In the third quarter, AppLovin reported revenue of $475 million, representing a 68% year-over-year increase, while adjusted EBITDA margins expanded to 82%, up from 74% in the prior-year period. Management emphasized that this margin improvement reflects the company’s ad-tech scalability, with lower incremental costs per ad served and streamlined infrastructure investments. Operating cash flow rose by 55% to $210 million, and free cash flow increased 62% to $160 million, underscoring that growth is now driven by efficiency gains rather than pure volume expansion.

AppLovin’s Axon AI engine processed over 200 billion ad requests during the quarter, optimizing targeting across 1.3 million active advertisers. For the first time, the platform captured a significant share of holiday shopping budgets in categories such as e-commerce, fintech and automotive, with non-gaming ad spend growing 120% year-over-year. A self-service beta launched in October added 4,500 new small-to-medium-sized businesses, and internal tests show that campaigns run through Axon deliver a 35% higher return on ad spend compared with legacy offerings.

In November, AppLovin signed a definitive agreement to sell its mobile gaming division for $900 million—$500 million in cash and $400 million in equity—allowing the company to redeploy capital into its core advertising platform. The divestment eliminates a 12% drag on consolidated margins and frees up engineering and data science resources to accelerate feature development for Axon. Executives project that reinvestment of proceeds will enable 20% faster rollout of generative creative tools and expanded server capacity to support 2x growth in daily active ad campaigns over the next 12 months.