Skip to content
    LFTO
    Earnings call· Jun 2026(Q2 FY26)

    Liftoff Mobile Q2 FY26 earnings call LFTO

    Aug 12, 2026 Source

    Executive summary

    Liftoff Q2 FY26 — Strong Revenue Growth and Margin Expansion Driven by Cortex and Market Dynamics

    Liftoff reported a strong second quarter, driven by its AI-powered Cortex platform and broad participation across the growing mobile app economy, including a boost from the World Cup. The company demonstrated significant operating leverage with expanding EBITDA margins and strong free cash flow generation. While Q3 guidance reflects some normalization after accelerated Q2 performance, management remains confident in its long-term profitable growth trajectory and capital-light model.

    Highlights

    5

    • Revenue grew 7% quarter-over-quarter and 35% year-over-year to $220 million, marking the 11th consecutive quarter of growth.

    • Adjusted EBITDA reached $132 million, with a 60% margin, expanding 2 percentage points sequentially and 8 percentage points YoY.

    • Generated $50 million in free cash flow, up from $15 million in the prior year, with trailing 12-month FCF at $184 million.

    • Net leverage reduced to 2.4x net debt to adjusted EBITDA, down from the target of below 3x.

    • Core advertising daily average revenue grew 6% sequentially, driven by market growth, Cortex self-learning, and model breakthroughs.

    Concerns

    2

    • Q3 revenue guidance implies flat sequential growth ($217M-$222M) compared to Q2 ($220M), below historical Q3 trends.

    • Q3 adjusted EBITDA margin guidance (57%-58%) is lower than Q2 (60%) due to expense timing benefits in Q2.

    Guidance & targets

    8
    CategoryTargetConfidence
    Revenue
    $217M-$222M
    high materiality
    High
    Adjusted EBITDA
    $124M-$128M
    high materiality
    High
    Adjusted EBITDA margin
    57%-58%
    high materiality
    High
    Revenue
    $870M-$880M
    high materiality
    High
    Adjusted EBITDA
    $510M-$518M
    high materiality
    High
    Adjusted EBITDA margin
    59%
    high materiality
    High
    Net leverage
    below 3x
    medium materiality
    High
    Return of capital to shareholders
    increasingly attractive option
    medium materiality
    Medium

    Operational metrics

    17
    Core advertising revenue
    $219M
    Q2 FY26

    Comprises close to 100% of total reported revenue.

    Core advertising daily average revenue sequential growth
    6%
    Q2 FY26

    Driven by market growth, Cortex self-learning, model breakthroughs, and World Cup contribution.

    Customers contributing over $100k in core advertising revenue
    391up from 341 for Q2 FY25
    Q2 FY26

    Consistent growth in the number of high-value customers.

    Incremental adjusted EBITDA margin
    82%year-over-year basis
    Q2 FY26

    Driven by top-line scaling faster than cost base and modest favorable changes in expense timing.

    Net loss
    -$4M
    Q2 FY26

    Inclusive of $45M of noncash expenses associated with IPO and other capital markets activities.

    IPO-related stock-based compensation expense
    $20M
    Q2 FY26

    Part of noncash expenses related to IPO.

    Contingent consideration revaluation
    $18M
    Q2 FY26

    Part of noncash expenses related to IPO and capital markets activities.

    Loss on debt extinguishment
    $7M
    Q2 FY26

    Part of noncash expenses related to IPO and capital markets activities.

    Debt paid down
    $418M
    YTD Q2 FY26

    Cash balance of $305M after this paydown.

    Shares outstanding
    169M
    Q2 FY26

    As of quarter end.

    Diluted weighted average shares outstanding
    137M
    Q2 FY26

    For the quarter.

    Growth from existing customers
    58%
    Q2 FY26

    Versus 42% from new customers acquired over the last 12 months.

    Growth from new customers
    42%
    Q2 FY26

    Versus 58% from existing customers. Influenced by World Cup.

    Cortex predictions
    over 1 billion
    per second

    Cortex estimates the probability of converting a user or device for each ad auction.

    Third-party in-app advertising market CAGR
    11%
    to 2030

    Projected market size of $136 billion by 2030.

    Nongaming verticals CAGR
    14%
    to 2030

    Expanding faster than the overall market.

    SDK integrated apps
    close to 170,000
    Q2 FY26

    Part of the supply side platform (SSP) network.

    Industry KPIs

    7
    MetricValueDetails
    Total revenue$220MUSD
    Net income EPS-$4MUSD
    Adjusted EBITDA$132MUSD
    CAPEX capital programmid- to high single-digit percent% of revenue
    Cash marketable securities$305MUSD
    Ai product feature adoptionunder 1 daytime
    Free cash flow operating cash flow$50MUSD

    Risks & headwinds

    3
    Q3 revenue guidance implies flat sequential growthQ3 FY26

    Q3 revenue guidance $217M-$222M vs Q2 $220M

    Mitigation: Management attributes this to Q2 benefiting from model breakthroughs that manifested sooner than expected, influencing the Q3 trend. They emphasize focusing on long-term trends.

    Q3 adjusted EBITDA margin guidance is lower than Q2Q3 FY26

    Q3 adjusted EBITDA margin 57%-58% vs Q2 60%

    Mitigation: Due to expense timing benefits in Q2 that will have a corresponding adverse impact in Q3. Full-year margin expansion still expected.

    Volatility in stock-based compensation expenseComing quarters

    Stock-based comp will move around quite a bit over the coming quarters along with the capital events.

    Mitigation: Implies it's a known factor related to IPO and capital events, but no specific mitigation strategy was detailed.

    What to watch in Q3 FY26

    5

    Q3 Revenue Growth

    Q3 FY26
    CurrentQ2 revenue grew 7% QoQ to $220M. Q3 guidance implies flat sequential growth ($217M-$222M).
    TargetSequential growth above the guided range, or strong YoY growth within the range.

    Why it matters

    To assess if the Q3 slowdown is temporary due to Q2 pull-forward📎 or a more sustained trend, impacting full-year trajectory.

    For the third quarter of 2026, we expect revenue of $217 million to $222 million, representing growth of approximately 21% to 24% year-over-year.

    Q&A highlights

    6

    Asked about differences in advertiser adoption/budget trends by vertical in Q2 and which verticals are most exciting for medium-term growth.

    Jeremy highlighted the World Cup's impact on sports betting, live scoring, and prediction markets, noting that Liftoff acts as an 'index' across the app economy. He emphasized the benefit from cultural moments like the NFL season, back-to-school, and holidays, and the faster growth of non-gaming verticals.

    “We benefit from our breadth across the app economy, not being exposed to any single event but participating in each and every one as we go through the calendar.”

    asked by Eric Sheridan · answered by Jeremy Bondy

    2 min read6 chapters

    Detailed Narrative

    01

    Cortex AI Platform Performance

    Cortex, Liftoff's proprietary AI engine, processes over 1 billion predictions per second, reducing campaign learning time from 2 weeks to under 1 day. Recent model breakthroughs, such as an enriched feature set for impression valuation, have provided durable performance gains across the user acquisition business, contributing to Q2 results and acting as a 'force multiplier' for predictive power.

    02

    Mobile App Economy & Market Position

    The third-party in-app advertising market is projected to grow at an 11% compound annual rate to $136 billion by 2030, with nongaming verticals expanding even faster at 14%. Liftoff's unified DSP and SSP, combined with its SDK integrated into close to 170,000 apps globally, provides a technology moat and direct user reach, making it difficult to replicate.

    03

    Vertical Diversification & Cultural Moments

    Liftoff's platform is built to serve the entire app economy, with over half of demand and over one-third of supply coming from non-gaming verticals. The company benefits from major cultural moments like the World Cup, which drove increased demand in sports betting, live scoring, and prediction markets, and expects similar engagement during the upcoming NFL season, back-to-school, and holiday commerce periods.

    04

    Financial Model & Operating Leverage

    Liftoff's scalable business model drives strong financial performance, with high incremental adjusted EBITDA flow-through on revenue growth. The company achieved an 82% incremental adjusted EBITDA margin on a year-over-year basis in Q2, demonstrating its capital-light architecture and ability to convert growth into significant free cash flow.

    05

    Capital Allocation Strategy

    Liftoff prioritizes reinvesting in the business (R&D, new vertical expansion), maintaining net leverage below 3x, and returning capital to shareholders as leverage normalizes. While M&A is considered a tool, it is not currently intended to be a primary use of capital, with the company emphasizing organic growth and strategic flexibility.

    06

    Gaming Market Health

    Management views the mobile gaming market as healthy and foundational, growing alongside other verticals year-over-year in Q2. They note that third-party data often understates the market's health due to hybrid monetization and off-store purchases, and Liftoff benefits from gaming as both a demand and supply source.

    AI-generated summary of the company’s earnings call. Not investment advice.