AppLovin Corp.'s stock was one of the hottest plays of 2024, and it shot higher on Thursday after the app-monetization company offered an upbeat outlook and announced plans for a sale of its mobile gaming business for $900 million.

AppLovin (APP) delivered a revenue forecast for the current quarter that came in above analysts' expectations. It models $1.355 billion to $1.385 billion on the top line for the first quarter, while analysts tracked by FactSet were anticipating $1.318 billion.

The company's forecast implies that quarterly advertising revenue is expected to top $1 billion for the first time after it came up just shy - at $999.5 million - in the latest quarter. AppLovin also derives revenue from its apps business, which is just over a third of the size of its advertising business.

Shares of AppLovin surged 28% in premarket trading on Thursday.

AppLovin said it expects to see more traction as it improves its artificial-intelligence advertising models and introduces more personalization to the advertising experience.

"With AI, we aim to scale this process exponentially by creating countless iterations and dynamically selecting personalized creatives for each user," Chief Executive Adam Foroughi said in a shareholder letter. "This will unlock improved consumer engagement and response."

The company also sees the potential to broaden the reach of advertisers that it serves, after seeing particular momentum with direct-to-consumer advertising. And the company said it's "exploring" moves in connected-TV advertising.

"While still in its early stages, we believe there's significant potential in applying our targeting technology to connected TV $(CTV)$ for direct-to-consumer brands," Foroughi said. "This is an exciting frontier that could further amplify the impact of our platform."

In the fourth quarter, AppLovin turned in revenue of $1.37 billion, up 44% from a year prior. Analysts were modeling $1.26 billion. Growth picked up relative to the third quarter, when AppLovin saw revenue expand at a nearly 39% clip.

Later in the day, AppLovin said in a filing that it had entered into a "term sheet" to sell its mobile gaming business to a "privately held company" that was not named.

The term sheet was non-binding, save for agreements to make a good-faith effort to finalize the agreement and which prohibit AppLovin from talking with anyone other than the buyer about the sale for a certain time frame.

The proposed deal will consist of $400 million in shares of the buyer's stock and $500 million in cash, the filing said. The buyer will borrow up to $250 million for the cash portion of that deal, with AppLovin offering up financing if the buyer can't do so.

Chief Financial Officer Matt Stumpf, during AppLovin's earnings call, said the company hoped to close the transaction in the coming quarter. Foroughi, during that call, said that the teams affected by the deal would "soon be part of a company that specializes in and champions game development."

"While it's bittersweet to part ways, we're excited for your future and immensely grateful for your role in getting us to where we are today," he said.