Digital Turbine(US:APPS)2025-11-04 22:30Financial Data and Key Metrics Changes - Revenue for the quarter was $140.4 million, representing an 18% year-over-year growth [4][12] - Adjusted EBITDA grew by 78% year-over-year, reaching $27.2 million, with an EBITDA margin of 19.4% [4][13] - Free cash flow improved to $7 million, an increase of nearly $23 million year-over-year [13] - GAAP net loss was $21.4 million, or $0.20 per share, while non-GAAP net income was $16.5 million, or $0.15 per share [15] Business Line Data and Key Metrics Changes - On-Device Solutions (ODS) generated $96 million in revenue, up approximately 17% year-over-year, with international ODS revenue growing over 80% year-over-year [5][12] - App Growth Platform (AGP) revenue was $45 million, reflecting a 20% year-over-year increase [5][12] - Revenue per device in the ODS business saw over 30% year-over-year growth in both the US and international markets [6] Market Data and Key Metrics Changes - International revenues exceeded 25% of total ODS revenues for the first time in company history [5] - The company experienced a 40% sequential improvement in its brand business and a double-digit increase in its DTX or SSP business [6] Company Strategy and Development Direction - The company is focused on leveraging first-party data and AI-driven capabilities to enhance operational efficiency and drive growth [8][12] - Investments in AI, branded as DTIQ, are aimed at improving advertising outcomes and return on ad spend for clients [26][31] - The company is positioning itself to capitalize on the growing trend of alternative app distribution models [10][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to sustain profitable growth, citing strong momentum across core businesses [11][16] - The company raised its full-year revenue guidance to a range of $540-$550 million and adjusted EBITDA guidance to $100-$105 million for fiscal year 2026 [16] Other Important Information - The company completed a successful debt refinancing with a new four-year term loan facility, enhancing liquidity for growth initiatives [5][15] - The Ignite Graph and DTIQ are seen as major growth drivers for the future, with over 1,000 unique data signals being utilized [9][30] Q&A Session Summary Question: Insights on brand business and ROI - Management highlighted the integration of platforms leading to improved results and noted that direct brand relationships accounted for 47% of total brand revenue in the September quarter [18][20] Question: International market penetration and RPD revenue - Management reported solid double-digit growth in international RPDs and emphasized the significance of international revenue exceeding 25% of ODS revenues [23] Question: Role of AI in operations and advertising - AI is a critical part of the company's strategy, with significant investments in DTIQ aimed at improving operational efficiency and advertising outcomes [25][26] Question: Impact of recent Supreme Court ruling on alternative app storefront - Management expressed excitement about the democratization of app distribution and the potential for growth in this area [27][28] Question: Competitive landscape changes - Management noted reduced competition in the device side of the business due to a major player exiting the market, while the AGP side remains competitive but focused on building demand-supply connections [32][34]