BofA Analyst Omar Dessouky on Applovin

Investment Analysis Clubs Saul’s Investing Discussions
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I just came this comment re/ APP. BofA analyst Omar Dessouky reported:
December’s new advertisers were disproportionately small businesses.
Dessouky’s channel checks showed that the merchants AppLovin added in December were not primarily large Shopify Plus brands, but smaller Shopify stores—the vast majority of the 450 net new trackers added that month. Small merchants spend modestly, but collectively represent a very large market. Applovin is adding hundreds of small merchants per month, there TAM is expanding rapidly and dramatically.

Small merchants tend to adopt under the following circumstances:

  1. Product must be easy to use
  2. Returns are reliably strong
  3. Word-of-mouth spreads adoption
  4. Platform quickly becomes the default “go-to” tool.
    Once they find a tool that works, they seldom churn. They don’t have teams that are constantly optimizing, they rely heavily on the platform provider.
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In this episode of Hot Takes, Jeremy shares why Kitsch can now spend almost as much on AppLovin as Meta with similar efficiencies, how the platform rapidly improved in just six months, and why most brands are overlooking one of the biggest opportunities in paid media. At one point, he even drops the line:
“I think AppLovin’s taking over the world.” Explains why he sees more consistent performance on Applovin than Meta, TikTok, or Pinterest

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