APPS Tops Q1 Earnings & Revenue Estimates, Raises Fiscal 2027 Guidance

By segment, Digital Turbine's On Device Solutions generated $110 million of net revenues before intercompany eliminations, up 15% year over year, led by higher device volumes and revenue per device from international partners. App Growth Platform net revenues came in at $56.6 million, up 56% year over year, marking the segment's second consecutive quarter of more than 50% growth on the back of strength in both the brand business and DT Exchange.

APPS’ Q1 in Detail

The non-GAAP gross margin expanded 210 basis points (bps) year over year to 49.4%.

Sales and marketing expenses, as a percentage of revenues, decreased 114 bps from the year-ago quarter's level to 9.2%.

General and administrative expenses, as a percentage of revenues, decreased from the year-ago quarter's level of 32.8% to 19.9%.

Product development expenses, as a percentage of revenues, decreased 137 bps to 6.4%.

Non-GAAP EBITDA was $42.5 million as compared with $25.1 million in the year-ago quarter, indicating an increase of 69% year over year, with margin expanding nearly 640 bps to 25.6%.

Digital Turbine reported GAAP income from operations of $23.1 million, up from a loss of $4.7 million in the year-ago quarter, reflecting the combined impact of higher scale and continued expense discipline.

Non-GAAP net income more than tripled to $24.1 million from $7 million in the year-ago quarter, driven by strong top-line growth and operating leverage.

APPS’ Balance Sheet

As of June 30, 2026, cash and cash equivalents (including restricted cash) were $43.2 million compared with $38 million as of March 31, 2026.

In the reported quarter, the company generated cash flow from operations of $17.9 million compared with $4.38 million in the previous quarter.

Non-GAAP free cash flow was $11.3 million compared with a free cash flow burn of $3 million in the previous quarter.

Total debt, net of issuance costs and discounts, was $352.9 million, down more than $8 million sequentially, reflecting continued deleveraging following an amendment to the company's financing agreement during the quarter.

APPS Raises Fiscal 2027 Guidance

Management pointed to broad-based momentum across both segments, continued AI-driven yield improvement and balance sheet strengthening as key supports for the raised outlook. The updated guidance implies a higher profitability profile compared with the initial fiscal 2027 view, underscoring that the company's growth initiatives are translating into more durable earnings power.

For fiscal 2027, APPS now expects non-GAAP revenues between $650 million and $670 million, up from the prior guided range of $630 million to $650 million. Adjusted EBITDA is projected to be in the band of $145 million to $155 million, up from the earlier guidance of $135 million to $145 million.

Zacks Rank & Stocks to Consider

APPS currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer & Technology include Applied Materials AMAT, ACI Worldwide ACIW and Analog Devices ADI. Each stock sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Materials shares have gained 112.7% in the year-to-date period. Applied Materials is set to report second-quarter 2026 results on Aug. 13.

Shares of ACI Worldwide have gained 19.7% in the year-to-date period. ACI Worldwide is set to report second-quarter 2026 results on Aug. 6.

Shares of Analog Devices have rallied 40.3% year to date. Analog Devices is slated to report fiscal third-quarter 2026 results on Aug. 19.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research