In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to the firm (FCFF) is generally described as cash flows after direct costs and before any payments to capital suppliers.

Intrinsic Stock Value (Valuation Summary)
Weighted Average Cost of Capital (WACC)
FCFF Growth Rate (g)

AppLovin Corp., free cash flow to the firm (FCFF) forecast

US$ in thousands, except per share data

Year	Value	FCFF_t or Terminal value (TV_t)	Calculation	Present value at 35.82%
0¹	FCFF₀	4,143,620
1	FCFF₁	4,794,311	= 4,143,620 × (1 + 15.70%)	3,529,987
2	FCFF₂	5,747,511	= 4,794,311 × (1 + 19.88%)	3,115,829
3	FCFF₃	7,130,385	= 5,747,511 × (1 + 24.06%)	2,846,123
4	FCFF₄	9,143,924	= 7,130,385 × (1 + 28.24%)	2,687,325
5	FCFF₅	12,108,140	= 9,143,924 × (1 + 32.42%)	2,620,064
5	Terminal value (TV₅)	471,657,457	= 12,108,140 × (1 + 32.42%) ÷ (35.82% – 32.42%)	102,061,320
Intrinsic value of AppLovin Corp. capital				116,860,647
Less: Debt and finance lease liabilities (fair value)				3,722,653
Intrinsic value of AppLovin Corp. common stock				113,137,994

Intrinsic value of AppLovin Corp. common stock (per share)				$336.78
Current share price				$469.39

Based on: 10-K (reporting date: 2025-12-31).

¹ See details »

Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.

AppLovin Corp., cost of capital

	Value¹	Weight	Required rate of return²	Calculation
Equity (fair value)	157,686,877	0.98	36.55%
Debt and finance lease liabilities (fair value)	3,722,653	0.02	4.78%	= 5.56% × (1 – 14.00%)

Based on: 10-K (reporting date: 2025-12-31).

¹ US$ in thousands

Equity (fair value) = No. shares of common stock outstanding × Current share price
= 335,940,000 × $469.39
= $157,686,876,600.00

Debt and finance lease liabilities (fair value). See details »

² Required rate of return on equity is estimated by using CAPM. See details »

Required rate of return on debt. See details »

Required rate of return on debt is after tax.

Estimated (average) effective income tax rate
= (13.10% + 21.00% + 6.27% + 5.96% + 23.69%) ÷ 5
= 14.00%

WACC = 35.82%

FCFF growth rate (g) implied by PRAT model

AppLovin Corp., PRAT model

	Average	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Selected Financial Data (US$ in thousands)
Interest expense and loss on settlement of debt		207,016)	318,260)	275,665)	171,863)	103,170)
Loss from discontinued operations, net of income taxes		(99,444)	—)	—)	—)	—)
Net income (loss) attributable to AppLovin		3,333,751)	1,579,776)	356,711)	(192,746)	35,446)

Effective income tax rate (EITR)¹		13.10%	21.00%	6.27%	5.96%	23.69%

Interest expense and loss on settlement of debt, after tax²		179,897)	251,425)	258,381)	161,620)	78,729)
Interest expense (after tax) and dividends		179,897)	251,425)	258,381)	161,620)	78,729)

EBIT(1 – EITR)³		3,613,092)	1,831,201)	615,092)	(31,126)	114,175)

Finance lease liabilities, current		17,481)	22,336)	19,683)	22,304)	21,999)
Short-term debt		—)	—)	215,000)	33,310)	25,810)
Long-term debt		3,512,987)	3,508,983)	2,905,906)	3,178,412)	3,201,834)
Finance lease liabilities, non-current		105,172)	133,893)	144,174)	44,736)	24,085)
Stockholders’ equity		2,134,671)	1,089,818)	1,256,329)	1,902,677)	2,138,090)
Total capital		5,770,311)	4,755,030)	4,541,092)	5,181,439)	5,411,818)
Financial Ratios
Retention rate (RR)⁴		0.95	0.86	0.58	—	0.31
Return on invested capital (ROIC)⁵		62.62%	38.51%	13.55%	-0.60%	2.11%
Averages
RR	0.68
ROIC	23.24%

FCFF growth rate (g)⁶	15.70%

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

¹ See details »

2025 Calculations

² Interest expense and loss on settlement of debt, after tax = Interest expense and loss on settlement of debt × (1 – EITR)
= 207,016 × (1 – 13.10%)
= 179,897

³ EBIT(1 – EITR) = Net income (loss) attributable to AppLovin – Loss from discontinued operations, net of income taxes + Interest expense and loss on settlement of debt, after tax
= 3,333,751 – -99,444 + 179,897
= 3,613,092

⁴ RR = [EBIT(1 – EITR) – Interest expense (after tax) and dividends] ÷ EBIT(1 – EITR)
= [3,613,092 – 179,897] ÷ 3,613,092
= 0.95

⁵ ROIC = 100 × EBIT(1 – EITR) ÷ Total capital
= 100 × 3,613,092 ÷ 5,770,311
= 62.62%

⁶ g = RR × ROIC
= 0.68 × 23.24%
= 15.70%

FCFF growth rate (g) implied by single-stage model

g = 100 × (Total capital, fair value₀ × WACC – FCFF₀) ÷ (Total capital, fair value₀ + FCFF₀)
= 100 × (161,409,530 × 35.82% – 4,143,620) ÷ (161,409,530 + 4,143,620)
= 32.42%

where:

Total capital, fair value₀ = current fair value of AppLovin Corp. debt and equity (US$ in thousands)
FCFF₀ = the last year AppLovin Corp. free cash flow to the firm (US$ in thousands)
WACC = weighted average cost of AppLovin Corp. capital

FCFF growth rate (g) forecast

AppLovin Corp., H-model

Year	Value	g_t
1	g₁	15.70%
2	g₂	19.88%
3	g₃	24.06%
4	g₄	28.24%
5 and thereafter	g₅	32.42%

where:
g₁ is implied by PRAT model
g₅ is implied by single-stage model
g₂, g₃ and g₄ are calculated using linear interpolation between g₁ and g₅

Calculations

g₂ = g₁ + (g₅ – g₁) × (2 – 1) ÷ (5 – 1)
= 15.70% + (32.42% – 15.70%) × (2 – 1) ÷ (5 – 1)
= 19.88%

g₃ = g₁ + (g₅ – g₁) × (3 – 1) ÷ (5 – 1)
= 15.70% + (32.42% – 15.70%) × (3 – 1) ÷ (5 – 1)
= 24.06%

g₄ = g₁ + (g₅ – g₁) × (4 – 1) ÷ (5 – 1)
= 15.70% + (32.42% – 15.70%) × (4 – 1) ÷ (5 – 1)
= 28.24%

AppLovin Corp. (NASDAQ:APP)

Present Value of Free Cash Flow to the Firm (FCFF)

Intrinsic Stock Value (Valuation Summary)

Weighted Average Cost of Capital (WACC)

FCFF Growth Rate (g)

FCFF growth rate (g) implied by PRAT model

FCFF growth rate (g) implied by single-stage model

FCFF growth rate (g) forecast