10-K – 2026-02-19 – app-20251231.htm

Many of our products and services contain open source software, and we license some of our software through open source projects, which may pose particular risks to our proprietary software, products, and services in a manner that could adversely affect our business, financial condition, and results of operations.
We use open source software in our advertising solutions and expect to continue to use open source software in the future. In addition, we contribute software source code to open source projects under open source licenses or release internal software projects under open source licenses, and anticipate continuing to do so in the future. The terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services. Additionally, under some open source licenses, if we combine our proprietary software with open source software in a certain manner, third parties may claim ownership of, a license to, or demand release of, the open source software or derivative works that we developed using such software, which could include our proprietary source code. Such third parties may also seek to enforce the terms of the applicable open source license through litigation which, if successful, could require us to make our proprietary software source code freely available, purchase a costly license, or cease offering the implicated products or services unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional research and development resources, and we may not be able to complete it successfully. In addition to risks related to open source license requirements, use of certain open source software may pose greater risks than use of third-party commercial software, since open source licensors generally do not provide warranties or controls on the origin of software and open source software could incorporate AI generated code which may be a result of hallucinatory behavior. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could adversely affect our business, reputation, financial condition, and results of operations.
Risks Related to Financial and Accounting Matters
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable Nasdaq listing standards. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems, and resources.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. If any of these new or improved controls and systems do not perform as expected, we may experience deficiencies in our controls. The effectiveness of our controls and procedures may also be limited by a variety of factors including faulty human judgment and simple errors, omissions or mistakes, fraudulent action of an individual or collusion of two or more people, and inappropriate management override of controls and procedures.
Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, to the extent we acquire other businesses, the acquired company may not have a sufficiently robust system of controls and we may discover deficiencies. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could adversely affect our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in our periodic reports that are filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely cause the market price of our Class A common stock to decline. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the Nasdaq Global Select Market. As a public company, we are required to provide an annual management report on the effectiveness of our internal control over financial reporting and our independent registered public accounting firm is required to formally attest to the effectiveness of our internal control over financial reporting. Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed, or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could adversely affect our business, financial condition, and results of operations and could cause the market price of our Class A common stock to decline.
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We may be required to record a significant charge to earnings if our goodwill becomes impaired.
We are required under GAAP to review our goodwill for impairment at least annually or more frequently when events or changes in circumstances indicate the carrying value may not be recoverable. Factors that may be considered a change in circumstances, indicating a requirement to reevaluate whether our goodwill continues to be recoverable, include a significant decline in the market price of our Class A common stock and our market capitalization, slower growth rates in our industry, underperformance of certain assets, or other material and adverse events. We may be required to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill is determined.
We have indebtedness, and our obligations thereunder may limit our operational flexibility or otherwise adversely affect our business, financial condition, and results of operations.
As of December 31, 2025, we had a total of $3.6 billion in aggregate principal amount of senior unsecured notes outstanding (the “Senior Notes”). We also had $1.0 billion of commitments (with a $100 million letter of credit sublimit) under our senior unsecured credit agreement that provides for an unsecured revolving credit facility (the “Credit Agreement”). As of December 31, 2025, we did not have outstanding borrowings under the Credit Agreement.
Our indebtedness could adversely impact us. For example, these obligations could among other things:
• require us to dedicate a significant portion of our cash flow from operations to service and repay the indebtedness, reducing the amount of cash flow available for other purposes;
• make it difficult for us to pay other obligations;
• increase our cost of borrowing;
• make it difficult to obtain favorable terms for any necessary future financing for working capital, capital expenditures, strategic acquisitions and partnerships, debt service requirements, or other purposes;
• restrict us from making strategic acquisitions and partnerships or cause us to make divestitures or similar transactions;
• adversely affect our liquidity and result in a material adverse effect on our financial condition upon repayment of the indebtedness;
• increase our vulnerability to adverse economic and industry conditions;
• increase our exposure to interest rate risk from variable rate indebtedness;
• place us at a competitive disadvantage compared to our less leveraged competitors; and
• limit our flexibility in planning for and reacting to changes in our business.
In addition, from time to time we have entered into interest rate swap instruments to limit our exposure to changes in variable interest rates. While our hedging strategy is designed to minimize the impact of increases in interest rates applicable to our variable rate debt, including our credit facility, there can be no guarantee that our hedging strategy will be effective, and we may experience credit-related losses in some circumstances. Upon the occurrence of a change of control repurchase event (as defined in the indenture governing the Senior Notes), we will be required to repurchase the Senior Notes at the option of each holder. We may not have sufficient funds to repurchase the Senior Notes in cash at the time of any change of control repurchase event. Upon the occurrence of a change of control (as defined in the Credit Agreement), the lenders thereunder could accelerate the obligations under the Credit Agreement and terminate the commitments under the Credit Agreement. The indentures governing the Senior Notes also include customary affirmative and negative covenants (including covenants restricting our ability to incur certain liens and enter into sale and leaseback transactions, subject to certain exceptions), events of default, and other customary provisions. The Credit Agreement also imposes restrictions on us and requires us to maintain compliance with specified covenants regardless of whether any amounts are outstanding thereunder. Our ability to comply with these covenants may be affected by market, economic, financial, competitive, legislative, and regulatory factors, as well as other factors that are beyond our control. A breach of any of the covenants in the indentures governing the Senior Notes or the Credit Agreement could result in an event of default, which, if not cured or waived, could trigger acceleration of our indebtedness and an increase in the interest rates applicable to such indebtedness (in the case of the Credit Agreement), and may result in the acceleration of or default under any other debt we may incur in the future to which a cross-acceleration or cross-default provision applies. The acceleration of the indebtedness under the Credit Agreement, the Senior Notes, or under any other indebtedness could have a material and adverse effect on our business, financial condition, and results of operations.
We receive debt ratings from the major credit rating agencies in the United States. Factors that may impact our credit ratings include debt levels, planned asset purchases or sales and near-term and long-term growth opportunities. Liquidity, asset quality and cost structure could also be considered by the rating agencies. The applicable margins with respect to the loans incurred under the Credit Agreement will vary based on our applicable public debt credit ratings assigned by Moody's Investors Service, Inc., Standard & Poor's Financial Services LLC, Fitch’s and any successor to each such rating agency business. Moreover, our Senior Notes are currently rated investment-grade by various rating agencies. A ratings downgrade, including any announcement that our ratings are under further review for a downgrade, could adversely impact our ability to access debt markets in the future and increase the cost of current or future debt and may adversely affect our share price.
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We may be unable to generate sufficient cash flow to satisfy our significant debt service obligations, which could have a material and adverse effect on our business, financial condition, results of operations, and cash flows.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and results of operations, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory, and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, or interest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay strategic acquisitions and partnerships, capital expenditures, and payments on account of other obligations, seek additional capital, restructure or refinance our indebtedness, or sell assets. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and could require us to comply with more onerous covenants, which could further restrict our business operations. In addition, we cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms, or at all.
If we are unable to repay or otherwise refinance our indebtedness when due, or if any other event of default is not cured or waived, the applicable lenders or holders could accelerate our outstanding obligations, which could force us into bankruptcy or liquidation. In the event the applicable lenders or holders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. Any acceleration of amounts due under the agreements governing our indebtedness could have a material and adverse effect on our business.
We may require additional capital to meet our financial obligations and support business growth, and this capital may not be available on acceptable terms or at all.
We intend to continue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to continue to develop our advertising solutions, improve our operating infrastructure, or enter into new markets or strategic transactions. Accordingly, we may need to engage in equity, equity-linked, or debt financings to secure additional funds. Our ability to obtain additional financing that we may choose or need, including for the refinancing of future debt maturities or potential strategic acquisitions and investments, will depend on, among other things, our development efforts, business plans, operating performance, and the condition of the capital markets at the time we seek financing. Also, if we raise additional funds through future issuances of equity or equity-linked securities, our existing stockholders could experience significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our Class A common stock. Any debt financing that we secure in the future could involve offering security interests and undertaking restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Our Credit Agreement, which provides for a revolving credit facility, contains a financial covenant with which we must comply. We may not be able to obtain additional financing on terms favorable to us, if at all. Additionally, if we seek to access additional capital or increase our borrowing, there can be no assurance that financing and credit may be available on favorable terms, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business, financial condition, or results of operations could be adversely affected.
Risks Related to Ownership of Our Class A Common Stock and Governance
The multi-class structure of our common stock and the Voting Agreement among the Voting Agreement Parties have the effect of concentrating voting power with the Voting Agreement Parties, which will limit your ability to influence the outcome of matters submitted to our stockholders for approval, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws, and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transactions.
We have three classes of common stock. Our Class A common stock has one vote per share, our Class B common stock has 20 votes per share, and our Class C common stock has no voting rights, except as otherwise required by law. Adam Foroughi, our co-founder, CEO, and Chairperson and Herald Chen, a member of our board of directors (collectively with certain affiliates, the "Voting Agreement Parties") together hold all of the issued and outstanding shares of our Class B common stock. As of December 31, 2025, the Voting Agreement Parties collectively held approximately 67% of the voting power of our outstanding capital stock in the aggregate. This voting power includes shares of Class A common stock deemed beneficially owned in accordance with Rule 13d-3(d)(1) under the Exchange Act. The Voting Agreement Parties have entered into a voting agreement (the "Voting Agreement") whereby all Class B common stock held by the Voting Agreement Parties and their respective permitted entities and permitted transferees will be voted as determined by Mr. Foroughi and Mr. Chen. As a result, the Voting Agreement Parties will collectively be able to determine or significantly influence any action requiring the approval of our stockholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws, and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction. The Voting Agreement Parties may have interests that differ from yours and may vote in a way with which you disagree, and which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing, or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company, and might ultimately affect the market price of our Class A common stock.
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Future transfers by the holders of Class B common stock will generally result in those shares automatically converting into shares of Class A common stock, subject to limited exceptions, such as certain transfers effected for estate planning or other transfers among the Voting Agreement Parties. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon certain events specified in our amended and restated certificate of incorporation.
In addition, because our Class C common stock carries no voting rights (except as otherwise required by law), if we issue Class C common stock in the future, the holders of Class B common stock may be able to elect all of our directors and to determine the outcome of most matters submitted to a vote of our stockholders for a longer period of time than would be the case if we issued Class A common stock rather than Class C common stock in such transactions.
We are considered a “controlled company” within the meaning of the Nasdaq corporate governance requirements, and, as a result, we qualify for exemptions from certain corporate governance requirements.
As a result of our multi-class common stock structure and the Voting Agreement among the Voting Agreement Parties, the Voting Agreement Parties collectively hold greater than a majority of the voting power of our outstanding capital stock and the Voting Agreement Parties have the authority to vote the shares of all Class B common stock, subject to the terms of the Voting Agreement, at their discretion on all matters to be voted upon by stockholders. Therefore, we are considered a “controlled company” as that term is set forth in the Nasdaq corporate governance requirements. Under these corporate governance requirements, a company in which over 50% of the voting power for the election of directors is held by an individual, a group, or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:
• the requirement that a majority of its board of directors consist of independent directors;
• the requirement that we have a nominating/corporate governance committee that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
• the requirement that we have a compensation committee that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
• the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.
We do not currently avail ourselves of any of these corporate governance accommodations, though we may do so in the future. In the event that we cease to be a “controlled company” and our Class A common stock continues to be listed on Nasdaq, we will be required to comply with these provisions within the applicable transition periods.
The market price of our Class A common stock has been, and could continue to be, volatile, and you could lose all or part of your investment.
The market price of our Class A common stock has fluctuated, and may continue to fluctuate, substantially depending on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our Class A common stock. Factors that have in the past caused and could in the future cause fluctuations in the market price of our Class A common stock include the following:
• price and volume fluctuations in the overall stock market from time to time, including fluctuations due to general economic uncertainty or negative market sentiment;
• volatility in the market and trading volumes of technology stocks;
• changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;
• sales of shares of our Class A common stock by us or our stockholders;
• rumors and market speculation involving us or other companies in our industry;
• failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
• actual or perceived significant data privacy or cybersecurity incidents involving our advertising solutions;
• the financial or non-financial metric projections we may provide to the public, any changes in those projections or our failure to meet those projections;
• third-party data published about us or other advertising companies, whether or not such data accurately reflects circumstances;
• announcements by us or our competitors of new products or services;
• the public’s reaction to our press releases, other public announcements, and filings with the SEC;
• fluctuations in the trading volume of shares of our Class A common stock or the size of our public float;
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• short selling of our Class A common stock or related derivative securities, and the publication of short seller reports;
• actual or anticipated changes or fluctuations in our results of operations;
• actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally;
• our issuance or repurchase of shares of our Class A common stock;
• litigation or regulatory action involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;
• developments or disputes concerning our intellectual property or other proprietary rights;
• announced or completed acquisitions of businesses or technologies by us or our competitors;
• new laws, regulations or app store policies or new interpretations of existing laws, regulations or app store policies applicable to our business;
• changes in accounting standards, policies, guidelines, interpretations, or principles;
• major catastrophic events in our domestic and foreign markets;
• any significant change in our management; and
• general economic conditions and slow or negative growth of our markets.
In addition, the market price of our Class A common stock has in the past fluctuated and could in the future fluctuate for reasons unrelated to our business, financial condition, or results of operations, including if the market for technology stocks or the stock market in general experiences a loss of investor confidence. The market price of our Class A common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. Accordingly, we cannot assure you of the liquidity of any trading market, your ability to sell your shares of our Class A common stock when desired, or the prices that you may obtain for your shares of our Class A common stock.
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If the market price of our Class A common stock is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business. Such litigation could adversely affect our business, financial condition, and results of operations.
We may not realize the anticipated long-term stockholder value of our share repurchase programs and any failure to repurchase our Class A common stock after we have announced our intention to do so may negatively impact our stock price.
Our board of directors has authorized a share repurchase program under which we repurchase shares of our Class A common stock from time to time. We may make share repurchases through a variety of methods, including open share market purchases, block transactions or privately negotiated transactions, in accordance with applicable federal securities laws. Our share repurchase program has no time limit, does not obligate us to repurchase any specific number of shares and may be suspended at any time at our discretion and without prior notice. The timing and amount of any repurchases, if any, will be subject to liquidity, stock price, market and economic conditions, compliance with applicable legal requirements such as Delaware surplus and solvency tests, compliance with our credit agreement, and other relevant factors. Any failure to repurchase stock after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and may negatively impact our stock price.
The existence of this share repurchase program could cause our stock price to be higher than it otherwise would be and could potentially reduce the market liquidity for our stock. Although this program is intended to enhance long-term stockholder value, there is no assurance it will do so because the market price of our Class A common stock may decline below the levels at which we repurchased shares and short-term stock price fluctuations could reduce the effectiveness of the program.
Repurchasing our Class A common stock will reduce the amount of cash we have available to fund working capital, capital expenditures, strategic acquisitions or business opportunities, and other general corporate requirements, and we may fail to realize the anticipated long-term stockholder value of any share repurchase programs.
The issuance of additional stock in connection with financings, acquisitions, investments, our equity incentive plans, or otherwise will dilute all other stockholders.
Our amended and restated certificate of incorporation authorizes us to issue up to 1,500,000,000 shares of Class A common stock, up to 150,000,000 shares of Class C common stock, and up to 100,000,000 shares of preferred stock with such rights and preferences as may be determined by our board of directors. Subject to compliance with applicable rules and regulations, we may issue shares of Class A common stock or securities convertible into shares of our Class A common stock from time to time in connection with a financing, acquisition, investment, our equity incentive plans, or otherwise. Any such issuance could result in dilution to our existing stockholders and/or negatively impact the market price of our Class A common stock.
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Our multi-class stock structure, the Voting Agreement, and other provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the market price of our Class A common stock.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following:
• our multi-class common stock structure and the Voting Agreement, which provide the Voting Agreement Parties with the ability to determine or significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding common stock;
• vacancies on our board of directors may be filled only by our board of directors and not by stockholders;
• a special meeting of our stockholders may only be called by a majority of our board of directors, the chairperson of our board of directors, our Chief Executive Officer, or our President;
• advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders;
• our amended and restated certificate of incorporation does not provide for cumulative voting;
• our amended and restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued by our board of directors, without further action by our stockholders;
• after the first date on which the outstanding shares of our Class B common stock represent less than a majority of the total combined voting power of our Class A common stock and our Class B common stock (the "Voting Threshold Date"), our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter; and
• certain litigation against us may only be brought in Delaware.
These provisions, alone or together, could discourage, delay, or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the market price of our Class A common stock.
Our amended and restated bylaws designate a state or federal court located within the State of Delaware and the federal district courts of the United States as the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (iii) any action arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws, or (iv) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware), in all cases subject to the court having jurisdiction over indispensable parties named as defendants, and provided that this exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act.
Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated bylaws also provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of our securities shall be deemed to have notice of and consented to the foregoing bylaw provisions. Although we believe these exclusive forum provisions benefit us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or any of our directors, officers, stockholders, or other employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, officers, stockholders, or other employees. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder as a result of our exclusive forum provisions.
Further, the enforceability of similar exclusive forum provisions in other companies’ organizational documents has been challenged in legal proceedings, and it is possible that a court of law may rule that these types of provisions are inapplicable or unenforceable if they are challenged in a proceeding or otherwise. In the event a court finds either exclusive forum provision
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contained in our amended and restated bylaws to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations.

Item 1B. Unresolved Staff Comments
Not applicable.

Item 1C. Cybersecurity
Risk Management and Strategy
We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes into our overall risk management systems and processes . We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on, or conducted through, our information systems, that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
We conduct periodic risk assessments to identify potential cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats. The frequency of these risk assessments is based on the potential risk and criticality to our business systems. The risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential impact and damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
Following these risk assessments, we evaluate how to reasonably address identified gaps in existing safeguards to minimize identified risks and regularly monitor the effectiveness of our safeguards. We devote significant resources and designate high level personnel, including our Head of Information Security and Compliance, to manage the risk assessment and mitigation process.
As part of our overall risk management system, we monitor and test our safeguards, in collaboration with human resources, IT, and management. Personnel at all levels and departments are made aware of our cybersecurity policies and educated about cybersecurity best practices through annual company-wide cybersecurity training, regular phishing simulations and cybersecurity reminders, and role-based training, as appropriate.
Our cybersecurity risk management program is closely based upon recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and certain other applicable industry standards. In 2024, we obtained our ISO/IEC27001 certification.
We engage consultants and third parties in connection with our risk assessment processes . These providers assist us in evaluating our cybersecurity program, provide support for threat monitoring and detection, and scan for vulnerabilities and other related security events which may pose a risk to the company.
We utilize our third-party risk management program to evaluate the cybersecurity posture of our third-party service providers based on risk, including data and systems access. These processes assist us in identifying and mitigating risks from cybersecurity threats associated with our use of third-party service providers. Where appropriate, we contractually require third-party service providers to implement and maintain appropriate and reasonable security measures in connection with their work with us and consistent with applicable laws, and to promptly report any breach of their security measures or systems that may affect our company .
To date, we have not identified any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition . However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced cybersecurity incidents. For information about these risks, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K, including the risk factor entitled “Security breaches, improper access to or disclosure of our data or client data, other hacking and phishing attacks on our systems, or other cyber incidents could harm our reputation and adversely affect our business.”
Governance
One of the key functions of our Board of Directors is informed oversight of our risk management process, including risks from cybersecurity threats . Our Board of Directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face . Our Board of Directors administers its cybersecurity risk oversight function directly as a whole, as well as through the Audit Committee .
Our Head of Information Security and Compliance and our InfoSec management team are primarily responsible for assessing and managing our material risks from cybersecurity threats. Our Head of Information Security and Compliance has over two decades of experience leading cybersecurity, data privacy and risk management programs for large, multi-national organizations and Fortune 500 companies, and CISSP and CRISC certifications . Our InfoSec management team is comprised of qualified cybersecurity professionals whose collective expertise includes penetration testing, cyber threat intelligence, data
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privacy, information security, and risk and compliance in the healthcare, financial, and technology industries, with certifications such as CISA, CRISC, CISSP, CCSP, CIPP, GIAC, and OSCP.
Our Head of Information Security and Compliance and our InfoSec management team, in partnership with our legal privacy team, oversee our cybersecurity policies and processes, including those described in “Risk Management and Strategy” above. Our Head of Information Security and Compliance and our InfoSec management team are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents through their implementation and oversight of safeguards, including through the use of automated tools and manual processes, like security event monitoring, vulnerability scanning, threat analytics, security awareness and training, endpoint security, bug bounty program, offensive security testing, and third-party risk and monitoring .
Our Head of Information Security and Compliance provides periodic and as needed briefings to the Audit Committee regarding our company’s cybersecurity program and information security risks, including any recent AppLovin-related cybersecurity incidents and possible responses, internal and third-party cybersecurity systems testing, third-party risk management, and other topics related to cybersecurity. The Audit Committee provides updates to the Board on such reports. The Company has adopted an escalation process for review of cybersecurity incidents, based on severity level, by an internal cyber task force with oversight by the Audit Committee. In addition, our Head of Information Security and Compliance provides annual briefings to the Board on our cybersecurity program and risks.

Item 2. Properties
Our corporate headquarters is in Palo Alto, California, where we currently lease approximately 72,812 square feet under a lease agreement that expires in May 2028. We also lease and license additional facilities in the United States and internationally, including in Beijing and Shanghai, China; Berlin and Frankfurt, Germany; and Singapore.
We believe that our facilities are suitable to meet our current needs. However, should we need to expand our facilities and add new facilities, we believe that suitable additional or alternative space will be available as needed to accommodate any such growth. If we choose to expand our facilities or locations, we expect to incur additional expenses.

Item 3. Legal Proceedings
We are currently involved in, and may in the future be involved in, legal proceedings and claims that arise in the ordinary course of business, as well as governmental and other regulatory investigations and proceedings. In addition, third parties have in the past, and may in the future, assert claims against us in the form of letters and other communications.
Securities Litigation
Beginning in early March 2025, certain alleged stockholders filed putative class action complaints against the Company, Adam Foroughi, Matthew Stumpf, and/or Herald Chen asserting claims for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, and seeking unspecified monetary relief, interest, and attorneys’ fees. On March 5, 2025, Michael Quiero filed the first complaint against the Company, Adam Foroughi, and Matthew Stumpf in the U.S. District Court for the Northern District of California (the “Northern District of California”); on March 24, 2025, Ben Brownback filed the second complaint in the same court against the Company, Adam Foroughi, Matthew Stumpf, and Herald Chen in the Northern District of California (the “Brownback Action”); and on April 17, 2025, the Wayne County Employees’ Retirement System filed the third complaint against the Company, Adam Foroughi, Matthew Stumpf, and Herald Chen in the Northern District of California (collectively, the “Securities Complaints”). In May 2025, Michael Quiero and the Wayne County Employees’ Retirement System voluntarily dismissed the complaints they filed in the Northern District of California. The U.S. District Court subsequently appointed lead plaintiffs and lead plaintiffs’ counsel in the Brownback Action, and the lead plaintiffs filed an Amended Complaint on September 12, 2025, adding Basil Shikin as a defendant (the "Amended Complaint"). The Amended Complaint alleges that the defendants made materially false and misleading statements regarding the Company's advertising solutions and financial growth. The Amended Complaint alleges a putative class period running from November 7, 2024 through March 27, 2025. The defendants filed a motion to dismiss the Amended Complaint in November 2025, and a hearing on the defendants’ motion is scheduled in March 2026. We believe that these allegations lack merit and will vigorously contest this action.
Shareholder Derivative Litigation
Beginning in late March 2025, certain alleged shareholders filed shareholder derivative complaints in the Northern District of California against the individual then current members of the Company’s board of directors, Adam Foroughi, and Matthew Stumpf (collectively, the “D&O Parties”) alleging claims for violations of Section 14(a) of the Exchange Act, breaches of their fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets (collectively, the “Shareholder Derivative Complaints”). The Shareholder Derivative Complaints also assert claims for contribution under the Exchange Act against Adam Foroughi and Matthew Stumpf and seek unspecified monetary relief, certain declaratory and injunctive relief, restitution, and attorneys’ fees from the D&O Parties. Relying on the Securities Complaints, the Shareholder Derivative Complaints allege that the D&O Parties made materially false and misleading statements regarding our advertising solutions and financial growth. On March 25, 2025, Amit Patel filed the first complaint against the individual then current members of the Company’s board of directors, Adam Foroughi, and Matthew Stumpf in the Northern District of California; and on May 19, 2025, Nathan Smith filed the second complaint against the individual then current members of the Company’s board of
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directors, Adam Foroughi, and Matthew Stumpf in the Northern District of California. The Shareholder Derivative Complaints have been consolidated and stayed pending resolution of the defendants’ motion to dismiss in the Brownback Action. We believe that these allegations lack merit and will vigorously contest these actions.
While we remain confident in the Company’s defenses to the asserted allegations in these cases, it is not possible to determine the ultimate outcome at this time, and thus we cannot reasonably estimate the maximum potential exposure or range of possible loss.
Future litigation may be necessary to defend ourselves and our business partners and to determine the scope, enforceability, and validity of third-party proprietary rights, or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Item 4. Mine Safety Disclosures
Not applicable.

Part II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information for Common Stock
Our Class A common stock is traded on the Nasdaq Global Select Market under the symbol “APP.” Our Class B and Class C common stock are neither listed nor traded.
Holders of Record
As of December 31, 2025, there were approximately 32 stockholders of record of our Class A common stock, 8 stockholders of record of our Class B common stock and no holders of record of our Class C common stock. Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. All shares of Class B common stock are beneficially held by Adam Foroughi and Herald Chen, collectively with certain affiliated trusts.
Dividend Policy
We have never paid cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future.
Stock Performance Graph
This performance graph shall not be deemed "soliciting material" or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of AppLovin Corporation under the Securities Act of 1933, as amended (the "Securities Act").
The graph below compares the cumulative total stockholder return on our Class A common stock with the cumulative total return on the Standard & Poor's 500 Stock Index ("S&P 500") and the S&P 500 Information Technology Index ("S&P IT") through December 31, 2025. The graph assumes $100 was invested at the market close on April 15, 2021, which was the first day our Class A common stock began trading. Data for the S&P 500 and S&P IT assumes reinvestment of dividends. The offering price of our Class A common stock in our initial public offering on April 15, 2021 was $80.00 per share. The graph uses the closing market price on April 15, 2021 of $65.20 per share as the initial value of our Class A common stock.
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The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our Class A common stock.

Recent Sale of Unregistered Securities and Use of Proceeds
Recent Sale of Unregistered Securities
During the three months ended December 31, 2025, we issued restricted stock units ("RSUs") covering 14,810 shares of our Class A common stock under our 2021 Partner Studio Incentive Plan (the "PSIP") and issued 16,335 shares of our Class A common stock upon the vesting and settlement of RSUs issued under our PSIP.
The foregoing transactions did not involve any underwriters, any underwriting discounts or commissions, or any public offering. We believe the offer, sale, and issuance of the above securities was exempt from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities Act and Regulation S promulgated under the Securities Act, because the issuance of securities to the recipients did not involve a public offering. The recipients of the securities in the transaction represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in the transaction. All recipients had adequate access, through their relationships with us or otherwise, to information about us. The issuance of these securities was made without any general solicitation or advertising.
Use of Proceeds
None.
Issuer Purchases of Equity Securities
The following table summarizes the share repurchase activity for the three months ended December 31, 2025:

Period Total Number of Shares Purchased (1)
Average Price Paid Per Share (2)
Total Number of Shares Purchased as Part of Publicly Announced Programs (1)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)

(in thousands) (in thousands) (in millions)
October 1 - 31, 2025 588  $ 620.79  588  $ 3,327 
November 1 - 30, 2025 72  $ 617.64  72  $ 3,282 
December 1 - 31, 2025 —  $ —  —  $ 3,282 
Total 660  660 
        
(1) In February 2022, our board of directors authorized a share repurchase program to repurchase shares of our Class A common stock. In October 2025, our board of directors authorized an increase to the repurchase program of $3.2 billion, such that an aggregate amount of approximately $3.3 billion remained available for repurchases as of October 31, 2025. Repurchases may be made from time to time through open market purchases or through privately negotiated transactions, subject to market conditions, applicable legal requirements, including surplus and solvency requirements, and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18. We may also, from time to time, enter into Rule 10b5-1 trading plans to facilitate repurchases of shares. The repurchase program does not obligate us to acquire any particular amount of our Class A common stock, has no expiration date and may be modified, suspended, or terminated at any time at our discretion. See Note 10 — Equity of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information related to share repurchases.
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(2) Average price paid per share includes commissions and fees associated with the repurchases under our repurchase program.

Item 6. [Reserved]

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Risk Factors” and other parts of this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview
Our mission is to create meaningful connections between companies and their ideal customers. We provide end-to-end AI-powered advertising solutions for businesses to reach, monetize and grow their global audience. Our scaled business model is intricately linked to the advertising ecosystem, providing a durable competitive advantage. We generate revenue when our advertisers achieve their return on advertising spend targets with our advertising solutions, ensuring that their success directly fuels our growth.
Since our founding in 2011, we have been focused on building advertising solutions for advertisers to improve the marketing and monetization of their content. Our founders, who were mobile app developers themselves, quickly realized the real impediment to success and growth in the advertising ecosystem was a discovery and monetization problem—breaking through the congested app stores to efficiently find users and successfully grow their business. Their first-hand experience with these challenges led to the development of our infrastructure and advertising solutions.
Recent Developments
On May 7, 2025, we, along with our subsidiaries Morocco, Inc. and AppLovin GmbH (collectively, the “Sellers”) entered into a Purchase Agreement (the “Agreement”) with Tripledot and its subsidiaries Eton Games Inc. ("Eton") and Tripledot Group Holdings Limited (collectively, with Tripledot, the “Purchasers”) relating to the sale of our Apps business. On June 30, 2025, we and Tripledot entered into an amendment to the Agreement to provide, among other things, that in lieu of the issuance of a secured promissory note by Eton to us or our designated affiliate to fund a portion of the full Cash Consideration (as defined in the Agreement), Tripledot may elect to pay such amount in cash.
On June 30, 2025, we consummated the sale of the Apps business to the Purchasers for $400 million in cash, subject to closing adjustments, and equity consideration representing approximately 20% of Tripledot’s fully-diluted equity at the time of closing. No promissory note was issued as part of the transaction. Following the sale of the Apps business, we operate as a single operating and reportable segment. Results related to our Apps business are presented as discontinued operations in our consolidated financial statements. See Note 2 — Summary of Significant Accounting Policies and Note 3 – Discontinued Operations of the Notes to consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Our Business Model
We primarily generate revenue from fees paid by advertisers who use our advertising solutions to grow and monetize their content. We are able to grow our revenue by improving our various technologies, including improvements to our Axon AI recommendation engine.
Advertising clients include a wide variety of advertisers, from indie developer studios to some of the largest global internet platforms, such as Meta and Google. We see multiple opportunities to gain new clients, and to increase spend from existing clients, as we help them grow their businesses and make them more successful.
Our advertising solutions include Axon Ads Manager, MAX, Adjust, and Wurl. Clients use Axon Ads Manager to automate, optimize, and manage their user acquisition investments. They set marketing and user growth goals, and Axon Ads Manager optimizes their ad spend in an effort to achieve their return on advertising spend targets and other marketing objectives. Axon Ads Manager comprises the vast majority of revenue. The revenue we generate from Axon Ads Manager is determined dynamically based on advertisers’ campaign goals .
Advertising networks use MAX to optimize purchases of app advertising inventory. The MAX tool provides insights to manage against key performance indicators, understand the long-term value of users, and help manage profitability. Revenue from MAX is generated based on a percentage of client spend. As more advertising networks move to in-app real-time bidding, we expect growth in the adoption of, and revenue from, MAX.
Advertising clients use Adjust's measurement and analytics marketing platform to better understand their users' journey while allowing marketers to make smarter decisions through measurement, attribution and fraud prevention. Revenue from Adjust is primarily generated from an annual software subscription fee.
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Advertising clients use Wurl's CTV platform to distribute streaming video, maximize revenue, and acquire and retain viewers or subscribers. Revenue from Wurl is primarily generated from content companies, streamers, and advertisers, typically on a usage-based and/or CPM model.

Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin
We define Adjusted EBITDA for a particular period as net income adjusted for loss from discontinued operations, net of income taxes, interest expense and loss on settlement of debt, other income, net (excluding certain recurring items), provision for income taxes, amortization, depreciation and write-offs and as further adjusted for stock-based compensation, transaction-related expense, restructuring costs, and non-operating foreign exchange (gain) loss, as well as certain other items that we believe are not reflective of our core operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue for the same period.
Adjusted EBITDA and Adjusted EBITDA margin are key measures we use to assess our financial performance and are also used for internal planning and forecasting purposes. We believe Adjusted EBITDA and Adjusted EBITDA margin are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. In addition, these measures are frequently used by analysts, investors, and other interested parties to evaluate and assess performance. We use Adjusted EBITDA and Adjusted EBITDA margin in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance.
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and are presented for supplemental informational purposes only and should not be considered as alternatives or substitutes to financial information presented in accordance with GAAP. These measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our Adjusted EBITDA and Adjusted EBITDA margin should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.
The following table provides our Adjusted EBITDA and Adjusted EBITDA margin for 2025, 2024, and 2023, and a reconciliation of net income to Adjusted EBITDA:

Year Ended December 31,

2025 2024 2023
(in thousands, except percentages)
Revenue
$ 5,480,717 $ 3,224,058 $ 1,841,762
Net income
3,333,751 1,579,776 356,711
Net margin
60.8% 49.0% 19.4%
Loss from discontinued operations, net of income taxes
99,444 9,748 101,115
Net income from continuing operations
3,433,195 1,589,524 457,826
Net margin from continuing operations
62.6% 49.3% 24.9%
Adjusted as follows:
Interest expense and loss on settlement of debt 207,016 317,209 273,508
Other income, net 1
(15,694) (23,396) (4,729)
Provision for income taxes
519,715 22,419 43,776
Amortization, depreciation and write-offs 130,724 128,791 119,152
Non-operating foreign exchange (gain) loss
(3,949) 1,642 837
Stock-based compensation
207,958 357,431 342,551
Transaction-related expense
27,579 885 1,047
Restructuring costs 5,908 17,259 2,316
Adjusted EBITDA $ 4,512,452 $ 2,411,764 $ 1,236,284
Adjusted EBITDA margin 82.3% 74.8% 67.1%

1 Excludes recurring operational foreign exchange gains and losses.

Free Cash Flow
We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment and principal payment of finance leases. We use Free Cash Flow to help manage the health of our business, prepare budgets and for capital allocation purposes. We believe Free Cash Flow provides useful supplemental information to help investors understand
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underlying trends in our business and our liquidity. Free Cash Flow also reflects cash flows from both continuing and discontinued operations. Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish Free Cash Flow or similar metrics. Thus, our Free Cash Flow should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.
The following table provides our Free Cash Flow for 2025, 2024, and 2023, and a reconciliation of net cash provided by operating activities to Free Cash Flow:

Year Ended December 31,

2025 2024 2023
(in thousands)

Net cash provided by operating activities $ 3,971,094  $ 2,099,011  $ 1,061,510 
Less:
Purchase of property and equipment (473) (4,776) (4,246)
Principal payments of finance leases (18,669) (20,875) (20,170)
Free Cash Flow $ 3,951,952  $ 2,073,360  $ 1,037,094 
Net cash provided by (used in) investing activities $ 358,428  $ (106,754) $ (77,829)
Net cash used in financing activities $ (2,593,069) $ (1,749,844) $ (1,562,791)

Factors Affecting Our Performance
We believe that the future success of our business depends on many factors, including the factors described below.
Continue to invest in innovation
We have made, and intend to continue to make, significant investments in our advertising solutions to enhance their effectiveness and value proposition for our clients. We expect to continue to invest in our technology and solutions and to incur related costs, including costs to attract and retain critical engineering talent, such as stock-based compensation, as well as datacenter costs as we continue to launch enhancements to our Axon AI recommendation engine. We believe investments in our technology will further improve effectiveness for advertisers. Our investments will also allow us to continue to enter into and expand into new verticals outside of gaming, such as e-commerce and CTV. We also continue to opportunistically explore strategic transactions related to our advertising solutions and the expansion of the markets we serve.
Attract and retain clients
We rely on existing clients for a significant portion of our revenue. As we improve our advertising solutions, we can attract additional spend from these clients. Our clients include indie studio developers and some of the largest advertising platforms in the world. We believe there is significant room for us to further expand our relationships with existing clients and increase their usage of our advertising solutions, as well as to onboard new clients both inside and outside of mobile gaming. We expect to continue to invest in sales and marketing to enhance awareness of the Axon brand and drive new client acquisition.
Changes to the mobile app and advertising ecosystems
Our business and results of operations are and will continue to be impacted by industry factors that drive the overall performance and growth of the mobile app and advertising ecosystems. Mobile app developers rely on third-party platforms, such as the Apple App Store and Google Play Store, among others, to distribute apps, collect payments made for in-app purchases, and target users with relevant advertising. These third-party platforms have significant market power and discretion to set platform fees, select which apps to promote, and decide how much consumer information to provide to advertising networks that enable our advertising solutions to target users with personalized and relevant advertising and allocate marketing campaigns in an efficient and cost-effective manner. Any changes made to the policies of these third party platforms can drive rapid change across the mobile app and advertising ecosystems. Both the Apple App Store and Google Play Store have made various changes to their policies in recent years, as further discussed in the section titled “Risk Factors–Risks Related to Our Business, Operations and Industry–-If third-party platforms change their policies in a way that harms our business, including the design and effectiveness of our advertising solutions, our business, financial condition, and results of operations could be adversely affected.” The mobile app and advertising ecosystems also continue to be subject to an evolving legal and regulatory landscape, including with respect to data protection, privacy, and AI. We must continue to innovate and stay ahead of developments in the advertising and mobile app ecosystems in order for our business to succeed and our results of operations to continue to improve.

Components of Results of Operations
Revenue
We generate substantially all of our revenue from fees collected from advertisers spending on Axon Ads Manager, which are determined dynamically based on advertisers’ campaign goals . Revenue from other services was not material. Revenue does not include the results of our former Apps business, which is classified as discontinued operations.
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Cost of Revenue and Operating Expenses
Cost of revenue. Cost of revenue consists primarily of amortization of acquired technology-related intangible assets, amortization of finance lease right-of-use assets related to certain servers and networking equipment and datacenter costs related primarily to third-party cloud computing services.
Sales and marketing . Sales and marketing expenses consist primarily of marketing programs and other advertising expenses, professional services costs, personnel-related expenses including salaries, employee benefits, and stock-based compensation for employees engaged in sales and marketing activities, amortization of acquired user-related intangible assets, travel and allocated facilities and information technology costs.
Research and development. Research and development expenses consist primarily of product development costs, including personnel-related expenses such as salaries, employee benefits, and stock-based compensation for employees engaged in research and development activities, professional services costs, consulting costs, and allocated facilities and information technology costs.
General and administrative. General and administrative expenses consist primarily of costs incurred to support our business, including personnel-related expenses such as salaries, employee benefits, and stock-based compensation for employees engaged in finance, accounting, legal, human resources and administration, professional services fees for legal, accounting, recruiting, and administrative services (including acquisition or other transaction-related expenses), insurance, travel, and allocated facilities and information technology costs.
Other Income and Expenses
Interest expense and loss on settlement of debt. Interest expense and loss on settlement of debt consists primarily of interest expense associated with our outstanding debt, including accretion of debt discount and issuance costs.
Other income, net. Other income, net, primarily includes interest earned on our cash and cash equivalents, fair value adjustments relating to our non-marketable equity securities, and foreign currency gains and losses.
Provision for income taxes. We are subject to income taxes in the United States and foreign jurisdictions in which we do business. These foreign jurisdictions have different statutory tax rates than those in the United States. Additionally, certain of our foreign earnings may also be taxable in the United States. Accordingly, our effective tax rate will vary depending on the relative proportion of foreign to domestic income, impacts from acquisition restructuring, deduction benefits related to foreign-derived intangible income, future changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. Additionally, our effective tax rate can vary based on the amount of pre-tax income or loss.
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Results of Operations
In this section, we discuss the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024, as well as a comparison for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The following tables summarize our historical consolidated statement of operations:

Year Ended December 31,
2025 2024 2023
(in thousands)
Revenue $ 5,480,717  $ 3,224,058  $ 1,841,762 
Costs and expenses
Cost of revenue 1,2
665,140  520,613  356,613 
Sales and marketing 1,2
203,651  252,863  228,025 
Research and development 1
226,510  374,710  333,781 
General and administrative 1
233,502  164,916  150,932 
Total costs and expenses 1,328,803  1,313,102  1,069,351 
Income from operations 4,151,914  1,910,956  772,411 
Other income (expense):
Interest expense and loss on settlement of debt (207,016) (317,209) (273,508)
Other income, net
8,012  18,196  2,699 
Total other expense, net (199,004) (299,013) (270,809)
Income before income taxes 3,952,910  1,611,943  501,602 
Provision for income taxes 519,715  22,419  43,776 
Net income from continuing operations 3,433,195  1,589,524  457,826 
Loss from discontinued operations, net of income taxes (99,444) (9,748) (101,115)
Net income $ 3,333,751  $ 1,579,776  $ 356,711 

_______
1 Includes stock-based compensation as follows:

Year Ended December 31,
2025 2024 2023
(in thousands)
Cost of revenue $ 1,425  $ 4,799  $ 3,834 
Sales and marketing 34,055  76,824  69,903 
Research and development 114,463  229,577  216,236 
General and administrative 58,015  46,231  52,578 
Total stock-based compensation $ 207,958  $ 357,431  $ 342,551 

_______
2 Includes amortization expense related to intangible assets as follows:

Year Ended December 31,
2025 2024 2023
(in thousands)
Cost of revenue $ 42,300  $ 38,220  $ 36,983 
Sales and marketing 55,104  54,628  54,556 
Total amortization expense related to intangible assets $ 97,404  $ 92,848  $ 91,539 

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The following table sets forth the components of our consolidated statements of operations for each of the periods presented as a percentage of revenue 1 :

Year Ended December 31,
2025 2024 2023
Revenue 100  % 100  % 100  %
Costs and expenses
Cost of revenue 12  % 16  % 19  %
Sales and marketing 4  % 8  % 12  %
Research and development 4  % 12  % 18  %
General and administrative 4  % 5  % 8  %
Total costs and expenses 24  % 41  % 58  %
Income from operations 76  % 59  % 42  %
Other income (expense):
Interest expense and loss on settlement of debt (4) % (10) % (15) %
Other income, net
—  % 1  % —  %
Total other expense, net (4) % (9) % (15) %
Income before income taxes 72  % 50  % 27  %
Provision for income taxes 9  % 1  % 2  %
Net income from continuing operations 63  % 49  % 25  %
Loss from discontinued operations, net of income taxes (2) % —  % (5) %
Net income 61  % 49  % 19  %

_______
1 Totals of percentages of revenue may not foot due to rounding.

Comparison of Our Results of Operations for the Twelve Months Ended December 31, 2025, 2024, and 2023
Revenue

Year Ended December 31, 2024 to 2025
% change 2023 to 2024
% change
2025 2024 2023
(in thousands, except percentages)
Revenue $ 5,480,717  $ 3,224,058  $ 1,841,762  70  % 75  %

For the twelve months ended December 31, 2025, our revenue increased by $2.3 billion, or 70%, from the prior year period primarily due to improved Axon Ads Manager performance, where the volume of installations increased 3% and net revenue per installation increased 72% compared to the prior year period.
For the twelve months ended December 31, 2024, our revenue increased by $1.4 billion, or 75%, from the prior year period primarily due to improved Axon Ads Manager performance, where the volume of installations increased 50% and net revenue per installation increased 22% compared to the prior year period.
Cost of revenue

Year Ended December 31, 2024 to 2025
% change 2023 to 2024
% change
2025 2024 2023
(in thousands, except percentages)
Cost of revenue $ 665,140  $ 520,613  $ 356,613  28  % 46  %
Percentage of revenue 12  % 16  % 19  %

Cost of revenue in 2025 increased by $144.5 million, or 28%, compared to 2024, due primarily to an increase of $150.2 million in expenses associated with operating our network infrastructure driven by the growth in our operations.
Cost of revenue in 2024 increased by $164.0 million, or 46%, compared to 2023, due primarily to an increase of $141.3 million in expenses associated with operating our network infrastructure driven by the growth in our operations.
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Sales and marketing

Year Ended December 31, 2024 to 2025
% change 2023 to 2024
% change
2025 2024 2023
(in thousands, except percentages)
Sales and marketing $ 203,651  $ 252,863  $ 228,025  (19) % 11  %
Percentage of revenue 4  % 8  % 12  %

Sales and marketing expenses in 2025 decreased by $49.2 million, or 19%, compared to 2024 due primarily to a decrease of $57.1 million in personnel-related expenses related to a decrease in stock-based compensation related payroll costs and a reduction in headcount.
Sales and marketing expenses in 2024 increased by $24.8 million, or 11%, compared to 2023 due primarily to an increase of $12.8 million in personnel-related expenses related to an increase in stock-based compensation related payroll costs and an increase of $4.8 million in marketing costs.
Research and development

Year Ended December 31, 2024 to 2025
% change 2023 to 2024
% change
2025 2024 2023
(in thousands, except percentages)
Research and development $ 226,510  $ 374,710  $ 333,781  (40) % 12  %
Percentage of revenue 4  % 12  % 18  %

Research and development expenses in 2025 decreased by $148.2 million, or 40%, compared to 2024, due primarily to a decrease of $151.1 million in personnel-related expenses related to a decrease in stock-based compensation related payroll costs.
Research and development expenses in 2024 increased by $40.9 million, or 12%, compared to 2023, due primarily to an increase of $39.8 million in personnel-related expenses related to an increase in stock-based compensation related payroll costs.
General and administrative
Year Ended December 31, 2024 to 2025
% change 2023 to 2024
% change
2025 2024 2023
(in thousands, except percentages)
General and administrative $ 233,502  $ 164,916  $ 150,932  42  % 9  %
Percentage of revenue 4  % 5  % 8  %

General and administrative expenses in 2025 increased by $68.6 million, or 42% compared to 2024, due primarily to an increase of $31.6 million in professional services costs primarily associated with transaction support and an increase of $24.5 million in bad debt expense primarily related to new initiatives.
General and administrative expenses in 2024 increased by $14.0 million, or 9% compared to 2023, due primarily to an increase of $9.5 million in indirect tax costs and an increase of $5.5 million in personnel-related expenses related to an increase in stock-based compensation related payroll costs, partially offset by a decrease of $6.3 million in bad debt expense.
Interest expense and loss on settlement of debt

Year Ended December 31, 2024 to 2025
% change 2023 to 2024
% change
2025 2024 2023
(in thousands, except percentages)
Interest expense and loss on settlement of debt $ (207,016) $ (317,209) $ (273,508) (35) % 16  %
Percentage of revenue (4) % (10) % (15) %

In 2025, interest expense and loss on settlement of debt decreased by $110.2 million, or 35%, compared to 2024. Interest expense decreased $78.7 million as a result of lower interest rates under our senior unsecured notes compared to the interest rates under our prior credit agreement. The decrease was also due to a loss on extinguishment of debt of $28.4 million in the prior year period.
In 2024, interest expense and loss on settlement of debt increased by $43.7 million, or 16%, compared to 2023. This increase was due to loss on extinguishment of debt of $28.4 million in 2024. In addition, the prior year period included a net gain of $15.8 million related to interest rate swaps.
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Other income, net

Year Ended December 31, 2024 to 2025
% change 2023 to 2024
% change
2025 2024 2023
(in thousands, except percentages)
Other income, net $ 8,012  $ 18,196  $ 2,699  (56) % **
Percentage of revenue —  % 1  % —  %

** Not meaningful

In 2025, other income, net decreased by $10.2 million compared to 2024, due primarily to a net fair value remeasurement loss of $34.8 million related to our investments in non-marketable equity securities in the current period and an increase in net foreign currency losses of $2.5 million. This is partially offset by an increase in interest income of $18.2 million driven by an increase in cash and a decrease in certain third-party costs of $6.6 million incurred in connection with the refinancing of term loans in the prior year period.
In 2024, other income, net increased by $15.5 million compared to 2023. The increase was primarily due to the loss on fair value remeasurement of $24.2 million from the impairment of non-marketable equity securities in the prior year period, partially offset by a decrease in interest income of $9.1 million due to a reduction in average cash balances held during the period.
Provision for Income Taxes

Year Ended December 31, 2024 to 2025
% change 2023 to 2024
% change
2025 2024 2023
(in thousands, except percentages)
Provision for income taxes
$ 519,715  $ 22,419  $ 43,776  ** **
Percentage of revenue 9  % 1  % 2  %

** Not meaningful

In 2025, provision for income taxes increased by $497.3 million compared to 2024. The increase in tax provision was primarily driven by higher pre-tax book income, global minimum tax, a decrease in stock-based compensation benefits, and a decrease in research and development credits, partially offset by an increase in deduction benefits related to foreign-derived intangible income.
In 2024, provision for income taxes decreased by $21.4 million compared to 2023. The decrease in tax provision was primarily driven by an increase in stock-based compensation benefits, an increase in research and development credits, and a favorable shift in jurisdictional mix partially offset by higher pre-tax book income.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. We evaluated the provisions of OBBBA effective in 2025 and its impact on the consolidated financial statements was immaterial.
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Liquidity and Capital Resources
As of December 31, 2025, we had cash and cash equivalents of $2.5 billion, consisting primarily of cash held in checking and interest-bearing deposit accounts, as well as investments in money market funds . We believe that our existing cash and cash equivalents, cash flows expected to be generated by our operations, and, if necessary, our borrowing capacity under our 2024 Credit Agreement that provides for a $1.0 billion unsecured revolving credit facility, would be sufficient to satisfy our anticipated working capital and capital expenditures needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth rate; sales and marketing activities; timing and extent of spending to support our research and development efforts; capital expenditures to purchase hardware and software; our continued need to invest in our IT infrastructure to support our growth; and the volume and timing of our stock repurchases. In addition, we may enter into additional strategic investments in teams and technologies, including intellectual property rights, which could increase our cash requirements. As a result of these and other factors, we may be required to seek additional equity or debt financing sooner than we currently anticipate, or we may opportunistically seek additional financing. See the section titled “Risk Factors—Risks Related to Financial and Accounting Matters” for more information regarding risks related to liquidity and capital resources.
The following table summarizes our cash flows for the periods indicated (all periods include cash flows from continuing and discontinued operations):

Year Ended December 31,
2025 2024 2023
(in thousands)
Net cash provided by operating activities $ 3,971,094  $ 2,099,011  $ 1,061,510 
Net cash provided by (used in) investing activities $ 358,428  $ (106,754) $ (77,829)
Net cash used in financing activities $ (2,593,069) $ (1,749,844) $ (1,562,791)

Operating Activities
Net cash provided by operating activities was $4.0 billion for 2025, primarily consisting of $3.3 billion of net income, adjusted for certain non-cash items, such as $210.4 million of stock-based compensation, $194.8 million of amortization, depreciation and write-offs, $188.9 million of goodwill impairment, $50.0 million of impairment of non-marketable equity securities, and a net increase in the operating assets and liabilities of $77.9 million, partially offset by a gain from the divestiture of our Apps business, net of transaction costs, of $106.2 million.
Net cash provided by operating activities was $2.1 billion for 2024, primarily consisting of $1.6 billion of net income, adjusted for certain non-cash items, such as $448.7 million of amortization, depreciation and write-offs, and $369.4 million of stock-based compensation, partially offset by a net decrease in the operating assets and liabilities of $349.5 million.
The improvement in cash flows from operating activities during 2025 compared to 2024 was primarily due to an increase in cash collection from our customers driven by revenue growth and a decrease of interest payments on debt as a result of lower interest rates, partially offset by higher cash operating expenses primarily associated with operating our network infrastructure, as well as higher income tax payments due to revenue growth.
Investing Activities
Net cash provided by investing activities was $358.4 million for 2025, primarily driven by $407.3 million in proceeds from the divestiture of our Apps business, net of cash divested, which were partially offset by $28.3 million related to purchase of intangible assets and $20.2 million in purchases of non-marketable equity securities.
Net cash used in investing activities was $106.8 million for 2024, primarily consisting of $77.0 million in purchases of non-marketable equity securities and $25.6 million related to purchase of intangible assets.
Financing Activities
Net cash used in financing activities was $2.6 billion for 2025, primarily driven by $2.2 billion in stock repurchases under our share repurchase program and $392.4 million in payments for withholding taxes related to the net share settlement of equity awards.
Net cash used in financing activities was $1.7 billion for 2024, primarily consisting of $4.2 billion in principal repayments of debt, $1.1 billion in payments for withholding taxes related to net share settlement of equity awards, and $981.3 million of stock repurchases, partially offset by $4.6 billion of proceeds from issuance of debt.

Credit Agreement
Our unsecured revolving credit facility under the 2024 Credit Agreement provides for up to $1.0 billion of borrowing capacity and matures on December 5, 2029, with the option for two one-year extensions, subject to the terms of the agreement. In March 2025, we borrowed $200.0 million under the facility to fund share repurchases and we repaid $100.0 million in April 2025 and the remaining $100.0 million in May 2025. As of December 31, 2025, $1.0 billion remained available for borrowing under the facility. For additional information, see Note 9—Debt to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
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Long-term Debt
As of December 31, 2025, we had $3.6 billion of senior unsecured notes outstanding, issued in multiple series that mature between 2029 and 2054 and bear fixed annual interest rates ranging from 5.125% to 5.950%. Interest is payable semi-annually in arrears on June 1 and December 1 of each year, beginning June 1, 2025. For additional information, see Note 9—Debt to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Stock Repurchase Program
In 2025, we repurchased and retired 5.5 million shares of Class A common stock for $2.2 billion and our board of directors authorized an incremental increase to our stock repurchase program totaling $3.2 billion. As of December 31, 2025, $3.3 billion remained available for repurchases under the program. The program has no expiration date, does not obligate us to repurchase any specific amount of stock, and may be modified, suspended, or terminated at any time at our discretion. For additional information, see Note 10—Equity to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Contractual Obligations
As of December 31, 2025, we had non-cancelable purchase obligations of $702.8 million, primarily related to an agreement for third-party cloud computing services, of which $398.5 million is payable within twelve months. For additional information, see Note 6—Commitments and Contingencies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
As of December 31, 2025, we had non-cancelable lease payment obligations of $173.9 million, consisting of $140.3 million for server and network equipment leases and $33.7 million for office leases, of which $37.7 million is payable within twelve months. For additional information, see Note 8—Leases to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Taxes
As of December 31, 2025, our long-term income tax liabilities include $64.2 million related to the uncertain tax positions. Due to uncertainties in the timing of potential tax audits, the timing of the resolution of these positions is uncertain and we are unable to make a reasonable estimate of the timing of payments in individual years particularly beyond 12 months.

Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. On an ongoing basis, we evaluate our estimates based on assumptions that are believed to be reasonable under the circumstances. These estimates are inherently subject to judgment and actual results could differ materially from those estimates.
An accounting estimate is considered critical if it involves significant subjectivity and judgment, and if changes in the estimate have had or are reasonably likely to have a material effect on our consolidated financial statements. We believe the following estimates are subject to a greater degree of judgment and complexity and have the greatest potential impact on our consolidated financial statements. For additional information on all of our significant accounting policies, see Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Goodwill and Intangible Assets
We assess goodwill for impairment at the reporting unit level annually during the fourth quarter, or more frequently if events or changes in circumstances indicate potential impairment. Similarly, we evaluate intangible assets for impairment at the asset group level whenever indications suggest that their carrying amounts may not be recoverable. These impairment assessments involve both qualitative and quantitative evaluations.
The qualitative evaluation considers factors such as financial performance, macroeconomic conditions, industry trends, and other relevant events that may impact a reporting unit or asset group. If qualitative assessments suggest a potential impairment, we proceed with a quantitative assessment, which involves significant estimates and assumptions including projected future cash flows, risk-adjusted discount rates, economic and market conditions, and appropriate market comparables, among others. Additionally, we apply judgment and assumptions in allocating shared assets and liabilities to determine the carrying values of each reporting unit or asset group. Furthermore, we review and reassess the estimated remaining useful lives of intangible assets if significant events or changes in circumstances indicate a need to revise the remaining amortization periods.
Equity Method Investments
We account for investments under the equity method when we have the ability to exercise significant influence, but not control, over the financial and operating policies of an investee, unless the fair value option is elected. Equity method investments are initially recorded at cost and subsequently adjusted for our proportionate share of the investee’s net income or loss and the amortization of basis differences arising from the excess of investment cost over our share of the investee’s
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underlying net assets. We record our share of the investee’s results and related basis difference amortization one quarter in arrears in other income (expense), net in our consolidated statements of operations.
We evaluate equity method investments for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable and record an impairment loss when a decline in fair value below carrying value is determined to be other than temporary. Indicators of potential impairment include, among other factors, the investee’s financial results and operating trends, implied values from transactions involving the investee’s securities, the severity and duration of any decline in value, and our intent and ability to hold the investment. If an impairment is determined to be other than temporary, we determine the investment’s fair value and record an impairment charge for the difference between fair value and carrying value. Determining fair value, particularly for investments in privately held companies, requires significant judgment and the use of estimates and assumptions. Changes in these estimates and assumptions could affect the fair value determination and the amount of any impairment charges.
Stock-Based Compensation
We measure and recognize stock-based compensation for share-based awards, primarily including restricted stock units ("RSUs"), performance-based RSUs with both service and market-based conditions, stock options and stock purchase rights granted under the Employee Stock Purchase Plan, based on the grant-date fair value of the awards. To estimate the grant-date fair value, we may use different valuation models such as the Black-Scholes option valuation model or the Monte Carlo valuation model that require various assumptions including, among others, the expected stock price volatility, the risk-free interest rate, the expected dividend yield, the discount for awards subject to post-vesting restrictions.
Income Taxes
Significant management judgment is required in determining our provision for income taxes, including the determination of deferred tax assets and liabilities. We consider both positive and negative evidence regarding the realizability of deferred tax assets in assessing the need for valuation allowances, and if necessary, adjust the valuation allowance so that the net deferred tax assets are recorded only to the extent we conclude it is more likely than not that these deferred tax assets will be realized.
In evaluating the exposure associated with various tax filing positions, we accrue an income tax liability when such positions do not meet the more-likely-than-not threshold for recognition. We consider changes in facts and circumstances, such as new regulations or recent judicial opinions, as well as the status of audit activities by taxing authorities.
While we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes and the effective tax rate in the period in which such determination is made.

Recent Accounting Pronouncements
See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position included in this Annual Report on 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks in the ordinary course of our business, which primarily relate to fluctuations in interest rates and foreign exchange.
Interest Rate Fluctuation Risk
As of December 31, 2025, we had unrestricted cash and cash equivalents of $2.5 billion. A hypothetical 100 basis point increase in interest rates would not have a material impact on our financial condition or results of operations due to the short-term nature of our cash equivalents.
The Senior Notes have fixed annual interest rates, and therefore we do not have economic interest rate exposure on these debt obligations. However, the fair values of the Senior Notes are exposed to interest rate risk. Generally, the fair values of the Senior Notes will increase as interest rates fall and decrease as interest rates rise.
Future borrowings under our 2024 Credit Agreement will bear interest, which varies based on the underlying index rates. Because the interest rates applicable to borrowings under the 2024 Credit Agreement are variable, we are exposed to market risk from changes in the underlying index rates, which affect our cost of borrowing.
For additional information, see Note 9—Debt to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Foreign Currency Exchange Risk
Translation Exposure
We are exposed to foreign exchange rate fluctuations as we translate the financial statements of our foreign subsidiaries into U.S. dollars in consolidation. If there is a change in foreign currency exchange rates, the translating adjustments resulting
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from the conversion of our foreign subsidiaries’ financial statements into U.S. dollars would result in a gain or loss recorded as a component of accumulated other comprehensive income (loss), which is part of stockholders’ equity. We are also exposed to fluctuations in our net income as a result of transaction gains or losses related to remeasuring monetary asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded. Accordingly, changes in exchange rates may negatively affect our future revenue and other results of operations as expressed in U.S. dollars. At this time, we do not, but we may in the future, enter into derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk. Foreign currency transaction gains and losses were not material for the year ended December 31, 2025, 2024, or 2023.
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Item 8. Financial Statements and Supplementary Data

APPLOVIN CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34 )
50

Consolidated Balance Sheets
53

Consolidated Statements of Operations
54

Consolidated Statements of Comprehensive Income
55

Consolidated Statements of Stockholders’ Equity
56

Consolidated Statements of Cash Flows
57

Notes to Consolidated Financial Statements
59

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of AppLovin Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of AppLovin Corporation and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 19, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Performance-based Restricted Stock Units - Refer to Note 2 and Note 11 to the financial statements
Critical Audit Matter Description
In October 2025, the Company granted performance-based restricted stock units ("PSUs") which are eligible to vest based on the achievement of certain market capitalization targets and the satisfaction of service conditions. The grant date fair value of the PSUs was $410.5 million.
A Monte Carlo simulation model was utilized to determine the grant date fair value. The Monte Carlo simulation model utilized the market capitalization of the Company on the date of grant, expected volatility, risk-free interest rate, discount for awards subject to post-vesting restrictions, and dividend yield to calculate the grant date fair value. The valuation assumptions used in the Monte Carlo simulation model had a significant effect on the grant date fair value of the PSUs.
Given the level of judgement involved by management in developing certain of the valuation assumptions and their use of a specialist to determine the grant date fair value of the PSUs and the derived service period, our audit procedures required a high degree of auditor judgement and increased extent of effort, including the need to involve our fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the valuation of the PSUs included the following, among others:
◦ We tested the design and operating effectiveness of the Company’s internal controls over the determination of the grant date fair value of the PSUs.
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◦ We inquired with management regarding the valuation assumptions used in the determination of the grant date fair value of the PSUs.
◦ We tested the accuracy of underlying data inputs in the Monte Carlo simulation model, such as grant date, quantity of awards granted, and vesting conditions, among others, back to source documents, such as PSU grant agreements.
◦ We evaluated the qualifications of the Company's specialists by assessing their certifications and determining whether they meet the qualifications necessary to perform independent PSU valuations.
◦ With the assistance of our fair value specialists, we evaluated management’s valuation of the PSUs and the derived service period by:
I. Evaluating the Monte Carlo simulation model methodology and the reasonableness of the valuation assumptions, including cost of equity, expected volatility, risk-free interest rate, discount for awards subject to post-vesting restrictions, and dividend yield.
II. Independently developing a Monte Carlo simulation model using independently calculated valuation assumptions.

/s/ DELOITTE & TOUCHE LLP
San Jose, California
February 19, 2026

We have served as the Company's auditor since 2015.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of AppLovin Corporation
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of AppLovin Corporation and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 19, 2026, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP
San Jose, California
February 19, 2026

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AppLovin Corporation
Consolidated Balance Sheets
(In thousands, except per share data)

As of December 31,

2025 2024
Assets
Current assets:
Cash and cash equivalents $ 2,487,096   $ 697,030  
Accounts receivable, net 1,819,366   1,283,335  
Prepaid expenses and other current assets 124,330   140,470  
Current assets of discontinued operations —   191,355  
Total current assets 4,430,792   2,312,190  
Property and equipment, net 122,445   159,970  
Operating lease right-of-use assets 25,457   36,473  
Goodwill 1,539,986   1,457,685  
Intangible assets, net 396,714   472,851  
Equity method investments
287,666   —  
Other assets 456,550   492,841  
Non-current assets of discontinued operations —   937,249  
Total assets $ 7,259,610   $ 5,869,259  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 746,977   $ 504,302  
Accrued and other current liabilities
572,868   401,531  
Operating lease liabilities, current 13,943   14,526  
Current liabilities of discontinued operations —   137,113  
Total current liabilities 1,333,788   1,057,472  
Long-term debt 3,512,987   3,508,983  
Operating lease liabilities, non-current 17,811   31,101  
Other non-current liabilities 260,353   180,471  
Non-current liabilities of discontinued operations —   1,414  
Total liabilities 5,124,939   4,779,441  
Commitments and contingencies (Note 6)

Stockholders’ equity:
Preferred stock, $ 0.00003 par value— 100,000 shares authorized, no shares issued and outstanding as of December 31, 2025 and 2024
—   —  
Class A, Class B, and Class C Common Stock, $ 0.00003 par value— 1,850,000 (Class A 1,500,000 , Class B 200,000 , Class C 150,000 ) shares authorized, 338,313 (Class A 307,955 , Class B 30,358 , Class C nil ) and 340,042 (Class A 309,353 , Class B 30,689 , Class C nil ) shares issued and outstanding as of December 31, 2025 and 2024, respectively
11   11  
Additional paid-in capital 446,550   593,699  
Accumulated other comprehensive loss ( 46,987 ) ( 103,096 )
Retained earnings 1,735,097   599,204  
Total stockholders’ equity 2,134,671   1,089,818  
Total liabilities and stockholders’ equity $ 7,259,610   $ 5,869,259  

See Accompanying Notes to Consolidated Financial Statements.
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AppLovin Corporation
Consolidated Statements of Operations
(In thousands, except per share data)

Year Ended December 31,
2025 2024 2023
Revenue $ 5,480,717   $ 3,224,058   $ 1,841,762  
Costs and expenses:
Cost of revenue 665,140   520,613   356,613  
Sales and marketing 203,651   252,863   228,025  
Research and development 226,510   374,710   333,781  
General and administrative 233,502   164,916   150,932  
Total costs and expenses 1,328,803   1,313,102   1,069,351  
Income from operations
4,151,914   1,910,956   772,411  
Other income (expense):

Interest expense and loss on settlement of debt
( 207,016 ) ( 317,209 ) ( 273,508 )
Other income, net
8,012   18,196   2,699  
Total other expense, net
( 199,004 ) ( 299,013 ) ( 270,809 )
Income before income taxes
3,952,910   1,611,943   501,602  
Provision for income taxes
519,715   22,419   43,776  
Net income from continuing operations
3,433,195   1,589,524   457,826  
Loss from discontinued operations, net of income taxes
( 99,444 ) ( 9,748 ) ( 101,115 )
Net income $ 3,333,751   $ 1,579,776   $ 356,711  

Net income (loss) per share attributed to Class A and Class B common stockholders - Basic:
Continuing operations $ 10.13   $ 4.71   $ 1.29  
Discontinued operations
( 0.29 ) ( 0.03 ) ( 0.28 )
Basic net income per share
$ 9.84   $ 4.68   $ 1.01  

Net income (loss) per share attributed to Class A and Class B common stockholders - Diluted:

Continuing operations $ 10.04   $ 4.56   $ 1.26  
Discontinued operations
( 0.29 ) ( 0.03 ) ( 0.28 )
Diluted net income per share
$ 9.75   $ 4.53   $ 0.98  

Weighted-average common shares used to compute net income (loss) per share attributable to Class A and Class B common stockholders:
Basic 338,781   336,922   351,952  
Diluted 341,970   347,808   362,589  

See Accompanying Notes to Consolidated Financial Statements.
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AppLovin Corporation
Consolidated Statements of Comprehensive Income
(In thousands)

Year Ended December 31,
2025 2024 2023
Net income
$ 3,333,751   $ 1,579,776   $ 356,711  
Other comprehensive income (loss):

Foreign currency translation adjustment, net of tax
56,109   ( 37,822 ) 18,108  
Other comprehensive income (loss), net of tax
56,109   ( 37,822 ) 18,108  
Comprehensive income
$ 3,389,860   $ 1,541,954   $ 374,819  

See Accompanying Notes to Consolidated Financial Statements.
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AppLovin Corporation
Consolidated Statements of Stockholders’ Equity
(In thousands)

Class A and Class B
Common Stock Additional
Paid-In Capital Accumulated
Other
Comprehensive
Loss
Retained Earnings (Accumulated
Deficit) Total
Stockholders'
Equity
Shares Amount
Balances as of December 31, 2022 373,874 $ 11   $ 3,155,748   $ ( 83,382 ) $ ( 1,169,700 ) $ 1,902,677  
Stock issued in connection with equity awards 20,320 —  25,998   —  —  25,998  
Shares withheld related to net share settlement of equity awards ( 7,642 ) —  ( 246,435 ) —  —  ( 246,435 )
Repurchase of Class A common stock ( 46,665 ) —  ( 1,153,593 ) —  —  ( 1,153,593 )
Stock-based compensation — —  352,863   —  —  352,863  
Other comprehensive income, net of tax — —  —  18,108   —  18,108  
Net income — —  —  —  356,711   356,711  
Balances as of December 31, 2023 339,887   $ 11   $ 2,134,581   $ ( 65,274 ) $ ( 812,989 ) $ 1,256,329  
Stock issued in connection with equity awards 25,821   —  55,596   —  —  55,596  
Shares withheld related to net share settlement of equity awards ( 9,585 ) —  ( 1,152,131 ) —  —  ( 1,152,131 )
Repurchase of Class A common stock ( 16,081 ) —  ( 813,714 ) —  ( 167,583 ) ( 981,297 )
Stock-based compensation —  —  369,367   —  —  369,367  
Other comprehensive loss, net of tax —  —  —  ( 37,822 ) —  ( 37,822 )
Net income —  —  —  —  1,579,776   1,579,776  
Balances as of December 31, 2024 340,042   $ 11   $ 593,699   $ ( 103,096 ) $ 599,204   $ 1,089,818  
Stock issued in connection with equity awards 4,672 —  25,329   —  —  25,329  
Shares withheld related to net share settlement of equity awards ( 890 ) —  ( 382,899 ) —  —  ( 382,899 )
Repurchase of Class A common stock ( 5,511 ) —  —  —  ( 2,197,858 ) ( 2,197,858 )
Stock-based compensation — —  210,421   —  —  210,421  
Other comprehensive income, net of tax — —  —  56,109   —  56,109  
Net income — —  —  —  3,333,751   3,333,751  
Balances as of December 31, 2025 338,313   $ 11   $ 446,550   $ ( 46,987 ) $ 1,735,097   $ 2,134,671  

See Accompanying Notes to Consolidated Financial Statements.
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AppLovin Corporation
Consolidated Statements of Cash Flows
(In thousands)

Year Ended December 31,
2025 2024 2023
Operating Activities
Net income $ 3,333,751   $ 1,579,776   $ 356,711  
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization, depreciation and write-offs 194,778   448,680   489,008  
Goodwill impairment
188,943   —   —  
Stock-based compensation, excluding cash-settled awards 210,421   369,367   363,107  
Gain on divestiture, net of transaction costs
( 106,229 ) —   —  
Impairment of investments 50,000   —   27,953  
Loss on settlement of debt —   28,375   4,337  
Change in operating right-of-use assets 12,295   12,689   17,842  
Other 9,213   9,663   11,226  
Changes in operating assets and liabilities:
Accounts receivable ( 542,219 ) ( 467,028 ) ( 261,279 )
Prepaid expenses and other assets 134,658   ( 185,331 ) ( 133,968 )
Accounts payable 232,486   189,585   98,574  
Operating lease liabilities ( 15,229 ) ( 14,106 ) ( 18,612 )
Accrued and other liabilities 268,226   127,341   106,611  
Net cash provided by operating activities 3,971,094   2,099,011   1,061,510  
Investing Activities
Purchase of intangible assets ( 28,318 ) ( 25,553 ) ( 63,899 )
Purchase of non-marketable equity securities ( 20,178 ) ( 76,983 ) ( 17,934 )
Proceeds from divestiture, net of cash divested 407,297   —   —  
Other investing activities ( 373 ) ( 4,218 ) 4,004  
Net cash provided by (used in) investing activities 358,428   ( 106,754 ) ( 77,829 )
Financing Activities
Repurchases of common stock ( 2,191,944 ) ( 981,297 ) ( 1,153,593 )
Payments of withholding taxes related to net share settlement ( 392,410 ) ( 1,143,525 ) ( 246,435 )
Principal repayments of debt ( 200,000 ) ( 4,225,223 ) ( 497,994 )
Payments of deferred acquisition costs —   —   ( 33,903 )
Principal payments of finance leases ( 18,669 ) ( 20,875 ) ( 20,170 )
Payments of licensed asset obligation ( 13,532 ) —   ( 27,110 )
Payments of debt issuance cost ( 1,843 ) ( 35,563 ) ( 4,655 )
Proceeds from issuance of debt 200,000   4,614,841   395,281  
Proceeds from issuance of common stock upon exercise of stock options and purchase of ESPP shares 25,329   41,798   25,788  
Net cash used in financing activities ( 2,593,069 ) ( 1,749,844 ) ( 1,562,791 )
Effect of foreign exchange rate on cash and cash equivalents 9,232   ( 3,154 ) 778  
Net increase in cash and cash equivalents, including cash classified within current assets of discontinued operations 1,745,685   239,259   ( 578,332 )
Less: net decrease in cash classified within current assets of discontinued operations ( 44,381 ) —   —  
Net (decrease) increase in cash and cash equivalents 1,790,066   239,259   ( 578,332 )
Cash and cash equivalents at beginning of the period 697,030   502,152   1,080,484  
Cash and cash equivalents at end of the period $ 2,487,096   $ 741,411   $ 502,152  
    

See Accompanying Notes to Consolidated Financial Statements.
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AppLovin Corporation
Consolidated Statement of Cash Flows (Continued)
(In thousands)
Year Ended December 31,
2025 2024 2023
Supplemental non-cash investing and financing activities disclosures:
Non-cash consideration received from divestiture
$ 285,000   $ —   $ —  
Right-of-use assets obtained in exchange for lease obligations, net of modifications $ ( 28,570 ) $ 26,325   $ 119,911  
Accrued withholding taxes related to net share settlement of restricted stock units $ —   $ 8,606   $ —  
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net of refunds $ 194,843   $ 67,332   $ 75,433  
Cash paid for interest $ 198,788   $ 270,615   $ 248,828  

See Accompanying Notes to Consolidated Financial Statements.
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APPLOVIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business
AppLovin Corporation (the “Company” or “AppLovin”) was incorporated in the state of Delaware on July 18, 2011. The Company is a leader in the advertising industry providing end-to-end advertising solutions that allow businesses to reach, monetize and grow their global audiences.
The Company is headquartered in Palo Alto, California, and has several operating locations in the U.S. as well as various international office locations in North America, Asia, and Europe.

2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation — The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP"). Consolidated financial statements include accounts and operations of the Company and its wholly owned subsidiaries. In accordance with the provisions of Accounting Standards Codification ("ASC") 810, Consolidation , the Company is also required to consolidate any variable interest entities ("VIE") when it is the primary beneficiary. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company evaluates its relationships with all VIEs on an ongoing basis. All intercompany transactions and balances have been eliminated upon consolidation.
Certain prior period amounts reported in the Company's consolidated financial statements and accompanying notes have been reclassified to conform to the current period presentation where applicable.
Use of Estimates —The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. The Company bases its estimates on assumptions that are believed to be reasonable under the circumstances. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to valuation of long-lived assets and their associated estimated useful lives, valuation of goodwill, valuation of non-marketable equity securities, valuation of equity method investments, income taxes, stock-based compensation, and other contingent liabilities. These estimates are inherently subject to judgment and actual results could differ materially from those estimates.
Apps Business Divestiture —On May 7, 2025, the Company and its subsidiaries Morocco, Inc. and AppLovin GmbH entered into a purchase agreement with Tripledot and its subsidiaries Eton Games Inc. and Tripledot Group Holdings Limited to sell the equity interests of certain wholly-owned subsidiaries that operated the Company’s Apps business (the “Apps Business”). The sale was completed on June 30, 2025. The Company determined that the divestiture of the Apps Business met the criteria for presentation as discontinued operations in the second quarter of the year ended December 31, 2025, as it represented a strategic shift that had a major impact on the Company’s operations and financial results. Accordingly, the results of the Apps Business, including the gain on divestiture, are reported as discontinued operations in the consolidated statements of operations, and as such, have been excluded from both continuing operations and segment results for all periods presented. Further, the assets and liabilities of the Apps Business were reclassified as assets and liabilities of discontinued operations in the consolidated balance sheets as of December 31, 2024. The consolidated statements of cash flows continue to be presented on a consolidated basis for both continuing and discontinued operations. Certain costs previously allocated to the Apps Business for segment reporting purposes do not meet the criteria for classification within discontinued operations, and as such, these costs were reallocated to continuing operations. In addition, historical intercompany balances and transactions between the Company and the divested Apps Business that were eliminated in consolidation were not included in the results of either continuing or discontinued operations. Unless otherwise indicated, all references in the notes to the consolidated financial statements relate to continuing operations. See Note 3—Discontinued Operations for additional information.
Segment Reporting — Following the divestiture of the Apps Business, the Company has determined that it currently operates as a single operating and reportable segment at the consolidated level. Prior period segment results and related disclosures have been recast to conform to the current period segment presentation. See Note 14 — Segment and Geographic Information for further details.
Equity Method Investments —The Company accounts for investments under the equity method when it has the ability to exercise significant influence, but not control, over the financial and operating policies of an investee, unless the fair value option is elected. Equity method investments are initially recorded at cost and subsequently adjusted for the Company’s proportionate share of the investee’s net income or loss and the amortization of basis differences resulting from the excess of the investment cost over the Company’s share of the investee’s underlying net assets. The Company records its share of the investee’s results and any related basis difference amortization one quarter in arrears in other income (expense), net in the consolidated statements of operations. The Company evaluates equity method investments for impairment on an ongoing basis and records an impairment loss when a decline in fair value below carrying value is determined to be other than temporary.
In connection with the sale of its Apps Business, the Company received 596.9  million ordinary shares of Tripledot,
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representing approximately a 22 % ownership interest, with an estimated fair value of $ 285.0  million at the acquisition date. The Company accounts for this investment under the equity method. The Company’s share of Tripledot’s income and related basis difference amortization was not material for the year ended December 31, 2025. See Note 3—Discontinued Operations and Note 15—Related Party Transactions for additional information.
Revenue from Contracts with Customers —The Company generates substantially all of its revenue from Axon Ads Manager, the Company's AI-powered advertising solution that matches advertiser demand with publisher supply of advertising inventory through auctions at vast scale and microsecond-level speeds. The Company’s performance obligation is to provide customers with access to its advertising solution, which facilitates the advertisers’ purchase of advertising inventory from publishers on an impression or action basis.
The Company does not control the advertising inventory prior to its transfer to the advertiser because it does not have the substantive ability to direct the use of, or obtain substantially all of the remaining benefits from, the advertising inventory. In addition, the Company is not primarily responsible for fulfillment. Therefore, the Company is an agent in these arrangements and presents revenue net of advertising inventory costs.
The transaction price is determined dynamically based on advertisers’ campaign goals, less consideration paid or payable to publishers. Revenue is recognized for impression-based arrangements when an ad impression is delivered; for action-based arrangements, when the specified action (such as a click or install) occurs.
The Company’s terms and conditions generally stipulate payment terms of 30 days after the end of the month. Substantially all of the Company's contracts with customers are cancelable at any time.
Revenue from other services was not material for any period presented.
The Company presents taxes collected from customers and remitted to governmental authorities on a net basis.
Disaggregation of Revenue — Revenue disaggregated by geography, based on user location, consisted of the following (in thousands):

Year Ended December 31,

2025 2024 2023
United States $ 2,827,248   $ 1,726,202   $ 1,015,897  
Rest of the world
2,653,469   1,497,856   825,865  
Total revenue
$ 5,480,717   $ 3,224,058   $ 1,841,762  

Cash and Cash Equivalents —Cash and cash equivalents primarily consist of cash held in checking and interest-bearing deposit accounts as well as investments in money market funds. The Company classifies highly liquid investments with original maturities of 90 days or less from the date of purchase as cash equivalents.
Non-Marketable Equity Investments —Non-marketable equity securities are investments without readily determinable fair values. For investments that qualify for the net asset value (“NAV”) practical expedient, the Company estimates fair value based on their NAV. All other non-marketable equity securities are accounted for under the measurement alternative and recorded at cost, less any impairment, plus or minus changes resulting from qualifying observable price changes. An impairment loss is recognized when events or circumstances indicate a decline in value. Non-marketable equity securities are included in other assets in the consolidated balance sheets, and changes in carrying amount are included in other income (expense) net in the consolidated statements of operations. See Note 4—Financial Instruments and Fair Value Measurements for additional information.
Accounts Receivable, net —The Company records accounts receivable at the invoiced amount, net of allowance for potentially uncollectible amounts. The Company reviews accounts receivable periodically and estimates the allowance based on known troubled accounts, historical experience, and other currently available evidence. As of December 31, 2025 and 2024, the allowance for uncollectible amounts was not material.
Fair Value of Financial Instruments —The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows:
Level 1 —Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 —Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly.
Level 3 —Unobservable inputs of which there is little or no market data, which require the Company to develop its own assumptions.
Financial assets measured at fair value on a recurring basis include investments in money market funds and non-marketable equity securities in private equity funds measured using the NAV practical expedient. Financial assets measured at fair value on a nonrecurring basis include non-marketable equity securities in privately held companies. All other financial assets
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and liabilities are carried at cost, with fair value disclosed when required. Refer to Note 4—Financial Instruments and Fair Value Measurements and Note 9—Debt for additional information.
Concentration of Credit Risk and Uncertainties —The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, and accounts receivable. The Company maintains its cash and cash equivalents with large, reputable financial institutions in amounts that exceed Federal Deposit Insurance Corporation limits.
The Company performs ongoing credit evaluations of its customers and generally requires no collateral for its accounts receivable. No individual customer represented 10% or more of the Company’s accounts receivable, net as of December 31, 2025 or 2024. No individual customer represented 10% or more of the Company’s total revenue during the years ended December 31, 2025, 2024, or 2023.
Property and Equipment, net —Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is as follows:

Useful Life
Leasehold improvements Over the shorter of useful life (up to 10 years) or lease term

Software and licenses 3 years

Furniture and fixtures 3 - 5 years

Computer equipment 3 - 5 years

When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in operations in the period realized. Maintenance and repairs are charged to operations as incurred.
Leases — Leases consist primarily of operating leases for office facilities and finance leases for servers and networking equipment. The Company determines if an arrangement is or contains a lease at inception. The Company accounts for lease and non-lease components as a single lease component and does not recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less. Payments under the Company's lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, primarily including common-area maintenance, utilities, taxes or other operating costs, which are expensed as incurred and not included in the lease right-of-use assets and liabilities.
Operating and finance lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist primarily of the fixed payments under the arrangement, less any lease incentives. The Company generally uses an incremental borrowing rate estimated based on the information available at the lease commencement date or on the date of lease modification, if applicable, to determine the present value of lease payments unless the implicit rate is readily determinable. The Company estimates its incremental borrowing rate based on the rate of interest it would have to pay to borrow on a collateralized basis with an equal lease payment amount, over a similar term, and in a similar economic environment. Generally, the lease term is based on non-cancelable lease term when determining the lease assets and liabilities. The lease terms may include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current on the Company's consolidated balance sheets. Finance leases are included in property and equipment, net, accrued and other current liabilities, and other non-current liabilities on the Company's consolidated balance sheets.
Operating lease costs are recognized on a straight-line basis over the lease terms. Finance lease assets are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease terms.
Acquisitions —The Company applies a screen test to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets to determine whether a transaction is accounted for as an asset acquisition or business combination.
For transactions accounted for as business combinations, the Company allocates the fair value of acquisition consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, except for revenue contracts acquired, which are recognized in accordance with the Company's revenue recognition policy, based on their estimated fair value, with excess recorded as goodwill. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Acquisition-related costs are expensed as incurred. There were no business combinations during the years ended December 31, 2025 or 2024.
For transactions accounted for as asset acquisitions, the cost, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values. The Company generally includes contingent consideration in the cost of the assets acquired only when the uncertainty is resolved. The Company amortizes contingent consideration adjustments to the cost
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of the acquired assets prospectively using the straight-line method over the remaining useful life of the assets. No goodwill is recognized in asset acquisitions. There were no asset acquisitions during the years ended December 31, 2025 or 2024.
Software Development Costs —The Company incurs development costs related to internal-use software. Development costs meet the criteria for capitalization once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. S oftware development costs that meet the capitalization criteria were not material for any period presented.
Goodwill —The Company allocates goodwill to reporting units based on the expected benefit from the business combination. In the event of changes in reporting units, the Company reassigns goodwill using a relative fair value allocation approach. The Company tests goodwill for impairment at the reporting unit level on an annual basis during the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. A goodwill impairment is recognized for the amount that the carrying value of the reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. Refer to Note 3 — Discontinued Operations and Note 7 — Goodwill and Intangible Assets, Net for additional information.
Intangible Assets —Intangible assets are carried at cost and amortized on a straight-line basis over their estimated useful lives. The Company determines the appropriate useful life of its intangible assets based on their expected cash flows.
Impairment of Long-Lived Assets —The Company reviews long-lived assets that are held and used for impairment whenever events or changes in circumstances indicate the carrying value of an asset or asset group may not be recoverable. If such indicators are present, the Company assesses the recoverability of the asset or asset group by comparing its carrying value to the undiscounted future cash flows expected to be generated by the asset or asset group. If the future undiscounted cash flows are less than the carrying value of the asset or asset group, an impairment charge is recognized by the amount by which the carrying value of the asset or asset group exceeds its estimated fair value. Impairment related to long-lived assets that are held and used was not material for any period presented.
Stock-Based Compensation —The Company measures and recognizes stock-based compensation for share-based awards, primarily including restricted stock units ("RSUs"), p erformance-based RSUs (“PSUs”) with both service and market-based conditions, stock options and stock purchase rights granted under the Employee Stock Purchase Plan ("ESPP"), based on the grant-date fair value of the awards. The Company accounts for forfeitures for all awards as they occur.
The fair value of RSUs is based on the closing price of the Company's Class A common stock on the grant date, with stock-based compensation recognized on a straight-line basis over the requisite service period, which is generally one or four years.
The fair value of PSUs with both service and market conditions is estimated using the Monte Carlo simulation pricing model, which incorporates various assumptions including the expected stock price volatility, the risk-free interest rate, the expected dividend yield and the discount for awards subject to post-vesting restrictions, with stock-based compensation recognized using the accelerated attribution method over the derived service period, regardless of whether the market conditions are achieved. If the market conditions are achieved earlier than the derived service period, the Company adjusts its stock-based compensation to reflect the cumulative expense associated with the vested awards.
The fair value of stock options and purchase rights granted under the ESPP is estimated using the Black-Scholes option-pricing model, which incorporates various assumptions including the expected term, the expected stock price volatility, the risk-free interest rate, and the expected dividend yield, with stock-based compensation recognized on a straight-line basis over the requisite service period.
Income Taxes —The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize deferred tax assets in the future in excess of their net recorded amount, an adjustment to the deferred tax asset valuation allowance would be made to reduce the provision for income taxes. The Company presents deferred tax assets and liabilities on a net basis by jurisdictional filing group. Net deferred tax assets are included in other assets, while net deferred tax liabilities are included in other non-current liabilities on the Company’s consolidated balance sheets.
The Company records uncertain tax positions on the basis of a two-step process in which determinations are made (1) whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position; and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 % likely to be realized upon ultimate settlement with a tax authority.
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The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets.
Foreign Currency Transactions —Generally, the functional currency of the Company's international subsidiaries is the U.S. dollar. In cases where the functional currency is not the U.S. dollar, the Company translates the financial statements of these subsidiaries to U.S. dollars using the exchange rate at the balance sheet date for assets and liabilities, and average exchange rates during the period for revenue and expenses. The Company records translation gains and losses in accumulated other comprehensive income (loss) as a component of stockholders’ equity. The Company records foreign currency transaction gains and losses from transactions denominated in a currency other than the functional currency of the subsidiary involved in other income (expense), net on the Company's consolidated statements of operations.
Comprehensive Income (Loss) —Comprehensive income (loss) is composed of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) consists of foreign currency translation adjustments.
Net Income (Loss) Per Share Attributable to Common Stockholders —Basic and diluted net income (loss) per share attributable to common stockholders is computed under the two-class method required for participating securities. The Company considers options exercised by non-recourse promissory notes, early exercised unvested stock options, and common stock subject to certain share repurchase agreements to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to participating securities as the holders of these instruments do not have a contractual obligation to share in the Company’s losses. Net income is attributed to common stockholders and participating securities based on their respective participation rights. Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted income (loss) per share attributable to common stockholders is computed by giving effect to all potentially dilutive securities outstanding during the period. For periods in which the Company reports net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because potentially dilutive common shares are anti-dilutive.
As the liquidation and dividend rights are identical for Class A and Class B common stock, the undistributed earnings are allocated on a proportional basis and the resulting basic and diluted EPS are the same for Class A and Class B common stock on an individual or combined basis.
Recent Accounting Pronouncements (Issued and Adopted) —In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes: Improvements to Income Tax Disclosures , which requires disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024 . The amendment may be applied prospectively or retrospectively , and early adoption is permitted. The Company adopted this ASU for the year ended December 31, 2025 and applied the new disclosure requirements on a prospective basis. For additional information, see Note 13—Income Taxes .
Recent Accounting Pronouncements (Issued and Not Yet Adopted) — In November 2024, the FASB issued ASU 2024-03, Income Statement: Reporting Comprehensive Income-Expense Disaggregation Disclosures , which requires disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The amendments will be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The amendments may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software , which provides updated recognition and disclosure framework for internal-use software costs. The amendments will be effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. The amendments may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements , which clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial statements in accordance with U.S. GAAP. Per the FASB, the amendment does not intend to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements but rather provide clarity and improve navigability of the existing interim reporting requirements. The amendments will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The amendments may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

3. Discontinued Operations
Divestiture
On June 30, 2025, the Company completed the sale of its Apps Business, as part of its strategic effort to divest non-core assets and dedicate its resources to advancing its advertising business. In connection with the transaction, the Company received $ 715.6  million in total consideration, consisting of $ 430.6  million in cash and 596.9  million ordinary shares of Tripledot,
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valued a t $ 285.0  million . These shares represented approximately 22 % of Tripledot’s outstanding ordinary shares and 20 % of its fully diluted equity capitalization as of the closing date. The cash consideration of $ 430.6  million includes $ 400.0  million as specified in the purchase agreement and $ 30.6  million in purchase price adjustments in accordance with the terms of the purchase agreement.
The fair value of the equity consideration was determined based on the combined value of Tripledot and the Apps Business as of the closing date, estimated using a combination of the market approach, which incorporated valuation multiples of comparable public companies, and the income approach based on projected discounted cash flows. The significant assumptions used included estimates of future revenues and operating expenses, long-term growth rates, working capital requirements and discount rates, which are considered unobservable inputs and are classified as Level 3 within the fair value hierarchy.
For tax purposes, the transfer of certain Apps Business subsidiaries was treated as an asset sale, resulting in a $ 125.6  million write-off of deferred tax assets, which was included in the provision for income taxes from discontinued operations. The Company derecognized the remaining net assets of $ 591.2  million and recorded a pre-tax gain of $ 106.2  million in discontinued operations after giving effect to $ 18.3  million of transaction costs. The transaction also resulted in a capital loss for income tax purposes of $ 204.3  million, which was fully offset by a valuation allowance.
The following table summarizes the results of operations classified as loss from discontinued operations, net of income taxes, in the consolidated statements of operations (in thousands):

Year Ended December 31,
2025 2024 2023
Revenue $ 640,830   $ 1,485,190   $ 1,441,325  
Costs and expenses:
Cost of revenue 209,442   646,193   702,578  
Sales and marketing 242,547   596,346   602,693  
Research and development 130,298   263,979   258,605  
General and administrative 4,202   16,169   1,653  
Goodwill impairment 188,943   —   —  
Total costs and expenses 775,432   1,522,687   1,565,529  
Loss from operations
( 134,602 ) ( 37,497 ) ( 124,204 )
Other income:

Gain on divestiture, net of transaction costs 106,229   —   —  
Other income, net
1,519   1,559   3,172  
Total other income, net
107,748   1,559   3,172  
Loss from discontinued operations before income taxes ( 26,854 ) ( 35,938 ) ( 121,032 )
Provision for (benefit from) income taxes 72,590   ( 26,190 ) ( 19,917 )
Loss from discontinued operations, net of income taxes
$ ( 99,444 ) $ ( 9,748 ) $ ( 101,115 )

The following table represents assets and liabilities that are classified as discontinued operations in the consolidated balance sheets for the period presented (in thousands):

Assets: As of December 31, 2024
Cash
$ 44,381  
Accounts receivable, net 130,911  
Prepaid expenses and other current assets 16,063  
Total current assets of discontinued operations 191,355  
Goodwill 345,741  
Intangible assets, net 423,826  
Other non-current assets 167,682  
Total assets of discontinued operations $ 1,128,604  

Liabilities:
Accounts payable $ 59,125  
Accrued and other current liabilities 45,202  
Deferred revenue 32,786  
Total current liabilities of discontinued operations 137,113  
Other non-current liabilities 1,414  
Total liabilities of discontinued operations $ 138,527  

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The following table summarizes significant non-cash operating items and capital expenditures related to discontinued operations, as reflected in the consolidated statements of cash flows for the periods presented (in thousands):

Year Ended December 31,
2025 2024 2023
Amortization, depreciation and write-offs $ 64,054   $ 319,889   $ 369,856  
Stock-based compensation $ 3,663   $ 19,024   $ 20,556  
Goodwill impairment $ 188,943   $ —   $ —  
Acquisition of intangible assets $ 22,429   $ 15,883   $ 52,718  

Goodwill Impairment
On February 12, 2025, the Company entered into a non-binding term sheet to sell its Apps Business to Tripledot. As of March 31, 2025, the Apps Business was not classified as held for sale, as the criteria required for such classification had not yet been met. However, the Company identified the non-binding term sheet combined with negotiations throughout the first quarter of 2025 to sell the Apps Business as an indicator of impairment for the Apps reporting unit and performed an interim quantitative goodwill impairment test as of March 31, 2025. Based on this assessment, the Company determined that the carrying amount of the Apps reporting unit exceeded its estimated fair value and recorded a non-cash goodwill impairment charge of $ 188.9  million. This charge was included in loss from discontinued operations, net of income taxes, for the year ended December 31, 2025.
At the time the interim impairment test was performed, the Company had not yet determined the fair value of the total consideration, which was subject to the valuation of the equity consideration at the closing of the transaction. As a result, the Company estimated the fair value of the Apps reporting unit using the discounted cash flow method of the income approach. Key valuation inputs included projected future cash flows, risk-adjusted discount rates and long-term growth rates, which are based on management’s estimates and assumptions believed to be reasonable and reflective of known market conditions as of the interim impairment test date. The resulting fair value measurement is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs.

4. Financial Instruments and Fair Value Measurements
Financial Instruments Measured at Fair Value by Level on a Recurring Basis
As of December 31, 2025, the Company held $ 200.1 million in money market funds, which were classified as Level 1 within the fair value hierarchy. As of December 31, 2024, the money market funds balance was not material.
Non-Marketable Equity Securities Measured at Net Asset Value
The Company held equity interests in certain private equity funds of $ 118.7  million and $ 77.3  million as of December 31, 2025 and 2024, respectively, which are measured using the NAV practical expedient and accordingly, are not classified within the fair value hierarchy. Under the NAV practical expedient, the Company records investments based on its proportionate share of the underlying funds’ NAV.
These funds vary in investment strategies and generally have an initial term of 7 to 10 years, which may be extended for 2 to 3 additional years with the applicable approval. These investments are subject to certain restrictions regarding transfers and withdrawals and generally cannot be redeemed with the funds. Distributions from the funds will be received as the underlying investments are liquidated. The Company’s maximum exposure to loss is limited to the carrying value of these investments of $ 118.7  million and the remaining unfunded commitments of $ 3.0  million as of December 31, 2025.
During the year ended December 31, 2025, the Company made total capital contributions of $ 18.7  million related to these investments. Unrealized gains on these investments were $ 18.8 million for the twelve months ended December 31, 2025 and were not material for the twelve months ended December 31, 2024.
Non-Marketable Equity Securities Measured at Fair Value on a Non-Recurring Basis
The Company's non-marketable equity securities are investments in privately held companies without readily determinable fair values. The Company elected the measurement alternative to account for these investments. Under the measurement alternative, the carrying value of the non-marketable equity securities are adjusted based on price changes from observable transactions of identical or similar securities of the same issuer or for impairment. These investments are classified as Level 3 when measured due to impairment or qualifying observable price changes, as the valuation incorporates observable transaction prices and significant unobservable inputs.
As of December 31, 2025 and 2024, the carrying amounts of the Company's non-marketable equity securities were $ 19.6 million and $ 68.1  million, respectively, and were included in other assets in the Company’s consolidated balance sheets. During the year ended December 31, 2025 , the Company recorded a $ 50.0 million impairment charge, resulting in a full write-down of its investment in Humans, Inc. Refer to Note 15—Related Party Transactions for additional information. No other upward or downward adjustments were recorded during the years ended December 31, 2025 or 2024. Cumulative downward adjustments for investments held as of December 31, 2025 and 2024 were not material.
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5. Supplemental Financial Statement Information
Property and equipment, net consisted of the following (in thousands):

As of December 31,
2025 2024
Finance lease right-of-use assets $ 212,208   $ 222,203  
Leasehold improvements 17,608   17,666  
Software and licenses 7,143   7,125  
Furniture and fixtures 1,266   1,569  
Computer equipment 1,787   2,053  
Total property and equipment, gross 240,012   250,616  
Less: accumulated depreciation ( 117,567 ) ( 90,646 )
Total property and equipment, net $ 122,445   $ 159,970  

Depreciation expenses were $ 25.7 million, $ 29.3 million, and $ 26.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Accrued and other current liabilities consisted of the following (in thousands):

As of December 31,
2025 2024
Accrued taxes $ 451,594   $ 263,703  
Compensation and related liabilities 18,335   49,559  
Deferred revenue
47,682   37,053  
Accrued expenses and other 55,257   51,216  
Total accrued and other current liabilities $ 572,868   $ 401,531  

6. Commitments and Contingencies
Commitments —As of December 31, 2025, the Company's non-cancelable minimum purchase commitments totaled $ 702.8 million, which were primarily related to a multi-year contractual arrangement with a cloud computing services provider. In August 2024, the Company amended its agreement with the provider, committing to spending a minimum of $ 1.3 billion over a three-year period. By December 31, 2025, the Company had made payments of $ 579.3 million towards this commitment.
As of December 31, 2025, future minimum payments under these non-cancelable purchase commitments with a remaining term in excess of one year were as follows (in thousands):

2026 $ 398,524  
2027 304,322  
Thereafter —  
Total non-cancelable purchase commitments
$ 702,846  

Contingencies —From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated.
Legal Proceedings —The Company is involved from time to time in litigation, claims, and proceedings. The outcomes of the Company’s legal proceedings are inherently unpredictable and subject to significant uncertainty.
The Company records a liability for loss contingencies when it is probable that a loss has been incurred and the amount can be reasonably estimated. If a loss is reasonably possible and the amount or range of loss can be reasonably estimated, the Company discloses the estimated loss or range of loss. The Company monitors legal matters and evaluates developments that could affect previously accrued amounts or related disclosures, or whether a previously unaccrued or undisclosed matter requires accrual or disclosure, and adjusts accruals and disclosures as appropriate. Determining the likelihood of loss and the amount or range of loss involves significant judgment.
Based on its current knowledge, the Company does not believe the ultimate resolution of its outstanding legal and regulatory matters will have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows. However, if one or more of these matters were resolved against the Company for amounts in excess of the Company’s expectations, the Company’s results of operations, financial position, or cash flows could be materially affected.
As of December 31, 2025 and 2024, the Company had no material loss contingencies related to legal proceedings for which a loss was probable or reasonably possible.
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The Company expenses legal fees in the period in which they are incurred.
Indemnifications —The Company enters into indemnification provisions under agreements with other parties in the ordinary course of business, including certain customers, business partners, investors, contractors and the Company’s officers, directors and certain employees. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in the Company’s consolidated statements of operations in connection with the indemnification provisions have not been material.
Non-income Taxes —The Company may be subject to audit by various tax authorities with regard to non-income tax matters. The subject matter of non-income tax audits primarily arises from different interpretations on tax treatment and tax rates applied. The Company accrues liabilities for non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the reasonably possible loss.

7. Goodwill and Intangible Assets, Net
As a result of the Apps Business divestiture, the Company has a single reportable segment, and the reporting unit is the same as the reportable segment. This change did not affect the composition of the remaining reporting unit and, accordingly, no impairment indicator was identified upon the change. The Company performed the required annual goodwill assessment in the fourth quarter of the year ended December 31, 2025, and concluded the goodwill was not impaired.
The following table presents the changes in the carrying amount of goodwill (in thousands):

Balance as of December 31, 2023 $ 1,497,109  
Foreign currency translation
( 39,424 )
Balance as of December 31, 2024 $ 1,457,685  
Foreign currency translation 82,301  
Balance as of December 31, 2025 $ 1,539,986  

Intangible assets, net consisted of the following (in thousands):

Weighted-
Average
Remaining
Useful Life
(in years) As of December 31, 2025 As of December 31, 2024
Gross
Carrying
Value Accumulated
Amortization Net Book
Value Gross
Carrying
Value Accumulated
Amortization Net Book
Value
Customer relationships 6.3 $ 528,207   $ ( 218,736 ) $ 309,471   $ 511,125   $ ( 160,810 ) $ 350,315  
Developed technology 1.7 210,708   ( 159,274 ) 51,434   203,030   ( 119,552 ) 83,478  
Other 3.4 65,790   ( 29,981 ) 35,809   56,880   ( 17,822 ) 39,058  
Total intangible assets $ 804,705   $ ( 407,991 ) $ 396,714   $ 771,035   $ ( 298,184 ) $ 472,851  

The Company recorded amortization expense related to intangible assets as follows (in thousands):

Year Ended December 31,
2025 2024 2023
Cost of revenue $ 42,300   $ 38,220   $ 36,983  
Sales and marketing 55,104   54,628   54,556  
Total $ 97,404   $ 92,848   $ 91,539  

As of December 31, 2025, the expected future amortization expense related to intangible assets was estimated as follows (in thousands):

2026 $ 89,357  
2027 81,014  
2028 59,469  
2029 53,167  
2030 48,941  
Thereafter 64,766  
Total $ 396,714  

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8. Leases
The Company has entered into various non-cancelable operating and finance leases primarily for its office facilities and servers and networking equipment. These leases have remaining lease terms of less than 1 year to 7 years, some of which include options to extend the leases for up to 5 years.
The components of lease costs recognized in the Company's consolidated statements of operations were as follows (in thousands):

Year Ended December 31,
2025 2024 2023
Finance lease cost:

Amortization of right-of-use assets $ 19,938   $ 24,308   $ 22,673  
Interest 6,395   9,231   7,036  
Operating lease cost 13,467   14,916   16,304  
Variable lease cost and other 5,098   4,820   4,465  
Total lease cost $ 44,898   $ 53,275   $ 50,478  

Maturities of lease liabilities as of December 31, 2025 were as follows (in thousands):

Operating
Leases Finance
Leases
2026 15,162   22,500  
2027 12,408   22,483  
2028 5,276   22,218  
2029 809   22,131  
2030 —   22,131  
Thereafter —   28,809  
Total lease payments 33,655   140,272  
Less: amount representing interest ( 1,901 ) ( 17,619 )
Present value of future lease payments 31,754   122,653  
Less: current obligations under leases ( 13,943 ) ( 17,481 )
Non-current lease obligations $ 17,811   $ 105,172  

Supplemental balance sheet information related to lease liabilities was as follows:

As of December 31,
2025 2024
Weighted-average remaining lease term:
Finance leases 6.3 years 6.0 years
Operating leases 2.4 years 3.2 years
Weighted-average discount rate:
Finance leases 4.4   % 5.7   %
Operating leases 5.2   % 5.2   %

Supplemental cash flow information related to leases was as follows (in thousands):

Year Ended December 31,
2025 2024 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases $ 16,240   $ 16,332   $ 16,781  
Operating cash flows for finance leases $ 6,395   $ 9,231   $ 7,036  
Financing cash flows for finance leases $ 18,669   $ 20,875   $ 20,170  

As of December 31, 2025, the Company did not have any significant lease that had not yet commenced.
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9. Debt
The Company’s outstanding debt consisted of the following (in thousands):

As of December 31,

2025 2024
2029 Notes $ 1,000,000   $ 1,000,000  
2031 Notes 1,000,000   1,000,000  
2034 Notes 1,000,000   1,000,000  
2054 Notes 550,000   550,000  
Total principal amount 3,550,000   3,550,000  
Less: unamortized debt discount and issuance costs ( 37,013 ) ( 41,017 )
Long-term debt
$ 3,512,987   $ 3,508,983  

As of December 31, 2025, the future principal payments for the outstanding debt were as follows (in thousands):

2026 through 2028
$ —  
2029 1,000,000  
Thereafter 2,550,000  
Total future principal payments
$ 3,550,000  

Senior Notes
In December 2024, the Company issued $ 3.6  billion in aggregate principal amount of senior notes, consisting of $ 1.0  billion in aggregate principal amount of 5.125 % notes due December 1, 2029 (the "2029 Notes"), $ 1.0  billion in aggregate principal amount of 5.375 % notes due December 1, 2031 (the "2031 Notes"), $ 1.0  billion in aggregate principal amount of 5.500 % notes due December 1, 2034 (the “2034 Notes”), and $ 550.0  million in aggregate principal amount of 5.950 % notes due December 1, 2054 (the "2054 Notes", and collectively with the 2029 Notes, the 2031 Notes and 2034 Notes, the "Senior Notes"). Interest on each series of the Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2025.
The Senior Notes are unsecured obligations and are not guaranteed by any of the Company's subsidiaries. The Senior Notes rank equally with all existing and future unsecured and unsubordinated indebtedness of the Company. The Company may redeem the Senior Notes in whole or in part at any time or from time to time at specified redemption prices. In addition, upon the occurrence of certain change of control repurchase events, the Company may be required to repurchase the Senior Notes at a specified repurchase price plus accrued and unpaid interest on the Senior Notes to, but excluding, the repurchase date. The indentures governing the Senior Notes also include customary affirmative and negative covenants (including covenants that limit the Company’s ability and the ability of its restricted subsidiaries to create liens on certain assets to secure debt, enter into sale and leaseback transactions, and, with respect to the Company, consolidate or merge with or into, or sell or otherwise dispose of all or substantially all of its assets, in each case subject to certain exceptions), events of default, and other customary provisions. As of December 31, 2025, the Company was in compliance with all applicable covenants.
The Company incurred debt discount and issuance cost of $ 41.3 million in connection with the Senior Notes offering, which were allocated on a pro rata basis to the 2029 Notes, 2031 Notes, 2034 Notes, and 2054 Notes. The debt discount and issuance costs are amortized to interest expense over the contractual term of each series of the Senior Notes under the effective interest rate method. The effective interest rates on the 2029 Notes, 2031 Notes, 2034 Notes, and 2054 Notes, which are calculated as the contractual interest rates adjusted for the debt discount and issuance costs, are 5.34 %, 5.56 %, 5.66 %, and 6.07 %, respectively.
As of December 31, 2025, the total estimated fair value of the Senior Notes was $ 3.6 billion. The estimated fair value of the Senior Notes, which the Company has classified as Level 2 financial instruments, was determined based on quoted bid prices in an over-the-counter market on the last trading day of the reporting period.
Credit Agreement
2024 Credit Agreement
In December 2024, concurrently with the issuance of its Senior Notes, the Company entered into the 2024 Credit Agreement, establishing a $ 1.0  billion revolving credit facility maturing on December 5, 2029, with the option for two one-year extensions as permitted under the agreement. The obligations of the Company under the 2024 Credit Agreement are unsecured and are not guaranteed by any of the Company's subsidiaries.
U.S. Dollar borrowings under the 2024 Credit Agreement will bear interest, at the Company’s option, based on either (1) a base rate equal to the highest of (i) the prime rate then in effect, (ii) the federal funds rate, plus 0.50 % and (iii) the Term SOFR rate for a one-month interest period plus 1.10 %, in each case subject to a 1.00 % floor, plus an applicable margin; or (2) the Term SOFR rate for the applicable interest period plus 0.10 %, subject to a 0 % floor, plus an applicable margin. The applicable margin ranges from 0.125 % to 1.000 % for base rate borrowings and from 1.125 % to 2.000 % for Term SOFR rate borrowings , in each
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case determined by the Company’s credit ratings. Additionally, the 2024 Credit Agreement also requires the Company to pay a commitment fee on unused amounts, ranging from 0.100 % to 0.325 %, based on the Company’s credit ratings.
The 2024 Credit Agreement includes usual and customary provisions for unsecured revolving credit agreements of this type, including covenants limiting, with certain exceptions, (1) incurrence of indebtedness by the Company’s subsidiaries, (2) liens, (3) fundamental changes and (4) sale and leaseback transactions, and requires the Company to maintain a maximum total net debt-to-EBITDA ratio of 3.50 to 1.00 as of the last day of each fiscal quarter, subject to a step-up to 4.00 to 1.00 at the Company's option for a certain period following certain qualified acquisitions. As of December 31, 2025, the Company was in compliance with all applicable covenants and ratios.
The 2024 Credit Agreement replaced the existing credit agreement, originally entered into in August 2018 and subsequently amended multiple times (the “2018 Credit Agreement").
In March 2025, the Company borrowed $ 200.0  million under the revolving credit facility to fund share repurchases under the Company's repurchase program. The Company repaid $ 100.0  million in April 2025 and the remaining $ 100.0  million in May 2025. As of December 31, 2025, $ 1.0  billion remained available for borrowing under the revolving credit facility.
2018 Credit Agreement
In August 2018, the Company entered into the 2018 Credit Agreement. The 2018 Credit Agreement, as last amended in March 2024, provided for a $ 1.5  billion term loan maturing in October 2028, a $ 2.1  billion term loan maturing in August 2030, and a $ 610.0  million secured revolving credit facility. Under the 2018 Credit Agreement, the Company may voluntarily prepay outstanding loans at any time, subject to notice, minimum amount requirements, and customary breakage costs, and may be required to prepay outstanding loans under certain circumstances. Prepaid amounts under the revolving credit facility may be re-borrowed.
The term loans and borrowings under the 2018 Credit Agreement bear interest, at the Company’s option, based on either (1) a base rate equal to the highest of (i) the prime rate then in effect, (ii) the federal funds rate, plus 0.50 % and (iii) the Term SOFR rate for a one-month interest period plus 1.00 %, plus an applicable margin; or (2) the Term SOFR rate for a specified period, subject to a 0.50 % floor in the case of the term loans and a 0 % floor in the case of the revolving credit facility, plus an applicable margin. The applicable margin with respect to the term loans was 1.50 % for base rate borrowings and 2.50 % for Term SOFR rate borrowings. The applicable margin with respect to the amounts outstanding under the revolving credit facility ranges from 1.00 % to 1.25 % for base rate borrowings, and from 2.10 % to 2.35 % for Term SOFR rate borrowings, in each case determined by the Company’s senior secured net leverage ratio. A dditionally, the 2018 Credit Agreement also requires the Company to pay a commitment fee on unused amounts under the revolving credit facility, ranging from 0.25 % to 0.50 %, based on the Company’s senior secured net leverage ratio. As of December 31, 2023, the interest rates for the term loans and the borrowings under the 2018 Credit Agreement were 8.45 % and 7.45 %, respectively.
The Company’s obligations under the 2018 Credit Agreement are secured by substantially all assets of the Company and its domestic subsidiary guarantors, with certain exclusions. The 2018 Credit Agreement also includes covenants restricting debt, liens, business mergers, dissolutions, investments, dividends, asset disposals, and affiliate transactions, along with default provisions covering payment failures, cross-defaults, change of control, judgments, and bankruptcy. In case of default, lenders may demand immediate repayment and enforce other remedies provided under the agreement. The Company was in compliance with all applicable covenants at all times.
In March 2024, the Company drew $ 418.7  million from the revolving credit facility to fund certain share repurchases and subsequently repaid the entire outstanding amount of $ 603.7  million.
Upon executing the 2024 Credit Agreement, the Company used the proceeds from the issuance of the Senior Notes to repay the entire remaining $ 3.5  billion principal amount on both term loans under the 2018 Credit Agreement and terminated the secured revolving credit facility under the 2018 Credit Agreement, which had no outstanding balance. The Company recognized a $ 27.7  million loss on extinguishment of the term loans, while the modification to the revolving credit facility had no material impact on the Company's consolidated statements of operations for the year ended December 31, 2024.
Interest Expense on Debt
The following table sets forth total interest expense recognized related to the Company’s debt (in thousands):

Year Ended December 31,
2025 2024 2023
Contractual interest expense $ 195,440   $ 274,141   $ 268,583  
Amortization of debt discount and issuance costs 5,175   5,460   8,792  
Loss on debt extinguishment —   28,375   4,337  
Total interest expense $ 200,615   $ 307,976   $ 281,712  

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