Analyzing AppLovin’s Wurl Acquisition

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According to a recent report, the global?mobile apps market is estimated to grow at 21% to reach $654 billion by 2025. Palo Alto-based AppLovin’s (Nasdaq:APP)?software solutions provide advanced tools for mobile app developers to grow their businesses by automating and optimizing the marketing and monetization of their apps.

AppLovin’s Financials

Recently, AppLovin announced its fourth-quarter earnings. Q4 revenues grew 56% to $793 million and net income was $31.36 million or $0.08 per share.

For the fiscal year, revenues grew 92% to $2.8 billion, and net income was $35 million or $0.09 per share.

AppLovin continues to see growth within its marketplace AppLovin Apps as well. The marketplace now offers over 300 third-party apps that are primarily free-to-play mobile games run by over twelve studios. Its Platform and Apps offering have built a?strategic flywheel?that drives growth across its business. Today, it has over 10,000 developers using its solution and has helped drive more than 10 billion app downloads.

For the current fiscal year, AppLovin forecasts revenues of $3.55 – $3.85 billion compared with the market’s estimate of $3.7 billion.

AppLovin’s Wurl Acquisition

Recently, AppLovin announced its acquisition of Palo Alto-based Wurl, a software platform in the Connected TV (CTV) market, for an estimated $430 million. Wurl’s FAST Pass platform allows content companies such as A+E Networks, AMC Networks, Scripps, and Bloomberg to distribute streaming video content to more than 300 million TVs and reach over 30 million users globally each month. Its distribution platform provides access to CTV ad inventory and data that is leveraged for its CTV performance advertising products – Wurl AdPool and Wurl Perform.?Wurl makes it easier for content companies to build and track global distribution for branded linear channels, live events, and on-demand programming to manage and monetize their ad inventory.

The acquisition provides AppLovin with the ability to extend its software platform capabilities into the CTV market. AppLovin will be able to expand its presence in the digital marketing platform by giving advertisers a seamless way to access the CTV market. Its software marketing expertise will be able to further optimize the experience for advertisers and consumers in addition to providing content companies with the tools necessary to increase their audiences and monetization. Prior to the acquisition, Wurl raised $31 million in four rounds of funding led by William Hearst and Sean Doherty. Its most recent round of funding was held in February 2021 where it raised $11 million.

It also announced its partnership with HUMAN that will combine HUMAN’s traffic quality protection with AppLovin’s monetization and marketing software solutions. The partnership will provide AppLovin’s platform with fraud protection and a traffic quality experience. It will also allow AppLovin to join other industry leaders in protecting overall ad ecosystem traffic quality. As well as including brand-safety measures, the partnership will leverage HUMAN’s pre-bid and post-bid traffic quality protection product MediaGuard to combat invalid traffic (ITV) in preventing non-human ad views across AppLovin’s platform.

Its stock is trading at $50.48 with a market capitalization of $18.97 billion. It had touched a 52-week high of $116.09 in November last year before it fell to a 52-week low of $43.08 in March. In its IPO last year, it raised $2 billion at a valuation of $26.8 billion. Prior to the listing, it had raised $1.4 billion in six rounds of funding from investors Saidik Ventures, Kohlberg Kravis Roberts, Orient Hontai Capital, Webb Investment Network, Suren Markosian, Streamlined Ventures, and Nimble Ventures

Disclosure:?All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article.

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Photo Credit:?Gerd Altmann?/?Pixabay