AppLovin's Q3 Revenue of $2.19 Billion Tops Five Ad Tech Rivals Combined

AppLovin generated $2.19 billion in third-quarter revenue, up 55% year over year — more than the combined $1.94 billion of the five other publicly traded ad tech companies that reported this week. The company said so directly to analysts, according to its earnings commentary, and it forecast Q4 revenue between $2.365 billion and $2.395 billion.

The six-company cohort — AppLovin, Unity, Magnite, Criteo, Taboola and Teads — produced sharply divergent results. Net income at AppLovin rose 72% to $1.44 billion. Unity posted 32% growth and Magnite a double-digit increase. Three of the six reported annual revenue declines, with Teads suffering the steepest drop at 26%.

What separates the winners?

The two strongest performers, AppLovin and Unity, are mobile advertising rivals — the two are involved in a recently filed, ongoing legal dispute. Their strength suggests the decline of the open web and the resilience of app-based media, both mobile and connected TV.

Unity reported revenue of $622 million, up 32%. Its Grow Solutions division, which hosts its media offering, generated $457 million, up 44%. Unity's Vector ad platform grew 126% year over year and 40% sequentially.

The open-web players fared worse. Magnite grew revenue 14% to $204.2 million, driven primarily by connected TV. Criteo reported revenue of $416 million, down 11%, while contribution ex-TAC (a profit measure calculated after deducting "traffic acquisition costs") declined 17% to $240 million. Criteo's retail media revenue fell 23%, with executives attributing part of the drop to changes involving two unnamed clients that reduced business by $20 million.

Taboola reported revenue of $462.3 million, down 6.9%, amid declining advertising impression volumes. Its gross profit still rose 9.6% to $152.3 million despite the revenue decline.

Teads, Taboola's historic rival and one-time prospective merger partner, recorded the largest contraction. Revenue fell 26% to $235.1 million, gross profit after TAC declined 28% to $93.5 million, and the company posted a net loss of $325.5 million, compared with a $19.7 million loss a year earlier. Executives cited continued weakness in open-internet advertising and did not reinstate financial guidance.

Did revenue growth translate into profit?

Not consistently. Unity reported its first profitable quarter since its IPO. Criteo, once known as an ad-retargeting company and now emphasizing its retail media business, deteriorated on both measures. Its gross margin declined from 55% to 50%, while net income fell 85% to $6 million.

The figures show that companies with similar revenue trends are experiencing different outcomes in gross profit, net income and cash generation. Top-line direction alone no longer predicts bottom-line performance in this cohort.

How important is connected TV?

CTV remained a significant growth engine. Magnite's CTV contribution ex-TAC rose 39% to $105.4 million, versus 5% growth in its DV+ business, which includes display and other digital video advertising. CTV accounted for roughly 53% of Magnite's total contribution ex-TAC of $200.6 million, up from 45% a year earlier.

Teads reported nearly $100 million in year-to-date CTV revenue, and its CTV growth was insufficient to offset the broader decline. The lesson: CTV grows even where other formats weaken, but its impact on total company performance depends on the size of the CTV business relative to other revenue streams.

The filings mark the midway point in this quarter's earnings season, with Zeta Global, The Trade Desk, PubMatic and Liftoff Mobile all due to report next week.