AppLovin to sell apps business for $900m as it focuses on ads

• AppLovin generated $4.7 billion in revenue in 2024, $3.2 billion of which came from advertising

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AppLovin intends to sell all of its apps business in the first quarter of 2025 for an estimated $900 million.

Following significant growth in its ads business throughout 2024, AppLovin CEO and co-founder Adam Foroughi shared plans to prioritise ads going forward during the mobile ad platform’s Q4 2024 earnings call, as spotted by Mobilegamer.biz.

The company has already signed an exclusive terms sheet, though the acquirer was not disclosed.

AppLovin has a number of partner studios, including Lion Studios, Machine Zone, Belka Games, Magic Tavern and PeopleFun.

Ads vs apps

AppLovin reported total revenue of $4.7 billion in 2024, marking a 43% increase year-over-year. Across the full year of 2024, net income increased by 343% Y/Y to almost $1.6bn.

Advertising revenue contributed $3.2bn, up 75% Y/Y and accounting for 68% of the total revenue figure. 

By comparison, app revenue increased by just 3% Y/Y to $1.5bn, comprising 32% of total revenue.

AppLovin’s adjusted EBITDA for its ads business was also substantially stronger than in apps, at $2.4bn versus $277m for the full year of 2024. Advertising adjusted EBITDA increased by 91% Y/Y compared to its app category’s 22% rise.

Looking at the last quarter specifically, AppLovin’s advertising revenue totalled $999.5m compared to its apps’ $373.3m. The latter actually declined by 1% Y/Y.

On this basis, and after eyeing up non-gaming growth for some time, the decision has been reached to sell “all” of its apps business.

“We’ve never been a game developer at heart,” said Foroughi.

AppLovin CFO Matt Stumpf explained: “We’re excited to announce we’ve signed a terms sheet to divest our apps business. Total estimated consideration is $900 million, including $500 million in cash with the remainder representing a minority equity stake in the combined private company.

“Subject to regulatory clearance, we hope to close this transaction in the coming quarter and look forward to seeing the success of this business under new leadership.”

Broadening horizons

Speaking to the recent success of AppLovin’s advertising business, Foroughi commented: “Historically, most of our ads focused on advertising for other games, but now we’re attracting a broader set of advertisers.

“We’ve now also validated that our platform’s success isn’t only limited to direct-to-consumer brands. Early pilots have shown positive outcomes for a range of advertisers, suggesting that any business in any vertical can harness the power of our platform.

“Where we once focused on gaming, we’re now positioning ourselves to serve the entire global advertising economy.”