filings.toolsItem 8. Financial Statements and Supplementary Data
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Item 8. Financial Statements and Supplementary Data
APPLOVIN CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of AppLovin Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of AppLovin Corporation and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 19, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Performance-based Restricted Stock Units - Refer to Note 2 and Note 11 to the financial statements
Critical Audit Matter Description
In October 2025, the Company granted performance-based restricted stock units ("PSUs") which are eligible to vest based on the achievement of certain market capitalization targets and the satisfaction of service conditions. The grant date fair value of the PSUs was $410.5 million.
A Monte Carlo simulation model was utilized to determine the grant date fair value. The Monte Carlo simulation model utilized the market capitalization of the Company on the date of grant, expected volatility, risk-free interest rate, discount for awards subject to post-vesting restrictions, and dividend yield to calculate the grant date fair value. The valuation assumptions used in the Monte Carlo simulation model had a significant effect on the grant date fair value of the PSUs.
Given the level of judgement involved by management in developing certain of the valuation assumptions and their use of a specialist to determine the grant date fair value of the PSUs and the derived service period, our audit procedures required a high degree of auditor judgement and increased extent of effort, including the need to involve our fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the valuation of the PSUs included the following, among others:
◦We tested the design and operating effectiveness of the Company’s internal controls over the determination of the grant date fair value of the PSUs.
◦We inquired with management regarding the valuation assumptions used in the determination of the grant date fair value of the PSUs.
◦We tested the accuracy of underlying data inputs in the Monte Carlo simulation model, such as grant date, quantity of awards granted, and vesting conditions, among others, back to source documents, such as PSU grant agreements.
◦We evaluated the qualifications of the Company's specialists by assessing their certifications and determining whether they meet the qualifications necessary to perform independent PSU valuations.
◦With the assistance of our fair value specialists, we evaluated management’s valuation of the PSUs and the derived service period by:
I.Evaluating the Monte Carlo simulation model methodology and the reasonableness of the valuation assumptions, including cost of equity, expected volatility, risk-free interest rate, discount for awards subject to post-vesting restrictions, and dividend yield.
II.Independently developing a Monte Carlo simulation model using independently calculated valuation assumptions.
/s/ DELOITTE & TOUCHE LLP
San Jose, California
February 19, 2026
We have served as the Company's auditor since 2015.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of AppLovin Corporation
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of AppLovin Corporation and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 19, 2026, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
San Jose, California
February 19, 2026
AppLovin Corporation
Consolidated Balance Sheets
(In thousands, except per share data)
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 2,487,096 | $ | 697,030 | |||||||
| Accounts receivable, net | 1,819,366 | 1,283,335 | |||||||||
| Prepaid expenses and other current assets | 124,330 | 140,470 | |||||||||
| Current assets of discontinued operations | — | 191,355 | |||||||||
| Total current assets | 4,430,792 | 2,312,190 | |||||||||
| Property and equipment, net | 122,445 | 159,970 | |||||||||
| Operating lease right-of-use assets | 25,457 | 36,473 | |||||||||
| Goodwill | 1,539,986 | 1,457,685 | |||||||||
| Intangible assets, net | 396,714 | 472,851 | |||||||||
| Equity method investments | 287,666 | — | |||||||||
| Other assets | 456,550 | 492,841 | |||||||||
| Non-current assets of discontinued operations | — | 937,249 | |||||||||
| Total assets | $ | 7,259,610 | $ | 5,869,259 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 746,977 | $ | 504,302 | |||||||
| Accrued and other current liabilities | 572,868 | 401,531 | |||||||||
| Operating lease liabilities, current | 13,943 | 14,526 | |||||||||
| Current liabilities of discontinued operations | — | 137,113 | |||||||||
| Total current liabilities | 1,333,788 | 1,057,472 | |||||||||
| Long-term debt | 3,512,987 | 3,508,983 | |||||||||
| Operating lease liabilities, non-current | 17,811 | 31,101 | |||||||||
| Other non-current liabilities | 260,353 | 180,471 | |||||||||
| Non-current liabilities of discontinued operations | — | 1,414 | |||||||||
| Total liabilities | 5,124,939 | 4,779,441 | |||||||||
| Commitments and contingencies (Note 6) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock, $0.00003 par value—100,000 shares authorized, no shares issued and outstanding as of December 31, 2025 and 2024 | — | — | |||||||||
| Class A, Class B, and Class C Common Stock, $0.00003 par value—1,850,000 (Class A 1,500,000, Class B 200,000, Class C 150,000) shares authorized, 338,313 (Class A 307,955, Class B 30,358, Class C nil) and 340,042 (Class A 309,353, Class B 30,689, Class C nil) shares issued and outstanding as of December 31, 2025 and 2024, respectively | 11 | 11 | |||||||||
| Additional paid-in capital | 446,550 | 593,699 | |||||||||
| Accumulated other comprehensive loss | (46,987) | (103,096) | |||||||||
| Retained earnings | 1,735,097 | 599,204 | |||||||||
| Total stockholders’ equity | 2,134,671 | 1,089,818 | |||||||||
| Total liabilities and stockholders’ equity | $ | 7,259,610 | $ | 5,869,259 |
See Accompanying Notes to Consolidated Financial Statements.
AppLovin Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Revenue | $ | 5,480,717 | $ | 3,224,058 | $ | 1,841,762 | |||||||||||
| Costs and expenses: | |||||||||||||||||
| Cost of revenue | 665,140 | 520,613 | 356,613 | ||||||||||||||
| Sales and marketing | 203,651 | 252,863 | 228,025 | ||||||||||||||
| Research and development | 226,510 | 374,710 | 333,781 | ||||||||||||||
| General and administrative | 233,502 | 164,916 | 150,932 | ||||||||||||||
| Total costs and expenses | 1,328,803 | 1,313,102 | 1,069,351 | ||||||||||||||
| Income from operations | 4,151,914 | 1,910,956 | 772,411 | ||||||||||||||
| Other income (expense): | |||||||||||||||||
| Interest expense and loss on settlement of debt | (207,016) | (317,209) | (273,508) | ||||||||||||||
| Other income, net | 8,012 | 18,196 | 2,699 | ||||||||||||||
| Total other expense, net | (199,004) | (299,013) | (270,809) | ||||||||||||||
| Income before income taxes | 3,952,910 | 1,611,943 | 501,602 | ||||||||||||||
| Provision for income taxes | 519,715 | 22,419 | 43,776 | ||||||||||||||
| Net income from continuing operations | 3,433,195 | 1,589,524 | 457,826 | ||||||||||||||
| Loss from discontinued operations, net of income taxes | (99,444) | (9,748) | (101,115) | ||||||||||||||
| Net income | $ | 3,333,751 | $ | 1,579,776 | $ | 356,711 | |||||||||||
| Net income (loss) per share attributed to Class A and Class B common stockholders - Basic: | |||||||||||||||||
| Continuing operations | $ | 10.13 | $ | 4.71 | $ | 1.29 | |||||||||||
| Discontinued operations | (0.29) | (0.03) | (0.28) | ||||||||||||||
| Basic net income per share | $ | 9.84 | $ | 4.68 | $ | 1.01 | |||||||||||
| Net income (loss) per share attributed to Class A and Class B common stockholders - Diluted: | |||||||||||||||||
| Continuing operations | $ | 10.04 | $ | 4.56 | $ | 1.26 | |||||||||||
| Discontinued operations | (0.29) | (0.03) | (0.28) | ||||||||||||||
| Diluted net income per share | $ | 9.75 | $ | 4.53 | $ | 0.98 | |||||||||||
| Weighted-average common shares used to compute net income (loss) per share attributable to Class A and Class B common stockholders: | |||||||||||||||||
| Basic | 338,781 | 336,922 | 351,952 | ||||||||||||||
| Diluted | 341,970 | 347,808 | 362,589 |
See Accompanying Notes to Consolidated Financial Statements.
AppLovin Corporation
Consolidated Statements of Comprehensive Income
(In thousands)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net income | $ | 3,333,751 | $ | 1,579,776 | $ | 356,711 | |||||||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Foreign currency translation adjustment, net of tax | 56,109 | (37,822) | 18,108 | ||||||||||||||
| Other comprehensive income (loss), net of tax | 56,109 | (37,822) | 18,108 | ||||||||||||||
| Comprehensive income | $ | 3,389,860 | $ | 1,541,954 | $ | 374,819 |
See Accompanying Notes to Consolidated Financial Statements.
AppLovin Corporation
Consolidated Statements of Stockholders’ Equity
(In thousands)
| Class A and Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings (Accumulated Deficit) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balances as of December 31, 2022 | 373,874 | $ | 11 | $ | 3,155,748 | $ | (83,382) | $ | (1,169,700) | $ | 1,902,677 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 20,320 | — | 25,998 | — | — | 25,998 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (7,642) | — | (246,435) | — | — | (246,435) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (46,665) | — | (1,153,593) | — | — | (1,153,593) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 352,863 | — | — | 352,863 | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 18,108 | — | 18,108 | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 356,711 | 356,711 | |||||||||||||||||||||||||||||
| Balances as of December 31, 2023 | 339,887 | $ | 11 | $ | 2,134,581 | $ | (65,274) | $ | (812,989) | $ | 1,256,329 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 25,821 | — | 55,596 | — | — | 55,596 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (9,585) | — | (1,152,131) | — | — | (1,152,131) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (16,081) | — | (813,714) | — | (167,583) | (981,297) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 369,367 | — | — | 369,367 | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | (37,822) | — | (37,822) | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 1,579,776 | 1,579,776 | |||||||||||||||||||||||||||||
| Balances as of December 31, 2024 | 340,042 | $ | 11 | $ | 593,699 | $ | (103,096) | $ | 599,204 | $ | 1,089,818 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 4,672 | — | 25,329 | — | — | 25,329 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (890) | — | (382,899) | — | — | (382,899) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (5,511) | — | — | — | (2,197,858) | (2,197,858) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 210,421 | — | — | 210,421 | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 56,109 | — | 56,109 | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 3,333,751 | 3,333,751 | |||||||||||||||||||||||||||||
| Balances as of December 31, 2025 | 338,313 | $ | 11 | $ | 446,550 | $ | (46,987) | $ | 1,735,097 | $ | 2,134,671 |
See Accompanying Notes to Consolidated Financial Statements.
AppLovin Corporation
Consolidated Statements of Cash Flows
(In thousands)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Operating Activities | |||||||||||||||||
| Net income | $ | 3,333,751 | $ | 1,579,776 | $ | 356,711 | |||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Amortization, depreciation and write-offs | 194,778 | 448,680 | 489,008 | ||||||||||||||
| Goodwill impairment | 188,943 | — | — | ||||||||||||||
| Stock-based compensation, excluding cash-settled awards | 210,421 | 369,367 | 363,107 | ||||||||||||||
| Gain on divestiture, net of transaction costs | (106,229) | — | — | ||||||||||||||
| Impairment of investments | 50,000 | — | 27,953 | ||||||||||||||
| Loss on settlement of debt | — | 28,375 | 4,337 | ||||||||||||||
| Change in operating right-of-use assets | 12,295 | 12,689 | 17,842 | ||||||||||||||
| Other | 9,213 | 9,663 | 11,226 | ||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable | (542,219) | (467,028) | (261,279) | ||||||||||||||
| Prepaid expenses and other assets | 134,658 | (185,331) | (133,968) | ||||||||||||||
| Accounts payable | 232,486 | 189,585 | 98,574 | ||||||||||||||
| Operating lease liabilities | (15,229) | (14,106) | (18,612) | ||||||||||||||
| Accrued and other liabilities | 268,226 | 127,341 | 106,611 | ||||||||||||||
| Net cash provided by operating activities | 3,971,094 | 2,099,011 | 1,061,510 | ||||||||||||||
| Investing Activities | |||||||||||||||||
| Purchase of intangible assets | (28,318) | (25,553) | (63,899) | ||||||||||||||
| Purchase of non-marketable equity securities | (20,178) | (76,983) | (17,934) | ||||||||||||||
| Proceeds from divestiture, net of cash divested | 407,297 | — | — | ||||||||||||||
| Other investing activities | (373) | (4,218) | 4,004 | ||||||||||||||
| Net cash provided by (used in) investing activities | 358,428 | (106,754) | (77,829) | ||||||||||||||
| Financing Activities | |||||||||||||||||
| Repurchases of common stock | (2,191,944) | (981,297) | (1,153,593) | ||||||||||||||
| Payments of withholding taxes related to net share settlement | (392,410) | (1,143,525) | (246,435) | ||||||||||||||
| Principal repayments of debt | (200,000) | (4,225,223) | (497,994) | ||||||||||||||
| Payments of deferred acquisition costs | — | — | (33,903) | ||||||||||||||
| Principal payments of finance leases | (18,669) | (20,875) | (20,170) | ||||||||||||||
| Payments of licensed asset obligation | (13,532) | — | (27,110) | ||||||||||||||
| Payments of debt issuance cost | (1,843) | (35,563) | (4,655) | ||||||||||||||
| Proceeds from issuance of debt | 200,000 | 4,614,841 | 395,281 | ||||||||||||||
| Proceeds from issuance of common stock upon exercise of stock options and purchase of ESPP shares | 25,329 | 41,798 | 25,788 | ||||||||||||||
| Net cash used in financing activities | (2,593,069) | (1,749,844) | (1,562,791) | ||||||||||||||
| Effect of foreign exchange rate on cash and cash equivalents | 9,232 | (3,154) | 778 | ||||||||||||||
| Net increase in cash and cash equivalents, including cash classified within current assets of discontinued operations | 1,745,685 | 239,259 | (578,332) | ||||||||||||||
| Less: net decrease in cash classified within current assets of discontinued operations | (44,381) | — | — | ||||||||||||||
| Net (decrease) increase in cash and cash equivalents | 1,790,066 | 239,259 | (578,332) | ||||||||||||||
| Cash and cash equivalents at beginning of the period | 697,030 | 502,152 | 1,080,484 | ||||||||||||||
| Cash and cash equivalents at end of the period | $ | 2,487,096 | $ | 741,411 | $ | 502,152 |
See Accompanying Notes to Consolidated Financial Statements.
AppLovin Corporation
Consolidated Statement of Cash Flows (Continued)
(In thousands)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Supplemental non-cash investing and financing activities disclosures: | |||||||||||||||||
| Non-cash consideration received from divestiture | $ | 285,000 | $ | — | $ | — | |||||||||||
| Right-of-use assets obtained in exchange for lease obligations, net of modifications | $ | (28,570) | $ | 26,325 | $ | 119,911 | |||||||||||
| Accrued withholding taxes related to net share settlement of restricted stock units | $ | — | $ | 8,606 | $ | — | |||||||||||
| Supplemental disclosure of cash flow information: | |||||||||||||||||
| Cash paid for income taxes, net of refunds | $ | 194,843 | $ | 67,332 | $ | 75,433 | |||||||||||
| Cash paid for interest | $ | 198,788 | $ | 270,615 | $ | 248,828 |
See Accompanying Notes to Consolidated Financial Statements.
APPLOVIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business
AppLovin Corporation (the “Company” or “AppLovin”) was incorporated in the state of Delaware on July 18, 2011. The Company is a leader in the advertising industry providing end-to-end advertising solutions that allow businesses to reach, monetize and grow their global audiences.
The Company is headquartered in Palo Alto, California, and has several operating locations in the U.S. as well as various international office locations in North America, Asia, and Europe.
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation—The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP"). Consolidated financial statements include accounts and operations of the Company and its wholly owned subsidiaries. In accordance with the provisions of Accounting Standards Codification ("ASC") 810, Consolidation, the Company is also required to consolidate any variable interest entities ("VIE") when it is the primary beneficiary. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company evaluates its relationships with all VIEs on an ongoing basis. All intercompany transactions and balances have been eliminated upon consolidation.
Certain prior period amounts reported in the Company's consolidated financial statements and accompanying notes have been reclassified to conform to the current period presentation where applicable.
Use of Estimates—The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. The Company bases its estimates on assumptions that are believed to be reasonable under the circumstances. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to valuation of long-lived assets and their associated estimated useful lives, valuation of goodwill, valuation of non-marketable equity securities, valuation of equity method investments, income taxes, stock-based compensation, and other contingent liabilities. These estimates are inherently subject to judgment and actual results could differ materially from those estimates.
Apps Business Divestiture—On May 7, 2025, the Company and its subsidiaries Morocco, Inc. and AppLovin GmbH entered into a purchase agreement with Tripledot and its subsidiaries Eton Games Inc. and Tripledot Group Holdings Limited to sell the equity interests of certain wholly-owned subsidiaries that operated the Company’s Apps business (the “Apps Business”). The sale was completed on June 30, 2025. The Company determined that the divestiture of the Apps Business met the criteria for presentation as discontinued operations in the second quarter of the year ended December 31, 2025, as it represented a strategic shift that had a major impact on the Company’s operations and financial results. Accordingly, the results of the Apps Business, including the gain on divestiture, are reported as discontinued operations in the consolidated statements of operations, and as such, have been excluded from both continuing operations and segment results for all periods presented. Further, the assets and liabilities of the Apps Business were reclassified as assets and liabilities of discontinued operations in the consolidated balance sheets as of December 31, 2024. The consolidated statements of cash flows continue to be presented on a consolidated basis for both continuing and discontinued operations. Certain costs previously allocated to the Apps Business for segment reporting purposes do not meet the criteria for classification within discontinued operations, and as such, these costs were reallocated to continuing operations. In addition, historical intercompany balances and transactions between the Company and the divested Apps Business that were eliminated in consolidation were not included in the results of either continuing or discontinued operations. Unless otherwise indicated, all references in the notes to the consolidated financial statements relate to continuing operations. See Note 3—Discontinued Operations for additional information.
Segment Reporting—Following the divestiture of the Apps Business, the Company has determined that it currently operates as a single operating and reportable segment at the consolidated level. Prior period segment results and related disclosures have been recast to conform to the current period segment presentation. See Note 14—Segment and Geographic Information for further details.
Equity Method Investments—The Company accounts for investments under the equity method when it has the ability to exercise significant influence, but not control, over the financial and operating policies of an investee, unless the fair value option is elected. Equity method investments are initially recorded at cost and subsequently adjusted for the Company’s proportionate share of the investee’s net income or loss and the amortization of basis differences resulting from the excess of the investment cost over the Company’s share of the investee’s underlying net assets. The Company records its share of the investee’s results and any related basis difference amortization one quarter in arrears in other income (expense), net in the consolidated statements of operations. The Company evaluates equity method investments for impairment on an ongoing basis and records an impairment loss when a decline in fair value below carrying value is determined to be other than temporary.
In connection with the sale of its Apps Business, the Company received 596.9 million ordinary shares of Tripledot,
representing approximately a 22% ownership interest, with an estimated fair value of $285.0 million at the acquisition date. The Company accounts for this investment under the equity method. The Company’s share of Tripledot’s income and related basis difference amortization was not material for the year ended December 31, 2025. See Note 3—Discontinued Operations and Note 15—Related Party Transactions for additional information.
Revenue from Contracts with Customers—The Company generates substantially all of its revenue from Axon Ads Manager, the Company's AI-powered advertising solution that matches advertiser demand with publisher supply of advertising inventory through auctions at vast scale and microsecond-level speeds. The Company’s performance obligation is to provide customers with access to its advertising solution, which facilitates the advertisers’ purchase of advertising inventory from publishers on an impression or action basis.
The Company does not control the advertising inventory prior to its transfer to the advertiser because it does not have the substantive ability to direct the use of, or obtain substantially all of the remaining benefits from, the advertising inventory. In addition, the Company is not primarily responsible for fulfillment. Therefore, the Company is an agent in these arrangements and presents revenue net of advertising inventory costs.
The transaction price is determined dynamically based on advertisers’ campaign goals, less consideration paid or payable to publishers. Revenue is recognized for impression-based arrangements when an ad impression is delivered; for action-based arrangements, when the specified action (such as a click or install) occurs.
The Company’s terms and conditions generally stipulate payment terms of 30 days after the end of the month. Substantially all of the Company's contracts with customers are cancelable at any time.
Revenue from other services was not material for any period presented.
The Company presents taxes collected from customers and remitted to governmental authorities on a net basis.
Disaggregation of Revenue—Revenue disaggregated by geography, based on user location, consisted of the following (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | 2,827,248 | $ | 1,726,202 | $ | 1,015,897 | |||||||||||
| Rest of the world | 2,653,469 | 1,497,856 | 825,865 | ||||||||||||||
| Total revenue | $ | 5,480,717 | $ | 3,224,058 | $ | 1,841,762 |
Cash and Cash Equivalents—Cash and cash equivalents primarily consist of cash held in checking and interest-bearing deposit accounts as well as investments in money market funds. The Company classifies highly liquid investments with original maturities of 90 days or less from the date of purchase as cash equivalents.
Non-Marketable Equity Investments—Non-marketable equity securities are investments without readily determinable fair values. For investments that qualify for the net asset value (“NAV”) practical expedient, the Company estimates fair value based on their NAV. All other non-marketable equity securities are accounted for under the measurement alternative and recorded at cost, less any impairment, plus or minus changes resulting from qualifying observable price changes. An impairment loss is recognized when events or circumstances indicate a decline in value. Non-marketable equity securities are included in other assets in the consolidated balance sheets, and changes in carrying amount are included in other income (expense) net in the consolidated statements of operations. See Note 4—Financial Instruments and Fair Value Measurements for additional information.
Accounts Receivable, net—The Company records accounts receivable at the invoiced amount, net of allowance for potentially uncollectible amounts. The Company reviews accounts receivable periodically and estimates the allowance based on known troubled accounts, historical experience, and other currently available evidence. As of December 31, 2025 and 2024, the allowance for uncollectible amounts was not material.
Fair Value of Financial Instruments—The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows:
Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly.
Level 3—Unobservable inputs of which there is little or no market data, which require the Company to develop its own assumptions.
Financial assets measured at fair value on a recurring basis include investments in money market funds and non-marketable equity securities in private equity funds measured using the NAV practical expedient. Financial assets measured at fair value on a nonrecurring basis include non-marketable equity securities in privately held companies. All other financial assets
and liabilities are carried at cost, with fair value disclosed when required. Refer to Note 4—Financial Instruments and Fair Value Measurements and Note 9—Debt for additional information.
Concentration of Credit Risk and Uncertainties—The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, and accounts receivable. The Company maintains its cash and cash equivalents with large, reputable financial institutions in amounts that exceed Federal Deposit Insurance Corporation limits.
The Company performs ongoing credit evaluations of its customers and generally requires no collateral for its accounts receivable. No individual customer represented 10% or more of the Company’s accounts receivable, net as of December 31, 2025 or 2024. No individual customer represented 10% or more of the Company’s total revenue during the years ended December 31, 2025, 2024, or 2023.
Property and Equipment, net—Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is as follows:
| Useful Life | ||||||||
| Leasehold improvements | Over the shorter of useful life (up to 10 years) or lease term | |||||||
| Software and licenses | 3 years | |||||||
| Furniture and fixtures | 3-5 years | |||||||
| Computer equipment | 3-5 years |
When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in operations in the period realized. Maintenance and repairs are charged to operations as incurred.
Leases—Leases consist primarily of operating leases for office facilities and finance leases for servers and networking equipment. The Company determines if an arrangement is or contains a lease at inception. The Company accounts for lease and non-lease components as a single lease component and does not recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less. Payments under the Company's lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, primarily including common-area maintenance, utilities, taxes or other operating costs, which are expensed as incurred and not included in the lease right-of-use assets and liabilities.
Operating and finance lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist primarily of the fixed payments under the arrangement, less any lease incentives. The Company generally uses an incremental borrowing rate estimated based on the information available at the lease commencement date or on the date of lease modification, if applicable, to determine the present value of lease payments unless the implicit rate is readily determinable. The Company estimates its incremental borrowing rate based on the rate of interest it would have to pay to borrow on a collateralized basis with an equal lease payment amount, over a similar term, and in a similar economic environment. Generally, the lease term is based on non-cancelable lease term when determining the lease assets and liabilities. The lease terms may include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current on the Company's consolidated balance sheets. Finance leases are included in property and equipment, net, accrued and other current liabilities, and other non-current liabilities on the Company's consolidated balance sheets.
Operating lease costs are recognized on a straight-line basis over the lease terms. Finance lease assets are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease terms.
Acquisitions—The Company applies a screen test to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets to determine whether a transaction is accounted for as an asset acquisition or business combination.
For transactions accounted for as business combinations, the Company allocates the fair value of acquisition consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, except for revenue contracts acquired, which are recognized in accordance with the Company's revenue recognition policy, based on their estimated fair value, with excess recorded as goodwill. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Acquisition-related costs are expensed as incurred. There were no business combinations during the years ended December 31, 2025 or 2024.
For transactions accounted for as asset acquisitions, the cost, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values. The Company generally includes contingent consideration in the cost of the assets acquired only when the uncertainty is resolved. The Company amortizes contingent consideration adjustments to the cost
of the acquired assets prospectively using the straight-line method over the remaining useful life of the assets. No goodwill is recognized in asset acquisitions. There were no asset acquisitions during the years ended December 31, 2025 or 2024.
Software Development Costs—The Company incurs development costs related to internal-use software. Development costs meet the criteria for capitalization once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Software development costs that meet the capitalization criteria were not material for any period presented.
Goodwill—The Company allocates goodwill to reporting units based on the expected benefit from the business combination. In the event of changes in reporting units, the Company reassigns goodwill using a relative fair value allocation approach. The Company tests goodwill for impairment at the reporting unit level on an annual basis during the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. A goodwill impairment is recognized for the amount that the carrying value of the reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. Refer to Note 3—Discontinued Operations and Note 7—Goodwill and Intangible Assets, Net for additional information.
Intangible Assets—Intangible assets are carried at cost and amortized on a straight-line basis over their estimated useful lives. The Company determines the appropriate useful life of its intangible assets based on their expected cash flows.
Impairment of Long-Lived Assets—The Company reviews long-lived assets that are held and used for impairment whenever events or changes in circumstances indicate the carrying value of an asset or asset group may not be recoverable. If such indicators are present, the Company assesses the recoverability of the asset or asset group by comparing its carrying value to the undiscounted future cash flows expected to be generated by the asset or asset group. If the future undiscounted cash flows are less than the carrying value of the asset or asset group, an impairment charge is recognized by the amount by which the carrying value of the asset or asset group exceeds its estimated fair value. Impairment related to long-lived assets that are held and used was not material for any period presented.
Stock-Based Compensation—The Company measures and recognizes stock-based compensation for share-based awards, primarily including restricted stock units ("RSUs"), performance-based RSUs (“PSUs”) with both service and market-based conditions, stock options and stock purchase rights granted under the Employee Stock Purchase Plan ("ESPP"), based on the grant-date fair value of the awards. The Company accounts for forfeitures for all awards as they occur.
The fair value of RSUs is based on the closing price of the Company's Class A common stock on the grant date, with stock-based compensation recognized on a straight-line basis over the requisite service period, which is generally one or four years.
The fair value of PSUs with both service and market conditions is estimated using the Monte Carlo simulation pricing model, which incorporates various assumptions including the expected stock price volatility, the risk-free interest rate, the expected dividend yield and the discount for awards subject to post-vesting restrictions, with stock-based compensation recognized using the accelerated attribution method over the derived service period, regardless of whether the market conditions are achieved. If the market conditions are achieved earlier than the derived service period, the Company adjusts its stock-based compensation to reflect the cumulative expense associated with the vested awards.
The fair value of stock options and purchase rights granted under the ESPP is estimated using the Black-Scholes option-pricing model, which incorporates various assumptions including the expected term, the expected stock price volatility, the risk-free interest rate, and the expected dividend yield, with stock-based compensation recognized on a straight-line basis over the requisite service period.
Income Taxes—The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize deferred tax assets in the future in excess of their net recorded amount, an adjustment to the deferred tax asset valuation allowance would be made to reduce the provision for income taxes. The Company presents deferred tax assets and liabilities on a net basis by jurisdictional filing group. Net deferred tax assets are included in other assets, while net deferred tax liabilities are included in other non-current liabilities on the Company’s consolidated balance sheets.
The Company records uncertain tax positions on the basis of a two-step process in which determinations are made (1) whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position; and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with a tax authority.
The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets.
Foreign Currency Transactions—Generally, the functional currency of the Company's international subsidiaries is the U.S. dollar. In cases where the functional currency is not the U.S. dollar, the Company translates the financial statements of these subsidiaries to U.S. dollars using the exchange rate at the balance sheet date for assets and liabilities, and average exchange rates during the period for revenue and expenses. The Company records translation gains and losses in accumulated other comprehensive income (loss) as a component of stockholders’ equity. The Company records foreign currency transaction gains and losses from transactions denominated in a currency other than the functional currency of the subsidiary involved in other income (expense), net on the Company's consolidated statements of operations.
Comprehensive Income (Loss)—Comprehensive income (loss) is composed of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) consists of foreign currency translation adjustments.
Net Income (Loss) Per Share Attributable to Common Stockholders—Basic and diluted net income (loss) per share attributable to common stockholders is computed under the two-class method required for participating securities. The Company considers options exercised by non-recourse promissory notes, early exercised unvested stock options, and common stock subject to certain share repurchase agreements to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to participating securities as the holders of these instruments do not have a contractual obligation to share in the Company’s losses. Net income is attributed to common stockholders and participating securities based on their respective participation rights. Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted income (loss) per share attributable to common stockholders is computed by giving effect to all potentially dilutive securities outstanding during the period. For periods in which the Company reports net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because potentially dilutive common shares are anti-dilutive.
As the liquidation and dividend rights are identical for Class A and Class B common stock, the undistributed earnings are allocated on a proportional basis and the resulting basic and diluted EPS are the same for Class A and Class B common stock on an individual or combined basis.
Recent Accounting Pronouncements (Issued and Adopted)—In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes: Improvements to Income Tax Disclosures*,* which requires disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024. The amendment may be applied prospectively or retrospectively, and early adoption is permitted. The Company adopted this ASU for the year ended December 31, 2025 and applied the new disclosure requirements on a prospective basis. For additional information, see Note 13—Income Taxes.
Recent Accounting Pronouncements (Issued and Not Yet Adopted)—In November 2024, the FASB issued ASU 2024-03, Income Statement: Reporting Comprehensive Income-Expense Disaggregation Disclosures, which requires disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The amendments will be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The amendments may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software, which provides updated recognition and disclosure framework for internal-use software costs. The amendments will be effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. The amendments may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial statements in accordance with U.S. GAAP. Per the FASB, the amendment does not intend to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements but rather provide clarity and improve navigability of the existing interim reporting requirements. The amendments will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The amendments may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.
3. Discontinued Operations
Divestiture
On June 30, 2025, the Company completed the sale of its Apps Business, as part of its strategic effort to divest non-core assets and dedicate its resources to advancing its advertising business. In connection with the transaction, the Company received $715.6 million in total consideration, consisting of $430.6 million in cash and 596.9 million ordinary shares of Tripledot,
valued at $285.0 million. These shares represented approximately 22% of Tripledot’s outstanding ordinary shares and 20% of its fully diluted equity capitalization as of the closing date. The cash consideration of $430.6 million includes $400.0 million as specified in the purchase agreement and $30.6 million in purchase price adjustments in accordance with the terms of the purchase agreement.
The fair value of the equity consideration was determined based on the combined value of Tripledot and the Apps Business as of the closing date, estimated using a combination of the market approach, which incorporated valuation multiples of comparable public companies, and the income approach based on projected discounted cash flows. The significant assumptions used included estimates of future revenues and operating expenses, long-term growth rates, working capital requirements and discount rates, which are considered unobservable inputs and are classified as Level 3 within the fair value hierarchy.
For tax purposes, the transfer of certain Apps Business subsidiaries was treated as an asset sale, resulting in a $125.6 million write-off of deferred tax assets, which was included in the provision for income taxes from discontinued operations. The Company derecognized the remaining net assets of $591.2 million and recorded a pre-tax gain of $106.2 million in discontinued operations after giving effect to $18.3 million of transaction costs. The transaction also resulted in a capital loss for income tax purposes of $204.3 million, which was fully offset by a valuation allowance.
The following table summarizes the results of operations classified as loss from discontinued operations, net of income taxes, in the consolidated statements of operations (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Revenue | $ | 640,830 | $ | 1,485,190 | $ | 1,441,325 | |||||||||||
| Costs and expenses: | |||||||||||||||||
| Cost of revenue | 209,442 | 646,193 | 702,578 | ||||||||||||||
| Sales and marketing | 242,547 | 596,346 | 602,693 | ||||||||||||||
| Research and development | 130,298 | 263,979 | 258,605 | ||||||||||||||
| General and administrative | 4,202 | 16,169 | 1,653 | ||||||||||||||
| Goodwill impairment | 188,943 | — | — | ||||||||||||||
| Total costs and expenses | 775,432 | 1,522,687 | 1,565,529 | ||||||||||||||
| Loss from operations | (134,602) | (37,497) | (124,204) | ||||||||||||||
| Other income: | |||||||||||||||||
| Gain on divestiture, net of transaction costs | 106,229 | — | — | ||||||||||||||
| Other income, net | 1,519 | 1,559 | 3,172 | ||||||||||||||
| Total other income, net | 107,748 | 1,559 | 3,172 | ||||||||||||||
| Loss from discontinued operations before income taxes | (26,854) | (35,938) | (121,032) | ||||||||||||||
| Provision for (benefit from) income taxes | 72,590 | (26,190) | (19,917) | ||||||||||||||
| Loss from discontinued operations, net of income taxes | $ | (99,444) | $ | (9,748) | $ | (101,115) |
The following table represents assets and liabilities that are classified as discontinued operations in the consolidated balance sheets for the period presented (in thousands):
| Assets: | As of December 31, 2024 | ||||
| Cash | $ | 44,381 | |||
| Accounts receivable, net | 130,911 | ||||
| Prepaid expenses and other current assets | 16,063 | ||||
| Total current assets of discontinued operations | 191,355 | ||||
| Goodwill | 345,741 | ||||
| Intangible assets, net | 423,826 | ||||
| Other non-current assets | 167,682 | ||||
| Total assets of discontinued operations | $ | 1,128,604 | |||
| Liabilities: | |||||
| Accounts payable | $ | 59,125 | |||
| Accrued and other current liabilities | 45,202 | ||||
| Deferred revenue | 32,786 | ||||
| Total current liabilities of discontinued operations | 137,113 | ||||
| Other non-current liabilities | 1,414 | ||||
| Total liabilities of discontinued operations | $ | 138,527 |
The following table summarizes significant non-cash operating items and capital expenditures related to discontinued operations, as reflected in the consolidated statements of cash flows for the periods presented (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Amortization, depreciation and write-offs | $ | 64,054 | $ | 319,889 | $ | 369,856 | |||||||||||
| Stock-based compensation | $ | 3,663 | $ | 19,024 | $ | 20,556 | |||||||||||
| Goodwill impairment | $ | 188,943 | $ | — | $ | — | |||||||||||
| Acquisition of intangible assets | $ | 22,429 | $ | 15,883 | $ | 52,718 |
Goodwill Impairment
On February 12, 2025, the Company entered into a non-binding term sheet to sell its Apps Business to Tripledot. As of March 31, 2025, the Apps Business was not classified as held for sale, as the criteria required for such classification had not yet been met. However, the Company identified the non-binding term sheet combined with negotiations throughout the first quarter of 2025 to sell the Apps Business as an indicator of impairment for the Apps reporting unit and performed an interim quantitative goodwill impairment test as of March 31, 2025. Based on this assessment, the Company determined that the carrying amount of the Apps reporting unit exceeded its estimated fair value and recorded a non-cash goodwill impairment charge of $188.9 million. This charge was included in loss from discontinued operations, net of income taxes, for the year ended December 31, 2025.
At the time the interim impairment test was performed, the Company had not yet determined the fair value of the total consideration, which was subject to the valuation of the equity consideration at the closing of the transaction. As a result, the Company estimated the fair value of the Apps reporting unit using the discounted cash flow method of the income approach. Key valuation inputs included projected future cash flows, risk-adjusted discount rates and long-term growth rates, which are based on management’s estimates and assumptions believed to be reasonable and reflective of known market conditions as of the interim impairment test date. The resulting fair value measurement is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs.
4. Financial Instruments and Fair Value Measurements
Financial Instruments Measured at Fair Value by Level on a Recurring Basis
As of December 31, 2025, the Company held $200.1 million in money market funds, which were classified as Level 1 within the fair value hierarchy. As of December 31, 2024, the money market funds balance was not material.
Non-Marketable Equity Securities Measured at Net Asset Value
The Company held equity interests in certain private equity funds of $118.7 million and $77.3 million as of December 31, 2025 and 2024, respectively, which are measured using the NAV practical expedient and accordingly, are not classified within the fair value hierarchy. Under the NAV practical expedient, the Company records investments based on its proportionate share of the underlying funds’ NAV.
These funds vary in investment strategies and generally have an initial term of 7 to 10 years, which may be extended for 2 to 3 additional years with the applicable approval. These investments are subject to certain restrictions regarding transfers and withdrawals and generally cannot be redeemed with the funds. Distributions from the funds will be received as the underlying investments are liquidated. The Company’s maximum exposure to loss is limited to the carrying value of these investments of $118.7 million and the remaining unfunded commitments of $3.0 million as of December 31, 2025.
During the year ended December 31, 2025, the Company made total capital contributions of $18.7 million related to these investments. Unrealized gains on these investments were $18.8 million for the twelve months ended December 31, 2025 and were not material for the twelve months ended December 31, 2024.
Non-Marketable Equity Securities Measured at Fair Value on a Non-Recurring Basis
The Company's non-marketable equity securities are investments in privately held companies without readily determinable fair values. The Company elected the measurement alternative to account for these investments. Under the measurement alternative, the carrying value of the non-marketable equity securities are adjusted based on price changes from observable transactions of identical or similar securities of the same issuer or for impairment. These investments are classified as Level 3 when measured due to impairment or qualifying observable price changes, as the valuation incorporates observable transaction prices and significant unobservable inputs.
As of December 31, 2025 and 2024, the carrying amounts of the Company's non-marketable equity securities were $19.6 million and $68.1 million, respectively, and were included in other assets in the Company’s consolidated balance sheets. During the year ended December 31, 2025, the Company recorded a $50.0 million impairment charge, resulting in a full write-down of its investment in Humans, Inc. Refer to Note 15—Related Party Transactions for additional information. No other upward or downward adjustments were recorded during the years ended December 31, 2025 or 2024. Cumulative downward adjustments for investments held as of December 31, 2025 and 2024 were not material.
5. Supplemental Financial Statement Information
Property and equipment, net consisted of the following (in thousands):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Finance lease right-of-use assets | $ | 212,208 | $ | 222,203 | |||||||
| Leasehold improvements | 17,608 | 17,666 | |||||||||
| Software and licenses | 7,143 | 7,125 | |||||||||
| Furniture and fixtures | 1,266 | 1,569 | |||||||||
| Computer equipment | 1,787 | 2,053 | |||||||||
| Total property and equipment, gross | 240,012 | 250,616 | |||||||||
| Less: accumulated depreciation | (117,567) | (90,646) | |||||||||
| Total property and equipment, net | $ | 122,445 | $ | 159,970 |
Depreciation expenses were $25.7 million, $29.3 million, and $26.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Accrued and other current liabilities consisted of the following (in thousands):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Accrued taxes | $ | 451,594 | $ | 263,703 | |||||||
| Compensation and related liabilities | 18,335 | 49,559 | |||||||||
| Deferred revenue | 47,682 | 37,053 | |||||||||
| Accrued expenses and other | 55,257 | 51,216 | |||||||||
| Total accrued and other current liabilities | $ | 572,868 | $ | 401,531 |
6. Commitments and Contingencies
Commitments—As of December 31, 2025, the Company's non-cancelable minimum purchase commitments totaled $702.8 million, which were primarily related to a multi-year contractual arrangement with a cloud computing services provider. In August 2024, the Company amended its agreement with the provider, committing to spending a minimum of $1.3 billion over a three-year period. By December 31, 2025, the Company had made payments of $579.3 million towards this commitment.
As of December 31, 2025, future minimum payments under these non-cancelable purchase commitments with a remaining term in excess of one year were as follows (in thousands):
| 2026 | $ | 398,524 | |||
| 2027 | 304,322 | ||||
| Thereafter | — | ||||
| Total non-cancelable purchase commitments | $ | 702,846 |
Contingencies—From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated.
Legal Proceedings—The Company is involved from time to time in litigation, claims, and proceedings. The outcomes of the Company’s legal proceedings are inherently unpredictable and subject to significant uncertainty.
The Company records a liability for loss contingencies when it is probable that a loss has been incurred and the amount can be reasonably estimated. If a loss is reasonably possible and the amount or range of loss can be reasonably estimated, the Company discloses the estimated loss or range of loss. The Company monitors legal matters and evaluates developments that could affect previously accrued amounts or related disclosures, or whether a previously unaccrued or undisclosed matter requires accrual or disclosure, and adjusts accruals and disclosures as appropriate. Determining the likelihood of loss and the amount or range of loss involves significant judgment.
Based on its current knowledge, the Company does not believe the ultimate resolution of its outstanding legal and regulatory matters will have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows. However, if one or more of these matters were resolved against the Company for amounts in excess of the Company’s expectations, the Company’s results of operations, financial position, or cash flows could be materially affected.
As of December 31, 2025 and 2024, the Company had no material loss contingencies related to legal proceedings for which a loss was probable or reasonably possible.
The Company expenses legal fees in the period in which they are incurred.
Indemnifications—The Company enters into indemnification provisions under agreements with other parties in the ordinary course of business, including certain customers, business partners, investors, contractors and the Company’s officers, directors and certain employees. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in the Company’s consolidated statements of operations in connection with the indemnification provisions have not been material.
Non-income Taxes—The Company may be subject to audit by various tax authorities with regard to non-income tax matters. The subject matter of non-income tax audits primarily arises from different interpretations on tax treatment and tax rates applied. The Company accrues liabilities for non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the reasonably possible loss.
7. Goodwill and Intangible Assets, Net
As a result of the Apps Business divestiture, the Company has a single reportable segment, and the reporting unit is the same as the reportable segment. This change did not affect the composition of the remaining reporting unit and, accordingly, no impairment indicator was identified upon the change. The Company performed the required annual goodwill assessment in the fourth quarter of the year ended December 31, 2025, and concluded the goodwill was not impaired.
The following table presents the changes in the carrying amount of goodwill (in thousands):
| Balance as of December 31, 2023 | $ | 1,497,109 | |||
| Foreign currency translation | (39,424) | ||||
| Balance as of December 31, 2024 | $ | 1,457,685 | |||
| Foreign currency translation | 82,301 | ||||
| Balance as of December 31, 2025 | $ | 1,539,986 |
Intangible assets, net consisted of the following (in thousands):
| Weighted- Average Remaining Useful Life (in years) | As of December 31, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Net Book Value | Gross Carrying Value | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||||||||||||||||
| Customer relationships | 6.3 | $ | 528,207 | $ | (218,736) | $ | 309,471 | $ | 511,125 | $ | (160,810) | $ | 350,315 | ||||||||||||||||||||||||||||
| Developed technology | 1.7 | 210,708 | (159,274) | 51,434 | 203,030 | (119,552) | 83,478 | ||||||||||||||||||||||||||||||||||
| Other | 3.4 | 65,790 | (29,981) | 35,809 | 56,880 | (17,822) | 39,058 | ||||||||||||||||||||||||||||||||||
| Total intangible assets | $ | 804,705 | $ | (407,991) | $ | 396,714 | $ | 771,035 | $ | (298,184) | $ | 472,851 |
The Company recorded amortization expense related to intangible assets as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of revenue | $ | 42,300 | $ | 38,220 | $ | 36,983 | |||||||||||
| Sales and marketing | 55,104 | 54,628 | 54,556 | ||||||||||||||
| Total | $ | 97,404 | $ | 92,848 | $ | 91,539 |
As of December 31, 2025, the expected future amortization expense related to intangible assets was estimated as follows (in thousands):
| 2026 | $ | 89,357 | |||
| 2027 | 81,014 | ||||
| 2028 | 59,469 | ||||
| 2029 | 53,167 | ||||
| 2030 | 48,941 | ||||
| Thereafter | 64,766 | ||||
| Total | $ | 396,714 |
8. Leases
The Company has entered into various non-cancelable operating and finance leases primarily for its office facilities and servers and networking equipment. These leases have remaining lease terms of less than 1 year to 7 years, some of which include options to extend the leases for up to 5 years.
The components of lease costs recognized in the Company's consolidated statements of operations were as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Finance lease cost: | |||||||||||||||||
| Amortization of right-of-use assets | $ | 19,938 | $ | 24,308 | $ | 22,673 | |||||||||||
| Interest | 6,395 | 9,231 | 7,036 | ||||||||||||||
| Operating lease cost | 13,467 | 14,916 | 16,304 | ||||||||||||||
| Variable lease cost and other | 5,098 | 4,820 | 4,465 | ||||||||||||||
| Total lease cost | $ | 44,898 | $ | 53,275 | $ | 50,478 |
Maturities of lease liabilities as of December 31, 2025 were as follows (in thousands):
| Operating Leases | Finance Leases | ||||||||||
| 2026 | 15,162 | 22,500 | |||||||||
| 2027 | 12,408 | 22,483 | |||||||||
| 2028 | 5,276 | 22,218 | |||||||||
| 2029 | 809 | 22,131 | |||||||||
| 2030 | — | 22,131 | |||||||||
| Thereafter | — | 28,809 | |||||||||
| Total lease payments | 33,655 | 140,272 | |||||||||
| Less: amount representing interest | (1,901) | (17,619) | |||||||||
| Present value of future lease payments | 31,754 | 122,653 | |||||||||
| Less: current obligations under leases | (13,943) | (17,481) | |||||||||
| Non-current lease obligations | $ | 17,811 | $ | 105,172 |
Supplemental balance sheet information related to lease liabilities was as follows:
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Weighted-average remaining lease term: | |||||||||||
| Finance leases | 6.3 years | 6.0 years | |||||||||
| Operating leases | 2.4 years | 3.2 years | |||||||||
| Weighted-average discount rate: | |||||||||||
| Finance leases | 4.4 | % | 5.7 | % | |||||||
| Operating leases | 5.2 | % | 5.2 | % |
Supplemental cash flow information related to leases was as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows for operating leases | $ | 16,240 | $ | 16,332 | $ | 16,781 | |||||||||||
| Operating cash flows for finance leases | $ | 6,395 | $ | 9,231 | $ | 7,036 | |||||||||||
| Financing cash flows for finance leases | $ | 18,669 | $ | 20,875 | $ | 20,170 |
As of December 31, 2025, the Company did not have any significant lease that had not yet commenced.
9. Debt
The Company’s outstanding debt consisted of the following (in thousands):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| 2029 Notes | $ | 1,000,000 | $ | 1,000,000 | |||||||
| 2031 Notes | 1,000,000 | 1,000,000 | |||||||||
| 2034 Notes | 1,000,000 | 1,000,000 | |||||||||
| 2054 Notes | 550,000 | 550,000 | |||||||||
| Total principal amount | 3,550,000 | 3,550,000 | |||||||||
| Less: unamortized debt discount and issuance costs | (37,013) | (41,017) | |||||||||
| Long-term debt | $ | 3,512,987 | $ | 3,508,983 |
As of December 31, 2025, the future principal payments for the outstanding debt were as follows (in thousands):
| 2026 through 2028 | $ | — | |||
| 2029 | 1,000,000 | ||||
| Thereafter | 2,550,000 | ||||
| Total future principal payments | $ | 3,550,000 |
Senior Notes
In December 2024, the Company issued $3.6 billion in aggregate principal amount of senior notes, consisting of $1.0 billion in aggregate principal amount of 5.125% notes due December 1, 2029 (the "2029 Notes"), $1.0 billion in aggregate principal amount of 5.375% notes due December 1, 2031 (the "2031 Notes"), $1.0 billion in aggregate principal amount of 5.500% notes due December 1, 2034 (the “2034 Notes”), and $550.0 million in aggregate principal amount of 5.950% notes due December 1, 2054 (the "2054 Notes", and collectively with the 2029 Notes, the 2031 Notes and 2034 Notes, the "Senior Notes"). Interest on each series of the Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2025.
The Senior Notes are unsecured obligations and are not guaranteed by any of the Company's subsidiaries. The Senior Notes rank equally with all existing and future unsecured and unsubordinated indebtedness of the Company. The Company may redeem the Senior Notes in whole or in part at any time or from time to time at specified redemption prices. In addition, upon the occurrence of certain change of control repurchase events, the Company may be required to repurchase the Senior Notes at a specified repurchase price plus accrued and unpaid interest on the Senior Notes to, but excluding, the repurchase date. The indentures governing the Senior Notes also include customary affirmative and negative covenants (including covenants that limit the Company’s ability and the ability of its restricted subsidiaries to create liens on certain assets to secure debt, enter into sale and leaseback transactions, and, with respect to the Company, consolidate or merge with or into, or sell or otherwise dispose of all or substantially all of its assets, in each case subject to certain exceptions), events of default, and other customary provisions. As of December 31, 2025, the Company was in compliance with all applicable covenants.
The Company incurred debt discount and issuance cost of $41.3 million in connection with the Senior Notes offering, which were allocated on a pro rata basis to the 2029 Notes, 2031 Notes, 2034 Notes, and 2054 Notes. The debt discount and issuance costs are amortized to interest expense over the contractual term of each series of the Senior Notes under the effective interest rate method. The effective interest rates on the 2029 Notes, 2031 Notes, 2034 Notes, and 2054 Notes, which are calculated as the contractual interest rates adjusted for the debt discount and issuance costs, are 5.34%, 5.56%, 5.66%, and 6.07%, respectively.
As of December 31, 2025, the total estimated fair value of the Senior Notes was $3.6 billion. The estimated fair value of the Senior Notes, which the Company has classified as Level 2 financial instruments, was determined based on quoted bid prices in an over-the-counter market on the last trading day of the reporting period.
Credit Agreement
2024 Credit Agreement
In December 2024, concurrently with the issuance of its Senior Notes, the Company entered into the 2024 Credit Agreement, establishing a $1.0 billion revolving credit facility maturing on December 5, 2029, with the option for two one-year extensions as permitted under the agreement. The obligations of the Company under the 2024 Credit Agreement are unsecured and are not guaranteed by any of the Company's subsidiaries.
U.S. Dollar borrowings under the 2024 Credit Agreement will bear interest, at the Company’s option, based on either (1) a base rate equal to the highest of (i) the prime rate then in effect, (ii) the federal funds rate, plus 0.50% and (iii) the Term SOFR rate for a one-month interest period plus 1.10%, in each case subject to a 1.00% floor, plus an applicable margin; or (2) the Term SOFR rate for the applicable interest period plus 0.10%, subject to a 0% floor, plus an applicable margin. The applicable margin ranges from 0.125% to 1.000% for base rate borrowings and from 1.125% to 2.000% for Term SOFR rate borrowings, in each
case determined by the Company’s credit ratings. Additionally, the 2024 Credit Agreement also requires the Company to pay a commitment fee on unused amounts, ranging from 0.100% to 0.325%, based on the Company’s credit ratings.
The 2024 Credit Agreement includes usual and customary provisions for unsecured revolving credit agreements of this type, including covenants limiting, with certain exceptions, (1) incurrence of indebtedness by the Company’s subsidiaries, (2) liens, (3) fundamental changes and (4) sale and leaseback transactions, and requires the Company to maintain a maximum total net debt-to-EBITDA ratio of 3.50 to 1.00 as of the last day of each fiscal quarter, subject to a step-up to 4.00 to 1.00 at the Company's option for a certain period following certain qualified acquisitions. As of December 31, 2025, the Company was in compliance with all applicable covenants and ratios.
The 2024 Credit Agreement replaced the existing credit agreement, originally entered into in August 2018 and subsequently amended multiple times (the “2018 Credit Agreement").
In March 2025, the Company borrowed $200.0 million under the revolving credit facility to fund share repurchases under the Company's repurchase program. The Company repaid $100.0 million in April 2025 and the remaining $100.0 million in May 2025. As of December 31, 2025, $1.0 billion remained available for borrowing under the revolving credit facility.
2018 Credit Agreement
In August 2018, the Company entered into the 2018 Credit Agreement. The 2018 Credit Agreement, as last amended in March 2024, provided for a $1.5 billion term loan maturing in October 2028, a $2.1 billion term loan maturing in August 2030, and a $610.0 million secured revolving credit facility. Under the 2018 Credit Agreement, the Company may voluntarily prepay outstanding loans at any time, subject to notice, minimum amount requirements, and customary breakage costs, and may be required to prepay outstanding loans under certain circumstances. Prepaid amounts under the revolving credit facility may be re-borrowed.
The term loans and borrowings under the 2018 Credit Agreement bear interest, at the Company’s option, based on either (1) a base rate equal to the highest of (i) the prime rate then in effect, (ii) the federal funds rate, plus 0.50% and (iii) the Term SOFR rate for a one-month interest period plus 1.00%, plus an applicable margin; or (2) the Term SOFR rate for a specified period, subject to a 0.50% floor in the case of the term loans and a 0% floor in the case of the revolving credit facility, plus an applicable margin. The applicable margin with respect to the term loans was 1.50% for base rate borrowings and 2.50% for Term SOFR rate borrowings. The applicable margin with respect to the amounts outstanding under the revolving credit facility ranges from 1.00% to 1.25% for base rate borrowings, and from 2.10% to 2.35% for Term SOFR rate borrowings, in each case determined by the Company’s senior secured net leverage ratio. Additionally, the 2018 Credit Agreement also requires the Company to pay a commitment fee on unused amounts under the revolving credit facility, ranging from 0.25% to 0.50%, based on the Company’s senior secured net leverage ratio. As of December 31, 2023, the interest rates for the term loans and the borrowings under the 2018 Credit Agreement were 8.45% and 7.45%, respectively.
The Company’s obligations under the 2018 Credit Agreement are secured by substantially all assets of the Company and its domestic subsidiary guarantors, with certain exclusions. The 2018 Credit Agreement also includes covenants restricting debt, liens, business mergers, dissolutions, investments, dividends, asset disposals, and affiliate transactions, along with default provisions covering payment failures, cross-defaults, change of control, judgments, and bankruptcy. In case of default, lenders may demand immediate repayment and enforce other remedies provided under the agreement. The Company was in compliance with all applicable covenants at all times.
In March 2024, the Company drew $418.7 million from the revolving credit facility to fund certain share repurchases and subsequently repaid the entire outstanding amount of $603.7 million.
Upon executing the 2024 Credit Agreement, the Company used the proceeds from the issuance of the Senior Notes to repay the entire remaining $3.5 billion principal amount on both term loans under the 2018 Credit Agreement and terminated the secured revolving credit facility under the 2018 Credit Agreement, which had no outstanding balance. The Company recognized a $27.7 million loss on extinguishment of the term loans, while the modification to the revolving credit facility had no material impact on the Company's consolidated statements of operations for the year ended December 31, 2024.
Interest Expense on Debt
The following table sets forth total interest expense recognized related to the Company’s debt (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Contractual interest expense | $ | 195,440 | $ | 274,141 | $ | 268,583 | |||||||||||
| Amortization of debt discount and issuance costs | 5,175 | 5,460 | 8,792 | ||||||||||||||
| Loss on debt extinguishment | — | 28,375 | 4,337 | ||||||||||||||
| Total interest expense | $ | 200,615 | $ | 307,976 | $ | 281,712 |
10. Equity
Preferred Stock
The Company’s amended and restated certificate of incorporation authorizes the issuance of preferred stock from time to time in one or more series. The Company's board of directors is authorized to determine the designation, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions.
Common Stock
The Company’s amended and restated certificate of incorporation authorizes the issuance of Class A common stock, Class B common stock, and Class C common stock (collectively referred to as the “Common Stock”). The rights of the holders of the Common Stock are identical, except with respect to voting and conversion.
Each share of Class A common stock is entitled to one vote per share, each share of Class B common stock is entitled to 20 votes per share, and Class C common stock is not entitled to vote, except as otherwise required by law. The holders of the Class B common stock (the “Voting Agreement Parties”) have entered into a voting agreement (the “Voting Agreement”), which provides that all shares of Class B common stock held by the Voting Agreement Parties and their respective permitted entities and permitted transferees will be voted as determined by Adam Foroughi and Herald Chen. In the event that the parties disagree, the shares of Class B common stock will be voted by each party in their own discretion.
One share of Class B common stock is convertible into one share of Class A common stock voluntarily at any time by the holder, and will convert automatically into one share of Class A common stock upon (1) certain transfers or (2) the date set by the Company's board of directors, between 61 days and 180 days following the date on which (i) the Voting Agreement is terminated or (ii) Adam Foroughi is no longer involved with the Company as a member of the Board or as an executive officer. After the conversion or exchange of all outstanding shares of the Company’s Class B common stock into shares of Class A common stock, all outstanding shares of Class C common stock will automatically convert into Class A common stock on a one-for-one basis at the date or time determined by a majority of the outstanding shares of Class A common stock, voting as a separate class.
Stock Repurchase Program
The Company's board of directors authorized a stock repurchase program in February 2022 for the Company's Class A common stock and has authorized additional amounts under the program from time to time, including an additional $3.2 billion authorized in 2025. During the year ended December 31, 2025 and 2024, the Company repurchased and retired 5,511,519 shares for $2.2 billion and 16,081,408 shares for $981.3 million, respectively, including commissions, fees, and applicable taxes. As of December 31, 2025, $3.3 billion remained available for repurchases under the program.
Repurchases may be made from time to time through open market purchases or through privately negotiated transactions, subject to market conditions, applicable legal requirements, including surplus and solvency requirements, and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company may also, from time to time, enter into Rule 10b5-1 trading plans, to facilitate repurchases of shares. The repurchase program does not obligate the Company to acquire any particular amount of Class A common stock, has no expiration date and may be modified, suspended, or terminated at any time at the Company's discretion.
The Company retires its Class A common stock upon repurchases, and records the excess of repurchase price over par value for shares repurchased to retained earnings to the extent the Company has retained earnings. If the Company has an accumulated deficit, the Company records the excess of repurchase price over par value for shares repurchased first to additional paid-in capital, to the extent the Company has additional paid-in capital, until depleted, and then to accumulated deficit in the Company’s consolidated statements of stockholders’ equity.
11. Stock-based Compensation
2021 Equity Incentive Plan
The 2021 Equity Incentive Plan (the “2021 Plan”) provides for the grant of incentive stock options ("ISOs"), non-qualified stock options ("NSOs"), restricted stock, RSUs, and other forms of equity awards to the Company’s employees, directors and consultants. A total of 39,000,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2021 Plan. The number of shares available for issuance under the 2021 Plan also include an annual increase of shares, equal to the least of (a) 39,000,000 shares, (b) five percent (5%) of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (c) such other amount as the Company’s board of directors may determine. As of December 31, 2025, there were 86,064,412 shares available for future issuance under the 2021 Plan.
2021 Partner Studio Incentive Plan
The 2021 Partner Studio Incentive Plan (the “2021 Partner Plan”) provides for the grant of NSOs, restricted stock, RSUs, and other forms of equity awards to individuals or entities engaged by the Company to render bona fide services. As of December 31, 2025, there were 1,541,811 shares available for future issuance under the 2021 Partner Plan.
Employee Stock Purchase Plan
The ESPP permits participants to purchase shares of the Company’s Class A common stock through contributions of up to 15% of their eligible compensation. The ESPP provides for consecutive, overlapping 24-month offering periods, during which the contributed amount by the participant will be used to purchase shares of the Company’s Class A common stock at the end of each 6-month purchase period with the purchase price of the shares being 85% of the lower of the fair market value of the Company’s Class A common stock on the first day of an offering period or on the exercise date. The ESPP has an automatic reset feature, whereby the offering period resets if the fair value of the Company’s common stock on a purchase date is less than that on the original offering date. No participant may purchase, in any one purchase period, more than 590 shares of Class A common stock, or 3,500 shares of Class A common stock for offering periods commencing on or after May 20, 2023. Participants may end their participation at any time during an offering and will be paid their accrued contributions that have not yet been used to purchase shares. Participation ends automatically upon termination of employment with the Company.
A total of 7,800,000 shares of the Company’s Class A common stock were initially reserved for issuance under the ESPP. The number of shares available for issuance under the ESPP also include an annual increase of shares, equal to the least of: (a) 7,800,000 shares, (b) one percent (1%) of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (c) such other amount as the Company’s board of directors may determine. As of December 31, 2025, there were 20,891,675 shares available for future issuance under the ESPP.
RSUs
A summary of the RSU activities, including those related to discontinued operations, for the year ended December 31, 2025 is as follows:
| Number of Restricted Stock Units | Weighted-Average Grant-Date Fair Value (per share) | ||||||||||
| Balances as of December 31, 2024 | 2,150,021 | $ | 74.34 | ||||||||
| Granted | 239,382 | $ | 577.97 | ||||||||
| Vested | (1,629,270) | $ | 88.97 | ||||||||
| Forfeited | (401,971) | $ | 60.03 | ||||||||
| Balances as of December 31, 2025 | 358,162 | $ | 360.48 |
The weighted-average grant-date fair value per share of RSUs granted during the years ended December 31, 2024 and 2023 was $105.09 and $25.11, respectively. The total fair value of RSUs vested as of the vesting dates during the years ended December 31, 2025, 2024, and 2023 was $695.7 million, $844.2 million, and $403.1 million, respectively.
PSUs
In March 2023, the Company granted 6,902,000 PSUs under the 2021 Plan to each of Adam Foroughi, its CEO and Chairperson, and Vasily Shikin, its CTO. In April 2023, the Company granted an additional 3,451,000 PSUs to certain non-executive employees under the same plan. These PSUs, divided into five tranches, vest upon achieving stock price targets ranging from $36.00 to $79.00, based on the minimum closing price of the Company’s Class A common stock over any 30 consecutive trading days during a five-year performance period from the respective grant date, subject to continued employment through the applicable vesting date. In the event of a change in control, unvested PSUs may vest a pro-rata amount if the transaction price falls between two stock price targets that have not previously been achieved, subject to continued employment through the date prior to the transaction. For Mr. Foroughi and Mr. Shikin, PSUs may continue to vest for up to one year post-employment if certain conditions are met. All of these PSUs had vested as of December 31, 2024.
In November 2024, the Company granted 348,327 PSUs under the 2021 Plan to certain non-executive employees. These PSUs, divided into 3 tranches, vest upon achieving stock price targets ranging from $184.35 to $294.96, based on the minimum closing price of the Company’s Class A common stock over any 30 consecutive trading days during a 2.5-year performance period from the grant date, subject to continued employment through the applicable vesting date. All of these PSUs had vested as of December 31, 2024.
In October 2025, the Company granted 920,526 PSUs under the 2021 Plan to certain key non-executive engineering employees. These PSUs vest upon the achievement of specified market capitalization milestones, including an initial milestone of $300.0 billion and, with respect to certain PSUs, additional milestones up to $1.0 trillion, based on the Company’s market capitalization over any 30 consecutive trading days during a 7-year performance period from the grant date, subject to continued employment through the applicable vesting date.
The weighted-average grant-date fair value per share of PSUs granted, including those related to discontinued operations, during the years ended December 31, 2025, 2024 and 2023 was $445.89, $103.76 and $7.20, respectively. The total fair value of PSUs vested as of the vesting dates during the years ended December 31, 2024 and 2023 was $1.3 billion and $132.7 million, respectively. No PSUs vested or were forfeited during the year ended December 31, 2025.
The following assumptions were used to estimate the fair value of PSUs:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stock price on the date of grant | $620.62 | $159.11 | $12.41 - $16.43 | ||||||||||||||
| Expected volatility | 70.95 | % | 64.72 | % | 73.76% - 73.95% | ||||||||||||
| Risk-free interest rate | 3.85 | % | 4.05 | % | 3.58% - 3.60% | ||||||||||||
| Discount for lack of marketability | 20.34 | % | 15.29 | % | 20.43% - 20.65% | ||||||||||||
| Dividend yield | — | % | — | % | — | % |
Stock Options
A summary of the stock option activities, including those related to discontinued operations, for the year ended December 31, 2025 is as follows:
| Number of Options | Weighted-Average Exercise Price (per share) | Weighted-Average Remaining Contractual Term (in years) | |||||||||||||||
| Balances as of December 31, 2024 | 3,747,152 | $ | 6.60 | 4.9 | |||||||||||||
| Exercised | (2,486,033) | $ | 6.85 | ||||||||||||||
| Forfeited | (5,005) | $ | 7.45 | ||||||||||||||
| Balances as of December 31, 2025 | 1,256,114 | $ | 6.10 | 4.0 | |||||||||||||
| Vested and exercisable as of December 31, 2025 | 1,256,114 | $ | 6.10 | 4.0 | |||||||||||||
| Vested and expected to vest as of December 31, 2025 | 1,256,114 | $ | 6.10 | 4.0 |
The fair value of stock options granted during the year ended December 31, 2023 was not material and no stock options were granted during the years ended December 31, 2025 or 2024. The total intrinsic value of share options exercised during the years ended December 31, 2025, 2024, and 2023 was $1.0 billion, $671.2 million, and $60.1 million, respectively. The aggregate intrinsic value of stock options outstanding as of December 31, 2025 was $838.7 million.
ESPP
The stock-based compensation recognized for the ESPP was not material during the years ended December 31, 2025, 2024, or 2023. During the year ended December 31, 2025, 91,645 shares of Class A common stock were purchased under the ESPP at a weighted-average price of $88.81 per share.
Stock-based Compensation
Stock-based compensation included in the Company's consolidated statements of operations was as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of revenue | $ | 1,425 | $ | 4,799 | $ | 3,834 | |||||||||||
| Sales and marketing | 34,055 | 76,824 | 69,903 | ||||||||||||||
| Research and development | 114,463 | 229,577 | 216,236 | ||||||||||||||
| General and administrative | 58,015 | 46,231 | 52,578 | ||||||||||||||
| Stock-based compensation from continuing operations | 207,958 | 357,431 | 342,551 | ||||||||||||||
| Stock-based compensation from discontinued operations | 3,663 | 19,024 | 20,556 | ||||||||||||||
| Total stock-based compensation | $ | 211,621 | $ | 376,455 | $ | 363,107 |
As of December 31, 2025, the total unrecognized stock-based compensation was $489.0 million, which is expected to be recognized over a weighted-average period of 1.95 years. The income tax benefit recognized related to stock-based awards that vested or were exercised during the years ended December 31, 2025, 2024, and 2023 were $123.0 million, $164.9 million, and $33.0 million, respectively.
12. Net Income Per Share
The following table sets forth the computation of basic and diluted net income per share attributable to common stockholders for the years ended December 31, 2025, 2024, and 2023 (in thousands, except per share data):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Basic EPS: | |||||||||||||||||
| Numerator: | |||||||||||||||||
| Net income from continuing operations | $ | 3,433,195 | $ | 1,589,524 | $ | 457,826 | |||||||||||
| Less: income attributable to participating securities | (478) | (2,731) | (2,270) | ||||||||||||||
| Net income from continuing operations attributable to common stockholders - Basic | 3,432,717 | 1,586,793 | 455,556 | ||||||||||||||
| Loss from discontinued operations, net of income taxes, attributable to common stockholders - Basic | (99,431) | (9,734) | (100,615) | ||||||||||||||
| Net income attributable to common shareholders - Basic | 3,333,286 | 1,577,059 | 354,941 | ||||||||||||||
| Denominator: | |||||||||||||||||
| Weighted-average shares used in computing net income (loss) per share - Basic | 338,781 | 336,922 | 351,952 | ||||||||||||||
| Net income (loss) per share attributed to Class A and Class B common stockholders - Basic: | |||||||||||||||||
| Continuing operations | $ | 10.13 | $ | 4.71 | $ | 1.29 | |||||||||||
| Discontinued operations | (0.29) | (0.03) | (0.28) | ||||||||||||||
| Basic net income per share | $ | 9.84 | $ | 4.68 | $ | 1.01 | |||||||||||
| Diluted EPS: | |||||||||||||||||
| Numerator: | |||||||||||||||||
| Net income from continuing operations attributable to common stockholders - Basic | $ | 3,432,717 | $ | 1,586,793 | $ | 455,556 | |||||||||||
| Re-allocation of participating securities considered potentially dilutive securities | 4 | 85 | 66 | ||||||||||||||
| Net income from continuing operations attributable to common stockholders - Diluted | 3,432,721 | 1,586,878 | 455,622 | ||||||||||||||
| Loss from discontinued operations, net of income taxes, attributable to common stockholders - Diluted | (99,431) | (9,734) | (100,629) | ||||||||||||||
| Net income attributable to common stockholders - Diluted | $ | 3,333,290 | $ | 1,577,144 | $ | 354,993 | |||||||||||
| Denominator: | |||||||||||||||||
| Weighted-average shares used in computing net income (loss) per share - Basic | 338,781 | 336,922 | 351,952 | ||||||||||||||
| Weighted-average dilutive stock awards | 3,189 | 10,886 | 10,637 | ||||||||||||||
| Weighted-average shares used in computing net income (loss) per share - Diluted | 341,970 | 347,808 | 362,589 | ||||||||||||||
| Net income (loss) per share attributed to Class A and Class B common stockholders - Diluted: | |||||||||||||||||
| Continuing operations | $ | 10.04 | $ | 4.56 | $ | 1.26 | |||||||||||
| Discontinued operations | (0.29) | (0.03) | (0.28) | ||||||||||||||
| Diluted net income per share | $ | 9.75 | $ | 4.53 | $ | 0.98 | |||||||||||
| Anti-dilutive potential common stock excluded | 11 | 137 | 4,861 |
13. Income Taxes
Income before income taxes for the years ended December 31, 2025, 2024, and 2023, included the following components (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. | $ | 2,210,613 | $ | 88,111 | $ | 26,138 | |||||||||||
| Foreign | 1,742,297 | 1,523,832 | 475,464 | ||||||||||||||
| Income before income taxes | $ | 3,952,910 | $ | 1,611,943 | $ | 501,602 |
Provision for income taxes for the years ended December 31, 2025, 2024, and 2023 consisted of the following (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 239,094 | $ | 21,659 | $ | 34,871 | |||||||||||
| State | 27,187 | 9,812 | 9,937 | ||||||||||||||
| Foreign | 259,750 | 156,891 | 52,804 | ||||||||||||||
| Total current | 526,031 | 188,362 | 97,612 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | (13,565) | (134,189) | (43,193) | ||||||||||||||
| State | 407 | (8,881) | (4,553) | ||||||||||||||
| Foreign | 6,842 | (22,873) | (6,090) | ||||||||||||||
| Total deferred | (6,316) | (165,943) | (53,836) | ||||||||||||||
| Total provision for income taxes | $ | 519,715 | $ | 22,419 | $ | 43,776 |
The reconciliation of federal statutory income tax rate to the effective income tax rate after the adoption of ASU 2023-09 is as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| Tax provision at U.S. federal statutory rate | $ | 830,036 | 21.0 | % | |||||||
| State income tax, net of federal benefit1 | 18,017 | 0.5 | % | ||||||||
| Foreign tax effects | |||||||||||
| Singapore | |||||||||||
| Statutory tax rate difference between Singapore and U.S. | (66,298) | (1.7) | % | ||||||||
| Local taxes at a rate different than the statutory tax rate2 | (33,280) | (0.8) | % | ||||||||
| Withholding taxes | 65,733 | 1.7 | % | ||||||||
| Other foreign jurisdictions | (592) | — | % | ||||||||
| Effect of cross-border tax laws | |||||||||||
| Global intangible low-taxed income | 43,051 | 1.1 | % | ||||||||
| Foreign-derived intangible income | (113,539) | (2.9) | % | ||||||||
| Foreign tax credits | (84,591) | (2.1) | % | ||||||||
| Other | 10,513 | 0.3 | % | ||||||||
| Tax credits | |||||||||||
| Research and development credit | (16,122) | (0.4) | % | ||||||||
| Changes in valuation allowances | 4,833 | 0.1 | % | ||||||||
| Nontaxable or nondeductible items | |||||||||||
| Stock-based compensation | (132,975) | (3.4) | % | ||||||||
| Other | 25,024 | 0.6 | % | ||||||||
| Changes in unrecognized tax benefits. | (7,515) | (0.2) | % | ||||||||
| Other | (22,580) | (0.6) | % | ||||||||
| Total provision for income taxes | $ | 519,715 | 13.1 | % |
1The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include New York state and city and New Jersey.
2The tax benefit related to the negotiated tax rate in Singapore was reduced by $82.7 million of the global minimum tax under Pillar 2.
The reconciliation of taxes at the federal statutory rate to our provision for income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Tax provision at U.S. federal statutory rate | $ | 338,515 | $ | 105,336 | |||||||
| State income taxes, net of federal benefit | (26,412) | (5,334) | |||||||||
| Foreign income taxed at different rates | (167,957) | (50,452) | |||||||||
| Global intangible low-taxed income | 52,378 | 25,625 | |||||||||
| Stock-based compensation | (146,183) | (3,039) | |||||||||
| Foreign-derived intangible income | (10,231) | (18,104) | |||||||||
| Research and development credits | (49,862) | (21,778) | |||||||||
| Foreign income inclusion | (859) | (4,042) | |||||||||
| Change in valuation allowance | 27,589 | 11,470 | |||||||||
| Return to Provision | 2,211 | 3,223 | |||||||||
| Other | 3,230 | 871 | |||||||||
| Total provision for income taxes | $ | 22,419 | $ | 43,776 |
Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows (in thousands):
| Year Ended December 31, | |||||
| 2025 | |||||
| Federal | $ | — | |||
| State | 13,395 | ||||
| Foreign | |||||
| Singapore | 177,972 | ||||
| Other | 3,476 | ||||
| Total cash paid for income taxes, net of refunds received | $ | 194,843 |
The Company operates in jurisdictions outside of the US, such as Singapore, where it has tax incentive arrangements. The Company's qualifying income earned in Singapore is taxed at reduced rates, subject to its compliance with the conditions specified in these incentives and legislative developments. These Singapore tax incentives are expected to expire in June 2028 which the Company can affirmatively elect to renew. Before taking into consideration the effects of the U.S. Tax Cuts and Jobs Act ("TCJA") and other indirect tax impacts, the effect of these tax incentives decreased the provision for income taxes by approximately $272.1 million ($0.80 per diluted share) and $135.4 million ($0.39 per diluted share) for the years ended December 31, 2025 and 2024, respectively.
The following summarizes the current and deferred tax assets and liabilities (in thousands):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Accrued expenses and reserves | $ | 20,525 | $ | 11,975 | |||||||
| Stock-based compensation | 26,849 | 10,063 | |||||||||
| Tax credit carryforwards | 103,416 | 99,314 | |||||||||
| Net operating loss | 25,735 | 38,354 | |||||||||
| Depreciation and amortization | 5,350 | 2,382 | |||||||||
| Operating lease liability | 4,967 | 10,437 | |||||||||
| Foreign tax deduction | 3,904 | 1,900 | |||||||||
| Capital loss | 222,425 | 18,075 | |||||||||
| Capitalized R&D expenses | 250,493 | 260,308 | |||||||||
| Valuation allowance | (291,382) | (75,690) | |||||||||
| Total deferred tax assets | 372,282 | 377,118 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Identified intangibles | (105,314) | (98,933) | |||||||||
| Other comprehensive income (loss) | (6,888) | 37,811 | |||||||||
| Operating lease right-of-use assets | (4,362) | (8,144) | |||||||||
| Other | (3,371) | (5,025) | |||||||||
| Total deferred tax liabilities | (119,935) | (74,291) | |||||||||
| Net deferred tax assets | $ | 252,347 | $ | 302,827 |
As of December 31, 2025, the Company's federal tax credit carryforwards of $49.2 million will begin to expire in 2036. The Company's federal capital loss carryforward of $948.9 million will begin to expire in 2027. The Company's California tax credit carryforwards of $71.4 million are not subject to expiration. The Company's foreign net operating loss carryforwards of $143.7 million are not subject to expiration.
The valuation allowance on the Company's net deferred tax assets increased by $215.7 million, $42.6 million, and $15.2 million during the years ended December 31, 2025, 2024, and 2023, respectively.
As of December 31, 2025, the Company maintained a valuation allowance with respect to certain of its deferred tax assets relating primarily to certain state tax credits, U.S. capital losses and operating losses in certain non-U.S. jurisdictions that the Company believes are not likely to be realized. In assessing the realizability of the Company’s deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized due, in part, to projections of future taxable income, including capital gains. To the extent realization of the deferred tax assets becomes more-likely-than-not, the Company would recognize such deferred tax assets as income tax benefits during the period.
The Company has not provided U.S. income or foreign withholding taxes on the undistributed earnings of its foreign subsidiaries as of December 31, 2025, because it intends to permanently reinvest such earnings outside of the U.S., except for Singapore. If these foreign earnings were to be repatriated in the future, the related U.S. tax liability will be immaterial, due to the participation exemption put in place in the TCJA.
Uncertain Tax Positions
The following table summarizes the activity related to the gross unrecognized tax benefits (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at beginning of year | $ | 60,905 | $ | 35,880 | $ | 19,052 | |||||||||||
| Increases related to prior year positions | 426 | 4,393 | 3,522 | ||||||||||||||
| Decreases related to prior year positions | (3,617) | (2,183) | — | ||||||||||||||
| Increases related to current year positions | 11,493 | 25,921 | 13,548 | ||||||||||||||
| Decreases related to lapse of statutes | (3,401) | (2,797) | (242) | ||||||||||||||
| Decreases related to settlements | (1,601) | (309) | — | ||||||||||||||
| Balance at end of year | $ | 64,205 | $ | 60,905 | $ | 35,880 |
As of December 31, 2025, $50.7 million represents the amount that if recognized, would favorably affect the effective income tax rate in 2025. The Company does not expect a significant change to its unrecognized tax benefits or recorded liabilities over the next twelve months. The unrecognized tax benefits may increase or change during the next year for items that arise in the ordinary course of business.
The Company records interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2025, 2024, and 2023, the Company had approximately $8.4 million, $8.3 million, and $4.0 million of interest and penalties, respectively.
The tax returns for years 2022 through 2024 remain open to examination for federal jurisdiction and for years 2018 through 2024 for other various state and foreign jurisdictions.
14. Segment and Geographic Information
The Company determines its operating segments based on how its Chief Operating Decision Maker ("CODM") manages the business, allocates resources, makes operating decisions and evaluates operating performance. The Company’s CODM is its Chief Executive Officer.
As disclosed in Note 2—Summary of Significant Accounting Policies and Note 3—Discontinued Operations, on June 30, 2025, the Company completed the divestiture of its Apps Business, which constituted the former Apps segment. Following the divestiture, the Company has determined that it operates the remaining business as a single operating and reportable segment at the consolidated level. Accordingly, the Company classified the Apps Business as discontinued operations in its consolidated statements of operations and excluded the Apps Business from both continuing operations and segment results for all periods presented. The Company’s single segment provides end-to-end advertising solutions including Axon Ads Manager, MAX, Adjust, and Wurl, that allow businesses to reach, monetize and grow their global audiences. Revenue is primarily generated from fees paid by advertisers for the placement of ads on mobile applications owned by Publishers.
As a single reportable segment entity, the Company has determined that its measure of profit or loss is net income from continuing operations, which is the measure most consistent with U.S. GAAP. The CODM uses net income from continuing operations to allocate resources during the annual budgeting and forecasting process, evaluate operating strategies, and assess performance across periods.
The table below is a summary of the segment net income from continuing operations, including significant segment expenses (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Revenue | $ | 5,480,717 | $ | 3,224,058 | $ | 1,841,762 | |||||||||||
| Less: | |||||||||||||||||
| Datacenter costs | 542,674 | 392,498 | 251,197 | ||||||||||||||
| Personnel related expenses | 207,278 | 259,711 | 230,762 | ||||||||||||||
| Interest expense and loss on settlement of debt | 207,016 | 317,209 | 273,508 | ||||||||||||||
| Provision for income taxes | 519,715 | 22,419 | 43,776 | ||||||||||||||
| Amortization, depreciation and write-offs | 130,724 | 128,791 | 119,152 | ||||||||||||||
| Stock-based compensation | 207,958 | 357,431 | 342,551 | ||||||||||||||
| Other expenses1 | 232,157 | 156,475 | 122,990 | ||||||||||||||
| Net income from continuing operations | $ | 3,433,195 | $ | 1,589,524 | $ | 457,826 |
1 Other expenses include professional services costs, facilities costs, advertising costs, software costs, and other individually insignificant costs.
The following table presents long-lived assets by geographic area which consist of property and equipment, net and operating lease right-of-use assets (in thousands):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| United States | $ | 49,711 | $ | 72,627 | |||||||
| Germany | 62,696 | 76,834 | |||||||||
| Netherlands | 29,673 | 40,215 | |||||||||
| All other countries | 5,822 | 6,767 | |||||||||
| Total long-lived assets | $ | 147,902 | $ | 196,443 |
For information regarding revenue disaggregated by geography, see Note 2—Summary of Significant Accounting Policies.
15. Related Party Transactions
KKR Denali
KKR Denali Holdings L.P. (“KKR Denali”) was previously a related party due to its ownership of more than 10% of the Company’s voting interests. In 2024, KKR Denali converted its remaining shares of the Company’s Class B common stock into Class A common stock and subsequently sold all such shares, and ceased to be a related party as of December 31, 2024.
In February 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with KKR Denali, and BofA Securities, Inc., acting for themselves and as representative of other underwriters (collectively, the “Underwriters”), in connection with a secondary public offering (the “Offering”) of 19,866,397 shares of the Company's Class A common stock by KKR Denali. Pursuant to the Underwriting Agreement, on March 6, 2024, the Company repurchased from the Underwriters 10,466,397 shares of Class A common stock sold to the Underwriters by KKR Denali in the Offering at a price per share of $54.46, the same per share price paid by the Underwriters to KKR Denali in the Offering. In addition, under the Company's stock repurchase program, the Company repurchased from KKR Denali (i) 15,000,000 shares of its Class A common stock in a private transaction in August 2023 at $36.85 per share for an aggregate purchase price of $552.8 million and (ii) 15,952,381 shares of its Class A common stock in a private transaction in May 2023 at $21.0 per share for an aggregate purchase price of $335.0 million.
KKR Capital Markets LLC, an affiliate of KKR Denali, served as a joint lead arranger and joint bookrunner for the 2018 Credit Agreement. In connection with amendments to the 2018 Credit Agreement, the Company paid fees to KKR Capital Markets LLC of $0.1 million and $1.2 million in 2024 and 2023, respectively. In addition, KKR Corporate Lending (CA) LLC, an affiliate of KKR Denali, provided revolving credit commitments totaling $15.0 million under the 2018 Credit Agreement. The 2018 Credit Agreement was terminated in December 2024. See Note 9—Debt for additional information.
Humans, Inc.
In February 2024, the Company entered into an agreement to invest $50.0 million in the Series C preferred stock financing of Humans, Inc., the developer of the Flip Shop social shopping app ("Flip Shop"). Eduardo Vivas, a member of the Company's board of directors, served as the Chief Operating Officer of Humans, Inc., and a member of its board of directors. The Company also entered into an arm's length commercial agreement with Humans, Inc. for the use of Axon AI to support advertising optimization on its app under a revenue-share model (the “Commercial Agreement”). The Company considered Humans, Inc. a related party through Mr. Vivas’ resignation from both positions at Humans, Inc. in September 2025. No transactions occurred under the Commercial Agreement. Under separate arrangements, Humans, Inc. used Axon Ads Manager for user acquisition on the Company's standard contractual terms, and related revenue was not material for the year ended December 31, 2025 or 2024.
During the year ended December 31, 2025, the Company recorded a full impairment of its $50.0 million investment in Humans, Inc. due to its deteriorating financial condition and uncertainty regarding its ability to continue as a going concern.
Tripledot
As discussed in Note 2—Summary of Significant Accounting Policies, the Company accounts for its equity interest in Tripledot under the equity method and, accordingly, considers Tripledot and its subsidiaries related parties beginning on the closing date of the Apps Business divestiture. For the period from the closing date through December 31, 2025, the Company recognized $19.0 million in revenue related to Tripledot and its subsidiaries’ use of the Company’s advertising solutions, reflecting their advertiser spend net of amounts paid or payable to them as publishers. In connection with the sale of the Apps Business, the Company also entered into a Transition Services Agreement (“TSA”) with Tripledot under which the Company agreed to provide limited administrative and transitional services for up to six months following the closing date. Amounts recorded under the TSA were not material for the year ended December 31, 2025.
Other Transactions
Herald Chen, the Company’s former President and Chief Financial Officer and a current member of its board of directors, served as an advisor to the Chief Executive Officer for a one-year term beginning on January 1, 2024. In connection with this role, Mr. Chen received an award of 62,418 RSUs with a grant-date fair value of $43.79 per share.
In March 2019, the Company entered into a promissory note with Rafael Vivas, the brother of Eduardo Vivas, a member of the Company's board of directors, for the purpose of advancing him funds to allow him to early exercise his stock options (“Vivas Note”). The Vivas Note was issued in the amount of $2.3 million at an interest rate of 2.59%, and later amended on August 7, 2020 to lower the interest rate on the outstanding balance of such note to the then applicable IRS annual mid-term rate of 0.41%. In March 2024, the principal amount due under the Vivas Note plus accrued interest, or $2.3 million, was repaid in full to the Company and the Vivas Note was extinguished.
The Company had no other material related party transactions in 2025, 2024, or 2023.
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