Digital Turbine Q1 2026 Earnings Call Transcript

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Provided by Quartr
August 5, 2025

Key Takeaways

  • Positive Sentiment: Strong first quarter results: Revenue of $131 M (+11% YoY) and EBITDA of $25 M (+73% YoY) led to an increase in full‐year guidance to $525–$535 M in revenue and $90–$95 M in adjusted EBITDA.
  • Neutral Sentiment: On‐Device Solutions revenue rose 18% YoY to $95 M, while the Application Growth Platform was down 5% YoY to $36 M but recovered with a 9% sequential revenue gain.
  • Positive Sentiment: Higher advertiser demand boosted revenue per device by over 30% YoY, and growing device volumes in North America and international markets expanded monetization.
  • Positive Sentiment: Investments in first‐party data and AI, branded as DT Ignite Graph and DTiQ, are enhancing targeting precision and driving a 50% increase in brand campaigns quarter-over-quarter.
  • Neutral Sentiment: Regulatory momentum—including U.S. Open App Markets Act proposals and global legal rulings—and participation in the Coalition for a Competitive Mobile Experience may open alternative app distribution opportunities.
AI Generated. May Contain Errors.
Earnings Conference Call
Digital Turbine Q1 2026
00:00 / 00:00

Transcript Sections

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Operator

Afternoon, and welcome to the Digital Turbine Fiscal twenty twenty six First Quarter Results Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Brian Bartholomew, Senior Vice President, Capital Markets. Please go ahead.

Brian Bartholomew
Brian Bartholomew
SVP - Capital Markets & Strategy at Digital Turbine

Thanks, Drew. Good afternoon, and welcome to the Digital Turbine Fiscal twenty twenty six First Quarter Earnings Conference Call. Joining me on the call to discuss our results are CEO, Bill Stone and CFO, Steve Lasher. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward looking statements. These forward looking statements are based on our current assumptions, expectations and beliefs, including projected operating metrics, future products and services, anticipated market demand and other forward looking topics.

Brian Bartholomew
Brian Bartholomew
SVP - Capital Markets & Strategy at Digital Turbine

Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. Except as required by law, we undertake no obligation to update any forward looking statements. For a discussion of the risk factors that could cause our actual results to differ materially from those contemplated by our forward looking statements, please refer to the documents we file with the Securities and Exchange Commission. Also, during this call, we will discuss certain non GAAP measures of our performance. Non GAAP measures are not substitutes for GAAP measures.

Brian Bartholomew
Brian Bartholomew
SVP - Capital Markets & Strategy at Digital Turbine

Please refer to today's press release for important information about the limitations of using non GAAP measures as well as reconciliations of these non GAAP financial results to the most comparable GAAP measures. Now I'd like to turn the call over to our CEO, Bill Stone.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Thanks, Brian. Good afternoon, everyone, and thank you for joining us for Digital Turbine's fiscal first quarter twenty twenty six earnings call. We're excited to report on our continued business momentum that accelerated in the first quarter. We delivered $131,000,000 of revenue and $25,000,000 in EBITDA, reflecting 11 revenue growth and 73% EBITDA growth year over year. These results are a testament to our strategic focus and improved execution across our platform and enabling us to increase our annual outlook for the fiscal year.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Breaking it down by segment, our on device solution business generated $95,000,000 in revenue, which was up approximately 18% from June. Our application growth platform business posted $35,000,000 in revenue, which is modestly down year over year. However, we're encouraged by the nearly 10% sequential improvement compared to fiscal fourth quarter. There are three key drivers that powered our improved performance this quarter. First was higher advertiser demand, which translated into improved pricing and fill rates, particularly for premium placements on our platform.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

This strong advertiser demand resulted in 30 plus percent year over year growth in our revenue per device, or RPD, in both The U. S. And international markets for our on device business, and we also had solid double digit year over year growth in our content media business. Our second driver was improved device volumes, particularly in North America and select international markets. This helped us expand our installed footprint and monetization base.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

As an example, last year, we saw a decline of approximately 1,000,000 devices here in The U. S. Between March and June. And this year, we saw a modest increase in U. S.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Devices from March to June. Similarly, our international device volumes were up a few million units sequentially and year over year. Combined, these better RPDs and improved device volumes drove strong year over year growth. And finally, we made meaningful progress in our first party data and AI machine learning platform, which is finally setting the foundation for smarter targeting, higher return on ad spend for advertisers, and improved user experiences. Beyond near term execution, we're also making strategic progress positioning Digital Turbine for the future.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Our first party data investments, coupled with real time AI driven decisioning, were unlocking new levels of precision and scale. These capabilities are becoming even more valuable as advertisers seek alternatives to the closed walled garden ecosystems and look for transparent, performant ways to engage mobile users. We will begin branding these unique advantages as they are important to showcase to customers and partners why Digital Turbine is special and unique. You'll see us branding our first party data as the DT Ignite Graph, and our AI machine learning platform leveraging those data insights to drive improved advertiser and user experiences will be branded as DTiQ. We're also seeing increasing brand engagement directly on our platform, a trend driven by our audience scale, strong device footprint and proven ability to deliver measurable outcomes.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

The number of campaigns contributing to brand revenue increased by nearly 50% quarter over quarter. This signals stronger and more diversified demand. This diversification spans major advertisers across retail, consumer packaged goods, finance, insurance, entertainment, tech, telco and more, giving us increased confidence in our ability to scale both broadly and deeply across many verticals. Moreover, the macro environment continues to shift in favor of direct distribution and alternative app distribution models. With the combination of our tech enablers such as IgniteGraph, DTIQ and Single Tap, this trend positions us well.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Regulatory momentum is accelerating in all geographies around the world to offer customer and publisher choice, including a reintroduction of the Open App Markets Act here in The United States as well as other recent legal rulings. We've recently joined forces with companies such as Meta, Spotify and others in the Coalition for a Competitive Mobile Experience to work with regulators and other stakeholders to ensure a more open and competitive mobile marketplace for consumers and publishers. To wrap up, the first quarter was a promising start to our fiscal year. We showed solid year over year double digit growth in revenue and EBITDA, driven by a healthy mix of execution, innovation and favorable industry dynamics. We're building on the right foundation through operational discipline and strategic investment to drive sustained profitable growth.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

We're excited by the traction we're seeing across the business and confident in our ability to continue to deliver value to partners, advertisers, users and shareholders. With that, I'll turn it over to Steve to take you through the financials in more detail.

Stephen Lasher
Stephen Lasher
EVP & CFO at Digital Turbine

Thank you, Bill, and good afternoon, everyone. The fiscal first quarter represented another meaningful step forward for the company. Total revenue for the quarter was $130,900,000 reflecting 11% growth year over year. At a segment level, our ODS business delivered $95,400,000 in revenue, up 18% year over year, driven by strong growth in both device volumes and revenue per device or RPD, particularly within our international partners.

Stephen Lasher
Stephen Lasher
EVP & CFO at Digital Turbine

We also saw continued strength in RPDs and modest improvement in activation trends in The U. S. Market. Our AGP segment generated $36,300,000 in revenue, representing a 5% decline year over year. However, on a sequential basis, ATP revenue increased 9%, reflecting early signs of stabilization and progress as we work to strengthen the platform leveraging our unique first party data and AI capabilities.

Stephen Lasher
Stephen Lasher
EVP & CFO at Digital Turbine

Combination of accelerated top line growth and improving operating efficiencies, driven by the transformation initiatives we began late last year, resulted in strong EBITDA performance this quarter. Adjusted EBITDA for our fiscal first quarter was $25,100,000 up 73% year over year, marking our highest quarterly EBITDA since calendar twenty twenty three. Free cash flow remained positive at $1,400,000 an improvement of approximately $7,000,000 year over year. Non GAAP gross margin for the fiscal first quarter was 47%, representing an improvement of more than 100 basis points compared to the same period last year. As a reminder, our gross margins are primarily influenced by shifts in product and segment mix, which will vary from period to period.

Stephen Lasher
Stephen Lasher
EVP & CFO at Digital Turbine

Our cash operating expenses for the June were $36,800,000 down 8% year over year, in addition to our gross profit of $62,000,000 which grew 14% over the same period, a strong proof point of the operating leverage of the company. While we're encouraged by the progress made on cost discipline and operating efficiency, we remain committed to further streamlining our business processes even as we continue to make disciplined investments to support future growth. Turning now to the bottom portion of the income statement. We reported a GAAP net loss of $14,100,000 or $0.13 per share in the fiscal first quarter. On a non GAAP basis, we recorded net income of $5,800,000 or $05 per share based on 110,000,000 shares outstanding in the fiscal first quarter.

Stephen Lasher
Stephen Lasher
EVP & CFO at Digital Turbine

Looking at the balance sheet, we ended the quarter with a cash balance of $34,100,000 down approximately $6,000,000 from the March, primarily reflecting the timing of working capital. Our total debt stood at $400,500,000 a reduction of more than $8,000,000 quarter over quarter. With respect to debt refinancing activities, we're pleased with our continued progress and will share additional details as appropriate. Now let me turn to our updated outlook for fiscal twenty twenty six. On the heels of a stronger than expected first quarter and improved visibility into the remainder of the year, we are raising our full year revenue and adjusted EBITDA guidance.

Stephen Lasher
Stephen Lasher
EVP & CFO at Digital Turbine

We now expect revenue to be in the range of $525,000,000 to $535,000,000 and adjusted EBITDA in the range of $90,000,000 to $95,000,000 for fiscal year twenty twenty six. At the midpoint, this represents an increase of $10,000,000 in revenue guidance and $5,000,000 in EBITDA guidance compared to our prior outlook. In closing, we are actively positioning the company for sustainable growth in fiscal twenty twenty six and beyond. While we are encouraged by recent momentum across key areas of the business, our focus remains squarely on disciplined execution, financial rigor and delivering long term value for our shareholders. With that, let me hand the call back to our operator to open up the call for questions.

Operator

We will now begin the question and answer session. On your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. Again, it is The first question comes from Anthony Stoss with Craig Hallum. Please go ahead.

Anthony Stoss
Senior Research Analyst at Craig-Hallum Capital Group LLC

Hi, guys. Nice execution for sure. Bill, on the international carrier strength and strength on the RPD side on the international business, is that a combination of new international customers? Or is it largely just better take rates on the international side? And then I had a follow-up after that.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Yes. Thanks, Tony. Yes, our international business on our on device business in general was up 70%. It was driven by better device volumes and better RPDs. Specifically, on the RPDs themselves, we're just getting better at execution.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

We're seeing also stronger demand coming into these geographies from other geographies. So in other words, where we'd see a lot of demand coming in from Europe or Asia into The U. S, we've done a much better job now being able to get that demand going into other markets such as Latin America or into Europe on European supply. And so those things are helping us drive better RPDs. But we continue to see strong performance there, especially combined with the stronger devices, really helped drive some solid top line performance.

Anthony Stoss
Senior Research Analyst at Craig-Hallum Capital Group LLC

Got it. And then the brand revenue or brand portion of your business was exceptionally strong. Can you talk about the longevity of this business? Is it something new? Do you have a bunch of new customers that have come online? What's your visibility into that continuing?

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Yes. One of the things I was really excited about in the brand business for the quarter is just more diversification. I talked about in my prepared remarks that we saw nearly 50% increase in the amount of brand advertisers coming on the platform from more and more verticals. It's our job now to continue to grow and scale that. But to see that diversification with more brands looking for solutions on our platform is incredibly encouraging for us.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

And we think we have something unique and differentiated here in terms of mobile first with our strategy in app and something that we're playing a long game with it and continuing to make good strides here.

Anthony Stoss
Senior Research Analyst at Craig-Hallum Capital Group LLC

Got it. Last question, Bill, related to just the ongoing potential breakup of Apple or the monopoly of Apple and Google for App Stores. What are you seeing recently just in terms of activity of potential customers? And do you expect any additional customers to actually launch alternative app stores on top of Epic this year?

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Yes. So it's really encouraging to see the recent legal ruling that came out from the judge reiterating what the jury had decided in the Epic in Google case really opening up alternatives alternative app stores within the Google Play ecosystem. That's an encouraging development in terms of just more fair, open, transparent. And we're seeing that around the world, not just also in The United States, but also in Europe, Korea, Brazil, Japan, India, just to name a few. And so I think from our perspective, what we're seeing is very strong interest, first and foremost, from publishers.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

So if you're thinking about large gaming companies or even large non gaming companies looking to find different billing methods to their customers And our ability to leverage our platform with things like Single Tap and DTIQ and our Ignite Graph, I think, is something that's particularly encouraging to offer publishers options, first and foremost. And then on the distribution side, we're seeing a lot of encouraging developments here, not just in The United States on partners like Verizon where we're live, but also we've got traction in Latin America as well as in The EU from a lot of different operator and OEM partners that are excited about what happens here in the future with that.

Anthony Stoss
Senior Research Analyst at Craig-Hallum Capital Group LLC

Perfect. Thanks, Bill. Congrats on the strong results again.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Thanks, Tony.

Operator

The next question comes from Omar Dusuki with Bank of America. Please go ahead.

Arthur Chu
Arthur Chu
Internet Equity Research at Bank of America Merrill Lynch

Hey, guys. This is Arthur on for Omar. Thanks for taking the question. Neil, maybe just on the AGP business, obviously, great to see this gradual improvement here. What do you think needs to happen to bring this business back to year with growth?

Arthur Chu
Arthur Chu
Internet Equity Research at Bank of America Merrill Lynch

Like, are there specific products or business segments that you'd like to see more improvement in this year?

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Yes. I think in terms of our AGP business, our supply side platform and our DTx product is showing nice year over year growth. I think the real key for us will be on the performance side of the business. That's something we're making a lot of energy and investments. And some of the first party data and AI machine learning things that I referenced in my remarks will be super important here on the demand side of that to really show that top line growth.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

But as I mentioned in my remarks, we saw really nice sequential growth in that business. It gives us encouragement that, that's going to continue in quarters to come.

Arthur Chu
Arthur Chu
Internet Equity Research at Bank of America Merrill Lynch

Got it. And then if I could just follow-up on that. Any particular time line you could share with us in terms of just that work that you guys are doing on the performance DSP side?

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Yeah. We'll communicate our progress and timelines on future calls right now. Again, I'm encouraged because what we've done now is we've been able to connect the actual performance DSP and all the bidding work to now the first party data and AI machine learning algorithms. And we're getting much better and stronger at that. And that will be the key driver to improve top line performance in that business.

Arthur Chu
Arthur Chu
Internet Equity Research at Bank of America Merrill Lynch

Awesome. Thank you. Appreciate it.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Thanks, Arthur.

Operator

The next question comes from Mitchell Pindus with Wells Fargo Private Bank. Please go ahead.

Analyst

Sure. Hi, gentlemen. And I'd like to also thank you for what looks like a nice confirmation of DTE's turnaround with these numbers. A couple of quick questions. Device sales have, in recent quarters actually, in recent years, been headwinds.

Analyst

But now it looks like we're starting to get evidence from Apple, from Verizon, that there seems to be a turnaround and anecdotally in device sales. Can you talk a little bit as to how that can affect DT going forward?

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Yes. Sure, Mitch. We see it really helping us in two areas. First is just the macro trend, which is something that's been a headwind, as you mentioned, for us for the last couple of years. So this past quarter was an encouraging sign to see that turnaround and become a tailwind and show growth from the June to the March and that sequential improvement.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

It's been a while since we've been able to talk about that. So hopefully, that's an encouraging trend that continues. We've known for a long time that these long elongated upgrade cycles that were in The U. S. Are not sustainable, and we're going to see that turn around.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

So we're starting to see that. So that's a nice tailwind for us. But the second thing we can do is also continue to grow our share with getting our technology on more devices. So for example, that could be T Mobile here in The United States, which we just recently launched with, Motorola and a variety of other things with Chinese OEMs and other partners in The EU. So growing our device footprint in addition to just the macro tailwinds starting to emerge gives us a lot of optimism that we can see good growth from this part of the business.

Analyst

Great. Thank you. And generally speaking, where are you seeing some of your growth geographically coming from?

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Yes. So on the supply side of the business, on AGP, I've been really pleased with our growth in Asia and Europe, in particular. And then for our on device business, we've really done a nice job growing our business in the EU America. So those have been two bright spots for us. And then on the ODS business, to see the double digit growth back here in The United States is also something that's been encouraging.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

So it's really a true global story that's starting to emerge here.

Analyst

Got it. And when you're billing outside the country, are you billing in USD or the local currency?

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Yeah. Predominantly, the vast majority of our revenues all come through USD.

Analyst

Okay. All right. Well, that's all from me. Thank you.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Okay. Thanks, Mitch.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Bill Stone for any closing remarks.

Bill Stone
Bill Stone
CEO & Director at Digital Turbine

Thanks, everyone, for joining our call today. We'll talk to you again on our fiscal twenty twenty six second quarter call in a few months. Thanks, and have a great night.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Executives
    • Brian Bartholomew
      Brian Bartholomew
      SVP - Capital Markets & Strategy
    • Bill Stone
      Bill Stone
      CEO & Director
    • Stephen Lasher
      Stephen Lasher
      EVP & CFO
Analysts
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