Insight
Foroughi: High cash-flow companies should buy back shares, not hoard cash
“I never believed in saving cash for a rainy day. I feel like I'm a big believer in what we're building. I believe in where we're going. So if I believe in the future, and we're a really high cash-generated business, We should always be buying back our shares.”
Disclosure
Foroughi: AppLovin tied executive compensation plan triggers to a $1 trillion valuation
“We believe there's a path to a trillion dollar outcome, and we don't set time, it's just that this business can be as big as what you would need to be a trillion dollar business, and we actually just did a comp plan to some of the key people that, is built on,…”
Assertion Not checkable as stated
Foroughi: AppLovin cut 40% of headcount while doubling revenue
“The business grew nearly a hundred percent year over year, and we fired about 40% of the team because I wanted to distill it down to these eight players.”
Assertion Supported
Foroughi: AppLovin's $6B buyback generated $50B to $60B in value
“And so for the following 18 months, we ended up deploying somewhere around six billion dollars of buybacks of our own capital, and we leveraged some to buy back shares in the company. And over time, that ended up creating somewhere in the neighborhood of 50, s…”
Insight
Foroughi: AppLovin rejects job candidates whose lives were easy
“And so I always looked for people on the team that had some reason to have a grudge or a chip on their shoulder or something that would motivate them. If they didn't have that in life was really easy. Those were not people that I was going to introduce to the …”
Assertion Partly supported
AppLovin restructured a $1B Chinese buyout into debt to pass CFIUS
“We ended up doing it so that instead of their billion dollars being an equity investment for 70% where they would get control, which is what triggers this scrutiny, we ended up pivoting it to a billion dollar convertible note that if on conversion we pay them …”
Insight
Foroughi: Retaining top performers requires replacing tenured leaders when junior talent surpasses them
“A lot of people get complacent with the leaders that they have, and those leaders, if they're not at that moment as good for the role of someone underneath, that person underneath is going to leave and start a new business. So like you owe it to every single p…”
Insight
Foroughi: Pushing IPO valuations with low float repels long-term blue-chip investors
“Too low a float makes you more volatile, and if the valuation is lower and you can do a 10 to 15% float, you end up attracting better investors who can end up being long-term with you. If you push the valuation where you can't fill a bigger round, you end up w…”
Assertion Not checkable as stated
Foroughi: AppLovin may capture over 50% of mobile gaming ad spend
“Probably, I don't know how big, but maybe even almost the over 50% of the marketing dollars in the space go back to our platform because the developers on the other side are seeing the best returns that they've ever seen in their existence on the dollars that …”
Disclosure
Foroughi: AppLovin gives equity to only ~100 core employees
“And so we took it down to a little over a hundred people that we give equity to in the business.”
Insight
Foroughi: AI amplifies top performers non-linearly over mediocre staff
“Your best people know how to use AI better than your mediocre people. And it's Not by some sort of linear function. It's much greater than that.”
Opinion
Foroughi: Only AppLovin, Meta, and Google have mastered true advertiser arbitrage
“And if you do that, and what I call performance marketing is that make the advertiser an arbitrage. Very few people define performance marketing as that, and very few companies have executed. Facebook's done a fantastic job of it. Google, part of their busines…”
Assertion Not checkable as stated
Foroughi: Well over 80% of AppLovin's code is written by LLMs
“Over, I think it was about a year and a half ago, over 80% of our code was LLM written, and now it's much higher than that”
Assertion Not checkable as stated
Foroughi: Top VCs rejected AppLovin's $1M seed pitch at $4M valuation
“When we first started the business, I went out and talked to VCs to raise capital, and I got turned down by all the top VCs. So a million dollars over four million dollar valuation at some point in spring, 2012.”
Assertion Partly supported
Foroughi: AppLovin bought 14 to 15 game studios to train its ad models
“So actually like the business from KKR investment to IPO ended up looking wildly different than an advertising business because we ended up with like 14, 15 different game studios across all categories of gaming that we ended up owning so that we can not only …”
Disclosure
Foroughi: AppLovin discounted its 15 gaming studios to sell as one package to Tripledot
“We didn't want to go through. And say, we own 15 studios. We're going to sell off one at a time just to make a profit. So instead we just priced it down enough to make it enticing to a company like Triple Dot to just take the whole thing off our hands.”
Assertion Supported
Foroughi: AppLovin operates with no CRO or COO in its C-suite
“To this day, we don't have a CRO. We're an ads business. I mean, anywhere you look, advertising business, who doesn't have a CRO? We don't have a CRO. We don't have a COO. We have today this, the C-suite is myself, the CFO, the CTO, and we have a general couns…”
Assertion Partly supported
Foroughi: A 10-person Turkish gaming studio sold for $1B built entirely on AppLovin
“There's a company that recently exited out of Turkey and mobile gaming that I believe was like 10, 15 people and sold for a billion dollars. They sold under one year from launch for a billion dollars. Almost all of their business Growth on the marketing and mo…”
Disclosure
Foroughi: AppLovin had no board of directors until 2018
“So back to the board point, and we did raise another round, there was more liquidity later, but back to the board point I didn't have a board in this business until 2018.”
Assertion Not checkable as stated
Foroughi: AppLovin received a $600 million all-cash buyout offer around 2015
“We started getting interest from other tech companies to buy us, and so got as big as an offer for six hundred million dollars cash.”
Assertion Contradicted
Foroughi: AppLovin generated $1.3B cash in a single quarter
“I mean, run, run rate wise, I think Q one we made, or I guess Q four, what we just announced in, in Q one was I think it was 1.3 billion in cash just in a single quarter.”
Assertion Partly supported
Foroughi: AppLovin valuation rose from under $4B to peak of $250B
“I think it was April, 2023 was when the stock was nine, 10, 11 bucks. So we peaked it was probably six months ago or so at 750 bucks. So the valuation went from under four billion to a peak of two hundred and fifty billion.”
Assertion Supported
Foroughi: AppLovin reaches over 1B daily gamers globally and 150M US adults
“In our business on the, on one hand, we have billion users who are playing games, billion plus users who are playing games every single day around the world in the U S over a hundred and fifty million only adults.”
Assertion Supported
Foroughi: AppLovin grew EBITDA from $700M in 2021 to over $1B in 2022
“At the same time, interestingly, we went out with seven hundred million dollars of EBITDA in 21. We did a billion dollars plus of EBITDA in 22, so like fast growth, executing on the business, yet public market investors were telling us business is terrible”
