What Happened:

Shares of mobile app advertising platform AppLovin (NASDAQ: APP) jumped 18.9% in the morning session after the company reported first quarter results that blew past analysts' revenue and adjusted EBITDA expectations. Despite the weaknesses observed in the mobile gaming industry, Applovin noted that advertisers increased their spend on its platform following the improved performance of its AXON ad engine. Moving on, its revenue and adjusted EBITDA guidance for the next quarter exceeded expectations by a convincing amount. Zooming out, we think this was a great quarter that shareholders will appreciate.

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What is the market telling us:

AppLovin's shares are very volatile and over the last year have had 23 moves greater than 5%. But moves this big are very rare even for AppLovin and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 3 months ago, when the company gained 24.7% on the news that the company reported fourth-quarter results with revenue, adjusted EBITDA, and EPS exceeding Wall Street's expectations. The solid performance was driven by a combination of factors, including a strong holiday season, mobile advertising market growth, and software platform improvements. Looking ahead, guidance for Q1 2024 revenue and adjusted EBITDA were both convincingly ahead as well. Overall, this was a really good quarter that should please shareholders.

AppLovin is up 120% since the beginning of the year. Investors who bought $1,000 worth of AppLovin's shares at the IPO in April 2021 would now be looking at an investment worth $1,306.

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