Applovin Corp-A：AI驱动业务增长，非游领域拓宽市场空间

Investment Rating - The report initiates coverage on AppLovin (APP.US) with a "Buy" rating and a target price of $148, implying a potential upside of 16% [2][3] Core Views - AppLovin is a leading player in the mobile advertising industry with a comprehensive ecosystem, driven by its AI-powered advertising engine AXON 2.0, which has significantly boosted its growth [2] - The company is expanding beyond gaming into e-commerce and connected TV (CTV) advertising, which could further enhance its market potential [2] - AppLovin's software platform business benefits from low marginal costs and high operating leverage, with a 73% adjusted EBITDA margin in 2Q24 [2] Industry Overview - The global in-app advertising (IAA) market is expected to reach$ 352.7 billion in 2024, accounting for over 40% of digital ad revenue, with a CAGR of 9% from 2024 to 2028 [10] - The in-game advertising (IGA) market is projected to grow to $109.6 billion in 2024, with a CAGR of 9.5% from 2024 to 2028 [10] - Regulatory changes, such as the EU's Digital Markets Act (DMA) and privacy policies like Apple's ATT, are reshaping the mobile advertising landscape, creating opportunities for more flexible and adaptive ad tech companies [12][13] Company Analysis AI-Driven Growth - AppLovin's AI advertising engine, AXON 2.0, has driven a 75% YoY growth in ad revenue in 2Q24, with the company expecting over 20% annual growth in ad revenue in the coming years [2] - The company's AI capabilities are supported by its extensive data and technological expertise, which enhance its competitive advantage [20] Expansion into Non-Gaming Sectors - AppLovin is focusing on e-commerce as a key growth area, with successful tests in e-commerce advertising and plans to scale up investments in this sector [2][32] - The company is also exploring opportunities in CTV advertising through its acquisition of Wurl, aiming to leverage AXON 2.0's capabilities in this space [34] Financial Performance - AppLovin's software platform business has a high adjusted EBITDA margin of 73% in 2Q24, with 81% of incremental revenue converting to adjusted EBITDA [36] - The company's free cash flow to adjusted EBITDA ratio stands at 74%, reflecting strong cash generation capabilities [36] Valuation - The report values AppLovin's software platform business at 20x FY25E EV/EBITDA and its apps business at 5x FY25E EV/EBITDA, resulting in a target price of$ 148 [41][42] Competitive Landscape - AppLovin's AppDiscovery platform is a leading user acquisition tool in the mobile gaming market, ranking second in Android and first in iOS [22] - MAX, AppLovin's monetization solution, is the largest mediation platform in mobile gaming, with a 2/3 market share [24] - Adjust, the company's attribution platform, ranks second in market share, providing valuable insights for optimizing ad campaigns [26]