Digital Turbine, Inc.

Digital Turbine, Inc. operates as a leading independent mobile growth platform that levels up the landscape for advertisers, publishers, carriers, and device original equipment manufacturers (OEMs). The Company offers end-to-end products and solutions leveraging proprietary technology to all participants in the mobile application ecosystem, enabling brand discovery and advertising, user acquisition and engagement, and operational efficiency for advertisers. The mobile advertising business is an intensely competitive industry, and the Company operates in a highly competitive and fragmented mobile app ecosystem that includes divisions of large, well-established companies, including public and privately held companies. The Company's primary competition for On Device Solutions comes from the Google Play application store, and it faces competition from existing operator solutions built internally, as well as companies providing application and content media products and services, such as Facebook, Snapchat, Unity Software, InMobi, Magnite, AppLovin, and others. For App Growth Platform products and services, competition comes from a diverse group of companies, including AppLovin, Unity Software, and Liftoff.

The Company's primary competition for On Device Solutions comes from the Google Play application store. Broadly, the ODS platform faces competition from existing operator solutions built internally, as well as companies providing application and content media products and services, such as Facebook, Snapchat, Unity Software, InMobi, Magnite, AppLovin, and others. Some of the Company's existing wireless carriers could make a strategic decision to develop their own solutions rather than continue to use its suite of products, which could be a material source of competition. For App Growth Platform products and services, competition comes from a diverse group of companies, including AppLovin, Unity Software, and Liftoff. The Company competes with other DSP providers, some of which are smaller, privately held companies, while others are large, well-established companies such as the Trade Desk, or divisions of large companies, such as AT&T, Google, and Adobe. The Company believes that the principal competitive factors in the mobile app ecosystems are: the ability to enhance and improve technologies and offerings; knowledge, expertise, and experience in the mobile app ecosystem; relationships with third parties in the mobile app ecosystem, including app publishers and developers; the ability to reach and target large numbers of users; the ability to identify and execute on strategic transactions; the ability to successfully monetize mobile apps; the pricing and perceived value of offerings; brand and reputation; and the ability to expand into new offerings and geographies.

The Company generates revenue from transactions for the purchase and sale of digital advertising inventory through its various platforms and service offerings. Revenue is based on fixed cost-per-thousand (CPM), cost-per-install (CPI), or cost-per-acquisition (CPA) arrangements or a percentage of the ad spend through its platforms. The Company recognizes revenue upon fulfillment of its performance obligation to its customers, which generally occurs at the point in time when an ad is rendered or an end consumer action, such as an app install, is completed. The Company reports its results of operations through two segments: On Device Solutions and App Growth Platform. Under agreements with wireless carriers and OEMs, the Company manages the monetization of end-user mobile devices through the marketing of application slots or advertisement space/inventory to publishers and/or advertisers by delivering apps or advertisements to the mobile device, generally offering these services under a revenue share model. Supply partners in the AGP business are primarily comprised of app publishers and are generally non-exclusive, with the Company compensating app publishers through a revenue share model or via direct CPM, CPI, CPP, or CPA arrangements.

The On Device Solutions (ODS) business consists of products and services that simplify the discovery and delivery of mobile apps and content media for device end users. ODS is comprised of Application Media, which delivers apps to end users through partnerships with wireless carriers and OEMs and optimizes revenue by using proprietary technology to streamline, track, and manage app install demand from hundreds of application developers across various publishers, carriers, OEMs, and devices. Content Media presents news, weather, sports, and other content directly within the native device experience through partnerships with wireless carriers and OEMs, optimizing revenue by a combination of Programmatic Ad Partner Revenue, Sponsored Content, and Editorial Content. User acquisition tools including SingleTap and the Company's DSP (DT DSP) remove friction in the app install process, delivering apps to devices with a single touch, resulting in higher conversion rates. For the year ended March 31, 2026, ODS net revenue was $382,429 ¹, compared to $341,632 ² for the year ended March 31, 2025.

The App Growth Platform (AGP) business consists of Advertising Solutions and Ad Monetization Solutions. Advertising Solutions serve two key segments: App Developers and Brands and Agencies, enabling them to execute targeted mobile campaigns on the Company's direct mobile app inventory. App Developers and other performance-focused advertisers execute mobile user acquisition campaigns for their apps and products using products such as the DT Demand Side Platform (DSP) and Offer Wall (DT Offer Wall). Brands and Agencies run mobile brand-awareness campaigns on the Company's direct mobile app inventory using programmatic real-time bidding technology and creative studio. Ad Monetization solutions allow mobile app publishers and developers to monetize their monthly active users via display, native, and video advertising, integrated directly with leading mobile apps and games, connecting their ad inventory to campaigns from DSP, app marketers, brand advertisers, and agencies, primarily through a programmatic, real-time bidding auction. For the year ended March 31, 2026, AGP net revenue was $185,742 ³, compared to $153,229 ⁴ for the year ended March 31, 2025.

In October 2024, the Company began a transformation program intended to improve current and future operating expenses, cash flows, and personnel costs, which included a two-phased reduction in its workforce, one in November 2024 and the other in January 2025, and was completed in the fourth quarter of fiscal year 2025. On August 29, 2025, the Company refinanced its existing senior credit facility by entering into a Financing Agreement with Blue Torch Finance LLC, which provided for three separate tranches of term loans in an aggregate principal amount of $430,000 ⁵, all of which were borrowed in full on the Closing Date. In connection with the Financing Agreement, the Company issued warrants to purchase an aggregate of 824,421 ⁶ shares of common stock at an exercise price of $4.84 ⁷ per share, and on September 15, 2025, issued an additional warrant to purchase an aggregate of 397,997 ⁸ shares of common stock at the same exercise price. On August 5, 2025, the Company entered into an at-the-market (ATM) offering program for aggregate gross proceeds of up to $150,000 ⁹, and during the year ended March 31, 2026, sold a total of 9,945,136 ¹⁰ shares of Common Stock at an average selling price of $5.89 ¹¹ per share, yielding aggregate gross proceeds of $58,566 ¹², and incurred commission costs of $1,757 ¹³. The Company terminated the Sales Agreement effective as of February 2, 2026. Total Transformation Program costs for the year ended March 31, 2026 were $626 ¹⁴, compared to $5,771 ¹⁵ for the year ended March 31, 2025.

For the fiscal year ended March 31, 2026, total net revenue was $565,251 ¹⁶, compared to $490,506 ¹⁷ for the fiscal year ended March 31, 2025, representing an increase of 15.2% ¹⁸. Net loss was $37,732 ¹⁹ for the year ended March 31, 2026, compared to a net loss of $92,099 ²⁰ for the year ended March 31, 2025. Diluted net loss per common share was $0.33 ²¹ for the year ended March 31, 2026, compared to $0.89 ²² for the year ended March 31, 2025. Income from operations was $34,042 ²³ for the year ended March 31, 2026, compared to a loss from operations of $54,075 ²⁴ for the year ended March 31, 2025. Total costs of revenue and operating expenses were $531,209 ²⁵ for the year ended March 31, 2026, compared to $544,581 ²⁶ for the year ended March 31, 2025.

A significant growth vector is the expansion of the On Device Solutions business internationally, particularly in the Asia Pacific and China regions. For the year ended March 31, 2026, ODS net revenue increased by $40,797 ²⁷ or 11.9% ²⁸ compared to the prior year, primarily driven by improved performance in the Asia Pacific and China regions. Revenue from application media increased by approximately $38,307 ²⁹ primarily due to higher device volumes internationally and an increase in revenue-per-device in the U.S. and internationally, offset by lower device volumes in the U.S. The Company expects international sales and growth to continue to be an important component of its revenue and operations, and expects its business will return to growth in the foreseeable future as it continues to pursue opportunities globally.

Another growth vector is the App Growth Platform business, which saw net revenue increase by $32,513 ³⁰ or 21.2% ³¹ for the year ended March 31, 2026 compared to the prior year, primarily driven by improved performance in the Asia Pacific and China regions. Advertising exchange revenues increased $36,607 ³², which was largely due to the continued onboarding of new publishers and demand partners. The Company is increasingly building AI into certain of its offerings and uses AI technologies in connection with the development of its advertising and monetization solutions, and other product offerings. The Company's AI platform-based advertising and monetization solutions are expected to deliver targeted precision, revenue-per-device lift, and advertiser return on investment. The Company also completed the acquisition of One Store International on November 26, 2024, as part of its strategy to help deliver One Store's app to the European market and expand the Company's broader alternative app market business.

The Company completed a transformation program in the fourth quarter of fiscal year 2025 intended to improve current and future operating expenses, cash flows, and personnel costs. Total Transformation Program costs for the year ended March 31, 2026 were $626 ³³, compared to $5,771 ³⁴ for the year ended March 31, 2025, and the Company anticipates costs associated with the Transformation Program to be insignificant in future years. Revenue share as a percentage of total net revenue decreased to 43.1% ³⁵ for the year ended March 31, 2026 from 48.0% ³⁶ for the year ended March 31, 2025, primarily driven by product mix changes, including certain high-margin product lines driving a higher percentage of total net revenue. General and administrative expenses decreased by $31,523 ³⁷ or 18.2% ³⁸ for the year ended March 31, 2026 compared to the prior year, primarily due to decreases in stock-based compensation of $17,056 ³⁹ and depreciation and amortization expense of $11,226 ⁴⁰.

As of March 31, 2026, the Company employed 620 ⁴¹ full-time employees globally, compared to 647 ⁴² as of March 31, 2025. The Company may continue to invest selectively in additional headcount in the future as organizational needs arise. The Company's corporate headquarters are located in Austin, Texas, consisting of approximately 9,800 ⁴³ square feet expiring on November 30, 2028. The Company also leases properties for office space in Durham, North Carolina, New York, New York, San Francisco, California, and internationally in Singapore, Warsaw, Poland, Istanbul, Turkey, Berlin, Germany, Beijing, China and Tel Aviv, Israel. The Company believes that its facilities are adequate to meet its needs for the immediate future and that, should it be needed, it will be able to secure additional space to accommodate expansion of its operations.

Total product development costs incurred for the fiscal year ended March 31, 2026 were $40,476 ⁴⁴, compared to $39,464 ⁴⁵ for the fiscal year ended March 31, 2025. Capital expenditures for the year ended March 31, 2026 were $30,619 ⁴⁶, compared to $27,477 ⁴⁷ for the year ended March 31, 2025, primarily comprised of capital expenditures related to internally developed software. The Company capitalized software development costs in the amount of $32,294 ⁴⁸ for the year ended March 31, 2026. During the year ended March 31, 2026, the Company sold 9,945,136 ⁴⁹ shares of Common Stock under the ATM program at an average selling price of $5.89 ⁵⁰ per share, yielding aggregate gross proceeds of $58,566 ⁵¹, and used the net proceeds to prepay the principal of the Financing Agreement. The Company has not declared cash dividends on its common stock since its inception and does not anticipate paying any cash dividends in the foreseeable future, and the payment of any future dividends would be substantially restricted by its secured indebtedness.

The Company faces structural headwinds from macroeconomic conditions and geopolitical developments, including the wars in Ukraine, Israel, Gaza, Iran, Lebanon and Syria, geopolitical tensions involving China, market conditions related to inflation, recessionary concerns, fluctuating foreign currency exchange rates, increases in trade tariffs, changes in interest rates, and supply chain issues including the 2026 global memory chip shortage associated with high AI demands. As a result of these macroeconomic conditions and uncertainties, certain of the Company's customers have, and others may, defer or reduce their use of its services, which has had, and could in the future have, a negative impact on net revenues. The Company's borrowings outstanding under its Financing Agreement currently bear interest at variable rates and may continue to fluctuate as a result of changes in interest rates. The Company anticipates that these macroeconomic events could continue to negatively impact its results of operation.

The Company faces execution risks related to its significant indebtedness under the Financing Agreement, which has an outstanding principal balance of $391,150 ⁵² as of March 31, 2026. The Company is currently seeking to refinance certain loan tranches under the Financing Agreement and is exploring options to raise additional capital through the sale of equity securities or equity-linked or debt-financing arrangements. If the Company is unable to refinance certain loan tranches by certain dates, it will be required to pay exit and duration fees on such tranches when repaid. The Financing Agreement contains a maximum leverage ratio and minimum liquidity amount, and as of March 31, 2026, the Company was in compliance with all covenants. The Company's ability to meet its debt service obligations and to fund working capital, capital expenditures, and investments in its business will depend upon its future performance and its ability to access capital markets and refinance such loans, as well as financial, business, and other factors affecting its operations, many of which are beyond its control.

The Company has significant indebtedness under its Financing Agreement, with an outstanding principal balance of $391,150 ⁵³ as of March 31, 2026, which could limit financial flexibility and requires compliance with a maximum leverage ratio and minimum liquidity covenant. A significant portion of ODS revenue is derived from a limited number of wireless carriers, and the failure to maintain these relationships or a loss of terms could materially reduce revenue. The Company recorded a goodwill impairment of $336,640 ⁵⁴ during the fiscal year ended March 31, 2024, and further impairment charges could result from changes in assumptions about future cash flows or market conditions. The Company has a history of net losses, having incurred net losses of $37,732 ⁵⁵, $92,099 ⁵⁶, and $420,448 ⁵⁷ for the fiscal years ended March 31, 2026, 2025, and 2024, respectively, and may not achieve or sustain profitability. The Company's operations are global in scope, with significant presence in Israel, and it faces risks from geopolitical conflicts, including the wars in Ukraine, Israel, Gaza, Lebanon, Syria, and Iran, which could disrupt operations and affect financial results.

Management's message emphasizes the Company's position as a leading independent mobile growth platform and its focus on improving financial performance through the transformation program completed in the fourth quarter of fiscal year 2025. The Company reported a net loss of $37,732 ⁵⁸ for the year ended March 31, 2026, compared to a net loss of $92,099 ⁵⁹ for the prior year, and income from operations of $34,042 ⁶⁰ compared to a loss from operations of $54,075 ⁶¹ in the prior year. Management highlights the 15.2% ⁶² increase in net revenue to $565,251 ⁶³ and the 11.9% ⁶⁴ increase in ODS net revenue and 21.2% ⁶⁵ increase in AGP net revenue. The strategic priorities emphasized include continuing to pursue opportunities globally, with international sales and growth expected to remain an important component of revenue and operations, and the Company expects its business will return to growth in the foreseeable future. Management also notes the ongoing efforts to refinance certain loan tranches under the Financing Agreement and explore options to raise additional capital through the sale of equity securities or equity-linked or debt-financing arrangements.