Digital Turbine Stock

Digital Turbine, Inc., through its subsidiaries, is a leading independent mobile growth platform that levels up the landscape for advertisers, publishers, carriers, and device original equipment manufacturers (OEMs). The company offers end-to-end products and solutions leveraging proprietary technology to all participants in the mobile application ecosystem, enabling brand discovery and advertising, user acquisition and engagement, and operational efficiency for advertisers. In addition, its products and solutions provide monetization opportunities for OEMs, carriers, and application (app or apps) publishers and developers.

Products and Services

Effective April 1, 2022, the company made certain changes to its organizational and management structure that resulted in the following: the renaming of the On Device Media segment to On Device Solutions (ODS) and the integration of IAM-A and IAM-F into a single segment called App Growth Platform (AGP).

The integration of IAM-A and IAM-F was completed to drive operating efficiencies and revenue synergies. Effective April 1, 2022, the company reports its results of operations through the following two segments, each of which represents an operating and reportable segment, as follows:

On Device Solutions

The company’s ODS business consists of products and services that simplify the discovery and delivery of mobile apps and content media for device end-users. ODS consists of the following product and service groups:

Application Media represents the portion of the ODS business platform that delivers apps to end users through partnerships with wireless carriers and OEMs. Application Media optimizes revenue by using proprietary technology to streamline, track, and manage app install demand from hundreds of application developers across various publishers, carriers, OEMs, and devices.

Content Media represents the portion of the ODS business platform that presents news, weather, sports, and other content directly within the native device experience (e.g., as the start page in the mobile browser, a widget, on unlock, etc.) through partnerships with wireless carriers and OEMs. Content Media optimizes revenue by a combination of:

Programmatic Ad Partner Revenue - advertising within the content media that’s sold on an ad exchange at a market rate (cost-per-thousand (CPM));

Sponsored Content - sponsored content media from third party content providers, presented similarly to an ad, that is monetized when a recommended story is viewed (cost-per-click (CPC)); and

Editorial Content - owned or licensed media, presented similarly to an ad, that is monetized when the media is clicked on (CPC).

User acquisition tools, including SingleTap and the company’s DSP (DT DSP) that removes friction in the app install process, delivering apps to devices with a single touch, resulting in higher conversion rates.

App Growth Platform

The company’s AGP business consists of Advertising Solutions and Ad Monetization Solutions.

Advertising Solutions serve two key segments: App Developers and Brands and Agencies - enabling them to execute targeted mobile campaigns on the company’s direct app inventory.

App Developers and other performance-focused advertisers execute mobile user acquisition campaigns for their apps and products on the company’s direct mobile app inventory. This advertiser segment utilizes products, such as the DT DSP and Offer Wall (DT Offer Wall) to configure targeting, bid prices, and creative assets used for executing the campaign.

Brands and Agencies run mobile brand-awareness campaigns on the company’s direct mobile app inventory. The advertiser segment utilizes the company’s programmatic real-time bidding technology and creative studio to build highly engaging video creatives that are then used exclusively in campaigns targeting the company’s direct mobile app inventory.

Ad Monetization solutions allow mobile app publishers and developers to monetize their monthly active users via display, native, and video advertising. The company’s Ad Monetization solutions are integrated directly with leading mobile apps and games, connecting their ad inventory to campaigns from Demand Side Platforms (DSPs), app marketers, brand advertisers, and agencies, primarily through a programmatic, real-time bidding auction, and, in some cases, through the company’s direct campaign management products, such as the DT DSP and DT Offer Wall.

Competition

The company’s primary competition for ODS comes from the Google Play application store. Broadly, the company’s ODS platform faces competition from existing operator solutions built internally, as well as companies providing application and content media products and services, such as Facebook, Snapchat, Unity (ironSource), lnMobi, Magnite, Applovin, and others.

The company competes with other demand-side platform providers, some of which are smaller, privately-held companies, while others are large, well-established companies, such as The Trade Desk, or divisions of large companies, such as AT&T, Google, and Adobe.

The company’s competition for AGP products and services comes from a diverse group of companies, including AppLovin, Unity (ironSource), and Liftoff.

Product Development

The company’s total product development costs incurred for the fiscal years ended March 31, 2023, $56,486.

Contracts with Supply Partners and Customers

The company has both exclusive and non-exclusive agreements with its supply partners, which consist of wireless carriers and OEMs within its ODS business. The company’s wireless carrier and OEM agreements are usually multi-year agreements and in some cases, the wireless carrier can terminate the agreement early without cause.

Under the agreements with wireless carriers and OEMs, the company manages the monetization of end user mobile devices through the marketing of application slots or advertisement space/inventory to publishers and/or advertisers by delivering apps or advertisements to the mobile device. The company generally offers these services under a revenue share model.

Supply partners in the company’s AGP business are primarily consisted of app publishers and is generally non-exclusive.

The company’s customers for ODS products are numerous advertisers, agencies, and DSPs and its contracts with them are not exclusive and can be terminated by them with either no notice or relatively short notice. The company offers brand and programmatic advertising services under customer contract arrangements with third-party advertisers and agencies, generally in the form of insertion orders that specify the type of arrangement for a budgeted amount.

In addition, the company offers programmatic and direct-sold advertising services under customer contract arrangements as part of its AGP business. The company’s customers can offer/bid on each individual display ad and the highest bid wins the right to fill each ad impression.

Business Seasonality

The company’s revenue, cash flow from operations, operating results, and other key operating and financial measures may vary from quarter-to-quarter due to the seasonal nature of advertiser spending. For example, many advertisers (and their agencies) devote a disproportionate amount of their budgets to the fourth quarter of the calendar year to coincide with increased holiday spending.

History

The company was formerly known as Mandalay Digital Group, Inc. and changed its name to Digital Turbine, Inc. in 2015.