Digital Turbine (APPS) Q1 Revenue Up 11%

Core Insights - Digital Turbine reported a return to growth with GAAP revenue of $130.9 million for the quarter ended June 30, 2025, marking an 11% increase year over year [1][2] - The company narrowed its GAAP net loss to $14.1 million from $25.2 million in the prior year, while non-GAAP adjusted EBITDA rose significantly to $25.1 million, a 73.1% increase [2][7] - Management raised its financial outlook for fiscal 2026, expecting revenue between $525 million and $535 million, reflecting increased confidence in the On Device Solutions (ODS) segment [9] Financial Performance - GAAP revenue increased to $130.9 million from $118.0 million, representing a 10.9% year-over-year growth [2] - Non-GAAP EPS decreased from $0.07 to $0.05, a decline of 28.6% [2] - Adjusted EBITDA rose to $25.1 million from $14.5 million, indicating strong operational performance [2] Business Segments - The ODS segment was the primary growth driver, with revenue increasing by 18% to $95.4 million, supported by the Ignite platform and improved device sales [5] - The App Growth Platform (AGP) experienced a revenue decline of 5% to $36.3 million, facing challenges from competition and market changes, but management sees potential in non-gaming brands and international expansion [6] Profitability and Cash Flow - Non-GAAP gross margin improved to 47% from 46% in the prior year, reflecting better operational leverage [7] - Free cash flow turned positive at $1.4 million compared to a negative $5.7 million in the prior year, indicating improved cash management [7] - Cash decreased to $34.1 million from $40.1 million, while debt remained high at $400.5 million [8] Future Outlook - Management's guidance for fiscal 2026 includes a non-GAAP adjusted EBITDA range of $90 million to $95 million, up from earlier forecasts, driven by confidence in the ODS segment [9] - Investors are advised to monitor revenue progress in ODS and any recovery in AGP metrics, as well as the competitive landscape and technology advancements [10]