All articles tagged with #rule of 40
AppLovin reported Q2 revenue of $1.92B (up 53% YoY) but missed the $1.94B consensus, while EPS was $3.76 and net income rose 55% to $1.27B. Free cash flow hit $863M and EBITDA margin was 84%, with the Rule of 40 at 98. Management guided Q3 revenue to about $2.06-2.09B and about $551M in buybacks, but the stock fell roughly 17% in premarket trading.
Palantir’s Q1 results show accelerating growth powered by its AI Platform, with revenue up 85% YoY to $1.63B—the 11th straight quarter of accelerating growth—driven by strong US commercial demand and a government win (USDA). Margins are robust (adjusted operating margin 60%, GAAP net income margin 53%), and the company posts a Rule of 40 of 145% with net revenue retention at 150%, signaling a durable moat. Valuation remains premium (forward P/S ~42x, forward P/E ~93x), but analysts see potential upside if EPS doubles and growth persists; Palantir sits on a debt-free balance sheet with roughly $8B in cash. Overall, while expensive, the growth trajectory and margins make a compelling case for a long-term buy for some investors, with a Moderate Buy consensus and about 45% upside to a ~$188 target.
SoFi kept its full-year guidance unchanged due to macro uncertainty, with CEO Anthony Noto noting no rate cuts are expected this year. The quarter was strong—revenue growth, healthy margins, and the 18th straight quarter of meeting the Rule of 40—yet the cautious stance pressured the stock.