Shares of AppLovin Corporation experienced a notable decline in premarket activity on Thursday, February 12, 2026, following the release of the company's fourth-quarter financial results and its forward-looking guidance. The stock was indicated approximately 5% lower, trading near $435, a drop from its previous closing price of $456.81 on Wednesday. This movement occurred despite the company reporting a substantial 66% year-over-year increase in quarterly revenue, which reached $1.658 billion for the period ending December 31.
The financial metrics presented were robust. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter came in at $1.399 billion, representing a significant 84% margin. Furthermore, the company generated free cash flow of $1.31 billion and executed a share repurchase program, buying back and withholding 0.8 million shares during the quarter. These figures underscore the company's current operational strength and cash-generating ability.
Looking ahead to the first quarter of 2026, management provided revenue guidance in the range of $1.745 billion to $1.775 billion. The company anticipates adjusted EBITDA for the March quarter to be between $1.465 billion and $1.495 billion, which would maintain the impressive 84% margin level. This outlook sets a high bar for continued performance as the new fiscal year progresses.
During the subsequent earnings conference call, Chief Executive Officer Adam Foroughi characterized the recent period as "the strongest operating performance in our history." However, he also acknowledged persistent investor concerns regarding the long-term impact of artificial intelligence on the advertising technology landscape and the competitive environment, particularly from larger players like Meta Platforms. Analysts specifically inquired about Meta's influence in the mobile advertising sector, to which management deferred detailed discussion to the upcoming annual Form 10-K filing later in the month.
A key strategic initiative for AppLovin remains its expansion beyond its core mobile gaming advertising business into the broader e-commerce sector. Foroughi tempered near-term expectations for this endeavor, noting that the rollout of self-serve ad buying tools would be a gradual process and is not expected to materially impact financial results immediately. A broader general availability launch is planned for a later date.
The stock's volatility was evident in after-hours trading on Wednesday, where it fell roughly 6% to $429.30 before recovering some losses ahead of Thursday's market open. Trading patterns suggest the initial hour of the regular session will be critical in establishing short-term direction. Investors continue to scrutinize the company's ability to scale its e-commerce initiatives without eroding its industry-leading profitability.
Market participants are also weighing broader macroeconomic factors. The upcoming release of the U.S. Consumer Price Index (CPI) for January, scheduled for 8:30 a.m. ET on Friday, is a significant event known to influence interest rate expectations and, consequently, pressure growth-oriented stocks like AppLovin. This macro data point arrives just as the market is digesting the company's latest quarterly performance and guidance.
The investment thesis for AppLovin hinges on its high-margin business model and its potential for diversification. While the company benefits from scale, as its advertising models theoretically improve with more auction volume, it faces a double-edged sword. Any downturn in digital ad spending, tightening of data privacy regulations, or a sustained increase in customer acquisition costs could directly pressure those coveted margins. Given the stock's recent price swings, the market appears highly sensitive to any signals that could challenge the sustainability of its current growth trajectory.
