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What changed in Digital Turbine, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Digital Turbine, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+302 added−243 removedSource: 10-K (2025-06-16) vs 10-K (2024-05-28)

Top changes in Digital Turbine, Inc.'s 2025 10-K

302 paragraphs added · 243 removed · 193 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeContent Media optimizes revenue by a combination of: • Programmatic Ad Partner Revenue - advertising within the content media that’s sold on an ad exchange at a market rate (cost-per-thousand (“CPM”)); • Sponsored Content - sponsored content media from third party content providers, presented similarly to an ad, that is monetized when a recommended story is viewed (cost-per-click (“CPC”)); and • Editorial Content - owned or licensed media, presented similarly to an ad, that is monetized when the media is clicked on (CPC). • User acquisition tools including SingleTap ® and the Company’s DSP (“DT DSP”) that removes friction in the app install process, delivering apps to devices with a single touch, resulting in higher conversion rates.
Biggest changeContent Media optimizes revenue by a combination of: • Programmatic Ad Partner Revenue - advertising within the content media that’s sold on an ad exchange at a market rate (cost-per-thousand (“CPM”)); • Sponsored Content - sponsored content media from third party content providers, presented similarly to an ad, which is monetized when a recommended story is viewed (cost-per-click (“CPC”)); and • Editorial Content - owned or licensed media, presented similarly to an ad, which is monetized when the media is clicked on (CPC). • User acquisition tools including SingleTap ® and the Company’s DSP (“DT DSP”) that removes friction in the app install process, delivering apps to devices with a single touch, resulting in higher conversion rates. 6 Table of Contents App Growth Platform The Company’s App Growth Platform (“AGP”) business consists of Advertising Solutions and Ad Monetization Solutions. • Advertising Solutions serve two key segments: (1) App Developers and (2) Brands and Agencies - enabling them to execute targeted mobile campaigns on the Company’s direct app inventory. • App Developers and other performance-focused advertisers execute mobile user acquisition campaigns for their apps and products on the Company’s direct mobile app inventory.
We believe that the principal competitive factors in the mobile app ecosystems are: • the ability to enhance and improve technologies and offerings; • knowledge, expertise, and experience in the mobile app ecosystem; • relationships with third parties in the mobile app ecosystem, including app publishers and developers; • the ability to reach and target large numbers of users; • the ability to identify and execute on strategic transactions; 7 Table of Contents • the ability to successfully monetize mobile apps; • the pricing and perceived value of offerings; • brand and reputation; and • ability to expand into new offerings and geographies.
We believe that the principal competitive factors in the mobile app ecosystems are: 7 Table of Contents • the ability to enhance and improve technologies and offerings; • knowledge, expertise, and experience in the mobile app ecosystem; • relationships with third parties in the mobile app ecosystem, including app publishers and developers; • the ability to reach and target large numbers of users; • the ability to identify and execute on strategic transactions; • the ability to successfully monetize mobile apps; • the pricing and perceived value of offerings; • brand and reputation; and • ability to expand into new offerings and geographies.
Available Information Our Annual Reports, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website at https://www.digitalturbine.com generally as soon as reasonably practicable after such reports are electronically filed or furnished with the SEC.
Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website at https://www.digitalturbine.com generally as soon as reasonably practicable after such reports are electronically filed or furnished with the SEC.
We have patent and patent applications in the U.S. and outside the U.S., including in Israel and Canada, and we own and use trademarks and service marks on or in connection with our proprietary technology and related services, including both unregistered common law marks and issued trademark registrations.
We have patents and patent applications in the U.S. and outside the U.S., including in Israel and Canada, and we own and use trademarks and service marks on or in connection with our proprietary technology and related services, including both unregistered common law marks and issued trademark registrations.
Our Products and Services The Company reports its results of operations through the following two segments, each of which represents an operating and a reportable segment, as follows: On Device Solutions The Company’s ODS business consists of products and services that simplify the discovery and delivery of mobile apps and content media for device end-users.
Our Products and Services The Company reports its results of operations through the following two segments, each of which represents an operating and a reportable segment, as follows: On Device Solutions The Company’s On Device Solutions (“ODS”) business consists of products and services that simplify the discovery and delivery of mobile apps and content media for device end-users.
For the fiscal years ended March 31, 2024, 2023, and 2022, the Company did not generate revenue from any single supply partner that was more than 10% of our net revenue. Further, no single customer was responsible for more than 10% of our net revenue during the fiscal years ended March 31, 2024, 2023, and 2022.
For the fiscal years ended March 31, 2025, 2024, and 2023, the Company did not generate revenue from any single supply partner that was more than 10% of our net revenue. Further, no single customer was responsible for more than 10% of our net revenue during the fiscal years ended March 31, 2025, 2024, and 2023.
The Company 8 Table of Contents offers brand and programmatic advertising services under customer contract arrangements with third-party advertisers and agencies, generally in the form of insertion orders that specify the type of arrangement for a budgeted amount. These customer contracts are generally short-term in nature (less than one-year).
The Company offers brand and programmatic advertising services under customer contract arrangements with third-party advertisers and agencies, generally in the form of insertion orders that specify the type of arrangement for a budgeted amount. These customer contracts are generally short-term in nature (less than one-year).
Generally, the Company compensates app publishers through a revenue share model or via direct CPM, cost-per-install (“CPI”), cost-per-placement (“CPP”), or cost-per-acquisition (“CPA”) arrangements. Such payments to app publishers are recorded as an expense in our consolidated financial statements.
Generally, the Company compensates app publishers through a 8 Table of Contents revenue share model or via direct CPM, cost-per-install (“CPI”), cost-per-placement (“CPP”), or cost-per-acquisition (“CPA”) arrangements. Such payments to app publishers are recorded as an expense in our consolidated financial statements.
Total product development costs incurred for the fiscal years ended March 31, 2024, 2023, and 2022, were $54,157, $56,486, and $52,723, respectively. Intellectual Property We consider our trademarks, copyrights, trade secrets, patents, and other intellectual property rights, including those in our know-how, and the software code of our proprietary technology to be, in the aggregate, material to our business.
Total product development costs incurred for the fiscal years ended March 31, 2025, 2024, and 2023, were $39,464, $54,157, and $56,486, respectively. Intellectual Property We consider our trademarks, copyrights, trade secrets, patents, and other intellectual property rights, including those in our know-how, and the software code of our proprietary technology to be, in the aggregate, material to our business.
People and Culture We believe the strength of our workforce is critical to our success as we strive to become a more inclusive and diverse technology company.
Human Capital Resources and Culture We believe the strength of our workforce is critical to our success as we strive to become a more inclusive and diverse technology company.
Culture and Values: We have adopted our culture values of Hustle, Results, Accountability, Global, Freedom and Laugh to help create and foster a culture where every employee is empowered, engaged and trusted to be their best at work.
Culture and Values: We have adopted our culture values of Hustle, Results, Accountability, Global, Freedom and Laugh to help create and foster a culture where every employee is empowered, engaged and trusted to be their best at work. We welcome people of different backgrounds, experiences, abilities, and perspectives.
In addition, substantially all employees receive a new-hire long-term incentive equity grant and an annual long-term incentive equity grant, based on performance. We also provide our employees twelve weeks of paid short-term disability at 100% of base pay, which includes parental leave. Diversity and Inclusion: We take great pride in our focus and commitment to diversity and inclusion.
In addition, during 2024 and 2025, substantially all employees receive a new-hire long-term incentive equity grant and an annual long-term incentive equity grant, based on performance. We also provide our employees twelve weeks of paid short-term disability at 100% of base pay, which includes parental leave.
As of March 31, 2024, we employed 754 full-time employees globally, including 335 employees in North America, 337 employees in Europe and the Middle East, 68 employees in Asia Pacific, and 14 employees in Latin America.
As of March 31, 2025, we employed 647 full-time employees globally, including 285 employees in North America, 296 employees in Europe and the Middle East, 53 employees in Asia Pacific, and 13 employees in Latin America.
We sponsor and support our Community Action Teams, which is an employee-led program designed to create purposeful action to build a stronger and better-connected team.
We embed diverse perspectives in our mindset, products, and teams to empower an equitable and culturally fluent environment. Building and continuously fostering this culture within our teams makes us better collaborators, partners, and innovators. We sponsor and support our Community Action Teams, which is an employee-led program designed to create purposeful action to build a stronger and better-connected team.
The Community Action Teams have helped drive meaningful advancements in on-boarding, cross-functional understanding, a mentoring program, and a Digital Turbine Gives campaign where employees volunteer in the community over a six-week period on an annual basis .
The Community Action Teams have helped drive meaningful advancements in on-boarding, cross-functional understanding, a mentoring program, and a Digital Turbine Gives campaign where employees volunteer in their local communities on a regular basis. 9 Table of Contents Health, Safety, and Wellness: The success of our business is fundamentally connected to the well-being of our people.
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App Growth Platform The Company’s AGP business consists of Advertising Solutions and Ad Monetization Solutions. • Advertising Solutions serve two key segments: (1) App Developers and (2) Brands and Agencies - enabling 6 Table of Contents them to execute targeted mobile campaigns on the Company’s direct app inventory. • App Developers and other performance-focused advertisers execute mobile user acquisition campaigns for their apps and products on the Company’s direct mobile app inventory.
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We seek a diverse and inclusive work environment and transparently measure our progress to ensure that our employee populations are reflective of the communities in which we reside. We evaluate all of our people practices, particularly in talent acquisition and pay equity.
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We benchmark our demographics to our industry , both at an overall level and a professional category level (VPs and above, directors, managers, individual contributors and administrative), and note that we continue to make progress each year.
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Workplace Flexibility: As part of our “Freedom” value, and before the COVID-19 pandemic drove a shift to remote work, we established a workplace strategy to provide more flexible work options to our employees.
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As a result, we had process, culture and technology in place that allowed us to seamlessly pivot to a fully remote 9 Table of Contents workforce following the onset of the COVID-19 pandemic. As the COVID-19 pandemic has abated and recognizing the importance of in-person collaboration, we have instituted “return-to-office” policies.
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Employees that are located near our office locations work in-person based on the needs of their teams. As a result, we are able to continue to offer flexibility to our employees while enhancing collaboration and effectiveness among our teams. Health, Safety, and Wellness: The success of our business is fundamentally connected to the well-being of our people.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks affecting our international operations include: • challenges caused by distance, language and cultural differences; • the burdens of complying with multiple and conflicting foreign laws and regulations, including complications due to unexpected changes in these laws and regulations; • higher costs associated with doing business internationally; • difficulties in staffing and managing international operations; • greater fluctuations in sales to customers, end users, and through carriers in developing countries, including longer payment cycles and greater difficulty collecting accounts receivable; • protectionist laws and business practices that favor local businesses in certain countries; • foreign exchange controls that might prevent us from repatriating income earned outside the U.S.; 11 Table of Contents • geopolitical actions targeting or addressing international regions or countries, including China; • the servicing of regions by many different carriers; • imposition of public sector controls, including price controls; • political, economic, and social instability; • restrictions on the export or import of technology; • trade and tariff restrictions; • variations in tariffs, quotas, taxes, and other market barriers; and • reduced protection for intellectual property rights in some countries and practical difficulties in enforcing intellectual property rights in countries other than the U.S.
Biggest changeRisks affecting our international operations include: • challenges caused by distance, language and cultural differences; • the burdens of complying with multiple and conflicting foreign laws and regulations, including complications due to unexpected changes in these laws and regulations; • higher costs associated with doing business internationally; • difficulties in staffing and managing international operations; • greater fluctuations in sales to customers, end users, and through carriers in developing countries, including longer payment cycles and greater difficulty collecting accounts receivable; • foreign exchange controls that might prevent us from repatriating income earned outside the U.S.; • the servicing of regions by many different carriers; • imposition of public sector controls, including price controls; • political, economic, and social instability; • restrictions on the export or import of technology; • protectionist laws and business practices that favor local businesses in certain countries; • variations in tariffs, quotas, taxes, and other market barriers; • the introduction of new or increased import duties or tariffs from a number of different countries; • geopolitical actions targeting or addressing international regions or countries, including China; and • reduced protection for intellectual property rights in some countries and practical difficulties in enforcing intellectual property rights in countries other than the U.S.
Therefore, we cannot always ensure the efficacy of our security measures or the success of our remedial actions. The expenses incurred to mitigate cyber or security issues, such as viruses, worms, and malware, could be substantial. Despite our efforts, resolving these issues may not always be successful and could lead to service interruptions, delays, or the loss of customers.
Therefore, we cannot always ensure the efficacy of our security measures or the success of our remedial actions. The expenses incurred to mitigate cyber or security issues, such as viruses and malware, could be substantial. Despite our efforts, resolving these issues may not always be successful and could lead to service interruptions, delays, or the loss of customers.
There are individuals and groups who develop and deploy viruses, worms, and other illicit code or malicious software programs that may attack wireless networks and mobile devices. Security experts have identified computer “worm” programs that target mobile devices running on certain operating systems.
There are individuals and groups who develop and deploy viruses and other illicit code or malicious software programs that may attack wireless networks and mobile devices. Security experts have identified computer “worm” programs that target mobile devices running on certain operating systems.
Accordingly, political, economic, and military conditions in Israel directly affect us. Israel has been and is currently involved in several armed conflicts and is the target of terrorist activity, including threats from Hezbollah militants in Lebanon, Iranian militia in Syria, and others.
Accordingly, political, economic, and military conditions in Israel directly affect us. Israel has been and is currently involved in several armed conflicts and is the target of terrorist activity, including from Hezbollah militants in Lebanon, Iranian militia in Syria, and others.
The establishment of a link between the use of mobile phone services and health problems, or any media reports suggesting such a link, could increase government regulation of, and reduce demand for, mobile phones and, accordingly, the demand for our products and services, and this could harm our business, operating results, and financial condition. 24 Table of Contents 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 establishment of a link between the use of mobile phone services and health problems, or any media reports suggesting such a link, could increase government regulation of, and reduce demand for, mobile phones and, accordingly, the demand for our products and services, and this could harm our business, operating results, and financial condition. 25 Table of Contents Government regulation of our marketing methods could restrict our ability to adequately advertise and promote our content, products, and services available in certain jurisdictions.
Many regions have imposed obligations regarding breach notifications, and our agreements with specific customers or partners may necessitate us to inform them or fulfill other duties in case of a security breach. Individuals affected by breaches or governmental bodies may pursue legal or regulatory measures against us for actual or perceived breaches or unauthorized access or disclosure of data.
Many regions have imposed obligations regarding breach notifications, and our agreements with specific customers or partners may require us to inform them or fulfill other duties in case of a security breach. Individuals affected by breaches or governmental bodies may pursue legal or regulatory measures against us for actual or perceived breaches or unauthorized access or disclosure of data.
Consumer usage of these mobile connected devices may be inhibited for a number of reasons, such as: • inadequate network infrastructure to support advanced features beyond just mobile web access; • users’ concerns about the security of these devices; • inconsistent quality of cellular or wireless connections; • unavailability of cost-effective, high-speed Internet service; • changes in network carrier pricing plans that charge device users based on the amount of data consumed; and • new technology which is not compatible with our products and offerings.
Consumer usage of these mobile connected devices may be inhibited for a number of reasons, such as: • inadequate network infrastructure to support advanced features beyond just mobile web access; • users’ concerns about the security of these devices; 19 Table of Contents • inconsistent quality of cellular or wireless connections; • unavailability of cost-effective, high-speed Internet service; • changes in network carrier pricing plans that charge device users based on the amount of data consumed; and • new technology which is not compatible with our products and offerings.
Should we choose to pursue alternative strategies to accelerate growth or enhance our existing business, we may require significant cash outlays and commitments. Our business strategy may include expansion through internal growth or external growth by acquiring complimentary businesses, acquiring or licensing additional brands, or establishing strategic relationships with targeted customers and suppliers.
Should we choose to pursue alternative strategies to grow or enhance our existing business, we may require significant cash outlays and commitments. Our business strategy may include expansion through internal growth or external growth by acquiring complimentary businesses, acquiring or licensing additional brands, or establishing strategic relationships with targeted customers and suppliers.
To the extent our platform depends on the successful operation of open-source software, any undetected errors or defects in such open-source software could prevent 25 Table of Contents the deployment or impair the functionality of our platform, delay introductions of new solutions, result in a failure of any of our solutions, and injure our reputation.
To the extent our platform depends on the successful operation of open-source software, any undetected errors or defects in such open-source software could prevent 26 Table of Contents the deployment or impair the functionality of our platform, delay introductions of new solutions, result in a failure of any of our solutions, and injure our reputation.
While we've implemented systems and protocols to safeguard our data, user information, and collaborations, and to mitigate risks such as data loss and unauthorized activities, we cannot guarantee absolute security. Despite our efforts, we may not always identify breaches promptly or respond effectively.
While we have implemented systems and protocols to safeguard our data, user information, and collaborations, and to mitigate risks such as data loss and unauthorized activities, we cannot guarantee absolute security. Despite our efforts, we may not always identify breaches promptly or respond effectively.
Federal Trade Commission (“FTC”) and state attorneys general have also, in recent years, increased enforcement of the Children’s Online Privacy Protection Act (“COPPA”), and other US State laws that restrict the processing of children’s personal information without a parental consent.
Federal Trade Commission and state attorneys general have also, in recent years, increased enforcement of the Children’s Online Privacy Protection Act, and other US State laws that restrict the processing of children’s personal information without a parental consent.
When transferring personal data outside the EEA or UK to non-"adequate" countries, we ensure compliance with relevant laws, potentially utilizing derogation or implementing standard contractual clauses. Since November 2023, we've participated in the EU-US Data Privacy Framework (“EU-US DPF”), UK Extension to the EU-US DPF (“UK Extension”), and Swiss-US Data Privacy Framework (“Swiss-US DPF”) per the US Department of Commerce.
When transferring personal data outside the EEA or UK to non-adequate countries, we ensure compliance with relevant laws, potentially utilizing derogation or implementing standard contractual clauses. Since November 2023, we have participated in the EU-US Data Privacy Framework (“EU-US DPF”), UK Extension to the EU-US DPF (“UK Extension”), and Swiss-US Data Privacy Framework per the US Department of Commerce.
In addition, if we fail to comply with the applicable portions of the Sarbanes-Oxley Act, we could be subject to a variety of civil and administrative sanctions and penalties, including ineligibility for short form resale registration, action by the SEC, shareholder litigation, and the inability of registered broker-dealers to make a market in our common stock.
In addition, if we fail to comply with 30 Table of Contents the applicable portions of the Sarbanes-Oxley Act, we could be subject to a variety of civil and administrative sanctions and penalties, including ineligibility for short form resale registration, action by the SEC, shareholder litigation, and the inability of registered broker-dealers to make a market in our common stock.
In addition, Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, requires us to maintain, evaluate and report on disclosure controls and procedures and internal control over financial reporting, that meet the applicable standards.
In addition, Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, requires us to maintain, evaluate and report on disclosure controls and procedures and internal control over financial reporting, which meet the applicable standards.
Defending such actions could be costly and involve significant time and attention of our management and other resources, may result in monetary liabilities or penalties, and may require us to change our business in an adverse manner. 20 Table of Contents Public health issues, such as a major epidemic or pandemic, could adversely affect our business or financial results.
Defending such actions could be costly and involve significant time and attention of our management and other resources, may result in monetary liabilities or penalties, and may require us to change our business in an adverse manner. Public health issues, such as a major epidemic or pandemic, could adversely affect our business or financial results.
The collateral pledged to secure our secured debt, consisting of substantially all of our and our U.S. subsidiaries’ assets, would be available to the secured creditor in a foreclosure, in addition to many other remedies.
The collateral pledged to secure our secured debt, consisting of substantially all of our and our U.S. and certain foreign subsidiaries’ assets, would be available to the secured creditor in a foreclosure, in addition to many other remedies.
In addition to other risk factors discussed in this section, factors that may contribute to the variability of our results include: • the number of new products and services released by us and our competitors; • the timing of release of new products and services by us and our competitors, particularly those that may represent a significant portion of revenue in a period; • the popularity of new products and services, and products and services released in prior periods; • changes in prominence of deck placement for our leading products and those of our competitors; • the timing of charges related to impairments of goodwill and intangible assets; • changes in pricing policies by us, our competitors, our vendors or our carriers and other distributors; • changes in the mix of direct versus indirect advertising sales, which have varying margin profiles; • changes in the mix of CPI, CPP, CPA, and license fee sales, which have varying revenue and margin profiles; • the seasonality of our industry; • fluctuations in the size and rate of growth of overall consumer demand for mobile products and services and digital advertising; • changes in advertising budget allocations or marketing strategies; • changes to our product, media, customer or channel mix; • changes in the economic prospects of advertisers, app developers, or the economy generally, which could alter advertisers’ or developers’ spending priorities, or could increase the time or costs required to complete advertising inventory sales; • changes in the pricing and availability of advertising inventory through real-time advertising exchanges or in the cost of reaching end consumers through digital advertising; • disruptions or outages on our platform; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • our success in entering new geographic markets; • decisions by one or more of our partners and/or customers to terminate our business relationship(s); • foreign exchange fluctuations; 12 Table of Contents • accounting rules governing recognition of revenue; • charges associated with impairment of any assets on our balance sheet or changes in our expected estimated useful life of property and equipment and intangible assets; • changes in regional or global business, political, macroeconomic and market conditions, including as a result of conflicts, hostilities, the COVID-19 pandemic, inflation, and rising interest rates, which may impact the other factors described above. • the timing of compensation expense associated with equity compensation grants; and • decisions by us to incur additional expenses for product and service development.
In addition to other risk factors discussed in this section, factors that may contribute to the variability of our results include: • the number of new products and services released by us and our competitors; • the timing of release of new products and services by us and our competitors, particularly those that may represent a significant portion of revenue in a period; • the popularity of new products and services, and products and services released in prior periods; 12 Table of Contents • changes in prominence of deck placement for our leading products and those of our competitors; • the timing of charges related to impairments of goodwill and intangible assets; • changes in pricing policies by us, our competitors, our vendors or our carriers and other distributors; • changes in the mix of direct versus indirect advertising sales, which have varying margin profiles; • changes in the mix of CPI, CPP, CPA, and license fee sales, which have varying revenue and margin profiles; • the seasonality of our industry; • fluctuations in the size and rate of growth of overall consumer demand for mobile products and services and digital advertising; • changes in advertising budget allocations or marketing strategies; • changes to our product, media, customer or channel mix; • changes in the economic prospects of advertisers, app developers, or the economy generally, which could alter advertisers’ or developers’ spending priorities, or could increase the time or costs required to complete advertising inventory sales; • changes in the pricing and availability of advertising inventory through real-time advertising exchanges or in the cost of reaching end consumers through digital advertising; • disruptions or outages on our platform; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • our success in entering new geographic markets; • decisions by one or more of our partners and/or customers to terminate our business relationship(s); • foreign exchange fluctuations; • accounting rules governing recognition of revenue; • charges associated with impairment of any assets on our balance sheet or changes in our expected estimated useful life of property and equipment and intangible assets; • changes in regional or global business, political, macroeconomic and market conditions, including as a result of conflicts, hostilities, changes in interest rates, recessionary fears, global supply constraints, the impact of global instability, domestic and foreign tariffs and other trade protectionist measures and inflation, which may impact the other factors described above; • the timing of compensation expense associated with equity compensation grants; and • decisions by us to incur additional expenses for product and service development.
Should events, including limited liquidity, 16 Table of Contents defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, our liquidity may be adversely affected.
Should events, including limited liquidity, defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, our liquidity may be adversely affected.
If our markets do not continue to experience growth or if the demand for our products and services decreases, then our business, financial condition, and results of operations could be 18 Table of Contents materially and adversely affected. Our business is dependent on the continued growth in usage of smartphones, tablets, and other mobile connected devices.
If our markets do not continue to experience growth or if the demand for our products and services decreases, then our business, financial condition, and results of operations could be materially and adversely affected. Our business is dependent on the continued growth in usage of smartphones, tablets, and other mobile connected devices.
Sustained uncertainty about, or worsening of, current global economic conditions and further escalation of trade tensions between the U.S. and its trading partners, especially 21 Table of Contents China, could result in a global economic slowdown and long-term changes to global trade, including retaliatory trade restrictions that further restrict our ability to operate in China.
Sustained uncertainty about, or worsening of, current global economic conditions and further escalation of trade tensions between the U.S. and its trading partners, especially China, could result in a global economic slowdown and long-term changes to global trade, including retaliatory trade restrictions that further restrict our ability to operate in China.
If advertising spend is lower than our expectations -- a factor over which we have no control as we do not determine our customers’ advertising budgets -- our revenue will be impacted negatively. From time-to-time, we expect that a limited number of our advertising customers will account for a significant share of our advertising revenue.
If advertising spend is 13 Table of Contents lower than our expectations -- a factor over which we have no control as we do not determine our customers’ advertising budgets -- our revenue will be impacted negatively. From time-to-time, we expect that a limited number of our advertising customers will account for a significant share of our advertising revenue.
We have a significant business presence in the region, and therefore, continuation or escalation of the conflict could cause significant adverse financial impacts, due to reductions in demand and/or interruptions in business operations.
We have a significant business presence in Israel, and therefore, continuation or escalation of the conflict could cause significant adverse financial impacts, due to reductions in demand and/or interruptions in business operations.
In addition, employees may be more likely to leave us if the shares they own or the shares underlying their options have significantly appreciated in value relative to the original purchase prices of the shares or the exercise 27 Table of Contents prices of the options, or if the exercise prices of the options they hold are significantly above the market price of our common stock.
In addition, employees may be more likely to leave us if the shares they own or the shares underlying their options have significantly appreciated in value relative to the original purchase prices of the shares or the exercise prices of the options, or if the exercise prices of the options they hold are significantly above the market price of our common stock.
Our financial results could vary significantly from period-to-period and are difficult to predict. Our revenue and operating results could vary significantly from period-to-period because of a variety of factors, many of which are outside of our control, including the seasonal nature of advertiser spending. As a result, comparing our operating results on a period-to-period basis may not be meaningful.
Our revenue and operating results could vary significantly from period-to-period because of a variety of factors, many of which are outside of our control, including the seasonal nature of advertiser spending. As a result, comparing our operating results on a period-to-period basis may not be meaningful.
Despite our efforts to safeguard data and respond to threats, challenges like software bugs, human errors, cyberattacks, or physical breaches may undermine our defenses. Consequently, clients and users may lose confidence in our products, leading to reputational harm and market setbacks. As cyber threats advance in complexity and frequency, they may remain undetected for extended periods.
Despite our efforts to 15 Table of Contents safeguard data and respond to threats, challenges like software bugs, human errors, cyberattacks, or physical breaches may undermine our defenses. Consequently, clients and users may lose confidence in our products, leading to reputational harm and market setbacks. As cyber threats advance in complexity and frequency, they may remain undetected for extended periods.
We have operations, deal with carriers, and make sales in countries known to experience corruption, particularly certain emerging countries in Eastern Europe, Latin America, and Asia. Further international expansion 23 Table of Contents may involve more of these countries.
We have operations, deal with carriers, and make sales in countries known to experience corruption, particularly certain emerging countries in Eastern Europe, Latin America, and Asia. Further international expansion may involve more of these countries.
In particular, PRC laws and regulations impose restrictions on foreign ownership of companies that engage in internet, market survey, cloud-based services and other related businesses from time to time.
In particular, PRC laws and regulations impose restrictions on foreign ownership of companies that engage in internet, market survey, cloud-based services and other related 22 Table of Contents businesses from time to time.
We are bound by numerous laws and regulations in the United States and internationally concerning cybersecurity and data protection. Some of these laws allow individuals to take legal action against us.
We are subject to numerous laws and regulations in the United States and internationally concerning cybersecurity and data protection. Some of these laws allow individuals to take legal action against us.
The large companies in our ecosystem may play multiple different roles given the breadth of their businesses. 17 Table of Contents • Our primary competition for media distribution comes from the Google Play application store.
The large companies in our ecosystem may play multiple different roles given the breadth of their businesses. • Our primary competition for media distribution comes from the Google Play application store.
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.
These events could materially adversely affect our business, reputation, results of operations and financial condition. 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.
Our development resources are concentrated in today’s most popular operating systems, and we have experience developing applications for these operating systems.
Our development resources are concentrated in today’s most 20 Table of Contents popular operating systems, and we have experience developing applications for these operating systems.
Our credit facility 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’s maturity. Any such default would have a material adverse effect on us.
Our Amended and Restated Credit Agreement also contains a maximum consolidated secured net leverage ratio and other financial covenants. If we fail to satisfy these covenants, the lender may declare a default, which could lead to acceleration of the debt’s maturity. Any such default would have a material adverse effect on us.
Our outstanding secured indebtedness of $386,000 as of March 31, 2024, and our ability to borrow additional amounts under its $600,000 revolving credit facility, could have significant negative consequences including: • increasing our vulnerability to general adverse economic and industry conditions; • increasing our exposure to interest rate risk; • limiting our ability to obtain additional financing; • violating a financial covenant, resulting in the indebtedness being due immediately and negatively impacting our liquidity; • requiring additional financial covenant measurement consents or default waivers without enhanced financial performance in the short term; • requiring the use of a substantial portion of any cash flow from operations to service indebtedness, thereby reducing the amount of cash flow available for other purposes, including capital expenditures; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which it competes; and 26 Table of Contents • placing us at a possible competitive disadvantage to less leveraged competitors that are larger and may have better access to capital resources.
The reduction in available funds could have significant negative consequences including: • increasing our vulnerability to general adverse economic and industry conditions; • increasing our exposure to interest rate risk; • limiting our ability to obtain additional financing; • violating a financial covenant, resulting in the indebtedness being due immediately and negatively impacting our liquidity; • requiring additional financial covenant measurement consents or default waivers without enhanced financial performance in the short term; • requiring the use of a substantial portion of any cash flow from operations to service indebtedness, thereby reducing the amount of cash flow available for other purposes, including capital expenditures; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which it competes; and • placing us at a possible competitive disadvantage to less leveraged competitors that are larger and may have better access to capital resources.
Some of our senior management and other key employees have become, or will soon become, vested 15 Table of Contents in a substantial amount of stock or stock options.
Some of our senior management and other key employees have become, or will soon become, vested and/or under water in a substantial amount of stock or stock options.
The effects of the current and any future general downturns in the U.S. and the global economy, including financial market disruptions, could have an adverse impact on our business, operating results, or financial condition . 13 Table of Contents Our business depends on the overall demand for advertising and on the economic health of advertisers that benefit from our platform.
The effects of the current and any future general downturns in the U.S. and the global economy, including financial market disruptions, could harm the economic health of advertisers and the overall demand for advertising, which could have an adverse impact on our business, operating results, or financial condition.
Any of these developments would make it more difficult for us to sell our services and could result in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, or the loss of market share. The markets for our products and services are rapidly evolving and may decline or experience limited growth.
Any of these developments would make it more difficult for us to sell our services and could result in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, or the loss of market share.
Also, we cannot be certain that we will be able to implement and maintain adequate controls over our financial processes and reporting in the future. 28 Table of Contents In the event management successfully remediates a future material weakness in internal control over financial reporting and consequently concludes that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.
In the event management successfully remediates a future material weakness in internal control over financial reporting and consequently concludes that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.
Our business and growth may suffer if we are unable to hire and retain key talent who are in high demand. We depend on the continued contributions of our domestic and international senior management and other key talent. The loss of the services of any of our executive officers or other key employees could harm our business.
Our business may suffer if we are unable to hire and retain key talent who are in high demand. We depend on the continued contributions of our domestic and international senior management and other key talent.
In the event management identifies a future material weakness in internal control over financial reporting, we cannot be certain that measures we take to remediate the material weakness will be successful.
In the event management identifies a future material weakness in internal control over financial reporting, we cannot be certain that measures we take to remediate the material weakness will be successful. Also, we cannot be certain that we will be able to implement and maintain adequate controls over our financial processes and reporting in the future.
In addition, other mobile platforms may become widespread, and end users may choose to switch to these platforms. If the market for our products and services does not continue to grow or we are unable to acquire new customers or end users, our business growth and future revenue could be adversely affected.
If the market for our products and services does not continue to grow or we are unable to acquire new customers or end users, our business growth and future revenue could be adversely affected.
If there are delays in the distribution of our products or if we are unable to successfully negotiate with advertisers, application developers, carriers, mobile operators, or OEMs, or if these negotiations cannot occur on a timely basis, we may not be able to generate revenue sufficient to meet the needs of the business. 10 Table of Contents We have a limited operating history for our current portfolio of assets, which may make it difficult to evaluate our business.
If there are delays in the distribution of our products or if we are unable to successfully negotiate with advertisers, application developers, carriers, mobile operators, or OEMs, or if these negotiations cannot occur on a timely basis, we may not be able to generate revenue sufficient to meet the needs of the business.
We've certified adherence to the EU-US DPF Principles for data received from the EU and UK (including Gibraltar) and to the Swiss-US DPF 22 Table of Contents Principles for data received from Switzerland.
We have certified adherence to the EU-US DPF Principles for data received from the EU and UK (including Gibraltar) and to the Swiss-US DPF Principles for data received from Switzerland.
Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that you would receive a premium for your shares of our common stock in an acquisition.
Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that you would receive a premium for your shares of our common stock in an acquisition. 31 Table of Contents Our bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for certain disputes between us and our stockholders.
If global economic and market conditions, or economic conditions in the United States or other key markets, remain uncertain or persist, spread, or deteriorate further, we may experience material impacts on our business, operating results, and financial condition in a number of ways including negatively affecting our profitability and causing our stock price to decline.
If global economic and market conditions, or economic conditions in the United States or other key markets, remain uncertain or persist, spread, or deteriorate further, we may experience material impacts on our business, operating results, and financial condition in a number of ways including negatively affecting our profitability and causing our stock price to decline. 14 Table of Contents Our products, services, and systems rely on software that is highly technical, and if it contains errors or viruses, our business could be adversely affected.
U.S. economic sanctions and export control laws and regulations prohibit the shipment of specified products and services to countries, governments, and persons targeted by U.S. sanctions.
Export Administration Regulations and economic embargo and trade sanctions programs administered by the Treasury Department’s Office of Foreign Assets Control. U.S. economic sanctions and export control laws and regulations prohibit the shipment of specified products and services to countries, governments, and persons targeted by U.S. sanctions.
Our operating results also may be affected by uncertain or changing economic conditions such as the challenges that are currently affecting economic conditions in the U.S. and the global economy, including the conflict in Israel, the Russia-Ukraine Conflict, the impact of U.S. - China relations, inflation and global supply constraints.
Our operating results also may be affected by uncertain or changing economic conditions such as the challenges that are currently affecting economic conditions in the U.S. and the global economy, including the conflict in India and Pakistan, Israel, Gaza, Lebanon and Syria, the Russia-Ukraine Conflict, the impact of U.S. - China relations, inflation, changes in interest rates, recessionary fears, global supply constraints, the impact of global instability, and domestic and foreign tariffs and other trade protectionist measures.
Such advertising platform companies vary in size and include players such as Facebook, Google, Amazon, and Unity Software, as well as various private companies. Several of these platforms are also our partners and customers.
Such advertising platform companies vary in size and include players such as Facebook, Google, Amazon, and Unity Software, as well as various private companies.
Competitors could also seek to gain market share from us by reducing the prices they charge to advertisers or publishers or by introducing new technology tools for advertisers or developers.
Several of these platforms are also our partners and customers. 18 Table of Contents Competitors could also seek to gain market share from us by reducing the prices they charge to advertisers or publishers or by introducing new technology tools for advertisers or developers.
These activities are regulated by a variety of federal, state, local, and international privacy, data governance, and data security laws and regulations, which have become increasingly stringent in recent years. Most jurisdictions in which we or our customers operate have enacted or are in the process of enacting privacy, data governance, and data security laws and regulations.
Our platform relies on our ability to process the information of our customers and end users. These activities are regulated by a variety of federal, state, local, and international privacy, data governance, and data security laws and regulations, which have become increasingly stringent in recent years.
Our certificate of incorporation and bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock; • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, our chief executive officer, or our president, or holders of a majority of our outstanding common stock; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • prohibit cumulative voting in the election of directors. 29 Table of Contents In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
Our certificate of incorporation and bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock; • specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, our chief executive officer, or our president, or holders of a majority of our outstanding common stock; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • prohibit cumulative voting in the election of directors.
Current or future global market uncertainties or downturns and associated macroeconomic conditions, such as growing inflation, rising interest rates, recessionary fears, changes in foreign currency exchange rates, the impact of global instability in many parts of the world and public health crises, may disrupt the operations of our clients and partners and cause advertisers to decrease or pause their advertising budgets, which could reduce spend though our platform and adversely affect our business, financial condition and results of operations.
Such current or future global market uncertainties or downturns and associated macroeconomic conditions may disrupt the operations of our clients and partners and cause advertisers to decrease or pause their advertising budgets, which could reduce spend though our platform and adversely affect our business, financial condition and results of operations.
While our offices are open worldwide, including in Israel, and, to date, we have not had disruptions to our ability to operate and deliver products to customers, a prolonged war or an escalation of the current conditions in Israel could adversely affect our business.
While our offices are open worldwide, including in Israel, and, to date, we have not had disruptions to our ability to operate and deliver products to customers, a prolonged war or an escalation of the current conditions in Israel could adversely affect our business. 21 Table of Contents At this time, it is unknown whether hostilities in these regions will escalate into an even larger conflict.
We operate in a developing industry. Our success depends on growth in the number of wireless subscribers who use their mobile devices to access data services we develop and distribute. New or different mobile content applications developed by our current or future competitors may be preferred by subscribers to our offerings.
If wireless subscribers do not continue to use their mobile devices to access mobile content and other applications, our business growth and future revenue may be adversely affected. We operate in a developing industry. Our success depends on growth in the number of wireless subscribers who use their mobile devices to access data services we develop and distribute.
We may choose to raise additional capital to finance the purchase price of acquisitions or to otherwise 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.
If we are unable to retain our employees, our business, operating results, and financial condition could be harmed. 29 Table of Contents We may choose to raise additional capital to finance the purchase price of acquisitions or to otherwise grow our business, and we may not be able to raise capital to grow our business on terms acceptable to us or at all.
An escalation of recent trade tensions between the U.S. and China has resulted in trade restrictions that harm our ability to participate in Chinese markets. For example, U.S. export control regulations relating to China have created restrictions with respect to the sale of certain products to Chinese companies and further changes to regulations could result in additional restrictions.
Further, U.S. export control regulations relating to China have created restrictions with respect to the sale of certain products to Chinese companies and further changes to regulations could result in additional restrictions.
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. Industry Regulatory Risks We are subject to rapidly changing and increasingly stringent laws, contractual obligations, and industry standards relating to data governance, privacy and data security.
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.
Disputes from time to time with such companies, organizations or individuals are not uncommon, and we cannot assure you that we will always be able to resolve such disputes or on terms favorable to us.
Disputes from time to time with such companies, organizations or individuals are not uncommon, and we cannot assure you that we will always be able to resolve such disputes or on terms favorable to us. Carriers and customers have and may try to include us as defendants in suits brought against them by their own customers or third parties.
If our revenue does not increase sufficiently to offset these expected increases in operating expenses, we will incur losses and may not be able to achieve profitability in the future.
If our transformation program does not improve operating expenses, cash flows, and personnel costs as expected or there are other unexpected operating cost increases, we may continue to incur operating net losses. If our revenue does not increase sufficiently to offset our operating expenses, we will incur losses and may not be able to achieve profitability in the future.
In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources an could have a material adverse effect on our business, financial condition or results of operations.
In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources and could have a material adverse effect on our business, financial condition or results of operations. 17 Table of Contents In addition, if any of our customers, suppliers or other parties with whom we conduct business are unable to access funds pursuant to instruments or lending arrangements with a financial institution, such parties’ ability to pay their obligations to us could be adversely affected.
If we are unable to retain our employees, our business, operating results, and financial condition could be harmed. Our corporate culture has contributed to our success and, if we are unable to maintain it as we grow, our business, financial condition, and results of operations could be harmed.
If we are unable to retain our employees, our business, operating results, and financial condition could be harmed. Our corporate culture has contributed to our success, and if we cannot maintain this culture, we could lose the innovation, creativity, passion and teamwork that we believe contribute to our success and our business may be harmed.
Our operations are global in scope, and we face added business, political, regulatory, legal, 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.
In addition, accomplishing many of these efforts may be costly and these efforts may not yield the anticipated returns, which could adversely impact our operating results and financial condition. 11 Table of Contents Our operations are global in scope, and we face added business, political, regulatory, legal, operational, financial, and economic risks as a result of our international operations and distribution, any of which could increase our costs, hinder our operations and return to growth.
Risks Specific to Our Business We have a history of net losses, may incur substantial net losses in the future, and may not achieve or sustain profitability in the future.
Our failure to successfully accomplish any of the above activities and goals may have a material adverse impact on our business, financial condition and results of operations. We have a history of net losses, may incur substantial net losses in the future, and may not achieve or sustain profitability in the future.
The DSA addresses several critical aspects related to online services, including providing a consistent framework for digital services offered in the EU, preventing illegal and harmful online activities, and protecting service recipients’ fundamental rights.
The DSA addresses several critical aspects related to online services, including providing a consistent framework for digital services offered in the EU, preventing illegal and harmful online activities, and protecting service recipients’ fundamental rights. 23 Table of Contents Apart from the requirements of privacy, data governance, and data security laws, we have obligations relating to privacy, data governance and data security under our published policies, contracts, and applicable industry standards.
Some errors may only be discovered after the code has been released for external or internal use.
The software on which we rely has contained, and may now or in the future contain, undetected errors, bugs, or vulnerabilities. Some errors may only be discovered after the code has been released for external or internal use.
In addition, our products, services, and systems depend on the ability of such software to transfer, store, retrieve, process, and manage large amounts of data. The software on which we rely has contained, and may now or in the future contain, undetected errors, bugs, or vulnerabilities.
Our products, services, and systems rely on software, including software developed or maintained internally and/or by third parties, which is highly technical and complex. In addition, our products, services, and systems depend on the ability of such software to transfer, store, retrieve, process, and manage large amounts of data.
Any investigations, actions and/or sanctions could have a material negative impact on our business, financial condition and results of operations. We are subject to governmental economic sanctions requirements and export and import controls that could impair our ability to compete in international markets or subject us to liability if we are not in compliance with applicable laws.
We are subject to governmental economic sanctions requirements and export and import controls that could impair our ability to compete in international markets or subject us to liability if we are not in compliance with applicable laws. 24 Table of Contents As a U.S. company, we are subject to U.S. export control and economic sanctions laws and regulations, and we are required to export our technology and services in compliance with those laws and regulations, including the U.S.
In addition, developing user interfaces that are compatible with other languages or cultures can be expensive. As a result, our ongoing international expansion efforts may be more costly than we expect.
In addition, developing user interfaces that are compatible with other languages or cultures can be expensive. As a result, our ongoing operations efforts may be more costly than we expect. Further, expansion into developing countries subjects us to the effects of regional instability, civil unrest, and hostilities, and could adversely affect us by disrupting communications and making travel more difficult.
In the future, we may be required to make substantial investments in our development if the number of different types of mobile device models continues to proliferate.
In the future, we may be required to make substantial investments in our development if the number of different types of mobile device models continues to proliferate. In addition, as more advanced mobile devices are introduced that enable more complex, feature-rich products and services, we anticipate our product development and maintenance costs will increase.
Such failures or disruptions can adversely impact our business by, among other things, preventing access to our online services, interfering with customer transactions or impeding the development of our products. These events could materially adversely affect our business, reputation, results of operations and financial condition.
System upgrades, redundancy and other continuity measures may be ineffective or inadequate, and our or our vendors’ business continuity and disaster recovery planning may not be sufficient for all eventualities. Such failures or disruptions can adversely impact our business by, among other things, preventing access to our online services, interfering with customer transactions or impeding the development of our products.
International acquisitions involve risks related to integration of operations across different cultures and languages, currency risks, and the particular economic, political, and regulatory risks associated with specific countries.
International acquisitions involve risks related to integration of operations across different cultures and languages, currency risks, and the particular economic, political, and regulatory risks associated with specific countries. Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non-performance by financial institutions, could adversely affect our business, financial condition, or results of operations.
Carriers and customers have and may try to include us as defendants in suits brought against them by their own customers or third parties. In such cases, the risks and expenses would be similar to those where we are the party directly involved in the litigation.
In such cases, the risks and expenses would be similar to those where we are the party directly involved in the litigation.
Further, expansion into developing countries subjects us to the effects of regional instability, civil unrest, and hostilities, and could adversely affect us by disrupting communications and making travel more difficult. These risks could harm our international expansion efforts, which, in turn, could materially and adversely affect our business, operating results, and financial condition.
These risks could harm our operations and international expansion efforts, which, in turn, could materially and adversely affect our business, operating results, and financial condition. Our financial results could vary significantly from period-to-period and are difficult to predict.
Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non-performance by financial institutions, could adversely affect our business, financial condition, or results of operation s We regularly maintain cash balances at banks and other financial institutions that would exceed any applicable Federal Deposit Insurance Corporation insurance limits.
We regularly maintain cash balances at banks and other financial institutions that would exceed any applicable Federal Deposit Insurance Corporation insurance limits.
Risks Relating to Our Common Stock and Capital Structure We have secured and unsecured indebtedness, which could limit its financial flexibility.
Risks Relating to Our Common Stock and Capital Structure We have secured and unsecured indebtedness, which the Company will need to be refinancing and which could limit our financial flexibility. As of March 31, 2025, we had $411,000 drawn against the revolving line of credit under the Amended and Restated Credit Agreement.
We may be unable to accomplish one or more of these objectives, which could cause our business to suffer. In addition, accomplishing many of these efforts may be costly and these efforts may not yield the anticipated returns, which could adversely impact our operating results and financial condition. Growth may place significant demands on our management and our infrastructure.
We may be unable to accomplish one or more of these objectives, which could cause our business to suffer.
The restrictions and costs imposed by these legal requirements, or our actual or perceived failure to comply with them, could harm our business. Our platform relies on our ability to process the information of our customers and end users.
Risks Related to Laws and Regulations We are subject to rapidly changing and increasingly stringent laws, contractual obligations, and industry standards relating to data governance, privacy and data security. The restrictions and costs imposed by these legal requirements, or our actual or perceived failure to comply with them, could harm our business.
Any refinancing of our debt could be at higher interest rates and could require us to comply with more onerous covenants, which could further restrict our business operations. In addition, we cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms, or at all.
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.
Removed
We expect to continue to increase expenses as we implement initiatives designed to continue to grow our business, including, among other things, the development and marketing of new products and services, further international and domestic expansion, expansion of our infrastructure, growing our number of employees, development of systems and processes, acquisition of content, and general and administrative expenses associated with being a public company.
Added
Risks Specific to Our Business Our transformation program and reduction in force may not adequately reduce our operating costs or improve our operating margins or cash flows, may lead to additional workforce attrition and may cause operational disruptions. In October 2024, the Company began a transformation program intended to improve various measures across the organization.
Removed
Managing our growth will require significant expenditures and allocation of valuable management resources. If we fail to achieve the necessary level of efficiency in our organization as it grows, our business, operating results, and financial condition could be harmed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeITEM 1C. CYBERSECURITY We maintain a comprehensive process for identifying, assessing, and managing material risks from cybersecurity threats as part of our broader risk management system and processes.
Biggest changeITEM 1C. CYBERSECURITY Risk Management and Strategy We maintain a comprehensive process for identifying, assessing, and managing material risks from cybersecurity threats as part of our broader risk management system and processes.
We require employees with access to information systems, including all corporate employees, to undertake data protection, cybersecurity, privacy and compliance programs at least annually. We maintain a team of dedicated security and compliance professionals who oversee cybersecurity risk management, mitigation, incident prevention, detection, and remediation, which is led by our Chief Information Security Officer (“CISO”).
We require employees with access to information systems, including all corporate employees, to undertake data protection, cybersecurity, privacy and compliance programs at least annually. We maintain a team of dedicated security and compliance professionals who oversee cybersecurity risk management, mitigation, incident prevention, detection, and remediation, which is led by our Chief Information Security Officer.
Our executive leadership team, along with input from the above team, are responsible for our overall enterprise risk management system and processes and regularly consider cybersecurity risks in the context of other material risks to the Company.
Governance Our executive leadership team, along with input from the above team, are responsible for our overall enterprise risk management system and processes and regularly consider cybersecurity risks in the context of other material risks to the Company.
Any incident assessed as potentially being or 30 Table of Contents potentially becoming material is immediately escalated for further assessment, and then reported to designated members of our senior management.
Any incident assessed as potentially being or 32 Table of Contents potentially becoming material is immediately escalated for further assessment, and then reported to designated members of our senior management.
Removed
For more information on our cybersecurity related risks, see Item 1A Risk Factors of this Annual Report on Form 10-K.
Added
We achieved SOC 2 Type 2 attestation this fiscal year, demonstrating the operating effectiveness of our internal security controls and our commitment to industry-leading information security standards. This attestation provides assurance to stakeholders that Digital Turbine’s systems and processes are regularly audited by independent third parties to verify compliance with rigorous security and privacy requirements.
Added
For more information on our cybersecurity related risks, see Part I, Item 1A Risk Factors of this Annual Report on Form 10-K, including the risk factor titled “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.”

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES The principal offices of Digital Turbine, Inc. are located in Austin, Texas. The Company also leases properties, primarily for office space, in Durham, North Carolina, Arlington, Virginia, and New York, New York, in the U.S. Internationally, the Company leases properties, primarily for office space, in Singapore, Istanbul, Turkey, Berlin, Germany, and Tel Aviv, Israel.
Biggest changeITEM 2. PROPERTIES The principal offices of Digital Turbine, Inc. are located in Austin, Texas. The Company also leases properties, primarily for office space, in Durham, North Carolina, and New York, New York, in the U.S. Internationally, the Company leases properties, primarily for office space, in Singapore, Warsaw, Poland, Istanbul, Turkey, Berlin, Germany, and Tel Aviv, Israel.
Added
We believe that our facilities are adequate to meet our needs for the immediate future and that, should it be needed, we will be able to secure additional space to accommodate expansion of our operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The information required by this Item 3 is incorporated herein by reference to the information set forth under the caption “Legal Matters” in Note 15— Commitments and Contingencies , of the notes to the consolidated financial statements in Part II, Item 8 of this Annual Report. ITEM 4.
Biggest changeITEM 3. LEGAL PROCEEDINGS The information required by this Item 3 is incorporated herein by reference to the information set forth under the caption “Legal Matters” in Note 17— Commitments and Contingencies , of the notes to the condensed consolidated financial statements in Part II, Item 8 of this Annual Report. ITEM 4.
MINE SAFETY DISCLOSURES Not applicable. 31 Table of Contents PART II
MINE SAFETY DISCLOSURES Not applicable. 33 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

89 edited+54 added−23 removed77 unchanged
Biggest changePlease see Note 2— Basis of Presentation and Summary of Significant Accounting Policies for further information. 35 Table of Contents RESULTS OF OPERATIONS The following table sets forth our results of operations for the years ended March 31, 2024 and 2023 (in thousands): Year ended March 31, 2024 2023 % of Change Net revenue $ 544,482 $ 665,920 (18.2) % Costs of revenue and operating expenses Revenue share 262,226 309,247 (15.2) % Other direct costs of revenue 34,799 36,445 (4.5) % Product development 54,157 56,486 (4.1) % Sales and marketing 61,481 63,295 (2.9) % General and administrative 169,617 154,282 9.9 % Impairment of goodwill 336,640 — 100.0 % Total costs of revenue and operating expenses 918,920 619,755 48.3 % (Loss) income from operations (374,438) 46,165 (911.1) % Interest and other (expense) income, net Change in fair value of contingent consideration 372 — 100.0 % Interest expense, net (30,838) (23,352) 32.1 % Foreign exchange transaction gain (loss) 101 (1,026) (109.8) % Other (expense) income, net (328) 229 (243.2) % Total interest and other (expense) income, net (30,693) (24,149) 27.1 % (Loss) income before income taxes (405,131) 22,016 (1940.2) % Income tax provision 15,317 5,146 197.6 % Net (loss) income (420,448) 16,870 (2592.3) % Net revenue ($ in thousands) Year ended March 31, 2024 2023 % of Change Net revenue On Device Solutions $ 370,112 $ 420,328 (11.9) % App Growth Platform 178,760 252,995 (29.3) % Elimination (4,390) (7,403) 40.7 % Total net revenue $ 544,482 $ 665,920 (18.2) % Fiscal 2024 compared to fiscal 2023 During the year ended March 31, 2024, net revenue decreased by $121,438 or 18.2% compared to the prior year.
Biggest changeIn 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. 39 Table of Contents RESULTS OF OPERATIONS The following table sets forth our results of operations for the years ended March 31, 2025 and 2024 (in thousands): Year ended March 31, 2025 2024 % of Change Net revenue $ 490,506 $ 544,482 (9.9) % Costs of revenue and operating expenses Revenue share 235,287 262,226 (10.3) % Other direct costs of revenue 34,541 34,799 (0.7) % Product development 39,464 54,157 (27.1) % Sales and marketing 61,642 61,481 0.3 % General and administrative 173,647 169,617 2.4 % Impairment of goodwill — 336,640 (100.0) % Total costs of revenue and operating expenses 544,581 918,920 (40.7) % (Loss) income from operations (54,075) (374,438) (85.6) % Interest and other (expense) income, net Change in fair value of contingent consideration (300) 372 (180.6) % Interest expense, net (34,783) (30,838) 12.8 % Foreign exchange transaction gain (loss) 1,297 101 1184.2 % Other (expense) income, net (3) (328) 99.1 % Total interest and other (expense) income, net (33,789) (30,693) 10.1 % (Loss) income before income taxes (87,864) (405,131) (78.3) % Income tax provision 4,235 15,317 (72.4) % Net (loss) income (92,099) (420,448) (78.1) % Net revenue ($ in thousands) Year ended March 31, 2025 2024 % of Change Net revenue On Device Solutions $ 341,632 $ 370,112 (7.7) % App Growth Platform 153,229 178,760 (14.3) % Elimination (4,355) (4,390) 0.8 % Total net revenue $ 490,506 $ 544,482 (9.9) % Fiscal 2025 compared to fiscal 2024 During the year ended March 31, 2025, net revenue decreased by $53,976 or 9.9% compared to the prior year.
Financing Activities For the year ended March 31, 2024, net cash used in financing activities was $29,300, which was comprised of: (1) the repayment of debt obligations of $77,134, (2) payment of $3,751 for the acquisition of the remaining minority interest shareholders’ outstanding shares in one of our subsidiaries, and (3) payment of payroll withholding taxes for net share settlement of equity awards of $1,286.
For the year ended March 31, 2024, net cash used in financing activities was $29,300, which was comprised of: (1) the repayment of debt obligations of $77,134, (2) payment of payroll withholding taxes for net share settlement of equity awards of $1,286, and (3) payment of $3,751 for the acquisition of the remaining minority interest shareholders’ outstanding shares in one of our subsidiaries.
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.
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.
The sources of taxable income are listed below from least to most subjective: • Future reversals of existing taxable temporary differences • Future taxable income exclusive of reversing temporary differences and carryforwards • Taxable income in prior carryback year(s) if carryback is permitted under the tax law • Tax-planning strategies that would, if necessary, be implemented to, for example: ◦ Accelerate taxable amounts to utilize expiring carryforwards ◦ Change the character of taxable or deductible amounts from ordinary income or loss to capital gain or loss ◦ Switch from tax-exempt to taxable investments ASC 740-10 prescribes that a company should use a more-likely-than-not recognition threshold based on the technical merits of the tax position taken.
The sources of taxable income are listed below from least to most subjective: • Future reversals of existing taxable temporary differences • Future taxable income exclusive of reversing temporary differences and carryforwards • Taxable income in prior carryback year(s) if carryback is permitted under the tax law • Tax-planning strategies that would, if necessary, be implemented to, for example: ◦ Accelerate taxable amounts to utilize expiring carryforwards 50 Table of Contents ◦ Change the character of taxable or deductible amounts from ordinary income or loss to capital gain or loss ◦ Switch from tax-exempt to taxable investments ASC 740-10 prescribes that a company should use a more-likely-than-not recognition threshold based on the technical merits of the tax position taken.
If negative macroeconomic factors or geopolitical developments continue to 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.
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.
AGP - Brand and Performance The Company, through its AGP segment for its Brand and Performance offerings, contracts directly with advertisers or agencies. through insertion orders, that require the Company to fulfill advertising campaigns by identifying and purchasing targeted ad inventory and serving ads on behalf of the advertiser.
AGP - Brand and Performance The Company, through its AGP segment for its Brand and Performance offerings, contracts directly with advertisers or agencies. through insertion orders, which require the Company to fulfill advertising campaigns by identifying and purchasing targeted ad inventory and serving ads on behalf of the advertiser.
We caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock. 32 Table of Contents COMPARISON OF CUMULATIVE TOTAL RETURN ITEM 6. RESERVED ITEM 7.
We caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock. 34 Table of Contents COMPARISON OF CUMULATIVE TOTAL RETURN ITEM 6. RESERVED ITEM 7.
While the financial impact of 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.
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.
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. 34 Table of Contents 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.
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.
After products and features are released, all product maintenance cost are expensed. 45 Table of Contents The Company also applies the principles of FASB ASC 350-40, Accounting for the Cost of Computer Software Developed or Obtained for Internal Use (“ASC 350-40”). ASC 350-40 requires that software development costs incurred before the preliminary project stage be expensed as incurred.
After products and features are released, all product maintenance cost are expensed. The Company also applies the principles of FASB ASC 350-40, Accounting for the Cost of Computer Software Developed or Obtained for Internal Use (“ASC 350-40”). ASC 350-40 requires that software development costs incurred before the preliminary project stage be expensed as incurred.
For a discussion of the results of our operations for the year ended March 31, 2023, compared with the year ended March 31, 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the fiscal year ended March 31, 2023.
For a discussion of the results of our operations for the year ended March 31, 2024, compared with the year ended March 31, 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the fiscal year ended March 31, 2024.
Performance-based restricted units (“PSUs”) are evaluated on a quarterly basis for probability of meeting 46 Table of Contents performance metrics and any adjustments to share-based compensation expense are then made in the quarter of evaluation. For PSUs, we must also make assumptions regarding the likelihood of achieving performance metrics.
Performance-based restricted units (“PSUs”) are evaluated on a quarterly basis for probability of meeting performance metrics and any adjustments to share-based compensation expense are then made in the quarter of evaluation. For PSUs, we must also make assumptions regarding the likelihood of achieving performance metrics.
The Company gains access and control of application slots on wireless carrier and OEM mobile devices and markets those slots on their behalf to the Company’s customers. The Company has concluded that the performance obligation within the contract is complete upon delivery 43 Table of Contents of the application to the end user mobile device.
The Company gains access and control of application slots on wireless carrier and OEM mobile devices and markets those slots on their behalf to the Company’s customers. The Company has concluded that the performance obligation within the contract is complete upon delivery of the application to the end user mobile device.
Goodwill We evaluate goodwill for possible impairment at least annually or upon the occurrence of events or circumstances that indicate that they would more likely than not reduce the fair value of a reporting unit below its carrying amount.
Goodwill We evaluate goodwill for possible impairment at least annually or upon the occurrence of events or circumstances that indicate that they would more likely than not reduce the fair value of a reporting unit below its 51 Table of Contents carrying amount.
The graph set forth below compares the cumulative total stockholder return on an initial investment of $100 in our common stock between March 31, 2019, and March 31, 2024, with the comparative cumulative total return of such amount on (i) the NASDAQ Composite Index (IXIC) and (ii) the Russell 2000 Index (RUT) over the same period.
The graph set forth below compares the cumulative total stockholder return on an initial investment of $100 in our common stock between March 31, 2020, and March 31, 2025, with the comparative cumulative total return of such amount on (i) the NASDAQ Composite Index (IXIC) and (ii) the Russell 2000 Index (RUT) over the same period.
This section of our Annual Report generally discusses the results of our operations for the year ended March 31, 2024, compared with the year ended March 31, 2023.
This section of our Annual Report generally discusses the results of our operations for the year ended March 31, 2025, compared with the year ended March 31, 2024.
The Company controls the service because it has the ultimate discretion in purchasing ad inventory; and once an ad inventory slot is purchased, filling that ad inventory slot. As a result, the Company reports the revenue billed to advertisers and agencies on a gross basis and revenue shares paid to publishers as revenue share.
The Company controls the service because it has the ultimate discretion in purchasing ad inventory; and once an ad inventory slot is purchased, filling that ad inventory slot. As a result, the Company reports the revenue billed to advertisers and agencies on a gross basis and revenue 49 Table of Contents shares paid to publishers as revenue share.
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 credit facility also contains a maximum consolidated secured net leverage ratio and minimum consolidated interest coverage ratio.
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.
This sponsored content takes the form of articles, graphics, pictures, and similar content. The Company has concluded that the performance obligation within the contract is complete upon delivery of the content to the mobile device.
This sponsored content takes the form of articles, graphics, pictures, and similar content. The Company has concluded that the performance obligation within the contract is complete upon delivery of the content 48 Table of Contents to the mobile device.
Foreign exchange transaction gain (loss) For the years ended March 31, 2024 and 2023, the Company recorded foreign exchange transaction gain and loss of $101 and $1,026, respectively, and was 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.
Foreign exchange transaction gain (loss) For the years ended March 31, 2025 and 2024, the Company recorded foreign exchange transaction gains of $1,297 and $101, respectively, and was 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.
We are impacted by the volume of sales of new mobile devices by our partners, which has been below our expectations. 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.
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.
The increase in other direct costs as a percentage of total net revenue was due to the decline in total net revenue for the year ended March 31, 2024. Product development Product development expenses include the development and maintenance of the Company’s product suite and are primarily a function of personnel.
The increase in other direct costs as a percentage of total net revenue was primarily a result of the decline in total net revenue for the year ended March 31, 2025. Product development Product development expenses include the development and maintenance of the Company’s product suite and are primarily a function of personnel.
Additionally, the Company performed its annual goodwill impairment evaluation as of March 31, 2024, noting continued trends in quoted market price, interest rates, and the Company’s forecast as described above.
The Company also performed its annual goodwill impairment evaluation as of March 31, 2024, noting continued trends in quoted market price, interest rates, and the Company’s forecast.
Purchases of Equity Securities by the Issuer and Affiliated Purchaser There were no purchases of equity securities by us during the fiscal year ended March 31, 2024. Recent Sale of Unregistered Securities None.
Purchases of Equity Securities by the Issuer and Affiliated Purchaser There were no purchases of equity securities by us during the fiscal year ended March 31, 2025. Recent Sales of Unregistered Securities None.
Our future cash flows from operating activities will be diminished if we cannot increase our revenue levels and manage costs appropriately. Cash provided by operating activities was $28,677 for the year ended March 31, 2024, compared to $113,376 for the year ended March 31, 2023.
Our future cash flows from operating activities will be diminished if we cannot increase our revenue levels and manage costs appropriately. Cash provided by operating activities was $11,880 for the year ended March 31, 2025, compared to $28,677 for the year ended March 31, 2024.
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 or to fund our other liquidity needs.
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.
Costs are anticipated to be incurred through various deployment phases that are expected to continue through early fiscal year 2026. The Company incurred $9,417 of business transformation costs in the twelve months ended March 31, 2024. These costs are recorded in General and Administrative expenses and Product Development expenses in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.
Costs are anticipated to be incurred through various deployment phases that are expected to continue through early fiscal year 2026. The Company incurred $2,060 of business transformation costs during the year ended March 31, 2025. These costs are recorded in General and Administrative expenses and Product Development expenses in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.
In each evaluation, the Company also updated key inputs for the discounted cash flow models, including the weighted-average cost of capital, which incrementally increased due to higher interest rates, market volatility, and the company specific premium. The market approach estimates the fair value of the reporting unit by applying multiples of operating performance measures to the reporting unit’s operating performance.
In each evaluation the Company also updated key inputs for the discounted cash flow models, including weighted-average cost of capital, which incrementally decreased due to lower equity risk premium and the company specific premium. The market approach estimates the fair value of the reporting unit by applying multiples of operating performance measures to the reporting unit’s operating performance.
Our cash used in investing activities for the twelve months ended March 31, 2024 and March 31, 2023, was primarily comprised of capital expenditures related to internally-developed software and equity investments in strategic businesses.
Our cash used in investing activities for the twelve months ended March 31, 2025 and March 31, 2024, was primarily comprised of capital expenditures related to internally-developed software.
AGP - Marketplace The Company, through its AGP segment, provides platforms that allow DSPs and publishers to buy and sell ad inventory, respectively, in a programmatic, real-time bidding (“RTB”) auction. The Company generally contracts with DSPs through an RTB Ad Exchange Agreement.
AGP - Marketplace The Company, through its AGP segment, provides platforms that allow DSPs and publishers to buy and sell ad inventory, respectively, in a programmatic, real-time bidding auction. The Company generally contracts with DSPs through service orders.
The Company’s interim and annual testing reflected a 75%/25% allocation between the income and market approaches. The Company believes the 75% weighting to the income approach is appropriate, as it directly reflects its future growth and profitability expectations.
The Company’s interim and annual testing reflected a 75%/25% allocation between the income and market approaches. In both years, the Company believed the 75% weighting to the income approach to be appropriate, as it directly reflects its future growth and profitability expectations.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the NASDAQ Capital Market under the symbol “APPS.” Holders As of May 23, 2024, there were 89 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the NASDAQ Capital Market under the symbol “APPS.” Holders As of June 13, 2025, there were 85 holders of record of our common stock.
It also separately contracts with publishers through an advertising insertion order or service order to provide access to its auction platform and the ad inventory available through the platform. The auction is held when ad inventory becomes available. The Company will send bid requests to various DSPs, which may choose to bid on the available ad inventory.
It also separately contracts with publishers through service orders to provide access to its auction platform and the ad inventory available through the platform. The auction is held when ad inventory becomes available. The exchange platform will send bid requests to various DSPs, which may choose to bid on the available ad inventory.
Total costs of revenue and operating expenses included total impairment of goodwill charges of $336,640. Excluding the impairment of goodwill, total costs of revenue and operating expenses decreased by $37,475 or 6.0% for the year ended March 31, 2024, compared to the year ended March 31, 2023.
Total costs of revenue and operating expenses included impairment of goodwill charges of $336,640 during the year ended March 31, 2024. Excluding the impairment of goodwill, total costs of revenue and operating expenses decreased by $37,699 or 6.5% for the year ended March 31, 2025, compared to the year ended March 31, 2024.
Sales and marketing expenses included acquisition-related costs and severance costs of $1,836 for the year ended March 31, 2023. Excluding business transformation costs, acquisition-related costs and severance costs, sales and marketing expenses decreased by $1,666 for the year ended March 31, 2024.
Sales and marketing expenses included severance costs, acquisition-related costs, and business transformation costs of $1,688 for the year ended March 31, 2024. Excluding business transformation costs, acquisition-related costs and severance costs, sales and marketing expenses decreased by $98 for the year ended March 31, 2025.
Other direct costs of revenue Other direct costs of revenue are comprised primarily of hosting expenses directly related to the generation of revenue and depreciation expense associated with capitalized software costs and amortization of developed technology intangible assets. 37 Table of Contents Other direct costs of revenue decreased by $1,646 or 4.5% to $34,799 for the year ended March 31, 2024, and was 6.4% as a percentage of total net revenue compared to $36,445, or 5.5% of total net revenue, for the year ended March 31, 2023.
Other direct costs of revenue Other direct costs of revenue are comprised primarily of hosting expenses directly related to the generation of revenue and depreciation expense associated with capitalized software costs and amortization of developed technology intangible assets. 41 Table of Contents Other direct costs of revenue decreased by $258 or 0.7% to $34,541 for the year ended March 31, 2025, and was 7.0% as a percentage of total net revenue compared to $34,799, or 6.4% of total net revenue, for the year ended March 31, 2024.
These customer contracts can be open ended in regards to length of time and can renew automatically unless terminated; however, specific advertising campaigns are generally short-term in nature. Under these agreements, the Company delivers the customer’s applications to end user mobile devices, allowing for the application to be installed by the end user at their discretion.
These customer contracts can be open ended in regard to length of time and can renew automatically unless terminated; however, specific advertising campaigns are generally short-term in nature. Under these agreements, the Company delivers the customer’s applications to end user mobile devices.
The Company also may manage application or ad campaigns of advertisers associated with these services. If the applications or advertisements are not delivered to the mobile device or the Company doesn’t comply with certain policies of the advertiser, the Company would be responsible and have to indemnify the customer for these issues.
If the applications or advertisements are not delivered to the mobile device or the Company doesn’t comply with certain policies of the advertiser, the Company would be responsible and have to indemnify the customer for these issues.
Excluding acquisition-related costs, business transformation costs and severance costs, general and administrative expenses increased by $10,892 for the year ended March 31, 2024.
Excluding acquisition-related costs, business transformation costs and severance costs, general and administrative expenses increased by $7,833 for the year ended March 31, 2025.
As of March 31, 2024, we had $386,000 drawn against the revolving line of credit under the New Credit Agreement. The proceeds from the borrowings were primarily used to finance past acquisitions.
As of March 31, 2025, we had $411,000 drawn against the revolving line of credit under the Amended and Restated Credit Agreement. The proceeds from the borrowings were primarily used to finance past acquisitions.
Additionally, product development expenses include certain integration and business transformation costs, which may impact the comparability of product development expenses between periods. Product development expenses decreased by $2,329 to $54,157 for the year ended March 31, 2024 compared to $56,486 for the year ended March 31, 2023.
Additionally, product development expenses include certain integration and business transformation costs, which may impact the comparability of product development expenses between periods. Product development expenses decreased by $14,693 to $39,464 for the year ended March 31, 2025 compared to $54,157 for the year ended March 31, 2024.
General and administrative expenses included acquisition-related costs of $424, business transformation costs of $6,639 and severance costs of $226 for the year ended March 31, 2024. General and administrative expenses included acquisition-related costs of $2,496 and severance costs of $350 for the year ended March 31, 2023.
General and administrative expenses included acquisition-related costs of $359, business transformation costs of $2,060 and severance costs of $1,067 for the year ended March 31, 2025. General and administrative expenses included acquisition-related costs of $424, business transformation costs of $6,639, and severance costs of $226 for the year ended March 31, 2024.
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, which will be subject to availability of borrowing capacity under our credit facility and our ability to access capital markets as well as financial, business, and other factors affecting our operations, many of which are beyond our control.
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.
The maturity date of the New Credit Agreement is April 29, 2026, and the outstanding balance is classified as long-term debt, net of debt issuance costs of $2,510, on our consolidated balance sheets as of March 31, 2024.
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 $2,313, on our consolidated balance sheets as of March 31, 2025.
These cash outflows were partially offset by cash inflows comprising of proceeds from borrowings of $50,000 and stock option exercises of $2,871.
These cash outflows were offset by cash inflows comprising of proceeds from borrowings of $38,000 and stock option exercises of $373.
See the segment discussion below for further details regarding net revenue. On Device Solutions ODS revenue for the year ended March 31, 2024, decreased by $50,216 or 11.9% compared to the year ended March 31, 2023.
See the segment discussion below for further details regarding net revenue. On Device Solutions ODS revenue for the year ended March 31, 2025, decreased by $28,480 or 7.7% compared to the year ended March 31, 2024.
Additionally, general and administrative expenses include certain integration and business transformation costs, which may impact the comparability of general and administrative expenses between periods. 38 Table of Contents General and administrative expenses increased by $15,335 to $169,617 for the year ended March 31, 2024 compared to $154,282 for the year ended March 31, 2023.
Additionally, general and administrative expenses include certain integration and business transformation costs, which may impact the comparability of general and administrative expenses between periods. 42 Table of Contents General and administrative expenses increased by $4,030 to $173,647 for the year ended March 31, 2025 compared to $169,617 for the year ended March 31, 2024.
These multiples are derived from comparable publicly-traded companies with similar investment characteristics. For the September 30, 2023 impairment evaluation, as compared to the March 31, 2023 testing, the Company reduced its revenue and EBITDA market multiples, reflecting declining valuations across the Company’s selected peer group.
These multiples are derived from comparable publicly-traded companies with similar investment characteristics. For the March 31, 2025 impairment evaluation, as compared to the March 31, 2024 evaluation, the Company increased its EBITDA market multiples, reflecting increasing valuations across the Company’s selected peer group.
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 year ended March 31, 2024, net cash used in investing activities increased by $8,783 to $43,848.
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 year ended March 31, 2025, net cash used in investing activities decreased by $16,371 to $27,477.
Excluding severance costs, acquisition-related costs and business transformation costs, product development expenses decreased by $3,670 for the year ended March 31, 2024.
Product development expenses included severance costs of $697 for the year ended March 31, 2025. Product development expenses included business transformation, severance, and acquisition-related costs of $3,574 for the year ended March 31, 2024. Excluding severance costs, acquisition-related costs and business transformation costs, product development expenses decreased by $11,816 for the year ended March 31, 2025.
During the three months ended September 30, 2023, as a result of sustained decline in the quoted market price of the Company’s common stock, increase in interest rates, and the Company’s forecasted operating trends, the Company identified interim indicators of impairment related to the goodwill assigned to the AGP reporting unit.
During the fiscal year ended March 31, 2024, the Company sustained a decline in the quoted market price of the Company’s common stock, an increase in interest rates, and the Company’s forecasted operating trends, which represented potential indicators of impairment related to the goodwill assigned to the AGP reporting unit for the three months ended September 30, 2023.
As of March 31, 2024, the interest rate was 7.71% and the unused line of credit fee was 0.35%, and we were in compliance with the consolidated leverage ratio, interest coverage ratio, and other covenants under the New Credit Agreement.
As of March 31, 2025, the interest rate was 8.17% and the unused line of credit fee was 0.35%, and we were in compliance with the consolidated secured net leverage ratio, consolidated interest coverage ratio, and other covenants under the Amended and Restated Credit Agreement.
For the year ended March 31, 2024, impairment charges of $336,640 were recorded. There was no impairment charge recorded during the years ended March 31, 2023 and 2022. Refer to Note 6— Goodwill and Intangible Assets for further details.
For the year ended March 31, 2025, no impairment was recorded. During the year ended March 31, 2024, the Company recorded total impairment of goodwill of $336,640. Refer to Note 6— Goodwill and Intangible Assets for further details.
These factors include general and regional economic, financial, competitive, legislative, regulatory, and other factors such as health epidemics, 40 Table of Contents 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.
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.
For further description of the terms of the New Credit Agreement, see Note 11—Debt under the heading “Revolver” in the notes to our consolidated financial statements under Part II, Item 8 of this Annual Report.
For further description of the terms of the Amended and Restated Credit Agreement, see Note 12—Debt under the heading “Revolver” in the notes to our consolidated financial statements under Part I, Item 1 of this Report.
The decrease was primarily due to a decline in brand and performance advertising of approximately $41,963 and a decline in advertising exchange of approximately $21,275 due to broader weakness in 36 Table of Contents mobile advertising markets and the impact of the consolidation and exiting of certain legacy AdColony platforms and business lines.
The decrease was primarily due to a decline in advertising exchange of approximately $20,857 due to broader weakness in mobile advertising markets and the impact of the consolidation and exiting of certain legacy AdColony platforms and business lines. Additionally, there was a decline in brand and performance advertising of approximately $4,674 due to broader weakness in mobile advertising markets.
When we are the principal in a transaction, revenue is reported on a gross basis, which is the amount billed to DSPs, advertisers and agencies.
When we are the principal in a transaction, revenue is reported on a gross basis, which is the amount billed to DSPs, advertisers and agencies. When we are an agent in a transaction, revenue is reported net of revenue share paid to app publishers or developers.
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 app developers and publishers, the recent conflict in Israel, and Russia’s invasion of Ukraine.
In addition, our products and solutions provide monetization opportunities for OEMs, carriers, and application (“app” or “apps”) publishers and developers. 35 Table of Contents 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, the conflict in Israel, Gaza, Lebanon and Syria, and the recent conflict between India and Pakistan.
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.
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.
Costs of revenue and operating expenses included total business transformation costs, severance and transaction costs of $9,418, $2,795 and $338, respectively, for the year ended March 31, 2024, compared to $0, $2,174, and $4,739, respectively, for the year ended March 31, 2023.
Costs of revenue and operating expenses included total business transformation costs, severance and acquisition-related costs of $2,060, $3,711 and $359, respectively, for the year ended March 31, 2025, compared to $9,418, $2,795, and $338, respectively, for the year ended March 31, 2024.
Revenue share decreased by $47,021 to $262,226 for the year ended March 31, 2024, and was 48.2% as a percentage of total net revenue compared to $309,247, or 46.4% of total net revenue, for the year ended March 31, 2023.
Revenue share decreased by $26,939 to $235,287 for the year ended March 31, 2025, and was 48.0% as a percentage of total net revenue compared to $262,226, or 48.2% of total net revenue, for the year ended March 31, 2024.
For each goodwill impairment evaluation performed at September 30, 2023 and March 31, 2024, respectively, the fair value of each reporting unit was estimated using a weighted combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach (the “Guideline Public Company Method”).
For both of the goodwill impairment evaluations performed during the years ended March 31, 2025 and March 31, 2024, the fair value of each reporting unit was estimated using a weighted combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach.
Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
These cash outflows were offset by cash inflows from proceeds from borrowings of $50,000 and stock option exercises of $2,871. Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
The increase in total costs of revenue and operating expenses is primarily due to the impairment of goodwill charges in 2024 of $336,640 partially offset by lower revenue share, which is the result of lower revenue over the same comparative periods.
The decrease in total costs of revenue and operating expenses after excluding the impairment of goodwill is primarily due to lower revenue share, which is the result of lower revenue over the same comparative periods, and lower product development costs.
Inflation, rising interest rates, supply chain disruptions, 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.
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 protectionist 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.
Our minimum purchase commitments under these hosting agreements total approximately $269,315 over the next six fiscal years. 41 Table of Contents Cash Flow Summary ($ in thousands) Year ended March 31, 2024 2023 % of Change Consolidated statements of cash flows data: Net cash provided by operating activities $ 28,677 $ 113,376 (74.7) % Equity investments (19,634) (8,499) 131.0 % Purchase price adjustment related to business acquisition 65 (2,708) (102.4) % Capital expenditures (24,279) (23,858) 1.8 % Net cash used in investing activities $ (43,848) $ (35,065) 25.0 % Proceeds from borrowings 50,000 25,500 96.1 % Payment of debt issuance costs — (99) (100.0) % Repayment of debt obligations (77,134) (149,000) (48.2) % Acquisition of non-controlling interest in consolidated subsidiaries (3,751) — 100.0 % Payment of withholding taxes for net share settlement of equity awards (1,286) (6,709) (80.8) % Options exercised 2,871 2,020 42.1 % Net cash provided by (used in) financing activities $ (29,300) $ (128,288) (77.2) % 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.
Cash Flow Summary ($ in thousands) Year ended March 31, 2025 2024 % of Change Consolidated statements of cash flows data: Net cash provided by operating activities $ 11,880 $ 28,677 (58.6) % Equity investments — (19,634) (100.0) % Business acquisitions, net of cash acquired — 65 (100.0) % Capital expenditures (27,477) (24,279) 13.2 % Net cash used in investing activities $ (27,477) $ (43,848) (37.3) % Proceeds from borrowings 38,000 50,000 (24.0) % Payment of debt issuance costs (1,627) — 100.0 % Repayment of debt obligations (13,000) (77,134) (83.1) % Acquisition of non-controlling interest in consolidated subsidiaries — (3,751) (100.0) % Payment of withholding taxes for net share settlement of equity awards (465) (1,286) (63.8) % Options exercised 373 2,871 (87.0) % Net cash provided by (used in) financing activities $ 23,281 $ (29,300) (179.5) % 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 46 Table of Contents fluctuations in receipts from customers and payments to our carrier and publisher partners as well as other vendors.
For the March 31, 2024 annual impairment evaluation, as compared to the Company’s interim evaluation as of September 30, 2023, the Company further reduced its estimated future cash flows, including revenues, gross profits, and EBITDA to reflect its best estimates at this time.
For both impairment evaluations performed at March 31, 2025 and March 31, 2024, respectively, the Company reduced its estimated future cash flows, including revenues, gross profits, and EBITDA, relative to the previous evaluation, to reflect its best estimates at this time.
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.
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.
The decrease in product development expenses after excluding severance costs, acquisition-related costs and business transformation costs was primarily due to lower employee-related costs of $948, depreciation and amortization expense of $3,085, reduced third-party development costs of $1,530, and other operating costs, including facilities and travel of $1,817. These decreases were partially offset by higher hosting and software costs of $3,709.
The decrease in product development expenses after excluding severance costs, acquisition-related costs and business transformation costs was primarily due to lower hosting and software costs of $4,162, employee-related costs of $3,404, third-party development costs of $1,933, and other operating costs, including facilities and travel of $2,363.
The decrease in sales and marketing expense after excluding business transformation costs, acquisition-related costs and severance costs was primarily due to lower costs for sales events and sales related travel of $863, reduced recruiting and relocation of sales personnel of $405, a reduction in the use of professional services of $410, and lower facilities and other related costs of $398, partially offset by an increase of personnel related costs of $411.
The decrease in sales and marketing expense after excluding business transformation costs, acquisition-related costs and severance costs was primarily due to lower costs for sales events and sales related travel of $1,379 and reduced facilities and other related costs of $1,650. These decreases were partially offset by increased professional services of $644 and personnel related costs of $2,287.
Sales and marketing expenses decreased by $1,814 to $61,481 for the year ended March 31, 2024 compared to $63,295 for the year ended March 31, 2023. Sales and marketing expenses included business transformation costs, acquisition-related costs and severance costs of $1,688 for the year ended March 31, 2024.
Sales and marketing expenses increased by $161 to $61,642 for the year ended March 31, 2025 compared to $61,481 for the year ended March 31, 2024. Sales and marketing expenses included severance costs of $1,947 for the year ended March 31, 2025.
Costs of revenue and operating expenses ($ in thousands) Year ended March 31, 2024 2023 % of Change Costs of revenue and operating expenses Revenue share $ 262,226 $ 309,247 (15.2) % Other direct costs of revenue 34,799 36,445 (4.5) % Product development 54,157 56,486 (4.1) % Sales and marketing 61,481 63,295 (2.9) % General and administrative 169,617 154,282 9.9 % Impairment of goodwill 336,640 — 100.0 % Total costs of revenue and operating expenses $ 918,920 $ 619,755 48.3 % Fiscal 2024 compared to fiscal 2023 For the year ended March 31, 2024, total costs of revenue and operating expenses increased by $299,165 compared to the year ended March 31, 2023.
Costs of revenue and operating expenses ($ in thousands) Year ended March 31, 2025 2024 % of Change Costs of revenue and operating expenses Revenue share $ 235,287 $ 262,226 (10.3) % Other direct costs of revenue 34,541 34,799 (0.7) % Product development 39,464 54,157 (27.1) % Sales and marketing 61,642 61,481 0.3 % General and administrative 173,647 169,617 2.4 % Impairment of goodwill — 336,640 (100.0) % Total costs of revenue and operating expenses $ 544,581 $ 918,920 (40.7) % Fiscal 2025 compared to fiscal 2024 For the year ended March 31, 2025, total costs of revenue and operating expenses decreased by $374,339 compared to the year ended March 31, 2024.
The Company completed the annual impairment assessment of its goodwill, and as a result, recorded an additional $189,459 non-deductible, non-cash goodwill impairment charge for the AGP reporting unit as of March 31, 2024. Total non-deductible, non-cash goodwill impairment charges for the AGP reporting unit for the twelve months ended March 31, 2024, was $336,640.
As a result of these reviews, the Company recorded a $147,181 and $189,459 non-deductible, non-cash goodwill impairment charge, respectively, for a total of $336,640 to the AGP reporting unit during the fiscal year ended March 31, 2024. There was no impairment of goodwill for the ODS reporting unit during the year ended March 31, 2024.
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. As of March 31, 2024, we were in compliance with all covenants under the New Credit Agreement.
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 decrease in other direct costs of revenue for the year ended March 31, 2024, compared to the prior year, was primarily due to slightly lower amortization of developed technology intangible assets and lower hosting costs.
The decrease in other direct costs of revenue for the year ended March 31, 2025, compared to the prior year, was primarily due to lower hosting costs and a decrease in amortization of internally developed software. These declines in costs were offset by an increase in bidding and platform fees.
Revenue from content media declined by approximately $30,812 primarily due to the end of a carrier partnership that resulted in lower daily active users on prepaid devices. Revenue from application media declined by approximately $19,403 primarily due to lower new device volume in the U.S. and internationally and weakness in mobile advertising and user acquisition spending.
Revenue from application media declined by approximately $28,938 primarily due to lower new device volume in the U.S. and internationally and a decrease in mobile advertising and user acquisition spending.
ODS - Application Media Supply - Carriers and OEMs We enter into contracts with carriers and OEMs for our ODS segment to help the customer control, manage, and monetize the mobile device through the marketing of application slots or advertisement space/inventory to advertisers and delivering the applications or advertisements to the mobile device.
We recognize revenue upon fulfillment of our performance obligation to our customers, which generally occurs at the point in time when an ad is rendered or an end consumer action, such as an app install, is completed. 47 Table of Contents ODS - Application Media Supply - Carriers and OEMs We enter into contracts with carriers and OEMs for our ODS segment to help the customer control, manage, and monetize the mobile device through the marketing of application slots or advertisement space/inventory to advertisers and delivering the applications or advertisements to the mobile device.
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 could result in goodwill impairment charges. Finite-lived intangible assets and property, plant, and equipment are amortized or depreciated over their estimated useful lives on a straight-line basis.
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.
The decrease of $84,699 was due to the following: • $437,318 decrease in net income, which includes the goodwill impairment charge of $336,640. • $1,955 increase due to changes in operating assets and liabilities, driven primarily by working capital changes. • $350,664 increase in non-cash charges during the year ended March 31, 2024 primarily related to goodwill impairment, increased deferred income taxes and increased stock-based compensation, partially offset by lower right-of-use assets for the year ended March 31, 2024.
The decrease of $16,797 was due to the following: • $328,349 decrease in net loss, which is primarily due to a goodwill impairment charge of $336,640 during the year ended March 31, 2024; • $8,262 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 offset by an increase in the change in accounts receivable, as well as a decrease in deferred tax liabilities; • $336,884 net decrease in non-cash charges during the year ended March 31, 2025 primarily related to the impairment of goodwill reported for the year ended March 31, 2024.
Liquidity and Capital Resources Our primary sources of liquidity are our cash and cash equivalents, cash from operations, and borrowings under our New Credit Agreement. As of March 31, 2024, we had unrestricted cash of approximately $32,916 and $139,000 available to draw under the New Credit Agreement with BoA, excluding the accordion feature, subject to the required covenants.
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 March 31, 2025, we had unrestricted cash of approximately $39,393 and restricted cash of approximately $691.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+3 added−0 removed3 unchanged
Biggest changeThe Company’s borrowings under its credit facility 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 credit facility. If market interest rates materially increase, the Company’s results of operations could be adversely affected.
Biggest changeThe 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.
The Company has transactions denominated in currencies other than the U.S. dollar, principally the euro, Turkish lira, and British pound, that expose the Company’s operations to risk from the effects of exchange rate movements. Such movements may impact future revenues, expenses, and cash flows.
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.
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. 48 Table of Contents
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. 52 Table of Contents
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 credit facility.
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 has not used any derivative financial instruments to manage its interest rate risk exposure. 47 Table of Contents 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.
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.
Added
As of March 31, 2025, the Company had $411,000 drawn against the Amended and Restated Credit Agreement and had $14,000 available to draw on the revolving line of credit under the Amended and Restated Credit Agreement, excluding the accordion feature, subject to the required covenants.
Added
As of March 31, 2025, the interest rate was 8.17% 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.
Added
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.

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