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What's in Store for Digital Turbine (APPS) in Q4 Earnings?

Zacks Equity Research
·3-min read

Digital Turbine APPS is set to release fourth-quarter fiscal 2020 results on Jun 2.

For the quarter, Digital Turbine expects revenues between $33.2 million and $34.5 million. The Zacks Consensus Estimate for revenues is currently pegged at $38.4 million, indicating 41.2% growth from the figure reported in the year-ago quarter.

Moreover, the Zacks Consensus Estimate for earnings stands at 5 cents per share, unchanged over the past 30 days, and suggests growth of 66.7% from the figure reported in the year-ago quarter.

Over the trailing four quarters, Digital Turbine’s earnings beat the Zacks Consensus Estimate on three occasions and missed in the other, the average positive surprise being 52.08%.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

Digital Turbine is likely to have benefited from the growing demand for its cloud-based mobile software offerings as enterprises continue to shift from on-premise to cloud environments especially amid coronavirus lockdown.

Additionally, strength in the company’s mobile device management platform, Ignite, which gained significant traction during the third quarter is likely to have continued the momentum in the to-be-reported quarter.

Digital Turbine, Inc. Price and EPS Surprise

Digital Turbine, Inc. Price and EPS Surprise
Digital Turbine, Inc. Price and EPS Surprise

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

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Moreover, steady contributions from products like SingleTap, Folders, App Wizard and Notifications are expected to have contributed to the top line.

During the quarter, the company focused on adding strategic resources to improve international revenue per device and scale partnerships and infrastructure.

An expanded partner base, which includes Samsung, America Movil, Pandora, Disney DIS, Netflix, Twitter, Pinterest and others, is likely to have enhanced penetration in the fourth quarter.

Till Feb 10, the company’s software was installed on more than 7 million unlocked Samsung devices across more than 75 countries. Developments related to this initiative are likely to have boosted the company’s growth and credibility among international advertisers and other global OEM partners.

Also, notable partnerships in the United States with the likes of Verizon VZ and AT&T T are expected to have helped the company pull demand from its media partners in the United States during the quarter.

For example, during the third quarter, Digital Turbine became the official partner to deliver Disney+ on Android devices. Notably, the company already handles distribution and management of high profile applications such as Facebook, Netflix and Apple music for Verizon.

Moreover, Digital Turbine announced a global partnership with LG in the quarter while extending partnership with AT&T in Mexico. The latter has 20 million subscribers in the country.

However, Digital Turbine’s top line is expected to reflect weakness in advertising demand amid coronavirus outbreak as high profile multinational advertising companies across categories including brands, games, and mobile first applications reduced capital expenditure due to business uncertainties.

Key Development in Q4

This Zacks Rank #3 (Hold) company concluded the acquisition of Mobile Posse with an aim to strengthen its comprehensive mobile content delivery platform, which is anticipated to boost adoption of innovative offerings further.

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Zacks Investment Research