Digital Turbine (APPS) 7 Aug 24 2025 Q1 Earnings call transcript
Digital Turbine, a leading provider of mobile advertising and app distribution solutions, recently held its fiscal 2025 first quarter earnings call, highlighting its return to growth and strategic initiatives. The company reported sequential growth in revenue, EBITDA, and non-GAAP earnings per share, marking a positive step towards regaining momentum.
Financial Highlights
For the first quarter, Digital Turbine reported $118 million in revenue, $15 million in EBITDA, and $0.07 in non-GAAP earnings per share. These figures represent a return to growth after the March quarter, which was identified as a trough for the business. The company's revenue growth was driven by better execution on controllables, particularly in the ODS and AGP business segments. Notably, the company's revenue per device (RPD) improved by 15% despite continued softness in U.S. device sales. This trend is expected to reverse as the company anticipates an upgrade cycle driven by new AI features on OEM hardware and the anniversary of the migration from 2- to 3-year leases in the U.S. market.
Operational Updates and Strategic Focus
Digital Turbine's operational progress is centered around three key areas: growing its device footprint, launching and scaling new products, and expanding media relationships. The company has been expanding its global device relationships through partners like Motorola, Nokia, One store in Korea, and Xiaomi. It also recently secured a partnership with a large Brazilian operator, marking a significant win for the company. This focus on expanding its device footprint, along with the launch and scaling of new products, is expected to be the primary driver for the company's return to growth.
The company's AGP business grew by 11% sequentially, with solid eCPM improvements and the ability to drive more first-party data traffic over its own network. Digital Turbine's strategy to leverage its unique assets, including its AdColony and fiber exchanges, has been a differentiator in the market. The company's brand business has momentum, with double-digit sequential growth and close to 40% of revenues on its DT Exchange coming from SDK Bidding, a requirement for many brands and agencies. This growth is expected to continue as the company scales its advertising offerings and partnerships with third-party DSPs.
Future Outlook and Strategic Initiatives
Looking ahead, Digital Turbine's priority for fiscal year 2025 is to continue demonstrating sequential growth with its three key growth drivers: expanding its device footprint, launching and scaling new products, and expanding media relationships. The company also highlighted the European Union's Digital Markets Act (DMA) as a potential tailwind, especially for its alternative app distribution strategy. The DMA's enforcement on Apple is expected to create opportunities for Digital Turbine, particularly with EU telcos and other mega-cap tech players.
In conclusion, Digital Turbine's fiscal 2025 first quarter earnings call underscored the company's return to growth and strategic focus on expanding its device footprint, launching new products, and expanding media relationships. The company's operational progress and strategic initiatives, coupled with the anticipated impact of regulatory changes like the EU's DMA, position Digital Turbine for continued growth and long-term value creation for its shareholders.