Digital Turbine(APPS) - 2025 Q2 - Quarterly Report

Revenue Performance - Net revenue for the three months ended September 30, 2024, was $118,728, a decrease of 17.1% compared to $143,259 for the same period in 2023[117]. - On Device Solutions revenue decreased by 16.8% to $82,414 for the three months ended September 30, 2024, down from $99,060 in the prior year[118]. - App Growth Platform revenue decreased by 19.1% to $37,346 for the three months ended September 30, 2024, compared to $46,183 in the same period last year[118]. - Net revenue for the three months ended September 30, 2024, decreased by $24,531 or 17.1% compared to the same period in 2023[119]. - ODS revenue for the three months ended September 30, 2024, decreased by $16,646 or 16.8%, with application media revenue declining by approximately $17,211 due to lower new device volumes[120]. - AGP revenue for the three months ended September 30, 2024, decreased by $8,837 or 19.1%, primarily due to weaker demand and the impact of consolidating certain legacy platforms[122]. Cost and Expense Management - Total costs of revenue and operating expenses for the three months ended September 30, 2024, were $132,270, a decrease of 55.3% from $295,876 in the prior year[117]. - Total costs of revenue and operating expenses decreased by $163,606 or 55.3% for the three months ended September 30, 2024, compared to the same period in 2023[125]. - The decrease in total costs of revenue and operating expenses was primarily due to lower revenue share and product development costs, with expectations of increased transformation costs in future quarters[127]. - Product development expenses decreased by $4,604 or 32.8% to $9,433 for the three months ended September 30, 2024, primarily due to lower employee-related costs[135]. - General and administrative expenses increased by $791 or 1.9% to $42,176 for the three months ended September 30, 2024, including severance costs of approximately $300[148]. - General and administrative expenses increased by $3,875 for the six months ended September 30, 2024, compared to the same period in 2023, primarily due to higher employee-related costs of $1,674 and depreciation and amortization of $1,363[151]. Operational Loss and Financial Position - Loss from operations for the three months ended September 30, 2024, was $(13,542), a significant improvement from $(152,617) in the same period last year, representing a decrease of 91.1%[117]. - The company reported a net loss of $(24,986) and $(50,142) for the three and six months ended September 30, 2024, respectively[157]. - Cash provided by (used in) operating activities was $(10,071) for the six months ended September 30, 2024, compared to $28,772 for the same period in 2023, a decrease of $38,843[169]. - The company had unrestricted cash of approximately $32,081 and restricted cash of approximately $684 as of September 30, 2024[157]. - The outstanding secured indebtedness under the Amended and Restated Credit Agreement was $411,000 as of September 30, 2024[162]. Business Transformation and Future Outlook - The company incurred $1,309 in business transformation costs during the six months ended September 30, 2024, as part of a multi-year project to implement a new global ERP system[114]. - The company is targeting over $25,000 in annual cash expense savings through ongoing transformation efforts, including workforce reductions[115]. - The company expects the business transformation program to be substantially implemented by the first quarter of fiscal year 2026[115]. Market Conditions and Challenges - The company continues to monitor macroeconomic conditions and geopolitical developments that may impact its business, including inflation and supply chain disruptions[100]. - The company is facing challenges due to lower-than-expected sales of new mobile devices, which may continue to affect its financial performance[102]. Interest and Taxation - Interest expense, net, increased by $1,388 or 17.7% for the three months ended September 30, 2024, and by $2,248 or 14.8% for the six months ended September 30, 2024, primarily due to an increase in interest rates of 112 basis points[154]. - The effective tax rate for the three and six months ended September 30, 2024, was (5.9)% and (6.7)%, respectively[155].