Digital Turbine(US:APPS)2026-02-03 21:31Financing and Debt Management - Digital Turbine refinanced its existing senior credit facility with a new Financing Agreement totaling $430 million, secured by substantially all assets[136][137]. - The Financing Agreement requires maintaining a minimum liquidity of $10 million until March 31, 2026, and $20 million thereafter[141]. - The company made principal payments of $44.91 million and $55 million on the Loans during the three and nine months ended December 31, 2025, respectively[138]. - The Loans accrue interest at a term SOFR rate or a reference rate, with margins ranging from 6.50% to 8.00%[139]. - As of December 31, 2025, the outstanding secured indebtedness under the Financing Agreement is $375 million, with a maturity date of August 29, 2029[204]. - 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 under the Financing Agreement[221]. - The company is subject to risks related to refinancing its debt and may face adverse effects if unable to meet its debt service obligations[209]. Revenue Performance - Net revenue for the three months ended December 31, 2025, was $151,399, an increase of 12.4% compared to $134,637 for the same period in 2024[155]. - For the nine months ended December 31, 2025, net revenue reached $422,702, reflecting a 13.8% increase from $371,354 in 2024[155]. - On Device Solutions revenue increased by 8.5% to $99,556 for the three months ended December 31, 2025, and by 14.4% to $291,468 for the nine months ended December 31, 2025[156][159]. - App Growth Platform revenue rose by 18.9% to $52,616 for the three months ended December 31, 2025, and by 11.3% to $133,593 for the nine months ended December 31, 2025[160][161]. - Revenue share decreased by 7.9% to $64,425 for the three months ended December 31, 2025, and increased by 2.0% to $185,656 for the nine months ended December 31, 2025[169][170]. Cost Management - Total costs of revenue and operating expenses decreased by 12.0% to $129,745 for the three months ended December 31, 2025, and by 3.5% to $399,175 for the nine months ended December 31, 2025[164]. - General and administrative expenses decreased by 32.5% to $28,897 for the three months ended December 31, 2025, and by 17.6% to $105,889 for the nine months ended December 31, 2025[162]. - Product development expenses decreased by $311 or 3.0% to $9,892 for the three months ended December 31, 2025, compared to $10,203 for the same period in 2024[177]. - Sales and marketing expenses decreased by $1,168 or 7.5% to $14,326 for the three months ended December 31, 2025, and represented 9.5% of total net revenue compared to 11.5% for the same period in 2024[183]. - General and administrative expenses, after excluding severance and business transformation costs, decreased by $19,639 for the nine months ended December 31, 2025, compared to the same period in 2024[192]. Business Transformation - Business transformation costs incurred during the nine months ended December 31, 2025, amounted to $31, compared to $1.31 million in the same period of 2024[152]. - The company anticipates ongoing costs related to the business transformation project through early fiscal year 2026[152]. - The transformation program is expected to yield over $25,000 in annual cash expense savings[153]. - The company incurred $2,886 in expenses related to the transformation program during the fiscal year ended March 31, 2025[153]. - The company completed the first deployment phase of its new global cloud-based ERP system in the third quarter of fiscal year 2024[152]. Cash Flow and Investments - Cash provided by operating activities for the nine months ended December 31, 2025, was $37,424 thousand, a significant increase of 9,960.2% compared to $372 thousand for the same period in 2024[212]. - Net cash used in investing activities for the nine months ended December 31, 2025, was $23,172 thousand, an increase of 12.9% from $20,533 thousand in 2024[212]. - Proceeds from borrowings, net of original issue discount, amounted to $418,700 thousand for the nine months ended December 31, 2025, compared to $38,000 thousand in 2024, reflecting a 1,001.8% increase[212]. - The company reported a net cash used in financing activities of $10,332 thousand for the nine months ended December 31, 2025, compared to net cash provided of $23,245 thousand in 2024, indicating a significant change in financing activities[216][217]. Economic and Market Conditions - The company is actively monitoring macroeconomic conditions and geopolitical developments that could impact its business, including inflation and trade disputes[126][133]. - The company is exploring options to raise additional capital through equity securities or debt financing arrangements, which may dilute existing stockholders' ownership[208]. - The company has minimum purchase commitments under hosting agreements totaling approximately $201,925 thousand over the next five fiscal years[211]. - As of December 31, 2025, the company was in compliance with all covenants under the Financing Agreement[207]. Financial Results - The company incurred a net income of $5,107 and a net loss of $30,392 for the three and nine months ended December 31, 2025, respectively[200]. - Interest expense, net, increased by $5,648 or 71.4% for the three months ended December 31, 2025, compared to the same period in 2024, primarily due to increased interest rates[194]. - The company recorded foreign exchange transaction gains of $2,815 and $3,037 for the three and nine months ended December 31, 2025, respectively, compared to losses in the same periods of 2024[198].