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Digital Turbine, Inc. (APPS)·Q1 2026 Earnings Summary

Executive Summary

  • Revenue beat and EPS miss versus consensus: Q1 FY26 revenue was $130.9M vs S&P Global consensus of ~$121.9M, while Primary EPS came in at $0.05 vs ~$0.08; SPGI-standard EBITDA was below consensus, highlighting differences versus company-reported adjusted EBITDA *.
  • Management raised FY26 guidance to revenue of $525–$535M and adjusted EBITDA of $90–$95M, citing stronger Ignite demand, improved device sales, and execution; later in September, guidance was further raised to $530–$535M and $92–$95M alongside a four-year debt refinancing .
  • On Device Solutions (ODS) drove growth (up 18% YoY to $95.4M), while App Growth Platform (AGP) declined 5% YoY but improved 9% sequentially; non-GAAP adjusted EBITDA rose 73% YoY to $25.1M .
  • Catalysts: momentum in alternative app distribution/regulatory tailwinds (Open App Markets Act reintroduction; coalition membership with Meta/Spotify), brand advertiser diversification (+~50% QoQ campaigns), and improved RPDs and device volumes .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and profitability momentum: “Double-digit revenue growth year-over-year and a corresponding 73% increase in EBITDA… enable us to confidently raise our outlook for the fiscal year” (CEO) .
  • ODS segment strength and monetization: ODS revenue up ~18% YoY to $95.4M; RPDs up 30%+ YoY in both U.S. and international markets, supported by improved advertiser demand and pricing .
  • Brand advertiser diversification: “The number of campaigns contributing to brand revenue increased by nearly 50% quarter over quarter,” increasing demand breadth across verticals (CEO) .

What Went Wrong

  • Continued GAAP losses and interest expense: GAAP net loss was $14.1M (EPS -$0.13), pressured by net interest expense ($9.954M) .
  • AGP still below prior-year levels: AGP revenue of $36.3M fell 5% YoY; management emphasized ongoing performance advertising improvements (first-party data/AI) as key to re-accelerating growth .
  • EBITDA vs SPGI consensus and standardized lens: SPGI-standard EBITDA ($18.9M) was below consensus ($21.1M), reflecting differences from company non-GAAP adjusted EBITDA ($25.1M) and highlighting that Street may anchor on standardized definitions* .

Financial Results

Consolidated Performance (Oldest → Newest)

MetricQ3 FY25 (Dec 31, 2024)Q4 FY25 (Mar 31, 2025)Q1 FY26 (Jun 30, 2025)
Revenue ($USD Millions)$134.6 $119.2 $130.9
GAAP EPS ($USD)($0.22) ($0.18) ($0.13)
Non-GAAP Adjusted EPS ($USD)$0.13 $0.10 $0.05
Non-GAAP Adjusted EBITDA ($USD Millions)$22.0 $20.5 $25.1
Non-GAAP Gross Margin (%)44% 48% 47%

Segment Revenues ($USD Millions)

SegmentQ3 FY25Q4 FY25Q1 FY26
On Device Solutions$91.7 $86.8 $95.4
App Growth Platform$44.2 $33.3 $36.3
Eliminations($1.34) ($0.93) ($0.81)

KPIs and Cash Metrics

KPIQ3 FY25Q4 FY25Q1 FY26
RPD YoY (U.S.)Record levels; specifics not disclosed >40% YoY 30%+ YoY
RPD YoY (International)Record levels; specifics not disclosed >100% YoY 30%+ YoY
Brand campaigns QoQn/an/a+~50% QoQ
Cash from Operations ($M)$10.44 $11.51 $8.79
Non-GAAP Free Cash Flow ($M)$6.41 $5.47 $1.37

Q1 FY26 Actuals vs S&P Global Consensus

MetricConsensusActual
Revenue ($USD Millions)$121.94*$130.93
EPS (Primary) ($USD)$0.08*$0.05
EBITDA ($USD Millions, SPGI standard)$21.06*$18.87*

Values with asterisk (*) retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY26$515–$525M (June 16) $525–$535M (Aug 5) Raised
Adjusted EBITDA (Non-GAAP)FY26$85–$90M (June 16) $90–$95M (Aug 5) Raised
RevenueFY26 (Sep 2 update)$525–$535M (Aug 5) $530–$535M (Sep 2) Raised
Adjusted EBITDA (Non-GAAP)FY26 (Sep 2 update)$90–$95M (Aug 5) $92–$95M (Sep 2) Raised

Earnings Call Themes & Trends

TopicQ3 FY25 (Dec)Q4 FY25 (Mar)Q1 FY26 (Jun)Trend
First-party data & AI/MLEmphasis on SDK bidding shift; building moat with brands; diversify non-gaming supply Scaling first-party data; ingesting >1,000 dimensions and >1,500 events; conversion gains Branding IgniteGraph and DTiQ; smarter targeting and ROAS for advertisers Strengthening and productized
Alternative app distribution & regulationEpic partnership; Verizon distribution; DMA watchpoint T-Mobile live; alternative app strategy scaling OAMA reintroduced; joined Coalition for a Competitive Mobile Experience Regulatory tailwinds building
Device volumes & footprintU.S. softness; International ODS +100% YoY; expanding OEM/operator footprint T-Mobile U.S. live; expanding with Motorola/Nokia/Xiaomi; more devices Modestly improved device sales; improved volumes in NA/int’l Sequential improvement
Brand advertiser demandDouble-digit sequential brand growth; marquee brands (P&G, Coke, Disney, Starbucks) SDK bidding unlocks brand spend; DTX non-gaming revenue nearly doubled YoY Campaigns +~50% QoQ; diversified across retail/CPG/finance/entertainment/telco Broadening and accelerating
Regional trendsInt’l ODS strength; U.S. volumes soft Global expansion with EU/Asia/LatAm partners AGP growth in Asia/Europe; ODS growth in EU America; U.S. double-digit ODS growth Global mix improving

Management Commentary

  • “Double-digit revenue growth year-over-year and a corresponding 73% increase in EBITDA during the quarter enable us to confidently raise our outlook for the fiscal year… leverage our unique first-party datasets to drive greater performance across our AI/ML platform” — Bill Stone, CEO .
  • “Our on device solution business generated $95M… up ~18%… advertiser demand resulted in 30%+ YoY growth in RPD in both the U.S. and international markets” — Bill Stone .
  • “Adjusted EBITDA for our fiscal first quarter was $25.1M, up 73% YoY… Non-GAAP gross margin… 47%… cash operating expenses… $36.8M, down 8% YoY” — Stephen Lasher, CFO .
  • “Regulatory momentum is accelerating… reintroduction of the Open App Markets Act… we’ve joined forces… in the Coalition for a Competitive Mobile Experience” — Bill Stone .

Q&A Highlights

  • International ODS strength driven by better device volumes and RPD, with improved execution and cross-geo demand-routing; management expects continued performance .
  • Brand revenue durability supported by diversified campaigns (+~50% QoQ) across verticals; focus on scaling relationships and outcomes .
  • Alternative app stores: Epic ruling bolsters alternatives; strong publisher interest; distribution traction with U.S. operators and Latin America/EU partners .
  • AGP path back to YoY growth hinges on performance side and first-party data/AI integration into the DSP; timelines to be communicated as progress continues .
  • Geographic revenue mix: AGP growth in Asia/Europe; ODS growth in EU America and double-digit growth in U.S.; majority of billing in USD .

Estimates Context

  • Revenue beat: Actual $130.93M vs S&P Global consensus $121.94M*; reflects stronger advertiser demand, improved device volumes, and RPD gains in ODS *.
  • EPS miss: Primary EPS $0.05 vs ~$0.08*; management highlighted that AGP remains in transition and interest expense burden persisted ($9.954M) *.
  • EBITDA below SPGI consensus: SPGI-standard EBITDA ~$18.87M vs ~$21.06M*; company-reported non-GAAP adjusted EBITDA was $25.1M, indicating definitional differences that investors should reconcile *.

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • ODS is the growth engine: 18% YoY revenue growth and stronger RPDs/pricing underpin a revenue beat and guidance raise; watch device volumes and additional OEM/operator launches (e.g., T-Mobile) as catalysts .
  • AGP stabilization underway: 9% sequential improvement, though still -5% YoY; execution on performance advertising (first-party data + AI/ML integration) is critical for restoring YoY growth .
  • Regulatory tailwinds and coalition alignment bolster alternative distribution narrative and potential multi-year monetization via SingleTap, DTiQ, IgniteGraph .
  • Profitability trajectory improving: Non-GAAP gross margin 47%, adjusted EBITDA +73% YoY; continued OpEx discipline and mix should support margin expansion .
  • Balance sheet and runway: Debt refinancing (Sep 2) extends maturities and supports execution; guidance raised again post-refi, signaling confidence in outlook .
  • Estimate revisions likely: Revenue beat vs Street and raised FY26 guide may drive upward revisions, while EPS/EBITDA discrepancies vs SPGI standardized definitions warrant reconciliation in models *.
  • Near-term focus: Monitor brand demand breadth, RPD trends, device volumes, and regulatory developments (OAMA, DMA) as primary stock narrative drivers .