AppLovin stock plunges 20% as top-line miss and soft guidance overshadow profit

Investing.com -- AppLovin Corporation (NASDAQ: APP) saw its shares crater 20% after delivering second-quarter results that proved sky-high profit growth isn’t always enough for Wall Street. Despite surging year-over-year earnings, the marketing software titan missed sales targets and issued a lukewarm forecast for the quarter ahead.

The marketing platform company posted adjusted earnings per share of $3.76 for the quarter ended June 30, narrowly beating the analyst consensus of $3.75. However, revenue of $1.92 billion fell short of the $1.94 billion estimate, despite climbing 53% YoY from $1.26 billion in the prior-year period. For the third quarter, AppLovin guided revenue to a range of $2.06 billion to $2.09 billion, with a midpoint of $2.07 billion slightly below the analyst consensus of $2.08 billion.

The company reported net income of $1.27 billion for the second quarter, up 55% from $820 million in the same period last year. Adjusted EBITDA reached $1.61 billion, representing a 58% increase from $1.02 billion in the prior-year quarter.

AppLovin generated $869.0 million in net cash from operating activities and $863.3 million in free cash flow during the quarter.

For the third quarter, the company projected adjusted EBITDA in the range of $1.71 billion to $1.74 billion, with an adjusted EBITDA margin of 83%

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