Digital Turbine revenue jumps 27% to $178.7 million, raises 2027 outlook

Key Facts

Digital Turbine said on November 9 that revenue for the second quarter of fiscal 2027, ended September 30, rose 27% year over year to $178.7 million, from $140.4 million in the year-earlier period. Revenue topped analysts’ consensus of $166.83 million, while adjusted earnings per share of $0.18 matched the analyst estimate cited in an Investing.com report. The company also returned to profitability under generally accepted accounting principles, posting net income of $10.3 million, or $0.06 per diluted share. It had recorded a net loss of $21.4 million, or $0.20 per share, a year earlier. Meanwhile, adjusted net income increased to $23.4 million, or $0.18 per share, from $16.5 million and $0.15 per share in the comparable quarter.

Growth varied across the company’s two segments. Revenue from On Device Solutions, before intersegment eliminations, rose 20% to $115.6 million. App Growth Platform grew faster, up 42%, with revenue on the same basis reaching $63.5 million. App Growth Platform’s growth rate was therefore more than twice that of On Device Solutions, even though the latter segment had higher revenue. Chief Executive Bill Stone said revenue growth of more than 20% in both segments, together with operating leverage efficiencies, enabled the company to increase adjusted EBITDA by 46%. The measure reached $39.8 million, compared with $27.2 million a year earlier.

Results showed improvement in net income and cash flow alongside pressure on gross margin. Revenue share expense, the payments tied to partners, was $87.719 million in the quarter ended September 30, compared with $63.093 million in the same period a year earlier. Non-GAAP gross margin fell to 43% from 47%. By contrast, net cash generated from operating activities rose to $18.843 million from $14.460 million. Non-GAAP operating free cash flow also increased to $10.457 million from $7.031 million a year earlier.

The company raised its fiscal 2027 revenue outlook to a range of $670 million to $690 million, from the $650 million to $670 million range issued on August 4. It left its adjusted EBITDA outlook unchanged at $145 million to $155 million. The new revenue range puts the midpoint at $680 million, above analysts’ average estimate of $665.3 million at the time of the results announcement. Stone said stronger-than-expected second-quarter performance and continued platform momentum “reinforce our confidence” in the company’s ability to capitalize on available opportunities. The company had announced that its earnings call would be held on November 9, 2026, at 4:30 p.m. Eastern time.

The revenue beat did not prevent the shares from falling in after-hours trading on November 9. Investing.com reported that the stock dropped 23%, attributing the move to higher partner payments and the resulting pressure on margins. The shares closed at $11.30 in the regular session that day, according to EL7 data; that was the closing price, separate from the after-hours move that followed the results. The November 6 close was $10.38, ahead of the results session. These figures put the after-hours reaction in chronological context, as the results combined revenue and adjusted earnings growth on one hand with lower gross margin and higher revenue share expense on the other.