Applovin APP · USD

Segment and Geographic InformationThe Company determines its operating segments based on how its Chief Operating Decision Maker ("CODM") manages the business, allocates resources, makes operating decisions and evaluates operating performance. The Company’s CODM is its Chief Executive Officer.As disclosed in Note 2—Summary of Significant Accounting Policies and Note 3—Discontinued Operations, on June 30, 2025, the Company completed the divestiture of its Apps Business, which constituted the former Apps segment. Following the divestiture, the Company has determined that it operates the remaining business as a single operating and reportable segment at the consolidated level. Accordingly, the Company classified the Apps Business as discontinued operations in its consolidated statements of operations and excluded the Apps Business from both continuing operations and segment results for all periods presented. The Company’s single segment provides end-to-end advertising solutions including Axon Ads Manager, MAX, Adjust, and Wurl, that allow businesses to reach, monetize and grow their global audiences. Revenue is primarily generated from fees paid by advertisers for the placement of ads on mobile applications owned by Publishers.As a single reportable segment entity, the Company has determined that its measure of profit or loss is net income from continuing operations, which is the measure most consistent with U.S. GAAP. The CODM uses net income from continuing operations to allocate resources during the annual budgeting and forecasting process, evaluate operating strategies, and assess performance across periods.The table below is a summary of the segment net income from continuing operations, including significant segment expenses (in thousands): Year Ended December 31,202520242023Revenue$5,480,717 $3,224,058 $1,841,762 Less:Datacenter costs542,674 392,498 251,197 Personnel related expenses207,278 259,711 230,762 Interest expense and loss on settlement of debt207,016 317,209 273,508 Provision for income taxes519,715 22,419 43,776 Amortization, depreciation and write-offs130,724 128,791 119,152 Stock-based compensation207,958 357,431 342,551 Other expenses1232,157 156,475 122,990 Net income from continuing operations$3,433,195 $1,589,524 $457,826 1 Other expenses include professional services costs, facilities costs, advertising costs, software costs, and other individually insignificant costs.

Commitments and ContingenciesCommitments—As of December 31, 2025, the Company's non-cancelable minimum purchase commitments totaled $702.8 million, which were primarily related to a multi-year contractual arrangement with a cloud computing services provider. In August 2024, the Company amended its agreement with the provider, committing to spending a minimum of $1.3 billion over a three-year period. By December 31, 2025, the Company had made payments of $579.3 million towards this commitment.As of December 31, 2025, future minimum payments under these non-cancelable purchase commitments with a remaining term in excess of one year were as follows (in thousands):2026$398,524 2027304,322 Thereafter— Total non-cancelable purchase commitments$702,846 Contingencies—From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated.Legal Proceedings—The Company is involved from time to time in litigation, claims, and proceedings. The outcomes of the Company’s legal proceedings are inherently unpredictable and subject to significant uncertainty.The Company records a liability for loss contingencies when it is probable that a loss has been incurred and the amount can be reasonably estimated. If a loss is reasonably possible and the amount or range of loss can be reasonably estimated, the Company discloses the estimated loss or range of loss. The Company monitors legal matters and evaluates developments that could affect previously accrued amounts or related disclosures, or whether a previously unaccrued or undisclosed matter requires accrual or disclosure, and adjusts accruals and disclosures as appropriate. Determining the likelihood of loss and the amount or range of loss involves significant judgment. Based on its current knowledge, the Company does not believe the ultimate resolution of its outstanding legal and regulatory matters will have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows. However, if one or more of these matters were resolved against the Company for amounts in excess of the Company’s expectations, the Company’s results of operations, financial position, or cash flows could be materially affected.

DebtThe Company’s outstanding debt consisted of the following (in thousands):As of December 31,202520242029 Notes$1,000,000 $1,000,000 2031 Notes1,000,000 1,000,000 2034 Notes1,000,000 1,000,000 2054 Notes550,000 550,000 Total principal amount3,550,000 3,550,000 Less: unamortized debt discount and issuance costs(37,013)(41,017)Long-term debt$3,512,987 $3,508,983 As of December 31, 2025, the future principal payments for the outstanding debt were as follows (in thousands):2026 through 2028$— 20291,000,000 Thereafter2,550,000 Total future principal payments$3,550,000 Senior NotesIn December 2024, the Company issued $3.6 billion in aggregate principal amount of senior notes, consisting of $1.0 billion in aggregate principal amount of 5.125% notes due December 1, 2029 (the "2029 Notes"), $1.0 billion in aggregate principal amount of 5.375% notes due December 1, 2031 (the "2031 Notes"), $1.0 billion in aggregate principal amount of 5.500% notes due December 1, 2034 (the “2034 Notes”), and $550.0 million in aggregate principal amount of 5.950% notes due December 1, 2054 (the "2054 Notes", and collectively with the 2029 Notes, the 2031 Notes and 2034 Notes, the "Senior Notes"). Interest on each series of the Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2025.The Senior Notes are unsecured obligations and are not guaranteed by any of the Company's subsidiaries. The Senior Notes rank equally with all existing and future unsecured and unsubordinated indebtedness of the Company. The Company may redeem the Senior Notes in whole or in part at any time or from time to time at specified redemption prices. In addition, upon the occurrence of certain change of control repurchase events, the Company may be required to repurchase the Senior Notes at a specified repurchase price plus accrued and unpaid interest on the Senior Notes to, but excluding, the repurchase date. The indentures governing the Senior Notes also include customary affirmative and negative covenants (including covenants that limit the Company’s ability and the ability of its restricted subsidiaries to create liens on certain assets to secure debt, enter into sale and leaseback transactions, and, with respect to the Company, consolidate or merge with or into, or sell or otherwise dispose of all or substantially all of its assets, in each case subject to certain exceptions), events of default, and other customary provisions.

Income TaxesIncome before income taxes for the years ended December 31, 2025, 2024, and 2023, included the following components (in thousands):Year Ended December 31,202520242023U.S.$2,210,613 $88,111 $26,138 Foreign1,742,297 1,523,832 475,464 Income before income taxes $3,952,910 $1,611,943 $501,602 Provision for income taxes for the years ended December 31, 2025, 2024, and 2023 consisted of the following (in thousands):Year Ended December 31,202520242023Current:Federal$239,094 $21,659 $34,871 State27,187 9,812 9,937 Foreign259,750 156,891 52,804 Total current526,031 188,362 97,612 Deferred:Federal(13,565)(134,189)(43,193)State 407 (8,881)(4,553)Foreign6,842 (22,873)(6,090)Total deferred(6,316)(165,943)(53,836)Total provision for income taxes$519,715 $22,419 $43,776 The reconciliation of federal statutory income tax rate to the effective income tax rate after the adoption of ASU 2023-09 is as follows (in thousands):Year Ended December 31,2025Tax provision at U.S. federal statutory rate$830,036 21.0 %State income tax, net of federal benefit1 18,017 0.5 %Foreign tax effectsSingaporeStatutory tax rate difference between Singapore and U.S.(66,298)(1.7)%Local taxes at a rate different than the statutory tax rate2 (33,280)(0.8)%Withholding taxes65,733 1.7 %Other foreign jurisdictions(592)— %Effect of cross-border tax laws Global intangible low-taxed income43,051 1.1 %Foreign-derived intangible income(113,539)(2.9)%Foreign tax credits (84,591)(2.1)%Other10,513 0.3 %Tax creditsResearch and development credit(16,122)(0.4)%Changes in valuation allowances4,833 0.1 %Nontaxable or nondeductible itemsStock-based compensation(132,975)(3.4)%Other25,024 0.6 %Changes in unrecognized tax benefits.(7,515)(0.2)%Other (22,580)(0.6)%Total provision for income taxes$519,715 13.1 %1The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include New York state and city and New Jersey.2The tax benefit related to the negotiated tax rate in Singapore was reduced by $82.7 million of the global minimum tax under Pillar 2.The reconciliation of taxes at the federal statutory rate to our provision for income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows (in thousands):Year Ended December 31,20242023Tax provision at U.S.

Stock-based Compensation2021 Equity Incentive PlanThe 2021 Equity Incentive Plan (the “2021 Plan”) provides for the grant of incentive stock options ("ISOs"), non-qualified stock options ("NSOs"), restricted stock, RSUs, and other forms of equity awards to the Company’s employees, directors and consultants. A total of 39,000,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2021 Plan. The number of shares available for issuance under the 2021 Plan also include an annual increase of shares, equal to the least of (a) 39,000,000 shares, (b) five percent (5%) of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (c) such other amount as the Company’s board of directors may determine. As of December 31, 2025, there were 86,064,412 shares available for future issuance under the 2021 Plan.2021 Partner Studio Incentive PlanThe 2021 Partner Studio Incentive Plan (the “2021 Partner Plan”) provides for the grant of NSOs, restricted stock, RSUs, and other forms of equity awards to individuals or entities engaged by the Company to render bona fide services. As of December 31, 2025, there were 1,541,811 shares available for future issuance under the 2021 Partner Plan.Employee Stock Purchase PlanThe ESPP permits participants to purchase shares of the Company’s Class A common stock through contributions of up to 15% of their eligible compensation. The ESPP provides for consecutive, overlapping 24-month offering periods, during which the contributed amount by the participant will be used to purchase shares of the Company’s Class A common stock at the end of each 6-month purchase period with the purchase price of the shares being 85% of the lower of the fair market value of the Company’s Class A common stock on the first day of an offering period or on the exercise date. The ESPP has an automatic reset feature, whereby the offering period resets if the fair value of the Company’s common stock on a purchase date is less than that on the original offering date. No participant may purchase, in any one purchase period, more than 590 shares of Class A common stock, or 3,500 shares of Class A common stock for offering periods commencing on or after May 20, 2023. Participants may end their participation at any time during an offering and will be paid their accrued contributions that have not yet been used to purchase shares.

LeasesThe Company has entered into various non-cancelable operating and finance leases primarily for its office facilities and servers and networking equipment. These leases have remaining lease terms of less than 1 year to 7 years, some of which include options to extend the leases for up to 5 years. The components of lease costs recognized in the Company's consolidated statements of operations were as follows (in thousands):Year Ended December 31,202520242023Finance lease cost:Amortization of right-of-use assets$19,938 $24,308 $22,673 Interest6,395 9,231 7,036 Operating lease cost13,467 14,916 16,304 Variable lease cost and other5,098 4,820 4,465 Total lease cost$44,898 $53,275 $50,478 Maturities of lease liabilities as of December 31, 2025 were as follows (in thousands):OperatingLeasesFinance Leases202615,162 22,500 202712,408 22,483 20285,276 22,218 2029809 22,131 2030— 22,131 Thereafter— 28,809 Total lease payments33,655 140,272 Less: amount representing interest(1,901)(17,619)Present value of future lease payments31,754 122,653 Less: current obligations under leases(13,943)(17,481)Non-current lease obligations$17,811 $105,172 Supplemental balance sheet information related to lease liabilities was as follows:As of December 31,20252024Weighted-average remaining lease term:Finance leases6.3 years6.0 yearsOperating leases2.4 years3.2 yearsWeighted-average discount rate:Finance leases4.4 %5.7 %Operating leases5.2 %5.2 %Supplemental cash flow information related to leases was as follows (in thousands):Year Ended December 31,202520242023Cash paid for amounts included in the measurement of lease liabilities:Operating cash flows for operating leases$16,240 $16,332 $16,781 Operating cash flows for finance leases$6,395 $9,231 $7,036 Financing cash flows for finance leases$18,669 $20,875 $20,170 As of December 31, 2025, the Company did not have any significant lease that had not yet commenced.

Risk Management and StrategyWe have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes into our overall risk management systems and processes. We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on, or conducted through, our information systems, that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.We conduct periodic risk assessments to identify potential cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats. The frequency of these risk assessments is based on the potential risk and criticality to our business systems. The risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential impact and damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.Following these risk assessments, we evaluate how to reasonably address identified gaps in existing safeguards to minimize identified risks and regularly monitor the effectiveness of our safeguards. We devote significant resources and designate high level personnel, including our Head of Information Security and Compliance, to manage the risk assessment and mitigation process.As part of our overall risk management system, we monitor and test our safeguards, in collaboration with human resources, IT, and management. Personnel at all levels and departments are made aware of our cybersecurity policies and educated about cybersecurity best practices through annual company-wide cybersecurity training, regular phishing simulations and cybersecurity reminders, and role-based training, as appropriate.Our cybersecurity risk management program is closely based upon recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and certain other applicable industry standards. In 2024, we obtained our ISO/IEC27001 certification. We engage consultants and third parties in connection with our risk assessment processes.

EquityPreferred StockThe Company’s amended and restated certificate of incorporation authorizes the issuance of preferred stock from time to time in one or more series. The Company's board of directors is authorized to determine the designation, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions.Common StockThe Company’s amended and restated certificate of incorporation authorizes the issuance of Class A common stock, Class B common stock, and Class C common stock (collectively referred to as the “Common Stock”). The rights of the holders of the Common Stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share, each share of Class B common stock is entitled to 20 votes per share, and Class C common stock is not entitled to vote, except as otherwise required by law. The holders of the Class B common stock (the “Voting Agreement Parties”) have entered into a voting agreement (the “Voting Agreement”), which provides that all shares of Class B common stock held by the Voting Agreement Parties and their respective permitted entities and permitted transferees will be voted as determined by Adam Foroughi and Herald Chen. In the event that the parties disagree, the shares of Class B common stock will be voted by each party in their own discretion. One share of Class B common stock is convertible into one share of Class A common stock voluntarily at any time by the holder, and will convert automatically into one share of Class A common stock upon (1) certain transfers or (2) the date set by the Company's board of directors, between 61 days and 180 days following the date on which (i) the Voting Agreement is terminated or (ii) Adam Foroughi is no longer involved with the Company as a member of the Board or as an executive officer. After the conversion or exchange of all outstanding shares of the Company’s Class B common stock into shares of Class A common stock, all outstanding shares of Class C common stock will automatically convert into Class A common stock on a one-for-one basis at the date or time determined by a majority of the outstanding shares of Class A common stock, voting as a separate class.