AppLovin (APP) Q2 2026 earnings call transcript

Welcome to AppLovinʼs earnings call for the second quarter ended June 30, 2026. Iʼm David Hsiao, Head of Investor Relations. Joining me today to discuss our results are Adam Foroughi, our Co-Founder and CEO; and Matt Stumpf, our CFO. Please note our SEC filings to date, as well as our financial update and press release discussing our second quarter performance, are available at investors.applovin.com. During todayʼs call, we will be making forward-looking statements, including, but not limited to, the future development and reach of our platform, our expected growth opportunities, the expected future financial performance of the company and other future events. These statements are based on our current assumptions and beliefs, and we assume no obligation to update them except as required by law.

Our actual results may differ materially from the results predicted. We encourage you to review the risk factors in our most recently filed Form 10Q for the fiscal quarter ended March 31, 2026. Additional information may also be found in our quarterly report on Form 10Q for the fiscal quarter ended June 30, 2026, which will be filed today. We will also be discussing non-GAAP financial measures. These non-GAAP measures are not intended to be superior to or a substitute for our GAAP results. Please be sure to review the GAAP results and reconciliations of our GAAP and non-GAAP financial measures in our earnings release and financial update available on our Investor Relations site. This conference call is being recorded, and a replay and transcript will be available for a period of time on our IR website.

Now, Iʼll turn it over to Adam and Matt for some opening remarks. Then weʼll have the moderator take us through Q&A.

Thanks, everyone, for joining us today. Iʼm going to get right to it. This quarter, we delivered almost $2 billion in revenue, which was just below the midpoint of our guidance range, and our Adjusted EBITDA was just below the range. Weʼve always managed this business with the goal of outperforming our own expectations. And this quarter, we fell short of that standard. What matters is that we know what happened, and itʼs already been addressed. Q3 is off to a strong start, and the business is back on the trajectory we expect. Let me explain. Gaming is still the majority of our revenue, and the single biggest driver of its growth is model performance. When our models improve, advertisers can profitably deploy more spend at their target return on ad spend goals and budgets naturally step up.

This quarter came down to timing. Our pace of meaningful model improvement was lighter than normal during the quarter and the next step-up in model performance landed just after quarter end. Importantly, nothing we saw suggested weakening advertiser demand or a change in the competitive environment. In fact, Max publisher earnings grew double digits quarter-over- quarter, and our share of publisher waterfalls remained consistent. With those improvements now live and heading into what is a seasonally stronger part of the year, the business is reaccelerating.

Now, let me talk about consumer, which had an outstanding quarter. Advertiser spend set another record, finishing 28% above Q4 2025 levels. And remember, Q4 is the seasonal peak for these advertisers. Growing well past peak season levels in a seasonally slow quarter tells you how steep this curve is. Consumer isnʼt yet large enough to fully smooth a quarter like this, but that will change as we continue to ramp up our consumer business every quarter. Stepping back, I want to put our long-term growth in context: how we think about the next decade. We built gaming into a far larger business, far faster than we believed possible, and gaming keeps improving. What consumer adds is runway. We run one auction across multiple advertiser categories, and every category we bring in extends the opportunity in front of us.

Over the longer term, as we continue improving gaming and expanding consumer, we believe this business can compound at roughly 30% annually. Now on EBITDA Adjusted EBITDA grew to a bit over $1.6 billion, up more than 50% year-over-year. While this result lands just below our guidance range, the incremental investments were exactly where we believe they should be: in our technology. Weʼve been investing in architectural changes that let us build more complex models, models that benefit far more from additional training compute. That investment includes additional compute spend on the model improvements now live in Q3. And every dollar of it is dependent on return. When additional compute produces substantially more revenue through better model performance, thatʼs a trade weʼll make every day.

These higher training and inference costs are built into our guidance for next quarter. During the quarter, we also opened up our platform to the public under its original name, AppLovin Ads Manager. As we said last quarter, we never expected the public launch to change the business overnight. Weʼre sequencing deliberately: mid-market advertisers first, where the platform performs best today, with the long tail unlocking as our data compounds – the same way gaming developed. Weʼll execute on this through partnerships, and youʼll see us continue to invest there.

Before I close, hereʼs what weʼre focused on as a team: First, improving our core models, which is the primary driver of our near-term growth. Second, advancing the architectural work that lets us benefit more from scaling compute, which we believe unlocks meaningfully larger gains over time.

Third, improving our creative tools and ad formats so advertisers can optimize their use of our platform to achieve even better outcomes. Fourth, bringing more high-quality advertisers onto the platform through strategic partnerships.

Let me close with this: Weʼve spent years building an advertising platform whose economics improve as our models improve. Advertiser demand is healthy. Our models continue to improve. Consumer is scaling rapidly. Nothing we saw this quarter changed our conviction in the long-term opportunity ahead.

With that, Iʼll turn it over to Matt to walk through the financials.

Thanks, Adam, and thanks to everyone for joining us today. This quarter is a good example of the underlying strength of our business. As Adam mentioned, we didnʼt get the same level of model uplift weʼve seen in recent quarters. But we still delivered second quarter revenue of $1.92 billion – growing 53% year-over-year and 4% sequentially – driven by the core gaming business and continued scaling in the consumer vertical. Adjusted EBITDA was $1.61 billion, up 58% year-over-year, with margins expanding approximately 300 basis points from the same period last year. Quarter-over-quarter flow-through to Adjusted EBITDA was 70%. The primary driver of the sequential increase in cost was higher compute associated with training our existing models and with new model development.

And that higher compute run rate is reflected in our outlook. We manage this business to EBITDA dollars and free cash flow rather than to a margin percentage, and will continue to deploy dollars when we see an opportunity to produce more revenue. Free cash flow for the quarter was $863 million. As I previewed on last quarterʼs call, conversion was below our normal cadence in the second quarter due to the timing of international cash tax and interest payments. This is a timing dynamic, not a change in the earnings power of our business. We expect free cash flow conversion to improve in the third quarter and to normalize to roughly 75% of Adjusted EBITDA for the full year.

We ended the quarter with $3.05 billion of cash against $3.7 billion of total debt, which puts net leverage at approximately 0.1x trailing 12-month Adjusted EBITDA, well within the approximately 1x where weʼd expect to operate over the long term. During the second quarter, we repurchased and withheld a total of approximately 1.14 million shares for $551 million, and ended the quarter with 335 million shares outstanding and approximately $1.8 billion remaining under our share repurchase authorization. Our choice to moderate the pace of our buybacks this quarter relative to the roughly $1 billion we deployed in the first quarter reflects consideration of our lower free cash flow during the quarter and does not indicate a change in conviction or in how we intend to use the authorization going forward.

One other item before I turn to our outlook. We continue to get questions on the reported SEC inquiry, so let me close the loop. It was a voluntary request, which we never deemed material. The SEC has recently advised us that it concluded its inquiry with no recommended action. Weʼre pleased to have it resolved.

Turning to our outlook for the third quarter of 2026 We expect revenue between $2.055 billion and $2.085 billion, representing 46% to 48% year-over-year growth, or 7% to 8% sequentially. We expect Adjusted EBITDA between $1.71 billion and $1.74 billion, representing 48% to 50% year-over-year growth, with an Adjusted EBITDA margin of approximately 83%. That outlook reflects the model improvements that are already live and performing, continued scaling in our consumer vertical, normal seasonality, and the higher training and compute costs I mentioned. It does not assume additional model releases that have not yet been deployed.

To close, this was not the quarter we hold ourselves to, and weʼve been direct with you about why. What hasnʼt changed is the shape or strength of this business: nearly $2 billion of quarterly revenue, growing better than 50% year over year; margins above 80%; and extremely strong cash generation. And with the next step-up in model performance already live, our outlook reflects a business getting back to the trajectory we expect.

With that, letʼs move to Q&A.

Yeah. Thanks, Jason. We have done a couple deals so far with third-party companies, one of the larger analytics companies in the market in e-commerce. And we found that if we go to the source that works with these companies on the other side – the advertisers that we want – itʼs a more targeted way to get the right kinds of advertisers onto our platform. So rather than just start by buying ads and bringing in the long tail, which is harder to make work with where the model evolution is today, weʼre going through these partnerships to try to get very targeted customers into the platform.

You sort of nailed it with what youʼre saying.

Yeah. Thanks, James. If you go back the last 12 quarters, every quarter weʼve had really good growth except for Q2 in single digits. I think every other quarter since Axon 2 has been double digits. Now Q2 starts as the seasonally weakest quarter. But every quarter that weʼve had these outsized growth rates, weʼve had improvements to our model. So our team isnʼt just sitting there doing nothing for the last 12 quarters – itʼs constant improvement. We just donʼt really break it out. So if you recall, our gaming growth model weʼd given you all back in the day included one sizable improvement per year, but constant improvements to the models as well on an ongoing basis. In this case, in Q2, we didnʼt have the same amount of uplift that we normally have in any other prior quarter.

That came right after the quarter, so thatʼs why Q3 has started really, really well, and thatʼs why weʼve guided strong going forward.

Yeah. I mean, new advertisers are beneficial, but the base of the business is already pretty good. And so new customers arenʼt going to go live and really drive impact to that growth rate. So when we say – I think I said 26% growth in the talk track over Q4, thatʼs a substantial uptick in this category. Usually e-commerce, Q1 dips a lot from Q4, Q2 then has to trail back up, and then Q3 and Q4 really build on the year with half the dollar spent in Q4. And so having that kind of growth in Q2 implies that the customers that we have on the platform are seeing a lot of success.

28%.

28%, to be correct.

Yeah. Iʼll go with the second one first, Steven. So in gaming, our model is pretty mature, and weʼve got a lot of data. So the architecture is just more developed. If you have a new game in the market today that hasnʼt even launched and you go onto our platform, the return goals are hit really, really quickly. So thereʼs almost no learning budget. The model is really sophisticated at nailing it for anything. In e-commerce or consumer, weʼre still early in evolution. Weʼve got less data penetration in the market by a lot. Weʼve got a less sophisticated model at this point. And so, if thereʼs a small shop that goes live, itʼs less likely that with very few dollars spent itʼs going to hit their goals and theyʼre going to scale.

Some of them do, but in a lot of the smaller ones, theyʼre not able to achieve it. Now, if thereʼs a mid-market brand, they know that thereʼs learning cost to marketing campaigns. So theyʼll invest more, get to their goals and scale. So what we found is that mid-market is a sweet spot right now. As data builds, we have no reason to believe that tailʼs not going to be covered, too, given that in gaming weʼre able to support any type of game at any level. On your first question, if I understood it correctly, youʼre basically saying advertisers havenʼt reached their maximum amount of spend for the return that theyʼre getting—and weʼre new – yeah, weʼre a new platform, right?

These companies, first of all, manage their budgets really slowly. We launched this product. I think itʼs now been probably 18 months or so. And so, youʼve got these companies that usually manage their budgets somewhere in the neighborhood of one quarter to four quarters ahead. Most of their budget goes to social and search. Weʼre deemed a new bucket – so a testing category – and to graduate up takes time. So this stuff compounds over time – over quarters and years. An advertiser that is live today – we would expect for sure, given the results they would be able to see, that in 12 months theyʼre bigger, in 24 months theyʼre bigger. But the rate of improvement there shouldnʼt be organically appearing, just like some of the more mature marketing platforms.

It should be accelerated because theyʼre probably indexing lower on us as they build the history and get to know the platform, invest more in the platform, get comfort in long-term results, run their incrementality studies, etc. That ramp-up should be faster.

Iʼll have Matt take two and three. Iʼll start with one. Look, itʼs R&D, right? Thereʼs no guarantee that weʼre always going to have lifts in every single period of three months. The team is always working on lifts. And usually, in every single quarter, itʼs not one lift that we get – we compound multiple small lifts. The impact was just smaller in Q2, followed by a pretty material uplift in Q3, in the early part of Q3. And so, thatʼs just a reality of when youʼre building models. Youʼre building models, you donʼt have certainty on the impact of what youʼre testing. Youʼre testing hypotheses, hoping for a good result. And so, the system is a whole bunch of A/B tests looking for lifts.

And there are going to be periods where we donʼt get material lifts. Thereʼs going to be other periods where we have huge lifts that contribute to 12%, 13%, 15% Q-over-Q-type quarters.

Yeah. In terms of the rate of improvement and whatʼs included within the guide, Ralph – so within this quarter, what weʼve assumed is similar to our guidance philosophy in the past, where we have a high level of confidence. But the difference being for this quarter, weʼve guided inclusive of the model improvements that weʼve launched that weʼre aware of, and then also the compute cost increase that weʼve seen. To the margin question, over the longer term, we may see some variability – which is consistent with what weʼve told analysts and investors in the past, as well – that we may have some short-term fluctuation in the margin profile of the business. But it should be indicative and investors should look at that as positive because, when weʼre spending, weʼre very cautious about how weʼre spending – and weʼre only spending if we see that there is incremental revenue behind that.

So when you see these short-term fluctuations, you should then realize that over time weʼre going to continue to improve based on those cost increases. So over the longer term, we still have a very high level of confidence that weʼll be within kind of that low-80% EBITDA margin.

Yeah. Itʼd be the latter, in your own words, Omar: Few advertisers contributing more today. So we look at the launches as expected. We said itʼs not going to be a big marketing push behind the launch. Weʼre targeting the marketing relationships and the dollars that we spend to where we can go get those mid-market brands. We need to execute on the bigger-ticket customers first. So not the very, very big – because weʼll get to the head of the market later – and not the very, very small that would contribute count of advertisers but be considered SMB or long tail. Thatʼs harder for us to make work right now. So that mid-market is what weʼre focused on.

If weʼre able to execute there, which we have a lot of confidence in – thatʼs what most of the customers in the consumer category spending today are – then you broaden it out. But that gets us more data coverage. It gets us time to get to a place where the model is more sophisticated, because, with time, weʼre going to build a better model, and it gives us time for a reputation to seep into the bigger parts of the market. Now remember, these systems take a long time to build out. You talked about Google and Facebook. Theyʼve been around two decades and a decade-plus, right? It took us 14 years to be fully penetrated into the gaming category, in terms of any customer in the world in mobile gaming today would be foolish not to spend dollars on our platform.

So it will take time to build this thing up, but weʼre seeing very quick growth because the customers that are on the platform are seeing a lot of success. And as I already touched on, theyʼre not even at a ceiling of what they can spend given the results that theyʼre seeing. The ad templates are going to improve over time. The model is going to improve over time. With every incremental mid-market customer, the data in the system improves. And then over time, weʼre going to be able to broaden it out. We canʼt tell you when. Thatʼs just something thatʼs not predictable.

Yeah. I mean, look, weʼre early in a business that is pretty substantial at this point and growing very quickly. The reality with it is that we canʼt say whatʼs behind or ahead of schedule. The requirement is, get more customers, get more data, continue to write more sophisticated models, improve the ad template, and you get lifts for the current customers and every single new customer. Over time, that compounds. As we get more success stories on the platform, more narratives out there, more agencies that are media-buying agencies knowing that our platform works really well as the third sort of anchor in the marketplace, more customers are just naturally going to come. So thatʼs sort of the formula to the future.

Yeah. Thanks for all the questions. So both answers are sort of related. The creative is the biggest hurdle in our system. So nothing has really changed there. Lengthy video plus interactive end card, which isnʼt a common ad unit, we can auto-generate the interactive end card with pretty high efficiency at this point. Weʼre not at the point where we can yet get a high-quality video for 30 to 60 seconds in the hand of an advertiser out of the box. So thatʼs still a work in progress. And we have examples where it works, other examples where it doesnʼt work. The reality is, once we can get that to happen – or we create alternative forms of templates that donʼt require video – weʼll be able to hand advertisers a one-click campaign creation.

And that should resolve any sort of conversion rate issues in the flow. So itʼs just not something that weʼve gotten to yet. Thatʼs the same concern that people have on number two. When they buy on social and search, a lot of the advertisements – when you buy on open web, social and search, a lot of the advertisements are just dynamic catalogs or theyʼre more static, like “come get a sale, click here to buy this productˮ – much less so a 30-to 60-second video. So itʼs not that common that someone has that unless theyʼre a pretty material advertiser that is buying on television. And so, if you think about that mid-market and up, probably has templates that match the creative needs on our platform.

When you get into the SMBs that are signing up directly, they probably donʼt. And so, weʼve got to resolve that as we go into wanting to get more in the long tail over time.

Yeah. So, itʼs a good question. The category has to be good for us to perform in gaming, right? Thatʼs why we gave you the stat that the Max marketplace grew double digits Q-over-Q, which is not immaterial growth. In fact, thatʼs incredibly outsized growth. The ad-supported market is growing really quickly. The in-app purchasing market has some misleading data out there because companies that are analytics providers canʼt actually track the purchases that are going off-platform. And as more and more in-app purchasing games go off-platform, the revenue didnʼt just disappear or shrink – it actually became incremental to them on a net revenue basis. Itʼs just not measurable. So as you look at what companies are reporting as services revenue in the category, or what these analytics providers are reporting, youʼre not going to catch all that incremental revenue thatʼs missed.

Now, when it comes to installs, the trend over the last few years has been a movement away from very high-install, low-quality hyper-casual, much more to casual and deeper games and in-app purchasing. As you get into deeper funnels, you get a much higher CPI and a much higher LTV. So as the cost goes up, it does not mean that the value goes down. Everything is on a return-on-ad-spend basis. Now the last point is, we drive a lot of the market, too, especially for discovery. Weʼre the biggest in the world, as far as I know, when it comes to mobile gaming user acquisition. And so, when we have a quarter where we donʼt push lifts, thatʼs not great for the category, as well.

Weʼre driving growth in the category given the scale that we operate at. Then when we follow it up and we push a model release early in Q3 – if you talk to a lot of those same advertisers, theyʼll say install rates went up, CPIs went down, performance has improved. So we are the catalyst in large part in this category at this point if youʼre talking about user acquisition. That is something we take very seriously. Weʼve got to be on top of our game so these game developers can continue to see the type of success that our tools and platform have enabled for years.

Yeah. I mean, look, we canʼt get rid of the name AppLovin, unfortunately, but we switched to Axon, everyone kept calling us AppLovin, we switched back. The reality is, if you talk to 100 customers that donʼt use us in e-commerce today, there is going to be an awareness problem. But weʼre early in this category. A lot of people may actually know of us, but think of us as a mobile gaming platform. Now, if youʼd asked us 10 years ago in mobile gaming whether customers knew about us, the answer would have been no – a lot of customers didnʼt know about us. We had some customers, but they were going to Facebook and Google much more so than they were coming to AppLovin.

If you ask us today, well, every customer is on our platform. So in some part, brand does matter, but you earn brand loyalty with performance. If we continue to compound improvements in the technology, improvements in the templates, and get more success stories out there, over time, the customers are going to find out about our platform. And again – I said this a couple of minutes ago – it took Google a couple decades to become the de facto standard for customers in anything search-related. It took Facebook well over a decade. So these are not things that just build overnight. Weʼre not going to have, out of those 100 brands, a high percentage in next quarter knowing of us.

But if we do our job right over the coming quarters, itʼs going to compound and get to a point where the brand is going to be recognized as a standard. And these analytics providers do help, as well, as they talk to the customers on their platform. If they see us performing as the second or third best channel for customers that we have live, it behooves them to push us to their clients. And in some way, itʼll also benefit them economically because weʼll strike a lot of partnership deals.

Yeah. So the World Cup first. The World Cup has spikes in spend from World Cup-specific advertisers during games. And itʼs not that material in the grand scheme of a whole quarter. So I wouldnʼt say the World Cup has much of any impact on if an in-app purchasing or ad-supported game customer can actually spend on platform. And we donʼt index highly to any sort of customer in any category, nor do we run any branding. So for us, we still cater to the game advertiser. On the first question, we are very competitive on both platforms. Now, there is a very large company out there that owns the Google Play platform that provides a lot of installs and spend for customers on Google Play.

I would say for sure we look at opportunity to grow equally on both platforms. As the models get better, our ability to scale spend goes up on both platforms. Itʼs just that the Android platform is more competitive because thereʼs a very big competitor out there doing well there.

No, nothing material. I mean international has been strengthening for a period of time over the past few quarters, and then itʼs slowed down a little bit, but nothing specific. And thatʼs based on user location, so itʼs really demographics based on region.

Also remember the web consumer business is more concentrated to the West than it is internationally, at least today.

Yeah. We just touched on the World Cup. Prediction markets was a big category there, but those other categories arenʼt yet a focus of ours. If you split the world up into consumer business, e-commerce on the web, and then non-gaming apps, the former is a much bigger category and thatʼs what weʼre going after first. So we will go after the second later, and it just hasnʼt been a focus of ours yet in what we model.

No, I mean, you have to do smart A/B tests, right? Just a whole bunch of nominally different A/B tests or low-IQ A/B tests arenʼt going to yield uplifts. So in a way, we want very high talent density, which we have. We still need to hire more research scientists, do more A/B tests, but we need to become even more sophisticated using AI technologies to accelerate the rate of those tests, too. So we do a lot of that where AI is helping aid testing, and the rate of testing has for sure gone up in our company over the last couple years as LLMs have gotten a lot more sophisticated at writing code. So our focus wonʼt change in terms of hiring very, very smart people and then enabling them to drive more A/B tests powered by large language models helping with a lot of the coding.

Yeah. Second one first – and thanks, Clark. Lead-gen business is still a work in progress. So weʼre still in testing with customers. Thereʼs nothing new to report there. On the first one, every new customer we get live, their spend doesnʼt determine the type of data that we are able to access. They have to share their data with us to tap into the deep learning model that we have to get output – good advertising results out of our system. So the goal is getting more mid-market customers that can give our model visibility into more of the userʼs transactional behavior. If weʼre able to do that over time – which is inevitable; itʼs just getting more customers on the platform that are substantial – we will have more data that then we can model against, write a more complex model, and get a better output.

So thatʼs sort of the function over time. And it compounds because the more customers we get, the better our performance will be. And then youʼll get to a place where, hopefully, we reach a tipping point and the rate of customer acquisition goes up and then itʼs just automatically off to the races.

Yeah. I mean, we donʼt expect any departure from the higher-level guidance that weʼve given to analysts and investors in the past – that of the incremental dollar in revenue, weʼre spending about 10 cents on compute. Weʼre at that level within the guide. And weʼre at that level – if you look at the data center disclosure, youʼll get in the 10Q, as well, weʼre still tracking it at that level. So we donʼt expect any difference from here. But we may see variability over the longer term, and weʼll communicate that and the reasons behind why weʼve increased compute if there is such an increase. But today, we donʼt expect any change from that kind of guide.

Now, we will say, look, engineers are doing R&D, right? So if someone figures out a way to write a more complex model, way more parameters, train a bigger model and run it, and thereʼs a material revenue uplift, weʼre not going to hold it back. So if we go into a quarterly earnings call and four weeks later we get that word, weʼre pushing forward. And you saw it as we talked about the guide and reaccelerating. We have a model uplift that releases a more complex model, creates revenue reacceleration. Thatʼs always a good thing in our business.

Itʼll likely go up as we do partnership deals and target mid-market. So thatʼs just an indicator of, are the customers coming into the platform just signing up on the website pushed by marketing, where youʼre going to get a lot more SMBs and low-GMV shops? Or are the customers that are signing up less in quantity and higher GMV that weʼre getting through strategic partnerships? The latter being the focus, weʼd expect that number to go up.

Yeah. Itʼs a good question. Weʼre still working through how to do it the optimal way. But if youʼre an attribution company, and weʼre willing to pay for leads and they benefit from their customers having more complex attribution – another big vendor in the mix – thereʼs a big win. If the customer on the other side gets another big vendor in the mix, itʼs a big win for them, too. So youʼve got a construct thatʼs just win-win-win across the board. But weʼve got to get past the awareness problem and the implementation problem. So Triple Whale was mentioned earlier on the call. That is a good example of one that weʼre iterating on actively to find the right way to let a large, large set of customers working with them understand that our platform is beneficial.

As a partner, theyʼre highly motivated – one, because thereʼs obviously revenue potential, but two, because it is very beneficial for their business model to add us into the mix for all their clients.

Yeah. Look, supply will expand over time. But I would say, actually, that itʼs a little bit crazy to think that thereʼs quality-controls in mobile gaming because thereʼs no UGC. The apps are in the App Store, approved. These are only adult apps and thereʼs no UGC, so itʼs a very, very controlled framework. An ad inside Candy Crush is materially safer than an ad almost anywhere else because that inventory is so controlled. And then, obviously, the attention given to that ad in mobile gaming is much more than anywhere, including television, given our ads run longer than 30 seconds to the user. So it sets it up to be a really good framework.

Now, for us to get to the head of the market, we need sales. That requires actual people selling. And we need a reputation that suggests weʼve made the middle of the market work. Weʼre more focused on the middle of the market because, there, youʼve got hungrier companies, leaner marketing teams, probably not agencies – at least big holding companies – in the middle, so things can go quicker. But if weʼre able to build a really solid reputation here, weʼre definitely going to go to the head of the market. And I donʼt think inventory quality will be the concern inside gaming. Now, that does not mean that supply expansion is, for sure, not one of the levers that weʼll pull on over time as a growth lever.

Yeah. I mean, look, this ties to what we tell customers that come to us and weʼre their largest channel of spend. Sometimes we get asked, should they only spend with us, or are they competing with themselves if they spend on other platforms? Everyoneʼs data and model is different. And in this space – I think when we first went public, this was part of the narrative that was negative on us, that weʼre in a zero-sum sector. I think weʼve proven over the last five years this is not a zero-sum sector. As marketing companies improve across the board, scale of user acquisition goes up, growth goes up, the P&L of the end client – the gaming customer – improves.

Then they can reinvest more dollars into marketing platforms. Weʼre obviously the biggest. We want the market to improve. And that quote I gave you with the Max marketplace improving double digits quarter-over-quarter – thatʼs a huge amount of growth for a very, very large market at this point in terms of our penetration into the ad-supported market in the ecosystem. So weʼve proven the space is not zero-sum. And thatʼs because these models, when trained with differentiated data, create a higher ceiling for the gaming customer, which is beneficial.

Yeah. Thanks, Tim. Still getting used to your new firm. But on the Wurl and CTV question: in consumer, weʼre still budgetarily constrained. Weʼre still early in the category. And if we were to go expand supply, the most natural path is going to non-gaming apps and other open-web-type placements. But the consumer vertical allows us to actually go out and expand supply. Gaming is much more niche. And really, if you look at the world of the open web and social, you almost never see gaming ads. Of course you see e-commerce ads, right? So we think the first path to supply expansion will be on-device, and the second path will be connected TV. Itʼs definitely an area of interest for us, because that same lipstick-selling ad on the mobile device thatʼs full screen should port really, really well to television.

And we know that television drives shopper behavior. Everyone knows that, at the scale that TV operates. So itʼs an opportunity sitting there. Weʼre just not at the point yet where we can go execute on it.

Yeah. Itʼs more – think of our consumer advertisers as, if theyʼre spending – the earlier question of, theyʼre seeing really good ROAS, but theyʼre not even spending to their ceiling yet. Weʼre not at a point where we have excess budgets to take out. So if we had just launched CTV and actually made it work and shifted dollars, weʼre weakening our position in mobile to go launch into CTV, and we wouldnʼt actually expand our revenue. To go into new supply, we need to believe thereʼs going to be more dollars flowing. So step one would be the obvious: non-gaming apps. And gaming apps that donʼt currently run game ads, which would run non-gaming ads inside those apps.

And then step two would be the open web. Step three would be connected TV. All of thatʼs going to come for us, because those are just obvious levers of growth to pull when we have the budget to go out and get it.

Thank you.