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DT

Digital Turbine, Inc. (APPS)·Q2 2026 Earnings Summary

Executive Summary

  • APPS delivered a strong quarter: revenue $140.4M (+18% YoY), Non-GAAP adjusted EBITDA $27.2M (+78% YoY), and Non-GAAP adjusted EPS $0.15; GAAP EPS was ($0.20) due to financing-related items tied to the September debt refinance .
  • Results materially beat Wall Street consensus: revenue beat by ~10.5% and EPS beat by $0.10; estimate breadth was limited (Revenue: 1 estimate; EPS: 2)*.
  • Guidance raised again for FY26 to revenue $540–$550M and Adjusted EBITDA $100–$105M, up from prior ranges, reflecting improved visibility and momentum .
  • Catalysts: accelerating ODS international strength (80% YoY growth), brand direct shift (47% of brand revenue), SingleTap adoption (+45% seq), and AI/ML (DTIQ) leveraging first‑party data .

What Went Well and What Went Wrong

  • What Went Well

    • Segment growth broad‑based: ODS $96.5M (+17% YoY) and AGP $44.7M (+20% YoY) returned to growth, supported by higher advertiser demand and increased supply .
    • International momentum: ODS international revenue grew >80% YoY; first time international exceeded 25% of ODS revenue. CEO: “Our September quarter showcased accelerating business momentum… [we] delivered top- and bottom-line results that exceeded expectations.”
    • Product adoption and AI: SingleTap installs +45% sequentially; direct brand relationships rose to 47% of brand revenue; DTIQ AI/ML platform scaling to improve ROAS .

  • What Went Wrong

    • GAAP profitability remained negative: GAAP net loss ($21.4M), EPS ($0.20), impacted by interest expense, amortization of debt costs, unrealized derivative loss, and loss on extinguishment of debt tied to the refinancing .
    • Financing burden: total interest and other expense rose to ($26.5M) in the quarter vs ($10.0M) prior year, reflecting higher interest and refinancing charges .
    • Estimate depth thin: consensus breadth was limited (Revenue: 1 estimate; EPS: 2), increasing potential volatility around beats/misses; investors should treat revisions cautiously*.

Financial Results

MetricQ4 2025 (oldest)Q1 2026Q2 2026 (newest)
Revenue ($USD Millions)$119.2 $130.9 $140.4
GAAP Net Income ($USD Millions)($18.8) ($14.1) ($21.4)
GAAP EPS ($USD)($0.18) ($0.13) ($0.20)
Non-GAAP Adjusted EPS ($USD)$0.10 $0.05 $0.15
Non-GAAP Adjusted EBITDA ($USD Millions)$20.462 $25.138 $27.192
Non-GAAP Gross Margin (%)48% 47% 47%

Segment revenue breakdown (before intercompany eliminations):

Segment Revenue ($USD Millions)Q4 2025 (oldest)Q1 2026Q2 2026 (newest)
On Device Solutions (ODS)$86.832 $95.448 $96.464
App Growth Platform (AGP)$33.250 $36.292 $44.685
Elimination($0.930) ($0.814) ($0.772)
Consolidated$119.152 $130.926 $140.377

Selected KPIs and operating drivers:

KPIQ4 2025Q1 2026Q2 2026
ODS International Revenue Growth YoY>100% U.S. RPD and >40% U.S. RPD; >100% international RPD commentary (ODS mix) ODS international up ~70% YoY; strong devices and RPD ODS international revenue +80% YoY
Revenue per Device (RPD) YoYU.S. >40%; international >100% “30+%” YoY growth in U.S. and international “Over 30%” YoY growth in U.S. and international
AGP Impressions Growth YoYn/an/a~+30% impressions YoY
SingleTap Installs (seq)n/an/a+45% sequential
Brand Direct Share of Brand Revenuen/an/a47% (up from 22% prior quarter)

Versus Wall Street consensus (Q2 2026):

MetricConsensusActualSurprise
Revenue ($USD Millions)$127.0$140.377+$13.377 / +10.5%*
Primary EPS ($USD)$0.05$0.15+$0.10*
Estimates CountRevenue: 1; EPS: 2——*
Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2026$515–$525 (Q4 FY25) $540–$550 (Q2 FY26) Raised
Adjusted EBITDA ($USD Millions)FY 2026$85–$90 (Q4 FY25) $100–$105 (Q2 FY26) Raised
Revenue ($USD Millions)FY 2026$525–$535 (Q1 FY26) $540–$550 (Q2 FY26) Raised
Adjusted EBITDA ($USD Millions)FY 2026$90–$95 (Q1 FY26) $100–$105 (Q2 FY26) Raised
Revenue ($USD Millions)FY 2026$530–$535 (Sep 2 update) $540–$550 (Q2 FY26) Raised
Adjusted EBITDA ($USD Millions)FY 2026$92–$95 (Sep 2 update) $100–$105 (Q2 FY26) Raised

Earnings Call Themes & Trends

TopicQ4 2025 (oldest)Q1 2026Q2 2026 (newest)Trend
AI/technology initiativesData lake and AI/ML models; >1,000 dimensions and 1,500 events; conversion rates improving Branded DT Ignite Graph and DTIQ; scaling AI/ML Continued investment in DTIQ, unlocking better ROAS, operational automation Strengthening
Alternative apps/regulatoryVerizon alt store live; partners include Epic, King; global regulatory momentum Coalition for a Competitive Mobile Experience; OAMA reintroduced Post Supreme Court ruling vs Google Play; more democratization; DT enables distribution/billing Accelerating tailwind
Product performance (SingleTap)Licensing expansions (e.g., Pinterest) Momentum improving SingleTap installs +45% seq; dual downloads highlighted Improving
ODS international/regionalU.S. RPD >40%; international RPD >100% ODS international +70% YoY; devices up sequentially ODS international revenue +80% YoY; >25% of ODS revenue now international Acceleration
Brand/AGPNon-gaming DTX revenues nearly doubled YoY AGP stabilization; +9% seq; focus on performance DSP AGP +20% YoY; direct brands 47% of brand revenue; +40% seq brand business Recovery
Macro/device cycleHeadwind improving; T‑Mobile live; EU/LatAm partners Device volumes modestly improving; U.S. upgrades turning Global devices up YoY; pricing/fill rates improving Tailwind emerging
Competitive landscapeSSP commoditization (gaming); DT focuses on first‑party data Building performance DSP linked to first‑party data Less competition in device side (major player exited); AGP nuanced landscape Mixed but favorable

Management Commentary

  • CEO Bill Stone: “Our September quarter showcased accelerating business momentum… deliver[ing] top- and bottom-line results that exceeded expectations.”
  • CEO on AI/ML: “We brand these unique advantages as the DT Ignite Graph… our AI machine learning platform as DTIQ… major growth driver… SingleTap technology grew 45% sequentially.”
  • CFO Steve Lasher: “Adjusted EBITDA… $27.2M, up 78% YoY. EBITDA margin of 19.4% expanded for the sixth consecutive quarter… Free cash flow… $7M… Non-GAAP gross margin… 47%.”
  • CEO on international: “International ODS revenue reached a record high… surged more than 80% year-over-year… first time… international revenues exceeded 25% of our total ODS revenues.”

Q&A Highlights

  • Brand business and ROI: Direct brand relationships now ~half of brand revenue; momentum into holiday season; +40% sequential brand business cited .
  • SingleTap adoption: ~50% sequential increase in SingleTap installs; strong publisher interest .
  • International growth depth: Solid double‑digit RPD growth and devices drove ~80% YoY international ODS revenue; >25% of ODS revenue now international .
  • AI/ML execution: DTIQ to drive better outcomes and operating leverage; >1,000 signals across 500M Ignite devices and 2–3B SDK devices informing models .
  • Regulatory tailwinds: Supreme Court ruling adverse to Google Play seen as democratizing app distribution; DT enabling alternative stores and direct billing .
  • Competitive dynamics: Less competition on device side after a major player exited; AGP competitive landscape nuanced .

Estimates Context

  • APPS beat consensus on both revenue and EPS in Q2 FY26; breadth of estimates was limited (Revenue: 1; EPS: 2), so post‑print revisions may be more impactful than usual.
  • Table above summarizes the beat; consider potential upward revisions to FY26 EBITDA given raised guidance and expanding margin trajectory*.
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Strong beat and raised FY26 guidance signal sustained momentum; expect near‑term positive estimate revisions and potential multiple support on improving EBITDA margin trajectory .
  • International ODS is becoming a core growth engine (80% YoY), diversifying revenue beyond U.S. carriers; watch continued partner additions and device volumes .
  • AGP’s return to growth (+20% YoY) plus brand direct shift (47%) indicates improving demand quality; non‑gaming supply diversification reduces legacy gaming dependency .
  • AI/ML (DTIQ) and first‑party data (DT Ignite Graph) are differentiators for ROAS and monetization; SingleTap adoption (+45% seq) enhances publisher distribution .
  • Balance sheet de‑risked via $430M term loan refinancing; watch interest expense trajectory and derivative/warrant impacts on GAAP earnings .
  • Near‑term trading: narrative tailwinds (beat/raise, AI, alt‑apps regulatory momentum) are supportive; monitor sector ad pricing/fill rates and holiday spend .
  • Medium‑term thesis: leverage first‑party data + AI across ODS/AGP; expand international footprint and alt‑apps distribution; execute on margin expansion with disciplined OpEx .