Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: ERN, CCA

Digital Turbine Reports Fourth Quarter and Fiscal Full Year 2020 Results


AUSTIN, Texas, June 2, 2020 /PRNewswire/ -- Digital Turbine, Inc. (Nasdaq: APPS) announced financial results for the fiscal full year and quarter ended March 31, 2020.  All operating results discussed below, except as otherwise specifically noted, refer only to the continuing operations of the Company, and all comparisons to prior periods have been adjusted to reflect only continuing operations. The Company completed its acquisition of Mobile Posse, Inc., on February 28, 2020.  All operating results discussed below include the contribution of Mobile Posse's operations for the period from February 28, 2020 through March 31, 2020.

Recent Financial Highlights:

"We executed well in our fiscal fourth quarter, delivering results that exceeded our expectations while completing the highly strategic Mobile Posse acquisition and tactically navigating the onset of unique challenges and opportunities presented by COVID-19," said Bill Stone, CEO.  "I am incredibly grateful for the resilience, focus and determination shown by the entire Digital Turbine team, which has enabled our business to quickly adapt to rapidly evolving market trends during these dynamic times. Today more than ever consumers are turning to their mobile devices and applications for information, socialization, entertainment, education and home delivery services, and Digital Turbine values its critical role in helping to connect consumers to this content."

"Looking ahead to fiscal 2021 and the pursuit of our primary growth objectives, we are highly confident given the strengthening momentum underlying our business today. We remain laser-focused on operational execution in support of our valued partners, advertisers on our platform, and mobile end-users everywhere.  While we expect some near-term uncertainty in terms of device activations amid carrier store closures and associated re-opening timelines, we could not be more pleased with the clear strength in demand that we are witnessing from key advertiser segments, most notably within the mobile gaming, social media, news, content streaming and home delivery segments that collectively comprise the overwhelming majority of our app installs. We expect consumers' increased usage of these types of apps to continue well beyond the current period, which we believe should continue to provide an upward bias to conversion rates and revenue-per-device trends even as device activation levels return to normalized levels.  Furthermore, like many others in the mobile industry, we eagerly look forward to broader promotion and adoption of 5G devices later this year as a possible catalyst for increased activations and richer application-based services."

Mr. Stone concluded, "We believe that our motivated team, profitable operating model, healthy balance sheet and unique platform offering give us the confidence to not just be able to weather near-term macro conditions, but to be able to continue to grow both our top and bottom lines despite these conditions."

Fourth Quarter Fiscal 2020 Financial Results

Results for the fourth quarter and full fiscal year 2020 include the results of the acquired Mobile Posse operations from February 28, 2020 through March 31, 2020.  Revenue for the fourth quarter of fiscal 2020 was $39.4 million, representing an increase of 45% year-over-year.

GAAP gross margin was 39% for the fourth quarter of fiscal 2020, as compared to a 40% GAAP gross margin in the fourth quarter of fiscal 2019.  Non-GAAP adjusted gross margin4 was 40% for the fourth quarter of fiscal 2020, as compared to 42% for the fourth quarter of fiscal 2019.

GAAP net income from continuing operations for the fourth quarter of fiscal 2020 was $14.0 million, or $0.16 per share, as compared to a GAAP net loss from continuing operations for the fourth quarter of fiscal 2019 of $6.8 million, or ($0.09) per share.  Non-GAAP adjusted net income1 for the fourth quarter of fiscal 2020 was $4.2 million, or $0.05 per share, as compared to Non-GAAP adjusted net income of $2.4 million, or $0.03 per share, during the fourth quarter of fiscal 2019.

Non-GAAP adjusted EBITDA2 was $5.3 million for the fourth quarter of fiscal 2020, as compared to Non-GAAP adjusted EBITDA of $3.3 million for the fourth quarter of fiscal 2019. The reconciliations between GAAP and Non-GAAP financial results for all referenced periods are provided in the tables immediately following the Unaudited Consolidated Statements of Cash Flows below.

Full Year Fiscal 2020 Financial Results

Revenue for fiscal 2020 totaled $138.7 million, representing an increase of 34% as compared to revenue of $103.6 million in fiscal 2019.

GAAP gross margin was 39% for fiscal 2020, as compared to a 34% GAAP gross margin in fiscal 2019.  Non-GAAP adjusted gross margin4 was 40% for fiscal 2020, as compared to 36% in fiscal 2019.

GAAP net income from continuing operations for fiscal 2020 was $14.3 million, or $0.17 per share, as compared to a GAAP net loss from continuing operations for fiscal 2019 of $4.3 million, or ($0.06) per share.  Non-GAAP adjusted net income1 for fiscal 2020 was $17.5 million, or $0.20 per share, as compared to Non-GAAP adjusted net income of $5.9 million, or $0.08 per share, in fiscal 2019.

Non-GAAP adjusted EBITDA2 was $19.6 million for fiscal 2020, as compared to Non-GAAP adjusted EBITDA of $8.9 million in fiscal 2019. The reconciliations between GAAP and Non-GAAP financial results for all referenced periods are provided in the tables immediately following the Unaudited Consolidated Statements of Cash Flows below.

Business Outlook

Based on information available as of June 2, 2020, the Company expects first quarter fiscal 2021 revenue of between $47 million and $50 million, and Non-GAAP adjusted EBITDA2 of between $8 million and $10 million.

It is not reasonably practicable to provide a business outlook for GAAP net income/(loss) from continuing operations because the Company cannot reasonably estimate the changes in stock-based compensation expense, which is directly impacted by changes in the Company's stock price, or other items that are difficult to predict with precision.

About Digital Turbine, Inc.

Digital Turbine simplifies content discovery and delivers relevant content directly to consumer devices.  The Company's on-demand media platform powers frictionless app and content discovery, user acquisition and engagement, operational efficiency and monetization opportunities.  Digital Turbine's technology platform has been adopted by more than 40 mobile operators and OEMs worldwide, and has delivered more than three billion app preloads for tens of thousands of advertising campaigns. The company is headquartered in Austin, Texas, with global offices in Arlington, Durham, Mumbai, San Francisco, Singapore and Tel Aviv. For additional information visit www.digitalturbine.com.

Conference Call
Management will host a conference call today at 4:30 p.m. ET to discuss its fourth quarter and full fiscal year 2020 financial results and provide operational updates on the business and issue additional commentary on the Mobile Posse acquisition. To participate, interested parties should dial 855-238-2713 in the United States or 412-542-4111 from international locations. A webcast of the conference call will be available at ir.digitalturbine.com/events.

For those who are not able to join the live call, a playback will be available through June 9, 2020. The replay can be accessed by dialing 877-344-7529 in the United States or 412-317-0088 from international locations, passcode 10144552.

The conference call will discuss guidance and other material information.

Use of Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements presented in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), Digital Turbine uses non-GAAP measures of certain components of financial performance.  These non-GAAP measures include non-GAAP adjusted net income and earnings per share ("EPS"), non-GAAP adjusted gross profit, non-GAAP adjusted gross margin, non-GAAP adjusted EBITDA and non-GAAP free cash flow.  Reconciliations to the nearest GAAP measures of all non-GAAP measures included in this press release can be found in the tables below.

Non-GAAP measures are provided to enhance investors' overall understanding of the Company's current financial performance, prospects for the future and as a means to evaluate period-to-period comparisons.  The Company believes that these Non-GAAP measures provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results.  The Company believes the Non-GAAP measures that exclude such items when viewed in conjunction with GAAP results and the accompanying reconciliations enhance the comparability of results against prior periods and allow for greater transparency of financial results.  The Company believes Non-GAAP measures facilitate management's internal comparison of its financial performance to that of prior periods as well as trend analysis for budgeting and planning purposes.  The presentation of Non-GAAP measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

1Non-GAAP adjusted net income and EPS are defined as GAAP net income/(loss) and EPS adjusted to exclude the effect of stock-based compensation, amortization of intangibles, changes in the fair value of derivatives associated with warrants issued in connection with the September 2016 convertible notes offering, loss on extinguishment of debt, tax adjustments and transaction expenses.  Readers are cautioned that Non-GAAP adjusted net income and EPS should not be construed as an alternative to comparable GAAP net income figures determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP. 

2Non-GAAP adjusted EBITDA is calculated as GAAP net income/(loss) excluding the following cash and non-cash expenses: net interest income/(expense), foreign exchange transaction loss, income tax provision, depreciation and amortization, stock-based compensation expense, amortization of intangibles, the change in fair value of derivatives associated with warrants issued in connection with the September 2016 convertible notes offering, other expense, loss on extinguishment of debt, non-recurring severance expense and transaction expenses.  Readers are cautioned that Non-GAAP adjusted EBITDA should not be construed as an alternative to net income/(loss) determined in accordance with U.S. GAAP as an indicator of performance, which is the most comparable measure under GAAP.

3Non-GAAP free cash flow, which is a non-GAAP financial measure, is defined as net cash provided by operating activities (as stated in our Consolidated Statement of Cash Flows) reduced by capital expenditures. Readers are cautioned that free cash flow should not be construed as an alternative to net cash provided by operating activities determined in accordance with U.S. GAAP as an indicator of profitability, performance or liquidity, which is the most comparable measure under GAAP.

4Non-GAAP adjusted gross profit and gross margin are defined as GAAP gross profit and gross margin adjusted to exclude the effect of intangible amortization expense and depreciation of software.  Readers are cautioned that Non-GAAP adjusted gross profit and gross margin should not be construed as an alternative to gross margin determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP. 

Non-GAAP adjusted gross profit and gross margin, Non-GAAP adjusted EBITDA, Non-GAAP adjusted net income and EPS, and Non-GAAP free cash flow are used by management as internal measures of profitability, performance and liquidity.  They have been included because the Company believes that the measures are used by certain investors to assess the Company's financial performance before non-cash charges and certain costs that the Company does not believe are reflective of its underlying business.

Forward-Looking Statements 
This news release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this news release that are not statements of historical fact and that concern future results from operations, financial position, economic conditions, product releases and any other statement that may be construed as a prediction of future performance or events, including financial projections and growth in various products are forward-looking statements that speak only as of the date made and which involve known and unknown risks, uncertainties and other factors which may, should one or more of these risks uncertainties or other factors materialize, cause actual results to differ materially from those expressed or implied by such statements. These factors and risks include:

You should not place undue reliance on these forward-looking statements.  The Company does not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Relations Contacts:

Brian Bartholomew
Digital Turbine
brian.bartholomew@digitalturbine.com

 

Digital Turbine, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income / (Loss)


(in thousands, except per share amounts)














3 Months Ended


3 Months Ended


12 Months Ended


12 Months Ended


March 31, 2020


March 31, 2019


March 31, 2020


March 31, 2019


(Unaudited)


(Unaudited)





Net revenues

$                           39,351


$                           27,192


$                         138,715


$                         103,569

Cost of revenues








License fees and revenue share

23,591


15,768


83,588


65,981

Other direct cost of revenues

432


470


1,454


2,023

Total cost of revenues

24,023


16,238


85,042


68,004

Gross profit

15,328


10,954


53,673


35,565

Operating expenses








Product development

3,706


2,702


12,018


10,876

Sales and marketing

3,710


2,501


11,244


8,212

General and administrative

4,987


3,817


17,199


13,032

Total operating expenses

12,403


9,020


40,461


32,120

Income from operations

2,925


1,934


13,212


3,445

Interest and other expense, net








Interest income / (expense), net

(77)


(472)


41


(1,120)

Foreign exchange transaction gain / (loss)

-


(3)


-


3

Change in fair value of convertible note embedded derivative liability

-


(2,104)


-


(1,008)

Change in fair value of warrant liability

1,021


(5,720)


(9,580)


(4,875)

Loss on extinguishment of debt

-


(421)


-


(431)

Other income / (expense)

(223)


336


232


153

Total interest and other income / (expense), net

721


(8,384)


(9,307)


(7,278)

Income / (loss) from continuing operations before income taxes

3,646


(6,450)


3,905


(3,833)

Income tax provision / (benefit)

(10,381)


312


(10,375)


469

Net income / (loss) from continuing operations, net of taxes

14,027


(6,762)


14,280


(4,302)

Loss from discontinued operations

(209)


(96)


(380)


(1,708)

     Net loss from discontinued operations, net of taxes

(209)


(96)


(380)


(1,708)

Net income / (loss) from operations, net of taxes

$                           13,818


$                           (6,858)


$                           13,900


$                           (6,010)

Foreign currency translation adjustment

129


(26)


(235)


(31)

Comprehensive income / (loss):

$                           13,947


$                           (6,884)


$                           13,665


$                           (6,041)

Basic net income / (loss) per common share








Continuing operations

$                               0.16


$                              (0.09)


$                               0.17


$                             (0.06)

Discontinued operations

$                               0.00


$                               0.00


$                               0.00


$                             (0.02)

Net income / (loss)

$                               0.16


$                              (0.09)


$                               0.17


$                             (0.08)

Weighted average common shares outstanding, basic

86,784


79,404


84,594


77,440

Diluted net income / (loss) per common share








Continuing operations

$                               0.15


$                              (0.09)


$                               0.16


$                             (0.06)

Discontinued operations

$                               0.00


$                                0.00


$                               0.00


$                             (0.02)

Net income / (loss)

$                               0.15


$                              (0.09)


$                               0.16


$                             (0.08)

Weighted average common shares outstanding, diluted

91,875


79,404


89,558


77,440

 

Digital Turbine, Inc. and Subsidiaries

Consolidated Balance Sheets






(in thousands, except par value and share amounts)











March 31, 2020


March 31, 2019





ASSETS




Current assets




Cash and cash equivalents

$                          21,534


$                            10,894

Restricted cash

125


165

Accounts receivable, net of allowances of $1,101 and $895, respectively

33,135


22,707

Prepaid expenses and other current assets

3,653


1,331

Deferred tax assets, current

-


-

Current assets held for disposal

-


2,026

Total current assets

58,447


37,123

Property and equipment, net

8,183


3,430

Right-of-use assets

4,237


-

Deferred tax assets

-


40

Intangible assets, net

43,882


-

Goodwill

69,262


42,268

TOTAL ASSETS

$                        184,011


$                           82,861

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities




Accounts payable

$                          31,579


$                           14,912

Accrued license fees and revenue share

19,423


16,205

Accrued compensation

4,311


2,441

Accrued earn-out

23,735


-

Short-term debt, net of debt issuance costs of $62 and $0, respectively

1,188


-

Other current liabilities

2,573


826

Current liabilities held for disposal

-


3,924

Total current liabilities

82,809


38,308

Long-term debt, net of debt issuance costs of $245 and $0, respectively

18,505


-

Warrant liability

-


8,013

Other non-current liabilities

5,243


182

Total liabilities

106,557


46,503

Stockholders' equity




Preferred stock




Series A convertible preferred stock at $0.0001 par value;
2,000,000 shares authorized, 100,000 issued and outstanding
(liquidation preference of $1,000)

100


100

Common stock




Common Stock at '$0.0001 par value: 200,000,000 shares authorized; 88,041,240 issued and 87,306,784 outstanding at March 31, 2020; 82,354,940 issued and 81,620,485 outstanding at March 31, 2019

10


10

Additional paid-in capital

360,224


332,793

Treasury stock (754,599 shares at March 31, 2020 and March 31, 2019)

(71)


(71)

Accumulated other comprehensive loss

(591)


(356)

Accumulated deficit

(282,218)


(296,118)

Total stockholders' equity

77,454


36,358

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$                      184,011


$                          82,861

 

Digital Turbine, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)






3 Months Ended


3 Months Ended


March 31, 2020


March 31, 2019


(Unaudited)


(Unaudited)

Cash flows from operating activities




Net income / (loss) from continuing operations, net of taxes 

$                         14,027


$                         (6,762)

Adjustments to reconcile net income / (loss) to net cash used in operating activities:




Depreciation and amortization

858


621

Change in allowance for doubtful accounts

2,660


(42)

Loss on disposal of fixed assets

(4)


-

Non-cash interest expense

6


547

Stock-based compensation

666


595

Stock-based compensation for services rendered

173


155

Change in fair value of convertible note embedded derivative liability

-


2,104

Change in fair value of warrant liability

(1,021)


5,720

Loss on extinguishment of debt

-


406

(Increase)/decrease in assets:




Accounts receivable

1,762


1,586

Deposits

-


10

Deferred tax assets

-


399

Prepaid expenses and other current assets

82


121

Right-of-use asset

171


-

Increase/(decrease) in liabilities:




Accounts payable

10,260


(7,640)

Accrued license fees and revenue share

(3,689)


4,715

Accrued compensation

806


820

Other current liabilities

(2,419)


(1,041)

Other non-current liabilities

(10,823)


127

Net cash provided by operating activities - continuing operations

13,515


2,441

Net cash used in operating activities - discontinued operations

(2,148)


(265)

Net cash provided by operating activities

$                          11,367


$                           2,176





Cash flows from investing activities




Capital expenditures

$                          (1,666)


$                             (533)

Acquisition of Mobile Posse, net of cash received

(41,872)


-

Cash used in investing activities - continuing operations

(43,538)


(533)

Cash used in investing activities - discontinued operations

-


-

Net cash used in investing activities

(43,538)


(533)





Cash flows from financing activities




Proceeds from borrowings

$                          20,000


$                                   -

Options and warrants exercised

135


511

Repayment of debt obligations

-


(1,600)

Payment for debt issuance costs

(313)


-

Net cash provided by financing activities

$                          19,822


$                          (1,089)





Effect of exchange rate changes on cash and cash equivalents and restricted cash

$                               129


$                               (26)





Net change in cash and cash equivalents and restricted cash

$                         (12,220)


$                               528





Cash and cash equivalents and restricted cash, beginning of period

$                          33,879


$                          10,531





Cash and cash equivalents and restricted cash, end of period

$                          21,659


$                          11,059

 

GAAP GROSS MARGIN TO NON-GAAP GROSS MARGIN














(in thousands)



























3 Months Ended


3 Months Ended


12 Months Ended


12 Months Ended



March 31, 2020


March 31, 2019


March 31, 2020


March 31, 2019



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Continuing Operations:









Revenue


$                          39,351


$                          27,192


$                        138,715


$                        103,569

Gross profit


$                          15,329


$                          10,954


$                          53,673


$                          35,565

Gross margin percentage


39.0%


40.3%


39%


34%

Add back items:









Amortization of intangibles


-


224


-


1,230

Depreciation of software


431


148


1,454


696

Non-GAAP gross profit from continuing operations


$                          15,760


$                          11,326


$                          55,127


$                          37,491

Non-GAAP gross margin percentage from continuing operations

40.0%


41.7%


40%


36%

 

GAAP NET INCOME TO NON-GAAP ADJUSTED NET INCOME












(in thousands)

























3 Months Ended


3 Months Ended


12 Months Ended


12 Months Ended



March 31, 2020


March 31, 2019


March 31, 2020


March 31, 2019



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Continuing Operations:









Net income / (loss) from continuing operations


$                          14,027


$                          (6,763)


$                          14,280


$                          (4,303)

Add back items:









Stock and stock option compensation


839


750


3,353


2,531

Amortization of intangibles


218


224


218


1,230

Change in fair value of convertible note
embedded derivative and warrant liability


(1,021)


7,824


9,580


5,883

Loss on extinguishment of debt


-


406


-


431

Non-recurring severence expense


-


-


-


145

Tax adjustment (1)


(10,552)


-


(10,552)


-

Transaction expenses


657


-


657


-

Non-GAAP adjusted net income from continuing operations


$                            4,168


$                            2,441


$                          17,536


$                            5,917










Non-GAAP adjusted net income per share from continuing operations


$                              0.05


$                              0.03


$                              0.20


$                              0.08

Weighted average common shares outstanding, diluted


91,875


79,404


89,558


77,440










(1) Valuation allowance release due to purchase price allocation of Mobile Posse

 

GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA











(in thousands)

















3 Months Ended


3 Months Ended


12 Months Ended


12 Months Ended



March 31, 2020


March 31, 2019


March 31, 2020


March 31, 2019

Continuing Operations:


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Net income / (loss) from continuing operations


$                          14,027


$                          (6,763)


$                          14,280


$                          (4,303)

Add back items:









Stock and stock option compensation


839


750


3,353


2,531

Amortization of intangibles


218


224


218


1,230

Depreciation expense


620


396


2,124


1,535

Interest expense, net


77


472


(41)


1,120

Other expense / (income)


223


(316)


(246)


(139)

Change in fair value of convertible note
embedded derivative and warrant liability


(1,021)


7,824


9,580


5,883

Loss on extinguishment of debt


-


406


-


425

Non-recurring severence expense


-


-


-


145

Foreign exchange transaction loss / (gain)


-


4


1


(2)

Income tax provision


(10,381)


312


(10,375)


469

Transactions expenses


657


-


657


-

Non-GAAP adjusted EBITDA from continuing operations


$                            5,259


$                            3,309


$                          19,550


$                            8,894

 

GAAP CASH FLOW FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS TO NON-GAAP FREE CASH FLOW FROM CONTINUING OPERATIONS






(in thousands)















3 Months Ended


3 Months Ended



March 31, 2020


March 31, 2019



(Unaudited)


(Unaudited)

Net cash provided by operating activities from continuing operations


$                              13,515


$                              2,441

Capital expenditures


(1,666)


(533)






Non-GAAP free cash flow provided by continuing operations


$                              11,849


$                              1,908

 

Digital Turbine - Right App. Right Person. Right Time. (PRNewsFoto/Digital Turbine, Inc.) (PRNewsfoto/Digital Turbine, Inc.)

 

SOURCE Digital Turbine, Inc.


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