AppLovin Corporation stock research
FY2023 Q2
AppLovin (APP) Gross Margin — Quarter Ended Jun 30, 2023
Revenue increased compared to the prior quarter, while gross profit rose and cost of revenue decreased slightly, leading to an improved gross margin. Compared to the same quarter last year, revenue was lower but gross profit was higher due to a larger reduction in cost of revenue, resulting in a stronger gross margin.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q2
Revenue increased compared to the prior quarter, while gross profit rose and cost of revenue decreased slightly, leading to an improved gross margin. Compared to the same quarter last year, revenue was lower but gross profit was higher due to a larger reduction in cost of revenue, resulting in a stronger gross margin.
- The strongest observable margin driver is the reduction in cost of revenue relative to revenue, as cost of revenue decreased both sequentially and year-over-year while revenue grew sequentially. This directly supported the expansion of gross margin.
- Gross margin improved compared to the immediately preceding quarter and was higher than the same quarter one year earlier. Revenue was higher than the prior quarter but lower than the year-ago quarter, while gross profit increased both sequentially and year-over-year.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
65.5%
Gross profit
$491.6M
Revenue
$750.2M
Cost of revenue
$258.6M
Quarter-over-quarter change
+2.1 pts
Year-over-year change
+4.7 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $715.4M | $453.4M | $262.0M | 63.4% |
| Jun 30, 2023 | $750.2M | $491.6M | $258.6M | 65.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
+2.1 pts
Year-over-year change
Jun 30, 2022
+4.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the reduction in cost of revenue relative to revenue, as cost of revenue decreased both sequentially and year-over-year while revenue grew sequentially. This directly supported the expansion of gross margin.
Gross margin improved compared to the immediately preceding quarter and was higher than the same quarter one year earlier. Revenue was higher than the prior quarter but lower than the year-ago quarter, while gross profit increased both sequentially and year-over-year.
Monitor the trend in cost of revenue, as its continued decline relative to revenue has been a key factor in margin improvement.