What To Expect From AppLovin’s (APP) Q1 Earnings

Jabin Bastian /
2022/05/10 7:01 am EDT

Mobile app advertising platform AppLovin (NASDAQ: APP) will be reporting results tomorrow after market hours. Here's what to expect.

Last quarter AppLovin reported revenues of $793.4 million, up 55.6% year on year, beating analyst revenue expectations by 2.2%. Despite the strong topline growth, it was a weaker quarter for the company, with full year guidance missing analysts' expectations.

Is AppLovin buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting AppLovin's revenue to grow 35.2% year on year to $817 million, slowing down from the 132% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.44 per share.

AppLovin Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing four downward revisions over the last thirty days. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time since going public on average by 4.75%.

Looking at AppLovin's peers in the sales and marketing software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. PubMatic delivered top-line growth of 25% year on year, beating analyst estimates by 0.15% and Sprout Social reported revenues up 40.6% year on year, exceeding estimates by 2.08%. Pubmatic traded flat on results, and Sprout Social was up 3.7%. Read our full analysis of PubMatic's results here and Sprout Social's results here.

Tech stocks have been under pressure since the end of last year and software stocks have been swept alongside with it, with share price down on average 25.6% over the last month. AppLovin is down 39.2% during the same time, and is heading into the earnings with analyst price target of $86.8, compared to share price of $30.3.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.