Digital Turbine (APPS -4.39%), a software company specializing in mobile app distribution and monetization, reported its latest earnings for the quarter ended June 30, 2025. The results, announced on August 5, 2025, signaled a return to growth as GAAP revenue increased to $130.9 million, up 11% year over year. The company also delivered a sharp rise in non-GAAP adjusted EBITDA and narrowed its GAAP net loss compared to the prior year period. Although non-GAAP earnings per share (EPS) dipped from $0.07 in the prior-year quarter to $0.05, both revenue and profitability showed improvement in core business areas. The period marked meaningful operational progress, particularly in the ODS segment. With no analyst estimates available for comparison, management’s raised forecasts for the rest of fiscal 2026 are the key takeaway this quarter.
| Metric | Q1 FY26(ended June 30, 2025) | Q1 FY25(ended June 30, 2024) | Y/Y Change |
|---|---|---|---|
| Revenue (GAAP) | $130.9 million | $118.0 million | 10.9 % |
| EPS (Non-GAAP) | $0.05 | $0.07 | (28.6 %) |
| Net Income (GAAP) | $(14.1) million | $(25.2) million | N/A |
| Adjusted EBITDA (Non-GAAP) | $25.1 million | $14.5 million | 73.1 % |
| Free Cash Flow (Non-GAAP) | $1.4 million | $(5.7) million | N/A |
What Digital Turbine Does and Its Core Business Drivers
Digital Turbine provides technology that simplifies how apps are delivered, discovered, and monetized on smartphones. Its main customers are mobile carriers, device manufacturers, app developers, and advertisers. The company has built a global platform that installs and promotes mobile apps directly on devices, leveraging a massive network—over two billion mobile devices worldwide use its software.
The business relies on two segments: On Device Solutions (ODS), which supplies carriers and manufacturers with solutions to deliver apps and services straight to end users, and App Growth Platform (AGP), which helps app developers and brands reach potential users through targeted advertising and analytics. To succeed, Digital Turbine must maintain strong partnerships with wireless carriers and device makers, continually advance its technology to outpace competitors, and adapt its business to new privacy and regulatory standards.
Quarter in Review: Growth Engines and Headwinds
GAAP revenue grew 11% compared to the prior year. The ODS segment was the main engine, increasing GAAP revenue before eliminations by 18% to $95.4 million. Key to this improvement was stronger performance of the Ignite platform, an app delivery tool pre-installed on devices, and modestly improved device sales. On Device Solutions now generates the majority of the company’s revenue.
AGP, which includes Digital Turbine’s app discovery and advertising platforms, saw revenue decrease by 5% to $36.3 million compared to the prior-year period. The segment remains pressured by increased competition and market changes. However, management pointed to new opportunities involving non-gaming brands and international expansion, as well as increased use of first-party data and artificial intelligence to enhance results. Management views AGP as crucial for the company’s diversification and future development.
Profitability metrics reflected improved operational leverage. Gross profit rose alongside margins, with non-GAAP gross margin reaching 47%, up from 46% in the prior-year quarter. GAAP net loss narrowed to $14.1 million, less than the $25.2 million loss in the prior-year period, driven primarily by top-line gains. Improved non-GAAP free cash flow—$1.4 million versus a negative $5.7 million in the prior-year quarter—underlined better cash management, though heavy capital expenditures and elevated debt continued to weigh on the balance sheet.
Noteworthy this quarter was a modest decrease in cash to $34.1 million, down from $40.1 million at the end of the previous quarter, and a persistently high debt level at $400.5 million. The company’s reliance on a few key carrier partners remained unchanged, maintaining a degree of revenue risk. There were no dividends declared or changes to dividend policy—Digital Turbine does not currently pay a dividend.
Looking Forward: Management Guidance and Investor Focus
Management has raised its financial outlook for fiscal 2026. It now expects revenue between $525 million and $535 million for the year, above prior guidance. The non-GAAP adjusted EBITDA range is now $90 million to $95 million for fiscal 2026, up from earlier forecasts. These revised figures reflect increased confidence in the ODS segment and improved device sales. The company did not provide a forecast for net income due to variability in stock-based compensation and other one-time items. Operating expenses are projected to remain relatively flat, according to the latest call (Q4 fiscal 2025 earnings call), suggesting additional gains in profitability could be driven by top-line growth.
Looking ahead, investors should monitor further revenue progress in ODS, as well as any rebound in AGP segment metrics. The competitive landscape—dominated by larger platforms and alternative app distribution models—will remain a key variable. Management emphasizes the importance of expanding partnerships, exploring alternative app distribution channels, and leveraging new technology like AI and first-party analytics. Cash flow, capital expenditures, debt reduction, and customer concentration will also remain central topics in the next quarters.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
