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David SenraDavid Senra

Building a $150 Billion Company With Just 400 People | Adam Foroughi of AppLovin

Adam Foroughi is the co-founder and CEO of AppLovin, the AI-powered advertising platform that became one of the most impressive stock stories in recent history. Foroughi was born in Iran in 1980. His family fled the Iran-Iraq War when he was four, leaving behind everything. They settled in Laguna Niguel, California. He studied economics at UC Berkeley, then became a derivatives trader, drawn to scalable, data-driven models for consistent returns. He carried that appetite into two mobile advertising companies before deciding the opportunity was larger than either of them. In 2011, he co-founded AppLovin with two friends. The top VCs all passed. Rather than chase outside money, he bootstrapped, built a bad dating app, a worse fashion app, and eventually found the insight that would define everything: the recommendation algorithm, not the app, was the product. He stripped the consumer layer away, launched an advertising platform in March 2012, and by November it was earning a million dollars a month. The company went public in April 2021 at roughly $28 billion. Then Apple changed its privacy rules and the stock fell 92% — from $115 a share to $9. Foroughi responded by doing something almost no one thought was sane: he borrowed money to buy back his own stock at the bottom, deploying around $6 billion in buybacks that would eventually return roughly $60 billion in value. Then he bet the company on a new AI model. The launch of AXON 2.0 in 2023 sparked one of the great corporate comebacks in recent memory. The stock rose 735% in 2024 alone, outpacing Nvidia. By mid-2025, he sold off the gaming studios entirely and AppLovin became a pure-play software platform. He controls a majority of the voting power and has run the company for over a decade with a C-suite of four people. Show notes: https://www.davidsenra.com/episode/adam-foroughi Made possible by Ramp: ⁠https://ramp.com⁠ Axon by AppLovin: https://axon.ai/senra Deel: https://deel.com/senra Chapters 00:00:00 The $6B Buyback That Made $60B 00:02:15 Borrowing Money To Buy Back Stock At A Discount 00:05:02 Why VCs Passed On AppLovin In 2012 00:09:00 From App Discovery To Ad Platform 00:14:45 Beating Google's AdMob With Performance Marketing 00:19:30 No Board For Six Years 00:30:12 The China Deal That Almost Blew Up 00:37:45 The Convertible Note Pivot And KKR 00:46:30 Buying Gaming Studios To Get Data 00:51:45 Losing Trust With Game Developers 00:58:20 The 2022 Crash And How He Kept His Team 01:02:00 Building An Hyper Competent & Efficient Company 01:07:25 Why Every New Hire Needs His Approval 01:19:06 The Axon 2 Inflection Point 01:21:15 One Great Engineer Now Beats A Hundred

David SenrahostAdam Foroughiguest
May 2, 20261h 26mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

AppLovin’s contrarian buybacks, Axon AI, and lean A-team scaling

  1. AppLovin’s stock fell ~92% in 2022 despite rising EBITDA, prompting a highly targeted ~$6B buyback program that ultimately created ~$50–$60B in value as the market repriced the business.
  2. After being rejected by top VCs in 2012, AppLovin bootstrapped to product-market fit by turning an “app discovery” recommendation insight into an SDK-based mobile ad network optimized for developers, not brand advertisers.
  3. A board-less early history enabled fast, founder-led decisions but also led to a near-disastrous China-linked transaction that was later salvaged via a pivot to a non-control convertible note and then refinanced with KKR.
  4. To compete with data-rich platforms, AppLovin temporarily bought multiple gaming studios to obtain advertiser-like purchase data needed to train machine-learning models, later selling the studios once the core ad platform became dominant.
  5. The company’s operating system is “hyper-competence with minimal process”: ruthless headcount discipline, CEO-approved hires, heavy pruning of non-A players, and leveraging LLMs so small teams can outperform much larger orgs.

IDEAS WORTH REMEMBERING

5 ideas

Buybacks can be transformational when fundamentals and price diverge dramatically.

Foroughi argues the 2022 selloff created an unusually “juicy” valuation (low multiple on cashflow/EBITDA), so AppLovin leaned in—using both operating cash and leverage—to retire shares at distressed prices and compound the upside when sentiment reversed.

Don’t do “generic” buybacks—source liquidity from the sellers you can predict.

Instead of only buying in the open market, AppLovin negotiated repurchases directly with large holders (private equity and departed founders) it expected to sell over time, improving execution certainty and reducing the risk of buying from the “wrong” counterparties.

Being board-less increases speed, but raises the cost of capital-market ignorance.

The lack of a board helped him avoid pressure to sell early, but it also contributed to a major misstep: underestimating geopolitical/regulatory risk (CFIUS scrutiny) in a China-linked control transaction.

Regulatory and geopolitics can dominate deal logic—even if the business feels innocuous.

AppLovin thought it was “solitaire and poker data,” but regulators evaluated it as a large-scale data platform on mobile devices; the control element and state-linked capital made approval unlikely regardless of valuation appeal.

Data is the unlock for performance advertising; acquiring it can justify temporary vertical integration.

To build stronger machine-learning models (and compete with Facebook/Google’s data advantage), AppLovin bought gaming studios to access purchase/monetization data, trained Axon models, and later exited the studios once the platform no longer needed that crutch.

WORDS WORTH SAVING

5 quotes

So you're running a business, and the whole world is telling you your business is trash. Like like what, what do you do?

— Adam Foroughi

But then two, to lever up to buy your own shares when everyone's telling you your, your company is a piece of shit, that's really scary to do.

— Adam Foroughi

I never believed in saving cash for a rainy day.

— Adam Foroughi

We ended up deploying somewhere around $6 billion of buybacks of our own capital, and we leveraged some to buy back shares in the company. And over time, that ended up creating somewhere in the neighborhood of $50, $60 billion of actual proceeds from the buyback, one of the more successful buybacks in the history of companies.

— Adam Foroughi

I'd wake up every morning and go, "I gotta check stats. Are we going bankrupt today, or are we still doing well?"

— Adam Foroughi

$6B leveraged buyback during 2022 crashPublic-market structure, float, and investor support post-IPOVC rejections and bootstrapped early product pivotsPerformance marketing vs brand advertising (developer-first tools)China deal, CFIUS risk, and convertible-note restructuringKKR financing and first formal board creationAxon 1 to Axon 2 deep learning inflection and AI/LLM leverageBuying then selling gaming studios for data advantageTalent density, firing 40% while growing, CEO-only hiring approvalExpanding beyond gaming ads into e-commerce and broader categories

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