Digital Turbine (APPS) Q2 2025 earnings summary

Executive summary

• Q2 revenue was $118.7M, up 1% sequentially but down 17% year-over-year, with EBITDA and net loss both improving sequentially but remaining below prior-year levels.

• Strategic growth areas, including international device supply and brand advertising, are expanding but not fast enough to offset U.S. device and legacy DSP declines.

• A transformation program is underway, targeting over $25M in annual cost savings through workforce reductions and system upgrades, with $15M already realized.

• The company announced the acquisition of ONE Store International and signed a multi-year agreement with a tier-one U.S. operator to drive future growth.

Financial highlights

• Q2 revenue was $118.7M, with $82.4M from On Device Solutions and $37.3M from App Growth Platform.

• Non-GAAP adjusted EBITDA was $15.3M, up 6% sequentially but down 45% year-over-year.

• Non-GAAP adjusted net income was $5.0M ($0.05/share), down from $13.9M ($0.13/share) a year ago.

• GAAP net loss was $25.0M ($0.24/share), a significant improvement from $161.5M ($1.61/share) loss in the prior year, which included a $147.2M goodwill impairment.

• Gross margin was 45%, down from 46% in Q1 and 47% in the prior year.

Outlook and guidance

• Fiscal 2025 revenue is projected at $475–$485M, with adjusted EBITDA of $65–$75M.

• Sequential revenue growth is expected in Q3, with a return to year-over-year top-line growth in Q4, but the outlook for the remainder of FY2025 is reduced due to headwinds in legacy businesses.

• Transformation program is expected to be substantially implemented by Q1 FY2026, with anticipated annual cash savings exceeding $25M.