Digital Turbine, Inc. (NASDAQ:APPS) Q3 2024 Earnings Call Transcript

Omar Dessouky: And could I just ask as well, how should we think about the strategic value of these deals kind of coming together, right? You have the Aptoide, you have ONE Store. How do we think about synergies and the strategic value across regions and with multiple assets now?

Bill Stone: Yes, I think what’s important for investors is if you believe that the alternative app store space is going to grow and be extremely disruptive over the upcoming years, which obviously we believe that, we believe we’re uniquely positioned in partnering with the companies that continue to bring the capabilities because in order to enable this, there’s a lot of things behind the scenes that have to happen, whether that’s porting the apps into the alternative versions, managing the payments, doing it in a friction freeway with customers, having the publisher relationships to do multi-variants, I can go on and on about all the different things. But anybody that wants to do that, whether it’s us direct or whether it’s with other mega cap tech companies that have ambitions to go do this, there’s a lot of those plumbing and electricity things that have to happen that make us super uniquely positioned to go out and help enable that.

So now having these relationships with these companies all together is something that I think is going to make it easier for a one-stop shop for any app publisher to come to what we’re doing to be able to solve the single biggest issue they have on their P&L, which is the egregious 30% tax that is getting paid to the two that are running the duopoly today.

Operator: Our next question comes from Dan Day from B Riley Securities.

Dan Day: Yes, guys, thanks for taking the question. So Bill, in the prepared remarks you talked about changes in leadership and new org structure. Just it would be great if you could elaborate on that are you planning to bring in totally new people to run certain business lines, just sort of switching around positions or reports. It should be good to get a sense of what you’re looking to accomplish with those changes.

Bill Stone: Yes, absolutely. I think the biggest issue we need to improve our execution is just getting alignment around the organization. So we need to make faster decisions. We need to have clearer accountability in what we’re driving right now. So one of the things we’re going to be doing is moving our business into a GM model where we’ll be able to have clearer accountability to make results and drive the short-term profit and loss for different business lines each quarter. So we’re making leadership changes to accomplish that, but this is really about us just getting better focus externally with our customers and better alignment internally between our different functions. And so we’ve got to change what we’re doing and we’ve done a nice job assembling the companies, the legacy companies we’ve acquired and now have standardized a lot of things of how we’ve worked versus the legacy DT way versus the AdColony way versus the fiber way and so on.

So now we’re at a point and now where we can take that standardization and now decentralize that standardization out that’s closer to customers and have clear accountability internally to who’s making decisions. So what we’re doing is really aligned around that.

Dan Day: Okay, great. Thanks. And then just for me, you’ve consistently said that US RPD is sit around over $5 for the last few quarters. Has that helped pretty steady even if devices have been a lot softer than you thought?

Bill Stone: Yes, device RPDs have been pretty consistent. They were marginally down in the December quarter from the September quarter and that was 100% driven by those two execution issues I mentioned earlier in my remarks. If you take out those two issues, it would have accrued it again.

Operator: Our next question comes from Anthony Stoss from Craig-Hallum.

Anthony Stoss: Hey, Bill, I just wanted to follow up on your comment about why the SingleTap trial wasn’t live. You talked about administrative issues. Can you give us a little bit more color on that when you expect that to be resolved? And then I had a couple of follow-ups.

Bill Stone: Yes, sure, Tony. Yes, we, as we know, we’ve all been impatiently waiting for us to go live and we’d work through the kind of final tech and ops issues, yes, that may be confident and talk about it. Yes, there’s a final administrative decision that the partner wants to make with some other considerations that they’re looking at bigger picture and they’re going through that internal discussion right now. So as soon as that discussion is done, then I expect us to go live with the pilot. I don’t have a timeline at least given our past here that I want to commit to on the call today, but I would just consider it to say it’s important for both sides to work through that.

Anthony Stoss: Got it. Then maybe, this is probably more for Barrett, for your March guide, the down sequential revenues, can you break out how much of the decline was from ODS or your expectations versus AGP? Are they both down equally or is one worse than the other? Just a question.

Barrett Garrison: Hey, Tony. Yes. Here’s what I would say. We obviously don’t guide by segment, but I would say our seasonality is that if you look back at our seasonality for AGP business, it’s relatively constant. We got a little bit of headwind I mentioned on as we completed the consolidation of the exchange. The real factor that on the change is kind of an accelerating decline on the Q4 US devices that we’ve contemplated in our guidance.