AppLovin Corp. (NASDAQ:APP)

The analysis of the annual financial data over the presented periods reveals several notable trends regarding the company's asset base.

Total Assets

The total assets demonstrate a declining trend from 6,163,579 thousand USD at the end of 2021 to 5,359,187 thousand USD by the end of 2023, reflecting a reduction of approximately 13%. However, in 2024, there is a reversal in this trend, with total assets increasing to 5,869,259 thousand USD, signaling a potential recovery or asset acquisition strategy.

Adjusted Total Assets

Adjusted total assets similarly decreased from 6,125,140 thousand USD in 2021 to 5,132,214 thousand USD in 2023, which marks a roughly 16% decline over two years. This category also shows an uptick in 2024 to 5,432,946 thousand USD, although it remains below the initial 2021 level, indicating partial but not full recovery in the adjusted asset base.

Overall, both total and adjusted total assets reflect a strategic contraction phase between 2021 and 2023, followed by an asset growth phase in 2024. The difference between total assets and adjusted total assets remains relatively consistent, suggesting that the adjustments applied to the asset figures maintain a stable proportional relationship across the periods analyzed.

The analysis of the annual data concerning the current liabilities and adjusted current liabilities reveals notable trends over the four-year period ending December 31, 2024.

Current Liabilities

The current liabilities started at 640,097 thousand US dollars at the end of 2021. In the following year, these liabilities decreased to 578,958 thousand US dollars, indicating a reduction in short-term obligations. However, the trend reversed in 2023, with current liabilities increasing significantly to 944,122 thousand US dollars. This upward trajectory continued into 2024, where they further rose to 1,057,472 thousand US dollars. The data indicates that after an initial improvement, the company encountered growing short-term liabilities in the last two years.

Adjusted Current Liabilities

Adjusted current liabilities followed a similar but less pronounced pattern. Beginning at 561,167 thousand US dollars in 2021, these figures declined to 514,940 thousand US dollars in 2022. Subsequently, there was a notable increase to 865,563 thousand US dollars in 2023, followed by a further rise to 987,633 thousand US dollars in 2024. While also presenting an overall increase, the adjusted liabilities consistently remain lower than the unadjusted current liabilities across all years. This could suggest the exclusion of certain short-term obligations or reclassification adjustments, leading to a more conservative measure of immediate financial commitments.

Overall, the data reflects an initial improvement in managing liabilities between 2021 and 2022, potentially indicating better liquidity or decreased short-term debt. However, the subsequent two years show a significant increase in both reported and adjusted current liabilities, suggesting an expansion in short-term financial obligations that may require scrutiny concerning liquidity management and repayment capacity.

The annual financial data indicates that the total liabilities of the company have exhibited an overall increasing trend over the four-year period. Beginning at approximately 4,025 million US dollars at the end of 2021, total liabilities slightly decreased in 2022 to about 3,945 million US dollars. However, this was followed by a steady increase in the subsequent years, rising to 4,103 million US dollars in 2023 and reaching approximately 4,779 million US dollars by the end of 2024.

The adjusted total liabilities display a similar pattern to total liabilities. Starting at roughly 3,946 million US dollars in 2021, there was a slight decline to around 3,881 million US dollars in 2022. Afterward, the adjusted total liabilities increased to approximately 4,024 million US dollars in 2023 and further to about 4,710 million US dollars in 2024.

The consistent upward movement in both total and adjusted total liabilities in the last two years suggests an expansion in the company's financial obligations. The slight decreases observed in 2022 could indicate a temporary reduction or restructuring of liabilities during that period. Nonetheless, the subsequent increases highlight a trend toward greater leverage or increased borrowing activities.

Overall, the data reflects increasing financial commitments over time, which may impact the company's risk profile and capital structure. Careful monitoring of liabilities and their composition will be important in future assessments of financial health and sustainability.

Stockholders’ Equity

Stockholders' equity has exhibited a consistent downward trend over the four-year period. Beginning at approximately $2.14 billion at the end of 2021, it decreased to around $1.90 billion by the end of 2022, reflecting a decline of roughly 11%. This downward trajectory continued in 2023 with a more pronounced reduction to approximately $1.26 billion, representing a drop of about 34% from the previous year. By the end of 2024, stockholders’ equity further declined to just under $1.09 billion, which is a decrease of nearly 13% compared to 2023. Overall, the cumulative decrease in stockholders’ equity from 2021 to 2024 exceeds 49%, indicating notable reductions in the company's net assets attributable to shareholders.

Adjusted Stockholders’ Equity

The adjusted stockholders’ equity, which may account for certain accounting adjustments or exclusions, similarly reflects a decreasing pattern over the same timeframe. It started at roughly $2.18 billion at the end of 2021, declined to about $1.82 billion in 2022, marking a significant 17% reduction. This downward momentum accelerated in 2023 with adjusted equity falling to near $1.11 billion, around a 39% decrease year-over-year. In 2024, the adjusted measure reached approximately $723 million, a further substantial decline of about 35%. Taken together, these movements translate into a nearly 67% overall reduction in adjusted stockholders’ equity from 2021 through 2024. This suggests that after adjustments, the company’s equity base has contracted more severely compared to the unadjusted figure.

Insights

The consistent and marked decline in both standard and adjusted stockholders’ equity points to significant underlying challenges impacting the company's financial foundation. The sharper decrease in adjusted equity relative to the unadjusted figure suggests that impairment adjustments or other equity-reducing factors have played a considerable role. This downward trend may reflect net losses, asset impairments, dividend distributions exceeding earnings, share repurchases, or other equity transactions negatively affecting shareholder value. Such a pattern warrants further investigation into operational performance, capital management strategies, and risk exposures to understand the drivers of this persistent equity erosion.

Total Reported Debt

The total reported debt exhibits a gradual upward trend over the analyzed period, increasing from approximately $3.27 billion at the end of 2021 to about $3.67 billion by the end of 2024. This steady rise suggests a consistent reliance on debt financing.

Stockholders’ Equity

Stockholders’ equity shows a significant decline throughout the period. Starting at roughly $2.14 billion in 2021, it decreases to approximately $1.09 billion by the close of 2024. This decline may indicate losses, dividend payments exceeding earnings, or other equity reducing factors.

Total Reported Capital

Total reported capital, representing the sum of debt and equity, decreases from about $5.41 billion in 2021 to around $4.75 billion in 2024. This reduction is primarily driven by the fall in equity, partially offset by the rise in debt.

Adjusted Total Debt

Adjusted total debt follows a trend similar to the reported debt, increasing from approximately $3.35 billion in 2021 to roughly $3.71 billion in 2024. The adjusted figures reinforce the insight regarding increasing leverage.

Adjusted Stockholders’ Equity

Adjusted stockholders' equity declines more sharply than the reported figure, dropping from about $2.18 billion in 2021 to approximately $0.72 billion by 2024. This steeper decline may reflect adjustments for items affecting equity quality or valuation changes.

Adjusted Total Capital

The adjusted total capital decreases notably, from around $5.53 billion in 2021 to approximately $4.44 billion in 2024. The downward trend confirms a contraction in overall capital base, influenced significantly by the reduction in adjusted equity despite increasing debt.

Overall Financial Position

The combination of rising debt levels and declining equity values indicates increasing financial leverage over the period. The reduction in total capital implies a shrinking capital base, which may impact financial stability and risk profile. The sharper decline in adjusted equity suggests potential adjustments for quality or valuation issues, further emphasizing a deteriorating equity position.

The financial data reveals consistent revenue growth over the observed periods. From 2021 to 2024, there is a steady upward trend in both reported revenue and adjusted revenue figures.

Revenue Trends

Revenue increased from approximately $2.79 billion in 2021 to about $4.71 billion in 2024. The growth was moderate between 2021 and 2022 but became more pronounced in subsequent years, indicating accelerated business expansion or enhanced market presence.

Adjusted Revenue Trends

Adjusted revenue closely follows the reported revenue trend and remains slightly lower in each year. It shows similar growth dynamics, rising from approximately $2.79 billion in 2021 to $4.70 billion in 2024. The close alignment between adjusted and reported revenue suggests consistency in accounting practices and minor adjustment impacts.

Growth Rate

Between 2021 and 2022, revenue grew marginally, by around 0.9%. From 2022 to 2023, the increase was more significant, roughly 16.5%, and the most substantial growth occurred between 2023 and 2024, with revenue jumping by approximately 43.4%. This accelerating revenue growth hints at successful strategic initiatives, product acceptance, or market expansion.

Net Income (Loss) Attributable to AppLovin

The net income exhibited significant volatility over the observed period. In the year ending December 31, 2021, the company reported a positive net income of approximately $35.4 million. However, this was followed by a substantial loss of nearly $193 million in 2022, indicating a challenging fiscal year. Subsequently, there was a marked turnaround in 2023 with net income rising sharply to about $357 million. This upward trajectory continued strongly into 2024, reaching approximately $1.58 billion. The trend reflects considerable recovery and growth, suggesting improvements in operational performance or other financial factors.

Adjusted Net Income (Loss)

The adjusted net income figures demonstrate a somewhat similar pattern but start from a negative base. In 2021, the adjusted net loss stood at $84.4 million, increasing to a more pronounced loss of $348 million in 2022. This loss was reversed in 2023, when the company reported a positive adjusted net income of about $307 million. The growth accelerated in 2024, with adjusted net income soaring to around $1.34 billion. The adjustment measures appear to normalize certain expenses or one-time items, providing a clearer view of the company’s profitability trends, which align closely with the net income recovery and growth observed.

Overall, the financial data indicates a period of initial losses and operational challenges around 2022, followed by a strong recovery and significant profitability expansion in the subsequent two years. The increasing positive results in both net and adjusted net income suggest enhanced financial health and possibly more efficient management or successful strategic initiatives during this period.