Can AppLovin's 53% Revenue Surge Keep Its Growth Streak Alive?

AppLovin APP extended an unusually consistent top-line climb in the second quarter of 2026. Revenues reached $1.92 billion, rising 53% year over year from $1.26 billion. The latest result also extended the uninterrupted 12-quarter climb shown in the accompanying chart, with sales nearly quadrupling from $504 million in the third quarter of 2023.

Importantly, the expansion was not growth without leverage. Net income advanced 55% to $1.27 billion, while adjusted EBITDA increased 58% to $1.61 billion. The adjusted EBITDA margin widened three percentage points to 84%, and free cash flow totaled $863 million. AppLovin expects third-quarter revenues of $2.06-$2.09 billion, suggesting another sequential record. However, the midpoint implies roughly 8% quarter-over-quarter growth, making the pace of future revenue gains the central issue for investors. Sustaining advertiser demand while scaling newer opportunities will be crucial to extending the streak.

For now, this revenue trajectory keeps APP ahead of its closest rivals.

How Does APP Compare With Its Peers?

The Trade Desk TTD generated second-quarter revenues of $715 million, up only 3%, while its adjusted EBITDA margin contracted to 34%. The Trade Desk retained more than 95% of customers, but its third-quarter revenue outlook of at least $650 million signals near-term pressure. Consequently, The Trade Desk currently trails APP’s growth profile.

Unity Software U delivered stronger momentum: revenues increased 24% to $546 million, helped by 63% growth in strategic Grow revenues. Unity Software also lifted adjusted EBITDA to $160 million from $90 million. Still, Unity Software’s 29% margin remained far below APP’s, highlighting AppLovin’s superior profitability alongside its faster expansion.

APP’s Price Performance, Valuation and Estimates

The stock has declined 53% year to date compared with the industry’s 15% fall.

                                                         Image Source: Zacks Investment Research

From a valuation standpoint, APP trades at a forward price-to-earnings ratio of 17.24, which is below the industry average of 20.2. It carries a Value Score of D.

                                                                Image Source: Zacks Investment Research

The Zacks Consensus Estimate for APP’s 2026 earnings has declined over the past 30 days.

APP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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