AppLovin (APP) reported a standout fourth-quarter performance, significantly exceeding market expectations across key financial metrics. The company’s strong earnings and optimistic first-quarter guidance propelled its share price 31.3% higher in after-hours trading, reinforcing its inclusion in the US Momentum portfolio.

For the December quarter, AppLovin posted earnings per share (EPS) of $1.73, well above the $1.26 consensus estimate. Revenue surged 44% year-over-year to $1.37 billion, exceeding forecasts of $1.26 billion. Adjusted EBITDA came in at $848 million, beating expectations of $762.5 million, while net income reached $599.2 million, surpassing the projected $438.5 million.

The strong results were driven by a 73% increase in advertising revenue, reflecting the effectiveness of AppLovin’s AI-powered ad platform. The company continues to enhance its machine-learning models to drive higher engagement and response rates, which management sees as a key growth driver.

Looking ahead, AppLovin’s first-quarter revenue guidance of $1.36 billion to $1.39 billion is above market expectations of $1.32 billion, reinforcing confidence in its growth trajectory. The company also expects an adjusted EBITDA margin of 63% to 64%, higher than the 60.2% consensus.

AppLovin is expanding its presence in connected TV advertising and direct-to-consumer marketing, areas that offer substantial growth potential. With AI-driven ad optimisation and a strengthening revenue base, the company remains well-positioned in the digital advertising space.