Digital Turbine Inc
For the period ended Dec 31, 2024. Filed Feb 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 5, 2025
APPS$10.38+7.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001628280-24-045815
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-05.
0001628280-25-004090
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 103 current paragraphs.
43 unchanged; 45 reworded; 13 added; 10 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
See Part I, Item 1A, “Risk Factors,” in its Annual Report on Form 10-K for the fiscal year ended March 31, 2024, filed with the Securities and Exchange Commission on May 28, 2024, for additional information related to risks associated with macroeconomic challenges.
Current report
Goodwill and Intangible Assets
Current report
Finite-lived intangible assets and property, plant, and equipment have been assigned an estimated finite useful life and are amortized on a straight-line basis over the number of years that approximate their respective useful lives. The Company evaluates intangible assets other than goodwill for impairment at least annually or upon the occurrence of events or circumstances that indicate the carrying value of an asset may not be recoverable. In determining whether an impairment exists, the Company considers factors such as changes in the use of the asset, changes in the legal or business environment, and current or historical operating or cash flow losses.
Current report
Transformation Program
Current report
Costs incurred in connection with the transformation program are categorized under two primary headings: severance costs and business transformation costs. The costs classified as severance costs primarily reflect expenses associated with workforce reductions aimed at realigning the Company’s structure as part of the transformation program. These severance-related expenses are directly tied to the Company's efforts to reduce headcount and optimize its labor force to better align with its long-term strategic goals. In addition, the business transformation costs primarily reflect investments made in the prior year for the upgrade of key business systems, including the implementation of a global cloud-based ERP system and a new HR system. These costs, while also part of the broader transformation efforts, are not related to workforce reductions but rather to the modernization of the Company’s technological infrastructure to support long-term operational improvements.
Current report
Revenue share decreased by $417 or 0.6% to $69,947 for the three months ended December 31, 2024, and was 52.0% as a percentage of total net revenue compared to $70,364, or 49.3% of total net revenue, for the three months ended December 31, 2023.
Current report
Revenue share decreased by $26,583 or 12.7% to $182,092 for the nine months ended December 31, 2024, and was 49.0% as a percentage of total net revenue compared to $208,675, or 48.3% of total net revenue, for the nine months ended December 31, 2023.
Current report
Other direct costs of revenue increased by $340 or 3.9% to $8,954 for the three months ended December 31, 2024, and was 6.7% as a percentage of total net revenue compared to $8,614, or 6.0% of total net revenue, for the three months ended December 31, 2023.
Current report
Sales and marketing expenses increased by $2,082 or 4.6% to $47,628 for the nine months ended December 31, 2024, and was 12.8% as a percentage of total net revenue compared to $45,546, or 10.5% of total net revenue, for the nine months ended December 31, 2023. Sales and marketing expenses included severance costs of approximately $1,524 for the nine months ended December 31, 2024. Sales and marketing expenses included severance and acquisition-related costs of approximately $1,199 for the nine months ended December 31, 2023.
Current report
General and administrative expenses decreased by $2,663 or 5.9% to $42,792 for the three months ended December 31, 2024 compared to $45,455 for the three months ended December 31, 2023. General and administrative expenses included severance, acquisition-related, and business transformation costs of approximately $1,585 for the three months ended December 31, 2024. General and administrative expenses included severance, acquisition-related, and business transformation costs of approximately $3,461 for the three months ended December 31, 2023.
Current report
For the three and nine months ended December 31, 2024, interest expense, net, increased by $780 or 10.2% and $3,028 or 13.2%, respectively, compared to the three and nine months ended December 31, 2023. The increase was primarily due to an increase in interest rates of 70 basis points and 98 basis points, respectively, and higher average outstanding borrowings of $25,000 and $5,489, respectively, over the comparative periods.
Current report
In the future, we may attempt to raise additional capital through the sale of equity securities or through equity-linked or debt-financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by incurring additional indebtedness, we may be subject to increased fixed payment obligations and could also be subject to additional restrictive covenants and other operating restrictions that could adversely impact our ability to conduct our business. Any future indebtedness we incur may result in terms that could be less unfavorable to the Company.
Current report
•$110,669 decrease in net loss;
Removed paragraphs (10)
Previous report
Finite-lived intangible assets and property, plant, and equipment are amortized or depreciated over their estimated useful lives on a straight-line basis. We monitor conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization or depreciation period or an impairment. We test these assets for potential impairment whenever we conclude events or changes in circumstances indicate carrying amounts may not be recoverable.
Previous report
Business Transformation Initiative
Previous report
Revenue share decreased by $12,383 or 18.0% to $56,336 for the three months ended September 30, 2024, and was 47.4% as a percentage of total net revenue compared to $68,719, or 48.0% of total net revenue, for the three months ended September 30, 2023.
Previous report
Revenue share decreased by $26,166 or 18.9% to $112,145 for the six months ended September 30, 2024, and was 47.4% as a percentage of total net revenue compared to $138,311, or 47.8% of total net revenue, for the six months ended September 30, 2023.
Previous report
Other direct costs of revenue decreased by $2,402 or 12.9% to $16,228 for the six months ended September 30, 2024, and was 6.9% as a percentage of total net revenue compared to $18,630, or 6.4% of total net revenue, for the six months ended September 30, 2023.
Previous report
Product development expenses decreased by $4,604 or 32.8% to $9,433 for the three months ended
Previous report
Sales and marketing expenses increased by $1,020 or 3.3% to $32,134 for the six months ended September 30, 2024, and was 13.6% as a percentage of total net revenue compared to $31,114, or 10.7% of total net revenue, for the six months ended September 30, 2023. Sales and marketing expenses included severance costs of approximately $506 for the six months ended September 30, 2024. Sales and marketing expenses included severance and acquisition-related of approximately $623 for the six months ended September 30, 2023.
Previous report
General and administrative expenses increased by $791 or 1.9% to $42,176 for the three months ended September 30, 2024 compared to $41,385 for the three months ended September 30, 2023. General and administrative expenses included severance and business transformation costs of approximately $300 for the three months ended September 30, 2024. General and administrative expenses included severance, acquisition-related, and business transformation costs of approximately $1,333 for the three months ended September 30, 2023.
Previous report
For the three and six months ended September 30, 2024, interest expense, net, increased by $1,388 or 17.7% and $2,248 or 14.8%, respectively, compared to the three and six months ended September 30, 2023. The increase was primarily due to an increase in interest rates of 112 basis points for the three and six months ended September 30, 2024. Further, average outstanding borrowings for the three months ended September 30, 2024 increased $5,433 compared to the three months ended September 30, 2023, contributing to the increase in interest expense, while the average outstanding borrowings for the six months ended September 30, 2024 decreased $4,267 compared to the six months ended September 30, 2023, partially offsetting the increase in interest rates for the six month period.
Previous report
•$119,739 decrease in net loss;
Reworded paragraphs (45)
Previous wording
We are impacted by the volume of sales of new mobile devices by our partners, which has been below our expectations. We believe this is driven by the impact of inflation, economic uncertainty, and their potential impacts on consumers. These negative macroeconomic trends have resulted, and may continue to result in, a decrease in mobile phone sales volume. Continued weakness in the sale of new mobile devices is likely to continue to impact our business, financial condition, and results of operations, the full impact of which remains uncertain at this time.
Current wording
We are impacted by declining volume of sales of new mobile devices by our partners. We believe this is driven by the impact of inflation, economic uncertainty, and their potential impacts on consumers. These negative macroeconomic trends have resulted, and may continue to result in, a decrease in mobile phone sales volume. Continued weakness in the sale of new mobile devices is likely to continue to impact our business, financial condition, and results of operations, the full impact of which remains uncertain at this time.
Previous wording
Additionally, we continue to actively monitor the recent and ongoing conflict in Israel and the Gaza Strip for any material impacts to our business. While no adverse financial or operational impacts have been noted in the current period, if such conflict continues or escalates, it could have a potential negative impact on our business, given our significant presence in the region.
Current wording
Additionally, we continue to actively monitor the recent developments in Israel, Gaza, Lebanon, and Syria for any material impacts to our business. While no adverse financial or operational impacts have been noted in the current period, if such conflict continues or escalates, it could have a potential negative impact on our business, given our significant presence in the region.
Previous wording
Beginning in fiscal year 2023, the Company entered into a business transformation project that includes the implementation of a new, global cloud-based enterprise resource planning (“ERP”) system to upgrade our existing enterprise-wide operating systems. Additionally, a new human resource system was also implemented to streamline employee management processes and enhance organizational effectiveness. We are also undertaking the consolidation of existing ancillary systems and deploying other new platforms and systems to improve our operations and drive business and cost efficiencies.
Current wording
Beginning in fiscal year 2023, the Company entered into a business transformation project that includes the implementation of a new, global cloud-based enterprise resource planning (“ERP”) system to upgrade our existing enterprise-wide operating systems. Additionally, a new human resource (“HR”) system was also implemented to streamline employee management processes and enhance organizational effectiveness. We are also undertaking the consolidation of existing ancillary systems and deploying other new platforms and systems to improve our operations and drive business and cost efficiencies.
Previous wording
This is a multi-year project that includes various costs, including software configuration and implementation costs that would be recognized as either capital expenditures or deferred costs in accordance with applicable accounting policies, with certain costs recognized as operating expense associated with project development and project management costs, and professional services with business partners engaged in the planning, design and business process review that would not qualify as software configuration and implementation costs. In addition, the Company is incurring duplicative personnel and other operating costs to maintain legacy systems and operations during the deployment of the new systems and certain other ancillary platforms and systems. The Company completed the first deployment phase in the third quarter of fiscal year 2024. Costs are anticipated to be incurred through various deployment phases that are expected to continue through early fiscal year 2026. The Company incurred $1,309 of business transformation costs during the six months ended September 30, 2024. These costs are recorded in General and Administrative expenses and Product Development expenses in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.
Current wording
This is a multi-year project that includes various costs, including software configuration and implementation costs that would be recognized as either capital expenditures or deferred costs in accordance with applicable accounting policies, with certain costs recognized as operating expense associated with project development and project management costs, and professional services with business partners engaged in the planning, design and business process review that would not qualify as software configuration and implementation costs. In addition, the Company is incurring duplicative personnel and other operating costs to maintain legacy systems and operations during the deployment of the new systems and certain other ancillary platforms and systems. The Company completed the first deployment phase in the third quarter of fiscal year 2024. Costs are anticipated to be incurred through various deployment phases that are expected to continue through early fiscal year 2026. The Company incurred $1,976 of business transformation costs during the nine months ended December 31, 2024. These costs are recorded in General and Administrative expenses and Product Development expenses in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.
Previous wording
Additionally, the Company is in the process of initiating further transformation efforts, a portion of which include various measures across the organization to reduce current and future operating expenses and improve cash flows, including a reduction in force, reductions in personnel costs, and steps intended to simplify and streamline business operations. As part of these transformation efforts, we are currently implementing a reduction in our workforce. Thereafter, to further reduce operating expenses and improve cash flows, we plan to implement additional transformation activities, including but not limited subsequent reductions in force. The program is underway and is targeted to yield more than $25,000 in annual cash expense savings. The Company expects the program to be substantially implemented by the first quarter of fiscal year 2026.
Current wording
Additionally, the Company is in the process of initiating further transformation efforts. In October 2024, the Company began a transformation program intended to improve various measures across the organization. These measures include but are not limited to current and future operating expenses, cash flows, and personnel costs. Additionally, the initiatives intend to simplify and streamline business operations, including product optimization, procurement and cost optimization, and team restructuring. As part of the transformation program, we implemented a two phased reduction in our workforce, one in November 2024 and the other in January 2025. During the three and nine months ended December 31, 2024, the Company incurred expenses of $2,887, related to our transformation program primarily consisting of severance and other one-time termination benefits. The transformation program includes several other initiatives that are underway, and the Company expects the transformation program to be substantially completed by the first quarter of fiscal year 2026. The transformation program is targeted to yield more than $25,000 in annual cash expense savings, and the Company expects the program to be substantially implemented by the first quarter of fiscal year 2026.
Previous wording
The following table sets forth our results of operations for the three and six months ended September 30, 2024 and 2023 (in thousands):
Current wording
The following table sets forth our results of operations for the three and nine months ended December 31, 2024 and 2023 (in thousands):
Previous wording
Over the three-month comparative periods, net revenue decreased by $24,531 or 17.1%, and over the six-month comparative periods, net revenue decreased by $52,908 or 18.3%. See the segment discussion below for further details regarding net revenue.
Current wording
Over the three-month comparative periods, net revenue decreased by $7,997 or 5.6%, and over the nine-month comparative periods, net revenue decreased by $60,905 or 14.1%. See the segment discussion below for further details regarding net revenue.
Previous wording
ODS revenue for the six months ended September 30, 2024, decreased by $34,246 or 17.4% compared to the six months ended September 30, 2023. Revenue from content media increased by approximately $1,317 for the same reason as noted above for the three months ended September 30, 2024. In addition, application media revenue declined by approximately $35,563 for the six months ended September 30, 2024. The decline in revenue in application media was primarily due to lower device volumes and lower revenue-per-device in the US region and internationally, resulting in a $25,362 decrease in revenue. The decrease was partially offset by higher device volumes and revenue-per-device in the Asia Pacific and China regions. This decrease was also driven by lower revenue from strategic demand customers of approximately $10,201.
Current wording
ODS revenue for the three months ended December 31, 2024, decreased by $2,562 or 2.7% compared to the three months ended December 31, 2023. Revenue from content media decreased by approximately $399 primarily due to unforeseen impacts on the demand auction. In addition, revenue from application media decreased by approximately $2,162. The decrease was primarily driven by lower new device volumes, partially offset by an increase in revenue-per-device in the US region and internationally. These decreases in revenue were primarily driven by the Europe, Middle East, and Africa regions and were partially offset by increases in the Asia Pacific and China regions.
Previous wording
ODS revenue for the three months ended September 30, 2024, decreased by $16,646 or 16.8% compared to the three months ended September 30, 2023. Revenue from content media increased by approximately $565 primarily due to increased activity with a carrier that resulted in higher daily active users on prepaid devices. Revenue from application media decreased by approximately $17,211. The decrease was primarily driven by lower new device volumes and revenue-per-device in the US region and the Europe, Middle East, and Africa regions. These decreases were partially offset by higher device volumes and revenue-per-device in the Asia Pacific and China regions.
Current wording
ODS revenue for the nine months ended December 31, 2024, decreased by $36,808 or 12.6% compared to the nine months ended December 31, 2023. Revenue from content media increased by approximately $918 primarily due to increased activity with a carrier that resulted in higher daily active users on prepaid devices. In addition, application media revenue declined by approximately $37,726 for the nine months ended December 31, 2024. The decline in revenue in application media was primarily due to lower device volumes, partially offset by an increase in revenue-per-device in the US region and internationally. These decreases in revenue were primarily driven by the US and Canada regions and the Europe, Middle East, and Africa regions, partially offset by increases in the Asia Pacific and China regions.
Previous wording
AGP revenue for the three months ended September 30, 2024, decreased by $8,837 or 19.1% compared to the three months ended September 30, 2023. Performance and brand advertising revenue declined by approximately $268 and advertising exchange revenue declined by approximately $8,594, primarily due to weaker demand and the impact of the consolidation and exiting of certain legacy AdColony platforms and business lines. The decrease in advertising exchange revenue was primarily due to lower performance in the US and Canada regions, partially offset by higher performance in the Europe, Middle East, and Africa regions of $1,169. Revenues from reseller partnerships remained flat between the comparable periods.
Current wording
AGP revenue for the three months ended December 31, 2024, decreased by $4,940 or 10.0% compared to the three months ended December 31, 2023. Performance and brand advertising revenue increased by approximately $3,483. Advertising exchange revenue declined by approximately $8,403, primarily due to weaker demand and the impact of the consolidation and exiting of certain legacy AdColony platforms and business lines. The decrease in advertising exchange revenue was primarily driven by lower performance in the US and Canada regions, partially offset by higher performance in the Asia Pacific and China region of $1,347. Revenues from reseller partnerships remained flat between the comparable periods.
Previous wording
AGP revenue for the six months ended September 30, 2024, decreased by $19,404 or 20.4% compared to the six months ended September 30, 2023. Performance and brand advertising revenue declined by approximately $4,617 and advertising exchange revenue declined by approximately $14,824, primarily due to weaker demand and the impact of the consolidation and exiting of certain legacy AdColony platforms and business lines. The decrease in advertising exchange revenue was primarily due to lower performance in the US and Canada regions. Revenues from reseller partnerships remained flat between the comparable periods.
Current wording
AGP revenue for the nine months ended December 31, 2024, decreased by $24,344 or 16.9% compared to the nine months ended December 31, 2023. Performance and brand advertising revenue declined by approximately $1,134 and advertising exchange revenue declined by approximately $23,226, primarily due to weaker demand and the impact of the consolidation and exiting of certain legacy AdColony platforms and business lines. The decrease in advertising exchange revenue was primarily due to lower performance in the US and Canada regions. Revenues from reseller partnerships remained flat between the comparable periods.
Previous wording
Total costs of revenue and operating expenses decreased by $163,606 or 55.3% and decreased by $180,610 or 40.4%, respectively, for the three and six months ended September 30, 2024, compared to the three and six months ended September 30, 2023.
Current wording
Total costs of revenue and operating expenses decreased by $4,511 or 3.0% and decreased by $185,121 or 30.9%, respectively, for the three and nine months ended December 31, 2024, compared to the three and nine months ended December 31, 2023.
Previous wording
Total costs of revenue and operating expenses for the three and six months ended September 30, 2023 included an impairment of goodwill of $147,181. Excluding the impairment of goodwill, total costs of revenue and operating expenses decreased by $16,425 or 11.0% and $33,429 or 11.2%, respectively, for the three and six months ended September 30, 2024, compared to the three and six months ended September 30, 2023.
Current wording
Total costs of revenue and operating expenses for the nine months ended December 31, 2023 included an impairment of goodwill of $147,181. Excluding the impairment of goodwill, total costs of revenue and operating expenses decreased by $37,940 or 8.4% for the nine months ended December 31, 2024, compared to the nine months ended December 31, 2023.
Previous wording
The decrease in total costs of revenue and operating expenses for both comparative periods, after excluding the impairment of goodwill, was primarily due to lower revenue share and product development costs, partially offset by higher general and administrative costs. The reduced revenue share is the result of lower revenue over the same comparative periods. Costs of revenue and operating expenses included total business transformation, severance and transaction costs of $505 and $2,134 for the three and six months ended September 30, 2024, respectively, compared to $3,416 and $3,819 for the three and six months ended September 30, 2023, respectively. In connection with the Company’s transformation efforts, business transformation and severance costs are expected to increase in the future remaining quarters of fiscal year 2025.
Current wording
The decrease in total costs of revenue and operating expenses for both comparative periods, after excluding the impairment of goodwill, was primarily due to lower revenue share, general and administrative, and product development costs. These decreases were partially offset by higher sales and marketing costs. The reduced revenue share is the result of lower revenue over the same comparative periods. Costs of revenue and operating expenses included total business transformation, severance and acquisition-related costs of $3,094 and $5,228 for the three and nine months ended December 31, 2024, respectively, compared to $5,718 and $9,537 for the three and nine months ended December 31, 2023, respectively. In connection with the Company’s transformation program, business transformation and severance costs are expected to increase in the future remaining quarter of fiscal year 2025.
Previous wording
The decrease in revenue share was attributable to the decrease in total net revenue over the same periods, as these costs are typically paid as a percentage of our revenue. Revenue share as a percentage of total net revenue for the three and six months ended September 30, 2024 compared to the prior year comparative periods remained flat.
Current wording
The decrease in revenue share was attributable to the decrease in total net revenue over the same periods, as these costs are typically paid as a percentage of our revenue. Revenue share as a percentage of total net revenue for the three and nine months ended December 31, 2024 compared to the prior year comparative periods remained flat.
Previous wording
Other direct costs of revenue decreased by $579 or 6.4% to $8,438 for the three months ended September 30, 2024, and was 7.1% as a percentage of total net revenue compared to $9,017, or 6.3% of total net revenue, for the three months ended September 30, 2023.
Current wording
Other direct costs of revenue decreased by $2,062 or 7.6% to $25,182 for the nine months ended December 31, 2024, and was 6.8% as a percentage of total net revenue compared to $27,244, or 6.3% of total net revenue, for the nine months ended December 31, 2023.
Previous wording
The decrease in other direct costs was primarily due to lower amortization of developed technology intangible assets, lower hosting costs as a result of both a strategic switch in web hosting providers during fiscal year 2024, and a comparable decrease in total net revenues between comparable periods. The increase in other direct costs of revenue as a percentage of total net revenue was due to the decline in total net revenue.
Current wording
The decrease in other direct costs for the nine months ended December 31, 2024 was primarily due to lower amortization of developed technology intangible assets, lower hosting costs, and a comparable decrease in total net revenues between comparable periods. The increase in other direct costs of revenue as a percentage of total net revenue was due to the decline in total net revenue.
Previous wording
Product development expenses include the development and maintenance of the Company’s product suite. Expenses in this area are primarily a function of personnel. Additionally, product development expenses include certain integration and business transformation costs, which may impact the comparability of product development expenses between periods.
Current wording
Expenses in this area are primarily a function of personnel. Additionally, product development expenses include certain integration and business transformation costs, which may impact the comparability of product development expenses between periods.
Previous wording
September 30, 2024, compared to $14,037 for the three months ended September 30, 2023. Product development expenses included severance costs of approximately $109 for the three months ended September 30, 2024. Product development expenses included severance and business transformation costs of $1,508 for the three months ended September 30, 2023.
Current wording
Product development expenses decreased by $2,833 or 21.7% to $10,203 for the three months ended December 31, 2024, compared to $13,036 for the three months ended December 31, 2023. Product development expenses included severance costs of approximately $491 for the three months ended December 31, 2024. Product development expenses included severance and business transformation costs of $1,681 for the three months ended December 31, 2023.
Previous wording
Product development expenses, after excluding severance and business transformation costs, decreased by approximately $3,205 for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease in product development expenses was primarily due to lower employee-related costs, including base salary and incentive compensation of $1,011, hosting and software costs of $1,489, and other operating costs, including third-party development of $1,864. These decreases were partially offset by higher depreciation and amortization costs of $1,159.
Current wording
Product development expenses, after excluding severance and business transformation costs, decreased by approximately $1,643 for the three months ended December 31, 2024 compared to the three months ended December 31, 2023. The decrease in product development expenses was primarily due to lower hosting and software costs of $958, third-party development costs of $451, and other costs, including travel and facilities of $769. These decreases were partially offset by increased personnel related costs of $536.
Previous wording
Product development expenses decreased by $9,690 or (32.5)% to $20,147 for the six months ended September 30, 2024, compared to $29,837 for the six months ended September 30, 2023. Product development expenses included severance costs of approximately $180 for the six months ended September 30, 2024. Product development expenses included severance, acquisition-related, and business transformation costs of approximately $1,682 for the six months ended September 30, 2023.
Current wording
Product development expenses decreased by $12,523 or (29.2)% to $30,350 for the nine months ended December 31, 2024, compared to $42,873 for the nine months ended December 31, 2023. Product development expenses included severance costs of approximately $671 for the nine months ended December 31, 2024. Product development expenses included severance, acquisition-related, and business transformation costs of approximately $3,363 for the nine months ended December 31, 2023.
Previous wording
Product development expenses, after excluding severance, acquisition-related and business transformation costs, decreased by approximately $8,188 for the six months ended September 30, 2024 compared to the six months ended September 30, 2023. The decrease in product development expenses was primarily due to lower employee-related costs, including base salary and incentive compensation of $3,546, hosting and software costs of $2,204, reduced third-party development costs of $833, and other operating costs, including facilities and travel of $1,602.
Current wording
Product development expenses, after excluding severance, acquisition-related and business transformation costs, decreased by approximately $9,831 for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023. The decrease in product development expenses was primarily due to lower employee-related costs, including base salary and incentive compensation of $3,010, lower hosting and software costs of $3,162, reduced third-party development costs of $1,283, and other operating costs, including facilities and travel of $2,369.
Previous wording
Product development expenses, excluding severance, acquisition-related, and business transformation costs, changed to 7.9% and 8.4% of total net revenue for the three and six months ended September 30, 2024, respectively, compared to 8.7% and 9.7% of total net revenue for the three and six months ended September 30, 2023, respectively. The decrease in product development expenses as a percentage of total net revenue for the six months ended September 30, 2024 was primarily due to lower employee-related costs and revenues declining at a rate faster than product development expenses due to the Company’s continued investments in its technology platforms.
Current wording
Product development expenses, excluding severance, acquisition-related, and business transformation costs, changed to 7.2% and 8.0% of total net revenue for the three and nine months ended December 31, 2024, respectively, compared to 8.0% and 9.1% of total net revenue for the three and nine months ended December 31, 2023, respectively. The decrease in product development expenses as a percentage of total net revenue for the nine months ended December 31, 2024 was primarily due to lower employee-related costs and revenues declining at a rate faster than product development expenses due to the Company’s continued investments in its technology platforms.
Previous wording
Sales and marketing expenses increased by $350 or 2.3% to $15,887 for the three months ended September 30, 2024, and was 13.4% as a percentage of total net revenue compared to $15,537, or 10.8% of total net revenue, for the three months ended September 30, 2023. Sales and marketing expenses included severance costs of approximately $96 and $575 for the three months ended September 30, 2024 and September 30, 2023, respectively.
Current wording
Sales and marketing expenses increased by $1,062 or 7.4% to $15,494 for the three months ended December 31, 2024, and was 11.5% as a percentage of total net revenue compared to $14,432, or 10.1% of total net revenue, for the three months ended December 31, 2023. Sales and marketing expenses included severance costs of approximately $1,018 and $576 for the three months ended December 31, 2024 and December 31, 2023, respectively.
Previous wording
Sales and marketing expenses, after excluding severance expenses, increased by approximately $829 for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase in sales and marketing expenses was primarily due to higher employee-related costs, including base salary, incentive compensation, and recruiting of $959, and higher third-party development costs of $159.
Current wording
Sales and marketing expenses, after excluding severance expenses, increased by approximately $620 for the three months ended December 31, 2024 compared to the three months ended December 31, 2023. The increase in sales and marketing expenses was primarily due to higher employee-related costs, including base salary and incentive compensation of $1,041, and higher third-party development costs of $356. These increases were partially offset by lower other operating costs, including facilities and travel of $641.
Previous wording
Sales and marketing expenses, after excluding severance and acquisition-related expenses, increased by approximately $1,137 for the six months ended September 30, 2024 compared to the six months ended September 30, 2023. The increase in sales and marketing expenses was primarily due to higher employee-related costs, including base salary, incentive compensation, and recruiting of $1,904. This increase was partially offset by lower costs for sales events and sales related travel of $478 and reduced facilities costs of $251.
Current wording
Sales and marketing expenses, after excluding severance and acquisition-related expenses, increased by approximately $1,757 for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023. The increase in sales and marketing expenses was primarily due to higher employee-related costs, including base salary and incentive compensation of $2,946. This increase was partially offset by lower costs for sales events and sales related travel of $614 and reduced facilities and other operating costs of $890.
Previous wording
General and administrative expenses, after excluding severance, acquisition-related and business transformations costs, increased by $1,824 for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily due to higher employee-related costs, including base salary and incentive compensation of $1,966, and an increase in other operating expenses, including software and license fees of $1,409. These increases were partially offset by lower depreciation and amortization of $1,014 and third-party development costs of $767.
Current wording
General and administrative expenses, after excluding severance, acquisition-related and business transformations costs, decreased by $787 for the three months ended December 31, 2024 compared to the three months ended December 31, 2023. The decrease was primarily due to lower professional fees of $1,576, depreciation and amortization of $832, and reduced bad debt expense of $446. These decreases were partially offset by higher personnel related costs, including stock-based compensation of $1,261 and higher other operating expenses, including software and license fees of $562.
Previous wording
General and administrative expenses increased by $3,809 or 4.7% to $85,693 for the six months ended September 30, 2024, compared to $81,884 for the six months ended September 30, 2023. General and administrative expenses included severance and business transformation costs of approximately $1,448 for the six months ended September 30, 2024. General and administrative expenses included severance, acquisition-related, and business transformation costs of $1,514 for the six months ended September 30, 2023.
Current wording
General and administrative expenses increased by $1,146 or 0.9% to $128,485 for the nine months ended December 31, 2024, compared to $127,339 for the nine months ended December 31, 2023. General and administrative expenses included severance, acquisition-related, and business transformation costs of approximately $3,033 for the nine months ended December 31, 2024. General and administrative expenses included severance, acquisition-related, and business transformation costs of $4,975 for the nine months ended December 31, 2023.
Previous wording
General and administrative expenses, after excluding severance, acquisition-related, and business transformation costs, increased by $3,875 for the six months ended September 30, 2024 compared to the six months ended September 30, 2023. The increase was primarily due to higher employee related costs of $1,674, depreciation and amortization of $1,363, other operating costs, including software and travel of approximately $2,287, and professional services including audit, tax, and legal fees of $344. These increases were partially offset by lower stock-based compensation of approximately $2,001.
Current wording
General and administrative expenses, after excluding severance, acquisition-related, and business transformation costs, increased by $3,088 for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023. The increase was primarily due to higher employee related costs of $2,653 and other operating costs, including software and travel of approximately $2,852. These increases were partially offset by lower stock-based compensation expense of $1,749 and professional services, including audit, tax, and legal fees of $1,232.
Previous wording
During the three and six months ended September 30, 2024, a tax provision expense of $1,400 and $3,150, respectively, resulted in an effective tax rate of (5.9)% and (6.7)%, respectively. Differences between the effective tax rate and the statutory tax rate primarily relate to foreign income expense and a valuation allowance on loss from operations.
Current wording
During the three and nine months ended December 31, 2024, a tax provision expense of $2,412 and $5,562, respectively, resulted in an effective tax rate of (11.6)% and (8.2)%, respectively. Differences between the effective tax rate and the statutory tax rate primarily relate to foreign income expense and a valuation allowance on loss from operations.
Previous wording
During the three and six months ended September 30, 2023, a tax benefit of $713 and $2,252, respectively, resulted in an effective tax rate of 0.4% and 1.3%, respectively. Differences between the effective tax rate and the statutory tax rate primarily relate to the non-deductible goodwill impairment charge, tax limitations on certain deductions and state tax benefits.
Current wording
During the three and nine months ended December 31, 2023, a tax benefit of $2,845 and $5,097, respectively, resulted in an effective tax rate of 16.8% and 2.7%, respectively. Differences between the effective tax rate and the statutory tax rate primarily relate to the non-deductible goodwill impairment charge, tax limitations on deductions for compensation, state tax benefits and foreign rate differences.
Previous wording
Our primary sources of liquidity are our cash and cash equivalents, cash from operations, and borrowings under our Credit Agreement (“Amended and Restated Credit Agreement”) with Bank of America, N.A. (“BoA”). As of September 30, 2024, we had unrestricted cash of approximately $32,081 and restricted cash of approximately $684. Restricted cash consists primarily of cash held by a bank in a collateral account as collateral to cover the Company's corporate credit cards. The Company had $14,000 available to draw under the Amended and Restated Credit Agreement with BoA, excluding the accordion feature, subject to the required covenants. The Amended and Restated Credit Agreement matures in 2026. We incurred a net loss of $(24,986) and $(50,142), respectively, and used cash in operating activities of $(8,719) and $(10,071), respectively for the three and six months ended September 30, 2024.
Current wording
Our primary sources of liquidity are our cash and cash equivalents, cash from operations, and borrowings under our Credit Agreement (“Amended and Restated Credit Agreement”) with Bank of America, N.A. (“BoA”). As of December 31, 2024, we had unrestricted cash of approximately $34,620 and restricted cash of approximately $694. Restricted cash consists primarily of cash held by a bank in a collateral account as collateral to cover the Company's corporate credit cards. The Company had $14,000 available to draw under the Amended and Restated Credit Agreement with BoA, excluding the accordion feature, subject to the required covenants. The Amended and Restated Credit Agreement matures in 2026. We incurred a net loss of $(23,131) and $(73,273), respectively, and generated cash from operating activities of $10,443 and $372, respectively for the three and nine months ended December 31, 2024.
Previous wording
Our principal cash requirements for the twelve-month period following this report primarily consists of personnel costs, contractual payment obligations, including office leases, cloud hosting costs, capital expenditures, minimum commitments under hosting agreements (see Liquidity and Capital Resources—Hosting Agreements below) payment of interest and required principal payments under our Amended and Restated Credit Agreement, cash outlays for income taxes, and cash requirements to fund working capital. In the longer term, we would expect to have similar cash requirements.
Current wording
Our principal cash requirements for the twelve-month period following this Report primarily consist of personnel costs, contractual payment obligations, including office leases, cloud hosting costs, capital expenditures, minimum commitments under hosting agreements (see Liquidity and Capital Resources—Hosting Agreements below) payment of interest and required principal payments under our Amended and Restated Credit Agreement, cash outlays for income taxes, and cash requirements to fund working capital. In the longer term, we would expect to have similar cash requirements.
Previous wording
We are exploring various cost saving opportunities, namely through the Company’s recently initiated transformation efforts, and we intend to continue seeking opportunities to generate additional revenue through operations. There can be no assurance that we will be successful in our plans described above. If we are unable to effectively implement additional cost reductions, generate additional revenue or refinance our Amended and Restated Credit Agreement or raise additional funding, we may be forced to delay, reduce or eliminate some or all of our strategic operational efforts and product and service expansion, and our business, financial condition and results of operations could be materially and adversely affected.
Current wording
We are exploring various cost saving opportunities, namely through the Company’s recently initiated transformation program, and we intend to continue seeking opportunities to generate additional revenue through operations. There can be no assurance that we will be successful in our plans described above. If we are unable to effectively implement additional cost reductions, generate additional revenue or refinance our Amended and Restated Credit Agreement or raise additional funding, we may be forced to delay, reduce or eliminate some or all of our strategic operational efforts and product and service expansion, and our business, financial condition and results of operations could be materially and adversely affected.
Previous wording
We believe our existing cash and cash equivalents, cash flow from operations and undrawn available balance under our Amended and Restated Credit Agreement will be sufficient to meet our working capital and other business requirements for at least 12 months from the filing date of this Report. However, our ability to meet our debt service obligations and to fund working capital, capital expenditures, and investments in our business will depend upon our future performance, which will be subject to availability of borrowing capacity under our credit facility and our ability to access capital markets as well as financial, business, and other factors affecting our operations, many of which are beyond our control. These factors include general and regional economic, financial, competitive, legislative, regulatory, and other factors such as health epidemics, economic and macro-economic factors like labor shortages, supply chain disruptions, and inflation, and geopolitical developments, including the conflict in Ukraine, the political climate related to China, and the conflict in Israel. We cannot guarantee we will generate sufficient cash flow from operations, or that future borrowings or capital markets will be available, in an amount sufficient to enable us to pay our debt or to fund our other liquidity needs.
Current wording
We believe our existing cash and cash equivalents, cash flow from operations and undrawn available balance under our Amended and Restated Credit Agreement will be sufficient to meet our working capital and other business requirements for at least 12 months from the filing date of this Report. However, our ability to meet our debt service obligations and to fund working capital, capital expenditures, and investments in our business will depend upon our future performance, which will be subject to availability of borrowing capacity under our Amended and Restated Credit Agreement and our ability to access capital markets as well as financial, business, and other factors affecting our operations, many of which are beyond our control. These factors include general and regional economic, financial, competitive, legislative, regulatory, and other factors such as health epidemics, economic and macro-economic factors like labor shortages, supply chain disruptions, and inflation, and geopolitical developments, including the conflict in Ukraine, the political climate related to China, and the conflict in Israel. We cannot guarantee we will generate sufficient cash flow from operations, or that future borrowings or capital markets will be available, in an amount sufficient to enable us to pay our debt or to fund our other liquidity needs. See Part I, Item 1A, “Risk Factors,” in its Annual Report on Form 10-K for the fiscal year ended March 31, 2024, filed with the Securities and Exchange Commission on May 28, 2024, for additional information related to the foregoing risks.
Previous wording
Our outstanding secured indebtedness under the Amended and Restated Credit Agreement is $411,000 as of September 30, 2024. The maturity date of the Amended and Restated Credit Agreement is April 29, 2026, and the outstanding balance is classified as long-term debt, net of debt issuance costs of $3,380, on our consolidated balance sheets as of September 30, 2024. For further description of the terms of the Amended and Restated Credit Agreement, see Note 10—Debt under the heading “Revolver” in the notes to our condensed consolidated financial statements under Part I, Item 1 of this Report.
Current wording
Our outstanding secured indebtedness under the Amended and Restated Credit Agreement is $411,000 as of December 31, 2024. The maturity date of the Amended and Restated Credit Agreement is April 29, 2026, and the outstanding balance is classified as long-term debt, net of debt issuance costs of $2,846, on our consolidated balance sheets as of December 31, 2024. For further description of the terms of the Amended and Restated Credit Agreement, see Note 11—Debt under the heading “Revolver” in the notes to our condensed consolidated financial statements under Part I, Item 1 of this Report.
Previous wording
Our credit facility also contains a maximum consolidated secured net leverage ratio and minimum consolidated interest coverage ratio. If we fail to satisfy these covenants, the lender may declare a default, which could lead to acceleration of the debt maturity. Any such default would have a material adverse effect on us.
Current wording
Our Amended and Restated Credit Agreement also contains a maximum consolidated secured net leverage ratio and minimum consolidated interest coverage ratio. If we fail to satisfy these covenants, the lender may declare a default, which could lead to acceleration of the debt maturity. Any such default would have a material adverse effect on us.
Previous wording
We enter into hosting agreements with service providers, and, in some cases, those agreements include minimum commitments that require us to purchase a minimum amount of service over a specified time period (“the minimum commitment period”). The minimum commitment period is generally one year in duration, and the hosting agreements include multiple minimum commitment periods. Our minimum purchase commitments under these hosting agreements total approximately $252,866 over the next six fiscal years.
Current wording
We enter into hosting agreements with service providers, and, in some cases, those agreements include minimum commitments that require us to purchase a minimum amount of service over a specified time period (“the minimum commitment period”). The minimum commitment period is generally one year in duration, and the hosting agreements include multiple minimum commitment periods. Our minimum purchase commitments under these hosting agreements total approximately $244,388 over the next six fiscal years.
Previous wording
Our cash flows from operating activities are primarily driven by revenue generated from user acquisition and advertising activity, offset by the cash costs of operations, and are significantly influenced by the timing of and fluctuations in receipts from customers and payments to our carrier and publisher partners as well as other vendors. Our future cash flows from operating activities will be diminished if we cannot increase our revenue levels and manage costs appropriately. Cash provided by (used in) operating activities was $(10,071) for the six months ended September 30, 2024, compared to $28,772 for the six months ended September 30, 2023. The decrease of $38,843 was due to the following:
Current wording
Our cash flows from operating activities are primarily driven by revenue generated from user acquisition and advertising activity, offset by the cash costs of operations, and are significantly influenced by the timing of and fluctuations in receipts from customers and payments to our carrier and publisher partners as well as other vendors. Our future cash flows from operating activities will be diminished if we cannot increase our revenue levels and manage costs appropriately. Cash provided by operating activities was $372 for the nine months ended December 31, 2024, compared to $40,433 for the nine months ended December 31, 2023. The decrease of $40,061 was due to the following:
Previous wording
•$4,631 decrease due to changes in operating assets and liabilities, driven primarily by working capital changes, specifically accounts payable and other current liabilities;
Current wording
•$3,220 net increase due to changes in operating assets and liabilities, driven primarily by working capital changes, specifically accounts receivable and other current assets;
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The increase in other direct costs for the three months ended December 31, 2024 was primarily due to higher platform and bidding fees. The increase in other direct costs of revenue as a percentage of total net revenue was due to the decline in total net revenue.
Current report — wording carried from elsewhere
Product development expenses include the development and maintenance of the Company’s product suite.