AppLovin (NASDAQ:APP) grew third-quarter revenue 55% to about $2.2 billion, and profit grew faster. Shares rose about 18% in after-hours trading. The ad platform is turning nearly all of its growth into profit: About 81% of the added revenue became operating income, even as research spending more than doubled. AppLovin's costs barely move when revenue jumps. Total expenses rose only about $150 million, since running more ad spend through the same software costs little extra. That gives management room to spend heavily on research without squeezing margins. Free cash flow grew about half as fast as net income, and higher tax bills are a big reason. Cash paid for income taxes in the first nine months was more than five times last year's level. Rising receivables, the money customers owe as sales grow, also tie up cash. A much bigger share of profit now leaves as cash taxes.
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