Stock Analysis on Net
Stock Analysis on Net

AppLovin Corp. (NASDAQ:APP)

Common-Size Income Statement 
Quarterly Data

AppLovin Corp., common-size consolidated income statement (quarterly data)

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3 months ended: Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021
Revenue 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of revenue -12.32 -13.09 -23.34 -22.50 -26.16 -27.80 -28.70 -30.67 -34.47 -36.62 -52.59 -42.21 -39.15 -45.05 -33.41 -34.95 -36.76 -36.94
Gross profit 87.68% 86.91% 76.66% 77.50% 73.84% 72.20% 71.30% 69.33% 65.53% 63.38% 47.41% 57.79% 60.85% 54.95% 66.59% 65.05% 63.24% 63.06%
Sales and marketing -3.73 -5.12 -15.64 -17.17 -18.71 -21.42 -23.39 -24.57 -25.65 -28.37 -28.55 -27.60 -29.90 -46.39 -39.53 -39.24 -39.69 -43.97
Research and development -3.50 -4.87 -12.35 -12.52 -15.17 -14.68 -15.82 -18.43 -18.32 -20.25 -16.83 -17.12 -18.18 -20.19 -15.07 -14.93 -11.58 -10.08
General and administrative -4.37 -4.45 -4.39 -3.16 -3.76 -4.01 -3.81 -4.77 -4.05 -6.23 -5.22 -6.17 -5.89 -8.83 -4.61 -4.69 -6.74 -7.11
Income (loss) from operations 76.08% 72.48% 44.29% 44.64% 36.20% 32.09% 28.27% 21.56% 17.51% 8.53% -3.19% 6.91% 6.87% -20.46% 7.38% 6.20% 5.23% 1.90%
Interest expense -4.08 -4.56 -6.86 -6.28 -6.91 -7.01 -7.51 -9.09 -6.80 -10.42 -7.79 -6.82 -4.70 -5.12 -3.83 -2.58 -2.85 -5.80
Other income (expense), net -1.77 0.65 0.10 0.66 0.83 0.24 -2.00 0.17 2.06 1.41 1.56 0.14 0.07 0.32 0.06 -1.27 -0.23 1.62
Other expense, net -5.85% -3.92% -6.76% -5.61% -6.08% -6.77% -9.51% -8.92% -4.74% -9.00% -6.23% -6.68% -4.64% -4.80% -3.77% -3.85% -3.08% -4.18%
Income (loss) before income taxes 70.23% 68.56% 37.52% 39.03% 30.11% 25.32% 18.77% 12.64% 12.77% -0.47% -9.42% 0.23% 2.24% -25.26% 3.61% 2.35% 2.15% -2.28%
(Provision for) benefit from income taxes -8.91 -6.13 6.12 -2.77 -1.42 -3.00 -0.70 -0.07 -2.06 -0.16 -1.90 3.09 -5.05 6.82 0.35 -2.33 0.00 0.53
Net income (loss) from continuing operations 61.32% 62.43% 43.65% 36.25% 28.70% 22.32% 18.07% 12.57% 10.71% -0.63% -11.32% 3.32% -2.81% -18.44% 3.96% 0.02% 2.15% -1.75%
Income (loss) from discontinued operations, net of income taxes 3.79 -12.69 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net income (loss) 65.11% 49.74% 43.65% 36.25% 28.70% 22.32% 18.07% 12.57% 10.71% -0.63% -11.32% 3.32% -2.81% -18.44% 3.96% 0.02% 2.15% -1.75%
Net loss attributable to noncontrolling interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.01 0.01 -0.01 0.00 0.01 0.01
Net income (loss) attributable to AppLovin 65.11% 49.74% 43.65% 36.25% 28.70% 22.32% 18.07% 12.57% 10.71% -0.63% -11.32% 3.33% -2.80% -18.43% 3.95% 0.02% 2.16% -1.74%

Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).

The financial performance exhibits distinct trends over the observed periods, with notable fluctuations in key expense categories and profitability metrics relative to revenue.

Cost of Revenue and Gross Profit
The cost of revenue as a percentage of revenue initially declined from approximately 37% in early 2021 to below 34% by the end of that year, indicating improved cost efficiency. However, there was a sharp increase in cost of revenue in 2022, peaking above 52% at year-end, which significantly compressed gross profit during the same period, reducing it from about 67% in late 2021 to under 48% at the close of 2022. Starting in 2023, cost of revenue steadily decreased, reaching a low of around 12% by mid-2025, propelling gross profit to its highest levels in the series, approaching 88% of revenue, suggesting a substantial improvement in product or service margin management.
Operating Expenses
Sales and marketing expenses as a percentage of revenue decreased markedly over the timeframe, shrinking from a high near 44% in early 2021 to below 4% by mid-2025. This represents a strong scaling back of marketing investment relative to revenue, which could reflect increased operational efficiency or a strategic shift in customer acquisition efforts. Research and development costs also trended downward, dropping from about 20% of revenue in early 2022 to below 4% by 2025, indicating reduced relative spending on innovation or product development over time. General and administrative expenses showed moderate variability but generally declined slightly from near 9% in early 2022 to about 4% by 2025, reflecting tighter overhead control.
Profitability
Income from operations experienced significant volatility. Early 2021 saw positive margins around 2%-7%, followed by a substantial dip into negative territory at approximately -20% by the first quarter of 2022. Subsequent quarters showed recovery and a strong positive trend, with operating margins reaching above 76% by mid-2025, underscoring substantial operational leverage or margin expansion. Income before taxes and net income mirrored these trends, with net income fluctuating from negative percentages in early 2022 to over 65% of revenue by mid-2025. The improvements in net income as a percentage of revenue suggest robust overall profitability enhancement over the period.
Interest and Other Income/Expense
Interest expense as a percentage of revenue rose from roughly 3%-6% in early years to peaks above 10% by early 2023, before declining again to around 4% by mid-2025. Other income and expense showed mixed results with some periods of positive net income offset by negative impacts, though the magnitude of these effects decreased somewhat by the end of the period, indicating a stabilizing financial cost structure beyond operating activities.
Tax Provision
The provision or benefit from income taxes exhibited volatility, with notable tax benefits near 7% of revenue in early 2022 followed by periods of negative tax effects through 2023 and into 2025, including some sizable adverse impacts exceeding 8% of revenue. This variability may reflect changing tax environments, deferred tax assets or liabilities, and adjustments related to earnings fluctuations.
Discontinued Operations
There is evidence of a notable impact from discontinued operations near the end of the timeline, particularly a negative effect exceeding 12% of revenue around early 2025, partially offset by a positive contribution in a subsequent quarter. This suggests restructuring or divestiture activities influencing net results during that timeframe.

Overall, the data conveys a narrative of initial operational challenges with high costs and negative profitability in early 2022, followed by progressive expense rationalization and strong margin improvement leading to exceptional profitability ratios by mid-2025. Reductions in sales, marketing, and R&D expenses relative to revenue, along with declining cost of revenue, appear central to this enhanced financial performance. However, variability in interest expenses, tax provisions, and the effect of discontinued operations indicate continuing complexity in comprehensive income components.