David Moadel
6 min read
Quick Read
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Digital Turbine (APPS) plunged 23% despite a 27% revenue jump because its profit forecast stayed flat and gross margin fell to 43%.
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Unity (U) and AppLovin (APP) slipped just 1% to 2%, buoyed by far stronger margins of 41% and 84%.
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A $3.5 million revenue share cost revision and a disclosed material weakness in internal controls give bears fresh ammunition against the rally.
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A revenue beat and a higher sales forecast weren’t enough to protect Digital Turbine (NASDAQ:APPS), because the extra revenue isn’t reaching the company’s profit outlook. Digital Turbine stock is at $8.73, down 23% in morning trading. The drop cuts a big run, and Digital Turbine stock remains up 75% year to date.
Company figures point to three pressure points: an flat forecast for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a lower gross margin and a revision tied to understated costs. Wall Street appears to be weighing those issues more heavily than Digital Turbine’s top-line strength.
Digital Turbine Raised Its Revenue Outlook and Held Its Profit Forecast
Digital Turbine reported Q2 FY2027 results on November 9 after the market closed. The company’s revenue reached $178.7 million, up 27% year over year and ahead of the $166.75 million consensus estimate. On a per-share basis, adjusted earnings came in at $0.18, beating the $0.17 estimate.
Both of Digital Turbine’s segments grew. Sales in the App Growth Platform segment climbed 42% to $63.5 million, while On Device Solutions revenue rose 20% to $115.6 million. Each segment’s gains helped lift the company’s adjusted EBITDA 46% to $39.8 million.
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