Applovin Corp (APP) 2024 Q2 法說會逐字稿

Welcome to the AppLovin earnings call for the second quarter ended June 30, 2024. I'm David Hsiao, Head of Investor Relations. Joining me today to discuss our results are Adam Foroughi, our Co-Founder, CEO and Chairperson, and Matt Stumpf, our CFO. Please note our SEC filings to date as well as our shareholder letter and press release discussing our second quarter are available at investors.applovin.com.

歡迎參加 AppLovin 截至 2024 年 6 月 30 日的第二季財報電話會議。我是投資者關係主管 David Hsiao。今天與我一起討論我們業績的有我們的共同創辦人、執行長兼董事長 Adam Foroughi 和我們的財務長 Matt Stumpf。請注意，我們迄今為止提交給美國證券交易委員會 (SEC) 的文件以及有關第二季度的股東信函和新聞稿均可在 investor.applovin.com 上查閱。

During today's call, we will be making forward-looking statements regarding our products and services market expectations, the expected future financial performance of the company and other future events. These statements are based on our current assumptions and beliefs, and we assume no obligation to update them, except as required by law.

在今天的電話會議中，我們將就我們的產品和服務市場預期、公司預期的未來財務表現以及其他未來事件做出前瞻性陳述。這些聲明是基於我們目前的假設和信念，我們不承擔更新它們的義務，除非法律要求。

Our 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 first quarter ended March 31, 2024. Additional information may also be found on our quarterly report and Form 10-Q for the fiscal quarter ended June 30, 2024, which will be filed later today.

我們的實際結果可能與預測的結果有重大差異。我們鼓勵您查看我們最近提交的截至 2024 年 3 月 31 日第一季的 10-Q 表中的風險因素。您還可以在我們今天稍後提交的截至 2024 年 6 月 30 日的財政季度的季度報告和 10-Q 表中找到更多資訊。

We will also be discussing non-GAAP financial measures. These non-GAAP measures are not intended to be superior to or substitute for our GAAP results. Please be sure to review the reconciliations of our GAAP to non-GAAP financial measures in our earnings release and shareholder letter available on our Investor Relations site. This conference call is being recorded and a replay will be available for a period of time on our IR website.

我們也將討論非公認會計準則財務指標。這些非 GAAP 指標並非設計優於或取代我們的 GAAP 結果。請務必查看我們投資者關係網站上的收益報告和股東信中 GAAP 與非 GAAP 財務指標的對帳表。本次電話會議正在錄音，重播將在一段時間內在我們的 IR 網站上提供。

Now, I'll turn it over to Adam and Matt for some opening remarks. Then we'll have the moderator take us through Q&A.

現在，我將請亞當和馬特致開場白。然後我們將讓主持人帶領我們進行問答。

Welcome, everyone, and thank you for joining us. We had another strong quarter in Q2. Our software business had 5% revenue growth quarter-over-quarter because our models continue to improve. As you'll recall, in Q1, we had a big step-up in growth, so continuing that trend to continue to grow quarter-over-quarter is a really promising sign.

歡迎大家，感謝大家的加入。我們在第二季又取得了強勁的表現。由於我們的模型不斷改進，我們的軟體業務收入較上季成長了 5%。大家可能還記得，在第一季度，我們的成長有了很大的提升，因此，保持這一趨勢並繼續保持環比成長是一個非常好的跡象。

As we've stated in previous earnings calls, if we keep growing the software business, the flow through to EBITDA and cash is very high and our business margins and cash conversion will continue to improve. We've also consistently said that the slower growth market we're in mobile gaming doesn't constrain our opportunity to grow our software business. We've noticed that at times this concept is needed a little bit more explaining for our shareholders and prospective investors. So I wanted to take the time to do that here.

正如我們在先前的財報電話會議上所說的那樣，如果我們繼續發展軟體業務，那麼 EBITDA 和現金的流動就會非常高，我們的業務利潤率和現金轉換率將繼續提高。我們也一直表示，行動遊戲市場的成長放緩並不會限制我們發展軟體業務的機會。我們注意到，有時我們需要向股東和潛在投資者進一步解釋這個概念。所以我想花點時間在這裡做這件事。

Our platform is entirely performance-based. In other words, gaming advertisers who market on our platform, generate a measurable revenue and profit from the dollars they spend on our platform. Our customers run marketing campaigns with target return goals, but tend to have a much higher appetite for spend on our platform than we can deliver today. And why can't we deliver more today? Because our current system can only find a limited number of users who will meet their revenue goals.

我們的平台完全基於績效。換句話說，在我們的平台上行銷的遊戲廣告商可以透過在我們平台上花費的資金獲得可觀的收入和利潤。我們的客戶進行有目標回報的行銷活動，但他們對我們平台的支出需求往往遠遠超出我們目前所能提供的水平。為什麼我們今天不能提供更多？因為我們目前的系統只能找到有限數量的能夠達到其收入目標的用戶。

As our technology improves, we will continue to find more users who achieve these goals, increasing advertiser spend, resulting in materially higher growth than the growth rate of the mobile gaming market. Last quarter, I talked about a goal of growing our software business 20% to 30% for the long term. I typically don't communicate externally about our goals if I don't have confidence in it. I'm communicating it now because I do have strong confidence in it and I see many years of growth ahead of us.

隨著我們技術的進步，我們將繼續尋找更多實現這些目標的用戶，增加廣告商支出，從而實現比行動遊戲市場成長率更高得多的成長。上個季度，我談到了長期實現軟體業務成長 20% 至 30% 的目標。如果我對我們的目標沒有信心，我通常不會對外溝通我們的目標。我現在傳達這個訊息是因為我確實對此很有信心，而且我看到我們未來很多年都會有成長。

Here are the primary drivers of that growth goal. Continued improvement from our models as they learn for more data. As our models gather more data, they'll become more accurate and find more good users for our advertisers, gains that our team delivers to the efficacy of our models through enhancements. Our research science and core engineering team members are exceptionally talented and consistently deliver lifts to the performance of our models.

以下是實現此成長目標的主要驅動力。隨著我們的模型不斷學習更多的數據，它們將不斷改進。隨著我們的模型收集到更多的數據，它們會變得更加準確，並為我們的廣告商找到更多優質用戶，我們的團隊透過增強功能提高了模型的有效性。我們的研究科學和核心工程團隊成員非常有才華，並不斷提升我們模型的效能。

Demand expansion into new verticals. We just launched the first web advertising campaigns for shops this quarter. And while in pilot right now, we think it will unlock a lot of demand expansion opportunities for us. And then supply expansion, as we broaden out our demand base outside of gaming, we expect the new categories will really help grow our CTV footprint. We continue to be very excited about our prospects and the performance our team is able to deliver.

需求擴展到新的垂直領域。我們本季剛推出了首個針對商店的網路廣告活動。雖然目前還處於試點階段，但我們認為它將為我們釋放許多需求擴張的機會。然後是供應擴張，隨著我們擴大遊戲之外的需求基礎，我們預計新的類別將真正有助於擴大我們的 CTV 足跡。我們對我們的前景以及我們團隊所能取得的表現繼續感到非常興奮。

We will work tirelessly to achieve the goals we set and hope that over the next many quarters and years together, you will have a better sense of how an AI-driven marketing platform creates growth opportunities that just weren't possible in advertising before because technologies were not this sophisticated.

我們將不懈努力，實現我們設定的目標，並希望在接下來的幾個季度和幾年裡，你們將更了解人工智慧驅動的行銷平台如何創造成長機會，而這種機會在以前的廣告中是不可能實現的，因為技術還沒有這麼先進。

With that, I'll hand it off to Matt to run you through the financial highlights.

說完這些，我將交給馬特向你們介紹財務亮點。

Thanks, Adam, and good afternoon. I'm pleased to report we had another strong quarter with total revenue reaching $1.08 billion and adjusted EBITDA of $601 million, achieving a 56% adjusted EBITDA margin. This marks a 44% increase in revenue and an 80% increase in adjusted EBITDA from the same period last year, translating to an impressive 81% flow-through from revenue to adjusted EBITDA.

謝謝，亞當，下午好。我很高興地報告，我們又度過了一個強勁的季度，總收入達到 10.8 億美元，調整後的 EBITDA 達到 6.01 億美元，實現 56% 的調整後 EBITDA 利潤率。這標誌著營收較去年同期成長了 44%，調整後 EBITDA 成長了 80%，相當於收入向調整後 EBITDA 的轉換率達到了驚人的 81%。

In the first quarter, we generated $446 million in free cash flow, which is a 74% flow-through from adjusted EBITDA. Quarter-over-quarter, our free cash flow grew 15% compared to 10% growth in adjusted EBITDA over the same period as we benefited from a relatively stable base of cash taxes and interest.

第一季度，我們產生了 4.46 億美元的自由現金流，佔調整後 EBITDA 的 74%。與上一季相比，我們的自由現金流成長了 15%，而同期調整後的 EBITDA 成長了 10%，這得益於我們相對穩定的現金稅和利息基礎。

During the quarter, improvement in our AXON technology driven by ongoing self learning contributed to further growth of our software platform, which generated $711 million in revenue and $520 million in adjusted EBITDA, retaining our 73% margin and growing it 91% from the same period last year. This represents an 87% flow-through of revenue from the prior quarter, illustrating our ability to remain disciplined with our costs, growing revenue while remaining lean and efficient.

在本季度，透過持續的自我學習推動 AXON 技術的改進，促進了我們軟體平台的進一步成長，創造了 7.11 億美元的營收和 5.2 億美元的調整後 EBITDA，維持了 73% 的利潤率，比去年同期成長了 91%。這意味著與上一季相比，收入流向了 87%，顯示我們有能力控製成本，在保持精簡高效的同時增加收入。

Our apps revenue for the quarter was $369 million, an increase of 7% from last year with $81 million in adjusted EBITDA, representing a 22% margin. During the quarter, we readjusted our user acquisition return goals, resulting in an 11% quarter-over-quarter decrease in total app segment costs, while revenue decreased by 3%. We expect our future margin profile to normalize to approximately 15% over the long term, consistent with industry standards.

本季我們的應用程式營收為 3.69 億美元，較去年同期成長 7%，調整後 EBITDA 為 8,100 萬美元，利潤率為 22%。本季度，我們重新調整了用戶獲取回報目標，導致應用程式部門總成本環比下降 11%，而收入下降 3%。我們預計，從長遠來看，我們的未來利潤率將正常化至約 15%，與行業標準一致。

Looking ahead to capital allocation, we plan to focus on three key areas. First, investment and organic growth initiatives, specifically our engineering and business development headcount to support the development of our AXON technology and expansion into e-commerce. We do not expect significant capital investment here since we plan to expand our teams in a very lean and targeted manner.

展望資本配置，我們計劃專注於三個關鍵領域。首先，投資和有機成長計劃，特別是我們的工程和業務開發人員，以支援我們的 AXON 技術的發展和向電子商務的擴展。由於我們計劃以非常精簡和有針對性的方式擴大我們的團隊，因此我們預計不會在這裡進行大量的資本投資。

Second, continued share management activities with a combination of withhold to cover on future share vesting and strategic repurchase. And third, strengthening of our balance sheet to enhance operational flexibility and liquidity while reducing net debt. In Q2, we used $356 million to withhold 4.2 million shares, allocating about 80% of our free cash flow in the quarter to share management.

第二，繼續進行股份管理活動，採取預扣以彌補未來股份歸屬與策略性回購結合的方式。第三，加強我們的資產負債表，以提高營運靈活性和流動性，同時減少淨債務。第二季度，我們動用了 3.56 億美元扣留了 420 萬股股票，將本季約 80% 的自由現金流分配給了股票管理。

Since 2022, we've invested nearly $3 billion to repurchase and withhold a combined 83.6 million shares. Finally, in the third quarter of 2024, we anticipate to deliver between $1.115 billion and $1.135 billion in revenue, with adjusted EBITDA between $630 million and $650 million targeting an adjusted EBITDA margin of 57%.

自 2022 年以來，我們已投資近 30 億美元回購並扣留了總計 8,360 萬股。最後，在 2024 年第三季度，我們預計實現 11.15 億美元至 11.35 億美元的收入，調整後的 EBITDA 在 6.3 億美元至 6.5 億美元之間，調整後的 EBITDA 利潤率目標為 57%。

Now with that, let's move to Q&A.

現在，我們進入問答環節。

Thank you so much, Matt. And again, like Matt mentioned, we will now take your questions. (Operator Instructions)

非常感謝，馬特。再次，正如馬特所提到的，我們現在將回答您的問題。 （操作員指令）

Jason Bazinet, Citi. (Operator Instructions)

花旗銀行的 Jason Bazinet。 （操作員指令）

Well, it says the host won't let me do my videos, I can't do that part, but --

嗯，上面說主持人不讓我拍視頻，我不能拍那部分，但是——

I got it. All right. You can do it now. Sorry about that Jason, that's my fault.

我得到了它。好的。你現在就可以做。很抱歉傑森，這是我的錯。

I just had a quick question on some of the initiatives you guys are pursuing outside of gaming. I know it's still a little bit early, and you said some of these products were in beta. But can you just sort of refresh us on sort of what your ambitions are and anything that you've learned so far? And when do you think it might be sort of something that is large enough where the Street could care about? Is it at '25 or '26 event, just some sort of dimensionalization of the timing? Thanks.

我只是想快速地問一下你們在遊戲之外正在採取的一些舉措。我知道現在還有點早，你說過其中一些產品還處於測試階段。但是您能否向我們簡單介紹一下您的抱負以及您迄今為止所學到的知識？您認為什麼時候它才會發展成足以引起華爾街關注的規模呢？它是在 '25 或 '26 年發生的事件嗎，只是某種時間維度？謝謝。

Yeah. Good to see, Jason. In the quarter, Q2, we launched pilot of our web advertising program. And this allows -- let's talk about e-commerce first. This allows an e-commerce shop that has a website to buy on our in-app inventory, the 1 billion plus daily active users we see in mobile gaming, a video advertisement route that user to their shop and purchase a user in the same way that mobile game companies like purchasing users on our platform.

是的。很高興見到傑森。在第二季度，我們啟動了網路廣告計劃的試點。這允許——我們先來談談電子商務。這樣一來，擁有網站的電子商務商店就可以在我們的應用程式內庫存中購買商品，而我們在手機遊戲中看到的每天超過 10 億的活躍用戶，可以透過視訊廣告將該用戶引導到他們的商店併購買用戶，就像手機遊戲公司在我們的平台上購買用戶一樣。

So doing it on a performance basis and then we're delivering a measurable revenue and results. This is brand-new. I'd say it's been in pilot for a few months now. Results are looking really promising, materially better than what we would have expected this early in our progression in trying to get into web advertising.

因此，我們以績效為基礎來做，然後我們提供可衡量的收入和成果。這是全新的。我想說它已經試行了幾個月了。結果看起來確實很有希望，比我們在進入網路廣告領域的初期所預期的要好得多。

So this product, we think is something that we're going to invest heavily behind, start scaling out and hopefully will show a material impact in '25 and beyond. And it is not limited to just e-commerce. It opens the door to advertising for any website of any type that wants to drive transactions that are measurable on a performance basis on our platform.

因此，我們認為我們將對這款產品進行大力投資，開始擴大規模，並希望在2025年及以後產生實質的影響。並且它不僅限於電子商務。它為任何類型的網站打開了廣告之門，這些網站希望在我們的平台上推動可基於績效衡量的交易。

Thank you very much.

非常感謝。

Thank.

感謝。

Clark Lampen, BTIG.

克拉克·蘭彭（Clark Lampen），BTIG。

Hey, guys. Good afternoon. Hopefully, you can see and hear me. Adam -- perfect. So Adam, if we look at the third quarter guidance and we sort of assume that apps trends are relatively similar to what we saw last year, there's sort of an implied comp adjusted reacceleration in the software business.

嘿，大家好。午安.希望您能看到我、聽到我。亞當——完美。所以亞當，如果我們看一下第三季的指引，並且我們假設應用程式趨勢與去年相對相似，那麼軟體業務就存在一種隱含的調整後再加速趨勢。

And I'm going to guess that it's going to be driven by that sort of first primary driver that you mentioned sort of model improvements and sort of the learnings that go on. But one, I guess I'm curious if you could give us a sense of what's actually driving acceleration against tougher comps now? And then, maybe what that sort of for the back half into '25?

我猜想它將受到您提到的第一個主要驅動因素的推動，即模型改進和持續的學習。但首先，我很好奇您是否可以告訴我們現在真正推動加速對抗更強對手的因素是什麼？那麼，也許這對 25 年的後半段來說會是怎麼樣的呢？

Yeah. I mean, look, when we've talked about this -- this growth goal, if you just think about the growth goal in terms of mobile gaming and the business that we have today, we just grew 5% quarter-over-quarter as the numbers are getting pretty big. Q1 was materially more. It was in the teens quarter-over-quarter. We've always talked about -- like the model is going to continue to improve itself and pick up a few points of growth every single quarter, just from that enhancement.

是的。我的意思是，你看，當我們談論這個成長目標時，如果你只考慮行動遊戲和我們今天的業務的成長目標，我們剛剛實現了 5% 的季度環比增長，因為這個數字變得相當大。 Q1 實質上更多。與上一季相比，這一數字保持在十幾歲的水平。我們一直在談論——就像模型將繼續自我改進並且每個季度都會獲得幾個成長點，僅僅是透過這種增強。

But then the team is also trying to apply enhancements on top. When we get lifts from the team, those can be step function. Like we saw in Q1, you wouldn't expect Q1 having double digit growth over Q4. And so we're seeing really good trends in Q3. The business is still very strong. We've got a lot of momentum with our customers that continue to see us as really the main channel now in mobile gaming advertising. And around and behind that, we're also now seeing exciting trends in what we just talked about the web advertising category. So we've got a lot of optimism going into the next quarter.

但隨後團隊也正嘗試在其基礎上進行增強。當我們得到團隊的支持時，這些就可以起到階梯式的作用。正如我們在第一季看到的那樣，你不會期望第一季比第四季實現兩位數的成長。因此我們看到第三季的趨勢非常好。業務仍然非常強勁。我們與客戶一起獲得了巨大的發展勢頭，他們繼續將我們視為目前行動遊戲廣告的主要管道。在這背後，我們也看到了我們剛才談到的網路廣告類別中令人興奮的趨勢。因此我們對下個季度充滿樂觀。

Okay. And if I could, Matt, year to date, you've repurchased around $1.1 billion of stock. The guidance implies both an uptick in margins and higher incremental if we take sort of apps margins at 15%. I think as you just said, how do you think about, I guess as the free cash flow profile of the business is improving, maybe being a little bit more tactical with the buyback in periods where there is a bigger dislocation between the market price and then what you guys view as intrinsic value? Thanks a lot.

好的。馬特，如果可以的話，今年到目前為止，你已經回購了價值約 11 億美元的股票。如果我們以 15% 為應用程式利潤率，該指引意味著利潤率將會上升，而且增量也會更高。我想就像您剛才說的，您如何看待，隨著企業自由現金流狀況的改善，在市場價格和您認為的內在價值之間出現較大差距的時期，也許可以採取更策略性的回購方式？多謝。

Yeah, sure, Clark. So our plan currently is to continue kind of the historical trend of continuing to manage our shares through withhold to cover on shares that are vesting each quarter and then on a strategic basis, we'll continue to do supplemental repurchases in addition to the quarterly investing.

是的，當然，克拉克。因此，我們目前的計劃是繼續沿襲歷史趨勢，透過扣留以彌補每季歸屬的股票來繼續管理我們的股票，然後在策略基礎上，除了季度投資外，我們還將繼續進行補充回購。

Thanks, Clark.

謝謝，克拉克。

James Heaney, Jefferies.

傑富瑞的詹姆斯希尼。

Great. Hey, guys, and thanks for taking the questions. Could you just talk more about the 20% to 30% long-term software platform growth that you referenced? And I'm curious just how dependent that goal is on verticals beyond gaming? And I just had one more follow-up.

偉大的。嘿，夥計們，感謝你們回答這些問題。您能否詳細談談您提到的 20% 到 30% 的長期軟體平台成長？我很好奇，這個目標對遊戲以外的垂直產業的依賴程度有多大？我還有最後一個後續問題。

Yeah. We don't think it's very dependent outside of gaming at all. You've got a mobile gaming category. It's got a few percentage points of growth a year now. So let's call that low single digits. You've got a business that as these models continue to improve from gathering more data, we think that's an extra 3%, 4% a quarter as well. So that sort of gets you to the low end.

是的。我們認為它對遊戲以外的依賴程度並不高。您有一個移動遊戲類別。目前，其每年的成長率為幾個百分點。因此我們稱之為低個位數。您的企業有這樣的業務，隨著這些模型透過收集更多數據而不斷改進，我們認為這每季還會額外帶來 3% 到 4% 的成長。這會使您陷入低端境地。

And then we've got a team that's constantly working on improving the models and any improvement that's actually developer driven enhancements to the malls that makes them more accurate, then stops you up into the higher end of that range. And so we've got a lot of confidence in the growth goal we put out there just on a baseline basis, the current business.

然後我們有一個團隊不斷致力於改進模型，任何改進實際上都是由開發人員推動的對商場的增強，使其更加準確，然後阻止你進入該範圍的高端。因此，我們對基於目前業務的基準制定的成長目標非常有信心。

Now we do sit on 1 billion plus daily active users. We've got one of the most sophisticated advertising platforms in the world, and we're driving billions of dollars of performance value in gaming. There's nothing about the technology we have that would disallow it from going outside of just mobile gaming. And we're already seeing positive trends in that pilot. So as we start putting these pieces together and broaden out our platform over time, we're really excited about how big the numbers could become.

現在我們每天的活躍用戶已經超過 10 億。我們擁有世界上最先進的廣告平台之一，並且正在遊戲領域創造數十億美元的績效價值。我們現有的技術並沒有阻止它走出手機遊戲的範疇。我們已經在該試點中看到了積極的趨勢。因此，當我們開始將這些部分整合在一起，並隨著時間的推移擴展我們的平台時，我們對數字可能變得如此之大感到非常興奮。

Great. And then just one more follow-up on the just the overall health of the mobile gaming market. I think you've in the past talked about 3% to 4% industry growth. So curious if you're seeing any and change in those trends?

偉大的。然後再一次關注行動遊戲市場的整體健康狀況。我想您過去曾談到 3% 到 4% 的行業成長。所以好奇您是否看到這些趨勢有任何變化？

No. And we're not seeing any change in the aggregate, but you also have to remember our market is a little bit different. We're driven in large part by advertising based applications growing audience. So that 1 billion plus daily active users are inside of apps that run advertisements. You monetize those apps, partially with games that generate purchases, partially with games that generate purchases and advertising. And so that number is a documented anywhere, but we're seeing the overall IP market, everyone can look at industry reports and see growing low-single digits. We're also seeing the advertising supported market grow faster than that.

沒有。我們沒有看到整體上有任何變化，但你也必須記住我們的市場有點不同。我們很大程度上受到基於廣告的應用程式受眾不斷增長的推動。因此，每天有超過 10 億的活躍用戶處於投放廣告的應用程式中。你可以透過這些應用程式獲利，部分是透過產生購買的遊戲，部分是透過產生購買和廣告的遊戲。這個數字在任何地方都有記錄，但我們看到，在整個 IP 市場中，每個人都可以查看行業報告並看到低個位數的成長。我們也看到廣告支援市場的成長速度更快。

Great. Thank you.

偉大的。謝謝。

Omar Dessouky, BofA. And Adam And Matt, just to let you know, he is on audio only.

美國銀行的奧馬爾·德蘇基（Omar Dessouky）。亞當和馬特，我要告訴你們，他只有音頻。

Hey, Omar.

嘿，奧馬爾。

Hey, guys, I'm on all audio only. Thanks. So look, I'm -- just looking at your third quarter guidance, if I were to back out the apps business, I kind of get a number that's sort of 50% year-on-year in the third quarter, which is still pretty far -- pretty far off from the 20% to 30% long-term growth that you talked about.

嘿，夥計們，我只聽音頻。謝謝。所以你看，我——只是看一下你對第三季度的預期，如果我退出應用程式業務，我得到的數字是第三季度同比增長 50%，但這仍然與你所說的 20% 到 30% 的長期增長率相差甚遠。

So I think myself and a lot of people would kind of want to know like what is potentially that trajectory going from software business of maybe 50% year-over-year next quarter eventually to that 20%, 30%, do you have any visibility into the first couple of quarters of 2025 yet that you're able to share with us?

所以我想我自己和很多人都想知道這個軌跡是什麼樣的，軟體業務下個季度的同比增長率可能從 50% 最終上升到 20%、30%，您是否對 2025 年前幾個季度的情況有所了解，可以和我們分享嗎？

So we don't provide long-term guidance, obviously, really only a quarter ahead. As Clark touched on, you can sort of deduce where that software business we're guiding to on the upcoming quarter. It's still -- if you start adding up the quarters to get into 20%, 30%, you want to see 5%, 6%, 7% quarter-over-quarter growth. We think we can -- we can be confidently in those ranges for quite some time. We see a lot of opportunity to grow.

因此，我們顯然不提供長期指導，實際上僅提供提前一個季度的指導。正如克拉克所提到的，你可以推斷我們在下一季的軟體業務將走向何方。如果你開始將各季度的成長率加起來達到 20%、30%，你仍然希望看到 5%、6%、7% 的季度環比成長率。我們認為我們可以——我們可以在相當長的一段時間內自信地保持這些範圍。我們看到了很多成長的機會。

Now that removes any opportunity for step function gains and model enhancements driven by the team. That also does not include really any sort of thought given to what new categories are going to contribute to our business long term because frankly, again, they're in pilot. So we're not backing those numbers into longer-term views on the business.

現在，這消除了由團隊推動的階躍函數增益和模型增強的任何機會。這也實際上沒有包括對哪些新類別將對我們的業務做出長期貢獻的任何思考，因為坦白說，它們還處於試點階段。因此，我們不會將這些數字作為對業務的長期看法的基礎。

So we think we're going to be in a place where this business is going to be steady. It's going to be growing at a very nice rate. The conversion to cash flow is only going to improve and we've got a lot of other exciting things that are going on that give us confidence that we could even be above those ranges.

因此我們認為我們的業務將會處於穩定狀態。它將會以非常快的速度成長。現金流的轉換只會不斷改善，而且我們正在進行許多其他令人興奮的事情，這些事情讓我們有信心甚至超越這些範圍。

Okay. Could I just ask you another quick question. So in terms of the opportunity for in-app advertising, some of the checks that I did suggest that there are some improvements there. So I think the in-app -- the in-app purchase market is somewhere around $100 billion. The in-app advertising market, a lot smaller somewhere maybe between $20 billion and $30 billion, is my estimate. Does your technology really drive advertising revenues for publishers as well and potentially turn that into a growth market and could that make a major difference in your software business?

好的。我可以再問您一個簡單的問題嗎？因此，就應用程式內廣告的機會而言，我所做的一些檢查表明，它有一些改進。所以我認為應用程式內購市場規模大約是 1000 億美元。我估計應用程式內廣告市場規模要小得多，大概在 200 億到 300 億美元之間。您的技術是否真的能為出版商帶來廣告收入，並有可能將其轉變為成長市場，這會對您的軟體業務產生重大影響嗎？

Yeah. Also, look, that market already is growing much faster than the in-app purchasing market because it's just at a smaller base. We're also the MAX platform we've touched on in the past, the majority of the mobile gaming and app advertising market is running through that MAX auction.

是的。而且，由於該市場基數較小，因此其成長速度已比應用程式內購買市場快得多。我們也是過去提到的 MAX 平台，大部分的手機遊戲和應用程式廣告市場都是透過 MAX 拍賣運行。

That MAX auction has gone from the inefficient world of waterfall to programmatic bidding. Vast, vast majority of the auction is now in a bidding state and so it's continuously gotten more efficient. Our advertising has also gotten a lot more efficient. So as you've seen our business double in the last year, there's billions of dollars of more investment happening from mobile gaming companies in user acquisition and user discovery.

MAX 拍賣已從低效率的瀑布式競價模式轉變為程式競價模式。絕大多數拍賣現在都處於競標狀態，因此其效率不斷提高。我們的廣告也變得更有效率。正如你所看到的，我們的業務在去年翻了一番，行動遊戲公司在用戶獲取和用戶發現方面投入了數十億美元。

Some part of that is in-app advertising advertisers and that's help be a catalyst to re-growing this industry as a whole in-app purchasing. But some portion of that also is the -- are these publishers that are buying more users now because our systems are more effective for advertising based applications. So all of this stuff is intertangled together and we're one of the main catalysts of growth in this category because our scale is so large inside this category on both fronts.

其中一部分是應用程式內廣告商，這有助於成為整個應用程式內購買產業重新發展的催化劑。但其中的一部分也是——這些出版商現在正在購買更多的用戶，因為我們的系統對於基於廣告的應用程式更有效。所以所有這些東西都是相互交織在一起的，我們是這一類別成長的主要催化劑之一，因為我們在這兩個方面的這一類別的規模都非常大。

Understood. Thank you very much.

明白了。非常感謝。

Vasily Karasyov with Cannonball has the next question and is also audio only.

Cannonball 的 Vasily Karasyov 提出了下一個問題，也只有音訊。

Yes, apologies for that. Good afternoon. Adam, I think on the previous call, you mentioned that the big publishers started spending with you and before that they were not because they see -- they saw you as a competitor.

是的，我很抱歉。午安.亞當，我想在之前的電話會議中，你提到大型出版商開始與你合作，而在此之前他們並不是因為你而將你視為競爭對手。

So I was wondering how the trend continued this quarter. Do you still see them coming in bigger, bigger buckets? And then does that open up a significant corner of the market that you sort of could not address before? Would appreciate your thoughts here. Thank you.

所以我想知道本季的趨勢如何延續。你還看到它們裝在越來越大的桶子裡嗎？那麼這是否會打開一個您以前無法解決的重要市場領域？非常感謝您的想法。謝謝。

Yeah. I mean, look, like at this level of scale with how big the software business is, if you backed out total advertiser dollars that you think are in our platform, it's in the many billions of dollars. So we've always worked with some of the very large publishers like we usually have had pretty deep penetration in mobile gaming, but there are some very well-known large publishers that did look at us as a competitor.

是的。我的意思是，看看軟體業務的規模，如果你把我們平台上的廣告商總支出算出來，那將達到數十億美元。因此，我們一直與一些非常大的出版商合作，例如我們通常在手機遊戲領域有相當深入的滲透，但也有一些非常知名的大型出版商確實將我們視為競爭對手。

At this point, our platform is so successful in mobile gaming, it's very, very hard for any publisher to look the other way. And so we've gotten a lot more adoption across even those publishers. There isn't really a customer that I know of in mobile gaming that does not find success and scalable success on our platform at this point today.

就目前而言，我們的平台在手機遊戲領域取得了巨大的成功，任何出版商都很難忽視我們的存在。因此，我們的產品甚至得到了那些出版商的更多採用。據我所知，目前行動遊戲領域中沒有一個客戶不能在我們的平台上獲得成功和可擴展的成功。

Okay. Thank you.

好的。謝謝。

Moving on to Mohammad [Galauth] with HSBC. Mohammed do you want to turn your video on? Mohammed, if you can hear me, go-ahead and unmute yourself so we can at least hear you to ask your question.

接下來是匯豐銀行的穆罕默德 [Galauth]。穆罕默德，你想打開你的影片嗎？穆罕默德，如果你能聽到我的聲音，請繼續並取消靜音，這樣我們至少可以聽到你提出的問題。

All right. Well, hearing no response, we'll move on to Matt Cost with Morgan Stanley.

好的。好吧，沒有收到回复，我們將繼續採訪摩根士丹利的馬特·科斯特 (Matt Cost)。

Great. Hi guys. Thanks for taking the question. I guess when I think about e-commerce advertising kind of an in-app environment or an in-game environment, as I understand it today because of the AppLovin exchange, which should allow people like Google or Trade Desk to access the inventory on MAX to run e-commerce ads today, that should be possible, but it doesn't seem like it's a very big business today.

偉大的。嗨，大家好。感謝您回答這個問題。我想，當我想到電子商務廣告時，它就是一種應用內環境或遊戲內環境，正如我今天所理解的，因為 AppLovin 交易所應該允許像谷歌或 Trade Desk 這樣的公司訪問 MAX 上的庫存來運行電子商務廣告，這應該是可能的，但它今天似乎並不是一項很大的業務。

So I guess, what are the impediments to running e-commerce advertising in an in-game or in-app environment that are preventing others from doing it already since -- I believe it should be possible. And then how are you solving those problems or aiming to solve them with your e-commerce product? Thank you.

所以我想，在遊戲內或應用程式內環境中運行電子商務廣告的障礙是什麼，阻礙了其他人這樣做——我相信這是可能的。那麼您如何解決這些問題或打算透過您的電子商務產品解決這些問題？謝謝。

Look, we can't speak to other people's technologies or things that prohibit them from being able to get categories to work in gaming, but Trade Desk products are nothing like ours. When it comes to succeeding on behalf of advertisers, in any category, we want our models to be able to drive measurable revenue. So you got to have an attribution framework, you've got to have models that can predict revenue and match the user up with the advertiser and you've got to make it all work together. We're in pilot with this product right now. It's looking quite promising. And so we think it's something that we're going to be able to build on and build on very aggressively as we go forward.

你看，我們無法談論其他人的技術或阻止他們在遊戲中使用類別的東西，但 Trade Desk 的產品與我們的產品完全不同。當談到代表廣告商取得成功時，無論在任何類別，我們都希望我們的模型能帶來可衡量的收入。所以你必須有一個歸因框架，你必須有一個可以預測收入並將用戶與廣告商配對的模型，你必須讓它們協同工作。我們目前正在試用該產品。看起來非常有希望。因此，我們認為這是我們在前進過程中能夠不斷開拓、積極發展的事情。

And just to follow up on that. I guess from a data perspective, it is just a matter of iterating on it. I mean, because obviously you have so much data that's specifically relevant to kind of like the game advertising products you've done historically. Is that applicable directly to e-commerce advertising or other verticals or is it about iterating and kind of building a new dataset?

只是為了跟進這一點。我想從資料角度來看，這只是一個迭代的問題。我的意思是，因為顯然你擁有大量與你過去做過的遊戲廣告產品特別相關的數據。這是否直接適用於電子商務廣告或其他垂直行業，還是涉及迭代和建立新的資料集？

No, I think it's a combination of both. I mean, we trend -- we process tens of billions of dollars of transactional volume already, and we see [$1 billion-plus] daily active. So our platform is not small at this point. And that data is able to be used across anything. These are human beings, not just mobile gamers, and the audience skews female and middle-aged. And so it's completely different than what people would assume a gaming audience is at a very, very large scale, directly applicable to e-commerce is something that we've always hypothesized as possible.

不，我認為兩者兼而有之。我的意思是，我們趨勢是——我們已經處理了數百億美元的交易量，我們看到每日活躍交易量為 [10 億美元以上]。所以目前我們的平台還不算小。並且這些數據可以應用於任何事物。這些都是人，不僅是手機遊戲玩家，而且觀眾主要以女性和中年為主。因此，這與人們對非常大規模的遊戲受眾的假設完全不同，我們一直假設它可以直接應用於電子商務。

The models in AXON 2 are so much more sophisticated than in technologies we've had in the past that they should enable success there. Now we're in pilot and we're seeing success there. So we're at the point now where we know we put the pieces in place and now it's more of a go-to-market problem and less of a technology.

AXON 2 中的模型比我們過去的技術複雜得多，它們應該能夠取得成功。現在我們正在試點並且取得了成功。所以我們現在所處的階段是，我們知道我們已經把各個部分都放到位了，現在更多的是一個進入市場的問題，而不是一個技術問題。

Great. Thank you.

偉大的。謝謝。

[Arsenti matovik] with Wolfe.

[Arsenti matovik] 與 Wolfe。

Hi. Thanks for taking my question. So looking at AppDiscovery installations growing 77% on a tough comp and revenue per installation accelerating versus last quarter. I guess just -- is there any strength in installations from non-gaming?

你好。感謝您回答我的問題。因此，從嚴格比較來看，AppDiscovery 的安裝量成長了 77%，與上一季相比，每個安裝的收入也在加速成長。我猜只是——非遊戲類安裝有優勢嗎？

I know it's small revenue base today, but in terms of AppDiscovery installations, is it a more material portion of that growth? And then just aside from that, any types of could you go into a little bit more detail on how you're still seeing that strong strength in installations and revenue per installation? Then just a follow-up on the apps business. Thanks.

我知道目前它的收入基數很小，但就 AppDiscovery 安裝而言，它是否佔成長的更重要的部分？除此之外，您能否更詳細地介紹一下您如何仍然看到安裝量和每次安裝收入的強勁增長？然後只是對應用程式業務的後續關注。謝謝。

Yeah, Sure. So the non-gaming continues to grow, but it's still a relatively small portion of the overall installations when you look at the overall software business. So to Adam's previous comments, like it's still a relatively small portion of the existing business and it's still kind of in pilot mode there. So we continue to see kind of promising results, but it's really not moving today.

是的，當然。因此，非遊戲類軟體仍在繼續成長，但從整個軟體業務來看，它在整體安裝中所佔的比例仍然相對較小。因此，對於亞當先前的評論，這仍然是現有業務中相對較小的一部分，並且仍然處於試點模式。因此，我們繼續看到一些有希望的結果，但今天它確實沒有任何進展。

Got it. And then just on apps, despite the dip in monthly active payers, you saw, I think when you back it out in-app advertising basically flat sequentially. This a function of the strength from AXON 2? And also on apps, do you plan on exploring any divestiture studios? Some people were talking about wanting to add more studios. Does that -- would that support some of your capital allocation plans in the medium term? Thanks.

知道了。然後僅在應用程式上，儘管每月活躍付費用戶數量有所下降，但我認為，當你將其撤回時，應用程式內廣告基本上是持平的。這是 AXON 2 強度的功能嗎？另外，在應用程式方面，您是否計劃探索任何剝離工作室？有些人談論著想要增加更多的工作室。這是否會支持您的一些中期資本配置計劃？謝謝。

I mean, like we've said in the past about M&A and divesting the apps businesses, we continue to be open to it and we're really just waiting for the market to improve. And we've been optimizing the app studios over the last over a year.

我的意思是，就像我們過去所說的關於併購和剝離應用程式業務一樣，我們對此持開放態度，我們只是在等待市場好轉。在過去的一年多時間裡，我們一直在優化應用程式工作室。

So you can see that as well, right, in this quarter where we've adjusted the return goals for our UA spend, decreasing costs pretty materially and increasing our margin profile. So we'll continue to maximize those businesses for-profit and we'll be open to transactions in the future.

所以您也可以看到，在本季度，我們調整了 UA 支出的回報目標，大幅降低了成本並提高了利潤率。因此，我們將繼續最大化這些業務的利潤，我們將來也會對交易持開放態度。

Thank you.

謝謝。

Martin Yang, OpCo.

馬丁楊 (OpCo)

Thank you for taking my question. I want to dig a little deeper into your confidence on that 35% constant improvement on a sequential basis. What gave you the type of confidence because I look at the underlying market and your customer behavior, it's a very dynamic market for mobile gaming with new game launches, certain games performing worse or better and customers are doing all sort of things. So what is a constant in that type of market that gave you the confidence that your improvement can be pretty consistent on a quarterly basis?

感謝您回答我的問題。我想更深入地了解你對於連續 35% 持續改進的信心。是什麼給了你這樣的信心？根據我觀察的基礎市場和客戶行為，我發現手機遊戲市場非常活躍，不斷有新遊戲推出，某些遊戲的表現有好有壞，而客戶則會做各種各樣的事情。那麼，在那種市場中，什麼因素是不變的，能夠讓您有信心相信您的業績每季都能保持相當持續的改善呢？

I think, you said 35% sequential quarter-over-quarter.

我認為您說的是環比增長 35%。

3% to 5%.

3% 至 5%。

So there's two components, right, like one is the market growth, which we can all say is low-single digits. One is just models getting better every single quarter because they see more data and they get more accurate. And that's -- these models by definition, this is how they work. And so we see that in real-time, the models continue to get more accurate. Now our advertisers and I said this in my talk track, our advertisers will spend much more today on our platform that we can deliver to them.

所以有兩個組成部分，對吧，一個是市場成長，我們都可以說這是低個位數。一是模型每季都會變得更好，因為它們看到更多的數據，變得更加準確。這就是 —— 這些模型根據定義，它們的工作原理就是這樣的。因此我們即時看到模型變得越來越準確。現在，我們的廣告商和我在談話中說過，我們的廣告商今天在我們的平台上花費的錢將遠遠超過我們可以為他們提供的服務。

The limitation is how many users can the models match-up on across every single one of those advertisers at those revenue goals. If the models get better, they're able to process more data and find more users for those advertisers, so the spend will go up naturally, and it's not that these advertisers are adding more budget, it's not that they're saying, we want to buy users at a more expensive cost to them by definition, lowering their goals. It's that the models get better, all else stays equal and these advertisers grow on our platform. And so we're seeing that in real-time.

限制在於，在這些收入目標下，模型可以在每個廣告商中匹配多少用戶。如果模型變得更好，他們就能夠處理更多的數據並為這些廣告商找到更多的用戶，因此支出自然會增加，而這並不是說這些廣告商增加了更多的預算，並不是說他們說，我們想以更高的成本購買用戶，從而降低他們的目標。那就是模型變得越來越好，其他所有條件都保持不變，這些廣告商在我們的平台上不斷成長。所以我們可以即時看到這一點。

And there is a very, very large appetite for incremental spend on our platform because we deliver profits to these advertisers. They're arbitrage marketing on us, they are buying at a profit. And so they will spend a lot more if our models can do it. And so those two things can build out a very good sustainable growth rate inside the mobile gaming category.

由於我們為這些廣告商帶來了利潤，因此人們對我們平台的增量支出需求非常大。他們對我們進行套利行銷，以賺取利潤。如果我們的模型能夠做到這一點，他們就會花更多的錢。因此，這兩件事可以在行動遊戲類別中建立非常好的可持續成長率。

And then the third piece is, if you end up having a lift to the form of technology that you're using, you materially enhance that technology and in the past have used like ChatGPT 3.5, 4, these are incremental changes that are step functions in these types of technologies and I use that as an analogy because people understand it. But in our world, we're constantly making enhancements to the technology.

第三點是，如果你最終提升了所使用的技術形式，那麼你就實質地增強了這項技術，過去使用過像 ChatGPT 3.5、4 這樣的技術，這些都是漸進式的變化，是這些類型的技術的階躍函數，我用它作為類比，因為人們理解它。但在我們的世界中，我們正在不斷地改進技術。

When there is a lift to the technology, that could be a step-function in growth for the same reason because these advertisers will spend more and it can make our models more accurate at larger-scale on behalf of them. So hopefully that answers for you, Martin.

當技術得到提升時，出於同樣的原因，這可能是成長的階梯函數，因為這些廣告商將花費更多，並且可以代表他們使我們的模型在更大規模上更加準確。所以希望這能為你解答，馬丁。

Yeah, a quick follow-up. So are you saying that the key inputs to your own model improvement is primarily volume-driven or the volume data driven?

是的，快速跟進。那麼，您是說，您自己的模型改進的關鍵輸入主要是由體積驅動還是由體積數據驅動？

Yeah. I mean, look, we're a very, very large-scale, right? So that data creates a moat. And the more data our models process, the better they're going to get. So every single quarter, we launch the system, we just went and lapped the one-year anniversary, right? So it's been in the market now for a year-plus. Every month has been bigger than the prior month. So we get more data, processes more data with those incremental data points, the math gets stronger, the model gets stronger and it can drive more value. So we've seen that consistently.

是的。我的意思是，你看，我們的規模非常非常大，對吧？因此數據就形成了護城河。我們的模型處理的資料越多，模型的效果就越好。所以每個季度，我們都會推出這個系統，然後去慶祝一週年，對嗎？現在它已經上市一年多了。每個月的規模都比前一個月更大。因此，我們獲得更多數據，利用這些增量數據點處理更多數據，數學變得更強大，模型變得更強大，並能帶來更多價值。我們已經看到了這個現象。

These AI technologies are very, very new. So it's not like in the world, we have 10 years of history to look-back on and go, when do these models stop improving themselves. They currently are doing that today. That's by nature, that's how this AI technology works, processes immense amounts of data and through that, the math gets stronger and more accurate and more predictive. And so we're seeing that in real time. That gives us confidence that this core underlying technology is going to continue to grow over time.

這些人工智慧技術非常非常新。所以這不像在世界上，我們有 10 年的歷史可以回顧，這些模型什麼時候才會停止自我改進。他們今天正在這樣做。這就是本質，這就是人工智慧技術的工作原理，處理大量數據，並透過這種方式，數學變得更強大、更準確、更具預測性。我們可以即時看到這一情況。這使我們相信，這項核心底層技術將會隨著時間的推移而不斷發展。

Got it. You talked about matching. Is there a sense you can give us on how accurately are you matching the users to the apps now and how much more accurate it can be in the future?

知道了。您談到了匹配。您能否告訴我們，現在您匹配用戶和應用程式的準確度有多高，以及將來的準確度會有多高？

Yeah. I mean, look, we're very, very accurate today. When an advertiser says, I want to break even in 30 days on our platform, we achieve that goal for them. When I say increasing the match rate, it means let's say that advertiser says, I want to spend $1,000 today and I want to get the $1,000 back in 30 days and we get that within a percent of inaccuracy. So they get whether it's $990 or $1,010 back in 30 days. That we have a limit of $1,000 that they can spend today, though the system can only deliver that much with a very low error rate for them.

是的。我的意思是，看，我們今天非常非常準確。當廣告主說「我想在我們的平台上 30 天內實現收支平衡」時，我們會為他們實現這個目標。當我說提高匹配率時，這意味著假設廣告商說，我今天想花 1,000 美元，並且我想在 30 天內收回 1,000 美元，而我們在百分之一的誤差範圍內實現了這一目標。因此，他們可以在 30 天內收回 990 美元或 1,010 美元。我們為他們今天可以花費的金額設定了 1,000 美元的限額，但係統只能以極低的錯誤率提供這麼多錢。

Now let's say tomorrow the system processes more data or our team makes an enhancement and now the system can deliver $2,000 at that same 30 day breakeven. The advertiser is going to say, I got the $2,000 ready to go. You're breakeven in 30 days, I'll put it on my credit card. Well, they have unlimited tolerance to spend if all else remains equal and as our technology continues to improve, that business will continue to grow.

現在假設明天系統處理更多數據或我們的團隊進行了改進，現在系統可以在相同的 30 天盈虧平衡點提供 2,000 美元。廣告商會說，我已經準備好了 2,000 美元。 30 天內你就收支平衡了，我會把錢記在我的信用卡上。嗯，如果其他所有條件保持不變，他們就有無限的消費承受力，而且隨著我們的技術不斷進步，這項業務將繼續成長。

Thank you.

謝謝。

Well, this concludes our question and answer session and today's webinar. We thank you all for your participation, and we look forward to seeing you all next quarter. You may now disconnect. Enjoy your summer.

好了，我們的問答環節和今天的網路研討會到此結束。我們感謝大家的參與，並期待下季與大家見面。您現在可以斷開連線。享受你的夏天。