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Digital Turbine (APPS) Q4 Earnings Beat, Revenues Up Y/Y

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Digital Turbine (APPS - Free Report) reported fourth-quarter fiscal 2019 non-GAAP earnings of 3 cents per share, which beat the Zacks Consensus Estimate by a penny and was better than the year-ago quarter’s loss of a cent.

Revenues of $27.2 million also surpassed the consensus mark of $27 million and rallied 29.7% on a year-over-year basis.

Moreover, U.S. revenue-per-device (RPD) increased 27% year over year, driven by continued strong demand for the Digital Turbine platform among advertisers. Further, revenues derived from international partners and Open Market devices surged 129% year over year.

Digital Turbine’s mobile device management platform, Ignite, has gained significant traction. In fourth-quarter fiscal 2019, Ignite was installed on roughly 29 million devices. As of Jun 3, 2019, approximately 260 million devices had Ignite installed.

Operating Details

Non-GAAP gross margin expanded 570 basis points (bps) on a year-over-year basis to 41.7%.

Digital Turbine, Inc. Price, Consensus and EPS Surprise

Digital Turbine, Inc. Price, Consensus and EPS Surprise

Digital Turbine, Inc. price-consensus-eps-surprise-chart | Digital Turbine, Inc. Quote


On a GAAP-basis, product development expenses as percentage of revenues expanded 80 bps to 10.9%. Sales & marketing (S&M) and general & administrative (G&A) expenses as percentage of revenues shrunk 50 bps and 630 bps to 9.2% and 13%, respectively.

Operating expenses as percentage of revenues contracted 610 bps to 33.2%.

Operating income on a GAAP basis was $1.9 million against operating loss of $1.3 million in the year-ago    quarter.

Balance Sheet & Cash Flow

Digital Turbine ended fiscal 2019 with a cash balance of $10.9 million and no debt, following the conversion of all remaining convertible notes previously outstanding and full repayment of short-term debt.

GAAP cash provided by operating activities totaled $2.4 million. Non-GAAP free cash flow totaled $1.9 million in the reported quarter.


For first-quarter fiscal 2020, Digital Turbine expects revenues between $28 million and $28.5 million. The Zacks Consensus Estimate for revenues is currently pegged at $27.8 million, indicating 25.8% growth from the figure reported in the year-ago quarter.

Non-GAAP adjusted EBITDA is expected between $2.2 million and $2.6 million.

Zacks Rank & Stocks to Consider

Currently, Digital Turbine carries a Zacks Rank #3 (Hold).

eGain Corporation (EGAN - Free Report) , j2 Global (JCOM - Free Report) and Alteryx (AYX - Free Report) are stocks worth considering in the same industry. While eGain and j2 Global sport a Zacks Rank #1 (Strong Buy), Alteryx has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for eGain, j2 Global and Alteryx are currently pegged at 30%, 8% and 13.7%, respectively.


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