Digital Turbine (NASDAQ:APPS) Issues Quarterly Earnings Results, Beats Expectations By $0.01 EPS

Key Points

• Digital Turbine reported quarterly EPS of $0.18, beating the $0.17 consensus, and revenue of $178.7 million, above the $166.8 million estimate and up 27% year over year.
• The company raised its fiscal 2027 revenue outlook by $20 million to $670 million–$690 million, with growth in both On-Device Solutions (+20%) and App Growth Platform (+42%). It kept adjusted EBITDA guidance at $145 million–$155 million, while gross margin fell to 43% from 47% a year earlier.
• First-half non-GAAP free cash flow increased to $21.8 million from $8.4 million a year earlier, and net leverage improved to 2.3 turns from more than 4.0 turns.

Digital Turbine (NASDAQ:APPS - Get Free Report) announced its quarterly earnings data on Monday. The software maker reported $0.18 EPS for the quarter, beating analysts' consensus estimates of $0.17 by $0.01, FiscalAI reports. Digital Turbine had a positive return on equity of 38.34% and a negative net margin of 4.46%. The company had revenue of $178.68 million during the quarter, compared to the consensus estimate of $166.75 million.

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

• Revenue guidance increased: Digital Turbine reported Q2 revenue of $178.7 million, up 27% year over year, and raised its fiscal 2027 revenue outlook by $20 million to $670 million–$690 million.
• Both business segments grew: On-Device Solutions revenue rose 20%, while App Growth Platform revenue increased 42%, including 45% growth in the brand business. Management attributed momentum to stronger advertiser outcomes, data and AI efforts, and expanded supply and demand.
• Profitability guidance was unchanged: The company maintained its fiscal-year adjusted EBITDA outlook of $145 million–$155 million despite raising revenue guidance, citing measured investment in AI and data and a mix shift toward businesses with different profitability profiles. Q2 non-GAAP gross margin declined to 43% from 47% a year earlier.
• Cash generation and leverage improved: First-half non-GAAP free cash flow was $21.8 million, versus $8.4 million a year earlier, and net leverage fell to 2.3 turns from more than 4.0 turns a year ago.

Digital Turbine Price Performance

Shares of APPS stock traded up $0.92 during mid-day trading on Monday, reaching $11.30. The company's stock had a trading volume of 7,991,334 shares, compared to its average volume of 3,808,197. The company has a debt-to-equity ratio of 1.80, a quick ratio of 1.20 and a current ratio of 1.20. The firm's 50-day moving average is $10.59 and its two-hundred day moving average is $7.65. Digital Turbine has a 1-year low of $2.74 and a 1-year high of $15.34. The company has a market cap of $1.37 billion, a P/E ratio of -43.46, a PEG ratio of 0.53 and a beta of 3.01.

Analyst Upgrades and Downgrades

Several research firms have weighed in on APPS. Benchmark lifted their target price on Digital Turbine from $15.00 to $16.00 and gave the company a "buy" rating in a research note on Wednesday, August 5th. Wall Street Zen downgraded shares of Digital Turbine from a "strong-buy" rating to a "buy" rating in a report on Sunday. TD Cowen restated a "hold" rating on shares of Digital Turbine in a report on Tuesday, September 29th. Weiss Ratings restated a "sell (e+)" rating on shares of Digital Turbine in a research note on Wednesday, September 2nd. Finally, Northland Securities began coverage on Digital Turbine in a report on Thursday, October 29th. They issued an "outperform" rating and a $17.00 target price on the stock. Six equities research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus target price of $15.42.

Digital Turbine Company Profile

Digital Turbine, Inc NASDAQ: APPS is a mobile advertising and application distribution company that helps advertisers, mobile carriers, device manufacturers and application developers connect with smartphone users. Its platform is designed to support the discovery, distribution, promotion and monetization of mobile applications and digital content.

The company provides technology that can be integrated into mobile devices and operating systems, including tools for app recommendations, device setup and application installation.

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