APPS Q3 Earnings Beat Estimates, Revenues Up Y/Y, Shares Fall

Digital Turbine APPS shares have declined 1.8% since the company reported its third-quarter fiscal 2026 results on Feb. 3. In the reported quarter, Digital Turbine experienced softness in U.S. device volumes, which impacted the supply side of its operations.

The company reported third-quarter fiscal 2026 non-GAAP earnings of 16 cents per share, which beat the Zacks Consensus Estimate by 77.78%. The company reported non-GAAP earnings of 5 cents in the year-ago quarter.

The company reported non-GAAP revenues of $151.4 million, which increased 12% on a year-over-year basis. The growth was driven by strong demand, expanding global supply and great execution by the team. 

Segment-wise, revenues from the On Device Solutions contributed 65.8% to total revenues in the third quarter. The figure increased approximately 9% year over year to nearly $100 million. App Growth Platform revenues contributed 34.8% to total revenues. The figure increased 19% year over year to $53 million.
 

Digital Turbine, Inc. Price, Consensus and EPS Surprise

Digital Turbine, Inc. price-consensus-eps-surprise-chart | Digital Turbine, Inc. Quote

The share price of Digital Turbine is down 5.06% at the time of writing this article.

APPS Q3 Details

The non-GAAP gross margin expanded 520 basis points (bps) year over year to 49%.

Sales and marketing expenses, as a percentage of revenues, decreased 200 bps from the year-ago quarter’s level to 9.5%.

General and administrative expenses, as a percentage of revenues, decreased from the year-ago quarter’s level of 31.8% to 19.1%.

Product development expenses, as a percentage of revenues, decreased 100 bps to 6.5%.

Non-GAAP EBITDA was $38.8 million as compared with $22 million in the year-ago quarter, indicating an increase of 76% year over year.

Digital Turbine reported a non-GAAP operating margin of 14.3%, up from an operating loss of 9.5% reported in the year-ago quarter.

Balance Sheet

As of Dec. 31, 2025, cash and cash equivalents (including restricted cash) were $40 million compared with $1 million as of Sept. 30, 2025. 

In the reported quarter, the company generated a cash flow from operations of $14.17 million compared with $14.46 million in the previous quarter.

In the reported quarter, the company generated free cash flow of $6.4 million compared with $7 million in the previous quarter.

APPS FY26 Guidance

For the full fiscal year 2026, APPS expects non-GAAP revenues between $553 million and $558 million. and adjusted EBITDA in the range of $114 million to $117 million.

APPS’ Zacks Rank & Stocks to Consider

Digital Turbine currently carries a Zacks Rank #3 (Hold).

Ciena CIEN, Advanced Energy Industries AEIS, and MKS MKSI are some other better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. Ciena and MKS presently sport a Zacks Rank #1 (Strong Buy) each, while Advanced Energy Industries presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Ciena have gained 184.7% in the past 12-month period. CIEN is likely to report its first-quarter fiscal 2026 results on Mar. 10, 2026.

Shares of Advanced Energy Industries have gained 123.4% in the past 12-month period. AEIS is likely to report its fourth-quarter 2025 results on Feb. 10, 2026.

Shares of MKS have gained 97.3% in the past 12-month period. MKSI is likely to report its fourth-quarter 2025 results on Feb. 17, 2026.

 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research