Executive Summary

Fiscal Q3 2025 delivered sequential acceleration: revenue $134.6M, non-GAAP adjusted EBITDA $22.0M, non-GAAP EPS $0.13, and positive non-GAAP free cash flow $6.4M .
Year-over-year, revenue declined 6% while adjusted EBITDA fell to $22.0M from $25.4M; GAAP net loss was ($23.1M), or ($0.22) per share .
Management raised FY25 guidance to revenue $485–$490M and non-GAAP adjusted EBITDA $69–$71M, citing improved execution, cost transformation, and brand demand; this is above the Q2 guide of $475–$485M and $65–$70M and reflects internal outperformance .
Operational catalysts: record revenue-per-device within On Device Solutions (ODS), international ODS revenue up sharply, brand spending momentum in App Growth Platform (AGP), and ongoing shift from waterfall to SDK bidding; watch DMA enforcement and alternative app ecosystem ramp with partners like ONE Store, Epic, Microsoft, Pinterest and U.S. operators including Verizon and T-Mobile .
Governance update: CFO transition to Stephen Lasher with prior Vonage/IBM experience; outgoing CFO Barrett Garrison to consult through May 31, 2025, reinforcing continuity amid transformation execution .

What Went Well and What Went Wrong

What Went Well

“Our financial results exceeded our expectations… transformational profit-optimization measures driving improved operating performance and free cash flow” – Bill Stone; Q3 delivered $134.6M revenue, $22.0M adjusted EBITDA, $0.13 non-GAAP EPS, and $6.4M non-GAAP FCF .
ODS strength: revenue reached $91.7M (+11% QoQ) with “all-time records for revenue per device” in U.S. and internationally; international ODS revenues up 100% YoY .
AGP brand momentum: Q3 AGP revenue $44.2M with double-digit sequential growth and accelerating brand spend; PMPs leveraging first-party data across a diversified non-gaming supply footprint .

What Went Wrong

U.S. device volume softness continued, partially offset by higher RPD; management expects stabilization with new flagship launches and AI features, but volumes remain a headwind .
AGP legacy performance DSP declines during the transition from waterfall to SDK bidding; SDK bidding is now >70% of impressions vs ~5% a year ago, but migration impacts near-term mix .
Gross margin down modestly QoQ (44% vs 45%) on ODS product mix; GAAP net loss widened vs prior year ($23.1M vs $14.1M), with interest expense $8.446M and long-term debt ~$408.2M .

Financial Results

Quarterly Performance (Fiscal 2025)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$118.0	$118.7	$134.6
GAAP EPS ($)	($0.25)	($0.24)	($0.22)
Non-GAAP Adjusted EPS ($)	$0.07	$0.05	$0.13
Non-GAAP Adjusted EBITDA ($USD Millions)	$14.5	$15.3	$22.0
Non-GAAP Gross Margin (%)	46%	45%	44%
Non-GAAP Free Cash Flow ($USD Millions)	($5.7)	($15.7)	$6.4

Year-over-Year Snapshot (Q3)

Metric	Q3 2024	Q3 2025
Revenue ($USD Millions)	$142.6	$134.6
GAAP EPS ($)	($0.14)	($0.22)
Non-GAAP Adjusted EPS ($)	$0.15	$0.13
Non-GAAP Adjusted EBITDA ($USD Millions)	$25.4	$22.0
Non-GAAP Gross Margin (%)	45%	44%
Non-GAAP Free Cash Flow ($USD Millions)	$14.3	$6.4

Segment Revenues

Segment ($USD Millions)	Q1 2025	Q2 2025	Q3 2025
On Device Solutions (ODS)	$80.7	$82.4	$91.7
App Growth Platform (AGP)	$38.4	$37.3	$44.2

Balance Sheet/Other KPIs (Q3)

KPI	Q3 2025
Cash and Cash Equivalents ($USD Millions)	$35.3
Long-Term Debt ($USD Millions)	$408.2
Accounts Receivable, net ($USD Millions)	$199.5

Note: The Q3 press release cites a 13% YoY decline in adjusted EBITDA, while the 8-K cites 14%; both refer to the same absolute values ($25.4M → $22.0M), indicating rounding variance .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$475M–$485M (Q2 guide, Nov 6, 2024)	$485M–$490M (Q3 guide, Feb 5, 2025)	Raised
Non-GAAP Adjusted EBITDA	FY 2025	$65M–$70M (Q2 guide)	$69M–$71M (Q3 guide)	Raised
Revenue	FY 2025	$540M–$560M (Q1 guide, Aug 7, 2024)	$475M–$485M (Q2 guide)	Lowered (in Q2)
Non-GAAP Adjusted EBITDA	FY 2025	$85M–$95M (Q1 guide)	$65M–$70M (Q2 guide)	Lowered (in Q2)

FY25 actuals subsequently reported at FY year-end were revenue $490.5M and non-GAAP adjusted EBITDA $72.3M, exceeding the raised Q3 guidance ranges .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Brand advertising momentum	Q1: Sequential AGP growth; stronger demand for Brand and Exchange offerings . Q2: Continued sequential growth; transformation program launched .	Double-digit sequential AGP growth; accelerating brand spend; PMPs leveraging first-party data .	Improving
ODS revenue-per-device (RPD) and device mix	Q1: ODS +3% QoQ on international devices and higher RPD . Q2: ODS $82.4M; ongoing device softness .	ODS $91.7M; record RPD U.S. & international; international ODS +100% YoY .	Improving, offsetting U.S. volumes
SDK bidding vs waterfall	Q1/Q2: Not primary focus in releases .	SDK bidding now >70% of impressions vs ~5% a year ago; waterfall <30% traffic; offsets legacy DSP declines .	Strategic pivot progressing
Alternative app ecosystem and regulatory (DMA)	Q2: Acquisition of ONE Store International; alternative app model highlighted .	Scaling alternative distribution with ONE Store; partners include Epic, Microsoft, Pinterest; watch EU DMA compliance as watershed catalyst .	Expanding opportunity
Cost transformation and automation	Q2: $25M+ annual savings targeted .	Actions totaling >$25M annualized savings; billing/invoicing automation; expect further efficiencies .	Ahead of plan
Regional/device partnerships	Q1: International devices added and higher RPD .	Expanding global device relationships: Motorola, Nokia, ONE store, Xiaomi, TIM Brazil; added T-Mobile in U.S. .	Broadening supply base

Management Commentary

Bill Stone: “We did $135 million in revenue, $22 million in adjusted EBITDA and $0.13 in non-GAAP EPS… improved advertising demand… transformation efforts are showing early results… especially for our on-device international business and our brand strategy” .
On ODS: “We set all-time records for revenue per device… on-device International revenues were up 100% year-over-year” .
On AGP transition: “SDK bidding is now over 70% of total impressions compared to only 5% a year ago… diversifying away from waterfall bidding… nongaming applications nearly doubled over the past year” .
On alternative apps: “We’ve already distributed ONE store on many millions of devices… live on 3 operators in the U.S., including Verizon… partners include Epic, Microsoft and Pinterest” .
CFO Barrett Garrison: “Cash operating expenses were $37.6M, down 3% sequentially and year-on-year… actions totaling more than $25M in annualized cost efficiencies… free cash flow generated in the quarter was $6.4M” .
CFO Transition: Stephen Lasher appointed CFO; terms include base salary, incentive eligibility, and equity awards; Barrett to consult through May 31, 2025 .

Q&A Highlights

Brand advertising resurgence: Management emphasized hard-earned agency/brand trust and in-app positioning versus CTV/retail media; cited names like P&G, Coke, Disney, Starbucks as emblematic of the opportunity .
Alternative app stores momentum: Epic awareness building; Microsoft/Xbox also engaged; regulatory inflection expected around EU DMA/Apple compliance potentially catalyzing broader publisher adoption in 2025 .
Outlook dynamics: For fiscal 2026 (next year), key growth drivers are devices, products, and media relationships; focus on monetizing first-party data plumbing into revenue/EBITDA .

Estimates Context

S&P Global consensus data for APPS around Q3 FY2025 was unavailable due to API limit at the time of retrieval; therefore, explicit beat/miss versus Wall Street is not provided here. Values retrieved from S&P Global would normally anchor consensus comparisons.*
Management asserted results “exceeded our expectations” and raised FY25 guidance (revenue $485–$490M; adjusted EBITDA $69–$71M), which suggests upward pressure on sell-side estimates for FY25 and potentially FY26 .

Key Takeaways for Investors

Sequential growth inflection: Q3 revenue +13% QoQ, adjusted EBITDA +44% QoQ, non-GAAP EPS up to $0.13, and a swing to positive non-GAAP free cash flow—evidence the transformation program is taking hold .
ODS momentum with record RPD and international strength (+100% YoY) provides a buffer against lingering U.S. device softness; new supply partnerships (e.g., TIM Brazil, T-Mobile) broaden footprint .
AGP is strategically pivoting to SDK bidding (>70% of impressions) and brand-led demand using first-party data and PMPs, diversifying beyond gaming publishers—expect continued mix shift benefits .
Guidance raised for FY25 and later delivered FY25 actuals at the top end on revenue and ahead on EBITDA; a favorable setup heading into fiscal 2026 guide and estimate revisions .
Watch regulatory catalysts (EU DMA, Apple compliance) and alternative app ecosystem scaling across ONE Store, Epic, Microsoft, and U.S. operators—potential multi-year growth driver .
Balance sheet considerations: interest expense ($8.446M in Q3) and long-term debt (~$408.2M) remain watchpoints; management targets revolver pay-down as EBITDA and FCF strengthen .
Execution priorities: continue cost take-out (> $25M annualized already actioned), automation in billing/invoicing, deepen brand/media relationships, and monetize first-party data assets across ODS/AGP .

Digital Turbine, Inc. (APPS)·Q3 2025 Earnings Summary