AppLovin generated $715.4 million in revenue in Q1 2023, representing a 14% increase from $625.4 million the same period in 2022, according to its latest financial report.
The quarter also saw the company receive $61 million due to income from operations, compared to an operational loss of $128 million in Q1 2022. This suggests that the company has successfully rebounded following the turbulence that epitomised the industry in 2022.
A slim majority of AppLovin’s revenue came from apps, which accounted for $360.6 million – 50.4% of the total. The company’s software platform generated $355 million, the remaining 40.6%.
In comparison, Q1 2022 saw the company draw $506.6 million from apps, compared to $118.9 million for the software platform – an 81% – 19% split. This indicates that the company’s software platform has gone from strength to strength, from a minor part of the company’s income to standing on close to equal footing with its app portfolio.
The rise of software
“In the first quarter, we achieved our highest quarterly Software Platform revenue at $355 million, growing 199% year-over-year (8% growth after excluding the impact of publisher bonuses in the prior year period),” reads the company’s shareholder’s letter. “The 8% increase in revenue was primarily driven by partial stabilisation in the mobile app ad market and continued improvements in our core advertising technology resulting in higher revenue per install from our advertising solutions, and a modest contribution from our acquisition of Wurl.”
Adjusted EBITDA stood at $273.7 million, a slight year-on-year decrease from $276.2 million. The company is operating at an adjusted EBITDA margin of 38% compared to 44% in the same period of 2022.
While apps were just ahead ahead in terms of revenue, the company’s software platform continues to outperform in terms of adjusted EBITDA, standing at $218.7 million compared to $55 million – 79% of the total EBITDA. This suggests that, while the company still makes the larger share of its revenue from apps, its software platform is on the rise
We listed AppLovin as one of the top 50 mobile game makers of 2022.