Digital Turbine APPS Q3 2026 Earnings Transcript

Core Insights - The company is experiencing double-digit revenue growth across various products and geographies, driven by diversification and improved operational efficiency through AI and machine learning [1][2][12] - The December quarter showed strong business momentum, with revenue reaching $151.4 million, a 12% year-over-year increase, and EBITDA of $39 million, reflecting a 76% year-over-year growth [2][14] - The company has made significant progress in strengthening its balance sheet, reducing its debt leverage ratio from over five turns to approximately three turns [5][19] Revenue and Growth - Total revenue for the fiscal third quarter was $151.4 million, with the On Device Solutions (ODS) segment generating $99.6 million (up 9% year-over-year) and the Application Growth Platform (AGP) segment contributing $52.6 million (up 19% year-over-year) [14][15] - The international business is a key growth driver, with over 30% of revenues from the Ignite platform coming from outside the U.S. and a greater than 20% increase in both devices and revenue per device [6][5] Operational Efficiency - The company reported a gross profit increase of over 25% while operating expenses declined, showcasing improved operational efficiency [1] - Cash operating expenses were down 4% year-over-year, contributing to a non-GAAP gross margin of 49%, up from 44% in the prior year [16] Strategic Priorities - The company has identified five strategic priorities to sustain growth, including leveraging first-party data, enhancing the flywheel effect between supply and demand, scaling the brand business, expanding services through the Ignite platform, and exploring alternative app opportunities [9][10][11] - The integration of technology stacks has allowed the company to better utilize first-party data and AI capabilities, driving growth in both segments [15][12] Financial Performance - Adjusted EBITDA for the fiscal third quarter totaled $38.8 million, representing a 76% increase year-over-year, with an EBITDA margin of 26% [15][16] - The company ended the quarter with a cash balance of $40 million and reduced total debt by over $41 million, resulting in a stronger balance sheet [18][19] Future Outlook - Following strong performance in December, the company has raised its full-year revenue guidance to a range of $553 million to $558 million and adjusted EBITDA guidance to $114 million to $117 million for fiscal year 2026 [20]