AppLovin (APP) risk factors, 2025 10-K

Risks Related to Our Business, Operations and Industry

1. 01Our results of operations are likely to fluctuate from period-to-period, which could cause the market price of our Class A common stock to decline
2. 02Security breaches, improper access to or disclosure of our data or user data, other hacking and phishing attacks on our systems, or other cyber incidents could harm our reputation and adversely affect our business
3. 03We are highly dependent on our co-founder and chief executive officer, as well as our senior management team, we operate a lean organizational structure and our business and growth may be adversely affected if we fail to attract, retain, and motivate key personnel
4. 04Our company culture has contributed to our success and if we cannot maintain this culture as we grow, our business could be harmed
5. 05The failure to attract new clients, the loss of clients, or a reduction in spending by these clients could adversely affect our business, financial condition, and results of operations
6. 06The advertising ecosystem and mobile gaming are intensely competitive. If clients or users prefer our competitors’ products or services over our own, our business, financial condition, and results of operations could be adversely affected
7. 07The advertising ecosystem and mobile gaming are subject to rapid technological change, and if we do not adapt to, and appropriately allocate our resources among, emerging technologies and business models, our business, financial condition, and results of operations could be adversely affected
8. 08cost-effective manner and may contain errors or defects, both of which could adversely affect our business, financial condition, and results of operations
9. 09Our business depends in part on our ability to maintain and scale our technical infrastructure, and any significant disruption to our Advertising solutions or Apps could damage our reputation, result in a potential loss of engagement, and adversely affect our business, financial condition, and results of operations
10. 10Our revenue has been concentrated in the mobile app ecosystem and any failure to successfully expand and diversify our revenue sources beyond the mobile ecosystem could adversely affect our business, financial condition, and results of operations
11. 11Our future growth may involve expansion into new business opportunities, and any efforts to do so that are unsuccessful or are not cost-effective could adversely affect our business, financial condition, and results of operations
12. 12Our business is subject to global economic, market, public health, and geopolitical conditions as well as to natural disasters beyond our control and could adversely affect our revenue and results of operations
13. 13of entertainment, and critical reviews and public tastes and preferences, which may change rapidly and cannot necessarily be predicted
14. 14We plan to continue to consider opportunities to expand and diversify our operations through strategic acquisitions and partnerships. We face a number of risks related to strategic transactions we may pursue
15. 15Our international operations are subject to increased challenges and risks
16. 16We have experienced significant growth through strategic acquisitions and partnerships, and we face risks related to the integration of such acquisitions and the management of such growth
17. 17explore and evaluate additional acquisitions, some of which may be the same size or even larger in scale and investment than our recent acquisitions
18. 18Our strategic review of our Apps portfolio may not result in sustained improvements to our financial performance, strategy, or operations, and we face a number of risks related to such review
19. 19Our strategic acquisitions and partnerships may expose us to tax risks
20. 20We have entered into strategic partnerships with mobile gaming studios, and a failure to maintain such relationships may harm our ability to launch new Apps as well as our brand and reputation
21. 21If we are unable to launch or acquire new Apps and successfully monetize them, or continue to improve the experience and monetization of our existing Apps, our business, financial condition, and results of operations could be adversely affected
22. 22If we fail to retain existing users or add new users cost-effectively, or if our users decrease their level of engagement with Apps, our business, financial condition, and results of operations could be adversely affected
23. 23We have experienced recent rapid growth, which may not be indicative of our future growth. We may be unable to effectively manage the growth of our business, which could adversely affect our business, financial condition, and results of operations
24. 24Our business depends in part on our ability to increase IAPs, manage the economies in our Apps and respond to changes with respect to IAPs, and any failure to do so could adversely affect our business, financial condition, and results of operations
25. 25We anticipate increasing our operating expenses in the future, and we may not be able to achieve or maintain our profitability in any given period. If we cannot achieve or maintain our profitability, our business could be adversely affected
26. 26We generally do not have long-term agreements with our clients
27. 27If our Apps do not meet user expectations, or contain objectionable content, our reputation, business, financial condition, and results of operations could be adversely affected
28. 28If we do not successfully or cost-effectively invest in and maintain awareness of the AppLovin brand, our business, financial condition, and results of operations could be adversely affected
29. 29Third parties with whom we do business may be unable to honor their obligations to us or their actions may put us at risk

Risks Related to Legal and Regulatory Matters

1. 30Our business is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing, which could subject us to claims or otherwise adversely affect our business, financial condition, and results of operations
2. 31The development and use of AI in our business, combined with an uncertain regulatory environment, may adversely affect our business, reputation, financial condition or results of operations
3. 32We are subject to the Foreign Corrupt Practices Act, and similar anti-corruption and anti-bribery laws, and non-compliance with such laws could subject us to criminal penalties or significant fines and adversely affect our business and reputation
4. 33We are subject to governmental export controls and economic sanctions laws that could impair our ability to compete in global markets or subject us to liability if we violate the controls
5. 34Changes in tax laws or tax rulings could adversely affect our effective tax rates, business, financial condition, and results of operations
6. 35We may have exposure to greater than anticipated tax liabilities
7. 36Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value added or similar taxes, and any such assessments could adversely affect our business, financial condition, and results of operations
8. 37We may not be able to realize tax savings from our international structure, which could materially and adversely affect our results of operations
9. 38If we are found liable for content that is distributed through or advertising that is served through our Advertising solutions or Apps, our business could be adversely affected
10. 39We have incurred and will continue to incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our business, financial condition, and results of operations
11. 40Legal or regulatory proceedings and settlements could cause us to incur additional expenses or otherwise adversely affect our business, financial condition, and results of operations

Risks Related to Our Intellectual Property

1. 41Failure to protect or enforce our proprietary and intellectual property rights or the costs involved in such enforcement could adversely affect our business, financial condition, and results of operations
2. 42We are, and may in the future be, subject to intellectual property disputes, which are costly to defend and could require us to pay significant damages and could limit our ability to use certain technologies in the future
3. 43Many of our products and services contain open source software, and we license some of our software through open source projects, which may pose particular risks to our proprietary software, products, and services in a manner that could adversely affect our business, financial condition, and results of operations
4. 44Our ability to acquire and maintain licenses to intellectual property may affect our business, financial condition, and results of operations. Competition for these licenses may make them more expensive and increase our costs

Risks Related to Financial and Accounting Matters

1. 45If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired
2. 46We rely on assumptions and estimates to calculate certain of our key metrics and real or perceived inaccuracies in such metrics could adversely affect our reputation and our business
3. 47We may be required to record a significant charge to earnings if our goodwill becomes impaired
4. 48We have a substantial amount of indebtedness and our obligations thereunder may limit our operational flexibility or otherwise adversely affect our business, financial condition, and results of operations
5. 49We may be unable to generate sufficient cash flow to satisfy our significant debt service obligations, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows
6. 50We may require additional capital to meet our financial obligations and support business growth, and this capital may not be available on acceptable terms or at all

Risks Related to Ownership of Our Class A Common Stock and Governance

1. 51We are considered a “controlled company” within the meaning of the Nasdaq corporate governance requirements, and, as a result, we qualify for exemptions from certain corporate governance requirements
2. 52The market price of our Class A common stock could be volatile, and you could lose all or part of your investment
3. 53We may not realize the anticipated long-term stockholder value of our share repurchase programs and any failure to repurchase our Class A common stock after we have announced our intention to do so may negatively impact our stock price
4. 54The issuance of additional stock in connection with financings, acquisitions, investments, our equity incentive plans, or otherwise will dilute all other stockholders
5. 55Our multi-class stock structure, the Voting Agreement, and other provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the market price of our Class A common stock