APP - AppLovin Q1 Earnings: Robust Ad Spending Boosts Outlook

2024-05-09 02:27:38 ET

Summary

• AppLovin's Q1 FY24 revenue beat estimates, driven by strong growth in the Software Platform segment.
• At the same time, advertising spend is increasing, indicating a positive outlook for the company. The volume of installs increased 90% indicating strong ad spend.
• APP expects higher sales and EBITDA margins in Q2, leading to an improved overall outlook and higher targets.
• With the improved outlook and updates by management, I have raised my target to ~$103, implying +20% upside.

Investment Thesis

AppLovin ( APP ) posted its quarterly earnings and revenue for their first quarter of FY24 that handsomely beat consensus estimates amid strong growth in their Software Platform revenue segment, which almost doubled versus last year's first quarter....

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