AppLovin stock surges, but what does the company do?
AppLovin has been making waves on Wall Street, with its stock soaring more than 700% in 2024 and experiencing a 30% increase in 2025 after reporting impressive earnings. The company’s market cap has surpassed $170 billion, putting it ahead of major corporations like Uber, Pfizer, Boeing, and Starbucks. But what exactly does AppLovin do?
While some may think it has something to do with a comedic fake ID from the movie “Superbad,” AppLovin is actually a gaming company that has transitioned into a software business. According to the company’s 10Q report from November, AppLovin is a key player in the advertising landscape, offering a comprehensive software platform that helps businesses connect with audiences worldwide and enhance their monetization strategies.
Looking beyond the surface, AppLovin operates a platform similar to a marketplace where app developers can showcase ads to assist brands in reaching new users who may download their apps. The company generates its revenue primarily through two main avenues:
1. Advertising: Formerly known as the “Software Platform” division, AppLovin earns the majority of its revenue by facilitating connections between advertisers and digital advertising inventory owners through auctions conducted at a large scale and high speed. In 2024, this segment brought in approximately $3.2 billion, accounting for 68% of the company’s total revenue. Whenever a user views an ad delivered by the AppLovin network, the company receives compensation.
2. Apps: AppLovin’s technology is often involved in scenarios where users make hefty in-app purchases in games. This portion of the business generated around $1.5 billion in revenue in 2024, sourced from fees collected from users who buy virtual goods to elevate their gaming experiences.
Despite its origins as a gaming company, AppLovin has shifted focus towards bolstering its advertising initiatives. According to reports, the company is divesting its remaining gaming studios for approximately $900 million to streamline its operations as a pure advertising platform, as per CEO Adam Foroughi’s vision.
Additionally, AppLovin is capitalizing on the potential of artificial intelligence (AI) to enhance its offerings. The company has emphasized its AI capabilities like “AXON,” a self-learning AI model that leverages extensive first-party data obtained from its gaming titles.
Overall, AppLovin’s success on the stock market is a testament to its innovative approach to advertising and software solutions. As it continues to evolve and adapt to market trends, the company’s future prospects remain promising, solidifying its status as a prominent player in the digital advertising landscape.
