APPS - Earnings call transcript Q3 2021

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Operator

Good day and welcome to the Digital Turbine Reports Fiscal 2021 Third Quarter Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would like now to turn the conference over to Brian Bartholomew, VP of Capital Markets. Please go ahead.

Brian Bartholomew

Matt. Thanks welcome call. Turbine and quarter XXXX the conference earnings to afternoon fiscal Digital third Good

on call me Stone; Joining today's and CEO, results CFO, Bill are Barrett Garrison. to discuss our

take forward-looking products started, and projected would other that get demand, beliefs remarks include are including forward-looking will and operating market statements. today to and current based we Before on our like to our services, remind this anticipated I topics. you These statements future forward-looking metrics, opportunity assumptions, expectations,

believe inevitably we are as they be Although statements. undertake our that reasonable, forward-looking performance Except any we are assumptions future of no and not update obligation required incorrect. prove guarantees by law, some to will to

for are results measures statements, we as materially non-GAAP our measures certain and to information most results non-GAAP the limitations contemplated by a using of the refer file reconciliations during please substitutes those this differ for of release today's call, about will that For risk the measures. our Please actual discussion measures comparable from forward-looking of the Commission. Also, Securities to the factors important well performance. with discuss not documents to to Exchange press we our GAAP refer these could GAAP financial non-GAAP of Non-GAAP as measures. cause

like I'd CEO, to Stone. Now, turn Bill the our call to Mr. over

Bill Stone

for you all call tonight. our thank joining and Brian Thanks

not happen. team commentary, these Digital shareholders. best give from I I've Before positive getting these Turbine to to you and our happen results may are to hustle it's and into be Thanks partners, of customers, our and and break for could my results a continues and on around and who the them all that of generating DT year want I I focus challenge a myself, also should investors them And and while been don't maintaining three only out want XX-year of too. magically going just in my into all results us make in my proud virtually on Brian, prepared you it Working shout quarter-after-quarter more I'm our to almost amazing business for the nearly team. pandemic team team outcomes. out a our People Barrett, driving career. positive team prepared remarks a remarks know is areas. while our business hear now crush be to global

First, I'll summarize quarterly our results.

the benefit had operational the revenue value commentary We $XX.X initiatives we're more but over half ago on to finally, results of as our four ago with the Thus I'm year. to year updates our year, the of in enormous. the of exciting this was of the devices for a scale. against larger driven our in strong will annual more Media of overall in particular, achieved platform This devices other EBITDA resulted More and increased opportunity. revenues In nearly we year in from and acquisition Second, our Mobile materially many XXXX market. our of with continue growth also software. a business, is close also addressable operating despite deployed XX from content we products growth macro decrease our And was distribution operationally, our which and first an announce in drive provide In driving against operating over a of details record to added counts the footprint, nearly saw fiscal rates and words, of improving the result first synergies by of year Combined more revenue on business RPDs growth an Application our improve increased content $XX.X earnings launch strategic advertising achieved our breakout December across XXX% and global for and the results. platform. basis. our the to media Posse revenue turn penetration I legacy numbers, board. device quarter this fiscal the nearly improved over DAUs build devices Media growth more out demand growth current In And XX coming forma partnerships represented anticipate the market of times XX% our revenues effects from of the I'll pleased with the XXX% And million come future. new from million over represents generated revenue by us forma operational story international States. opportunity enabled daily accelerating gross leverage platform about the last in in on underway. active our than just margins basis international XXX% XX% device growth is and flow Higher the demand and into our million and fully reminder, quarter, which XXX% the And real-time some being which year-over-year. supply share out from global hundreds with strong should some To which $XXX,XXX It as and partners revenues still continue Android from momentum App third or with per in all in a growth, year-over-year Tier-one later US being better quarter, DAUs. end multiple over provide specifically DAU our some into per by users a where synergies the network that many our on had on I'll we economies going pro is XX% on reach the in core revenue strong to than growth the for outside a content business, pleased cash growth metric compared on non-GAAP year-over-year. pro for or we the is sunset approximately platform was RPD devices platform existing includes the content free and health we EBITDA million time, to Barrett revenues This business. millions United international RPDs. XX% we're our new Xx we as-reported

priority on me for and heard prior is advertisers. major partners, As company. you've models, the a products strategic business diversification of Diversification calls, say geographies

grew with total continue We to success we whom revenues double-digits year-over-year despite activated. have US-based carrier number partners of healthy our devices with flat

outside increased over by year-over-year. group revenues with partners of XXX% our this However,

growth including to how want the devices products. we turning outlook. and new positioned growth each some media levers Now for provide forward to I commentary across are of our on continued

devices. on First

As mentioned set our a devices with earlier, quarterly launched million new software. I record we more with than XX

device less expanding a these in Given devices revenue than compared in our majority revenues, The the international XXX% we growth XX% ago. annually the nicely revenues the more moment, is partners our growth the overwhelming international with almost occurring to trends US quarter is partner growth a Media of which partners. as than internationally App flattish year of at third international from in are ramping was

entire Day we our three generated Eve, Christmas more anecdote and small than revenue day the Turbine in international same to on this Digital after past our from did the partners those progress, highlight days Just Company a Christmas as Christmas XXXX.

smartphones of robust beyond remains mention front us calls, increase further devices excited device is opportunity prior us expanding as and about offerings. and you've natural our of many me pipeline extension footprint. in exciting for we're Our on to a opportunities And our heard an

to year. we calls look our occurring on continue discussed progress forward make this TV offerings those and our to We later launches as last on earnings

from revenues are represents product Revenues XX% less SingleTap to solid products last as growth. grew other installs year-over-year, sequentially XX% year. dynamic XX% and from XXX% nearly front, than our XX% now our total non-dynamic installed by over grew revenues over our showing the products content year-over-year and products On of derived compared but

be growth content products. While drive on it believe the more is synergies our exciting, better as strong I revenue we will even

the capture other products in continue We business momentum SingleTap as such our even to faster. recent notifications ramp emerging and

The quarter growth material Last driver say is talked a compared SingleTap about being our to media progress to we over on business. large want including and more are for social seven-figure a carrier happy revenues be nearly I'm seven-figure talked XX% also XXXX I in now quarterly business rate. Not about growth ago. recurring partner, call on SingleTap. our on a today, with becoming it expect us. our Our the run monthly we XX% integration out a year seven-figure for business specifically beyond. it's SingleTap ago we and now to being a to a just And quarters few

is scale our to make nice internationally. stack we investors to for continue we'll of seeing continue to picture side we'll proactively efforts The diversification and multiple have a this we'll to investments we're and business occurring make and Specifically, takeaway growth these that or US focus our ad from the product growth and major area platform both fronts here demand in look bigger tech on areas. DSP in the continue

from international to or of our United partners. like; international the U.S. devices. quarter, are to growth things year we more are our see history in of quarter in Media this And more for while the international currently the time such be scaling companies our past from States. business spending on devices, application U.S. XX% developers focused media greater the Media on in demand applications this And Application meet On were from revenues want a we December our Crush. based very XX% international was front, in that saw supply despite Candy significantly Application TikTok continuing media Last not than to in as first year-over-year our media December

increased of the RPDs partners Our a reason from outside this XXX% direct from international why saw broader U.S. scale we year more Achieving than U.S. set in a demand and XX% by the is global grow media ago. a XX% approximately nearly demand

global home of Tencent see all more European King is spending and McDonald's Pinterest, with Chinese more such to geographies us that of We Europe, on Latin ByteDance and spending and in U.S. their spending geography as and and home outside Uber, continue respective of like; America, we companies scale see whether where geographies. partners and Alibaba, benefits companies their outside the devices

percentage at coming strategically remains we're finally year just non-gaming overall my in of verticals, and highlight and for the the quarterly particular moat. only similar from any mix consistent the long to is decline App our the team, streaming want revenues networking entertainment of In we've video, both unique I the growth areas but from rates of showing Barrett, sports, on-device for strong for industry business fairly turn category as and before last gaming how results distribution each scale business. social Media the enthusiasm news, very In and of with quarter to as our travel. And in seen these terms is over footprint. positioned I our material not it for the given term the This grow

extending you to the want context additional it through progress to you and Barrett see I'll our and a activities my through forward prepared over have tech updating this you area own Our you on future footprint to integration ability all We focus us. that both that With to our strategic take remarks from vertical strategies that our look and ad is concludes drive to against content us. stack numbers. as for our on turn

Barrett Garrison

everyone. afternoon good and Bill Thanks

and very Digital pleased are delivering for with another financial performance We QX record our Turbine. execution, quarter

a pro the where appropriate the our the our comparing Before to reference in I forma in prior trends cover acquisition results Mobile content into business will as includes from against provide insight a the year. when additional occasionally primarily earlier reminder, periods. Posse basis results on current period performance I performance underlying of

the as quarter growing $XX.X to year-over-year. Adjusted pro of reported and a million on XXX% EBITDA in revenue the XX% $XX.X Turning increased to XXX% quarter, forma up basis. million was

business. our We continue experience to content accelerating business and Media our growth Application both across

U.S. product and than and $XX.X million, strength XX% international XX% representing growth more quarter. Our leading RPDs. continued of We growth to the Application saw over of RPD in delivered advertiser business on in expansion revenue demand XX% Media

fully Our up $XX.X financial the content demand to up deployed in combined our forma was which with profit from increasing on performance on margin was advertising year-over-year a on quarter business improved as yields. was quarter platform in million content prior Gross we XXX% and generated XX% pro platform a $XX.X key experienced XXX% in XX% grew the Gross the year. basis. up the which metric XX% million performance

apps business new Media mix. high-margin Our acceleration product on largely margin business by partner margin continued and our is improvements Content expansion from momentum the and new of revenue driven continued our and

and year-on-year expansion execute $XX.X and quarter-to-quarter, operating total XX% period. $XX.X a to we fluctuate impressive or $X sequentially prior cash quarter. $X.X million even or and while forma the as expand a from on from partners platform XX% in to platform. margins I revenues I very business. profitability achieved While free the further primarily, million we year the pleased product we quarter were scale our our million gross year. in per down make prior partner within and share of $XX expenses note as were continue be in on of only expense the cash to increased EBITDA of the Adjusted achieved with of up over force of drive technology as of to margin XXX% to that number basis, prior to investments flow products strategy. the from the These year revenue quarter and the the last year. within future in as expenses our to compared teams XX% in million revenues million we XX.X% $XX.X the share We Total adjusted quarter per income being sales continued third prior quarter incremental diversification continue operating can on in focused the the experienced up our operating new slightly In this international by a to revenues expenses net down continue our compared was pro leverage support XX.X% is delivered on XX% in investments. $X.XX anticipate and or quarter will rates during -- were and $X.XX million of year, quarter, margin

an year exit million impressive totaled million, prior $X.X compared of to in cash. with quarter, $XX as of us million free enabling Our cash a balance $XX flow the to QX increase strong

was income net third diluted income XXXX a income net million $X.XX GAAP $X.X per a or is per to from payment closed be liability the our acquisition million original impact of Mobile change shares XX Our the earn-out $XX.X GAAP our $X.XX versus to the acquisition. accelerated this a for reminder, share. $X.X final recorded quarter. to in based of our of quarterly as the net tied on of expectations the our Included or performance quarter outstanding compared share adjustment March of earn-out related million Posse in in will quarter And million out

for credit new given provides and $XXX the led interest than America, enabling feature favorable by to attractive upsizing a executed we facility with of Lastly, our Bank of credit rates revolving lower line million current accordion million a debt $XXX terms of an which markets. facility prior with

further ha operations of our accelerate significant strong balance flow While and the level to ensure we and generate a to cash of plans. opportunities a take company our have from core sheet free advantage to potential greater want we liquidity flexibility growth

XXXX and to turn to between outlook. $XX between million, and expect expect $XXX back growing We hand to and $XXX adjusted questions. per Operator? open highlight grow to me I'll revenues of of and our EBITDA growing diluted fiscal grow let in has that this full year share to over adjusted $X.XX. the currently million to me the and revenue the net that, $XX year-over-year EBITDA it growth to million, implied Now, call income With XXX% let our XXX%. XXXX fiscal over for operator our midpoint guidance million

Operator

Please Aftahi first question [Operator session. the ahead. will from We Capital now Darren with ROTH Instructions] comes Partners. question-and-answer go begin Our

Darren Aftahi

Hope taking few A well. Hey, if you nice are may. Very guys. for I quarter. question. my Thanks

Second terms relative you two that question. higher devices guys just looks that like down? driving share for kind of side quarters penetration? just consistent kind Is is back million Can a in Samsung? that rate? device -- topped significantly in XX any run have row. And new number the dip of then a of level you On what's that would And of reason

You I guess carriers calendar this for in, content talked new about XXXX, later year.

one, into we have how talked And guys of on don't the last about And insight Just media scale? platform? that you other of cross-pollination domestic it second currently kind kind then to about business then last two have one carriers any think do quarters international. of their

relative said curious this XXX% the consumers of foreign think customers? US I you growth what's wanting mix I'm to brands year. reaching reach US brands foreign versus Thanks.

Bill Stone

Darren. Yes. I Hey, thanks, it. appreciate

the majority in is go, order. little bit devices of as continuing vast our and coming I'd well well growth Xiaomi of addition of list, We're So Yes, is going América to, take of partners international partners. getting in to our highlight some Samsung. seeing your top internationally. vast are XG from at the as but that predominant and the was as our of, the perform the the majority growth Móvil say to as the I'd other in bump other I kind partners a as questions Samsung U.S. is refer flattish. to but U.S. far Obviously the like of and

way. a while this our our of to your some and going as commitments materially I their got on we've bit this later hesitant statements our the expectation the to DAU our not counts Tier new a question those be Yes, something should content far comments forward-looking partners. now working on around want any But business is a This get X we've that Tier and As some making launch about X little been positive we behalf. year. influence with second is expect to partners. in on for

there, XX%, yes, And, would really in seeing we just yes, last today. demand partners. could right international our excited And cross-pollination relationships you U.S. we're point want specific we a our is classic case perspective. XX% your Media And and global here. from continue and your the have more our then question to international of of that for think they to third begets just And now from that. that of characterize to miniscule coming partners are about part demand on with ROIs us. was I strong scale. deep report our just the ad the So be that more partners seeing question And ramping. get progress it's show continue more given and make probably more ecosystem revenues spend as scale to products. mobile with broader around platform nothing App spend we really I we're in around such what we're your a And partners with we're was a And And, just

So lot of world, is key I the demand here that's is international something the focused And a which there. really just think we've But add quality to think continue I to we're good room around to that got run supply stay. on.

Darren Aftahi

Thank you. Great.

Operator

Our with go Oppenheimer. next question from ahead. comes Horan Tim Please

Tim Horan

quarter. Hi, guys, a great

was talking we you Are can from users, of order years? know active daily your tough years little then talking markets, pre-booked time? or tripling it's what don't had give be XX% to customers mean, United new can you can or us I secondly, and want any was I users. of seeing States. or or it lot over in you. sounds And point? about you And where think Maybe tenfold do four where talk them what versus pricing it call. at doubling next kind that what about sense some in a a you think you quarter indication this to can the Thank you ago. the talk to this in you're four specifically like could you're active spot on the with pricing of like daily trend three, six magnitude here up RPD the I Your now? where of three, -- that you being the about up I think think go a know but the months pricing

Bill Stone

think the but the DAU our about share Yes, XXX% of it it. the today Tim. T-Mobile. lion's DAU Not of when lion's growth Thanks we growth Yes. with is share on

States the those think numbers So think world if X about and our that the X today extrapolating of on think we a millions terms we longer we of the at quarter right here something Tier short-term. United set partners remember then out in talked we're partners of as many we're around Tier in least the of many, about opportunity term, other In about we And devices today. now. adding million hundreds in XX-plus the is

we about beyond and nature So device it of how given it's not into XXXX of quite it's tied about as sales grow in out and XXXX, think new those in only terms we're we revenues, And recurring to necessarily can something that bullish looking number. XXXX well. and the as excited

kind dollar their getting they And from investment those sticky, partners given then spend for to don't XXX% in something around platform. working to a I we quarters that's the It's that uniqueness and something can more partners. us. the the now big focus that the seen excited we've So their right the it that are On your That's And that prior to see it's as as our second here area of an ROI business. And just is. provide happens question what of that's more advertisers clearly our ROI just pricing. about. platform demand for you're return seasonality. or partners on supply and they're continues can onto bringing before XXX inventory economics think our the more back that spending dollars Yes, due platform of holidays. have makes holidays right be that for an macro we're RPD to And your we of strong. and that's now an of there's get platform That trend see spent given demand existing fixed, I is every think

you So prices. -- to rise raise allows it

gain through referenced so see this as grow to that and we continue also in traction to I it to such and see products from perspective, marketplace. we increase RPD new notifications so And demand the on in these our expected the to SingleTap as continue but expect grow new

bullish pretty continue to So RPD. grow the on opportunity to excited and we're pretty

Tim Horan

customers size you And would customer anything the T-Mobile are new on a type you couple or T-Mobile? the -- same the just one a color? of clarification then Or type of are adding like they a same adding as type like just be? a Are

Bill Stone

just say partners. let without me getting Yes, you X just water I refer Tier will into statements any yes, -- forward-looking hot on

Tim Horan

you. Thank

Bill Stone

Sure.

Operator

Our Austin next comes go Canaccord. from with Moldow question Please ahead.

Austin Moldow

Hi. for questions. my Thanks taking

First compared one is on product social pricing integration? like historical SingleTap. And relationships? look newer now the does What to work SingleTap these the does on how media the

Bill Stone

as as will have Yes. with SingleTap you're a if well you revenue It's look Hey, we Austin, far on goes you in partner. sales. referenced at terms -- new that SingleTap. aware device media as our ways on we One, basically as prepayment is two social

to marketplace. regular mean that tries given have improved and that rates conversion know use us to by of we at to market So if with for and flow. now ramping the those excited pricing The And be and of demand buy really rest been And able we're really platform over in to our sales. everybody And else. leveraging go is seeing revenues what will side time. through not. better what devices is ability get about advertising we're better the going conversion But And very I competitive relatively the is to given SingleTap the consistent we're somebody it's the capability. SingleTap fluctuate Play a that what out is device what's right Google allows arbitrage than we're aware

and And going us So a I invest referenced to that's we're game really as just and but remarks, nice been continue are ramp for not just for something seeing positive scale my in materially growth we're months. really seven-figure has there. there that our aspirations to

zeros put continue those to are aspirations Our on to trends.

Austin Moldow

last content question the Great. you. segment. on And my Thank is

of what really drove growth? products terms that Content revenue Media In pronounced

Bill Stone

Yes.

of was So in platform legacy-based and in put replace did and really drivers we last a place. year a is three in that there's the -- summertime One and lift new was growth. the platform about a place there

and better And operational results. more retention just helped of viewability, better of stickiness drive blocking overall with standard of so kind just a the and benefits of of customers, kind tackling performance lot

things Secondly, able ad within reason Chrome. we secular introduced then tailwinds. new that rates to just the higher deliver get better macro was third we And experiences broader were richer, the They for. some

You other it Google rebound from of saw started out you'll has yesterday. The players really from sure that ad from the market pandemic. I'm broader maybe some see there. to

the are those key of drivers pro growth. think I we XXX% to forma So got how three really factors

Austin Moldow

very All right. Thank you much.

Operator

Klee Our Maxim comes Please go Allen from with next question ahead. Group.

Allen Klee

afternoon. Good

If of Or you smartphone add somehow from that Tier a carriers side, new a the is a service TAM who devices? and your also also new media you're to customer? Tier get after become has already you X the someone can content the carrier X going to add one

Bill Stone

absolutely base OEM as more would for can hit the base the if for Yes. that a to they well. Allen, release and make absolutely mobile or the we will do to or can the can they just that push want a to network is maintenance do the devices they their entire allow new That's they that. through that come decision operator it products if want content on to the opportunity out that software it to do do

just absolutely it's implementation So something decision technical our can make. their we us but a it's From be for they that perspective, will do. issue

Allen Klee

content internationally, of example how happens? if what Great. that, or they devices generic this it on? or How how or grows people potentially amount for? what like of see do in grows? And When you then them kind many give do new on are your just look maybe of a understand two us you kind to we could that first you of year a that And customer internationally -- the put have how apps you bidding application get could the maybe a path

Bill Stone

Yes.

right? just stores of continuing drivers the three you same-store put really on the then launching. how that the to more sales equivalent just more part is software more of there's building more growth and do And be One second That's device or devices. the will So every you're Allen. get on

second we onto One we're ways. add And to so, products through with. continue two part we the do on is that the partners

started process. we to we recently to Brazil where that dynamic you setup installs with of And out as in SingleTap Samsung example out-of-the-box the you added part select that. the added want, for then we've Then apps So Wizard our that.

as products to rates so that to just to now that media international our then where we my more continue spending to partners more see demand is their media outside the device. remarks wanting then home in therefore bid and on obviously be in increases increases get geography, more referenced add money we And the I which RPD. final geographies And driver the

media more is ramping more and now. So products, three see devices doing ourselves business how plus the combination our more really we partners right all we're plus of international

Allen Klee

Okay. Thank you.

Operator

next question ahead. comes go Hickman Jon [Operator Our with from Ladenburg. Instructions] Please

Jon Hickman

nice a Bill, bit accelerating where on you that's new elaborate geography any growth? that's like anything could that? Is little international Anyway there quarter. different the

Bill Stone

Yes.

I we're are our Not think really just pleased growth. Latin Samsung in really scratching relationship, growth America. think And but showing we've just with América others with the there. Móvil positive our been we and surface nice

So I'd America one. really highlight Latin as

say Samsung us and -- There's the Asia/Pacific. there. us operators performance there improve with we've nicely biggest rounding obviously in international of and result look APAC us Europe. devices then our our we're got We've region. the lot is OEMs a and where there to gotten improving for really as well. of in other highlight I'd Second, people, lot a We've by I'd some out focused to really of and I relationship as for ramped as a going is of opportunity the that's forward

Jon Hickman

follow-up. just one more So

calling getting So to still you Or carriers? you? -- having these chase are like you are they are

Bill Stone

more States Yes. it's you over internationally because bit Well device. the different here United a have the the in little as control carriers know

with than selling markets the mobile Outside the especially how relationship more actually States many in in device. Asia/Pacific and the it the they OEM is important The OEMs types and important with operator applications is OEM. because the the is the content are want carrier's just the the United cards. on of is so SIM what deciding device configured And with more relationship

the States So United our inside the with relationships than outside more OEMs the States. do matter United they

Jon Hickman

are chasing So calling Or you are you? them? they

Bill Stone

people got calling calling always We're and people us. we

So it's X-way street. a

Operator

Bill to the would I Stone Officer Chief turn Executive This conference like over closing concludes to for our question-and-answer any back remarks. session.

Bill Stone

forward that Yes. and to months. against We night. on a fiscal today. our fourth joining call a call again the today's reporting on Thanks and the progress Thanks talk quarter great everyone our few on all to made look have for you we we'll in points call

Operator

The conference concluded. now for presentation. you Thank today's attending has

now disconnect. may You

Digital Turbine (APPS) 4 Feb 212021 Q3 Earnings call transcript