AppLovin's $2.19B Quarter Towers Over Struggling Ad Tech Rivals

AppLovin generated $2.19 billion in third-quarter revenue, up 55% year over year — a figure its executives told analysts exceeded the combined revenue of the other five publicly traded ad tech companies that reported this week. Those five, including Criteo, Taboola and Teads, totaled roughly $1.94 billion. The quarterly filings, released this week, chart an industry splitting into two cohorts: fast-growing app-based advertising players and open-web businesses in decline.

The numbers arrive at the midway point of this quarter's earnings season, with Zeta Global, The Trade Desk, PubMatic and Liftoff Mobile all due to file next week.

Who won and who lost in Q3?

AppLovin paired its 55% revenue growth with net income of $1.44 billion, a 72% increase. It also forecast Q4 revenue between $2.365 billion and $2.395 billion. Unity, AppLovin's mobile advertising rival — the two are locked in a recently filed, ongoing legal dispute — posted revenue of $622 million, up 32%.

Unity's Grow Solutions division, which houses its media offering, generated $457 million, up 44%. The company also reported that its Vector ad platform grew 126% year over year and 40% sequentially.

The losers tell a different story:

• Criteo: revenue of $416 million, down 11%; contribution ex-TAC fell 17% to $240 million. Retail media revenue dropped 23%, with executives saying changes involving two unnamed clients cut business by $20 million.
• Taboola: revenue of $462.3 million, down 6.9%, amid declining ad impression volumes — though gross profit rose 9.6% to $152.3 million.
• Teads: the steepest contraction, with revenue falling 26% to $235.1 million.

Magnite sat between the camps, reporting revenue of $204.2 million, up 14%, driven primarily by connected TV.

What happened to profitability?

Revenue trends did not map neatly onto earnings. Unity reported its first profitable quarter since its IPO. Criteo, once renowned as an ad-retargeting company and now emphasizing its retail media wares, deteriorated on both lines: gross margin fell from 55% to 50%, and net income dropped 85% to $6 million.

Teads fared worst. After traffic acquisition costs, its gross profit declined 28% to $93.5 million, according to the filing. Executives cited continued weakness in open-internet advertising and did not reinstate financial guidance. The quarter produced a net loss of $325.5 million, compared with a $19.7 million loss a year earlier — roughly sixteen times deeper.

The pattern shows that companies with similar revenue trajectories can face sharply different outcomes in gross profit, net income and cash generation.

Why does CTV keep growing?

For all the industry's talk of AI, connected TV remained the standout format of the quarter. Magnite reported a 39% increase in CTV contribution ex-TAC, to $105.4 million, while its DV+ business — display and other digital video — grew just 5%. CTV now accounts for approximately 53% of Magnite's total contribution ex-TAC of $200.6 million, up from 45% a year earlier. Total contribution ex-TAC grew 20%.

Teads found partial shelter in the same channel, reporting nearly $100 million in year-to-date CTV revenue. The relief proved insufficient against a 26% overall revenue decline.

The takeaway for practitioners: CTV keeps growing even where other digital advertising formats weaken, but its power to move a company's total performance depends on how large that CTV business is relative to everything else.

What does the divide mean for the open web?

The two strongest performers — AppLovin and Unity — are both mobile advertising businesses. For some observers, the trend underlines the decline of the open web and the resilience of app-based media, both mobile and CTV. Taboola and Teads, historic rivals and one-time prospective merger partners, both posted revenue declines rooted in open-internet weakness.

The results illustrate how unevenly the industry's growth opportunities are now distributed. With The Trade Desk and PubMatic reporting next week, the picture of that divide — and whether CTV-heavy players can close the gap — will sharpen quickly.