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Core Insights - Digital Turbine, Inc. will participate in three investor conferences in New York City on November 18 and 19, 2025 [1][4] Company Overview - Digital Turbine empowers mobile consumer experiences and results for telcos, advertisers, and publishers through its end-to-end platform [1] - The company is headquartered in North America and has offices globally [1] Upcoming Events - The company will host one-on-one and small group investor meetings at the 16th Annual Craig-Hallum Alpha Select Conference on November 18, 2025 [4] - CEO Bill Stone will participate in a fireside chat at the RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference on November 18, 2025, at 3:20 PM ET [4] - The company will also host one-on-one and small group investor meetings at the 14th Annual ROTH Technology Conference on November 19, 2025 [4]

Core Insights - Narweena is an asset manager that focuses on identifying market dislocations due to poor understanding of long-term business prospects [1] - The firm aims to achieve excess risk-adjusted returns by targeting businesses with secular growth opportunities in markets with barriers to entry [1] - Narweena's investment strategy emphasizes company and industry fundamentals to uncover unique insights, with a high risk appetite and long-term investment horizon [1] Investment Strategy - The coverage is tilted towards smaller cap stocks and markets where competitive advantages are not immediately apparent [1] - The firm believes that an aging population, low population growth, and stagnating productivity will create new investment opportunities distinct from historical trends [1] - Many industries may experience stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [1] Market Dynamics - Some businesses are expected to face rising costs and diseconomies of scale, while economies are increasingly dominated by asset-light businesses [1] - The declining need for infrastructure investments is leading to a situation where a large pool of capital is pursuing a limited set of investment opportunities [1] - This dynamic is driving up asset prices and compressing risk premia over time [1] Leadership Background - Richard Durant, the leader of Narweena, holds undergraduate degrees in engineering and finance from the University of Adelaide and an MBA from Nanyang Technological University [1] - He has passed the CFA exams, indicating a strong foundation in finance and investment analysis [1]

Core Viewpoint - The NASDAQ is experiencing a resurgence, particularly in small-cap tech, presenting opportunities to identify stocks with strong earnings trends that are currently undervalued [1] Company Overview - Digital Turbine (APPS) is highlighted as a Zacks Rank 1 (Strong Buy) stock, positioned at the intersection of mobile advertising, app delivery, and content monetization [2] - The company's software is pre-installed on smartphones, enabling carriers and manufacturers to deliver apps and ads seamlessly to users [2] Earnings Trends - Analysts have revised next year's earnings estimates upward, increasing the Zacks Consensus Estimate from 73 cents to 85 cents, indicating a projected earnings growth of 157% year-over-year [3] - Despite a current year earnings contraction of 5.7%, the positive revisions signal a turnaround for the company [3] Market Position - Digital Turbine's turnaround is evident in its Price, Consensus & EPS Surprise chart, with estimates trending higher since Q2 and six consecutive quarterly earnings beats fostering analyst optimism [4] - The stock trades at a forward P/E of around 18x, significantly below the software industry's average of 28x and the broader market's 24x earnings [4] Technical Analysis - The stock shows a strong positive trend with a 200-day moving average positively sloped, currently trading near $6 after a pullback from over $8 [5] - A retest of the 50-day moving average occurred recently, indicating a potential buying opportunity at this key technical level [5]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - SMX (Security Matters) Public Limited Company (SMX) increased by 52% to $2.24 [3] - Entravision Communications Corporation (EVC) rose by 33% to $2.66 [3] - Babcock & Wilcox Enterprises, Inc. (BW) saw a 28% increase to $4.79 [3] - NeuroPace, Inc. (NPCE) gained 24% reaching $11.71 [3] - Kennedy-Wilson Holdings, Inc. (KW) also increased by 24% to $9.30 [3] - Rigel Pharmaceuticals, Inc. (RIGL) rose by 22% to $34.72 [3] - Digital Turbine, Inc. (APPS) increased by 21% to $7.20 [3] - Lumentum Holdings Inc. (LITE) saw a 15% increase to $218.06 [3] - AsiaStrategy (SORA) rose by 14% to $3.63 [3] - Marine Petroleum Trust (MARPS) increased by 7% to $5.05 [3] Premarket Losers - Biohaven Ltd. (BHVN) decreased by 42% to $7.96 [4] - Trex Company, Inc. (TREX) fell by 34% to $30.65 [4] - Soleno Therapeutics, Inc. (SLNO) saw a 23% decline to $49.00 [4] - Axon Enterprise, Inc. (AXON) decreased by 19% to $572.00 [4] - Clover Health Investments, Corp. (CLOV) fell by 19% to $2.82 [4] - Pinterest, Inc. (PINS) decreased by 18% to $26.91 [4] - SSR Mining Inc. (SSRM) saw a 17% decline to $17.91 [4] - Upstart Holdings, Inc. (UPST) decreased by 16% to $38.81 [4] - WF International Limited (WXM) fell by 12% to $2.25 [4] - Corsair Gaming, Inc. (CRSR) decreased by 11% to $6.66 [4]

Financial Data and Key Metrics Changes - Revenue for the quarter was $140.4 million, representing an 18% year-over-year growth [4][12] - Adjusted EBITDA grew by 78% year-over-year, reaching $27.2 million, with an EBITDA margin of 19.4% [4][13] - Free cash flow improved to $7 million, an increase of nearly $23 million year-over-year [13] - GAAP net loss was $21.4 million, or $0.20 per share, while non-GAAP net income was $16.5 million, or $0.15 per share [15] Business Line Data and Key Metrics Changes - On-Device Solutions (ODS) generated $96 million in revenue, up approximately 17% year-over-year, with international ODS revenue growing over 80% year-over-year [5][12] - App Growth Platform (AGP) revenue was $45 million, reflecting a 20% year-over-year increase [5][12] - Revenue per device in the ODS business saw over 30% year-over-year growth in both the US and international markets [6] Market Data and Key Metrics Changes - International revenues exceeded 25% of total ODS revenues for the first time in company history [5] - The company experienced a 40% sequential improvement in its brand business and a double-digit increase in its DTX or SSP business [6] Company Strategy and Development Direction - The company is focused on leveraging first-party data and AI-driven capabilities to enhance operational efficiency and drive growth [8][12] - Investments in AI, branded as DTIQ, are aimed at improving advertising outcomes and return on ad spend for clients [26][31] - The company is positioning itself to capitalize on the growing trend of alternative app distribution models [10][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to sustain profitable growth, citing strong momentum across core businesses [11][16] - The company raised its full-year revenue guidance to a range of $540-$550 million and adjusted EBITDA guidance to $100-$105 million for fiscal year 2026 [16] Other Important Information - The company completed a successful debt refinancing with a new four-year term loan facility, enhancing liquidity for growth initiatives [5][15] - The Ignite Graph and DTIQ are seen as major growth drivers for the future, with over 1,000 unique data signals being utilized [9][30] Q&A Session Summary Question: Insights on brand business and ROI - Management highlighted the integration of platforms leading to improved results and noted that direct brand relationships accounted for 47% of total brand revenue in the September quarter [18][20] Question: International market penetration and RPD revenue - Management reported solid double-digit growth in international RPDs and emphasized the significance of international revenue exceeding 25% of ODS revenues [23] Question: Role of AI in operations and advertising - AI is a critical part of the company's strategy, with significant investments in DTIQ aimed at improving operational efficiency and advertising outcomes [25][26] Question: Impact of recent Supreme Court ruling on alternative app storefront - Management expressed excitement about the democratization of app distribution and the potential for growth in this area [27][28] Question: Competitive landscape changes - Management noted reduced competition in the device side of the business due to a major player exiting the market, while the AGP side remains competitive but focused on building demand-supply connections [32][34]

Market Overview - U.S. equities faced a significant downturn on November 4, 2025, with all three major indexes closing in the red, particularly the tech-heavy Nasdaq Composite, which led the declines [1][2] - The S&P 500 fell 1.2% to 6,771 points, while the Dow Jones Industrial Average decreased by 0.5% or approximately 238 points to 47,085, and the Nasdaq Composite dropped 2% to 23,348 [2] - The Cboe Volatility Index (VIX) surged 10% to 18.9, indicating increased investor apprehension amid concerns over valuations and a potential market correction [2] Economic Data and Events - The ongoing U.S. government shutdown is delaying key economic data releases, increasing focus on private sector data [3] - The ADP employment report is anticipated, which may provide insights into hiring trends following a dip in September [3] - The ISM Manufacturing PMI declined to 48.7 in October from 49.1 in September, marking the eighth consecutive month of contraction [4] Corporate Developments - Palantir Technologies (PLTR) saw a significant decline of 7.9% despite surpassing analysts' forecasts for sales and profit, raising concerns over high valuations [5] - Nvidia (NVDA) fell 4%, and Microsoft (MSFT) dipped 1%, reflecting growing concerns about the sustainability of the AI rally [5] - Uber Technologies (UBER) slumped 6.3% despite reporting better-than-expected financial results [5] - Yum! Brands (YUM) rose 6.1% after announcing strong quarterly results and considering selling its Pizza Hut unit [5] - Kinross Gold Corporation (KGC) reported robust third-quarter results, including record free cash flow and an increase in share buyback target and dividend [6] Earnings Announcements - Advanced Micro Devices, Inc. (AMD) is expected to report a 27.63% year-over-year increase in earnings per share [10] - Arista Networks, Inc. (ANET) is forecasted to see a 14.04% increase in earnings per share [10] - Axon Enterprise, Inc. (AXON) plunged 20% in after-hours trading following a Q3 earnings miss [10] - Digital Turbine (APPS) surged 22% in after-hours trading after reporting its FY 2026 Q2 earnings [10]

Financing and Debt Management - The Company refinanced its existing senior credit facility, securing loans totaling $430,000, all borrowed in full on August 29, 2025[138][139]. - The Loans accrue interest at a term SOFR rate ranging from 7.50% to 8.00% and a reference rate ranging from 6.50% to 7.00%[140]. - The Financing Agreement requires the Company to maintain a minimum liquidity of $10,000 until March 31, 2026, and $20,000 thereafter[142]. - As of September 30, 2025, the outstanding secured indebtedness under the Financing Agreement is $419,908, with a maturity date of August 29, 2029[203]. - The interest rate on the company's borrowings under the Financing Agreement was 12.05% as of September 30, 2025, exposing the company to interest rate fluctuations[222]. - The company faces risks related to refinancing its debt and potential adverse impacts on its financial condition if unable to meet obligations[209]. Business Transformation and Costs - The Company incurred $31 and $1,309 in business transformation costs during the six months ended September 30, 2025 and September 30, 2024, respectively[152]. - The transformation program is expected to yield more than $25,000 in annual cash expense savings[153]. - The company incurred total business transformation and severance costs of $341 and $536 for the three and six months ended September 30, 2025, respectively[167]. - The Company has initiated a business transformation project, including a new global cloud-based ERP system[151]. Revenue and Financial Performance - Net revenue for the three months ended September 30, 2025, was $140,377, an increase of 18.2% compared to $118,728 for the same period in 2024[156]. - Net revenue for the six months ended September 30, 2025, was $271,303, reflecting a 14.6% increase from $236,717 in 2024[156]. - On Device Solutions revenue increased by $14,050 or 17.0% to $96,464 for the three months ended September 30, 2025, driven by higher device volumes internationally[159]. - App Growth Platform revenue for the three months ended September 30, 2025, increased by $7,339 or 19.7% to $44,685, primarily due to increased advertising exchange revenue[161]. - Revenue share increased by $6,757 or 12.0% to $63,093 for the three months ended September 30, 2025, representing 44.9% of total net revenue[168]. Expenses and Losses - Total costs of revenue and operating expenses for the three months ended September 30, 2025, were $133,843, a slight increase of 1.2% from $132,270 in 2024[163]. - Product development expenses for the three months ended September 30, 2025, were $10,979, an increase of 16.4% from $9,433 in 2024[163]. - Sales and marketing expenses decreased by $1,441 or 9.1% to $14,446 for the three months ended September 30, 2025, and was 10.3% as a percentage of total net revenue compared to 13.4% for the same period in 2024[183]. - General and administrative expenses decreased by $8,093 or 19.2% to $34,083 for the three months ended September 30, 2025, compared to $42,176 for the same period in 2024[188]. - Interest expense, net, increased by $2,722 or 31.0% for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to increased interest rates and higher average outstanding borrowings[193]. - The company recorded a loss on extinguishment of debt of $9,795 for the three months ended September 30, 2025, compared to the same period in 2024[198]. - Net loss for the three months ended September 30, 2025, was $21,395, a decrease of 14.4% compared to a net loss of $24,986 in 2024[156]. Cash Flow and Investments - As of September 30, 2025, the company had unrestricted cash of approximately $38,846 and restricted cash of approximately $438[199]. - The company incurred a net loss of $21,395 for the three months ended September 30, 2025, while generating cash from operating activities of $14,460[199]. - Cash provided by operating activities for the six months ended September 30, 2025, was $23,248, a significant increase of $33,319 compared to $(10,071) for the same period in 2024[212][213]. - Net cash used in investing activities for the six months ended September 30, 2025, was $15,386, an increase of 14.8% from $13,408 in 2024[212][214]. - Proceeds from borrowings, net of original issue discount, amounted to $418,700 for the six months ended September 30, 2025, a substantial increase of 1,001.8% compared to $38,000 in 2024[212][215]. - The company reported a net cash used in financing activities of $8,232 for the six months ended September 30, 2025, compared to a net cash provided of $23,372 in 2024[215][218]. Market Conditions and Challenges - The Company is actively monitoring macroeconomic conditions and geopolitical developments that may impact its business[128][135]. - The company is facing challenges due to declining sales volumes of new mobile devices, influenced by inflation and economic uncertainty[130]. - The company is exploring options to raise additional capital through its ATM program or the sale of equity securities, which may dilute existing stockholders' ownership[208]. - The company has minimum purchase commitments under hosting agreements totaling approximately $213,379 over the next five fiscal years[210]. - As of September 30, 2025, the company was in compliance with all covenants under the Financing Agreement[207].

Core Insights - Digital Turbine (NASDAQ: APPS) reported a significant earnings beat, exceeding expectations for both revenue and adjusted earnings while also raising its full-year guidance [1] Financial Performance - The company delivered strong financial results, indicating robust operational performance [1] - The earnings report highlighted a decisive improvement in key financial metrics compared to previous periods [1] Future Outlook - Digital Turbine raised its full-year guidance, suggesting confidence in continued growth and performance [1]

Financial Performance - Fiscal Q2 2026 revenue totaled $140.4 million, representing year-over-year growth of 18% compared to $118.7 million in Q2 2025[4] - GAAP net loss for Q2 2026 was $21.4 million, or ($0.20) per share, an improvement from a net loss of $25.0 million, or ($0.24) per share in Q2 2025[6] - Non-GAAP adjusted net income for Q2 2026 was $16.5 million, or $0.15 per share, compared to $5.5 million, or $0.05 per share in Q2 2025[6] - Non-GAAP adjusted EBITDA for Q2 2026 was $27.2 million, representing a 78% increase year-over-year from $15.3 million in Q2 2025[6] - Non-GAAP free cash flow totaled $7.0 million in Q2 2026, an increase of $22.7 million compared to Q2 2025[4] - The net loss for the three months ended September 30, 2025, was $21,395,000, compared to a net loss of $24,986,000 in the same period of 2024[35] - The company reported a basic net loss per common share of $0.20 for the three months ended September 30, 2025, compared to $0.24 for the same period in 2024[31] - The company reported a net loss of $(21,395,000) in Q3 2025, an improvement from a net loss of $(24,986,000) in Q3 2024, showing a reduction of 10.4%[39] Revenue Segments - The On Device Solutions segment generated $96,464,000 in revenue, a 17% increase from $82,414,000 year-over-year[37] - The App Growth Platform segment reported revenue of $44,685,000, reflecting a 20% increase compared to $37,346,000 in the prior year[37] - Net revenue for Q3 2025 increased to $140,377,000, up from $118,728,000 in Q3 2024, representing a growth of 18.2%[38] Cash Flow and Expenses - Cash and cash equivalents and restricted cash at the end of the period were $39,284,000, up from $32,765,000 at the end of the same quarter in 2024[35] - The company experienced a net cash provided by operating activities of $14,460,000 for the three months ended September 30, 2025, compared to a net cash used of $8,719,000 in the same period of 2024[35] - Non-GAAP gross profit for Q3 2025 was $66,042,000, with a gross profit margin of 47%, compared to $54,005,000 and 45% in Q3 2024[38] - Non-GAAP adjusted EBITDA for Q3 2025 reached $27,192,000, compared to $15,314,000 in Q3 2024, reflecting a growth of 77.5%[40] - Non-GAAP free cash flow for Q3 2025 was $7,031,000, compared to a negative free cash flow of $(15,691,000) in Q3 2024[42] - Stock-based compensation expense decreased to $5,451,000 in Q3 2025 from $8,999,000 in Q3 2024, a reduction of 39.8%[39] - Capital expenditures for Q3 2025 were $7,770,000, slightly higher than $7,477,000 in Q3 2024[42] Outlook and Strategy - The company raised its full-year revenue outlook to between $540 million and $550 million[10] - Non-GAAP adjusted EBITDA guidance for the full year is projected to be between $100 million and $105 million[10] - The company expressed high conviction in its strategy to pursue a half-trillion dollar market opportunity[3] - The company highlighted strong demand for its platform and operational execution as key drivers of performance[3] Debt and Assets - The company announced a successful completion of debt refinancing with a new 4-year $430.0 million term loan credit facility[4] - Total assets as of September 30, 2025, were $818,665,000, compared to $812,854,000 as of March 31, 2025[33] - Long-term debt as of September 30, 2025, was $393,753,000, down from $408,687,000 as of March 31, 2025[33] - Total costs of revenue and operating expenses for the three months ended September 30, 2025, were $133,843,000, slightly up from $132,270,000 in the same quarter of 2024[31] Shareholder Information - The weighted-average common shares outstanding, diluted, increased to 113,009,000 in Q3 2025 from 105,345,000 in Q3 2024[39]