Digital Turbine Inc (APPS) Q1 2026 Earnings Call Highlights: Strong Revenue Growth Amidst Challenges
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Digital Turbine Inc (NASDAQ:APPS) reported an 11% year-over-year revenue growth, reaching $131 million.
The company achieved a 73% increase in EBITA, reflecting strong operational performance.
On-device solution business revenue grew by 18% year-over-year, driven by higher device volumes and improved revenue per device.
The company made significant progress in first-party data and AI machine learning platforms, enhancing targeting and user experience.
There was a nearly 50% increase in brand campaigns, indicating stronger and more diversified demand across various verticals.
Negative Points
The application growth platform business saw a 5% year-over-year decline in revenue.
Despite positive cash flow, the company reported a GAAP net loss of $14.1 million for the fiscal first quarter.
The cash balance decreased by approximately $6 million from the previous quarter, primarily due to working capital timing.
Total debt remains high at $400.5 million, though there was a reduction of over $8 million quarter over quarter.
The company faces ongoing challenges in stabilizing and growing its application growth platform business.
Q & A Highlights
Warning! GuruFocus has detected 5 Warning Signs with APPS.
Q: Can you elaborate on the international carrier strength and RPD growth in the international business? Is this due to new customers or better rates? A: (Bill Stone, CEO) Our international on-device business grew by 70%, driven by better device volumes and improved RPDs. We are executing better and seeing stronger demand from other geographies. This demand is now being effectively channeled into markets like Latin America and Europe, enhancing our RPDs and overall performance.
Q: The brand revenue was strong this quarter. Can you discuss the sustainability and visibility of this business? A: (Bill Stone, CEO) The brand business saw nearly a 50% increase in brand advertisers across various verticals. This diversification is encouraging, and we believe our mobile-first strategy is unique. We are committed to growing and scaling this segment, which is a long-term play for us.
Q: Regarding the potential breakup of Apple and Google's app store monopoly, what are you seeing in terms of customer activity and alternative app store launches? A: (Bill Stone, CEO) The recent legal ruling in the Epic and Google case is encouraging for alternative app stores. We see strong interest from publishers seeking different billing methods and are leveraging our platform to offer options. We are also seeing traction in the US, Latin America, and the EU with various partners.
Q: What needs to happen for the AGP business to return to year-over-year growth? Are there specific areas for improvement? A: (Bill Stone, CEO) Our supply side platform and DTX product are growing well. The key will be improving the performance side of the business, where we are investing in first-party data and AI. We saw sequential growth, which is encouraging for future quarters.
Q: How do you see device sales trends affecting Digital Turbine going forward? A: (Bill Stone, CEO) Device sales have been a headwind, but recent trends are turning into a tailwind. We are seeing growth in device sales, which is encouraging. Additionally, we are expanding our device footprint with partners like T-Mobile and others, which should drive growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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