Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 05, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
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 $0.00003 per share | |
Trading Symbol | APP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001751008 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 291,939,038 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 78,662,622 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 951,560 | $ 1,520,504 |
Restricted cash equivalents | 0 | 1,050,000 |
Accounts receivable, net | 690,911 | 514,520 |
Prepaid expenses and other current assets | 174,826 | 150,040 |
Total current assets | 1,817,297 | 3,235,064 |
Property and equipment, net | 62,431 | 63,608 |
Operating lease right-of-use assets | 61,127 | 70,975 |
Goodwill | 1,803,167 | 966,427 |
Intangible assets, net | 2,028,974 | 1,709,347 |
Other assets | 157,832 | 118,158 |
Total assets | 5,930,828 | 6,163,579 |
Current liabilities: | ||
Accounts payable | 283,397 | 258,220 |
Accrued liabilities | 162,978 | 133,770 |
Licensed asset obligation | 7,058 | 17,374 |
Short-term debt | 33,310 | 25,810 |
Deferred revenue | 68,925 | 78,930 |
Operating lease liabilities | 13,202 | 18,392 |
Deferred acquisition costs, current | 75,719 | 107,601 |
Total current liabilities | 644,589 | 640,097 |
Long-term debt | 3,190,047 | 3,201,834 |
Operating lease liabilities, non-current | 56,343 | 62,498 |
Licensed asset obligation, non-current | 0 | 8,039 |
Other non-current liabilities | 132,565 | 112,820 |
Total liabilities | 4,023,544 | 4,025,288 |
Commitments and contingencies (Note 6) | ||
Redeemable noncontrolling interest | 109 | 201 |
Stockholders’ equity: | ||
Convertible preferred stock,100,000,000 shares authorized, no shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 0 | 0 |
Class A and Class B Common Stock, $0.00003 par value—1,700,000,000 (Class A 1,500,000,000 and Class B 200,000,000) shares authorized, 373,184,049 (Class A 294,521,427 and Class B 78,662,622) and 375,089,360 (Class A 296,426,738 and Class B 78,662,622) shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 11 | 11 |
Additional paid-in capital | 3,149,474 | 3,160,487 |
Accumulated other comprehensive loss | (128,351) | (45,454) |
Accumulated deficit | (1,113,959) | (976,954) |
Total stockholders’ equity | 1,907,175 | 2,138,090 |
Total liabilities, redeemable noncontrolling interest, and stockholders’ equity | $ 5,930,828 | $ 6,163,579 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par or stated value per share (in dollars per share) | $ 0.00003 | $ 0.00003 |
Common stock, shares authorized (in shares) | 1,700,000,000 | 1,700,000,000 |
Common stock, shares issued (in shares) | 373,184,049 | 375,089,360 |
Common stock, shares outstanding (in shares) | 373,184,049 | 375,089,360 |
Class A Common Stock | ||
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (in shares) | 294,521,427 | 296,426,738 |
Common stock, shares outstanding (in shares) | 294,521,427 | 296,426,738 |
Class B Common Stock | ||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 78,662,622 | 78,662,622 |
Common stock, shares outstanding (in shares) | 78,662,622 | 78,662,622 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 776,231 | $ 668,806 | $ 1,401,652 | $ 1,272,683 |
Costs and expenses: | ||||
Cost of revenue | 303,929 | 245,853 | 585,709 | 468,914 |
Sales and marketing | 232,096 | 265,463 | 522,229 | 530,976 |
Research and development | 141,108 | 77,462 | 267,358 | 138,338 |
General and administrative | 45,743 | 45,050 | 100,988 | 88,012 |
Total costs and expenses | 722,876 | 633,828 | 1,476,284 | 1,226,240 |
Income (loss) from operations | 53,355 | 34,978 | (74,632) | 46,443 |
Other income (expense): | ||||
Interest expense and loss on settlement of debt | (36,505) | (19,030) | (68,514) | (54,040) |
Other income (expense), net | 518 | (1,570) | 2,532 | 8,220 |
Total other expense | (35,987) | (20,600) | (65,982) | (45,820) |
Income (loss) before income taxes | 17,368 | 14,378 | (140,614) | 623 |
Provision for (benefit from) income taxes | 39,167 | 14 | (3,517) | (3,166) |
Net income (loss) | (21,799) | 14,364 | (137,097) | 3,789 |
Add: Net loss attributable to noncontrolling interest | 51 | 59 | 92 | 113 |
Net income (loss) attributable to AppLovin | (21,748) | 14,423 | (137,005) | 3,902 |
Less: Net income attributable to participating securities | 0 | (1,128) | 0 | (807) |
Net income (loss) attributable to common stock—Basic | (21,748) | 13,295 | (137,005) | 3,095 |
Net income (loss) attributable to common stock—Diluted | $ (21,748) | $ 13,349 | $ (137,005) | $ 3,137 |
Net income (loss) per share attributable to common stock: | ||||
Basic (in dollars per share) | $ (0.06) | $ 0.04 | $ (0.37) | $ 0.01 |
Diluted (in dollars per share) | $ (0.06) | $ 0.04 | $ (0.37) | $ 0.01 |
Weighted average common shares used to compute net income (loss) per share attributable to common stock: | ||||
Basic (in shares) | 373,912,724 | 335,619,207 | 372,932,509 | 279,326,624 |
Diluted (in shares) | 373,912,724 | 353,857,814 | 372,932,509 | 298,506,265 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (21,799) | $ 14,364 | $ (137,097) | $ 3,789 |
Other comprehensive loss: | ||||
Foreign currency translation loss, net of tax | (69,365) | (9,188) | (82,897) | (9,909) |
Total other comprehensive loss | (69,365) | (9,188) | (82,897) | (9,909) |
Add: Net loss attributable to noncontrolling interest | 51 | 59 | 92 | 113 |
Total comprehensive income (loss) attributable to AppLovin | $ (91,113) | $ 5,235 | $ (219,902) | $ (6,007) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | IPO | Class A and Class B Common Stock | Class A and Class B Common Stock IPO | Additional Paid-In Capital | Additional Paid-In Capital IPO | Accumulated Other Comprehensive Loss | Accumulated Deficit | Redeemable Noncontrolling Interest | Convertible Preferred Stock Convertible Preferred Stock | Convertible Preferred Stock Convertible Preferred Stock IPO |
Balance at beginning of period at Dec. 31, 2020 | $ 309 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net loss | (54) | ||||||||||
Balance at end of period at Mar. 31, 2021 | 255 | ||||||||||
Balance at beginning of period (in shares) at Dec. 31, 2020 | 226,364,401 | 109,090,908 | |||||||||
Balance at beginning of period at Dec. 31, 2020 | $ (158,545) | $ 7 | $ 453,655 | $ 604 | $ (1,012,400) | $ 399,589 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises and vesting of early exercised Class A common stock options (in shares) | 1,232,156 | ||||||||||
Stock issued in connection with equity awards | 10,143 | 10,143 | |||||||||
Repurchases of stock (in shares) | (214,509) | ||||||||||
Stock-based compensation | 29,667 | 29,667 | |||||||||
Other comprehensive loss, net | (721) | (721) | |||||||||
Net loss | (10,521) | (10,521) | |||||||||
Balance at end of period (in shares) at Mar. 31, 2021 | 227,382,048 | 109,090,908 | |||||||||
Balance at end of period at Mar. 31, 2021 | (129,977) | $ 7 | 493,465 | (117) | (1,022,921) | $ 399,589 | |||||
Balance at beginning of period at Dec. 31, 2020 | 309 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net loss | 113 | ||||||||||
Balance at end of period at Jun. 30, 2021 | 196 | ||||||||||
Balance at beginning of period (in shares) at Dec. 31, 2020 | 226,364,401 | 109,090,908 | |||||||||
Balance at beginning of period at Dec. 31, 2020 | (158,545) | $ 7 | 453,655 | 604 | (1,012,400) | $ 399,589 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | 3,902 | ||||||||||
Balance at end of period (in shares) at Jun. 30, 2021 | 372,165,319 | 0 | |||||||||
Balance at end of period at Jun. 30, 2021 | 1,997,441 | $ 11 | 3,015,233 | (9,305) | (1,008,498) | $ 0 | |||||
Balance at beginning of period at Mar. 31, 2021 | 255 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net loss | 59 | (59) | |||||||||
Balance at end of period at Jun. 30, 2021 | 196 | ||||||||||
Balance at beginning of period (in shares) at Mar. 31, 2021 | 227,382,048 | 109,090,908 | |||||||||
Balance at beginning of period at Mar. 31, 2021 | (129,977) | $ 7 | 493,465 | (117) | (1,022,921) | $ 399,589 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises and vesting of early exercised Class A common stock options (in shares) | 1,020,588 | ||||||||||
Stock issued in connection with equity awards | 5,190 | 5,190 | |||||||||
Exercise of warrants, net of shares withheld (in shares) | 6,229,081 | ||||||||||
Issuance of Class A common stock in connection with acquisitions (in shares) | 6,320,688 | ||||||||||
Issuance of Class A common stock in connection with acquisitions | 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 | 1,747,970 | ||||||||
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 | $ 3 | $ 399,586 | $ (399,589) | |||||||
Repurchases of stock (in shares) | (390,000) | ||||||||||
Stock-based compensation | 26,852 | 26,852 | |||||||||
Other comprehensive loss, net | (9,188) | (9,188) | |||||||||
Net loss | 14,423 | 14,423 | |||||||||
Balance at end of period (in shares) at Jun. 30, 2021 | 372,165,319 | 0 | |||||||||
Balance at end of period at Jun. 30, 2021 | 1,997,441 | $ 11 | 3,015,233 | (9,305) | (1,008,498) | $ 0 | |||||
Balance at beginning of period at Dec. 31, 2021 | 201 | 201 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net loss | (41) | ||||||||||
Balance at end of period at Mar. 31, 2022 | 160 | ||||||||||
Balance at beginning of period (in shares) at Dec. 31, 2021 | 375,089,360 | 0 | |||||||||
Balance at beginning of period at Dec. 31, 2021 | 2,138,090 | $ 11 | 3,160,487 | (45,454) | (976,954) | $ 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises and vesting of early exercised Class A common stock options (in shares) | 1,179,554 | ||||||||||
Stock issued in connection with equity awards | 6,541 | 6,541 | |||||||||
Shares withheld related to net share settlement (in shares) | (89,319) | ||||||||||
Shares withheld related to net share settlement | (4,227) | (4,227) | |||||||||
Repurchases of stock - repurchase program (in shares) | (893,556) | ||||||||||
Repurchases of stock - repurchase program | (43,697) | (43,697) | |||||||||
Stock-based compensation | 44,377 | 44,377 | |||||||||
Other comprehensive loss, net | (13,532) | (13,532) | |||||||||
Net loss | (115,257) | (115,257) | |||||||||
Balance at end of period (in shares) at Mar. 31, 2022 | 375,286,039 | 0 | |||||||||
Balance at end of period at Mar. 31, 2022 | 2,012,295 | $ 11 | 3,163,481 | (58,986) | (1,092,211) | $ 0 | |||||
Balance at beginning of period at Dec. 31, 2021 | 201 | 201 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net loss | 92 | ||||||||||
Balance at end of period at Jun. 30, 2022 | 109 | 109 | |||||||||
Balance at beginning of period (in shares) at Dec. 31, 2021 | 375,089,360 | 0 | |||||||||
Balance at beginning of period at Dec. 31, 2021 | 2,138,090 | $ 11 | 3,160,487 | (45,454) | (976,954) | $ 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (137,005) | ||||||||||
Balance at end of period (in shares) at Jun. 30, 2022 | 373,184,049 | 0 | |||||||||
Balance at end of period at Jun. 30, 2022 | 1,907,175 | $ 11 | 3,149,474 | (128,351) | (1,113,959) | $ 0 | |||||
Balance at beginning of period at Mar. 31, 2022 | 160 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net loss | 51 | (51) | |||||||||
Balance at end of period at Jun. 30, 2022 | 109 | $ 109 | |||||||||
Balance at beginning of period (in shares) at Mar. 31, 2022 | 375,286,039 | 0 | |||||||||
Balance at beginning of period at Mar. 31, 2022 | 2,012,295 | $ 11 | 3,163,481 | (58,986) | (1,092,211) | $ 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises and vesting of early exercised Class A common stock options (in shares) | 1,194,805 | ||||||||||
Stock issued in connection with equity awards | 8,267 | 8,267 | |||||||||
Shares withheld related to net share settlement (in shares) | (234,412) | ||||||||||
Shares withheld related to net share settlement | (9,384) | (9,384) | |||||||||
Repurchases of stock - repurchase program (in shares) | (5,749,856) | ||||||||||
Repurchases of stock - repurchase program | (210,830) | (210,830) | |||||||||
Issuance of Class A common stock in connection with acquisitions (in shares) | 2,579,692 | ||||||||||
Issuance of Class A common stock in connection with acquisitions | 137,422 | 137,422 | |||||||||
Issuance of common stock under employee stock purchase plan (in shares) | 107,781 | ||||||||||
Issuance of common stock under employee stock purchase plan | 3,663 | 3,663 | |||||||||
Stock-based compensation | 56,855 | 56,855 | |||||||||
Other comprehensive loss, net | (69,365) | (69,365) | |||||||||
Net loss | (21,748) | (21,748) | |||||||||
Balance at end of period (in shares) at Jun. 30, 2022 | 373,184,049 | 0 | |||||||||
Balance at end of period at Jun. 30, 2022 | $ 1,907,175 | $ 11 | $ 3,149,474 | $ (128,351) | $ (1,113,959) | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Activities | ||
Net income (loss) | $ (137,097) | $ 3,789 |
Adjustments to reconcile net income (loss) to operating activities: | ||
Amortization, depreciation and write-offs | 281,677 | 195,973 |
Amortization of debt issuance costs and discount | 6,820 | 6,380 |
Stock-based compensation | 101,796 | 57,103 |
Change in operating right-of-use asset | 10,558 | 12,267 |
Loss on settlement of debt | 0 | 16,852 |
Net unrealized loss (gain) on fair value remeasurements | 1,755 | (9,855) |
Net (gain) loss on foreign currency remeasurements | (1,277) | 952 |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable | (163,416) | (69,881) |
Prepaid expenses and other current assets | (28,993) | (92,851) |
Other assets | 3,033 | 5,269 |
Accounts payable | 13,773 | 33,936 |
Operating lease liabilities | (12,046) | (12,083) |
Accrued and other liabilities | 7,795 | 6,752 |
Deferred revenue | (9,286) | (2,327) |
Net cash provided by operating activities | 75,092 | 152,276 |
Investing Activities | ||
Purchase of property and equipment | (400) | (653) |
Acquisitions, net of cash acquired | (1,294,352) | (1,017,012) |
Purchase of non-marketable investments and other | (56,546) | (14,000) |
Proceeds from other investing activities | 2,162 | 10,000 |
Capitalized software development costs | (2,608) | (1,517) |
Net cash used in investing activities | (1,351,744) | (1,023,182) |
Financing Activities | ||
Proceeds from Issuance Initial Public Offering | 0 | 1,744,240 |
Proceeds from debt issuance, net of issuance costs | 0 | 844,729 |
Payments of debt principal | (9,155) | (706,905) |
Payments of finance leases | (12,326) | (4,621) |
Proceeds from exercise of stock options | 15,873 | 17,888 |
Proceeds from the issuance of common stock under the Employee Stock Purchase Plan | 3,663 | 0 |
Payments of deferred acquisition costs | (71,712) | (157,565) |
Payments of licensed asset obligation | (17,374) | 0 |
Repurchases of stock - repurchase program | (244,015) | 0 |
Net cash provided by (used in) financing activities | (335,046) | 1,737,766 |
Effect of foreign exchange rate on cash and cash equivalents | (7,246) | (352) |
Net increase (decrease) in cash and cash equivalents | (1,618,944) | 866,508 |
Cash, cash equivalents and restricted cash equivalents at beginning of the period | 2,570,504 | 317,235 |
Cash and cash equivalents at end of the period | 951,560 | 1,183,743 |
Supplemental non-cash investing and financing activities disclosures: | ||
Issuance of common stock in connection with an acquisition | 137,422 | 0 |
Acquisitions not yet paid | 70,792 | 119,256 |
Assets acquired under finance leases | 17,869 | 2,658 |
Repurchases of common stock included in accrued liabilities | 10,512 | 0 |
Issuance of convertible security related to acquisitions | 0 | 342,170 |
Deferred IPO costs not yet paid | 0 | 986 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest on debt | 61,867 | 31,767 |
Cash paid for income taxes, net of refunds | $ 19,529 | $ 32,737 |
Description of Business Basis o
Description of Business Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business Basis of Presentation | Description of Business Basis of Presentation Description of Business AppLovin Corporation (the “Company” or “AppLovin” or "we") 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 is headquartered in Palo Alto, California, and has several operating locations in the U.S. as well as various international office locations in North America, South 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 Annual Report on Form 10-K filed with the SEC on March 11, 2022. The condensed consolidated balance sheet data as of December 31, 2021 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 normal and 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, 2022 shown in this report are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or any other period. Segments Effective May 2022, the Company revised the presentation of segment information to reflect changes in the way the Company manages and evaluates the business. As such, we now report operating results through two reportable segments: Software Platform and Apps, as further discussed in Note 4. Accordingly, segment information for the comparable prior year period has been revised. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with GAAP. Consolidated financial statements include accounts and operations of the Company and its subsidiaries in which the Company has a controlling financial interest. In accordance with the provisions of Accounting Standards Codifications ("ASC") 810, the Company consolidates any variable interest entities ("VIE") where it 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 has 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. We do not consolidate a VIE in which we have a majority ownership interest when we are 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. Revenue from Contracts with Customers The Company generates Software Platform and Apps revenue. Software Platform revenue is generated from fees paid by advertisers who use our Software Platform. The Company generates Apps revenue from both consumers and business clients. Consumer revenue is generated from in-app purchases (“IAPs”) made by users within the Company’s apps (“Apps”). Business revenue is generated from advertisers that purchase ad inventory from Apps. Software Platform Revenue The 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. Software Platform Revenue is generated by placing ads on mobile applications owned by Publishers. The Company’s performance obligation is to provide an advertiser with access to the Software Platform, which facilitates the advertiser’s purchase of ad inventory from Publishers. The Company does not control the ad 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 ad 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 the number of completions of agreed upon actions less consideration paid or payable to Publishers. Apps Revenue Consumer Revenue Consumer Revenue includes fees collected from users to purchase 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. 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 as deferred revenue. 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. 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, which is generally the estimated average user life (“EAUL”). 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 the 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 with limited playing data, the Company determines its EAUL based on the EAUL of a game with 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 Business Revenue Business Revenue is generated by selling ad inventory on the Company's Apps to third-party advertisers. Advertisers purchase ad inventory either through the Software Platform or through third-party advertising networks (“Ad Networks”). Revenue from the sale of ad 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 revenue when the ad is displayed to users. 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 7, “Acquisitions” for additional information. Recent Accounting Pronouncements (Issued and Not Yet Adopted) In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires specific disclosures for equity securities subject to contractual sale restrictions. These changes will become effective for the Company on January 1, 2024. The Company is currently evaluating the potential impact of these changes. Recent Accounting Pronouncements (Issued and 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. The Company adopted this ASU on January 1, 2022 with no material impact on the consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606).The Company adopted this ASU on January 1, 2022 with no material impact on the consolidated financial statements. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The following table presents revenue disaggregated by segment and type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Software Platform Revenue $ 317,540 $ 145,664 $ 436,380 $ 234,083 Consumer Revenue 303,268 360,919 642,740 719,414 Business Revenue 155,423 162,223 322,532 319,186 Apps Revenue 458,691 523,142 965,272 1,038,600 Total Revenue $ 776,231 $ 668,806 $ 1,401,652 $ 1,272,683 Revenue disaggregated by geography, based on user location, consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 United States $ 481,378 $ 406,179 $ 861,945 $ 772,345 Rest of the World 294,853 262,627 539,707 500,338 Total Revenue $ 776,231 $ 668,806 $ 1,401,652 $ 1,272,683 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, 2022 and 2021, the Company recognized $54.7 million and $59.5 million of revenue that was included in deferred revenue as of March 31, 2022 and 2021, respectively. During the six months ended June 30, 2022 and 2021, the Company recognized $73.4 million and $81.4 million of revenue that was included in deferred revenue as of December 31, 2021 and 2020, 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. Publisher Bonuses |
Segments
Segments | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Segments | Segments In the second quarter of 2022, the Company revised the presentation of segment information to align with changes to how the Company's chief operating decision maker (“CODM”), which as of June 30, 2022 was the Chief Executive Officer, allocates resources and assesses performance. Effective May 2022, the Company reports operating results through two reportable segments: Software Platform and Apps. Previously, the Company had a single operating and reportable segment. Accordingly, financial information for the comparable prior year period has been updated to conform with the current year presentation of two segments. The CODM evaluates the performance of each segment using revenue and segment adjusted EBITDA and the components of net income excluded from adjusted EBITDA are not separately evaluated. We define segment adjusted EBITDA as revenue less expenses, excluding depreciation and amortization. Segment adjusted EBITDA is used as a consistent performance measure by removing the impact of certain items that do not directly reflect segments’ core operations. The reconciliation of the aggregate amount of segment adjusted EBITDA for the Company's reportable segments to consolidated income (loss) before income taxes is presented in the table further below. Revenue is attributed to the reportable segments based upon the customer. Expenses are attributed to the reportable segments either on a direct basis or are allocated. Allocated costs are generally sales and marketing-related activities and general and administrative overhead such as human resources, finance, legal, accounting and merger and acquisition activity. Revenue and expenses exclude transactions between our reportable segments. Our CODM does not use assets by segment to evaluate performance or allocate resources. Therefore, disclosure of assets by segment is not provided. The Software Platform and Apps segments provide a view into the organization of our business and generate revenue as follows: • Software Platform : primarily consists of revenue generated from fees paid by advertisers for the placement of ads on mobile applications owned by Publishers. • Apps : revenue is generated when a user of one of our Apps makes an in-app purchase ("Consumer Revenue") and when clients purchase the digital advertising inventory of our portfolio of Apps ("Business Revenue"). The following is selected financial data for our reportable segments for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenue: Software Platform $ 317,540 $ 145,664 $ 436,380 $ 234,083 Apps 458,691 523,142 965,272 1,038,600 Total Revenue $ 776,231 $ 668,806 $ 1,401,652 $ 1,272,683 Segment Adjusted EBITDA: Software Platform $ 196,744 $ 91,850 $ 432,299 $ 151,240 Apps 73,000 91,882 113,674 163,554 Total Segment Adjusted EBITDA $ 269,744 $ 183,732 $ 545,973 $ 314,794 Interest expense and loss on settlement of debt, net $ (36,505) $ (19,030) $ (68,514) $ (54,040) Other income (expense), net 2,452 (1,671) 4,869 6,955 Amortization, depreciation and write-offs (152,688) (107,156) (281,677) (195,973) Non-operating foreign exchange gain (loss) 819 (6) 1,277 1,275 Stock-based compensation (57,156) (29,435) (101,796) (59,394) Acquisition-related expense and transaction bonus (1,921) (12,056) (16,735) (12,994) Publisher bonuses — — (209,635) — MoPub acquisition transition services — — (6,999) — Restructuring costs (7,377) — (7,377) — Income (loss) before provision for tax $ 17,368 $ 14,378 $ (140,614) $ 623 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value accounting is applied for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. At June 30, 2022 and December 31, 2021, the carrying amount of cash and cash equivalents, accounts receivable, other current assets, other assets, accounts payable, and accrued and other current liabilities approximated their estimated fair value due to their relatively short maturities. 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, 2022 Balance Sheet Location Total Level 1 Level 2 Level 3 Financial Assets: Unrestricted Balances Money market funds Cash and cash equivalents $ 717,091 $ 717,091 $ — $ — Total financial assets $ 717,091 $ 717,091 $ — $ — As of December 31, 2021 Balance Sheet Location Total Level 1 Level 2 Level 3 Financial Assets: Unrestricted Balances Money market funds Cash and cash equivalents $ 1,070,979 $ 1,070,979 $ — $ — Marketable equity securities Prepaid expenses and other current assets $ 2,532 $ 2,532 $ — $ — Restricted Balances Money market funds Restricted cash equivalents 1,050,000 1,050,000 — — Total financial assets $ 2,123,511 $ 2,123,511 $ — $ — Non-Marketable Equity Securities Measured at Net Asset Value The Company held equity interests in certain private equity funds of $21.3 million a nd $3.2 million as of June 30, 2022 and December 31, 2021, respectively, which are measured using the net asset value practical expedient. Under the net asset value practical expedient, the Company records its investments based on its proportionate share of the underlying funds’ net asset value as of the Company's reporting date. These investments are included in other assets in the Company’s condensed consolidated balance sheets. These funds vary in investment strategies and generally have an initial term of 7 to 10 years, which may be extended for 2 to 3 additional years with the applicable approval. These investments are subject to certain restrictions regarding transfers and withdrawals and generally cannot be redeemed with the funds. Distributions from the funds will be received as the underlying investments are liquidated. The Company’s maximum exposure to loss is limited to the carrying value of these investments of $21.3 million and the unfunded commitments of $38.0 million as of June 30, 2022. During the three and six months ended June 30, 2022, the Company made total capital contributions of $4.4 million and $18.5 million related to these investments and recorded an unrealized loss of $0.8 million and an unrealized gain of $0.8 million in other income, net in the Company’s condensed consolidated statement of operations, respectively. The Company had no such investments in 2021. Non-Marketable Equity Securities Measured at Fair Value on a Non-Recurring Basis During the three months ended June 30, 2022, the Company purchased certain non-marketable equity securities for total proceeds of $38.0 million. Non-marketable equity securities are investments in privately held companies without readily determinable fair values. The Company elected the measurement alternative to account for these investments. Under the measurement alternative, the carrying value of the non-marketable equity securities are adjusted based on price changes from observable transactions of identical or similar securities of the same issuer or for impairment. Any changes in carrying value are recorded within other income (expense), net in the Company's condensed consolidated statement of operations. There was no change in the carrying value of the non-marketable equity securities during the three months ended June 30, 2022. These investments are included in other assets in the Company’s condensed consolidated balance sheets. The Company had no such investments in 2021. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments As of June 30, 2022, the Company's non-cancelable minimum purchase commitments comprised primarily of a certain arrangement related to cloud platform services, under which the Company committed to a minimum spend of $550.0 million through May 2025. As of June 30, 2022, the Company has not yet made any payments towards this commitment. In addition, the Company had total unfunded commitments of $38.0 million related to its investments in certain private equity funds (see Note 5). 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, 2022 and December 31, 2021, 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 our 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, 2022, the Company did not have any material indemnification claims that were probable or reasonably possible. Non-income Taxes |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions 2022 Acquisitions Business Combinations Wurl — On April 1, 2022, the Company completed its acquisition of all of the equity interests of Wurl , Inc. ("Wurl") , a connected TV software platform, for a total purchase price of $378.2 million, consisting of $219.3 million in cash, 2,579,692 shares of the Company's Class A common stock valued at $137.4 million and a deferred payment of $21.5 million relating to an indemnity holdback amount to be paid in 18 months following the transaction close date. The transaction will enable the Company to expand into the connected TV market. The Company accounted for the acquisition as a business combination. Transaction costs incurred by the Company in connection with the acquisition, including professional fees, were $1.9 million. The following table summarizes the preliminary allocation of the purchase price to the fair value of the assets acquired and liabilities assumed (in thousands): Cash and cash equivalents $ 400 Accounts receivable and other current assets 15,194 Intangible assets Customer Relationships—estimated useful life of 15 years 41,000 Developed Technology—estimated useful life of 6 years 60,500 Tradename—estimated useful life of 10 years 14,700 Goodwill 261,945 Property and equipment, net 363 Other assets 159 Accounts payable, accrued liabilities and other current liabilities (12,854) Deferred revenue (209) Deferred income tax liability (3,031) Total purchase consideration $ 378,167 The above allocation of the purchase price is still provisional and subject to change within the measurement period, including potential adjustments to deferred tax balances. The final allocation of the purchase price is expected to be completed as soon as practicable, but no later than one year from the date of the acquisition close. 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, no tax deductible goodwill was generated as a result of this acquisition. Contemporaneously with entering into the definitive agreement, the Company also adopted a multi-year performance-based incentive plan for certain key employees of Wurl, under which the key employees may earn up to a total of $600.0 million in additional shares of the Company's Class A common stock through 2025, contingent upon the achievement of certain revenue and other performance targets by the acquired business and the continued employment of such key employees between 2023 and 2025. Such plan became effective at the closing of the transaction. The Company’s condensed consolidated statement of operations for the three and six months ended June 30, 2022 includes Wurl's revenue of $11.4 million and pre-tax loss of $4.6 million for the p eriod from the acquisition date of April 1, 2022 to June 30, 2022. See Pro forma results of operations below under "Supplemental Pro Forma Information". MoPub — On January 1, 2022, the Company completed its acquisition from Twitter, Inc. of certain assets that comprised of its MoPub business for a total purchase price of $1.03 billion in cash. The acquisition allows the Company to integrate certain product features of the MoPub platform into MAX, the Company's own in-app mediation platform, and migrate publishers and demand partners from the MoPub platform to MAX. The Company accounted for the acquisition as a business combination. Transaction costs incurred by the Company in connection with the acquisition, including professional fees, were $14.4 million. The following table summarizes the preliminary allocation of the purchase consideration to the fair value of the assets acquired (in thousands): As of June 30, 2022 Intangible assets Advertiser Relationships—estimated useful life of 9 years $ 212,700 Publisher Relationships—estimated useful life of 9 years 123,300 Developed Technology—estimated useful life of 5 years 61,800 Tradename—estimated useful life of 3 months 60 Goodwill 632,472 Total purchase consideration $ 1,030,332 The fair values assigned to the assets acquired are based on the Company's best estimates and assumptions as of the reporting date. No liabilities were assumed in the transaction. 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 advertiser relationships, publisher relationships, developed technology and tradename. Goodwill represents the excess of the purchase price over the preliminary fair value of identifiable assets acquired 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 $694.5 million was generated as a result of this acquisition. Contemporaneously with the signing of the asset purchase agreement, the Company entered into an agreement for Twitter, Inc. to provide certain transitional services to facilitate the migration of publishers and demand partners to MAX during a three-month transitional period following the closing of the transaction (the "TSA"). The Company accounted for the TSA as a transaction separate from the business combination since it was negotiated primarily for the benefit of the Company. During the six months ended June 30, 2022, the Company recognized total expense of $7.0 million related to the transitional services, which was included primarily in cost of revenue in the Company's condensed consolidated statement of operations. Due to the significant integration of the MoPub business with MAX, it was impractical to determine the impact of the acquired business on revenue or earnings. See Pro forma results of operations below under "Supplemental Pro Forma Information". Asset Acquisitions During the three and six months ended June 30, 2022, the Company recognized total earn-out costs of $43.8 million and $75.5 million, respectively, related to asset acquisitions closed in 2021 and prior. No other asset acquisition was completed during the three and six-month period ended June 30, 2022. 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 price of $980.0 million, which was composed of a $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 Platform 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 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 income approach was used to determine the fair value of the customer relationships, developed technology, 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. For tax purposes, a 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". 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. Supplemental Pro Forma Information The unaudited supplemental pro forma information below presents the combined historical results of operations of the Company, Adjust, the MoPub business, and Wurl for each of the periods presented as if Adjust had been acquired as of January 1, 2020, and the MoPub business and Wurl had been acquired as of January 1, 2021 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenue $ 776,231 $ 723,699 $ 1,410,684 $ 1,397,200 Net income (loss) $ (20,810) $ 20,974 $ (128,437) $ (18,880) The unaudited supplemental pro forma information above includes the following adjustments to net loss in the appropriate pro forma periods (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 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 $ — $ (17,953) $ (3,512) $ (40,253) A decrease (increase) in expenses related to the TSA $ — $ — $ 7,000 $ (7,000) An increase in revenue related to fair value adjustment $ — $ 538 $ 538 An (increase) due to replacement stock awards $ — $ (2,693) $ (1,221) $ (6,159) An (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) $ — $ (2,641) A decrease (increase) in expenses related to transaction costs $ 179 $ 2,903 $ 16,899 $ (8,912) A decrease in expenses related to transaction bonuses $ 1,101 $ 10,000 $ 1,101 $ 8,899 A decrease (increase) in income tax provision $ (292) $ 1,952 $ (4,625) $ 12,671 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net As described in Note 4, as of May 2022, the Company revised the presentation of segment information to reflect changes in the way the Company manages and evaluates the business. As such, the Company now has two operating segments, Software Platform and Apps, which are also its reporting units. This change also resulted in a change in reporting units to coincide with the new operating segments—Software Platform and Apps. Due to this change, the Company considered whether indicators of impairment were present through the date of filing of this Quarterly Report on Form 10-Q for goodwill and concluded that no applicable factors existed to give rise to goodwill impairment testing during the three months ended June 30, 2022. Though we concluded that goodwill impairment testing was not applicable as of June 30, 2022, we will continue to monitor impairment indicators. The fair value of reporting units after the change was measured using a discounted cash flow valuation model incorporating discount rates commensurate with the risks involved. The Company allocated goodwill to the new reporting units using a relative fair value approach with total goodwill of $1.8 billion allocated, $1.5 billion to Software Platform and $0.3 billion to Apps. The following table presents goodwill activity (in thousands): December 31, 2021 $ 966,427 Goodwill acquired 894,463 Foreign currency translation (57,723) June 30, 2022 $ 1,803,167 Intangible assets, net consisted of the following (in thousands): Weighted- As of June 30, 2022 As of December 31, 2021 Gross Accumulated Net Book Gross Accumulated Net Book Long-lived intangible assets : Apps 4.8 $ 1,988,525 $ (701,772) $ 1,286,753 $ 1,939,180 $ (529,012) $ 1,410,168 Customer relationships 9.7 511,338 (32,722) 478,616 145,870 (8,442) 137,428 User base 3.8 68,817 (32,245) 36,572 68,817 (27,369) 41,448 License asset 1.0 25,640 (8,547) 17,093 25,640 — 25,640 Developed technology 5.1 204,405 (36,269) 168,136 87,851 (21,435) 66,416 Other 6.6 51,409 (9,605) 41,804 34,895 (6,648) 28,247 Total long-lived intangible assets 2,850,134 (821,160) 2,028,974 2,302,253 (592,906) 1,709,347 Short-lived intangible assets: Apps 0.5 44,807 (42,961) 1,846 40,348 (38,724) 1,624 Total intangible assets $ 2,894,941 $ (864,121) $ 2,030,820 $ 2,342,601 $ (631,630) $ 1,710,971 As of June 30, 2022 and December 31, 2021, 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, 2022 2021 2022 2021 Cost of revenue $ 126,237 $ 95,200 $ 230,856 $ 177,385 Sales and marketing 16,532 6,034 32,924 9,243 Total $ 142,769 $ 101,234 $ 263,780 $ 186,628 |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Common Stock | Common Stock In February 2022, the Company's Board authorized the repurchase of up to $750.0 million of the Company’s Class A common stock. Repurchases may be made from time to time through open market purchases or through privately negotiated transactions, subject to market conditions, applicable legal requirements and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company may also, from time to time, enter into Rule 10b-5 trading plans, under the Exchange Act, to facilitate repurchases of its shares. The repurchase program does not obligate the Company to acquire any particular amount of its Class A common stock, has no expiration date and may be modified, suspended, or terminated at any time at the Company's discretion. As of June 30, 2022, the Company repurchased 6,643,412 shares of our Class A common stock for an aggregate amount of $254.5 million. |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation The Company maintains the 2021 Equity Incentive Plan, the 2021 Partner Studio Incentive Plan, and the 2021 Employee Stock Purchase Plan, all of which were adopted by the Board and approved by its stockholders. 2021 Equity Incentive Plan The 2021 Equity Incentive Plan (the “2021 Plan”) provides for the grant of restricted stock units ("RSUs"), incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), restricted stock, stock appreciation rights ("SARs"), performance units, and performance shares to the Company’s employees, directors, consultants, and other service providers. The total shares of the Company’s Class A common stock that were initially reserved for issuance under the 2021 Plan was 39,000,000, and provides for an annual increase of shares 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 may determine. During the six months ended June 30, 2022, the Board decreased the number of shares of Class A common stock reserved for issuance under the 2021 Plan by 2,000,000 shares. In the three and six months ended June 30, 2022, the Company granted 2,388,544 and 3,293,317 RSUs to certain employees under the 2021 Plan at the weighted average grant date fair value of $41.92 and $49.63 per RSU, respectively. The RSUs generally vest over an approximate period of four 2021 Partner Studio Incentive Plan The 2021 Partner Studio Incentive Plan (the “2021 Partner Plan”) provides for the grant of RSUs, ISOs, NSOs, 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. During the six months ended June 30, 2022, the Board reserved an additional 2,000,000 shares of Class A common stock for issuance under the 2021 Partner Plan. In the three and six months ended June 30, 2022, the Company granted 452,517 and 577,772 RSUs under the 2021 Partner Plan at the weighted average grant date fair value of $46.74 and $47.05 per RSU, respectively. The RSUs generally vest over an approximate period of four 2021 Employee Stock Purchase Plan The 2021 Employee Stock Purchase Plan (the "ESPP") permits participants to purchase shares of the Company’s Class A common stock through contributions of up to 15% of their eligible compensation. The ESPP provides for consecutive, overlapping 24-month offering periods, during which the contributed amount by the participant will be used to purchase shares of the Company’s 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. 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. A total of 7,800,000 shares of the Company’s Class A common stock are available for sale under the ESPP and provides for an annual increase of shares 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. During the six months ended June 30, 2022, 107,781 shares were purchased under the ESPP. 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, 2022 2021 2022 2021 Cost of revenue $ 2,706 $ 473 $ 3,758 $ 582 Sales and marketing 13,432 2,221 20,351 4,040 Research and development 25,890 13,573 46,519 20,038 General and administrative 15,128 10,877 31,168 32,443 Total $ 57,156 $ 27,144 $ 101,796 $ 57,103 For the three and six months ended June 30, 2022 and 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, respectively. Early Exercise of Stock Options —As of June 30, 2022 and December 31, 2021, the Company had 512,249 and 486,999 shares of Class A common stock subject to repurchase in connection with early exercised stock options, respectively. The liability for the shares subject to repurchase as of June 30, 2022 and December 31, 2021 was $2.5 million and $1.4 million, respectively, which was included in 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, 2022 and December 31, 2021, the Company had 1,774,999 and 2,884,999 shares of Class A common stock options, respectively, that were exercised via nonrecourse promissory notes, of which 198,231 and 663,856 shares, were unvested and subject to repurchase, respectively. The principal balances of nonrecourse promissory notes outstanding amounted to $6.9 million and $15.1 million as of June 30, 2022 and December 31, 2021, respectively. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share 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, 2022 2021 2022 2021 Basic EPS Numerator: Net income (loss) attributable to AppLovin $ (21,748) $ 14,423 $ (137,005) $ 3,902 Less: Income attributable to convertible preferred stock — $ (902) — $ (731) Income attributable to options exercised by 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 $ (21,748) $ 13,295 $ (137,005) $ 3,095 Denominator: Weighted average common shares used to compute net income (loss) per share attributable to common stock, basic 373,912,724 335,619,207 372,932,509 279,326,624 Net income (loss) per share attributable to common stock, basic $ (0.06) $ 0.04 $ (0.37) $ 0.01 Diluted EPS Numerator: Net income (loss) attributable to AppLovin $ (21,748) $ 14,423 $ (137,005) $ 3,902 Less: Income attributable to convertible preferred stock — $ (859) — $ (693) Income attributable to options exercises by 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 $ (21,748) $ 13,349 $ (137,005) $ 3,137 Denominator: Weighted-average shares used in computing net income (loss) per share: Basic 373,912,724 335,619,207 372,932,509 279,326,624 Weighted-average dilutive stock options, RSUs, and convertible security — 18,238,607 — 19,179,641 Weighted-average shares used in computing net income (loss) per share: Diluted 373,912,724 353,857,814 372,932,509 298,506,265 Net income (loss) per share attributable to common stock: Diluted $ (0.06) $ 0.04 $ (0.37) $ 0.01 The following table presents the forms of antidilutive potential common shares: As of June 30, 2022 2021 Stock options exercised for promissory notes 1,774,999 3,484,999 Shares issuable upon conversion of Athena convertible security — 616,003 Early exercised stock options 512,249 1,291,975 Unvested RSAs 60,579 512,613 Stock options 13,196,979 35,250 Unvested RSUs 9,316,138 — ESPP 432,845 226,156 Total antidilutive potential common shares 25,293,789 6,166,996 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
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 records 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 2022 annual effective tax rate differs from the U.S. statutory rate primarily due to stock-based compensation expense, foreign derived intangible income deduction, global intangible low-taxed income, and valuation allowance against losses which are not more likely than not to be realized. During the six months ended June 30, 2022, 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, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions On February 12, 2021, the Company amended its credit agreement that provides for senior secured credit consisting of term loans and a revolving credit facility, with varying maturity dates through 2028. In connection with this amendment, the Company paid $0.8 million in fees to KKR Capital Markets LLC, which is affiliated with KKR Denali Holdings L.P. ("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. |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RestructuringIn June 2022, the Company announced a workforce reduction which affected approximately 12% of the Company’s employees. As a result, the Company recognized a total restructuring charge of $7.4 million comprising primarily of one-time termination benefits in the Company’s condensed consolidated statement of operations for the three months ended June 30, 2022. The majority of such restructuring costs was not paid and was included in the accrued liabilities on the Company's condensed consolidated balance sheet as of June 30, 2022. The Company expects to pay all restructuring costs related to the workforce reduction in the third quarter of 2022. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn August 2022, the Company made a non-binding proposal to combine with Unity Software Inc. (“Unity”), an industry leading platform for creating and operating interactive, real-time 3D content, in a transaction where all outstanding shares of Unity common stock would be exchanged for shares of the Company’s Class A and Class C common stock. The proposed transaction is subject to a number of contingencies, and it is uncertain that any transaction will be consummated on the terms described above or at all. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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 Annual Report on Form 10-K filed with the SEC on March 11, 2022. The condensed consolidated balance sheet data as of December 31, 2021 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 normal and 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, 2022 shown in this report are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or any other period. |
Segments | Segments Effective May 2022, the Company revised the presentation of segment information to reflect changes in the way the Company manages and evaluates the business. As such, we now report operating results through two reportable segments: Software Platform and Apps, as further discussed in Note 4. Accordingly, segment information for the comparable prior year period has been revised. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with GAAP. Consolidated financial statements include accounts and operations of the Company and its subsidiaries in which the Company has a controlling financial interest. In accordance with the provisions of Accounting Standards Codifications ("ASC") 810, the Company consolidates any variable interest entities ("VIE") where it 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 has 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. We do not consolidate a VIE in which we have a majority ownership interest when we are 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. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company generates Software Platform and Apps revenue. Software Platform revenue is generated from fees paid by advertisers who use our Software Platform. The Company generates Apps revenue from both consumers and business clients. Consumer revenue is generated from in-app purchases (“IAPs”) made by users within the Company’s apps (“Apps”). Business revenue is generated from advertisers that purchase ad inventory from Apps. Software Platform Revenue The 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. Software Platform Revenue is generated by placing ads on mobile applications owned by Publishers. The Company’s performance obligation is to provide an advertiser with access to the Software Platform, which facilitates the advertiser’s purchase of ad inventory from Publishers. The Company does not control the ad 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 ad 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 the number of completions of agreed upon actions less consideration paid or payable to Publishers. Apps Revenue Consumer Revenue Consumer Revenue includes fees collected from users to purchase 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. 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 as deferred revenue. 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. 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, which is generally the estimated average user life (“EAUL”). 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 the 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 with limited playing data, the Company determines its EAUL based on the EAUL of a game with 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 Business Revenue Business Revenue is generated by selling ad inventory on the Company's Apps to third-party advertisers. Advertisers purchase ad inventory either through the Software Platform or through third-party advertising networks (“Ad Networks”). Revenue from the sale of ad 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 revenue when the ad is displayed to users. |
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 7, “Acquisitions” for additional information. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements (Issued and Not Yet Adopted) In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ASU also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires specific disclosures for equity securities subject to contractual sale restrictions. These changes will become effective for the Company on January 1, 2024. The Company is currently evaluating the potential impact of these changes. Recent Accounting Pronouncements (Issued and 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. The Company adopted this ASU on January 1, 2022 with no material impact on the consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606).The Company adopted this ASU on January 1, 2022 with no material impact on the consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue Disaggregated by Type | The following table presents revenue disaggregated by segment and type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Software Platform Revenue $ 317,540 $ 145,664 $ 436,380 $ 234,083 Consumer Revenue 303,268 360,919 642,740 719,414 Business Revenue 155,423 162,223 322,532 319,186 Apps Revenue 458,691 523,142 965,272 1,038,600 Total Revenue $ 776,231 $ 668,806 $ 1,401,652 $ 1,272,683 |
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, 2022 2021 2022 2021 United States $ 481,378 $ 406,179 $ 861,945 $ 772,345 Rest of the World 294,853 262,627 539,707 500,338 Total Revenue $ 776,231 $ 668,806 $ 1,401,652 $ 1,272,683 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The following is selected financial data for our reportable segments for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenue: Software Platform $ 317,540 $ 145,664 $ 436,380 $ 234,083 Apps 458,691 523,142 965,272 1,038,600 Total Revenue $ 776,231 $ 668,806 $ 1,401,652 $ 1,272,683 Segment Adjusted EBITDA: Software Platform $ 196,744 $ 91,850 $ 432,299 $ 151,240 Apps 73,000 91,882 113,674 163,554 Total Segment Adjusted EBITDA $ 269,744 $ 183,732 $ 545,973 $ 314,794 Interest expense and loss on settlement of debt, net $ (36,505) $ (19,030) $ (68,514) $ (54,040) Other income (expense), net 2,452 (1,671) 4,869 6,955 Amortization, depreciation and write-offs (152,688) (107,156) (281,677) (195,973) Non-operating foreign exchange gain (loss) 819 (6) 1,277 1,275 Stock-based compensation (57,156) (29,435) (101,796) (59,394) Acquisition-related expense and transaction bonus (1,921) (12,056) (16,735) (12,994) Publisher bonuses — — (209,635) — MoPub acquisition transition services — — (6,999) — Restructuring costs (7,377) — (7,377) — Income (loss) before provision for tax $ 17,368 $ 14,378 $ (140,614) $ 623 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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, 2022 Balance Sheet Location Total Level 1 Level 2 Level 3 Financial Assets: Unrestricted Balances Money market funds Cash and cash equivalents $ 717,091 $ 717,091 $ — $ — Total financial assets $ 717,091 $ 717,091 $ — $ — As of December 31, 2021 Balance Sheet Location Total Level 1 Level 2 Level 3 Financial Assets: Unrestricted Balances Money market funds Cash and cash equivalents $ 1,070,979 $ 1,070,979 $ — $ — Marketable equity securities Prepaid expenses and other current assets $ 2,532 $ 2,532 $ — $ — Restricted Balances Money market funds Restricted cash equivalents 1,050,000 1,050,000 — — Total financial assets $ 2,123,511 $ 2,123,511 $ — $ — |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 price to the fair value of the assets acquired and liabilities assumed (in thousands): Cash and cash equivalents $ 400 Accounts receivable and other current assets 15,194 Intangible assets Customer Relationships—estimated useful life of 15 years 41,000 Developed Technology—estimated useful life of 6 years 60,500 Tradename—estimated useful life of 10 years 14,700 Goodwill 261,945 Property and equipment, net 363 Other assets 159 Accounts payable, accrued liabilities and other current liabilities (12,854) Deferred revenue (209) Deferred income tax liability (3,031) Total purchase consideration $ 378,167 The following table summarizes the preliminary allocation of the purchase consideration to the fair value of the assets acquired (in thousands): As of June 30, 2022 Intangible assets Advertiser Relationships—estimated useful life of 9 years $ 212,700 Publisher Relationships—estimated useful life of 9 years 123,300 Developed Technology—estimated useful life of 5 years 61,800 Tradename—estimated useful life of 3 months 60 Goodwill 632,472 Total purchase consideration $ 1,030,332 The following table summarizes 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 |
Supplemental Pro Forma Information | The unaudited supplemental pro forma information below presents the combined historical results of operations of the Company, Adjust, the MoPub business, and Wurl for each of the periods presented as if Adjust had been acquired as of January 1, 2020, and the MoPub business and Wurl had been acquired as of January 1, 2021 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenue $ 776,231 $ 723,699 $ 1,410,684 $ 1,397,200 Net income (loss) $ (20,810) $ 20,974 $ (128,437) $ (18,880) |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustments | The unaudited supplemental pro forma information above includes the following adjustments to net loss in the appropriate pro forma periods (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 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 $ — $ (17,953) $ (3,512) $ (40,253) A decrease (increase) in expenses related to the TSA $ — $ — $ 7,000 $ (7,000) An increase in revenue related to fair value adjustment $ — $ 538 $ 538 An (increase) due to replacement stock awards $ — $ (2,693) $ (1,221) $ (6,159) An (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) $ — $ (2,641) A decrease (increase) in expenses related to transaction costs $ 179 $ 2,903 $ 16,899 $ (8,912) A decrease in expenses related to transaction bonuses $ 1,101 $ 10,000 $ 1,101 $ 8,899 A decrease (increase) in income tax provision $ (292) $ 1,952 $ (4,625) $ 12,671 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill Activity | The following table presents goodwill activity (in thousands): December 31, 2021 $ 966,427 Goodwill acquired 894,463 Foreign currency translation (57,723) June 30, 2022 $ 1,803,167 |
Summary of Intangible Assets Acquired, Net | Intangible assets, net consisted of the following (in thousands): Weighted- As of June 30, 2022 As of December 31, 2021 Gross Accumulated Net Book Gross Accumulated Net Book Long-lived intangible assets : Apps 4.8 $ 1,988,525 $ (701,772) $ 1,286,753 $ 1,939,180 $ (529,012) $ 1,410,168 Customer relationships 9.7 511,338 (32,722) 478,616 145,870 (8,442) 137,428 User base 3.8 68,817 (32,245) 36,572 68,817 (27,369) 41,448 License asset 1.0 25,640 (8,547) 17,093 25,640 — 25,640 Developed technology 5.1 204,405 (36,269) 168,136 87,851 (21,435) 66,416 Other 6.6 51,409 (9,605) 41,804 34,895 (6,648) 28,247 Total long-lived intangible assets 2,850,134 (821,160) 2,028,974 2,302,253 (592,906) 1,709,347 Short-lived intangible assets: Apps 0.5 44,807 (42,961) 1,846 40,348 (38,724) 1,624 Total intangible assets $ 2,894,941 $ (864,121) $ 2,030,820 $ 2,342,601 $ (631,630) $ 1,710,971 |
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, 2022 2021 2022 2021 Cost of revenue $ 126,237 $ 95,200 $ 230,856 $ 177,385 Sales and marketing 16,532 6,034 32,924 9,243 Total $ 142,769 $ 101,234 $ 263,780 $ 186,628 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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, 2022 2021 2022 2021 Cost of revenue $ 2,706 $ 473 $ 3,758 $ 582 Sales and marketing 13,432 2,221 20,351 4,040 Research and development 25,890 13,573 46,519 20,038 General and administrative 15,128 10,877 31,168 32,443 Total $ 57,156 $ 27,144 $ 101,796 $ 57,103 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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, 2022 2021 2022 2021 Basic EPS Numerator: Net income (loss) attributable to AppLovin $ (21,748) $ 14,423 $ (137,005) $ 3,902 Less: Income attributable to convertible preferred stock — $ (902) — $ (731) Income attributable to options exercised by 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 $ (21,748) $ 13,295 $ (137,005) $ 3,095 Denominator: Weighted average common shares used to compute net income (loss) per share attributable to common stock, basic 373,912,724 335,619,207 372,932,509 279,326,624 Net income (loss) per share attributable to common stock, basic $ (0.06) $ 0.04 $ (0.37) $ 0.01 Diluted EPS Numerator: Net income (loss) attributable to AppLovin $ (21,748) $ 14,423 $ (137,005) $ 3,902 Less: Income attributable to convertible preferred stock — $ (859) — $ (693) Income attributable to options exercises by 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 $ (21,748) $ 13,349 $ (137,005) $ 3,137 Denominator: Weighted-average shares used in computing net income (loss) per share: Basic 373,912,724 335,619,207 372,932,509 279,326,624 Weighted-average dilutive stock options, RSUs, and convertible security — 18,238,607 — 19,179,641 Weighted-average shares used in computing net income (loss) per share: Diluted 373,912,724 353,857,814 372,932,509 298,506,265 Net income (loss) per share attributable to common stock: Diluted $ (0.06) $ 0.04 $ (0.37) $ 0.01 |
Summary of Antidilutive Potential Common Shares | The following table presents the forms of antidilutive potential common shares: As of June 30, 2022 2021 Stock options exercised for promissory notes 1,774,999 3,484,999 Shares issuable upon conversion of Athena convertible security — 616,003 Early exercised stock options 512,249 1,291,975 Unvested RSAs 60,579 512,613 Stock options 13,196,979 35,250 Unvested RSUs 9,316,138 — ESPP 432,845 226,156 Total antidilutive potential common shares 25,293,789 6,166,996 |
Description of Business Basis_2
Description of Business Basis of Presentation (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Product Information [Line Items] | |
Number of reportable segments | 2 |
Durable Virtual Goods | Minimum | |
Product Information [Line Items] | |
Estimated average user life | 6 months |
Durable Virtual Goods | 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, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue from External Customer [Line Items] | ||||
Revenue | $ 776,231 | $ 668,806 | $ 1,401,652 | $ 1,272,683 |
Software Platform Revenue | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 317,540 | 145,664 | 436,380 | 234,083 |
Apps Revenue | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 458,691 | 523,142 | 965,272 | 1,038,600 |
Consumer Revenue | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 303,268 | 360,919 | 642,740 | 719,414 |
Business Revenue | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | $ 155,423 | $ 162,223 | $ 322,532 | $ 319,186 |
Revenue - Summary of Revenue _2
Revenue - Summary of Revenue Disaggregated by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 776,231 | $ 668,806 | $ 1,401,652 | $ 1,272,683 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 481,378 | 406,179 | 861,945 | 772,345 |
Rest of the World | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 294,853 | $ 262,627 | $ 539,707 | $ 500,338 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | |||||
Deferred revenue | $ 54,700 | $ 59,500 | $ 73,400 | $ 81,400 | |
Segment Reconciling Items | |||||
Disaggregation of Revenue [Line Items] | |||||
Consideration incurred for existing and potential customer incentive bonuses | $ 0 | $ 0 | $ 209,635 | $ 0 | |
MoPub | Segment Reconciling Items | |||||
Disaggregation of Revenue [Line Items] | |||||
Consideration incurred for existing and potential customer incentive bonuses | $ 209,600 |
Segments - Narrative (Details)
Segments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
Segments - Schedule of Segment
Segments - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Revenue | $ 776,231 | $ 668,806 | $ 1,401,652 | $ 1,272,683 | |
Adjusted EBITDA | 269,744 | 183,732 | 545,973 | 314,794 | |
Interest expense and loss on settlement of debt | (36,505) | (19,030) | (68,514) | (54,040) | |
Other income (expense), net | 518 | (1,570) | 2,532 | 8,220 | |
Amortization, depreciation and write-offs | (281,677) | (195,973) | |||
Non-operating foreign exchange gain (loss) | 1,277 | (952) | |||
Stock-based compensation | (57,156) | (27,144) | (101,796) | (57,103) | |
Income (loss) before income taxes | 17,368 | 14,378 | (140,614) | 623 | |
Software Platform Revenue | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Revenue | 317,540 | 145,664 | 436,380 | 234,083 | |
Adjusted EBITDA | 196,744 | 91,850 | 432,299 | 151,240 | |
Apps | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Revenue | 458,691 | 523,142 | 965,272 | 1,038,600 | |
Adjusted EBITDA | 73,000 | 91,882 | 113,674 | 163,554 | |
Segment Reconciling Items | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Interest expense and loss on settlement of debt | (36,505) | (19,030) | (68,514) | (54,040) | |
Other income (expense), net | 2,452 | (1,671) | 4,869 | 6,955 | |
Amortization, depreciation and write-offs | (152,688) | (107,156) | (281,677) | (195,973) | |
Non-operating foreign exchange gain (loss) | 819 | (6) | 1,277 | 1,275 | |
Stock-based compensation | (57,156) | (29,435) | (101,796) | (59,394) | |
Acquisition-related expense and transaction bonus | (1,921) | (12,056) | (16,735) | (12,994) | |
Publisher bonuses | 0 | 0 | (209,635) | 0 | |
Restructuring costs | (7,377) | 0 | (7,377) | 0 | |
MoPub | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Acquisition-related expense and transaction bonus | (14,400) | ||||
MoPub | Segment Reconciling Items | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Publisher bonuses | $ (209,600) | ||||
Acquisition transition services | $ 0 | $ 0 | $ (6,999) | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | $ 717,091 | $ 2,123,511 |
Money market funds | Cash and cash equivalents | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 717,091 | 1,070,979 |
Money market funds | Restricted cash equivalents | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 1,050,000 | |
Marketable equity securities | Prepaid expenses and other current assets | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 2,532 | |
Level 1 | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 717,091 | 2,123,511 |
Level 1 | Money market funds | Cash and cash equivalents | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 717,091 | 1,070,979 |
Level 1 | Money market funds | Restricted cash equivalents | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 1,050,000 | |
Level 1 | Marketable equity securities | Prepaid expenses and other current assets | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 2,532 | |
Level 2 | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 0 | 0 |
Level 2 | Money market funds | Cash and cash equivalents | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 0 | 0 |
Level 2 | Money market funds | Restricted cash equivalents | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 0 | |
Level 2 | Marketable equity securities | Prepaid expenses and other current assets | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 0 | |
Level 3 | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 0 | 0 |
Level 3 | Money market funds | Cash and cash equivalents | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | $ 0 | 0 |
Level 3 | Money market funds | Restricted cash equivalents | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | 0 | |
Level 3 | Marketable equity securities | Prepaid expenses and other current assets | ||
Fair Value By Fair Value Hierarchy Level [Line Items] | ||
Financial Assets | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Fair Value by Fair Value Hierarchy Level [Line Items] | |||
Investment fund, maximum exposure loss limit | $ 21.3 | $ 21.3 | |
Investment fund, maximum exposure loss limit, unfunded commitments | 38 | 38 | |
Purchase of non-marketable investments | 4.4 | 18.5 | |
Equity securities without readily determinable fair value, downward price adjustment | 0.8 | ||
Equity securities without readily determinable fair value, upward price adjustment | $ 0.8 | ||
Proceeds from non marketable securities | 38 | ||
Minimum | |||
Fair Value by Fair Value Hierarchy Level [Line Items] | |||
Investment fund, term | 7 years | ||
Investment fund, option to extend, term | 2 years | ||
Maximum | |||
Fair Value by Fair Value Hierarchy Level [Line Items] | |||
Investment fund, term | 10 years | ||
Investment fund, option to extend, term | 3 years | ||
Fair Value Measured at Net Asset Value Per Share | |||
Fair Value by Fair Value Hierarchy Level [Line Items] | |||
Equity securities without readily determinable fair value | $ 21.3 | $ 21.3 | $ 3.2 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Cloud Platform Services | ||
Other Commitments [Line Items] | ||
Unfunded committed amount | $ 550 | |
Private Equity Funds | ||
Other Commitments [Line Items] | ||
Unfunded committed amount | 38 | |
Standby Letters of Credit | ||
Other Commitments [Line Items] | ||
Letters of credit outstanding | $ 11.1 | $ 11.1 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | 15 Months Ended | ||||||
Apr. 01, 2022 USD ($) shares | Jan. 01, 2022 USD ($) | Apr. 20, 2021 USD ($) | Jun. 30, 2021 USD ($) | Apr. 30, 2021 USD ($) transaction | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | |||||||||||
Consideration transferred, liabilities incurred | $ 0 | $ 342,170,000 | |||||||||
Certain Mobile Game Apps | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent consideration, costs | $ 43,800,000 | 75,500,000 | |||||||||
Acquistion of Certain Mobile Game Apps | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent consideration, costs | $ 51,800,000 | 87,600,000 | |||||||||
Number of asset acquisitions | transaction | 2 | ||||||||||
Payments for asset acquisitions | $ 130,000,000 | $ 300,000,000 | 8,000,000 | 8,000,000 | |||||||
Asset acquisition, transaction cost | 4,000,000 | 6,000,000 | |||||||||
Asset acquisition, consideration transferred | $ 134,000,000 | $ 306,000,000 | |||||||||
Acquired asset, amortization period | 9 years | 8 years | |||||||||
Development services agreement, term | 4 years | 4 years | |||||||||
Contingent consideration, earn-out term | 4 years | ||||||||||
Contingent consideration, earn-out payment | $ 50,000,000 | ||||||||||
Transitional Services Agreement | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Expenses recognized | 7,000,000 | ||||||||||
Wurl, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration transferred | $ 378,200,000 | ||||||||||
Consideration paid | 219,300,000 | ||||||||||
Business combination, equity interests issued and issuable | 137,400,000 | ||||||||||
Consideration transferred, liabilities incurred | $ 21,500,000 | ||||||||||
Indemnity holdback, period | 18 months | ||||||||||
Acquisition-related expense and transaction bonus | $ 1,900,000 | ||||||||||
Revenue of acquiree since acquisition date | $ 11,400,000 | ||||||||||
Pretax loss of acquiree since acquisition date | 4,600,000 | ||||||||||
Wurl, Inc. | Class A Common Stock | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business combination, equity interests issued and issuable (in shares) | shares | 2,579,692 | ||||||||||
Cash and equity interests issued and issuable, earnout | $ 600,000,000 | ||||||||||
MoPub | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration paid | $ 1,030,000,000 | ||||||||||
Acquisition-related expense and transaction bonus | 14,400,000 | ||||||||||
Liabilities assumed in transaction | 0 | 0 | 0 | ||||||||
Expected tax deductible amount for goodwill | $ 694,500,000 | $ 694,500,000 | $ 694,500,000 | ||||||||
Adjust GmbH | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration transferred | $ 967,800,000 | ||||||||||
Consideration paid | 578,000,000 | ||||||||||
Consideration transferred, liabilities incurred | 342,200,000 | ||||||||||
Revenue of acquiree since acquisition date | $ 21,600,000 | ||||||||||
Pretax loss of acquiree since acquisition date | $ (19,200,000) | ||||||||||
Expected tax deductible amount for goodwill | 692,500,000 | ||||||||||
Fair value of cash holdback | 47,600,000 | ||||||||||
Transaction costs | 3,100,000 | ||||||||||
Adjust GmbH | Reported Value Measurement | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration transferred | 980,000,000 | ||||||||||
Business combination, equity interests issued and issuable | 352,000,000 | ||||||||||
Consideration transferred, liabilities incurred | $ 50,000,000 | ||||||||||
2020 Asset Acquisition | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent consideration, costs | $ 40,700,000 | $ 67,900,000 |
Acquisitions - Summary of the F
Acquisitions - Summary of the Fair Value of Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Apr. 01, 2022 | Jan. 01, 2022 | Apr. 20, 2021 | Jun. 30, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,803,167 | $ 966,427 | |||
Wurl, Inc. | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 400 | ||||
Accounts receivable and other current assets | 15,194 | ||||
Goodwill | 261,945 | ||||
Property and equipment, net | 363 | ||||
Other assets | 159 | ||||
Accounts payable, accrued liabilities and other current liabilities | (12,854) | ||||
Deferred revenue | (209) | ||||
Deferred income tax liability | (3,031) | ||||
Total purchase consideration | 378,167 | ||||
Wurl, Inc. | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 41,000 | ||||
Estimated useful life | 15 years | ||||
Wurl, Inc. | Developed Technology | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 60,500 | ||||
Estimated useful life | 6 years | ||||
Wurl, Inc. | Tradename | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 14,700 | ||||
Estimated useful life | 10 years | ||||
MoPub | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 632,472 | ||||
Total purchase consideration | 1,030,332 | ||||
MoPub | Advertiser Relationships | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 212,700 | ||||
Estimated useful life | 9 years | ||||
MoPub | Publisher Relationships | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 123,300 | ||||
Estimated useful life | 9 years | ||||
MoPub | Developed Technology | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | 61,800 | ||||
Estimated useful life | 5 years | ||||
MoPub | Tradename | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 60 | ||||
Estimated useful life | 3 months | ||||
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 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 | ||||
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 |
Acquisitions - Supplemental Pro
Acquisitions - Supplemental Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||||
Revenue | $ 776,231 | $ 723,699 | $ 1,410,684 | $ 1,397,200 |
Net income (loss) | $ (20,810) | $ 20,974 | $ (128,437) | $ (18,880) |
Acquisitions - Pro Forma Adjust
Acquisitions - Pro Forma Adjustments to Net Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | $ (20,810) | $ 20,974 | $ (128,437) | $ (18,880) |
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) | 0 | (17,953) | (3,512) | (40,253) |
A decrease (increase) in expenses related to the TSA | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | 0 | 0 | 7,000 | (7,000) |
An increase in revenue related to fair value adjustment | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | 0 | 538 | 538 | |
An (increase) due to replacement stock awards | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | 0 | (2,693) | (1,221) | (6,159) |
An (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) | 0 | (1,350) | 0 | (2,641) |
A decrease (increase) in expenses related to transaction costs | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | 179 | 2,903 | 16,899 | (8,912) |
A decrease in expenses related to transaction bonuses | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | 1,101 | 10,000 | 1,101 | 8,899 |
A decrease (increase) in income tax provision | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income (loss) | $ (292) | $ 1,952 | $ (4,625) | $ 12,671 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Narrative (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
Goodwill [Line Items] | ||
Number of operating segments | segment | 2 | |
Number of reportable segments | segment | 2 | |
Goodwill | $ 1,803,167 | $ 966,427 |
Software Platform Revenue | ||
Goodwill [Line Items] | ||
Goodwill | 1,500,000 | |
Apps | ||
Goodwill [Line Items] | ||
Goodwill | $ 300,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Summary of Goodwill Activity (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 966,427 |
Goodwill acquired | 894,463 |
Foreign currency translation | (57,723) |
Balance at end of period | $ 1,803,167 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Summary of Intangible Assets Acquired, Net (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Net Book Value | $ 2,028,974 | $ 1,709,347 |
Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 2,850,134 | 2,302,253 |
Accumulated Amortization | (821,160) | (592,906) |
Net Book Value | 2,028,974 | 1,709,347 |
Total intangible assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 2,894,941 | 2,342,601 |
Accumulated Amortization | (864,121) | (631,630) |
Net Book Value | $ 2,030,820 | 1,710,971 |
Apps | 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 | $ 1,988,525 | 1,939,180 |
Accumulated Amortization | (701,772) | (529,012) |
Net Book Value | $ 1,286,753 | 1,410,168 |
Apps | Short-Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 6 months | |
Gross Carrying Value | $ 44,807 | 40,348 |
Accumulated Amortization | (42,961) | (38,724) |
Net Book Value | $ 1,846 | 1,624 |
Customer relationships | Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 9 years 8 months 12 days | |
Gross Carrying Value | $ 511,338 | 145,870 |
Accumulated Amortization | (32,722) | (8,442) |
Net Book Value | $ 478,616 | 137,428 |
User base | Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 3 years 9 months 18 days | |
Gross Carrying Value | $ 68,817 | 68,817 |
Accumulated Amortization | (32,245) | (27,369) |
Net Book Value | $ 36,572 | 41,448 |
License asset | Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 1 year | |
Gross Carrying Value | $ 25,640 | 25,640 |
Accumulated Amortization | (8,547) | 0 |
Net Book Value | $ 17,093 | 25,640 |
Developed technology | Long -Lived Intangible Assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 5 years 1 month 6 days | |
Gross Carrying Value | $ 204,405 | 87,851 |
Accumulated Amortization | (36,269) | (21,435) |
Net Book Value | $ 168,136 | 66,416 |
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 | $ 51,409 | 34,895 |
Accumulated Amortization | (9,605) | (6,648) |
Net Book Value | $ 41,804 | $ 28,247 |
Goodwill and Intangible Asset_6
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, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 142,769 | $ 101,234 | $ 263,780 | $ 186,628 |
Cost of revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | 126,237 | 95,200 | 230,856 | 177,385 |
Sales and marketing | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 16,532 | $ 6,034 | $ 32,924 | $ 9,243 |
Common Stock (Details)
Common Stock (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | Feb. 28, 2022 | |
Class of Stock [Line Items] | ||||
Stock repurchased, value | $ 210,830,000 | $ 43,697,000 | ||
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 750,000,000 | |||
Stock repurchased (in shares) | 6,643,412 | |||
Stock repurchased, value | $ 254,500,000 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Feb. 28, 2021 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Stock-based compensation expense | $ 57,156 | $ 27,144 | $ 101,796 | $ 57,103 | |||
Liabilities related to exercised options subject to repurchase | $ 1,400 | $ 2,500 | |||||
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) | 2,388,544 | 3,293,317 | |||||
Restricted stock units granted (in dollars per share) | $ 41.92 | $ 49.63 | |||||
Promissory Notes | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Employee promissory note settled | $ 20,900 | ||||||
Employee promissory note outstanding | $ 6,900 | $ 6,900 | $ 15,100 | ||||
Minimum | Restricted Stock Units (RSUs) | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Maximum | Restricted Stock Units (RSUs) | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Award 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) | 1,774,999 | 1,774,999 | 2,884,999 | ||||
Class A Common Stock | Promissory Notes | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Early exercised options with promissory note (in shares) | 663,856 | 198,231 | |||||
Class A Common Stock | Equity Option | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Exercised options subject to repurchase (in shares) | 486,999 | 512,249 | |||||
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 | |||||
Number of shares available for future issuance (in shares) | 39,000,000 | ||||||
Number of shares available for future issuance as a percentage of outstanding stock | 5% | ||||||
2021 Equity Incentive Plan | Class A Common Stock | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Decrease in the number of shares reserved for future issuance (in shares) | 2,000,000 | ||||||
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 | |||||
Number of additional shares authorized (in shares) | 2,000,000 | ||||||
2021 Partner Studio Incentive Plan | Restricted Stock Units (RSUs) | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Number of shares stock option (in shares) | 452,517 | 577,772 | |||||
Restricted stock units granted (in dollars per share) | $ 46.74 | $ 47.05 | |||||
2021 Partner Studio Incentive Plan | Minimum | Restricted Stock Units (RSUs) | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Award vesting period | 4 years | ||||||
2021 Partner Studio Incentive Plan | Maximum | Restricted Stock Units (RSUs) | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Award vesting period | 5 years | ||||||
Employee Stock Purchase Plan | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
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] | |||||||
Number of shares available for future issuance as a percentage of outstanding stock | 1% | ||||||
Percentage of eligible compensation eligible for participation in the stock purchase plan | 15% | 15% | |||||
Share based compensation by share based payment arrangement purchase price of the stock as a percentage of fair value | 85% | ||||||
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 | |||||
Number of additional shares available for issuance (in shares) | 7,800,000 | ||||||
Shares purchased for award (in shares) | 107,781 | ||||||
2011 Equity Incentive Plan | |||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||
Stock-based compensation expense | $ 300 | $ 300 | $ 600 | $ 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, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 57,156 | $ 27,144 | $ 101,796 | $ 57,103 |
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 2,706 | 473 | 3,758 | 582 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 13,432 | 2,221 | 20,351 | 4,040 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 25,890 | 13,573 | 46,519 | 20,038 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 15,128 | $ 10,877 | $ 31,168 | $ 32,443 |
Earnings Per Share - Summary of
Earnings 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, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||||
Net income (loss) attributable to AppLovin | $ (21,748) | $ (115,257) | $ 14,423 | $ (10,521) | $ (137,005) | $ 3,902 |
Income attributable to convertible preferred stock | 0 | (902) | 0 | (731) | ||
Income attributable to options exercised by promissory notes | 0 | (140) | 0 | (55) | ||
Income attributable to unvested early exercised options | 0 | (61) | 0 | (12) | ||
Income attributable to unvested RSA’s | 0 | (25) | 0 | (9) | ||
Net income (loss) attributable to common stock | $ (21,748) | $ 13,295 | $ (137,005) | $ 3,095 | ||
Denominator: | ||||||
Weighted average common shares used to compute net loss per share attributable to common stockholders, basic (in shares) | 373,912,724 | 335,619,207 | 372,932,509 | 279,326,624 | ||
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.06) | $ 0.04 | $ (0.37) | $ 0.01 | ||
Numerator: | ||||||
Net income (loss) attributable to AppLovin | $ (21,748) | $ (115,257) | $ 14,423 | $ (10,521) | $ (137,005) | $ 3,902 |
Income attributable to convertible preferred stock | 0 | (859) | 0 | (693) | ||
Income attributable to options exercises by promissory notes | 0 | (132) | 0 | (53) | ||
Income attributable to unvested early exercised options | 0 | (59) | 0 | (11) | ||
Income attributable to unvested RSA's | 0 | (24) | 0 | (8) | ||
Net income (loss) attributable to common stock | $ (21,748) | $ 13,349 | $ (137,005) | $ 3,137 | ||
Denominator: | ||||||
Weighted average common shares used to compute net loss per share attributable to common stockholders, basic (in shares) | 373,912,724 | 335,619,207 | 372,932,509 | 279,326,624 | ||
Weighted-average dilutive stock options, RSUs, and convertible security (in shares) | 0 | 18,238,607 | 0 | 19,179,641 | ||
Weighted-average shares used in computing net income (loss) per share: Diluted (in shares) | 373,912,724 | 353,857,814 | 372,932,509 | 298,506,265 | ||
Net income (loss) per share attributable to common stock: Diluted (in dollars per share) | $ (0.06) | $ 0.04 | $ (0.37) | $ 0.01 |
Earnings Per Share - Summary _2
Earnings Per Share - Summary of Antidilutive Potential Common Shares (Details) - shares | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 25,293,789 | 6,166,996 |
Stock options exercised for promissory notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 1,774,999 | 3,484,999 |
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) | 0 | 616,003 |
Early exercised stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 512,249 | 1,291,975 |
Unvested RSAs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 60,579 | 512,613 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 13,196,979 | 35,250 |
Unvested RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 9,316,138 | 0 |
ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares (in shares) | 432,845 | 226,156 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Mar. 31, 2021 | Feb. 12, 2021 |
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 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Restructuring and Related Activities [Abstract] | ||
Number of positions eliminated, period percent | 12% | |
Restructuring charges | $ 7.4 |