Key Highlights

  • Net Revenue rose 27% to USD 178.7 million.
  • Adjusted EBITDA rose 46% to USD 39.8 million.
  • GAAP Net Income was USD 10.3 million, or USD 0.06 per diluted share.
  • Net Leverage was 2.3x, compared with above 4.0x a year earlier.

Digital Turbine, Inc. (NASDAQ:APPS) reported fiscal second quarter 2027 total net revenue of USD 178.7 million, up 27% year over year. Reported EPS was USD 0.18 and revenue was USD 178.68 million, compared with estimates of EPS of USD 0.17 and revenue of USD 166.75 million.

Adjusted EBITDA was USD 39.8 million, up 46%, with Margin expanding approximately 290 basis points to 22.3%. The company reported GAAP net income of USD 10.3 million, or USD 0.06 per diluted share, compared with a net loss of USD 21.4 million, or USD 0.20 per share, in the second quarter of fiscal 2026.

Segment Performance

The company reports two segments, On Device Solutions and the AppGrowth Platform. On Device Solutions net revenue was USD 115.6 million, up 20%. International revenue growth was approximately 50% year over year, driven by higher device volumes and higher revenue per device. The AppGrowth Platform net revenue was USD 63.5 million, up 42%, the fifth consecutive quarter of double digit growth and the third consecutive quarter of more than 40% growth. DTX Exchange revenue increased 42% and the Brand Business grew 45%.

Management said improved ad spend is being driven by AI, and that approximately 40% of advertiser spend on DTX comes from non-gaming partners. The company has more than 2 billion devices and more than 80 thousand apps using its Advertising technology.

Margins and Expenses

Non-GAAP gross margin was 43%, compared with 47% a year earlier. Revenue share increased to 49% of net revenue from 45%, driven by product mix changes and revenue generated related to revenue share obligations. Other direct cost of revenue increased USD 2.3 million, primarily from higher hosting, bidding and platform fees.

Cash operating expenses were USD 37.6 million, down 3% year over year and down 5% from the first quarter. Year to date annualized run rate revenue per employee is over USD 1 million, up from USD 700 thousand last year.

Balance Sheet and Outlook

Management summarized the September quarter as revenue of USD 179 million, 27% year over year growth, with both On Device Solutions and AppGrowth Platform delivering growth of 20% or higher. It tied the Operating Leverage in its model to scale and the use of AI to drive efficiencies across headcount and operating expenses. The net Leverage Ratio was 2.3x as implied in the increased outlook, compared with above 4.0x in the September quarter a year ago. Management raised its revenue outlook for the remainder of the fiscal year by USD 20 million, which it said is more than the revenue beat of the quarter, citing five drivers, with AI and data as the first.

Management said it is adding another tier 1 operator win in the European Union, and cited first dollars of revenue with Orange in the current quarter, the launch of incremental makes and models of new devices around the globe and a new Partnership with a telecom operator.

Segment Mix, Leverage and Cost Base

Digital Turbine's fiscal second quarter combined net revenue of USD 178.7 million with GAAP net income of USD 10.3 million, or USD 0.06 per diluted share. Management referred to the split of revenue between segments, the revenue share rate, the cash Operating Expense figure and net leverage of 2.3x, compared with above 4.0x a year earlier.