Key Takeaways
- AppLovin shares soared in premarket trading Thursday morning after the app monetization company topped analysts’ first quarter expectations and issued a better-than-expected outlook.
- The company said it saw an improvement in the app advertising market during the quarter and continues to add innovations to its software.
- Monitor the $88 level, an area on the chart where AppLovin shares may run into resistance from a key horizontal trendline connecting several technically important price points extending back to June 2021.
App monetization company AppLovin (APP) posted quarterly results that topped Wall Street estimates and issued an upbeat current-quarter earnings and sales outlook amid signs of a rebound in the app advertising market, sending its shares soaring more than 14% in premarket trading Thursday morning.
The Palo Alto, California-based company, which offers a suite of software products to help market, monetize and analyze apps, posted first-quarter adjusted earnings of $549 million, easily surpassing analysts’ expectations of $496 million. Revenue in the period jumped 48% to $1.06 billion, up from $715.4 million a year earlier, and ahead of the $974 million consensus.
The company’s software segment boosted the top line, with the unit reporting revenue growth of 91% from the prior year’s equivalent quarter and 18% growth on a sequential basis, driven by platform updates that enhanced advertisers’ return on spend.
Recovery in App Advertising Market Drives Outlook
Looking ahead, the company anticipates current quarter net sales of $1.06 billion to $1.08 billion and adjusted earnings to come in between $550 million and $570 million. The midpoint of both metrics handily exceeded forecasts, which Wall Street had pegged at $1.01 billion and $521 million, respectively.
“We were encouraged to see improvement in the app advertising market with another quarter of year-over-year market growth and a continued shift to real-time bidding,” AppLovin said in its quarterly letter to shareholders. “By continuing to innovate and improve our AXON technology, we remain committed to driving growth not just for our company, but for the entire ecosystem we support.”
Monitor This Price Level Amid Earnings-Driven Buying
Taking a look at the weekly chart, AppLovin shares have tracked steadily higher following their breakout from a six-month trading range in early February. More recently, the price has consolidated within a pennant pattern, indicating a continuation of the longer-term uptrend. Indeed, the stock sits poised to climb to a new multi-year high today following the company’s impressive quarterly results.
Amid further upside, investors should keep a close eye on the $88 level, an area where the price may run into overhead resistance from a key horizontal trendline connecting several technically important price points extending back to June 2021.
AppLovin shares were up 14.5% at $84.69 at around 7:10 a.m. The stock price has more than quadrupled over the past 12 months.
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