Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 01, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-40325 | |
Entity Registrant Name | AppLovin Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-3264542 | |
Entity Address, Address Line One | 1100 Page Mill Road | |
Entity Address, City or Town | Palo Alto | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94304 | |
City Area Code | 800 | |
Local Phone Number | 839-9646 | |
Title of 12(b) Security | Class A common stock, par value $0.00003 per share | |
Trading Symbol | APP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001751008 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 224,542,213 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 147,807,622 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,183,743 | $ 317,235 |
Accounts receivable, net | 383,133 | 296,964 |
Prepaid expenses and other current assets | 149,969 | 48,795 |
Total current assets | 1,716,845 | 662,994 |
Property and equipment, net | 62,986 | 28,587 |
Operating lease right-of-use assets | 80,092 | 84,336 |
Goodwill | 1,016,074 | 249,773 |
Intangible assets, net | 1,675,669 | 1,086,332 |
Other assets | 47,905 | 42,571 |
Total assets | 4,599,571 | 2,154,593 |
Current liabilities: | ||
Accounts payable | 192,658 | 147,275 |
Accrued liabilities | 130,485 | 95,057 |
Licensed asset obligation | 17,856 | 18,760 |
Short-term debt | 18,310 | 15,210 |
Deferred revenue | 90,054 | 86,886 |
Operating lease liabilities | 24,536 | 22,206 |
Deferred acquisition costs, current | 129,280 | 212,658 |
Total current liabilities | 603,179 | 598,052 |
Non-current liabilities: | ||
Long-term debt | 1,733,676 | 1,583,990 |
Operating lease liabilities, noncurrent | 65,371 | 71,755 |
Other non-current liabilities | 199,708 | 59,032 |
Total liabilities | 2,601,934 | 2,312,829 |
Commitments and Contingencies (Note 5) | ||
Redeemable noncontrolling interest | 196 | 309 |
Stockholders’ equity (deficit): | ||
Convertible preferred stock, 100,000,000 and 109,090,908 shares authorized, nil and 109,090,908 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 0 | 399,589 |
Class A, Class B and Class F common stock, $0.00003 par value—1,700,000,000 (Class A 1,500,000,000, Class B 200,000,000, Class F nil) and 429,600,000 (Class A 386,400,000, Class B nil, Class F 43,200,000) shares authorized, 372,165,319 (Class A 224,357,697, Class B 147,807,622, Class F nil) and 226,364,401 (Class A 183,800,251, Class B nil, Class F 42,564,150) shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 11 | 7 |
Additional paid-in capital | 3,015,233 | 453,655 |
Accumulated other comprehensive income (loss) | (9,305) | 604 |
Accumulated deficit | (1,008,498) | (1,012,400) |
Total stockholders’ equity (deficit) | 1,997,441 | (158,545) |
Total liabilities, redeemable noncontrolling interest, and stockholders’ equity (deficit) | $ 4,599,571 | $ 2,154,593 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 109,090,908 |
Preferred stock, shares issued (in shares) | 0 | 109,090,908 |
Preferred stock, shares outstanding (in shares) | 0 | 109,090,908 |
Common stock, par value (in dollars per share) | $ 0.00003 | $ 0.00003 |
Common stock, shares authorized (in shares) | 1,700,000,000 | 429,600,000 |
Common stock, shares issued (in shares) | 372,165,319 | 226,364,401 |
Common stock, shares outstanding (in shares) | 372,165,319 | 226,364,401 |
Class A Common Stock | ||
Common stock, shares authorized (in shares) | 1,500,000,000 | 386,400,000 |
Common stock, shares issued (in shares) | 224,357,697 | 183,800,251 |
Common stock, shares outstanding (in shares) | 224,357,697 | 183,800,251 |
Class B Common Stock | ||
Common stock, shares authorized (in shares) | 200,000,000 | 0 |
Common stock, shares issued (in shares) | 147,807,622 | 0 |
Common stock, shares outstanding (in shares) | 147,807,622 | 0 |
Class F Common Stock | ||
Common stock, shares authorized (in shares) | 0 | 43,200,000 |
Common stock, shares issued (in shares) | 0 | 42,564,150 |
Common stock, shares outstanding (in shares) | 0 | 42,564,150 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 668,806 | $ 299,331 | $ 1,272,683 | $ 559,509 |
Costs and expenses: | ||||
Cost of revenue | 245,853 | 118,051 | 468,914 | 194,504 |
Sales and marketing | 265,463 | 135,319 | 530,976 | 263,986 |
Research and development | 77,462 | 29,702 | 138,338 | 48,814 |
General and administrative | 45,050 | 15,170 | 88,012 | 25,980 |
Lease modification and abandonment of leasehold improvements | 0 | 7,851 | 0 | 7,851 |
Total costs and expenses | 633,828 | 306,093 | 1,226,240 | 541,135 |
Income (loss) from operations | 34,978 | (6,762) | 46,443 | 18,374 |
Other income (expense): | ||||
Interest expense and loss on settlement of debt | (19,030) | (18,809) | (54,040) | (37,438) |
Other income (expense), net | (1,570) | 3,157 | 8,220 | 4,178 |
Total other income (expense) | (20,600) | (15,652) | (45,820) | (33,260) |
Income (loss) before income taxes | 14,378 | (22,414) | 623 | (14,886) |
Provision for (benefit from) income taxes | 14 | (703) | (3,166) | 2,161 |
Net income (loss) | 14,364 | (21,711) | 3,789 | (17,047) |
Add: Net loss attributable to noncontrolling interest | 59 | 320 | 113 | 320 |
Net income (loss) attributable to AppLovin | 14,423 | (21,391) | 3,902 | (16,727) |
Less: Net income attributable to participating securities | (1,128) | 0 | (807) | 0 |
Net income (loss) attributable to common stock—Basic | 13,295 | (21,391) | 3,095 | (16,727) |
Net income (loss) attributable to common stock—Diluted | $ 13,349 | $ (21,391) | $ 3,137 | $ (16,727) |
Net income (loss) per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.04 | $ (0.10) | $ 0.01 | $ (0.08) |
Diluted (in dollars per share) | $ 0.04 | $ (0.10) | $ 0.01 | $ (0.08) |
Weighted average common shares used to compute net income (loss) per share attributable to common stockholders: | ||||
Basic (in shares) | 335,619,207 | 213,440,147 | 279,326,624 | 212,169,247 |
Diluted (in shares) | 353,857,814 | 213,440,147 | 298,506,265 | 212,169,247 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 14,364 | $ (21,711) | $ 3,789 | $ (17,047) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation gain (loss), net of tax effect of $2.6 million for the three and six months ended June 30, 2021 | (9,188) | 96 | (9,909) | 60 |
Interest rate swap gain, net of tax effect of $0.4 million and $1.0 million for the three and six months ended June 30, 2020 | 0 | 2,455 | 0 | 588 |
Total other comprehensive income (loss) | (9,188) | 2,551 | (9,909) | 648 |
Add: Net loss attributable to noncontrolling interest | 59 | 320 | 113 | 320 |
Total comprehensive income (loss) attributable to Applovin | $ 5,235 | $ (18,840) | $ (6,007) | $ (16,079) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation gain (loss) tax component | $ 2.6 | $ 2.6 | ||
Interest rate swap gain tax component | $ 0.4 | $ 1 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | IPO | Additional Paid-In Capital | Additional Paid-In CapitalIPO | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Redeemable Noncontrolling Interest | Convertible Preferred Stock | Convertible Preferred StockIPO | Common Stock | Common StockIPO |
Balance at beginning of period at Dec. 31, 2019 | $ 0 | ||||||||||
Balance at end of period at Mar. 31, 2020 | 0 | ||||||||||
Balance at beginning of period (in shares) at Dec. 31, 2019 | 109,090,908 | 220,157,922 | |||||||||
Balance at beginning of period at Dec. 31, 2019 | $ (256,567) | $ 235,190 | $ (4,140) | $ (887,213) | $ 399,589 | $ 7 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises and vesting of early exercised Class A common stock options (in shares) | 442,503 | ||||||||||
Exercises and vesting of early exercised Class A common stock options | 145 | 145 | |||||||||
Repurchase of unvested Class A common stock related to early exercised stock (in shares) | (425,001) | ||||||||||
Repurchase of Class A common stock (in shares) | (114,000) | ||||||||||
Repurchase of Class A common stock | (760) | (760) | |||||||||
Stock-based compensation | 3,462 | 3,462 | |||||||||
Total other comprehensive loss, net | (1,903) | (1,903) | |||||||||
Net income (loss) | 4,664 | 4,664 | |||||||||
Balance at end of period (in shares) at Mar. 31, 2020 | 109,090,908 | 220,061,424 | |||||||||
Balance at end of period at Mar. 31, 2020 | (250,959) | 238,037 | (6,043) | (882,549) | $ 399,589 | $ 7 | |||||
Balance at beginning of period at Dec. 31, 2019 | 0 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net income (loss) | 320 | ||||||||||
Balance at end of period at Jun. 30, 2020 | 2,236 | ||||||||||
Balance at beginning of period (in shares) at Dec. 31, 2019 | 109,090,908 | 220,157,922 | |||||||||
Balance at beginning of period at Dec. 31, 2019 | (256,567) | 235,190 | (4,140) | (887,213) | $ 399,589 | $ 7 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (16,727) | ||||||||||
Balance at end of period (in shares) at Jun. 30, 2020 | 109,090,908 | 219,964,017 | |||||||||
Balance at end of period at Jun. 30, 2020 | (226,468) | 281,368 | (3,492) | (903,940) | $ 399,589 | $ 7 | |||||
Balance at beginning of period at Mar. 31, 2020 | 0 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Acquisition of noncontrolling interest | 2,556 | ||||||||||
Net income (loss) | 320 | (320) | |||||||||
Balance at end of period at Jun. 30, 2020 | 2,236 | ||||||||||
Balance at beginning of period (in shares) at Mar. 31, 2020 | 109,090,908 | 220,061,424 | |||||||||
Balance at beginning of period at Mar. 31, 2020 | (250,959) | 238,037 | (6,043) | (882,549) | $ 399,589 | $ 7 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises and vesting of early exercised Class A common stock options (in shares) | 37,593 | ||||||||||
Exercises and vesting of early exercised Class A common stock options | 117 | 117 | |||||||||
Repurchase of Class A common stock (in shares) | (135,000) | ||||||||||
Repurchase of Class A common stock | (1,006) | (1,006) | |||||||||
Issuance of common stock warrants and options in connection with an acquisition | 39,040 | 39,040 | |||||||||
Issuance of common stock warrants in connection with lease modification | 433 | 433 | |||||||||
Stock-based compensation | 4,747 | 4,747 | |||||||||
Total other comprehensive loss, net | 2,551 | 2,551 | |||||||||
Net income (loss) | (21,391) | (21,391) | |||||||||
Balance at end of period (in shares) at Jun. 30, 2020 | 109,090,908 | 219,964,017 | |||||||||
Balance at end of period at Jun. 30, 2020 | (226,468) | 281,368 | (3,492) | (903,940) | $ 399,589 | $ 7 | |||||
Balance at beginning of period at Dec. 31, 2020 | 309 | 309 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net income (loss) | (54) | ||||||||||
Balance at end of period at Mar. 31, 2021 | 255 | ||||||||||
Balance at beginning of period (in shares) at Dec. 31, 2020 | 109,090,908 | 226,364,401 | |||||||||
Balance at beginning of period at Dec. 31, 2020 | (158,545) | 453,655 | 604 | (1,012,400) | $ 399,589 | $ 7 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises and vesting of early exercised Class A common stock options (in shares) | 1,232,156 | ||||||||||
Exercises and vesting of early exercised Class A common stock options | 10,143 | 10,143 | |||||||||
Repurchase of Class A common stock (in shares) | (214,509) | ||||||||||
Stock-based compensation | 29,667 | 29,667 | |||||||||
Total other comprehensive loss, net | (721) | (721) | |||||||||
Net income (loss) | (10,521) | (10,521) | |||||||||
Balance at end of period (in shares) at Mar. 31, 2021 | 109,090,908 | 227,382,048 | |||||||||
Balance at end of period at Mar. 31, 2021 | (129,977) | 493,465 | (117) | (1,022,921) | $ 399,589 | $ 7 | |||||
Balance at beginning of period at Dec. 31, 2020 | 309 | 309 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net income (loss) | 113 | ||||||||||
Balance at end of period at Jun. 30, 2021 | 196 | 196 | |||||||||
Balance at beginning of period (in shares) at Dec. 31, 2020 | 109,090,908 | 226,364,401 | |||||||||
Balance at beginning of period at Dec. 31, 2020 | (158,545) | 453,655 | 604 | (1,012,400) | $ 399,589 | $ 7 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | 3,902 | ||||||||||
Balance at end of period (in shares) at Jun. 30, 2021 | 0 | 372,165,319 | |||||||||
Balance at end of period at Jun. 30, 2021 | 1,997,441 | 3,015,233 | (9,305) | (1,008,498) | $ 0 | $ 11 | |||||
Balance at beginning of period at Mar. 31, 2021 | 255 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net income (loss) | 59 | (59) | |||||||||
Balance at end of period at Jun. 30, 2021 | 196 | $ 196 | |||||||||
Balance at beginning of period (in shares) at Mar. 31, 2021 | 109,090,908 | 227,382,048 | |||||||||
Balance at beginning of period at Mar. 31, 2021 | (129,977) | 493,465 | (117) | (1,022,921) | $ 399,589 | $ 7 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises and vesting of early exercised Class A common stock options (in shares) | 1,020,588 | ||||||||||
Exercises and vesting of early exercised Class A common stock options | 5,190 | 5,190 | |||||||||
Exercise of warrant, net of shares withheld (in shares) | 6,229,081 | ||||||||||
Repurchase of Class A common stock (in shares) | (390,000) | ||||||||||
Issuance of common stock warrants and options in connection with an acquisition (in shares) | 6,320,688 | ||||||||||
Issuance of common stock warrants and options in connection with an acquisition | 342,170 | 342,170 | |||||||||
Issuance of Class A common stock (in shares) | 12,006 | ||||||||||
Issuance of Class A common stock in connection with initial public offering, net of issuance costs as adjusted for cost reimbursement (in shares) | 22,500,000 | ||||||||||
Issuance of Class A common stock in connection with initial public offering, net of issuance costs as adjusted for cost reimbursement | 1,747,971 | 1,747,970 | $ 1 | ||||||||
Conversion of preferred stock to common stock in connection with initial public offering (in shares) | (109,090,908) | 109,090,908 | |||||||||
Conversion of preferred stock to common stock in connection with initial public offering | $ 0 | $ 399,586 | $ (399,589) | $ 3 | |||||||
Stock-based compensation | 26,852 | 26,852 | |||||||||
Total other comprehensive loss, net | (9,188) | (9,188) | |||||||||
Net income (loss) | 14,423 | 14,423 | |||||||||
Balance at end of period (in shares) at Jun. 30, 2021 | 0 | 372,165,319 | |||||||||
Balance at end of period at Jun. 30, 2021 | $ 1,997,441 | $ 3,015,233 | $ (9,305) | $ (1,008,498) | $ 0 | $ 11 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating Activities | ||
Net income (loss) | $ 3,789 | $ (17,047) |
Adjustments to reconcile net income (loss) to operating activities: | ||
Amortization, depreciation and write-offs | 195,973 | 83,704 |
Amortization of debt issuance costs and discount | 6,380 | 3,414 |
Stock-based compensation | 57,103 | 8,494 |
Change in operating right-of-use asset | 12,267 | 3,578 |
Lease modification and abandonment of leasehold improvements | 0 | 7,851 |
Loss on settlement of debt | 16,852 | 0 |
Net unrealized gains on fair value remeasurement of financial instruments | (9,855) | (2,940) |
Net gain on foreign currency remeasurement | 952 | 203 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (69,881) | 7,708 |
Prepaid expenses and other current assets | (92,851) | (16,840) |
Other assets | 5,269 | 2,598 |
Accounts payable | 33,936 | (5,713) |
Operating lease liabilities | (12,083) | (2,828) |
Accrued and other liabilities | 6,752 | (2,839) |
Deferred revenue | (2,327) | 15,915 |
Net cash provided by operating activities | 152,276 | 85,258 |
Investing Activities | ||
Purchase of property and equipment | (653) | (1,183) |
Acquisitions, net of cash acquired | (1,017,012) | (523,202) |
Purchase of non-marketable investments and other | (14,000) | 0 |
Proceeds from other investing activities | 10,000 | 0 |
Capitalized software development costs | (1,517) | 0 |
Net cash used in investing activities | (1,023,182) | (524,385) |
Financing Activities | ||
Proceeds from issuance of common stock in initial public offering, net of issuance costs as adjusted for cost reimbursement | 1,744,240 | 0 |
Proceeds from debt issuance, net of issuance costs | 844,729 | 331,346 |
Payments of debt principal | (706,905) | (56,690) |
Payments of finance leases | (4,621) | (4,356) |
Proceeds from exercise of stock options | 17,888 | 262 |
Payments of deferred acquisition costs | (157,565) | (11,020) |
Repurchases of common stock | 0 | (1,766) |
Net cash provided by financing activities | 1,737,766 | 257,776 |
Effect of foreign exchange rate on cash and cash equivalents | (352) | 9 |
Net increase (decrease) in cash and cash equivalents | 866,508 | (181,342) |
Cash and cash equivalents at beginning of the period | 317,235 | 396,247 |
Cash and cash equivalents at end of the period | 1,183,743 | 214,905 |
Supplemental non-cash investing and financing activities disclosures: | ||
Issuance of convertible security related to acquisitions | 342,170 | 0 |
Acquisitions of business through issuance of common stock and common stock warrants | 0 | 38,167 |
Acquisitions not yet paid | 119,256 | 9,169 |
Deferred IPO costs not yet paid | 986 | 0 |
Assets acquired under finance leases | 2,658 | 2,780 |
Right of use assets acquired under operating leases | 0 | 6,937 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest on debt | 31,767 | 30,236 |
Cash paid for income taxes | $ 32,737 | $ 1,866 |
Description of Business and Pri
Description of Business and Principles of Consolidation | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Principles of Consolidation | Description of Business and Principles of Consolidation 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 mobile app industry with a focus on building a software-based platform for mobile app developers to improve the marketing and monetization of their apps. The Company also has a globally diversified portfolio of apps—free-to-play mobile games that it operates through its own or partner studios. The Company’s operations are 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 final prospectus dated April 14, 2021 and filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933 (the “Prospectus”). The condensed consolidated balance sheet data as of December 31, 2020 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 adjustments, consisting only of normal 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 and six months ended June 30, 2021 shown in this report are not necessarily indicative of the results to be expected for the full year ending December 31, 2021 or any other period. Principles of Consolidation The unaudited condensed consolidated financial statements reflect the accounts of AppLovin Corporation and its subsidiaries in which the Company has a controlling financial interest. In accordance with the provisions of Accounting Standards Codification (“ASC”) 810, Consolidation, the Company consolidates any variable interest entity (“VIE”) of which the Company is the primary beneficiary. The Company engages in business relationships with certain entities in the ordinary course of business to develop game Apps. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company does not consolidate a VIE in which it has a majority ownership interest when the Company is not considered the primary beneficiary. The Company evaluates its relationships with all VIEs on an ongoing basis. All intercompany transactions and balances have been eliminated upon consolidation. Initial Public Offering and Capital Structure Change The Company’s registration statement on Form S-1 (the “IPO Registration Statement”) related to its initial public offering (“IPO”) was declared effective on April 14, 2021, and the Company’s Class A common stock began trading on the Nasdaq Global Select Market on April 15, 2021. On April 19, 2021, the Company completed its IPO, in which the Company sold 22,500,000 shares of Class A common stock at price to the public of $80.00 per share. The Company received aggregate net proceeds of $1.75 billion after deducting underwriting discounts and commissions of $47.2 million and offering expenses of $7.9 million subject to certain cost reimbursements. KKR Capital Markets LLC was an underwriter for the IPO and is an affiliate of KKR Denali Holdings L.P. (“KKR Denali”), who is a principal stockholder of the Company. The Company used $400.0 million of the net proceeds from the IPO to repay the entire outstanding amount under the revolving credit facility (See Note 8). KKR Capital Markets LLC is a lender under the revolving credit facility and an affiliate of KKR Denali, a principal stockholder of the Company. Following the effectiveness of the IPO Registration Statement, the Company filed its Amended and Restated Certificate of Incorporation, which became effective immediately prior to the closing of the IPO (the “IPO Certificate”). The IPO Certificate authorizes a total of 1,500,000,000 shares of Class A common stock, 200,000,000 shares of Class B common stock, 150,000,000 shares of Class C common stock, and 100,000,000 shares of preferred stock. Upon the filing and effectiveness of the IPO Certificate, all shares of Class F common stock and Series A convertible preferred stock then outstanding automatically converted into the equivalent number of shares of Class A common stock, respectively (the “Capital Stock Conversions”). Following the Capital Stock Conversions and immediately prior to the completion of the IPO, a total of 150,307,622 shares of Class A common stock held by Adam Foroughi, the Company’s co-founder, CEO, and Chairperson; Herald Chen, the Company’s President and Chief Financial Officer, and a member of the Company’s board of directors; and KKR Denali (collectively with certain affiliates, the Class B Stockholders) were exchanged for an equivalent number of shares of Class B common stock pursuant to the terms of certain exchange agreements. Following the closing of the IPO, the Company had two classes of outstanding common stock: Class A common stock and Class B common stock. No shares of the Company’s Class C common stock or preferred stock were issued and outstanding as of June 30, 2021. The rights of the holders of all classes of stock pursuant to the IPO Certificate are as follows: Common Stock The rights of the holders of Class A common stock, Class B common stock, and Class C common stock (referred to together as the “common stock”) are identical, except with respect to voting and conversion. Voting Rights Holders of the Class A common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders, holders of the Class B common stock are entitled to 20 votes for each share held on all matters submitted to a vote of stockholders, and holders of the Class C common stock are not entitled to vote on any matter that is submitted to a vote of stockholders, except as otherwise required by law. The holders of the Class A common stock and Class B common stock will vote together as a single class, unless otherwise required by law. Under the IPO Certificate, approval of the holders of at least a majority of the outstanding shares of the Class B common stock voting as a separate class will be required to increase the number of authorized shares of the Class B common stock. In addition, Delaware law could require either holders of the Class A common stock, the Class B common stock, or the Class C common stock to vote separately as a single class in the following circumstances: • if the Company were to seek to amend the IPO Certificate to increase or decrease the par value of a class of stock, then that class would be required to vote separately to approve the proposed amendment; and • if the Company were to seek to amend the IPO Certificate in a manner that alters or changes the powers, preferences or special rights of a class of stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment. Until the date on which the final conversion of all outstanding shares of Class B common stock pursuant to the terms of the IPO Certificate occurs, approval of at least two-thirds of the outstanding shares of the Company’s Class B common stock voting as a separate class will be required to amend or modify any provision of the IPO Certificate inconsistent with, or otherwise alter, any provision of the IPO Certificate to modify the voting, conversion, or other rights, powers, preferences, privileges, or restrictions of the Company’s Class B common stock. Upon the closing of the IPO, the Class B Stockholders held all of the issued and outstanding shares of the Company’s Class B common stock. The Class B Stockholders have entered into a voting agreement (the “Voting Agreement”) whereby all Class B common stock held by the Class B Stockholders and their respective permitted entities and permitted transferees will be voted as determined by two of Mr. Foroughi, Mr. Chen, and KKR Denali (one of which must be Mr. Foroughi). Dividend Rights Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of the Company’s common stock will be entitled to receive dividends out of funds legally available if the Company’s board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that the Company’s board of directors may determine. No Preemptive or Similar Rights The Company’s common stock will not be entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions. Right to Receive Liquidation Distributions If the Company becomes subject to a liquidation, dissolution or winding-up, the assets legally available for distribution to the Company’s stockholders would be distributable ratably among the holders of the Company’s common stock and any participating preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock. Conversion of Class B Common Stock Each share of Class B common stock will be convertible at any time at the option of the holder into one share of Class A common stock. Following the closing of the IPO, shares of Class B common stock will automatically convert into shares of Class A common stock upon sale or transfer except for certain transfers described in the IPO Certificate, including transfers for estate planning, transfers among KKR Denali and its affiliates, or other transfers among the Class B Stockholders. Withdrawal from the Voting Agreement constitutes a transfer. Each share of Class B common stock will convert automatically into one share of Class A common stock upon the date fixed by the Company’s board of directors that is no less than 61 days and no more than 180 days following the date on which (i) the Voting Agreement is terminated or (ii) Adam Foroughi is no longer involved with the Company as a member of the board of directors or as an executive officer. Conversion of Class C Common Stock After the conversion or exchange of all outstanding shares of the Company’s Class B common stock into shares of Class A common stock, all outstanding shares of Class C common stock will convert automatically into Class A common stock, on a share-for-share basis, on the date or time specified by the holders of a majority of the outstanding shares of Class A common stock, voting as a separate class. Preferred Stock The Company’s IPO Certificate also authorizes the issuance of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by the board of directors. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Revenue from Contracts with Customers The Company generates Business and Consumer revenue. Business Revenue includes fees paid by mobile app advertisers that use the Company’s software platform (“Software Platform”), and revenue generated from the sale of digital advertising inventory of the Company’s apps (“Apps”). Consumer Revenue consists of mobile in-app purchases (“IAPs”) made by users within Apps. Business Revenue Our Software Platform provides the technology to match advertisers and third-party owners of digital advertising inventory (“Publishers”) via auctions at large scale and microsecond-level speeds. The pricing and terms for all mobile advertising arrangements are governed by the Company’s terms and conditions and generally stipulate payment terms of 30 days subsequent to the end of the month. The contract is fully cancellable at any time. For Business Revenue generated through placement of advertisements on mobile applications owned by Publishers, the Company’s performance obligation is to provide an advertiser with access to our Software Platform which facilitates the advertiser’s purchase of advertising inventory from Publishers. The Company does not control the advertising inventory prior to its transfer to the advertiser, the Company’s customer, because the Company does not have the substantive ability to direct the use of, nor obtain substantially all of the remaining benefits from the advertising inventory. The Company is not primarily responsible for fulfillment and does not have any inventory risk. The Company is an agent as it relates to the sale of third-party advertising inventory and presents revenue on a net basis. The transaction price is the product of either the number of completions of agreed upon actions or advertisements displayed and the contractually agreed upon price per advertising unit with the advertiser less consideration paid or payable to Publishers. Advertisers purchase Apps advertising inventory either through the Software Platform or through third-party advertising networks (“Ad Networks”). Revenue from the sale of advertising inventory through Ad Networks is recognized net of the amounts retained by Ad Networks as the Company is unable to determine the gross amount paid by the advertisers to Ad Networks. The Company recognizes mobile advertising revenue when the agreed upon action is completed or when the ad is displayed to users, depending on the agreed upon pricing mechanism with an advertiser or Ad Network. The number of advertisements delivered and completions of agreed upon actions is determined at the end of each month, which resolves any uncertainty in the transaction price during the reporting period. Consumer Revenue IAPs include fees collected from users for the purchase of virtual goods to enhance their gameplay experience. The identified performance obligation is to provide users with the ability to acquire, use, and hold virtual items over the estimated period of time the virtual items are available to the user or until the virtual item is consumed. The Company categorizes its virtual goods as either consumable or durable. Consumable virtual goods represent goods that can be consumed by a specific player action in gameplay; accordingly, the Company recognizes revenue from the sale of consumable virtual goods as the goods are consumed and the Company’s performance obligation is satisfied. Durable virtual goods represent goods that are accessible to the user over an extended period of time; accordingly, the Company recognizes revenue from the sale of durable virtual goods ratably over the period of time the goods are available to the user and the Company’s performance obligation is satisfied, which is generally the estimated average user life (“EAUL”). Payment is required at the time of purchase and the purchase price is a fixed amount. Users make IAPs through the Company’s distribution partners. The transaction price is equal to the gross amount charged to users because the Company is the principal in the transaction. IAPs fees are non-refundable. Such payments are initially recorded to deferred revenue. The EAUL represents the Company’s best estimate of the expected life of paying users for the applicable game. The EAUL begins when a user makes a first purchase of durable virtual goods and ends when a user is determined to be inactive. The Company determines the EAUL on a game-by-game basis. For a newly launched game that has limited playing data, the Company determines its EAUL based on the EAUL of a game that has sufficiently similar characteristics. The Company determines the EAUL on a quarterly basis and applies such calculated EAUL to all bookings in the respective quarter. Determining the EAUL is subjective and requires management’s judgment. Future playing patterns may differ from historical playing patterns, and therefore the EAUL may change in the future. The EAULs are generally between six The Company presents taxes collected from customers and remitted to governmental authorities on a net basis. Asset Acquisitions and Business Combinations The Company performs an initial test to determine whether substantially all of the fair value of the gross assets transferred are concentrated in a single identifiable asset or a group of similar identifiable assets, such that the acquisition would not represent a business. If that test suggests that the set of assets and activities is a business, the Company then performs a second test to evaluate whether the assets and activities transferred include inputs and substantive processes that together, significantly contribute to the ability to create outputs, which would constitute a business. If the result of the second test suggests that the acquired assets and activities constitute a business, the Company accounts for the transaction as a business combination. For transactions accounted for as business combinations, the Company allocates the fair value of acquisition consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. Acquisition consideration includes the fair value of any promised contingent consideration. The excess of the fair value of acquisition consideration over the fair value of acquired identifiable assets and liabilities is recorded as goodwill. Contingent consideration is remeasured to its fair value each reporting period with changes in the fair value of contingent consideration recorded in general and administrative expenses. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates. In certain circumstances, the allocations of the excess purchase price are based upon preliminary estimates and assumptions and subject to revision when the Company receives final information, including appraisals and other analyses. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Acquisition-related costs are expensed as incurred. For transactions accounted for as asset acquisitions, the cost, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values. The Company generally includes contingent consideration in the cost of the assets acquired only when the uncertainty is resolved. The Company recognizes contingent consideration adjustments to the cost of the acquired assets prospectively using the straight-line method over the remaining useful life of the assets. No goodwill is recognized in asset acquisitions. Services and Development Agreements The Company enters into strategic agreements with mobile gaming studios (“Partner Studios”). The Company has historically allowed these Partner Studios to continue their operations with a significant degree of autonomy. In some cases, the Company bought Apps from Partner Studios and entered into service and development agreements whereby Partner Studios provide support in improving existing Apps and developing new Apps. The substantial majority of payments associated with service agreements for existing Apps are expensed to research and development when the services are rendered as the payments primarily relate to developing enhancements for the Apps. Payments for new Apps associated with development agreements are generally made in connection with the development of a particular App, and therefore, the Company is subject to development risk prior to the release of the App. Accordingly, payments that are due prior to completion of an App are generally expensed to research and development over the development period as the services are incurred. Payments due after completion of an App are generally capitalized and expensed as cost of revenue. See Note 6, “Acquisitions” for additional information. Recent Accounting Pronouncements (Issued and Not Yet Adopted) In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The standard eliminates beneficial conversion feature and cash conversion models resulting in more convertible instruments being accounted for as a single unit; and simplifies classification of debt on the balance sheet and earnings per share calculation. These changes will become effective for the Company on January 1, 2022. The Company is currently evaluating the potential impact of these changes. In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Option. The ASU requires the issuers to account for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. Under the guidance, an issuer determines the accounting for the modification or exchange based on whether the transaction was done to issue equity, to issue or modify debt, or for other reasons. These changes will become effective for the Company on January 1, 2022. The Company is currently evaluating the potential impact of these changes. Recent Accounting Pronouncements (Issued and Adopted) In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. The ASU impacts various topic areas within ASC 740, including accounting for taxes under hybrid tax regimes, accounting for increases in goodwill, allocation of tax amounts to separate company financial statements within a group that files a consolidated tax return, intra period tax allocation, interim period accounting, and accounting for ownership changes in investments, among other minor codification improvements. The Company adopted this ASU on January 1, 2021 with no material financial statement impact upon adoption. In January 2020, the FASB issued ASU 2020-01, Clarifying the Interactions between Investments—Equity Securities, Investments—Equity Method and Joint Ventures, and Derivatives and Hedging. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The following table presents revenue disaggregated by type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Business Revenue - Apps $ 162,223 $ 95,583 $ 319,186 $ 195,332 Business Revenue - Software Platform 145,664 40,909 234,083 87,421 Total Business Revenue 307,887 136,492 553,269 282,753 Consumer Revenue 360,919 162,839 719,414 276,756 Total Revenue $ 668,806 $ 299,331 $ 1,272,683 $ 559,509 Revenue disaggregated by geography, based on user location, consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 United States $ 406,179 $ 189,812 $ 772,345 $ 351,900 Rest of the World 262,627 109,519 500,338 207,609 Total Revenue $ 668,806 $ 299,331 $ 1,272,683 $ 559,509 Contract Balances Contract liabilities consist of deferred revenue and include payments received in advance of the satisfaction of performance obligations. During the three months ended June 30, 2021 and 2020, the Company recognized $59.5 million and $8.0 million of revenue that was included in deferred revenue as of March 31, 2021 and 2020, respectively. During the six months ended June 30, 2021 and 2020, the Company recognized $81.4 million and $8.2 million of revenue that was included in deferred revenue as of December 31, 2020 and 2019, respectively. Unsatisfied Performance Obligations All of the Company’s unsatisfied performance obligations relate to contracts with an original expected length of one year or less. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table sets forth the Company’s financial instruments that were measured at fair value by level within the fair value hierarchy on a recurring basis as of the dates indicated (in thousands): As of June 30, 2021 Balance Sheet Location Total Level 1 Level 2 Level 3 Financial Assets: Money market funds Cash and cash equivalents $ 477 $ 477 $ — $ — Marketable equity securities Prepaid expenses and other current assets 4,715 4,715 Total financial assets $ 5,192 $ 5,192 $ — $ — Financial Liability: Convertible security Deferred acquisition costs, current $ 49,000 $ — $ — $ 49,000 As of December 31, 2020 Balance Sheet Location Total Level 1 Level 2 Level 3 Financial Assets: Money market funds Cash and cash equivalents $ 6,413 $ 6,413 $ — $ — Embedded derivative Long-term debt 5,680 — — 5,680 Total financial assets $ 12,093 $ 6,413 $ — $ 5,680 Financial Liability: Convertible security Deferred acquisition costs, current $ 46,500 $ — $ — $ 46,500 Convertible Security In November 2020, the Company issued a convertible security as part of the consideration exchanged for certain mobile game Apps acquired from an independent foreign-based mobile game developer (the "Seller"). The Company elected to account for the convertible security using the fair value option. Under the fair value option, the financial liability is initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The fair value of the convertible security was determined using the probability-weighted expected return method (“PWERM”). This valuation methodology is based on unobservable estimates and judgements, and therefore is classified as a Level 3 fair value measurement. The significant unobservable input used in the fair value measurement of the convertible security is the expected timing of occurrence of an IPO and a discount for lack of marketability derived based on the remaining term of the lock up period related to the Company's Class A common stock into which the convertible security is convertible. Fair value measurements are highly sensitive to changes in this input and significant changes in this input would result in a significantly higher or lower fair value. For the three and six months ended June 30, 2021, the Company recorded a total loss of $1.8 million and $2.5 million, respectively, in other income (expense), net in the Company’s condensed consolidated statements of operations due to the change in fair value of the convertible security. The convertible security is included in deferred acquisition costs, current, in the Company’s condensed consolidated balance sheets. Embedded Derivative Loans issued under Company’s credit agreement with the lenders party thereto and Bank of America, N.A., as administrative agent for the lenders (the “Credit Agreement”), contain certain interest adjustment features which were determined to be an embedded derivative requiring bifurcation and separate accounting as the features are not clearly and closely related to the host debt instrument. The embedded derivative was initially valued and remeasured using the “with-and-without” method. The “with-and-without” methodology involves valuing the whole instrument with and without the embedded derivative using a discounted cash flow approach. The difference of the estimated fair value between the instrument with the embedded derivative and the instrument without the embedded derivative is the fair value of the embedded derivative. This valuation methodology is based on unobservable estimates and judgements, and therefore is classified as a Level 3 fair value measurement. The significant unobservable input used in the fair value measurement of the embedded derivative is the expected timing of occurrence of an IPO. Fair value measurements are highly sensitive to changes in these inputs and significant changes in these inputs would result in a significantly higher or lower fair value. The initial fair value of the embedded derivative was determined to be nominal for term loans issued prior to 2021 and $5.6 million for the term loans issued in February 2021, which was accounted for as a reduction to the carrying amount of the term loans. After the effectiveness of the IPO Registration Statement, the applicable margins for both the Term Loans and the Revolving Credit Loans were reduced by 0.25% on April 16, 2021 in accordance with the pre-existing terms of the Credit Agreement. As a result, the embedded derivative for the contingent interest adjustment feature related to the term loans was settled. The Company remeasured the embedded derivative to its fair value of $17.8 million on the settlement date, and then reclassified it to the carrying amount of the term loans. For the three and six months ended June 30, 2021, the Company recorded a total gain of $1.1 million and $7.6 million, respectively, in other income (expense), net in the Company’s condensed consolidated statements of operations due to the change in fair value of the embedded derivative. There was no gain or loss related to the change in fair value of the embedded derivative during the same periods in 2020. Marketable Equity Securities The Company’s marketable equity securities consist entirely of its investment in the ordinary shares of Huuuge, Inc., a foreign-based independent mobile game developer, which completed its initial public offering and became listed on the Warsaw Stock Exchange in the first quarter of 2021. The Company had carried the investment at cost in other assets on the Company’s consolidated balance sheets in prior fiscal years. The cost basis of the investment was immaterial. The fair value of the marketable equity securities was based on the quoted market price of Huuuge, Inc.’s ordinary shares as of June 30, 2021, and therefore was classified as a Level 1 fair value measurement. For the three and six months ended June 30, 2021, the Company recorded a total unrealized loss and gain of $0.6 million and $4.7 million, respectively, in other income (expense), net in the Company’s condensed consolidated statements of operations as a result of remeasuring the investment to fair value. The following table presents a reconciliation of the Company’s financial asset and liability measured at fair value as of June 30, 2021 using significant unobservable inputs (Level 3), and the change in fair value (in thousands): Embedded Convertible Balance as of December 31, 2020 $ 5,680 $ 46,500 Addition related to the issuance of term loans in February 2021 5,630 — Extinguishment of term loans in February 2021 (1,130) — Change in fair value recognized in earnings 7,640 2,500 Settlement (17,820) — Balance as of June 30, 2021 $ — $ 49,000 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments In May 2021, the Company amended a certain agreement with a cloud service provider to increase the aggregate spend commitment from $130.0 million to $300.0 million through May 2026. 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. Letters of Credit As of June 30, 2021 and December 31, 2020 the Company had outstanding letters of credit in the aggregate amount of $11.1 million, which were issued as security for certain leased office facilities under the Credit Agreement. These letters of credit have never been drawn upon. 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 when it is probable that a loss has been incurred and the amount can be reasonably estimated. If it is determined that a loss is reasonably possible and the loss or range of loss can be estimated, the reasonably possible loss is disclosed. The Company evaluates developments in legal matters that could affect the amount of liability that has been previously accrued, and related reasonably possible losses disclosed, and makes adjustments as appropriate. Significant judgment is required to determine the likelihood of matters and the estimated amount of losses related to such matters. To date, losses in connection with legal proceedings have not been material. 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 June 30, 2021, 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, and the expense is recorded as a reduction of revenue or to general and administrative expenses depending on the nature of the liability. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions 2021 Acquisitions Business Combinations On April 20, 2021, the Company acquired adjust GmbH (“Adjust”), a mobile application tracking and analytics company. The Company purchased all of the outstanding shares of the capital stock of Adjust and settled all of Adjust’s debt for the stated purchase consideration of $980.0 million, which was composed of $352.0 million stated value of convertible securities convertible into a variable number of shares of the Company's Class A common stock at a variable conversion price, $50.0 million of cash holdback, and remaining amount of 578.0 million in cash consideration. The fair value of the convertible securities and fair value of the cash holdback are estimated to be $342.2 million and $47.6 million, respectively. As such, the fair value of the acquisition consideration is determined to be $967.8 million. The transaction is expected to expand the Company’s Software solutions and has been accounted for as a business combination. Transaction costs incurred by the Company in connection with the acquisition, including professional fees, were $3.1 million. The following table summarizes the preliminary allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed (in thousands): Cash and cash equivalents $ 12,155 Accounts receivable and other current assets 21,840 Intangible assets Customer Relationships—estimated useful life of 12 years 155,000 Developed Technology—estimated useful life of 6 years 77,000 Tradename—estimated useful life of 5 years 8,000 Goodwill 776,147 Operating lease right-of-use assets 8,130 Property and equipment, net 1,897 Finance lease right-of-use assets 43,156 Other assets 3,191 Accounts payable, accrued liabilities and other current liabilities (15,540) Deferred revenue (5,600) Operating lease liabilities (8,130) Finance lease liabilities (43,156) Deferred income tax liability (66,273) Total purchase consideration $ 967,817 The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of the reporting date. The Company has completed a preliminary valuation and expects to finalize it as soon as practical, but no later than one year from the acquisition date. The income approach was used to determine the preliminary fair value of the customer relationships, developed technology and tradename. Goodwill represents the excess of the purchase price over the preliminary fair value of identifiable assets acquired and liabilities assumed at the acquisition date and is primarily attributable to the assembled workforce and expected synergies at the time of the acquisition. For tax purposes, an estimated tax deductible goodwill of $692.5 million was generated as a result of this acquisition. The Company’s condensed consolidated statement of operations for the three months ended June 30, 2021 includes Adjust’s revenue of $21.6 million and pretax loss of $19.2 million for the period from the acquisition date of April 20, 2021 to June 30, 2021. See Pro forma results of operations below under "Supplemental Pro Forma Information". In May 2021, the convertible securities were converted into 6,320,688 shares of the Company's Class A common stock. As a result, the fair value of the Convertible Security was reclassified into the stockholders' equity. Asset Acquisitions In April 2021, the Company completed two separate transactions to acquire certain mobile Apps from two foreign-based independent mobile game developers in exchange for an aggregate upfront cash consideration of $300.0 million and potential future earn-out payments. The Company incurred a total transaction cost of $6.0 million related to these transactions. Both transactions were accounted for as asset acquisitions with $306.0 million allocated to the acquired mobile Apps, which will be amortized over approximately eight years. Concurrent with the closings of these transactions, the Company entered into a development services agreement with each of the independent mobile game developers to support the acquired mobile Apps, as well as to develop new mobile Apps during the four-year term of the agreement. With respect to the first transaction, the potential future earn-out payments are contingent on the revenue generated by the acquired mobile Apps exceeding a certain revenue threshold, which will be measured and payable (if applicable) each year for four years from the date of the transaction. With respect to the second transaction, the potential future earn-out payments will be determined in a manner similar to the first transaction, in addition to a potential one-time earn-out payment of $50.0 million contingent on the achievement of a certain monthly revenue milestone within the four years following the date of the transaction. In June 2021, the Company acquired certain mobile Apps from a foreign-based independent mobile game developer in exchange for an upfront cash consideration of $130.0 million and future earn-out payments. The Company incurred a total transaction cost of $4.0 million related to the transaction. The transaction was accounted for as an asset acquisition with $134.0 million allocated to the acquired mobile Apps, which will be amortized over nine years. Concurrent with the closing of the transaction, the Company entered into a development services agreement with the independent mobile game developer to support the acquired mobile Apps, as well as to develop new mobile Apps during the four-year term of the agreement. With respect to all initially acquired mobile Apps, the potential future earn-out payments are contingent on the revenue and/or earnings before interest, taxes, depreciation and amortization ("EBITDA") generated by the acquired Apps exceeding certain thresholds. During the three and six months ended June 30, 2021, the Company also acquired certain mobile Apps for an upfront cash consideration of $8.0 million and $8.0 million, respectively. During the three and six months ended June 30, 2021, the Company recognized total earn-out costs of $51.8 million and $87.6 million, respectively, of which, $40.7 million and $67.9 million were related to an asset acquisition closed in 2020. These earn-out costs increased the book value of the acquired mobile Apps, and are amortized over the remaining useful life of the originally acquired mobile Apps. In January 2021 the Company paid $60.0 million to Recoded, an independent foreign-based mobile game developer, in relation to a new mobile App acquired in 2020. In February 2021, the Company paid an additional $90.0 million to Recoded related to deferred cash consideration on the acquisition closed in 2019. 2020 Acquisitions Business Combinations Geewa —On January 31, 2020, the Company acquired Geewa A.S. (“Geewa”), a privately held company specializing in mobile gaming. The transaction expanded the Company’s Apps portfolio and was accounted for as a business combination. The Company purchased all of the outstanding shares of the capital stock of Geewa for a total consideration of $25.6 million, of which $23.5 million was paid in cash and the unpaid balance was attributed to a $2.1 million indemnity holdback that was paid in January 2021. Transaction costs incurred by the Company in connection with the acquisition, including professional fees, were $0.3 million. The following table summarizes the fair value of identifiable assets acquired and liabilities assumed (in thousands): Cash $ 1,043 Accounts receivable and other current assets 1,457 Intangible assets Apps—estimated useful life of 5 years 17,040 Tradename—estimated useful life of 5 years 260 Developed Technology—estimated useful life of 2 years 590 Property, equipment and other tangible assets 369 Goodwill 9,805 Accounts payable, accrued liabilities and other liabilities (4,935) Total purchase consideration $ 25,629 The income approach was used to value the developed Apps and tradename. Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed at the acquisition date and is primarily attributable to the assembled workforce and expected synergies at the time of the acquisition. Goodwill is not deductible for tax purposes. Pro forma results of operations have not been presented because the effect of the acquisition was not material to the condensed consolidated statements of operations. Redemption Games— On April 6, 2020, the Company acquired Redemption Games, Inc. (“Redemption Games”), a privately held company specializing in mobile gaming. The transaction expanded the Company’s Apps portfolio and was accounted for as a business combination. As part of the transaction, the Company purchased 95.5% of the outstanding shares of the capital stock of Redemption Games for an aggregate total consideration of $53.7 million. Based on the consideration paid and the percent acquired, the transaction implied a total value for Redemption of $56.2 million. Transaction costs incurred by the Company in connection with the acquisition, including professional fees, were $0.6 million. In November 2020, the Company increased its ownership in Redemption Games to 98.2% by exchanging 2.7% of minority shares for the Company’s Class A common stock. The difference between the $4.5 million in fair value of the Class A common stock issued and the $1.5 million in fair value of the minority shares was recognized as stock-based compensation in research and development expenses. The following table summarizes the fair value of identifiable assets acquired and liabilities assumed (in thousands): Cash $ 2,787 Accounts receivable, net 1,850 Intangible assets Apps—estimated useful life of 5 years 44,000 Tradename—estimated useful life of 5 years 900 Goodwill 20,198 Other tangible assets 131 Accounts payable (2,492) Other liabilities (11,142) Total valuation 56,232 Redeemable noncontrolling interest (2,556) Total purchase consideration $ 53,676 The income approach was used to value the developed Apps and tradename. Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed at the acquisition date and is primarily attributable to the assembled workforce and expected synergies at the time of the acquisition. Goodwill is not deductible for tax purposes. Pro forma results of operations have not been presented because the effect of the acquisition was not material. Machine Zone, Inc.— On May 19, 2020, the Company acquired Machine Zone, Inc. (“Machine Zone”), a privately held company specializing in mobile gaming. The transaction expanded the Company’s Apps portfolio and was accounted for as a business combination. The Company purchased all of the outstanding shares of the capital stock of Machine Zone and settled all Machine Zone debt for an aggregate acquisition price of $328.6 million comprising $287.1 million cash paid to Machine Zone lenders, common stock warrants issued to Machine Zone lenders and preferred stockholders with the aggregate fair value of $38.2 million and a settlement of the preexisting accounts receivable balance of $3.3 million. Transaction costs incurred by the Company in connection with the acquisition, including professional fees, were $2.8 million. The Company also assumed an IP license agreement with a third-party game content provider that was included in the Machine Zone acquisition. The term of the IP license agreement is set to expire in December 2021 with the option to renew for additional terms by the mutual agreement of the parties. The remaining future fixed payments under the IP license agreement as of the date of the Machine Zone acquisition amounted to $37.1 million. The following table summarizes the fair value of identifiable assets acquired and liabilities assumed (in thousands): Cash $ 37,767 Accounts receivable and other current assets 27,284 Intangible assets Tradename—estimated useful life of 10 years 13,000 Apps—estimated useful life of 3—5 years 272,000 IP license—useful life of 2 years 28,551 Goodwill 82,353 Right-of-use assets under operating leases 125,639 Property, equipment and other tangible assets 42,312 Accounts payable, accrued liabilities and other liabilities (81,591) Deferred revenue (43,200) License obligation (35,685) Operating lease liabilities (139,875) Total purchase consideration $ 328,555 The income approach was used to value the developed Apps and tradename. The replacement cost approach was used to value the IP license asset. Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed at the acquisition date and is primarily attributable to the assembled workforce and expected synergies at the time of the acquisition. Goodwill is deductible for tax purposes. Contemporaneously with the closing of the acquisition, the Company exited from one of Machine Zone’s real estate leases. The Company accounted for this lease termination as a transaction separate from the business combination since the lease termination was negotiated primarily for the benefit of the combined entity; the Company was the party who directly negotiated this lease amendment with the lessor; and such negotiation took place contemporaneously with the negotiation of the business combination. The Company decreased the operating lease right-of-use asset and operating lease liability by $57.6 million and $63.1 million, respectively. The Company also wrote-off $15.0 million of leasehold improvements and other assets related to this real estate lease. In connection with this transaction, the Company issued a common stock warrant with the fair value of $0.4 million. The Company’s consolidated statements of operations for the three months ended June 30, 2020 includes Machine Zone’s revenue of $17.8 million and pretax loss of $32.2 million for the period from the acquisition date of May 19, 2020 to June 30, 2020. See Pro forma results of operations below under "Supplemental Pro Forma Information". Asset Acquisitions Zenlife asset acquisition —In June 2020, the Company acquired certain mobile Apps from an independent foreign-based mobile game developer in exchange for an upfront cash consideration of $160.0 million and future earn-out payments for each of the four years from the date of the transaction based on the excess, if any, of revenue generated by the initially acquired mobile App for such year above the sum of (i) an annual fixed baseline revenue and (ii) the aggregate earn-out payments made in prior years. The transaction was accounted for as an asset acquisition with $173.3 million allocated to the acquired mobile Apps and $13.3 million to deferred tax liability. The recorded value of acquired mobile Apps is amortized over five years. Additionally, the Company entered into a service and development agreement with the independent mobile game developer to support the initially acquired mobile Apps as well as to develop new mobile Apps during the four-year term of the agreement. The Company is also required to make future earn-out payments for newly developed mobile Apps determined under the similar approach as for the initially acquired mobile Apps. In March and April 2020, the Company completed two asset acquisitions to acquire two mobile Apps from two separate independent foreign-based mobile game developers in exchange for an aggregate upfront cash consideration of $35.0 million and future earn-out payments. Both transactions were accounted for as asset acquisitions with $35.0 million allocated to the acquired mobile Apps, which will be amortized over three During the three and six months ended June 30, 2020, the Company recognized total earn-out costs of $7.8 million and $13.7 million, respectively, related to all acquired mobile Apps. These earn-out costs increased the book value of the acquired mobile Apps, and are amortized over the remaining useful life of the originally acquired mobile Apps. Supplemental Pro Forma Information The unaudited supplemental pro forma information below presents the combined historical results of operations of the Company, Machine Zone and Adjust for each of the periods presented as if Adjust had been acquired as of January 1, 2020 and Machine Zone had been acquired as of January 1, 2019 (in thousands): Three Months Ended Six Months Ended 2021 2020 2021 2020 Revenue $ 675,869 $ 373,228 $ 1,307,276 $ 727,082 Net income (loss) 23,675 (74,755) 4,014 (176,626) The unaudited supplemental pro forma information above include the following adjustments to net income (loss) in the appropriate pro forma periods (in thousands): Three Months Ended Six Months Ended 2021 2020 2021 2020 An (increase) in amortization expense related to the fair value of acquired identifiable intangible assets, net of the amortization expense already reflected in actual historical results $ (1,519) $ (14,707) $ (7,325) $ (36,124) A net increase in revenue related to fair value adjustment 538 9,724 538 9,043 A decrease (increase) in expenses related to transaction expenses 12,903 9,484 14,115 (2,617) An decrease (increase) in interest expense related to new debt financing, net of interest expense related to pre-existing debt settled as part of the acquisitions (1,350) 33,650 (2,640) 99,759 A (decrease) in other income - liability classified warrants — — — (1,730) An (increase) in tax provision (2,425) (8,752) (1,075) (15,675) The unaudited supplemental pro forma information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisitions taken place on the date indicated, or of the Company's future consolidated results of operations. The supplemental pro forma information presented above has been derived from the Company's historical consolidated financial statements and from the historical accounting records of Adjust and Machine Zone. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net The following table presents goodwill activity (in thousands): December 31, 2020 $ 249,773 Goodwill acquired 776,147 Foreign currency translation (9,846) June 30, 2021 $ 1,016,074 Intangible assets, net consisted of the following (in thousands): Weighted- As of June 30, 2021 As of December 31, 2020 Gross Accumulated Net Book Gross Accumulated Net Book Long-lived intangible assets : Apps 5.3 $ 1,718,938 $ (355,652) $ 1,363,286 $ 1,222,417 $ (232,832) $ 989,585 Customer Relationships 11.8 153,103 (2,481) 150,622 — — — User base 4.8 68,817 (22,493) 46,324 68,817 (17,617) 51,200 License asset 0.4 28,551 (19,662) 8,889 28,551 (10,918) 17,633 Developed technology 5.6 91,101 (13,441) 77,660 14,946 (8,489) 6,457 Other 6.6 32,718 (3,830) 28,888 23,321 (1,864) 21,457 Total long-lived intangible assets 2,093,228 (417,559) 1,675,669 1,358,052 (271,720) 1,086,332 Short-lived intangible assets: Apps 0.4 36,908 (33,989) 2,919 29,869 (25,599) 4,270 Total intangible assets $ 2,130,136 $ (451,548) $ 1,678,588 $ 1,387,921 $ (297,319) $ 1,090,602 As of June 30, 2021 and December 31, 2020, short-lived mobile Apps were included in prepaid expenses and other current assets. The Company recorded amortization expenses related to acquired intangible assets as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Cost of revenue $ 95,200 $ 44,562 $ 177,385 $ 72,138 Sales and marketing 6,034 2,726 9,243 5,420 Total $ 101,234 $ 47,288 $ 186,628 $ 77,558 |
Credit Agreement
Credit Agreement | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Credit Agreement | 8. Credit Agreement On August 15, 2018, the Company entered into a Credit Agreement which provided for senior secured term loans in an aggregate principal amount of $820.0 million (the “Closing Term Loans”) and a revolving credit facility of $50.0 million. On April 23, 2019, the Credit Agreement was amended to increase the senior secured term loan facility by $400.0 million, on terms identical to those applicable to the Closing Term Loans (together with the Closing Term Loans, the “Initial Term Loans”). On April 27, 2020, the Credit Agreement was further amended to modify certain negative covenants. On May 6, 2020, the Credit Agreement was further amended (the “Third Amendment”) to increase the senior secured term loan facility by an additional $300.0 million (the “Third Amendment Term Loans”). On October 27, 2020, the Credit Agreement was further amended to increase the aggregate principal amount of the revolving credit facility by an additional $540.0 million. On November 30, 2020, the Company borrowed $150.0 million under the revolving credit facility. On February 12, 2021, the Company amended the Credit Agreement to 1) increase the senior secured term loan facility by an aggregate principal amount of $597.8 million (the “Fifth Amendment Term Loans”, and together with the Initial Term Loans, the “Term Loans”), on terms identical to those applicable to the existing Initial Term Loans, the proceeds of which was partially used to repay in full the outstanding principal and accrued and unpaid interest of the Third Amendment Term Loans, totaling $298.2 million, in accordance with the pre-existing early redemption option in the Credit Agreement, and 2) increase the aggregate principal amount of the revolving credit facility by an additional $10.0 million, on terms identical to those applicable to the existing revolving credit facility. According to the amended Credit Agreement, the Company is required to make equal quarterly repayments of $4.6 million with respect to the Term Loans. In connection with this amendment, the Company paid $0.8 million in fees to KKR Capital Markets LLC, who is affiliated with KKR Denali, one of the Company’s principal stockholders. The Company evaluated the accounting for the Fifth Amendment Term Loans on a creditor-by-creditor basis. For existing creditors who participated in the Fifth Amendment Term Loans, the transaction was accounted for as a debt modification because the present value of the cash flows between the two debt instruments before and after the transaction was less than 10%. For new creditors, the transaction was accounted for as an issuance of new debt. As a result, $2.9 million of the $3.5 million third-party issuance costs related to the modified debt was recorded in other income (expense), net on the Company’s condensed consolidated statements of operations for the three months ended March 31, 2021, with the remaining $0.6 million related to the new debt recorded as a reduction to the carrying amount of the Term Loans. In addition, the Company recorded $5.6 million for an embedded derivative related to the contingent interest adjustment feature of the Fifth Amendment Term Loans, which was bifurcated and accounted for separately as the feature is not clearly and closely related to the host instrument. For details regarding the fair value measurement of the embedded derivative, see Note 4. The debt discount, comprising of 1) the deferred third-party issuance costs, 2) the bifurcated embedded derivative and 3) the debt discount of the Initial Term Loans that were modified as part of the amendment, is being amortized to interest expense using the effective interest method over the remaining contractual term of the Term Loans. The Company accounted for the early repayment of the Third Amendment Term loans as a debt extinguishment. As a result, the Company recognized a loss on debt extinguishment of $16.9 million during the three months ended March 31, 2021, which was recorded in interest expense and loss on extinguishment of debt on the Company’s condensed consolidated statements of operations. The loss on debt extinguishment consisted primarily of the unamortized original issue discount and debt issuance cost. On March 31, 2021, the Company drew down an additional $250.0 million from the Company’s $600.0 million revolving credit facility. A lender under the revolving credit facility is an affiliate of KKR Denali, a principal stockholder of the Company. Following such draw down, the Company had an aggregate amount of $400.0 million outstanding under the revolving credit facility, which was repaid in full with the net proceeds from the IPO in April 2021. After the effectiveness of the IPO Registration Statement, the applicable margins for both the Term Loans and the Revolving Credit Loans were reduced by 0.25% on April 16, 2021 in accordance with the pre-existing terms of the Credit Agreement. As a result, the embedded derivative for the contingent interest adjustment feature related to the Term Loans was settled. The Company remeasured the embedded derivative to its fair value of $17.8 million on the settlement date by recording a gain of $1.1 million in other income (expense), net in the Company’s condensed consolidated statements of operations, and then reclassified it to the carrying amount of the Term Loans as an additional debt discount. The new unamortized discount balance is subsequently amortized using the new effective interest rate determined on the settlement date of the embedded derivative. As of June 30, 2021, the Company was in compliance with all of the covenants. |
Cash Flow Hedges
Cash Flow Hedges | 6 Months Ended |
Jun. 30, 2021 | |
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | |
Cash Flow Hedges | Cash Flow HedgesThe Company manages exposure to market risk associated with fluctuating interest rates with the use of interest rate derivative financial instruments, namely interest rate swaps. The Company does not use derivatives for trading or speculative purposes. On November 14, 2018, the Company entered into an interest rate swap agreement as part of its interest rate risk management strategy in connection with the term loan. The notional amount for the swap was $410.0 million. The swap was a receive-variable (one-month LIBOR) and pay-fixed (2.9065%) interest rate swap with settlement date commencing on the last calendar day of each month and reset date on first day of each month beginning December 31, 2018. The Company applied the hedge accounting provisions of the critical terms match hedge, and formally documented at inception all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking the various hedges. The critical terms of the swap and hedged item coincided (notional amount, interest rate reset dates, interest rate payment dates, and underlying index), the hedge was expected to offset changes in expected cash flows due to fluctuations in one-month LIBOR over the term of the hedge. Therefore, the effectiveness of the hedge relationship was assessed each quarter by comparing the current terms of the swap and the debt to assure they continued to coincide and through an evaluation of the continued ability of the counterparty to the swap to honor its obligations under the swap. Had the critical terms no longer matched exactly, hedge effectiveness (both prospective and retrospective) would have to be assessed by evaluating the cumulative dollar-offset ratio for the actual derivative and the hedged item. |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation In March 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Equity Incentive Plan, the 2021 Partner Studio Incentive Plan and the Employee Stock Purchase Plan, all of which became effective on the business day immediately prior to the effective date of the IPO Registration Statement: 2021 Equity Incentive Plan The 2021 Equity Incentive Plan (the “2021 Plan”) provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to the Company’s employees and any parent and subsidiary companies’ employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units (RSUs), stock appreciation rights (SARs), performance units, and performance shares to the Company’s employees, directors, and consultants and the Company’s parent and subsidiary companies’ employees and consultants. A total of 39,000,000 shares of the Company’s Class A common stock were reserved for issuance pursuant to the 2021 Plan. The number of shares available for issuance under the 2021 Plan will also include an annual increase on the first day of each fiscal year beginning on January 1, 2021, equal to the least of (a) 39,000,000 shares, (b) five percent (5%) of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (c) such other amount as the Company’s board of directors may determine. Immediately prior to the effectiveness of the 2021 Plan, the 2011 Plan was terminated, and no further awards will be granted thereunder. All outstanding awards will continue to be governed by their existing terms. In May 2021, the Company granted 6,038,514 RSUs to certain employees under the 2021 Plan at the grant date fair value of $58.55 per RSU. The RSUs generally vest either over four 2021 Partner Studio Incentive Plan The 2021 Partner Studio Incentive Plan (the “2021 Partner Plan”) provides for the grant of nonstatutory stock options, restricted stock, RSUs, SARs, performance units, and performance shares to individuals or entities engaged by the Company or a parent or subsidiary of the Company to render bona fide services to the party engaging such individual or entity. A total of 390,000 shares of the Company’s Class A common stock are reserved for issuance pursuant to the 2021 Partner Plan. Employee Stock Purchase Plan The Employee Stock Purchase Plan (the “ESPP”) permits participants to purchase shares of the Company’s Class A common stock through contributions (in the form of payroll deductions or otherwise to the extent permitted by the administrator) of up to 15% of their eligible compensation. Amounts contributed and accumulated by the participant will be used to purchase shares of the Company’ Class A common stock at the end of each 6-month purchase period with the purchase price of the shares being 85% of the lower of the fair market value of the Company’s Class A common stock on the first day of an offering period or on the exercise date. A participant may purchase a maximum of 590 shares of the Company’s Class A common stock during a purchase period. The ESPP provides for consecutive, overlapping 24-month offering periods, subject to certain rollover mechanism as defined in the ESPP. Participants may end their participation at any time during an offering and will be paid their accrued contributions that have not yet been used to purchase shares. Participation ends automatically upon termination of employment with the Company. The initial offering period is from April 15, 2021 through November 19, 2023. A total of 7,800,000 shares of the Company’s Class A common stock are available for sale under the ESPP. The number of shares of the Company’s Class A common stock that will be available for sale under the ESPP also includes an annual increase on the first day of each fiscal year beginning with fiscal year 2022, equal to the least of: (a) 7,800,000 shares, (b) one percent (1%) of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (c) such other amount as the Company’s board of directors may determine. 2011 Equity Incentive Plan The Company’s 2011 Equity Incentive Plan (the “2011 Plan”) provides for the grant of stock options to employees, consultants, and advisors of the Company. Options granted under the 2011 Plan may be either incentive stock options or nonqualified stock options. Incentive stock options may be granted only to Company employees, including directors who are also employees. As noted above, immediately prior to the effectiveness of the 2021 Plan, the 2011 Plan was terminated, and no further awards will be granted thereunder. All outstanding awards will continue to be governed by their existing terms. The Company recognized stock-based compensation expense for the periods indicated as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Cost of revenue $ 473 $ 49 $ 582 $ 78 Sales and marketing 2,221 789 4,040 1,241 Research and development 13,573 2,342 20,038 3,869 General and administrative 10,877 1,852 32,443 3,306 Total $ 27,144 $ 5,032 $ 57,103 $ 8,494 For the three and six months ended June 30, 2021, total stock-based compensation expense included $0.3 million and $0.6 million associated with awards that may be settled in stock of one of the Company’s subsidiaries. Early Exercise of Stock Options —The 2011 Plan allowed, subject to the Board's approval for the early exercise of options granted. Under the terms of the 2011 Plan, option holders, upon early exercise, must sign a restricted stock purchase agreement that gives the Company the right to repurchase any unvested shares, at the original exercise price, in the event the optionees’ employment terminates for any reason. The right to exercise options before they are vested does not change existing vesting schedules in any way and the early exercised options may not be sold or transferred before they are vested. The repurchase right lapses over time as the shares vest at the same rate as the original option vesting schedule. The cash amounts received in exchange for these early exercised shares are recorded as a liability on the accompanying balance sheets and reclassified into common stock and additional paid-in-capital as the shares vest. The Company’s right to repurchase these shares lapses by 1/4th of the shares on the one year anniversary of the vesting start date and ratably each month over the next 36 months. The Company has 1,291,975 and 19,800 shares of Class A common stock subject to repurchase as of June 30, 2021 and December 31, 2020, respectively. The liability for the shares of Class A common stock subject to repurchase as of June 30, 2021 and December 31, 2020 was $2.6 million and $0.1 million, respectively, which was included in the accrued liabilities in the Company’s condensed consolidated balance sheets. During 2020 and 2019, the Company provided financing to certain employees in the form of promissory notes to early exercise stock options. These promissory notes are partially collateralized by shares and, for accounting purposes, in-substance are nonrecourse. For accounting purposes, exercised options via nonrecourse promissory notes are not substantive and are continued to be treated as options. In February 2021, promissory notes issued to executive officers in the amount of $20.9 million were settled through either share repurchase, in the amount of $17.2 million, or cash payment, in the amount of $3.7 million. In connection with the repurchase of shares, the Company accelerated vesting of 60,968 shares of Class A common stock for one of the Company’s officers. The acceleration of vesting was accounted as an option modification with an immaterial impact to the stock-based compensation expense. As of June 30, 2021 and December 31, 2020, the Company had 3,484,999 and 8,022,499 shares of Class A common stock options, respectively, that were exercised via nonrecourse promissory notes, of which 962,502 and 4,136,677 shares, were unvested and subject to repurchase, respectively. The principal balances of nonrecourse promissory notes outstanding amounted to $16.8 million and $40.4 million as of June 30, 2021 and December 31, 2020, respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic and diluted net income (loss) per share attributable to common stockholders is computed in conformity with the two-class method required for participating securities. The Company considers its convertible preferred stock, options exercised in exchange for nonrecourse promissory notes, early exercised unvested stock options and unvested restricted stock awards to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to convertible preferred stock, options exercised in exchange for nonrecourse promissory notes, early exercised unvested common stock options and unvested restricted stock awards as the holders of these instruments do not have a contractual obligation to share in the Company’s losses. Net income is attributed to common stockholders and participating securities based on their participation rights. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options. The following table sets forth the computation of basic and diluted net income (loss) per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Basic EPS Numerator: Net income (loss) attributable to AppLovin $ 14,423 $ (21,391) $ 3,902 $ (16,727) Less: Income attributable to convertible preferred stock (902) — (731) — Income attributable to options exercised via promissory notes (140) — (55) — Income attributable to unvested early exercised options (61) — (12) — Income attributable to unvested RSA’s (25) — (9) — Net income (loss) attributable to common stock—Basic $ 13,295 $ (21,391) $ 3,095 $ (16,727) Denominator: Weighted-average shares used in computing net income (loss) per share—Basic 335,619,207 213,440,147 279,326,624 212,169,247 Net income (loss) per share attributable to common stock—Basic $ 0.04 $ (0.10) $ 0.01 $ (0.08) Diluted EPS Numerator: Net income (loss) attributable to AppLovin $ 14,423 $ (21,391) $ 3,902 $ (16,727) Less: Income attributable to convertible preferred stock (859) — (693) — Income attributable to options exercised via promissory notes (132) — (53) — Income attributable to unvested early exercised options (59) — (11) — Income attributable to unvested RSA’s (24) — (8) — Net income (loss) attributable to common stock—Diluted $ 13,349 $ (21,391) $ 3,137 $ (16,727) Denominator: Weighted-average shares used in computing net income (loss) per share—Basic 335,619,207 213,440,147 279,326,624 212,169,247 Weighted-average dilutive stock options, RSUs, warrants and other convertible securities 18,238,607 — 19,179,641 — Weighted-average shares used in computing net income (loss) per share—Diluted 353,857,814 213,440,147 298,506,265 212,169,247 Net income (loss) per share attributable to common stock—Diluted $ 0.04 $ (0.10) $ 0.01 $ (0.08) The following table presents the forms of antidilutive potential common shares: As of June 30, 2021 2020 Convertible preferred stock — 109,090,908 Stock options exercised for promissory notes 3,484,999 5,709,999 Shares issuable upon conversion of Athena convertible security 616,003 — Early exercised stock options 1,291,975 6,789 Unvested RSAs 512,613 2,580,582 Stock options 35,250 23,154,934 ESPP 226,156 — Total antidilutive potential common shares 6,166,996 140,543,212 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to income taxes in the U.S. and in foreign jurisdictions. The Company bases its interim tax accruals on an estimated annual effective tax rate applied to year-to-date income and record the discrete tax items in the period to which they relate. In each quarter, the Company updates its estimated annual effective tax rate and makes a year-to-date adjustment to its tax provision as necessary. The Company’s calendar year 2021 annual effective tax rate differs from the U.S. statutory rate primarily due to net excess tax benefits from stock-based compensation, foreign derived intangible income deduction, valuation allowance against losses which cannot be realized and the foreign tax rate differential. On March 11, 2021, the American Rescue Plan Act (“ARPA”) was enacted. The ARPA contains numerous income tax provisions, such as expanding the definition of covered employees. The ARPA has no impact on the income tax provision (benefit) for the six months ended June 30, 2021. During the six months ended June 30, 2021, there were no material changes to the Company’s unrecognized tax benefits, and the Company does not expect material changes in its unrecognized tax benefits within the next twelve months. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions On February 12, 2021, the Company entered into certain amendment to the Credit Agreement. See Note 8. In connection with this amendment, the Company paid $0.8 million in fees to KKR Capital Markets LLC, which is affiliated with KKR Denali, one of the Company’s principal stockholders. On March 31, 2021, the Company drew down an additional $250.0 million from the Company’s $600.0 million revolving credit facility. A lender under the revolving credit facility is an affiliate of KKR Denali, a principal stockholder of the Company. Following such draw down, the Company had an aggregate amount of $400.0 million outstanding under the revolving credit facility, which was repaid in full with the net proceeds from the IPO in April 2021. See Note 8. On May 6, 2020, the Company entered into certain amendment to the Credit Agreement. See Note 8. In connection with this amendment, the Company paid $1.5 million in fees to KKR Capital Markets LLC, which is affiliated with KKR Denali, one of the Company’s principal stockholders. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn August 2021, the Company granted 800,201 RSUs to certain employees under the 2021 Plan. In addition, the Company also granted 356,300 RSUs under the 2021 Partner Plan. The RSUs generally vest over an approximate period of four |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company generates Business and Consumer revenue. Business Revenue includes fees paid by mobile app advertisers that use the Company’s software platform (“Software Platform”), and revenue generated from the sale of digital advertising inventory of the Company’s apps (“Apps”). Consumer Revenue consists of mobile in-app purchases (“IAPs”) made by users within Apps. Business Revenue Our Software Platform provides the technology to match advertisers and third-party owners of digital advertising inventory (“Publishers”) via auctions at large scale and microsecond-level speeds. The pricing and terms for all mobile advertising arrangements are governed by the Company’s terms and conditions and generally stipulate payment terms of 30 days subsequent to the end of the month. The contract is fully cancellable at any time. For Business Revenue generated through placement of advertisements on mobile applications owned by Publishers, the Company’s performance obligation is to provide an advertiser with access to our Software Platform which facilitates the advertiser’s purchase of advertising inventory from Publishers. The Company does not control the advertising inventory prior to its transfer to the advertiser, the Company’s customer, because the Company does not have the substantive ability to direct the use of, nor obtain substantially all of the remaining benefits from the advertising inventory. The Company is not primarily responsible for fulfillment and does not have any inventory risk. The Company is an agent as it relates to the sale of third-party advertising inventory and presents revenue on a net basis. The transaction price is the product of either the number of completions of agreed upon actions or advertisements displayed and the contractually agreed upon price per advertising unit with the advertiser less consideration paid or payable to Publishers. Advertisers purchase Apps advertising inventory either through the Software Platform or through third-party advertising networks (“Ad Networks”). Revenue from the sale of advertising inventory through Ad Networks is recognized net of the amounts retained by Ad Networks as the Company is unable to determine the gross amount paid by the advertisers to Ad Networks. The Company recognizes mobile advertising revenue when the agreed upon action is completed or when the ad is displayed to users, depending on the agreed upon pricing mechanism with an advertiser or Ad Network. The number of advertisements delivered and completions of agreed upon actions is determined at the end of each month, which resolves any uncertainty in the transaction price during the reporting period. Consumer Revenue IAPs include fees collected from users for the purchase of virtual goods to enhance their gameplay experience. The identified performance obligation is to provide users with the ability to acquire, use, and hold virtual items over the estimated period of time the virtual items are available to the user or until the virtual item is consumed. The Company categorizes its virtual goods as either consumable or durable. Consumable virtual goods represent goods that can be consumed by a specific player action in gameplay; accordingly, the Company recognizes revenue from the sale of consumable virtual goods as the goods are consumed and the Company’s performance obligation is satisfied. Durable virtual goods represent goods that are accessible to the user over an extended period of time; accordingly, the Company recognizes revenue from the sale of durable virtual goods ratably over the period of time the goods are available to the user and the Company’s performance obligation is satisfied, which is generally the estimated average user life (“EAUL”). Payment is required at the time of purchase and the purchase price is a fixed amount. Users make IAPs through the Company’s distribution partners. The transaction price is equal to the gross amount charged to users because the Company is the principal in the transaction. IAPs fees are non-refundable. Such payments are initially recorded to deferred revenue. The EAUL represents the Company’s best estimate of the expected life of paying users for the applicable game. The EAUL begins when a user makes a first purchase of durable virtual goods and ends when a user is determined to be inactive. The Company determines the EAUL on a game-by-game basis. For a newly launched game that has limited playing data, the Company determines its EAUL based on the EAUL of a game that has sufficiently similar characteristics. The Company determines the EAUL on a quarterly basis and applies such calculated EAUL to all bookings in the respective quarter. Determining the EAUL is subjective and requires management’s judgment. Future playing patterns may differ from historical playing patterns, and therefore the EAUL may change in the future. The EAULs are generally between six The Company presents taxes collected from customers and remitted to governmental authorities on a net basis. |
Asset Acquisitions and Business Combinations | Asset Acquisitions and Business Combinations The Company performs an initial test to determine whether substantially all of the fair value of the gross assets transferred are concentrated in a single identifiable asset or a group of similar identifiable assets, such that the acquisition would not represent a business. If that test suggests that the set of assets and activities is a business, the Company then performs a second test to evaluate whether the assets and activities transferred include inputs and substantive processes that together, significantly contribute to the ability to create outputs, which would constitute a business. If the result of the second test suggests that the acquired assets and activities constitute a business, the Company accounts for the transaction as a business combination. For transactions accounted for as business combinations, the Company allocates the fair value of acquisition consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. Acquisition consideration includes the fair value of any promised contingent consideration. The excess of the fair value of acquisition consideration over the fair value of acquired identifiable assets and liabilities is recorded as goodwill. Contingent consideration is remeasured to its fair value each reporting period with changes in the fair value of contingent consideration recorded in general and administrative expenses. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates. In certain circumstances, the allocations of the excess purchase price are based upon preliminary estimates and assumptions and subject to revision when the Company receives final information, including appraisals and other analyses. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Acquisition-related costs are expensed as incurred. For transactions accounted for as asset acquisitions, the cost, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values. The Company generally includes contingent consideration in the cost of the assets acquired only when the uncertainty is resolved. The Company recognizes contingent consideration adjustments to the cost of the acquired assets prospectively using the straight-line method over the remaining useful life of the assets. No goodwill is recognized in asset acquisitions. |
Services and Development Agreements | Services and Development Agreements The Company enters into strategic agreements with mobile gaming studios (“Partner Studios”). The Company has historically allowed these Partner Studios to continue their operations with a significant degree of autonomy. In some cases, the Company bought Apps from Partner Studios and entered into service and development agreements whereby Partner Studios provide support in improving existing Apps and developing new Apps. The substantial majority of payments associated with service agreements for existing Apps are expensed to research and development when the services are rendered as the payments primarily relate to developing enhancements for the Apps. Payments for new Apps associated with development agreements are generally made in connection with the development of a particular App, and therefore, the Company is subject to development risk prior to the release of the App. Accordingly, payments that are due prior to completion of an App are generally expensed to research and development over the development period as the services are incurred. Payments due after completion of an App are generally capitalized and expensed as cost of revenue. See Note 6, “Acquisitions” for additional information. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements (Issued and Not Yet Adopted) In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The standard eliminates beneficial conversion feature and cash conversion models resulting in more convertible instruments being accounted for as a single unit; and simplifies classification of debt on the balance sheet and earnings per share calculation. These changes will become effective for the Company on January 1, 2022. The Company is currently evaluating the potential impact of these changes. In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Option. The ASU requires the issuers to account for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. Under the guidance, an issuer determines the accounting for the modification or exchange based on whether the transaction was done to issue equity, to issue or modify debt, or for other reasons. These changes will become effective for the Company on January 1, 2022. The Company is currently evaluating the potential impact of these changes. Recent Accounting Pronouncements (Issued and Adopted) In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. The ASU impacts various topic areas within ASC 740, including accounting for taxes under hybrid tax regimes, accounting for increases in goodwill, allocation of tax amounts to separate company financial statements within a group that files a consolidated tax return, intra period tax allocation, interim period accounting, and accounting for ownership changes in investments, among other minor codification improvements. The Company adopted this ASU on January 1, 2021 with no material financial statement impact upon adoption. In January 2020, the FASB issued ASU 2020-01, Clarifying the Interactions between Investments—Equity Securities, Investments—Equity Method and Joint Ventures, and Derivatives and Hedging. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue Disaggregated by Type | The following table presents revenue disaggregated by type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Business Revenue - Apps $ 162,223 $ 95,583 $ 319,186 $ 195,332 Business Revenue - Software Platform 145,664 40,909 234,083 87,421 Total Business Revenue 307,887 136,492 553,269 282,753 Consumer Revenue 360,919 162,839 719,414 276,756 Total Revenue $ 668,806 $ 299,331 $ 1,272,683 $ 559,509 |
Summary of Revenue Disaggregated by Geography | Revenue disaggregated by geography, based on user location, consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 United States $ 406,179 $ 189,812 $ 772,345 $ 351,900 Rest of the World 262,627 109,519 500,338 207,609 Total Revenue $ 668,806 $ 299,331 $ 1,272,683 $ 559,509 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value | The following table sets forth the Company’s financial instruments that were measured at fair value by level within the fair value hierarchy on a recurring basis as of the dates indicated (in thousands): As of June 30, 2021 Balance Sheet Location Total Level 1 Level 2 Level 3 Financial Assets: Money market funds Cash and cash equivalents $ 477 $ 477 $ — $ — Marketable equity securities Prepaid expenses and other current assets 4,715 4,715 Total financial assets $ 5,192 $ 5,192 $ — $ — Financial Liability: Convertible security Deferred acquisition costs, current $ 49,000 $ — $ — $ 49,000 As of December 31, 2020 Balance Sheet Location Total Level 1 Level 2 Level 3 Financial Assets: Money market funds Cash and cash equivalents $ 6,413 $ 6,413 $ — $ — Embedded derivative Long-term debt 5,680 — — 5,680 Total financial assets $ 12,093 $ 6,413 $ — $ 5,680 Financial Liability: Convertible security Deferred acquisition costs, current $ 46,500 $ — $ — $ 46,500 |
Summary of Reconciliation of Financial Assets and Liabilities Measured at Fair Value | The following table presents a reconciliation of the Company’s financial asset and liability measured at fair value as of June 30, 2021 using significant unobservable inputs (Level 3), and the change in fair value (in thousands): Embedded Convertible Balance as of December 31, 2020 $ 5,680 $ 46,500 Addition related to the issuance of term loans in February 2021 5,630 — Extinguishment of term loans in February 2021 (1,130) — Change in fair value recognized in earnings 7,640 2,500 Settlement (17,820) — Balance as of June 30, 2021 $ — $ 49,000 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of the Fair Value of Identifiable Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed (in thousands): Cash and cash equivalents $ 12,155 Accounts receivable and other current assets 21,840 Intangible assets Customer Relationships—estimated useful life of 12 years 155,000 Developed Technology—estimated useful life of 6 years 77,000 Tradename—estimated useful life of 5 years 8,000 Goodwill 776,147 Operating lease right-of-use assets 8,130 Property and equipment, net 1,897 Finance lease right-of-use assets 43,156 Other assets 3,191 Accounts payable, accrued liabilities and other current liabilities (15,540) Deferred revenue (5,600) Operating lease liabilities (8,130) Finance lease liabilities (43,156) Deferred income tax liability (66,273) Total purchase consideration $ 967,817 The following table summarizes the fair value of identifiable assets acquired and liabilities assumed (in thousands): Cash $ 1,043 Accounts receivable and other current assets 1,457 Intangible assets Apps—estimated useful life of 5 years 17,040 Tradename—estimated useful life of 5 years 260 Developed Technology—estimated useful life of 2 years 590 Property, equipment and other tangible assets 369 Goodwill 9,805 Accounts payable, accrued liabilities and other liabilities (4,935) Total purchase consideration $ 25,629 The following table summarizes the fair value of identifiable assets acquired and liabilities assumed (in thousands): Cash $ 2,787 Accounts receivable, net 1,850 Intangible assets Apps—estimated useful life of 5 years 44,000 Tradename—estimated useful life of 5 years 900 Goodwill 20,198 Other tangible assets 131 Accounts payable (2,492) Other liabilities (11,142) Total valuation 56,232 Redeemable noncontrolling interest (2,556) Total purchase consideration $ 53,676 The following table summarizes the fair value of identifiable assets acquired and liabilities assumed (in thousands): Cash $ 37,767 Accounts receivable and other current assets 27,284 Intangible assets Tradename—estimated useful life of 10 years 13,000 Apps—estimated useful life of 3—5 years 272,000 IP license—useful life of 2 years 28,551 Goodwill 82,353 Right-of-use assets under operating leases 125,639 Property, equipment and other tangible assets 42,312 Accounts payable, accrued liabilities and other liabilities (81,591) Deferred revenue (43,200) License obligation (35,685) Operating lease liabilities (139,875) Total purchase consideration $ 328,555 |
Supplemental Pro Forma Information | The unaudited supplemental pro forma information below presents the combined historical results of operations of the Company, Machine Zone and Adjust for each of the periods presented as if Adjust had been acquired as of January 1, 2020 and Machine Zone had been acquired as of January 1, 2019 (in thousands): Three Months Ended Six Months Ended 2021 2020 2021 2020 Revenue $ 675,869 $ 373,228 $ 1,307,276 $ 727,082 Net income (loss) 23,675 (74,755) 4,014 (176,626) The unaudited supplemental pro forma information above include the following adjustments to net income (loss) in the appropriate pro forma periods (in thousands): Three Months Ended Six Months Ended 2021 2020 2021 2020 An (increase) in amortization expense related to the fair value of acquired identifiable intangible assets, net of the amortization expense already reflected in actual historical results $ (1,519) $ (14,707) $ (7,325) $ (36,124) A net increase in revenue related to fair value adjustment 538 9,724 538 9,043 A decrease (increase) in expenses related to transaction expenses 12,903 9,484 14,115 (2,617) An decrease (increase) in interest expense related to new debt financing, net of interest expense related to pre-existing debt settled as part of the acquisitions (1,350) 33,650 (2,640) 99,759 A (decrease) in other income - liability classified warrants — — — (1,730) An (increase) in tax provision (2,425) (8,752) (1,075) (15,675) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill Activity | The following table presents goodwill activity (in thousands): December 31, 2020 $ 249,773 Goodwill acquired 776,147 Foreign currency translation (9,846) June 30, 2021 $ 1,016,074 |
Summary of Intangible Assets Acquired, Net | Intangible assets, net consisted of the following (in thousands): Weighted- As of June 30, 2021 As of December 31, 2020 Gross Accumulated Net Book Gross Accumulated Net Book Long-lived intangible assets : Apps 5.3 $ 1,718,938 $ (355,652) $ 1,363,286 $ 1,222,417 $ (232,832) $ 989,585 Customer Relationships 11.8 153,103 (2,481) 150,622 — — — User base 4.8 68,817 (22,493) 46,324 68,817 (17,617) 51,200 License asset 0.4 28,551 (19,662) 8,889 28,551 (10,918) 17,633 Developed technology 5.6 91,101 (13,441) 77,660 14,946 (8,489) 6,457 Other 6.6 32,718 (3,830) 28,888 23,321 (1,864) 21,457 Total long-lived intangible assets 2,093,228 (417,559) 1,675,669 1,358,052 (271,720) 1,086,332 Short-lived intangible assets: Apps 0.4 36,908 (33,989) 2,919 29,869 (25,599) 4,270 Total intangible assets $ 2,130,136 $ (451,548) $ 1,678,588 $ 1,387,921 $ (297,319) $ 1,090,602 |
Summary of Finite-Lived Intangible Assets, Amortization Expenses | The Company recorded amortization expenses related to acquired intangible assets as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Cost of revenue $ 95,200 $ 44,562 $ 177,385 $ 72,138 Sales and marketing 6,034 2,726 9,243 5,420 Total $ 101,234 $ 47,288 $ 186,628 $ 77,558 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock-based Payment Arrangement Expenses | The Company recognized stock-based compensation expense for the periods indicated as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Cost of revenue $ 473 $ 49 $ 582 $ 78 Sales and marketing 2,221 789 4,040 1,241 Research and development 13,573 2,342 20,038 3,869 General and administrative 10,877 1,852 32,443 3,306 Total $ 27,144 $ 5,032 $ 57,103 $ 8,494 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Income (Loss) Per Share Attributable to Common Stockholders | The following table sets forth the computation of basic and diluted net income (loss) per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Basic EPS Numerator: Net income (loss) attributable to AppLovin $ 14,423 $ (21,391) $ 3,902 $ (16,727) Less: Income attributable to convertible preferred stock (902) — (731) — Income attributable to options exercised via promissory notes (140) — (55) — Income attributable to unvested early exercised options (61) — (12) — Income attributable to unvested RSA’s (25) — (9) — Net income (loss) attributable to common stock—Basic $ 13,295 $ (21,391) $ 3,095 $ (16,727) Denominator: Weighted-average shares used in computing net income (loss) per share—Basic 335,619,207 213,440,147 279,326,624 212,169,247 Net income (loss) per share attributable to common stock—Basic $ 0.04 $ (0.10) $ 0.01 $ (0.08) Diluted EPS Numerator: Net income (loss) attributable to AppLovin $ 14,423 $ (21,391) $ 3,902 $ (16,727) Less: Income attributable to convertible preferred stock (859) — (693) — Income attributable to options exercised via promissory notes (132) — (53) — Income attributable to unvested early exercised options (59) — (11) — Income attributable to unvested RSA’s (24) — (8) — Net income (loss) attributable to common stock—Diluted $ 13,349 $ (21,391) $ 3,137 $ (16,727) Denominator: Weighted-average shares used in computing net income (loss) per share—Basic 335,619,207 213,440,147 279,326,624 212,169,247 Weighted-average dilutive stock options, RSUs, warrants and other convertible securities 18,238,607 — 19,179,641 — Weighted-average shares used in computing net income (loss) per share—Diluted 353,857,814 213,440,147 298,506,265 212,169,247 Net income (loss) per share attributable to common stock—Diluted $ 0.04 $ (0.10) $ 0.01 $ (0.08) |
Summary of Antidilutive Potential Common Shares | The following table presents the forms of antidilutive potential common shares: As of June 30, 2021 2020 Convertible preferred stock — 109,090,908 Stock options exercised for promissory notes 3,484,999 5,709,999 Shares issuable upon conversion of Athena convertible security 616,003 — Early exercised stock options 1,291,975 6,789 Unvested RSAs 512,613 2,580,582 Stock options 35,250 23,154,934 ESPP 226,156 — Total antidilutive potential common shares 6,166,996 140,543,212 |
Description of Business and P_2
Description of Business and Principles of Consolidation (Details) $ / shares in Units, $ in Millions | Apr. 30, 2021USD ($) | Apr. 19, 2021USD ($)$ / sharesshares | Jun. 30, 2021transactionvoteshares | Dec. 31, 2020shares |
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Common stock, shares authorized (in shares) | 1,700,000,000 | 429,600,000 | ||
Preferred stock, shares authorized (in shares) | 100,000,000 | 109,090,908 | ||
Preferred stock shares converted into equity (in shares) | 0 | |||
Common stock, shares issued (in shares) | 372,165,319 | 226,364,401 | ||
Common stock, shares outstanding (in shares) | 372,165,319 | 226,364,401 | ||
Shares issued for each share converted (in shares) | 1 | |||
Minimum | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Conversion period | 61 days | |||
Maximum | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Conversion period | 180 days | |||
KKR Denali Holdings L P | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Repayment of revolving credit facility | $ | $ 400 | |||
Class A Common Stock | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Common stock, shares authorized (in shares) | 1,500,000,000 | 386,400,000 | ||
Common stock, shares issued (in shares) | 224,357,697 | 183,800,251 | ||
Common stock, shares outstanding (in shares) | 224,357,697 | 183,800,251 | ||
Votes for each warrant or right | vote | 1 | |||
Class A Common Stock | Restated Certificate of Incorporation | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Common stock, shares authorized (in shares) | 1,500,000,000 | |||
Class A Common Stock | Conversion of Class A Common Stock into Class B Common Stock | KKR Denali | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Common stock converted from one class to another (in shares) | 150,307,622 | |||
Class A Common Stock | Conversion of Class A Common Stock into Class B Common Stock | Adam Foroughi | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Common stock converted from one class to another (in shares) | 150,307,622 | |||
Class A Common Stock | Conversion of Class A Common Stock into Class B Common Stock | Herald Chen | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Common stock converted from one class to another (in shares) | 150,307,622 | |||
Class B Common Stock | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Common stock, shares authorized (in shares) | 200,000,000 | 0 | ||
Common stock, shares issued (in shares) | 147,807,622 | 0 | ||
Common stock, shares outstanding (in shares) | 147,807,622 | 0 | ||
Votes for each warrant or right | transaction | 20 | |||
Class B Common Stock | Restated Certificate of Incorporation | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Common stock, shares authorized (in shares) | 200,000,000 | |||
Class C Common Stock | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Common stock, shares issued (in shares) | 0 | |||
Common stock, shares outstanding (in shares) | 0 | |||
Class C Common Stock | Restated Certificate of Incorporation | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Common stock, shares authorized (in shares) | 150,000,000 | |||
Preferred Stock | Restated Certificate of Incorporation | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 100,000,000 | |||
IPO | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Issuance of common stock (in shares) | 22,500,000 | |||
Sale of stock issue price (in dollars per share) | $ / shares | $ 80 | |||
Sale of stock net consideration received on the transaction | $ | $ 1,750 | |||
Underwriting discounts and commissions | $ | 47.2 | |||
Offering expenses | $ | $ 7.9 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - Durable Virtual Goods | 6 Months Ended |
Jun. 30, 2021 | |
Minimum | |
Product Information [Line Items] | |
Estimated average user life | 6 months |
Maximum | |
Product Information [Line Items] | |
Estimated average user life | 9 months |
Revenue - Summary of Revenue Di
Revenue - Summary of Revenue Disaggregated by Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue from External Customer [Line Items] | ||||
Revenue | $ 668,806 | $ 299,331 | $ 1,272,683 | $ 559,509 |
Business Revenue - Apps | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 162,223 | 95,583 | 319,186 | 195,332 |
Business Revenue - Software Platform | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 145,664 | 40,909 | 234,083 | 87,421 |
Total Business Revenue | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 307,887 | 136,492 | 553,269 | 282,753 |
Consumer Revenue | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | $ 360,919 | $ 162,839 | $ 719,414 | $ 276,756 |
Revenue - Summary of Revenue _2
Revenue - Summary of Revenue Disaggregated by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 668,806 | $ 299,331 | $ 1,272,683 | $ 559,509 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 406,179 | 189,812 | 772,345 | 351,900 |
Rest of the World | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 262,627 | $ 109,519 | $ 500,338 | $ 207,609 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||||
Deferred revenue | $ 59.5 | $ 8 | $ 81.4 | $ 8.2 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Balance Sheet Location | Deferred acquisition costs, current | Deferred acquisition costs, current |
Financial Assets | $ 5,192 | $ 12,093 |
Convertible security | $ 49,000 | $ 46,500 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Balance Sheet Location | Cash and cash equivalents | Cash and cash equivalents |
Financial Assets | $ 477 | $ 6,413 |
Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Balance Sheet Location | Prepaid expenses and other current assets | |
Financial Assets | $ 4,715 | |
Embedded derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Balance Sheet Location | Long-term debt | |
Financial Assets | $ 5,680 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | 5,192 | 6,413 |
Convertible security | 0 | 0 |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | 477 | 6,413 |
Level 1 | Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | 4,715 | |
Level 1 | Embedded derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | 0 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | 0 | 0 |
Convertible security | 0 | 0 |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | 0 | 0 |
Level 2 | Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | ||
Level 2 | Embedded derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | 0 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | 0 | 5,680 |
Convertible security | 49,000 | 46,500 |
Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | 0 | 0 |
Level 3 | Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | ||
Level 3 | Embedded derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Assets | $ 5,680 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Apr. 16, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Feb. 28, 2021 |
Fair Value by Fair Value Hierarchy Level [Line Items] | ||||||
Gain (loss) due to change in the fair value, included in earnings | $ 1,100,000 | $ 0 | $ 7,600,000 | $ 0 | ||
Embedded derivative | $ 17,800,000 | $ 5,600,000 | ||||
Amended Revolving Credit Facility | Affiliate Of KKR Denali | ||||||
Fair Value by Fair Value Hierarchy Level [Line Items] | ||||||
Decrease in the variable interest rate margin | 0.25% | |||||
Fair Value, Inputs, Level 1 | ||||||
Fair Value by Fair Value Hierarchy Level [Line Items] | ||||||
Unrealized gain (loss) due to change in fair value of marketable securities | (600,000) | $ 4,700,000 | ||||
Convertible security | ||||||
Fair Value by Fair Value Hierarchy Level [Line Items] | ||||||
Gain (loss) due to change in the fair value, included in earnings | $ (1,800,000) |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Reconciliation of Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Convertible Security | ||||
Change in fair value recognized in earnings | $ 1,100,000 | $ 0 | $ 7,600,000 | $ 0 |
Embedded derivative | Level 3 | ||||
Embedded Derivative | ||||
Balance at beginning of period | 5,680,000 | |||
Addition related to the issuance of term loans in February 2021 | 5,630,000 | |||
Extinguishment of term loans in February 2021 | (1,130,000) | |||
Change in fair value recognized in earnings | 7,640,000 | |||
Settlement | (17,820,000) | |||
Balance at end of period | 0 | 0 | ||
Convertible security | ||||
Convertible Security | ||||
Change in fair value recognized in earnings | (1,800,000) | |||
Convertible security | Level 3 | ||||
Convertible Security | ||||
Balance at beginning of period | 46,500,000 | |||
Addition related to the issuance of term loans in February 2021 | 0 | |||
Extinguishment of term loans in February 2021 | 0 | |||
Change in fair value recognized in earnings | 2,500,000 | |||
Settlement | 0 | |||
Balance at end of period | $ 49,000,000 | $ 49,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Jun. 30, 2021 | May 31, 2021 | May 30, 2021 | Dec. 31, 2020 |
Other Commitments [Line Items] | ||||
Contractual obligation amount | $ 130 | |||
Amended contractual obligation amount | $ 300 | |||
Standby Letters of Credit | ||||
Other Commitments [Line Items] | ||||
Letters of credit outstanding | $ 11.1 | $ 11.1 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | Apr. 20, 2021USD ($) | May 19, 2020USD ($)lease | Apr. 06, 2020USD ($) | Jan. 31, 2020USD ($) | Jun. 30, 2021USD ($) | May 31, 2021shares | Apr. 30, 2021USD ($)transaction | Feb. 28, 2021USD ($) | Jan. 31, 2021USD ($) | Nov. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Apr. 30, 2020USD ($)developerapptransaction | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) |
Business Acquisition [Line Items] | ||||||||||||||||||
Business combination, equity interests issued and issuable | $ 0 | $ 38,167 | ||||||||||||||||
Consideration transferred, liabilities incurred | 342,170 | 0 | ||||||||||||||||
Transactions | transaction | 2 | |||||||||||||||||
Payments for asset acquisitions | $ 35,000 | |||||||||||||||||
Asset acquisition, consideration transferred | $ 35,000 | |||||||||||||||||
Development services agreement, term | 2 years | |||||||||||||||||
Asset acquisition, earn-out term | 4 years | |||||||||||||||||
Contingent consideration, costs | $ 7,800 | $ 13,700 | ||||||||||||||||
Annual earn-out payment period | 4 years | |||||||||||||||||
Apps acquired | app | 2 | |||||||||||||||||
Game developers | developer | 2 | |||||||||||||||||
Development services agreement, renewal, term | 2 years | |||||||||||||||||
Asset acquisition, baseline revenue, cumulative amount (up to) | $ 45,000 | |||||||||||||||||
Exit Of Machine Zone Real Estate Leases | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Number of businesses exited | lease | 1 | |||||||||||||||||
Increase (decrease) in operating lease, right-of-use asset | $ 57,600 | |||||||||||||||||
Increase (decrease) in operating lease, liability | 63,100 | |||||||||||||||||
Leasehold improvements, write off | 15,000 | |||||||||||||||||
Adjustments to additional paid in capital, warrants issued | 400 | |||||||||||||||||
Adjust GmbH | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Consideration transferred | $ 967,800 | |||||||||||||||||
Consideration transferred, liabilities incurred | 342,200 | |||||||||||||||||
Consideration paid | 578,000 | |||||||||||||||||
Liabilities incurred, cash holdback | 47,600 | |||||||||||||||||
Transaction costs | 3,100 | |||||||||||||||||
Expected tax deductible amount for goodwill | 692,500 | |||||||||||||||||
Revenue of acquiree since acquisition date | $ 21,600 | |||||||||||||||||
Earnings (loss) of acquiree since acquisition date | $ (19,200) | |||||||||||||||||
Conversion of stock (in shares) | shares | 6,320,688 | |||||||||||||||||
Total purchase consideration | 967,817 | |||||||||||||||||
Adjust GmbH | Reported Value Measurement | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Consideration transferred | 980,000 | |||||||||||||||||
Business combination, equity interests issued and issuable | 352,000 | |||||||||||||||||
Consideration transferred, liabilities incurred | $ 50,000 | |||||||||||||||||
Certain Mobile Game Apps | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Transactions | transaction | 2 | |||||||||||||||||
Payments for asset acquisitions | $ 130,000 | $ 300,000 | $ 8,000 | 8,000 | ||||||||||||||
Asset acquisition, transaction cost | 4,000 | 6,000 | ||||||||||||||||
Asset acquisition, consideration transferred | $ 134,000 | $ 306,000 | ||||||||||||||||
Acquired asset, amortization period | 9 years | 8 years | ||||||||||||||||
Development services agreement, term | 4 years | 4 years | ||||||||||||||||
Asset acquisition, earn-out term | 4 years | |||||||||||||||||
Asset acquisition, earn-out payment | $ 50,000 | |||||||||||||||||
Contingent consideration, costs | 51,800 | 87,600 | ||||||||||||||||
2020 Asset Acquisition | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Contingent consideration, costs | $ 40,700 | $ 67,900 | ||||||||||||||||
2020 Mobile App Acquisition | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Payments for asset acquisitions | $ 60,000 | |||||||||||||||||
2019 Asset Acquisition | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Payments for asset acquisitions | $ 90,000 | |||||||||||||||||
Geewa A S | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Consideration transferred | $ 25,600 | |||||||||||||||||
Consideration paid | 23,500 | |||||||||||||||||
Consideration indemnity holdback | 2,100 | |||||||||||||||||
Business combination acquisition related costs | 300 | |||||||||||||||||
Total purchase consideration | $ 25,629 | |||||||||||||||||
Redemption Games | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Consideration transferred | $ 53,700 | |||||||||||||||||
Transaction costs | $ 600 | |||||||||||||||||
Percentage of voting interests acquired | 95.50% | |||||||||||||||||
Total purchase consideration | $ 56,232 | |||||||||||||||||
Business combination, ownership interest | 0.982 | |||||||||||||||||
Fair value of minority shares | $ 2,556 | |||||||||||||||||
Redemption Games | Convertible Securities Convertible Into Class A Common Stock | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Business combination, exchange of minority shares | 0.027 | |||||||||||||||||
Redemption Games | Class A Common Stock | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Business combination, equity interests issued and issuable | $ 4,500 | |||||||||||||||||
Redemption Games | Minority Shares | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Fair value of minority shares | $ 1,500 | |||||||||||||||||
Machine Zone | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Consideration transferred | 328,600 | |||||||||||||||||
Business combination, equity interests issued and issuable | 38,200 | |||||||||||||||||
Consideration paid | 287,100 | |||||||||||||||||
Transaction costs | 2,800 | |||||||||||||||||
Revenue of acquiree since acquisition date | $ 17,800 | |||||||||||||||||
Earnings (loss) of acquiree since acquisition date | $ 32,200 | |||||||||||||||||
Total purchase consideration | 328,555 | |||||||||||||||||
Business combination, settlement of receivables | 3,300 | |||||||||||||||||
Machine Zone | IP License | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Business combination, remaining future fixed payments | $ 37,100 | |||||||||||||||||
Zenlife | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Payments for asset acquisitions | $ 160,000 | |||||||||||||||||
Asset acquisition, consideration transferred | $ 173,300 | |||||||||||||||||
Acquired asset, amortization period | 5 years | |||||||||||||||||
Development services agreement, term | 4 years | |||||||||||||||||
Asset acquisition, deferred tax liability | $ 13,300 | |||||||||||||||||
Mobile App One | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquired asset, amortization period | 3 years | |||||||||||||||||
Mobile App Two | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquired asset, amortization period | 5 years |
Acquisitions - Summary of the F
Acquisitions - Summary of the Fair Value of Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Apr. 20, 2021 | May 19, 2020 | Apr. 06, 2020 | Jan. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 1,016,074 | $ 249,773 | ||||
Adjust GmbH | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | $ 12,155 | |||||
Accounts receivable and other current assets | 21,840 | |||||
Goodwill | 776,147 | |||||
Operating lease right-of-use assets | 8,130 | |||||
Property, equipment and other tangible assets | 1,897 | |||||
Finance lease right-of-use assets | 43,156 | |||||
Other assets | 3,191 | |||||
Accounts payable, accrued liabilities and other liabilities | (15,540) | |||||
Deferred revenue | (5,600) | |||||
Operating lease liabilities | (8,130) | |||||
Finance lease liabilities | (43,156) | |||||
Deferred income tax liability | (66,273) | |||||
Total purchase consideration | 967,817 | |||||
Adjust GmbH | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 155,000 | |||||
Estimated useful life | 12 years | |||||
Adjust GmbH | Developed Technology | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 77,000 | |||||
Estimated useful life | 6 years | |||||
Adjust GmbH | Tradename | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 8,000 | |||||
Estimated useful life | 5 years | |||||
Geewa A S | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | $ 1,043 | |||||
Accounts receivable and other current assets | 1,457 | |||||
Goodwill | 9,805 | |||||
Property, equipment and other tangible assets | 369 | |||||
Accounts payable, accrued liabilities and other liabilities | (4,935) | |||||
Total purchase consideration | 25,629 | |||||
Geewa A S | Developed Technology | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 590 | |||||
Estimated useful life | 2 years | |||||
Geewa A S | Tradename | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 260 | |||||
Estimated useful life | 5 years | |||||
Geewa A S | Apps | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 17,040 | |||||
Estimated useful life | 5 years | |||||
Redemption Games | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | $ 2,787 | |||||
Accounts receivable and other current assets | 1,850 | |||||
Goodwill | 20,198 | |||||
Accounts payable | (2,492) | |||||
Other liabilities | (11,142) | |||||
Total purchase consideration | 56,232 | |||||
Redeemable noncontrolling interest | (2,556) | |||||
Total purchase consideration, net | 53,676 | |||||
Redemption Games | Tradename | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 900 | |||||
Estimated useful life | 5 years | |||||
Redemption Games | Other tangible assets | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 131 | |||||
Redemption Games | Apps | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 44,000 | |||||
Estimated useful life | 5 years | |||||
Machine Zone | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | $ 37,767 | |||||
Accounts receivable and other current assets | 27,284 | |||||
Goodwill | 82,353 | |||||
Operating lease right-of-use assets | 125,639 | |||||
Property, equipment and other tangible assets | 42,312 | |||||
Accounts payable, accrued liabilities and other liabilities | (81,591) | |||||
Deferred revenue | (43,200) | |||||
License obligation | (35,685) | |||||
Operating lease liabilities | (139,875) | |||||
Total purchase consideration | 328,555 | |||||
Machine Zone | Tradename | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 13,000 | |||||
Estimated useful life | 10 years | |||||
Machine Zone | Apps | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 272,000 | |||||
Machine Zone | Apps | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 3 years | |||||
Machine Zone | Apps | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 5 years | |||||
Machine Zone | IP License | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 28,551 | |||||
Estimated useful life | 2 years |
Acquisitions - Supplemental Pro
Acquisitions - Supplemental Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Business Combination and Asset Acquisition [Abstract] | ||||
Revenue | $ 675,869 | $ 373,228 | $ 1,307,276 | $ 727,082 |
Net income (loss) | $ 23,675 | $ (74,755) | $ 4,014 | $ (176,626) |
Acquisitions - Pro Forma Adjust
Acquisitions - Pro Forma Adjustments to Net Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | $ 14,364 | $ (21,711) | $ 3,789 | $ (17,047) |
An (increase) in amortization expense related to the fair value of acquired identifiable intangible assets, net of the amortization expense already reflected in actual historical results | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | (1,519) | (14,707) | (7,325) | (36,124) |
A net increase in revenue related to fair value adjustment | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | 538 | 9,724 | 538 | 9,043 |
A decrease (increase) in expenses related to transaction expenses | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | 12,903 | 9,484 | 14,115 | (2,617) |
An decrease (increase) in interest expense related to new debt financing, net of interest expense related to pre-existing debt settled as part of the acquisitions | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | (1,350) | 33,650 | (2,640) | 99,759 |
A (decrease) in other income - liability classified warrants | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | 0 | 0 | 0 | (1,730) |
An (increase) in tax provision | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | $ (2,425) | $ (8,752) | $ (1,075) | $ (15,675) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Summary of Goodwill Activity (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 249,773 |
Goodwill acquired | 776,147 |
Foreign currency translation | (9,846) |
Balance at end of period | $ 1,016,074 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Summary of Intangible Assets Acquired, Net (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Net Book Value | $ 1,675,669 | $ 1,086,332 |
Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 2,093,228 | 1,358,052 |
Accumulated Amortization | (417,559) | (271,720) |
Net Book Value | 1,675,669 | 1,086,332 |
Total intangible assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 2,130,136 | 1,387,921 |
Accumulated Amortization | (451,548) | (297,319) |
Net Book Value | $ 1,678,588 | 1,090,602 |
Apps | Short-Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 4 months 24 days | |
Gross Carrying Value | $ 36,908 | 29,869 |
Accumulated Amortization | (33,989) | (25,599) |
Net Book Value | $ 2,919 | 4,270 |
Apps | Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 5 years 3 months 18 days | |
Gross Carrying Value | $ 1,718,938 | 1,222,417 |
Accumulated Amortization | (355,652) | (232,832) |
Net Book Value | $ 1,363,286 | 989,585 |
Customer Relationships | Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 11 years 9 months 18 days | |
Gross Carrying Value | $ 153,103 | 0 |
Accumulated Amortization | (2,481) | 0 |
Net Book Value | $ 150,622 | 0 |
User base | Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 4 years 9 months 18 days | |
Gross Carrying Value | $ 68,817 | 68,817 |
Accumulated Amortization | (22,493) | (17,617) |
Net Book Value | $ 46,324 | 51,200 |
License asset | Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 4 months 24 days | |
Gross Carrying Value | $ 28,551 | 28,551 |
Accumulated Amortization | (19,662) | (10,918) |
Net Book Value | $ 8,889 | 17,633 |
Developed technology | Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 5 years 7 months 6 days | |
Gross Carrying Value | $ 91,101 | 14,946 |
Accumulated Amortization | (13,441) | (8,489) |
Net Book Value | $ 77,660 | 6,457 |
Other | Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 6 years 7 months 6 days | |
Gross Carrying Value | $ 32,718 | 23,321 |
Accumulated Amortization | (3,830) | (1,864) |
Net Book Value | $ 28,888 | $ 21,457 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Summary of Finite-Lived Intangible Assets, Amortization Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 101,234 | $ 47,288 | $ 186,628 | $ 77,558 |
Cost of revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | 95,200 | 44,562 | 177,385 | 72,138 |
Sales and marketing | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 6,034 | $ 2,726 | $ 9,243 | $ 5,420 |
Credit Agreement (Details)
Credit Agreement (Details) - USD ($) | Apr. 16, 2021 | Mar. 31, 2021 | Feb. 12, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Feb. 28, 2021 | Nov. 30, 2020 | Oct. 27, 2020 | May 06, 2020 | Apr. 23, 2019 | Aug. 15, 2018 |
Debt Instrument [Line Items] | ||||||||||||||
Quarterly repayments | $ 4,600,000 | |||||||||||||
Embedded derivative | $ 17,800,000 | $ 5,600,000 | ||||||||||||
Loss on settlement of debt | $ 16,852,000 | $ 0 | ||||||||||||
Line of credit non current outstanding | $ 400,000,000 | $ 400,000,000 | ||||||||||||
Change in fair value recognized in earnings | $ 1,100,000 | $ 0 | $ 7,600,000 | $ 0 | ||||||||||
Closing Term Loans | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
New term loan | $ 400,000,000 | $ 820,000,000 | ||||||||||||
Amended Revolving Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Lender commitment under the line of credit | 10,000,000 | $ 540,000,000 | $ 50,000,000 | |||||||||||
Debt instrument increase in the credit facility | $ 150,000,000 | |||||||||||||
Proceeds from long term line of credit facility | 250,000,000 | |||||||||||||
Line of credit facility maximum borrowing capacity | 600,000,000 | 600,000,000 | ||||||||||||
Amended Revolving Credit Facility | Affiliate Of KKR Denali | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from long term line of credit facility | 250,000,000 | |||||||||||||
Line of credit facility maximum borrowing capacity | $ 600,000,000 | 600,000,000 | ||||||||||||
Decrease in the variable interest rate margin | 0.25% | |||||||||||||
Third Amendment Term Loans | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
New term loan | $ 300,000,000 | |||||||||||||
Repayment of long term debt | 298,200,000 | |||||||||||||
Fifth Amendment Term Loan | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
New term loan | $ 597,800,000 | |||||||||||||
Percentage change of present value of cash flow between the original and modified debt | 10.00% | |||||||||||||
Third party debt issuance costs that were expensed immediately | 2,900,000 | |||||||||||||
Debt issuance costs | $ 3,500,000 | |||||||||||||
Debt issuance costs, gross | 600,000 | |||||||||||||
Loss on settlement of debt | $ 16,900,000 | |||||||||||||
Fifth Amendment Term Loan | Contingent Interest Adjustment Feature | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Embedded derivative | 5,600,000 | |||||||||||||
Fifth Amendment Term Loan And Revolving Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt issuance costs paid to related party | $ 800,000 |
Cash Flow Hedges (Details)
Cash Flow Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Nov. 14, 2018 | |
Cash Flow Hedges | |||
Settlement value of interest rate swap liability before tax | $ 5.7 | $ 5.7 | |
Receive Variable Pay Fixed Rate | Interest Rate Swap | |||
Cash Flow Hedges | |||
Interest rate swap notional amount | $ 410 | ||
Derivatives interest rate swap fixed interest rate | (2.9065%) | ||
Derivative hedges realized gain loss | $ 2.5 | $ 3.8 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
May 31, 2021 | Feb. 28, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Stock-based compensation expense | $ 27,144 | $ 5,032 | $ 57,103 | $ 8,494 | |||
Percentage of unvested options accelerated upon the occurrence of a qualified event | 25.00% | ||||||
Liabilities related to exercised options subject to repurchase | $ 2,600 | $ 100 | |||||
Employee promissory note settled in shares | $ 17,200 | ||||||
Employee promissory note settled in cash | 3,700 | ||||||
Restricted Stock Units (RSUs) | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Number of shares stock option (in shares) | 6,038,514 | ||||||
Restricted stock units granted (in dollars per share) | $ 58.55 | ||||||
Promissory Notes | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Employee promissory note settled | $ 20,900 | ||||||
Employee promissory note outstanding | $ 16,800 | $ 16,800 | $ 40,400 | ||||
Tranche One | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Exercised options, right to repurchase, term | 1 year | ||||||
Tranche Two | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Exercised options, right to repurchase, term | 36 months | ||||||
Minimum | Restricted Stock Units (RSUs) | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Restricted stock unit, granted, vesting period | 4 years | ||||||
Maximum | Restricted Stock Units (RSUs) | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Restricted stock unit, granted, vesting period | 5 years | ||||||
Class A Common Stock | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Number of shares recognized cost (in shares) | 60,968 | ||||||
Number of share options exercised (in shares) | 3,484,999 | 3,484,999 | 8,022,499 | ||||
Class A Common Stock | Promissory Notes | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Early exercised options with promissory note (in shares) | 962,502 | 4,136,677 | |||||
Class A Common Stock | Equity Option | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Exercised options subject to repurchase (in shares) | 1,291,975 | 19,800 | |||||
2021 Equity Incentive Plan | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Capital shares reserved for future issuance (in shares) | 39,000,000 | 39,000,000 | |||||
Share based compensation by share based payment arrangement increase in the number of shares available for future issuance (in shares) | 39,000,000 | ||||||
Share based compensation by share based payment arrangement increase in the number of shares available for future issuance as a percentage of outstanding stock | 5.00% | ||||||
2021 Partner Studio Incentive Plan | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Capital shares reserved for future issuance (in shares) | 390,000 | 390,000 | |||||
Employee Stock Purchase Plan | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 24 months | ||||||
Employee Stock Purchase Plan | Class A Common Stock | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Share based compensation by share based payment arrangement increase in the number of shares available for future issuance as a percentage of outstanding stock | 1.00% | ||||||
Percentage of eligible compensation eligible for participation in the stock purchase plan | 15.00% | 15.00% | |||||
Share based compensation by share based payment arrangement purchase price of the stock as a percentage of fair value | 85.00% | ||||||
Share based compensation by share based payment arrangement maximum number of shares per employee (in shares) | 590 | ||||||
Share based compensation by share based payment arrangement number of shares available for issuance (in shares) | 7,800,000 | 7,800,000 | |||||
Share based compensation by share based payment arrangement number of additional shares available for issuance (in shares) | 7,800,000 | ||||||
2011 Equity Incentive Plan | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Stock-based compensation expense | $ 300 | $ 600 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock-based Payment Arrangement Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 27,144 | $ 5,032 | $ 57,103 | $ 8,494 |
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 473 | 49 | 582 | 78 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 2,221 | 789 | 4,040 | 1,241 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 13,573 | 2,342 | 20,038 | 3,869 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 10,877 | $ 1,852 | $ 32,443 | $ 3,306 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Summary of Basic and Diluted Net Income (Loss) Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||||
Net income (loss) attributable to AppLovin | $ 14,423 | $ (10,521) | $ (21,391) | $ 4,664 | $ 3,902 | $ (16,727) |
Income attributable to convertible preferred stock | (902) | 0 | (731) | 0 | ||
Income attributable to options exercised via promissory notes | (140) | 0 | (55) | 0 | ||
Income attributable to unvested early exercised options | (61) | 0 | (12) | 0 | ||
Income attributable to unvested RSA’s | (25) | 0 | (9) | 0 | ||
Net income (loss) attributable to common stock—Basic | $ 13,295 | $ (21,391) | $ 3,095 | $ (16,727) | ||
Denominator: | ||||||
Weighted-average shares used in computing net income (loss) per share—Basic (in shares) | 335,619,207 | 213,440,147 | 279,326,624 | 212,169,247 | ||
Net income (loss) per share attributable to common stock—Basic (in dollars per share) | $ 0.04 | $ (0.10) | $ 0.01 | $ (0.08) | ||
Numerator: | ||||||
Net income (loss) attributable to AppLovin | $ 14,423 | $ (10,521) | $ (21,391) | $ 4,664 | $ 3,902 | $ (16,727) |
Income attributable to convertible preferred stock | (859) | 0 | (693) | 0 | ||
Income attributable to options exercised via promissory notes | (132) | 0 | (53) | 0 | ||
Income attributable to unvested early exercised options | (59) | 0 | (11) | 0 | ||
Income attributable to unvested RSA’s | (24) | 0 | (8) | 0 | ||
Net income (loss) attributable to common stock—Diluted | $ 13,349 | $ (21,391) | $ 3,137 | $ (16,727) | ||
Denominator: | ||||||
Weighted-average shares used in computing net income (loss) per share—Basic (in shares) | 335,619,207 | 213,440,147 | 279,326,624 | 212,169,247 | ||
Weighted-average dilutive stock options (in shares) | 18,238,607 | 0 | 19,179,641 | 0 | ||
Weighted-average shares used in computing net income (loss) per share—Diluted (in shares) | 353,857,814 | 213,440,147 | 298,506,265 | 212,169,247 | ||
Net income (loss) per share attributable to common stock—Diluted (in dollars per share) | $ 0.04 | $ (0.10) | $ 0.01 | $ (0.08) |
Net Income (Loss) Per Share -_2
Net Income (Loss) Per Share - Summary of Antidilutive Potential Common Shares (Details) - shares | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 6,166,996 | 140,543,212 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 0 | 109,090,908 |
Stock options exercised for promissory notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 3,484,999 | 5,709,999 |
Shares issuable upon conversion of Athena convertible security | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 616,003 | 0 |
Early exercised stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 1,291,975 | 6,789 |
Unvested RSAs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 512,613 | 2,580,582 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 35,250 | 23,154,934 |
ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 226,156 | 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Mar. 31, 2021 | Feb. 12, 2021 | May 06, 2020 |
Related Party Transaction [Line Items] | |||
Line of credit non current outstanding | $ 400,000,000 | ||
Affiliated Entity | KKR Capital Markets, LLC | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | $ 1,500,000 | ||
Fifth Amendment Term Loan And Revolving Credit Facility | |||
Related Party Transaction [Line Items] | |||
Debt issuance costs paid to related party | $ 800,000 | ||
Amended Revolving Credit Facility | |||
Related Party Transaction [Line Items] | |||
Proceeds from long term line of credit facility | 250,000,000 | ||
Line of credit facility maximum borrowing capacity | $ 600,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Restricted Stock Units (RSUs) - $ / shares | 1 Months Ended | |
Aug. 31, 2021 | May 31, 2021 | |
Subsequent Event [Line Items] | ||
Restricted stock units granted (in shares) | 6,038,514 | |
Restricted stock units granted (in dollars per share) | $ 58.55 | |
Minimum | ||
Subsequent Event [Line Items] | ||
Restricted stock unit, granted, vesting period | 4 years | |
Maximum | ||
Subsequent Event [Line Items] | ||
Restricted stock unit, granted, vesting period | 5 years | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Restricted stock units granted (in dollars per share) | $ 57.19 | |
Subsequent Event | Certain Employees | ||
Subsequent Event [Line Items] | ||
Restricted stock units granted (in shares) | 800,201 | |
Subsequent Event | Partner Plan | ||
Subsequent Event [Line Items] | ||
Restricted stock units granted (in shares) | 356,300 | |
Subsequent Event | Minimum | ||
Subsequent Event [Line Items] | ||
Restricted stock unit, granted, vesting period | 4 years | |
Subsequent Event | Maximum | ||
Subsequent Event [Line Items] | ||
Restricted stock unit, granted, vesting period | 5 years |