Core Insights - Digital Turbine's stock experienced a significant increase of 23.1% following the release of its Q4 results, despite some pullbacks later in the week [1] - The company's fiscal Q4 report showed non-GAAP earnings per share of $0.10 on sales of $119.15 million, surpassing analyst expectations [3] - Although adjusted per-share profit decreased by approximately 16.7% year over year, sales increased by around 6.2% [3] Financial Performance - Digital Turbine's Q4 results exceeded Wall Street's targets, with adjusted earnings per share beating the average estimate of $0.04 [3] - The company provided forward guidance for sales between $515 million and $525 million for the current year, indicating an expected annual revenue growth of roughly 6% [4] - The targeted adjusted EBITDA is between $85 million and $90 million, suggesting a potential annual growth of 21% if the midpoint is achieved [5] Strategic Outlook - The business appears to be stabilizing, with successful integration of AI tools into app promotion services [6] - Cost-cutting measures and strategic shifts are yielding positive results for the company [6] - However, the company's significant exposure to the Chinese market presents a risk due to potential geopolitical tensions with the U.S. [6]

Core Viewpoint - Digital Turbine's stock experienced significant sell-offs following a post-earnings rally, closing down 14.6% amid broader market declines [1][2][4] Group 1: Stock Performance - The stock was initially up 1.8% during trading but turned bearish as investors took profits and reacted to risk factors [4] - The share price surged earlier in the week after the company reported better-than-expected quarterly results and forward guidance [4][6] Group 2: Market Dynamics - The sell-off was influenced by new restrictions on technology exports and concerns over escalating geopolitical tensions, particularly between Israel and Iran [2][5] - The Trump administration's potential strengthening of export restrictions on companies like Samsung and TSMC added to the bearish sentiment [5] Group 3: Financial Guidance - For the current fiscal year, Digital Turbine projects revenue between $515 million and $525 million, indicating an annual growth of approximately 6% at the midpoint [6] - Non-GAAP EBITDA is expected to be between $85 million and $90 million, representing a growth of 21% at the midpoint of the guidance range [6] Group 4: Geopolitical Risks - The company's reliance on business in China exposes it to substantial risks due to rising geopolitical tensions, despite not being a hardware company [7]

Core Insights - Alcatel and Digital Turbine have formed an exclusive partnership to enhance mobile user experience in India, particularly with the launch of Alcatel's new smartphone range [2][5] - The collaboration aims to provide personalized mobile experiences from the moment users unbox their devices, integrating Digital Turbine's technology directly into Alcatel smartphones [4][8] Company Overview - Alcatel is a leading French consumer tech brand, established in 1898, and operates under a trademark licensing agreement from Nokia, available in over 160 countries [9] - Digital Turbine, listed on NASDAQ as APPS, specializes in enhancing mobile experiences and simplifying the acquisition and monetization processes for mobile operators and advertisers [10] Partnership Details - The partnership will utilize Digital Turbine's suite of mobile technologies, including Dynamic Installs and SingleTap™ installs, to improve app discovery and user engagement [4][6] - Alcatel's collaboration with Digital Turbine positions it alongside other major manufacturers like Xiaomi and Samsung, expanding its reach in the global market [7][8] Market Significance - India is recognized as one of the most important smartphone markets globally, making this partnership a strategic move for both companies to deliver a richer user experience [5][8] - The integration of personalized content and app recommendations is expected to drive consumer value and enhance user engagement throughout the device's lifecycle [6][8]

Core Insights - Digital Turbine's stock surged by 49.7% amid a broader market decline, reflecting strong investor sentiment following the release of its fiscal Q4 results [1] - The company reported non-GAAP adjusted earnings per share of $0.10 on sales of $119.15 million, exceeding Wall Street expectations [3] - Digital Turbine provided optimistic guidance for the current fiscal year, projecting sales between $515 million and $525 million, indicating a growth of approximately 6% year-over-year [4] Financial Performance - In fiscal Q4, Digital Turbine's revenue increased by roughly 6% year-over-year, despite a decline in per-share profit from $0.12 in the prior-year quarter [3] - The company's sales surpassed the average analyst estimate of $116.64 million, while adjusted earnings per share exceeded expectations of $0.04 [3] - Management's guidance for adjusted EBITDA is between $85 million and $90 million, which is better than the average estimate of $85.2 million [5] Future Outlook - Digital Turbine's sales guidance for the current fiscal year is between $515 million and $525 million, with the midpoint indicating a growth of approximately 6% over the previous year's sales of $490.5 million [4] - The company’s positive performance and outlook for sales and profitability suggest a stronger position moving forward [5]

Group 1 - Digital Turbine (NASDAQ: APPS) reported mixed results in Q4 of FY25, which has led to a temporary increase in stock price despite ongoing business struggles [1] - Richard Durant leads Narweena, an asset manager focused on identifying market dislocations due to misinterpretations of long-term business prospects [1] - Narweena aims to achieve excess risk-adjusted returns by targeting businesses with secular growth opportunities in markets with high barriers to entry [1] Group 2 - Narweena's research emphasizes company and industry fundamentals to uncover unique insights, with a focus on smaller cap stocks and less obvious competitive advantages [1] - The investment strategy is influenced by an aging population, low population growth, and stagnating productivity, which may create new investment opportunities [1] - The economic landscape is shifting towards asset-light businesses, reducing the need for infrastructure investments, leading to increased asset prices and compressed risk premia [1]

Financial Data and Key Metrics Changes - The company achieved revenue of $119.1 million for the fourth quarter, representing a 6% year-over-year growth [22] - Adjusted EBITDA for the fourth quarter was $20.5 million, reflecting a 66% increase year-over-year [22] - Non-GAAP earnings per share for the fourth quarter were $0.10, with a GAAP net loss of $18.8 million or $0.18 per share [26] - For the full fiscal year 2025, total revenue was $490.5 million, a decline of approximately 10% compared to the previous year [26] Business Line Data and Key Metrics Changes - The On-Device Solutions (ODS) segment revenue increased by 11% year-over-year, while the Advertising Growth Platform (AGP) segment revenue decreased by 3% year-over-year [22] - Revenue per device (RPD) in the U.S. increased by over 40% year-over-year, and internationally by over 100% year-over-year [8] Market Data and Key Metrics Changes - The company reported a positive trend in international markets, with improved execution and operational strategies leading to increased revenue per device [32][34] - The DTX revenues from non-gaming applications nearly doubled over the past year, indicating a diversification of supply [12] Company Strategy and Development Direction - The company is focused on expanding its device footprint and enhancing its product portfolio for both ODS and AGP businesses [14][15] - Strategic investments are being made in first-party data and AI machine learning platforms to drive growth and improve operational efficiencies [17][19] - The company aims to build deeper media relationships and leverage regulatory changes to enhance its market position [38][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, projecting revenue for fiscal year 2026 to be between $515 million and $525 million [28] - The regulatory environment is seen as favorable, with increasing interest from app publishers in the company's technologies [36][38] Other Important Information - The company extended its credit facility, which is expected to lower its cost of capital in the future [6] - Cash balance at the end of the quarter was $40.1 million, with no new borrowings reported [27] Q&A Session Summary Question: Focus on international RPD growth opportunities - Management highlighted improved execution and increased distribution footprint as key factors driving international RPD growth, with partnerships expanding in regions like Brazil and India [32][34] Question: Activity increase from app publishers due to regulatory environment - Management noted a favorable regulatory environment leading to increased interest from app publishers in their Single Tap and app install technologies, with several new licensees signed [36][38] Question: Future operating expenses outlook - Management indicated that operating expenses are expected to remain relatively flat going forward, with potential increases aligned with business growth [40]

Financial Data and Key Metrics Changes - The company achieved revenue of $119.1 million for Q4 2025, representing a 6% year-over-year growth [23] - Adjusted EBITDA for the quarter was $20.5 million, reflecting a significant 66% increase year-over-year [24] - Non-GAAP earnings per share for the quarter were $0.10, with a GAAP net loss of $18.8 million or $0.18 per share [26] - For the full fiscal year 2025, total revenue was $490.5 million, a decline of approximately 10% compared to the previous year [26] Business Line Data and Key Metrics Changes - The On-Device Solutions (ODS) segment revenue increased by 11% year-over-year [23] - The Advertising Growth Platform (AGP) segment revenue decreased by 3% year-over-year [23] - Revenue per device (RPD) increased by over 40% year-over-year in the U.S. and over 100% internationally [8] Market Data and Key Metrics Changes - The company reported a positive trend in June, expecting improved performance both sequentially and year-over-year [6] - The DTX business returned to growth, with revenues from non-gaming applications nearly doubling over the past year [12] Company Strategy and Development Direction - The company is focused on expanding its device footprint and improving operational efficiency through automation and AI [13][15] - Strategic investments are being made in first-party data and AI machine learning to enhance advertising capabilities [10][16] - The launch of the new version of Ignite is a key milestone, now on over 100 million devices, aimed at generating more revenue and improving service quality [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and market opportunities, highlighting a favorable regulatory environment that supports growth [39] - The outlook for fiscal year 2026 anticipates revenue between $515 million and $525 million, with adjusted EBITDA projected between $85 million and $95 million [28] Other Important Information - The company extended its credit facility, which is expected to lower the cost of capital in the future [6] - Cash balance at the end of the quarter was $40.1 million, with no new borrowings reported [27] Q&A Session Summary Question: Focus on international RPD growth opportunities - Management highlighted improved execution and increased distribution footprint as key factors driving international RPD growth, with partnerships expanding in regions like Brazil and India [35] Question: Activity from app publishers regarding Single Tap technology - Management noted a favorable regulatory environment leading to increased interest from app publishers in Single Tap licensing, with ongoing partnerships with companies like Epic and Pinterest [39] Question: Future operating expenses outlook - The CFO indicated that operating expenses are expected to remain relatively flat going forward, with potential increases aligned with business growth [40]

Core Insights - The company reported Q4 FY2025 revenue of $119.2 million, a 6% increase year-over-year, driven by double-digit growth in the On Device Solutions segment, despite a 3% decline in the App Growth Platform segment [2][31] - Adjusted EBITDA for Q4 FY2025 was $20.5 million, reflecting a 66% year-over-year growth due to improved execution and cost-saving initiatives [3][32] - The company achieved free cash flow of $5.5 million in March, an increase of over $21 million compared to the prior-year period [3][32] - Non-GAAP gross margin improved to 48%, up from 46% in the prior-year period, primarily due to product mix improvements and disciplined cost controls [3][32] Financial Performance - Cash operating expenses were $36.1 million in March, indicating progress in expense management and automation [4][33] - GAAP net loss for Q4 FY2025 was $18.8 million, or $0.18 per share [4][34] - Non-GAAP net income for Q4 FY2025 was $10.1 million, or $0.10 per share [5][34] - The cash balance at the end of the quarter was $40.1 million, an increase of $5 million from the previous quarter [5][34] - Debt balance stood at $408.7 million at the end of Q4 FY2025, with no new borrowings during the period [5][36] Segment Performance - On Device Solutions (ODS) segment revenue increased by 11% year-over-year, with over 40% RPD growth in the U.S. and over 100% internationally [6][31] - App Growth Platform (AGP) segment revenue was $30 million, representing a 3% decrease year-over-year [6][31] Strategic Initiatives - The company emphasized the importance of expense controls and operational efficiencies as key drivers of margin expansion [8] - Management reported progress in artificial intelligence, first-party data, and international device expansion as central elements for future growth [8] - The company is actively seeking a more permanent debt solution following the extension of its credit facility [5][36] Future Outlook - Projected revenue for FY2026 is between $515 million and $525 million, with non-GAAP adjusted EBITDA expected to be between $85 million and $95 million [7][37] - The management team expressed confidence in achieving sustained growth in 2026 and beyond, focusing on execution, financial discipline, and long-term value creation [11][37]

Transformation and Workforce Management - The company initiated a transformation program in October 2024 aimed at improving operating expenses, cash flows, and personnel costs, with substantial completion expected by Q1 FY 2026[46][49] - A two-phased workforce reduction was implemented, with the first phase in November 2024 and the second in January 2025[49] - The company has implemented a two-phased workforce reduction as part of its transformation program, with the first phase in November 2024 and the second in January 2025[75] Financial Performance and Risks - The company has a history of net losses and may continue to incur substantial losses if revenue does not increase sufficiently to offset operating expenses[49] - A significant portion of revenue is derived from a limited number of wireless carriers and customers, increasing the risk of revenue fluctuations[59] - The company faces challenges in maintaining and developing relationships with wireless carriers, OEMs, and advertisers, which are crucial for revenue generation[52][60] - The company's financial results are subject to significant variability due to factors such as seasonal advertising spending and economic conditions[55][65] - The company relies on advertising spend, which can be affected by changes in economic conditions and client budgets, impacting revenue[61][62] - The company anticipates that global economic uncertainties may disrupt operations and lead to decreased advertising budgets, adversely impacting financial performance[65] - The company may incur substantial costs related to acquisitions, which could adversely affect liquidity and result in increased fixed obligations[82] - The company is exposed to risks associated with new lines of business and products, which may not achieve profitability targets and could harm financial results[88] - The company’s ability to attract and retain key talent is critical, especially in high-cost regions, and failure to do so could harm business operations[76] - The company may face significant litigation costs and management distractions from legal proceedings, which could disrupt business operations[89] - The company faces challenges in adapting to rapidly changing technology and evolving customer preferences, which could impact its competitiveness[93] Regulatory and Compliance Challenges - The company is subject to numerous cybersecurity and data protection laws, which could result in legal actions and reputational harm if breaches occur[74] - The company is subject to the Digital Services Act (DSA), effective from November 2022, which imposes a comprehensive consumer protection framework and focuses on content governance and moderation[119] - The California Consumer Privacy Act (CCPA) imposes restrictions on the sale of personal information, which could materially affect the company's advertising business[116] - The company faces significant compliance costs and potential liabilities due to increasing privacy and data security regulations globally, which may limit operational capabilities in certain jurisdictions[123] - The company is subject to anti-bribery and anti-corruption laws, with non-compliance potentially leading to criminal penalties or significant fines[124] - The company has obligations under various privacy, data governance, and data security laws, which are becoming more complex and may increase operational costs[123] Market and Competitive Landscape - The company faces intense competition in the mobile advertising industry from major players like Google, Facebook, and Amazon, which could impact market share and pricing strategies[91] - The growth of the company's business is heavily reliant on the proliferation of mobile connected devices, such as smartphones and tablets[98] - A lack of customer acceptance and technological challenges could lead to a reduction in demand for the company's products and services[97] - The company must continuously invest in technology and offerings to meet evolving industry standards, which may not yield anticipated returns[95] - Security vulnerabilities in mobile devices and networks could adversely affect user confidence and revenue[105] Economic and Geopolitical Factors - International sales are expected to be a key component of revenue, but expansion efforts may be hindered by regional instability and regulatory challenges[54] - The ongoing geopolitical tensions, such as the Russia-Ukraine conflict, could disrupt the global economy and negatively impact the company's operations[110] - Changes in U.S.-China relations and regulatory landscapes could restrict the company's ability to operate in Chinese markets[111] - The introduction of stringent data privacy laws in China may complicate data transfer processes and impact the company's operations[112] Financial Obligations and Capital Management - As of March 31, 2025, the company had $411,000 drawn against its revolving line of credit and approximately $39,393 in unrestricted cash[144] - The company entered into a Fifth Amendment to its Amended and Restated Credit Agreement, extending the maturity date to August 29, 2026, and reducing the Revolver amount from $425,000 to $411,000[146] - The company is required to pay an amendment fee of $8,220 at closing and additional fees totaling $10,275 and $1,027 in subsequent quarters[146] - The company is exploring options to refinance its Amended and Restated Credit Agreement before August 29, 2025, which may include raising additional capital through new credit facilities or equity securities[149] - If the company fails to refinance its existing credit agreement, the indebtedness would be reclassified as short-term debt, potentially adversely affecting its business and stock price[151] - The company does not anticipate paying dividends in the foreseeable future due to its secured and unsecured indebtedness[159] - The company’s ability to meet debt service obligations depends on future performance and access to capital markets, which are influenced by various external factors[152] Stock and Market Volatility - The market price of the company's common stock is likely to be highly volatile, influenced by factors such as quarterly revenue variations and announcements from competitors[156] - A hypothetical increase in market interest rates of 100 basis points would result in an increase in interest expense of $10 per year for every $1,000 of outstanding debt[312] - The company is exposed to foreign currency exchange risks primarily with the euro, Turkish lira, and British pound, which may impact future revenues and expenses[313] - The company has not used any derivative financial instruments to manage its interest rate or foreign currency exchange risk exposure[312][313] Internal Controls and Governance - The company may face increased legal, accounting, and financial compliance costs due to the requirements of being a public company[165] - The Sarbanes-Oxley Act imposes challenges in maintaining effective disclosure controls and internal control over financial reporting[166] - The company has significant efforts ahead to implement appropriate processes and document its internal control system, which may divert management's attention from other business concerns[167] - Anti-takeover provisions in the company's charter could limit attempts by stockholders to replace current management and affect the market price of its common stock[169] - The company is subject to various civil and administrative sanctions if it fails to comply with the Sarbanes-Oxley Act[164] Intellectual Property and Liability Risks - The company is exposed to risks associated with intellectual property infringement, which could disrupt business operations and lead to significant financial liabilities[138] - Indemnity provisions in various agreements expose the company to substantial liability for intellectual property infringement and damages caused by malicious software[143] - The company faces risks related to open-source software, including potential vulnerabilities and the possibility of having to release proprietary code[141] Tax Attributes and NOL Carryforwards - The company has net operating loss (NOL) carryforwards for U.S. federal purposes amounting to $122.645 million, with $44.812 million subject to expiration through 2037 and the remaining $77.833 million available indefinitely but limited to 80% usage of federal taxable income per year[128] - The company may face challenges in utilizing its NOL carryforwards due to potential ownership changes affecting tax attributes[128] - The company relies on its understanding of regional regulatory requirements for marketing and advertising, with adverse changes potentially impacting revenue[129]

Financial Performance - Fourth quarter revenue totaled $119.2 million, representing year-over-year growth of 6% compared to $112.2 million in the fourth quarter of fiscal 2024[2][4] - Fourth quarter GAAP net loss was $18.8 million, or ($0.18) per share, significantly improved from a net loss of $236.5 million, or ($2.32) per share, in the same quarter last year[2][5] - Non-GAAP adjusted net income for the fourth quarter was $10.8 million, or $0.10 per share, compared to $12.6 million, or $0.12 per share, in the fourth quarter of fiscal 2024[2][6] - Non-GAAP adjusted EBITDA for the fourth quarter was $20.5 million, representing a year-over-year increase of 66% from $12.3 million in the fourth quarter of fiscal 2024[2][6] - Fiscal year 2025 revenue totaled $490.5 million, with a GAAP net loss of $92.1 million, or ($0.89) per share, compared to a net loss of $420.4 million, or ($4.16) per share, in fiscal 2024[2][7] - Non-GAAP adjusted EBITDA for fiscal year 2025 was $72.3 million, down from $92.4 million in fiscal 2024[2][8] - Consolidated net revenue for the year ended March 31, 2025, was $490,506 thousand, a decrease of 10% from $544,482 thousand in 2024[39] Revenue Breakdown - Total On Device Solutions revenue for fiscal year 2025 was $341.6 million, while App Growth Platform revenue was $153.2 million[6] - Net revenue for the three months ended March 31, 2025, was $119,152 thousand, an increase from $112,223 thousand in the same period of 2024, representing a growth of 8.6%[31] - On Device Solutions revenue increased by 11% to $86,832 thousand for the three months ended March 31, 2025, compared to $78,504 thousand in the same period of 2024[37] - App Growth Platform revenue decreased by 3% to $33,250 thousand for the three months ended March 31, 2025, down from $34,437 thousand in 2024[37] Cost and Expenses - The total costs of revenue and operating expenses for the three months ended March 31, 2025, were $130,844 thousand, significantly lower than $320,062 thousand for the same period in 2024, indicating a reduction of 59.1%[31] - The company reported a total of $39,464 thousand in product development expenses for the year ended March 31, 2025, down from $54,157 thousand in 2024[39] - General and administrative expenses increased to $173,647 thousand for the year ended March 31, 2025, compared to $169,617 thousand in 2024[39] Cash Flow and Assets - Cash and cash equivalents and restricted cash at the end of the period on March 31, 2025, were $40,084 thousand, up from $33,605 thousand at the end of March 31, 2024, reflecting an increase of 19.0%[35] - Total assets decreased to $812,854 thousand as of March 31, 2025, from $865,540 thousand as of March 31, 2024, a decline of 6.1%[33] - Long-term debt, net of debt issuance costs, increased to $408,687 thousand as of March 31, 2025, compared to $383,490 thousand as of March 31, 2024, an increase of 6.6%[33] Loss and Improvement - The net loss attributable to Digital Turbine, Inc. for the three months ended March 31, 2025, was $18,826 thousand, compared to a net loss of $236,506 thousand in the same period of 2024, showing an improvement of 92.0%[31] - The company experienced a comprehensive loss of $18,000 thousand for the three months ended March 31, 2025, compared to a comprehensive loss of $238,968 thousand for the same period in 2024, reflecting a reduction of 92.5%[31] - The company reported a basic net loss per common share of $0.18 for the three months ended March 31, 2025, compared to a basic net loss per common share of $2.32 for the same period in 2024, indicating a significant improvement[31] Future Outlook - The company expects fiscal year 2026 revenue to be between $515 million and $525 million, with non-GAAP adjusted EBITDA projected between $85 million and $90 million[12] - The CEO highlighted strong advertiser and partner demand, along with profit margin expansion, as key drivers for continued growth in fiscal 2026[3] - The company is making meaningful progress in utilizing AI and Machine Learning to optimize first-party data and explore new opportunities for Alternative Apps distribution[3] Shareholder Information - The weighted-average common shares outstanding for the three months ended March 31, 2025, were 105,427 thousand, compared to 101,974 thousand for the same period in 2024, an increase of 3.4%[31] - The company reported a foreign currency translation gain of $826 thousand for the three months ended March 31, 2025, compared to a loss of $2,462 thousand for the same period in 2024, indicating a positive shift in foreign exchange impact[31] Non-GAAP Metrics - Non-GAAP gross profit for the three months ended March 31, 2025, was $56,604 thousand, representing a gross profit margin of 48%, up from 46% in the same period of 2024[39] - Non-GAAP adjusted net income for the year ended March 31, 2025, was $36,837 thousand, down from $60,272 thousand in 2024[41] - Non-GAAP adjusted EBITDA for the three months ended March 31, 2025, increased to $20,462 thousand, compared to $12,301 thousand in the same period of 2024[43] - Non-GAAP free cash flow for the three months ended March 31, 2025, was $5,466 thousand, a significant improvement from a cash outflow of $15,637 thousand in 2024[45]