Insightful Word
  • Investing
  • Stock
  • Economy
  • Politics
  • Investing
  • Stock
  • Economy
  • Politics
No Result
View All Result
Insightful Word
No Result
View All Result
Home Stock

What is the potential impact of U.S. Android Play Store remedies

admin by admin
October 27, 2024
in Stock
0
What is the potential impact of U.S. Android Play Store remedies
0
SHARES
9
VIEWS
Share on FacebookShare on Twitter

Investing.com — In a recent note, Wells Fargo analyzed the potential financial impact on app developers and Alphabet (NASDAQ:GOOGL) Inc’s Google, following the U.S. District Judge’s decision in the Epic Games v. Google case, which could lead to changes in the Play Store’s operations.

More concretely, the firm’s analysts expect that app developers like Match Group (NASDAQ:MTCH), Bumble Inc (NASDAQ:BMBL), and Roblox Corp (NYSE:RBLX). could see an increase in their adjusted EBITDA by 2026 if they are allowed to process payments directly on Android in the U.S.

Wells Fargo estimates an accretion of 3 points, 5 points, and 3 points to the fiscal year 2026 adjusted EBITDA forecasts for MTCH, BMBL, and RBLX, respectively. The analysis suggests that with incentives for higher adoption of direct billing, even with a promotional discount, the companies could see an even larger benefit.

“Even with a likely promotion offset (assume a 5% discount), a 75% US direct billing mix (vs. base case 35%) would suggest a 4pts / 7pts / 6pts accretion” to Wells Fargo’s fiscal 2026 adjusted EBITDA estimates for MTCH, BMBL, and RBLX, respectively.

In contrast, Google is projected to experience only a modest 1 point negative impact on its earnings per share (EPS) due to the loss of Play Store fee revenue. Wells Fargo’s analysis indicates that U.S. Google Play billings currently account for approximately 2% of Google’s fiscal year 2026 operating income (OI) and EPS.

The firm’s forecast assumes a shift of 35% from Google Play to direct billings in 2026, considering the likelihood of large developers opting for direct billing to benefit from direct customer relationships and cost savings.

While the near-term financial impact on Google is expected to be limited, Wells Fargo notes that there is a more significant risk if international regulators implement similar rules.

The Play Store is estimated to contribute around 6% to Google’s operating income, with non-U.S. transactions constituting about 65% of total Play billings.

“Further, we believe the 3-year remedy ban on Play Store revenue share to distribution partners and a resultant rise in the distribution of alternative app stores likely opens up the Android ecosystem,” analysts added.

The legal backdrop for these projections stems from the October 7th ruling that Google must allow for greater competition in its Play Store. This follows a December 2023 jury verdict that found Google’s Play Store to be operating as an illegal monopoly.

The judge ordered an end to Google’s Play billing mandates and revenue share payments to Android Play store distributors for three years starting on November 1.

However, with a short-term stay granted and Google’s plans to appeal, the earliest implementation of the remedy is expected to be in the first quarter of 2026, pending the outcome of the appeal process.

This post appeared first on investing.com

Previous Post

Stocks rally faces gauntlet of tech earnings, jobs data, election

Next Post

Dogizen poised for gains, Bitcoin bull Paul Tudor Jones sees BTC upside

admin

admin

Next Post
Dogizen poised for gains, Bitcoin bull Paul Tudor Jones sees BTC upside

Dogizen poised for gains, Bitcoin bull Paul Tudor Jones sees BTC upside

Trending News

Metaplanet raises $30 million via zero-interest bonds to grow Bitcoin holdings

Metaplanet raises $30 million via zero-interest bonds to grow Bitcoin holdings

December 17, 2024
Boeing shares fall after workers reject latest offer

Boeing shares fall after workers reject latest offer

October 24, 2024
TSMC and Intel joint venture? Chip giants explore potential collaboration

TSMC and Intel joint venture? Chip giants explore potential collaboration

February 14, 2025
Subscribe to Insightful Word


    Recent News

    Nvidia shares fall on China sales exclusion, weaker data center sales: analysts weigh in

    Nvidia shares fall on China sales exclusion, weaker data center sales: analysts weigh in

    August 28, 2025
    SentinelOne stock price forecast ahead of earnings: buy or sell?

    SentinelOne stock price forecast ahead of earnings: buy or sell?

    August 28, 2025
    Tesla wants millions of robotaxis by 2025, but will Waymo win the long game?

    Tesla wants millions of robotaxis by 2025, but will Waymo win the long game?

    August 28, 2025
    Urban Outfitters stock slides 4% despite strong quarter on cautious outlook

    Urban Outfitters stock slides 4% despite strong quarter on cautious outlook

    August 28, 2025

    Recent News

    Nvidia shares fall on China sales exclusion, weaker data center sales: analysts weigh in

    Nvidia shares fall on China sales exclusion, weaker data center sales: analysts weigh in

    August 28, 2025
    SentinelOne stock price forecast ahead of earnings: buy or sell?

    SentinelOne stock price forecast ahead of earnings: buy or sell?

    August 28, 2025

    Latest News

    • Nvidia shares fall on China sales exclusion, weaker data center sales: analysts weigh in
    • SentinelOne stock price forecast ahead of earnings: buy or sell?
    • Tesla wants millions of robotaxis by 2025, but will Waymo win the long game?

    About Insightful Word

    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools
    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools

    Copyright © 2025 Insightfulword.com. All Rights Reserved.

    No Result
    View All Result
    • Investing
    • Stock
    • Economy
    • Politics

    Copyright © 2025 Insightfulword.com. All Rights Reserved.