## Latest disclosed read-through: Varma is leaning into an “engineered earnings” compounding story (not just a momentum trade) Varma Mutual Pension Insurance Co’s most recent SEC disclosure (13F for period ended **December 31, 2025**) shows it held **35,600 shares** of **AppLovin Corp Class A** with a reported **market value of $23.99 million**. ["APPLOVIN CORP"](0001140361-26-003200|1) ["23987992"](0001140361-26-003200|1) ["35600"](0001140361-26-003200|1) What looks like a straightforward “institutional ownership” headline reads differently when you pair it with AppLovin’s latest earnings disclosure: the business is producing unusually large cash flow and profitability—and management is explicitly converting that into aggressive share count reduction and forward margin guidance. ["Free Cash Flow was $1.31 billion"](0001751008-26-000005|1) ["repurchased and withheld 0.8 million"](0001751008-26-000005|1) ["total cost of $481.7 million"](0001751008-26-000005|1) ["repurchased and withheld 6.4 million"](0001751008-26-000005|1) ["total cost of $2.58 billion"](0001751008-26-000005|1) --- ## The “hidden” alpha: a cash machine with an explicit capital return flywheel In its February 11, 2026 earnings release (furnished on an 8‑K), AppLovin reported **Q4 2025 revenue of $1.658 billion (+66% Y/Y)** and **FY2025 revenue of $5.481 billion (+70% Y/Y)**. ["Revenue | $1,658"](0001751008-26-000005|1) ["66%"](0001751008-26-000005|1) ["$5,481"](0001751008-26-000005|1) ["70%"](0001751008-26-000005|1) More important than the top line, the company disclosed **Q4 2025 Adjusted EBITDA of $1.399 billion** (and **$4.512 billion** for FY2025). ["Adjusted EBITDA | $1,399"](0001751008-26-000005|1) ["$4,512"](0001751008-26-000005|1) Then management effectively underlined what it intends to do with that profitability: **$3.95 billion of Free Cash Flow in FY2025**, alongside **$2.58 billion** of repurchases/withholding activity for the year. ["Free Cash Flow was $1.31 billion and $3.95 billion"](0001751008-26-000005|1) ["total cost of $2.58 billion"](0001751008-26-000005|1) **Why this matters for “alpha between the lines”:** Varma’s position can be read as a bet that AppLovin’s core advantage is not just growth—it’s the company’s ability to *self-fund per-share compounding* through outsized cash generation plus systematic repurchases. ["Net cash from operating activities was $1.31 billion and $3.97 billion"](0001751008-26-000005|1) ["repurchased and withheld"](0001751008-26-000005|1) --- ## Guidance signals confidence in sustained operating leverage (and unusually high margins) AppLovin guided **Q1 2026 revenue of $1.745–$1.775 billion** and **Adjusted EBITDA of $1.465–$1.495 billion**, with an **84% Adjusted EBITDA margin** at both the low and high ends. ["Revenue | $1,745"](0001751008-26-000005|1) ["$1,775"](0001751008-26-000005|1) ["Adjusted EBITDA | 1,465"](0001751008-26-000005|1) ["1,495"](0001751008-26-000005|1) ["Adjusted EBITDA Margin | 84%"](0001751008-26-000005|1) That 84% margin guide is the tell: management is effectively saying near-term profitability is not a “one-quarter spike,” but a controlled outcome they are willing to commit to publicly. ["Adjusted EBITDA Margin | 84%"](0001751008-26-000005|1) --- ## The “watch item” also embedded in filings: insiders are taking some chips off the table Recent Form 4 activity shows at least some executives have sold shares, including an officer sale of **7,609 shares at $657.13** on **December 18, 2025** (reported December 19). ["S(1) | 7,609"](0001846998-25-000005|0) ["$ 657.13"](0001846998-25-000005|0) ["12/18/2025"](0001846998-25-000005|0) This doesn’t negate the bull case—but it’s a real-time reminder that the stock is liquid enough for insiders to monetize, while the company simultaneously highlights buybacks and large cash generation (a mix investors should track quarter-to-quarter). ["repurchased and withheld"](0001751008-26-000005|1) ["Free Cash Flow"](0001751008-26-000005|1) --- ## Bottom line: what Varma appears to be underwriting Varma’s latest 13F confirms it has real exposure to AppLovin at size. ["VALUE"](0001140361-26-003200|1) ["23987992"](0001140361-26-003200|1) The more actionable signal from the *latest company disclosure* is that AppLovin is positioning itself as a rare blend of **high growth + extreme profitability + explicit capital return**, with Q1 guidance reinforcing that margin profile rather than walking it back. ["Revenue | $1,658"](0001751008-26-000005|1) ["Adjusted EBITDA"](0001751008-26-000005|1) ["Adjusted EBITDA Margin | 84%"](0001751008-26-000005|1) ["total cost of $2.58 billion"](0001751008-26-000005|1) If you want, I can add a short “what would break the thesis” section using AppLovin’s own risk language referenced in the same release (it explicitly points readers to competitive and macro/forecasting risks). ["competitive advertising ecosystem"](0001751008-26-000005|1) ["macroeconomic environment"](0001751008-26-000005|1)

## Latest disclosed read-through: Varma is leaning into an “engineered earnings” compounding story (not just a momentum trade) Varma Mutual Pension Insurance Co’s most recent SEC disclosure (13F for period ended **December 31, 2025**) shows it held **35,600 shares** of **AppLovin Corp Class A** with a reported **market value of $23.99 million**. ["APPLOVIN CORP"](0001140361-26-003200|1) ["23987992"](0001140361-26-003200|1) ["35600"](0001140361-26-003200|1) What looks like a straightforward “institutional ownership” headline reads differently when you pair it with AppLovin’s latest earnings disclosure: the business is producing unusually large cash flow and profitability—and management is explicitly converting that into aggressive share count reduction and forward margin guidance. ["Free Cash Flow was $1.31 billion"](0001751008-26-000005|1) ["repurchased and withheld 0.8 million"](0001751008-26-000005|1) ["total cost of $481.7 million"](0001751008-26-000005|1) ["repurchased and withheld 6.4 million"](0001751008-26-000005|1) ["total cost of $2.58 billion"](0001751008-26-000005|1) --- ## The “hidden” alpha: a cash machine with an explicit capital return flywheel In its February 11, 2026 earnings release (furnished on an 8‑K), AppLovin reported **Q4 2025 revenue of $1.658 billion (+66% Y/Y)** and **FY2025 revenue of $5.481 billion (+70% Y/Y)**. ["Revenue | $1,658"](0001751008-26-000005|1) ["66%"](0001751008-26-000005|1) ["$5,481"](0001751008-26-000005|1) ["70%"](0001751008-26-000005|1) More important than the top line, the company disclosed **Q4 2025 Adjusted EBITDA of $1.399 billion** (and **$4.512 billion** for FY2025). ["Adjusted EBITDA | $1,399"](0001751008-26-000005|1) ["$4,512"](0001751008-26-000005|1) Then management effectively underlined what it intends to do with that profitability: **$3.95 billion of Free Cash Flow in FY2025**, alongside **$2.58 billion** of repurchases/withholding activity for the year. ["Free Cash Flow was $1.31 billion and $3.95 billion"](0001751008-26-000005|1) ["total cost of $2.58 billion"](0001751008-26-000005|1) **Why this matters for “alpha between the lines”:** Varma’s position can be read as a bet that AppLovin’s core advantage is not just growth—it’s the company’s ability to *self-fund per-share compounding* through outsized cash generation plus systematic repurchases. ["Net cash from operating activities was $1.31 billion and $3.97 billion"](0001751008-26-000005|1) ["repurchased and withheld"](0001751008-26-000005|1) --- ## Guidance signals confidence in sustained operating leverage (and unusually high margins) AppLovin guided **Q1 2026 revenue of $1.745–$1.775 billion** and **Adjusted EBITDA of $1.465–$1.495 billion**, with an **84% Adjusted EBITDA margin** at both the low and high ends. ["Revenue | $1,745"](0001751008-26-000005|1) ["$1,775"](0001751008-26-000005|1) ["Adjusted EBITDA | 1,465"](0001751008-26-000005|1) ["1,495"](0001751008-26-000005|1) ["Adjusted EBITDA Margin | 84%"](0001751008-26-000005|1) That 84% margin guide is the tell: management is effectively saying near-term profitability is not a “one-quarter spike,” but a controlled outcome they are willing to commit to publicly. ["Adjusted EBITDA Margin | 84%"](0001751008-26-000005|1) --- ## The “watch item” also embedded in filings: insiders are taking some chips off the table Recent Form 4 activity shows at least some executives have sold shares, including an officer sale of **7,609 shares at $657.13** on **December 18, 2025** (reported December 19). ["S(1) | 7,609"](0001846998-25-000005|0) ["$ 657.13"](0001846998-25-000005|0) ["12/18/2025"](0001846998-25-000005|0) This doesn’t negate the bull case—but it’s a real-time reminder that the stock is liquid enough for insiders to monetize, while the company simultaneously highlights buybacks and large cash generation (a mix investors should track quarter-to-quarter). ["repurchased and withheld"](0001751008-26-000005|1) ["Free Cash Flow"](0001751008-26-000005|1) --- ## Bottom line: what Varma appears to be underwriting Varma’s latest 13F confirms it has real exposure to AppLovin at size. ["VALUE"](0001140361-26-003200|1) ["23987992"](0001140361-26-003200|1) The more actionable signal from the *latest company disclosure* is that AppLovin is positioning itself as a rare blend of **high growth + extreme profitability + explicit capital return**, with Q1 guidance reinforcing that margin profile rather than walking it back. ["Revenue | $1,658"](0001751008-26-000005|1) ["Adjusted EBITDA"](0001751008-26-000005|1) ["Adjusted EBITDA Margin | 84%"](0001751008-26-000005|1) ["total cost of $2.58 billion"](0001751008-26-000005|1) If you want, I can add a short “what would break the thesis” section using AppLovin’s own risk language referenced in the same release (it explicitly points readers to competitive and macro/forecasting risks). ["competitive advertising ecosystem"](0001751008-26-000005|1) ["macroeconomic environment"](0001751008-26-000005|1)