Digital Turbine (NASDAQ:APPS) reported fiscal 2027 first-quarter revenue growth of 27% and raised its full-year outlook, citing gains in its international device business, app-growth platform and advertising demand.
Revenue for the quarter ended in June was $166 million, up from the prior-year period. Adjusted EBITDA rose 69% year over year to $42.5 million, while adjusted EBITDA margin expanded to 25.6% from 19.2% a year earlier, according to Interim CFO Josh Kinsell.
Segment Growth Led by App Growth Platform
Digital Turbine’s On Device Solutions, or ODS, segment generated $110 million in revenue, up 15% year over year. CEO Bill Stone said international ODS was a key contributor, with nearly 80% year-over-year growth driven by increased device volumes and higher revenue per device.
Stone said the company saw double-digit growth in global devices despite supply-chain concerns related to DRAM pricing. During the question-and-answer session, he identified Motorola and Samsung as sources of strength among OEM partners, while also pointing to growth from international mobile operators.
The App Growth Platform, or AGP, generated $56.6 million in revenue, an increase of 56% from a year earlier. Kinsell said DTX revenue rose 54%, supported by publisher and demand-partner onboarding, particularly in Asia-Pacific, as well as the company’s AI-powered optimization capabilities.
Stone said Digital Turbine’s direct brand business grew more than 70% year over year, while its DTX or supply-side platform business grew more than 40%. He said advertiser demand improved pricing and fill rates, particularly for premium placements, and noted that 80% of DTX advertiser spending came from non-gaming partners.
“Our key growth drivers in June quarter were both rates and volume,” Stone said, attributing higher rates to advertiser demand and the platform’s ability to generate better return on ad spend.
AI, Data and Distribution Priorities
Management characterized artificial intelligence as a tailwind for its operations and customer offerings. Stone said the company is using AI and automation across quality assurance, back-office processes, campaign management, software development and data management.
He said annualized revenue per employee has risen above $1 million, compared with about $800,000 a year ago, which he attributed to AI-driven efficiency and automation. Digital Turbine is also combining first-party data with its DTiQ and IgniteGraph capabilities to improve advertiser outcomes, according to Stone.
The company’s growth priorities include data and AI, its brand advertising business, the expansion of its Ignite platform and alternative application distribution. Stone said the company has nearly 3 billion devices and more than 80,000 apps using its advertising technology.
On alternative app distribution, Stone said the outcome of the Epic Games litigation involving Google and Google-related rulings in the European Union could create opportunities as app stores become more open to alternative distribution. He said publishers are seeking greater control over distribution as AI affects web traffic and app discovery.
Stone also said the company is using Ignite as a software distribution tool beyond its existing SingleTap, out-of-the-box setup and notification products. He cited work with a U.S. AI-focused partner to distribute AI agents to devices and pointed to potential applications in e-commerce, lock screens and content distribution.
Cash Flow, Debt Reduction and Raised Outlook
Digital Turbine generated $17.9 million in cash from operations during the quarter, more than double the $8.8 million generated a year earlier. Non-GAAP free cash flow was $11.3 million, an improvement of roughly $10 million from the prior-year period.
The company ended the quarter with $43.2 million in cash and cash equivalents, up more than $5 million from the start of the fiscal year. Total debt, net of debt issuance costs and discounts, declined by more than $8 million during the quarter to approximately $352.9 million.
Kinsell said the company amended its financing agreement to secure more favorable terms. Following the quarter, the applicable margin on its largest loan tranche was reduced by 50 basis points after the company reached specified leverage thresholds.
Stone said Digital Turbine’s net leverage ratio improved to 2.5 turns from more than five turns in the year-ago June quarter. Management expects further balance-sheet improvement during the fiscal year.
The company raised its fiscal 2027 outlook, now forecasting:
- Revenue of $650 million to $670 million, up from prior guidance of $630 million to $650 million.
- Adjusted EBITDA of $145 million to $155 million, up from prior guidance of $135 million to $145 million.
Stone said the revised forecast reflects momentum in AI and data products, the company’s advertising marketplace, international ODS operations, its Ignite platform and alternative app-distribution opportunities. He added that Digital Turbine’s largely digital business and customer mix, which is focused on digital goods and services, make it relatively insulated from certain inflation, tariff and geopolitical pressures, while acknowledging that no business is fully insulated from macroeconomic conditions.
About Digital Turbine (NASDAQ:APPS)
Digital Turbine, Inc (NASDAQ: APPS) is a mobile technology company that streamlines content delivery and app advertising across connected devices. Its platform enables carriers, OEMs, app developers and advertisers to engage users through personalized app recommendations, in-app promotions and turnkey monetization solutions. By integrating software directly on smartphones and tablets, Digital Turbine simplifies the user journey from discovery to installation without requiring additional downloads or redirects through traditional app stores.
The company’s flagship Ignite Platform offers end-to-end campaign management, combining demand-side advertising, real-time analytics and automated content fulfillment.
