Market Overview - Wall Street regained momentum in 2025, driven by solid corporate earnings and advancements in AI, with the S&P 500 rising 2.2%, Dow Jones gaining 2.1%, and Nasdaq Composite Index increasing by 1.1% since the start of the year [1] - Despite gains, concerns over economic slowdown and trade war fears persist [1] Corporate Earnings - Total fourth-quarter earnings for 429 S&P 500 members increased by 12.1% year-over-year, with revenues up by 5.5% [3] - 77.9% of companies beat EPS estimates, and 66.2% surpassed revenue estimates, indicating a stronger performance compared to recent periods [3] AI Investments - Companies are significantly investing in AI, anticipating long-term benefits that justify current valuations, which has spurred optimism about future productivity gains and economic expansion [4] Economic Concerns - Recent economic data indicates a slowdown, with U.S. business activity stalling in February and consumer sentiment dropping to a 15-month low [5] - Consumers' 12-month inflation expectations rose to 4.3%, the highest since November 2023, up from 3.3% in January [5] - Homebuilder sentiment dropped to a five-month low due to concerns over rising costs of building materials from tariffs [6] Trade Issues - President Trump's tariff talks, including a 25% tariff on goods from Mexico and Canada, are set to take effect next month, contributing to market uncertainty [7] - Additional tariff threats on automobile, semiconductor, and pharmaceutical imports have been announced, further heightening trade concerns [8] Best-Performing Stocks - INVIVYD INC. (IVVD) has seen a stock increase of 299% since the start of the year, with an expected earnings growth of 9.4% [9] - 21Vianet Group, Inc. (VNET) stock has rallied 208% with an estimated earnings growth rate of 90.7% [10][11] - FuboTV (FUBO) stock surged 198% with an estimated earnings growth rate of 49.3% [11] - Noodles & Company (NDLS) stock increased by 152%, although its earnings are expected to decline by 290.9% this year [12] - Digital Turbine Inc. (APPS) stock has rallied 150% with an estimated earnings growth rate of 26.67% for the fiscal year ending March 2026 [13]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum if their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer strategy involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Digital Turbine (APPS) Analysis - Digital Turbine (APPS) has shown significant price movement, with a 72% increase over the past four weeks, indicating strong investor interest [4] - Over the past 12 weeks, APPS has gained 193.8%, demonstrating its ability to deliver positive returns over a longer timeframe [5] - APPS has a high beta of 2.38, suggesting it moves 138% more than the market, indicating fast-paced momentum [5] - The stock has a Momentum Score of A, suggesting it is an opportune time for investment to capitalize on its momentum [6] Group 3: Earnings Estimates and Valuation - APPS has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [7] - The stock is currently trading at a Price-to-Sales ratio of 0.92, indicating it is reasonably valued at 92 cents for each dollar of sales, providing room for further growth [7] Group 4: Additional Investment Opportunities - Besides APPS, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Viewpoint - Digital Turbine's stock experienced a significant decline of 31.7% from the previous week's close, driven by sell-offs and concerning demand indicators in the market [1][2]. Company Performance - Digital Turbine reported a 6% year-over-year decline in sales, totaling $135 million, but initially saw a stock price increase due to beating expectations and positive management guidance [4]. - Despite the recent downturn, Digital Turbine's stock is still up approximately 96% over the last month, indicating volatility in trading as the company works on a turnaround initiative [6]. Industry Context - Baidu's Q4 report indicated a 7% year-over-year decline in total sales for its digital marketing businesses, raising concerns about the overall health of the industry, which negatively impacted Digital Turbine's stock [3][4]. - Macroeconomic factors, including weaker-than-expected sales guidance from Walmart and declining U.S. consumer confidence, contributed to the sell-offs in Digital Turbine's stock [5].

Core Viewpoint - Digital Turbine's stock is experiencing significant sell-offs due to concerns stemming from Baidu's recent quarterly report, which indicated weakness in the digital advertising sector [1][2]. Company Performance - Digital Turbine's share price fell by 17.7% during trading, reflecting investor reactions to Baidu's results [1]. - The company reported a 6% year-over-year decline in revenue for its third quarter, amounting to $135 million, although this performance exceeded market expectations [4]. - Despite the recent decline, Digital Turbine's share price has increased by 152% over the past month, indicating prior strong performance [5]. Industry Context - Baidu reported a 7% year-over-year decline in its online marketing businesses for the fourth quarter, suggesting ongoing challenges in the digital advertising industry [3]. - As a significant player in the digital advertising space, Baidu's performance is seen as a bellwether for other companies, including Digital Turbine, which has substantial exposure to the Chinese market [2][5]. - The recent results from Baidu may indicate potential headwinds for Digital Turbine's business, raising concerns about future performance in the Asia Pacific and China segments [5].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Digital Turbine (APPS) - Digital Turbine currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance [2][3] - The stock has seen significant price increases, with shares up 87.02% over the past week and 230.96% over the past month, compared to the Zacks Internet - Software industry's flat performance of 0% and 4.5% respectively [5] - Over the past quarter, shares have increased by 343.54%, and by 84.7% over the last year, while the S&P 500 has only moved 2.43% and 24.91% respectively [6] Trading Volume - The average 20-day trading volume for Digital Turbine is 11,876,224 shares, which is a useful indicator for assessing price movements and market interest [7] Earnings Outlook - In the past two months, one earnings estimate for Digital Turbine has increased, raising the consensus estimate from $0.20 to $0.30, with no downward revisions during the same period [9] - For the next fiscal year, one estimate has also moved upwards, indicating positive sentiment regarding future earnings [9] Conclusion - Given the strong performance metrics and positive earnings outlook, Digital Turbine is positioned as a promising momentum pick for investors [11]

Core Viewpoint - Digital Turbine (APPS) has significantly outperformed the Computer and Technology sector in year-to-date performance, indicating strong investment potential [1][4]. Company Performance - Digital Turbine has achieved a year-to-date return of approximately 285.8%, while the average return for the Computer and Technology sector is only 2.6% [4]. - The Zacks Consensus Estimate for Digital Turbine's full-year earnings has increased by 76.9% over the past three months, reflecting improved analyst sentiment [4]. Industry Context - Digital Turbine is part of the Internet - Software industry, which consists of 150 stocks and has an average gain of 21.6% this year, indicating that APPS is outperforming its industry peers [6]. - In contrast, another stock in the sector, ams-OSRAM AG Unsponsored ADR (AMSSY), has a year-to-date return of 17.1% and belongs to the Electronics - Semiconductors industry, which has only gained 2.5% this year [5][6]. Zacks Rank - Digital Turbine currently holds a Zacks Rank of 1 (Strong Buy), suggesting it is positioned well for future performance [3].

Core Viewpoint - Digital Turbine's stock surged by 82% following the release of its fiscal Q3 2025 financial results, despite reporting a revenue decline and a larger net loss compared to the previous year [1][2]. Financial Performance - The company reported quarterly revenue of $135 million, which represents a 6% decrease year over year [2]. - Digital Turbine incurred a net loss of $23 million, larger than the $14 million loss from the same period last year [2]. - Management anticipates Q4 revenue to be around $115 million, indicating growth compared to the same quarter of fiscal 2024 [3]. Market Context - The stock had previously fallen to a valuation of less than 1 times its sales, leading investors to believe the company was in a downward spiral [4]. - The recent positive outlook for Q4 has prompted investors to reassess their assumptions about the company's growth potential [4]. Business Model and Challenges - Digital Turbine's software is pre-installed on mobile devices from select telecom companies, creating advertising opportunities [3]. - The company faces challenges due to its reliance on a limited number of telecom partnerships and the lower advertising revenue potential in international markets compared to the U.S. [5].

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to improve significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] Group 2 - Michael has over 10 years of experience analyzing companies in the tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] - He leads the investing group Deep Value Returns, which offers insights through a concentrated portfolio of value stocks, timely updates on stock picks, and a weekly webinar for live advice [2] - The Deep Value Returns community is described as active, vibrant, and supportive, providing accessible chat options for both new and experienced investors [2]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $135 million, representing a 13% sequential increase and a 3% decrease year-over-year [10][39] - Adjusted EBITDA was $22 million, with a projected nearly 50% growth in EBITDA for the March quarter [10][11] - Non-GAAP EPS was $0.13, down from $0.15 in the same quarter last year [49] - Gross margin for Q3 was 44%, down from 45% in Q2 and 46% in Q3 of the prior year [42] Business Line Data and Key Metrics Changes - On-Device Solutions (ODS) segment revenues reached $92 million, an 11% sequential increase but down 3% year-over-year [12][39] - Revenue per device (RPD) reached record levels in both the US and international markets, driven by strong advertiser demand [40] - Advertising Growth Platform (AGP) revenues were $44 million, with a 17% sequential growth and a 34% year-over-year growth in brand spending [14][41] Market Data and Key Metrics Changes - International ODS revenues increased by 100% year-over-year, indicating strong advertiser demand and improved execution [13] - The company is expanding its global device relationships despite soft device sales in the US, with partnerships including Motorola, Nokia, and T-Mobile [22] Company Strategy and Development Direction - The company is focused on growth and efficiency, targeting more than $25 million in annual operating expense savings [20][48] - Investments in brand relationships and first-party data are seen as key differentiators in a competitive market [15][19] - The transition from waterfall bidding to SDK bidding is a strategic move to improve performance advertising [16][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's transformation and growth strategy, highlighting the importance of leveraging first-party data [31][68] - The upcoming Digital Markets Act in Europe is anticipated to create new opportunities for the company [61] - The company expects revenue for fiscal year 2025 to be in the range of $485 million to $490 million, with projected non-GAAP adjusted EBITDA between $69 million and $71 million [52] Other Important Information - The company announced a leadership transition with Steve Lasher joining as the new CFO [7][33] - Cash balance at the end of the quarter was $34.6 million, with free cash flow of $6.4 million [50] Q&A Session Summary Question: What has changed for big brand names to return to Digital Turbine for advertising? - Management attributed the return to hard work and relationship building, emphasizing the importance of trust with brands [57][58] Question: Are other large publishers preparing to launch their own app stores? - Management noted increased awareness and interest from major players like Epic and Microsoft, with potential for more aggressive moves in 2025 [60][61] Question: What are the key dynamics for 2025 compared to this year? - Management highlighted the importance of leveraging first-party data and expanding device relationships as key growth drivers for the upcoming year [67][70]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-35958 DIGITAL TURBINE, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 22-2267658 (State or Other Jurisdiction of Incorporation or Organiz ...