Digital Turbine, Inc. engages in the innovation of media and mobile communications which helps to deliver an end-to-end platform solution for mobile operators, application developers, device original equipment manufacturers (OEM), and other third parties. It operates through the Advertising segment, which is comprised of Operator and OEM (O&O) business. The O&O is an advertiser solution for unique and exclusive carrier and OEM inventory. The company was founded on November 6, 1998 and is headquartered in Austin, TX.
The Company has a history of net losses, may incur substantial net losses in the future, and may not achieve profitability.
We have a limited operating history for our current portfolio of assets, which may make it difficult to evaluate our business.
Our financial results could vary significantly from quarter to quarter and are difficult to predict.
If we are unsuccessful in establishing and increasing awareness of our brand and recognition of our products and services or if we incur excessive expenses promoting and maintaining our brand or our products and services, our potential revenues could be limited, our costs could increase and our operating results and financial condition could be harmed.
Our business is dependent on the continued growth in usage of smartphones, tablets and other mobile connected devices.
If mobile connected devices, their operating systems or content distribution channels, including those controlled by our competitors, develop in ways that prevent advertising or content from being delivered to their users, our ability to grow our business will be impaired.
If we fail to deliver our products and services ahead of the commercial launch of new mobile handset models, our sales may suffer.
We may be unable to develop and introduce in a timely way new products or services, and our products and services may have defects, which could harm our brand.
If we fail to maintain and enhance our capabilities for our offerings to a broad array of mobile operating systems, our attractiveness to wireless carriers, equipment manufacturers, and application developers will be impaired, and our sales could suffer.
A majority of our revenues are currently being derived from a limited number of wireless carriers, advertisers and application developers, if any one of these customers were to terminate their agreement with us or if they were unable to fulfill their payment obligations, our financial condition and results of operations would suffer.
We may be subject to legal liability associated with providing mobile and online services.
Our business is dependent on our ability to maintain and scale our infrastructure, including our employees and 3rd parties; and any significant disruption in our service could damage our reputation, result in a potential loss of customers and adversely affect our financial results.
Our products, services and systems rely on software that is highly technical, and if it contains undetected errors, our business could be adversely affected.
We plan to continue to review opportunities and possibly make acquisitions, which could require significant management attention, disrupt our business, result in dilution to our stockholders, and adversely affect our financial condition and results of operations.
The Company’s business is highly dependent on decisions and developments in the mobile device industry over which the Company has no control.
The Company’s business may depend in part on its ability to collect and use location-based information about mobile connected device users.
The Company does not have long-term agreements with its advertiser clients, and it may be unable to retain key clients, attract new clients or replace departing clients with clients that can provide comparable revenue to the Company.
The Company’s business practices with respect to data could give rise to liabilities or reputational harm as a result of governmental regulation, legal requirements or industry standards relating to consumer privacy and data protection.
The Company’s business may involve the use, transmission and storage of confidential information, and the failure to properly safeguard such information could result in significant reputational harm and monetary damages.
Changes to current accounting principles could have a significant effect on the Company’s reported financial results or the way in which it conducts its business.
System failures could significantly disrupt the Company’s operations and cause it to lose advertiser clients or advertising inventory.
System security risks, data protection breaches, cyber-attacks, and systems integration issues could disrupt our internal operations or information technology services provided to customers, and any such disruption could reduce our expected revenue, increase our expenses, damage our reputation and adversely affect our stock price.
If our goodwill becomes impaired, we may be required to record a significant charge to earnings.
Our revenues may fluctuate significantly based on mobile device sell-through, over which we have no control.
Activities of the Company’s advertiser clients could damage the Company’s reputation or give rise to legal claims against it.
Loss or reduction of business from the Company’s large advertiser clients could have a significant impact on the Company’s revenues, results of operations and overall financial condition.
Mobile applications and advertising are relatively new, as are our products which are evolving and growth in revenues from those areas is uncertain and changes in the industry may negatively affect our revenue and financial results.
Our growth and monetization on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that we do not control as we are largely an Android-based technology provider.
We currently rely on wireless carriers and OEMs to distribute our products and services and thus to generate much of our revenues. The loss of or a change in any of these significant carrier relationships could cause us to lose access to their subscribers and thus materially reduce our revenues.
The mobile advertising business is an intensely competitive industry, and we may not be able to compete successfully.
The mobile advertising market may develop more slowly than expected, which could harm the business of the Company.
The Company does not control the mobile networks over which it provides its advertising services.
The Company may not be able to enhance its mobile advertising platform to keep pace with technological and market developments.
The Company’s advertising business depends on its ability to collect and use data to deliver applications, and any limitation on the collection and use of this data could significantly diminish the value of the Company’s services and cause it to lose clients and revenue.
The Company’s business depends on its ability to maintain the quality of its advertiser content.
The markets in which we operate are highly competitive, and many of our competitors have significantly greater resources than we do.
End user tastes are continually changing and are often unpredictable; if we fail to develop and publish new products and services that achieve market acceptance, our sales would suffer.
We rely on the current state of the law in certain territories where we operate our business and any adverse change in such laws may significantly adversely impact our revenues and thus our operating results and financial condition.
We rely on our current understanding of regional regulatory requirements pertaining to the marketing, advertising and promotion of our products and services, and any adverse change in such regulations, or a finding that we did not properly understand such regulations, may significantly impact our ability to market, advertise and promote our products and services and thereby adversely impact our revenues, our operating results and our financial condition.
The strategic direction of the Company's businesses is in early stages and not completely proven or certain.
Wireless communications technologies are changing rapidly, and we may not be successful in working with these new technologies.
The complexity of and incompatibilities among mobile handsets may require us to use additional resources for the development of our products and services.
If wireless subscribers do not continue to use their mobile handsets to access mobile content and other applications, our business growth and future revenues may be adversely affected.
Our industry is subject to risks generally associated with advertising content delivery, any of which could significantly harm our operating results.
A shift of technology platform by wireless carriers and mobile handset manufacturers could lengthen the development period for our offerings, increase our costs and cause our offerings to be of lower quality or to be published later than anticipated.
System or network failures could reduce our sales, increase costs or result in a loss of end users of our products and services.
Our business depends on the growth and maintenance of wireless communications infrastructure.
Actual or perceived security vulnerabilities in mobile handsets or wireless networks could adversely affect our revenues.
Changes in government regulation of the media and wireless communications industries may adversely affect our business.
Our business and growth may suffer if we are unable to hire and retain key personnel, who are in high demand.
Growth may place significant demands on our management and our infrastructure.
The acquisition of other companies, businesses or technologies could result in operating difficulties, dilution and other harmful consequences.
Changes to financial accounting standards could make it more expensive to issue stock options to employees, which would increase compensation costs and might cause us to change our business practices.
The effects of the past recession in the United States and general downturn in the global economy, including financial market disruptions, could have an adverse impact on our business, operating results or financial condition.
We face added business, political, regulatory, operational, financial and economic risks as a result of our international operations and distribution, any of which could increase our costs and hinder our growth.
The Company is expanding and developing internationally, and our increasing foreign operations and exposure to fluctuations in foreign currency exchange rates may increase.
If we do not adequately protect our intellectual property rights, it may be possible for third parties to obtain and improperly use our intellectual property and our competitive position may be adversely affected.
Third parties may sue us for intellectual property infringement, which, if successful, may disrupt our business and could require us to pay significant damage awards.
Litigation may harm our business.
Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, damages caused by malicious software and other losses.
Our business in countries with a history of corruption and transactions with foreign governments, including with government owned or controlled wireless carriers, increase the risks associated with our international activities.
Government regulation of our marketing methods could restrict our ability to adequately advertise and promote our content, products and services available in certain jurisdictions.
The Company has secured and unsecured indebtedness, which could limit its financial flexibility.
To service our debt and fund our other capital requirements, we will require a significant amount of cash, and our ability to generate cash will depend on many factors beyond our control.
The market price of our common stock is likely to be highly volatile and subject to wide fluctuations, and you may be unable to resell your shares at or above the current price.
If we fail to comply with the continued listing requirements of the NASDAQ Capital Market, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.
The sale of securities by us in any equity or debt financing, or the issuance of new shares related to an acquisition, could result in dilution to our existing stockholders and have a material adverse effect on our earnings.
We may choose to raise additional capital to accelerate the growth of our business, and we may not be able to raise capital to grow our business on terms acceptable to us or at all.
Recent regulatory actions may adversely affect the trading price and liquidity of the warrants and our common stock.
The exercise price for the warrants may not be adjusted for all dilutive events.
There is no public market for the warrants, which could limit their respective trading price or the investors' ability to sell them.
Exercise of the warrants will dilute the ownership interest of existing stockholders, or may otherwise depress the market price of our common stock.
Volatility in the market price and trading volume of our common stock could adversely impact the trading price of the warrants.
Future sales of our common stock in the public market could lower the market price for our common stock and adversely impact the trading price of the warrants.
If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock, our stock price and trading volume could decline.
We do not anticipate paying dividends.
If we fail to maintain an effective system of internal controls, we might not be able to report our financial results accurately or prevent fraud; in that case, our stockholders could lose confidence in our financial reporting, which could negatively impact the price of our stock.
Maintaining and improving our financial controls and the requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified members for our Board of Directors.
All numbers are in thousands, except share and per share amounts.
Digital Turbine, through its subsidiaries, innovates at the convergence of media and mobile communications, delivering an end-to-end platform solution for mobile operators, application developers, device original equipment manufacturers ("OEMs"), and other third parties to enable them to effectively monetize mobile content and generate higher value user acquisition. Currently Digital Turbine has delivered over 2 billion application pre-loads on over 260 million devices across thirty plus Operator and OEM (O&O) partnerships. The Company operates this business as one reportable segment – Advertising.
Prior to the sale of the A&P Assets described above under Note 4. "Discontinued Operations," the Advertising reporting segment also included the A&P Assets as an operating segment within Advertising.