Digital Turbine, Inc.
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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.
Jun 30, 2026 · Filed Aug 5, 2026
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 2025-12-31; filed 2026-02-03.
0001628280-26-005047
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001628280-26-053446
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 123 previous paragraphs and 91 current paragraphs.
30 unchanged; 18 reworded; 41 added; 73 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 5 previous and 6 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 (41)
Current report
Recent Developments for the Three Months Ended June 30, 2026
Current report
The Company announced a strategic partnership with Orange, one of the world's leading telecommunications operators, serving 340 million customers across 26 countries in the EMEA region. Through this partnership, Digital Turbine will bring its alternative app distribution platform and its SingleTap technology to Orange subscribers during the latter half of this fiscal year.
Current report
The Company announced Artificial Intelligence (“AI”)-focused collaborations with Google Cloud and Databricks. Through the integration of Databricks Genie Spaces and Databricks Apps into its technology stack, the Company is accelerating its data and AI strategy to enable smarter and privacy-conscious mobile experiences at a global scale. The Company is embedding AI directly into the core intelligence systems powering its platform to improve targeting, recommendations, and real-time optimization across apps, devices, and on-device surfaces.
Current report
The Company named Benneaser John as its Chief Technology Officer on April 6, 2026. Mr. John brings extensive AI and enterprise technology leadership experience to the Company.
Current report
The Company entered into an agreement with a third-party to sell its dormant exchange (the “Exchange”), originally acquired in connection with the AdColony acquisition in 2021, for total cash consideration of $4,700. The Company will recognize the gain in the second quarter of fiscal 2027 and has used the proceeds to pay down a portion of its outstanding debt.
Current report
As a result of achieving certain leverage ratio thresholds under its Financing Agreement, the applicable margin of the Company’s most significant loan tranche was reduced by 50 basis points.
Current report
Amendment to Financing Agreement
Current report
On April 20, 2026, the Company amended its Financing Agreement. The amendment reduced the liquidity covenant requirement for the period between April 1, 2026 and December 31, 2026 from $20,000 to $15,000 and modified the timing and amount of its exit and duration fees. The Company (i) paid a $5,000 amendment fee, capitalized as original debt discount to be amortized over the remaining term of the Financing Agreement; (ii) limited its remaining exit fees to $1,350; and (iii) limited future duration fees to $5,000, payable in cash, which will be waived if the Company prepays the principal of a certain tranche of the outstanding term loan by December 31, 2026. The exit fees were added to the outstanding principal balance on the Amendment Date.
Current report
The Company, as a global company, is subject to negative impacts and risks related to prevailing macroeconomic conditions and significant events with macroeconomic impacts, including, but not limited to, the wars in Ukraine, Israel, Gaza, Iran, Lebanon and Syria, geopolitical tensions involving China including but not limited to various U.S. federal and state governmental agencies continued examination of the distribution and use of apps developed and/or published by China-based companies, market conditions related to inflation, recessionary concerns, fluctuating foreign currency exchange rates, increases in trade tariffs, changes in interest rates, uncertainty over liquidity concerns in the broader financial services industry, supply chain, including the continued global memory chip shortage associated with high AI demand, and energy market disruption issues. As a result of these macroeconomic conditions and uncertainties, certain of our customers have, and others may, defer or reduce their use of our services, which has had, and could in the future have, a negative impact on our net revenues. We have suspended our business activities in Russia and Belarus to the extent required by applicable law, but such suspension has not had, and we do not expect it to have, a material impact on our financial results. Despite our significant presence in the region, we do not expect the ongoing conflicts in Iran, Israel, Gaza, Lebanon, and Syria to have a material impact on our operations or our financial results. In addition, our borrowings outstanding under our Financing Agreement currently bear interest at variable rates and may continue to fluctuate as a result of changes in interest rates. We continuously monitor the direct and indirect impacts of these events on our business and financial results, as well as the overall global economy, and we anticipate that these macroeconomic events could continue to negatively impact our results of operation.
Current report
Components of Results of Operations
Current report
The Company generates revenue from transactions for the purchase and sale of digital advertising inventory through our various platforms and service offerings. Our 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 our platforms. The Company recognizes revenue upon fulfillment of our performance obligation to our 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.
Current report
Revenue share includes amounts paid to our carrier and OEM partners, as well as app publishers and developers through revenue sharing arrangements or via direct CPM, CPI, CPA, or cost-per-placement (“CPP”) arrangements, and are recorded as a cost of revenue. In addition, when indirect arrangements exist through advertising aggregators (ad networks) and revenue is shared with our carrier and app development partners, the shared revenue is also recorded as a cost of revenue.
Current report
Product development expenses include the development and maintenance of the Company’s product suite and are primarily a function of employee-related costs, which include salaries, incentive compensation, and benefits as well as professional services fees, hosting expenses, and software costs. The Company capitalizes certain product development costs related to developing new functionality for our products, which may cause our product development expense to fluctuate from period to period.
Current report
Sales and marketing expenses represent the costs of sales and marketing personnel, which include salaries, incentive compensation, and benefits in addition to advertising, marketing campaigns and campaign management, professional services fees, travel, and software costs. The Company capitalizes certain sales and marketing costs related to developing new functionality for our products, which may cause our sales and marketing expense to fluctuate from period to period.
Current report
General and administrative expenses consist primarily of costs incurred to support our business operations across the parent and subsidiary companies, and include employee-related expenses such as salaries, incentive compensation and benefits for employees engaged in finance, accounting, legal, human resources and administration as well as other costs such as professional services and consulting fees, software costs, travel, facilities costs, insurance, stock-based compensation, and depreciation and amortization expense.
Current report
Interest expense, net consists of interest paid and accrued on our debt and amortization of debt discount, debt issuance costs, and exit and duration fees, offset by interest income earned on our cash and cash equivalents. Since the borrowings outstanding under our credit agreement currently bear interest at variable rates, we expect our interest expense may continue to fluctuate as a result of changes in interest rates.
Current report
Unrealized gain (loss) on derivatives represents the fair value re-measurement of the 2025 Warrants at each balance sheet date and is heavily dependent on the price of our common stock at each reporting period. These remeasurements will continue until the 2025 Warrants are exercised or expire.
Current report
Foreign exchange transaction gain (loss) consists of the revaluation of assets or liabilities that are denominated in currencies other than the functional currency of our applicable operating subsidiaries.
Current report
Other income (expense), net primarily consists of non-recurring transactions for the Company.
Current report
Comparison of Our Results of Operations for the Three Months Ended June 30, 2026 to June 30, 2025:
Current report
Net revenue
Current report
Brand and performance advertising increased approximately $5,962, which was largely due to increased spend by major partners.
Current report
Revenue share increased by $12,910, or 22.2%, to $71,048 for the three months ended June 30, 2026, compared to $58,138 for the three months ended June 30, 2025. The increase in revenue share is primarily attributable to higher net revenues when comparing the two periods. Revenue share as a percentage of total net revenue was 42.8% and 44.4% for the three months ended June 30, 2026 and 2025, respectively. The decrease in revenue share as a percentage of total net revenue was primarily due to revenue mix changes, as evidenced by the growth in our AGP segment during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Current report
Other direct costs of revenue increased by $2,160, or 20.0%, to $12,964 for the three months ended June 30, 2026 and was 7.8% as a percentage of total net revenue compared to $10,804, or 8.3% of total net revenue, for the three months ended June 30, 2025. The increase in other direct costs was primarily due to higher platform and bidding fees and higher hosting costs between comparable periods.
Current report
Product development expenses increased by $443, or 4.4%, to $10,590 for the three months ended June 30, 2026 compared to $10,147 for the three months ended June 30, 2025. The increase in product development expense, was primarily due to increases in hosting, software, and other license costs of $462 and personnel-related costs of $392, as well as lower offsetting capitalization of labor costs related to internally-developed software of $805. These increases were partially offset by a decrease in professional services costs of $1,238.
Current report
Sales and marketing expenses increased by $1,744, or 12.8%, to $15,333 for the three months ended June 30, 2026 compared to $13,589 for the three months ended June 30, 2025. The increase in sales and marketing expense was primarily due to higher personnel-related costs of $1,401 and professional services costs of $325.
Current report
General and administrative expenses decreased by $9,922, or 23.1%, to $32,987 for the three months ended June 30, 2026 compared to $42,909 for the three months ended June 30, 2025. The decrease in general and administrative expenses was primarily due to decreased depreciation and amortization costs of $6,532 and share-based compensation costs of $3,699.
Current report
Interest and other expense, net
Current report
For the three months ended June 30, 2026, interest expense, net, increased by $2,936, or 29.5%, compared to the three months ended June 30, 2025, primarily due to an increase in the applicable margins on our outstanding debt. The average interest rate was 11.65% and 8.63% for the three months ended June 30, 2026 and 2025, respectively.
Current report
Other expense, net
Current report
For the three months ended June 30, 2026, other expense, net increased $8,426 to $9,094 compared to $668 for the three months ended June 30, 2025. The increase in other expense, net was primarily due to a non-cash fair value adjustment of $9,281 relating to the revaluation of one of the Company’s non-marketable, strategic equity investments. The increase was partially offset by a reduction in professional services fees associated with the Company's financing transactions, which were incurred in the three months ended June 30, 2025 and did not recur in the current period. For further description of the Company’s non-marketable equity investments, see Note 3—Fair Value Measurements in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
Current report
Income tax expense (benefit)
Current report
Income tax expense increased $4,381, or 209.3%, to $2,288 for the three months ended June 30, 2026 from a benefit of $2,093 for the three months ended June 30, 2025. The increase in our tax expense is primarily due to the reduction in our loss before taxes when comparing the two periods as well as changes to our valuation allowances and other discrete items.
Current report
If the Company is unable to refinance certain loan tranches under the Financing Agreement by December 31, 2026, the Company will be required to pay duration fees in the amount of $5,000. See Note 9— Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for a discussion of the exit and duration fees.
Current report
Cash Flow Summary
Current report
The increase of $9,071 in net cash provided by operating activities during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was due primarily to the $27,722 increase in operating income, partially offset by decreases in non-cash depreciation and amortization expenses and stock-based compensation expense of $6,532 and $3,819 respectively. Additionally, our operating cash flows were affected by increases in cash paid for income taxes and interest in the amounts of $4,440 and $2,920, respectively.
Current report
Financing cash flows consist primarily of repayments associated with our long-term debt, proceeds from the issuance of shares of common stock through our equity incentive plans, and the repurchase of common stock to satisfy withholding tax requirements related to the settlement of restricted stock units, including our performance-based restricted stock units.
Current report
Net cash used in financing activities increased $1,234 during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily as a result of higher principal payments on the Company’s long-term debt in the amount of $4,700 and a $5,000 payment for original issue discount in connection with our amendment to the Financing Agreement, partially offset by a decrease of $9,298 in payments relating to debt issuance costs. Additionally, proceeds from options exercised decreased by $1,279 when comparing the two periods. Principal payments for the three months ended June 30, 2026 included $4,700 resulting from the sale of the Exchange. For further description of the terms of and amendment to the Financing Agreement, see Note 9—Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
Current report
During the three months ended June 30, 2026 and 2025, the Company withheld and retired shares of common stock to satisfy $271 and $144, respectively, of statutory withholding tax requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees related to the settlement of restricted and performance stock units during the relevant periods. These shares are treated as common stock repurchases in our condensed consolidated financial statements.
Current report
Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. On an ongoing basis, we evaluate our estimates based on assumptions that are believed to be reasonable under the circumstances. These estimates are inherently subject to judgment and actual results could differ materially from those estimates.
Showing the first 40 of 41 passages. Open the source sections for the rest.
Removed paragraphs (73)
Previous report
Recent Developments
Previous report
Our results of operations are affected by macroeconomic conditions and geopolitical developments, including but not limited to levels of business and consumer confidence, actions taken by governments to counter inflation, potential trade disputes, including but not limited to any U.S. government actions against China-based developers and publishers, Russia’s invasion of Ukraine, and the recent conflict in Israel.
Previous report
Inflation, rising interest rates, supply chain disruptions and constraints, changes in regional or global business, political, macroeconomic and market conditions, including as a result of conflicts, hostilities, recessionary fears, the impact of global instability, domestic and foreign tariffs and other trade protection measures, and reduced business and consumer confidence have caused and may continue to cause a global slowdown of economic activity, which has caused and may continue to cause a decrease in demand for a broad variety of goods and services, including those provided by our clients.
Previous report
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 report
Further, various U.S. federal and state governmental agencies continue to examine the distribution and use of apps developed and/or published by China based companies. In some cases, government agencies have banned certain apps from mobile devices. Further actions by U.S. federal or state governmental agencies or other countries to restrict or ban the distribution of China based apps could negatively impact our business, financial condition, and results of operations.
Previous report
While Russia’s invasion of Ukraine has not had a direct, material impact on our business, any European conflict, if expanded to include other countries, would likely have a material, negative impact on general economic conditions and would impact our business directly.
Previous report
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 report
The extent of the impact of these macroeconomic factors on our operational and financial performance is also dependent on their impact on carriers and OEMs in relation to their sales of smartphones, tablets, and other devices, as well as the impact on application developers and in-app advertisers. If negative macroeconomic factors or geopolitical developments materially impact our partners over a prolonged period, our results of operations and financial condition could also be adversely impacted, the size and duration of which we cannot accurately predict at this time.
Previous report
We continue to actively monitor these factors and we may take further actions that alter our business operations, as required, or that we determine are in the best interests of our employees, customers, partners, suppliers, and stockholders. In addition to monitoring the developments described above, the Company also considers the impact such factors may have on our accounting estimates and potential impairments of our non-current assets, which primarily consist of goodwill and finite-lived intangible assets.
Previous report
Financing Agreement
Previous report
On August 29, 2025 (the “Closing Date”), the Company refinanced its existing senior credit facility. The Company and certain wholly-owned subsidiaries of the Company, as guarantors (the “Guarantors”), entered into a Financing Agreement (the “Financing Agreement”) with Blue Torch Finance LLC, as administrative agent and as collateral agent (“Administrative Agent”), and the lenders from time to time party thereto (“Lenders”), pursuant to which the Lenders made loans and other extensions to the Company under certain term loan credit facilities on the terms and conditions as set forth therein.
Previous report
The Financing Agreement (i) has a four-year term from the Closing Date and (ii) provides for three separate tranches of term loans in an aggregate principal amount of $430,000 (the “Loans”), all of which were borrowed in full by the Company on the Closing Date. The Loans are secured by substantially all of the assets of the Company and the Guarantors, subject to certain exceptions.
Previous report
During the three and nine months ended December 31, 2025, the Company made a payments of $44,908 and $55,000, respectively, on the principal of the Loans with proceeds raised from utilizing the Company’s At-the-Market offering, except for $3,002, which was paid with operating cash. Under the Financing Agreement, the Company has the option to retain proceeds from one or more at-the-market equity issuances up to the aggregate amount not to exceed $5,000. As of December 31, 2025, the Company has not retained any proceeds from such equity issuances.
Previous report
The Loans accrue interest, at the Company’s option, at a term SOFR rate or a reference rate for U.S. dollar borrowings, plus an applicable margin. The applicable margin for Loans accruing interest at the term SOFR rate ranges from 7.50% to 8.00% and ranges from 6.50% to 7.00% for loans accruing interest at the reference rate. The outstanding principal amount of the Loans is subject to scheduled repayment as follows: (i) on the last day of each fiscal quarter until the maturity of the Loans, the Company will repay the outstanding principal amount of term loans in an amount equal to $2,344 in the aggregate across the remaining two tranches and (ii) on the maturity date, the Company will pay the remaining aggregate outstanding principal amount, including all accrued and unpaid interest thereon. In addition, the Financing Agreement contains certain mandatory prepayment provisions, including from proceeds raised from equity issuances and, beginning in fiscal year 2027, 50% of any excess cash flows, and the Company would also be required to pay certain escalating exit fees and duration fees if one of the two remaining tranches of term loans is not repaid by a certain date.
Previous report
The Financing Agreement contains various customary affirmative and negative covenants, as well as financial covenants. The Financing Agreement requires the Company to maintain (i) a maximum leverage ratio with step-downs every fiscal quarter and (ii) minimum liquidity of (A) $10,000 from the Closing Date until March 31, 2026 and (B) $20,000 from and after April 1, 2026 until the maturity date, of which no less than $10,000 must be maintained within the United States.
Previous report
Warrants to Purchase Common Stock
Previous report
In connection with the Financing Agreement, on the Closing Date, the Company issued warrants (the “August 2025 Warrants”) to purchase an aggregate of 824,421 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), to certain affiliates of the Lenders (in such capacity, the “August Holders”) at an exercise price of $4.84 per share (the “Exercise Price”), which is equal to the 30-day volume-weighted average price per share of Common Stock ending on and including the trading day immediately preceding the Closing Date. In addition, the Company issued, on September 15, 2025, an additional warrant to purchase an aggregate of 397,997 shares of Common Stock to an affiliate of a Lender (in such capacity, the “September Holder” and, together with the August Holders, the “Holders”) at the Exercise Price (the “September 2025 Warrant” and, together with the August 2025 Warrants, the “2025 Warrants”).
Previous report
The 2025 Warrants expire on March 1, 2030. The Exercise Price and the number of shares underlying the 2025 Warrants are subject to adjustment in the event of specified events, including a subdivision or combination of the Common Stock, a reclassification of the Common Stock, certain change of control transactions, certain rights offerings or specified dividend payments, subject to certain limitations as set forth in the 2025 Warrants. Upon exercise, the aggregate exercise price may be paid, at each warrant holder’s election, in cash or on a net issuance basis, based upon the fair market value of the Common Stock at the time of exercise.
Previous report
The Company agreed to provide certain customary registration rights with respect to the resale of shares of Common Stock underlying 2025 Warrants held by or issuable to the holders from time to time. The 2025 Warrants also contain customary indemnity and contribution obligations in connection with such registration.
Previous report
ATM Offering
Previous report
On August 5th, 2025, the Company entered into a Sales Agreement with RBC Capital Markets LLC and Craig-Hallum Capital Group LLC as our sales agents, pursuant to which we could offer and sell from time-to-time shares of our Common Stock for aggregate gross proceeds of up to $150,000. During the nine months ended December 31, 2025, the Company sold 9,945,136 shares of Common Stock at an average selling price of $5.89 per share, yielding aggregate gross proceeds of $58,566, and incurred commission costs of $1,757 associated with such sales.
Previous report
Net proceeds raised subsequent to the execution of the Financing Agreement were used to prepay the principal of the Loans, as required under the Financing Agreement.
Previous report
On February 2, 2026, the Company delivered notice to RBC Capital Markets, LLC (“RBC”) and Craig-Hallum Capital Group LLC (collectively, the "Agents") of the termination of the Sales Agreement, dated as of August 5, 2025 (the "Sales Agreement"), pursuant to which the Company could offer and sell, from time to time, shares of the Company's common stock, par value $0.0001 per share, having an aggregate offering price of up to $150,000 through the Agents, as sales agents. The Company terminated the Sales Agreement at its sole discretion, as permitted under Section 7(a) of the Sales Agreement. The termination was effective as of February 2, 2026. As of the termination date, the Company had sold an aggregate of 9,945,136 shares of common stock under the Sales Agreement for aggregate gross proceeds of approximately $58,566.
Previous report
Goodwill and Intangible Assets
Previous report
The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment, including qualitative and quantitative factors such as the identification of reporting units, identification and allocation of assets and liabilities to reporting units, and determinations of fair value. In estimating the fair value of our reporting units when performing our annual impairment test, or when an indicator of impairment is present, we make estimates and significant judgments about the future cash flows of those reporting units and other estimates including appropriate discount rates. Discount rates can fluctuate based on various economic conditions including our capital allocation and interest rates, including the interest rates on U.S. treasury bonds. Changes in judgments on these assumptions and estimates, particularly expectations of revenue and cash flow growth rates in future periods and discount rates, could result in goodwill impairment charges.
Previous report
In addition to evaluating goodwill for impairment when events or circumstances indicate they would more likely than not reduce the fair value of a reporting unit below its carrying value, the Company also evaluates goodwill for impairment on an annual basis. The Company’s next annual evaluation of goodwill for impairment will be as of March 31, 2026.
Previous 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.
Previous report
Transformation Program
Previous report
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 report
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 $31 and $1,309 of business transformation costs during the nine months ended December 31, 2025 and December 31, 2024, respectively. 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 report
Additionally, the Company is in the process of initiating further transformation efforts. The Company launched an additional transformation effort in October 2024, in which the Company began a transformation program intended to improve various measures across the organization. These measures include but were 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, the Company implemented a two phased reduction in our workforce, one in November 2024 and the other in January 2025. No costs associated with our transformation program were incurred during the nine months ended December 31, 2025. During the fiscal year ended March 31, 2025, the Company incurred expenses of $2,886, related to our transformation program primarily consisting of severance and other one-time termination benefits. The transformation program included several other initiatives and was substantially completed in the fourth quarter of fiscal year 2025. The transformation program was targeted to yield more than $25,000 in annual cash expense savings.
Previous report
ODS revenue for the nine months ended December 31, 2025, increased by $36,668 or 14.4% compared to the nine months ended December 31, 2024. Revenue from content media increased by approximately $1,144 primarily due to increased activity with a carrier that resulted in higher daily active users on prepaid devices. In addition, application media revenue increased by approximately $35,524 for the nine months ended December 31, 2025. The increase in revenue in application media was primarily due to higher device volumes internationally and an increase in revenue-per-device in the US and internationally, offset by lower device volumes in the US. The increase in revenue was primarily driven by improved performance in the Asia Pacific and China regions.
Previous report
AGP revenue for the three months ended December 31, 2025, increased by $8,375 or 18.9% compared to the three months ended December 31, 2024. The increase was primarily driven by higher advertising exchange revenue of approximately $9,719, which was largely due to the continued onboarding of new publishers and demand partners. This increase was partially offset by a decline in performance and brand advertising revenue by approximately $1,073 primarily due to reduced demand by a major brand and a decrease in private marketplace spend. The increase in AGP revenue was primarily driven by higher performance in the Asia Pacific and China regions. Revenues from reseller partnerships decreased by $271, between the comparable periods.
Previous report
Total costs of revenue and operating expenses decreased by $17,645 or 12.0% and decreased by $14,562 or 3.5%, respectively, for the three and nine months ended December 31, 2025, compared to the three and nine months ended December 31, 2024.
Previous report
The decrease in total costs of revenue and operating expenses for the three months ended December 31, 2025 was due to a decrease in revenue share, product development expenses, sales and marketing expenses, and general and administrative expenses. These decreases were partially offset by higher other direct costs of revenue.
Previous report
The decrease in total costs of revenue and operating expenses for the nine months ended December 31, 2025 was due to a decrease in sales and marketing expenses and general and administrative expenses. These decreases were partially offset by higher revenue share, other direct costs of revenue, and product development expenses.
Previous report
Costs of revenue and operating expenses included total business transformation, acquisition-related expenses, and severance costs of $33 and $569 for the three and nine months ended December 31, 2025, respectively, compared to $3,094 and $5,228 for the three and nine months ended December 31, 2024, respectively.
Previous report
Revenue share decreased by $5,522 or 7.9% to $64,425 for the three months ended December 31, 2025, and was 42.6% as a percentage of total net revenue compared to $69,947, or 52.0% of total net revenue, for the three months ended December 31, 2024. Thedecrease in revenue share and revenue share as a percentage of total net revenue was driven by product mix changes, including certain high-margin product lines driving a higher percentage of total net revenue between the comparative periods.
Previous report
Revenue share increased by $3,564 or 2.0% to $185,656 for the nine months ended December 31, 2025, and was 43.9% as a percentage of total net revenue compared to $182,092, or 49.0% of total net revenue, for the nine months ended December 31, 2024. The increase in revenue share was attributable to the increase in total net revenue over the same periods, as these costs are typically paid as a percentage of our revenue. The decrease in revenue share as a percentage of total net revenue was driven by product mix changes, including certain high-margin product lines driving a higher percentage of total net revenue between the comparative periods.
Previous report
Other direct costs of revenue increased by $3,251 or 36.3% to $12,205 for the three months ended December 31, 2025, and was 8.1% as a percentage of total net revenue compared to $8,954, or 6.7% of total net revenue, for the three months ended December 31, 2024.
Showing the first 40 of 73 passages. Open the source sections for the rest.
Reworded paragraphs (18)
Previous wording
Digital Turbine, Inc., through its subsidiaries (collectively “Digital Turbine” or the “Company”), is a leading independent mobile growth platform that levels up the landscape for advertisers, publishers, carriers, and device original equipment manufacturers (“OEMs”). We offer 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. In addition, our products and solutions provide monetization opportunities for OEMs, carriers, and application (“app” or “apps”) publishers and developers.
Current wording
Digital Turbine, Inc., through its subsidiaries (collectively “Digital Turbine” or the “Company,” “we,” or “us”), is a leading independent mobile growth platform that levels up the landscape for advertisers, publishers, carriers, and device original equipment manufacturers (“OEMs”). We offer 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. In addition, our products and solutions provide monetization opportunities for OEMs, carriers, and application (“app” or “apps”) publishers and developers.
Previous wording
Revenue share includes amounts paid to our carrier and OEM partners, as well as app publishers and developers, and are recorded as a cost of revenue.
Current wording
Cost of Revenue and Operating Expenses
Previous wording
Other direct costs of revenue are comprised primarily of hosting expenses directly related to the generation of revenue and bidding and platform fees, which are fees incurred by the Company for facilitating certain programmatic ad transactions on our exchange platform. These fees are generally calculated as a percentage of gross advertising spend.
Current wording
Other direct costs of revenue are comprised primarily of hosting expenses directly related to the generation of revenue and bidding and platform fees associated with the Company’s exchange platform.
Previous wording
The following table sets forth our results of operations for the three and nine months ended December 31, 2025 and 2024 (in thousands):
Current wording
The following table sets forth our results of operations for the three months ended June 30, 2026 and 2025:
Previous wording
Over the three-month comparative periods, net revenue increased by $16,762 or 12.4%, and over the nine-month comparative periods, net revenue increased by $51,348 or 13.8%. See the segment discussion below for further details regarding net revenue.
Current wording
Net revenue increased by $35,057 or 26.8% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. See the segment discussion below for further details regarding net revenue.
Previous wording
ODS revenue for the three months ended December 31, 2025, increased by $7,820 or 8.5% compared to the three months ended December 31, 2024. Revenue from content media increased by $279, primarily due to increased activity with a carrier that resulted in higher daily active users on prepaid devices., and revenue from application media increased by approximately $7,541. This increase was primarily due to higher device volumes internationally and an increase in revenue-per-device in the US and internationally, offset by lower device volumes in the US. The increase in revenue was primarily driven by improved performance in the Asia Pacific and China regions.
Current wording
On Device Solutions revenue increased by $14,548, or 15.2%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 and was primarily driven by improved performance internationally. Revenue from application media increased by approximately $13,714 due to an increase in new device volumes and revenue-per-device internationally, partially offset by a decrease in new device sales and revenue-per-device in the U.S., in addition to increased activity of certain strategic demand contracts in the current period.
Previous wording
AGP revenue for the nine months ended December 31, 2025, increased by $13,614 or 11.3% compared to the nine months ended December 31, 2024. The increase was primarily a result of an increase in advertising exchange of approximately $22,591, which was largely due to the continued onboarding of new publishers and demand partners. Performance and brand advertising revenue declined by approximately $8,148 primarily due to reduced demand by major brands. The increase in AGP revenue was primarily due to higher performance in the Asia Pacific and China regions. Revenues from reseller partnerships decreased by $829, between the comparable periods.
Current wording
App Growth Platform revenue increased by $20,304, or 55.9%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, and was primarily driven by improved performance in the Asia Pacific and China regions. The increase was primarily a result of an increase in advertising exchange revenue of $14,342, which was largely due to the continued onboarding and growth of new publishers and demand partners.
Previous wording
For the three and nine months ended December 31, 2025, there was an increase in unrealized gains of $1,600 and unrealized loss of $735 on derivatives, respectively, compared to the three and nine months ended December 31, 2024. The increase was due to the issuance of the 2025 Warrants in relation to the Company’s Financing Agreement. The Company classified these warrant instruments as derivative liabilities at fair value and adjusts the instruments to fair value at each reporting period. This liability is re-measured at each balance sheet date until the 2025 Warrants are exercised or expire, and any change in fair value will be recognized in the Company’s statements of operations and comprehensive (loss) income as an unrealized gain or loss on derivatives.
Current wording
For the three months ended June 30, 2026, the Company recognized an unrealized loss on derivatives of $10,799. There was no comparable amount for the three months ended June 30, 2025. The increase was due to the issuance of the 2025 Warrants in connection with the Company’s Financing Agreement. The Company classified these warrant instruments as derivative liabilities at fair value and adjusted the instruments to fair value at each reporting period.
Previous wording
For the three and nine months ended December 31, 2025, the Company recorded foreign exchange transaction gains of $2,815 and $3,037, respectively. For the three and nine months ended December 31, 2024, the Company recorded foreign exchange transaction losses of $1,037 and $879, respectively. The changes were primarily attributable to fluctuations in foreign exchange rates for trade accounts receivables and payables denominated in currencies other than the functional currency of foreign entities.
Current wording
For the three months ended June 30, 2026, the Company recorded foreign exchange transaction gains of $681 compared to losses of $914 for the three months ended June 30, 2025. These amounts are primarily attributable to fluctuations in foreign exchange rates for trade accounts receivables and payables denominated in currencies other than the functional currency of foreign entities.
Previous wording
Our primary sources of liquidity are our cash and cash equivalents, cash from operations, and borrowings under the Financing Agreement. As of December 31, 2025, we had unrestricted cash of approximately $40,180 and restricted cash of approximately $243. For the three and nine months ended December 31, 2025, we incurred net income of $5,107 and a net loss of $30,392, respectively, and generated cash from operating activities of $14,176 and $37,424, respectively.
Current wording
Our primary sources of liquidity are our cash and cash equivalents, cash from operations, and borrowings under the Financing Agreement. As of June 30, 2026, we had unrestricted cash of approximately $42,930 and restricted cash of approximately $276. For the three months ended June 30, 2026, the Company generated a net loss of $11,329 and cash from operating activities of $17,859.
Previous wording
Our principal cash requirements for the twelve-month period following this Report primarily consist of refinancing certain Loan tranches under the Financing Agreement and payment of interest and required principal payments thereunder in addition to 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), cash outlays for income taxes, and cash requirements to fund working capital.
Current wording
Our principal cash requirements for the twelve-month period following this Report primarily consist of refinancing certain loan tranches under the Financing Agreement and payment of interest and required principal payments thereunder in addition to employee-related 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), cash outlays for income taxes, and cash requirements to fund working capital.
Previous wording
As described above, we are currently seeking to refinance certain Loan tranches under the Financing Agreement and are exploring options to raise additional capital through the sale of equity securities or equity-linked or debt-financing arrangements. Under the Financing Agreement, the Company is required to pay certain escalating exit fees and duration fees if one of the two remaining tranches of term loans is not repaid by certain dates. If we successfully refinance such Loans on acceptable terms, we believe our existing cash and cash equivalents, cash flow from operations, and ability to access debt financing arrangements would 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 and our ability to access capital markets and refinance such Loans, 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 the U.S. and global economic climate uncertainty, the impact of tariffs, the state of the equity and debt markets and the ability to raise capital in such markets, 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, refinance Loan tranches under the Financing Agreement or to fund our other liquidity needs. See Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission on June 16, 2025, and Part II, Item 1A in this Report for additional information related to the foregoing risks.
Current wording
We may from time to time seek to refinance existing indebtedness or raise additional capital through equity or debt financing arrangements in order to optimize our capital structure and reduce borrowing costs. Under the Financing Agreement, the Company is required to pay duration fees of $5,000 if one of the two remaining tranches of term loans is not repaid by December 31, 2026. See Note 9—Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for a discussion of the exit and duration fees. If we successfully refinance such loans on acceptable terms, we believe our existing cash and cash equivalents, cash flow from operations, and ability to access debt financing arrangements would 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 and our ability to access capital markets and refinance such loans, 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 the U.S. and global economic climate uncertainty, the impact of tariffs, the state of the equity and debt markets and the ability to raise capital in such markets, health epidemics, economic and macroeconomic factors like labor shortages, supply chain disruptions, and inflation, and geopolitical developments, including the conflicts in Ukraine, Iran, Israel, Gaza, Lebanon and Syria and the political climate related to China. We cannot guarantee we will generate sufficient cash flow from operations, or that future borrowings or capital markets transactions will be available, in amounts sufficient to enable us to pay our debt, refinance our existing indebtedness or to fund our other liquidity needs. We have been and are continuing to explore various cost-saving opportunities, 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 existing indebtedness or raise additional capital through equity or debt financing arrangements, 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. See Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026 for additional information related to the foregoing risks.
Previous wording
Our outstanding secured indebtedness under the Financing Agreement is $375,000 as of December 31, 2025. The maturity date of the Financing Agreement is August 29, 2029, and the outstanding balance is classified as long-term debt, net of debt issuance costs of $8,067, original issuance discount of $11,965, and short-term debt, net of debt discount and issuance costs of $4,688 on our consolidated balance sheets as of December 31, 2025. For further description of the terms of the Financing Agreement, see Note 11—Debt under the heading “Financing Agreement” 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 Financing Agreement was $387,800 as of June 30, 2026. The term loans under the Financing Agreement are fully borrowed and there is no further borrowing capacity under the Financing Agreement. The maturity date of the Financing Agreement is August 29, 2029, and the outstanding balance is classified as long-term debt, net of original debt discount of $14,704, debt issuance costs of $6,966, unamortized exit and duration fees of $13,267, and the current portion of long-term debt of $9,375 on our consolidated balance sheet as of June 30, 2026. For further description of the terms of the Financing Agreement, see Note 9—Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
Previous wording
As described above, we are currently seeking to refinance certain Loan tranches under the Financing Agreement and are exploring options to raise additional capital through the sale of equity securities or equity-linked or debt-financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, it may be at a price and on terms and conditions that are less favorable to the Company, and the ownership of our existing stockholders will be diluted. If we raise additional financing by incurring new indebtedness, we may be subject to increased interest rates, 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 favorable to the Company. We cannot assure you that we will be able to refinance any of our indebtedness or enter into equity or equity-linked financing arrangements on commercially reasonable terms, or at all.
Current wording
As described above, we may from time to time seek to refinance existing indebtedness or raise additional capital through equity or debt financing arrangements in order to optimize our capital structure and reduce borrowing costs. If we raise additional funds by issuing equity or equity-linked securities, it may be at a price and on terms and conditions that are less favorable to the Company, and the ownership of our existing stockholders will be diluted. If we raise additional financing by incurring new indebtedness, we may be subject to increased interest rates, 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 favorable to the Company. We cannot guarantee that we will be able to refinance any of our indebtedness or enter into equity or equity-linked financing arrangements on commercially reasonable terms, or at all.
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 $201,925 over the next five 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 $37,469 for the remaining nine months of fiscal year 2027 and $144,000 over the next three fiscal years through March 31, 2030. See Note 13—Commitments and Contingencies in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
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 operating activities was $37,424 for the nine months ended December 31, 2025, compared to $372 for the nine months ended December 31, 2024. The increase of $37,052 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. If we cannot increase our revenue levels and manage costs appropriately, our future cash flows from operating activities may be negatively affected. Cash provided by operating activities was $17,859 and $8,788 for the three months ended June 30, 2026 and 2025, respectively.
Previous wording
Our primary investing activities have consisted of acquisitions of businesses, purchases of property and equipment, and capital expenditures in support of creating and enhancing our technology infrastructure. For the nine months ended December 31, 2025, net cash used in investing activities increased by $2,639 to $23,172. Our cash used in investing activities for the nine months ended December 31, 2025 and December 31, 2024, was primarily comprised of capital expenditures related to internally-developed software.
Current wording
Our primary investing activities consist of purchases of property and equipment, sales of assets, capital expenditures in support of creating and enhancing our technology infrastructure, and to a lesser extent acquisitions of businesses. Net cash used in investing activities decreased by $5,637 when comparing the three months ended June 30, 2026 to 2025, and this decrease was primarily due to $4,700 of proceeds from the sale of the Exchange during the three months ended June 30, 2026. There was no comparable transaction during the three months ended June 30, 2025.
Previous wording
Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited financial statements. The preparation of these financial statements is based on management’s selection and application of accounting policies, some of which require management to make judgments, estimates, and assumptions that affect the amounts reported in the financial statements and notes. For more information regarding our critical accounting policies and estimates, please see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies,” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, and Note 2—Basis of Presentation and Summary of Significant Accounting Policies,” of this Report on Form 10-Q for our fiscal third quarter ended December 31, 2025.
Current wording
There have been no material changes to our critical accounting estimates during the three months ended June 30, 2026, as compared to those disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies,” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. For additional information on all of our significant accounting policies, see Note 2—Basis of Presentation and Summary of Significant Accounting Policies, in the notes to the condensed consolidated financial statements in our Annual Report on Form 10-K for the year ended March 31, 2026.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
An accounting estimate is considered critical if it involves significant subjectivity and judgment, and if changes in the estimate have had or are reasonably likely to have a material effect on our consolidated financial statements. Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited financial statements. The preparation of these financial statements is based on management’s selection and application of accounting policies, some of which require management to make judgments, estimates, and assumptions that affect the amounts reported in the financial statements and notes.
Current report — wording carried from elsewhere
See Note 2—Basis of Presentation and Summary of Significant Accounting Policies in the notes to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report — wording carried elsewhere
We have been and are continuing to explore various cost saving opportunities, 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 certain Loan tranches under the Financing 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.