Digital Turbine (APPS) Financials

Digital Turbine’s latest quarter shows a business that is still growing revenue, but profitability and balance-sheet risk remain major concerns. In Q4 2026, revenue rose to $142.5 million from $119.2 million in the prior-year quarter, but the company still posted a net loss of $7.3 million. That said, operating income turned positive at $10.5 million, which is a meaningful improvement from the steep operating losses seen a year ago. The problem is that high interest expense and debt keep dragging the bottom line into the red.

What stands out most is the improvement in the core business versus the burden of the capital structure. Gross profit improved sharply year over year, and operating expenses were much better controlled than in the comparable 2025 period. However, Digital Turbine still carries a heavy debt load, with long-term debt of $350.3 million at quarter-end, and interest expense of $23.6 million in the quarter exceeded operating income, pushing pre-tax income negative.

• Q4 2026 revenue grew to $142.5 million from $119.2 million a year earlier, showing solid top-line momentum.
• Operating income improved to $10.5 million versus a loss in the prior-year quarter, indicating better core operating performance.
• Gross profit rose to $71.8 million, with gross margin also improving materially year over year.
• Operating cash flow was positive at $4.4 million in Q4 2026, even though earnings were negative.
• The company generated positive net cash from operating activities in several recent quarters, suggesting the business can still produce cash.
• Shares outstanding have been trending higher over the past year, which can dilute per-share results even when operations improve.
• Cash and equivalents were $40.4 million at the end of Q3 2026, providing some near-term liquidity.
• Q4 2026 net income was a loss of $7.3 million, and pre-tax income was also negative.
• Interest expense remains very high relative to operating profit, which keeps earnings under pressure.
• Long-term debt remains elevated at $350.3 million, and total liabilities of $663.6 million far exceed equity of $194.6 million.

Looking at the broader trend, the company has clearly improved from the difficult period in 2024. In Q4 2024, Digital Turbine reported a massive operating loss and net loss, and the business has since stabilized considerably. Revenue has generally been lower than the peak levels seen in 2023, but operating efficiency has improved, and the latest quarter suggests management has made progress on cost control.

The balance sheet is still the key risk. At Q3 2026, current liabilities were $288.1 million and long-term debt was $350.3 million, while total equity was just $194.6 million. That means the company is still highly leveraged, and even modest earnings volatility can quickly wipe out net income after interest expense.

Bottom line: Digital Turbine appears to be in a turnaround phase. The business is not where it was in the weaker quarters of 2024, and the latest results show real operating improvement. But until interest expense comes down and leverage improves, APPS remains a financially risky story rather than a clean profitability play.