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 APP, +12.36% 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 U, +10.37% 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 12% 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 looking 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.