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Classified in: Science and technology, Business, Covid-19 virus
Subjects: ERN, ERP

Digital Turbine Reports Fiscal 2023 First Quarter Financial Results


First Quarter Revenue Totaled $188.6 Million, Representing Year-over-Year Growth of 19% on an As-Reported Basis and Year-over-Year Growth of 5% on a Pro Forma Basis

First Quarter GAAP Net Income of $15.0 Million and GAAP EPS of $0.15

First Quarter Non-GAAP EPS1 of $0.38 Increased 12% Year-Over-Year; First Quarter Non-GAAP Adjusted EBITDA2 of $51.9 Million Increased 30% Year-Over-Year

AUSTIN, Texas, Aug. 8, 2022 /PRNewswire/ -- Digital Turbine, Inc. (Nasdaq: APPS) announced financial results for the fiscal first quarter ended June 30, 2022.  The Company completed the acquisitions of AdColony Holding AS and Fyber N.V. on April 29 and May 25, 2021, respectively. Specific references made to "pro forma" results in this release provide investors with quarterly results and comparisons as if all acquired businesses were owned for the entirety of the first quarter of fiscal 2022. The Company believes that pro forma results, where applicable, can provide investors with more relevant year-over-year comparisons. The reconciliations between the pro forma and GAAP financial results for the relevant periods are provided in the tables following the Unaudited Consolidated Statements of Cash Flows below.

Recent Financial Highlights:

"Like most companies, we are experiencing challenging macro conditions," said Bill Stone CEO.  "However, despite these macro headwinds, I was pleased with the demonstrated emphasis on profitable growth and our continuing progress on several strategic initiatives, such as SingleTap, that should serve as critical growth drivers in the future.  It has now been one full year for us operating as 'OneDT', and we have generated a total of $207 million in non-GAAP adjusted EBITDA2 and $144 million in non-GAAP free cash flow3 over the past four quarters while integrating our full array of platform assets. We are focused on maintaining our highly profitable business model amid macro headwinds, while continuing to make strategic investments in a wide range of future growth initiatives, including exploring strategic partnerships with other app distribution platform providers. These investments should position Digital Turbine as a far more versatile and more valuable business for all of our stakeholders."

Fiscal 2023 First Quarter Financial Results

Total revenue for the first quarter of fiscal 2023 was $188.6 million.  Total "On-Device Solutions" revenue, which represents revenue derived from the Company's Application Media and Content Media platform products before intercompany eliminations, was mostly flat year-over-year at $118.6 million. Before intercompany eliminations, total revenue from our App Growth Platform, which represents revenue derived from the Fyber and AdColony businesses, increased 13% year-over-year on a pro forma basis to $72.4 million

GAAP net income for the fiscal first quarter of 2023 was $15.0 million, or $0.15 per share, as compared to GAAP net income of $14.3 million, or $0.14 per share for the first quarter of fiscal 2022.  Non-GAAP adjusted net income1 for the first quarter of fiscal 2023 was $38.6 million, or $0.38 per share, as compared to Non-GAAP adjusted net income of $33.4 million, or $0.34 per share, in the first quarter of fiscal 2022.

Non-GAAP adjusted EBITDA2 for the first quarter of fiscal 2023 was $51.9 million, representing an increase of 30% year-over-year when compared to Non-GAAP adjusted EBITDA of $39.8 million in the first quarter of fiscal 2022. The reconciliations between GAAP and Non-GAAP financial results for all referenced periods are provided in the tables immediately following the Unaudited Consolidated Statements of Cash Flows below.

Business Outlook

Based on information available as of August 8, 2022, the Company currently expects the following for the second quarter of fiscal 2023:

It is not reasonably practicable to provide a business outlook for GAAP net income because the Company cannot reasonably estimate the changes in stock-based compensation expense, which is directly impacted by changes in the Company's stock price, or other items that are difficult to predict with precision.

About Digital Turbine, Inc.

Digital Turbine is the leading independent mobile growth platform and levels up the landscape for advertisers, publishers, carriers and OEMS.  By integrating a full ad stack with proprietary technology built into devices by wireless operators and OEMs, Digital Turbine supercharges advertising and monetization. The company is headquartered in Austin, Texas, with global offices in New York, Los Angeles, San Francisco, London, Berlin, Singapore, Tel Aviv and other cities serving top agency, app developer and advertising markets.  For additional information visit www.digitalturbine.com.

Conference Call

Management will host a conference call today at 4:30 p.m. ET to discuss its fiscal 2023 first quarter financial results and provide operational updates on the business. To participate, interested parties should dial 855-238-2713 in the United States or 412-542-4111 from international locations. A webcast of the conference call will be available at ir.digitalturbine.com/events.

For those who are not able to join the live call, a playback will be available through August 15, 2022. The replay can be accessed by dialing 877-344-7529 in the United States or 412-317-0088 from international locations, passcode 6410980.

The conference call will discuss forward guidance and other material information.

Use of Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements presented in accordance with GAAP, Digital Turbine uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP adjusted net income and earnings per share ("EPS"), non-GAAP adjusted EBITDA, non-GAAP free cash flow, and non-GAAP gross profit. Reconciliations to the nearest GAAP measures of all non-GAAP measures included in this press release can be found in the tables below.

Non-GAAP measures are provided to enhance investors' overall understanding of the Company's current financial performance, prospects for the future and as a means to evaluate period-to-period comparisons. The Company believes that these non-GAAP measures provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results. The Company believes the non-GAAP measures that exclude such items when viewed in conjunction with GAAP results and the accompanying reconciliations enhance the comparability of results against prior periods and allow for greater transparency of financial results. The Company believes non-GAAP measures facilitate management's internal comparison of its financial performance to that of prior periods as well as trend analysis for budgeting and planning purposes. The presentation of non-GAAP measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

1Non-GAAP adjusted net income and EPS are defined as GAAP net income and EPS adjusted to exclude the effect of stock-based compensation expense, amortization of intangibles, and transaction-related expenses and compensation costs. Readers are cautioned that non-GAAP adjusted net income and EPS should not be construed as an alternative to comparable GAAP net income figures determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP.

2Non-GAAP adjusted EBITDA is calculated as GAAP net income excluding the following cash and non-cash expenses: net interest income/(expense), income tax provision, depreciation and amortization, stock-based compensation expense, amortization of intangibles, foreign exchange transaction gains/(losses), and transaction-related expenses and compensation costs. Readers are cautioned that non-GAAP adjusted EBITDA should not be construed as an alternative to net income determined in accordance with U.S. GAAP as an indicator of performance, which is the most comparable measure under GAAP.

3Non-GAAP free cash flow, which is a non-GAAP financial measure, is defined as net cash provided by operating activities (as stated in our Consolidated Statement of Cash Flows), excluding transaction-related expenses and compensation costs, reduced by capital expenditures. Readers are cautioned that free cash flow should not be construed as an alternative to net cash provided by operating activities determined in accordance with U.S. GAAP as an indicator of profitability, performance or liquidity, which is the most comparable measure under GAAP.

4Non-GAAP gross profit is defined as GAAP income from operations adjusted to exclude the effect of product development costs, sales and marketing costs, general and administrative costs, and depreciation of software. Readers are cautioned that non-GAAP gross profit should not be construed as an alternative to income from operations determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP.

Non-GAAP adjusted EBITDA, non-GAAP adjusted net income and EPS, non-GAAP free cash flow, and non-GAAP gross profit are used by management as internal measures of profitability and performance. They have been included because the Company believes that the measures are used by certain investors to assess the Company's financial performance before non-cash charges and certain costs that the Company does not believe are reflective of its underlying business.

Forward-Looking Statements

This news release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this news release that are not statements of historical fact and that concern future results from operations, financial position, economic conditions, product releases and any other statement that may be construed as a prediction of future performance or events, including financial projections and growth in various products are forward-looking statements that speak only as of the date made and which involve known and unknown risks, uncertainties and other factors which may, should one or more of these risks uncertainties or other factors materialize, cause actual results to differ materially from those expressed or implied by such statements. These factors and risks include:

You should not place undue reliance on these forward-looking statements. The Company does not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Relations Contact:

Brian Bartholomew
Digital Turbine, Inc.
brian.bartholomew@digitalturbine.com

 

Digital Turbine, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income / (Loss)

(in thousands, except per share amounts)




Three months ended June 30,



2022


2021

Net revenue


$                188,633


$                158,075

Costs of revenue and operating expenses





License fees and revenue share


87,367


83,808

Other direct costs of revenue


8,915


4,468

Product development


14,133


12,924

Sales and marketing


16,058


13,736

General and administrative


37,725


23,994

Total costs of revenue and operating expenses


164,198


138,930

Income from operations


24,435


19,145

Interest and other income / (expense), net





Interest expense, net


(4,082)


(1,157)

Foreign exchange transaction loss


(331)


(270)

Other income / (expense), net


72


(35)

Total interest and other income / (expense), net


(4,341)


(1,462)

Income before income taxes


20,094


17,683

Income tax provision


5,136


3,430

Net income


14,958


14,253

Less: net income / (loss) attributable to non-controlling interest


36


(31)

Net income attributable to Digital Turbine, Inc.


14,922


14,284

Other comprehensive loss





Foreign currency translation adjustment


(5,542)


(20,781)

Comprehensive income / (loss)


9,416


(6,528)

Less: comprehensive income / (loss) attributable to non-controlling interest


243


(793,000)

Comprehensive income / (loss) attributable to Digital Turbine, Inc.


$                     9,173


$                   (5,735)

Net income per common share





Basic


$                       0.15


$                       0.16

Diluted


$                       0.15


$                       0.14

Weighted-average common shares outstanding





Basic


97,822


91,585

Diluted


102,686


98,822

 

Digital Turbine, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except par value and share amounts)

 







June 30, 2022


March 31, 2022

ASSETS





Current assets





Cash and cash equivalents


$         89,292


$       126,768

Restricted cash


547


394

Accounts receivable, net


257,634


263,139

Prepaid expenses and other current assets


25,375


20,570

Total current assets


372,848


410,871

Property and equipment, net


33,828


31,086

Right-of-use assets


12,873


15,439

Intangible assets, net


426,909


440,589

Goodwill


554,963


559,792

Other non-current assets


590


732

TOTAL ASSETS


$    1,402,011


$    1,458,509






LIABILITIES AND STOCKHOLDER'S EQUITY





Current liabilities





Accounts payable


$       173,920


$       167,858

Accrued license fees and revenue share


86,155


95,170

Accrued compensation


17,345


28,775

Short-term debt


?


12,500

Other current liabilities


38,577


30,960

Acquisition purchase price liabilities


?


50,000

Total current liabilities


315,997


385,263

Long-term debt, net of debt issuance costs


472,987


520,785

Deferred tax liabilities, net


22,205


19,976

Other non-current liabilities


12,789


16,270

Total liabilities


823,978


942,294

Commitments and contingencies (Note 13)





Stockholders' equity





Preferred stock





Series A convertible preferred stock at $0.0001 par value; 2,000,000 shares
authorized, 100,000 issued and outstanding (liquidation preference of $1)


100


100

Common stock





$0.0001 par value: 200,000,000 shares authorized; 99,515,747 issued and
98,757,622 outstanding at June 30, 2022; 97,921,826 issued and 97,163,701
outstanding at March 31, 2022


10


10

Additional paid-in capital


798,063


745,661

Treasury stock (758,125 shares at June 30, 2022 and March 31, 2022)


(71)


(71)

Accumulated other comprehensive loss


(45,090)


(39,341)

Accumulated deficit


(176,866)


(191,788)

Total stockholders' equity attributable to Digital Turbine, Inc.


576,146


514,571

Non-controlling interest


1,887


1,644

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$    1,402,011


$    1,458,509

 

Digital Turbine, Inc. and Subsidiaries

Consolidated Statements of Cash Flows


(in thousands)


Three months ended June 30,



2022


2021



(Unaudited)


(Unaudited)

Cash flows from operating activities:





Net income


14,958


14,253

Adjustments to reconcile net income to net cash provided by / (used in) operating activities:





Depreciation and amortization


19,929


8,653

Non-cash interest expense


210


127

Stock-based compensation expense


6,244


3,705

Right-of-use asset


2,654


628

Deferred income taxes


1,050


2,877

Foreign exchange transaction (gain) / loss


331


?

(Increase) / decrease in assets:





Accounts receivable, gross


6,626


(48,817)

Allowance for doubtful accounts


886


26

Prepaid expenses and other current assets


(4,967)


(4,492)

Other non-current assets


212


160

Increase / (decrease) in liabilities:





Accounts payable


5,718


35,396

Accrued license fees and revenue share


(9,433)


3,573

Accrued compensation


(11,585)


(46,956)

Other current liabilities


7,368


2,455

Other non-current liabilities


(3,572)


(585)

Net cash provided by / (used in) operating activities


36,629


(28,997)






Cash flows from investing activities





Business acquisitions, net of cash acquired


?


(126,604)

Capital expenditures


(6,413)


(4,364)

Net cash used in investing activities


(6,413)


(130,968)






Cash flows from financing activities





Proceeds from borrowings


?


237,041

Payment of debt issuance costs


?


(2,988)

Options and warrants exercised


296


695

Payment of withholding taxes for net share settlement of equity awards


(4,357)


?

Repayment of debt obligations


(60,508)


(19,680)

Net cash provided by / (used in) financing activities


(64,569)


215,068






Effect of exchange rate changes on cash and cash equivalents and restricted cash


(2,970)


(2,209)






Net change in cash and cash equivalents and restricted cash


(37,323)


52,894






Cash and cash equivalents and restricted cash, beginning of period


127,162


31,118






Cash and cash equivalents and restricted cash, end of period


$         89,839


$         84,012

 

PRO FORMA REVENUE

(in thousands)

(Unaudited)










Three months ended June 30,



2022


2021


% Change

On Device Solutions


$         118,637


$         120,383


(1) %

App Growth Platform


72,366


63,982


13 %

Elimination


(2,370)


(3,893)


(39) %

Consolidated


$         188,633


$         180,472


5 %

 

GAAP INCOME FROM OPERATIONS TO NON-GAAP GROSS PROFIT

(in thousands)

(Unaudited)








Three months ended June 30,



2022


2021

Net revenue


$      188,633


$      158,075

Income from operations


24,435


19,145

Add-back items:





Product development


14,133


12,924

Sales and marketing


16,058


13,736

General and administrative


37,725


23,994

Depreciation of software included in other direct costs of revenue


1,199


700

Non-GAAP gross profit


$        93,550


$        70,499

Non-GAAP gross profit percentage


50 %


45 %











GAAP NET INCOME TO NON-GAAP ADJUSTED NET INCOME

(in thousands)

(Unaudited)








Three months ended June 30,



2022


2021

Net income


$        14,958


$        14,253

Add-back items:





Stock and stock option compensation


6,244


3,705

Amortization of intangibles


16,177


7,101

Transaction expenses


1,299


8,345

Non-GAAP adjusted net income from continuing operations


$        38,678


$        33,404

Non-GAAP adjusted net income per share from continuing operations


$            0.38


$            0.34

Weighted-average common shares outstanding, diluted


102,686


98,822


(1) Valuation allowance  release

 

GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA

(in thousands)

(Unaudited)








Three months ended June 30,



2022


2021

Net income from continuing operations


$           14,958


$           14,253

Add-back items:





Stock and stock option compensation


6,244


3,705

Depreciation and amortization


19,929


8,653

Interest expense, net


4,082


1,157

Other income / (expense), net


(72)


35

Foreign exchange transaction loss


331


270

Income tax provision


5,136


3,430

Transaction expenses


1,299


8,345

Non-GAAP adjusted EBITDA


$           51,907


$           39,848

 

GAAP CASH FLOW FROM OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW

(in thousands)

(Unaudited)








Three months ended June 30,



2022


2021

Net cash provided by / (used in) operating activities


36,629


(28,997)

Capital expenditures


(6,413)


(4,364)

Payment of acquisition-related liabilities assumed


?


39,314

Transaction expenses


1,299


8,345

Non-GAAP free cash flow provided by / (used in) continuing operations


$           31,515


$           14,298

New logo (PRNewsfoto/Digital Turbine, Inc.)

SOURCE Digital Turbine, Inc.


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