8-K: Digital Turbine Q2 FY26 Revenue Jumps 18%, Raises Outlook

Digital Turbine reported strong fiscal second quarter 2026 financial results with 18% year-over-year revenue growth and significantly increased non-GAAP adjusted EBITDA, leading to an increased full-year outlook.

Summary

• Fiscal second quarter 2026 revenue totaled $140.4 million, an 18% increase year-over-year compared to $118.7 million in Q2 FY2025.
• GAAP net loss for Q2 FY2026 was $21.4 million, or ($0.20) per share, an improvement from a GAAP net loss of $25.0 million, or ($0.24) per share, in Q2 FY2025.
• Non-GAAP adjusted net income for Q2 FY2026 was $16.5 million, or $0.15 per share, significantly up from $5.5 million, or $0.05 per share, in Q2 FY2025.
• Non-GAAP adjusted EBITDA for Q2 FY2026 was $27.2 million, representing a 78% increase year-over-year compared to $15.3 million in Q2 FY2025.
• Non-GAAP free cash flow totaled $7.0 million in Q2 FY2026, an increase of $22.7 million compared to Q2 FY2025.
• The company successfully completed its debt refinancing on September 2, 2025, via a new, 4-year $430.0 million term loan credit facility.
• Management raised its fiscal year 2026 outlook, now expecting revenue between $540 million and $550 million, and Non-GAAP adjusted EBITDA between $100 million and $105 million.

Sentiment

Score: 8

Explanation: The company delivered strong financial results that exceeded expectations, demonstrated significant year-over-year growth in key non-GAAP metrics (revenue, adjusted net income, EBITDA, free cash flow), successfully refinanced debt, and raised its full-year outlook. While still reporting a GAAP net loss and incurring debt-related expenses, the overall momentum and management's positive commentary indicate a very favorable quarter.

Positives

• Revenue increased 18% year-over-year to $140.4 million, demonstrating strong top-line growth.
• GAAP net loss improved to $21.4 million from $25.0 million year-over-year, indicating a narrowing of losses.
• Non-GAAP adjusted net income significantly increased to $16.5 million ($0.15 per share) from $5.5 million ($0.05 per share) year-over-year, reflecting enhanced profitability.
• Non-GAAP adjusted EBITDA grew 78% year-over-year to $27.2 million, showcasing substantial operational leverage.
• Non-GAAP free cash flow improved by $22.7 million year-over-year, reaching $7.0 million, indicating stronger cash generation.
• Successful completion of debt refinancing with a new 4-year $430.0 million term loan credit facility, improving capital structure.
• Management increased the full-year fiscal 2026 outlook for both revenue and non-GAAP adjusted EBITDA, signaling confidence in future performance.
• Strong demand for the platform and operational execution enabled results that exceeded expectations.

Negatives

• The company still reported a GAAP net loss of $21.4 million for the quarter.
• Interest expense, net, increased to $11.498 million from $8.776 million year-over-year.
• Amortization of debt discount and issuance costs increased to $2.778 million from $0.456 million year-over-year.
• An unrealized loss on derivatives of $2.335 million was reported.
• A loss on extinguishment of debt of $9.795 million was incurred due to the debt refinancing.

Risks

• Transformation activities and reduction in force may not adequately reduce operating costs or improve operating margins or cash flows, may lead to additional workforce attrition, and may cause operational disruptions.
• The company has a history of net losses.
• There is a limited operating history for the current portfolio of assets.
• Global operations expose the company to added business, political, regulatory, legal, operational, financial, and economic risks.
• Financial results could vary significantly from quarter-to-quarter and are difficult to predict.
• A significant portion of revenue is derived from a limited number of wireless carriers and customers.
• There is a risk of impairment of goodwill.
• The effects of current and any future general downturns in the U.S. and global economy, including financial market disruptions, could impact the business.
• Products, services, and systems rely on highly technical software, and if it contains errors or viruses, the business could be adversely affected.
• The business may involve the use, transmission, and storage of confidential and personally identifiable information, and failure to properly safeguard such information could result in significant reputational harm and monetary damages.
• Business and reputation could be impacted by information technology system failures and network disruptions.
• System security risks and cyber-attacks could disrupt internal operations or information technology services provided to customers.
• Business and growth may suffer if the company is unable to hire and retain key talent.
• If the corporate culture cannot be maintained, the company could lose innovation, creativity, passion, and teamwork.
• Future acquisitions could require significant management attention and disrupt the business.
• Adverse effects of negative developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non-performance by financial institutions, pose a risk.
• Entry into new lines of business and offering new products and services may result in exposure to new risks.
• Litigation may harm the business.
• The mobile advertising business is an intensely competitive industry, and the company may not be able to compete successfully.
• The markets for products and services are rapidly evolving and may decline or experience limited growth.
• Business is dependent on the continued growth in usage of smartphones and other mobile connected devices.
• Wireless technologies are changing rapidly, and the company may not be successful in working with these new technologies.
• The complexity of and incompatibilities among mobile devices may require additional resources for product and service development.
• If wireless subscribers do not continue to use their mobile devices to access mobile content and other applications, business growth and future revenue may be adversely affected.
• A shift of technology platform by wireless carriers and mobile device manufacturers could lengthen the development period for offerings, increase costs, and cause offerings to be published later than anticipated.
• Actual or perceived security vulnerabilities in devices or wireless networks could adversely affect revenue.
• The company may be subject to legal liability associated with providing mobile and online services.
• Risks of public health issues, such as a major epidemic or pandemic, exist.
• Risks related to geopolitical conditions and the global economy, including conflicts, financial markets, inflation, global supply chain, and tariffs, are present.
• Risks related to the geopolitical relationship between the U.S. and China or changes in China's economic and regulatory landscape, including recent tariff increases and trade tensions, could impact the business.
• The company is subject to rapidly changing and increasingly stringent laws, regulations, and contractual requirements related to privacy, data security, and protection of children.
• The company is subject to anti-corruption, import/export, government sanction, and similar laws, especially related to international operations.
• Government regulation of marketing methods could restrict or prevent the ability to adequately advertise and promote content, products, and services.
• Limitations may negatively affect the ability to use net operating losses, credits, and certain other tax attributes to offset future taxable income.
• Regulatory requirements pertaining to the marketing, advertising, and promotion of products and services are a risk.
• Third parties may obtain and improperly use intellectual property, adversely affecting the competitive position.
• Third parties may sue for intellectual property infringement, which may prevent or limit use of intellectual property and disrupt business, potentially requiring significant damage awards.
• The platform contains open source software.
• Indemnity provisions in various agreements potentially expose the company to substantial liability for intellectual property infringement, damages caused by malicious software, and other losses.
• Secured and unsecured indebtedness could limit financial flexibility.
• Servicing debt and funding other obligations and capital requirements will require a significant amount of cash, and the ability to generate cash will depend on many factors beyond control.
• The market price of common stock is likely to be highly volatile and subject to wide fluctuations.
• There is a risk of not being able to raise capital to grow the business.
• Risk to trading volume due to lack of securities or industry analysts research coverage.
• A material weakness in internal control over financial reporting and disclosure controls and procedures could, if not remediated, result in material misstatements in financial statements.
• Maintaining and improving financial controls and being a public company may strain resources.
• Anti-takeover provisions in charter documents could make an acquisition of the company more difficult.
• Bylaws designate Delaware as the exclusive forum for certain disputes.
• Sales of common stock under the ATM program may cause substantial dilution to existing stockholders and depress the stock price, and the company may not be able to raise the full amount contemplated.

Future Outlook

Digital Turbine is raising its fiscal year 2026 expectations, now forecasting revenue between $540 million and $550 million, and Non-GAAP adjusted EBITDA between $100 million and $105 million. The company has high conviction in its strategy to address a half-trillion dollar market opportunity.

Management Comments

• Our September quarter showcased accelerating business momentum.
• We were pleased to see that the combination of strong demand for our platform and strong operational execution enabled us to deliver topand bottom-line results that exceeded expectations.
• Consequently, we are once again able to increase our full-year outlook.
• We have high conviction that we have the right strategy to go after the half-trillion dollar market opportunity in front of us.

Industry Context

Digital Turbine operates in the highly competitive and rapidly evolving mobile advertising industry. The company's focus on 'On Device Solutions' and 'App Growth Platform' positions it to capitalize on the continued growth in smartphone usage and mobile content consumption. The reported strong demand for its platform suggests it is effectively navigating market dynamics and potentially gaining market share or benefiting from overall industry expansion in mobile monetization.

Stakeholder Impact

• Shareholders: Positive impact due to strong financial performance, increased outlook, and improved profitability metrics (Non-GAAP adjusted net income, EBITDA, free cash flow). Potential dilution risk from the At-The-Market (ATM) program.
• Creditors: Debt refinancing completed, securing a new $430.0 million term loan facility, which could improve financial stability.
• Employees: Transformation activities and reduction in force are mentioned as a risk, potentially leading to additional workforce attrition or operational disruptions.
• Customers/Advertisers/Publishers: Strong demand for the platform suggests continued value and engagement.

Next Steps

• Management will host a conference call and webcast on November 4, 2025, at 4:30 p.m. ET to discuss fiscal 2026 second quarter financial results and provide operational updates.
• The conference call will discuss forward guidance and other material information.

Key Dates

Recommendation

The company reported robust Q2 FY2026 results, significantly exceeding prior year performance across key metrics like revenue, non-GAAP adjusted EBITDA (up 78%), and non-GAAP adjusted net income. The positive free cash flow generation and successful debt refinancing further strengthen the balance sheet. Management's decision to raise the full-year fiscal 2026 outlook for both revenue and adjusted EBITDA signals strong confidence in continued growth and operational execution. Despite a GAAP net loss, the non-GAAP profitability and cash flow improvements, coupled with an optimistic outlook in a large market opportunity, make this a compelling investment opportunity.

Keywords

Digital Turbine, APPS, Financial Results, Q2 FY2026, Earnings, Revenue Growth, Adjusted EBITDA, Mobile Advertising, On Device Solutions, App Growth Platform, Debt Refinancing, Financial Outlook, SEC Filing, 8-K