Good afternoon, everyone, and welcome to the Digital Turbine, Inc. Fiscal 2026 Third Quarter Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touch-tone telephones. To withdraw your questions, you may press star and two. Please also note this event is being recorded. I would now like to turn the conference call over to Brian Bartholomew, Senior Vice President of Capital Markets. Please go ahead.

Thanks, Jamie. Afternoon, and welcome to the Digital Turbine, Inc. Fiscal 2026 Third Quarter Earnings Conference Call. Joining me today on the call to discuss our results are CEO, William Gordon Stone, and CFO, Stephen Andrew 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, William Gordon Stone.

Thanks, Brian, and thanks, everyone, for joining our call tonight. Our December quarter showcased accelerating business momentum across both our on-device solutions and app growth platform segments. Strong demand for our platform combined with our disciplined operational execution drove top and bottom-line results that exceeded our expectations. Revenue for the quarter came in at $151.4 million, representing 12% year-over-year growth. We also achieved $39 million in quarterly EBITDA, that was 76% year-over-year growth with EBITDA margins of 26%. All of these results are proof points demonstrating the inherent operating leverage in our model. In particular, there are three things at a corporate level I wanted to call out before getting into my detailed segment remarks. First is the diversification of our revenues, the double-digit growth across so many of our products and geographies. We are seeing many drivers of our growth versus being tied to a single thing. Second is our improving use of AI and machine learning tools not only in our data and targeting that power revenue, but also for our operations that's driving improved efficiency in our coding, quality assurance, regression timelines, and a variety of other administrative and back-office tasks. As an example of this, in December, our gross profit dollars increased by more than 25% while our operating expenses declined. And finally is the strong progress we've made in strengthening our balance sheet. Our debt leverage ratio now stands at roughly three turns down from more than five turns just a year ago. This disciplined deleveraging is positioning us exceptionally well to pursue the $5 trillion market opportunity in front of us. Now turning to breaking our results out by segment, our On Device Solutions business generated nearly $100 million in revenue, which was up approximately 9% from December. In particular, our international business continues…

Thank you, Bill, and good afternoon, everyone. The fiscal third-quarter results were reflective of sustained business momentum. We delivered another quarter of double-digit revenue growth, further expanded profit margin, and delivered top and bottom-line results that surpassed expectations. We also made significant progress in strengthening our balance sheet in the process. Now let's get into the numbers. Total revenue for the fiscal third quarter was $151.4 million, representing 12% growth year-over-year. Both segments of our businesses, ODS and AGP, contributed positively to the overall growth and upside versus expectations. Our ODS business delivered $99.6 million in revenue, up 9% year-over-year. This growth was primarily driven by higher device volumes and RPDs primarily with our international partners. Our AGP segment delivered $52.6 million in revenue, up 19% from the prior year. These results reflect positive outcomes of our strategic focus to better utilize first-party data and showcase our AI-driven capabilities. The combination of strong top-line growth and efficient operational execution yielded 76% year-over-year growth in adjusted EBITDA in the quarter. Adjusted EBITDA for the fiscal third quarter totaled $38.8 million, representing a 76% increase year-over-year. EBITDA margin reached 26%, marking the seventh consecutive quarter of expansion and improvement of more than 900 basis points versus the prior year. This comparison includes approximately $3.5 million of one-time benefits in the period primarily related to a sublease settlement and improved working capital. Free cash flow for our third quarter totaled $6.4 million. Our non-GAAP gross margin in the fiscal third quarter was 49%, well above the prior year figure of 44%. This expansion was primarily the result of a more positive product and segment mix during the quarter. Cash operating expenses were $36 million, down 4% year-over-year. We're pleased with the progress we've made on our cost controls and operational discipline, which allowed…

Jamie? Ladies and gentlemen, at this time, if you would like to ask a question, you may press star and then one. To withdraw your questions, you may press star and 2. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then 1. Join the question queue. We'll pause momentarily to assemble the roster. And our first question today comes from Anthony Joseph Stoss from Craig Hallum. Please go ahead with your question.

Great. Thanks. I have a couple, so I'll just go one at a time. Bill, I love to hear, you know, you used the word flywheel. What are you seeing in terms of maybe the app install business? If those same customers are now giving you advertising within the app, any thoughts just on how things are starting to come in faster and faster? Love to hear it.

Yeah. Sure, Tony. Yeah. This is, as I mentioned, this is one of our five strategic priorities in the business. And there's enormous opportunity given that we have over 80,000 different applications with our technology, and those applications are all out trying to acquire users. So the ability for us to integrate their budgets that we're paying them back into acquiring users both with our own DSP as well as our own device business then feeds back into the monetization and becomes a flywheel feeding on itself to generate incremental growth in revenue and better margins. So this is a big area to integrate those. Now that we have the tech stacks integrated that we had not had over the few years, we can put a lot more energy behind this. So, you know, we're really excited about this being a driver for growth for us as we look into the future.

Got it. And then, Bill, I've fielded a couple of calls in the last few days regarding the Google Gemini announcement. You can help us understand how you think that'll impact you.

Yeah. So, you know, first, you know, for us, we made a concentrated effort I mentioned in my remarks, to diversify away from just strictly gaming inventory and increase nongaming inventory. And so that's been a growth driver for us. As it relates to Google's announcement specifically, I think it's a great thing for our company. And what I mean by that is we don't not in the game business. We don't we don't we don't make games. You know, we distribute them. And so as more games come into the market, they're all gonna need distribution. So our ability to leverage our extensive distribution footprint both on device and with our DSP, I think it's going to bring more games to market, and those they're gonna need more distribution to acquire the users regardless of how they're generating the technology to make the game. So I view it as positive, you know, for our business. And as I mentioned in our remarks more broadly around AI, it's driving revenue growth for us and it's driving efficiencies in the back office. So I look at it as a net positive. I can't speak for other companies. But for us, we're excited about it.

Got it. And, yeah, I just wanna call out your mentioning of the three largest global gaming companies have signed in December for Single Tap. How do they plan on using it? What's kind of the timing? And how quickly do you think it'll ramp?

Yeah. So I'm excited to say they're live today. And so they're using it today to distribute all alternative applications of their own versions that can be their own house billing, if you will, versus using, you know, one of the duopolies billing for that. They're also using it for a thing called dual downloads. And what that is is the ability to download an application with Single Tap, but also download the store that goes with that. So in other words, if a large gaming studio, you want you, Tony, want wanted wants a game, download it. Well, you also get the store that can be delivered in the background once you enter in your credentials and pay through that app or game you've downloaded, now it's prewired for anything that that publisher wants to do. So it reduces the friction in the future. It lowers the cost structure for the app publishers. So Single Tap's a key enabler to make that happen. So yeah, we're excited about that, and it's already generating revenue today.

Thanks, Bill, for everything, and great job, guys. Nice results.

Thanks, Tony.

Once again, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and 2. Our next question comes from Arthur Chu from Bank of America. Please go ahead with your question.

Hey, guys. This is Arthur on for Omar. Thanks for taking my question. Bill, there's been some recent chatter about Meta back on iOS bidding for non-IDFA traffic. I think after a couple of years of only bidding on the IDFA traffic, any sort of observations you have around maybe just, you know, any changes in the competitive landscape as a result of Meta being carrying a little bit more active on iOS?

Yeah. So nothing to comment specifically on them and iOS here. I would just say from a competitive perspective, I'm excited to see that the overall market grew kind of mid to high single digits, you know, in December. And our growth, you know, on the AGP side was 20%. So in other words, you know, our growth is 2x the market. From a competitive perspective, we're out taking share. Obviously, we're focused we have iOS and Android. We're focused more on Android, you know, given our unique on-device position there. So nothing specific on Meta to comment on this call. But in terms of what we're doing, you know, we're outgrowing the market right now.

Got it. That's really helpful color. Thanks a lot, guys.

And ladies and gentlemen, I'm showing no additional questions at this time. I'd like to turn the floor back over to William Gordon Stone for any closing remarks.

Thanks, everyone, for joining our call tonight. We'll talk to you again on our fiscal '26 fourth-quarter call in a few months. Thanks, and have a great night.

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.