AppLovin Corporation Q1 FY2026 earnings call

Adam Ferughi emphasized the strong performance of gaming and consumer verticals. Gaming benefits from AI enabling studios to improve and launch new games, and a hybrid monetization model. Consumer vertical is scaling fast with a recent model release improving scale and return on ad spend. Matt Stump discussed financials: Q1 revenue growth, adjusted EBITDA growth and margin, free cash flow, and outlook for Q2 2026 with revenue and adjusted EBITDA ranges

Gaming remains the foundation, performing well with AI enabling studios to improve and launch new games faster and cheaper, and a hybrid monetization model showing explosive growth. The consumer vertical is growing even faster than gaming, still a year-and-a-half-old product, with a recent material model improving scale and return on ad spend for consumer advertisers, March growing roughly 25% more than January and April reaching a record month in advertiser spend. Q1 revenue was $1.84 billion, up 59% year-over-year and 11% sequentially. Adjusted EBITDA was $1.56 billion, up 66% year-over-year with an 85% margin, margins expanding ~400 basis points from the same period last year. Free cash flow for the quarter was $1.29 billion

Expects Q2 2026 revenue between $1.915 and $1.945 billion, 52 - 55% YOY growth or 4 - 6% sequential growth. Adjusted EBITDA expected between $1.615 and $1.645 billion with ~84 - 85% margin

Includes questions and answers like Matthew Cost asking about product roadmap breakthroughs in consumer vertical and Gen AI creative tool uptake; Omar from B of A asking about gaming business growth, step-ups, and GPU capacity; Jason Bazinet asking about hybrid monetization mix in gaming and consumer; James Heaney asking about new customer onboarding flow breakage and marketing expense for Acton launch; Steven Ju asking about transportability of consumer efforts to other verticals and inventory expansion with IAP-only publishers; Benjamin Black asking about success and friction with consumer advertisers and gaming tailwind; Alex Brandolo asking about app store growth impact on mediation and social media app interest; Clark Lampin asking about hybrid conversion comparison between gaming and non-gaming advertisers; Rob Sanderson asking about video creation tool testing, Sora impact, and compute costs; Vasily Tarasov asking about Connected TV vision; Jim Callahan asking about balancing user acquisition between consumer and gaming verticals; Robert Culbreth asking about web shop data capture and creative tools; Martin Yang asking about consumer side growth breakdown; Ralph Shockert asking about macro impact and self-service retention rates; Tim Mullen asking about strategy with multiple verticals