AppLovin Q3 revenue rises 55%; free cash flow grows 35%
AppLovin's Q3 cash flow rose, but a smaller share of revenue became cash. Its fourth-quarter sales forecast points to continued growth.
AppLovin reported a 55% year-over-year increase in third-quarter revenue to $2.185 billion on November 4. Free cash flow rose 35% to $1.418 billion, giving the advertising platform more cash to put to work while producing less of it per dollar of sales.
The business is expanding quickly. The useful question is how that expansion translates into money available after the equipment and lease payments in AppLovin's cash-flow calculation. A rising dollar total and a falling cash margin can arrive in the same earnings report.
More cash, slower growth than sales
The company's earnings release and reconciliations put the comparison on the same quarterly basis. AppLovin trades on Nasdaq as APP. Figures below are in US dollars for the three months ended September 30.
| Quarterly measure | 2025 | 2026 |
|---|---|---|
| Revenue | $1.405 billion | $2.185 billion |
| GAAP net income | $836 million | $1.439 billion |
| Free cash flow, company definition | $1.049 billion | $1.418 billion |
AppLovin defines free cash flow, a non-GAAP measure, as operating cash after equipment purchases and finance-lease principal payments. For the latest quarter, that is $1.429 billion less $7.476 million and $2.923 million.
This is substantial cash generation: free cash flow almost matched quarterly net income. The issue is the pace relative to sales, rather than an absence of cash behind the profit.
Profit margin and cash margin went different ways
Reported net margin rose from 59% to 66%. Dividing the exact free-cash-flow and revenue figures gives a cash margin of 64.9%, down from 74.7%. Those cash margins are TrendyVest calculations.
For an investor assessing the platform's economics, the two comparisons answer different questions. Net margin measures the earnings retained from sales under accounting rules. The cash measure tracks what remains after the specific outlays in the company's definition. Neither percentage can do the other's job.
The release's detailed cash-flow statement covers nine months. Its working-capital and tax-payment movements cannot simply be assigned to the third quarter to explain the change. One quarter also cannot establish that the lower cash margin will persist.
The fourth-quarter sales outlook points higher
AppLovin forecasts revenue of $2.365 billion to $2.395 billion for the fourth quarter. The $2.380 billion midpoint would represent about 8.9% sequential growth, by TrendyVest's calculation.
That is a sales forecast, not a free-cash-flow forecast. The distinction leaves a clear way to assess the expansion: growth in the business, profit earned on it, and cash collected from it each deserve their own line in the comparison.