Good afternoon, and welcome to the Digital Turbine Fiscal 2026 First Quarter Results Call. [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, Drew. Good afternoon, and welcome to the Digital Turbine Fiscal 2026 First Quarter Earnings Conference Call. Joining me on the call to discuss our results are CEO, Bill Stone; and CFO, Steve Lasher. Before we get started, I would 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 file 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 CEO, Bill Stone.

Thanks, Brian. Good afternoon, everyone, and thank you for joining us for Digital Turbine's Fiscal First Quarter 2026 Earnings Call. We're excited to report on our continued business momentum that accelerated in the first quarter. We delivered $131 million of revenue and $25 million in EBITDA, reflecting 11% revenue growth and 73% EBITDA growth year-over-year. These results are a testament to our strategic focus and improved execution across our platform and enabling us to increase our annual outlook for the fiscal year. Breaking it down by segment, our On Device Solutions business generated $95 million in revenue, which was up approximately 18% from June quarter of last year. Our Application Growth Platform business posted $35 million in revenue, which was modestly down year-over-year. However, we're encouraged by the nearly 10% sequential improvement compared to fiscal fourth quarter. There are three key drivers that powered our improved performance this quarter. First was higher advertiser demand, which translated into improved pricing and fill rates, particularly for premium placements on our platform. This strong advertiser demand resulted in 30-plus percent year-over-year growth in our revenue per device or RPD, in both the U.S. and international markets for our On-Device business, and we also had solid double-digit year-over-year growth in our Content Media business. Our second driver was improved device volumes, particularly in North America and selected international markets. This helped us expand our install footprint and monetization base. As an example, last year, we saw a decline of approximately 1 million devices here in the U.S. between March and June. And this year, we saw a modest increase in U.S. devices from March to June. Similarly, our international device volumes were up a few million units sequentially and year-over-year. Combined, these better RPDs and improved device volumes drove strong year-over-year growth. And finally,…

Thank you, Bill, and good afternoon, everyone. The fiscal first quarter represented another meaningful step forward for the company. Total revenue for the quarter was $130.9 million, reflecting 11% growth year-over-year. At a segment level, our ODS business delivered $95.4 million in revenue, up 18% year-over-year, driven by strong growth in both device volumes and revenue per device or RPD, particularly within our international partners. We also saw continued strength in RPDs and modest improvement in activation trends in the U.S. market. Our AGP segment generated $36.3 million in revenue, representing a 5% decline year-over-year. However, on a sequential basis, AGP revenue increased 9%, reflecting early signs of stabilization and progress as we work to strengthen the platform, leveraging our unique first-party data and AI capabilities. The combination of accelerated top line growth and improving operating efficiencies driven by the transformation initiatives we began late last year resulted in strong EBITDA performance this quarter. Adjusted EBITDA for our fiscal first quarter was $25.1 million, up 73% year-over-year, marking our highest quarterly EBITDA since calendar 2023. Free cash flow remained positive at $1.4 million, an improvement of approximately $7 million year-over-year. Non-GAAP gross margin for the fiscal first quarter was 47%, representing an improvement of more than 100 basis points compared to the same period last year. As a reminder, our gross margins are primarily influenced by shifts in product and segment mix, which will vary from period to period. Our cash operating expenses for the June quarter were $36.8 million, down 8% year-over-year, in addition to our gross profit of $62 million, which grew 14% over the same period, a strong proof point of the operating leverage of the company. While we're encouraged by the progress made on cost discipline and operating efficiency, we remain committed to further streamlining our…

[Operator Instructions] The first question comes from Anthony Stoss with Craig-Hallum.

Nice execution for sure. Bill, on the international carrier strength and strength on the RPD side on the international business, is that a combination of new international customers? Or is it largely just better take rates on the international side? And then I have a follow- up after that.

Yes. Thanks, Tony. Yes, our international business on our On-Device business in general was up 70%. It was driven by better device volumes and better RPDs. Specifically on the RPDs themselves, we're just getting better at execution. We're seeing also stronger demand coming into these geographies from other geographies. So in other words, where we see a lot of demand coming in from Europe or Asia into the U.S., we've done a much better job, now -- been able to get that demand going into other markets such as Latin America or into Europe on European supply. And so those things are helping us drive better RPDs. But we continue to see strong performance there, especially combined with the stronger devices really helped drive some solid top line performance.

Got it. And then the brand revenue or brand portion of your business was exceptionally strong. Can you talk about the longevity of this business? Is it something new? Do you have a bunch of new customers that have come online? And what's your visibility into that continuing?

Yes. One of the things I was really excited about in the brand business for the quarter is just more diversification. I talked about -- in my prepared remarks that we saw nearly 50% increase in the amount of brand advertisers coming on the platform from more and more verticals. It's our job now to continue to grow and scale that. But to see that diversification with more brands looking for solutions on our platform is incredibly encouraging for us. And we think we have something unique and differentiated here in terms of mobile first with our strategy in app and something that we're playing a long game with it and continuing to make good strides there.

Got it. Last question, Bill, related to just the ongoing potential breakup of Apple or the monopoly of Apple and Google for app stores. What are you seeing recently, just in terms of activity, of potential customers? And do you expect any additional customers to actually launch alternative app stores on top of Epic this year?

Yes. So it's really encouraging to see the recent legal ruling that came out from the judge reiterating what the jury decided in the Epic and Google case, really opening up alternative app stores within the Google Play ecosystem. That's an encouraging development in terms of just more fair, open and transparent. And we're seeing that around the world, not just -- also in the United States, but also in Europe, Korea, Brazil, Japan, India, just to name a few. And so I think from our perspective, what we're seeing is very strong interest, first and foremost, from publishers. So if you're thinking about large gaming companies or even large nongaming companies looking to find different billing methods to their customers and our ability to leverage our platform with things like SingleTap, DTiQ and our [ Ignite ], I think it is something that's particularly encouraging to offer publishers options, first and foremost. And then on the distribution side, we're seeing a lot of encouraging developments here, not just in the United States -- on partners like Verizon, where we're live, but also we've got traction in Latin America as well as in the EU from a lot of different operator and OEM partners that are excited about what happens here in the future with that.

The next question comes from Omar Dessouky with Bank of America.

This is Arthur on for Omar. Bill, maybe just on the AGP business, obviously, great to see sequential improvement here. What do you think needs to happen to bring this business back to year-over-year growth? Like are there specific products or business segments that you'd like to see more improvement in, this year?

Yes. I think -- in terms of our AGP business, our Supply side platform and our DTX product is showing nice year-over-year growth. I think the real key for us will be on the performance side of the business. That's something we're making a lot of energy and investments and some of those first-party data and AI machine learning things that I referenced in my remarks will be super important here on the demand side of that to really show that top line growth. But as I mentioned in my remarks, we saw really nice sequential growth in that business that gives us encouragement that that's going to continue in quarters to come.

Got it. And then if I could just follow up on that. Any potential time line you could share with us in terms of just that work that you guys are doing on the performance DSP side?

Yes. We'll communicate our progress and time lines on -- in future calls right now. Again, I'm encouraged because what we've done now is we've been able to connect the actual performance DSP and all the bidding work to now the first-party data and AI machine learning algorithms, and we're getting much better and stronger at that. And that will be the key driver to improved top line performance in that business.

The next question comes from Mitchell Pindus with Wells Fargo Private Bank.

I'd like to also thank you for what looks like a nice confirmation of DT's turnaround with these numbers. A couple of quick questions. Device sales have, in recent quarters -- actually in recent years, been headwinds, but now it looks like we're starting to get evidence from Apple, from Verizon that there seems to be a turnaround and anecdotally in device sales. Can you talk a little bit as to how that can affect DT going forward?

Yes. Sure, Mitch. We see it really is helping us in two areas. First is just the macro trend, which is something that's been a headwind, as you mentioned, for us for the last couple of years. So this past quarter was an encouraging sign to see that turn around and become a tailwind and show growth from the June quarter to the March quarter and that sequential improvement. It's been a while since we've been able to talk about that. So hopefully, that's an encouraging trend that continues. We've known for a long time that these long, elongated upgrade cycles that are in the U.S. are not sustainable, and we're going to see that turn around. So we're starting to see that. So that's a nice tailwind for us. But the second thing we can do is also continue to grow our share with getting our technology on more devices. So for example, that could be T-Mobile here in the United States, which we just recently launched with Motorola and a variety of other things with Chinese OEMs and other partners in the EU. So growing our device footprint in addition to just the macro, tailwinds starting to emerge, gives us a lot of optimism that we can see good growth from this part of the business.

Great. And generally speaking, where are you seeing some of your growth geographically coming from?

So on the supply side of the business on AGP, I've been really pleased with our growth in Asia and Europe, in particular. And then for our On-Device business, we've really done a nice job on growing our business in the EU and Latin America. So those have been two bright spots for us. And then on the ODS business, you can see the double-digit growth back here in the United States. It Is also something that's been encouraging. So it's really a true global story that's starting to emerge here.

Got it. And are you -- when you're billing outside the country, are you billing in USD or the local currency?

Yes, predominantly, the vast majority of our revenues all come through USD.

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

Thanks, everyone, for joining our call today. We'll talk to you again on our fiscal '26 second 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.