Application performance refers to how well a software application operates in terms of speed, responsiveness, and efficiency. It is measured by various metrics, such as load time, transaction speed, and resource usage. High application performance ensures that users can complete tasks quickly and without frustration, leading to a better overall experience. Factors affecting application performance include server capacity, network speed, and the efficiency of the underlying code. Tools like performance monitoring software can help developers identify bottlenecks and optimize their applications. Maintaining good application performance is crucial for user satisfaction and retention in today's digital landscape.