App marketing platform AppLovin late Wednesday smashed analyst estimates for the fourth quarter. APP stock surged in extended trading, signaling a breakout.
The Palo Alto, Calif.-based company earned $1.73 a share on sales of $1.37 billion in the December quarter. Analysts polled by FactSet had expected earnings of $1.25 a share on sales of $1.26 billion. On a year-over-year basis, AppLovin earnings jumped 253% while revenue climbed 44%.
For the current quarter, AppLovin forecast revenue of $1.37 billion, based on the midpoint of its outlook. That would translate to year-over-year growth of 29%. Analysts were modeling revenue of $1.32 billion for the March quarter.
In after-hours trading on the stock market today, AppLovin stock rocketed more than 20% to 460. During the regular session Wednesday, APP stock advanced 1.4% to close at 380.32.
APP stock had formed a cup base with a buy point of 417.63, according to IBD MarketSurge charts.
AppLovin's software platform enables app developers to market, monetize and analyze their apps. The company also makes mobile games such as "Wordscapes," "Matchington Mansion" and "Game of War." Plus, the company has expanded into advertising-based e-commerce and streaming television services.
"AppLovin just reminded everyone why it's one of the hottest stocks in ad tech," Jeremy Goldman, senior director of content for Emarketer, said in a client note.
"Blowing past expectations, the company proved its AI-driven platform is monetizing better than even bulls anticipated. With ad revenue surging and margins expanding, it's clear that advertisers are prioritizing AppLovin's targeting tools over competitors," Goldman said.
AppLovin is on two IBD stock lists: Leaderboard and Tech Leaders.
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