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AppLovin faces growth skepticism after guidance miss in Q2 results
Bank of America cut its 2027 revenue growth forecast to 23% from 31% and lowered its EBITDA estimate to $8.3 billion from $9 billion after AppLovin missed Q2 guidance.
AppLovin reported Q2 revenue of $1.92 billion, up 53% year over year, but the quarter also missed management guidance, according to Yahoo Finance.
CEO Adam Foroughi said the pace of improvement to its ad models was lighter than normal during the quarter, and he added that management data did not indicate weaker advertiser demand or a tougher competitive environment, with the business already reaccelerating in the third quarter.
Bank of America said engineer-led improvements to AppLovin's gaming models appear to be the main driver of quarterly growth, but the bank raised doubt about whether a previously assumed 3% to 5% sequential lift from self-learning still holds, given AppLovin's market position.
The bank trimmed its 2027 revenue growth forecast to 23% from 31%, lowered its 2027 EBITDA estimate to $8.3 billion from $9 billion, and cut its price target to $400 from $430, suggesting the company could be viewed more as a maturing ad tech platform unless future model upgrades prove out.