AppLovin Corp. (NASDAQ:APP)

The financial data reveals several notable trends over the four-year period, reflecting changes in efficiency, liquidity, leverage, profitability, and returns.

Asset Turnover

Both reported and adjusted total asset turnover ratios show a consistent upward trajectory from 2021 to 2024. The reported ratio increases from 0.45 to 0.80, while the adjusted ratio rises from 0.45 to 0.87. This suggests improving efficiency in using assets to generate revenue over time.

Current Ratio

Liquidity appears to have declined significantly between 2021 and 2023, with reported current ratio dropping from 5.05 to 1.71 and adjusted from 5.76 to 1.87. However, there is a moderate recovery in 2024, with reported and adjusted ratios increasing to 2.19 and 2.34 respectively, indicating a partial restoration of short-term financial stability.

Debt to Equity and Debt to Capital

Leverage, as measured by debt to equity and debt to capital ratios, has increased steadily. Reported debt to equity rises from 1.53 in 2021 to 3.36 in 2024, with the adjusted measure showing an even sharper increase to 5.13. Similarly, debt to capital grows from 0.60 to 0.77 reported, and 0.61 to 0.84 adjusted. This indicates a growing reliance on debt financing and higher financial risk.

Financial Leverage

Financial leverage ratios corroborate the increased indebtedness trend. The reported financial leverage climbs from 2.88 in 2021 to 5.39 in 2024, while the adjusted figure rises more steeply from 2.81 to 7.51. This intensification of leverage could amplify both returns and risk.

Profitability Margins

Net profit margins exhibit considerable volatility. Initially positive at 1.27% reported in 2021, margins deteriorate into negative territory in 2022 (-6.84% reported, -12.42% adjusted). Subsequently, profitability improves markedly, reaching a reported 33.55% and adjusted 28.45% by 2024. This suggests recovery and improved operational performance.

Return on Equity (ROE) and Return on Assets (ROA)

ROE follows a pattern similar to net profit margin, with negative returns in 2022 (-10.13% reported, -19.16% adjusted) shifting to very strong positive results by 2024 (144.96% reported, 184.86% adjusted). ROA also recovers from negative values in 2022 to healthy positive levels in 2024 (26.92% reported, 24.61% adjusted). The sharp increase in returns indicates substantial improvement in overall profitability and efficient employment of capital and assets, though the extreme values may be influenced by the high leverage seen in this period.

In summary, the entity demonstrates enhanced asset utilization and a rebound in liquidity after temporary weakening. However, this improvement accompanies increased financial leverage and debt levels, magnifying both risks and returns. Profitability and returns show a significant turnaround from negative to robust positive figures by the final period, highlighting a strong recovery phase with potentially elevated financial risk due to increased leverage ratios.

The financial data indicates several noteworthy trends over the observed periods. Revenue has demonstrated consistent growth, increasing from approximately 2.79 billion US dollars in 2021 to nearly 4.71 billion US dollars by the end of 2024. This upward trend suggests effective growth strategies or market expansion contributing positively to top-line performance.

Total assets, in contrast, have shown a declining trend initially, moving from about 6.16 billion US dollars in 2021 down to around 5.36 billion in 2023, before recovering somewhat to approximately 5.87 billion in 2024. This fluctuation indicates asset base optimization or divestitures over the first part of the period, followed by a modest increase which may reflect reinvestments or acquisitions.

The reported total asset turnover ratio, which measures the efficiency of asset utilization in generating revenue, has improved steadily from 0.45 in 2021 to 0.80 in 2024. This indicates enhanced operational efficiency or better asset management over time. Similarly, adjusted total asset turnover, which likely accounts for certain non-recurring items or asset revaluations, has followed a comparable trajectory, rising from 0.45 to 0.87 during the same period. This confirms the company's increasing capability to generate sales from its assets, especially when considering adjusted figures.

Adjusted revenue closely tracks reported revenue, both demonstrating substantial growth, with adjusted figures slightly higher in the final years. Adjusted total assets follow a pattern similar to reported total assets, declining between 2021 and 2023 before increasing in 2024. The alignment between adjusted and reported figures suggests consistency in underlying financial performance measures, with adjustments providing slightly refined insights into operational efficiency.

Overall, the data reflects positive revenue progression accompanied by improved asset utilization efficiency. Despite some volatility in asset levels, the company's ability to generate increased revenue per unit of asset has strengthened, signaling enhanced management effectiveness and potentially favorable market conditions.

Current Assets

Current assets exhibit a declining trend from 3,235,064 thousand US dollars in 2021 to 1,616,163 thousand US dollars in 2023. However, there is a notable recovery in 2024, with current assets increasing to 2,312,190 thousand US dollars.

Current Liabilities

Current liabilities decreased slightly from 640,097 thousand US dollars in 2021 to 578,958 thousand US dollars in 2022 but then rose significantly, reaching 944,122 thousand US dollars in 2023 and further increasing to 1,057,472 thousand US dollars in 2024.

Reported Current Ratio

The reported current ratio declines steadily over the period, starting at 5.05 in 2021 and dropping to 1.71 by the end of 2023, before showing improvement to 2.19 in 2024. This suggests a reduction in short-term liquidity during 2022 and 2023, with some recovery in 2024.

Adjusted Current Liabilities

Adjusted current liabilities follow a similar pattern to reported current liabilities, decreasing from 561,167 thousand US dollars in 2021 to 514,940 thousand US dollars in 2022, then increasing markedly to 865,563 thousand US dollars in 2023 and 987,633 thousand US dollars in 2024.

Adjusted Current Ratio

The adjusted current ratio decreases from 5.76 in 2021 to 1.87 in 2023, indicating a decline in adjusted short-term liquidity. Like the reported ratio, there is a partial rebound in 2024, increasing to 2.34.

Total Debt

Total debt exhibits a gradual increase from approximately 3.27 billion in 2021 to 3.67 billion in 2024. The growth is relatively modest between 2021 and 2023, followed by a more noticeable rise in 2024, indicating a trend toward increasing leverage.

Stockholders’ Equity

Stockholders’ equity shows a consistent decline over the same period, falling from about 2.14 billion in 2021 to around 1.09 billion in 2024. This decline suggests a weakening equity base, which may reflect accumulated losses, dividends, share repurchases, or other equity-reducing activities.

Reported Debt to Equity Ratio

The reported debt to equity ratio increases significantly from 1.53 in 2021 to 3.36 in 2024. This rising ratio highlights an increasing reliance on debt financing relative to equity. The sharp growth particularly after 2022 signals possible heightened financial risk due to gearing.

Adjusted Total Debt

Adjusted total debt follows a similar pattern to reported debt, starting at roughly 3.35 billion in 2021 and increasing steadily to about 3.71 billion in 2024. This metric suggests that when adjustments are considered, total debt remains on an upward trajectory.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity drops more sharply than the reported equity, from approximately 2.18 billion in 2021 to 0.72 billion in 2024. This steeper decline indicates that adjustments reveal a more pronounced erosion of the company’s equity position over the period analyzed.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio escalates from 1.54 in 2021 to 5.13 in 2024, surpassing the reported ratio substantially in later years. This marked increase points to a considerable rise in leverage risk when considering all debt and equity adjustments, underscoring concerns about the company's capital structure sustainability.

Overall Insights

The financial data indicates a trend of increasing debt levels accompanied by a declining equity base, leading to higher leverage ratios over the four-year period. The adjusted metrics consistently amplify this trend, suggesting that off-balance-sheet items or debt-like obligations may contribute materially to financial risk. The escalation in debt-to-equity ratios signals potential challenges in meeting financial obligations and may impact creditworthiness. Monitoring of leverage and equity stability will be important for assessing future financial health.

Total Debt

The total debt has shown a gradual increase over the observed period. Starting from approximately $3.27 billion at the end of 2021, it increased slightly to around $3.28 billion in 2023, followed by a more noticeable rise to approximately $3.67 billion by the end of 2024. This upward trend suggests a growing reliance on debt financing.

Total Capital

Total capital decreased over the period, falling from about $5.41 billion at the end of 2021 to roughly $4.54 billion by the end of 2023. A slight recovery was noted in 2024, when total capital increased to approximately $4.76 billion. Despite this improvement, the overall downward trend indicates a reduction in the company's capital base.

Reported Debt to Capital Ratio

The reported debt to capital ratio exhibits a steady increase, starting at 0.60 in 2021 and rising to 0.77 by the end of 2024. This increase illustrates a growing proportion of debt relative to capital, which may imply higher financial leverage and increased risk profile.

Adjusted Total Debt

The adjusted total debt follows a pattern similar to total debt, beginning at approximately $3.35 billion in 2021 and remaining relatively stable around $3.34 billion through 2023, then rising to about $3.71 billion in 2024. This adjustment confirms the increase in debt levels when alternative accounting or valuation considerations are applied.

Adjusted Total Capital

Adjusted total capital consistently declined from around $5.53 billion in 2021 to approximately $4.44 billion in 2024. The steady decrease in adjusted capital reflects a reduction in the overall capital structure when adjustments are factored in, which further accentuates the relative increase in debt.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio increased more sharply than the reported ratio, moving from 0.61 in 2021 to 0.84 in 2024. This rise highlights a more aggressive growth in leverage when considering adjusted figures, indicating that debt is becoming an increasingly dominant component of the company’s financing.

The financial data reveals a consistent decrease in total assets over the initial three years, from approximately 6.16 billion to 5.36 billion US dollars, followed by a moderate rebound in the final year to about 5.87 billion. This suggests some decline in asset base initially which stabilizes towards the end of the period under review.

Stockholders’ equity shows a notable downward trend throughout the four years, declining from roughly 2.14 billion US dollars to approximately 1.09 billion. This steady reduction indicates diminishing net value attributable to shareholders, which may be a concern from an equity strength perspective.

The reported financial leverage ratio has increased progressively from 2.88 in the first year to 5.39 in the last year. This trend signifies a growing reliance on debt financing relative to equity, implying increased financial risk and potential pressure on the company’s capital structure.

When adjusted for certain factors, total assets follow a similar pattern as the reported figures, declining initially from around 6.13 billion to 5.13 billion and then slightly increasing to 5.43 billion in the final year. This parallel trend confirms the general reduction in asset base with some recovery.

Adjusted stockholders’ equity also decreases consistently more steeply than the reported equity figures, falling from about 2.18 billion to 0.72 billion US dollars. This sharp decline points to even greater erosion of the company’s adjusted net worth over the period, which may underscore additional considerations in asset valuation or liabilities.

The adjusted financial leverage ratio experiences a more pronounced increase, rising significantly from 2.81 to 7.51. This highlights an even stronger rise in leverage risk when accounting for adjustments, indicating a considerable amplification of debt relative to equity under adjusted conditions.

In summary, the company demonstrates a pattern of declining asset base and stockholders’ equity alongside increasing financial leverage ratios, both reported and adjusted. This combination reflects a trend towards greater financial risk and a weakening equity position over the reviewed period, warranting close monitoring and potential strategic responses to strengthen the balance sheet and reduce leverage.

Revenue Trends

Revenue displayed a steady upward trajectory over the analyzed periods. Starting at approximately $2.79 billion, it increased marginally to $2.82 billion in the following year. Subsequently, there was a more pronounced growth to about $3.28 billion, culminating in a significant rise to nearly $4.71 billion by the end of the latest period. This consistent increase indicates successful top-line growth and potential market expansion or operational scaling.

Net Income (Loss) Attributable

The net income showed substantial volatility throughout the period. Initially, there was a positive net income of roughly $35.4 million, which then shifted to a loss of approximately $192.7 million in the subsequent year. Recovery was evident in the next year with a net income rebound to about $356.7 million, followed by a substantial surge reaching nearly $1.58 billion. This pattern suggests initial challenges or investments impacting profitability, followed by strong operational or financial improvements.

Reported Net Profit Margin

The reported net profit margin mirrored the trends observed in net income. It began modestly positive at 1.27%, declined to a negative margin of -6.84%, then rebounded strongly to 10.87%, and finally peaked at an impressive 33.55%. This reflects an enhanced ability to convert revenue into net profit, indicating efficiency gains or favorable cost management in recent periods.

Adjusted Net Income (Loss)

Adjusted net income also demonstrated considerable fluctuation but with a similar recovery trajectory. Starting with a loss of about $84.4 million, the loss deepened to roughly $348 million the following year. This was followed by a turnaround to a positive $307 million and a substantial increase to nearly $1.34 billion in the final period. The adjustment presumably accounts for non-recurring items, highlighting improved core profitability over time.

Adjusted Revenue

Adjusted revenue figures paralleled reported revenue closely, indicating consistent adjustments without distorting overall revenue trends. Beginning near $2.79 billion, it increased steadily through the periods, reaching approximately $4.70 billion by the last period. The alignment suggests stable revenue recognition practices and consistent core revenue growth.

Adjusted Net Profit Margin

The adjusted net profit margin moved in a similar pattern as the reported margin but on a slightly lower scale. Initially negative at -3.03%, it decreased further to -12.42% before rebounding to 9.31% and reaching 28.45% in the latest period. This improvement indicates enhanced profitability once adjustments for extraordinary items are considered, reinforcing the narrative of operational strengthening and financial recovery.

The financial performance exhibits significant fluctuations over the four-year period. The net income attributable to the company shows a substantial decline in 2022, turning from a positive figure to a considerable loss. However, this is followed by a pronounced recovery in 2023 and a remarkable increase in 2024, reaching a peak far exceeding the initial period.

Stockholders’ equity demonstrates a consistent downward trend throughout the timeline, decreasing year-over-year from the highest level in 2021 to the lowest in 2024. This decline contrasts with the net income trend and may indicate increased liabilities, share repurchases, or other equity-reducing activities.

The reported return on equity (ROE) aligns with the net income trends, declining sharply into negative territory in 2022, recovering positively in 2023, and then surging dramatically in 2024. This increase suggests enhanced profitability or efficiency in generating earnings from equity in the latest period.

Adjusted figures, which may account for one-time items or other adjustments, also follow a parallel pattern. Adjusted net income worsens significantly in 2022 relative to 2021 but improves substantially in the following years, surpassing the starting point by 2024. Adjusted stockholders' equity decreases steadily, showing a more pronounced reduction by 2024 compared to the reported equity figures.

Adjusted ROE presents a deeper negative in 2022 than the reported ROE, implying that the adjustments reveal more severity in the underlying losses of that year. Subsequently, adjusted ROE improves markedly, reaching an exceptionally high return in 2024, even higher than the reported ROE, indicating strong adjusted profitability despite diminishing equity bases.

Overall, the data reveals a company that experienced a sharp downturn in 2022, both in earnings and returns, with a persistently declining equity base. The following years show substantial recovery and profitability, especially in 2024, but against a backdrop of shrinking equity, which amplifies return metrics. This pattern suggests operational improvements or extraordinary gains but also highlights potential capital structure or balance sheet concerns that would warrant further investigation.

The financial data shows notable fluctuations and an overall upward trend in profitability and returns over the analyzed periods.

Net Income (Loss) Attributable

Net income experienced significant volatility, moving from a positive $35.4 million in 2021 to a substantial loss of $192.7 million in 2022. However, it rebounded sharply in 2023 to $356.7 million and further surged to $1,579.8 million by 2024, indicating a recovery and strong growth in profitability.

Total Assets

Total assets showed a declining trend from $6,163.6 million in 2021 down to $5,359.2 million in 2023, followed by a moderate increase to $5,869.3 million in 2024. This pattern suggests a contraction in asset base initially, complemented by a partial recovery in the final year.

Reported Return on Assets (ROA)

Reported ROA mirrored the profit volatility, moving from a positive but low 0.58% in 2021 to a negative 3.3% in 2022. It then improved substantially to 6.66% in 2023 and further to an impressive 26.92% in 2024, reflecting a significant enhancement in asset profitability.

Adjusted Net Income (Loss)

Adjusted net income showed a broader loss of $84.4 million in 2021 and deepened to a loss of $347.9 million in 2022. The metric transitioned to a positive $307.0 million in 2023 and increased dramatically to $1,337.2 million in 2024, reinforcing the trend of considerable operational improvement when adjustments are accounted for.

Adjusted Total Assets

Adjusted total assets followed a similar downward trajectory as total assets, declining from $6,125.1 million in 2021 to $5,132.2 million in 2023 before increasing to $5,433.0 million in 2024. This indicates a comparable pattern of asset base optimization or disposals, followed by growth.

Adjusted ROA

Adjusted ROA remained negative at -1.38% in 2021 and further declined to -6.11% in 2022. It improved markedly to 5.98% in 2023 and reached a strong 24.61% in 2024, suggesting that underlying operational improvements are even more pronounced when adjustments are considered.

In summary, the financial performance indicates initial challenges leading to losses and asset base contraction, followed by a robust recovery period with substantially improved profitability and efficiency evident in both the reported and adjusted figures. The rapid escalation of ROA in 2024 highlights effective utilization of assets to generate earnings.