AppLovin delivered a surprise beat on revenue and EBITDA during its latest quarter, driven by the success of its Axon 2, the next-generation machine learning technology.
The company's quarterly revenue reached an impressive $864.3 million, smashing the consensus estimate of $798 million.
Additionally, earnings per share (EPS) for the quarter exceeded expectations at $0.30, compared to the projected $0.27.
It was the firm’s largest beat ever, analysts at Bank of America noted.
Axon 2.0, played a pivotal role in the success, driving Software revenues to $504 million, a significant increase and a testament to its advanced capabilities.
Software revenues witnessed a remarkable 65% year-over-year (YY) increase, well above Street, guidance, and Bank of America estimates.
Gaming revenues performed slightly better than expected, driven by the usage of Axon 2.0 for first-party gaming apps.
Applovin’s 4Q guidance implies an 83% year-over-year Software growth, showcasing the ongoing strength and potential for AppLovin's software segment.
Management expressed confidence in the company's machine learning technologies, emphasizing their sophistication compared to other broker ad networks, including large internet companies.
Bank of America analysts raised the price target on Applovin to $57, citing a multi-year growth story emerging, especially with the potential of Axon 2.0 and AppDiscovery penetrating non-gaming verticals.
Shares of the company were up around 0.5% on Thursday afternoon in New York.