Digital Turbine (NASDAQ:APPS) Posts Earnings Results, Beats Expectations By $0.03 EPS

Key Points

• Digital Turbine reported $0.17 in quarterly EPS, beating analyst expectations of $0.14 by $0.03. Revenue rose 27% year over year to $166 million, while adjusted EBITDA jumped 69% to $42.5 million.
• The company raised fiscal 2027 guidance to $650 million–$670 million in revenue and $145 million–$155 million in adjusted EBITDA, supported by growth in AI, international On Device Solutions, brand advertising, Ignite and alternative app distribution.
• Digital Turbine strengthened its financial position by generating $17.9 million in operating cash flow, reducing debt by more than $8 million and lowering net leverage to 2.5 times. Analysts maintain a consensus “Moderate Buy” rating with an average price target of $11.00.

Digital Turbine (NASDAQ:APPS - Get Free Report) announced its earnings results on Tuesday. The software maker reported $0.17 EPS for the quarter, topping the consensus estimate of $0.14 by $0.03, Zacks reports. Digital Turbine had a negative net margin of 6.68% and a positive return on equity of 27.60%.

Here are the key takeaways from Digital Turbine's conference call:

• Revenue rose 27% year over year to $166 million, while adjusted EBITDA increased 69% to $42.5 million, expanding the margin to 25.6% amid continued operating leverage.
• The App Growth Platform grew 56%, led by DTX up 54% and the direct brand business up more than 70%; management attributed the momentum to stronger advertiser demand, improved targeting, and AI-powered optimization.
• Digital Turbine raised fiscal 2027 guidance to $650 million–$670 million of revenue and $145 million–$155 million of adjusted EBITDA, citing AI and data, international On Device Solutions, brand advertising, Ignite, and alternative app distribution as growth drivers.
• The company strengthened its balance sheet, generating $17.9 million in operating cash flow, reducing debt by more than $8 million during the quarter, and lowering net leverage to 2.5 times; subsequent leverage improvements also reduced the margin on its largest loan tranche by 50 basis points.
• Management expects AI to benefit app usage, advertising demand, and operational efficiency, but acknowledged that macroeconomic conditions, device-supply constraints, and a potential non-cash accounting adjustment to beginning retained earnings remain factors investors should monitor.

Digital Turbine Price Performance

Shares of NASDAQ:APPS traded up $0.51 during midday trading on Tuesday, hitting $9.51. The stock had a trading volume of 6,885,617 shares, compared to its average volume of 4,060,349. The company has a quick ratio of 1.16, a current ratio of 1.16 and a debt-to-equity ratio of 1.84. Digital Turbine has a fifty-two week low of $2.74 and a fifty-two week high of $13.60. The company has a market capitalization of $1.15 billion, a P/E ratio of -26.42, a price-to-earnings-growth ratio of 0.62 and a beta of 2.81. The company's 50-day moving average price is $9.51 and its 200-day moving average price is $5.93.

Institutional Trading of Digital Turbine

Hedge funds and other institutional investors have recently modified their holdings of the stock. Creative Planning grew its stake in Digital Turbine by 9.4% during the third quarter. Creative Planning now owns 23,286 shares of the software maker's stock worth $149,000 after purchasing an additional 1,997 shares during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. lifted its stake in Digital Turbine by 4.4% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 57,539 shares of the software maker's stock valued at $156,000 after buying an additional 2,449 shares during the period. O Shaughnessy Asset Management LLC boosted its holdings in shares of Digital Turbine by 23.8% during the 4th quarter. O Shaughnessy Asset Management LLC now owns 13,180 shares of the software maker's stock worth $66,000 after buying an additional 2,536 shares in the last quarter. Legal & General Group Plc boosted its holdings in shares of Digital Turbine by 31.6% during the 2nd quarter. Legal & General Group Plc now owns 10,624 shares of the software maker's stock worth $63,000 after buying an additional 2,550 shares in the last quarter. Finally, Osaic Holdings Inc. grew its position in shares of Digital Turbine by 22.5% during the 2nd quarter. Osaic Holdings Inc. now owns 18,073 shares of the software maker's stock worth $107,000 after buying an additional 3,322 shares during the period. Institutional investors own 63.66% of the company's stock.

Analyst Upgrades and Downgrades

Several equities research analysts have commented on the stock. Weiss Ratings cut shares of Digital Turbine from a "sell (d-)" rating to a "sell (e+)" rating in a research report on Friday, June 5th. Roth Capital started coverage on Digital Turbine in a report on Tuesday, July 21st. They issued a "buy" rating and a $11.50 price objective for the company. Zacks Research downgraded Digital Turbine from a "strong-buy" rating to a "hold" rating in a research report on Monday, July 27th. Bank of America raised Digital Turbine from a "neutral" rating to a "buy" rating and set a $7.50 target price on the stock in a research report on Wednesday, May 27th. Finally, Wall Street Zen upgraded Digital Turbine from a "buy" rating to a "strong-buy" rating in a report on Saturday, July 18th. One research analyst has rated the stock with a Strong Buy rating, three have given a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $11.00.

About Digital Turbine

Digital Turbine, Inc NASDAQ: APPS is a mobile technology company that streamlines content delivery and app advertising across connected devices. Its platform enables carriers, OEMs, app developers and advertisers to engage users through personalized app recommendations, in-app promotions and turnkey monetization solutions. By integrating software directly on smartphones and tablets, Digital Turbine simplifies the user journey from discovery to installation without requiring additional downloads or redirects through traditional app stores.

The company's flagship Ignite Platform offers end-to-end campaign management, combining demand-side advertising, real-time analytics and automated content fulfillment.

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