Digital Turbine Lifts FY2027 Revenue View to $670–690 Million

Digital Turbine raised its fiscal 2027 revenue guidance to $670 million–$690 million, up from $650 million–$670 million, after posting 27% revenue growth in its September quarter. The mobile advertising company reaffirmed its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) outlook of $145 million–$155 million, a deliberate choice that signals where management is placing its next dollars.

Why raise revenue but not EBITDA?

CEO Bill Stone said stronger performance from the company's data and AI tools supported the higher revenue forecast. Asked why the EBITDA outlook stayed unchanged, Stone said Digital Turbine is investing in people and systems to expand the business and taking a prudent approach to profitability while it scales.

"We want to make sure that we've achieved the first important thing, which is return on ad spend for advertisers using these new things," Stone said. "Now we want to scale it, and then we'll scale it with margins as we go forward in the future."

For finance teams watching the model, the read is straightforward: incremental revenue is being plowed back into demand-generating capability before margin expansion becomes the priority.

What did the quarter deliver?

Fiscal second-quarter net revenue rose to $178.7 million from a year earlier. Adjusted EBITDA increased 46% to $39.8 million, with margin expanding roughly 290 basis points to 22.3%. That EBITDA margin gain is roughly seven times the size of the gross-margin compression the quarter also contained — a gap explained below.

Both segments contributed:

• On-Device Solutions: revenue rose 20% to $115.6 million. Interim CFO Josh Kinsell credited international supply and additional product offerings, even as global device volumes faced headwinds from DRAM pricing in the supply chain. International On-Device revenue grew approximately 50%, with improved advertising rates the larger driver over higher device volumes.
• App Growth Platform: revenue increased 42% to $63.5 million, the fifth consecutive quarter of double-digit year-over-year growth. DT Exchange revenue rose 42% and brand revenue grew 45%, Kinsell said.

Stone said brands are shifting spending away from the open web toward channels such as mobile apps, and Digital Turbine's data and distribution help advertisers improve returns. Nearly 40% of advertiser spending on DT Exchange came from non-gaming partners; Kinsell added that the non-gaming share on the supply side was higher.

Where did margins and cash land?

Non-GAAP gross margin fell to 43% from 47% a year earlier. Kinsell said revenue sharing rose to 49% of net revenue from 45%, driven by product mix changes and revenue carrying sharing obligations. Other direct costs also climbed, primarily from hosting, bidding and platform fees.

Cash operating expenses declined 3% year over year to $37.6 million. Kinsell said the company expects measured AI investments in the second half, focused on demand-driving areas, direct costs, research and development, and data analysis.

GAAP net income came in at $10.3 million, or $0.06 per diluted share, versus a loss of $21.4 million, or $0.20 per share, a year earlier. The quarter benefited from a $2.2 million non-cash gain on warrant liabilities and a $4.7 million gain on the sale of a dormant asset. Non-GAAP net income was $23.4 million, or $0.18 per share. Cash flow from operations rose to $18.8 million from $14.5 million, and non-GAAP free cash flow increased to $10.5 million.

The balance sheet shows deleveraging progress: $51.6 million in cash and cash equivalents against approximately $353.6 million in debt, net of issuance costs and discounts. Stone said net leverage fell to 2.3 times from more than 4 times in the prior-year September quarter.

What comes next in Europe and the CFO seat?

Digital Turbine expects its first revenue from Orange in the current quarter and plans to launch a partnership with another Tier 1 European operator during the current fiscal year. Stone did not identify the new partner or disclose its size, and neither partnership is material to revenue guidance for the remainder of this fiscal year — both should contribute to growth the following year.

On leadership, Stone welcomed Daniel Lentz as incoming CFO, starting later in the month. Kinsell, the interim CFO, will continue as chief accounting officer.