AppLovin, a mobile tech company specializing in advertising and app monetization, announced its plans to offload its entire apps business and go all in on its advertising platform. (Am I the only one who thinks of McLovin every time I read their name?)
The company signed a term sheet to fully divest the 10 remaining gaming studios in its portfolio at a $900M asking price by next quarter so that it can become — in the words of its CEO Adam Foroughi — a “pure advertising platform.”
Foroughi told investors on AppLovin’s Q4 earnings call Wednesday evening:
Seven years ago, we began acquiring gaming studios to help train our earliest machine learning models, an invaluable step in shaping the AI that underpins our Axon platform. However, we've never been a game developer at heart.
For the past decade, AppLovin's bread and butter has been helping game publishers monetize by advertising other games in their apps. However last year, the company launched a limited pilot program for e-commerce advertisers to promote their products and services in apps. And now it sees more upside to concentrate on that ad platform than on developing its own apps.
While making the pivot, the company's top priority is to roll out more automated ad buying tools and to eventually automate the entire system, so that it doesn't have to go on a hiring spree to scale its ad revenue. In fact, the company has been actively downsizing — laying off 120 people in 2024 and 89 more at the start of the year.
AppLovin reported total Q4 revenue of $1.37B, a 44% YoY increase, and is projecting more than $1.03B in revenue for its advertising segment in Q1 2025.