Applovin Corporation

Well, hello, everyone. Thank you for joining today's App Lovings earnings webinar. We will begin momentarily. And again, everyone, thank you so much for joining us today. We'll start in approximately one minute. Please stand by, we are about to begin.

Welcome, everyone, to the Applovin Earnings Call for the fourth quarter and year ended December 31st, 2023. I'm David Hsiao, Head of Investor Relations. Joining me today to discuss our results are Adam Ferughi, our co-founder, CEO, and chairperson, and Matt Stumpf, our CFO. Please note, our SEC filings to date, as well as our shareholder letter and press release discussing our fourth quarter and annual performance, are available at investors.applevin.com. During today's call, we will be making forward-looking statements regarding our products and services, market expectations, the future financial performance of the company, and other future events. These statements are based on our current assumptions and beliefs, and we assume no obligation to update them, except as required by law. Our actual results may differ materially from the results predicted. We encourage you to review the risk factors in our most recently filed Form 10-Q for the fiscal quarter ended September 30, 2023. We will also be discussing non-GAAP financial measures. These non-GAAP measures are not intended to be a substitute for or superior to our GAAP results. Please be sure to review the reconciliations of our GAAP and non-GAAP financial measures in our earnings release and shareholder letter available on our Investor Relations site. This conference call is being recorded and a replay will be available at our IR website. Now I'll turn it over to Adam and Matt for some opening remarks, then we'll have the moderator take us through Q&A.

Welcome everyone, and thank you for joining. We're thrilled to report another outstanding quarter in Q4. We surpassed the high end of our guidance and established a consistent pattern of exceptional performance throughout 2023. Reflecting on the last year, it's remarkable to consider how much we have grown and evolved in just one year. After a challenging 2022, characterized by stagnant growth, we refocused on growing our existing business and investing in new initiatives. I am immensely proud of our team's dedication and hard work, which has resulted in our software platform revenue growing by 76% in 2023. Despite a challenged economic landscape and mobile gaming sector, we have continued to grow. This is a clear testament to the strength and potential of the updates we have made to our AI advertising engine, Axon. When we embarked on our public journey in 2021, software platform revenue was nearly $700 million. And now, only two years later, we have reached close to $2 billion. We also forecast that we would have significant margins on incremental revenue for our software business. I'm proud to state that in Q4 2023, our incremental revenue had an approximate 80% flow through to adjusted EBITDA, culminating in record cash flows. This growth trajectory underscores a robust financial health and positions us favorably for diverse opportunities to enhance shareholder value like ongoing share repurchases. Now looking ahead to 2024 and beyond, we continue to remain bullish about the potential of our core AI technologies, which stand amongst the most advanced across all markets. Our focus on leveraging these technologies for Whirl in the CTV space and Array in the Carrier OEM market is just the beginning. We are poised to explore and expand into new applications of our AI technologies in the coming quarters and years, which has the potential to significantly broaden our TAM and opportunities. Now I'll turn it over to Matt, who will deliver his first financial summary as our CFO. We are incredibly fortunate to have him in this role. Thank you once again for your unwavering support on this journey.