AppLovin craters on competitive threats from Meta, new AI tools, and a slower ramp of its new ad portal

The bottom is falling out of AppLovin despite solid results and a better-than-expected outlook, as investors remain focused on the competitive threats from both new AI entrants as well as Meta and a warning that its new ad portal may not move the needle on the company’s financials in short order.

The ad tech company reported a top- and bottom-line beat for Q4, with guidance for the current quarter to match. Shares initially tanked in after-hours trading, but recovered a chunk of their losses ahead of the conference call.

• Revenues: $1.66 billion (estimate: $1.61 billion, guidance for $1.57 billion to $1.6 billion).

• Adjusted EBITDA: $1.4 billion (estimate: $1.33 billion, guidance for $1.29 billion to $1.32 billion).

For Q1, management said sales would range from $1.75 billion to $1.78 billion with adjusted EBITDA of $1.47 billion to $1.5 billion.

Wall Street had expected $1.7 billion and $1.4 billion, respectively.

On the call, CEO Adam Foroughi flagged a “disconnect between market sentiment and the reality of our business,” saying that the company was enjoying its strongest operating performance ever thanks to the growth in its own AI models.

Shares resumed their slide during the call after Chief Financial Officer Matt Stumpf said its self-service ad portal was not yet ready for a general launch, adding that it would be a while before this channel would impact the company’s overall numbers. After its Q2 report in August, Foroughi predicted that Q4 would be “a fun quarter” marked by the initial phase of the rollout of that ad portal.

“eCommerce, the wildcard in the Q, did not surprise to the upside leaving us too high; we estimate the October ‘Referral’ cohort contributed ~$34 million (vs. BofA $110) of ~$245 million (vs. BofA $335) total eCommerce revenue,” wrote Bank of America analyst Omar Dessouky. “About half our clients expected a higher eCommerce contribution like we did.”

The company fielded more questions on the call on the competitive threat from Meta, which has been able to muscle its way into a bigger market share on iOS, than new AI entrants.

In 2026, things haven’t been too fun for AppLovin. It’s a software stock, which means it’s been bludgeoned due to fears surrounding competitive threats from new AI tools and entrants. Ahead of this report, shares closed down more than 3% on Wednesday after peer Unity Software’s Q1 guidance came in shy of expectations.