AppLovin reported a 76% operating margin in FY2025 — the highest among all major tech peers. But a line-by-line decomposition of the 10-K reveals that roughly half of the margin expansion came from a collapsing stock compensation pool, not operational efficiency. With 920,526 PSU grants tied to $300B–$1T market cap milestones, the mechanism for SBC reversal is already embedded. Meanwhile, 97% of revenue growth came from pricing, not volume — and the filing's own risk factors warn that growth will decelerate.
AppLovin reported 70% revenue growth in FY 2025 — but the 10-K reveals nearly all of it came from AI pricing optimization (+72% revenue per install), not reaching more users (+3% install volume). With 99.3% incremental operating margins, Cash ROIC of 108.5%, and a $272 million Singapore tax benefit expiring June 2028, the filing paints a picture of extraordinary economics at an extraordinary price. Our 4-Component Growth Sustainability Model separates the $228 billion valuation into testable monitoring metrics.
Palantir (14.6% SBC) and AppLovin (2.4% SBC) both grew revenue ~65% in Q3 2025. So why does one require 6x more equity compensation? Our SEC filing analysis reveals diverging trajectories that matter more than static spreads: APP's SBC is declining 38% YoY while PLTR's is accelerating 42% YoY. The difference: human-intensive vs AI-engine scaling economics.
AppLovin's ROIC went from 4.5% to 75% in 2.5 years while revenue growth accelerated from +17% to +86%. Meanwhile, Unity's ironSource merger resulted in -9% ROIC and declining revenue. The data reveals one of the most dramatic capital efficiency divergences in tech history.