Software Development Kits (SDKs) are replacing web tracking to dominate the $400 billion in-app advertising space. As this trend grows, leading platforms face mixed signals. AppLovin is navigating securities litigation regarding AI performance, while India-based InMobi is moving forward with a $1 billion IPO. Investors must weigh the potential for AI-driven revenue against rising computing costs and regulatory challenges.
The global digital advertising world is shifting its foundation. As traditional tools like third-party cookies fade due to stricter privacy updates, software development kits (SDKs) have become the essential link for mobile advertising. These kits act as the bridge inside mobile apps, allowing companies to collect data and serve targeted ads directly on a user’s device. This shift has helped fuel an in-app advertising market now valued at approximately $400 billion, as brands seek new ways to track users without relying on web browsers.
The AppLovin Financial Story
AppLovin stands as a primary beneficiary of this trend, given its deep integration across mobile apps. In the second quarter of 2026, the company reported $1.92 billion in revenue, showing strong year-over-year growth of 53%. However, the company faces significant hurdles that shareholders are monitoring closely. AppLovin is currently involved in a securities class action lawsuit. The legal concerns center on the company’s disclosures regarding its artificial intelligence progress and its recent financial performance. Furthermore, because AI-based advertising tools require massive computing power to function, companies in this space face rising costs. If these expenses continue to climb, it could squeeze profit margins, even as revenues remain high.
InMobi's IPO Path in India
Closer to home, InMobi is making headlines as it prepares for a public listing. The company is currently working with major banks including JPMorgan Chase, Jefferies, Kotak Mahindra Capital, and Axis Capital for an IPO targeting roughly $1 billion. As part of this process, InMobi is redomiciling from Singapore to India, a move expected to simplify its structure before the shares hit the NSE and BSE.
While the market opportunity is vast, the IPO journey carries specific risks for investors. InMobi’s business model often relies on partnerships with phone makers—such as its Glance lock-screen platform—which creates a dependency on external hardware ecosystem changes. Additionally, the company is managing existing debt with interest rates that remain in the low-to-high teens. This debt load is a point of concern that analysts often track when companies prepare for a major capital raise, as it can affect financial flexibility.
Future Monitorables
Investors looking at the sector should track two main factors. First, the ability of companies to manage the high costs of running AI models is critical; if they cannot maintain strong profit margins while investing in these new tools, the growth story may face pressure. Second, the timing of the InMobi IPO and the outcome of the ongoing legal proceedings for AppLovin will shape market sentiment. For the broader industry, the shift toward SDK-based advertising is likely to continue, but the benefits will likely accrue to companies that can navigate both the technical costs of AI and the regulatory demands of global privacy standards.