Outside of the infrastructure space, one of the biggest artificial intelligence (AI) winners has been AppLovin (NASDAQ: APP).
The adtech platform has driven tremendous growth since the introduction of its Axon 2.0 engine in 2023, and that growth has shown no signs of letting up when the company recently reported its first-quarter results after the bell on May 6
Despite its continued strong operational performance, the stock is still down around 25% year to date. However, it is up 40% over the past year and up more than 750% over the past five years. Let’s take a closer look at its Q1 results and prospects to see if the stock is a buy.
Strong growth continues One of the most impressive things about AppLovin’s run since the introduction of Axon 2.0 in 2023 is that not only has it helped drive revenue growth, but it’s also helped expand its margins significantly. This continued in Q1, with the company growing its revenue by 59% to $1.84 billion, while its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins expanded by 400 basis points to 85%. Its gross margins came in at 89%, up from 86.8% a year ago.