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AppLovin shares fall to 52-week low after Q2 earnings miss
Q2 free cash flow topped $860 million, fueling buybacks at levels that translate to about 1.5% fewer shares year over year on average.
AppLovin shares plunged to a 52-week low after its Q2 earnings report, with investors focusing on near-term headwinds and timing versus the company’s underlying growth, margin strength, and cash generation, according to MarketBeat Ratings.
The outlet pointed to slower rollout of next-gen tools and weaker performance in legacy segments as issues weighing on results. Offsetting factors include double-digit growth, high margins, and an outlook that supports AppLovin’s capital return plans.
In Q2, free cash flow exceeded $860 million, enabling a buyback funded at roughly 63% of quarterly free cash flow. MarketBeat Ratings said this pace is sufficient to reduce the share count by approximately 1.5% on average year over year and 1.6% year to date.
MarketBeat Ratings also highlighted that revenue grew by more than 50% year over year, while the company posted near 88% gross margin and a nearly 78% GAAP operating margin. The report noted the stock reaction reflected expectations after forecasts implied more than 60% YOY growth at the high end, but also said the shortfall versus consensus was slim and the market may have overreacted.