AUSTIN, Texas, April 29, 2021 /PRNewswire/ -- Digital
Turbine, Inc. (Nasdaq: APPS) announced today that it has completed
its acquisition of AdColony Holding AS ("AdColony"). The
acquisition of AdColony, a leading mobile advertising platform
servicing advertisers and publishers with a reach of more than 1.5
billion monthly global users, is integral to Digital Turbine's
expressed strategy to provide a comprehensive media and advertising
solution for our operator and OEM partners while enriching the
mobile experience for end users by delivering highly relevant
content. Ad Colony's proprietary video technologies and rich
media formats are widely viewed as best-in-class technology
delivering industry-leading third-party verified viewability rates
for well-known global brands, such as Disney, Amazon and BMW.
"We are excited to have formally closed the acquisition of
AdColony," said Bill Stone, CEO of
Digital Turbine. "We believe that this strategic transaction,
along with the previously completed acquisition of Appreciate and
pending completion of the Fyber acquisition, will synergistically
accelerate our growth and is a real positive for our partners,
advertisers, employees and shareholders. With the addition of
AdColony, we will expand our collective experience, reach and suite
of capabilities to benefit mobile advertisers and publishers around
the globe. Performance-based spending trends by large,
established brand advertisers present material upside opportunities
for platforms with unique technology deployable across exclusive
access to inventory."
March Quarter Preliminary Results for AdColony
AdColony previously announced unaudited financial results for
its first quarter ended March 31,
2021. Revenue for AdColony for the first quarter is estimated
to be approximately $58.3 million,
representing growth of 37% as compared to revenue in the first
quarter of 2020.
All historical financial information for AdColony referenced
above is based on International Financial Reporting Standards, is
unaudited, and is subject to adjustment based on completion of the
audit of AdColony's financial statements, which adjustments may be
material. Investors therefore should not place undue reliance on
such unaudited financial information. Following the closing of the
acquisition, the Company intends to file the financial statements
of AdColony and furnish pro forma financial information as required
by Securities and Exchange Commission rules.
Digital Turbine Business Update
Fourth Quarter and Fiscal Year 2021 Preliminary Results for
Digital Turbine
Digital Turbine announced today preliminary, unaudited financial
results for its fourth quarter and fiscal year ended March 31, 2021:
- Revenue for the fourth quarter of fiscal 2021 is expected to be
approximately $95.1 million,
representing a 142% increase on an as-reported basis as compared to
revenue of $39.4 million in the
fourth quarter of fiscal 2020. On a pro forma basis to account for
the Mobile Posse acquisition completed on February 28, 2020, revenue for fourth quarter of
fiscal 2021 increased 101% year-over-year, as compared to pro forma
revenue for the fourth quarter of fiscal 2020.
- Revenue for full fiscal year 2021 is expected to be
approximately $313.6 million,
representing a 126% increase on an as-reported basis, as compared
to revenue of $138.7 million reported
in fiscal year 2020. On a pro forma basis to account for the Mobile
Posse acquisition completed on February 28,
2020, fiscal 2021 revenue increased 64%, as compared to pro
forma revenue for fiscal 2020.
Digital Turbine,
Inc. Revenue (in millions)
|
|
|
|
|
|
Q4 Fiscal
2021
|
Q4 Fiscal
2020
|
Y/Y
Growth
|
As
Reported
|
$95.1
|
$39.4
|
142%
|
Pro
Forma1
|
$95.1
|
$47.2
|
101%
|
|
|
|
|
|
Fiscal
2021
|
Fiscal
2020
|
Y/Y
Growth
|
As
Reported
|
$313.6
|
$138.7
|
126%
|
Pro
Forma1
|
$313.6
|
$190.9
|
64%
|
|
|
|
|
1Unaudited
pro forma revenue results for the fourth quarter and fiscal year
2020 include the contribution from the Mobile Posse acquisition
(which was completed on February 28, 2020) for the full periods
shown, as if the transaction were completed on April 1,
2019.
|
Preliminary, unaudited historical financial results for Digital
Turbine discussed above do not include any contribution from the
now-completed AdColony acquisition and are based on information
available as of April 29, 2021 and
management's initial review of operations for the fourth quarter
and fiscal year ended March 31, 2021.
The financial results reported above are preliminary, unaudited,
and subject to adjustment based on completion of the audit of the
Company's financial statements, which adjustments may be
material. Investors should therefore not place undue reliance
on such preliminary results.
The Company will report full financial results and select
operating metrics for the fourth quarter and fiscal year 2021,
along with forward guidance, as part of its forthcoming fourth
quarter earnings call.
"Our breakout momentum continued to accelerate in the March
quarter," said Bill Stone, CEO of
Digital Turbine. "We more than doubled our revenue
year-over-over on a pro forma basis during the quarter, as we
continue to see strong demand for both our Application Media and
Content Media offerings. The underlying strength and profitability
of our core on-device business will only further enhance the
addressable market opportunity for our vertical integration
strategy now underway via the AdColony and Appreciate acquisitions,
and the pending completion of the Fyber acquisition, currently
expected to close in the June quarter. Once the combined
organization and respective technologies are fully unified and
integrated, we believe that our unique end-to-end platform
capabilities will unlock significant new monetization
opportunities. We look forward to providing more specific details
regarding expected platform synergies and forward financial
projections for the combined organization on our next earnings
call."
Preliminary Business Outlook
Based on information available as of April 29, 2021, and including the results of
AdColony beginning on April 29, 2021
(the closing date of the acquisition), the Company currently
expects the following for the first quarter of fiscal 2022:
- Revenue of between $135 million
and $140 million
- Non-GAAP Adjusted EBITDA1 of between $25 million and $27
million
Please note that the business outlook above does not include any
anticipated contribution from the Fyber acquisition, which is
currently expected to close in the June quarter. Fyber separately
provided preliminary results for its March quarter, as well as
upwardly revised forward guidance, via a news release issued on
April 21, 2021. Fyber estimates total
revenue in excess of €85 million in the March quarter, representing
year-over-year growth of 179%. Fyber increased guidance for
total revenue for full year 2021 to a range of €300 million to €350
million. The full news release detailing the updated outlook can be
accessed on the investor relations portion of Fyber's website.
All historical financial information for Fyber referenced above
is based on International Financial Reporting Standards, is
unaudited, and is subject to adjustment based on completion of the
audit of Fyber's financial statements, which adjustments may be
material. Investors therefore should not place undue reliance on
such unaudited financial information. Following the closing of the
acquisition of Fyber, the Company intends to file the financial
statements of Fyber and furnish pro forma financial information as
required by Securities and Exchange Commission rules.
It is not reasonably practicable to provide a business outlook
for GAAP net income from continuing operations 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 contingent earn-out provisions,
which will continue to be adjusted to fair value through the end of
the earn-out period, or other items that are difficult to predict
with precision.
Amended and Restated Credit Agreement
On April 29, 2021, the Company
entered into an amended and restated credit facility agreement with
Bank of America, N.A., as a lender and administrative agent, and a
syndicate of lenders, which provides for a revolving line of credit
of $400 million, to be used for
working capital, acquisitions, and general corporate
purposes. The revolving line of credit contains an accordion
feature that permits an increase of the revolver by up to
$75 million plus an amount that would
enable the loan parties to remain in compliance with a consolidated
secured net leverage ratio, based on terms agreed upon by the
lenders. The revolving line of credit matures on April 29, 2026.
"We are pleased to once again partner with Bank of America, N.A.
on an expanded credit facility, which provides the Company greater
financial flexibility, and does so at highly attractive terms, in
our opinion. We believe this larger facility, along with the
continued profitability growth of the Company, will help support
our current and future growth initiatives, enabling us to execute
on our comprehensive global growth strategy," said Barrett Garrison, CFO.
About Digital Turbine, Inc.
Digital Turbine simplifies content discovery and delivers
relevant content directly to consumer devices. The Company's
on-demand media platform powers frictionless app and content
discovery, user acquisition and engagement, operational efficiency
and monetization opportunities. Digital Turbine's technology
platform has been adopted by more than 40 mobile operators and OEMs
worldwide, and has delivered more than three billion app preloads
for tens of thousands of advertising campaigns. The Company is
headquartered in Austin, Texas,
with global offices in Arlington,
Durham, Mumbai, San
Francisco, Singapore and
Tel Aviv. 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. 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 adjusted EBITDA is calculated as GAAP net
income excluding the following cash and non-cash expenses: net
interest income/(expense), adjustments in the earn-out liability
associated with the Mobile Posse acquisition, income tax provision,
depreciation and amortization, stock-based compensation expense,
amortization of intangibles, other expense and transaction
expenses. Readers are cautioned that Non-GAAP adjusted EBITDA
should not be construed as an alternative to net income determined
in accordance with U.S. GAAP as an indicator of performance, which
is the most comparable measure under GAAP. Non-GAAP adjusted
EBITDA is used by management as an internal measure of
profitability, performance and liquidity. The Company believes that
the measure is 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.
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 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
complex specifications of different carriers and the management of
a complex technology platform given the Company's relatively
limited resources
- risks and uncertainties associated with the integration of the
acquisition of AdColony, including our ability to realize the
anticipated benefits of the acquisition and the satisfaction of
related earn-out provisions
- risks and uncertainties associated with the completion and
integration of the acquisition of Fyber, including the satisfaction
of closing conditions
- the impact on our operations and stock price if the acquisition
of Fyber is not completed
- 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
- 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.
Investor Relations Contacts:
Brian Bartholomew
Digital Turbine
brian.bartholomew@digitalturbine.com
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SOURCE Digital Turbine, Inc.