We came across a bullish thesis on AppLovin Corporation on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on APP. AppLovin Corporation’s share was trading at $651.18 as of September 23rd. APP’s trailing and forward P/E were 89.45 and 48.08, respectively according to Yahoo Finance.
AppLovin Corporation (APP) delivered an exceptional Q2 2025, posting revenue growth of 77% YoY, driven by its transition from a mobile gaming publisher to a pure-play AI-powered advertising technology platform. The divestiture of its Apps business to Tripledot Studios for $400 million has allowed the company to focus entirely on its high-growth Software Platform, which now powers the core of its business.
AppLovin operates globally, connecting over 1.4 billion daily active users through its AI-driven AXON engine, MAX ad mediation platform, and AppDiscovery user acquisition platform. The company benefits from a deep moat supported by economies of scale, network effects, proprietary intellectual property with 536 patents, and moderate-to-strong switching costs for advertisers and publishers. AXON’s predictive algorithms optimize campaigns in real time, leveraging massive data to improve advertiser ROI and publisher yields, while the MAX platform ensures high fill rates and automated optimization, further entrenching AppLovin’s competitive advantage.
The company’s Q2 performance reflects accelerating revenue growth across key products, with Software Platform revenue reaching $1.26 billion and adjusted EBITDA margin improving to 81%. Core gaming advertising drove 30–40% YoY growth, while e-commerce expansion and the upcoming launch of Axon Ads Manager are expected to unlock additional international and small-business revenue. AppLovin is increasingly recognized as a top-tier adtech platform, consistently ranked just behind Google and Meta, with strong retention and share-of-wallet gains in gaming and e-commerce.
Profitability metrics have strengthened dramatically, with gross, EBITDA, and net margins rising above 80%, supported by disciplined cost management and shareholder-friendly capital returns. Despite trading at a forward EV/Sales of 35.9x, the premium is justified by high revenue growth, robust free cash flow, and the potential for further international expansion, making AppLovin a compelling investment with both strong near-term execution and long-term upside.
Previously we covered a bullish thesis on AppLovin Corporation (APP) by Jimmy Investor in March 2025, which highlighted its shift to a pure-play AI-powered ad tech platform, high-margin software, and strong financials. The stock has appreciated approximately 152% since coverage as growth and margins continued to improve. The thesis still stands, and Sergey shares a similar perspective but emphasizes Q2 performance and international expansion.
