Digital Turbine Reports Fiscal 2026 Third Quarter Financial Results
Third Quarter Revenue Totaled $151.4 Million, Representing Year-over-Year Growth of 12%
Third Quarter GAAP Net Income of $5.1 Million and GAAP EPS of $0.03; Third Quarter Non-GAAP Adjusted Net Income 1 of $21.7 Million and Non-GAAP Adjusted EPS 1 of $0.18
Third Quarter Non-GAAP Adjusted EBITDA 2 Totaled $38.8 Million, Representing Year-over-Year Growth of 76%
AUSTIN, Texas, Feb. 3, 2026 /PRNewswire/ -- Digital Turbine, Inc. (Nasdaq: APPS) announced financial results for the fiscal third quarter ended December 31, 2025.
Recent Financial Highlights:
"Our December quarter results reflected a continuance of our positive business momentum," said Bill Stone, CEO. "I was particularly pleased with the breadth and diversity of our results, which were driven by strong demand, expanding global supply, and great execution by our team. Collectively, it enabled us to once again deliver upside results and raise our full-year fiscal 2026 outlook. The market opportunity in front of us is expanding quickly, as mobile app publishers and advertisers look to capitalize on newly available ways to promote app usage and profitability. Provided that we continue to execute and align our resources effectively to facilitate the evolving demand trends, we are well positioned to capitalize on the wealth of opportunities that lie ahead."
Fiscal 2026 Third Quarter Financial Results
Total revenue for the third quarter of fiscal 2026 was $151.4 million, representing year-over-year growth of 12% as compared to revenue of $134.6 million for the third quarter of fiscal 2025. Total On Device Solutions revenue before intercompany eliminations was $99.6 million. Total App Growth Platform revenue before intercompany eliminations was $52.6 million.
GAAP net income for the third quarter of fiscal 2026 was $5.1 million, or $0.03 per share, as compared to GAAP net loss for the third quarter of fiscal 2025 of $23.1 million, or ($0.22) per share.
Non-GAAP adjusted net income 1 for the third quarter of fiscal 2026 was $21.7 million, or $0.18 per share, as compared to Non-GAAP adjusted net income 1 of $14.2 million, or $0.13 per share, in the third quarter of fiscal 2025.
Non-GAAP adjusted EBITDA 2 for the third quarter of fiscal 2026 was $38.8 million, representing year-over-year growth of 76% as compared to Non-GAAP adjusted EBITDA 2 for the third quarter of fiscal 2025 of $22.0 million.
Business Outlook
Based on information available as of February 3, 2026, the Company is raising its expectations for fiscal year 2026 to the following:
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 empowers superior mobile consumer experiences and results for the world's leading telcos, advertisers, and publishers. Its end-to-end platform uniquely simplifies its partners' abilities to supercharge awareness, acquisition, and monetization – connecting them with more consumers, in more ways, across more devices. Digital Turbine is headquartered in North America, with offices around the world. For additional information visit www.digitalturbine.com.
Conference Call
Management will host a conference call and webcast today at 4:30p.m. ET to discuss its fiscal 2026 third quarter financial results and provide operational updates on the business. The conference call will discuss forward guidance and other material information. The call can be accessed via webcast link: https://app.webinar.net/0Z1gnza8lmQ. The call can also be accessed by dialing 888-317-6003 in the United States (or 412-317-6061 from international locations) and entering access code 8758955. A live and archived webcast of the call can be accessed via the Investor Relations section of Digital Turbine's website. The webcast will be archived for a period of one year and is available via the Investor Relations section of Digital Turbine's website.
For those unable to join the live call, a playback will be available through February 10th, 2026. The replay can be accessed by dialing 877-344-7529 in the United States or 412-317-0088 from international locations, passcode 6108249.
An online webcast will be archived for a period of one year and is available via the Investor Relations section of Digital Turbine's website.
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 the following, if any: stock-based compensation expense, amortization of intangibles, business transformation costs, transaction-related expenses, severance costs, changes in fair value of contingent consideration, contract settlement fees, impairment of goodwill, tax adjustments, (gain)/loss on extinguishment of debt, amortization of debt discount, issuance costs, and unrealized (gain)/loss on derivatives. The Company added (gain)/loss on extinguishment, the amortization of debt discount and issuance costs, and unrealized (gain)/loss on derivatives due to their unusual nature and association with the Company's specific September 2, 2025 debt refinance transaction and related issuance of warrants. 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, if any: stock-based compensation expense, depreciation and amortization, net interest income (expense), net other income (expense), business transformation costs, foreign exchange transaction gains (losses), income tax (benefit) provision, transaction-related expenses, contract settlement fees, changes in fair value of contingent consideration, impairment of goodwill, severance costs, (gain)/loss on extinguishment of debt, amortization of debt discount and issuance costs, and unrealized (gain)/loss on derivatives. The Company added (gain)/loss on extinguishment, the amortization of debt discount, issuance costs, and unrealized (gain)/loss on derivatives due to their unusual nature and association with the Company's specific September 2, 2025 debt refinance transaction and related issuance of warrants. Non-GAAP adjusted EBITDA margin is calculated as non-GAAP adjusted EBITDA as a percentage of total revenue. 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 Statements of Cash Flows), excluding the following, if any: transaction-related expenses, severance costs and business transformation 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 the following, if any: product development costs, sales and marketing costs, general and administrative costs, contract settlement fees, impairment of goodwill and depreciation of software included in other direct costs of revenue. 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:
Risks Specific to our Business
Risks Related to the Mobile Advertising Industry
Industry Regulatory Risks
Risks Related to Our Intellectual Property and Potential Liability
Risks Relating to Our Common Stock and Capital Structure
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.
[email protected]
Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income
(Unaudited)
(in thousands, except share and per share amounts)
Three months ended December 31,
Nine months ended December 31,
2025
2024
2025
2024
Net revenue
$ 151,399
$ 134,637
$ 422,702
$ 371,354
Costs of revenue and operating expenses
Revenue share
64,425
69,947
185,656
182,092
Other direct costs of revenue
12,205
8,954
34,251
25,182
Product development
9,892
10,203
31,018
30,350
Sales and marketing
14,326
15,494
42,361
47,628
General and administrative
28,897
42,792
105,889
128,485
Total costs of revenue and operating expenses
129,745
147,390
399,175
413,737
Income (loss) from operations
21,654
(12,753)
23,527
(42,383)
Interest and other income (expense), net
Change in fair value of contingent consideration
(231)
(500)
(231)
(300)
Interest expense, net
(13,561)
(7,913)
(33,859)
(24,638)
Amortization of debt discount and issuance costs
(4,007)
(533)
(7,939)
(1,290)
Unrealized loss on derivatives
1,600
—
(735)
—
Foreign exchange transaction gain
2,815
1,037
3,037
879
Loss on extinguishment of debt
—
—
(9,795)
—
Other income (expense), net
74
(57)
(1,801)
21
Total interest and other expense, net
(13,310)
(7,966)
(51,323)
(25,328)
Income (loss) before income taxes
8,344
(20,719)
(27,796)
(67,711)
Income tax provision
3,237
2,412
2,596
5,562
Net income (loss)
5,107
(23,131)
(30,392)
(73,273)
Other comprehensive loss
Foreign currency translation loss
(3,260)
(4,119)
(1,264)
(3,175)
Comprehensive income (loss)
1,847
(27,250)
(31,656)
(76,448)
Net income (loss) per common share
Basic
$ 0.04
$ (0.22)
$ (0.27)
$ (0.71)
Diluted
$ 0.03
$ (0.22)
$ (0.27)
$ (0.71)
Weighted-average common shares outstanding
Basic
115,921
104,148
110,593
103,201
Diluted
120,474
104,148
110,593
103,201
Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except par value and share amounts)
December 31, 2025
March 31, 2025
(Unaudited)
ASSETS
Current assets
Cash, cash equivalents, and restricted cash
$ 40,423
$ 40,084
Accounts receivable, net
245,324
181,770
Prepaid expenses
7,529
6,923
Value-added tax receivable
10,552
8,291
Other current assets
14,246
5,711
Total current assets
318,074
242,779
Property and equipment, net
48,984
46,966
Right-of-use assets
7,577
9,924
Intangible assets, net
226,961
257,697
Goodwill
223,788
221,741
Other non-current assets
32,791
33,747
TOTAL ASSETS
$ 858,175
$ 812,854
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$ 127,538
$ 139,944
Accrued revenue share
94,123
35,264
Accrued compensation
17,459
7,503
Acquisition purchase price liabilities
540
1,697
Short-term debt, net of debt discount and issuance costs
4,688
—
Other current liabilities
43,801
38,118
Total current liabilities
288,149
222,526
Long-term debt, net of debt discount and issuance costs
350,280
408,687
Derivative liabilities
4,402
—
Deferred tax liabilities, net
11,698
16,308
Other non-current liabilities
9,044
11,375
Total liabilities
663,573
658,896
Commitments and contingencies
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; 120,372,292 issued and 119,614,167 outstanding at December 31, 2025; 106,735,767 issued and 105,977,642 outstanding at March 31, 2025
10
10
Additional paid-in capital
964,965
892,665
Treasury stock (758,125 shares at December 31, 2025 and March 31, 2025)
(71)
(71)
Accumulated other comprehensive loss
(52,568)
(51,304)
Accumulated deficit
(717,834)
(687,442)
Total stockholders' equity
194,602
153,958
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 858,175
$ 812,854
Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three months ended December 31,
2025
2024
Cash flows from operating activities:
Net (loss) income
$ 5,107
$ (23,131)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization
16,565
19,613
Amortization of debt discount and issuance costs
4,007
533
Allowance for credit losses
(653)
846
Unrealized loss on derivatives
(1,600)
—
Stock-based compensation expense
495
8,250
Change in estimate of remaining contingent consideration
231
500
Non-cash lease expense
860
811
Foreign exchange transaction gain
(2,815)
(1,037)
(Increase) decrease in assets:
Accounts receivable, gross
(38,841)
(9,091)
Prepaid expenses
(1,413)
143
Value-added tax receivable
(860)
(661)
Other current assets
(6,286)
618
Right-of-use asset
26
(573)
Other non-current assets
353
284
Increase (decrease) in liabilities:
Accounts payable
15,462
(7)
Accrued revenue share
13,690
5,022
Accrued compensation
4,323
1,244
Other current liabilities
8,028
9,719
Deferred income taxes
(4,927)
(2,243)
Other non-current liabilities
2,424
(397)
Net cash provided by operating activities
14,176
10,443
Cash flows from investing activities
Capital expenditures
(7,786)
(7,125)
Net cash used in investing activities
(7,786)
(7,125)
Cash flows from financing activities
Payment of debt issuance costs
(571)
(66)
Payment of deferred business acquisition consideration
(315)
—
Repayment of debt obligations
(44,908)
—
Proceeds from issuance of common stock in connection with at-the-market offering, net of issuance costs of $1,337
43,236
—
Payment of withholding taxes for net share settlement of equity awards
(204)
(71)
Options exercised
662
10
Net cash used in financing activities
(2,100)
(127)
Effect of exchange rate changes on cash and cash equivalents and restricted cash
(3,151)
(642)
Net change in cash and cash equivalents and restricted cash
1,139
2,549
Cash and cash equivalents and restricted cash, beginning of period
39,284
32,765
Cash and cash equivalents and restricted cash, end of period
$ 40,423
$ 35,314
REVENUE BY SEGMENT
(in thousands)
(Unaudited)
Three months ended December 31,
2025
2024
% Change
On Device Solutions
$ 99,556
$ 91,736
9 %
App Growth Platform
52,616
44,241
19 %
Elimination
(773)
(1,340)
(42) %
Consolidated
$ 151,399
$ 134,637
12 %
GAAP (LOSS) INCOME FROM OPERATIONS TO NON-GAAP GROSS PROFIT
(in thousands)
(Unaudited)
Three months ended December 31,
2025
2024
Net revenue
$ 151,399
$ 134,637
(Loss) income from operations
21,654
(12,753)
Add-back items:
Product development
9,892
10,203
Sales and marketing
14,326
15,494
General and administrative
28,897
42,792
Depreciation of software included in other direct costs of revenue
—
17
Contract settlement fees
—
3,800
Non-GAAP gross profit
$ 74,769
$ 59,553
Non-GAAP gross profit percentage
49 %
44 %
GAAP NET (LOSS) INCOME TO NON-GAAP ADJUSTED NET INCOME
(in thousands)
(Unaudited)
Three months ended December 31,
2025
2024
Net (loss) income
$ 5,107
(23,131)
Add-back items:
Stock-based compensation expense
495
8,250
Amortization of intangibles
8,868
13,474
Change in fair value of contingent consideration
231
500
Tax adjustment (1)
4,547
7,685
Business transformation costs
—
667
Transaction-related expenses
—
207
Severance costs
37
2,220
Contract settlement fees
—
3,800
Amortization of debt discount and issuance costs
4,007
533
Unrealized loss on derivatives
(1,600)
—
Non-GAAP adjusted net income
$ 21,692
$ 14,205
Non-GAAP adjusted net income per common share
$ 0.18
$ 0.13
Weighted-average common shares outstanding, diluted
120,474
105,851
(1) Valuation allowance
GAAP NET (LOSS) INCOME TO NON-GAAP ADJUSTED EBITDA
(in thousands)
(Unaudited)
Three months ended December 31,
2025
2024
Net income/(loss)
$ 5,107
$ (23,131)
Add-back items:
Stock-based compensation expense
495
8,250
Depreciation and amortization
16,565
19,613
Interest expense, net
13,561
7,913
Amortization of debt discount and issuance costs
4,007
533
Other income (expense), net
(74)
57
Change in fair value of contingent consideration
231
500
Business transformation costs
—
667
Foreign exchange transaction gain
(2,815)
(1,037)
Income tax provision
3,237
2,412
Transaction-related expenses
—
207
Severance costs
37
2,220
Contract settlement fees
—
3,800
Unrealized loss on derivatives
(1,600)
—
Non-GAAP adjusted EBITDA
$ 38,751
$ 22,004
GAAP CASH FLOW FROM OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW
(in thousands)
(Unaudited)
Three months ended December 31,
2025
2024
Net cash provided by operating activities
$ 14,176
$ 10,443
Capital expenditures
(7,786)
(7,125)
Transaction-related expenses
—
207
Severance costs
37
2,220
Business transformation costs
—
667
Non-GAAP free cash flow provided by operations
$ 6,427
$ 6,412
SOURCE Digital Turbine, Inc.