Applovin Corp (APP) 2022 Q3 法說會逐字稿

Hello. Good afternoon, everyone. Welcome to AppLovin's earnings call for the third quarter ended September 30, 2022. Joining me today to discuss our results are our Co-Founder, CEO and Chairperson Adam Foroughi; and our President and Chief Financial Officer, Herald Chen. Please note our SEC filings as well as our shareholder letter discussing our third quarter performance, are available at investors.applovin.com.

你好。大家下午好。歡迎參加 AppLovin 截至 2022 年 9 月 30 日的第三季度財報電話會議。今天與我一起討論我們業績的有我們的聯合創始人、首席執行官兼主席 Adam Foroughi；以及我們的總裁兼首席財務官 Herald Chen。請注意我們提交給美國證券交易委員會的文件以及討論我們第三季度業績的股東信函，可在investors.applovin.com 上獲取。

During today's call, we may be making forward-looking statements regarding future events, expectations regarding the market, the future financial performance of the company and our strategic review of our apps portfolio. These statements are based on our current assumptions and beliefs, and we assume no obligation to update them, except as required by law. Actual results may differ materially from the results predicted. We encourage you to review the risk factors in our most recently filed Form 10-Q for the fiscal quarter ended June 30, 2022, and in our Form 10-Q for the third quarter, which we expect to file later this week.

在今天的電話會議中，我們可能會就未來事件、市場預期、公司未來財務業績以及我們對應用程序組合的戰略審查做出前瞻性陳述。這些陳述基於我們當前的假設和信念，我們不承擔更新它們的義務，除非法律要求。實際結果可能與預測結果大相徑庭。我們鼓勵您查看我們最近提交的截至 2022 年 6 月 30 日的財政季度的 10-Q 表和我們預計將於本週晚些時候提交的第三季度的 10-Q 表中的風險因素。

We will also be discussing non-GAAP financial measures. Reconciliations of our GAAP and non-GAAP financial measures are included in our shareholder letter available on our Investor Relations website. Please be sure to review the GAAP measures and the reconciliations as the non-GAAP measures are not intended to be a substitute for or superior to our GAAP results.

我們還將討論非公認會計原則的財務措施。我們的 GAAP 和非 GAAP 財務措施的對賬包含在我們的投資者關係網站上提供的股東信中。請務必查看 GAAP 措施和對賬，因為非 GAAP 措施並非旨在替代或優於我們的 GAAP 結果。

Be advised this conference call is being recorded, and a replay will be available on our IR website.

請注意，此次電話會議正在錄音中，我們的 IR 網站上將提供重播。

I'd now like to turn it over to Adam for some opening remarks, then we'll open it up for Q&A. Please go ahead, Adam.

我現在想把它交給亞當做一些開場白，然後我們將打開它進行問答。請繼續，亞當。

Thanks all for joining us today. As this market continues to be difficult, it's easy to get disappointed, but you're not going to hear any disappointment from me today. I've been building businesses for nearly 2 decades now. And one thing I know is it takes years, not quarters to build a great business. We have several things to be excited about at AppLovin today. First, in '22, we're going to generate over $1 billion of EBITDA, growing nearly 50% over '21. We're going to convert a majority of this to cash. Our ability to generate so much cash allows us to patiently address our market and go after the business opportunities in front of us even in a difficult market.

感謝大家今天加入我們。由於這個市場仍然很困難，很容易感到失望，但今天你不會聽到我的任何失望。我已經建立企業近 2 年了。我知道的一件事是，建立一個偉大的企業需要數年，而不是幾個季度。今天，AppLovin 有幾件事情讓我們感到興奮。首先，在 22 年，我們將產生超過 10 億美元的 EBITDA，比 21 年增長近 50%。我們將把其中的大部分轉換為現金。我們產生如此多現金的能力使我們能夠耐心地應對我們的市場，即使在困難的市場中也能抓住擺在我們面前的商機。

Second, our business is incredibly stable. It's easy to look at our industry and realize how difficult it is right now, but it's really easy also to forget how big a sector we're in. Everyone's got a mobile device. Most people are playing mobile games. Many people are playing mobile games every single day. The size and stability of our category as well as our market-leading technologies give us a lot of confidence in our business long term.

其次，我們的業務非常穩定。很容易看到我們的行業並意識到它現在有多麼困難，但也很容易忘記我們所處的行業有多大。每個人都有移動設備。大多數人都在玩手機遊戲。許多人每天都在玩手機遊戲。我們品類的規模和穩定性以及我們市場領先的技術使我們對我們的長期業務充滿信心。

So what are we focused on at AppLovin today that gives us a lot of confidence that as we go through this economic downturn and come out, we're going to be a stronger business for it. First and most importantly, we're focused on retaining our core team. Many of our key contributors have been at the company for many years. I've had the pleasure of working with each and every one of you. We're going to continue to invest at AppLovin to make it a great place to work at. Second, we're really focused on attracting new talent. Over the last decade, there's been a talent crunch in Silicon Valley. More recently, we're getting resumes from incredibly qualified individuals better than we've ever seen before. The opportunity to attract new talent and pair with our existing and exceptional team gets us very excited.

因此，我們今天在 AppLovin 關注的重點是什麼，這讓我們充滿信心，相信隨著我們度過這次經濟衰退並走出困境，我們將成為一家更強大的企業。首先也是最重要的，我們專注於留住我們的核心團隊。我們的許多主要貢獻者已經在公司工作了很多年。我很高興與你們每一個人一起工作。我們將繼續對 AppLovin 進行投資，使其成為一個理想的工作場所。其次，我們真正專注於吸引新人才。在過去的十年裡，矽谷出現了人才短缺。最近，我們收到了前所未有的優秀人才的簡歷。吸引新人才並與我們現有的優秀團隊合作的機會讓我們非常興奮。

Third, we're working tirelessly to improve our core technologies. We see a path to doing so. And if we're successful, it will allow us to create growth that we can control. Fourth, we're still investing in new initiatives, and we're very excited about these. They utilize our core technologies and core competencies and will enable us to go into bigger market opportunities. If we're successful here, we'll create immense upside for both our shareholders and team. And lastly, we'll continue to be strategic with our cash. We'll look at share buybacks. We'll also use this moment in time to try to attract new investors, shareholders that are going to be focused on our long-term vision, just as we are.

第三，我們正在不懈地改進我們的核心技術。我們看到了這樣做的途徑。如果我們成功了，它將使我們能夠創造我們可以控制的增長。第四，我們仍在投資新舉措，我們對此感到非常興奮。他們利用我們的核心技術和核心競爭力，使我們能夠進入更大的市場機會。如果我們在這裡取得成功，我們將為我們的股東和團隊創造巨大的收益。最後，我們將繼續對我們的現金保持戰略性。我們將研究股票回購。我們還將利用這一時刻來嘗試吸引新的投資者和股東，他們將像我們一樣關注我們的長期願景。

The market today presents a low multiple entry point into our company. What's interesting about that is we generate a ton of cash, so it gives us a good base, and we're also going after very, very big opportunities. If we're successful in executing around our vision over the coming years, we're going to create outsized returns, private market like returns. That opportunity gets us really excited. In fact, we're working harder today at AppLovin than we've ever worked before because of that upside.

今天的市場為我們公司提供了一個較低的多重切入點。有趣的是我們產生了大量現金，因此它為我們提供了良好的基礎，而且我們也在追求非常非常大的機會。如果我們在未來幾年成功地圍繞我們的願景執行，我們將創造超額回報，類似於私人市場的回報。這個機會讓我們非常興奮。事實上，由於這一優勢，我們今天在 AppLovin 的工作比以往任何時候都更加努力。

I'll now hand you off to Herald.

我現在把你交給先驅報。

Thanks, Adam. And as we outlined in our shareholder letter, given the challenging backdrop, we are very much focused on what we control. Firstly, bolstering our leadership positions in our core markets and our core products; and second, using this cash flow that Adam mentioned, to really invest behind initiatives that are focused on increasing the durability of our business, ultimately leading to long-term growth, which will then lead to enterprise value creation.

謝謝，亞當。正如我們在股東信中所概述的那樣，鑑於充滿挑戰的背景，我們非常專注於我們控制的內容。首先，鞏固我們在核心市場和核心產品中的領先地位；其次，利用亞當提到的現金流，真正投資於旨在提高我們業務耐久性的計劃，最終實現長期增長，進而創造企業價值。

Shifting to the third quarter. Starting with the software business, we grew that 59% year-over-year. And based on our guidance from the second quarter, as expected, it was generally flat to the third quarter. EBITDA grew 49% year-over-year and achieved a 62% margin in the third quarter. We had 538 SPECs, a record in the quarter, and that also had an NDRR, net dollar revenue retention of 166%. On the app side, which is a midstream or change, operational changes as we previously discussed, the revenue was down 24% year-over-year, but EBITDA, which is where we're focused, was up 12% to a 17% margin. So on a combined basis, the total revenue was down slightly year-over-year, but EBITDA was up 35% to $258 million, $1 billion run rate and achieved an EBITDA margin of 36%.

轉移到第三季度。從軟件業務開始，我們同比增長了 59%。根據我們對第二季度的指導，正如預期的那樣，與第三季度基本持平。 EBITDA 同比增長 49%，第三季度利潤率為 62%。我們有 538 個 SPEC，創下本季度的記錄，還有 NDRR，淨美元收入保留率為 166%。在應用程序方面，這是我們之前討論的中游或變化，運營變化，收入同比下降 24%，但我們關注的 EBITDA 增長 12% 至 17%利潤。因此，綜合來看，總收入同比略有下降，但 EBITDA 增長 35% 至 2.58 億美元，運行率為 10 億美元，EBITDA 利潤率為 36%。

Then shifting to our outlook for Q4. We see Q4 coming in fairly similarly to what we achieved in Q3. And if that's the case, then the year, we'll end up at $2.8 billion with a margin structure around 37% to 38% adjusted EBITDA. The components of that we see would be software being over $1 billion in revenue with a mid-60s EBITDA margin. And on the application side, we would see a $1.7-plus billion revenue stream with a margin structure in the mid-teens. Of note, going forward, we will only be providing our forward quarter guidance and will not be providing a full year guidance in the future.

然後轉向我們對第四季度的展望。我們看到第四季度的表現與第三季度的表現非常相似。如果是這樣的話，那麼今年，我們最終將達到 28 億美元，利潤率結構約為 37% 至 38% 的調整後 EBITDA。我們看到的組成部分將是收入超過 10 億美元、EBITDA 利潤率在 60 年代中期的軟件。在應用程序方面，我們將看到超過 1.7 億美元的收入流，利潤率結構在十幾歲左右。值得注意的是，展望未來，我們將僅提供我們的前瞻性季度指導，而不會在未來提供全年指導。

Then talking about cash flow in a little more detail. We do plan on generating $1 billion of EBITDA this year. We also plan on finishing the year with over $1 billion of cash on our balance sheet. And as you all know, we're able to convert a high percentage of the EBITDA to free cash flow, given our very limited amount of CapEx. And as Adam described, we're able to then reinvest those dollars and have the financial flexibility and the patience to invest in projects, not trying to chase quarter-to-quarter growth on things that don't yield long-term return, but really invest behind our team, our talent and our tech to ensure that we're in a great spot going forward.

然後更詳細地討論現金流。我們確實計劃在今年產生 10 億美元的 EBITDA。我們還計劃以資產負債表上超過 10 億美元的現金結束這一年。眾所周知，鑑於我們的資本支出非常有限，我們能夠將大部分 EBITDA 轉換為自由現金流。正如亞當所描述的那樣，我們能夠將這些資金進行再投資，並擁有財務靈活性和耐心來投資項目，而不是試圖在不會產生長期回報的事物上追逐季度增長，而是真正投資於我們的團隊、我們的人才和我們的技術，以確保我們在未來處於有利地位。

We also have $400 million of availability -- over $400 million of availability on our stock repurchase plan. And given the stock market environment today and the rerating of risk as well as our highly leverageable operating structure, where if we do have growth in our high margin, high cash flow business, we think the combination of today's stock valuations and stock multiples, combined with the ability to have high operating levers when we return to growth, those dollars fall into the bottom line. We think for shareholders and for us in considering stock buybacks could be a very attractive return.

我們還有 4 億美元的可用性——我們的股票回購計劃的可用性超過 4 億美元。鑑於今天的股市環境和風險的重新評估以及我們高槓桿率的運營結構，如果我們的高利潤率、高現金流業務確實有增長，我們認為今天的股票估值和股票倍數的結合，加起來當我們恢復增長時能夠擁有高運營槓桿，這些美元就會落入底線。我們認為對於股東和我們在考慮股票回購時可能是一個非常有吸引力的回報。

And with that, I'll turn it back to Ryan to go through Q&A. Thank you.

有了這個，我會把它轉回給 Ryan 進行問答。謝謝你。

(Operator Instructions)

（操作員說明）

So the first question that we're going to take is from Tim Nollen from Macquarie.

所以我們要回答的第一個問題來自麥格理的蒂姆·諾倫。

Could I dig in a little bit to the Software Platform side, please? You've said previously that given the integration of MoPub and the great scale you've got there, all the integrations you've got on the mediation platform, that game makers will simply have to continue advertising to promote use of their games and you've got such a great market position there. It does, however, look like the growth is slowing. Just wondering if you could maybe update us on your thought process as to how game developers are going about their advertising or where they are pulling? And is there any increased risk from some of these being small game developers and therefore, in a financial crunch like this, high interest rates, maybe they're running into some sort of near-term funding problems of their own, and that might lead to them pulling back on spending.

請問我可以深入了解一下軟件平台方面嗎？你之前說過，考慮到 MoPub 的集成和你在那裡的巨大規模，你在中介平台上的所有集成，遊戲製造商將只需要繼續做廣告來推廣他們的遊戲的使用，而你在那裡擁有如此巨大的市場地位。然而，看起來增長正在放緩。只是想知道您是否可以向我們更新您關於遊戲開發者如何進行廣告或他們在哪里拉動的思考過程？其中一些是小型遊戲開發商是否會增加風險，因此，在像這樣的金融危機中，高利率，也許他們自己會遇到某種近期的資金問題，這可能會導致讓他們縮減開支。

Thanks, Tim. So a couple of things packed in there that I'm going to address. First, we're on our mediation platform and also AppDiscovery platform, we're market leaders. The MAX platform, that's our mediation solution probably has the vast majority of all the ad inventory in the gaming sector running through it.

謝謝，蒂姆。因此，我將要解決其中的一些問題。首先，我們在我們的中介平台和 AppDiscovery 平台上，我們是市場領導者。 MAX 平台，這是我們的中介解決方案，可能在遊戲領域的所有廣告庫存中都有絕大多數通過它運行。

Now what's interesting about that is it gives us access to a diverse set of advertisers where we're not dependent on any individual one. And most companies this year have been going through their P&L and really cutting costs. So marketing and OpEx. So most companies are at a stable point now where you're seeing the gaming market not growing because of that because of the focus on cash flow but you've also had that happen.

現在有趣的是，它使我們能夠接觸到各種各樣的廣告商，我們不依賴任何個人。今年大多數公司都經歷了損益表並真正削減了成本。所以營銷和運營支出。因此，大多數公司現在都處於穩定點，您會看到遊戲市場因此而沒有增長，因為關注現金流，但您也遇到了這種情況。

And because we've got a lot of diversity and because the sector is so big and consumers are still engaging with mobile games as much as they've ever engaged before. And the biggest change was just this handicap of shift from growth investment to cash flow, and that's already been baked in. That gives us a lot of confidence in the stability of our business that I referenced in my comments a couple of minutes ago.

而且因為我們有很多多樣性，而且因為這個行業如此之大，而且消費者仍然像以前一樣多地參與手機遊戲。最大的變化就是這種從增長投資轉向現金流的障礙，這已經根深蒂固。這讓我們對幾分鐘前我在評論中提到的業務穩定性充滿信心。

Tim, did you have any follow-ups?

蒂姆，你有任何後續行動嗎？

No, I'll jump back in queue, let some others go in.

不，我會跳回隊列，讓其他人進入。

Okay. We'll next go to Youssef Squali with Truist Securities.

好的。接下來，我們將與 Truist Securities 一起前往 Youssef Squali。

So I guess just as a follow-up to the comments about the stability in the business, Adam, I know you guys are not guiding, obviously, to 2023. But how are you guys thinking about the puts and takes. As you go through your own budgeting process, do you think at a base level that 2023 is a growth year or not? And then revenues from non-SPECs was down 34%. Can you just unpack that for us a little bit what drove that?

所以我想作為關於業務穩定性的評論的後續行動，亞當，我知道你們顯然沒有指導到 2023 年。但是你們是如何考慮看跌期權的。當您進行自己的預算編制過程時，您是否認為 2023 年是增長年？然後來自非 SPEC 的收入下降了 34%。你能為我們解開它的包裝嗎？

So I'll touch on the first point, and then we can come back to revenue from non-SPECs because frankly, I think that's just a very small percentage of our numbers. So it's going to be a volatile metric that doesn't, frankly, matter a whole lot. When you think about the business as it is, again, we're very strong in the market. We have very consistent business. So there's no share loss anywhere in our core technologies. They work really well for the mobile game developer.

所以我會談到第一點，然後我們可以回到非 SPEC 的收入，因為坦率地說，我認為這只是我們數字的一小部分。所以這將是一個不穩定的指標，坦率地說，它並不重要。當您再次考慮業務時，我們在市場上非常強大。我們有非常一致的業務。因此，我們的核心技術沒有任何份額損失。它們非常適合移動遊戲開發商。

And the one thing that we can't control that gives us hesitation on having long-term guidance right now is this focus of cash flow amongst our advertiser base and frankly, any company in technology today and away from growth. That's been baked into a lot of businesses at this point. Most managers are savvy enough to now have made the changes there. We just don't know when that reverses out. When the economy is going to turn around, when there will be a shift back to growth and sort of when you get to the bottom of this economic downturn.

我們無法控制的一件事讓我們現在對是否有長期指導猶豫不決，那就是我們的廣告客戶群中現金流的重點，坦率地說，今天任何一家技術公司都沒有增長。在這一點上，這已經融入了很多企業。大多數經理都足夠精明，現在已經在那裡做出了改變。我們只是不知道什麼時候會逆轉。當經濟要好轉時，何時會轉向增長，以及當你到達經濟低迷的底部時。

What we do know and that gives us confidence is we're already there and the business is very stable. We also know that our core technology has a lot of room to improve. That was another thing I touched on is that we're working really hard to improve it. And really, we have 2 paths to grow. One is advertisers are willing to invest more into growth and cash flow. So they're going to lower their goals and invest more dollars into our platform. The other is entirely in our control. It's improving the efficacy of our solution so that we're able to take the dollar spent. And even at a tighter set of goals, drive more scale to our advertising partners.

我們所知道的並且給我們信心的是我們已經在那裡並且業務非常穩定。我們也知道，我們的核心技術還有很大的提升空間。我談到的另一件事是我們正在努力改進它。真的，我們有兩條成長之路。一是廣告商願意在增長和現金流方面投入更多。因此，他們將降低目標並在我們的平台上投入更多資金。另一個完全在我們的控制之下。它提高了我們解決方案的功效，以便我們能夠花掉所花的錢。即使在更嚴格的目標下，也可以擴大我們的廣告合作夥伴的規模。

We see a path to doing that, and that's what we're working on today. Both of those things give us a lot of confidence that we're going to have a strong baseline where we are in terms of the cash that we're able to generate, and we have room to grow as well that both has 1 factor outside of our control and 1 factor entirely within our control.

我們看到了實現這一目標的途徑，這就是我們今天正在努力的方向。這兩件事都給了我們很大的信心，我們將有一個強大的基線，就我們能夠產生的現金而言，我們還有增長空間，兩者都有一個外部因素我們的控制和 1 因素完全在我們的控制範圍內。

Okay. But at a high level, though, no comment whether 2023 is a growth year for you guys or not. I guess you're saying it really depends on the overall macro environment?

好的。但在高層次上，對於 2023 年是否是你們的增長年，沒有任何評論。我猜你是說這真的取決於整體宏觀環境？

And our overall ability to improve our core technologies.

以及我們改進核心技術的整體能力。

Right. On the non-SPEC, the reason I was asking is to try to get a sense of whether you're seeing more of the weakness among the smaller kind of Software Platform clients were among the enterprise because the non-SPECs would tend to be the smaller ones, correct?

正確的。關於非規範，我問的原因是試圖了解您是否在企業中的小型軟件平台客戶中看到更多的弱點，因為非規範往往是較小的，對嗎？

Yes. Honestly, we don't actually look at each individual business. None of these partners make up a big part of our business. It's just as a whole, we all know that every company is under a lot of pressure right now to cut costs. So there has been just cost-cutting and budgetary constraints across the advertising sector. That's impacted most businesses, whether small or big.

是的。老實說，我們實際上並沒有關注每個單獨的業務。這些合作夥伴都不是我們業務的重要組成部分。總的來說，我們都知道現在每家公司都面臨著很大的削減成本的壓力。因此，整個廣告行業一直存在成本削減和預算限制。這影響了大多數企業，無論大小。

We'll next go to Eric Sheridan, Goldman Sachs.

接下來我們將介紹高盛的 Eric Sheridan。

Maybe two, if I can. First, on the Software Platform. Intrigued by the comment you made in the letter about continuing to invest for the long term against potential new use cases. Away from the dynamic you find yourself in the market today, maybe sketch out a little bit about what you're sort of investing against for the longer term and how you see the Software Platform continuing to evolve. That would be number one.

如果可以的話，也許兩個。首先，在軟件平台上。對您在信中關於繼續針對潛在的新用例進行長期投資的評論很感興趣。拋開您今天在市場上發現的動態，也許可以勾勒出一些關於您長期投資的對像以及您如何看待軟件平台的持續發展。那將是第一名。

And then number two, turning to the apps business. Felt like based on the letter, there was a fair bit of puts and takes in the quarter, the relevance of selling nonstrategic assets some investment being redirected in different elements. Can you talk a little bit about some of the headwinds and tailwinds just historically, that business faced as a result of those decisions in Q3 that impacted the absolute dollar amount we saw?

然後第二，轉向應用程序業務。根據這封信，感覺本季度有相當多的看跌期權，出售非戰略資產的相關性，一些投資被重定向到不同的元素。您能否談談歷史上的一些不利因素和不利因素，該業務是由於第三季度的決定影響了我們看到的絕對金額而面臨的？

I'll take the first question, Eric, and Herald will jump on the second. When it comes to our core business, we're pretty large scale at this point. We've talked about processing billions of dollars a year of advertising budget, and we're netting quite a bit, well over $1 billion a year of software revenue. And so at that level of scale, we built very good core technologies there. We also touched on a couple of letters ago about some investments in new initiatives. These have option value in our business. Frankly, like I said, I've been building businesses over a couple of decades. It takes years to be able to build the business to make an impact on a business as large scale as ours.

我會回答第一個問題，Eric，Herald 會回答第二個問題。就我們的核心業務而言，我們目前的規模相當大。我們已經討論過每年處理數十億美元的廣告預算，而且我們每年淨賺的軟件收入超過 10 億美元。所以在這樣的規模水平上，我們在那裡建立了非常好的核心技術。我們之前還談到了幾封關於對新舉措的一些投資的信件。這些在我們的業務中具有期權價值。坦率地說，就像我說的，幾十年來我一直在建立業務。建立業務以對像我們這樣大規模的業務產生影響需要數年時間。

But what gives us confidence going after these is they use the same core technologies and core competencies as our main business. One of those is extending our advertising solution to CTV. We did an acquisition there with a team role that we're very excited about. They have core technologies that are differentiated. And as we get our ad technologies to be sophisticated enough to extend to CTV, which is a work in progress, there'll be a go-to-market there, too, and the 2 technologies will couple together.

但讓我們有信心追求這些的是他們使用與我們的主營業務相同的核心技術和核心競爭力。其中之一是將我們的廣告解決方案擴展到 CTV。我們在那里以團隊角色進行了收購，我們對此感到非常興奮。他們擁有差異化的核心技術。隨著我們的廣告技術足夠複雜，可以擴展到 CTV，這是一項正在進行的工作，那裡也將進入市場，這兩種技術將結合在一起。

Initiatives like that, we're not baking into any of our forward outlook or a thought process around the short term in the business, but we think long term will create immense shareholder value and value for our team.

像這樣的舉措，我們並沒有考慮到我們的任何前瞻性展望或短期業務的思考過程，但我們認為長期將為我們的團隊創造巨大的股東價值和價值。

Eric, on the app side, I think we're making very good progress against our initiatives to get our portfolio to the position we want to get in terms of both the margin and then in a position for growth. So I'd say, really, there's 3 things that have taken place there. One, was instead of just driving users to gain the data, we really cut back on the UA to make sure that we are driving strong ROAS. And as we know in this marketplace, ROAS is even more difficult to come by. And so we've managed that UA spend. So we're taking revenue hit in exchange for profitability.

Eric，在應用程序方面，我認為我們在實現我們的計劃方面取得了非常好的進展，以使我們的投資組合在利潤率和增長方面達到我們想要的位置。所以我想說，真的，那裡發生了三件事。第一，我們不只是推動用戶獲取數據，而是真正削減了 UA 以確保我們推動強勁的 ROAS。正如我們在這個市場上所知道的，ROAS 更難獲得。因此，我們管理了 UA 支出。因此，我們用收入來換取盈利。

And then the second lever is just going through the portfolio and saying, well, which ones actually have the ability to drive real enterprise value for us in the long term. And there's some that frankly need more investment and more team, and there's others that really won't get there. And so we're in the process of winnowing through that, some of the studios we've just shut down or sold back to the founder. We're renegotiating some of the earnouts. And again, others were actually investing in quite a few new games.

然後第二個槓桿只是通過投資組合，然後說，從長遠來看，哪些實際上有能力為我們帶來真正的企業價值。坦率地說，有些人需要更多的投資和更多的團隊，還有一些人真的無法做到。因此，我們正在篩選出一些我們剛剛關閉或賣回給創始人的工作室。我們正在重新談判一些收益。再一次，其他人實際上是在投資不少新遊戲。

So the third lever will then be ultimately when we get to portfolio that we want to own and grow forward. We think that will be a healthy portfolio. We hope to get there really by the end of this year is what we talked about. And then from there, it really depends if the market recovers in terms of valuations on whether or not we'd actually be able to monetize any significant portion of the portfolio. We may end up owning all of it, or with the right bid, we may end up selling all of it. But given the macroeconomic environment and where purchase multiples might be out there, our focus is very much on owning those assets for now, optimizing them and then figuring out what value creation could be had down the road. And it is a significant amount of value relative to our current enterprise value and would be very accretive and deleveraging to us, we think, with the right price for the right assets.

因此，第三個槓桿最終將是當我們獲得我們想要擁有和發展的投資組合時。我們認為這將是一個健康的投資組合。我們希望在今年年底前真正到達那裡，這就是我們所說的。然後從那裡開始，這真的取決於市場是否在估值方面復甦，這取決於我們是否真的能夠將投資組合的任何重要部分貨幣化。我們可能最終擁有所有這些，或者通過正確的出價，我們最終可能會出售所有這些。但考慮到宏觀經濟環境以及購買倍數可能存在的情況，我們的重點是目前擁有這些資產，優化它們，然後弄清楚未來可以創造哪些價值。相對於我們當前的企業價值而言，這是一個巨大的價值，我們認為，以合適的價格購買合適的資產，對我們來說將是非常增值和去槓桿化的。

We'll next go to William Lampen at BTIG. Clark, go ahead.

接下來我們將前往 BTIG 的 William Lampen。克拉克，繼續。

I've got two. Adam, you talked a couple of times about improving your own core technologies, and you alluded to that a couple of times sort of intra-quarter back in August and September. I wanted to see if maybe you could give us just a small window into sort of what you're working on, how that's progressing and sort of what's in focus. And then on diversification and appreciating that you guys are operating this business with more of a long-term mindset right now. And I think, as you said, like a private entity, are you comfortable investing more to help scale and drive growth for businesses like Wurl or perhaps also Array or Vessel next year. And maybe along those lines, has Apple's change around in-app NFT utility change the priority in terms of which of those new businesses, you do want to focus a little bit more on scaling and growing?

我有兩個。亞當，你曾多次談到改進自己的核心技術，你曾在 8 月和 9 月的季度內提到過幾次。我想看看你是否可以給我們一個小窗口，讓我們了解你正在做的事情、進展情況以及關注的重點。然後在多元化和欣賞你們現在以更長期的心態經營這項業務。正如你所說，我認為，就像一個私人實體一樣，你是否願意投資更多來幫助擴大規模和推動明年 Wurl 或 Array 或 Vessel 等企業的增長。也許沿著這些思路，Apple 圍繞應用內 NFT 實用程序的改變是否改變了在哪些新業務方面的優先級，您是否希望更多地關注擴展和增長？

Thanks, Clark. I'll go the second first and then back to the first question. We're focused on investing in new initiatives but we know how to build businesses with a cash flow mindset from the very beginning. As a company at AppLovin and we were profitable our second month in operation. And every one of these new initiatives, we take that same approach into. We're excited about the opportunity. We leverage a lot of the resources that we already have in place and the incremental investments that we're making into them are not material given the market opportunity that they present us.

謝謝，克拉克。我先講第二個，然後再回到第一個問題。我們專注於投資新計劃，但我們從一開始就知道如何以現金流的心態建立業務。作為 AppLovin 的一家公司，我們在運營的第二個月就實現了盈利。這些新舉措中的每一項，我們都採用相同的方法。我們對這個機會感到興奮。我們利用了我們已經擁有的大量資源，鑑於它們為我們提供的市場機會，我們對它們進行的增量投資並不重要。

We'll continue to approach any business opportunity that way. We think of them as startups and the GMs that we have running those businesses also think of them as the CEO of a start-up. And when you have a new business that you're trying to incubate and build, a lot of times, you want to do it organically, make sure the product market fit is there, not overinvest early, and then we will invest behind growth as we know that we have something that's hot. And at that point in time, we'll talk about these businesses because in theory, they'll be making an impact to our numbers, both revenue and cost.

我們將繼續以這種方式處理任何商業機會。我們將他們視為初創公司，而我們經營這些業務的總經理也將他們視為初創公司的首席執行官。當你有一個新業務要嘗試孵化和建立時，很多時候，你想有機地去做，確保產品市場適合，不要過早過度投資，然後我們將投資於增長作為我們知道我們有一些很熱的東西。屆時，我們將討論這些業務，因為從理論上講，它們將對我們的數字產生影響，包括收入和成本。

And on the first question, when it comes to core technology, we always measure the error rate in our predictive engine. The whole model is predicated on being able to predict what are users going to download and engage with next and driving value to our advertisers. Value comes from revenue. So we've got to be very, very good at predicting a future event. And we know that there's error in our system. There's a lot of incremental changes that we, as a technology company, will do at all times. But very rarely, we'll go and rebuild a lot of our core system. We're doing both right now. And the last time we rebuilt a lot of our core systems to try to get an upgrade was actually the initial release of AXON, which was now, I think, about 2 years ago and obviously facilitated a ton of growth in our business. We're very excited about the potential of all of our investments in technology into our future.

第一個問題，當涉及到核心技術時，我們總是在我們的預測引擎中測量錯誤率。整個模型的前提是能夠預測用戶接下來會下載什麼內容並與之互動，並為我們的廣告商帶來價值。價值來自收入。所以我們必須非常非常擅長預測未來的事件。我們知道我們的系統存在錯誤。作為一家技術公司，我們將隨時進行許多增量更改。但很少，我們會去重建很多我們的核心系統。我們現在都在做。上一次我們重建很多核心系統以嘗試升級實際上是 AXON 的初始版本，我認為現在是大約 2 年前，顯然促進了我們業務的大量增長。我們對我們所有的技術投資對我們未來的潛力感到非常興奮。

That's really helpful. And if I could, maybe, Herald, just as a quick follow-up, you have north of $400 million in authorization for your buyback right now. I know that you have a lot of sort of attractive capital allocation opportunities in front of you. How does the sort of stock buyback option fit into the overall priority set right now?

這真的很有幫助。如果我可以的話，也許，先驅報，作為一個快速的跟進，你現在有超過 4 億美元的回購授權。我知道你面前有很多有吸引力的資本配置機會。這種股票回購選項如何適合目前的總體優先級設置？

Yes. Thanks, Clark. Look, it is a high priority for us to allocate our capital wisely, particularly when there's opportunities that arise. And in this market, maybe it's around stock, maybe there's other assets that have gotten a lot cheaper that we'd want to own or it's just hiring a lot of great people that we didn't have access to before. And so we're taking advantage of this time in making lemonade out of these lemons, and we're glad to have the EBITDA that we do and the cash balance sheet that we have. But certainly, at these stock prices and given all the upside opportunities we see in the free cash flow characteristics and just the cash-on-cash yield that we project out, we certainly are considering stock buyback and we think the sizing of $400 million. We'll have to figure out what's the right amount to use at what period of time.

是的。謝謝，克拉克。看，明智地分配資本是我們的重中之重，尤其是在出現機會時。在這個市場上，也許是股票，也許還有其他資產變得更便宜，我們想要擁有，或者它只是僱傭了很多我們以前無法接觸到的優秀人才。所以我們利用這段時間用這些檸檬製作檸檬水，我們很高興擁有我們所做的 EBITDA 和我們擁有的現金資產負債表。但可以肯定的是，在這些股價下，考慮到我們在自由現金流特徵中看到的所有上行機會，以及我們預測的現金收益率，我們當然正在考慮股票回購，我們認為規模為 4 億美元。我們必須弄清楚在什麼時間段使用什麼量是合適的。

We'll next go to Matt Cost at Morgan Stanley.

接下來我們將介紹摩根士丹利的 Matt Cost。

So it seems like the overall app install ad market has been decelerating over the course of 2022 but has not reached the level that we've seen mobile gaming and consumer spending on mobile gaming reach where you've got market year-on-year decline. So is it a fair statement that maybe the ad business here is a lagging indicator to what consumers are spending on mobile games? And does that create maybe more risk for next year, which you're reacting to? That's question one. Question 2 is, are there any indications or data points that you'll be looking for? I know you can't predict the future, but that you will be looking for to try to assess when the market has bottomed and maybe you'll be looking for opportunities to push harder on investment at that point?

因此，整個應用安裝廣告市場似乎在 2022 年期間一直在減速，但還沒有達到我們看到的移動遊戲和消費者在移動遊戲上的支出達到市場同比下降的水平.那麼，這裡的廣告業務可能是消費者在手機遊戲上花費的滯後指標，這是一個公平的說法嗎？這是否會為明年帶來更多風險，您對此有何反應？那是問題一。問題 2 是，您是否需要尋找任何跡像或數據點？我知道你無法預測未來，但你會試圖評估市場何時觸底，也許你會在那個時候尋找機會加大投資力度？

Yes. So I'll take the second first again, just top of mind. Look, we're investing in our business as it is. We run a high-margin business because we've got a lean team, we've got an exceptional team that creates a lot of output. We've been run entrepreneurial since the get-go. So there's no shortage of investment against things that we see as opportunities. We've got new initiatives that we're investing into. We've got a technological (inaudible) that we're investing into. And we're organizing a lot of the acquisitions that we've made over the last couple of years to be more advantageous for our business going forward.

是的。所以我會再拿第二個第一個，只是最重要的。看，我們正在投資我們的業務。我們經營高利潤業務是因為我們擁有一支精幹的團隊，我們擁有一支創造大量產出的卓越團隊。從一開始，我們就一直在創業。因此，對於我們認為是機會的事物，並不缺乏投資。我們有新的計劃，我們正在投資。我們正在投資一項技術（聽不清）。我們正在組織我們在過去幾年中進行的許多收購，以便對我們未來的業務更加有利。

So we've not stopped investing and we'll continue to invest both in growth opportunities that we see in front of us right now and those that we come up with in the future. Nothing about the market is going to change that because we do generate enough cash to be opportunistic enough to be able to invest in things that we deem worthwhile even in today's market.

因此，我們並沒有停止投資，我們將繼續投資於我們現在看到的增長機會以及我們未來提出的增長機會。市場不會改變這一點，因為我們確實產生了足夠的現金來投機取巧，即使在今天的市場上也能夠投資於我們認為值得的事情。

Now when it comes to the market itself, mobile gaming has been declining. People are still consuming the same amount of mobile games, though. The big change, there's been 2 changes. One is, as we've talked about, macroeconomically, a lot of companies are focused on cash flow and away from revenue growth. That's just a requirement. That's already baked into the advertising ecosystem. The other change that came obviously in our sector right around the same time as the economy fell off is that IDFA change. And traditionally, mobile gaming companies were able to spend a lot of their revenue back in the user acquisition, namely on some big social properties to be able to grow. Those buys had the best return on ad spend. They were highly targeted, and they were able to use those profits to subsidize future growth.

現在談到市場本身，手機遊戲一直在下降。不過，人們仍在消費相同數量的手機遊戲。最大的變化，有2個變化。一是，正如我們已經談到的，從宏觀經濟角度來看，很多公司都專注於現金流，而不是收入增長。這只是一個要求。這已經融入了廣告生態系統。與經濟下滑同時發生在我們行業的另一個明顯變化是 IDFA 變化。傳統上，移動遊戲公司能夠將大量收入用於獲取用戶，即用於一些能夠增長的大型社交資產。這些購買的廣告支出回報率最高。他們的針對性很強，他們能夠利用這些利潤來補貼未來的增長。

Take that away, and you have 2 things that really hit the category. And both those happen at the same time. So you can't really decouple them. Both are also baked into the business. Our business, we're fortunate enough to have a massive penetration in the market we operate in. Our mediation product is market leading and our AppDiscovery product is market-leading. And we've got no dependency on any single advertiser.

把它拿走，你就有兩件事真正符合這個類別。而這兩者同時發生。所以你不能真正將它們解耦。兩者也都融入了業務。我們的業務，我們很幸運能夠在我們經營的市場中進行大規模滲透。我們的中介產品是市場領先的，我們的 AppDiscovery 產品是市場領先的。而且我們不依賴任何單一的廣告商。

The nice thing about mobile gaming is that it is a very commoditized industry when it comes to advertising. All of our mobile gaming categories have multiple gaming companies that all look very similar to the naked eye. They certainly have different products. But if you think about some of our biggest advertisers, they make solitaire games or they make puzzle games, and there's 100 other ones of them that look the same, and most of them are marketing on our platform. So even if a couple of them start struggling as businesses, the other ones just fill in the gap. Therefore, we look at our businesses in a very stable place, and we don't see much more deteriorating going forward.

手機遊戲的好處在於，它在廣告方面是一個非常商品化的行業。我們所有的手機遊戲類別都有多家遊戲公司，它們都與肉眼非常相似。他們當然有不同的產品。但如果你想想我們的一些最大的廣告商，他們製作單人紙牌遊戲或益智遊戲，其中還有 100 款看起來相同，而且大部分都在我們的平台上進行營銷。因此，即使他們中的一些人開始在企業中掙扎，其他人也只是填補了空白。因此，我們以非常穩定的方式看待我們的業務，並且我們認為未來不會出現更多惡化。

So would it be fair to assume then that your quarter ahead guidance does not contemplate material further deterioration?

那麼，假設您的季度預測沒有考慮到實質性的進一步惡化，這是否公平？

Yes, I think we said, stable.

是的，我想我們說過，穩定。

We'll take our next question from Stephen Ju at Credit Suisse.

我們將向瑞士信貸的 Stephen Ju 提出我們的下一個問題。

All right. So Adam, to dig into the AXON topic a little bit more. I think you've previously talked about how it has helped you guys drive I think it was a 500% improvement in the accuracy of what ads you are showing. So have those improvements been fairly steady over the last couple of years? Or do they tend to show up in large steps as you think about what kind of effective CPI improvements you could drive over the longer term? And also if you can update us on where you are in the transition of the mediation solution from, I guess, the more waterfall to real-time bidding?

好的。因此，Adam，進一步深入研究 AXON 主題。我認為您之前曾談到它如何幫助你們駕駛我認為您展示的廣告的準確性提高了 500%。那麼這些改進在過去幾年中是否相當穩定？或者，當您考慮可以在長期內推動什麼樣的有效 CPI 改進時，它們是否傾向於以大的步驟出現？此外，如果您能向我們介紹您在調解解決方案的過渡過程中的最新情況，我猜是從瀑布式到實時出價？

Yes. So on the first, obviously, when we rolled out the AXON upgrade, there were huge step-ups of growth. And when you roll out a core technology like that, it has to get adopted by all your advertisers. So we have very predictable growth that was in the double digits, I think, around 30% for 4 subsequent quarters. That accuracy came from the upgrade in the engine. Then we've had incremental changes every step of the way. A material upgrade to the engine really is a step function opportunity, whereas your incremental upgrades end up just baked into your numbers. This isn't to do with CPI though. It's not that we were able to improve the accuracy and drive up CPI. Our goal is to say advertisers have their goals. Our advertisers are willing to spend today in our platform of whatever return on ad spend goals they've set, the amount that they're willing to spend.

是的。因此，很明顯，當我們推出 AXON 升級時，首先出現了巨大的增長。當你推出這樣的核心技術時，它必須被所有廣告商採用。所以我們有非常可預測的增長，我認為，在隨後的四個季度中，增長率約為 30%。這種準確性來自引擎的升級。然後我們在每一步都進行了增量更改。對引擎的材料升級確實是一個階梯函數機會，而您的增量升級最終只是融入了您的數字。但這與 CPI 無關。並不是說我們能夠提高準確性並推高 CPI。我們的目標是說廣告商有他們的目標。今天，我們的廣告商願意在我們的平台上花費他們設定的任何廣告支出目標回報，以及他們願意花費的金額。

We have a lot of excess budget that we're not able to fulfill today. So if we're able to improve the accuracy of our predictive engine, we'll be able to fulfill that excess budget and maintain advertiser rates similar to where they are. So that the advertiser is happy, and we're growing our business. And that's the opportunity that we're excited about. That's a performance business at its core.

我們有很多超額預算，我們今天無法完成。因此，如果我們能夠提高我們的預測引擎的準確性，我們將能夠滿足超額預算並保持廣告客戶的費率與他們的水平相似。這樣廣告商就高興了，我們也在發展我們的業務。這就是我們感到興奮的機會。這是一個以性能為核心的業務。

So on the second question, in the move from mediation to real-time bidding, we've talked about this in the past. There were some early adopters of real-time bidding, and a lot of the market is going to move there over time. And there's just some technology companies that are still getting to the point of being able to support real-time bidding instance.

所以關於第二個問題，在從調解到實時競價的轉變中，我們過去已經討論過這個問題。有一些實時競價的早期採用者，隨著時間的推移，很多市場將轉移到那裡。只有一些技術公司仍然能夠支持實時競價實例。

Now the biggest and most interesting partner there for us in the future is Google. There was an announcement a couple of months ago about their investment in real-time bidding. We're one of the launch partners for their efforts there. They're starting to see strong success there. We love that partnership. And together, if we can facilitate Google moving towards real-time bidding, it will really end up tilting the majority of the market over to it. We're excited about that. It will create efficiency gains for publishers, incremental revenue for the publisher that will then flow back into user acquisition. Obviously, we can charge for it. So it improves the business opportunity we have with the MAX products. And so we think there's a lot of gains to be had there over the coming quarters and years.

現在對我們來說未來最大和最有趣的合作夥伴是谷歌。幾個月前有一個關於他們投資實時競價的公告。我們是他們在那裡努力的啟動合作夥伴之一。他們開始在那裡看到巨大的成功。我們喜歡這種夥伴關係。同時，如果我們能夠幫助谷歌轉向實時競價，它最終將真正讓大部分市場向它傾斜。我們對此感到興奮。它將為出版商創造效率收益，為出版商增加收入，然後將回流到用戶獲取中。顯然，我們可以為此收費。因此，它改善了我們使用 MAX 產品的商機。因此，我們認為在接下來的幾個季度和幾年中會有很多收益。

And Herald, I think up to 40% of your revenue base is coming in from international given the strength of the U.S. dollar that had to have put the squeeze on revenue growth for you guys a little bit. So can you talk about the FX headwinds probably separated for perhaps the software business as well as apps?

先驅報，我認為，鑑於美元的強勢不得不對你們的收入增長造成一點壓力，你們高達 40% 的收入基礎來自國際市場。那麼，您能否談談軟件業務和應用程序可能分開的外匯逆風？

Yes, for us, a lot of the app side is transacted in dollars and through app stores. And so really more of the FX headwind is probably more macroeconomic and then if people are just transacting in a currency, then it's always translated into dollars for us. So we don't actually -- for our specific P&L, on the software side as well, we don't have like a big FX headwind on our P&L. It would be just if there was some currency translation of someone buying a good in a game itself, for example, you might see it there. But for us directly, it's not a big impact.

是的，對我們來說，很多應用端都是以美元和通過應用商店進行交易的。所以實際上更多的外匯逆風可能更多的是宏觀經濟，然後如果人們只是用一種貨幣進行交易，那麼它總是對我們來說轉化為美元。所以我們實際上並沒有——對於我們的特定損益，在軟件方面也是如此，我們的損益並沒有像大的外匯逆風。只是如果有人在遊戲中購買商品的某種貨幣轉換，例如，您可能會在那裡看到它。但直接對我們來說，影響不大。

Well, next go to Jason Bazinet with Citi. (Operator Instructions)

好吧，接下來和花旗一起去 Jason Bazinet。 （操作員說明）

We'll next go to Omar Dessouky at Bank of America. (Operator Instructions)

我們接下來要去美國銀行的 Omar Dessouky。 （操作員說明）

Yes. So look, in terms of specifically these other big players in the market that have been dominant prior to IDFA. They're making a lot of investments into kind of privacy-enhancing technologies and infrastructure and presumably once they get around to completing that and have it available for general use, market share could kind of shift back to them. And I was wondering if you had any thoughts on how long -- like how many years that would take before some of these players like Facebook could get there?

是的。所以看，特別是這些在 IDFA 之前一直佔據主導地位的市場上的其他大玩家。他們正在對某種增強隱私的技術和基礎設施進行大量投資，並且大概一旦他們完成這項工作並使其可用於一般用途，市場份額可能會轉移回他們手中。我想知道你是否對多長時間有任何想法——比如需要多少年才能讓像 Facebook 這樣的一些玩家到達那裡？

Yes. Thanks for the question, Omar. We can't comment on what other people are investing into or how long those investment efforts will take. But the reality of our sector is we want the pie to be growing. If the pie is growing, it means advertisers, these mobile gaming companies in general are able to reinvest more dollars into user acquisition. And we've got a strong share of that pie. We've always had a strong share of that pie. We had a very strong growing business.

是的。謝謝你的問題，奧馬爾。我們無法評論其他人正在投資什麼或這些投資需要多長時間。但我們行業的現實是我們希望餡餅不斷增長。如果餡餅在增長，則意味著廣告商，這些移動遊戲公司一般能夠將更多資金再投資於用戶獲取。我們在這個餡餅中佔有很大份額。我們一直在那個餡餅中佔有很大的份額。我們的業務增長非常強勁。

Prior to the IDFA change, we didn't really change a whole lot. After the IDFA change and now we're just caught up in the macroeconomic cycle. But the reality is that IDFA change is a burden on the growth of the whole sector. We want our advertisers, including our own gaming studios to be able to invest on Facebook and other properties as successfully as they possibly can. The deployment of dollars in efficacious and ROAS-based advertising, creates this upside to the category that did fuel a decade of consistent growth.

在 IDFA 更改之前，我們並沒有真正改變很多。在 IDFA 變更之後，現在我們剛剛陷入宏觀經濟周期。但現實情況是，IDFA 的變化是整個行業增長的負擔。我們希望我們的廣告商，包括我們自己的遊戲工作室，能夠盡可能成功地投資 Facebook 和其他資產。在有效和基於 ROAS 的廣告中部署美元，為確實推動了十年持續增長的類別創造了這種優勢。

Take that away and it creates a handicap. So we have no fear to that. We hope that all the technologies in the ecosystem continue to innovate and improve. We also, as a possible growth opportunity are hoping that Apple and the other -- and Google and other platforms bring more inventory online because as Apple continues to invest in their advertising efforts and they've talked about bringing more inventory online, it creates more places for these same advertisers to go invest and again, grow their business.

把它拿走，它就會造成障礙。所以我們對此沒有恐懼。我們希望生態系統中的所有技術不斷創新和改進。作為一個可能的增長機會，我們還希望蘋果和其他——以及谷歌和其他平台能夠帶來更多的在線庫存，因為隨著蘋果繼續投資於他們的廣告工作，並且他們已經討論過在網上帶來更多的庫存，它會創造更多這些相同的廣告商去投資並再次發展他們的業務的地方。

Because our business is performance-based, that never means that we lose budget. It just means that the businesses of our advertisers will improve, which then ends up allowing them to be more stable companies and reinvest back into our platform as well.

因為我們的業務是基於績效的，所以這絕不意味著我們會失去預算。這只是意味著我們廣告商的業務將得到改善，最終使他們成為更穩定的公司並重新投資回我們的平台。

Okay. So if I heard you right, it sounds like you're saying that a resurgence of those dominant companies pre-IDFA is actually more of like a tailwind and benefit for you guys rather than headwind...

好的。所以，如果我沒聽錯的話，聽起來你是在說那些在 IDFA 之前占主導地位的公司的複蘇實際上更像是順風，對你們有益，而不是逆風……

Yes. We want a growing sector. In a growing sector and a predictably growing one where companies can reinvest their dollars, everyone is winning together. And we have market leadership technologies when it comes to monetization, mediation and growth. And so we've got a very strong base to our business. We were always totally fine, doing very well, growing consistently prior to the IDFA change and we'll see that afterwards if these companies do make their technologies more efficient again.

是的。我們想要一個不斷增長的行業。在一個不斷增長的行業和一個可預測的增長行業，公司可以將他們的資金再投資，每個人都在共同獲勝。在貨幣化、中介和增長方面，我們擁有市場領先的技術。因此，我們的業務擁有非常強大的基礎。我們一直都很好，做得很好，在 IDFA 變更之前一直在增長，如果這些公司確實再次讓他們的技術變得更高效，我們會看到這一點。

We'll next go to Franco Granda with D.A. Davidson.

接下來我們將和 D.A. 一起去 Franco Granda。戴維森。

Couple of questions here. I was wondering, how many studios are you down to at the moment? How many do you own? And how should we think about the performance-based payments for the studios given the lower expected revenues?

這裡有幾個問題。我想知道，你現在有多少個工作室？你擁有多少？鑑於預期收入較低，我們應該如何考慮基於績效的工作室付款？

Yes, we have about a dozen studios now, and we are -- as I think I mentioned before, in process of renegotiating some of those payments. The vast majority that have already been paid out. And some of those studios are obviously not performing and not going to hit their earnouts either. And so the projected earn-out payments are not terribly significant. We hope as we restructure them in a way that there's more alignment for the new world and the new expectations that they succeed and we succeed along the way. So they're very much going to be aligned with our success going forward.

是的，我們現在有大約十幾個工作室，而且我們 - 正如我之前提到的那樣，正在重新談判其中一些付款。絕大多數已經付清了。其中一些工作室顯然沒有表現，也不會達到他們的收益。因此，預計的盈利支付並不是非常重要。我們希望在重組它們時，讓新世界和新的期望更加一致，即它們會成功，我們也會一路成功。因此，他們將與我們未來的成功保持一致。

Awesome. And then can you speak to what the business at Wurl is like at the moment? Where do you expect it to end for the year relative to your expectations entering the year? And then maybe any color around customer engagements that could translate into revenue next year?

驚人的。然後你能談談 Wurl 目前的業務情況嗎？相對於您對進入這一年的預期，您預計今年會在哪裡結束？然後也許圍繞客戶參與的任何顏色都可以轉化為明年的收入？

Yes, we're excited to own Wurl. Obviously, it's a very big category. If you've been looking at some releases of companies that are involved in the CTV category, it seems to be the one place that there's some green shoots and some growth. So we're excited to be entering the category and assessing our best strategies there. Wurl in and of itself in terms of revenue still very -- relatively small but growthful. It's in the $30 million, $40 million, $50 million range in terms of where it's going to grow to in the near term. So not meaningful from our revenue standpoint but it is very strategic, given the inventory that they operate with, given all the partners that use them for the distribution of content. We think it's an interesting way to enter the category instead of us trying to do it from a standing start. And they've got a team of people that are thinking about it every single day.

是的，我們很高興擁有 Wurl。顯然，這是一個非常大的類別。如果您一直在查看涉及 CTV 類別的公司的一些版本，它似乎是一個有一些萌芽和一些增長的地方。因此，我們很高興能夠進入該類別並評估我們在那裡的最佳策略。就收入而言，Wurl 本身仍然非常 - 相對較小但正在增長。就近期的增長幅度而言，它在 3000 萬美元、4000 萬美元、5000 萬美元的範圍內。所以從我們的收入角度來看沒有意義，但考慮到他們運營的庫存，考慮到所有使用它們來分發內容的合作夥伴，這非常具有戰略意義。我們認為這是一種有趣的進入類別的方式，而不是我們試圖從一開始就這樣做。他們有一群人每天都在思考這個問題。

And as Adam mentioned earlier, we're very much partnered up with them on the technology side, using our ad tech technology and their experience and expertise in the CTV category to figure out what our best plays are. But that's going to be a longer-term play for us. It is a big category. We want to figure out how to get it right. It's very dynamic. A lot of players in the space. And Wurl is going up and groups coming together. So it's something we're very focused on and excited about, but still pretty early.

正如亞當之前提到的，我們在技術方面與他們非常合作，利用我們的廣告技術技術以及他們在 CTV 類別中的經驗和專業知識來確定我們最好的戲劇是什麼。但這對我們來說將是一個長期的遊戲。這是一個很大的類別。我們想弄清楚如何讓它正確。這是非常動態的。空間內有很多玩家。 Wurl 正在上升，團體聚集在一起。所以這是我們非常關注和興奮的事情，但還很早。

We'll next go to Martin Yang with Oppenheimer.

接下來我們將和奧本海默一起去馬丁·楊。

I want to dig in to the mechanics when a diversified publisher scale back UA and focus on ROAS. How -- assuming a customer's yours does the same as you treat your apps? And how does it impact your AppDiscovery and AppLovin Exchange, respectively?

當多元化的出版商縮減 UA 並專注於 ROAS 時，我想深入研究機制。如何——假設一個客戶是你的，你對待你的應用程序的方式是一樣的？它對您的 AppDiscovery 和 AppLovin Exchange 分別有何影響？

Yes. So that's only directly impactful to us, Martin, on the AppDiscovery side, the ALX business is third-party demand sources that aggregate a lot of demand that may have the same or different models to us. But on the AppDiscovery product, if there's a customer to say, for instance, wants to spend $1,000 a day at 10% return on ad spend, willing to make $100 a day in the first 24 hours, our systems are very good at driving advertising for them that will yield that return.

是的。所以這只會對我們產生直接影響，Martin，在 AppDiscovery 方面，ALX 業務是第三方需求源，它們聚合了大量可能對我們具有相同或不同模型的需求。但是在 AppDiscovery 產品上，如果有客戶說，例如，希望以 10% 的廣告支出回報率每天花費 1,000 美元，願意在前 24 小時內每天賺取 100 美元，那麼我們的系統非常擅長推動廣告對於那些將產生回報的人。

Now that may back into somewhere around, let's call it, a day 270 return on ad spend, where they break even on the $1,000 spent, and they may be looking at this economy and saying, we can't afford to wait 270 days anymore to breakeven on the dollar invested. So they pull back that date. What they would do is they'd go, we're willing to spend the same $1,000, but now get us 20% return on ad spend in the first 24 hours. And again, that in our system, it's all programmatic. So they changed the goal, it instantly will flow through the system and the advertising now will try to find users that will yield twice the return on ad spend that yesterday's budget and targets would have gone and yielded.

現在這可能會回到某個地方，讓我們稱之為一天 270 天的廣告支出回報，他們在花費 1,000 美元時收支平衡，他們可能會看著這種經濟並說，我們不能再等待 270 天了對所投資的美元進行盈虧平衡。所以他們撤回了那個日期。他們會做的是，我們願意花同樣的 1,000 美元，但現在讓我們在前 24 小時內獲得 20% 的廣告支出回報。再說一次，在我們的系統中，這一切都是程序化的。所以他們改變了目標，它會立即流經系統，現在的廣告將試圖找到能夠產生兩倍於昨天預算和目標的廣告支出回報的用戶。

And so that's really the change that has flowed through the industry is that as advertisers have had to get tighter with the cash that they're able to invest on user acquisition, those just automatically flow through our system. Now also as this economy goes the other way and we get back to a growth period, hopefully at some point into the future, it will go the other way where they lower their goals and automatically will have a step up in the dollars that we can go spend on their behalf to drive them their new economic goals.

因此，整個行業真正發生的變化是，隨著廣告商不得不更緊地利用他們能夠投資於用戶獲取的現金，這些資金只會自動流經我們的系統。現在，隨著經濟走向另一個方向，我們又回到了增長期，希望在未來的某個時候，它會走向另一個方向，他們降低目標，自動增加美元，我們可以去代表他們消費，以推動他們實現新的經濟目標。

One more follow-up on margins for Software Platform. So aside from your own investment decisions regarding OpEx and anything else that are in your control, what are the potential factors that could impact your Software Platform margin?

軟件平台利潤率的另一項後續行動。因此，除了您自己關於 OpEx 的投資決策以及您可以控制的任何其他事項之外，還有哪些可能影響您的軟件平台利潤率的潛在因素？

Martin, we report on a net revenue basis to start with. So we do take out the vagaries of having a gross to net in our net revenue. So below the line there, though, it's really the data center costs, which we talked about before, and we have our contract in place and that we have a very good handle on to know what that cost will be. Our team is in place. Yes, we were trying to add awesome talent that's available to us now. But we're not talking about dozens and dozens of people at a time. So I wouldn't see any real significant increase there. Our new initiatives, we are spending against already. So it is in the P&L and part of our operating expenses today.

馬丁，我們首先以淨收入為基礎報告。因此，我們確實消除了淨收入中總淨額的變幻莫測。因此，在這條線的下方，實際上是我們之前討論過的數據中心成本，我們已經簽訂了合同，並且我們可以很好地了解該成本將是多少。我們的團隊就位。是的，我們正在嘗試添加我們現在可用的很棒的人才。但我們不是一次談論幾十個人。所以我不會在那裡看到任何真正的顯著增長。我們的新舉措，我們已經在反對了。所以它在損益表和我們今天的部分運營費用中。

Now if one of them catches fire, do we increase dramatically there? Potentially. But as Adam said, we've always been very cash flow focused and return focused. We'll do the right thing there. And by the way, likewise, on the app portfolio, and we've been targeting to get our margins up. But if there is a game that we see in the past, we've done that with Project Makeover and others. But if there's a game that we see that has a great return on ad spend, we will spend there to and possibly bring down margins on a quarterly basis as we scale our game. But on the software side, we have a high degree of confidence and visibility into that. Now mid-60s margin structure, including new initiatives.

現在，如果其中一個著火了，我們會在那裡急劇增加嗎？潛在的。但正如亞當所說，我們一直非常關注現金流和回報。我們會在那裡做正確的事。順便說一句，同樣，在應用程序組合上，我們一直致力於提高利潤率。但是，如果我們過去看到過一款遊戲，我們已經通過 Project Makeover 和其他遊戲做到了這一點。但是，如果我們發現有一款遊戲的廣告支出回報率很高，那麼我們將在該遊戲上進行支出，並可能在我們擴大遊戲規模時按季度降低利潤率。但在軟件方面，我們對此充滿信心和可見性。現在是 60 年代中期的利潤率結構，包括新舉措。

And if our core technology ramps up, there's a significant amount of flow-through per incremental dollar to the bottom line given the fact that our infrastructure is basically fixed at this point as well as our team has paid for as well.

如果我們的核心技術得到提升，考慮到我們的基礎設施在這一點上基本上是固定的，而且我們的團隊也已經為此付出了代價，每增加一美元就會有大量的資金流入。

We'll next go to Ralph Schackart with William Blair.

接下來我們將和威廉布萊爾一起去拉爾夫沙卡特。

I jumped on late, so I apologize if this has been asked. But can you maybe talk about sort of the softness that you saw in the quarter and maybe sort of the pace of that. And I think on the call, you had said that you feel that stuff is -- that the business has stabilized. Just trying to understand sort of the linear area of the pullback and sort of the comments around stabilization. That's the first one. And then I have a follow-up, please.

我跳得很晚，所以如果有人問我，我很抱歉。但是你能不能談談你在本季度看到的那種柔軟度，或者那種節奏。而且我認為在電話會議上，您曾說過您覺得事情是 - 業務已經穩定下來。只是試圖了解回調的線性區域和圍繞穩定的評論。那是第一個。然後我有一個跟進，請。

Yes. Ralph, we referenced it in the last call, but we've been pretty stable since our last big step-up growth quarter. It's not that we're seeing any trends change late in the quarter at all since then. We signaled that we thought it would be relatively flat on the quarter, it was. We see the same thing going forward. Right now, we're in an ecosystem that sort of has priced in all of this difficulty on the macro side and difficulty on the targeting side. And so we see stability everywhere in this business at the moment, and that gives us a lot of comfort with where we're at.

是的。拉爾夫，我們在上次電話會議中引用了它，但自上一個大幅增長季度以來，我們一直非常穩定。從那時起，我們並沒有在本季度末看到任何趨勢變化。我們表示我們認為本季度會相對持平，確實如此。我們看到了同樣的事情。目前，我們所處的生態系統已經將宏觀方面的所有困難和目標方面的困難都計入了價格。因此，我們目前在這項業務中到處都看到了穩定性，這讓我們對自己所處的位置感到很舒服。

Okay. And then just a clarifying question from the shareholder letter talked about during Q3 within Apps business about the sale of nonstrategic assets, did you sell off something during the quarter?

好的。然後只是一個澄清性問題，在第三季度應用業務中談到的關於出售非戰略資產的股東信中，你在本季度出售了一些東西嗎？

Yes, there was one that actually a very, very small asset that we sold back to the founders. They were trying to develop a new game that wasn't going to come to fruition so that they wanted to own the entity going forward. So it's a very, very small asset.

是的，有一個實際上是我們賣回給創始人的非常非常小的資產。他們試圖開發一款不會實現的新遊戲，因此他們希望擁有該實體。所以這是一個非常非常小的資產。

We'll go ahead and take our last question from David Pang with Stifel.

我們將繼續回答 David Pang 和 Stifel 的最後一個問題。

Just wanted to see if you could provide an update on the DSPs that were transitioning from MoPub to MAX that you highlighted last quarter. And then for Herald, how are you thinking about leverage in general in a rising rate environment?

只是想看看您是否可以提供有關從 MoPub 過渡到 MAX 的 DSP 的更新，您在上個季度強調了這一點。然後對於先驅報，您如何看待利率上升環境中的總體槓桿率？

DSP side, we use the word stable again, super stable. We are cut over on pretty much all the MoPub DSPs at this point. Really, the shift is a year ago, there's a lot more brand dollars in the ecosystem. A lot of these DSPs are advantageous for us because they're hedged on our business. They go tap into brand dollars, which is not something we've traditionally focused on. And all of those big vendors are live on our platform. They're doing very well. They like the new infrastructure and system. MAX plus MoPub is over 2x bigger than what MoPub was for them. So in terms of the pipes being connected up to the DSPs were there, in terms of them being able to spend materially more than they were doing in the past, we're actually there as well because our business is so much bigger. But in the long term, there's really going to be an opportunity there as this economy recovers for these DSPs to flow more dollars to our system.

DSP方面，我們再次使用穩定這個詞，超級穩定。此時，我們幾乎可以使用所有 MoPub DSP。真的，轉變是在一年前，生態系統中有更多的品牌美元。許多這些 DSP 對我們來說是有利的，因為它們對我們的業務進行了對沖。他們利用品牌資金，這不是我們傳統上關注的事情。所有這些大供應商都在我們的平台上。他們做得很好。他們喜歡新的基礎設施和系統。 MAX plus MoPub 比 MoPub 對他們來說大 2 倍以上。因此，就連接到 DSP 的管道而言，就它們能夠比過去花費更多的物質而言，我們實際上也在那裡，因為我們的業務要大得多。但從長遠來看，隨著經濟復甦，這些 DSP 將有機會向我們的系統注入更多資金。

Yes, David, thanks for the question. Yes. So on the leverage side, we feel very comfortable with where we sit today. We're at just over 2x net leverage, which is very reasonable. We have 4 Bs in terms of the rating. So we feel comfortable there as well. Of course, interest rates have gone up significantly and something that we watch. We did hedge out for the year, some of the interest -- actually more than half of the interest fixed for the year. Our duration also is fairly strong. So we have maturities coming in '25 and '28. So we can live with our term loans. There's no maintenance covenants or anything like that on it as well. So it does provide us quite a bit of flexibility.

是的，大衛，謝謝你的提問。是的。因此，在槓桿方面，我們對我們今天所處的位置感到非常自在。我們的淨槓桿率剛剛超過 2 倍，這是非常合理的。就評級而言，我們有 4 個 B。所以我們在那裡也感覺很舒服。當然，利率已經顯著上升，這是我們所關注的。我們確實對沖了這一年的一些利息——實際上超過了當年固定利息的一半。我們的持續時間也相當長。因此，我們將在 25 和 28 年到期。所以我們可以忍受我們的定期貸款。也沒有維護契約或類似的東西。所以它確實為我們提供了相當多的靈活性。

So we're very, very comfortable with the current leverage levels, and we still generate after interest cost, significant amount of free cash flow. As we described before, we have a relatively modest tax rate. Given a bunch of deductions, we have very little CapEx to us in there, just a little bit of lease expense. We are able to flow through a very strong percentage even with the amount of leverage we're carrying today.

因此，我們對當前的槓桿水平非常非常滿意，而且在扣除利息成本後，我們仍然會產生大量的自由現金流。如前所述，我們的稅率相對適中。考慮到一系列扣除，我們那裡的資本支出很少，只有一點租賃費用。即使我們今天攜帶的槓桿數量，我們也能夠通過非常高的百分比流動。

Okay. Well, thank you, everyone, for joining. That does conclude our call for today. We appreciate you hopping on, and we'll speak with you all next quarter.

好的。嗯，謝謝大家的加入。這確實結束了我們今天的呼籲。我們感謝您的加入，我們將在下個季度與大家交談。

Thanks, everyone.

感謝大家。