AppLovin Corporation stock research
FY2023 Q3
AppLovin (APP) Gross Margin — Quarter Ended Sep 30, 2023
Revenue, gross profit, and gross margin all increased compared to both the prior quarter and the same quarter last year. Cost of revenue rose slightly from the prior quarter but was lower than the year-ago quarter.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue, gross profit, and gross margin all increased compared to both the prior quarter and the same quarter last year. Cost of revenue rose slightly from the prior quarter but was lower than the year-ago quarter.
- The gross margin improved sequentially and year-over-year, driven by a larger increase in gross profit relative to revenue growth. The strongest observable driver is the reduction in cost of revenue as a proportion of revenue.
- Compared to the prior quarter, revenue and gross profit were higher, while cost of revenue was slightly higher, leading to an improved gross margin. Versus the same quarter last year, revenue and gross profit were substantially higher, cost of revenue was lower, and gross margin strengthened.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
69.3%
Gross profit
$599.2M
Revenue
$864.3M
Cost of revenue
$265.0M
Quarter-over-quarter change
+3.8 pts
Year-over-year change
+11.5 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% |
| Sep 30, 2023 | $864.3M | $599.2M | $265.0M | 69.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
+3.8 pts
Year-over-year change
Sep 30, 2022
+11.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improved sequentially and year-over-year, driven by a larger increase in gross profit relative to revenue growth. The strongest observable driver is the reduction in cost of revenue as a proportion of revenue.
Compared to the prior quarter, revenue and gross profit were higher, while cost of revenue was slightly higher, leading to an improved gross margin. Versus the same quarter last year, revenue and gross profit were substantially higher, cost of revenue was lower, and gross margin strengthened.
Monitor the trend in cost of revenue relative to revenue, as its decline year-over-year was a key factor in margin expansion.