filings.toolsItem 1. Condensed Consolidated Financial Statements
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Item 1. Condensed Consolidated Financial Statements
AppLovin Corporation
Condensed Consolidated Balance Sheets
(in thousands, except for share and per share data)
(unaudited)
| June 30, 2024 | December 31, 2023 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 460,449 | $ | 502,152 | |||||||
| Accounts receivable, net | 1,074,342 | 953,810 | |||||||||
| Prepaid expenses and other current assets | 125,479 | 160,201 | |||||||||
| Total current assets | 1,660,270 | 1,616,163 | |||||||||
| Property and equipment, net | 169,209 | 173,331 | |||||||||
| Goodwill | 1,821,913 | 1,842,850 | |||||||||
| Intangible assets, net | 1,101,935 | 1,292,635 | |||||||||
| Other assets | 516,139 | 434,208 | |||||||||
| Total assets | $ | 5,269,466 | $ | 5,359,187 | |||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 387,507 | $ | 371,702 | |||||||
| Accrued and other current liabilities | 232,334 | 278,861 | |||||||||
| Short-term debt | 35,563 | 215,000 | |||||||||
| Deferred revenue | 74,187 | 78,559 | |||||||||
| Total current liabilities | 729,591 | 944,122 | |||||||||
| Long-term debt | 3,482,166 | 2,905,906 | |||||||||
| Other non-current liabilities | 242,873 | 252,830 | |||||||||
| Total liabilities | 4,454,630 | 4,102,858 | |||||||||
| Commitments and contingencies (Note 4) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock, $0.00003 par value—100,000,000 shares authorized, no shares issued and outstanding as of June 30, 2024 and December 31, 2023 | — | — | |||||||||
| Class A and Class B Common Stock, $0.00003 par value—1,700,000,000 (Class A 1,500,000,000 and Class B 200,000,000) shares authorized, 334,168,646 (Class A 296,975,825 and Class B 37,192,821) and 339,886,712 (Class A 268,774,090 and Class B 71,112,622) shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 11 | 11 | |||||||||
| Additional paid-in capital | 1,172,290 | 2,134,581 | |||||||||
| Accumulated other comprehensive loss | (90,628) | (65,274) | |||||||||
| Accumulated deficit | (266,837) | (812,989) | |||||||||
| Total stockholders’ equity | 814,836 | 1,256,329 | |||||||||
| Total liabilities and stockholders’ equity | $ | 5,269,466 | $ | 5,359,187 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Condensed Consolidated Statements of Operations
(in thousands, except for per share data)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Revenue | $ | 1,080,119 | $ | 750,165 | $ | 2,138,234 | $ | 1,465,570 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of revenue | 282,547 | 258,575 | 576,695 | 520,535 | |||||||||||||||||||
| Sales and marketing | 202,107 | 192,427 | 428,794 | 395,403 | |||||||||||||||||||
| Research and development | 163,896 | 137,424 | 319,219 | 282,275 | |||||||||||||||||||
| General and administrative | 40,583 | 30,411 | 82,981 | 74,982 | |||||||||||||||||||
| Total costs and expenses | 689,133 | 618,837 | 1,407,689 | 1,273,195 | |||||||||||||||||||
| Income from operations | 390,986 | 131,328 | 730,545 | 192,375 | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense | (74,666) | (50,987) | (148,848) | (125,498) | |||||||||||||||||||
| Other income, net | 8,947 | 15,461 | 11,515 | 25,572 | |||||||||||||||||||
| Total other expense, net | (65,719) | (35,526) | (137,333) | (99,926) | |||||||||||||||||||
| Income before income taxes | 325,267 | 95,802 | 593,212 | 92,449 | |||||||||||||||||||
| Provision for income taxes | 15,298 | 15,445 | 47,060 | 16,610 | |||||||||||||||||||
| Net income | 309,969 | 80,357 | 546,152 | 75,839 | |||||||||||||||||||
| Less: Net income attributable to participating securities | $ | 79 | $ | 318 | $ | 1,752 | $ | 299 | |||||||||||||||
| Net income attributable to common stock—Basic | $ | 309,890 | $ | 80,039 | $ | 544,400 | $ | 75,540 | |||||||||||||||
| Net income attributable to common stock—Diluted | $ | 309,893 | $ | 80,047 | $ | 544,463 | $ | 75,547 | |||||||||||||||
| Net income per share attributable to Class A and Class B common stockholders: | |||||||||||||||||||||||
| Basic | $ | 0.92 | $ | 0.22 | $ | 1.62 | $ | 0.21 | |||||||||||||||
| Diluted | $ | 0.89 | $ | 0.22 | $ | 1.56 | $ | 0.20 | |||||||||||||||
| Weighted average common shares used to compute net income per share attributable to Class A and Class B common stockholders: | |||||||||||||||||||||||
| Basic | 335,681,788 | 356,957,059 | 335,785,864 | 365,013,736 | |||||||||||||||||||
| Diluted | 347,964,201 | 366,340,275 | 348,327,848 | 373,022,200 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Net income | $ | 309,969 | $ | 80,357 | $ | 546,152 | $ | 75,839 | |||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustment, net of tax | (6,732) | (3,154) | (25,354) | 6,852 | |||||||||||||||||||
| Other comprehensive income (loss), net of tax | (6,732) | (3,154) | (25,354) | 6,852 | |||||||||||||||||||
| Comprehensive income | $ | 303,237 | $ | 77,203 | $ | 520,798 | $ | 82,691 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share data)
(unaudited)
| Class A and Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
| Shares | Par Value | ||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | 339,886,712 | $ | 11 | $ | 2,134,581 | $ | (65,274) | $ | (812,989) | $ | 1,256,329 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 3,936,518 | — | 23,429 | — | — | 23,429 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (1,397,947) | — | (80,144) | — | — | (80,144) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (13,466,397) | — | (752,224) | — | — | (752,224) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 95,253 | — | — | 95,253 | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | (18,622) | — | (18,622) | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 236,183 | 236,183 | |||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | 328,958,886 | $ | 11 | $ | 1,420,895 | $ | (83,896) | $ | (576,806) | $ | 760,204 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 9,435,913 | — | 9,377 | — | — | 9,377 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (4,226,153) | — | (356,336) | — | — | (356,336) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 98,354 | — | — | 98,354 | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | (6,732) | — | (6,732) | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 309,969 | 309,969 | |||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | 334,168,646 | $ | 11 | $ | 1,172,290 | $ | (90,628) | $ | (266,837) | $ | 814,836 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share data)
(unaudited)
| Class A and Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
| Shares | Par Value | ||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | 373,873,683 | $ | 11 | $ | 3,155,748 | $ | (83,382) | $ | (1,169,700) | $ | 1,902,677 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 4,061,015 | — | 2,974 | — | — | 2,974 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (1,281,849) | — | (19,167) | — | — | (19,167) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (5,396,617) | — | (76,358) | — | — | (76,358) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 82,966 | — | — | 82,966 | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 10,006 | — | 10,006 | |||||||||||||||||||||||||||||
| Net loss | — | — | — | — | (4,518) | (4,518) | |||||||||||||||||||||||||||||
| Balance as of March 31, 2023 | 371,256,232 | $ | 11 | $ | 3,146,163 | $ | (73,376) | $ | (1,174,218) | $ | 1,898,580 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 4,227,973 | — | 5,748 | — | — | 5,748 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (1,503,757) | — | (37,436) | — | — | (37,436) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (25,483,835) | — | (503,448) | — | — | (503,448) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 76,753 | — | — | 76,753 | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | (3,154) | — | (3,154) | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 80,357 | 80,357 | |||||||||||||||||||||||||||||
| Balance as of June 30, 2023 | 348,496,613 | $ | 11 | $ | 2,687,780 | $ | (76,530) | $ | (1,093,861) | $ | 1,517,400 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Operating Activities | |||||||||||
| Net income | $ | 546,152 | $ | 75,839 | |||||||
| Adjustments to reconcile net income to operating activities: | |||||||||||
| Amortization, depreciation and write-offs | 221,208 | 248,100 | |||||||||
| Stock-based compensation | 193,977 | 164,219 | |||||||||
| Other | 10,300 | 12,459 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (125,185) | 33,271 | |||||||||
| Prepaid expenses and other assets | 26,161 | (5,128) | |||||||||
| Accounts payable | 15,453 | (12,265) | |||||||||
| Accrued and other liabilities | (40,760) | 1,961 | |||||||||
| Net cash provided by operating activities | 847,306 | 518,456 | |||||||||
| Investing Activities | |||||||||||
| Purchase of non-marketable equity securities | (76,333) | (16,834) | |||||||||
| Acquisition of intangible assets | (15,089) | (38,356) | |||||||||
| Other investing activities | (8,569) | (2) | |||||||||
| Net cash used in investing activities | (99,991) | (55,192) | |||||||||
| Financing Activities | |||||||||||
| Repurchases of stock | (752,224) | (572,101) | |||||||||
| Principal repayments of debt | (677,863) | (16,656) | |||||||||
| Payment of withholding taxes related to net share settlement of equity awards | (436,480) | (56,603) | |||||||||
| Payments of licensed asset obligation | — | (15,254) | |||||||||
| Proceeds from issuance of debt | 1,072,330 | — | |||||||||
| Proceeds from issuance of common stock upon exercise of stock options and purchase of ESPP shares | 19,098 | 8,606 | |||||||||
| Other financing activities | (10,473) | (16,105) | |||||||||
| Net cash used in financing activities | (785,612) | (668,113) | |||||||||
| Effect of foreign exchange rate on cash and cash equivalents | (3,406) | 592 | |||||||||
| Net decrease in cash and cash equivalents | (41,703) | (204,257) | |||||||||
| Cash and cash equivalents at beginning of the period | 502,152 | 1,080,484 | |||||||||
| Cash and cash equivalents at end of the period | $ | 460,449 | $ | 876,227 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Condensed Consolidated Statements of Cash Flows (continued)
(in thousands)
(unaudited)
| Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Supplemental non-cash investing and financing activities disclosures: | |||||||||||
| Right-of-use assets acquired in exchange for lease obligations | $ | 12,568 | $ | 49,565 | |||||||
| Acquisitions not yet paid | $ | 451 | $ | 7,463 | |||||||
| Repurchase of common stock included in accrued liabilities | $ | — | $ | 7,705 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid for interest, net | $ | 144,986 | $ | 118,948 | |||||||
| Cash paid for income taxes, net of refunds | $ | 32,764 | $ | 6,808 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Notes to the Condensed Consolidated Financial Statements
(unaudited)
1. Description of Business and Summary of Significant Accounting Policies
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 ecosystem providing an end-to-end software platform that allows businesses to reach, monetize and grow their global audiences. The Company also has a globally diversified portfolio of apps—free-to-play mobile games that it operates through its studios.
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.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, the unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2024. The condensed consolidated balance sheet data as of December 31, 2023 was derived from the audited consolidated financial statements at that date but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements reflect all normal and recurring adjustments, that are, in the opinion of management, necessary for the fair presentation of the Company’s financial position, results of operations, cash flows and stockholders’ equity for the interim periods presented. The results of operations for the three and six months ended June 30, 2024 shown in this report are not necessarily indicative of the results to be expected for the full year ending December 31, 2024 or any other period.
Basis of Consolidation
The Company's condensed consolidated financial statements include accounts of the Company and its wholly-owned and majority-owned subsidiaries, and the ownership interest of minority investors is recorded as noncontrolling interest. 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.
Use of Estimates
The preparation of the Company's condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed 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 fair values of assets and liabilities acquired through acquisitions, useful lives of intangible assets and property and equipment, expected period of consumption of virtual goods, income and indirect taxes, contingent liabilities, evaluation of recoverability of intangible assets and other long-lived assets, goodwill impairment, stock-based compensation, fair value of derivatives and other financial instruments. These estimates are inherently subject to judgment and actual results could differ materially from those estimates.
Recent Accounting Pronouncements (Issued Not Yet Adopted)
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. The amendments will be effective for fiscal
years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments must be applied retrospectively, and early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures, which requires disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments will be effective for annual periods beginning after December 15, 2024. 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.
2. Revenue
Revenue from Contracts with Customers
The Company generates Software Platform and Apps revenue. Software Platform revenue is generated primarily from fees collected from advertisers and advertising networks who use the Software Platform. Apps revenue consists of in-app purchase ("IAP") revenue generated from in-app purchases made by users within the Company’s apps (“Apps”), and in-app advertising ("IAA") revenue generated from advertisers that purchase ad inventory from Apps.
Software Platform Revenue
The vast majority of the Software Platform Revenue is generated through AppDiscovery and MAX, which provide the technology to match advertisers and owners of digital advertising inventory (“Publishers”) via auctions at large scale and microsecond-level speeds. The terms for all mobile advertising arrangements are governed by the Company’s terms and conditions and generally stipulate payment terms of 30 days subsequent to the end of the month. Substantially all of the Company's contracts with customers are fully cancellable at any time or upon short notice.
The Company’s performance obligation is to provide customers with access to the Software Platform, which facilitates the advertiser’s purchase of ad inventory from Publishers. The Company does not control the ad inventory prior to its transfer to the advertiser, because the Company does not have the substantive ability to direct the use of nor obtain substantially all of the remaining benefits from the ad inventory. The Company is not primarily responsible for fulfillment and does not have any inventory risk. The Company is an agent as it relates to the sale of third-party advertising inventory and presents revenue on a net basis. The transaction price is the product of either the number of completions of agreed upon actions or advertisements displayed and the contractually agreed upon price per advertising unit with the advertiser less consideration paid or payable to Publishers. The Company recognizes Software Platform Revenue when the agreed upon action is completed or when the ad is displayed to users. The number of advertisements delivered and completions of agreed upon actions is determined at the end of each month, which resolves any uncertainty in the transaction price during the reporting period.
Software Platform Revenue also includes revenue generated from Adjust's measurement and analytics marketing platform that is recognized ratably over the subscription period, generally up to twelve months. Revenue from other services within the Software Platform was not material.
Apps Revenue
In-App Purchase Revenue
IAP Revenue includes fees collected from users to purchase virtual goods to enhance their gameplay experience. The identified performance obligation is to provide users with the ability to acquire, use, and hold virtual items over the estimated period of time the virtual items are available to the user or until the virtual item is consumed. Payment is required at the time of purchase, and the purchase price is a fixed amount.
Users make IAPs through the Company’s distribution partners. The transaction price is equal to the gross amount charged to users because the Company is the principal in the transaction. IAP fees are non-refundable. Such payments are initially recorded as deferred revenue. The Company categorizes its virtual goods as either consumable or durable. Consumable virtual goods represent goods that can be consumed by a specific player action in gameplay; accordingly, the Company recognizes revenue from the sale of consumable virtual goods as the goods are consumed. Durable virtual goods represent goods that are accessible to the user over an extended period of time; accordingly, the Company recognizes revenue from the sale of durable virtual goods ratably over the period of time the goods are available to the user, which is generally the estimated average user life (“EAUL”).
The EAUL represents the Company’s best estimate of the expected life of paying users for the applicable game. The EAUL begins when a user makes the first purchase of durable virtual goods and ends when a user is determined to be inactive. The Company determines the EAUL on a game-by-game basis. For a newly launched game with limited playing data, the Company determines its EAUL based on the EAUL of a game with sufficiently similar characteristics.
The Company determines the EAUL on a quarterly basis and applies such calculated EAUL to all bookings in the respective quarter. Determining the EAUL is subjective and requires management’s judgment. Future playing patterns may differ from historical playing patterns, and therefore the EAUL may change in the future. The EAULs are generally between five and ten months.
In-App Advertising Revenue
IAA Revenue is generated by selling ad inventory on the Company's Apps to third-party advertisers. Advertisers purchase ad inventory either through the Software Platform or through third-party advertising networks (“Ad Networks”). Revenue from the sale of ad inventory through Ad Networks is recognized net of the amounts retained by Ad Networks as the Company is unable to determine the gross amount paid by the advertisers to Ad Networks. The Company recognizes revenue when the ad is displayed to users.
The Company presents taxes collected from customers and remitted to governmental authorities on a net basis.
Disaggregation of Revenue
The following table presents revenue disaggregated by segment and type (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Software Platform Revenue | $ | 711,015 | $ | 406,063 | $ | 1,389,385 | $ | 760,821 | |||||||||||||||
| In-App Purchase Revenue | 250,570 | 233,625 | 509,766 | 484,953 | |||||||||||||||||||
| In-App Advertising Revenue | 118,534 | 110,477 | 239,083 | 219,796 | |||||||||||||||||||
| Total Apps Revenue | 369,104 | 344,102 | 748,849 | 704,749 | |||||||||||||||||||
| Total Revenue | $ | 1,080,119 | $ | 750,165 | $ | 2,138,234 | $ | 1,465,570 |
Revenue disaggregated by geography, based on user location, consists of the following (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| United States | $ | 631,503 | $ | 453,720 | $ | 1,266,107 | $ | 893,039 | |||||||||||||||
| Rest of the World | 448,616 | 296,445 | 872,127 | 572,531 | |||||||||||||||||||
| Total Revenue | $ | 1,080,119 | $ | 750,165 | $ | 2,138,234 | $ | 1,465,570 |
Contract Balances
Contract liabilities consist of deferred revenue, which are recorded for payments received in advance of the satisfaction of performance obligations. During the three months ended June 30, 2024 and 2023, the Company recognized $41.8 million and $44.8 million of revenue that was included in deferred revenue as of March 31, 2024 and 2023, respectively. During the six months ended June 30, 2024 and 2023, the Company recognized $69.5 million and $58.8 million of revenue that was included in deferred revenue as of December 31, 2023 and 2022, respectively.
Unsatisfied Performance Obligations
Substantially all of the Company’s unsatisfied performance obligations relate to contracts with an original expected length of one year or less.
3. Financial Instruments and Fair Value Measurements
The following table sets forth the Company’s financial instruments that are measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):
| As of June 30, 2024 | ||||||||||||||||||||||||||||||||
| Balance Sheet Location | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||
| Financial Assets: | ||||||||||||||||||||||||||||||||
| Money market deposit accounts | Cash and cash equivalents | $ | 1,389 | $ | 1,389 | $ | — | $ | — | |||||||||||||||||||||||
| Total financial assets | $ | 1,389 | $ | 1,389 | $ | — | $ | — |
| As of December 31, 2023 | ||||||||||||||||||||||||||||||||
| Balance Sheet Location | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||
| Financial Assets: | ||||||||||||||||||||||||||||||||
| Money market deposit accounts | Cash and cash equivalents | $ | 1,352 | $ | 1,352 | $ | — | $ | — | |||||||||||||||||||||||
| Total financial assets | $ | 1,352 | $ | 1,352 | $ | — | $ | — |
Derivatives Not Designated as Hedging Instruments
In October 2022 and March 2023, the Company entered into multiple pay-fixed receive-variable interest rate swaps as part of its interest rate risk management strategy in connection with the term loans under a certain credit agreement (see Note 11 - Credit Agreement). The Company elected to not designate the interest rate swaps as hedging instruments for accounting purposes and recorded both realized and unrealized gains and losses associated with the interest rate swaps immediately through earnings in interest expense in the Company's condensed consolidated statement of operations. The fair value of the interest rate swaps are determined using widely accepted valuation techniques including discounted cash flow analysis based on the expected cash flows of the interest rate swaps. The Company has determined that the significant inputs, such as interest yield curve and discount rate, used to value its interest rate swaps fall within Level 2 of the fair value hierarchy.
In June 2023, the Company settled the March 2023 interest rate swaps with the counterparties and received $12.2 million. The net cash proceeds received from the settlement of the interest rate swaps are presented in net cash provided by operating activities and the supplemental disclosure of cash paid for interest, net in the Company's condensed consolidated statement of cash flows. The remaining interest rate swap matured on October 31, 2023. In relation to these interest rate swaps, the Company recorded a net gain of $21.4 million and $15.7 million during the three and six months ended June 30, 2023, respectively.
Non-Marketable Equity Securities Measured at Net Asset Value
The Company held equity interests in certain private equity funds of $78.0 million and $56.7 million as of June 30, 2024 and December 31, 2023, respectively, which are measured using the net asset value practical expedient. Under the net asset value practical expedient, the Company records investments based on the proportionate share of the underlying funds’ net asset value as of the Company's reporting date. These investments are included in other assets in the Company’s condensed consolidated balance sheets.
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 $78.0 million and the unfunded commitments of $22.2 million as of June 30, 2024.
During the three and six months ended June 30, 2024, the Company made total capital contributions of nil and $18.3 million, respectively, related to these investments. The unrealized gains related to these investments were not material for the three and six months ended June 30, 2024 and 2023, respectively.
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. Any changes in carrying value are recorded within other income, net in the Company's condensed consolidated statement of operations.
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"), of which $10.0 million was closed in February 2024 and the remaining $40.0 million was closed in April 2024. In February 2024, the Company also entered into an arm's length commercial agreement with Flip Shop related to its use of the Company's AXON technology under a revenue share model.
In the second quarter of 2024, the Company purchased certain additional non-marketable equity securities for a total of $8.0 million.
As of June 30, 2024 and December 31, 2023, the carrying amounts of the Company's non-marketable equity securities were $68.1 million and $10.1 million, respectively, and were included in other assets in the Company’s condensed consolidated balance sheets.
4. Commitments and Contingencies
Commitments
As of June 30, 2024, the Company's non-cancelable minimum purchase commitments consisted primarily of a certain arrangement related to cloud platform services. In May 2022, the Company entered into a new order form under an existing master agreement that required the Company to purchase a minimum of $550.0 million of cloud services through May 2025. During the six months ended June 30, 2024, the Company made payments of $174.6 million under this arrangement, with a remaining unpaid commitment of $48.9 million as of June 30, 2024. In addition, the Company had total unfunded commitments of $22.2 million related to investments in certain private equity funds. For additional information, see Note 3 – Financial Instruments and Fair Value Measurements.
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.
Letters of Credit
As of June 30, 2024 and December 31, 2023, the Company had outstanding letters of credit in the aggregate amount of $6.3 million and $6.3 million, respectively, which were issued as security for certain leased office facilities under the Credit Agreement. These letters of credit have never been drawn upon.
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 when it is probable that a loss has been incurred and the amount can be reasonably estimated. If it is determined that a loss is reasonably possible and the loss or range of loss can be estimated, the reasonably possible loss is disclosed. The Company evaluates developments in legal matters that could affect the amount of liability that has been previously accrued, and related reasonably possible losses disclosed, and makes adjustments as appropriate. Significant judgment is required to determine the likelihood of matters and the estimated amount of a loss related to such matters. To date, losses in connection with legal proceedings have not been material.
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 condensed consolidated statements of operations in connection with the indemnification provisions have not been material. As of June 30, 2024, the Company did not have any material indemnification claims that were probable or reasonably possible.
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.
5. Goodwill and Intangible Assets
The following table presents the changes in the carrying amount of goodwill by reporting unit (in thousands):
| Software Platform | Apps | Total | |||||||||
| December 31, 2023 | $ | 1,497,109 | $ | 345,741 | $ | 1,842,850 | |||||
| Foreign currency translation | (20,937) | — | (20,937) | ||||||||
| June 30, 2024 | $ | 1,476,172 | $ | 345,741 | $ | 1,821,913 |
Intangible assets, net consisted of the following (in thousands):
| Weighted- Average Remaining Useful Life (Years) | As of June 30, 2024 | As of December 31, 2023 | |||||||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Net Book Value | Gross Carrying Value | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||||
| Apps | 3.5 | $ | 1,829,142 | $ | (1,295,431) | $ | 533,711 | $ | 1,818,907 | $ | (1,152,611) | $ | 666,296 | ||||||||||||||||
| Customer relationships | 7.8 | 515,004 | (136,221) | 378,783 | 519,175 | (111,374) | 407,801 | ||||||||||||||||||||||
| User base | 1.8 | 68,817 | (51,750) | 17,067 | 68,817 | (46,874) | 21,943 | ||||||||||||||||||||||
| License asset | 1.5 | 60,707 | (38,054) | 22,653 | 59,207 | (31,003) | 28,204 | ||||||||||||||||||||||
| Developed technology | 3.1 | 206,024 | (104,876) | 101,148 | 207,900 | (88,716) | 119,184 | ||||||||||||||||||||||
| Other | 3.2 | 75,278 | (26,705) | 48,573 | 71,196 | (21,989) | 49,207 | ||||||||||||||||||||||
| Total intangible assets | $ | 2,754,972 | $ | (1,653,037) | $ | 1,101,935 | $ | 2,745,202 | $ | (1,452,567) | $ | 1,292,635 |
The Company recorded amortization expenses related to acquired intangible assets as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Cost of revenue | $ | 83,672 | $ | 96,138 | $ | 171,814 | $ | 194,782 | |||||||||||||||
| Sales and marketing | 16,802 | 16,780 | 33,621 | 33,568 | |||||||||||||||||||
| Total | $ | 100,474 | $ | 112,918 | $ | 205,435 | $ | 228,350 |
6. Equity
In February 2022, the Company's Board authorized the repurchase of up to $750.0 million of the Company’s Class A common stock. In May and August 2023, the Company's Board authorized increases to the repurchase program of $296.0 million and $447.6 million, respectively. In February 2024, the Company's Board authorized an additional increase of $1.25 billion to the repurchase 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 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 10b-5 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 repurchase, and records any excess of the cost of the repurchased shares over their par value as a reduction to additional paid-in capital, or in the absence of additional paid-in capital, to accumulated deficit.
During the six months ended June 30, 2024 and 2023, the Company repurchased 13,466,397 and 30,880,452 shares of Class A common stock for an aggregate amount, including commissions and fees, of $752.2 million and $579.8 million, respectively. As of June 30, 2024, $500.0 million remains available of the authorized amount under the repurchase program.
During the three and six months ended June 30, 2024, 17,850,000 and 33,919,801 shares of Class B
common stock were converted to Class A common stock, respectively.
7. Stock-based Compensation
The Company maintains three equity compensation plans that provide for the issuance of shares of its common stock to the Company’s employees, directors, consultants and other service providers: the 2021 Equity Incentive Plan (the "2021 Plan"), the 2021 Partner Studio Incentive Plan, and the 2021 Employee Stock Purchase Plan (the "ESPP").
In February 2024, the Company settled a liability of $15.7 million related to certain Wurl performance-based incentive plan through the issuance of 346,836 shares of the Company's Class A common stock under the 2021 Plan and $2.1 million in cash.
In March 2024, 3,416,490 performance-based restricted stock units ("PSUs") under the 2021 Plan vested upon the achievement of the stock price target of $46.75 per share, resulting in a stock-based compensation expense of $17.9 million recorded during the three months ended March 31, 2024.
In April and June 2024, 3,416,490 and 3,416,490 PSUs under the 2021 Plan, respectively, vested upon the achievement of their respective stock price targets of $57.50 and $68.25 per share, resulting in a total stock-based compensation expense of $28.9 million recorded during the three months ended June 30, 2024.
During the six months ended June 30, 2024 the Company granted 164,207 restricted stock units ("RSUs") to certain employees under the 2021 Plan at a weighted average grant date fair value of $59.52 per share. These awards vest based on a service condition that is satisfied generally over one year.
During the three months ended June 30, 2024, 226,066 shares of Class A common stock were purchased under the ESPP.
Stock-based compensation expense is attributed to the cost center to which the award holder belongs. The following table summarizes total stock-based compensation expense by function (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Cost of revenue | $ | 1,322 | $ | 1,317 | $ | 2,790 | $ | 2,633 | |||||||||||||||
| Sales and marketing | 23,485 | 19,413 | 45,448 | 36,096 | |||||||||||||||||||
| Research and development | 61,819 | 55,946 | 121,265 | 105,875 | |||||||||||||||||||
| General and administrative | 12,098 | 4,577 | 24,474 | 19,615 | |||||||||||||||||||
| Total | $ | 98,724 | $ | 81,253 | $ | 193,977 | $ | 164,219 |
8. Earnings Per Share
The rights, including the liquidation and dividend rights, of the holders of Class A and Class B 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 and each share of Class B common stock is entitled to 20 votes per share. Each share of Class B common stock is convertible into a share of Class A common stock voluntarily at any time by the holder, and automatically upon certain events. The Class A common stock has no conversion rights. 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 net income per share attributable to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.
The following table sets forth the computation of basic and diluted net income per share attributable to common stockholders (in thousands, except share and per share data):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Basic EPS | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income attributable to AppLovin | $ | 309,969 | $ | 80,357 | $ | 546,152 | $ | 75,839 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Income attributable to options exercised by promissory notes | (79) | (314) | (911) | (290) | |||||||||||||||||||
| Income attributable to common stock subject to share repurchase agreements | — | — | (840) | — | |||||||||||||||||||
| Income attributable to unvested early exercised options | — | (4) | (1) | (9) | |||||||||||||||||||
| Net income attributable to Class A and Class B common stockholders—Basic | $ | 309,890 | $ | 80,039 | $ | 544,400 | $ | 75,540 | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average shares used in computing net income per share—Basic | 335,681,788 | 356,957,059 | 335,785,864 | 365,013,736 | |||||||||||||||||||
| Net income per share attributable to common stock—Basic | $ | 0.92 | $ | 0.22 | $ | 1.62 | $ | 0.21 | |||||||||||||||
| Diluted EPS | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income attributable to AppLovin | 309,969 | 80,357 | 546,152 | 75,839 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Income attributable to options exercised by promissory notes | (76) | (306) | (878) | (284) | |||||||||||||||||||
| Income attributable to common stock subject to share repurchase agreements | — | — | (810) | — | |||||||||||||||||||
| Income attributable to unvested early exercised options | — | (4) | (1) | (8) | |||||||||||||||||||
| Net income attributable to Class A and Class B common stockholders—Diluted | $ | 309,893 | $ | 80,047 | $ | 544,463 | $ | 75,547 | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average shares used in computing net income per share—Basic | 335,681,788 | 356,957,059 | 335,785,864 | 365,013,736 | |||||||||||||||||||
| Weighted-average dilutive stock awards | 12,282,413 | 9,383,216 | 12,541,984 | 8,008,464 | |||||||||||||||||||
| Weighted-average shares used in computing net income per share—Diluted | 347,964,201 | 366,340,275 | 348,327,848 | 373,022,200 | |||||||||||||||||||
| Net income per share attributable to common stock—Diluted | $ | 0.89 | $ | 0.22 | $ | 1.56 | $ | 0.20 |
The following table presents the forms of antidilutive potential common shares:
| As of June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Stock options exercised for promissory notes | 85,000 | 1,399,999 | |||||||||
| Early exercised stock options | — | 8,324 | |||||||||
| Stock options | — | 955,658 | |||||||||
| Unvested RSUs | 347,627 | 5,547,615 | |||||||||
| ESPP | 43,712 | 750,149 | |||||||||
| Total antidilutive potential common shares | 476,339 | 8,661,745 |
The table above excludes any unvested PSUs since the related market conditions had not been met as of June 30, 2024.
9. Income Taxes
The Company is subject to income taxes in the U.S. and in foreign jurisdictions. The Company bases the interim tax accruals on an estimated annual effective tax rate applied to year-to-date income and records the discrete tax items in the period to which they relate. In each quarter, the Company updates the estimated annual effective tax rate and makes a year-to-date adjustment to the tax provision as necessary. The Company’s calendar year 2024 annual effective tax rate differs from the U.S. statutory rate primarily due to jurisdictional mix of earnings, stock-based compensation expense, foreign tax credits, foreign derived intangible income deduction, and global intangible low-taxed income.
During the six months ended June 30, 2024, there were no material changes to the Company's unrecognized tax benefits, and the Company does not expect material changes in unrecognized tax benefits within the next twelve months.
10. Segments
The Company determines its operating segments based on how its chief operating decision maker (“CODM”), the Chief Executive Officer, manages the business, allocates resources, makes operating decisions and evaluates operating performance. The Company's two operating and reportable segments are as follows:
-
Software Platform*:* Software Platform generates revenue primarily from fees paid by advertisers for the placement of ads on mobile applications owned by Publishers.
-
Apps*:* Apps generates revenue when a user of one of the Apps makes an in-app purchase and when an advertiser purchases the digital advertising inventory of the Company's portfolio of Apps.
The CODM evaluates the performance of each operating segment using revenue and segment adjusted EBITDA. The Company defines segment adjusted EBITDA as revenue less expenses, excluding depreciation and amortization and certain items that the Company does not believe are reflective of the operating segments’ core operations. Expenses include indirect costs that are allocated to operating segments based on a reasonable allocation methodology, which are generally related to sales and marketing activities and general and administrative overhead. Revenue and expenses exclude transactions between the Company's operating segments. The CODM does not evaluate operating segments using asset information, and, accordingly, the Company does not report asset information by segment.
The following table provides information about the Company's reportable segments and a reconciliation of the total segment adjusted EBITDA to income before income taxes (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Software Platform | $ | 711,015 | $ | 406,063 | $ | 1,389,385 | $ | 760,821 | |||||||||||||||
| Apps | 369,104 | 344,102 | 748,849 | 704,749 | |||||||||||||||||||
| Total Revenue | $ | 1,080,119 | $ | 750,165 | $ | 2,138,234 | $ | 1,465,570 | |||||||||||||||
| Segment Adjusted EBITDA: | |||||||||||||||||||||||
| Software Platform | $ | 520,482 | $ | 272,886 | $ | 1,012,502 | $ | 491,580 | |||||||||||||||
| Apps | 80,712 | 60,628 | 137,463 | 115,632 | |||||||||||||||||||
| Total Segment Adjusted EBITDA | $ | 601,194 | $ | 333,514 | $ | 1,149,965 | $ | 607,212 | |||||||||||||||
| Interest expense | $ | (74,666) | $ | (50,987) | $ | (148,848) | $ | (125,498) | |||||||||||||||
| Other income, net | 9,241 | 15,817 | 12,638 | 25,588 | |||||||||||||||||||
| Amortization, depreciation and write-offs | (108,541) | (119,892) | (221,208) | (248,100) | |||||||||||||||||||
| Loss on disposal of long-lived assets | — | — | (1,646) | — | |||||||||||||||||||
| Non-operating foreign exchange gain (loss) | 330 | (126) | 224 | 546 | |||||||||||||||||||
| Stock-based compensation | (98,724) | (81,253) | (193,977) | (164,219) | |||||||||||||||||||
| Transaction-related expense | (485) | (247) | (854) | (764) | |||||||||||||||||||
| Restructuring costs | (3,082) | (1,024) | (3,082) | (2,316) | |||||||||||||||||||
| Income before income taxes | $ | 325,267 | $ | 95,802 | $ | 593,212 | $ | 92,449 |
11. Credit Agreement
The Company is a party to a certain credit agreement (the “Credit Agreement”), which provides for a senior secured term loan maturing in October 2028 (“2028 Term Loan"), a senior secured term loan maturing in August 2030 (“2030 Term Loan”), and a revolving credit facility.
In March 2024, the Company entered into Amendment No. 10 to the Credit Agreement which reduces the interest rate margin from 3.1% to 2.5% with respect to SOFR loans (or from 2.0% to 1.5% with respect to base rate loans). In connection with the amendment, the Company increased the aggregate principal amount of the 2030 Term Loan to $2.09 billion and reduced the aggregate principal amount of the 2028 Term Loan to $1.46 billion. The other material terms of the Credit Agreement remain unchanged.
The transaction was assessed at the syndicated lender level and was accounted for primarily as a debt modification. The Company expensed $6.2 million of third-party costs incurred with the amendment in other income, net in the Company’s condensed consolidated statement of operations for the six months ended June 30, 2024. Fees paid to the lenders in connection with the amendment were recorded as an additional debt discount and are amortized to interest expense over the remaining term, together with unamortized original debt issuance costs and discount, using the effective interest method.
In March 2024, the Company drew down an additional $418.7 million from the revolving credit facility to fund certain repurchases under the Company's share repurchase program. As of March 31, 2024, the entire outstanding amount under the revolving credit facility of $603.7 million was repaid in full. KKR Corporate Lending (CA) LLC, an affiliate of KKR Denali Holdings L.P. (“KKR Denali”) which owns more than 10% of the Company's voting interests, has provided revolving credit commitments in the amount of $15.0 million under the revolving credit facility.
12. Related Party Transactions
On February 29, 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 connection with the Offering, KKR Denali converted 16,000,000 shares of Class B common stock to Class A common stock. See Note 6 – Equity for additional information on the share repurchase program.
On February 14, 2024, the Company entered into certain investment and arm's length commercial agreements with Humans, Inc. See Note 3 - Financial Instruments and Fair Value Measurements for additional information. Eduardo Vivas, a member the Company's board of directors, serves as the Chief Operating Officer of Humans, Inc., and a member of its board of directors.
On March 8, 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%. On March 8, 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 for the three and six months ended June 30, 2024 and 2023.
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