Digital Turbine (NASDAQ:APPS) has disclosed its financial performance for the fourth quarter and the full fiscal year 2024, experiencing a revenue decline of 18% year-over-year to $544.5 million. The company, however, remains focused on growth and expansion strategies despite the downturn and anticipates a revenue range of $540 million to $560 million for fiscal year 2025. The company is also dealing with regulatory reviews concerning the potential acquisition of UScellular, which could take over a year to finalize.
Key Takeaways
- Digital Turbine's revenue for FY 2024 was $544.5 million, a decrease of 18% from the previous year.
- The company achieved $92.4 million in adjusted EBITDA and $60.3 million in adjusted net income.
- Key growth drivers include expanding device footprint, product portfolio, and media relationships.
- Digital Turbine is focusing on alternative app market expansion with partnerships like Aptoide, Flexion, and ONE Store.
- The acquisition of UScellular is expected to take over a year due to regulatory reviews.
- The company is optimistic about leveraging its Digital Turbine Exchange for in-app advertising growth.
Company Outlook
- Digital Turbine expects revenue between $540 million and $560 million for FY 2025.
- Anticipated non-GAAP adjusted EBITDA for FY 2025 is estimated to be between $85 million and $95 million.
- The company is optimistic about its long-term value to shareholders and its ability to capitalize on emerging opportunities.
Bearish Highlights
- The company reported a year-over-year revenue decline of 18% in FY 2024.
- Short-term headwinds include challenging US device sales and restrictions on distributing Chinese non-gaming applications in the US.
Bullish Highlights
- Digital Turbine is leveraging investments in alternative app markets to drive growth.
- The launch of SingleTap in Korea is expected to enhance the partnership with ONE Store.
- The company sees potential in its Digital Turbine Exchange to attract brand advertisers.
Misses
- The company faces challenges in the operating environment, including the inability to distribute certain apps in the US.
Q&A Highlights
- The CEO clarified that the acquisition of UScellular is not imminent and is subject to a lengthy regulatory review process.
- The company discussed the impact of Apple (NASDAQ:AAPL)'s new privacy policy on app developers and expects EU regulators to weigh in later in the year.
- Digital Turbine is gaining traction with Tier 1 publishers in open app distribution, particularly in gaming.
- The company is committed to growth and has identified several encouraging activities and drivers for future progress.
Digital Turbine's fiscal year 2024 results reflect a challenging period, with a significant revenue decrease, but the company's strategic investments and focus on alternative app markets, such as partnerships with Aptoide, Flexion, and ONE Store, signal a robust effort to return to growth. The company's outlook for fiscal year 2025 shows a cautious optimism, with revenue projections slightly below the FY 2024 figures but with a clear focus on leveraging their unique advertising exchange to attract both performance and brand advertisers. The acquisition of UScellular looms on the horizon, promising a potential boost in revenue once regulatory hurdles are cleared. Digital Turbine's commitment to growth and innovation remains steadfast as it navigates the evolving digital landscape.
InvestingPro Insights
Digital Turbine's (APPS) latest earnings report highlights the company's resilience and strategic direction amidst a challenging fiscal year. As investors digest the information, InvestingPro provides additional insights that could help in assessing the company's position and prospects.
InvestingPro Tips for Digital Turbine suggest that despite the setbacks, the company is expected to see net income growth this year. This aligns with the company's own optimistic revenue projections for fiscal year 2025. Additionally, Digital Turbine is trading at a low Price / Book multiple of 0.51, which could indicate that the stock is potentially undervalued relative to its book value, presenting an attractive entry point for value investors.
However, it's important to note that three analysts have revised their earnings downwards for the upcoming period, which may signal caution regarding the company's near-term earnings potential. Moreover, the stock's price has experienced significant volatility, with a notable decline over the past year, but it has shown a strong return over the last month.
InvestingPro Data further reveals the financial contours shaping Digital Turbine's market presence:
- Market Cap (Adjusted): 228.75M USD, reflecting the company's current valuation in the market.
- Revenue Growth: The last twelve months as of Q3 2024 saw a decline of 19.38%, underlining the revenue challenges mentioned in the article.
- Price Total Return: The 1 Month Price Total Return as of the 150th day of 2024 stands at 14.29%, suggesting a recent uptick in investor confidence.
For readers interested in a deeper dive into Digital Turbine's financials and future prospects, InvestingPro offers a comprehensive array of additional tips. Utilize the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover why analysts predict profitability this year despite recent hurdles. With 12 more InvestingPro Tips available, investors can gain a thorough understanding of Digital Turbine's potential trajectory.
Full transcript - Mandalay Digital Group Inc (APPS) Q4 2024:
Operator: Good day and welcome to the Digital Turbine Reports Fourth Quarter and Fiscal 2024 Financial Results Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Brian Bartholomew, Senior Vice President of Capital Markets. Please go ahead.
Brian Bartholomew: Thanks, Nick. Good afternoon, and welcome to the Digital Turbine Fourth Quarter and Fiscal 2024 Earnings Conference Call. Joining me on the call today to discuss our results are CEO, Bill Stone; and CFO, Barrett Garrison. Before we get started, I'd like to take this opportunity to remind you that our remarks today will include forward-looking statements. These forward-looking statements are based on our current assumptions, expectations and beliefs, including projected operating metrics, future products and services, anticipated market demand and other forward-looking topics. Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. Except as required by law, we undertake no obligation to update any forward-looking statements. For a discussion of the risk factors that could cause our actual results to differ materially from those contemplated by our forward-looking statements, please refer to the documents we file with the Securities and Exchange Commission. Also during this call, we will discuss certain non-GAAP measures of our performance. Non-GAAP measures are not substitutes for GAAP measures. Please refer to today's press release for important information about the limitations of using non-GAAP measures as well as reconciliations of these non-GAAP financial results to the most comparable GAAP measures. Now I'll turn the call over to our CEO, Mr. Bill Stone.
Bill Stone: Thanks, Brian, and thank you all for joining our call tonight. I'd like to break my remarks into three areas. First, I want to close out our year-end results. Secondly, you may have seen in our outlook that we're beginning to issue annual guidance for the first time and I want to focus the majority of my remarks on our plan to return to growth this fiscal year versus only focusing on a single quarter. And finally, I want to provide some commentary and updates on how we're positioned to profitably grow well beyond just this fiscal year. To close out fiscal '24, we achieved $545 million of revenue, $92 million of EBITDA and $0.58 of non-GAAP earnings per share. In addition to the numbers and despite a challenging operating environment, I'm proud of the team and specifically the notable progress we made on numerous investment activities that set us up for the future, including our progress on our new version of Ignite, our migration to our new hosting platform, our launch of SDK Bidding and many new back-end corporate systems consolidated and launched. We've also seen a number of tailwinds emerge that I'll discuss later in my remarks that will be catalyst for our return to growth. But we also continue to navigate a few short-term headwinds that are persistent in our very near-term results. Specifically, US device sales continue to be challenging. As some US operators have publicly reported, postpaid upgrade rates were approximately 3% of the base for the March quarter or a run rate of 12% per year. This would imply more than an eight-year upgrade cycle, which I think all of us would recognize as unsustainable for the long-term, but it is a reality in the present. Exacerbating this trend were fewer software updates on the in-life devices, which reduced monetization opportunities. The other headwind is our ability to distribute Chinese nongaming applications here in the United States. We're working aggressively and pivoting these spends to other international markets. But nevertheless, it does impact revenue here in the US market but our spend from nongaming Chinese companies has decreased by approximately $20 million from fiscal '23 to fiscal '24 despite those companies wanting to spend more on our US supply. Our number one priority is returning the business to growth. And in order to do that, there are three growth drivers. First is growing our device footprint. As mentioned in our earnings press release, we anticipate an incremental 70 plus million devices launching with various Ignite capabilities. Including in this number is expanding our relationship with Motorola (NYSE:MSI) that is both exclusive to Digital Turbine and it's also global, including on all operators here in the United States. Motorola has been shipping between 40 million to 50 million devices over the past few years and are one of the few OEMs showing positive growth. Their shipments roughly approximate to the amount of postpaid devices that all the US operators combined are selling. In other words, this is a positive material development for us. It is early days, but we are also live with ONE Store in Korea that will ultimately add tens of millions more devices with SingleTap capability. Our pipeline remains extremely robust as we are seeing many global operators and OEMs wanting to work with us, and we look forward to sharing more device supply opportunities in the future. In addition to these wins, we've heard some recent encouraging reports from chipset suppliers on future device volumes, which tend to be lead indicators for future demand as well as the anniversarying of the two to three year lease plans later this year offered by US operators. Thus, we are hopeful for better trends here in the US into the future, but for now it's a major headwind and is reflected in our forecast. But returning to growth through new devices on new partners plus existing partners showing momentum are the keys to our first growth driver. Our second growth driver is expanding our product portfolio for both our ODS and AGP businesses. Scaling new ad tech and on-device capabilities are critical to our return to growth. On our AGP business, as we've mentioned on prior calls, the last couple of years have been focused on investments and consolidating our ad tech assets into a common platform. That's now largely complete and ready to bear fruit. A specific example of this is our exchange, which we brand as the Digital Turbine Exchange, or DTX, which we have now been fully consolidated from our legacy Fyber and AdColony acquisitions. We believe we're uniquely positioned in mobile with the acquisitions to differentiate with brand dollars to our publishers versus our competitors that are more focused on performance dollars. And conversely, many advertisers spending on brand have not been as focused on mobile, but other channels such as CTV or retail media. So we believe the combination of our mobile expertise, access to first-party data, product capabilities such as SingleTap and our agency brand relationships and creative capabilities, drive attention for advertiser audiences is something that we believe is going to allow us to win. And the early returns are encouraging. Our brand revenues for the March quarter were up 15% from the March quarter of last year. We're also now over one-third of our revenues on our DT Exchange coming from SDK Bidding, which is a requirement for many brands and agencies in how they bid for audiences. And this allows us to grow our revenues, not just with direct brand, but also with brand omni DSPs like The Trade Desk (NASDAQ:TTD) and Google (NASDAQ:GOOGL) DV360. Our other AGP product growth driver will be increasing our share of voice for leveraging our first-party data and our Ignite capabilities via bidding. We do this today through our Appreciate DSP acquisition, which is starting to show renewed growth. Our AI and machine learning enhancements to our new DSP, which we brand as DT Direct, will allow us to improve our bidding on our own supply, allowing us to optimize our own demand over our own supply. We also look to partner with third-party DSPs that can help us grow our share of voice. And this all translates not just into top line revenue growth with more demand dollars, but is also key in driving the flywheel effects of improving revenues on our other products such as SingleTap, our DT Exchange and FairBid, our mediation product. Our primary growth drivers on our ODS business are SingleTap alternative apps and better leveraging our first-party data for our existing ODS products. SingleTap continues to add more devices, more advertisers and have better execution. It's early days for alternative app distribution approach. But as we've discussed on prior calls, we will look to begin showing our progress of distribution, not just on Android and Apple iOS but also alternative app versions. The interest from large Tier 1 publishers is encouraging, it will be a growth driver for us this year. And finally, we've historically been focused on leveraging our distribution footprint to drive ODS revenue. We've not optimized our first-party data. We are beginning to do a better job here and see an increased interest from our supply partners to also leverage these insights to help advertisers drive better outcomes. And our third growth driver is our media relationships. We are continuing to expand directly with brands such as Apple, Amazon (NASDAQ:AMZN), Starbucks (NASDAQ:SBUX), P&G and many others as well as their advertising agencies that are driving 15% plus annual growth. In particular, I'm pleased to announce that GroupM who is the largest media buying agency in the world under the WPP (LON:WPP) umbrella, has included us as the only global preferred partner for mobile. This materially expands our addressable market for ad dollars as GroupM manages over $50 billion of media buying and our competition in mobile will not have access to this brand inventory. And as things like cookie deprecation happen in Chrome, it will showcase our mobile app inventory as more attractive offerings to brands than other omni SSPs that have been relying upon these identifiers and other ad channels. We anticipate that our GroupM relationship will unlock media dollars from well-known brands. And we also continue to have many strategic relationships with large global game publishers. And with the tailwind of alternative app distribution, these players are increasingly attracted to Digital Turbine to develop deeper relationships. And the final media growth driver is our change in channel strategy to grow revenue per device outside the United States. Our current distribution approach is optimized to drive stronger RPDs on US supply. And the positive results we've talked about on prior calls of doubling RPDs over the past few years as a result of this. However, that's been at the expense of better execution of working with channel partners who can bring more media dollars to our international device footprint. This is a controllable and a major focus area for us. To summarize, our number one priority this fiscal year is returning our business to growth with three main growth drivers. The first is expanding our device footprint. The second is growth from new products such as SingleTap, DTX, alt app stores and so on. And the third is expanding our media relationships, whether that's via new relationships with behemoths like GroupM expanding our brand dollars with brand buyers like The Trade Desk and Google or other gaming strategic partners looking to expand their mobile gaming audiences. And beyond this fiscal year, the goal is not just to return to growth but accelerate it. The key driver here will be the expansion of our alternative app strategy. We've launched our first alternative app distribution products, which we brand as DT Hub with five operators here in the United States. We're leveraging our Aptoide investment and are generating revenue today. We've also taken a minority interest in Flexion so we can improve our partnership on building great alternative app experiences as Flexion is a leading porting source for many alternative stores such as Amazon, Samsung (KS:005930), Huawei, Xiaomi (OTC:XIACF) and many others. And finally, we've also taken an equity stake in ONE Store. And as I mentioned earlier, we've just launched SingleTap on devices in Korea this month. This launch has three benefits: One is it will allow us to leverage our DSP to friction-free app downloads of alternative app versions to Korean customers. And second is a way for us to expand scale of developed market supply versus being constrained with the issues I mentioned here in the US. And finally we'll look to enhance our partnership with ONE Store into the future outside of Korea and combined with our Aptoide and Flexion relationships, we've got the building blocks to be a dominant force in the alternative app market. And as a reminder for investors, the Digital Markets Act, or DMA, launched in March in the EU, and we would encourage investors to pay very close attention to the details around this such as how the regulators manage Apple compliance and the corresponding opportunities that will present for us. I also want to emphasize that the alternative app strategy is not just about new in-app payment revenues, but perhaps more importantly, to be the catalyst to accelerate our existing lines of businesses beyond this fiscal year. Today, approximately 50% of our business is driven by user acquisition and 50% is driven by in-app advertising. Our app providers want to find ways to acquire more users at a lower cost with alternative users and we believe that this will also open up new app providers to leverage our ad tech stack as part of this strategy, thereby driving more AGP revenue growth. We're live today running both alternative app user acquisition campaigns and in-app advertising, leveraging our technology into the current result. In other words, improving our present revenues and cash flow are both closely linked to the future strategy. And a key to all this will be the leadership to make it happen. I'm pleased to announce that Michael Ackerman will be joining our team as the Chief Business Officer effective June 3rd, reporting to me. Michael is joining us from Uber (NYSE:UBER), where he's the General Manager of advertising across Uber's various businesses. And before that, Michael had executive roles at Pinterest (NYSE:PINS) and Cardlytics (NASDAQ:CDLX). I'm excited to have Michael's nice blend of functional skills in product, marketing and sales, but perhaps even more excited with his global background and cultural fit with ours. Michael's primary responsibility will be the lead executive returning our business to growth. And in conclusion, we've seen some nice tailwinds in our business that should be catalyst returning our business to growth later this year with many specific drivers from devices, products, media partners and cost optimization activities that are all in flight to accomplish this year. Those are the things that are going to return Digital Turbine to a growth company in the short term, while we continue to preserve our very bright long-term vision. And with that concludes my prepared remarks, and I'll take it over to Barrett to take you through the numbers.
Barrett Garrison: Thanks, Bill, and good afternoon, everyone. For the fiscal year 2024, we reported $544.5 million revenue down 18% year-on-year and generated $92.4 million in adjusted EBITDA or 17% of revenue and delivered $60.3 million in adjusted net income or $0.58 per share as compared to $1.15 per share in the prior year. While fiscal year 2024 presented its share of challenges, we are pleased to share that our strategic initiatives are gaining traction and setting the foundation for future growth, and I'll cover some of those highlights later within my remarks. Now turning to the financial performance in the quarter. Total revenue of $112.2 million in the quarter was down 20% year-on-year. On Device Solutions, our ODS segment revenues of $78 million were slightly below our expectations, largely due to weaker US upgrade rates that Bill described in his remarks. In our app growth platform, our AGP business. Q4 revenues of $33.8 million performed generally in line with our guidance expectations. We saw improving signs of spin levels, particularly within brand, evidenced by greater than 15% year-over-year revenue increases. The Q4 results in our AGP business reflects the impact of sunsetting certain legacy business lines in early January of this year. I'd reiterate Bill's earlier comments that despite the near-term headwinds, we're encouraged by the completion of our platform consolidation and expect these efforts to be an important catalyst for our future revenue growth. Before leaving revenues, I would point out, we completed sunsetting certain legacy business lines, marking an important milestone towards our priority of returning to growth and strategic focus. Looking ahead, we anticipate the March quarter revenues to be a period of normalization, free from the transitional impacts of our integration efforts. Drawing from historical seasonality trends, we anticipate modest sequential growth in the June quarter. Our Q4 gross margin was 46%, which was up from 44% in Q4 from the prior year. Improvement in margin year-on-year was largely driven by favorable product mix shifts where we experienced an increase in the mix towards certain higher-margin products. While mix had a positive impact, we also experienced improved margins year-on-year across both ODS and AGP segments. With our commitment to financial resilience, we proactively pursued expense efficiencies to maximize the profitability of our growth strategy and remain disciplined with expense plans. Cash operating expenses were $39 million in the quarter, decreasing 5% from prior year and represented 35% of our revenues in the quarter. Through our strategic investments, we've integrated our technology platforms, paving the way for enhanced operational synergies, scalability and unlocking the full potential of our organization. We're encouraged to see that our efforts are yielding tangible results. One notable area of progress is in our cloud computing expenses, where we've achieved important cost reductions and expenses are now declining as a percent of revenue, a testament to the effectiveness of our initiatives and optimizing cost and driving operational efficiency. Turning to profitability. Our adjusted EBITDA of $12.3 million in the quarter came in line with our guidance expectations. Given the inherent operating leverage in our business model, we expect the active focus on expense measures we are taking will strengthen the platform as we return to growth and enable a greater portion of those dollars to fall to the bottom line. In the quarter, we achieved non-GAAP adjusted net income of $12.6 million or $0.12 per share as compared to $13.6 million or $0.14 per share in the fourth quarter of 2023. During the period, we reported a higher-than-expected nonrecurring tax benefit. Also, as compared to prior year, we incurred greater interest expense driven by rising rates, partially offset by lower outstanding debt. Our GAAP net loss of $2.32 per share in the fourth quarter reflects a noncash goodwill impairment charge of $1.86 per share or $189.5 million in our AGP business. This charge was primarily driven by recent market-based factors by the decline in our stock price. There was no change to goodwill for the ODS reporting unit and we remain optimistic about the AGP segment given the ad tech enhancements we've made to enable future growth. Our cash balance at the end of the quarter was $32.9 million. Free cash flow from operations of negative $15.6 million was temporarily impacted primarily due to delays in invoicing timing. While we've completed our back-office system implementation to a single accounting platform that we have discussed on prior calls, our billing system migration impacted certain AGP invoicing timing delays in the quarter, resulting in a temporary negative impact on cash flows and working capital in the quarter of approximately $15 million. We have corrective actions in motion and expect to see our receivable balance and working capital returned to normal levels in the coming months and expect to return to generating positive free cash flow in the back half of the calendar year. Additionally, during the period, we completed and funded a $10 million strategic equity investment in our ONE Store partnership. Our debt balance ended the quarter at $385 million drawn on our revolving credit facility and as our business strengthens, we would expect to pay down our revolver in larger quarterly increments. Now let me turn to our outlook. Looking ahead to our growth road map, we are optimistic about the prospects for Digital Turbine. Starting this fiscal year, we are now providing annual guidance. This move is aimed at informing our stakeholders about our longer-term growth road map, intentions and expectations. With the recent addition of new global device supply and the ongoing enhancements to our platform, we are well positioned to capitalize on the emerging opportunities and drive top line growth and free cash flows. We expect revenue to be in the range of $540 million to $560 million for the fiscal year 2025, reflecting our confidence in the underlying trajectory of the business and the momentum we are seeing in the market. Additionally, we project non-GAAP adjusted EBITDA of between $85 million and $95 million, underscoring our commitment to driving operational efficiency and delivering value for our shareholders. In closing, we are working diligently to ensure that we position the company for growth in 2024 and beyond. Our business is seeing encouraging signals and evidence implying growth on the horizon fueled by some of the announcements and growth catalysts that Bill referenced earlier. Operationally, we have made significant strides in modernizing key product functionality and back-office system infrastructure and enhancing our leadership team. These initiatives are integral to our long-term success and will enable us to unlock growth potential and enhance shareholder value. Furthermore, the recent wins on the media and advertiser side are proof points that our newly reengineered ad tech platform is now performing at a level at which is well positioned to gain market share. As we look ahead to fiscal year 2025 and beyond, we are confident in our ability to capitalize on emerging opportunities, drive top line and free cash flow growth and deliver sustainable long-term value for our shareholders and we are excited about the journey ahead. With that, let me hand it back to the operator to open the call for questions. Operator?
Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions]. The first question comes from Omar Dessouky with Bank of America (NYSE:BAC). Please go ahead.
Omar Dessouky: Hi. Thanks for taking my question. We saw a news article today saying that T-Mobile is about to acquire UScellular. I think UScellular is one of your biggest -- one of your customers, but T-Mobile is working with one of your competitors. So do you foresee any impact to your business? And how should we think about the potential opportunity and risks relating to the merger -- potential merger?
Bill Stone: Yes. Sure, Omar. This is Bill. I think that this is something that is -- what I read today is that it's going to be about a year plus away from closing. So it's not anything that's imminent. It has to go through a bunch of regulatory reviews. But with that being said, UScellular has been a fantastic partner for us, for ours. They do our highest revenue per device of any of our partners today. And they've been fantastic for us. Today, they're probably about 1% to 2% of our revenue. I look forward to having that as an opportunity to put another zero on it is hopefully T-Mobile can see the great performance they've been able to generate with us.
Omar Dessouky: Okay. And if I could just ask one follow-up. Apple has begun enforcing new privacy manifest policy at the beginning of May. So wondering if you've heard anything from clients. I know there's a lot of focus on Android usually, but do you expect to see anything from the Apple side or just read through from some of the customers would be really helpful? Thanks.
Bill Stone: Yes, yes, sure. So I think as far as Apple's new pricing goes, I think, it really depends upon what kind of app developer you are, I think for app developers that have kind of mid to hardcore gaming audiences, where maybe there are fewer numbers of people, but they spend more per person. I think the changes are pretty much more of a nonevent. I think for lower end, casual, hyper-casual games that are advertising based, and may not generate a lot per user, it's prohibitive. So I think our expectation, Omar, is that we're going to see the EU regulators weigh in on this later this year. And I think we'll see a lot of downstream impacts from that, whether that's from telcos, whether that's from OEMs, whether that's from publishers, whether that's from mega cap players. I think you're going to see a lot of downstream impacts depending upon how the EU rules on some of the pricing moves they've made as part of the DMA.
Omar Dessouky: Okay. Thanks a lot guys. I look forward to catching up later.
Bill Stone: All right. Thanks.
Operator: The next question comes from Darren Aftahi with Roth. Please go ahead.
Darren Aftahi: Hey, guys. Good afternoon. Bill, you talked about some traction with Tier 1 publishers on the open app distribution side. Could you indulge us a little bit more about kind of the traction you're seeing and if you said there may be some contribution this fiscal year? Like how material is that?
Bill Stone: Yes. So, yes, thanks, Darren. So as far as Tier 1 publishers, we're seeing great relationship with some of the gaming folks, I'd call it King, I'd call out Playtika, I'd call out PlaySimple, I'd call out Scopely, it's kind of some specific publisher names that we're working with in the alternative space. And so as they are looking to diversify away from paying a 30% tax to Apple or Google. Obviously, alternative distribution is something is highly attractive to them, given it's the single biggest line item on their P&L right now. So we look forward to being good partners with companies like that and help them achieve their strategic goals.
Darren Aftahi: Great. Maybe if I could ask one more. Barrett, you made some commentary about sequential improvement in June relative to the annual guide. I guess maybe I missed or I didn't hear it correctly, if you said anything specifically about the cadence in margin that you guys historically have always given one quarter out guidance and given sort of 30 days left in the quarter. I'm just kind of curious if you have any thoughts there.
Barrett Garrison: Yes, Darren. Our focus has been we've been wanting to provide annual guidance for some time now. We think this is a good opportunity. I also wanted to focus on there can be ins and outs in the quarter, and we thought this would simplify for stakeholders, our approach and intent for growth. I also, you'll notice, I did comment on some seasonality, flattish to modest growth sequentially between the June and March quarter.
Darren Aftahi: Got it. Great. Thank you.
Operator: [Operator Instructions]. The next question comes Tim Nollen with Macquarie. Please go ahead.
Tim Nollen: Hi, guys. Thanks for taking the question. I'd like to ask about things on the AdCo side, where you had said previously with some of the longer tail customers that you were kind of not bringing on as part of your consolidation efforts would be, I think you had said would be kind of cycling out as lost business around this time kind of early 2025, fiscal '25. Just wondering if you could update us on that. And maybe comment a bit further on. It's been a very interesting market with the two biggest players in the space AppLovin (NASDAQ:APP) and Unity reporting very different types of results in ad tech. Just wonder if you could talk a bit about your positioning versus them and kind of what you're seeing in terms of demand from your customers to use your DT Exchange and other services. Thanks.
Bill Stone: Yes. Thanks, Tim. Yes, so you're referencing in the first part of your question around the deprecation of our AdColony exchange. And the AdColony Exchange had many, many tens of thousands of publishers and a very long tail of publishers, some of which were doing hundreds of dollars or thousands of dollars. And it didn't make economic sense for us to go out and migrate a lot of those legacy publishers over to our consolidated Digital Turbine Exchange. And so we're rolling through those comps right now. So as we go forward in the year, you'll see that no longer be a negative comp for us like it has been in the rearview mirror. But with that being said, the reason we did that is we wanted to consolidate around Digital Turbine Exchange. And we believe we've got something pretty special and unique here, not just with our performance advertisers, but also with brand advertisers. As I mentioned in my remarks being certified by GroupM as a global distribution partner. That's a really big deal in terms of unlocking brand dollars where now those brand dollars has historically had gone to other channels, whether that's retail media or CTV or other places on the web or what have you. So now in terms of in-app advertising for mobile, that's something that's unique for us, and that's something our competitors do not have. So if you talk to most game publishers and others out there, they'd much rather see a P&G ad or a Coca-Cola (NYSE:KO) ad than an ad for competing game is trying to take their users. So and we think this is something that is very sticky and something that has now allowed us to consolidate around in terms of differentiating our exchange versus others that are out in the marketplace. So that's something we're pretty excited about.
Tim Nollen: Okay. So could I just follow up on that point then, Bill. So is the momentum and the growth return to growth you're talking about for next year, is that maybe more coming from those advertisers? Or do you also see the gaming advertisers using a platform more...
Bill Stone: Yeah, we'll continue to work with our performance and gaming advertisers. But you'd asked the question around differentiation. And we feel like the brand dollar is rolling through, whether those are direct brand dollars, those are PMP to brand dollars or whether those are coming from omni-DSPs like The Trade Desk or Google DV360. That's something we're really excited about in terms of that's unique to us in the marketplace on our publishers. So that's something we're really focusing on how we can differentiate there.
Tim Nollen: Yeah, very clear. Got it. Thanks.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Bill Stone for any closing remarks.
Bill Stone: Yes. Thanks, everyone, for joining the call tonight. I feel the weight of our stock performance on our shareholders, employees and all of our stakeholders. And I want to make sure everybody knows we as a team are fully committed to returning to growth. We have a number of encouraging activities and growth drivers are going to help us achieve this. We look forward to reporting our progress against all the points that we made on today's call and we'll talk to you again on our fiscal '25 first quarter call in a few months. Thanks and have a great night.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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