Good afternoon and welcome to the Digital Turbine Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brian Bartholomew, Senior Vice President of Capital Markets. Please go ahead.

Thanks, Gary. Good afternoon and welcome to the Digital Turbine fourth quarter and fiscal year 2022 earnings conference call. Joining me on the call today to discuss our results are CEO, Bill Stone; and CFO, Barrett Garrison. Before we get started, I'd like to take this opportunity to remind you that our remarks today will include forward-looking statements. These forward-looking statements are based on our current assumptions, expectations and beliefs, including projected operating metrics, future products and services, anticipated market demand and other forward-looking topics. Although we believe that our assumptions are reasonable, they are not guarantees of future performance, and some will inevitably prove to be incorrect. Except as required by law, we undertake no obligation to update any forward-looking statements. For a discussion of the risk factors that could cause our actual results to differ materially from those contemplated by our forward-looking statements, please refer to the documents we filed with the Securities and Exchange Commission. Also during this call, we will discuss certain non-GAAP measures of our performance. Non-GAAP measures are not substitutes for GAAP measures. Please refer to today's press release for important information about the limitations of using non-GAAP measures as well as reconciliations of these non-GAAP financial results to the most comparable GAAP measures. Now, I'd like to turn the call over to our Chief Executive Officer, Mr. Bill Stone.

Thanks, Brian, and thank you all for joining our call tonight. Before diving into our micro results, I want to begin my remarks with some commentary on the macroeconomic situation as it appears to be dominating investor focus and overshadowing company-specific news right now. First, we want to be clear that we stand behind the people of Ukraine. Between our direct employees and contractors, we have over 100 Ukrainians working on the DT team. And while the macro situation in Ukraine is horrific and sad, the acts of kindness, sacrifice and generosity I've been able to witness by our broader DT community towards helping the Ukrainian people impacted has been an amazing tribute to the human spirit. Our team will continue to try to do its small part to help and hope that the situation can find a peaceful outcome for Ukrainian sovereignty. And in addition to Ukraine, the past few months since our last earnings call have seen more macro change and uncertainty that at any point during my time at Digital Turbine. Inflation, interest rates, geopolitics, supply chains, other companies opining on the future of the digital ad market and timing of the next recession have dominated investor focus over fundamentals and operating performance. 100% of companies in our space are impacted by these events, including us. However, I continue to believe the impact to us is much less than others for a few reasons, including, first, our company has been profitable for four years and growing at a compound annual growth rate of over 180%, including nearly 160% EBITDA growth this past fiscal year. Our platform is designed for showcasing return on ad spend, which is critical in time like these for marketers. Our market sector of mobile media is vibrant and still growing. The operating leverage…

Thanks, Bill, and good afternoon, everyone. We capped off another very impressive year and delivered a strong fourth quarter performance. For the fiscal year 2022, we reported $747.6 million in revenue, growing 138% as reported and 31% growth on a pro forma basis. We generated $195.2 million in adjusted EBITDA, an increase of 158% over prior year, and delivered $170.6 million in adjusted net income or $1.66 per share as compared to $0.74 per share prior year. In addition to the outstanding financial performance delivered in the year, we simultaneously integrated three key acquisitions to our platform, and we continue to drive towards a growing $400 billion of TAM. As it relates to our recently acquired businesses and as communicated in our recent press release, after conducting a thorough review, we restated certain product revenues of the recently acquired businesses to be on a net basis for FY 2022. Previously, all of the Fyber and AdColony publicly reported revenues were on a gross revenue classification. In addition, certain hosting expenses associated with the acquired businesses have been reclassified as cost of revenue, which were previously partially reported as product development expenses. These changes in presentation of the revenue and reclassification of certain cost of revenue are reflected in our recent amended Form 10-QAs. These changes did not have an impact on our operating performance, our earnings metrics or cash flows, and there is no change to the On-Device Media business. We also believe these reporting changes should assist investors with peer comparisons and highlight the relative profitability of our business model. Also, since the Company has closed several significant transactions during our fiscal reporting period and made the reporting amendments I referenced earlier, this has impacted the normal timing of our year-end audit. And as a result, we have filed…

[Operator Instructions] Our first question comes from Darren Aftahi with ROTH Capital Partners. Please go ahead.

A couple, if I may. First, Bill, you mentioned licensing opportunity with SingleTap. I think, if I heard you right, you said you had some deals signed and some that are getting closed and kind of a ramp in them. Yes. So I guess first question around there, if you kind of just contextualize the traction you've made there and kind of what kind of dominoes we might see in the environment we're in.

Yes. Thanks, Darren. Yes, on SingleTap licensing, and as I mentioned in my remarks, I actually see this as kind of emerging very similar to how the early days for us. It started with Verizon and then AT&T, Cricket, Samsung and Tracfone, all the rest of them, where you bring on a partner, it takes a while to bring on that partner because you got to integrate into their processes of how they do business. So a lot of these large Tier 1 players already have existing processes for how they do app installs. And so we've got to integrate into that. And we're in the process of doing that right now. As I mentioned, we're in trial phase with a number of them right now. Expect to start to generate some revenue for next quarter and then ramping it from there on out. And as we add those new partners, I think those will be nice sequential growth drivers as we continue to add each one of them. I think as we're just seeing in the macro world right now, people are trying to figure out how to improve their performance for their businesses, how do they improve conversion rates from the advertising dollars that they're spending, and obviously, SingleTap accomplishes that. So, there's a tremendous amount of interest right now in SingleTap licensing. We're excited about it. I think the key for us is just having to work with these larger companies to integrate our technology into their existing processes, which requires a little bit of work by them on their side. And so just kind of just getting that kind of time and materials work through is what we're taking to the ground floor right now. But we're extremely bullish, and the feedback so far has been very positive.

Okay. And let me squeeze in one more. Could you talk about kind of the expansion of the Samsung relationship, kind of how many new SKUs you're going to be on and then just what the number of devices have in the quarter were?

Yes. Yes, sure. So when we think about our Samsung relationship now, a year ago, we were doing millions of devices and now we're doing many, many, tens of millions of devices with them globally right now in I think about 75 different countries around the world right now. So we continue to expand with the relationship with Samsung, continue to look to expand even more. We obviously are bullish that SingleTap will be a catalyst for that since that's incremental economics for Samsung, and we're kind of in the midst of finalizing those plans right now.

The next question is from Tim Horan with Oppenheimer. Please go ahead.

A few questions. The SingleTap, you had given some expectations for revenue a couple of years out. Can you reiterate that? And I know you now -- you said that licensing could be bigger than what you'd do yourself. Can you just give us some more color around what you meant by that?

Yes, Tim. So when we were at our Analyst Day, we basically had presented a plan to say, okay, hey, over the next few years, how do we make this a $1 billion business. And we've broken out some math to talk about how we do that on a per-advertiser basis on our demand side platform, and we continue to add advertisers to that and are scaling that today. As I referenced, 650% year-on-year growth on that platform for where we were a year ago to today, so that absolutely is one of the drivers for it. And then today, I think one of the things we wanted to spend a little bit more time talking about, as Darren just asked about, was on the SingleTap licensing side and how we see actually to get towards the broader $100 billion addressable market app installs today, and that's more likely for us to get our piece of that through the licensing part of the business versus trying to only do that on a direct basis through our demand side platform. So, that's where we want to talk about some of our progress points today and look forward to keeping you guys updated on future calls against that.

Okay. Great. And just two other questions. I know you're investing for one platform, one ad tech platform and one brand. Are these material investments quarterly? And when should they end? And should we see synergies at that point? I guess, what do you think the EBITDA's impact now? And what does it mean for if it reverses?

Yes. Let me start, and then I'll turn it over to Barry for some specific thoughts on the cost structure side. One of the things I'm just really proud of is just how well this team hustles and makes investments, and we're able to fund investments there's through efficiencies and synergies. The fact that we grew all the metrics that we just talked about in the prepared remarks and basically did that with zero incremental cash OpEx is just a testament to the efficiency to model, the efficiency of the team and just how much hustle they have. So, we're making these investments without having to go out and spend incremental dollars against them. Now of course, we want to -- we're going to continue to make investments in the business, and we continue to look to accrete EBITDA margins and harvest some of those investments. But I don't know, Barrett, if you want to jump in here on some specific thoughts on the cost structure.

Pardon me, it looks like Barrett's line has disconnected from the call.

Okay. Well -- so let's keep going operator.

The next question is from Anthony Stoss with Craig-Hallum. Please go ahead.

Bill, how much was SingleTap in the March quarter? Bill?

Yes. So we're not breaking the revenues out, Anthony, anymore. And the reason for that is -- so we're starting to do revenues, for example, on the AdColony business, and so we're just adding as an adder. So, if we do $1 of revenue that was already there and how much do we get to cost accounting issues in terms of applying capabilities on the revenues that are already there and incremental. We kind of wanted to think about SingleTap as a little bit more as an enablement capability versus specific revenues. I called out the 650% on the demand side platform. But we're not trying to break out a specific business just because there are so many elements now of how SingleTap is being used, whether I've talked on the Fyber exchange, the AdColony part of the business, the licensing business and the demand side platform business. It can get confusing in terms of how you want to allocate the dollars appropriately.

In the past, you've talked about two different ways of getting paid kind of an ongoing revenue share, also a onetime fee per subscriber. Have you honed in any further? Or how do you expect to get paid from these first several partners?

Yes. I think the first one you're going to see us get paid is really -- is a licensing fee for each transaction that we generate and then some kickers based upon enhanced performance.

Got it. And then you called out weakness. Is it more on the Fyber side than the AdColony side or any geopolitical side? I'd love to hear your thoughts just where you're seeing the weakness.

Yes. I think for our business right now, I think that we're seeing some ad spend softness, as many others have talked about in Europe. I think I kind of equate this time a little bit to when IDFA came out a year ago. And what happened was when you introduce all this new change into the system, a lot of times, budgets -- people were spending $100, and then they say, okay. We're going to spend $80, just to kind of see what happens. And then once they see where the dust settles, then they go back to start spending $100 again. And I think what we're seeing right now with -- specifically in the -- in our Europe and Russia part of the world, is that kind of behavior is happening right now. I think we're starting to see some early days here in the U.S. in terms of people trying to be a little bit more cautious in overall. But I think one of the good things for us is because everything that we do has to generate a return on ad spend, so those -- we tend to get those dollars in those budgets because we can correlate that dollar directly back to what an advertiser spent with us. And so that's really important, much more important than a 30-second spot during the Warrior Celtics game later this week, where you don't necessarily know what the return on net ad spend is going to be. The fact that we can correlate that back, I think, insulates us a little bit more than others.

This concludes our question-and-answer session. I would like to turn the conference back over to Bill Stone for any closing remarks.

Yes. Thanks, everyone, for joining the call today. We look forward to reporting on our progress against all the points that we made on today's call, and we'll talk to you again on our fiscal '22 fourth quarter call in a few months. Thanks and have a great night.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.