# Digital Turbine, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [Digital Turbine, Inc.](/companies/apps.md) (CIK 317788)
- Form: 10-Q
- Filed: 2025-08-05
- Accepted by EDGAR: Aug 5, 2025, 16:52 ET
- Period: 2025-06-30
- Accession: 0001628280-25-037888
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/317788/000162828025037888/apps-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/317788/000162828025037888/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $130.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $58.1m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $72.8m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $10.1m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$4.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | −$2.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$14.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.13 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.13 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 106,627,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-04-01 to 2025-06-30 | $8.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-06-30 | $33.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $260.2m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $818.4m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $237.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $666.1m | us-gaap:Liabilities |
| Long-term debt | at 2025-06-30 | $400.5m | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2025-06-30 | $152.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 38,296 characters.

The following discussion should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q (this “Report”). The following discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements involve substantial risks and uncertainties. When used in this Report, the words “anticipate,” “believe,” “estimate,” “expect,” “will,” “seek,” “should,” “could,” “can,” “would,” “may,” “might,” “intend,” “plan,” “target,” “project,” “contemplate,” “predict,” “suggest,” “potential,” and “continue” and the negative of these words and other similar expressions, as they relate to our management or us, are intended to identify such forward-looking statements. Our actual results, performance, or achievements could differ materially from those expressed in or implied by these forward-looking statements as a result of a variety of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, as well as those described elsewhere in this Report and in our other public filings. The risks included are not exhaustive and additional factors could adversely affect our business and financial performance. We operate in a very competitive and rapidly changing environment. New risk factors emerge from time-to-time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Historical operating results are not necessarily indicative of the trends in operating results for any future period. We do not undertake any obligation to update any forward-looking statements made in this Report. Accordingly, investors should use caution in relying on past forward-looking statements, which are estimates based on assumptions, known historical results and trends at the time they are made, to anticipate future results or trends. This Report and all subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

All numbers are in thousands, except share and per share amounts.

### Company Overview

Digital Turbine, Inc., through its subsidiaries (collectively “Digital Turbine” or the “Company”), is a leading independent mobile growth platform that levels up the landscape for advertisers, publishers, carriers, and device original equipment manufacturers (“OEMs”). We offer end-to-end products and solutions leveraging proprietary technology to all participants in the mobile application ecosystem, enabling brand discovery and advertising, user acquisition and engagement, and operational efficiency for advertisers. In addition, our products and solutions provide monetization opportunities for OEMs, carriers, and application (“app” or “apps”) publishers and developers.

### Recent Developments

### Impact of Economic Conditions and Geopolitical Developments

Our results of operations are affected by macroeconomic conditions and geopolitical developments, including but not limited to levels of business and consumer confidence, actions taken by governments to counter inflation, potential trade disputes, including but not limited to any U.S. government actions against China based developers and publishers, Russia’s invasion of Ukraine, and the recent conflict in Israel.

Inflation, rising interest rates, supply chain disruptions and constraints, changes in regional or global business, political, macroeconomic and market conditions, including as a result of conflicts, hostilities, recessionary fears, the impact of global instability, domestic and foreign tariffs and other trade protection measures, and reduced business and consumer confidence have caused and may continue to cause a global slowdown of economic activity, which has caused and may continue to cause a decrease in demand for a broad variety of goods and services, including those provided by our clients.

We are impacted by declining volume of sales of new mobile devices by our partners. We believe this is driven by the impact of inflation, economic uncertainty, and their potential impacts on consumers. These negative macroeconomic trends have resulted, and may continue to result in, a decrease in mobile phone sales volume. Continued weakness in the sale of new mobile devices is likely to continue to impact our business, financial condition, and results of operations, the full impact of which remains uncertain at this time.

Further, various U.S. federal and state governmental agencies continue to examine the distribution and use of apps developed and/or published by China based companies. In some cases, government agencies have banned certain apps from mobile devices. Further actions by U.S. federal or state governmental agencies or other countries to restrict or ban the distribution of China based apps could negatively impact our business, financial condition, and results of operations.

While Russia’s invasion of Ukraine has not had a direct, material impact on our business, any European conflict, if expanded to include other countries, would likely have a material, negative impact on general economic conditions and would impact our business directly.

Additionally, we continue to actively monitor the recent developments in Israel, Gaza, Lebanon, and Syria for any material impacts to our business. While no adverse financial or operational impacts have been noted in the current period, if such conflict continues or escalates, it could have a potential negative impact on our business, given our significant presence in the region.

The extent of the impact of these macroeconomic factors on our operational and financial performance is also dependent on their impact on carriers and OEMs in relation to their sales of smartphones, tablets, and other devices, as well as the impact on application developers and in-app advertisers. If negative macroeconomic factors or geopolitical developments materially impact our partners over a prolonged period, our results of operations and financial condition could also be adversely impacted, the size and duration of which we cannot accurately predict at this time.

We continue to actively monitor these factors and we may take further actions that alter our business operations, as required, or that we determine are in the best interests of our employees, customers, partners, suppliers, and stockholders. In addition to monitoring the developments described above, the Company also considers the impact such factors may have on our accounting estimates and potential impairments of our non-current assets, which primarily consist of goodwill and finite-lived intangible assets.

See Part I, Item 1A, “Risk Factors,” in its Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission on May 28, 2024, for additional information related to risks associated with macroeconomic challenges.

### Goodwill and Intangible Assets

The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment, including qualitative and quantitative factors such as the identification of reporting units, identification and allocation of assets and liabilities to reporting units, and determinations of fair value. In estimating the fair value of our reporting units when performing our annual impairment test, or when an indicator of impairment is present, we make estimates and significant judgments about the future cash flows of those reporting units and other estimates including appropriate discount rates. Discount rates can fluctuate based on various economic conditions including our capital allocation and interest rates, including the interest rates on U.S. treasury bonds. Changes in judgments on these assumptions and estimates, particularly expectations of revenue and cash flow growth rates in future periods and discount rates, could result in goodwill impairment charges.

In addition to evaluating goodwill for impairment when events or circumstances indicate they would more likely than not reduce the fair value of a reporting unit below its carrying value, the Company also evaluates goodwill for impairment on an annual basis. The Company’s next annual evaluation of goodwill for impairment will be as of March 31, 2026.

Finite-lived intangible assets and property, plant, and equipment have been assigned an estimated finite useful life and are amortized on a straight-line basis over the number of years that approximate their respective useful lives. The Company evaluates intangible assets other than goodwill for impairment at least annually or upon the occurrence of events or circumstances that indicate the carrying value of an asset may not be recoverable. In determining whether an impairment exists, the Company considers factors such as changes in the use of the asset, changes in the legal or business environment, and current or historical operating or cash flow losses.

### Transformation Program

Beginning in fiscal year 2023, the Company entered into a business transformation project that includes the implementation of a new, global cloud-based enterprise resource planning (“ERP”) system to upgrade our existing enterprise-wide operating systems. Additionally, a new human resource (“HR”) system was also implemented to streamline employee management processes and enhance organizational effectiveness. We are also undertaking the consolidation of existing ancillary systems and deploying other new platforms and systems to improve our operations and drive business and cost efficiencies.

This is a multi-year project that includes various costs, including software configuration and implementation costs that would be recognized as either capital expenditures or deferred costs in accordance with applicable accounting policies, with certain costs recognized as operating expense associated with project development and project management costs, and professional services with business partners engaged in the planning, design and business process review that would not qualify as software configuration and implementation costs. In addition, the Company is incurring duplicative personnel and other operating costs to maintain legacy systems and operations during the deployment of the new systems and certain other ancillary platforms and systems. The Company completed the first deployment phase in the third quarter of fiscal year 2024. Costs are anticipated to be incurred through various deployment phases that are expected to continue through early fiscal year 2026. The Company incurred $31 and $1,072 of business transformation costs during the three months ended June 30, 2025 and June 30, 2024, respectively. These costs are recorded in General and Administrative expenses and Product Development expenses in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.

Additionally, the Company is in the process of initiating further transformation efforts. The Company launched an additional transformation effort in October 2024, in which the Company began a transformation program intended to improve various measures across the organization. These measures include but were not limited to current and future operating expenses, cash flows, and personnel costs. Additionally, the initiatives intend to simplify and streamline business operations, including product optimization, procurement and cost optimization, and team restructuring. As part of the transformation program, the Company implemented a two phased reduction in our workforce, one in November 2024 and the other in January 2025. No costs associated with our transformation program were incurred during the three months ended June 30, 2025. During the fiscal year ended March 31, 2025, the Company incurred expenses of $2,886, related to our transformation program primarily consisting of severance and other one-time termination benefits. The transformation program included several other initiatives and was substantially completed the transformation program in the fourth quarter of fiscal year 2025. The transformation program is targeted to yield more than $25,000 in annual cash expense savings.

The business transformation program is inclusive of multiple projects, to which the costs discussed in Note 15 specifically relates to the 2025 transformation program exclusively. Costs incurred in connection with the transformation program are categorized under two primary headings: severance costs and business transformation costs. The costs classified as severance costs primarily reflect expenses associated with workforce reductions aimed at realigning the Company’s structure as part of the transformation program. These severance-related expenses are directly tied to the Company's efforts to reduce headcount and optimize its labor force to better align with its long-term strategic goals. In addition, the business transformation costs primarily reflect investments made in the prior year for the upgrade of key business systems, including the implementation of a global cloud-based ERP system and a new HR system. These costs, while also part of the broader transformation efforts, are not related to workforce reductions but rather to the modernization of the Company’s technological infrastructure to support long-term operational improvements.

### RESULTS OF OPERATIONS

The following table sets forth our results of operations for the three months ended June 30, 2025 and 2024 (in thousands):

|  | Three months ended June 30, 2025 | 2024 | % of Change |
| --- | ---: | ---: | ---: |
| Net revenue | $130,926 | $117,989 | 11.0% |
| Costs of revenue and operating expenses |  |  |  |
| Revenue share | 58,138 | 55,809 | 4.2% |
| Other direct costs of revenue | 10,804 | 7,790 | 38.7% |
| Product development | 10,147 | 10,714 | (5.3)% |
| Sales and marketing | 13,589 | 16,247 | (16.4)% |
| General and administrative | 42,909 | 43,517 | (1.4)% |
| Total costs of revenue and operating expenses | 135,587 | 134,077 | 1.1% |
| Loss from operations | (4,661) | (16,088) | (71.0)% |
| **Interest and other (expense) income, net** |  |  |  |
| Interest expense, net | (9,954) | (8,250) | 20.7% |
| Foreign exchange transaction gain (loss) | (914) | 818 | (211.7)% |
| Other (expense) income, net | (668) | 114 | (686.0)% |
| Total interest and other (expense) income, net | (11,536) | (7,318) | 57.6% |
| Loss before income taxes | (16,197) | (23,406) | (30.8)% |
| Income tax provision (benefit) | (2,093) | 1,750 | (219.6)% |
| Net loss | (14,104) | (25,156) | (43.9)% |

### Net revenue

| Net revenue | Three months ended June 30, 2025 | 2024 | % of Change |
| --- | ---: | ---: | ---: |
| On Device Solutions | $95,448 | $80,650 | 18.3% |
| App Growth Platform | 36,292 | 38,392 | (5.5)% |
| Elimination | (814) | (1,053) | (22.7)% |
| Total net revenue | $130,926 | $117,989 | 11.0% |

### Comparison of the three months ended June 30, 2025 and 2024

Net revenue increased by $12,937 or 11.0% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. See the segment discussion below for further details regarding net revenue.

### On Device Solutions

On Device Solutions revenue increased by $14,798 or 18.3% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Revenue from content media increased by approximately $860 primarily due to increased activity with content providers that resulted in higher daily active users on prepaid devices. Revenue from application media increased by approximately $18,352 due to an increase in new device volumes internationally, offset by a decrease in new device sales in the US, and an increase in revenue-per-device in the US and internationally and a decrease partially due to the winding down of certain strategic demand contracts in the current period.

### App Growth Platform

App Growth Platform revenue decreased by $2,100 or 5.5% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily a result of a decline in brand and performance advertising of approximately $4,700, which was offset by an increase in advertising exchange of approximately $2,875, which was largely due to an increase in advertiser purchases. This decline was also partially due to a decrease in revenue from reseller partnerships of approximately $275.

### Costs of revenue and operating expenses

| Costs of revenue and operating expenses | Three months ended June 30, 2025 | 2024 | % of Change |
| --- | ---: | ---: | ---: |
| Revenue share | $58,138 | $55,809 | 4.2% |
| Other direct costs of revenue | 10,804 | 7,790 | 38.7% |
| Product development | 10,147 | 10,714 | (5.3)% |
| Sales and marketing | 13,589 | 16,247 | (16.4)% |
| General and administrative | 42,909 | 43,517 | (1.4)% |
| Total costs of revenue and operating expenses | $135,587 | $134,077 | 1.1% |

### Comparison of the three months ended June 30, 2025 and 2024

Costs of revenue and operating expenses increased by $1,510 or 1.1% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to higher revenue share, which is the result of higher revenue over the same comparative periods, offset by lower operating expenses, primarily sales and marketing costs, over the comparative periods. Costs of revenue and operating expenses included severance costs as well as business transformation costs of $164 and $31, respectively, for the three months ended June 30, 2025, compared to $557 and $1,072, respectively, for the three months ended June 30, 2024. See below for further discussion regarding changes in costs of revenue and operating expenses.

### Revenue share

Revenue share is reflective of amounts paid to our carrier and OEM partners, as well as app publishers and developers, and is recorded as a cost of revenue. In addition, when indirect arrangements exist through advertising aggregators (ad networks) and revenue is shared with our carrier and app development partners, the shared revenue is also recorded as a cost of revenue.

Revenue share increased by $2,329 or 4.2%, to $58,138 for the three months ended June 30, 2025, compared to $55,809, for the three months ended June 30, 2024. The increase in revenue share is similar to the increase in total net revenues for the same comparable periods.

Revenue share as a percentage of total net revenue was 44.4% for the three months ended June 30, 2025, compared to 47.3% for the three months ended June 30, 2024. The decrease in revenue share as a percentage of total net revenue was primarily due to revenue mix changes, specifically a lower mix of revenue reported on a net basis as compared to revenue reported on a gross basis during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 .

### Other direct costs of revenue

Other direct costs of revenue are comprised primarily of hosting expenses directly related to the generation of revenue, platform and bidding fees, and depreciation expense associated with capitalized software costs and amortization of developed technology intangible assets.

Other direct costs of revenue increased by $3,014 to $10,804 for the three months ended June 30, 2025 and was 8.3% as a percentage of total net revenue compared to $7,790, or 6.6% of total net revenue, for the three months ended June 30, 2024. The increase in other direct costs was primarily due to higher platform and bidding fees and higher hosting costs between comparable periods.

### Product development

Product development expenses include the development and maintenance of the Company’s product suite. Expenses in this area are primarily a function of personnel.

Product development expenses decreased by $567 to $10,147 for the three months ended June 30, 2025 compared to $10,714 and for the three months ended June 30, 2024. Product development expenses included severance costs of $56 and $71 for the three months ended June 30, 2025 the three months ended June 30, 2024, respectively. Excluding severance costs, product development expenses decreased by $552 for the three months ended June 30, 2025.

The decrease in product development expenses, excluding severance costs, was primarily due to higher offsetting capitalization of labor costs related to internally-developed software of approximately $926 and a reduction in professional service costs of approximately $288, offset by an increase of $662, related to employee reduction, hosting/software, and other related costs.

### Sales and marketing

Sales and marketing expenses represent the costs of sales and marketing personnel, advertising and marketing campaigns, and campaign management.

Sales and marketing expenses decreased by $2,658 to $13,589 for the three months ended June 30, 2025 compared to $16,247 for the three months ended June 30, 2024. Sales and marketing expenses included severance costs of $63 and $410 for the three months ended June 30, 2025 and the three months ended June 30, 2024, respectively. Excluding severance costs, sales and marketing expenses decreased by $2,311 for the three months ended June 30, 2025.

The decrease in sales and marketing expense after excluding severance costs was primarily due to lower personnel related costs of $1,697, lower travel and other marketing related costs of $434, and other costs, including travel and entertainment, of $495. These decreases were offset by an increase in professional service costs of $315.

### General and administrative

General and administrative expenses represent management, finance, and support personnel costs in both the parent and subsidiary companies, which include professional services and consulting costs, in addition to other costs such as rent, stock-based compensation, and depreciation and amortization expense.

General and administrative expenses decreased by $608 to $42,909 for the three months ended June 30, 2025 compared to $43,517 for the three months ended June 30, 2024. General and administrative expenses included severance costs of $45 and business transformation costs of $31 for the three months ended June 30, 2025. General and administrative expenses included severance costs of $76 and business transformation costs of $1,072 for the three months ended June 30, 2024. Excluding severance costs and business transformation costs, general and administrative expenses increased by $464 for the three months ended June 30, 2025.

The increase in general and administrative expenses after excluding severance costs and business transformation costs, was primarily due to increased depreciation and amortization costs of $2,644, increased credit loss expense of $574, and increased personnel related costs of $272. These increases were offset by lower share-based compensation costs of $1,999, professional service costs of $298, and other operating costs, including recruiting fees, of $729.

### Interest and other income (expense), net

| Interest and other (expense) income, net | Three months ended June 30, 2025 | 2024 | % of Change |
| --- | ---: | ---: | ---: |
| Interest expense, net | $(9,954) | $(8,250) | 20.7% |
| Foreign exchange transaction gain (loss) | (914) | 818 | (211.7)% |
| Other (expense) income, net | (668) | 114 | (686.0)% |
| Total interest and other (expense), net | $(11,536) | $(7,318) | 57.6% |

### Interest expense, net

For the three months ended June 30, 2025, interest expense, net, increased by $1,704 or 20.7% compared to the three months ended June 30, 2024, primarily due to an increase in interest rates of 55 basis points and higher average outstanding borrowings of $12,660 over the comparative period.

### Foreign exchange transaction gain (loss)

For the three months ended June 30, 2025 and 2024, the Company recorded foreign exchange transaction losses and gains of $914 and $818, respectively, that were primarily attributable to fluctuations in foreign exchange rates for trade accounts receivables and payables denominated in currencies other than the functional currency of foreign entities.

### Liquidity and Capital Resources

### Liquidity

Our primary sources of liquidity are our cash and cash equivalents, cash from operations, and borrowings under our Amended and Restated Credit Agreement. As of June 30, 2025, we had unrestricted cash of approximately $33,427 and restricted cash of approximately $705. The Company had $40 available to draw under the Amended and Restated Credit Agreement, subject to the required covenants. The Amended and Restated Credit Agreement matures on August 29, 2026. With the Fifth Amendment, as described below, the Revolver was reduced to $411,000, and was fully drawn as of June 13, 2025. We incurred a net loss of $14,104 and generated cash from operating activities of $8,788 for the three months ended June 30, 2025.

Our principal cash requirements for the twelve-month period following this Report primarily consist of refinancing our Amended and Restated Credit Agreement and payment of interest and required principal payments thereunder in addition to personnel costs, contractual payment obligations, including office leases, cloud hosting costs, capital expenditures, minimum commitments under hosting agreements (see Liquidity and Capital Resources—Hosting Agreements below), cash outlays for income taxes, and cash requirements to fund working capital.

We have been and are continuing to explore various cost saving opportunities, namely through the Company’s transformation program, and we intend to continue seeking opportunities to generate additional revenue through operations. There can be no assurance that we will be successful in our plans described above. If we are unable to effectively implement additional cost reductions, generate additional revenue or refinance our Amended and Restated Credit Agreement or raise additional funding, we may be forced to delay, reduce or eliminate some or all of our strategic operational efforts and product and service expansion, and our business, financial condition and results of operations could be materially and adversely affected.

As described above, we are currently seeking to refinance the Amended and Restated Credit Agreement before August 29, 2025 and are exploring options to raise additional capital through a new credit facility with new lenders or the sale of equity securities or equity-linked or debt-financing arrangements. If we successfully refinance the Amended and Restated Credit Agreement by August 29, 2025 on acceptable terms, we believe our existing cash and cash equivalents, cash flow from operations and any available balance under a new financing arrangement would be sufficient to meet our working capital and other business requirements for at least 12 months from the filing date of this Report. However, our ability to meet our debt service obligations and to fund working capital, capital expenditures, and investments in our business will depend upon our future performance and our ability to access capital markets and refinance our Amended and Restated Credit Agreement, as well as financial, business, and other factors affecting our operations, many of which are beyond our control. These factors include general and regional economic, financial, competitive, legislative, regulatory, and other factors such as the U.S. and global economic climate uncertainty, the impact of tariffs, the state of the equity and debt markets and the ability to raise capital in such markets, health epidemics, economic and macro-economic factors like labor shortages, supply chain disruptions, and inflation, and geopolitical developments, including the conflict in Ukraine, the political climate related to China, and the conflict in Israel. We cannot guarantee we will generate sufficient cash flow from operations, or that future borrowings or capital markets will be available, in an amount sufficient to enable us to pay our debt, refinance our Amended and Restated Credit Agreement or to fund our other liquidity needs. See Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission on June 16, 2025, for additional information related to the foregoing risks.

### Capital Resources

Our outstanding secured indebtedness under the Amended and Restated Credit Agreement is $410,960 as of June 30, 2025. The maturity date of the Amended and Restated Credit Agreement is August 29, 2026, and the outstanding balance is classified as long-term debt, net of debt issuance costs of $10,457, on our consolidated balance sheets as of June 30, 2025. For further description of the terms of the Amended and Restated Credit Agreement, see Note 11—Debt under the heading “Revolver” in the notes to our condensed consolidated financial statements under Part I, Item 1 of this Report.

The collateral pledged to secure our secured debt, consisting of substantially all of our U.S. subsidiaries’ assets, would be available to the secured creditor in a foreclosure, in addition to many other remedies. Accordingly, any adverse change in our ability to service our secured debt could result in an event of default, cross default, and foreclosure or forced sale. Depending on the value of the assets, there could be little, if any, assets available for common stockholders in any foreclosure or forced sale.

Our Amended and Restated Credit Agreement also contains a maximum consolidated secured net leverage ratio and minimum consolidated interest coverage ratio. If we fail to satisfy these covenants, the lender may declare a default, which could lead to acceleration of the debt maturity. Any such default would have a material adverse effect on us.

The Company entered into a Fourth Amendment to the Amended and Restated Credit Agreement on August 6, 2024 to revise certain covenants and address certain other matters. The Company entered into a Fifth Amendment to the Amended and Restated Credit Agreement on June 13, 2025 to extend the maturity date of the Amended and Restated Credit Agreement from April 29, 2026 to August 29, 2026, revise certain covenants and address certain other matters. Refer to Note 11—Debt for further discussion. As of June 30, 2025, we were in compliance with all covenants under the Amended and Restated Credit Agreement.

As described above, we are currently seeking to refinance the Amended and Restated Credit Agreement before August 29, 2025 and are exploring options to raise additional capital through a new credit facility with new lenders or the sale of equity securities or equity-linked or debt-financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, it may be at a price and on terms and conditions that are less favorable to the Company, and the ownership of our existing stockholders will be diluted. If we raise additional financing by incurring new indebtedness, we may be subject to increased interest rates, increased fixed payment obligations and could also be subject to additional restrictive covenants and other operating restrictions that could adversely impact our ability to conduct our business. Any future indebtedness we incur may result in terms that could be less favorable to the Company. We cannot assure you that we will be able to refinance any of our indebtedness or enter into equity or equity-linked financing arrangements on commercially reasonable terms, or at all.

If the Company is unable to refinance the existing Amended and Restated Credit Agreement before August

29, 2025, the Company’s indebtedness under the Amended and Restated Credit Agreement would be reclassified as short-term debt, which could have a material adverse effect on the Company’s business and stock price. There can be no assurance that we will be able to raise additional capital. The inability to raise capital would adversely affect our ability to achieve our business objectives and our expectations, our liquidity and ability to operate our business, our stock price and our ability to continue as a going concern. See Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission on June 16, 2025, for more information regarding risks related to liquidity and capital resources.

### Hosting Agreements

We enter into hosting agreements with service providers, and, in some cases, those agreements include minimum commitments that require us to purchase a minimum amount of service over a specified time period (“the minimum commitment period”). The minimum commitment period is generally one year in duration, and the hosting agreements include multiple minimum commitment periods. Our minimum purchase commitments under these hosting agreements total approximately $221,229 over the next five fiscal years.

### Cash Flow Summary ($ in thousands)

| Consolidated statements of cash flows data: | Three months ended June 30, 2025 | 2024 | % of Change |
| --- | ---: | ---: | ---: |
| **Net cash provided by (used in) operating activities** | **$8,788** | **$(1,352)** | **(750.0)%** |
| Capital expenditures | (7,616) | (5,931) | 28.4% |
| **Net cash used in investing activities** | **$(7,616)** | **$(5,931)** | **28.4%** |
| Proceeds from borrowings | — | 17,000 | (100.0)% |
| Payment of debt issuance costs | (9,298) | — | 100.0% |
| Payment of deferred business acquisition consideration | (534) | — | 100.0% |
| Repayment of debt obligations | (40) | (7,000) | (99.4)% |
| Payment of withholding taxes for net share settlement of equity awards | (144) | (48) | 200.0% |
| Options exercised | 1,560 | 14 | 11,042.9% |
| **Net cash provided by (used in) financing activities** | **$(8,456)** | **$9,966** | **(184.8)%** |

### Operating Activities

Our cash flows from operating activities are primarily driven by revenue generated from user acquisition and advertising activity, offset by the cash costs of operations, and are significantly influenced by the timing of and fluctuations in receipts from customers and payments to our carrier and publisher partners as well as other vendors. Our future cash flows from operating activities will be diminished if we cannot increase our revenue levels and manage costs appropriately. Cash provided by (used in) operating activities was $8,788 for the three months ended June 30, 2025, compared to $(1,352) for the three months ended June 30, 2024. The increase of $10,140 was due to the following:

- $11,052 decrease in net loss;
- $4,736 net decrease due to changes in operating assets and liabilities, driven primarily by working capital changes, specifically a decrease in the change in accounts payable due to lower operating expenses as well as acceleration of billing processes, offset by an increase in the change in accounts receivable due to increased revenue and accrued revenue share, which increased with the timing of publisher invoices received towards the end of the quarter;
- $3,824 net increase in non-cash charges during the three months ended June 30, 2025 primarily related to increased depreciation and amortization and foreign exchange transaction loss, offset by a decrease in share-based compensation expense for the three months ended June 30, 2024.

### Investing Activities

Our primary investing activities have consisted of acquisitions of businesses, purchases of property and equipment, and capital expenditures in support of creating and enhancing our technology infrastructure. For the three months ended June 30, 2025, net cash used in investing activities increased by $1,685 to $7,616. Our cash used in investing activities for the three months ended June 30, 2025 and June 30, 2024, was primarily comprised of capital expenditures related to internally-developed software.

### Financing Activities

For the three months ended June 30, 2025, net cash used in financing activities was $8,456, which was comprised of: (1) the repayment of debt obligations of $40, (2) a payment of $9,298 for debt issuance costs, and (3) payment of payroll withholding taxes for net share settlement of equity awards of $144. These cash outflows were offset by cash inflows comprising of stock option exercises of $1,560.

For the three months ended June 30, 2024, net cash provided by financing activities was $9,966, which was comprised of: (1) the repayment of debt obligations of $7,000, and (2) payment of payroll withholding taxes for net share settlement of equity awards of $48. These cash outflows were offset by cash inflows from proceeds from borrowings of $17,000 and stock option exercises of $14.

### Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited financial statements. The preparation of these financial statements is based on management’s selection and application of accounting policies, some of which require management to make judgments, estimates, and assumptions that affect the amounts reported in the financial statements and notes. For more information regarding our critical accounting policies and estimates, please see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies,” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, and Note 2—Basis of Presentation and Summary of Significant Accounting Policies,” of this Report on Form 10-Q for our fiscal first quarter ended June 30, 2025.

## Market risk

As filed, 3,097 characters.

The Company has operations both within the U.S. and internationally and is exposed to market risks in the ordinary course of business - primarily interest rate and foreign currency exchange risks.

### Interest Rate Fluctuation Risk

The primary objective of the Company’s investment activities is to preserve principal while maximizing income without significantly increasing risk. The Company’s cash and cash equivalents consist of cash and deposits, which are sensitive to interest rate changes.

The Company’s borrowings under its Amended and Restated Credit Agreement are subject to variable interest rates and thus expose the Company to interest rate fluctuations, depending on the extent to which the Company utilizes its Amended and Restated Credit Agreement. As of June 30, 2025, the Company had $410,960 drawn against the Amended and Restated Credit Agreement and had $40 available to draw on the revolving line of credit under the Amended and Restated Credit Agreement, subject to the required covenants. As of June 30, 2025, the interest rate was 9.92% and the unused line of credit fee was 0.35%. Market interest rates have increased significantly, and if market interest rates continue to materially increase, the Company’s results of operations could be adversely affected. A hypothetical increase in market interest rates of 100 basis points would result in an increase in interest expense of $10 per year for every $1,000 of outstanding debt under the Company’s Amended and Restated Credit Agreement. The Company has not used any derivative financial instruments to manage its interest rate risk exposure. The Company is potentially exposed to refinancing risk in the future, should the Company seek to refinance its debt or raise new debt. As such, the type, cost, and terms of any new debt potentially raised in the future may differ from that of our existing debt agreements.

### Foreign Currency Exchange Risk

Foreign currency exchange risk is the risk that the Company’s results of operations and/or financial condition could be affected by changes in exchange rates. The Company has transactions denominated in currencies other than the U.S. dollar, principally the euro, Turkish lira, and British pound, which expose the Company’s operations to risk from the effects of exchange rate movements. Such movements may impact future revenues, expenses, and cash flows. In certain of the Company’s foreign operations, the Company transacts primarily in the U.S. dollar, including for net revenue, revenue share, and employee-related compensation costs, which reduces the Company’s exposure to foreign currency exchange risk. In addition, gains (losses) related to translating certain cash balances, trade accounts receivable and payable balances, and intercompany balances also impact net income. As the Company’s foreign operations expand, results may be impacted further by fluctuations in the exchange rates of the currencies in which the Company does business. The Company has not used any derivative financial instruments to manage its foreign currency exchange risk exposure.

## Controls and procedures

As filed, 2,132 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, regardless of how well they were designed and are operating, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Report, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

### Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) or 15d-15(d) of the Exchange Act during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 261 characters.

The Company is not aware of any material changes to the risk factors set forth under Part I, Item 1A, “Risk Factors,” in its Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission on June 16, 2025.

Filed Aug 5, 2025.
Source: SEC EDGAR, the filing index for accession 0001628280-25-037888. Last ingested by Listed: Nov 5, 2026, 12:38 ET. No prices; not investment advice.