AppLovin Corporation (APP) Fundamental Checkup
AppLovin Corporation fundamental checkup using revenue growth, EPS growth, free cash flow, margins, ROIC, debt-to-equity, and TGMCharts chart exhibits as of September 11, 2026.
By TGMCharts Research · Data as of · Updated
AppLovin Corporation gets a balanced fundamental read when revenue growth of 25.84%, EPS growth of 73.54%, free-cash-flow growth of 73.58%, net margin of 64.58%, and ROIC of 63.79% support the same story.
The checkup weighs operating growth, shareholder conversion, cash conversion, reinvestment quality, and balance-sheet flexibility. Current ratio is 4.30x and debt-to-equity is 1.11x, so the balance-sheet read is part of the final view rather than a footnote.
- AppLovin Corporation has market cap of $108.83B and closed at $324 on September 11, 2026.
- Five-year revenue CAGR is 25.84% and five-year EPS CAGR is 73.54%.
- Five-year free-cash-flow CAGR is 73.58%.
- Net margin is 64.58% and ROIC is 63.79%.
- Current ratio is 4.30x and debt-to-equity is 1.11x.
Fundamental snapshot
The valuation, growth, profitability, and balance-sheet facts behind the checkup.
Analyzing the Integrated Growth and Capital Profile
Evaluating AppLovin Corporation requires looking past isolated metrics to see if operating expansion, cash generation, balance sheet leverage, and market valuation tell a unified story. With the market pricing the equity at $324 as of September 11, 2026, this analysis anchors itself in reported financial statements to determine if the operational momentum justifies the current market positioning.
The core of this evaluation rests on whether the top-line expansion rate of 25.84% successfully translates into bottom-line compounding, where the five-year EPS CAGR stands at 73.54%. Cross-referencing these metrics against a five-year free cash flow CAGR of 73.58% ensures that paper earnings are fully backed by hard cash generation before assessing balance sheet risk.
Current compounder snapshot · APP
Live supporting context; not part of the article's frozen 2026-09-11 evidence snapshot.
No 10Y consistency score yet for revenue — the window needs more comparable quarters.
Valuation vs own 10Y history: P/S 15.6x · 10Y median 9.1x · 65th percentile · as of Sep 10, 2026
Annualized revenue (TTM) · by quarter, last 27
Quarterly YoY revenue growth vs the 20% line
P/S multiple vs its 10Y median
Operational Footprint and Financial Baseline
As an established player within the competitive Technology sector, the business must be evaluated on its ability to sustain high-velocity growth without compromising capital efficiency. This operational baseline integrates the company's massive $108.83B market capitalization with its underlying margin structure and leverage ratios, establishing a comprehensive analytical framework before diving into individual financial statements.
Fundamental evidence table
A compact cross-check of valuation, growth, quality, and financial flexibility.
APP revenue
Revenue history shows whether the business has been expanding before margins and per-share metrics are considered. Q2 FY2026 (2026-06-30): $1.92B.
Five-year revenue CAGR: 25.84%. This is endpoint-to-endpoint across the five-year window — a depressed start year can inflate it, so read it against the recent bars.
Five-year revenue CAGR of 25.84% is the top-line test. A fundamental checkup becomes more durable when revenue growth is paired with earnings growth instead of depending only on margin expansion.
Translating Top-Line Momentum to Shareholder Returns
Top-line expansion is only as valuable as its ultimate conversion into per-share profitability. While the company has delivered a robust five-year revenue CAGR of 25.84%, its per-share earnings have scaled at a much faster rate, posting a five-year EPS CAGR of 73.54%. This positive divergence suggests significant operating leverage in the business model, though it necessitates a closer look at whether this outperformance stems from structural margin expansion or capital allocation decisions like share repurchases.
APP EPS
EPS history shows how much of the business growth has reached shareholders. Q2 FY2026 (2026-06-30): $3.77.
Five-year EPS CAGR: 73.54%. This is endpoint-to-endpoint across the five-year window — a depressed or negative start year can inflate it, so read it against the recent bars.
Five-year EPS CAGR of 73.54% is the shareholder conversion check. If EPS grows faster than revenue, the note should ask whether that came from margin quality, buybacks, or a temporary base effect.
Verifying Earnings Quality Through Cash Flow Generation
To confirm that the rapid rise in net income represents genuine economic value rather than accounting adjustments, we turn to cash flow conversion. The company's five-year free cash flow CAGR of 73.58% closely tracks its bottom-line growth, indicating an exceptionally clean earnings profile with minimal drag from working capital or heavy localized capital expenditures. This strong cash generation provides the business with substantial strategic flexibility to self-fund its operational initiatives.
APP free cash flow
Free cash flow checks whether earnings are converting into owner cash. Q2 FY2026 (2026-06-30): $869.04M.
Five-year free-cash-flow CAGR: 73.58%. This is endpoint-to-endpoint across the five-year window — a depressed or negative start year can inflate it, so read it against the recent bars.
Free-cash-flow CAGR of 73.58% is the counterweight to the EPS story. If cash flow lags earnings, the quality of the fundamental setup deserves a more cautious reading.
Assessing Profitability Thresholds and Capital Efficiency
The durability of this growth trajectory is heavily supported by elite profitability metrics, highlighted by a net margin of 64.58%. Furthermore, the business demonstrates remarkable capital efficiency, generating a return on invested capital (ROIC) of 63.79%. This level of ROIC indicates that the company possesses a highly optimized operating model capable of extracting immense value from every dollar of capital deployed back into its core technology platform.
APP net margin
Net margin is the operating-quality check behind the growth record. Q2 FY2026 (2026-06-30): 65.84%.
Net margin (TTM): 64.58%. The bars below are reported fiscal periods (quarterly where available).
Net margin of 64.58% shows how much revenue becomes profit. The checkup is stronger when margin quality supports EPS growth rather than simply flattering one recent period.
APP ROIC
ROIC tests whether the business earns enough on reinvested capital to deserve attention. Q2 FY2026 (2026-06-30): 63.79%.
Latest ROIC: 63.79%.
ROIC of 63.79% is the reinvestment-quality check. A business with stronger returns can support a better long-term read even when the valuation is not obviously cheap.
Liquidity Cushions and Leverage Guardrails
A high-growth operating model requires strong balance sheet guardrails to withstand unexpected macroeconomic shifts. Currently, the company maintains a highly liquid profile with a current ratio of 4.30x, paired with a manageable debt-to-equity ratio of 1.11x. While the leverage ratio shows a moderate reliance on debt financing, the substantial liquidity cushion and massive cash generation mitigate solvency risks and preserve operational flexibility.
APP debt-to-equity Chart
Debt-to-equity keeps the checkup honest about balance-sheet flexibility. Historical series through 2025-12-31.
Latest debt-to-equity ratio: 1.11x.
Debt-to-equity of 1.11x and current ratio of 4.30x are the balance-sheet checks. They matter because growth and margins are less valuable if financial flexibility is narrowing.
Evaluating the Market Premium and Yield Dynamics
The market currently prices these operational achievements at a trailing P/E ratio of 24.90x, which corresponds to an earnings yield of 4.02%. This multiple indicates that investors are pricing in continued high-velocity growth and premium execution, leaving little margin for error if operational performance experiences even a temporary deceleration. Notably, the current market price sits above the independent analyst DCF estimate, signaling a premium valuation.
APP Price Chart
Latest close: $324 as of September 11, 2026.
The close at $324 is not the conclusion, but it is the market reference point. The fundamental read has to explain whether growth, margins, and balance-sheet support justify the price investors are paying.
Weighing High Return Efficiency Against Valuation Hurdles
The structural bull case relies on the compounding power of an elite 63.79% ROIC and a net margin of 64.58%, which together ensure that future top-line expansion will generate massive pools of liquid cash. Conversely, the primary bear case centers on the steep valuation multiple and the company's debt-to-equity ratio of 1.11x, which could amplify downside volatility if top-line growth begins to revert toward historical industry averages.
Bull and bear case
Fundamental support
- Five-year revenue CAGR of 25.84% and five-year EPS CAGR of 73.54% support the business case.
- Net margin of 64.58% and ROIC of 63.79% are the quality checks behind the thesis.
Fundamental pressure
- Free-cash-flow CAGR of 73.58% can weaken the read if it falls away from EPS growth.
- Debt-to-equity of 1.11x and current ratio of 4.30x are the balance-sheet checks that can change the view.
Synthesizing the Long-Term Fundamental Outlook
In conclusion, the fundamental profile remains highly robust, characterized by tightly aligned growth in revenue, earnings, and free cash flow alongside exceptional capital returns. However, because the current market price exceeds the analyst DCF fair value estimate, any deterioration in the five-year revenue CAGR of 25.84% or a contraction in operating margins would require a swift re-evaluation of the investment thesis. This analysis serves as an objective fundamental benchmark and does not constitute personalized financial advice.
FAQ
What is the fundamental read on APP?
AppLovin Corporation is judged through revenue growth of 25.84%, EPS growth of 73.54%, free-cash-flow growth of 73.58%, net margin of 64.58%, and ROIC of 63.79%.
Which APP fundamental metric matters most?
No single metric carries the article. The checkup requires growth, cash conversion, profitability quality, balance-sheet flexibility, and valuation to be read together.
When should this APP checkup refresh?
Its figures are as of September 11, 2026, the note's dated snapshot; a note whose figures stop verifying against reported data is corrected or unpublished.
What would change our mind
- Revenue growth moving away from the current five-year CAGR of 25.84%.
- Free-cash-flow growth drifting away from five-year EPS CAGR of 73.54%.
- ROIC or balance-sheet flexibility weakening from ROIC of 63.79% and debt-to-equity of 1.11x.
The bottom line
AppLovin Corporation fundamental research note from TGMCharts Research, grounded in a dated fundamentals snapshot, chart exhibits, and linked source facts.
Read next: AppLovin Corporation (APP) Earnings ReviewEarnings review on AppLovin Corporation — from the same data-checked research desk.How we checked this researchShowHide
Data snapshot · By TGMCharts Research.
Every number in this note comes from data we compute and store ourselves from the company's reported figures, plus verbatim excerpts from its SEC filings. When a value isn't available we say so — we never fill gaps with estimates.
Latest filing excerpt
10-Q · filed 2026-08-05 · period 2026-06-30 · SEC EDGAR source
- “In the six months ended June 30, 2026, the provision for income taxes increased by $281.6 million compared to the same period in the prior year.”
- “We generate revenue when our advertisers achieve their return on advertising spend targets with our advertising solutions, ensuring that their success directly fuels our growth.”
- “We are able to grow our revenue by improving our various technologies, including improvements to our Axon AI recommendation system.”
- “AppLovin Ads comprises the vast majority of revenue.”
Source pages
Exhibit sources
Research trail
Every number, checked
Every numeric or dated claim in this note was checked against our stored company data before publishing — each figure below links to the page it comes from.