AppLovin Corporation stock research
FY2025 Q4
AppLovin (APP) Gross Margin — Quarter Ended Dec 31, 2025
Revenue and gross profit both rose compared to the prior quarter and the same quarter last year, while cost of revenue increased at a slower pace, leading to an improvement in gross margin. The relationship among the metrics shows that gross profit grew faster than cost of revenue, resulting in a higher gross margin.
Gross margin takeaway
Quarter ended Dec 31, 2025 · FY2025 Q4
Revenue and gross profit both rose compared to the prior quarter and the same quarter last year, while cost of revenue increased at a slower pace, leading to an improvement in gross margin. The relationship among the metrics shows that gross profit grew faster than cost of revenue, resulting in a higher gross margin.
- The strongest observable driver was gross profit growing more strongly than cost of revenue compared to both the prior quarter and the year-ago quarter, which directly lifted gross margin.
- Gross margin improved compared to the immediately preceding quarter and was higher than the same quarter one year earlier. Revenue and gross profit were higher in both comparisons, while cost of revenue was higher sequentially but lower relative to revenue growth.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
88.9%
Gross profit
$1.5B
Revenue
$1.7B
Cost of revenue
$183.5M
Quarter-over-quarter change
+1.4 pts
Year-over-year change
+4.3 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, 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% |
| Dec 31, 2025 | $1.7B | $1.5B | $183.5M | 88.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
+1.4 pts
Year-over-year change
Dec 31, 2024
+4.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver was gross profit growing more strongly than cost of revenue compared to both the prior quarter and the year-ago quarter, which directly lifted gross margin.
Gross margin improved compared to the immediately preceding quarter and was higher than the same quarter one year earlier. Revenue and gross profit were higher in both comparisons, while cost of revenue was higher sequentially but lower relative to revenue growth.
Monitor the trend in cost of revenue relative to revenue, as its slower growth supported margin expansion in the current quarter.