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Call sheet · Q4'25

AppLovin (APP)

Q4'25 earnings call · held February 11, 2026 · compared with the Q3'25 call · management-credibility review
9/12
Disclosure score
-
Financial quality
Bottom line
The sleeper story everyone's missing: AppLovin's e-commerce business is nowhere near ready for primetime - they need 50x more creative density and have a 43% funnel breakage rate, making the 'billions of incremental revenue' timeline much longer than bulls expect. The obvious headline is Meta competition fears, but Foroughi's confidence is striking and historically accurate: 'Every time this has happened...you've never seen that happen.' The real binding constraint isn't competition - it's advertiser density and model maturity in non-gaming verticals. His honesty about e-commerce challenges ('starting from a worse place...very little data penetration') is refreshing but pushes meaningful contribution further out. My view changes if they show >70% qualified-to-live conversion rates or >5,000 active e-commerce advertisers by Q2.

The 30-second version

  • SLEEPER: E-commerce conversion rates are still dogshit - AXON 2 dominance is masking fundamental model immaturity
  • Gaming sequential growth in Q1 means AXON is still ripping, but they're marketing-gating e-commerce GA
  • Meta bidding expansion isn't the threat - it's proof their moat works exactly as advertised

What changed this quarter

MetricQ3'25Q4'25Change
Revenue$1.405B (+68% YoY)$1.66B (+66% YoY)18% sequential jump, slight decel
Adjusted EBITDA$1.158B (+79% YoY, 82% margin)$1.4B (+82% YoY, 84% margin)+200bps margin expansion
Free Cash Flow$1.049B (+92% YoY)$1.31B (+88% YoY)+25% sequential acceleration
Q1 Revenue GuideTypical seasonal decline expected$1.745-1.775B (5-7% sequential growth)Massive guide beat vs seasonality
Share Repurchases$571M in Q3$482M in Q4Still aggressive at scale
Cash Balance$1.7B end Q3$2.5B end Q4+$800M buildup
E-commerce Go-Live RateNot disclosed57% of qualified leads go live43% breakage rate revealed
E-commerce Weekly GrowthNot disclosed~50% week-over-week since Oct 1New disclosure but small base
Marketing LTV:CACNot disclosed~30-day breakeven on AXON marketingStrong unit economics revealed
Ad Creative Count GapNot disclosedGaming: tens of thousands vs E-com: hundreds50x density gap exposed

Accountability tracked

8 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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This is a free preview. The full write-up and promise ledger are published to subscribers on Substack.
Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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