Digital Turbine, Inc 10-Q for FY2022 Q1

Digital Turbine, Inc. (APPS)

10-Q 2021-08-09 For: 2021-06-30

Added on April 10, 2026

About this 10-Q

Digital Turbine, Inc filed this 10-Q on August 9, 2021, covering the quarter ended June 30, 2021 (FY2022 Q1).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $212.62M; up 260.3% from $59.01M a year earlier
Net income: $14.28M; up 43.7% from net income of $9.94M a year earlier
Diluted EPS: $0.14; up 27.3% from $0.11 a year earlier

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Delaware						22-2267658
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)
110 San Antonio Street, Suite 160, Austin, TX						78701
(Address of Principal Executive Offices)						(Zip Code)


Common Stock, Par Value $0.0001 Per Share	APPS	The Nasdaq Stock Market LLC
		(NASDAQ Capital Market)
(Title of Class)	(Trading Symbol)	(Name of Each Exchange on Which Registered)


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
Emerging Growth Company	☐


PART I	FINANCIAL INFORMATION	3

ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS	3

	Condensed Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and March 31, 2021	3

	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended June 30, 2021 and 2020 (Unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2021 and 2020 (Unaudited)	5

	Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended June 30, 2021 and 2020 (Unaudited)	6

	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	7

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31

ITEM 4.	CONTROLS AND PROCEDURES	32

PART II	OTHER INFORMATION	33

ITEM 1.	LEGAL PROCEEDINGS	33

ITEM 1A.	RISK FACTORS	33

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	69

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	69

ITEM 4.	MINE SAFETY DISCLOSURES	70

ITEM 5.	OTHER INFORMATION	70

	EXHIBITS	71

	SIGNATURES	72


	June 30, 2021		1	March 31, 2021
	(Unaudited)
ASSETS
Current assets
Cash	$	83,129		$	30,778
Restricted cash	883			340
Accounts receivable, net	219,099			61,985
Prepaid expenses and other current assets	20,675			4,282
Total current assets	323,786			97,385
Property and equipment, net	18,927			13,050
Right-of-use assets	19,565			3,495
Deferred tax assets, net	—			12,963
Intangible assets, net	488,360			53,300
Goodwill	572,607			80,176
Other non-current assets	799			—
TOTAL ASSETS	$	1,424,044		$	260,369

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable	$	155,378		$	34,953
Accrued license fees and revenue share	84,428			46,196
Accrued compensation	23,251			9,817
Short-term debt	20,415			14,557
Other current liabilities	21,659			5,626
Acquisition purchase price liabilities	313,413			—
Total current liabilities	618,544			111,149
Long-term debt, net of debt issuance costs	233,830			—
Deferred tax liabilities, net	24,676			—
Other non-current liabilities	20,219			4,108
Total liabilities	897,269			115,257
Commitments and contingencies (Note 13)
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)	100			100
Common stock
$0.0001 par value: 200,000,000 shares authorized; 95,788,373 issued and 95,052,667 outstanding at June 30, 2021; 90,685,553 issued and 89,949,847 outstanding at March 31, 2021	10			10
Additional paid-in capital	736,943			373,310
Treasury stock (754,599 shares at June 30, 2021 and March 31, 2021)	(71)			(71)
Accumulated other comprehensive loss	(20,922)			(903)
Accumulated deficit	(213,050)			(227,334)
Total stockholders' equity attributable to Digital Turbine, Inc.	503,010			145,112
Non-controlling interest	23,765			—
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,424,044		$	260,369


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three months ended June 30,
	2021		2020
Net revenues	$	212,615	$	59,012
Costs of revenues and operating expenses
License fees and revenue share	138,348		32,300
Other direct costs of revenues	2,533		560
Product development	15,547		4,408
Sales and marketing	13,736		4,318
General and administrative	23,296		6,804
Restructuring and impairment costs	10		—
Total costs of revenues and operating expenses	193,470		48,390
Income from operations	19,145		10,622
Interest and other income / (expense), net
Interest expense, net	(1,157)		(306)
Foreign exchange transaction loss	(270)		—
Other income / (expense), net	(35)		—
Total interest and other income / (expense), net	(1,462)		(306)
Income before income taxes	17,683		10,316
Income tax provision	3,430		376
Net income	14,253		9,940
Less: net loss attributable to non-controlling interest	(31)		—
Net income attributable to Digital Turbine, Inc.	14,284		9,940
Other comprehensive loss
Foreign currency translation adjustment	(20,781)		(142)
Comprehensive income / (loss)	(6,528)		9,798
Less: comprehensive income / (loss) attributable to non-controlling interest	(793)		—
Comprehensive income / (loss) attributable to Digital Turbine, Inc.	$	(5,735)	$	9,798
Net income per common share
Basic	$	0.16	$	0.11
Diluted	$	0.14	$	0.11
Weighted-average common shares outstanding
Basic	91,585		87,386
Diluted	98,822		93,108


	Common Stock Shares	Amount		Preferred Stock Shares	Amount		Treasury Stock Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income / (Loss)		Accumulated Deficit		Non-Controlling Interest		Total
Balance at March 31, 2021	89,949,847	$	10	100,000	$	100	754,599	$	(71)	$	373,310	$	(903)	$	(227,334)	$	—	$	145,112
Net income	—	—		—	—		—	—		—		—		14,284		(31)		14,253
Foreign currency translation	—	—		—	—		—	—		—		(20,019)		—		(762)		(20,781)
Stock-based compensation	207,758	—		—	—		—	—		2,365		—		—		—		2,365
Stock-based compensation for services rendered	—	—		—	—		—	—		1,340		—		—		—		1,340
Shares for acquisition of Fyber	4,716,935	—		—	—		—	—		359,233		—		—		—		359,233
Non-controlling interests in Fyber	—	—		—	—		—	—		—		—		—		24,558		24,558


Options exercised	178,127	—		—	—		—	—		695		—		—		—		695
Balance at June 30, 2021	95,052,667	$	10	100,000	$	100	754,599	$	(71)	$	736,943	$	(20,922)	$	(213,050)	$	23,765	$	526,775


Assets acquired
Cash	$	71,489
Accounts receivable	64,877
Other current assets	10,470
Property and equipment	1,561
Right-of-use asset	13,191
Publisher relationships	106,400
Developed technology	86,900
Trade names	32,100
Customer relationships	31,400
Favorable lease	1,483
Goodwill	303,015
Other non-current assets	851
Total assets acquired	$	723,737

Liabilities assumed
Accounts payable	$	78,090
Accrued license fees and revenue share	5,929
Accrued compensation	52,929
Other current liabilities	12,273
Short-term debt	25,789
Deferred tax liability, net	25,213
Other non-current liabilities	15,386
Total liabilities assumed	$	215,609
Total purchase price	$	508,128


Assets acquired
Cash	$	24,793
Accounts receivable	57,285
Other current assets	1,845
Property and equipment	1,566
Right-of-use asset	2,460
Customer relationships	102,400
Developed technology	51,100
Trade names	36,100
Publisher relationships	4,400
Goodwill	202,552
Other non-current assets	131
Total assets acquired	$	484,632

Liabilities assumed
Accounts payable	$	21,140
Accrued license fees and revenue share	28,920
Accrued compensation	8,453
Other current liabilities	1,867
Deferred tax liability, net	10,520
Other non-current liabilities	1,770
Total liabilities assumed	$	72,670
Total purchase price	$	411,962


	Three months ended June 30, 2021
	ODM		IAM-A		IAM-F		Eliminations		Consolidated
Net revenues	$	120,383	$	44,937	$	49,641	$	(2,346)	$	212,615
License fees and revenue share	70,031		30,194		40,469		(2,346)		138,348
Segment profit	$	50,352	$	14,743	$	9,172	$	—	$	74,267


	Three months ended June 30, 2020
	ODM		IAM-A		IAM-F		Eliminations		Consolidated
Net revenues	$	59,012	$	—	$	—	$	—	$	59,012
License fees and revenue share	32,300		—		—		—		32,300
Segment profit	$	26,712	$	—	$	—	$	—	$	26,712


	June 30, 2021		March 31, 2021
United States and Canada	$	16,245	$	12,995
Europe, Middle East, and Africa	2,588		40
Asia Pacific and China	94		15
Mexico, Central America, and South America	—		—
Consolidated property and equipment, net	$	18,927	$	13,050


	As of June 30, 2021
	(Unaudited)
	Weighted-Average Remaining Useful Life	Cost		Accumulated Amortization		Net
Customer relationships	8.96 years	$	178,271	$	(6,902)	$	171,369
Developed technology	7.01 years	155,984		(13,723)		142,261
Trade names	6.94 years	69,244		(1,592)		67,652
Publisher relationships	19.51 years	107,588		(510)		107,078
Total		$	511,087	$	(22,727)	$	488,360


Remainder of fiscal year 2022	$	41,942
Fiscal year 2023	55,923
Fiscal year 2024	55,923
Fiscal year 2025	47,434
Fiscal year 2026	45,448
Thereafter	241,690
Total	$	488,360


	June 30, 2021		March 31, 2021
	(Unaudited)
Computer-related equipment	$	2,627	$	2,263
Developed software	22,646		18,473
Furniture and fixtures	2,053		714
Leasehold improvements	3,735		2,182
Property and equipment, gross	31,061		23,632
Accumulated depreciation	(12,134)		(10,582)
Property and equipment, net	$	18,927	$	13,050


	June 30, 2021
	(Unaudited)
Remainder of fiscal year 2022	$	4,265
Fiscal year 2023	4,576
Fiscal year 2024	4,101
Fiscal year 2025	3,028
Fiscal year 2026	2,578
Thereafter	3,000
Total undiscounted cash flows	21,548
(Less imputed interest)	(1,996)
Present value of lease liabilities	$	19,552


	June 30, 2021
	Balance		Interest Rate		Unused Line Fee
Revolver (subject to variable rate)	$	237,134	1.91	%	0.20	%
Fyber - Billfront	$	3,834	11.00	%	—	%
Fyber - Discount Bank (subject to variable rate)	$	4,092	5.95	%	0.60	%
Fyber - Bank Leumi (subject to variable rate)	$	12,489	5.95	%	1.00	%


	As of March 31, 2021
	Weighted-Average Remaining Useful Life	Cost		Accumulated Amortization		Net
Customer relationships	16.81 years	$	46,400	$	(4,171)	$	42,229
Developed technology	9.12 years	20,526		(11,141)		9,385
Trade names	9.92 years	2,000		(314)		1,686
Total		$	68,926	$	(15,626)	$	53,300


	Number of Shares	Weighted-Average Exercise Price (per share)		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
Options outstanding as of March 31, 2021	8,146,445	$	4.01	6.86	$	622,249
Granted	415,185	73.45
Forfeited / Cancelled	(121,187)	5.40
Exercised	(178,127)	3.90
Options outstanding as of June 30, 2021	8,262,316	$	7.48	6.77	$	567,952
Vested and expected to vest (net of estimated forfeitures) at June 30, 2021	8,117,035	$	7.18	6.73	$	560,286
Exercisable as of June 30, 2021	5,748,775	$	2.84	5.89	$	420,873


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested restricted shares outstanding as of March 31, 2021	333,544	$	4.55
Granted	279,303	42.43
Vested	(276,010)	2.51
Cancelled	(3,526)	13.88
Unvested restricted shares outstanding as of June 30, 2021	333,311	$	37.88


10.1						First Amendment Agreement to the Sale and Purchase Agreement, dated May 25, 2021, by and among Tennor Holding B.V., Advert Finance B.V., Lars Windhorst, Digital Turbine, Inc., Digital Turbine Media, Inc., and Digital Turbine Luxembourg S.à r.l., (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the Commission on May 28, 2021).

10.2						Credit Agreement, dated April 29, 2021, by and among Digital Turbine, Inc., Digital Turbine Media, Inc., Digital Turbine USA, Inc., Mobile Posse Inc., and Bank of America, N.A. as administrative agent and a lender, the lenders party thereto, BofA Securities, Inc., Wells Fargo Securities, LLC and PNC Bank, NA as Lead Arranger, Bookrunners and Syndication Agents, and CapitalOne and JPMorgan Chase Bank, N.A, as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the Commission on May 4, 2021).

31.1						Certification of William Stone, Principal Executive Officer.*

31.2						Certification of Barrett Garrison, Principal Financial Officer.*

32.1						Certification of William Stone, Principal Executive Officer pursuant to U.S.C. Section 1350.+

32.2						Certification of Barrett Garrison, Principal Financial Officer pursuant to U.S.C. Section 1350.+

101						INS XBRL Instance Document.*

101						SCH XBRL Schema Document.*

101						CAL XBRL Taxonomy Extension Calculation Linkbase Document.*

101						DEF XBRL Taxonomy Extension Definition Linkbase Document.*

101						LAB XBRL Taxonomy Extension Label Linkbase Document.*

101						PRE XBRL Taxonomy Extension Presentation Linkbase Document.*