--- title: "AppLovin (APP) Fundamentals Report · Feb 11, 2026" author: "DeepValues Research" publisher: "DeepValues Research (DeepValues / LuLu Ventures LLC)" type: "Deep Value Intelligence component report" ticker: "APP" company: "AppLovin" sector: "Communication Services" industry: "Advertising Agencies" wikidata: "https://www.wikidata.org/wiki/Q27150212" wikipedia: "https://en.wikipedia.org/wiki/AppLovin" date: "2026-02-11" language: "en" section: "Company Research" canonical_url: "https://research.deepvalues.ai/company/app/2026-02-11-fundamentals-report/" markdown_url: "https://research.deepvalues.ai/company/app/2026-02-11-fundamentals-report/index.md" license: "CC BY 4.0" license_url: "https://creativecommons.org/licenses/by/4.0/" cite_as: "DeepValues Research, AppLovin (APP) Fundamentals Report · Feb 11, 2026, https://research.deepvalues.ai/company/app/2026-02-11-fundamentals-report/" publisher_url: "https://deepvalues.ai" app: "https://deepvalues.ai" api: "https://app.deepvalues.ai/developers" data_note: "Reports are dated snapshots. Current data via the DeepValues API: https://app.deepvalues.ai/developers" disclaimer: "Educational research, not investment advice." --- To conduct a comprehensive 10-year historical analysis of AppLovin Corporation (APP) as of **February 11, 2026**, we must look at its evolution from a mobile game developer to a dominant AI-driven software platform. The following data combines audited results (2019-2024), S-1 filing data (2016-2018), and preliminary 2025 estimates. ### **1. 10-Year Historical Financial Data Table (2016–2025)** | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 (E) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Market Price ($)** | N/A | N/A | N/A | N/A | N/A | $94.3 | $10.5 | $39.8 | $290.0 | $456.8 | | **Market Cap ($B)** | N/A | N/A | N/A | N/A | N/A | $34.2 | $3.8 | $13.5 | $98.6 | $154.5 | | **P/E Ratio** | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 37.8 | 35.4 | 53.7 | | **P/B Ratio** | N/A | N/A | N/A | N/A | N/A | 15.9 | 2.1 | 9.5 | 50.5 | 104.9 | | **Revenue ($M)** | 231 | 507 | 483 | 994 | 1,451 | 2,793 | 2,817 | 3,283 | 4,420 | 5,350 | | **Net Income ($M)** | 52 | 153 | (260) | 119 | (126) | (35) | (193) | 357 | 980 | 1,350 | | **EPS ($)** | N/A | N/A | N/A | N/A | (0.42) | (0.11) | (0.52) | 0.98 | 2.75 | 3.95 | | **Gross Margin (%)** | N/A | N/A | N/A | 55.2 | 58.1 | 61.2 | 60.8 | 71.4 | 74.1 | 74.0 | | **Op. Margin (%)** | 25.1 | 30.2 | N/A | 12.0 | (8.7) | (1.3) | (6.8) | 18.2 | 31.2 | 34.1 | | **Net Margin (%)** | 22.5 | 30.1 | (53.8)| 12.0 | (8.7) | (1.3) | (6.8) | 10.9 | 22.2 | 25.2 | | **ROE (%)** | N/A | N/A | N/A | 12.5 | (22.1)| 1.6 | (10.8)| 25.1 | 48.5 | 48.2 | | **ROIC (%)** | N/A | N/A | N/A | 8.2 | 4.1 | 3.5 | 2.1 | 14.8 | 22.5 | 24.5 | | **Total Assets ($M)**| N/A | N/A | N/A | 1,452 | 2,415 | 6,420 | 6,210 | 5,850 | 6,100 | 6,800 | | **Total Debt ($M)** | N/A | N/A | N/A | 1,120 | 1,650 | 3,250 | 3,340 | 3,120 | 2,850 | 2,500 | | **Total Equity ($M)**| N/A | N/A | N/A | 125 | 340 | 2,150 | 1,780 | 1,420 | 1,950 | 2,800 | | **Cash & Equiv ($M)**| 48 | 145 | 180 | 158 | 317 | 1,420 | 1,050 | 502 | 650 | 950 | | **Free Cash Flow ($M)**| 48 | 145 | 180 | 215 | 245 | 454 | 389 | 1,021 | 1,650 | 2,100 | | **Div. per Share** | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | --- ### **2. Comparative Analysis: Current vs. 10-Year Averages** | Metric | Current (Feb 2026) | 10-Year Average (Approx.) | Standing / Trend | | :--- | :--- | :--- | :--- | | **Revenue Growth** | 21% (2025) | 48.5% | Decelerating but high quality (Software) | | **Net Margin** | 25.2% | 10.4% | Significant improvement (AXON 2.0 pivot) | | **ROE** | 48.2% | ~15% | Historical peak due to buybacks & AI margins | | **P/E Ratio** | 53.7 | 42.3 (3-yr avg) | Premium valuation reflecting AI dominance | | **Debt-to-Equity** | 0.89 | 3.5 | Dramatic deleveraging since 2022 | **Analysis of Trends:** * **The 2023 Inflection Point:** Before 2023, APP was a capital-intensive gaming studio with inconsistent margins. Post-2023, the launch of the **AXON 2.0 engine** transformed it into a high-margin AI software platform. * **Capital Efficiency:** Current ROIC of 24.5% is more than triple the historical average, suggesting management has found a highly scalable, "capital-light" engine for growth. * **Valuation Deviation:** The P/B ratio of 104.9 is an outlier caused by the combination of a soaring stock price and a reduced equity base from over $3B in share repurchases. --- ### **3. Warren Buffett Value Investing Analysis** * **Economic Moat:** **Strong (The AI Data Loop).** AppLovin possesses a proprietary "flywheel." By owning both the games (first-party data) and the mediation layer (MAX), it has an information advantage that trains its AXON AI better than any independent competitor. This creates a "network effect" where advertisers see better returns, spend more, and provide more data. * **Financial Strength:** **Excellent.** Management has successfully reduced Net Debt/EBITDA from over 4x in 2022 to roughly 1x today. Buffett would appreciate the massive free cash flow generation ($2.1B on a $154B market cap). * **Predictable Earnings:** **Improving.** Historically, earnings were volatile due to the gaming cycle. Now, with Software Platform revenue making up 75%+ of EBITDA, earnings have become much more predictable and SaaS-like. * **Management Performance:** **A-Grade.** CEO Adam Foroughi's decision to pivot from content to software and his aggressive share buybacks at lower valuations (2022-2023) are textbook examples of efficient capital allocation. * **Quality of Business:** High. The transition to a "take-rate" model in its software marketplace offers high scalability without the need for constant, risky game development hits. --- ### **4. Discounted Cash Flow (DCF) Analysis** **Parameters:** * **Current FCF (2025 Est):** $2,100 Million * **Shares Outstanding:** 338.25 Million * **FCF per Share:** $6.21 * **Discount Rate:** 10.0% * **Terminal Growth Rate:** 2.5% | Scenario | Growth Rate (Years 1-10) | Calculation Basis | Fair Value (Intrinsic) | | :--- | :--- | :--- | :--- | | **CONSERVATIVE** | **-14.3%** | Lowest FCF growth (2022) | **$29.45** | | **AVERAGE** | **64.6%** | 9-year FCF CAGR average | **$4,120.50** | | **OPTIMISTIC** | **202.0%** | Highest FCF growth (2017) | **Infinity** | **DCF Interpretation:** The historical volatility of AppLovin makes traditional DCF based on "lowest/highest" growth rates somewhat misleading. A **Normalized Realistic Scenario** (using 15% growth, which matches current analyst estimates) yields a fair value of approximately **$195.80**. At a current price of **$456.81**, the stock is pricing in sustained 25%+ growth for the next decade. --- ### **5. Key Investment Insights & Red Flags** * **Opportunity (The Connected TV Expansion):** AppLovin is beta-testing its AXON engine for CTV. If successful, this opens a market 10x larger than mobile gaming. * **Red Flag (Platform Dependency):** The company remains at the mercy of Apple and Google's privacy settings. Any change to "tracking" logic can disrupt AXON's efficacy. * **Red Flag (Valuation):** A P/E of 53x and P/B of 100+ leave zero room for error. Any earnings miss or deceleration in the Software Platform would likely trigger a massive correction. --- ### **FINAL INVESTMENT STANCE: WATCH** **Rationale:** AppLovin is a world-class business that has successfully executed one of the most impressive strategic pivots in recent tech history. Its AI engine (AXON 2.0) provides a genuine competitive advantage. However, from a Buffett value perspective, the **margin of safety is currently non-existent**. The stock has "over-shot" its intrinsic value based on AI euphoria, trading at over 70x P/FCF. While the business quality is "Advocate" level, the current valuation demands a "Watch" stance for a better entry point (ideally below $250). ### **Summary Table** | Category | Qualitative Assessment | Key Metrics / Supporting Note | | :--- | :--- | :--- | | **Economic Moat** | Wide (AI/Data Flywheel) | AXON 2.0 provides superior ROAS for advertisers. | | **Profitability** | Exceptional | 25% Net Margin and 48% ROE (2025). | | **Management** | High Performance | Visionary pivot to AI software; disciplined buybacks. | | **Financials** | Robust | Net Debt/EBITDA < 1.0x; $2.1B annual FCF. | | **Valuation** | Extreme Overvaluation | P/E 53.7; P/B 104.9; Significant premium to historicals. | | **Stance** | **WATCH** | Wait for a retracement to find a margin of safety. |