Review|APP 1Q26: Management Guides E-commerce to ~20% of U.S. Revenue, +25% QoQ
Quick Take
Revenue grew +59% YoY, in line with the bogey but ~3% below our estimate.
2Q26 revenue guide implies +56% YoY; applying a typical beat cadence points to ~+60% YoY, consistent with our model.
Management called out e-commerce +25% QoQ in 2Q26, with April marking a record month — precisely in line with our Preview, where we flagged +23% QoQ and noted that April e-commerce ad spend had reverted to Black Friday–level run-rates.
No signs of deceleration in the Gaming vertical.
E-commerce global GA slated for June.
$1Bn of buybacks executed in the quarter.
What’s Changed?
The E-commerce Narrative
Last quarter, Adam framed e-commerce as a gradual contributor — not a step-function — but emphasized it would compound sequentially. The +25% QoQ guide embedded in 2Q26 is the first unambiguous signal of that ramp inflecting.
In our Preview, we noted that e-commerce revenue declined QoQ in 1Q26 and would re-accelerate sequentially post-model upgrade. By 2Q26, while e-commerce is tracking to only ~10% of total revenue, it already represents close to 20% of U.S. revenue, growing +25% QoQ.
E-commerce revenue today is predominantly U.S.-sourced. Following the European GA in June, we expect the e-commerce share of total ad revenue to step up meaningfully. Net-net, e-commerce now has a clearly articulated ramp path, is compounding sequentially, and should sustain the current total revenue growth trajectory.
