Core Viewpoint - Digital Turbine's stock experienced a significant decline of 31.7% from the previous week's close, driven by sell-offs and concerning demand indicators in the market [1][2]. Company Performance - Digital Turbine reported a 6% year-over-year decline in sales, totaling $135 million, but initially saw a stock price increase due to beating expectations and positive management guidance [4]. - Despite the recent downturn, Digital Turbine's stock is still up approximately 96% over the last month, indicating volatility in trading as the company works on a turnaround initiative [6]. Industry Context - Baidu's Q4 report indicated a 7% year-over-year decline in total sales for its digital marketing businesses, raising concerns about the overall health of the industry, which negatively impacted Digital Turbine's stock [3][4]. - Macroeconomic factors, including weaker-than-expected sales guidance from Walmart and declining U.S. consumer confidence, contributed to the sell-offs in Digital Turbine's stock [5].

Core Viewpoint - Digital Turbine's stock is experiencing significant sell-offs due to concerns stemming from Baidu's recent quarterly report, which indicated weakness in the digital advertising sector [1][2]. Company Performance - Digital Turbine's share price fell by 17.7% during trading, reflecting investor reactions to Baidu's results [1]. - The company reported a 6% year-over-year decline in revenue for its third quarter, amounting to $135 million, although this performance exceeded market expectations [4]. - Despite the recent decline, Digital Turbine's share price has increased by 152% over the past month, indicating prior strong performance [5]. Industry Context - Baidu reported a 7% year-over-year decline in its online marketing businesses for the fourth quarter, suggesting ongoing challenges in the digital advertising industry [3]. - As a significant player in the digital advertising space, Baidu's performance is seen as a bellwether for other companies, including Digital Turbine, which has substantial exposure to the Chinese market [2][5]. - The recent results from Baidu may indicate potential headwinds for Digital Turbine's business, raising concerns about future performance in the Asia Pacific and China segments [5].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Digital Turbine (APPS) - Digital Turbine currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance [2][3] - The stock has seen significant price increases, with shares up 87.02% over the past week and 230.96% over the past month, compared to the Zacks Internet - Software industry's flat performance of 0% and 4.5% respectively [5] - Over the past quarter, shares have increased by 343.54%, and by 84.7% over the last year, while the S&P 500 has only moved 2.43% and 24.91% respectively [6] Trading Volume - The average 20-day trading volume for Digital Turbine is 11,876,224 shares, which is a useful indicator for assessing price movements and market interest [7] Earnings Outlook - In the past two months, one earnings estimate for Digital Turbine has increased, raising the consensus estimate from $0.20 to $0.30, with no downward revisions during the same period [9] - For the next fiscal year, one estimate has also moved upwards, indicating positive sentiment regarding future earnings [9] Conclusion - Given the strong performance metrics and positive earnings outlook, Digital Turbine is positioned as a promising momentum pick for investors [11]

Core Viewpoint - Digital Turbine (APPS) has significantly outperformed the Computer and Technology sector in year-to-date performance, indicating strong investment potential [1][4]. Company Performance - Digital Turbine has achieved a year-to-date return of approximately 285.8%, while the average return for the Computer and Technology sector is only 2.6% [4]. - The Zacks Consensus Estimate for Digital Turbine's full-year earnings has increased by 76.9% over the past three months, reflecting improved analyst sentiment [4]. Industry Context - Digital Turbine is part of the Internet - Software industry, which consists of 150 stocks and has an average gain of 21.6% this year, indicating that APPS is outperforming its industry peers [6]. - In contrast, another stock in the sector, ams-OSRAM AG Unsponsored ADR (AMSSY), has a year-to-date return of 17.1% and belongs to the Electronics - Semiconductors industry, which has only gained 2.5% this year [5][6]. Zacks Rank - Digital Turbine currently holds a Zacks Rank of 1 (Strong Buy), suggesting it is positioned well for future performance [3].

Core Viewpoint - Digital Turbine's stock surged by 82% following the release of its fiscal Q3 2025 financial results, despite reporting a revenue decline and a larger net loss compared to the previous year [1][2]. Financial Performance - The company reported quarterly revenue of $135 million, which represents a 6% decrease year over year [2]. - Digital Turbine incurred a net loss of $23 million, larger than the $14 million loss from the same period last year [2]. - Management anticipates Q4 revenue to be around $115 million, indicating growth compared to the same quarter of fiscal 2024 [3]. Market Context - The stock had previously fallen to a valuation of less than 1 times its sales, leading investors to believe the company was in a downward spiral [4]. - The recent positive outlook for Q4 has prompted investors to reassess their assumptions about the company's growth potential [4]. Business Model and Challenges - Digital Turbine's software is pre-installed on mobile devices from select telecom companies, creating advertising opportunities [3]. - The company faces challenges due to its reliance on a limited number of telecom partnerships and the lower advertising revenue potential in international markets compared to the U.S. [5].

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to improve significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] Group 2 - Michael has over 10 years of experience analyzing companies in the tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] - He leads the investing group Deep Value Returns, which offers insights through a concentrated portfolio of value stocks, timely updates on stock picks, and a weekly webinar for live advice [2] - The Deep Value Returns community is described as active, vibrant, and supportive, providing accessible chat options for both new and experienced investors [2]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $135 million, representing a 13% sequential increase and a 3% decrease year-over-year [10][39] - Adjusted EBITDA was $22 million, with a projected nearly 50% growth in EBITDA for the March quarter [10][11] - Non-GAAP EPS was $0.13, down from $0.15 in the same quarter last year [49] - Gross margin for Q3 was 44%, down from 45% in Q2 and 46% in Q3 of the prior year [42] Business Line Data and Key Metrics Changes - On-Device Solutions (ODS) segment revenues reached $92 million, an 11% sequential increase but down 3% year-over-year [12][39] - Revenue per device (RPD) reached record levels in both the US and international markets, driven by strong advertiser demand [40] - Advertising Growth Platform (AGP) revenues were $44 million, with a 17% sequential growth and a 34% year-over-year growth in brand spending [14][41] Market Data and Key Metrics Changes - International ODS revenues increased by 100% year-over-year, indicating strong advertiser demand and improved execution [13] - The company is expanding its global device relationships despite soft device sales in the US, with partnerships including Motorola, Nokia, and T-Mobile [22] Company Strategy and Development Direction - The company is focused on growth and efficiency, targeting more than $25 million in annual operating expense savings [20][48] - Investments in brand relationships and first-party data are seen as key differentiators in a competitive market [15][19] - The transition from waterfall bidding to SDK bidding is a strategic move to improve performance advertising [16][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's transformation and growth strategy, highlighting the importance of leveraging first-party data [31][68] - The upcoming Digital Markets Act in Europe is anticipated to create new opportunities for the company [61] - The company expects revenue for fiscal year 2025 to be in the range of $485 million to $490 million, with projected non-GAAP adjusted EBITDA between $69 million and $71 million [52] Other Important Information - The company announced a leadership transition with Steve Lasher joining as the new CFO [7][33] - Cash balance at the end of the quarter was $34.6 million, with free cash flow of $6.4 million [50] Q&A Session Summary Question: What has changed for big brand names to return to Digital Turbine for advertising? - Management attributed the return to hard work and relationship building, emphasizing the importance of trust with brands [57][58] Question: Are other large publishers preparing to launch their own app stores? - Management noted increased awareness and interest from major players like Epic and Microsoft, with potential for more aggressive moves in 2025 [60][61] Question: What are the key dynamics for 2025 compared to this year? - Management highlighted the importance of leveraging first-party data and expanding device relationships as key growth drivers for the upcoming year [67][70]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-35958 DIGITAL TURBINE, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 22-2267658 (State or Other Jurisdiction of Incorporation or Organiz ...

Financial Performance - Fiscal 2025 third quarter revenue totaled $134.6 million, representing a 13% increase quarter-over-quarter but a 6% decline year-over-year[5]. - GAAP net loss for the third quarter was $23.1 million, or ($0.22) per share, compared to a net loss of $14.1 million, or ($0.14) per share in the same quarter last year[7]. - Non-GAAP adjusted net income for the third quarter was $13.7 million, or $0.13 per share, down from $15.6 million, or $0.15 per share in the prior year[5]. - Non-GAAP adjusted EBITDA for the third quarter was $22.0 million, a 44% increase quarter-over-quarter but a 14% decline year-over-year[5]. - Net revenue for Q3 FY2025 was $134.6 million, a decrease of 6% from $142.6 million in Q3 FY2024[31]. - Loss from operations for Q3 FY2025 was $12.8 million, compared to a loss of $9.3 million in Q3 FY2024[31]. - Non-GAAP gross profit for Q3 FY2025 was $59.6 million, with a gross profit margin of 44%, down from 45% in Q3 FY2024[39]. - The On Device Solutions segment generated $91.7 million in revenue, a 3% decrease from $94.3 million in the prior year[37]. - The App Growth Platform segment reported $44.2 million in revenue, a 10% decline from $49.2 million in Q3 FY2024[37]. - The company reported a comprehensive loss of $27.3 million for Q3 FY2025, compared to a comprehensive loss of $10.5 million in the same quarter last year[31]. - Net loss attributable to Digital Turbine, Inc. for Q3 FY2025 was $23.1 million, compared to a net loss of $14.1 million in Q3 FY2024[31]. Cash Flow and Assets - Non-GAAP free cash flow for the third quarter totaled $6.4 million[5]. - Cash and cash equivalents at the end of the period were $35.3 million, an increase from $32.8 million at the beginning of the period[35]. - Total current assets increased to $254.1 million as of December 31, 2024, up from $242.3 million at March 31, 2024[33]. - Total liabilities rose to $676.1 million as of December 31, 2024, compared to $651.6 million at March 31, 2024[33]. - Net cash provided by operating activities was $10,443 thousand in Q4 2024, a decline from $11,661 thousand in Q4 2023[44]. - Non-GAAP free cash flow decreased significantly to $6,412 thousand in Q4 2024 from $14,272 thousand in Q4 2023[44]. Guidance and Future Outlook - The company is raising its fiscal 2025 annual guidance, expecting revenue between $485 million and $490 million[11]. - The company anticipates more material year-over-year growth in EBITDA for the March quarter[3]. Operational Insights - Strong demand from advertisers and publishers for On-Device product offerings and growth in spending from advertising agencies were key revenue drivers[3]. - Management highlighted the importance of transformational profit-optimization measures in improving operating performance and free cash flow[3]. Expenses and Costs - Stock-based compensation expense increased to $8,250 thousand in Q4 2024 from $7,987 thousand in Q4 2023[41]. - Business transformation costs were $667 thousand in Q4 2024, down from $4,763 thousand in Q4 2023[43]. - Capital expenditures rose to $7,125 thousand in Q4 2024, compared to $3,107 thousand in Q4 2023[44]. - Severance costs increased to $2,220 thousand in Q4 2024 from $909 thousand in Q4 2023[43]. - The company reported a change in fair value of contingent consideration of $500 thousand in Q4 2024, with no such item reported in Q4 2023[43].

Core Insights - Digital Turbine, Inc. reported a total revenue of $134.6 million for the fiscal third quarter of 2025, reflecting a 13% increase quarter-over-quarter but a 6% decline year-over-year [4][8] - The company experienced a GAAP net loss of $23.1 million, or ($0.22) per share, compared to a net loss of $14.1 million, or ($0.14) per share in the same quarter of the previous year [4][8] - Non-GAAP adjusted net income for the quarter was $13.7 million, or $0.13 per share, down from $15.6 million, or $0.15 per share in the prior year [5][8] - Non-GAAP adjusted EBITDA was reported at $22.0 million, showing a 44% increase quarter-over-quarter but a 13% decline year-over-year [5][8] Financial Performance - Total revenue for the third quarter of fiscal 2025 was $134.6 million, with On Device Solutions revenue at $91.7 million and App Growth Platform revenue at $44.2 million [4][8] - The GAAP net loss for the third quarter was $23.1 million, compared to a loss of $14.1 million in the same quarter of fiscal 2024 [4][8] - Non-GAAP adjusted net income decreased to $13.7 million from $15.6 million year-over-year [5][8] - Non-GAAP adjusted EBITDA for the quarter was $22.0 million, down from $25.4 million in the previous year [5][8] Business Outlook - The company is raising its fiscal 2025 outlook, anticipating year-over-year revenue growth in the March quarter and more significant growth in EBITDA [3][6] - The guidance for fiscal year 2025 expects total revenue between $485 million and $490 million, with Non-GAAP adjusted EBITDA projected between $69 million and $71 million [9]