Digital Turbine APPS Q4 2025 Earnings Transcript

Core Insights - The company reported Q4 FY2025 revenue of $119.2 million, a 6% increase year-over-year, driven by double-digit growth in the On Device Solutions segment, despite a 3% decline in the App Growth Platform segment [2][31] - Adjusted EBITDA for Q4 FY2025 was $20.5 million, reflecting a 66% year-over-year growth due to improved execution and cost-saving initiatives [3][32] - The company achieved free cash flow of $5.5 million in March, an increase of over $21 million compared to the prior-year period [3][32] - Non-GAAP gross margin improved to 48%, up from 46% in the prior-year period, primarily due to product mix improvements and disciplined cost controls [3][32] Financial Performance - Cash operating expenses were $36.1 million in March, indicating progress in expense management and automation [4][33] - GAAP net loss for Q4 FY2025 was $18.8 million, or $0.18 per share [4][34] - Non-GAAP net income for Q4 FY2025 was $10.1 million, or $0.10 per share [5][34] - The cash balance at the end of the quarter was $40.1 million, an increase of $5 million from the previous quarter [5][34] - Debt balance stood at $408.7 million at the end of Q4 FY2025, with no new borrowings during the period [5][36] Segment Performance - On Device Solutions (ODS) segment revenue increased by 11% year-over-year, with over 40% RPD growth in the U.S. and over 100% internationally [6][31] - App Growth Platform (AGP) segment revenue was $30 million, representing a 3% decrease year-over-year [6][31] Strategic Initiatives - The company emphasized the importance of expense controls and operational efficiencies as key drivers of margin expansion [8] - Management reported progress in artificial intelligence, first-party data, and international device expansion as central elements for future growth [8] - The company is actively seeking a more permanent debt solution following the extension of its credit facility [5][36] Future Outlook - Projected revenue for FY2026 is between $515 million and $525 million, with non-GAAP adjusted EBITDA expected to be between $85 million and $95 million [7][37] - The management team expressed confidence in achieving sustained growth in 2026 and beyond, focusing on execution, financial discipline, and long-term value creation [11][37]