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 per share data)
(Unaudited)
| September 30, 2025 | December 31, 2024 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,666,899 | $ | 697,030 | |||||||
| Accounts receivable, net | 1,603,953 | 1,283,335 | |||||||||
| Prepaid expenses and other current assets | 216,714 | 140,470 | |||||||||
| Current assets of discontinued operations | — | 191,355 | |||||||||
| Total current assets | 3,487,566 | 2,312,190 | |||||||||
| Property and equipment, net | 130,815 | 159,970 | |||||||||
| Goodwill | 1,540,889 | 1,457,685 | |||||||||
| Intangible assets, net | 421,868 | 472,851 | |||||||||
| Other non-current assets | 761,897 | 529,314 | |||||||||
| Non-current assets of discontinued operations | — | 937,249 | |||||||||
| Total assets | $ | 6,343,035 | $ | 5,869,259 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 516,438 | $ | 504,302 | |||||||
| Accrued and other current liabilities | 510,947 | 379,004 | |||||||||
| Deferred revenue | 45,748 | 37,053 | |||||||||
| Current liabilities of discontinued operations | — | 137,113 | |||||||||
| Total current liabilities | 1,073,133 | 1,057,472 | |||||||||
| Long-term debt | 3,511,965 | 3,508,983 | |||||||||
| Other non-current liabilities | 284,017 | 211,572 | |||||||||
| Non-current liabilities of discontinued operations | — | 1,414 | |||||||||
| Total liabilities | 4,869,115 | 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 September 30, 2025 and December 31, 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, 338,533 (Class A 308,176, 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 September 30, 2025 and December 31, 2024, respectively | 11 | 11 | |||||||||
| Additional paid-in capital | 427,998 | 593,699 | |||||||||
| Accumulated other comprehensive loss | (2,659) | (103,096) | |||||||||
| Retained earnings | 1,048,570 | 599,204 | |||||||||
| Total stockholders’ equity | 1,473,920 | 1,089,818 | |||||||||
| Total liabilities and stockholders’ equity | $ | 6,343,035 | $ | 5,869,259 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue | $ | 1,405,045 | $ | 835,186 | $ | 3,822,773 | $ | 2,224,571 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of revenue | 174,855 | 120,919 | 481,611 | 367,220 | |||||||||||||||||||
| Sales and marketing | 48,575 | 62,984 | 154,875 | 190,859 | |||||||||||||||||||
| Research and development | 43,852 | 80,776 | 144,290 | 268,847 | |||||||||||||||||||
| General and administrative | 58,756 | 36,208 | 165,326 | 115,023 | |||||||||||||||||||
| Total costs and expenses | 326,038 | 300,887 | 946,102 | 941,949 | |||||||||||||||||||
| Income from operations | 1,079,007 | 534,299 | 2,876,671 | 1,282,622 | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense | (51,429) | (74,937) | (155,726) | (223,280) | |||||||||||||||||||
| Other income (expense), net | (6,632) | 8,367 | (21,389) | 17,873 | |||||||||||||||||||
| Total other expense, net | (58,061) | (66,570) | (177,115) | (205,407) | |||||||||||||||||||
| Income before income taxes | 1,020,946 | 467,729 | 2,699,556 | 1,077,215 | |||||||||||||||||||
| Provision for income taxes | 185,401 | 34,656 | 368,617 | 83,803 | |||||||||||||||||||
| Net income from continuing operations | 835,545 | 433,073 | 2,330,939 | 993,412 | |||||||||||||||||||
| Income (loss) from discontinued operations, net of income taxes | — | 1,347 | (99,444) | (12,840) | |||||||||||||||||||
| Net income | $ | 835,545 | $ | 434,420 | $ | 2,231,495 | $ | 980,572 | |||||||||||||||
| Net income (loss) per share attributed to Class A and Class B common stockholders - Basic: | |||||||||||||||||||||||
| Continuing operations | $ | 2.47 | $ | 1.29 | $ | 6.87 | $ | 2.95 | |||||||||||||||
| Discontinued operations | — | — | (0.29) | (0.04) | |||||||||||||||||||
| Basic net income per share | $ | 2.47 | $ | 1.29 | $ | 6.58 | $ | 2.91 | |||||||||||||||
| Net income (loss) per share attributed to Class A and Class B common stockholders - Diluted: | |||||||||||||||||||||||
| Continuing operations | $ | 2.45 | $ | 1.24 | $ | 6.80 | $ | 2.85 | |||||||||||||||
| Discontinued operations | — | 0.01 | (0.29) | (0.04) | |||||||||||||||||||
| Diluted net income per share | $ | 2.45 | $ | 1.25 | $ | 6.51 | $ | 2.81 | |||||||||||||||
| Weighted-average common shares used to compute net income (loss) per share attributable to Class A and Class B common stockholders: | |||||||||||||||||||||||
| Basic | 338,531 | 336,931 | 338,990 | 336,167 | |||||||||||||||||||
| Diluted | 340,974 | 348,225 | 342,668 | 348,273 |
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income | $ | 835,545 | $ | 434,420 | $ | 2,231,495 | $ | 980,572 | |||||||||||||||
| Other comprehensive income: | |||||||||||||||||||||||
| Foreign currency translation adjustment, net of tax | 2,490 | 36,235 | 100,437 | 10,881 | |||||||||||||||||||
| Other comprehensive income, net of tax | 2,490 | 36,235 | 100,437 | 10,881 | |||||||||||||||||||
| Comprehensive income | $ | 838,035 | $ | 470,655 | $ | 2,331,932 | $ | 991,453 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands)
(Unaudited)
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
| Class A and Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| 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 | 1,674 | — | 5,329 | — | — | 5,329 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (422) | — | (185,667) | — | — | (185,667) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (2,932) | — | — | — | (1,001,670) | (1,001,670) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 61,281 | — | — | 61,281 | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 29,911 | — | 29,911 | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 576,419 | 576,419 | |||||||||||||||||||||||||||||
| Balances as of March 31, 2025 | 338,362 | $ | 11 | $ | 474,642 | $ | (73,185) | $ | 173,953 | $ | 575,421 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 1,348 | — | 9,495 | — | — | 9,495 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (195) | — | (70,983) | — | — | (70,983) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (732) | — | — | — | (270,118) | (270,118) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 35,745 | — | — | 35,745 | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 68,036 | — | 68,036 | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 819,531 | 819,531 | |||||||||||||||||||||||||||||
| Balances as of June 30, 2025 | 338,783 | $ | 11 | $ | 448,899 | $ | (5,149) | $ | 723,366 | $ | 1,167,127 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 1,083 | — | 6,190 | — | — | 6,190 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (146) | — | (60,232) | — | — | (60,232) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (1,187) | — | — | — | (510,341) | (510,341) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 33,141 | — | — | 33,141 | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 2,490 | — | 2,490 | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 835,545 | 835,545 | |||||||||||||||||||||||||||||
| Balances as of September 30, 2025 | 338,533 | $ | 11 | $ | 427,998 | $ | (2,659) | $ | 1,048,570 | $ | 1,473,920 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands)
(Unaudited)
| Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||
| Class A and Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| 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 | 3,936 | — | 23,429 | — | — | 23,429 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (1,398) | — | (80,144) | — | — | (80,144) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (13,466) | — | (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 | |||||||||||||||||||||||||||||
| Balances as of March 31, 2024 | 328,959 | $ | 11 | $ | 1,420,895 | $ | (83,896) | $ | (576,806) | $ | 760,204 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 9,436 | — | 9,377 | — | — | 9,377 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (4,226) | — | (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 | |||||||||||||||||||||||||||||
| Balances as of June 30, 2024 | 334,169 | $ | 11 | $ | 1,172,290 | $ | (90,628) | $ | (266,837) | $ | 814,836 | ||||||||||||||||||||||||
| Stock issued in connection with equity awards | 6,326 | — | 9,747 | — | — | 9,747 | |||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | (2,399) | — | (207,962) | — | — | (207,962) | |||||||||||||||||||||||||||||
| Repurchase of Class A common stock | (2,615) | — | (61,490) | — | (167,583) | (229,073) | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 80,003 | — | — | 80,003 | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 36,235 | — | 36,235 | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 434,420 | 434,420 | |||||||||||||||||||||||||||||
| Balances as of September 30, 2024 | 335,481 | $ | 11 | $ | 992,588 | $ | (54,393) | $ | — | $ | 938,206 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AppLovin Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating Activities | |||||||||||
| Net income | $ | 2,231,495 | $ | 980,572 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Amortization, depreciation and write-offs | 162,042 | 320,843 | |||||||||
| Goodwill impairment | 188,943 | — | |||||||||
| Stock-based compensation, excluding cash-settled awards | 130,167 | 275,534 | |||||||||
| Gain on divestiture, net of transaction costs | (106,229) | — | |||||||||
| Other | 80,887 | 17,229 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (326,747) | (237,530) | |||||||||
| Prepaid expenses and other assets | 84,474 | 33,199 | |||||||||
| Accounts payable | 2,069 | 55,575 | |||||||||
| Accrued and other liabilities | 210,259 | (47,414) | |||||||||
| Net cash provided by operating activities | 2,657,360 | 1,398,008 | |||||||||
| Investing Activities | |||||||||||
| Proceeds from divestiture, net of cash divested | 407,297 | — | |||||||||
| Purchase of non-marketable equity securities | (20,178) | (76,983) | |||||||||
| Other investing activities | (27,863) | (29,404) | |||||||||
| Net cash provided by (used in) investing activities | 359,256 | (106,387) | |||||||||
| Financing Activities | |||||||||||
| Repurchases of common stock | (1,774,329) | (980,672) | |||||||||
| Payment of withholding taxes related to net share settlement | (316,882) | (644,442) | |||||||||
| Principal repayments of debt | (200,000) | (686,754) | |||||||||
| Payments of licensed asset obligation | (13,532) | — | |||||||||
| Proceeds from issuance of debt | 200,000 | 1,072,330 | |||||||||
| Proceeds from issuance of common stock upon exercise of stock options and purchase of ESPP shares | 21,014 | 28,800 | |||||||||
| Other financing activities | (16,125) | (15,949) | |||||||||
| Net cash used in financing activities | (2,099,854) | (1,226,687) | |||||||||
| Effect of foreign exchange rate on cash and cash equivalents | 8,726 | 510 | |||||||||
| Net increase in cash and cash equivalents, including cash classified within current assets of discontinued operations | 925,488 | 65,444 | |||||||||
| Less: net decrease in cash classified within current assets of discontinued operations | (44,381) | — | |||||||||
| Net increase in cash and cash equivalents | 969,869 | 65,444 | |||||||||
| Cash and cash equivalents at beginning of the period | 697,030 | 502,152 | |||||||||
| Cash and cash equivalents at end of the period | $ | 1,666,899 | $ | 567,596 |
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)
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| 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 | $ | (26,227) | $ | 24,527 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid for interest | $ | 101,023 | $ | 220,140 | |||||||
| Cash paid for income taxes, net of refunds | $ | 167,291 | $ | 61,825 |
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 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.
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 27, 2025. The condensed consolidated balance sheet data as of December 31, 2024 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 nine months ended September 30, 2025 shown in this report are not necessarily indicative of the results to be expected for the full year ending December 31, 2025 or any other period.
Amounts presented may not sum due to rounding. Certain prior period amounts have been reclassified to conform to the current period presentation where applicable.
Basis of Consolidation
The Company's condensed 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.
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, income and indirect taxes, contingent liabilities, evaluation of recoverability of intangible assets and long-lived assets, goodwill impairment, stock-based compensation, fair value of financial instruments. 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 operate 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 ending 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 condensed 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 have been reclassified as assets and liabilities of discontinued operations in the condensed consolidated balance sheets as of December 31, 2024. The condensed 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 have been reallocated to continuing operations. In addition, historical intercompany balances and transactions between the Company and the divested Apps Business that were previously eliminated in consolidation have been excluded from both continuing and discontinued operations. Unless otherwise indicated, all references in the Notes to the condensed consolidated financial statements relate to continuing operations. See Note 2 – Discontinued Operations for further details.
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 12 – Segment for further details.
Equity Method Investments
The Company accounts for investments using the equity method of accounting when it has significant influence over the financial and operating policies, but not control, of the investee. The equity method investments are initially recorded at cost and included in other non-current assets in the condensed consolidated balance sheet. The Company records its share of investee's net income or loss and the amortization of equity method basis difference, calculated as the difference between the investment and the amount of underlying equity in net assets acquired one-quarter in arrears, which is applied consistently from period to period. The Company records its share of investee's net income or loss and the amortization of equity method basis difference in income (loss) from equity method investment, net of tax, in the condensed consolidated statement of operations. The Company monitors on an ongoing basis its equity method investments for indicators of other-than-temporary declines in fair value below carrying value, and records any required impairment loss in income (loss) from equity method investment, net of tax, in the condensed consolidated statement of operations. See Note 5 – Equity Method Investments for further details.
Recent Accounting Pronouncements (Issued Not Yet 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 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.
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.
2. 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 preliminary purchase price adjustments based on estimated closing date net assets, which is subject to finalization 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. See Note 5 – Equity Method Investments for further details.
For tax purposes, the transfer of certain Apps Business subsidiaries was treated as an asset sale and resulted in a write-off of $125.6 million of deferred tax assets from the carrying value of Apps Business net assets, which was included in the provision for income taxes from discontinued operations. As a result of the divestiture, the Company derecognized net assets of $591.2 million and incurred transaction costs of $18.3 million, resulting in a pre-tax gain of $106.2 million, which was recorded in net income from discontinued operations for the nine months ended September 30, 2025.
In addition, the Company entered into a Transition Services Agreement (“TSA”) with Tripledot. Under the terms of the TSA, the Company agreed to provide limited administrative and transitional services related to the divested Apps Business for a period of up to six months following the closing date.
The following table summarizes the results of operations classified as discontinued operations, net of income taxes, in the condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue | $ | — | $ | 363,049 | $ | 640,830 | $ | 1,111,898 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of revenue | — | 148,740 | 209,442 | 479,134 | |||||||||||||||||||
| Sales and marketing | — | 142,769 | 242,547 | 443,688 | |||||||||||||||||||
| Research and development | — | 69,214 | 130,298 | 200,362 | |||||||||||||||||||
| General and administrative | — | 1,691 | 4,202 | 5,857 | |||||||||||||||||||
| Goodwill impairment | — | — | 188,943 | — | |||||||||||||||||||
| Total costs and expenses | — | 362,414 | 775,432 | 1,129,041 | |||||||||||||||||||
| Income (loss) from operations | — | 635 | (134,602) | (17,143) | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Gain on divestiture, net of transaction costs | — | — | 106,229 | — | |||||||||||||||||||
| Other income (expense), net | — | (695) | 1,519 | 809 | |||||||||||||||||||
| Total other income (expense), net | — | (695) | 107,748 | 809 | |||||||||||||||||||
| Loss from discontinued operations before income taxes | — | (60) | (26,854) | (16,334) | |||||||||||||||||||
| Provision for (benefit from) income taxes | — | (1,407) | 72,590 | (3,494) | |||||||||||||||||||
| Income (loss) from discontinued operations, net of income taxes | $ | — | $ | 1,347 | $ | (99,444) | $ | (12,840) |
The following table represents assets and liabilities that are classified as discontinued operations in the condensed consolidated balance sheets for the period presented (in thousands):
| Assets: | December 31, 2024 | ||||
| Cash and cash equivalents | $ | 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 condensed consolidated statements of cash flows for the periods presented (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Amortization, depreciation and write-offs | $ | 64,054 | $ | 226,315 | |||||||
| Stock-based compensation | $ | 3,663 | $ | 15,629 | |||||||
| Goodwill impairment | $ | 188,943 | $ | — | |||||||
| Acquisition of intangible assets | $ | 22,429 | $ | 18,289 |
Goodwill Impairment
The Company evaluates goodwill for impairment at the reporting unit level on an annual basis, or more frequently if events or changes in circumstances indicate that goodwill may be impaired.
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 nine months ended September 30, 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.
3. Revenue
Revenue from Contracts with Customers
The Company generates revenue primarily from advertisers who use the Axon Platform, which consists of Axon Advertising and MAX. The platform provides the technology to match advertisers and owners of digital advertising inventory (“Publishers”) via auctions at large scale and microsecond-level speeds. The Company’s terms and conditions 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 cancelable at any time or upon a short notice.
The Company’s performance obligation is to provide customers with access to the advertising solutions, 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. 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 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.
The Company also generates revenue from Adjust's measurement and analytics marketing platform that is recognized ratably over the subscription period of generally up to twelve months. Revenue from other services was not material.
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, consists of the following (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| United States | $ | 687,927 | $ | 424,949 | $ | 1,961,951 | $ | 1,199,933 | |||||||||||||||
| Rest of the World | 717,118 | 410,237 | 1,860,822 | 1,024,638 | |||||||||||||||||||
| Total Revenue | $ | 1,405,045 | $ | 835,186 | $ | 3,822,773 | $ | 2,224,571 |
Contract Balances
Contract liabilities consist of deferred revenue related to Adjust, which are recorded for payments received in advance of the satisfaction of performance obligations. During the three months ended September 30, 2025 and 2024, the Company recognized $9.3 million and $7.4 million of revenue that was included in deferred revenue as of June 30, 2025 and 2024, respectively. During the nine months ended September 30, 2025 and 2024, the Company recognized $38.3 million and $30.6 million of revenue that was included in deferred revenue as of December 31, 2024 and 2023, 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.
4. Financial Instruments and Fair Value Measurements
Financial Instruments Measured at Fair Value by Level on a Recurring Basis
As of September 30, 2025 and December 31, 2024, the Company held $352.8 million and $41.5 million in money market deposit accounts, and $50.1 million and an immaterial amount in money market funds, respectively, which were included in cash and cash equivalents and classified as Level 1 within the fair value hierarchy.
Non-Marketable Equity Securities Measured at Net Asset Value
The Company held equity interests in certain private equity funds of $107.6 million and $77.3 million as of September 30, 2025 and December 31, 2024, 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 non-current 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. 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 $107.6 million and unfunded commitments of $3.0 million as of September 30, 2025.
During the three and nine months ended September 30, 2025, the Company made total capital contributions of nil and $18.7 million, respectively, related to these investments. Unrealized gains related to these investments were $7.0 million and $9.6 million for the three and nine months ended September 30, 2025, respectively, and were not material for the three and nine months ended September 30, 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. Any changes in carrying value are recorded within other income (expense), net in the Company's condensed consolidated statement of operations.
As of September 30, 2025 and December 31, 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 non-current assets in the Company’s condensed consolidated balance sheets. During the nine months ended September 30, 2025, the Company recorded a $50.0 million impairment on its investment in Humans, Inc. Since acquisition, the Company recorded a cumulative impairment charge of $78.0 million related to these investments.
5. Equity Method Investments
As disclosed in Note 2 – Discontinued Operations, the Company received 596.9 million ordinary shares of Tripledot, valued at $285.0 million, as part of the consideration for the sale of its Apps Business. These shares represented approximately 22% of Tripledot’s outstanding ordinary shares and the same proportion of its voting rights as of the closing date. The Company determined it had the ability to exercise significant influence, but not control, over Tripledot through its ownership interest. As such, the investment was accounted for under the equity method of accounting and included in other non-current assets on the condensed consolidated balance sheets as of September 30, 2025.
The carrying value of the equity method investment will be adjusted for the Company’s proportionate share of Tripledot’s income or loss, recognized one quarter in arrears. The basis difference between the investment's initial fair value and the Company's proportional share of Tripledot’s net assets at closing was not material. No income or loss from Tripledot was recorded in the Company’s condensed consolidated statements of operations for the three months ended September 30, 2025, as the transaction closed on June 30, 2025.
6. Commitments and Contingencies
Commitments
As of September 30, 2025, the Company's non-cancelable minimum purchase commitments were primarily related to a multi-year contractual arrangement with a cloud 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 September 30, 2025, the Company had made cumulative payments of $485.1 million towards this commitment.
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, and could, either individually or in aggregate, have a material adverse effect.
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 September 30, 2025, 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.
7. Goodwill and Intangible Assets
The following table presents the changes in the carrying amount of goodwill (in thousands):
| Balance as of December 31, 2024 | $ | 1,457,685 | |||
| Foreign currency translation | 83,204 | ||||
| Balance as of September 30, 2025 | $ | 1,540,889 |
Intangible assets, net consisted of the following (in thousands):
| Weighted- Average Remaining Useful Life (in years) | As of September 30, 2025 | As of December 31, 2024 | |||||||||||||||||||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Net Book Value | Gross Carrying Value | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||||||||||||||||
| Customer relationships | 6.6 | $ | 528,324 | $ | (205,613) | $ | 322,711 | $ | 511,125 | $ | (160,810) | $ | 350,315 | ||||||||||||||||||||||||||||
| Developed technology | 1.9 | 210,773 | (150,573) | 60,200 | 203,030 | (119,552) | 83,478 | ||||||||||||||||||||||||||||||||||
| Other | 3.5 | 65,185 | (26,228) | 38,957 | 56,880 | (17,822) | 39,058 | ||||||||||||||||||||||||||||||||||
| Total intangible assets | $ | 804,282 | $ | (382,414) | $ | 421,868 | $ | 771,035 | $ | (298,184) | $ | 472,851 |
The Company recorded amortization expenses related to acquired intangible assets as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Cost of revenue | $ | 11,730 | $ | 9,596 | $ | 30,589 | $ | 28,726 | |||||||||||||||
| Sales and marketing | 13,888 | 13,695 | 41,210 | 41,005 | |||||||||||||||||||
| Total | $ | 25,618 | $ | 23,291 | $ | 71,799 | $ | 69,731 |
8. Equity
In February 2022, the Company's board of directors authorized a stock repurchase program for the Company's Class A common stock. As of December 31, 2024, $2.3 billion remained available for repurchases under the program. During the nine months ended September 30, 2025, the Company repurchased and subsequently retired 4.9 million shares of Class A common stock for an aggregate amount, including commissions and fees, of $1.8 billion. As of September 30, 2025, $492.2 million 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 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 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 condensed consolidated statements of stockholders’ equity.
9. 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"). There were no material equity award issuances during the nine months ended September 30, 2025.
Stock-based compensation expense included in the Company's condensed consolidated statements of operations is as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Cost of revenue | $ | 175 | $ | 1,274 | $ | 1,375 | $ | 3,499 | |||||||||||||||
| Sales and marketing | 6,878 | 20,205 | 28,949 | 62,328 | |||||||||||||||||||
| Research and development | 15,593 | 45,980 | 60,593 | 160,853 | |||||||||||||||||||
| General and administrative | 11,121 | 9,943 | 36,517 | 33,225 | |||||||||||||||||||
| Total | $ | 33,767 | $ | 77,402 | $ | 127,434 | $ | 259,905 |
10. 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 one 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 per share data):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Basic EPS: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income from continuing operations | $ | 835,545 | $ | 433,073 | $ | 2,330,939 | $ | 993,412 | |||||||||||||||
| Income (loss) from discontinued operations, net of income taxes | — | 1,347 | (99,444) | (12,840) | |||||||||||||||||||
| Net income | $ | 835,545 | $ | 434,420 | $ | 2,231,495 | $ | 980,572 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Income attributable to participating securities | (50) | (110) | (416) | (2,172) | |||||||||||||||||||
| Net income attributable to Class A and Class B common stockholders—Basic | $ | 835,495 | $ | 434,310 | $ | 2,231,079 | $ | 978,400 | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average shares used in computing net income (loss) per share—Basic | 338,531 | 336,931 | 338,990 | 336,167 | |||||||||||||||||||
| Net income (loss) per share attributed to Class A and Class B common stockholders - Basic: | |||||||||||||||||||||||
| Continuing operations | $ | 2.47 | $ | 1.29 | $ | 6.87 | $ | 2.95 | |||||||||||||||
| Discontinued operations | — | — | (0.29) | (0.04) | |||||||||||||||||||
| Basic net income per share | $ | 2.47 | $ | 1.29 | $ | 6.58 | $ | 2.91 | |||||||||||||||
| Diluted EPS: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income from continuing operations | $ | 835,545 | $ | 433,073 | $ | 2,330,939 | $ | 993,412 | |||||||||||||||
| Income (loss) from discontinued operations, net of income taxes | — | 1,347 | (99,444) | (12,840) | |||||||||||||||||||
| Net income | $ | 835,545 | $ | 434,420 | $ | 2,231,495 | $ | 980,572 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Income attributable to participating securities | (50) | (106) | (412) | (2,097) | |||||||||||||||||||
| Net income attributable to Class A and Class B common stockholders—Diluted | $ | 835,495 | $ | 434,314 | $ | 2,231,083 | $ | 978,475 | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average shares used in computing net income (loss) per share—Basic | 338,531 | 336,931 | 338,990 | 336,167 | |||||||||||||||||||
| Weighted-average dilutive stock awards | 2,443 | 11,294 | 3,678 | 12,106 | |||||||||||||||||||
| Weighted-average shares used in computing net income (loss) per share—Diluted | 340,974 | 348,225 | 342,668 | 348,273 | |||||||||||||||||||
| Net income (loss) per share attributed to Class A and Class B common stockholders - Diluted: | |||||||||||||||||||||||
| Continuing operations | $ | 2.45 | $ | 1.24 | $ | 6.80 | $ | 2.85 | |||||||||||||||
| Discontinued operations | — | 0.01 | (0.29) | (0.04) | |||||||||||||||||||
| Diluted net income per share | $ | 2.45 | $ | 1.25 | $ | 6.51 | $ | 2.81 |
The following table presents the forms of antidilutive potential common shares (in thousands):
| As of September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Stock options exercised for promissory notes | — | 85 | |||||||||
| ESPP | 12 | 33 | |||||||||
| Total antidilutive potential common shares | 12 | 118 |
11. 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. 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 2025 annual effective tax rate differs from the U.S. statutory rate primarily due to jurisdictional mix of earnings, global minimum tax, foreign tax credits, foreign derived intangible income deduction, and global intangible low-taxed
income.
During the nine months ended September 30, 2025, 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.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company has evaluated the OBBBA provisions which became effective during the quarter and estimated their impact on the consolidated financial statements to be immaterial. The Company will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.
12. Segment
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 1 – Description of Business and Summary of Significant Accounting Policies and Note 2 – 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 currently 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 condensed 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 Advertising, 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):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue | $ | 1,405,045 | $ | 835,186 | $ | 3,822,773 | $ | 2,224,571 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Datacenter costs | 141,046 | 87,978 | 392,302 | 271,911 | |||||||||||||||||||
| Personnel related expenses | 50,011 | 64,998 | 155,966 | 196,686 | |||||||||||||||||||
| Interest expense | 51,429 | 74,937 | 155,726 | 223,280 | |||||||||||||||||||
| Provision for income taxes | 185,401 | 34,656 | 368,617 | 83,803 | |||||||||||||||||||
| Amortization, depreciation and write-offs | 34,978 | 32,369 | 97,988 | 94,528 | |||||||||||||||||||
| Stock-based compensation | 33,767 | 77,402 | 127,434 | 259,905 | |||||||||||||||||||
| Other expenses1 | 72,868 | 29,773 | 193,801 | 101,046 | |||||||||||||||||||
| Net income from continuing operations | $ | 835,545 | $ | 433,073 | $ | 2,330,939 | $ | 993,412 | |||||||||||||||
1 Other expenses include professional services costs, facilities costs, advertising costs, software costs, and other individually insignificant costs.
13. Debt
In March 2025, the Company borrowed $200.0 million under its revolving credit facility pursuant to the credit agreement entered in 2024 to fund share repurchases under the Company's repurchase program. For additional information regarding the share repurchases, see Note 8 - Equity. The Company repaid $100.0 million of the outstanding borrowings in April 2025 and the remaining $100.0 million in May 2025. As of September 30, 2025, $1.0 billion remained available for borrowing under the facility.
14. Related Party Transactions
KKR Denali
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 19.9 million 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 10.5 million 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 16.0 million shares of Class B common stock to Class A common stock.
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 until his resignation from both positions in September 2025.
Concurrently, the Company also entered into an arm's length commercial agreement with Humans, Inc. to provide access to Axon AI, the Company's advertising recommendation engine, under a revenue share model. No transactions have occurred under this agreement to date.
During the nine months ended September 30, 2025, the Company recognized an immaterial amount in revenue from Humans, Inc. related to their use of the Axon Platform. The transactions were conducted at arm’s-length pricing and under standard contractual terms. During the same period, the Company recorded a full impairment of its $50.0 million investment in Humans, Inc. as a result of its deteriorating financial condition and uncertainty about its ability to continue as a going concern.
Other
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%. 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 nine months ended September 30, 2025 and 2024.
15. Subsequent Events
In October 2025, the Company’s board of directors authorized an increase to the repurchase program of $3.2 billion, such that an aggregate amount of approximately $3.3 billion remained available for repurchases as of October 31, 2025. For additional information, see Note 8 – Equity.
In October 2025, the Company granted 0.9 million performance-based restricted stock units (“PSUs”) under its 2021 Equity Incentive Plan to certain key non-executive engineering employees. The PSUs are eligible to vest upon the achievement of certain market capitalization milestones and continued service through the applicable vesting dates. The estimated grant-date fair value of these awards was $410.5 million.
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