Q1 2026 revenue was $1.84 billion, up 59% YoY and 11% sequentially, driven by gaming and consumer vertical growth (CFO).
Adjusted EBITDA was $1.56 billion, up 66% YoY, representing an 85% margin — a new high, expanding ~400 bps YoY (CFO).
Free cash flow was $1.29 billion; full-year 2026 FCF conversion expected to normalize to ~75% of EBITDA (CFO).
Consumer vertical exited Q1 strong: March grew ~25% more than January, and April set a record month in advertiser spend, higher than any peak Q4 month (CEO).
Gaming partners are adopting hybrid monetization (IAP + ads), with non-gaming advertisers (e.g., cookware, fashion) reducing competitive concerns for IAP-only games (CEO).
Platform opens to the public in June 2026, enabling self-serve access for advertisers globally (CEO).
Q1 share repurchases: 2.23 million shares for $1 billion; $2.3 billion remaining under authorization; 336 million shares outstanding (CFO).
Cash and cash equivalents at quarter end: $2.76 billion (CFO).
"The future has never looked better. We just delivered another quarter where we beat our own guidance." (CEO)
"The consumer vertical is growing even faster than gaming. This is still only a 1.5-year-old product." (CEO)
"When we open up our platform in June... that is when this thing just continues to compound." (CEO)
"Q1 was a beat across every metric with margins at a new high and significant cash returned to shareholders." (CFO)
"We are building a system where an advertiser can onboard, generate high-performing ads and scale campaigns profitably without ever needing to talk to a human." (CEO)
Prepared Metrics
Metric
Value
Speaker/Context
Revenue
$1.84B
Q1 2026, +59% YoY (CFO)
Adjusted EBITDA
$1.56B
Q1 2026, 85% margin (CFO)
Free Cash Flow
$1.29B
Q1 2026 (CFO)
Cash & Equivalents
$2.76B
End of Q1 2026 (CFO)
Shares Outstanding
336M
End of Q1 2026 (CFO)
Share Repurchase
$1B (2.23M shares)
Q1 2026 (CFO)
Remaining Buyback Authorization
~$2.3B
As of Q1 2026 (CFO)
Q2 2026 Revenue Guidance
$1.915B – $1.945B
+52%–55% YoY (CFO)
Q2 2026 Adj. EBITDA Guidance
$1.615B – $1.645B
Margin ~84%–85% (CFO)
Q&A Batch (1-5 of 16)
Q1 — Matthew Cost
Topic: Product roadmap and GenAI creative tool update
Key points:
AXON 2.0 has delivered 12 straight quarters of fast growth, driven by new products (e.g., longer-dated gaming models) and model improvements.
A recent model breakthrough caused a "big acceleration" exiting Q1; April Q2 growth was "bigger than any quarter that we had in Q4," unusual for e-commerce (normally Q1 drops vs. Q4).
GenAI creative tool: interactive page generator rolled out to all customers with "widespread adoption"; video side still in testing, to be rolled out to all accounts shortly.
Mgmt stance: Bullish – model improvements and GenAI tools are driving accelerating growth and solving advertiser creative resource constraints.
Q2 — Omar Dessouky
Topic: Gaming business growth trends and GPU capacity
Key points:
Gaming vertical grew 59% year-over-year in Q1, with Q-over-Q growth vs. Q4 despite 2 fewer days post-holidays; no slowdown since AXON 2.0 launch.
Hybrid monetization (IAP + ads) is "explosive growth" on the platform; long-term gaming growth guidance remains 20%-30% (stated 6-8 quarters ago), but actual growth has been "way over" those rates.
GPU capacity: works with Google Cloud, can go to any cloud; needs to continue buying GPUs as models get more complex and customers increase.
Mgmt stance: Bullish – gaming growth continues to exceed long-term guidance; GPU capacity is not a competitive differentiator vs. Google/Facebook, but technology lead and data drive success.
Q3 — Jason Bazinet
Topic: Hybrid monetization mix and market opportunity
Key points:
In-app purchase (IAP) market is ~$100 billion, mature; hybrid category growth has been "phenomenal" – e.g., a Turkish company with ~12 people sold for nearly $1 billion ~6 months after launch, with vast majority of UA on AppLovin.
In a mobile game, sub-10% of users pay in a short window (28-day optimization); layering hybrid monetization creates "10x the market opportunity" for the same customer.
Ad-supported market is smaller but growing "way faster" than single-digit IAP market; expects convergence over next 5 years.
Mgmt stance: Bullish – hybrid monetization dramatically expands addressable market for developers and AppLovin, driving strong growth.
Q4 — James Heaney
Topic: New customer onboarding breakage and marketing spend
Key points:
Breakage resolution: delivering video out of the box is the main fix, rolling out over next few weeks before general release; AI-generated ads are "really, really tough to tell" from human-made, with "exceptionally low" cost.
Platform opening in June; projecting well over $70,000/year in ad spend from every new customer; if 100,000 customers sign in the next year, first-year revenue would be roughly $7 billion.
Marketing spend: performance marketing with 30-day breakeven; may see temporary increase in sales & marketing costs for general audience launch and brand awareness (e.g., podcasts, social media ads).
Mgmt stance: Bullish – breakage nearly resolved; customer lifetime value is high ($70k+/year), and disciplined marketing spend signals profitable returns.
Q5 — Stephen Ju
Topic: Consumer segment expansion and inventory opportunity
Key points:
Over 1 billion daily active users; current conversion rate on 1,000 impressions is "pretty low," expected to improve with model and advertiser density gains.
Inventory expansion: IAP-only publishers – e.g., Activision/King got ad revenue to 15% of IAP market (~$15B); most apps don't run ads, so even half adopting creates a $7.5 billion publisher opportunity.
AppLovin is not competitive with most publishers (except large walled gardens); e-commerce ads would place well on non-gaming platforms (e.g., social, music, streaming).
Mgmt stance: Bullish – large inventory expansion opportunity from IAP publishers and non-gaming verticals, with no competitive conflict for most publishers.
Q&A Batch (6-10 of 16)
Q6 — Benjamin Black
Topic: Advertiser success factors on Axon and gaming tailwinds from App Store fee cuts
Key points:
Ad creative matters: 10-second social ads do not suit 30-second video spots; advertisers must build creative for the platform.
Low demand density currently causes same advertiser to appear 5 times in a row, hurting conversion; future density will serve 5 different ads, raising conversion rates.
Game developers are risk-averse; no massive change in net economics to game developers from App Store fee cuts yet.
Mgmt stance: Neutral – success depends on advertiser adaptation; long-term opportunity large but conversion improvement requires more advertiser density.
Q7 — Alec Brondolo
Topic: Distribution strategy for new long-tail apps (Vibe-coded, prosumer-created)
Key points:
March app additions to app stores up ~170% year-over-year; many new apps are Vibe-coded and created by prosumers.
Question asks whether mediation solution needs to change to reach this new long tail.
Mgmt stance: No stance provided – management did not answer this question in the input.
Q8 — William Lampen
Topic: Hybrid conversion monetization improvements and gaming vs. non-gaming bidding dynamics
Key points:
Developers saw 10x improvements in monetization net of hybrid conversion changes.
Gaming business drove most of the growth in a huge growth quarter; no cannibalization seen from e-commerce/consumer advertisers.
More e-commerce/consumer brands bring more data, benefiting both gaming and non-gaming advertisers.
Game developers using hybrid monetization strategies and App Store fee cuts will drive monetization and reach.
Mgmt stance: Bullish – no cannibalization, data benefits all advertisers, and ecosystem expansion is expected.
Q9 — Adam Foroughi
Topic: Model improvement pace (1.3% from advertiser onboarding and model enhancements)
Key points:
1.3% improvement comes from advertiser onboarding and model enhancements; team is more sophisticated in testing.
AI research space (large language models) is seeing fast improvement; same trends apply to the company.
Faster model improvements seen across both consumer and gaming businesses; no reason to expect slowdown.
Better return on ad spend drives same-store growth; opening platform to new advertisers and data adds excitement.
Mgmt stance: Bullish – team’s smarter testing and AI trends will sustain improvement and growth.
Q10 — Robert Sanderson
Topic: Video creation tool testing, model sourcing, compute costs, and audience targeting learnings
Key points:
Video creation tool is new; adoption and volume are low; tool is days away from rollout.
More creatives catered to the platform drive up spend; tool targets long-tail and e-commerce/consumer brands, not top gaming companies (some have 50,000+ ads live).
Compute costs use third-party services; no margin compression expected; can charge or cap credits if adoption is high.
Sora 2 is a good product but its deprecation did not impact the company; uses multiple models (open/closed source) and optimizes for best results.
Audience targeting (discovery, prospecting, universal campaigns) unlocks greater aggregate budget; customers use a mix of all three.
Mgmt stance: Bullish – tool beneficial for smaller customers; cost manageable; model flexibility ensures no disruption; targeting tools drive success.
Q&A Batch (11-15 of 16)
Q11 — Vasily Karasyov
Topic: Connected TV (CTV) vision and development timeline
Key points:
CTV was a 2025 top priority but focus shifted to e-commerce/consumer scaling; CTV still seen as "massively undermonetized" for performance marketing.
Goal: enable SMBs to buy TV ads with proven incremental revenue, using existing creative; currently "early in development" and not yet ready to scale.
Company historically signals new products only when they can "extrapolate to big numbers"; no timeline given for CTV launch.
Mgmt stance: Neutral — CTV is a long-term opportunity, but mgmt is not yet confident enough to discuss specifics or commit to near-term scaling.
Q12 — James Callahan
Topic: Balancing user acquisition between consumer/e-commerce and gaming verticals
Key points:
No cannibalization observed between verticals; single auction platform allocates ads based on demand diversity.
Gaming is "much bigger" than other verticals; mgmt continues to invest in both, with gaming models improving and consumer growing faster.
April step-up in e-commerce driven primarily by model improvements (next release version) that boost ROAS across all advertisers.
Mgmt stance: Bullish — both verticals can grow simultaneously without trade-offs; model improvements are the key driver of success.
Q13 — Robert Coolbrith
Topic: Web shops and generative creative tools for gaming developers
Key points:
Web shops: AppLovin will not enter direct billing, but benefits if developers gain user data/remarketing capabilities; can play a role in ads on checkout pages.
Generative creative: eventual plans for playables and new ad formats; LLMs enable high-iteration ad creation (e.g., 50,000+ ads per customer).
Gaming developers already use AI tools to create ads for Axon platform; benefit will grow as AppLovin builds its own tools.
Mgmt stance: Bullish — sees indirect benefits from web shops and direct benefits from generative AI tools, which are already improving platform engagement.
Q14 — Martin Yang
Topic: Consumer-side growth drivers and gaming feature parity
Key points:
April strength came from both new and existing cohorts; material growth is "almost certainly" from existing customers as product improves.
Growth from current customers is the most important KPI; new customer growth is "inevitable" if current cohorts perform well.
Gaming models evolve as quickly as consumer models; gaming growth is "really, really quickly" due to model improvements.
Gaming advertisers are more sophisticated and need fewer tools; playable generator is planned but consumer vertical is the lowest-hanging fruit.
Mgmt stance: Bullish — existing customer growth validates model improvements; gaming and consumer both benefit from rapid model iteration.
Q15 — Ralph Schackart
Topic: Macro impact and self-service retention rates
Key points:
No macro impact observed; business sells "revenue and profit" to advertisers, making it insulated from macro trends; most customers are Western.
Self-service retention: customers who reach 30 days of spend "almost never churn"; low churn due to strong out-of-box ROAS.
Product offering has less than 30-day breakeven on marketing spend; net dollar retention is "pretty strong" for long-term cohorts.
Mgmt stance: Bullish — macro-insulated business model and high retention rates support confidence in scaling self-service customers profitably.