Item 8.01 Other Events
Current Operations
Digital Turbine, Inc.,
through its subsidiaries, is a leading end-to-end solution for mobile technology companies to enable advertising and monetization solutions.
Its digital media platform powers frictionless end-to-end application and brand discovery and advertising, user acquisition and engagement,
operational efficiency, and monetization opportunities. The Company provides on-device solutions to all participants in the mobile application
ecosystem that want to connect with end users and consumers who hold the device, including mobile carriers and device original equipment
manufacturers (“OEMs”) that participate in the app economy, app publishers and developers, and brands and advertising agencies.
With global headquarters
in Austin, Texas and offices in Durham, North Carolina; San Francisco, California; Arlington, Virginia; São Paulo, Brazil; Mexico
City, Mexico; Mumbai, India; Singapore; Poland, Germany, Norway, Sweden, Turkey, Indonesia and Tel Aviv, Israel, the Company’s
solutions are available worldwide. For additional information, please visit www.digitalturbine.com.
On Device Media
Through June 30, 2021,
Digital Turbine’s technology platform has been adopted by over 40 mobile operators and OEMs and has delivered more than 5.3 billion
application preloads for tens of thousands of advertising campaigns.
The Company’s On
Device Media business consists of products and services that simplify the discovery and delivery of mobile applications and content
media for device end-users.
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Application
Media represents the portion of the business where our platform delivers apps to end users
through partnerships with carrier networks and OEMs. Application Media optimizes revenues
by using developed technology to streamline, track, and manage app install demand from hundreds
of application developers across various publishers, carriers, OEMs, and devices.
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Content
Media represents the portion of the business where our platform 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 carrier networks
and OEMs. Content Media optimizes revenue by a combination of:
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Programmatic Ad Partner Revenue
– advertising within the content media that’s sold on an ad exchange at a market
rate (CPM - Cost Per Thousand);
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Sponsored Content – sponsored
content media from 3rd party content providers, presented similarly to an ad,
that is monetized when a recommended story is viewed (CPC – Cost Per Click);
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Editorial Content – owned
or licensed media, presented similarly to an ad, that is monetized when the media is clicked
on (CPC - Cost Per Click).
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In App Media—Fyber (Supply)
Digital Turbine provides
advanced tools and services for mobile app publishers and developers to automate and optimize marketing and profitability of their apps.
With Digital Turbine and its subsidiary technologies, mobile application developers and mobile first brands are able to manage, optimize
and analyze their marketing investments and improve the monetization of their apps.
Our supply side platform
technologies:
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store
and manage anonymized data from mobile devices we reach every day, which enables better production
and matching of users to relevant advertising content;
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enable
developers to have their mobile apps discovered and downloaded by target users, thereby enhancing
return on marketing spend; and
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utilize
advanced in-app bidding technology that optimizes the value of a developer’s advertising
inventory through real-time bidding.
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Our relationships with brand
advertisers, agencies and other ad buyers offers app publishers and developers the opportunity to engage in direct-sold campaigns, providing
more optionality for publishers and developers to monetize their apps.
In App Media—AdColony (Demand)
The Company’s In
App Media Demand business consists of products and services to enable brands, advertising agencies and other digital ad buyers to
navigate the complexities of the mobile app ecosystem and engage in direct-sold and programmatic advertising to optimize their
digital media campaigns. Our products and services enable brands and advertisers to effectively target and measure their advertising
campaigns across nearly every media channel and device. Our customers include prominent brand advertisers such as Disney, Starbucks,
Unilever and Toyota and many more brands and agencies. With our business model, we are a supplier of in-app inventory in the mobile
space, both within apps and directly on the device, giving advertisers wider targeting options for user acquisition. In addition,
our demand side platform enables mobile advertisers to engage in programmatic campaigns that optimize user acquisition and ROI while
providing verified viewability rates, thereby allowing advertisers to target the advertising inventory they value most and measure
campaign outcomes.
Recent Acquisitions
Mobile
Posse, Inc. On February 28, 2020, the Company completed the acquisition of Mobile Posse, Inc. The acquisition
of Mobile Posse is consistent with the Company’s strategy to provide a comprehensive media and advertising solution for operator
and OEM partners while enriching the mobile experience for end users by delivering relevant media rich content to their fingertips. The
addition of Mobile Posse’s offerings provides synergies and options for our partners and advertisers. The Company’s suite
of offerings continue to focus on promoting higher user engagement and boosting advertising revenue for mobile operators and OEMs.
Appreciate.
On March 2, 2021, the Company acquired all of the outstanding capital stock of Triapodi Ltd. (d/b/a Appreciate) in
exchange for total consideration of $20.0 million in cash and payment of up to $6.0 million in retention bonuses and performance bonuses
to the founders and certain other employees of Appreciate. Appreciate is a programmatic mobile advertising demand side platform company
headquartered in Israel. Appreciate’s platform collaborates closely with mobile measurement partners (“MMPs”), exchanges,
advertisers, and other partners to programmatically provide a transparent ecosystem designed to optimize user acquisition and ROI for
the mobile advertisers utilizing its platform. Deploying Appreciate’s technology expertise across Digital Turbine’s global
scale and reach should further benefit partners and advertisers that are a part of the combined Company’s platform.
AdColony
Holding AS. On April 29, 2021, the Company completed the acquisition of AdColony Holding AS, a Norway company
(“AdColony”), pursuant to a Share Purchase Agreement with AdColony and Otello Corporation ASA, a Norway company and the
sole shareholder of AdColony (“Otello”). The Company acquired all of the outstanding capital stock of AdColony in
exchange for an estimated total consideration in the range of $400.0 million to $425.0 million, to be paid as follows:
(1) $100.0 million in cash paid at closing (which was subject to customary closing purchase price adjustments), (2) $100.0
million in cash to be paid six months after closing, and (3) an estimated earn-out in the range of $200.0 million to $225.0
million, to be paid in cash, based on AdColony achieving certain future target net revenues, less associated cost of goods sold (as
such term is referenced in the Share Purchase Agreement), over a 12-month period ending on December 31, 2021 (the
“Earn-Out Period”). Under the terms of the earn-out, the Company would pay Otello a certain percentage of actual net
revenues (less associated cost of goods sold, as such term is referenced in the Share Purchase Agreement) of AdColony depending on the extent
to which AdColony achieves certain target net revenues (less associated cost of goods sold, as such term is referenced in the Share
Purchase Agreement) over the Earn-Out Period. The earn-out payment will be made following the expiration of the Earn-Out Period. The
Company paid the closing amount and intends to pay the remainder of the purchase price with a combination of available cash on hand
and borrowings under its existing senior credit facility along with proceeds from future capital financing. AdColony is a leading
mobile advertising platform servicing advertisers and publishers. AdColony’s proprietary video technologies and rich media
formats are widely viewed as a best-in-class technology delivering third-party verified viewability rates for well-known global
brands. These operations are now reflected in our In App Media—AdColony (Demand) segment.
Fyber,
N.V. On May 25, 2021, the Company completed the initial closing of the acquisition of at least 95% of the
outstanding voting shares (the “Majority Fyber Shares”), of Fyber N.V., a public limited liability company registered
with the Netherlands Chamber of Commerce Business Register (“Fyber”), pursuant to a Sale and Purchase Agreement between
Tennor Holding B.V., Advert Finance B.V., and Lars Windhorst (collectively, the “Seller”), the Company, and DT
Luxembourg. The Seller transferred and delivered 400,000,000 shares of the Majority Fyber Shares to Digital Turbine Media, Inc., a
Delaware Corporation and wholly-owned subsidiary of the Company (“DT Media”), on the closing date, and the Seller
transferred and delivered another 125,805,997 shares of the Majority Fyber Shares to DT Media in June-July 2021. The remaining outstanding shares in Fyber (the
“Minority Fyber Shares”) are (to the Company’s knowledge) widely held by other shareholders of Fyber (the
“Minority Fyber Shareholders”).
The Company acquired
Fyber in exchange for an estimated aggregate consideration of up to $600 million, consisting of (i) $150 million in cash, which
was subject to adjustments for certain items, approximately $124.3 million of which was paid to the Seller at the closing of the
acquisition and the remainder of which will be paid to the Minority Fyber Shareholders for the Minority Fyber Shares pursuant to the
tender offer described below, (ii) 3,216,935 newly-issued shares of common stock of the Company issued to the Seller at the
closing of the acquisition, (iii) 2,540,364 newly-issued shares of common stock of the Company issued to the Seller in
June-July 2021, (iv) an additional 59,289 newly-issued shares of common stock of the Company to be issued to the Seller but
subject to a true-up reduction based on increased transaction costs associated with the staggered delivery of the Majority Fyber
Shares to the Company, and (v) contingent upon Fyber’s net revenues (determined in accordance with International
Financial Reporting Standards) being equal or higher than $100 million for the 12-month earn-out period ending on March 31,
2022, as determined in the manner set forth in the Sale and Purchase Agreement, a certain number of shares of Company common stock,
which will be newly-issued to the Seller at the end of the earn-out period, and under certain circumstances, an amount of cash,
which value of such shares and cash in aggregate will not exceed $50 million (subject to set-off against certain potential
indemnification claims against the Seller). The Company paid the cash closing amount on the closing date, and intends to pay the
remainder of the cash consideration for the acquisition with a combination of available cash on hand, borrowings under the
Company’s senior credit facility, and proceeds from future capital financings.
Pursuant to certain
German law on public takeovers, following the closing, the Company launched a public tender offer to the Minority Fyber Shareholders
to acquire from them the Minority Fyber Shares. The tender offer is subject to certain minimum price rules under German law.
The timing and the conditions of the tender offer, including the consideration of EUR 0.84 per share offered to the Minority Fyber
Shareholders in connection with the tender offer, was determined by the Company pursuant to the applicable Dutch and German takeover
laws. The Company anticipates completing the tender offer during the second fiscal quarter 2022.
Fyber is a leading
mobile advertising monetization platform empowering global app developers to optimize profitability through quality
advertising. Fyber’s proprietary technology platform and expertise in mediation, real-time bidding, advanced analytics
tools, and video combine to deliver publishers and advertisers a highly valuable app monetization solution. These operations are now
reflected in our In App Media—Fyber (Supply) segment.
Information about Segment and Geographic Revenue
Prior to the acquisitions of AdColony and Fyber, the Company had one
operating and reportable segment called Media Distribution. As a result of the acquisitions, the Company reassessed its operating and
reportable segments and, effective April 1, 2021, the Company reports its results of operations through the three segments: On Device
Media, In App Media—Fyber (Supply), and In App Media—AdColony (Demand).
On Device Media
The Company’s On
Device Media business is an advertiser solution for unique and exclusive carrier and OEM inventory, which is comprised of our core
platform and other recurring and life-cycle products, features, and professional services delivered on this platform.
Our technology platform enables
mobile operators and OEMs to control, manage, and monetize devices through application installation at the time of activation and over
the life of a mobile device through a variety of offerings, allowing mobile operators to personalize the application activation experience
for customers and monetize their home screens via revenue share agreements such as: Cost-Per-Install (CPI), Cost-Per-Placement (CPP),
Cost-Per-Action (CPA) with third-party advertisers; or via Per-Device-License Fees (PDL) agreements which allow operators and OEMs to
leverage the platform, products, and features for a structured fee. There are several different delivery methods available to operators
and OEMs on first boot of the device: Wizard, Silent, or Software Development Kit (“SDK”). We also provide additional platform
monetization options, outside of our core application delivery technology, that monetize user actions over the life-cycle of a device
by delivering targeted media-rich advertising content to the end-user. Additional products and features are available throughout the
life-cycle of the device that provide operators and OEMs an opportunity for additional revenue streams through programmatic advertising
and targeted media delivery, which allows operators to monetize their operator-branded on-phone applications by showing in-application
advertisements via cost-per-thousand impression arrangements and page-view arrangements. The Company has launched its platform with mobile
operators and OEMs in North America, Latin America, Europe, Asia Pacific, India and Israel.
In App Media—Fyber (Supply)
The Company’s In
App Media—Fyber (Supply) business is a solution for mobile app publishers and developers to generate revenue and profitability from digital
advertising. The Company offers the following solutions:
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Ad
exchange: the Fyber Marketplace is a programmatic ad exchange for the in-app environment,
offering demand across video and display ad formats. The exchange brings together thousands
of app developers and their global audiences with more than 180 advertising partners that
bid on app inventory as part of ad campaigns.
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Ad
mediation: technology providing app developers with the infrastructure to configure ad placements
within their apps and connect, manage and optimize a variety of ad networks through a single
integration and interface.
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App
bidding: Fyber FairBid brings together programmatic mediation
and app bidding into a real-time auction protocol to unify all connected demand sources into
a single competitive bidding process for every single ad opportunity.
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Offer
Wall Edge: technology providing an opt-in, value-exchange ad format for users (primarily
used for gaming apps) with a list of offers from various advertisers, ranging from watching
a video or completing a survey to trying another game. Each offer is assigned a value.
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Customers provide insertion orders or equivalent contracts for advertising
during campaign windows where Fyber provides, inserts, and tracks the performance of the advertising to serve as the direct supplier for
the customer. Alternatively, Fyber also contracts with customers using a framework agreement that is not specific to a campaign or budget,
but instead determines parameters for the mobile advertising service. Customers will contract for these services, which are monetized
through a measurement of user impressions, clicks, or installs of the target product or service offered by the customer. Fyber’s
customers generally pay subsequent to the total aggregation of the impressions, clicks, and installs billed, generally, on a monthly
basis. Specifically, the aggregation follows the below events and parameters:
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When a user installs a game (i.e., a user plays a game, sees advertising, clicks on it, and installs another game) based on a CPA (cost
per action) arrangement.
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When a mobile ad is delivered to a user, based on a CPM (cost per thousand impressions) arrangement (i.e., every thousand impressions
of a mobile ad inside the publisher's inventory, which can be on a mobile app or website).
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When a user plays a mobile video ad all the way to completion, based on a CPCV (cost per completed view) arrangement.
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When a user clicks on a mobile ad, based on a CPC (cost per click) arrangement (i.e., after each instance when an ad is clicked inside
the publisher's inventory).
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In App Media—AdColony (Demand)
The Company’s In App
Media—AdColony (Demand) business offers prominent brand advertisers such as Disney, Starbucks, Unilever, Toyota, and many more to
engage in digital ad campaigns and reach end users on their mobile devices. The Company provides both direct and programmatic
advertising solutions for brands and agencies, providing greater optionality to design campaigns, target audiences, optimize
marketing spend, and measure campaign outcomes.
The Company’s demand
side platform (“DSP”) is directly connected to ad exchange marketplaces through server-to-server integrations and permit
the bidding on and purchasing of advertising inventory available in these marketplaces. Our DSP technology provides multiple, easy-to-use
automation tools that help advertisers focus on managing the key factors affecting their campaigns. The Company’s platform allows
advertisers to easily define and manage advertising campaigns with multiple targeting parameters, which provides advertisers with the
ability to target audiences with an extremely high level of precision and thus obtain higher returns on their advertising spend. Our
platform provides integrated access to a wide range of inventory and data sources, as well as third-party services such as ad servers,
ad verification services and survey vendors. Our platform’s integration of these sources and services enables advertisers to deploy
their budgets through a wide variety of channels, media screens and formats, targeted in their desired manner, through a single platform.
Customers provide insertion orders for advertising during campaign
windows where AdColony provides, inserts, and tracks the performance of the advertising to serve as the direct supplier for the customer.
Customers will contract for these services, which is monetized through a measurement of user views, clicks, or installs of the target
product or service offered by the customer. AdColony's customers generally pay subsequent to the total aggregation of the views, clicks,
and installs billed, generally, on a monthly basis. Specifically, the aggregation follows the below events and parameters:
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When a user installs a game (i.e., a user plays a game, sees advertising, clicks on it, and installs another game), based on a cost per
install (CPI) arrangement.
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When a mobile ad is delivered to a user, based on a CPM (cost per thousand impressions) arrangement (i.e., every thousand impressions
of a mobile ad inside the publisher's inventory, which can be on a mobile app or website).
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When a user plays a mobile video ad all the way to completion, based on a CPCV (cost per completed view) arrangement.
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When a user clicks on a mobile ad, based on a CPC (cost per click) arrangement (i.e., after each instance when an ad is clicked inside
the publisher's inventory).
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The Company uses the data
captured by its platform to build predictive models around user characteristics, such as demographic, purchase intent or interest data.
Data from our platform is continually fed back into these models, which enables them to improve over time as the use of our platform
increases. Our platform continuously collects data regarding inventory availability. Real-time campaign delivery and spend totals are
used to manage campaign budgets and goal caps, as well as campaign reporting. This data is fed back into our optimization engine to improve
campaign performance, and into machine-learning models for user demographic predictive modeling.
Competition
We operate in a highly competitive
and fragmented mobile app ecosystem composed of divisions of large, well-established companies as well as public and privately-held companies.
The large companies in our ecosystem may play multiple different roles given the breadth of their businesses.
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Our
primary competition for on-device media comes from the Google Play application store. Broadly, our on-device media 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, IronSource, InMobi, Cheetah Mobile, Baidu, Magnite, Applovin, and others. These
companies can be both customers for Digital Turbine products, as well as competitors in certain cases. We compete with smaller competitors,
but the more material competition is internally-developed operator solutions and specific media distribution solutions built in-house
by OEMs and wireless operators. Some of our existing wireless operators could make a strategic decision to develop their own solutions
rather than continue to use our suite of products, which could be a material source of competition.
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Advertisers
typically engage with several advertising platforms and networks to purchase advertisements on mobile devices and apps, looking to
optimize their marketing investments. Such advertising platform companies vary in size and include players such as Facebook, Google,
Amazon, and Unity Software, as well as various private companies. Several of these platforms are also our partners and clients.
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We
compete with other demand-side platform providers, some of which are smaller, privately-held companies and others are divisions of
large, well-established companies such as AT&T, Google and Adobe.
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We believe that the principal
competitive factors in the mobile app ecosystems are:
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the
ability to enhance and improve technologies and offerings;
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knowledge,
expertise, and experience in the mobile app ecosystem;
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relationships
with third parties in the mobile app ecosystem;
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the
ability to reach and target a large number of users;
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the
ability to identify and execute on strategic transactions;
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the
ability to successfully monetize mobile apps;
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the
pricing and perceived value of offerings;
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brand
and reputation; and
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ability
to expand into new offerings and geographies.
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Product Development
Our product development expenses
consist primarily of salaries and benefits for employees working on campaign management, creating, developing, editing, programming,
performing quality assurance, obtaining carrier ratification and deploying our products across various mobile phone carriers, OEMs, advertisers,
publishers and on our internal platforms. We devote substantial resources to the development, technology support, and quality assurance
of our products. Total product development costs incurred for the fiscal years ended March 31, 2021, 2020, and 2019 were $20.1 million,
$12.0 million, and $10.9 million, respectively.
Intellectual Property
We consider our trademarks,
copyrights, trade secrets, patent and other intellectual property rights, including those in our know-how and the software code of our
proprietary technology, to be, in the aggregate, material to our business. We protect our intellectual property rights by relying on
federal and state statutory and common law rights, foreign laws where applicable, as well as contractual restrictions.
We have patent and
patent applications in the U.S. and outside the U.S., including in Israel and Canada, and we own and use trademarks and service marks
on or in connection with our proprietary technology and related services, including both unregistered common law marks and issued
trademark registrations.
We design, test and update
our products, services and websites regularly, and we have developed our proprietary solutions in-house. Our know-how is an important
element of our intellectual property. The development and management of our platform requires sophisticated coordination among many specialized
employees. We take steps to protect our know-how, trade secrets and other confidential information, in part, by entering into confidentiality
agreements with our employees, consultants, developers and vendors who have access to our confidential information, and generally limiting
access to and distribution of our confidential information.
We intend to pursue additional
intellectual property protection to the extent we believe it would advance our business objectives and maintain our competitive position.
Contracts with Customers
We have both exclusive and
non-exclusive carrier and OEM agreements. Our agreements with advertisers and publishers are generally non-exclusive. Our carrier and
OEM agreements for our on-device media business are multi-year agreements, with terms that are generally longer than one to two years.
In addition, some carrier agreements provide that the carrier can terminate the agreement early and, in some instances, at any time without
cause, which could give them the ability to renegotiate economic or other terms. The agreements generally do not obligate the carriers
to market or distribute any of our products or services.
We generally have numerous
advertisers who represent a significant level of business. Coupled with advertiser concentration, we distribute a significant level of
advertising through one operator. If such advertising clients or this operator decided to materially reduce or discontinue its use of
our platform, it could cause an immediate and significant decline in our revenue and negatively affect our results of operations and
financial condition.
With respect to customer
revenue concentration, during the fiscal year ended March 31, 2021, no single customer represented more than 10% of net revenues.
During the fiscal year ended March 31, 2020, one major customer, Oath Inc., a subsidiary of Verizon Communications, represented
15.3% of net revenues. During the fiscal year ended March 31, 2019, one major customers, Oath Inc., a subsidiary of Verizon Communications,
represented 28.6% of net revenues.
With respect to partner revenue
concentration, the Company partners with mobile carriers and OEMs to deliver applications on our platform through the carrier network.
During the fiscal year ended March 31, 2021, T-Mobile US Inc., including Sprint and other subsidiaries, a carrier partner, generated
26.4%; AT&T Inc., including its Cricket subsidiary, a carrier partner, generated 22.3%; Verizon Wireless, a subsidiary of Verizon
Communications, a carrier partner, generated 18.5%; and America Movil, primarily through its subsidiary Tracfone Wireless Inc., a carrier
partner, generated 10.8%, of our net revenues. During the fiscal year ended March 31, 2020, Verizon Wireless, a subsidiary of Verizon
Communications, a carrier partner, generated 37.3%, while AT&T Inc., including its Cricket subsidiary, a carrier partner, generated
30.0% of our net revenues. During the fiscal year ended March 31, 2019, Verizon Wireless, a subsidiary of Verizon Communications,
a carrier partner, generated 45.9%, while AT&T Inc., including its Cricket subsidiary, a carrier partner, generated 38.7% of our
net revenues.
Under our contracts with
carriers and OEMs, the carriers and OEMs control, manage, and monetize the mobile device through the marketing of application slots or
advertisement space/inventory to advertisers and deliver the applications or advertisements to the mobile device. The Company generally
offers these services under a revenue share model or, to a lesser extent, a customer contract per-device license fee model for a two-to-four
year software as a service ("SaaS") license agreement.
The Company generally
offers application management advertising services to advertisers under customer contract arrangements with
third-party advertisers and developers, as described under “In App Media—AdColony (Demand)” above, generally in the form of insertion orders that specify the type of arrangement (as detailed above) at particular set
budget amounts/restraints. These advertiser customer contracts are generally short-term in nature, at less than one year, as the
budget amounts are typically spent in full within this time period.
The Company generally offers
programmatic and direct-sold advertising services under customer contract arrangements as described under “In App Media—Fyber (Supply)” above. The Company’s
customers can offer/bid on each individual display ad and the highest bid wins the right to fill each ad impression. When the bid is
won, the ad will be received and placed on the mobile device. The entire process happens almost instantaneously and on a continuous basis.
The advertising exchanges bill and collect from the winning bidders and provide daily and monthly reports of the activity to the Company.
Business Seasonality
Our 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. We expect our revenue, cash flow, operating results and other
key operating and financial measures to fluctuate based on seasonal factors from period to period and expect these measures to be generally
higher in the third and fourth fiscal quarters than in prior quarters.
People and Culture
We believe the strength
of our workforce is critical to our success as we strive to become a more inclusive and diverse technology company. As of
June 30, 2021, we employed approximately 900 full-time employees. Our key human capital management objectives are to attract,
retain, and develop the talent we need to deliver on our commitment to offer and deliver exceptional products and services. Examples
of our key programs and initiatives that are focused to achieve these objectives include:
Total
Compensation and Benefits. Our guiding principles are anchored on the goals of being able to attract, incentivize, and
retain talented employees. We believe in economic security for all employees and have adopted a Living Wage policy. All employees are
eligible for performance bonuses of at least 10% of base salary, which can be paid out significantly higher based on performance. In
addition, each employee receives a new-hire long-term incentive stock option grant and an annual long-term incentive stock option grant,
based upon performance. We also provide our employees twelve weeks of paid short-term disability at 100% of base pay, which includes
parental leave.
Inclusion
and Diversity. We take great pride in our diversity and inclusion. We seek a diverse and inclusive work environment and
transparently measure our progress to ensure that our employee populations are reflective of the communities in which we reside. We evaluate
all of our people practices, particularly in talent acquisition and pay equity. We benchmark our demographics to our industry, both at
an overall level and a professional category level (VPs and above, directors, managers, individual contributors and administrative),
and note that we either are at the high end or exceed the benchmark in every diversity category.
Culture
and Values. We have adopted our culture values of Hustle, Results, Accountability, Global, Freedom and Laugh to help create
and foster a culture where every employee is empowered, engaged and trusted to be their best at work. We sponsor and support our Community
Action Teams, which is an employee-led program designed to create purposeful action to build a stronger and better-connected team. The
Community Action Teams have helped drive meaningful advancements in on- boarding, cross-functional understanding, a mentoring program,
and a Digital Turbine Gives campaign where employees volunteer in the community over a six-week period on an annual basis.
Workplace
Flexibility. As part of our “Freedom” value, and before the COVID-19 pandemic drove a shift to remote work,
we established a workplace strategy to provide more flexible work options to enable employees to work from the location and the schedule
they desire. As a result, we had process, culture, and technology in place that allowed us to seamlessly pivot to a fully remote workforce
following the onset of the COVID-19 pandemic. As a result of the shift to fully remote work, we provided an allowance of up to one thousand
dollars for each employee for home office set-up or personal expenses such as tutoring or caregiving services. We also re-purposed computers
for employees who required more devices to support remote learning for dependents.
Government Regulation
We
are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business. These
laws and regulations involve matters including privacy, data use, data protection and personal information, rights of publicity, content,
intellectual property, advertising, marketing, consumer protection, taxation, anti-corruption and political law compliance, and securities
law compliance. In particular, we are subject to federal, state, and foreign laws regarding privacy and protection of people’s
data. Foreign data protection, privacy, and other laws and regulations can impose different obligations or be more restrictive than those
in the United States. Refer to the Company’s risk factors disclosed in its Annual Report on Form 10-K for the fiscal year
ended March 31, 2021 and updates to such risk factors described in subsequent periodic reports filed by the Company with the Securities
and Exchange Commission under Section 13(a) of the Securities Exchange Act of 1934, as amended, for further discussion
of government regulations and the associated risks.