AppLovin Corporation stock research
FY2025 Q1
AppLovin (APP) Gross Margin — Quarter Ended Mar 31, 2025
Revenue and gross profit both increased from the prior quarter and from the same quarter last year, while cost of revenue decreased compared with both periods. As a result, gross margin improved sequentially and year-over-year.
Gross margin takeaway
Quarter ended Mar 31, 2025 · FY2025 Q1
Revenue and gross profit both increased from the prior quarter and from the same quarter last year, while cost of revenue decreased compared with both periods. As a result, gross margin improved sequentially and year-over-year.
- Gross margin expansion was driven by a larger increase in gross profit relative to revenue, coupled with a lower cost of revenue. The relationship among the metrics shows that cost of revenue grew at a slower pace than revenue, supporting margin improvement.
- Compared with the immediately preceding quarter, revenue and gross profit were higher, cost of revenue was slightly lower, and gross margin improved. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was substantially lower, and gross margin was significantly stronger.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
86.9%
Gross profit
$1.0B
Revenue
$1.2B
Cost of revenue
$151.7M
Quarter-over-quarter change
+2.3 pts
Year-over-year change
+14.7 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 |
|---|---|---|---|---|
| Jun 30, 2024 | $711.0M | $589.3M | $121.8M | 82.9% |
| Sep 30, 2024 | $835.2M | $714.3M | $120.9M | 85.5% |
| Dec 31, 2024 | $999.5M | $846.1M | $153.4M | 84.7% |
| Mar 31, 2025 | $1.2B | $1.0B | $151.7M | 86.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2024
+2.3 pts
Year-over-year change
Mar 31, 2024
+14.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross margin expansion was driven by a larger increase in gross profit relative to revenue, coupled with a lower cost of revenue. The relationship among the metrics shows that cost of revenue grew at a slower pace than revenue, supporting margin improvement.
Compared with the immediately preceding quarter, revenue and gross profit were higher, cost of revenue was slightly lower, and gross margin improved. Versus the same quarter one year earlier, revenue and gross profit were higher, cost of revenue was substantially lower, and gross margin was significantly stronger.
Monitor the trend in cost of revenue, which declined over both comparison periods and is a key factor in sustaining gross margin levels.