Digital Turbine (APPS) Q3 2025 earnings summary

Executive summary

• Fiscal Q3 2025 revenue was $134.6M, up 13% sequentially but down 5.6% year-over-year; nine-month revenue totaled $371.4M.

• GAAP net loss for Q3 FY2025 was $23.1M (EPS $(0.22)), compared to $14.1M loss (EPS $(0.14)) a year ago; nine-month net loss was $73.3M, improved from $183.9M last year.

• Transformation program initiated in October 2024, targeting $25M+ in annual savings, including workforce reductions and cost optimization.

• Leadership transition: Stephen Lasher appointed CFO, with outgoing CFO Barrett Garrison supporting the transition.

• Acquisition of One Store International completed in November 2024 to expand alternative app market business in Europe and the US.

Financial highlights

• Q3 revenue of $134.6M; Adjusted EBITDA of $22M; positive free cash flow of $6.4M.

• ODS segment revenue at $91.7M, down 3% year-over-year; AGP revenue at $44.2M, down 10% year-over-year.

• Consolidated gross margin at 44%, down from 45% in Q2 and 46% in Q3 prior year; non-GAAP gross profit was $59.6M.

• Non-GAAP adjusted net income of $13.7M ($0.13/share); GAAP net loss of $23.1M ($0.22/share).

• Cash and cash equivalents at quarter-end were $34.6M–$35.3M; long-term debt at $408.2M.

Outlook and guidance

• Fiscal 2025 revenue guidance raised to $485M–$490M; projected non-GAAP adjusted EBITDA of $69M–$71M.

• March quarter expected to show year-over-year top-line and nearly 50% EBITDA growth.

• Transformation program expected to be substantially completed by Q1 FY2026, with anticipated annual cash expense savings of over $25M.

• Liquidity deemed sufficient for at least 12 months, with $34.6M in cash and $14M available under the credit facility as of December 31, 2024.

• Management expects continued pressure from weak mobile device sales and macroeconomic uncertainty.