AppLovin can finally put its SEC inquiry behind it. That was one of the biggest developments on the earnings call (more on that below), but it wasn’t the only headline.
The mobile adtech platform—and arguably adtech’s biggest success story of the past few years—reported Q2 revenue of $1.92 billion, up 53% year over year, while adjusted EBITDA climbed 58% to $1.61 billion. Revenue came in just below expectations, however, and the company guided for Q3 revenue of $2.055-$2.085 billion. Investors responded harshly, sending shares from roughly $433 at the open to around $351 after hours, wiping out nearly 20% of the company’s market value.
Why This Matters:
On the earnings call, AppLovin CFO Matt Stumpf disclosed that the SEC closed its inquiry into AppLovin with no recommended enforcement action, ending a months-long cloud over the company that was first reported by Bloomberg back in October 2025. Management emphasized the inquiry was voluntary and was never considered “material.”
Beyond that, management spent much of the call explaining that the quarter’s revenue miss stemmed from the timing of AI model improvements, not weaker advertiser demand. AppLovin’s AI models help advertisers improve campaign performance, which typically leads them to spend more on the platform. CEO Adam Foroughi said a major model upgrade was deployed shortly after the quarter ended, meaning the revenue benefit largely missed Q2 but is already contributing to a stronger start to Q3.
He also pointed to continued momentum in the company’s consumer vertical—its newer business serving e-commerce and other consumer brands beyond mobile gaming—where spend finished 28% above Q4 2025 levels despite Q2 typically being a slower period.
All in all, these were still strong numbers by most standards. But after many outsized, eye-popping beats, investors seem to be demanding near-perfect execution from the AppLovin gang. (As the great philosopher Notorious B.I.G. once said: “Mo Money, Mo Problems.”)
Experts React:
One analyst pressed the team on what caused the weaker-than-expected quarter. Foroughi leaned into AI, acknowledging that AI model development isn’t always predictable.
“The impact was just smaller in Q2, followed by a pretty material uplift in Q3, in the early part of Q3. That’s just the reality of when you’re building models… There are going to be periods where we don’t get material lifts. There are going to be other periods where we have huge lifts.”
He reiterated that the stronger model improvements are already live, which is why the company believes “Q3 has started really well” and why it issued stronger guidance for the current quarter.
Our Take:
Success giveth, and success taketh away. A key question is whether AppLovin can keep delivering the kind of performance that has made it one of adtech’s biggest growth stories.
The other thing to watch is competition. AppLovin has become one of the most closely watched companies in adtech, and success tends to attract challengers—from more pure-play mobile specialists to traditional adtech getting in on the mobile action. With the expected competition, investors will be watching. (Us, too.)
