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For the second quarter, APPS expects revenues between $170 million and $180 million. The Zacks Consensus Estimate for the top line is pegged at $173.67 million, suggesting a decline of 44.02% from the year-ago reported figure.
APPS expects second-quarter loss to be between 32 cents to 34 cents. The consensus mark for the bottom line has been unchanged at a loss of 32 cents per share over the past 30 days, suggesting a year-over-year decline of 27.27%.
The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missing once, with the average surprise being 8.21%.
Digital Turbine’s second-quarter results are expected to have been affected by rising inflationary pressure. While this may not have hurt the its input costs, it is expected to have affected the ad-revenue growth rate in the to-be-reported quarter as companies are reducing their ad spending drastically due to rising input costs.
Also, further trade tariffs and rising sanctions by the United States on China and the Russia-Ukraine war have increased the supply chain constraints on APPS’ original equipment manufacturing partners. This is expected to have impacted Digital Turbine’s top-line growth negatively.
Further foreign exchange transaction losses increased 22.6% in the first quarter of fiscal 2023. The losses are likely to have increased in the second quarter due to macroeconomic challenges like the Russia-Ukraine war, trade wars between different economies and the natural gas crisis across Europe. This is expected to have negatively impacted the company’s bottom-line growth.
Another macroeconomic factor that is expected to have hurt Digital Turbine’s second-quarter performance is rising interest rates. The U.S. Federal Reserve has raised its interest rates to battle rising inflation. This has impacted the company’s interest expenses too. In the first quarter, APPS interest expenses rose a whopping 252.8%, which is expected to have persisted in the second quarter due to macroeconomic issues.
Also, in the short term, further impacting the company’s top line is its strategy to pivot its Content Media business to focus increasingly on postpaid subscribers rather than predominantly prepaid subscribers. This change in strategy negatively impacted its first-quarter results and is expected to have continued in the second quarter too.
What Our Model Indicates
Our proven model does not conclusively predict an earnings beat for APPS this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
APPS has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
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Digital Turbine (APPS) to Post Q2 Earnings: What's in Store?
Digital Turbine (APPS - Free Report) is slated to release second-quarter fiscal 2023 results on Nov 9.
For the second quarter, APPS expects revenues between $170 million and $180 million. The Zacks Consensus Estimate for the top line is pegged at $173.67 million, suggesting a decline of 44.02% from the year-ago reported figure.
APPS expects second-quarter loss to be between 32 cents to 34 cents. The consensus mark for the bottom line has been unchanged at a loss of 32 cents per share over the past 30 days, suggesting a year-over-year decline of 27.27%.
The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missing once, with the average surprise being 8.21%.
Digital Turbine, Inc. Price and EPS Surprise
Digital Turbine, Inc. price-eps-surprise | Digital Turbine, Inc. Quote
Factors to Note
Digital Turbine’s second-quarter results are expected to have been affected by rising inflationary pressure. While this may not have hurt the its input costs, it is expected to have affected the ad-revenue growth rate in the to-be-reported quarter as companies are reducing their ad spending drastically due to rising input costs.
Also, further trade tariffs and rising sanctions by the United States on China and the Russia-Ukraine war have increased the supply chain constraints on APPS’ original equipment manufacturing partners. This is expected to have impacted Digital Turbine’s top-line growth negatively.
Further foreign exchange transaction losses increased 22.6% in the first quarter of fiscal 2023. The losses are likely to have increased in the second quarter due to macroeconomic challenges like the Russia-Ukraine war, trade wars between different economies and the natural gas crisis across Europe. This is expected to have negatively impacted the company’s bottom-line growth.
Another macroeconomic factor that is expected to have hurt Digital Turbine’s second-quarter performance is rising interest rates. The U.S. Federal Reserve has raised its interest rates to battle rising inflation. This has impacted the company’s interest expenses too. In the first quarter, APPS interest expenses rose a whopping 252.8%, which is expected to have persisted in the second quarter due to macroeconomic issues.
Also, in the short term, further impacting the company’s top line is its strategy to pivot its Content Media business to focus increasingly on postpaid subscribers rather than predominantly prepaid subscribers. This change in strategy negatively impacted its first-quarter results and is expected to have continued in the second quarter too.
What Our Model Indicates
Our proven model does not conclusively predict an earnings beat for APPS this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
APPS has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Backblaze (BLZE - Free Report) currently has an Earnings ESP of +7.41% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
BLZE shares have lost 75.1% in the year-to-date period compared with the Zacks Internet - Software industry’s decline of 64.1%.
Tencent Music Entertainment Group (TME - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #2 at present.
TME shares have lost 42.1% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 41.8%.
The Trade Desk (TTD - Free Report) has an Earnings ESP of +2.13% and a Zacks Rank #2 at present.
TME shares have lost 49.5% in the year-to-date period compared with the Zacks Internet - Services industry’s decline of 42.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.