Digital Turbine(US:APPS)2025-11-04 21:56Financing 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].