Digital Turbine(US:APPS)2022-08-08 21:28Financial Position - The Company had $476,134 drawn against its revolving line of credit as of June 30, 2022, with an interest rate of 3.38%[94] - The company had cash totaling approximately $89,839 and $123,866 available to draw under the New Credit Agreement as of June 30, 2022[127] - The company's outstanding secured indebtedness under the New Credit Agreement was $476,134 as of June 30, 2022[131] - The company believes it will generate sufficient cash flow from operations to meet its business requirements for at least twelve months from the filing date of the Quarterly Report[129] Acquisitions - The acquisition of AdColony was completed for an estimated total consideration of $400,000 to $425,000, including an earn-out of $200,000 to $225,000 based on future revenue targets[95] - The Company recognized an $8,913 reduction in the earn-out payment obligation related to AdColony due to an amendment agreement[97] - The acquisition of Fyber was completed for an estimated aggregate consideration of up to $600,000, including approximately $150,000 in cash and 5,816,588 newly-issued shares valued at $359,233[101] - The Company purchased an additional $18,341 of Fyber's outstanding shares, resulting in an ownership percentage of approximately 99.5% as of June 30, 2022[104] - The Company expects to complete the purchase of the remaining outstanding Fyber shares during fiscal year 2023[104] Revenue and Growth - Total net revenue for the three months ended June 30, 2022, was $188,633, an increase of 19.3% compared to $158,075 for the same period in 2021[113] - App Growth Platform revenue increased by $32,892 or 83.3% for the three months ended June 30, 2022, primarily due to the full quarter of operations from the AdColony and Fyber acquisitions[116] - On Device Solutions revenue decreased by $1,746 or 1.5% for the three months ended June 30, 2022, attributed to lower active daily users[115] Expenses - Costs of revenue and operating expenses increased by $25,268 or 18.2% for the three months ended June 30, 2022, primarily due to the AdColony and Fyber acquisitions[118] - General and administrative expenses increased by $13,731 or 57.2% for the three months ended June 30, 2022, including acquisition-related costs[123] - Interest expense, net, increased by $2,925 for the three months ended June 30, 2022, due to higher average outstanding borrowings and interest rates[126] Cash Flow - The company generated $36,629 in cash flows from operating activities for the three months ended June 30, 2022[127] - For the three months ended June 30, 2022, net cash provided by operating activities was $36,629, a significant increase of $65,626 compared to $(28,997) for the same period in 2021, primarily due to higher non-cash charges and changes in operating assets and liabilities[135] - Net cash used in investing activities for the three months ended June 30, 2022, was approximately $6,413, a decrease of $124,555 from $130,968 in the same period in 2021, mainly due to reduced cash expenditures for business acquisitions[136] - Net cash used in financing activities was approximately $64,569 for the year ended June 30, 2022, compared to net cash provided of $215,068 in the prior year, primarily due to increased repayment of debt obligations[137] - The company reported a repayment of debt obligations of $60,508 for the year ended June 30, 2022, compared to $19,680 in the previous year, reflecting a 207.5% increase in repayment[137] Capital Expenditures - Capital expenditures for the three months ended June 30, 2022, were $6,413, which included investments in product development for both the legacy ODS segment and the AGP segment[136] - The company’s net cash used in investing activities was entirely comprised of capital expenditures related to internally-developed software, indicating a focus on internal growth initiatives[136] Risk Factors - The company’s cash and cash equivalents are sensitive to interest rate changes, with a hypothetical 100 basis points increase in market interest rates resulting in an additional $10 in interest expense per $1,000 of outstanding debt[140] - Foreign currency exchange risk may impact future revenue and cash flows as the company expands its foreign operations, although many transactions are conducted in U.S. Dollars to mitigate this risk[141] Business Segments - The Company operates through two segments: On Device Solutions and App Growth Platform, following a restructuring effective April 1, 2022[107][108] - The App Growth Platform segment provides monetization solutions for mobile app publishers and developers through programmatic and direct advertising[108]