AppLovin Corporation (NASDAQ: APP) saw its stock price surge 17.17% in pre-market trading on Thursday, following the release of impressive first-quarter 2025 financial results and the announcement of a strategic business sale. The digital advertising technology company significantly outperformed analyst expectations, demonstrating robust growth and profitability in its core business.

AppLovin reported earnings per share (EPS) of $1.67, surpassing the consensus estimate of $1.44 and marking a substantial 149% increase from $0.67 in the same period last year. The company's revenue for the quarter reached $1.48 billion, beating the analyst forecast of $1.38 billion and representing a 40% year-over-year growth. The strong performance was primarily driven by the company's advertising business, which saw sales jump 71% year-over-year to $1.16 billion.

In addition to the stellar financial results, AppLovin announced the sale of its mobile gaming business to Tripledot Studios for $800 million, comprising $400 million in cash and approximately a 20% ownership stake in Tripledot's common equity. This strategic move allows AppLovin to focus on its core advertising technology business, which has shown higher growth rates and profit margins. The market's positive reaction to these developments reflects investor confidence in the company's growth strategy and future prospects. Several analysts have raised their price targets for AppLovin following the news, further bolstering investor sentiment.