The shares of Applovin Premarket Trading Thursday: (NASDAQ 🙂 were up over 11% despite disappointing Q1 results.

APP reported a Q1 loss of 31c per share, compared with a loss of 5c per share for the same period last fiscal year. Sixty-two million dollars in revenue was recorded, up 3.6% YoY. This is significantly lower than the $817.7 million consensus estimate.

The net loss was $115.3million, which is a decrease of the $10.5million loss from the previous quarter. Analysts were anticipating a $17.7 million profit.

Full-year revenue is expected to be in the $3.14 billion-$3.44 billion range, down from previous estimates of $3.55 billion and $3.85 billion. Analysts were expecting $3.69 billion. APP projects FY adjusted EBITDA at $1.2 Billion, compared with $1 billion in previous guidance.

AppLovin reported that AppLovin adjusted its total revenue and Software Platform revenues guidance by $210,000,000 non-recurring publisher bonus records as contra-revenue.

Because of its emphasis on the potential margin contribution to Apps, the company also reduced its Apps revenues guidance. APP also increased its adjusted EBITDA target due to strong growth in its Software Platform business, and the anticipated operating improvement in Apps.

AppLovin’s board approved a share repurchase plan of $750 million “given our current valuation relative to the significant growth opportunities in front of us, we believe we can create shareholder value by opportunistically buying our own shares.”

Martin Yang, Oppenheimer’s analyst on APP stock, reiterated the Outperform rating but lowered his price target to $74.00 per Share from $100.00 in order to account for peer multiple compression.

“The company is evolving at extraordinary speed. While we have reservations on how effective APP can stay without 1P games, its recent results clearly showed Software can maintain momentum despite declines in Apps,” Yang said.

Morgan Stanley analyst Matthew Cost maintained an Overweight rating and a $70.00 per share price target after results “showcased the differentiation of APP’s ad platform even through seasonal/reopening headwinds.”

Cost said shares moved higher in afterhours as APP ”raised its ’22 EBITDA guide by 20% as it plans to focus future growth efforts on the ad network and reduce investment/boost profits from the 1P games.”

By Senad Karaahmetovic