AppLovin Corp. (APP) Securities Class Action Lawsuit Update [March 28, 2025]

Introduction 

AppLovin designs digital advertising technology. From 2023 to 2024, it claimed its new technology, AXON 2.0 digital ad platform, would drive a breakthrough for advertisers to connect to consumers, particularly in mobile games. During that time, AppLovin reported record profits.

But in February 2025, two shortseller reports alleged AppLovin deceived consumers into fraudulently installing unwanted apps, thus driving up app installation numbers. The report also alleged AppLovin fraudulently used advert data is gleaned from Meta Platforms.

Investors reacted negatively to the reports. AppLovin’s stock fell sharply, dropping 12% after the short seller reports’ release.

AppLovin Corp. (APP) Securities Fraud Class Action Case Details

Quiero v. AppLovin Corp., et al 5:25-cv-2294 

U.S. District Court, Northern District of California  

File on March 5, 2025 

AppLovin Corp. (APP) Company Profile 

According to its website, AppLovin “makes technology that helps businesses of every size connect to over 1.4B daily active users.” It engages in building a software-based platform for advertisers to enhance the marketing and monetization of their content. The Company has two segments: Software and Apps. One of the Company’s Apps is “Axon,” described as an “AI-powered recommendation engine” which matches advertising impressions with users most likely to engage with the advertiser’s products. AppLovin Corporation shareholders are encouraged to stay informed about the ongoing legal proceedings.

AppLovin Corp. (APP) Lawsuit Class Period 

May 10, 2023 to February 25, 2025, inclusive.  

 The lawsuit aims to represent investors who acquired AppLovin securities during the specified class period.

AppLovin Corp. (APP) Lawsuit Allegations 

On May 10, 2023, AppLovin issued a press release announcing its Q1-23 financial results. The press release highlighted upgrades to its AXON Technology, which was also highlighted during the associated earnings call. During the earnings call, the Company’s CEO (Foroughi) announced development of AXON 2.0 digital ad platform, which would use “cutting-edge AI technologies” to more efficiently match advertisements to mobile games.

A year later, on May 8, 2024, the Company announced its Q1-24 financial results, including revenue growth. During the associated earnings call, the Company again stressed the improvements to AXON. Further, AppLovin emphasized that AXON could expand “into web-based marketing and e-commerce.”

The Company continued to tout AXON 2.0’s success through November 2024 and boasted about revenue growth driven by AXON in AppLovin’s November 2024 financial reports.

Plaintiffs allege these statements were false or misleading. In the Complaint, Plaintiffs claim AppLovin and its executives oversold AXON 2.0’s “cutting-edge” capabilities and ability to expand advertisers into mobile games and other markets. In reality, AppLovin piggybacked off existing advert data from Meta Platforms and forced unwanted apps on consumers via a “backdoor installation scheme.”

The Truth Emerges 

On February 26, 2025, Culper Research and Fuzzy Panda Research published reports showing AXON 2.0 is a façade and was not the main driver in AppLovin’s financial growth. The Reports allege AppLovin uses manipulative and dishonest advertising practices, such as exploitative and deceptive app permissions to carry out unwanted installations. These fraudulent app installations artificially inflated installation numbers and profits.

Further, the research reports alleged AppLovin reverse engineered and exploited advert data from Meta Platforms. Thus, rather than uncovering breakthrough AI to power AXON, the reports allege AppLoving actually piggybacked off Meta’s data.

Market Reaction 

Investors reacted negatively to this news, and AppLovin stock fell sharply, declining about 12% in one day after the reports’ release.

Next Steps 

• Submissions for lead plaintiff are due May 5, 2025.   

• The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.   

• The Court will then consider motion for class certification.    

• The Court may later consider a Motion to Dismiss.