Breaking Down Digital Turbine, Inc. (APPS) Financial Health: Key Insights for Investors

You're looking at Digital Turbine, Inc. (APPS) and seeing a classic turnaround story-a company that's successfully navigated a brutal advertising market, but still has a lot to prove, so you need a clear-eyed view of their financial health right now. Honestly, the headline numbers for the full fiscal year 2025 tell a mixed story: total revenue landed at $490.5 million, a decline from the prior year, but the operational efficiency is defintely showing up in the bottom line.

The real signal is the massive swing in profitability metrics, where the GAAP net loss improved dramatically to $92.1 million, down from a much larger loss the year before, and the Non-GAAP adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)-a cleaner look at core business performance-was a solid $72.3 million. This is not a growth-at-all-costs model anymore; it's about execution and cash flow, which hit $5.5 million in the final quarter. The trade-off is clear: they are capitalizing on the expansion of their On Device Solutions, now active on over 100 million devices globally, but they still face headwinds from soft U.S. device volumes and the continuous need to invest in AI and first-party data to stay ahead of regulatory shifts.

Revenue Analysis

You want to know where Digital Turbine, Inc. (APPS) is making its money, and honestly, the fiscal year 2025 (FY2025) results show a company in a necessary transition. The headline number for the full year is a total revenue of $490.5 million, which was a year-over-year decline of approximately 9.91% compared to FY2024. That drop is a clear sign of the mobile ecosystem headwinds they faced, but the real story is in the segments.

The company's revenue streams primarily flow through two channels: the On Device Solutions (ODS) segment and the App Growth Platform (AGP). ODS, which is their core business of pre-installing apps and managing content on mobile devices, is the clear revenue driver. It's the engine of the business, but the App Growth Platform is where they are focusing on diversification and future growth.

Here's the quick math on how each segment contributed to the full-year FY2025 revenue:

• On Device Solutions (ODS): Generated $341.6 million.
• App Growth Platform (AGP): Contributed $153.2 million.

ODS makes up nearly 70% of the top line, so its performance dictates the company's overall health. To be fair, while the full year showed a decline, the fourth quarter of FY2025 was a crucial inflection point, with total revenue returning to year-over-year growth of 6%, hitting $119.2 million. That's the momentum you want to see.

Shifting Segment Contributions and Key Drivers

The biggest change in the revenue mix is the renewed strength in ODS, which saw an 11% year-over-year increase in revenue during Q4 FY2025. This wasn't just about getting on more phones; it was driven by a significant improvement in Revenue Per Device (RPD). For example, their RPD was up more than 40% year-over-year in the U.S. and over 100% internationally. That tells me their monetization efforts-using first-party data and AI to optimize app delivery-are defintely working.

The App Growth Platform, which includes their programmatic advertising (DT DSP) and monetization solutions, still faces pressure, showing a 3% year-over-year decline in Q4 FY2025. However, the focus on growing spending from leading advertising agencies and brand advertisers is a key strategic move. They are also strategically positioning themselves for the rise of Alternative Apps distribution (non-traditional app store models), which is a huge opportunity you can read more about here: Mission Statement, Vision, & Core Values of Digital Turbine, Inc. (APPS).

Here is the breakdown of the full fiscal year 2025 revenue by segment:

The takeaway here is simple: ODS is the cash cow, and its improved monetization is the near-term opportunity. The AGP is the long-term bet, especially as regulatory shifts open the door for alternative app distribution. The overall year-over-year decline for FY2025 is a historical marker, but the Q4 return to growth is the actionable signal for investors.

Profitability Metrics

You need to look past the headline numbers to see where Digital Turbine, Inc. (APPS) actually makes and loses money. The profitability picture is a classic ad-tech story: a healthy gross margin (the profit on sales) that gets wiped out by high operating expenses, though recent trends show a clear focus on cost control that is starting to pay off.

For the trailing twelve months (TTM) ending in the second quarter of fiscal year 2026 (Q2 FY2026), which is the most current data we have in November 2025, Digital Turbine, Inc.'s profitability ratios show a company still in a transition phase. The TTM revenue stood at $503.44 million, but the company is not yet profitable on a GAAP (Generally Accepted Accounting Principles) basis.

• Gross Profit Margin: A solid 45.34%. This shows the core business of selling mobile ad inventory and on-device solutions is fundamentally sound.
• Operating Profit Margin: A negative -8.47%. This is where the cost of running the business-salaries, R&D, and marketing-eats up the gross profit.
• Net Profit Margin: A deeper negative at -16.1%. Interest expense and taxes push the loss further down the income statement.

The gross margin is defintely the bright spot.

Trends in Profitability and Operational Efficiency

The trend over the past year is what matters most, and it points to improving operational efficiency (cost management). While the full fiscal year 2025 (FY2025) GAAP net loss was a significant $92.1 million on $490.5 million in revenue, the sequential quarterly results tell a better story.

The company's transformation program, targeting over $25 million in annual cash expense savings, is actively driving this shift. For example, in the first quarter of fiscal year 2026 (Q1 FY2026), the non-GAAP gross margin expanded to 47%, a 100 basis point year-over-year increase, and cash operating expenses dropped 8% year-over-year. This focus on cost management is translating directly into better bottom-line metrics, even as they continue to invest in their platform.

Here's the quick math on the operational improvement using Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which strips out non-cash charges and is a better proxy for core operating performance in ad-tech:

That 66% jump in Adjusted EBITDA in the fourth quarter of FY2025 shows a sharp acceleration in profitability from the cost-cutting and stronger advertiser demand, especially in the international On Device Solutions segment.

Industry Comparison: Where Digital Turbine, Inc. Stands

When you compare Digital Turbine, Inc.'s current TTM margins to the broader 'Advertising Agencies' industry average, you see the challenge of being a high-growth, platform-based ad-tech firm versus a traditional agency. The industry average gross profit margin is around 51.4%, so Digital Turbine, Inc.'s 45.34% is slightly behind, which is common for a company with higher direct costs of revenue (like carrier and OEM revenue share).

The real gap is in the net margin:

• Digital Turbine, Inc. TTM Net Margin: -16.1%
• Advertising Agencies Average Net Margin: -1.9%

What this estimate hides is the impact of non-cash charges like goodwill impairment that have historically weighed heavily on the GAAP net loss. The company's goal is to close this gap by leveraging its proprietary On Device Solutions to drive higher-margin revenue and maintaining the discipline on operating expenses. This is a story of margin expansion, not just revenue growth. To dive deeper into who is betting on this turnaround, you should check out Exploring Digital Turbine, Inc. (APPS) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

If you're looking at Digital Turbine, Inc. (APPS), the first thing to understand is that the company is a growth-by-acquisition story, and that means a heavy reliance on debt financing. The direct takeaway is that its debt-to-equity ratio is significantly higher than the industry average, which points to a more aggressive, but also riskier, capital structure.

As of the quarter ending June 2025, Digital Turbine, Inc.'s balance sheet showed a clear preference for debt over shareholder equity. Specifically, the company reported a total of approximately $409.7 million in total debt, composed of a relatively small $3.5 million in Short-Term Debt and a substantial $406.2 million in Long-Term Debt and Capital Lease Obligations. This is a heavy load of long-term leverage.

Here's the quick math on the leverage: with Total Stockholders' Equity standing at only $152.3 million in June 2025, the Debt-to-Equity (D/E) ratio was 2.69.

• Current D/E Ratio (Q1 FY2026): 2.69
• Advertising Agencies Industry Average: 0.79
• Interactive Media & Services Average: 0.1869

Honestly, a D/E ratio of 2.69 is high, especially when you compare it to the Advertising Agencies industry average of around 0.79. This tells you Digital Turbine, Inc. has been aggressive in financing its growth with borrowed money, which can amplify returns when things go well, but also magnify losses when they don't. It's a classic high-growth, high-leverage profile.

Recent Debt Refinancing and Maturity Risk

The good news is the company recently took clear action to manage its near-term debt risk. In September 2025, Digital Turbine, Inc. successfully completed a major debt refinancing. This move secured a new $430 million four-year term loan credit facility.

This refinancing was crucial because it fully repaid the prior credit facility, which was set to mature in August 2026. Extending the debt maturity timeline by four years gives the management team, led by CEO Bill Stone, crucial breathing room to focus on their strategic initiatives and return to growth, rather than scrambling to address a looming debt wall. The market's willingness to provide a new $430 million facility, even without a widely reported public credit rating from a major agency, shows confidence in their future cash flow potential.

The balance between debt and equity here is a tightrope walk: the debt powers acquisitions and scale, but the low equity base means any stumble has an outsized impact on shareholders. For a deeper look at who is betting on this strategy, you should read Exploring Digital Turbine, Inc. (APPS) Investor Profile: Who's Buying and Why?.

What this estimate hides is the interest expense burden, which will continue to eat into net income, defintely given the current rate environment.

Liquidity and Solvency

You need to know if Digital Turbine, Inc. (APPS) can cover its near-term obligations, and the answer is yes, but with a thin margin. The company's liquidity ratios hover just above the critical 1.0 benchmark, and while this is technically adequate, the high debt load introduces a clear solvency risk you can't ignore.

Assessing Digital Turbine's Liquidity

The most recent data for Digital Turbine, Inc. shows a tight, but manageable, short-term liquidity position. For the fiscal year 2025, the company's current ratio and quick ratio were both around 1.10. The current ratio (current assets / current liabilities) tells us the company has $1.10 in short-term assets for every $1.00 in short-term debt. The quick ratio (or acid-test ratio) is almost identical, which is common for a software-driven business with minimal inventory, but it means there's no significant cushion of highly liquid assets beyond what's already included.

A ratio of 1.10 is defintely not a sign of excess cash, but it does signal the company is not in immediate distress. It's a lean approach. Here's the quick math on what that means for working capital (current assets minus current liabilities):

• Current and Quick Ratios: Both approximately 1.10.
• Indicates adequate, but tight, coverage of short-term liabilities.
• A ratio below 1.0 would signal a serious, immediate liquidity problem.

Working Capital and Cash Flow Trends

The working capital trend shows management is focused on tightening operations, but the overall cash generation from the core business remains a concern. The cash balance at the end of the full fiscal year 2025 (March 31, 2025) was $40.1 million. However, the subsequent quarter saw a drop to $34.1 million, which management attributed to the timing of working capital. This volatility shows how sensitive the company is to collection cycles on its accounts receivable.

Looking at the cash flow statement for the full fiscal year 2025 (FY 2025), we see a mixed picture:

The OCF of $11.88 million for FY 2025 is a sharp decline from the prior year, but the return to positive Free Cash Flow (FCF) in the back half of the year (Q4 FY 2025 FCF was $5.5 million) suggests their transformation program is starting to help cash generation.

Near-Term Liquidity Strengths and Solvency Concerns

The biggest strength is the recent return to positive Free Cash Flow, meaning the business is generating more cash than it needs for maintenance capital expenditures. This is a crucial step toward financial stability. However, the company's solvency-its ability to meet long-term debt obligations-is the primary risk.

The debt-to-equity ratio sits high at around 2.66, indicating significant financial leverage (debt financing). Plus, the Altman Z-Score, a measure of bankruptcy risk, is cited at -0.13, which is firmly in the distress zone. This score is a flashing yellow light, suggesting that while the company can handle its short-term bills, the sheer volume of debt makes it vulnerable if the business environment deteriorates. The focus for Digital Turbine, Inc. must remain on debt reduction, which they are doing-total debt was reduced by over $8 million quarter-over-quarter as of Q1 FY 2026.

For a deeper dive into the company's overall financial health, you should read the full blog post: Breaking Down Digital Turbine, Inc. (APPS) Financial Health: Key Insights for Investors

Next Step: Review the company's debt maturity schedule to assess the timing of their next major refinancing need.

Valuation Analysis

You're looking at Digital Turbine, Inc. (APPS) right now and asking the core question: is the stock a bargain, or is the market pricing in too much optimism? The short answer is that its valuation multiples suggest a premium for its growth potential, but the analyst consensus sees a significant upside from the current price.

The stock closed recently at $5.05 on November 14, 2025, after a wild ride that saw the price soar 285.50% over the last 12 months, only to drop 30.63% in the most recent month. That kind of volatility is a clear signal of a turnaround story still facing significant execution risks. You need to look past the noise and focus on the underlying metrics.

When we look at the core valuation ratios, the picture is mixed, which is typical for a company in a challenging, but evolving, ad-tech landscape. Here's the quick math on the 2025 fiscal year data:

• Price-to-Earnings (P/E): Digital Turbine's trailing twelve months (TTM) P/E ratio is currently negative (at a loss) due to recent financial performance, so this metric is less useful right now.
• Price-to-Book (P/B): The P/B ratio is around 4.51 as of early November 2025. This is a premium over the median for many capital-light software companies, suggesting investors are willing to pay a lot more than the company's net asset value, betting on intangible assets and future earnings.
• Enterprise Value-to-EBITDA (EV/EBITDA): The TTM EV/EBITDA as of June 2025 stands at 27.43. This is defintely high, sitting well above the industry median of roughly 13.5, which points toward the stock being overvalued relative to its current operating cash flow (EBITDA).

The company does not pay a dividend, so the dividend yield and payout ratios are 0.00% and $0.00, respectively, as of November 2025. This is standard for a growth-focused technology company that prefers to reinvest all earnings back into the business, supporting its Mission Statement, Vision, & Core Values of Digital Turbine, Inc. (APPS).

Is Digital Turbine, Inc. (APPS) Overvalued or Undervalued?

The analyst community leans toward the stock being undervalued, despite those high multiples. The consensus rating from Wall Street analysts is a Moderate Buy. The average 12-month price target is $7.75, which suggests a potential upside of over 53.47% from the recent $5.05 price.

This gap between the high valuation multiples and the bullish price target tells you the market is pricing for a turnaround that hasn't fully materialized yet. The high EV/EBITDA of 27.43 reflects the risk of a prolonged recovery, but the analysts believe the company's strategic moves-like advancements in alternative app store revenue-will drive a return to significant EBITDA growth in the second half of the 2025 fiscal year, justifying the higher price target.

The key action here is to watch for earnings reports that confirm the expected EBITDA growth. If the company misses those growth targets, the stock will likely re-rate quickly to a lower multiple, closer to the industry median for EV/EBITDA.

Risk Factors

You need to see past the headline revenue number to understand the real risks at Digital Turbine, Inc. (APPS). While the company reported total revenue of $490.5 million for fiscal year 2025, the persistent GAAP net loss of $92.1 million tells you there are fundamental operational and external pressures that need to be managed. The core risk is a high-stakes dependence on a few key partners and the constant threat of platform policy changes.

External and Industry-Specific Risks

The mobile advertising space is a battleground, and Digital Turbine, Inc. (APPS) is fighting giants. The biggest external risk is the continued dominance and policy control exerted by large tech ecosystems like Google and Apple. Any regulatory shifts or legal developments in global app store markets create immediate uncertainty for their business model, especially the On Device Solutions (ODS) segment.

Plus, there's the industry-wide shift toward data restrictions (like the deprecation of third-party identifiers), which directly impacts the effectiveness of their App Growth Platform. Honestly, the company's ability to keep expanding across global smartphones is defintely challenged by this heavy competition. You have to ask if their platform can keep up.

• Platform Policy Changes: A sudden change by a major operating system vendor can instantly cut off revenue streams.
• Intense Competition: Larger competitors have deeper pockets and can offer more integrated ad solutions.
• Privacy Regulation: New global privacy laws increase compliance costs and restrict data collection.

Operational and Financial Risks

The company's financial structure still presents a clear risk profile. A significant portion of Digital Turbine, Inc.'s revenue is derived from a limited number of wireless carriers and customers, which creates a concentration risk. If one of these key carrier partners walks, revenue takes an immediate hit. Here's the quick math: losing a major partner could wipe out a substantial percentage of the $341.6 million in On Device Solutions revenue reported in FY 2025.

On the financial side, the debt load is a constant headwind. As of the end of the first quarter of fiscal 2026 (June 30, 2025), the company's total debt was around $400.5 million. This debt level, coupled with lingering GAAP net losses, contributes to a distressed financial health signal like the Altman Z-Score. What this estimate hides is the potential for goodwill impairment, a non-cash charge that has hit the books before and could again if the value of past acquisitions declines.

Mitigation Strategies and Clear Actions

The management team is not sitting still; they are focused on internal transformation and technological investment to counter these risks. Their primary mitigation strategy centers on leveraging their unique first-party data and investing heavily in Artificial Intelligence (AI) and Machine Learning (ML) platforms. This is meant to optimize ad campaigns and reduce reliance on external identifiers.

They are also working to streamline business processes, which drove improved operating performance and profit margin expansion in fiscal 2025. This is about execution: getting more from their existing assets. To understand the long-term vision behind these moves, you should check out the Mission Statement, Vision, & Core Values of Digital Turbine, Inc. (APPS).

For you, the investor, the key action is to monitor the growth in Revenue Per Device (RPD) and the mix of their revenue. If the On Device Solutions segment continues to accelerate, driven by their AI/ML investments, it will show their mitigation plan is working. Management has also been committed to reducing debt, having decreased total debt by more than $8 million quarter-over-quarter in Q1 2026.

Growth Opportunities

You need to know where Digital Turbine, Inc. (APPS) is going, not just where it's been. The company's growth story for fiscal year (FY) 2025 pivoted from a turnaround to a clear expansion strategy, centered on its unique position between mobile carriers and advertisers.

The company wrapped up FY 2025 with total revenue of $490.5 million and a Non-GAAP adjusted EBITDA of $72.3 million. That's a solid base, but the real opportunity lies in the shift toward international market expansion and new product scaling. Honestly, the biggest near-term driver is their laser focus on efficiency and new monetization channels.

Key Growth Drivers and Product Innovations

Digital Turbine, Inc. is using its 'On Device Solutions' (ODS)-the pre-installed apps and content-as a competitive moat. This is a massive advantage because it bypasses some of the ad-tracking headaches plaguing competitors. Plus, the strategic focus on cost is paying off, with a program achieving over $25 million in annualized operating expense savings. Here's the quick math: cutting $25 million in costs drops straight to the bottom line, making future revenue growth more profitable.

The App Growth Platform (AGP) is also seeing a major product innovation win with its Software Development Kit (SDK) bidding capability. This feature now accounts for 70% of total impressions on their exchange, up sharply from just 5% a year ago. That's a huge jump in adoption, and it translates directly to better ad performance for their clients.

• Expand device footprint, especially internationally.
• Scale new products like SDK bidding.
• Leverage first-party data for better ad targeting.
• Capitalize on alternative app distribution.

Strategic Partnerships and Market Expansion

The company is defintely pushing hard outside the US. International ODS revenue doubled year-over-year in the third quarter of FY 2025, which is a fantastic pace. This growth is fueled by strategic alliances that lock in their platform with major mobile brands and carriers globally.

A great example is the January 2025 partnership with TIM in Brazil, which enhances the mobile user experience for millions of customers by integrating personalized app recommendations. This global expansion, combined with the acquisition of ONE Store International in late 2024 to accelerate their alternative app ecosystem strategy, positions them well to benefit from regulatory tailwinds like the EU's Digital Markets Act (DMA). That's a powerful one-two punch.

You can see their long-term vision in their Mission Statement, Vision, & Core Values of Digital Turbine, Inc. (APPS).

Future Revenue and Earnings Outlook

Management is confident in the trajectory. For the next fiscal year, FY 2026, the company has raised its revenue guidance to a range of $540 million to $550 million. This implies a solid return to top-line growth after a challenging period. What this estimate hides is the potential for margin expansion as the cost-saving program fully kicks in.

Analysts anticipate earnings per share (EPS) to grow to around $0.05 per share in the next year, moving from a negative to a positive non-GAAP EPS. This table shows the full-year picture for FY 2025 and the near-term revenue projection for FY 2026: