Digital Turbine, Inc. Q4 FY2025 earnings call

• Business has returned to year-over-year growth on top and bottom lines, with EBITDA up 66% year-over-year. Current June is trending positively with improved performance sequentially and year-over-year. Extended credit facility with bank group.
• Fiscal '25 results: $119.1 million revenue, $20.5 million EBITDA, $0.10 non-GAAP earnings per share. Investments in Ignite, first-party data into AI machine learning platform, new bidding capabilities, and back-end corporate systems are driving improved performance.
• ODS business: Double-digit top-line growth, RPD up over 40% in U.S. and over 100% internationally due to strong advertiser demand and improved monetization.
• AGP business: $30 million revenue, focus on brands leveraging first-party data and improving performance advertising via DSP.
• DTX business: Return to growth, expanded AGP supply to non-gaming applications.
• Future focus: Building on growth, increasing efficiency, expanding device footprint (e.g., T-Mobile live in U.S. on Ignite, international growth), expanding product portfolio (new Ignite version, first-party data leveraging, alternative app efforts), and broader media relationships (e.g., Pinterest expansion, new AI model partnerships).

For the ODS segment, in the quarter, there was double-digit year-on-year top-line growth. Devices on legacy U.S. partners declined year-over-year but were offset by new device launches outside the U.S. Revenue per device (RPD) was a highlight: up more than 40% year-over-year in the U.S. and over 100% internationally year-over-year. For the AGP segment, it generated $30 million in revenue in the quarter. A focus area is investing in brands leveraging first-party data to reach existing potential customers over the global network, and improving performance advertising by leveraging first-party data and AI machine learning platform on the demand-side platform (DSP). The DTX business, which is the consolidated exchange, has returned to growth, with DTX revenues on non-gaming applications nearly doubling over the past year.

• Fiscal year 2026 revenue expected to be in the range of $515 million to $525 million.
• Projected non-GAAP adjusted EBITDA for fiscal year 2026 is between $85 million and $95 million, driven by operational efficiencies and value delivery to shareholders.

• Regulatory and legal activity against Google and Apple has accelerated globally, including in EU, Brazil, Japan, India, Turkey, etc.
• Commoditization risk in the ad tech gaming space for companies without a strong mediation footprint, as third-party performance DSPs are vertically integrating their demand connected to their own supply.

Q: Bill, can you talk about opportunities for the significant increase in international RPD? Are they with new device makers, new carriers, or both?

A: Yes, on international RPD, it's due to ability to take international demand, improved operational execution to match market needs, and increasing distribution footprint to go after partners like Motorola, Telefonica, etc.

Q: Bill, have you seen an increase in activity from app publishers interested in Single Tap or app install technology, and number of new licensees signed last quarter?

A: Regulatory environment is favorable, awareness is building. People want level playing field. We have partners like Epic, Pinterest, and continue to see interest in distributing via Single Tap licensing capabilities, but specific number of new licensees signed last quarter not detailed.

Q: Steve, when looking at OpEx going forward, do you expect expense level to change quite a bit or be held relatively flat?

A: It would be relatively flat going forward, with possible increases as business grows, but mostly flat.