Why did Applovin's operating profit soar in late 2024?

Applovin's operating profit soared in late 2024 due to several key factors: 1. **Revenue Surge**: Applovin's revenue increased by 44% year-over-year, reaching $1.37 billion in Q4 2024, surpassing analyst estimates of $1.26 billion. This growth was driven by a 73% increase in advertising revenue to $999.5 million, which offset a 1% decline in apps revenue. The annual revenue for 2024 was $4.7 billion, marking a 43% increase year-over-year. 2. **Earnings Per Share (EPS) Beat Expectations**: Applovin reported an EPS of $1.73 for Q4 2024, significantly exceeding analyst estimates of $1.25. This beat on EPS reflects improved profitability and operational efficiency. 3. **Strong Guidance**: The company provided guidance for Q1 2025, projecting revenue between $1.36 billion and $1.39 billion, higher than analyst estimates of $1.31 billion. This positive outlook likely boosted investor confidence and attracted more investors, increasing the stock price. 4. **Strategic Diversification**: Applovin's expansion beyond gaming into ecommerce and its focus on AI-driven ad personalization and automation have proven successful, contributing to the revenue growth. The CEO's emphasis on self-serve capabilities and the potential to target over 10 million businesses worldwide highlights the company's strategic vision and market opportunity. 5. **Dividend and Buyback**: Applovin announced an additional $2 billion in approved stock buybacks, which can signal to the market that the company's management is confident in its financial health and value creation potential. In conclusion, Applovin's operating profit soar in late 2024 was driven by a combination of revenue growth, earnings beat expectations, strong guidance, strategic diversification, and dividend and buyback announcement. |code|Ticker|Name|Date|Operating Income YoY|market_code| |---|---|---|---|---|---| |APP|APP.O|Applovin|2024 Q1|2071.011586452763|185| |APP|APP.O|Applovin|2024 Q2|293.72176099376406|185| |APP|APP.O|Applovin|2024 Q3|326.71462384554695|185| |APP|APP.O|Applovin|2024 Q4|159.5771232253827|185|