Preview|APP 2Q26: E-commerce Growth Moderates After a Sharp Acceleration

Aug 03, 2026

∙ Paid

We recently spoke with eight AppLovin-related industry experts and updated our views on several key topics:

APP Budget Trends

We recently interviewed two gaming-company experts and four agency experts on recent AppLovin budgets.

AppLovin Budget Growth

YoY growth from 1Q25 to 1Q26: 56% / 30.4% / 97% / 68.6% / 132.8%.
In April, the expert expected 2Q26 YoY growth of 65.5%. Actual growth materially exceeded expectations at 74.2%.
The expert expects 3Q26 YoY growth of 77.4%.
At the end of 2025, the forecast for 2026 YoY growth was 44%. Actual performance has been far stronger.

Why 2Q26 exceeded expectations

2Q last year was already a relatively high base for AppLovin, as AXON gained traction. E-commerce also began ramping from 3Q last year. Growth has remained healthy despite the tougher comparison.
With 3Q growth expected at roughly 77% to 79%, the full-year AppLovin growth outlook should move higher. Estimates are still being revised, but could rise by roughly 5% to 7%.
Gaming-client growth eased modestly this quarter, while e-commerce clients performed well.

E-commerce advertising

E-commerce represented 34% of spend in Q2, is expected to reach 38% in Q3 and 42% to 45% in Q4. The 2026 mix is expected at 38% to 40%.
Client additions have been strong. Google clients, DTC e-commerce advertisers and advertisers from other platforms are migrating to AppLovin.
The number of new e-commerce advertisers may rise roughly 20% to 40% YoY and 20% to 25% QoQ.

Gaming advertising

Gaming-advertiser count declined slightly, with some budget moving to Meta and a smaller amount to Google. Meta’s Advantage+ offering and gaming AAC activity have pulled some IAA spend away.
Meta took a limited amount of AppLovin gaming budget in Q2, likely from only one or two clients and not their full budgets. For example, a client with 50% of spend on Meta may shift less than 10% to 20% there. The absolute impact on AppLovin budget was not meaningful.

Impact of e-commerce budgets on gaming budgets

User-acquisition costs for gaming clients remain elevated. CPM increased 4.7% YoY in 1Q, 5.2% YoY in 4Q last year, and 8.6% YoY in 2Q26.
The influx of e-commerce advertisers is putting upward pressure on overall traffic costs.
Higher conversion rates encourage advertisers to bid more aggressively. At the operating level, CPM was still higher even when ROI targets were unchanged and the objective was to protect ROI rather than scale. We believe both factors drove the 8.6% increase.

AXON product updates

AXON continues to strengthen its infrastructure, including second-level bid updates, richer Discovery data feedback, longer user-runtime data with stronger signals out to roughly D28, and improved final reporting in the testing environment.
On these enhancements, ad performance this quarter has surpassed Unity. Q2 CPM rose 8.6%, CTR rose 7.2% and CVR rose 10.8%, all ahead of Unity. D1 retention improved 5.2%, D28 retention improved 10.3%, and ROAS improved 23.4%. Most metrics outperformed Unity.
Unity had been growing faster than AppLovin over the past several quarters, but AppLovin pulled ahead this quarter. While some gaming budget moved to Meta, AppLovin also captured meaningful budget from Unity. Its D28 results reflect both quality improvements and infrastructure, including data feedback and signal enhancement.

CTV

CTV remains a small mix but is growing fastest. CTV ad budget grew roughly 70% YoY and represented less than 8% of spend. Web spend is smaller but growing at a similar pace.
Many gaming clients can automatically generate ad creative from their existing asset libraries for web campaigns. SparkLabs and other AI capabilities are improving automated creative integration and supporting web demand.
Inventory is ample. More accurately, client demand has yet to fully ramp.

App Store Link-out

This currently saves gaming companies roughly 3% to 6% in costs, with most savings reinvested in technology vendors.
Could drive 1% to 2% growth in advertising.

AppLovin Ad Budget Growth

Impact of e-commerce budgets on gaming budgets

AppLovin optimizes operations by vertical, so e-commerce and gaming do not directly affect one another. Competition is mainly within a vertical. For example, beauty advertisers compete for similar inventory, while gaming and beauty target different user cohorts and traffic pools.

CTV

CTV still feels more like a narrative than a material contributor. Advertisers remain more focused on AXON.

AppLovin Ad Budget Growth and Advertiser Count

Advertiser count was 24 in September and 45 in December. Monthly spend was $2.38m in 3Q25 and $3.8m in 4Q25.
Advertiser count reached 52 in 1Q26, in line with expectations. Monthly spend was $4.52m, above the $4.28m forecast.
In April, the 2Q26 forecast was 59 advertisers and $5.47m in monthly spend. Actual advertiser count was slightly lower at 58, but monthly spend was higher at $5.59m.
In April, the expert expected 65 advertisers and $6.51m of monthly spend in 3Q26. The current forecast is 63 advertisers and $6.73m.
4Q26 is expected to have 66 advertisers and $8.59m of spend. Non-e-commerce spend is expected at $7.7m, making 4Q26 the first quarter in which e-commerce advertisers exceed non-e-commerce advertisers.
“Given our position, we believe e-commerce will ultimately account for 80% of AppLovin budget.”

Advertiser penetration