What happened
Shares of Digital Turbine (APPS 0.54%) were down 23.4% as of 12:52 p.m. ET on Wednesday after the company delivered results for its fiscal 2022 fourth quarter on Tuesday.
For the period, which ended March 31, revenue increased by 94% year over year. On a pro forma (adjusted) basis -- which is calculated as if all acquired businesses had been owned for the entirety of its fiscal 2021 and 2022 -- revenue grew 19%.
Image source: Getty Images.
So what
The company's earnings per share of $0.39 equaled the analysts' consensus estimate. However, this might have been viewed by Wall Street as a disappointment after a string of quarters in which it beat estimates.
However, the mobile media company sent a red flag to investors by restating its financial results for fiscal 2022. It made these changes to "reflect revenue net of revenue share costs for certain product offerings of the acquired AdColony and Fyber businesses."
The stock moved sharply higher during the earlier phases of the pandemic as people relied more on mobile applications and content, which played to Digital Turbine's strengths as a content discovery and media platform for mobile operators. But over the last 12 months, the stock is down by 61%, underperforming the Nasdaq Composite's drop of 11.5%.
APPS Total Return Level data by YCharts
While management believes its reporting changes should help investors to better understand Digital Turbine's business, these types of maneuvers also engender uncertainty among investors. And uncertainty tends to put downward pressure on stock prices.
Now what
A portion of the blame for the stock's plunge Wednesday can be placed on the weak revenue outlook management offered for the current quarter. Digital Turbine expects revenue of between $183 million and $187 million for its fiscal 2023 Q1. The consensus analyst estimate had been for revenue of $357 million.
During the earnings call, CEO Bill Stone noted that the challenging macroeconomic environment and weakness in the digital ad market were impacting the company's performance.
