AppLovin Corp. (NASDAQ:APP)

The financial data indicates several significant trends regarding the company's capital structure over the observed period from the end of 2021 through the end of 2024.

Total Debt:

The total debt remained relatively stable between 2021 and 2023, with a slight decline from approximately $3.23 billion to $3.12 billion. However, a notable increase occurred in 2024, with the total debt rising to roughly $3.51 billion. This upward movement suggests an increased reliance on borrowed funds during the last year of the period under review.

Stockholders’ Equity:

Stockholders’ equity exhibited a consistent decline throughout the period. Beginning at about $2.14 billion in 2021, equity decreased to roughly $1.90 billion in 2022, then sharply dropped to approximately $1.26 billion in 2023, and further fell to around $1.09 billion in 2024. This decreasing trend points to diminishing net asset value attributable to shareholders, which could be due to accumulated losses, dividend payments exceeding earnings, share repurchases, or other equity-reducing activities.

Debt to Equity Ratio:

The debt to equity ratio shows a marked increase year over year, beginning at 1.51 in 2021, then rising to 1.69 in 2022, climbing steeply to 2.48 in 2023, and reaching 3.22 in 2024. This rising ratio reflects the combined effect of slight fluctuations in total debt juxtaposed against a persistent decline in equity. The increasing leverage indicates a higher financial risk, as the company relies more heavily on debt relative to equity financing.

In summary, the company’s capital structure has shifted towards greater leverage over the four-year period, driven by a decrease in equity coupled with relatively stable then increasing total debt levels. This trend signals an escalating financial risk profile, warranting attention to debt management strategies and potential implications for creditworthiness and shareholder value.