AppLovin Corporation stock research
FY2025 Q3
AppLovin (APP) Gross Margin — Quarter Ended Sep 30, 2025
Revenue and gross profit both increased compared to the prior quarter and the year-ago quarter. Gross margin was slightly lower than the prior quarter but higher than the year-ago quarter, reflecting a stable high-margin profile.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2025 Q3
Revenue and gross profit both increased compared to the prior quarter and the year-ago quarter. Gross margin was slightly lower than the prior quarter but higher than the year-ago quarter, reflecting a stable high-margin profile.
- The relationship between revenue and cost of revenue shows that revenue growth outpaced the increase in cost of revenue, leading to a higher gross profit year over year. The sequential decline in gross margin was minimal, indicating a consistent margin structure.
- Compared to the prior quarter, revenue and gross profit were higher, while cost of revenue was also higher. Gross margin was slightly lower. Compared to the same quarter one year ago, all metrics were significantly higher, with gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
87.6%
Gross profit
$1.2B
Revenue
$1.4B
Cost of revenue
$174.9M
Quarter-over-quarter change
-0.1 pts
Year-over-year change
+2.0 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 |
|---|---|---|---|---|
| Dec 31, 2024 | $999.5M | $846.1M | $153.4M | 84.7% |
| Mar 31, 2025 | $1.2B | $1.0B | $151.7M | 86.9% |
| Jun 30, 2025 | $1.3B | $1.1B | $155.1M | 87.7% |
| Sep 30, 2025 | $1.4B | $1.2B | $174.9M | 87.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
-0.1 pts
Year-over-year change
Sep 30, 2024
+2.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The relationship between revenue and cost of revenue shows that revenue growth outpaced the increase in cost of revenue, leading to a higher gross profit year over year. The sequential decline in gross margin was minimal, indicating a consistent margin structure.
Compared to the prior quarter, revenue and gross profit were higher, while cost of revenue was also higher. Gross margin was slightly lower. Compared to the same quarter one year ago, all metrics were significantly higher, with gross margin improved.
Monitor the trend of cost of revenue as the company continues to scale, given the filing context notes that future capital requirements depend on spending on research and development and IT infrastructure.