Digital Turbine (APPS) 6 Nov 24 2025 Q2 Earnings call transcript

In the latest earnings call, Digital Turbine, a leading provider of mobile ad tech solutions, shared insights into its financial performance and strategic outlook for the future. The call, led by CEO Bill Stone, CFO Barrett Garrison, and Head of Investor Relations Brian Bartholomew, provided a comprehensive overview of the company's second-quarter results and its plans for growth and efficiency.

Performance Highlights and Future Outlook

Digital Turbine reported a revenue of $119 million for the second quarter of fiscal 2025, an improvement from the previous quarter, but still below expectations. The company's EBITDA stood at $15.3 million, showing a positive trend. Despite these encouraging figures, Digital Turbine acknowledged that its progress has been below expectations, with challenges in legacy businesses, particularly in the U.S., offsetting the growth in strategic areas.

Looking ahead, the company expressed confidence in its ability to return to growth and accelerate it beyond the current fiscal year. Strategic initiatives, such as the expansion of its device footprint, the diversification of its product portfolio, and the focus on alternative app distribution, are seen as key growth drivers. The company also emphasized the importance of efficiency gains through automation and realignment of people, processes, and systems.

Strategic Focus Areas

One of the most notable aspects of the call was the company's emphasis on expanding its device footprint. Digital Turbine highlighted its recent partnership with a Tier 1 U.S. operator as a significant step towards this goal. The company is also investing in alternative app distribution strategies, aiming to unlock more device supply and attract innovative app providers. These efforts are expected to drive growth in both user acquisition and in-app advertising.

In terms of strategic focus areas, Digital Turbine's AGP business, which leverages first-party data to reach brands over its global network, has shown promising growth. The company's ability to attract major brands like P&G, Coke, Disney, and Starbucks underscores its differentiated position in the market. However, the company acknowledged that it needs to improve performance advertising on its exchange to fully capitalize on this growth opportunity.

Challenges and Strategic Priorities

Despite the positive outlook, Digital Turbine faced some challenges in the quarter, particularly in the ODS segment. The company acknowledged that softer U.S. device volumes and the underperformance of its Exchange business have impacted its performance. In response, Digital Turbine is undertaking a transformation program aimed at achieving more than $25 million in cost reductions across the business. This program includes streamlining processes, reducing workforce, and leveraging system integrations and platform migrations.

Investor Questions and Management's Response

During the Q&A session, investors raised questions about the declining performance in the phone activation side of the business and the potential loss of share in the performance advertising market. Management responded by acknowledging the challenges in the U.S. market, particularly in device sales and software updates, and emphasized the importance of improving performance advertising on its exchange.

Conclusion

Digital Turbine's second-quarter earnings call provided a mixed picture of the company's performance and outlook. While the company showed positive signs of growth in strategic areas, it acknowledged challenges in legacy businesses and the need for significant cost reductions. The company's focus on expanding its device footprint, diversifying its product portfolio, and investing in alternative app distribution strategies is a positive sign for the future. However, the company's ability to execute on these initiatives and improve performance in areas like the Exchange business will be key to its success. As Digital Turbine moves forward, it will need to balance its focus on growth with the need for operational efficiency and cost reductions.