No Changes to All Reported GAAP Income
from Operations, GAAP Net Income/Loss, Non-GAAP Gross
Profit1, Non-GAAP Adjusted EBITDA2 and
Non-GAAP Free Cash Flow3 Results
Re-Affirms Guidance for Non-GAAP Adjusted
EBITDA2 and Non-GAAP Adjusted EPS4 for Fiscal
Year Ended March 31, 2022
AUSTIN,
Texas, May 17, 2022 /PRNewswire/ -- Digital
Turbine, Inc. (Nasdaq: APPS) announced today that it will restate
its financial statements for the interim periods ended June 30, 2021, September
30, 2021, and December 31,
2021, following a review of the presentation of revenue net
of license fees and revenue share for the Company's recently
acquired businesses. The revenue for certain product lines of the
recently acquired businesses, which are separate reportable
segments, will now be reported net of license fees and revenue
share, rather than on a gross basis, as had been previously
reported. The changes have the offsetting effect of decreasing both
revenue and license fees and revenue share in a like amount, while
simultaneously increasing reported gross profit margin and Non-GAAP
Adjusted EBITDA margin, in the interim financial statements for
each relevant period. There is no change to the previously
reported GAAP income from operations, GAAP net income/loss,
Non-GAAP gross profit1, Non-GAAP Adjusted
EBITDA2 and Non-GAAP free cash flow3 results.
Restated interim consolidated financial statements for each of the
affected quarters will be filed as amendments to the respective
Company's Form 10-Q filings with the Securities and Exchange
Commission on or before May 31,
2022.
"We believe that this change will also help facilitate peer
comparisons for analysts and investors," said Barrett Garrison, CFO. "Furthermore, we
believe that it will help us to more effectively highlight the
relative gross margin and EBITDA margin profile of our profitable
business model."
Guidance for Fiscal Year Ended March
31, 2022
The Company is re-affirming its previously issued guidance for
Non-GAAP Adjusted EBITDA2 between $195 million and $197
million, and Non-GAAP Adjusted EPS4 of between
$1.66 and $1.68, for the full fiscal year ended
March 31, 2022. Previously
issued guidance for revenue for the full fiscal year is no longer
applicable as per today's reported accounting restatement.
The Company expects to report full fiscal year 2022 financial
results on May 31, 2022.
It is not reasonably practicable to provide a business outlook
for GAAP net income because the Company cannot reasonably estimate
the changes in stock-based compensation expense, which is directly
impacted by changes in the Company's stock price, any adjustment to
the contingent earn-out provisions, which will continue to be
adjusted to fair value through the end of the earn-out periods, or
other items that are difficult to predict with precision.
About Digital Turbine, Inc.
Digital Turbine is the leading independent mobile growth
platform and levels up the landscape for advertisers, publishers,
carriers and OEMs. By integrating a full ad stack with
proprietary technology built into devices by wireless operators and
OEMs, Digital Turbine supercharges advertising and monetization.
The company is headquartered in Austin,
Texas, with global offices in New
York, Los Angeles,
San Francisco, London, Berlin, Singapore, Tel
Aviv and other cities serving top agency, app developer and
advertising markets. For additional information visit
www.digitalturbine.com.
Use of Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements
presented in accordance with GAAP, Digital Turbine uses non-GAAP
measures of certain components of financial performance. These
non-GAAP measures include non-GAAP adjusted net income and earnings
per share ("EPS"), non-GAAP gross profit, non-GAAP adjusted EBITDA
and non-GAAP free cash flow.
Non-GAAP measures are provided to enhance investors' overall
understanding of the Company's current financial performance,
prospects for the future and as a means to evaluate
period-to-period comparisons. The Company believes that these
non-GAAP measures provide meaningful supplemental information
regarding financial performance by excluding certain expenses and
benefits that may not be indicative of recurring core business
operating results. The Company believes the non-GAAP measures that
exclude such items when viewed in conjunction with GAAP results and
the accompanying reconciliations enhance the comparability of
results against prior periods and allow for greater transparency of
financial results. The Company believes non-GAAP measures
facilitate management's internal comparison of its financial
performance to that of prior periods as well as trend analysis for
budgeting and planning purposes. The presentation of non-GAAP
measures is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP.
1Non-GAAP gross profit is defined as GAAP gross
profit adjusted to exclude the effect of stock-based compensation,
amortization of intangibles, adjustments in the fair value of
earn-out liabilities associated with acquisitions, and
transaction-related expenses and compensation costs. Readers are
cautioned that non-GAAP gross profit should not be construed as an
alternative to comparable GAAP net income figures determined in
accordance with U.S. GAAP as an indicator of profitability or
performance, which is the most comparable measure under GAAP.
2Non-GAAP adjusted EBITDA and non-GAAP adjusted net
income and EPS are used by management as internal measures of
profitability and performance. They have been included because the
Company believes that the measures are used by certain investors to
assess the Company's financial performance before non-cash charges
and certain costs that the Company does not believe are reflective
of its underlying business.
3Non-GAAP free cash flow, which is a non-GAAP
financial measure, is defined as net cash provided by operating
activities (as stated in our Consolidated Statement of Cash Flows),
excluding acquisition-related contingency payments, reduced by
capital expenditures. Readers are cautioned that free cash flow
should not be construed as an alternative to net cash provided by
operating activities determined in accordance with U.S. GAAP as an
indicator of profitability, performance or liquidity, which is the
most comparable measure under GAAP.
4Non-GAAP adjusted net income and EPS are defined as
GAAP net income and EPS adjusted to exclude the effect of
stock-based compensation expense, amortization of intangibles,
adjustments in the fair value of earn-out liabilities associated
with acquisitions, and transaction-related expenses and
compensation costs. Readers are cautioned that non-GAAP adjusted
net income and EPS should not be construed as an alternative to
comparable GAAP net income figures determined in accordance with
U.S. GAAP as an indicator of profitability, performance or
liquidity, which is the most comparable measure under GAAP.
Forward-Looking Statements
This news release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements in this news release that are not statements of
historical fact and that concern future results from operations,
financial position, economic conditions, product releases and any
other statement that may be construed as a prediction of future
performance or events, including financial projections and growth
in various products are forward-looking statements that speak only
as of the date made and which involve known and unknown risks,
uncertainties and other factors which may, should one or more of
these risks uncertainties or other factors materialize, cause
actual results to differ materially from those expressed or implied
by such statements. These factors and risks include:
- a decline in general economic conditions nationally and
internationally
- decreased market demand for our products and services
- market acceptance and brand awareness of our products
- risks associated with indebtedness
- the ability to comply with financial covenants in outstanding
indebtedness
- the ability to protect our intellectual property rights
- risks associated with adoption of our platform among existing
customers (including the impact of possible delays with major
carrier and OEM partners in the roll out for mobile phones
deploying our platform)
- actual mobile device sales and sell-through where our platform
is deployed is out of our control
- risks associated with our ability to manage the business amid
the COVID-19 pandemic
- the impact of COVID-19 on our partners, digital advertising
spend and consumer purchase behavior
- the impact of COVID-19 on our results of operations
- risks associated with new privacy laws, such as the European
Union's GDPR and similar laws which may require changes to our
development and user interface for certain functionality of our
mobile platform
- risks associated with the activities of advertisers
- risks associated with the timing of our platform software
pushes to the embedded bases of carrier and OEM partners
- risks associated with end user take rates of carrier and OEM
software pushes which include our platform
- new customer adoption and time to revenue with new carrier and
OEM partners is subject to delays and factors out of our
control
- risks associated with fluctuations in the number of our
platform slots across US carrier partners
- required customization and technical integration which may slow
down time to revenue notwithstanding the existence of a
distribution agreement
- risks associated with delays in major mobile phone launches, or
the failure of such launches to achieve the scale
- customer adoption that either we or the market may expect
- the difficulty of extrapolating monthly demand to quarterly
demand
- the challenges, given the Company's comparatively small size,
to expand the combined Company's global reach, accelerate growth
and create a scalable, low-capex business model that drives EBITDA
(as well as adjusted EBITDA)
- ability as a smaller company to manage international
operations
- varying and often unpredictable levels of orders; the
challenges inherent in technology development necessary to maintain
the Company's competitive advantage such as adherence to release
schedules and the costs and time required for finalization and
gaining market acceptance of new products
- changes in economic conditions and market demand
- rapid and complex changes occurring in the mobile
marketplace
- pricing and other activities by competitors
- technology management risk as the Company needs to adapt to a
rapidly developing mobile device marketplace, complex
specifications of different carriers and the management of a
complex technology platform given the Company's relatively limited
resources
- system security risks and cyberattacks
- risks and uncertainties associated with the integration of the
acquisition of AdColony, including our ability to realize the
anticipated benefits of the acquisition
- risks and uncertainties associated with the integration of the
acquisition of Fyber, including our ability to realize the
anticipated benefits of the acquisition and the satisfaction of
related earn-out provisions
- risks associated with the failure or inability to pay the
future consideration due in the Fyber acquisition
- challenges and risks associated with our rapid growth by
acquisitions and resulting significant demands on our management
and infrastructure
- challenges and risks associated with our global operations and
related business, political, regulatory, operational, financial,
and economic risks as a result of our global operations
- other risks including those described from time to time in
Digital Turbine's filings on Forms 10-K and 10-Q with the
Securities and Exchange Commission (SEC), press releases and other
communications.
You should not place undue reliance on these forward-looking
statements. The Company does not undertake to update
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Form 8-K Filing
As the Company completes the restatement analysis, financial
close and reporting process, and financial statement audit, the
interim period financial statements will reflect any additional
adjustments that are required. For additional details, as
well as preliminary estimates for select data, please reference the
Company's Form 8-K filed on May 17,
2022.
Investor Relations Contact:
Brian Bartholomew
Digital Turbine, Inc.
brian.bartholomew@digitalturbine.com
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SOURCE Digital Turbine, Inc.