AppLovin Corporation (NASDAQ:APP) Q1 2024 Earnings Call Transcript

Vasily Karasyov: Thank you very much.

Operator: And our next question will come from Martin Yang with OpCo.

Martin Yang: Hi. Thank you for taking my question. In your shareholder letter, you highlighted that underlying advertising market have grown year-over-year. And can you maybe comment on, what’s from your view, how much have that market grow in 1Q and you have the number, how much has the market grow in 4Q?

Adam Foroughi: You’re asking how much of the market grow from quarter-over-quarter or year-over-year?

Martin Yang: If you have both year-over-year numbers for 1Q and 4Q, respectively.

Adam Foroughi: It’s very hard for us to understand the whole ad market. And it’s also like I’m not sure the whole ad market has ever been fairly defined. Is it the global advertising spend? Is it the global advertising spend in mobile apps? Like, what we look at when we talk about growth are the two areas that drive our business. One, IAP category, so we talk about mobile gaming as a vertical a lot. When we talk about the advertising market, in large part, we’re talking about the MAX marketplace that’s growing quite a lot, double-digit plus year-over-year, but we don’t disclose what the annual year-over-year growth is of the actual MAX marketplace.

Martin Yang: Got it. So is it right to you — so you — are you assuming MAX marketplace is a good proxy for the world market?

Adam Foroughi: For mobile gaming, advertising, yes, given our leadership position in the category and what we’ve talked about percentage of market share of the MAX product that we think it’s so diversified at this point that it is a very good proxy for the growth in advertising-based mobile gaming businesses.

Martin Yang: Got it. My next question is on your net revenue per install and volume both install. This quarter, it’s 5% and 87% respectively. The net revenue per install change on a year-over-year basis is very different from preceding quarters. How should we interpret those two numbers and the changes? Is there any — a relationship between the two that tell us, underlying changes in the market?

Matt Stumpf: Yeah. So, I think we’ve talked about this in the past, Martin, that when you see a very large increase in the volume of installations as we were talking about in this quarter that — that’s correlated to an increase in advertiser spend. So, as a result, year-over-year, right, comparing to Q1 of 2023 to Q1 of 2024, we saw the AXON on launch during that period. And so, as a result of that, we saw advertisers increase their spend pretty dramatically over the last four quarters.

Martin Yang: Got it. Thank you.

Operator: That concludes today’s question-and-answer session and today’s webinar. We thank you all for your participation and we look forward to seeing you next quarter. Take care until then.

Adam Foroughi: Thanks everyone.