Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
AppLovin Corp., liquidity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Current ratio | 3.32 | 2.19 | 1.71 | 3.35 | 5.05 | |
| Quick ratio | 3.23 | 2.04 | 1.54 | 3.08 | 4.82 | |
| Cash ratio | 1.86 | 0.70 | 0.53 | 1.87 | 4.02 |
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).
The liquidity position, as indicated by the presented ratios, demonstrates a fluctuating trend over the five-year period. A general decline in all three liquidity measures is observed from 2021 to 2023, followed by a recovery in 2024 and 2025.
- Current Ratio
- The current ratio decreased significantly from 5.05 in 2021 to 1.71 in 2023, suggesting a weakening ability to meet short-term obligations using current assets. A subsequent increase to 2.19 in 2024 and further to 3.32 in 2025 indicates an improving short-term solvency position.
- Quick Ratio
- Mirroring the trend of the current ratio, the quick ratio also experienced a decline from 4.82 in 2021 to 1.54 in 2023. This suggests a diminishing capacity to cover immediate liabilities with the most liquid assets. The quick ratio then rose to 2.04 in 2024 and 3.23 in 2025, reflecting an enhanced ability to meet short-term obligations without relying on inventory.
- Cash Ratio
- The cash ratio exhibited the most pronounced decrease, falling from 4.02 in 2021 to a low of 0.53 in 2023. This indicates a substantial reduction in the proportion of current assets held as cash. A recovery is evident in 2024 (0.70) and a more significant improvement in 2025 (1.86), suggesting a rebuilding of cash reserves.
The concurrent movements of all three ratios suggest a consistent pattern in the company’s liquidity management. The period between 2021 and 2023 appears to have involved a strategic shift or external pressures leading to a reduction in liquid assets. The subsequent years demonstrate a reversal of this trend, with improvements across all measures, indicating a strengthening liquidity profile.
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Current Ratio
AppLovin Corp., current ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 4,430,792) | 2,312,190) | 1,616,163) | 1,939,083) | 3,235,064) | |
| Current liabilities | 1,333,788) | 1,057,472) | 944,122) | 578,958) | 640,097) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 3.32 | 2.19 | 1.71 | 3.35 | 5.05 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Accenture PLC | 1.42 | 1.10 | 1.30 | 1.23 | 1.25 | |
| Adobe Inc. | 1.00 | 1.07 | 1.34 | 1.11 | 1.25 | |
| Cadence Design Systems Inc. | 2.86 | 2.93 | 1.24 | 1.27 | 1.77 | |
| CrowdStrike Holdings Inc. | 1.77 | 1.76 | 1.73 | 1.83 | 2.65 | |
| Datadog Inc. | 3.38 | 2.64 | 3.17 | 3.09 | 3.54 | |
| International Business Machines Corp. | 0.96 | 1.04 | 0.96 | 0.92 | 0.88 | |
| Intuit Inc. | 1.36 | 1.29 | 1.47 | 1.39 | 1.94 | |
| Microsoft Corp. | 1.35 | 1.27 | 1.77 | 1.78 | 2.08 | |
| Oracle Corp. | 0.75 | 0.72 | 0.91 | 1.62 | 2.30 | |
| Palantir Technologies Inc. | 7.11 | 5.96 | 5.55 | 5.17 | 4.34 | |
| Palo Alto Networks Inc. | 0.94 | 0.89 | 0.78 | 0.77 | 0.91 | |
| Salesforce Inc. | 1.06 | 1.09 | 1.02 | 1.05 | 1.23 | |
| ServiceNow Inc. | 1.00 | 1.10 | 1.06 | 1.11 | 1.05 | |
| Synopsys Inc. | 1.62 | 2.44 | 1.15 | 1.09 | 1.16 | |
| Workday Inc. | 1.90 | 1.97 | 1.75 | 1.03 | 1.12 | |
| Current Ratio, Sector | ||||||
| Software & Services | 1.25 | 1.20 | 1.40 | 1.44 | 1.69 | |
| Current Ratio, Industry | ||||||
| Information Technology | 1.39 | 1.24 | 1.41 | 1.37 | 1.55 | |
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 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= 4,430,792 ÷ 1,333,788 = 3.32
2 Click competitor name to see calculations.
The current ratio exhibited considerable fluctuation over the five-year period. Initially strong, the ratio declined significantly before showing signs of recovery.
- Overall Trend
- The current ratio began at 5.05 in 2021 and decreased to a low of 1.71 in 2023. A subsequent increase was observed in 2024, reaching 2.19, and continued into 2025, rising to 3.32. This indicates an initial weakening of the short-term liquidity position followed by a period of improvement.
- 2021-2022
- A decrease from 5.05 to 3.35 was noted between 2021 and 2022. This decline suggests a reduction in the company’s ability to cover its short-term liabilities with its short-term assets during this period. While still above 3.0, the drop represents a notable shift.
- 2022-2023
- The most substantial decrease occurred between 2022 and 2023, with the current ratio falling from 3.35 to 1.71. This represents a significant deterioration in short-term liquidity, potentially indicating challenges in meeting immediate obligations. The decline suggests either a substantial decrease in current assets, a rise in current liabilities, or a combination of both.
- 2023-2025
- From 2023 to 2025, the current ratio demonstrated a recovery. It increased from 1.71 to 2.19 in 2024 and further to 3.32 in 2025. This improvement suggests a strengthening of the company’s short-term financial position, potentially due to increased current assets or decreased current liabilities. The ratio in 2025 approaches the level observed in 2022.
The fluctuations in the current ratio warrant further investigation into the underlying drivers of changes in both current assets and current liabilities to fully understand the company’s liquidity dynamics.
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Quick Ratio
AppLovin Corp., quick ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 2,487,096) | 741,411) | 502,152) | 1,080,484) | 1,520,504) | |
| Restricted cash equivalents | —) | —) | —) | —) | 1,050,000) | |
| Accounts receivable, net | 1,819,366) | 1,414,246) | 953,810) | 702,814) | 514,520) | |
| Total quick assets | 4,306,462) | 2,155,657) | 1,455,962) | 1,783,298) | 3,085,024) | |
| Current liabilities | 1,333,788) | 1,057,472) | 944,122) | 578,958) | 640,097) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 3.23 | 2.04 | 1.54 | 3.08 | 4.82 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Accenture PLC | 1.30 | 0.98 | 1.18 | 1.12 | 1.14 | |
| Adobe Inc. | 0.88 | 0.95 | 1.22 | 1.00 | 1.11 | |
| Cadence Design Systems Inc. | 2.51 | 2.53 | 1.02 | 1.02 | 1.47 | |
| CrowdStrike Holdings Inc. | 1.58 | 1.60 | 1.58 | 1.68 | 2.50 | |
| Datadog Inc. | 3.28 | 2.57 | 3.08 | 3.01 | 3.45 | |
| International Business Machines Corp. | 0.83 | 0.90 | 0.82 | 0.76 | 0.69 | |
| Intuit Inc. | 0.63 | 0.71 | 1.25 | 1.17 | 1.65 | |
| Microsoft Corp. | 1.16 | 1.06 | 1.54 | 1.57 | 1.90 | |
| Oracle Corp. | 0.61 | 0.59 | 0.74 | 1.43 | 2.15 | |
| Palantir Technologies Inc. | 6.99 | 5.83 | 5.41 | 4.92 | 4.11 | |
| Palo Alto Networks Inc. | 0.88 | 0.82 | 0.72 | 0.75 | 0.88 | |
| Salesforce Inc. | 0.93 | 0.96 | 0.90 | 0.93 | 1.11 | |
| ServiceNow Inc. | 0.91 | 1.02 | 1.00 | 1.06 | 1.01 | |
| Synopsys Inc. | 1.20 | 1.88 | 0.85 | 0.85 | 0.89 | |
| Workday Inc. | 1.80 | 1.87 | 1.66 | 0.96 | 1.07 | |
| Quick Ratio, Sector | ||||||
| Software & Services | 1.08 | 1.02 | 1.22 | 1.27 | 1.53 | |
| Quick Ratio, Industry | ||||||
| Information Technology | 1.09 | 0.96 | 1.12 | 1.09 | 1.30 | |
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 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 4,306,462 ÷ 1,333,788 = 3.23
2 Click competitor name to see calculations.
The quick ratio exhibited considerable fluctuation over the five-year period. Initially strong, the ratio declined significantly before recovering in later years. A detailed examination reveals a complex interplay between quick assets and current liabilities.
- Overall Trend
- The quick ratio began at 4.82 in 2021, indicating a robust ability to meet short-term obligations with highly liquid assets. A substantial decrease was observed in 2022, falling to 3.08, and continued downward in 2023, reaching a low of 1.54. Subsequently, the ratio improved to 2.04 in 2024 and further to 3.23 in 2025, suggesting a strengthening liquidity position.
- Quick Assets
- Total quick assets decreased from US$3,085,024 thousand in 2021 to US$1,783,298 thousand in 2022, and further to US$1,455,962 thousand in 2023. This decline likely contributed to the initial drop in the quick ratio. A reversal of this trend occurred in 2024 and 2025, with quick assets increasing to US$2,155,657 thousand and US$4,306,462 thousand respectively, supporting the subsequent improvement in the quick ratio.
- Current Liabilities
- Current liabilities remained relatively stable between 2021 and 2023, fluctuating between US$578,958 thousand and US$944,122 thousand. An increase was noted in 2024, rising to US$1,057,472 thousand, and continued in 2025, reaching US$1,333,788 thousand. While quick assets were increasing in 2024 and 2025, the concurrent rise in current liabilities moderated the impact on the quick ratio.
- Ratio Dynamics
- The most significant decline in the quick ratio occurred between 2022 and 2023, coinciding with the largest decrease in quick assets. The recovery observed in 2024 and 2025 is attributable to the substantial growth in quick assets, despite the increasing current liabilities. The ratio in 2025, at 3.23, remains below the initial value in 2021, but represents a notable improvement from the low point in 2023.
In conclusion, the quick ratio demonstrates a period of weakening liquidity followed by a recovery. The fluctuations are primarily driven by changes in quick assets, with current liabilities also playing a role in moderating the ratio’s overall trend.
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Cash Ratio
AppLovin Corp., cash ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | 2,487,096) | 741,411) | 502,152) | 1,080,484) | 1,520,504) | |
| Restricted cash equivalents | —) | —) | —) | —) | 1,050,000) | |
| Total cash assets | 2,487,096) | 741,411) | 502,152) | 1,080,484) | 2,570,504) | |
| Current liabilities | 1,333,788) | 1,057,472) | 944,122) | 578,958) | 640,097) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 1.86 | 0.70 | 0.53 | 1.87 | 4.02 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Accenture PLC | 0.56 | 0.26 | 0.50 | 0.45 | 0.52 | |
| Adobe Inc. | 0.65 | 0.75 | 0.95 | 0.75 | 0.84 | |
| Cadence Design Systems Inc. | 1.93 | 2.03 | 0.72 | 0.66 | 1.13 | |
| CrowdStrike Holdings Inc. | 1.25 | 1.29 | 1.28 | 1.42 | 2.22 | |
| Datadog Inc. | 2.81 | 2.25 | 2.58 | 2.48 | 2.94 | |
| International Business Machines Corp. | 0.37 | 0.45 | 0.39 | 0.28 | 0.22 | |
| Intuit Inc. | 0.44 | 0.54 | 0.97 | 0.90 | 1.46 | |
| Microsoft Corp. | 0.67 | 0.60 | 1.07 | 1.10 | 1.47 | |
| Oracle Corp. | 0.34 | 0.34 | 0.44 | 1.12 | 1.93 | |
| Palantir Technologies Inc. | 6.11 | 5.25 | 4.93 | 4.48 | 3.83 | |
| Palo Alto Networks Inc. | 0.36 | 0.34 | 0.31 | 0.44 | 0.57 | |
| Salesforce Inc. | 0.50 | 0.53 | 0.48 | 0.48 | 0.67 | |
| ServiceNow Inc. | 0.60 | 0.69 | 0.66 | 0.71 | 0.67 | |
| Synopsys Inc. | 0.80 | 1.53 | 0.53 | 0.56 | 0.65 | |
| Workday Inc. | 1.45 | 1.55 | 1.32 | 0.72 | 0.83 | |
| Cash Ratio, Sector | ||||||
| Software & Services | 0.62 | 0.59 | 0.79 | 0.83 | 1.12 | |
| Cash Ratio, Industry | ||||||
| Information Technology | 0.64 | 0.57 | 0.71 | 0.67 | 0.89 | |
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 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 2,487,096 ÷ 1,333,788 = 1.86
2 Click competitor name to see calculations.
The cash ratio exhibited considerable fluctuation over the five-year period. Initially strong, the ratio declined significantly before showing signs of recovery towards the end of the analyzed timeframe.
- Cash Ratio Trend
- The cash ratio began at 4.02 in 2021, indicating a substantial ability to meet current obligations with available cash. A marked decrease was observed in 2022, falling to 1.87. This downward trend continued into 2023, with the ratio reaching a low of 0.53. A modest recovery occurred in 2024, with the ratio increasing to 0.70. The most recent year, 2025, shows a further increase to 1.86, approaching the level seen in 2022.
- Total Cash Assets
- Total cash assets decreased substantially from US$2,570,504 thousand in 2021 to US$1,080,484 thousand in 2022, and further declined to US$502,152 thousand in 2023. A partial recovery was noted in 2024, rising to US$741,411 thousand, followed by a significant increase to US$2,487,096 thousand in 2025, nearly returning to the initial level.
- Current Liabilities
- Current liabilities demonstrated a generally increasing trend throughout the period. Starting at US$640,097 thousand in 2021, they decreased slightly to US$578,958 thousand in 2022. However, liabilities then increased to US$944,122 thousand in 2023, US$1,057,472 thousand in 2024, and reached US$1,333,788 thousand in 2025.
The fluctuations in the cash ratio appear to be driven by a combination of changes in total cash assets and current liabilities. The significant decline in cash assets between 2021 and 2023, coupled with increasing current liabilities, contributed to the ratio’s low point in 2023. The subsequent recovery in both cash assets and the cash ratio in 2024 and 2025 suggests improved liquidity.
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