Digital Turbine, Inc. (NASDAQ:APPS) Q1 2025 Results Conference Call August 7, 2024 4:30 PM ET Company Participants Brian Bartholomew - Senior Vice President, Capital Markets and Strategy Bill Stone - Chief Executive Officer Barrett Garrison - Executive Vice President and Chief Financial Officer Conference Call Participants Anthony Stoss - Craig-Hallum Operator Good afternoon, and welcome to the Digital Turbine Fiscal 2025 First Quarter Results Conference Call. All participants will be in listen-only mode. [ ...

PART I - FINANCIAL INFORMATION Presents the company's unaudited consolidated financial statements, management's analysis, and market risk disclosures [ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the quarter ended June 30, 2024 CONDENSED CONSOLIDATED BALANCE SHEETS | Metric | June 30, 2024 (Unaudited) (in thousands) | March 31, 2024 (in thousands) | | :--- | :--- | :--- | | **ASSETS** | | | | Total current assets | $252,688 | $242,341 | | Property and equipment, net | $46,375 | $45,782 | | Intangible assets, net | $298,064 | $313,505 | | Goodwill | $219,882 | $220,072 | | TOTAL ASSETS | $860,197 | $865,540 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $240,375 | $236,024 | | Long-term debt, net | $393,791 | $383,490 | | Total liabilities | $664,244 | $651,608 | | Total stockholders' equity | $195,953 | $213,932 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $860,197 | $865,540 | - Total assets decreased slightly from **$865,540 thousand** at March 31, 2024, to **$860,197 thousand** at June 30, 2024[7](index=7&type=chunk) - Total stockholders' equity decreased from **$213,932 thousand** at March 31, 2024, to **$195,953 thousand** at June 30, 2024[7](index=7&type=chunk) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME | Metric | Three months ended June 30, 2024 (in thousands, except per share data) | Three months ended June 30, 2023 (in thousands, except per share data) | | :--- | :--- | :--- | | Net revenue | $117,989 | $146,366 | | Total costs of revenue and operating expenses | $134,077 | $151,081 | | Loss from operations | $(16,088) | $(4,715) | | Total interest and other income, net | $(7,318) | $(5,223) | | Loss before income taxes | $(23,406) | $(9,938) | | Income tax provision (benefit) | $1,750 | $(1,539) | | Net loss | $(25,156) | $(8,399) | | Net loss attributable to Digital Turbine, Inc | $(25,156) | $(8,179) | | Basic Net loss per common share | $(0.25) | $(0.08) | | Diluted Net loss per common share | $(0.25) | $(0.08) | - Net revenue decreased by **19.4%** from $146,366 thousand in Q2 2023 to $117,989 thousand in Q2 2024[9](index=9&type=chunk) - Net loss attributable to Digital Turbine, Inc significantly increased from **$(8,179) thousand** in Q2 2023 to **$(25,156) thousand** in Q2 2024[9](index=9&type=chunk) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | Cash Flow Activity | Three months ended June 30, 2024 (in thousands) | Three months ended June 30, 2023 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(1,352) | $1,318 | | Net cash used in investing activities | $(5,931) | $(7,276) | | Net cash provided by (used in) financing activities | $9,966 | $(8,951) | | Net change in cash, cash equivalents, and restricted cash | $2,124 | $(16,489) | | Cash, cash equivalents, and restricted cash, end of period | $35,729 | $59,069 | - Operating activities shifted from providing **$1,318 thousand** in cash in Q2 2023 to using **$(1,352) thousand** in Q2 2024[10](index=10&type=chunk) - Financing activities provided **$9,966 thousand** in Q2 2024, a significant improvement from using $(8,951) thousand in Q2 2023, primarily due to higher proceeds from borrowings[10](index=10&type=chunk) CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | Metric (in thousands) | Balance at March 31, 2024 | Net Loss | Foreign Currency Translation | Stock-based Compensation Expense | Shares Issued (Exercise of Stock Options) | Shares Issued (Restricted Shares/Units) | Payment of Withholding Taxes | Balance at June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Common Stock Amount | $10 | — | — | — | — | — | — | $10 | | Preferred Stock Amount | $100 | — | — | — | — | — | — | $100 | | Treasury Stock Amount | $(71) | — | — | — | — | — | — | $(71) | | Additional Paid-In Capital | $858,191 | — | — | $8,424 | $14 | — | $(48) | $866,581 | | Accumulated Other Comprehensive Loss | $(48,955) | — | $(1,213) | — | — | — | — | $(50,168) | | Accumulated Deficit | $(595,343) | $(25,156) | — | — | — | — | — | $(620,499) | | Total | $213,932 | $(25,156) | $(1,213) | $8,424 | $14 | — | $(48) | $195,953 | - Total stockholders' equity decreased from **$213,932 thousand** at March 31, 2024, to **$195,953 thousand** at June 30, 2024, primarily due to a net loss of $(25,156) thousand and foreign currency translation loss of $(1,213) thousand, partially offset by stock-based compensation expense of $8,424 thousand[14](index=14&type=chunk) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1—Description of Business - Digital Turbine, Inc operates as a leading independent mobile growth platform, providing end-to-end products and solutions for advertisers, publishers, carriers, and device OEMs[20](index=20&type=chunk) - The Company's offerings facilitate brand discovery, advertising, user acquisition, engagement, and operational efficiency for advertisers, while also creating monetization opportunities for OEMs, carriers, and app developers[20](index=20&type=chunk) Note 2—Basis of Presentation and Summary of Significant Accounting Policies - The condensed consolidated financial statements are prepared in accordance with GAAP and include the accounts of the Company and its subsidiaries, with all intercompany balances and transactions eliminated[21](index=21&type=chunk) - As of June 30, 2024, the Company owned **100% of all its subsidiaries** after acquiring remaining minority interests in one subsidiary during Q2 2023 for $3,751 thousand[21](index=21&type=chunk) - Management's estimates, including revenue recognition, credit losses, stock-based compensation, and fair value of acquired assets, are subject to potential impacts from macroeconomic uncertainties like global conflicts, inflation, and supply chain disruptions[24](index=24&type=chunk)[25](index=25&type=chunk) Note 3—Fair Value Measurements - The Company holds non-marketable equity securities, primarily strategic investments in alternative app stores, with a carrying value of **$17,637 thousand** as of June 30, 2024 and March 31, 2024[28](index=28&type=chunk) - These investments are accounted for using the measurement alternative, adjusted for observable transactions or impairment, with no adjustments recorded for the three months ended June 30, 2024[29](index=29&type=chunk) - As of June 30, 2024, Level 1 equity securities recorded at fair value totaled **$501 thousand**, classified as other non-current assets[30](index=30&type=chunk) Note 4—Segment Information - Digital Turbine operates two reportable segments: **On Device Solutions (ODS)** and **App Growth Platform (AGP)**[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) | Segment | Net Revenue (Q2 2024) (in thousands) | Segment Profit (Q2 2024) (in thousands) | Net Revenue (Q2 2023) (in thousands) | Segment Profit (Q2 2023) (in thousands) | | :--- | :--- | :--- | :--- | :--- | | ODS | $80,650 | $31,507 | $98,250 | $39,952 | | AGP | $38,392 | $30,673 | $48,959 | $36,822 | | Consolidated | $117,989 | $62,180 | $146,366 | $76,774 | - Both ODS and AGP segments experienced a **decline in net revenue and segment profit** year-over-year[34](index=34&type=chunk)[35](index=35&type=chunk) | Geographic Area | Consolidated Net Revenue (Q2 2024) (in thousands) | Consolidated Net Revenue (Q2 2023) (in thousands) | | :--- | :--- | :--- | | United States and Canada | $58,967 | $69,858 | | Europe, Middle East, and Africa | $42,117 | $59,574 | | Asia Pacific and China | $17,460 | $16,990 | | Mexico, Central America, and South America | $498 | $787 | | Consolidated Total | $117,989 | $146,366 | Note 5—Goodwill and Intangible Assets | Segment | Goodwill as of March 31, 2024 (in thousands) | Foreign Currency Translation (in thousands) | Goodwill as of June 30, 2024 (in thousands) | | :--- | :--- | :--- | :--- | | ODS | $80,176 | — | $80,176 | | AGP | $139,896 | $(190) | $139,706 | | Total | $220,072 | $(190) | $219,882 | - Goodwill decreased slightly by **$190 thousand** due to foreign currency translation, primarily impacting the AGP segment[42](index=42&type=chunk) - **No goodwill impairment** was recognized for the three months ended June 30, 2024 or 2023, following significant impairment charges to the AGP reporting unit totaling **$336,640 thousand** during the fiscal year ended March 31, 2024[43](index=43&type=chunk)[44](index=44&type=chunk) | Intangible Asset | Weighted-Average Remaining Useful Life | Net (June 30, 2024) (in thousands) | Net (March 31, 2024) (in thousands) | | :--- | :--- | :--- | :--- | | Customer relationships | 11.99 years | $104,974 | $109,127 | | Developed technology | 4.06 years | $81,847 | $87,054 | | Trade names | 1.08 years | $19,888 | $24,487 | | Publisher relationships | 16.62 years | $91,355 | $92,837 | | Total | | $298,064 | $313,505 | - Total intangible assets, net, decreased from **$313,505 thousand** at March 31, 2024, to **$298,064 thousand** at June 30, 2024[46](index=46&type=chunk) Note 6—Accounts Receivable | Metric (in thousands) | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Billed | $134,612 | $136,604 | | Unbilled | $72,638 | $64,117 | | Allowance for credit losses | $(9,215) | $(9,706) | | Accounts receivable, net | $198,035 | $191,015 | - Net accounts receivable increased by **$7,020 thousand** from March 31, 2024, to June 30, 2024, driven by an increase in unbilled receivables[49](index=49&type=chunk) | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | | :--- | :--- | :--- | | Balance, beginning of period | $9,706 | $10,206 | | Provision for credit losses | $214 | $739 | | Write-offs, net of recoveries | $(705) | $(626) | | Balance, end of period | $9,215 | $10,319 | - The allowance for credit losses decreased to **$9,215 thousand** at June 30, 2024, from $9,706 thousand at the beginning of the period, primarily due to write-offs exceeding the provision for credit losses[51](index=51&type=chunk) Note 7—Property and Equipment | Metric (in thousands) | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Property and equipment, gross | $107,303 | $101,074 | | Accumulated depreciation | $(60,928) | $(55,292) | | Property and equipment, net | $46,375 | $45,782 | - Net property and equipment increased slightly to **$46,375 thousand** at June 30, 2024, from $45,782 thousand at March 31, 2024[52](index=52&type=chunk) - Depreciation expense for Q2 2024 was **$5,615 thousand**, up from $5,055 thousand in Q2 2023, with a significant portion related to internal-use software[52](index=52&type=chunk)[53](index=53&type=chunk) - Capitalized implementation costs for cloud computing arrangements, included in other non-current assets, were **$5,425 thousand** at June 30, 2024[54](index=54&type=chunk)[55](index=55&type=chunk) Note 8—Other Current Liabilities | Metric (in thousands) | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Accrued expenses | $7,773 | $7,376 | | Accrued interest | $3,352 | $3,414 | | Foreign income tax payable | $16,862 | $14,371 | | Other current liabilities | $8,259 | $10,520 | | Total | $36,246 | $35,681 | - Total other current liabilities increased to **$36,246 thousand** at June 30, 2024, from $35,681 thousand at March 31, 2024, primarily due to an increase in foreign income tax payable[57](index=57&type=chunk) Note 9—Other Non-Current Liabilities | Metric (in thousands) | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Non-current lease liabilities | $5,877 | $5,746 | | Contingent consideration | $1,015 | $1,015 | | Other long-term liabilities | $4,870 | $4,909 | | Total | $11,762 | $11,670 | - Total other non-current liabilities remained relatively stable at **$11,762 thousand** at June 30, 2024[59](index=59&type=chunk) - The fair value of contingent consideration related to the In App acquisition remained at **$1,015 thousand**, with no remeasurement recorded for Q2 2024[59](index=59&type=chunk)[60](index=60&type=chunk) Note 10—Debt | Debt Type | Balance (June 30, 2024) (in thousands) | Interest Rate (June 30, 2024) | Balance (March 31, 2024) (in thousands) | Interest Rate (March 31, 2024) | | :--- | :--- | :--- | :--- | :--- | | Revolver (variable interest rate) | $396,000 | 8.23% | $386,000 | 7.71% | - Outstanding borrowings under the Revolver increased by **$10,000 thousand** to $396,000 thousand at June 30, 2024, with the interest rate rising to **8.23%** from 7.71%[62](index=62&type=chunk)[63](index=63&type=chunk) - The Credit Agreement was amended on February 5, 2024, to adjust leverage and interest coverage covenants, increase permitted investments, and raise the annual interest rate based on the consolidated secured net leverage ratio[66](index=66&type=chunk) - As of June 30, 2024, the Company had **$29,000 thousand available** to draw on the revolving line of credit and was in compliance with all covenants[72](index=72&type=chunk) | Interest Expense Component | Three months ended June 30, 2024 (in thousands) | Three months ended June 30, 2023 (in thousands) | | :--- | :--- | :--- | | Interest expense, net | $(7,840) | $(7,114) | | Amortization of debt issuance costs | $(301) | $(212) | | Unused line of credit fees and other | $(109) | $(64) | | Total interest expense, net | $(8,250) | $(7,390) | Note 11—Stock-Based Compensation - As of June 30, 2024, **351,017 shares** of common stock were available for future awards under the 2020 Equity Incentive Plan[75](index=75&type=chunk) | Stock Option Activity | Number of Shares | Weighted-Average Exercise Price (per share) | | :--- | :--- | :--- | | Options outstanding as of March 31, 2024 | 5,797,869 | $13.26 | | Exercised | (8,645) | $1.58 | | Forfeited / Expired | (180,533) | $27.91 | | Options outstanding as of June 30, 2024 | 5,608,691 | $12.81 | | Exercisable as of June 30, 2024 | 4,820,073 | $11.62 | - Total unrecognized stock-based compensation expense for unvested stock options was **$9,142 thousand**, with an expected remaining recognition period of **1.63 years**[78](index=78&type=chunk) | Restricted Share Activity | Number of Shares | Weighted-Average Grant Date Fair Value | | :--- | :--- | :--- | | Unvested restricted shares outstanding as of March 31, 2024 | 3,919,842 | $12.44 | | Granted | 4,648,714 | $2.17 | | Vested | (420,743) | $11.13 | | Forfeited | (142,036) | $10.70 | | Unvested restricted shares outstanding as of June 30, 2024 | 8,005,777 | $6.57 | - Total unrecognized stock-based compensation expense for RSUs, PSUs, and RSAs was **$36,192 thousand**, with an expected remaining recognition period of **1.77 years**[81](index=81&type=chunk) - Stock-based compensation expense decreased to **$8,168 thousand** in Q2 2024 from $10,017 thousand in Q2 2023[83](index=83&type=chunk) Note 12—Earnings per Share | Metric | Three months ended June 30, 2024 (in thousands, except per share data) | Three months ended June 30, 2023 (in thousands, except per share data) | | :--- | :--- | :--- | | Net loss attributable to Digital Turbine, Inc | $(25,156) | $(8,179) | | Weighted-average common shares outstanding, basic | 102,396 | 99,877 | | Basic net (loss) income per common share | $(0.25) | $(0.08) | | Weighted-average common shares outstanding, diluted | 102,396 | 99,877 | | Diluted net (loss) income per common share | $(0.25) | $(0.08) | - Basic and diluted net loss per common share increased to **$(0.25)** in Q2 2024 from $(0.08) in Q2 2023[85](index=85&type=chunk) - Potentially dilutive securities of **9,638,950 shares** in Q2 2024 and 4,903,410 shares in Q2 2023 were excluded from diluted EPS calculation due to their anti-dilutive effect[85](index=85&type=chunk) Note 13—Income Taxes - For Q2 2024, the Company recognized a tax provision expense of **$1,750 thousand**, resulting in an effective tax rate of **(7.5)%**, primarily due to foreign income expense and a valuation allowance on loss from operations[86](index=86&type=chunk) - In Q2 2023, the Company recognized a tax benefit of **$1,539 thousand**, with an effective tax rate of **15.5%**[87](index=87&type=chunk) Note 14—Commitments and Contingencies - The Company has minimum purchase commitments under hosting agreements totaling approximately **$261,359 thousand** over the next six fiscal years[89](index=89&type=chunk) - Digital Turbine is involved in ongoing class action and derivative lawsuits related to its May 2022 financial restatement, with motions to dismiss pending[91](index=91&type=chunk) - Management is currently unable to assess a likely outcome or potential liability for these legal matters due to their early stages[91](index=91&type=chunk) Note 15—Subsequent Events - On August 6, 2024, the Company entered into a Fourth Amendment to its New Credit Agreement, renegotiating covenants, reducing the Revolver by **$100,000 thousand** to $425,000 thousand, increasing the annual interest rate for higher leverage ratios, and reducing the permitted investments threshold[92](index=92&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=22&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial condition and operational results for Q2 2024, including macroeconomic impacts and transformation initiatives Company Overview - Digital Turbine is a leading independent mobile growth platform offering end-to-end products and solutions to advertisers, publishers, carriers, and device OEMs[95](index=95&type=chunk) - The Company's technology enables brand discovery, advertising, user acquisition, engagement, and operational efficiency for advertisers, alongside monetization opportunities for its partners[95](index=95&type=chunk) Recent Developments - Macroeconomic conditions, including inflation, rising interest rates, and geopolitical developments, have **negatively impacted** mobile device sales and demand for the Company's services[96](index=96&type=chunk)[97](index=97&type=chunk)[99](index=99&type=chunk) - The Company is undertaking a multi-year business transformation initiative, including implementing a new global cloud-based ERP system and human resource system, with the first deployment phase completed in Q3 FY2024[104](index=104&type=chunk) - Business transformation costs incurred in Q2 2024 were **$1,072 thousand**, recorded in General and Administrative and Product Development expenses[106](index=106&type=chunk) Results of Operations | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | % of Change | | :--- | :--- | :--- | :--- | | Net revenue | $117,989 | $146,366 | (19.4)% | | Total costs of revenue and operating expenses | $134,077 | $151,081 | (11.3)% | | Loss from operations | $(16,088) | $(4,715) | 241.2% | | Total interest and other income, net | $(7,318) | $(5,223) | 40.1% | | Loss before income taxes | $(23,406) | $(9,938) | 135.5% | | Net loss | $(25,156) | $(8,399) | 199.5% | - Net revenue decreased by **19.4%**, leading to a significant increase in loss from operations (**241.2%**) and net loss (**199.5%**) year-over-year[108](index=108&type=chunk) Net Revenue | Segment | Net Revenue (Q2 2024) (in thousands) | Net Revenue (Q2 2023) (in thousands) | % of Change | | :--- | :--- | :--- | :--- | | On Device Solutions | $80,650 | $98,250 | (17.9)% | | App Growth Platform | $38,392 | $48,959 | (21.6)% | | Total net revenue | $117,989 | $146,366 | (19.4)% | - On Device Solutions (ODS) revenue decreased by **17.9%** due to lower new device volumes in the US and internationally, partially offset by increased revenue-per-device in the US and higher daily active users on prepaid devices[111](index=111&type=chunk) - App Growth Platform (AGP) revenue decreased by **21.6%** primarily due to declines in brand and performance advertising and advertising exchange, reflecting broader weakness in mobile advertising markets and consolidation of legacy platforms[112](index=112&type=chunk)[113](index=113&type=chunk) Costs of Revenue and Operating Expenses | Expense Category | Three months ended June 30, 2024 (in thousands) | Three months ended June 30, 2023 (in thousands) | % of Change | | :--- | :--- | :--- | :--- | | Revenue share | $55,809 | $69,592 | (19.8)% | | Other direct costs of revenue | $7,790 | $9,613 | (19.0)% | | Product development | $10,714 | $15,800 | (32.2)% | | Sales and marketing | $16,247 | $15,577 | 4.3% | | General and administrative | $43,517 | $40,499 | 7.5% | | Total costs of revenue and operating expenses | $134,077 | $151,081 | (11.3)% | - Total costs of revenue and operating expenses decreased by **11.3%**, primarily driven by lower revenue share due to decreased revenue and reduced product development costs[115](index=115&type=chunk) - Product development expenses decreased by **$5,086 thousand (32.2%)** due to lower employee-related costs and a decline in depreciation, amortization, hosting, and professional service fees[121](index=121&type=chunk) - General and administrative expenses increased by **$3,018 thousand (7.5%)**, mainly due to higher depreciation and amortization costs and professional service fees, partially offset by decreased stock-based compensation[123](index=123&type=chunk)[124](index=124&type=chunk) Interest and Other Income (Expense), Net | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | % of Change | | :--- | :--- | :--- | :--- | | Interest expense, net | $(8,250) | $(7,390) | 11.6% | | Foreign exchange transaction gain | $818 | $1,923 | (57.5)% | | Other income, net | $114 | $244 | (53.3)% | | Total interest and other income, net | $(7,318) | $(5,223) | 40.1% | - Total interest and other income, net, shifted from a net expense of $(5,223) thousand in Q2 2023 to **$(7,318) thousand** in Q2 2024, a **40.1% increase** in net expense[126](index=126&type=chunk) - Interest expense, net, increased by **11.6%** due to higher interest rates, despite lower average outstanding borrowings[127](index=127&type=chunk) - Foreign exchange transaction gain decreased by **57.5%**, primarily due to fluctuations in foreign exchange rates for trade accounts receivables and payables[128](index=128&type=chunk) Liquidity and Capital Resources - As of June 30, 2024, the Company had **$35,042 thousand** in unrestricted cash and **$29,000 thousand** available to draw under its New Credit Agreement[129](index=129&type=chunk) - The Company believes it has sufficient cash flow from operations and liquidity to meet business requirements for at least 12 months[131](index=131&type=chunk) - Outstanding secured indebtedness under the New Credit Agreement was **$396,000 thousand** as of June 30, 2024, maturing on April 29, 2026[132](index=132&type=chunk) - The Company was in compliance with all debt covenants as of June 30, 2024, but subsequently renegotiated covenants via a Fourth Amendment on August 6, 2024[135](index=135&type=chunk) - Minimum purchase commitments under hosting agreements total approximately **$261,359 thousand** over the next six fiscal years[136](index=136&type=chunk) Cash Flow Summary | Cash Flow Activity (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | % of Change | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(1,352) | $1,318 | (202.6)% | | Net cash used in investing activities | $(5,931) | $(7,276) | (18.5)% | | Net cash provided by (used in) financing activities | $9,966 | $(8,951) | (211.3)% | - Operating activities shifted from providing cash to using cash, a decrease of **$2,670 thousand**, primarily due to an increase in net loss and changes in operating assets and liabilities[138](index=138&type=chunk) - Net cash used in investing activities decreased by **$1,345 thousand**, mainly due to lower capital expenditures[141](index=141&type=chunk) - Net cash provided by financing activities significantly improved to **$9,966 thousand** from a net use of $(8,951) thousand, driven by higher proceeds from borrowings[142](index=142&type=chunk) Critical Accounting Policies and Estimates - Management's financial analysis relies on critical accounting policies and estimates, including revenue recognition, allowance for credit losses, stock-based compensation, and fair value of acquired assets[143](index=143&type=chunk) - These estimates involve significant judgments and assumptions that can affect reported amounts, and actual results may differ materially[143](index=143&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=30&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section outlines the Company's exposure to interest rate fluctuations and foreign currency exchange risks Interest Rate Fluctuation Risk - The Company is exposed to interest rate fluctuations due to its **variable-rate borrowings** under its credit facility[145](index=145&type=chunk) - A hypothetical **100 basis point increase** in market interest rates would result in an additional **$10 thousand** in interest expense per year for every $1,000 thousand of outstanding debt[145](index=145&type=chunk) - Digital Turbine has **not used derivative financial instruments** to manage its interest rate risk[145](index=145&type=chunk) Foreign Currency Exchange Risk - The Company faces foreign currency exchange risk from transactions denominated in currencies other than the U.S dollar, such as the euro, Turkish lira, and British pound[146](index=146&type=chunk)[147](index=147&type=chunk) - Fluctuations in exchange rates can impact future revenues, expenses, and cash flows, particularly as foreign operations expand[147](index=147&type=chunk) - The Company does **not use derivative financial instruments** to manage its foreign currency exchange risk[147](index=147&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=31&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section details management's evaluation of disclosure controls and procedures and changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures - As of June 30, 2024, management concluded that the Company's disclosure controls and procedures were **effective** at a reasonable assurance level[148](index=148&type=chunk) - Disclosure controls are designed to ensure timely recording, processing, summarizing, and reporting of information required by SEC rules[148](index=148&type=chunk) Changes in Internal Control Over Financial Reporting - **No changes** in internal control over financial reporting were identified during the three months ended June 30, 2024, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[149](index=149&type=chunk) PART II - OTHER INFORMATION Provides details on legal proceedings, risk factors, equity sales, and other required disclosures [ITEM 1. LEGAL PROCEEDINGS](index=32&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section details the Company's involvement in legal claims related to a prior financial restatement - Digital Turbine is a defendant in consolidated class action complaints and several derivative actions alleging federal securities law violations and breach of fiduciary duties, stemming from a May 2022 financial restatement[152](index=152&type=chunk) - The Western District court granted the Company's motion to dismiss the class action case on July 19, 2023, but an amended complaint was filed, with a new motion to dismiss pending[152](index=152&type=chunk) - Due to the early stages of these cases, management **cannot assess a likely outcome or potential liability** at this time, but plans to vigorously defend against the claims[152](index=152&type=chunk) [ITEM 1A. RISK FACTORS](index=32&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section states there are no material changes to risk factors previously disclosed in the Company's Annual Report - The Company is not aware of any **material changes** to the risk factors previously set forth in its Annual Report on Form 10-K for the fiscal year ended March 31, 2024[153](index=153&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=32&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section indicates no unregistered sales of equity securities or use of proceeds were reported for the period - There were **no unregistered sales** of equity securities and use of proceeds to report[153](index=153&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=32&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section states there are no defaults upon senior securities to report for the period - This item is not applicable, indicating **no defaults** upon senior securities[153](index=153&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=32&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section indicates that mine safety disclosures are not applicable to the Company - This item is **not applicable**, indicating no mine safety disclosures[153](index=153&type=chunk) [ITEM 5. OTHER INFORMATION](index=32&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section states that there is no other information to report for the period - There is **no other information** to report under this item[153](index=153&type=chunk) [ITEM 6. EXHIBITS](index=33&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including agreements and certifications - Exhibits include Cash Incentive Compensation Agreements, a Cash Bonus Agreement, and the Fourth Amendment to the Amended and Restated Credit Agreement[155](index=155&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer are also filed[155](index=155&type=chunk) [SIGNATURES](index=33&type=section&id=SIGNATURES) This section contains the required signatures for the Form 10-Q, confirming its submission by authorized officers - The report is duly signed on behalf of Digital Turbine, Inc by William Gordon Stone III, Chief Executive Officer, and James Barrett Garrison, Chief Financial Officer, on August 7, 2024[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)

Digital Turbine Reports Fiscal 2025 First Quarter Financial Results First Quarter Revenue Totaled $118.0 Million 1 First Quarter GAAP Net Loss of $25.2 Million, or GAAP EPS of ($0.25); First Quarter Non-GAAP Adjusted Net Income of $7.3 Million and Non-GAAP Adjusted EPS of $0.07 1 2 First Quarter Non-GAAP Adjusted EBITDA Totaled $14.5 Million Austin, TX – August 7, 2024 – Digital Turbine, Inc. (Nasdaq: APPS) announced financial results for the fiscal first quarter ended June 30, 2024. Recent Financial Highli ...

First Quarter Revenue Totaled $118.0 MillionFirst Quarter GAAP Net Loss of $25.2 Million, or GAAP EPS of ($0.25); First Quarter Non-GAAP Adjusted Net Income1 of $7.3 Million and Non-GAAP Adjusted EPS1 of $0.07First Quarter Non-GAAP Adjusted EBITDA2 Totaled $14.5 MillionAUSTIN, Texas, Aug. 7, 2024 /PRNewswire/ -- Digital Turbine, Inc. (Nasdaq: APPS) announced financial results for the fiscal first quarter ended June 30, 2024.Recent Financial Highlights:Fiscal first quarter of 2025 revenue totaled $118.0 mill ...

Group 1 - Digital Turbine, Inc. will host a conference call and webcast to discuss its fiscal 2025 first quarter financial results and operating progress on August 7, 2024 [1] - The call will be led by CEO Bill Stone and CFO Barrett Garrison, accessible via a provided webcast link and phone numbers for both U.S. and international participants [1] - A playback of the call will be available until August 14, 2024, with specific dial-in numbers and passcode for access [2] Group 2 - Digital Turbine specializes in enhancing mobile consumer experiences for telcos, advertisers, and publishers through its end-to-end platform [3] - The company is headquartered in North America and has a global presence with offices worldwide [3] - For more information, Digital Turbine's website is available for additional details [3]

Group 1: Small-Cap Stocks Overview - Small-cap stocks are gaining investor attention due to more attractive valuations compared to large-cap peers, presenting opportunities for substantial returns [1] - The previous year was dominated by the "Magnificent Seven," which drove nearly all gains in the S&P 500 and Nasdaq indices [1] - Small-cap stocks are perceived as undervalued and may rebound from underperformance, while larger stocks are seen as overvalued [1] Group 2: LivePerson (LPSN) - LivePerson provides AI-based messaging solutions for businesses and is a leader in AI-driven customer engagement [2] - The company reported total revenue of $85.1 million for Q1 2024, a 20.9% decrease from the previous year, but exceeded guidance [2] - Adjusted EBITDA improved to $0.5 million from a loss of $1.3 million in Q1 2023, although net loss widened to $35.6 million from $17.4 million [2][3] Group 3: Enphase Energy (ENPH) - Enphase Energy designs and manufactures software-driven home energy solutions, including solar generation and energy storage [5] - The company reported Q1 2024 revenue of $263.3 million, down from $302.6 million in the previous quarter, with a GAAP net loss of $16.1 million [5] - The outlook for Q2 2024 is optimistic, with expected revenue between $290 million and $330 million and projected gross margins of 42-47% [5][6] Group 4: Digital Turbine (APPS) - Digital Turbine offers a platform for mobile carriers and device OEMs to simplify app discovery, benefiting from the growth of mobile devices [7] - The company achieved Q4 2024 revenue of $112.2 million, a 20% decline from the previous year, with a significant net loss of $236.5 million due to a goodwill impairment charge [7] - For fiscal year 2025, Digital Turbine expects revenue between $540 million and $560 million, with non-GAAP adjusted EBITDA projected at $85 million to $95 million [7][8]

sankai/E+ via Getty ImagesDigital Turbine (NASDAQ:APPS) financial results continue to disappoint, dragging the stock lower, despite a very low valuation. Extremely weak Q4 results were largely attributed to soft device sales and the migration of the company's tech stack onto a consolidated platform. Digital Turbine’s performance has been poor for the past two years though, making it difficult to continue shifting blame onto the macro environment. While there is doubt hanging over the company, and a size ...

An advertising and tech veteran with almost two decades of experience in technology growth, Akkerman will lead the company's global business teamAUSTIN, Texas, June 10, 2024 /PRNewswire/ -- Digital Turbine, the global leader in growth solutions for the mobile ecosystem, is excited to announce the appointment of Michael Akkerman as the company's new Chief Business Officer. In this role, Michael will lead DT's global go-to-market efforts, including sales, partnerships, marketing, product, and business operati ...

Digital Turbine, Inc. (NASDAQ:APPS) Q4 2024 Earnings Conference Call May 28, 2024 4:30 PM ET Company Participants Brian Bartholomew - Senior Vice President, Capital Markets and Strategy Bill Stone - Chief Executive Officer Barrett Garrison - Executive Vice President and Chief Financial Officer Conference Call Participants Omar Dessouky - Bank of America Darren Aftahi - ROTH MKM Tim Nollen - Macquarie Operator Good day and welcome to the Digital Turbine Reports Fourth Quarter and Fiscal 2024 Financial Result ...

Digital Turbine (APPS) came out with quarterly earnings of $0.12 per share, beating the Zacks Consensus Estimate of $0.03 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 300%. A quarter ago, it was expected that this mobile software company would post earnings of $0.18 per share when it actually produced earnings of $0.15, delivering a surprise of -16.67%.Over the last four quarter ...