When Applovin's stock plummeted despite strong fundamentals, CEO Adam Foroughi ceased investor relations. Instead, he used the company's massive cash flow to execute an aggressive $6B stock buyback, turning a market crisis into a huge value-creation opportunity by retiring 20-25% of the company's shares.
To combat plummeting morale as Applovin's stock fell 92%, CEO Adam Foroughi fostered an "us against the world" culture. He stopped talking to external investors and implemented a performance stock plan for key employees, not just the CEO, aligning them with the company's long-term recovery and rewarding their loyalty.
Applovin's CEO distinguishes between two ad models. Search ads (Google) fulfill existing consumer intent, a transaction that would likely happen anyway. In contrast, discovery ads (Meta, Applovin) create new demand by showing consumers products they didn't know they wanted, leading to genuine economic expansion.
The creepy feeling that your phone is listening is a misconception, according to Applovin's CEO. It's not technically feasible to process voice data for ads. Instead, ad networks correlate signals like being in the same location as a friend who then searches for a topic, and then serve ads to the entire group.
Applovin's acquisition of game studios was a strategic data play, not a move into content creation. They needed proprietary data to train their first deep learning model when third-party studios were unwilling to share. Once the model was successful and attracted external data, they sold the studios, having achieved their objective.
Applovin's high 84% EBITDA margins aren't just a target for competitors; they are sustainable due to deep technological complexity and differentiated data. CEO Adam Foroughi argues that once a superior ML model achieves scale and wide adoption, it creates a powerful moat that is difficult for competitors to erode.