AppLovin Stock Rockets 23% After Hours as CEO Calls Last Quarter’s Miss ‘Our Own Foot Fault’

On Wednesday, AppLovin Corp. (NASDAQ:APP) CEO Adam Foroughi pushed back against concerns about intensifying competition in the advertising technology market. He said the company’s previous-quarter shortcomings were largely self-inflicted.

AppLovin shares gained 10.69% during Wednesday’s regular trading session, closing at $271.75. The stock subsequently jumped 22.83% to $333.80 in after-hours trading, according to Benzinga Pro.

AppLovin CEO Pushes Back Against Competition Concerns

During the company’s third-quarter earnings call, Ralph Shackert, an analyst at William Blair, asked Foroughi to address competitive concerns that had emerged following AppLovin’s previous earnings report.

Foroughi acknowledged that industry checks showed several competing companies were performing well but argued that their growth did not necessarily threaten AppLovin’s business.

“The industry checks out there show you all other companies are performing really well in the market,” Foroughi said.

He said that the digital advertising market was not a “zero-sum” game, arguing that improvements across competing advertising platforms could help customers build more profitable businesses.

According to the CEO, AppLovin’s advertising model offers a different value proposition than competing platforms. As multiple companies improve their technology, advertisers can benefit from better outcomes rather than simply shifting spending between providers.

CEO Attributes Previous Weakness to Internal Execution

Foroughi also revisited the competitive concerns raised during the previous earnings call, pushing back against the suggestion that rival companies’ growth had hurt AppLovin.

He said the company’s earlier performance issues were not the result of competitors gaining an advantage.

“It was our own foot fault,” Foroughi said, pointing to the latest quarterly performance as evidence, noting that AppLovin delivered a “massive quarter” even as multiple competitors reported strong performance.

AppLovin Beats Q3 Earnings Estimates, Issues Strong Outlook

AppLovin reported third-quarter revenue of approximately $2.19 billion, topping analyst expectations of $2.08 billion. The company also posted earnings of $4.30 per share, beating the consensus estimate of $4.07 per share.

For the fourth quarter, AppLovin forecast revenue between $2.365 billion and $2.395 billion, ahead of analyst estimates of $2.25 billion. The company expects adjusted EBITDA to range from $1.995 billion to $2.025 billion.

In the previous quarter, AppLovin reported revenue of $1.924 billion, falling short of analyst expectations of $1.935 billion. At the time, the company posted earnings of $3.76 per share, surpassing the consensus estimate of $3.67 per share.

Benzinga Edge Stock Rankings show that APP has a negative price trend across the short, medium and long term, while its Growth score ranks in the 99th percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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