By Wallace Witkowski
Applovin Inc. shares fell in the extended session Wednesday after the app-monetization company said it was rolling back its outlook for the year, a day after it offered to buy Unity Software Inc. for $20 billion.
Applovin /zigman2/quotes/226004863/composite APP +0.55% reported a second-quarter loss of $21.7 million, or 6 cents a share, compared with net income of $13.3 million, or 4 cents a share, in the year-ago period. The company did not list adjusted earnings-per-share figures.
The company reported revenue of $776.2 million compared with revenue of $668.8 million in the year-ago quarter.
Analysts surveyed by FactSet had forecast adjusted earnings of 16 cents a share on revenue of $819.6 million. Using Applovin’s forecast, FactSet calculated that represented adjusted earnings of 15 cents a share.
The Palo Alto, Calif.-based company offers marketing, monetization and analytics software that helps app developers grow their businesses, similar to the software Unity /zigman2/quotes/221035391/composite U +2.21% sells to videogame makers.
Applovin had already pre-warned about results Tuesday, when it eclipsed Unity’s own earnings with a $20 billion offer for the company , which was valued at $15 billion at Tuesday’s close. Applovin’s offer comes just three months after Unity revealed a flaw in its ad-targeting software , a flaw that was “behind us,” according to Unity’s Operate Solutions head Ingrid Lestiyo. Unity shares finished Wednesday up 10.4% at $55.57.
Applovin shares fell about 11% after hours, following a 12.4% gain in the regular session to close at $40.46, putting them 65% off their record closing high of $114.85 on Nov. 11. On Tuesday, shares had fallen 10.3% to finish at $36.01, and climbed 10% Monday to finish at $40.14. In the company’s April 15 initial public offering , shares priced at $80, but closed down nearly 20% in their debut.
Applovin is no stranger to M&A. In April, it added streaming-video company Wurl in a $430 million cash-and-stock acquisition, following its $1.05 billion acquisition of app-monetization company MoPub , which closed on Jan. 3 , and its year-ago $1 billion acquisition of German mobile-app measurement and marketing company Adjust.
The company now sees full-year revenue of $2.84 billion to $3.14 billion, down from a previous $3.14 billion to $3.44 billion, while the Street had been looking for $3.23 billion.
On Tuesday, Applovin confirmed its 2022 software sales outlook of $1.14 billion to $1.29 billion, while lowering the Apps outlook to a revenue range of $1.7 billion to $1.85 billion, down from a previous $2 billion to $2.15 billion. Last quarter, Applovin said it would start treating its apps business as a standalone concern , raising the question on whether the company intended to sell it.
The quarter before that, the company provided a 2022 forecast that disappointed Wall Street , when it called for full-year revenue between $3.55 billion and $3.85 billion when, at the time, analysts were looking for $3.83 billion.
Applovin Chief Executive Adam Foroughi told analysts on the call that the company considered making the offer for Unity “because the math was so compelling to us” after Unity’s $4.4 billion offer to buy IronSource. Unity shares also recently rose on reports that it was lookin g to spin off its business in China.
Applovin’s Foroughi said believes it offers greater scale than IronSource and that the combined data and resources of the companies offer greater growth opportunities.