AppLovin 10-Q 2026-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40325

AppLovin Corporation

(Exact name of registrant as specified in its charter)

Delaware						45-3264542
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1100 Page Mill Road

Palo Alto, California 94304

(Address of registrant’s principal executive offices, including zip code)

(800) 839-9646

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class						Trading Symbol(s)						Name of each exchange on which registered
Class A common stock, par value $0.00003 per share						APP						The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer			☒									Accelerated filer			☐
Non-accelerated filer			☐									Smaller reporting company			☐
												Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2026, the number of shares (in thousands) of the registrant’s Class A common stock outstanding was 305,732 and the number of shares (in thousands) of the registrant’s Class B common stock outstanding was 30,208.

Table of Contents

						Page
PART I			FINANCIAL INFORMATION (UNAUDITED)			3
Item 1.			Condensed Consolidated Financial Statements			3
			Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025			3
			Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025			4
			Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2026 and 2025			5
			Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025			6
			Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025			7
			Notes to Condensed Consolidated Financial Statements			9
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			27
Item 4.			Controls and Procedures			27
PART II			OTHER INFORMATION			28
Item 1.			Legal Proceedings			28
Item 1A.			Risk Factors			29
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			58
Item 5.			Other Information			59
Item 6.			Exhibits			60
			Signatures			61

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include statements about:

• our future financial performance, including our expectations regarding our revenue, cost of revenue, and operating expenses, and our ability to achieve or maintain future profitability;

• the sufficiency of our cash and cash equivalents to meet our liquidity needs;

• our ability to maintain the security and availability of our advertising solutions;

• our expectations regarding the effects of existing and developing laws and regulations, including with respect to taxation, privacy, data protection and AI;

• our ability to attract and retain employees and key personnel;

• our ability to comply with evolving changes in the data protection, privacy and regulatory landscape applicable to our business;

• our expectations regarding the macroeconomic environment, political uncertainty and international conflicts around the world;

• our ability to successfully expand our AI capabilities to support the further development of our advertising solutions, including Axon AI, our advertising recommendation engine;

• our ability to maintain, protect and enhance our intellectual property;

• our ability to manage risk associated with our business;

• the demand for our advertising solutions;

• our expectations concerning relationships with third parties;

• our ability to attract and retain clients, including in new markets such as e-commerce;

• our ability to develop new products, features, and enhancements for our advertising solutions;

• our ability to compete with existing and new competitors in existing and new markets and offerings;

• our ability to successfully acquire and integrate companies and assets and to expand and diversify our operations through strategic transactions;

• our expectations regarding new and evolving markets;

• our expectations and management of future growth;

• our expectations regarding outstanding litigation and legal, tax and regulatory matters;

• our expectations regarding our share repurchase program; and

• our ability to develop and protect our brand.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking

statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, partnerships, mergers, dispositions, joint ventures, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

PART I – FINANCIAL INFORMATION (UNAUDITED)

AppLovin Corporation

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

			March 31, 2026						December 31, 2025
Assets
Current assets:
Cash and cash equivalents			$	2,758,671					$	2,487,096
Accounts receivable, net			1,958,023						1,819,366
Prepaid expenses and other current assets			130,881						124,330
Total current assets			4,847,575						4,430,792
Property and equipment, net			114,820						122,445
Goodwill			1,523,050						1,539,986
Intangible assets, net			368,996						396,714
Equity method investments			288,669						287,666
Other non-current assets			564,595						482,007
Total assets			$	7,707,705					$	7,259,610
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable			$	697,524					$	746,977
Accrued and other current liabilities			796,858						586,811
Total current liabilities			1,494,382						1,333,788
Long-term debt			3,514,022						3,512,987
Other non-current liabilities			335,818						278,164
Total liabilities			5,344,222						5,124,939
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred Stock, $0.00003 par value—100,000 shares authorized, no shares issued and outstanding as of March 31, 2026 and December 31, 2025			—						—
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, 336,294 (Class A 306,087, Class B 30,208, Class C nil) and 338,313 (Class A 307,955, Class B 30,358, Class C nil) shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively			11						11
Additional paid-in capital			504,342						446,550
Accumulated other comprehensive loss			(67,767)						(46,987)
Retained earnings			1,926,897						1,735,097
Total stockholders’ equity			2,363,483						2,134,671
Total liabilities and stockholders’ equity			$	7,707,705					$	7,259,610

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 March 31,
			2026						2025
Revenue			$	1,842,449					$	1,158,974
Costs and expenses:
Cost of revenue			203,632						151,680
Sales and marketing			60,751						59,383
Research and development			94,104						56,406
General and administrative			44,029						51,523
Total costs and expenses			402,516						318,992
Income from operations			1,439,933						839,982
Other income (expense):
Interest expense			(51,159)						(52,888)
Other income, net			42,634						7,512
Total other expense, net			(8,525)						(45,376)
Income before income taxes			1,431,408						794,606
Provision for income taxes			225,795						71,068
Net income from continuing operations			1,205,613						723,538
Loss from discontinued operations, net of income taxes			—						(147,119)
Net income			$	1,205,613					$	576,419
Net income (loss) per share attributed to Class A and Class B common stockholders - Basic:
Continuing operations			$	3.57					$	2.13
Discontinued operations			—						(0.43)
Basic net income per share			$	3.57					$	1.70
Net income (loss) per share attributed to Class A and Class B common stockholders - Diluted:
Continuing operations			$	3.56					$	2.10
Discontinued operations			—						(0.43)
Diluted net income per share			$	3.56					$	1.67
Weighted-average common shares used to compute net income (loss) per share attributable to Class A and Class B common stockholders:
Basic			337,399						339,837
Diluted			338,729						344,878

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 March 31,
			2026						2025
Net income			$	1,205,613					$	576,419
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax			(20,780)						29,911
Other comprehensive income (loss), net of tax			(20,780)						29,911
Comprehensive income			$	1,184,833					$	606,330

The accompanying notes are an integral part of these condensed consolidated financial statements.

AppLovin Corporation

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)

			Three Months Ended March 31, 2026
			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, 2025			338,313						$	11					$	446,550					$	(46,987)					$	1,735,097					$	2,134,671
Stock issued in connection with equity awards			214						—						597						—						—						597
Shares withheld related to net share settlement of equity awards			(63)						—						(26,177)						—						—						(26,177)
Repurchase of Class A common stock			(2,170)						—						—						—						(1,013,813)						(1,013,813)
Stock-based compensation			—						—						83,372						—						—						83,372
Other comprehensive loss, net of tax			—						—						—						(20,780)						—						(20,780)
Net income			—						—						—						—						1,205,613						1,205,613
Balances as of March 31, 2026			336,294						$	11					$	504,342					$	(67,767)					$	1,926,897					$	2,363,483

			Three Months Ended March 31, 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

The accompanying notes are an integral part of these condensed consolidated financial statements.

AppLovin Corporation

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

			Three Months Ended March 31,
			2026						2025
Operating Activities
Net income			$	1,205,613					$	576,419
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization, depreciation and write-offs			33,665						79,887
Goodwill impairment			—						188,943
Stock-based compensation, excluding cash-settled awards			83,372						61,281
Other			(16,478)						8,086
Changes in operating assets and liabilities:
Accounts receivable			(138,098)						(167,382)
Prepaid expenses and other assets			(9,827)						(51,861)
Accounts payable			(49,556)						32,545
Accrued and other liabilities			182,702						103,794
Net cash provided by operating activities			1,291,393						831,712
Investing Activities
Purchase of non-marketable equity securities			—						(18,678)
Other investing activities			(5,247)						(3,986)
Net cash used in investing activities			(5,247)						(22,664)
Financing Activities
Repurchases of common stock			(981,723)						(1,000,911)
Payment of withholding taxes related to net share settlement			(26,874)						(185,667)
Payments of licensed asset obligation			—						(13,532)
Proceeds from issuance of debt			—						200,000
Other financing activities			(3,635)						(2,107)
Net cash used in financing activities			(1,012,232)						(1,002,217)
Effect of foreign exchange rate on cash and cash equivalents			(2,339)						2,782
Net increase (decrease) in cash and cash equivalents, including cash from discontinued operations			271,575						(190,387)
Less: net decrease in cash from discontinued operations			—						(35,873)
Net increase (decrease) in cash and cash equivalents			271,575						(154,514)
Cash and cash equivalents at beginning of the period			2,487,096						697,030
Cash and cash equivalents at end of the period			$	2,758,671					$	542,516

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)

			Three Months Ended March 31,
			2026						2025
Supplemental non-cash investing and financing activities disclosures:
Acquisitions not yet paid			$	—					$	20,368
Right-of-use assets obtained in exchange for lease obligations, net of modifications			$	58,027					$	3,967
Repurchases of common stock included in accrued liabilities			$	32,090					$	—
Supplemental disclosure of cash flow information:
Cash paid for interest			$	1,690					$	2,392
Cash paid for income taxes, net of refunds			$	106,677					$	5,597

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 19, 2026 (the "Annual Report"). The condensed consolidated balance sheet data as of December 31, 2025 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 months ended March 31, 2026 shown in this report are not necessarily indicative of the results to be expected for the full year ending December 31, 2026 or any other period.

Certain prior period amounts reported in the Company's condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period presentation where applicable. Amounts presented may not sum due to rounding.

Basis of Consolidation

The Company's condensed consolidated financial statements include accounts and operations of the Company and its wholly-owned subsidiaries. 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 valuation of long-lived assets and their associated estimated useful lives, valuation of goodwill, valuation of non-marketable equity securities and other financial instruments, valuation of equity method investments, income taxes, stock-based compensation, and other contingent liabilities. These estimates are inherently subject to judgment and actual results could differ materially from those estimates.

Significant Accounting Policies

There have been no material changes to the Company's significant accounting policies included in its Annual Report.

Recent Accounting Pronouncements (Issued and Adopted)

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 elected to early adopt this ASU on January 1, 2026 with no material impact on its condensed consolidated financial statements.

Recent Accounting Pronouncements (Issued Not Yet Adopted)

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial statements in accordance with U.S. GAAP. Per the FASB, the amendment does not intend to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements but rather provide clarity and improve navigability of the existing interim reporting requirements. The amendments will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The amendments may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

2. Discontinued Operations

Divestiture

On June 30, 2025, the Company completed the sale of certain wholly-owned subsidiaries that operate the Company’s Apps business (the “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. The cash consideration of $430.6 million included $400.0 million as specified in the purchase agreement and $30.6 million in purchase price adjustments in accordance with the terms of the purchase agreement. The Tripledot shares received represented approximately 22% of its outstanding ordinary shares and 20% of its fully diluted equity capitalization as of the closing date, and were accounted for as an equity method investment.

For tax purposes, the transfer of certain Apps Business subsidiaries was treated as an asset sale, resulting in a $125.6 million write-off of deferred tax assets, which was included in the provision for income taxes from discontinued operations. The Company derecognized the remaining net assets of $591.2 million and recorded a pre-tax gain of $106.2 million in discontinued operations after giving effect to $18.3 million of transaction costs. The transaction also resulted in a capital loss for income tax purposes of $204.3 million, which was fully offset by a valuation allowance.

The following table summarizes the results of the Apps Business presented as loss from discontinued operations, net of income taxes, in the condensed consolidated statements of operations for the three months ended March 31, 2025 (in thousands):

			Three Months Ended March 31, 2025
Revenue			$	325,047
Costs and expenses:
Cost of revenue			119,552
Sales and marketing			123,573
Research and development			66,512
General and administrative			2,978
Goodwill impairment			188,943
Total costs and expenses			501,558
Loss from operations			(176,511)
Other income:
Other income, net			299
Total other income, net			299
Loss from discontinued operations before income taxes			(176,212)
Benefit from income taxes			(29,093)
Loss from discontinued operations, net of income taxes			$	(147,119)

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 three months ended March 31, 2025 (in thousands):

			Three Months Ended March 31, 2025
Amortization, depreciation and write-offs			$	47,941
Stock-based compensation			$	2,268
Goodwill impairment			$	188,943
Acquisition of intangible assets			$	1,542

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 three months ended March 31, 2025.

At the time the interim impairment test was performed, the Company had not yet determined the fair value of the total consideration, which was subject to the valuation of the equity consideration at the closing of the transaction. As a result, the Company estimated the fair value of the Apps reporting unit using the discounted cash flow method of the income approach. Key valuation inputs included projected future cash flows, risk-adjusted discount rates and long-term growth rates, which were 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 substantially all of its revenue from Axon Ads Manager, the Company's AI-powered demand-side advertising solution that deploys advertiser capital at their return goals. The Company’s performance obligation is to provide customers with access to its advertising solution, which facilitates the advertisers’ purchase of advertising inventory from publishers primarily on an impression or action basis.

The Company does not control the advertising inventory prior to its transfer to the advertiser because it does not have the substantive ability to direct the use of, or obtain substantially all of the remaining benefits from, the advertising inventory. In addition, the Company is not primarily responsible for fulfillment. Therefore, the Company is an agent in these arrangements and presents revenue net of advertising inventory costs.

The transaction price is determined dynamically based on advertisers’ campaign goals, less consideration paid or payable to publishers. Revenue is recognized for impression-based arrangements when an ad impression is delivered, and for action-based arrangements when the specified action (such as a click or install) occurs.

The Company’s terms and conditions generally stipulate payment terms of 30 days after the end of the month. Substantially all of the Company's contracts with customers are cancelable at any time.

Revenue from other services was not material for any period presented.

The Company presents taxes collected from customers and remitted to governmental authorities on a net basis.

Disaggregation of Revenue

Revenue disaggregated by geography, based on user location, consists of the following (in thousands):

			Three Months Ended March 31,
			2026						2025
United States			$	907,219					$	615,703
Rest of the world			935,230						543,271
Total revenue			$	1,842,449					$	1,158,974

4. Financial Instruments and Fair Value Measurements

Financial Instruments Measured at Fair Value by Level on a Recurring Basis

As of March 31, 2026 and December 31, 2025, the Company held $200.0 million and $200.1 million in money market funds, respectively, which were 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 $139.2 million and $118.7 million as of March 31, 2026 and December 31, 2025, respectively, which are measured using the net asset value ("NAV") practical expedient and accordingly, are not classified within the fair value hierarchy. Under the NAV practical expedient, the Company records investments based on the proportionate share of the underlying funds’ NAV 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 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 $139.2 million and the remaining unfunded commitments of $3.0 million as of March 31, 2026.

During the three months ended March 31, 2026, the Company made no capital contributions related to these investments. Unrealized gains on these investments were $19.3 million for the three months ended March 31, 2026, and were not material for the three months ended March 31, 2025.

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 is 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. These investments are classified as Level 3 when measured due to impairment or qualifying observable price changes, as the valuation incorporates observable transaction prices and significant unobservable inputs.

As of March 31, 2026 and December 31, 2025, the carrying amounts of the Company's non-marketable equity securities were $19.6 million and $19.6 million, respectively, and were included in other non-current assets in the Company’s condensed consolidated balance sheets. During the three months ended March 31, 2026, there was no impairment or adjustment due to observable prices related to these investments.

5. Commitments and Contingencies

Commitments

As of March 31, 2026, the Company's non-cancelable minimum purchase commitments were primarily related to a multi-year contractual arrangement with a cloud computing services provider. In August 2024, the Company amended its agreement with the provider, committing to spending a minimum of $1.3 billion over a three-year period. By March 31, 2026, the Company had made payments of $780.4 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.

The Company records a liability for loss contingencies when it is probable that a loss has been incurred and the amount can be reasonably estimated. If a loss is reasonably possible and the amount or range of loss can be reasonably estimated, the Company discloses the estimated loss or range of loss. The Company monitors legal matters and evaluates developments that could affect previously accrued amounts or related disclosure, or whether a previously unaccrued or undisclosed matter requires accrual or disclosure, and adjusts accruals and disclosures as appropriate. Determining the likelihood of loss and the amount or range of loss involves significant judgment.

Based on its current knowledge, the Company does not believe the ultimate resolution of its outstanding legal and regulatory matters will have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows. However, if one or more of these matters were resolved against the Company for amounts in excess of the Company’s expectations, the Company’s results of operations, financial position, or cash flows could be materially affected.

As of March 31, 2026 and December 31, 2025, the Company had no material loss contingencies related to legal proceedings for which accrual or disclosure was required.

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 March 31, 2026, 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.

6. Goodwill and Intangible Assets, Net

The following table presents the changes in the carrying amount of goodwill (in thousands):

Balance as of December 31, 2025			$	1,539,986
Foreign currency translation			(16,936)
Balance as of March 31, 2026			$	1,523,050

Intangible assets, net consisted of the following (in thousands):

			Weighted- Average Remaining Useful Life (in years)						As of March 31, 2026																		As of December 31, 2025
			Gross Carrying Value						Accumulated Amortization						Net Book Value						Gross Carrying Value						Accumulated Amortization						Net Book Value
Customer relationships			6.1						$	524,716					$	(230,465)					$	294,251					$	528,207					$	(218,736)					$	309,471
Developed technology			1.5						209,134						(166,726)						42,408						210,708						(159,274)						51,434
Other			3.3						65,632						(33,295)						32,337						65,790						(29,981)						35,809
Total intangible assets									$	799,482					$	(430,486)					$	368,996					$	804,705					$	(407,991)					$	396,714

The Company recorded amortization expense related to intangible assets as follows (in thousands):

			Three Months Ended March 31,
			2026						2025
Cost of revenue			$	11,807					$	9,303
Sales and marketing			13,934						13,526
Total			$	25,741					$	22,829

7. Equity

The Company's board of directors authorized a share repurchase program in February 2022 for the Company's Class A common stock and has authorized additional amounts under the program from time to time, including an additional $3.2 billion authorized in 2025. As of December 31, 2025, $3.3 billion remained available for repurchases under the program. During the three months ended March 31, 2026, the Company repurchased and subsequently retired 2,170,041 shares of Class A common stock for an aggregate amount, including commissions, taxes, and fees, of $1.0 billion. As of March 31, 2026, $2.3 billion remained available for repurchases under the program.

Repurchases may be made from time to time through open market purchases or through privately negotiated transactions, subject to market conditions, applicable legal requirements, including surplus and solvency requirements, and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company may also, from time to time, enter into Rule 10b5-1 trading plans to facilitate repurchases of shares. The repurchase program does not obligate the Company to acquire any particular amount of Class A common stock, has no expiration date and may be modified, suspended, or terminated at any time at the Company's discretion.

The Company retires its Class A common stock upon repurchase, 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.

8. 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 Partner Studio Incentive Plan, and the 2021 Employee Stock Purchase Plan. There were no material equity award issuances during the three months ended March 31, 2026.

Stock-based compensation included in the Company's condensed consolidated statements of operations is as follows (in thousands):

			Three Months Ended March 31,
			2026						2025
Cost of revenue			$	59					$	1,100
Sales and marketing			3,232						15,966
Research and development			67,374						27,793
General and administrative			12,804						14,256
Stock-based compensation from continuing operations			83,469						59,115
Stock-based compensation from discontinued operations			—						2,268
Total stock-based compensation			$	83,469					$	61,383

9. 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 March 31,
			2026						2025
Basic EPS:
Numerator:
Net income from continuing operations			$	1,205,613					$	723,538
Less: income attributable to participating securities			—						(181)
Net income from continuing operations attributable to common stockholders - Basic			1,205,613						723,357
Loss from discontinued operations, net of income taxes, attributable to common stockholders - Basic			—						(147,082)
Net income attributable to common stockholders - Basic			$	1,205,613					$	576,275
Denominator:
Weighted-average shares used in computing net income (loss) per share - Basic			337,399						339,837
Net income (loss) per share attributed to Class A and Class B common stockholders - Basic:
Continuing operations			$	3.57					$	2.13
Discontinued operations			—						(0.43)
Basic net income per share			$	3.57					$	1.70
Diluted EPS:
Numerator:
Net income from continuing operations attributable to common stockholders - Basic			$	1,205,613					$	723,357
Re-allocation of participating securities considered potentially dilutive securities			—						3
Net income from continuing operations attributable to common stockholders - Diluted			1,205,613						723,360
Loss from discontinued operations, net of income taxes, attributable to common stockholders - Diluted			—						(147,083)
Net income attributable to common stockholders - Diluted			$	1,205,613					$	576,277
Denominator:
Weighted-average shares used in computing net income (loss) per share - Basic			337,399						339,837
Weighted-average dilutive stock awards			1,330						5,041
Weighted-average shares used in computing net income (loss) per share - Diluted			338,729						344,878
Net income (loss) per share attributed to Class A and Class B common stockholders - Diluted:
Continuing operations			$	3.56					$	2.10
Discontinued operations			—						(0.43)
Diluted net income per share			$	3.56					$	1.67
			As of March 31,
			2026						2025
Anti-dilutive potential common stock excluded			133						117

10. 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 2026 annual effective tax rate differs from the U.S. statutory rate primarily due to jurisdictional mix of earnings, and foreign-derived income deduction.

During the three months ended March 31, 2026, 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.

11. 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.

The Company operates as a single operating and reportable segment, providing end-to-end advertising solutions through Axon Ads Manager, MAX, Adjust, and Wurl. Revenue is primarily generated from fees paid by advertisers for advertisements placed in mobile applications owned by third-party publishers. As described in Note 2 – Discontinued Operations, the former Apps Business is classified as discontinued operations and excluded from segment results for all periods presented.

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 March 31,
			2026						2025
Revenue			$	1,842,449					$	1,158,974
Less:
Datacenter costs			162,229						122,358
Personnel related expenses			51,513						55,191
Interest expense			51,159						52,888
Provision for income taxes			225,795						71,068
Amortization, depreciation and write-offs			33,665						31,946
Stock-based compensation			83,469						59,115
Other expenses1			29,006						42,870
Net income from continuing operations			$	1,205,613					$	723,538

1 Other expenses include professional services costs, facilities costs, advertising costs, software costs, and other individually insignificant costs.

12. Related Party Transactions

During the three months ended March 31, 2026, the Company recognized $24.8 million in revenue related to Tripledot and its subsidiaries’ use of Axon Ads Manager, reflecting their advertiser spend net of amounts paid or payable to them as publishers.

The Company had no other material related party transactions for the three months ended March 31, 2026 and 2025.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Risk Factors” and other parts of this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

Our mission is to create meaningful connections between companies and their ideal customers. We provide end-to-end AI-powered advertising solutions for businesses to reach, monetize, and grow their global audience. Our scaled business model is intricately linked to the advertising ecosystem, providing a durable competitive advantage. We generate revenue when our advertisers achieve their return on advertising spend targets with our advertising solutions, ensuring that their success directly fuels our growth.

Since our founding in 2011, we have been focused on building advertising solutions for advertisers to improve the marketing and monetization of their content. Our founders, who were mobile app developers themselves, quickly realized the real impediment to success and growth in the advertising ecosystem was a discovery and monetization problem—breaking through the congested app stores to efficiently find users and successfully grow their business. Their first-hand experience with these challenges led to the development of our infrastructure and advertising solutions.

Our Business Model

We primarily generate revenue from fees paid by advertisers who use our advertising solutions to grow and monetize their content. We are able to grow our revenue by improving our various technologies, including improvements to our Axon AI recommendation engine.

Advertising clients include a wide variety of advertisers, from indie developer studios to some of the largest global internet platforms, such as Meta and Google. We see multiple opportunities to gain new clients, and to increase spend from existing clients, as we help them grow their businesses and make them more successful.

Our advertising solutions include Axon Ads Manager, MAX, Adjust, and Wurl. Clients use Axon Ads Manager to automate, optimize, and manage customer acquisition. They set marketing and transaction goals, and Axon Ads Manager maximizes advertising spend at their return on advertising spend targets and other marketing objectives. Axon Ads Manager comprises the vast majority of revenue. Revenue represents the dynamically-priced amount charged to advertisers based on their campaign goals, less consideration paid or payable to publishers.

Publishers use MAX to optimize the sale of their app advertising inventory to demand-side platforms and ad networks. The MAX tool provides insights to manage against key performance indicators, understand the long-term value of users, and help manage profitability. Revenue from MAX is generated based on a percentage of winning auction spend. As demand-side platforms continue to improve their recommendation systems and more apps adopt in-app advertising, we expect growth in the adoption of, and revenue from, MAX.

Advertising clients use Adjust's measurement and analytics marketing platform to better understand their users' journey while allowing marketers to make smarter decisions through measurement, attribution and fraud prevention. Revenue from Adjust is primarily generated from an annual software subscription fee.

Advertising clients use Wurl's connected TV ("CTV") platform to distribute streaming video and maximize revenue. Revenue from Wurl is primarily generated from content companies and streamers typically on a usage-based and/or CPM model.

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin

We define Adjusted EBITDA for a particular period as net income adjusted for loss from discontinued operations, net of income taxes, interest expense, other income, net (excluding certain recurring items), provision for income taxes, amortization, depreciation and write-offs and as further adjusted for stock-based compensation, transaction-related expense, restructuring costs (benefits), and non-operating foreign exchange gain, as we believe

these items are not reflective of our core operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue for the same period.

Adjusted EBITDA and Adjusted EBITDA margin are key measures we use to assess our financial performance and are also used for internal planning and forecasting purposes. We believe Adjusted EBITDA and Adjusted EBITDA margin are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. In addition, these measures are frequently used by analysts, investors, and other interested parties to evaluate and assess performance. We use Adjusted EBITDA and Adjusted EBITDA margin in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance.

Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and are presented for supplemental informational purposes only and should not be considered as alternatives or substitutes to financial information presented in accordance with GAAP. These measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our Adjusted EBITDA and Adjusted EBITDA margin should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

The following table provides our Adjusted EBITDA and Adjusted EBITDA margin for the three months ended March 31, 2026 and 2025, and a reconciliation of net income to Adjusted EBITDA:

			Three Months Ended March 31,
			2026						2025
			(in thousands, except percentages)
Revenue			$	1,842,449					$	1,158,974
Net income			1,205,613						576,419
Net margin			65.4%						49.7%
Loss from discontinued operations, net of income taxes			—						147,119
Net income from continuing operations			1,205,613						723,538
Net margin from continuing operations			65.4%						62.4%
Adjusted as follows:
Interest expense			51,159						52,888
Other income, net1			(41,360)						(8,644)
Provision for income taxes			225,795						71,068
Amortization, depreciation and write-offs			33,665						31,946
Non-operating foreign exchange gain			(1,266)						(320)
Stock-based compensation			83,469						59,115
Transaction-related expense2			(49)						4,583
Restructuring costs (benefits)2			(107)						3,598
Adjusted EBITDA			$	1,556,919					$	937,772
Adjusted EBITDA margin			84.5%						80.9%

1 Excludes recurring operational foreign exchange gains and losses.

2 Negative amount reflects a reversal of amounts expensed in prior periods.

Free Cash Flow

We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment and principal payment of finance leases. We use Free Cash Flow to help manage the health of our business, prepare budgets and for capital allocation purposes. We believe Free Cash Flow provides useful supplemental information to help investors understand underlying trends in our business and our liquidity. Free Cash Flow also reflects cash flows from both continuing and discontinued operations. Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies

may not publish Free Cash Flow or similar metrics. Thus, our Free Cash Flow should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

The following table provides our Free Cash Flow for the three months ended March 31, 2026 and 2025, and a reconciliation of net cash provided by operating activities to Free Cash Flow:

			Three Months Ended March 31,
			2026						2025
			(in thousands)
Net cash provided by operating activities			$	1,291,393					$	831,712
Less:
Purchase of property and equipment			(413)						(138)
Principal payments of finance leases			(4,232)						(5,843)
Free Cash Flow			$	1,286,748					$	825,731
Net cash used in investing activities			$	(5,247)					$	(22,664)
Net cash used in financing activities			$	(1,012,232)					$	(1,002,217)

Factors Affecting Our Performance

We believe that the future success of our business depends on many factors, including the factors described below.

Continue to invest in innovation

We have made, and intend to continue to make, significant investments in our advertising solutions to enhance their effectiveness and value proposition for our clients. We expect to continue to invest in our technology and to incur related costs, including costs to attract and retain critical engineering talent, such as stock-based compensation, as well as datacenter costs as we continue to launch enhancements to our Axon recommendation system. We believe investments in our technology will further improve effectiveness for advertisers. Our investments will also allow us to continue to enter into and expand into new verticals outside of gaming, such as e-commerce and CTV. We also continue to opportunistically explore strategic transactions related to our advertising solutions and the expansion of the markets we serve.

Attract and retain clients

We rely on existing clients for a significant portion of our revenue. As we improve our advertising solutions, we can attract additional spend from these clients. Our clients include indie studio developers and some of the largest advertising platforms in the world. We believe there is significant room for us to further expand our relationships with existing clients and increase their usage of our advertising solutions, as well as to onboard new clients. We expect to continue to invest in sales and marketing to enhance awareness of the Axon brand and drive new client acquisition.

Changes to the mobile app and advertising ecosystems

Our business and results of operations are and will continue to be, impacted by industry factors that drive the overall performance and growth of the mobile app and advertising ecosystems. Mobile app developers rely on third-party platforms, such as the Apple App Store and Google Play Store, among others, to distribute apps, collect payments made for in-app purchases, and target users with relevant advertising. These third-party platforms have significant market power and discretion to set platform fees, select which apps to promote, and decide how much consumer information to provide to advertising networks that enable our advertising solutions to target users with personalized and relevant advertising and allocate marketing campaigns in an efficient and cost-effective manner. Any changes made to the policies of these third-party platforms can drive rapid change across the mobile app and advertising ecosystems. Both the Apple App Store and Google Play Store have made various changes to their policies in recent years, as further discussed in the section titled “Risk Factors–Risks Related to Our Business, Operations and Industry–If third-party platforms change their policies in a way that harms our business, including the design and effectiveness of our advertising solutions, our business, financial condition, and results of operations could be adversely affected.” The mobile app and advertising ecosystems also continue to be subject to an evolving legal and regulatory landscape, including with respect to data protection, privacy, and AI. We must continue to innovate and stay ahead of developments in the advertising and mobile app ecosystems in order for our business to succeed and our results of operations to continue to improve.

Components of Results of Operations

Revenue

We generate substantially all of our revenue from fees collected from advertisers spending on Axon Ads Manager, which are determined dynamically based on advertisers' campaign goals. Revenue from other services was not material. Revenue does not include the results of our former Apps Business, which is classified as discontinued operations.

Cost of Revenue and Operating Expenses

Cost of revenue. Cost of revenue consists primarily of datacenter costs related mainly to third-party cloud computing services, amortization of acquired technology-related intangible assets and finance lease right-of-use assets related to certain servers and networking equipment, and third-party payment processing fees related to customer transactions.

Sales and marketing. Sales and marketing expenses consist primarily of personnel-related expenses including salaries, benefits, and stock-based compensation for employees engaged in sales and marketing activities, expenses related to marketing programs and other advertising activities, and amortization of acquired user-related intangible assets.

Research and development. Research and development expenses consist primarily of personnel-related expenses including salaries, benefits, and stock-based compensation for employees engaged in research and development activities related to existing and new products.

General and administrative. General and administrative expenses consist primarily of personnel-related expenses including salaries, benefits, and stock-based compensation for employees engaged in finance, accounting, legal, human resources and other administrative support functions, professional services fees related to legal, accounting, recruiting, and other administrative services (including acquisition or other transaction-related expenses), facilities related costs and other corporate expenses.

Other Income and Expenses

Interest expense. Interest expense consists primarily of interest expense associated with our outstanding debt, including accretion of debt discount, and issuance costs.

Other income, net. Other income, net, primarily includes interest earned on our cash and cash equivalents, fair value adjustments relating to our non-marketable equity securities, and foreign currency gains and losses.

Provision for income taxes. We are subject to income taxes in the United States and foreign jurisdictions in which we do business. These foreign jurisdictions have different statutory tax rates than those in the United States. Additionally, certain of our foreign earnings may also be taxable in the United States. Accordingly, our effective tax rate will vary depending on the relative proportion of foreign to domestic income, deduction related to foreign-derived income, future changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. Additionally, our effective tax rate can vary based on the amount of pre-tax income or loss.

Results of Operations

In this section, we discuss the results of our operations for the three months ended March 31, 2026 and 2025.

The following tables summarize our historical condensed consolidated statements of operations:

			Three Months Ended March 31,
			2026						2025
			(in thousands)
Revenue			$	1,842,449					$	1,158,974
Costs and expenses:
Cost of revenue(1)(2)			203,632						151,680
Sales and marketing(1)(2)			60,751						59,383
Research and development(1)			94,104						56,406
General and administrative(1)			44,029						51,523
Total costs and expenses			402,516						318,992
Income from operations			1,439,933						839,982
Other income (expense):
Interest expense			(51,159)						(52,888)
Other income, net			42,634						7,512
Total other expense, net			(8,525)						(45,376)
Income before income taxes			1,431,408						794,606
Provision for income taxes			225,795						71,068
Net income from continuing operations			1,205,613						723,538
Loss from discontinued operations, net of income taxes			—						(147,119)
Net income			$	1,205,613					$	576,419

__________________

(1) Includes stock-based compensation as follows:

			Three Months Ended March 31,
			2026						2025
			(in thousands)
Cost of revenue			$	59					$	1,100
Sales and marketing			3,232						15,966
Research and development			67,374						27,793
General and administrative			12,804						14,256
Total stock-based compensation			$	83,469					$	59,115

(2) Includes amortization expense related to intangible assets as follows:

			Three Months Ended March 31,
			2026						2025
			(in thousands)
Cost of revenue			$	11,807					$	9,303
Sales and marketing			13,934						13,526
Total amortization expense related to intangible assets			$	25,741					$	22,829

The following table sets forth the components of our condensed consolidated statements of operations for each of the periods presented as a percentage of revenue(1):

			Three Months Ended March 31,
			2026						2025
Revenue			100		%				100		%
Costs and expenses:
Cost of revenue			11		%				13		%
Sales and marketing			3		%				5		%
Research and development			5		%				5		%
General and administrative			2		%				4		%
Total costs and expenses			22		%				28		%
Income from operations			78		%				72		%
Other income (expense):
Interest expense			(3)		%				(5)		%
Other income, net			2		%				1		%
Total other expense, net			—		%				(4)		%
Income before income taxes			78		%				69		%
Provision for income taxes			12		%				6		%
Net income from continuing operations			65		%				62		%
Loss from discontinued operations, net of income taxes			0		%				(13)		%
Net income			65		%				50		%

---

(1) Totals of percentages of revenue may not foot due to rounding.

Comparison of Our Results of Operations for the Three Months Ended March 31, 2026 and 2025

Revenue

			Three Months Ended March 31,												2025 to 2026 % Change
			2026						2025
			(in thousands, except percentages)
Revenue			$	1,842,449					$	1,158,974					59		%

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

For the three months ended March 31, 2026, our revenue increased by $683.5 million, or 59%, compared to the same period in the prior year due primarily to improved Axon Ads Manager, where net revenue per installation increased 93%, partially offset by a decrease in the volume of installations of 18%.

Cost of revenue

			Three Months Ended March 31,												2025 to 2026 % Change
			2026						2025
			(in thousands, except percentages)
Cost of revenue			$	203,632					$	151,680					34		%
Percentage of revenue			11		%				13		%

Cost of revenue in the three months ended March 31, 2026 increased by $52.0 million, or 34%, compared to the same period in the prior year, due primarily to an increase of $39.9 million in expenses associated with operating our network infrastructure driven by the growth in our operations.

Sales and marketing

			Three Months Ended March 31,												2025 to 2026 % Change
			2026						2025
			(in thousands, except percentages)
Sales and marketing			$	60,751					$	59,383					2		%
Percentage of revenue			3		%				5		%

Sales and marketing expenses in the three months ended March 31, 2026 increased by $1.4 million, or 2%, compared to the same period in the prior year, due primarily to an increase of $16.7 million in advertising and marketing program costs, partially offset by a decrease of $15.3 million in personnel-related expenses related to a decrease in stock-based compensation-related payroll costs.

Research and development

			Three Months Ended March 31,												2025 to 2026 % Change
			2026						2025
			(in thousands, except percentages)
Research and development			$	94,104					$	56,406					67		%
Percentage of revenue			5		%				5		%

Research and development expenses in the three months ended March 31, 2026 increased by $37.7 million, or 67%, compared to the same period in the prior year, due primarily to an increase of $36.5 million in personnel-related expenses related to an increase in stock-based compensation-related payroll costs.

General and administrative

			Three Months Ended March 31,												2025 to 2026 % Change
			2026						2025
			(in thousands, except percentages)
General and administrative			$	44,029					$	51,523					(15)		%
Percentage of revenue			2		%				4		%

General and administrative expenses in the three months ended March 31, 2026 decreased by $7.5 million, or 15%, compared to the same period in the prior year, due to a decrease of $6.2 million in bad debt expense and a decrease of $2.1 million in professional services costs primarily associated with transaction-related expenses.

Interest expense

			Three Months Ended March 31,												2025 to 2026 % Change
			2026						2025
			(in thousands, except percentages)
Interest expense			$	(51,159)					$	(52,888)					(3)		%
Percentage of revenue			(3)		%				(5)		%

In the three months ended March 31, 2026, interest expense decreased by $1.7 million, or 3%, compared to the same period in the prior year, due primarily to a decrease of $0.9 million in interest expense as a result of outstanding borrowings in the prior year period under our revolving credit facility.

Other income, net

			Three Months Ended March 31,												2025 to 2026 % Change
			2026						2025
			(in thousands, except percentages)
Other income, net			$	42,634					$	7,512					**
Percentage of revenue			2		%				1		%

** Not meaningful

In the three months ended March 31, 2026, other income, net increased by $35.1 million compared to the same period in the prior year, due primarily to a net fair value remeasurement gain of $20.7 million related to our investments in non-marketable equity securities in the current period and an increase in interest income of $14.1 million driven by an increase in cash and cash equivalents.

Provision for income taxes

			Three Months Ended March 31,												2025 to 2026 % Change
			2026						2025
			(in thousands, except percentages)
Provision for income taxes			$	225,795					$	71,068					**
Percentage of revenue			12		%				6		%

** Not meaningful

In the three months ended March 31, 2026, the provision for income taxes increased by $154.7 million compared to the same period in the prior year. The increase was primarily driven by higher pre-tax income from business operations during the three months ended March 31, 2026, foreign income taxed at different rates, and a decrease in stock-based compensation benefits, partially offset by an increase in foreign-derived income deduction.

Liquidity and Capital Resources

As of March 31, 2026, we had cash and cash equivalents of $2.8 billion, consisting primarily of cash in checking and interest-bearing deposit accounts, as well as investments in money market funds. We believe that our existing cash and cash equivalents, cash flows expected to be generated by our operations, and, if necessary, our borrowing capacity under our 2024 Credit Agreement that provides for a $1.0 billion unsecured revolving credit facility, would be sufficient to satisfy our anticipated working capital and capital expenditures needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth rate; sales and marketing activities; timing and extent of spending to support our research and development efforts; capital expenditures to purchase hardware and software; our continued need to invest in our IT infrastructure to support our growth; and the volume and timing of our share repurchases. In addition, we may enter into additional strategic investments in teams and technologies, including intellectual property rights, which could increase our cash requirements. As a result of these and other factors, we may be required to seek additional equity or debt financing sooner than we currently anticipate, or we may opportunistically seek additional financing. See the section titled “Risk Factors—Risks Related to Financial and Accounting Matters” for more information regarding risks related to liquidity and capital resources.

The following table summarizes our cash flows for the periods indicated (all periods include cash flows from continuing and discontinued operations, to the extent applicable):

			Three Months Ended March 31,
			2026						2025
			(in thousands)
Net cash provided by operating activities			$	1,291,393					$	831,712
Net cash used in investing activities			$	(5,247)					$	(22,664)
Net cash used in financing activities			$	(1,012,232)					$	(1,002,217)

Operating Activities

Net cash provided by operating activities was $1.3 billion for the three months ended March 31, 2026, primarily consisting of $1.2 billion of net income, adjusted for certain non-cash items, including $83.4 million of stock-based compensation and $33.7 million of amortization, depreciation and write-offs, which were partially offset by a net decrease in operating assets and liabilities of $14.8 million.

Net cash provided by operating activities was $831.7 million for the three months ended March 31, 2025, primarily consisting of $576.4 million of net income, adjusted for certain non-cash items, including $188.9 million of goodwill impairment, $79.9 million of amortization, depreciation and write-offs, and $61.3 million of stock-based compensation, which were partially offset by a net decrease in the operating assets and liabilities of $82.9 million.

The improvement in cash flows from operating activities during the three months ended March 31, 2026 compared to the same period in the prior year was primarily driven by increased cash collections from customers due to revenue growth, partially offset by increased publisher payments, operational spending, and cash paid for income taxes.

Investing Activities

Net cash used in investing activities was $5.2 million for the three months ended March 31, 2026 and primarily related to payments for initial direct costs of certain new leases.

Net cash used in investing activities was $22.7 million for the three months ended March 31, 2025, primarily consisting of $18.7 million in purchases of non-marketable equity securities and $2.3 million in capitalized software development costs.

Financing Activities

Net cash used in financing activities was $1.0 billion for the three months ended March 31, 2026, primarily driven by $981.7 million in share repurchases under our share repurchase program and $26.9 million in payments for withholding taxes related to the net share settlement of equity awards.

Net cash used in financing activities was $1.0 billion for the three months ended March 31, 2025, primarily driven by $1.0 billion in share repurchases under our share repurchase program, $185.7 million in payments for withholding taxes related to the net share settlement of equity awards, and payments of licensed asset obligation of $13.5 million, partially offset by proceeds of $200.0 million from borrowings under the revolving credit facility pursuant to the 2024 Credit Agreement.

Share Repurchase Program

During the three months ended March 31, 2026, we repurchased and retired 2.2 million shares of Class A common stock for $1.0 billion. As of March 31, 2026, $2.3 billion remained available for repurchases under the program. The program has no expiration date, does not obligate us to repurchase any specific amount of stock, and may be modified, suspended, or terminated at any time at our discretion. For additional information, see Note 7 – Equity of the Notes to condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Contractual Obligations

Except for scheduled payments from the ongoing business, there were no other material changes to our commitments under contractual obligations since December 31, 2025. For additional information, see Note 5 – Commitments and Contingencies of the Notes to condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Critical Accounting Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. On an ongoing basis, we evaluate our estimates based on assumptions that are believed to be reasonable under the circumstances. These estimates are inherently subject to judgment and actual results could differ materially from those estimates.

An accounting estimate is considered critical if it involves significant subjectivity and judgment, and if changes in the estimate have had or are reasonably likely to have a material effect on our consolidated financial statements.

There have been no material changes to our critical accounting estimates during the three months ended March 31, 2026, as compared to those disclosed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in our Annual Report on Form 10-K for the year ended December 31, 2025. For additional information on all of our significant accounting policies, see Note 2 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

See Note 1 – Description of Business and Summary of Significant Accounting Policies of the Notes to condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.