Digital Turbine(APPS)2024-02-08 00:37Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was 25.4 million, down from 15.7 million or 30 million or 94.3 million, down 2% year-on-year [17] - App growth platform (AGP) revenues were $49.2 million, growing 6.5% sequentially but declining 27% year-on-year [19] - Gross margin for the consolidated business was 45%, down from 50% in the prior year [20] Market Data and Key Metrics Changes - U.S. device sales faced significant headwinds, with a double-digit year-over-year decline noted [28] - Despite challenges, there were signs of improving spend levels from brand advertisers, with over 25% sequential growth in brand business [8] Company Strategy and Development Direction - The company is focusing on modernizing its tech stack, with 40% of the product and tech organization dedicated to future growth initiatives [11] - Expansion of relationships with Motorola and ONE Store aims to enhance device pipeline and revenue opportunities [9][14] - The company is positioning itself as a major player in the alternative app distribution market, leveraging partnerships and technology [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged persistent headwinds in U.S. device sales but expressed optimism about future improvements based on chipset supplier feedback [28] - The company expects to see material improvements from tech stack modernization over the next 12 months [30] - Future revenue growth is anticipated from new partnerships and successful execution against the pipeline in FY25 [25] Other Important Information - The company has taken equity stakes in ONE Store and Flexion to enhance its alternative app store strategy [14] - The Digital Markets Act (DMA) is expected to launch in early March in the EU, presenting new opportunities for the company [15] Q&A Session Summary Question: Device headwinds and market recovery - Management noted significant declines in U.S. device sales but indicated potential improvements as the year progresses, particularly with new device launches [28] Question: Tech stack implementation timeline - The tech stack modernization is expected to roll out over the next 12 months, with material improvements anticipated in upcoming quarters [30] Question: Economics of the ONE Store partnership - The partnership with ONE Store is seen as a phase one initiative, focusing on user acquisition and in-app advertising, with further strategic developments expected [34] Question: Leadership changes and organizational structure - The company is moving to a GM model for clearer accountability and faster decision-making, with leadership changes aimed at improving execution [39] Question: Revenue growth expectations for FY25 - Management expressed optimism about driving revenue growth in FY25, supported by ongoing initiatives and partnerships [50]