Applovin Corporation is a mobile technology company headquartered in Palo Alto, California. The company was founded in 2012 and initially operated in stealth mode until 2014. It is currently one of the fastest growing companies in its industry. With millions of users, Applovin provides a range of mobile apps that help consumers find and share content on their devices. The company’s flagship product, the Applovin app, enables users to connect with friends and family and even send them messages.
Game developer AppLovin
Game developer AppLovin has announced that it has sold its marketing services business to MoPub, which reaches over 1.5 billion addressable users. AppLovin’s business model is split between games and marketing tools, with the former generating revenue from the sale of virtual items. The company was founded in 2011 and initially focused on helping mobile game developers earn money. Its software platform was later expanded to include game development as well, with the help of investors such as KKR.
Marketing tools
The AppLovin Marketing Tools help app developers optimize their mobile app monetization and user acquisition strategies. The platform contains a comprehensive set of tools for developers to discover and target users with a personalized message. These tools measure and automate app marketing campaigns. The company is headquartered in Palo Alto, California, and has offices globally. Here are the advantages of AppLovin Marketing Tools. They improve user acquisition, engage more users, and improve app conversions.
Games
In 2016, there were over two billion mobile game users worldwide, and AppLovin’s Software Platform Enterprise Clients (SPECs) grew by 41% YoY and increased by 40% QoQ. The company reports that its BSP generated a 279% net-dollar retention rate of existing SPECs and a 37% increase in its average revenue per in-app purchase. AppLovin makes its revenue from in-app purchases (IAPs) driven by its acquired apps, with the remainder coming from its portfolio prior to 2020. The company’s newest acquisitions also increased its COGS.
Growth prospects
With its rapidly growing mobile marketing platform and machine learning capabilities, AppLovin should see continued growth in the near future. While Apple’s crackdown on mobile advertising is likely to have an impact, AppLovin stands to benefit from the growing number of mobile apps. As a result, the company is likely to reach profitability sooner than expected. In May, it raised its revenue forecast for fiscal 2020 and fiscal 2021. Nevertheless, investors should stay cautious while looking at AppLovin’s growth prospects.
Costs
The first-quarter revenue of AppLovin was $625 million, up 3.5% from the year-ago quarter. Wall Street had estimated $814.9 million in sales. However, AppLovin reported a non-GAAP loss of $0.31 per share, much less than the $0.08 loss per share analysts expected. As a result, AppLovin lowered its full-year revenue guidance. However, the company remained confident that it would meet or exceed its revenue targets in 2019.
Strategy
While the overall growth rate for AppLovin remains strong, the company’s strategy is changing. With its recent flywheel model and international expansion, the company hopes to continue its rapid growth. Mobile advertising spending is booming worldwide, with current TAM of $200 billion and projected growth of 10% CAGR over the next couple of years. Meanwhile, AppLovin’s apps revenue is growing at an 80% YoY rate, demonstrating the strength of its product portfolio. The company is slowly shifting its revenue mix to first-party Consumer Revenues, replacing its Core Technology.
