The news: AppLovin beat expectations again, delivering a blowout quarter that affirmed its place among the most profitable players in adtech. Even as the company faces ongoing scrutiny over data practices and an SEC probe, its financial momentum appears unaffected.

The company reported $1.41 billion in revenues, up nearly 70% YoY, and earnings of $2.45 per share—topping analyst forecasts of roughly $1.34 billion and $2.39, respectively. Profit margins also widened; adjusted EBITDA surged 79% and free cash flow topped $1 billion for the quarter.

AppLovin credited its AXON advertising engine with driving growth, saying the platform’s AI optimization has made ad placement more efficient while improving yield for developers.

Why it matters: Adtech has been one of the more volatile sectors of the digital economy, but AppLovin has faced fewer headwinds than other digital advertising players. AppLovin’s vertically integrated model—combining ad tech, machine learning, and app monetization—continues growing faster than major digital players other than Reddit, which is considerably smaller.

Its margins are now closer to those of software companies than media firms, an uncommon feat in a sector long defined by razor-thin profitability. Investors appear willing to look past regulatory headwinds for now, focusing instead on execution and consistency.

The results also highlight a broader shift in digital advertising: Performance-based platforms with deep AI capabilities are stealing share from traditional social media and display networks. As Apple’s privacy policies and third-party cookie deprecation squeeze older targeting models, AppLovin’s first-party data and predictive tools are valuable assets.

What it means for marketers:

• AI is rewriting ad performance benchmarks. AppLovin’s AXON platform shows what happens when machine learning drives creative delivery and optimization—advertisers can reach users more likely to take action with fewer impressions.
• Diverse platforms are a better resource. AppLovin’s expansion into ecommerce advertising gives marketers new options beyond gaming and mobile apps, particularly for performance-based campaigns.

AppLovin is proving that controversy doesn’t always kill momentum. Its ability to execute quarter after quarter suggests marketers may be more pragmatic than moralistic, following results over rhetoric. But the company could face headwinds as the AI arms race intensifies. With margins this strong, competitors from Meta to Unity will likely double down on AI-fueled ad optimization.