Liftoff Mobile Q2 Earnings Call Highlights

Liftoff Mobile (NASDAQ:LFTO) reported second-quarter revenue growth and expanded adjusted EBITDA margins in its first earnings call as a public company, citing demand across the app economy, continued machine-learning improvements and activity tied to the FIFA World Cup.

Revenue rose 7% sequentially and 35% year over year to $220 million, marking the company’s 11th consecutive quarter of revenue growth. Core advertising revenue, which Liftoff defines as revenue from its current advertising platforms predominantly powered by its Cortex technology, totaled $219 million.

Adjusted EBITDA reached $132 million, producing a 60% margin. The margin expanded by about 2 percentage points from the first quarter and 8 percentage points from a year earlier. The company said its cost base grew more slowly than revenue, generating 82% incremental adjusted EBITDA margin on a year-over-year basis.

World Cup Demand and Diversified App Exposure

Chief Executive Officer Jeremy Bondy said the company benefited from elevated activity during the FIFA World Cup, particularly among sports-betting, live-scoring and prediction-market applications. He said adjacent categories, including finance apps with embedded markets, also participated in the event-driven demand.

Bondy emphasized that Liftoff is not reliant on a single seasonal event or app category. The company operates across gaming, shopping, finance, productivity and other verticals, and he described its business as resembling an index of activity across the mobile app economy.

“We don’t target a specific mix,” Bondy said in response to an analyst question about the company’s revenue composition. “We really benefit from and appreciate having this diversified portfolio of advertisers and publishers across all these different verticals, inclusive of gaming.”

Liftoff said more than half of its demand comes from advertisers outside gaming, while more than one-third of its supply is non-gaming. Bondy said the company expects to participate in other high-attention periods, including the NFL season, back-to-school spending and holiday commerce activity.

The company said gaming remained healthy in the second quarter, with its gaming business growing year over year alongside other verticals. Bondy said third-party market data may not fully capture gaming activity because hybrid monetization and off-store purchases are not always reflected in headline metrics.

Cortex Technology and Customer Expansion

Liftoff’s platform combines demand-side and supply-side advertising capabilities, supported by an SDK integrated into nearly 170,000 apps globally. At the center of the platform is Cortex, the company’s proprietary AI-powered prediction engine, which estimates the likelihood and value of conversions for advertising opportunities.

Bondy said Cortex now makes more than 1 billion predictions per second. Since its late-2023 launch, the learning period for a new campaign to reach optimized performance has declined from about two weeks to less than one day, according to the company.

The company attributed second-quarter growth to market expansion, ongoing Cortex self-learning, model breakthroughs and World Cup-related activity. Bondy said a recent improvement broadened the feature set Cortex uses to assess the value of an impression, and that the update was deployed across Liftoff’s user-acquisition models. He said the benefits are durable and are expected to continue through the year and beyond.

President and Chief Financial Officer Tarek Kutrieh said the majority of second-quarter growth came from existing customers increasing their spending as product enhancements improved performance. Liftoff had 391 customers that generated more than $100,000 in core advertising revenue over the trailing 12 months, compared with 341 customers a year earlier.

According to Kutrieh, 58% of the company’s growth came from expansion among existing customers, while 42% came from customers acquired during the prior 12 months. He said the contribution from new customers was higher than in the previous quarter, partly due to World Cup-related demand from prediction-market customers.

Cash Flow, Debt Reduction and Capital Priorities

Despite a $4 million net loss, Liftoff generated $50 million in free cash flow during the quarter, compared with $15 million in the prior-year period. Trailing 12-month free cash flow increased to $184 million from $76 million in the corresponding prior-year period.

The quarterly net loss included $45 million of non-cash expenses related to the company’s IPO and other capital-markets activities. Those expenses included $20 million of IPO-related stock-based compensation, an $18 million contingent-consideration revaluation and a $7 million loss on debt extinguishment.

Liftoff ended the quarter with $305 million in cash after repaying $418 million of debt year to date. Net leverage was 2.4 times net debt to adjusted EBITDA on a last-12-month basis. Kutrieh said the company generally targets net leverage below 3 times.

• First priority: Reinvesting in research and development, new verticals and other growth initiatives.
• Second priority: Maintaining a reasonable leverage position.
• Third priority: Potential future shareholder capital returns as leverage normalizes.
• Additional option: Opportunistic M&A, though management said acquisitions are not required for its current growth strategy.

Third-Quarter and Full-Year Outlook

For the third quarter, Liftoff expects revenue of $217 million to $222 million, representing year-over-year growth of approximately 21% to 24%. It forecast adjusted EBITDA of $124 million to $128 million, implying an adjusted EBITDA margin of roughly 57% to 58%.

Kutrieh said recent model breakthroughs contributed to monetization earlier than expected in the year, benefiting second-quarter results. He also said favorable expense timing helped second-quarter margins and is expected to have a corresponding adverse effect in the third quarter.

For full-year 2026, Liftoff forecast revenue of $870 million to $880 million, representing growth of approximately 27% to 28% from 2025. The company expects adjusted EBITDA of $510 million to $518 million and an adjusted EBITDA margin of about 59%, approximately 4 percentage points above the prior year.

Management said its guidance does not include assumed future model breakthroughs. Kutrieh said the company uses the same “realistic and prudent” approach for quarterly and annual outlooks, while visibility into potential model improvements generally increases as the relevant period approaches.

About Liftoff Mobile (NASDAQ:LFTO)

Liftoff Mobile Inc provides marketing and monetization solutions for the mobile app economy. Liftoff Mobile Inc is based in REDWOOD CITY, Calif.