Nov 4, 2026: a rally into the report, then a jump after it
AppLovin closed Nov 3 at $245.51, up 7.3% that day from a $228.85 close on Nov 2. Premarket trading on Nov 4 ranged from $242.28 to $251.74. The stock opened at $250.61, made its low of $249.85 in the first minute and climbed most of the day, to a high of $275.48 at 12:59pm. 24/7 Wall St. described "a sharp rally into earnings" and had the stock at $271.96 in the afternoon. It closed at $271.75, up 10.7%, on 10.2 million shares.
What moved the stock:
- Positioning before the print. There was no company news during the session. The rally ran ahead of the report and outpaced the beaten-down internet names: Roblox rose 8.5%, Reddit 5.9%, Unity 4.9%, The Trade Desk 2.9% and Meta 1.4%, while the Nasdaq 100 fund QQQ gained 1.0%.
- The report at 4:05pm. AppLovin released results through Business Wire at 4:05pm ET. The stock dipped to $261.00 at 4:04pm, then reached $291.80 by 4:05pm and $308.50 by 4:07pm.
- The guide and the buyback. 24/7 Wall St. flagged the fourth-quarter guide of up to $2.40 billion and the $3.2 billion buyback addition in its first updates. The stock touched $321.75 at 4:20pm and was $319.50 at 4:22pm.
At the close, RSI(14) stood at 51, the shares sat 6.6% below their 50-day average and 33.9% below their 200-day average, volume ran 2.7 times its 20-day average, and the stock was 63.2% below its 52-week high of $738.01 from December 2025. A move like this one can carry for weeks, as our explainer on post-earnings announcement drift covers, and the rest of the session's movers are in today's biggest stock moves.
The numbers
| Measure | Q3 2026 | Estimate or guide | Q3 2025 | Change |
|---|---|---|---|---|
| Revenue | $2.185 billion | about $2.07 billion consensus | $1.405 billion | +55% |
| Diluted EPS | $4.30 | about $4.03 consensus | $2.45 | +76% |
| Adjusted EBITDA | $1.842 billion | $1.710 to $1.740 billion guide | $1.158 billion | +59% |
| Net income | $1.439 billion | $836 million | +72% | |
| Free cash flow | $1.418 billion | $1.049 billion | +35% |
The quarter beat the company's own August guide of $2.055 billion to $2.085 billion of revenue, which GuruFocus cited before the report. The adjusted EBITDA margin was 84%, against 82% a year earlier, and the net margin was 66%. Other income of $86.0 million, against a $6.6 million expense a year earlier, added to the bottom line, so revenue and adjusted EBITDA are the cleaner read.
The fourth-quarter guide calls for adjusted EBITDA of $1.995 billion to $2.025 billion, an 84% to 85% margin. The revenue midpoint of $2.38 billion would be 8.9% above the third quarter and about 44% above a year earlier. Our guide to guidance changes explains why a forward number this far above consensus often matters more than the quarter itself.
The company's release and financial update give the figures but no management commentary. Chief executive Adam Foroughi and chief financial officer Matthew Stumpf host the webinar at 5pm ET, and the questions that matter are whether the e-commerce advertisers added since June are spending more and how much of the gain came from model updates.
Why the stock had fallen 60%
The decline came in steps, and each one hit the same worry: that AppLovin's ad models had stopped getting better as fast as investors had paid for.
- Feb 12. The stock fell 19.7% to $366.91 the day after its fourth-quarter report.
- July 13. It fell 12.7% to $442.85 after a Bank of America analyst reported slower-than-expected e-commerce ad growth in June, after AppLovin opened its ads platform to all advertisers on June 22, according to the class action complaint.
- Aug 6. It fell 19.7% to $335.67 after second-quarter revenue of $1.92 billion missed the $1.94 billion estimate, Mobile Dev Memo reported. On the call Foroughi said, "Our pace of meaningful model improvement was lighter than normal during the quarter," as 24/7 Wall St. reported.
- Sept 16. A shareholder filed a securities class action, Talbot v. AppLovin, alleging the company overstated how steadily its AI models were improving. The claims are unproven, and the lead plaintiff deadline is Nov 16.
- October. UBS cut its target to $414 from $790 on Oct 28, and Citi and RBC cut theirs to $500, TIKR reported. On Oct 30 the stock fell 10% to $228.50 with no company news, after weak user numbers from Reddit and Roblox, and set its 52-week low of $225.19 that day.
Through all of it the earnings kept rising. TIKR noted the decline came "almost entirely from a lower multiple," with 2026 adjusted earnings estimates up to $16.65 a share from $13.67 a year earlier. At the close the stock traded at 13.8 times forward earnings. Our page on forward against trailing P/E covers the gap.
The bull case
The second-quarter slowdown was the core of the bear case, and the third quarter reversed it. Revenue grew $261 million from the second quarter, more than three times the $82 million sequential gain of the quarter before, and the guide implies another $195 million in the fourth quarter.
Cash generation lets the company shrink its share count while it grows. Free cash flow was $1.4 billion in the quarter, it ended September with $3.17 billion of cash against $3.52 billion of long-term debt, and shares outstanding fell to 331 million from 338 million at the end of 2025. The new $3.6 billion of authorization is about 4% of its $91.3 billion market value at the close. Our explainer on buybacks as catalysts explains when repurchases move a stock. The average analyst target is about $450, 41% above the after-hours price.
The risks
- The rally ran first. The stock rose 18.7% in two sessions before the report, so part of the beat was priced in, and after-hours prices on thin trading often shift by the next open.
- Taxes take a larger share of the cash. AppLovin paid $926 million of cash taxes in the first nine months, against $167 million a year earlier, so free cash flow now trails adjusted EBITDA by more than it did. Third-quarter free cash flow was 77% of adjusted EBITDA.
- Governance and litigation. Holders of about 67% of the voting power, including Foroughi, approved by written consent on Oct 29 a move of the company's incorporation from Delaware to Nevada, which the 8-K filed today discloses. The class action is still at an early stage.
- The ad market is uneven. The Trade Desk is down 65% this year, 24/7 Wall St. reported, and the Oct 30 drop showed how quickly weak numbers from other internet companies spill onto AppLovin.
What comes next
- The open on Nov 5. Whether the stock holds above the $271.75 close tells you whether the after-hours buyers stay. Our guide to preparing for an earnings report covers how the first full session after a print often sets the range.
- The 10-Q. It should show the advertiser mix and any update on the class action.
- Nov 16. The lead plaintiff deadline in Talbot v. AppLovin.
- The fourth-quarter report, expected around February 11, 2027. Revenue of at least $2.365 billion keeps the reacceleration story intact.