What To Expect From AppLovin’s (APP) Q3 Earnings

Anthony Lee /
2023/11/07 2:03 am EST

Mobile app advertising platform AppLovin (NASDAQ: APP) will be reporting earnings tomorrow after market hours. Here's what you need to know.

Last quarter AppLovin reported revenues of $750.2 million, down 3.4% year on year, beating analyst revenue expectations by 3.6%. It was an impressive quarter for the company, with optimistic revenue guidance for the next quarter and a significant improvement in its gross margin.

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 11.8% year on year to $797.4 million, improving on the 1.9% year-over-year decline in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.61 per share.

AppLovin Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates three times over the last two years.

Looking at AppLovin's peers in the sales and marketing software segment, some of them have already reported Q3 earnings results, giving us a hint what we can expect. Zeta delivered top-line growth of 24.1% year on year, beating analyst estimates by 5.7% and Sprout Social reported revenues up 31% year on year, exceeding estimates by 1.6%. Zeta traded flat on the results, Sprout Social was up 16.9%.

Read our full analysis of Zeta's results here and Sprout Social's results here.

Tech stocks have had a rocky start since 2022 and while some of the sales and marketing software stocks have fared somewhat better, they have not been spared, with share price declining 4.4% over the last month. AppLovin is down 3.3% during the same time, and is heading into the earnings with analyst price target of $43.8, compared to share price of $39.5.

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.

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