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What's in Store for Digital Turbine (APPS) in Q1 Earnings?

Digital Turbine APPS is set to release first-quarter fiscal 2021 results on Aug 5.

For the quarter, Digital Turbine expects revenues between $47 million and $50 million. The Zacks Consensus Estimate for revenues is currently pegged at $48.4 million, indicating 58.7% growth from the figure reported in the year-ago quarter.

Moreover, the Zacks Consensus Estimate for earnings stands at 9 cents per share, unchanged over the past 30 days, and suggests growth of 80% from the figure reported in the year-ago quarter.

Over the trailing four quarters, Digital Turbine’s earnings beat the Zacks Consensus Estimate on three occasions and missed on one, the average surprise being 39.58%.

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

Factors to Consider

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

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

Digital Turbine, Inc. Price and EPS Surprise

Digital Turbine, Inc. Price and EPS Surprise

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

As of Jun 2, 2020, more than 405 million devices had Ignite installed, including more than 40 million devices installed during the fiscal fourth quarter.

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

The company’s focus on adding strategic resources to improve international revenue per device (RPD) and scale partnerships and infrastructure is expected to have been a key growth driver.

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

The company’s software was installed on more than 10 million unlocked Samsung devices across more than 75 countries at the end of the fiscal fourth quarter. Developments related to this initiative are likely to have boosted the company’s growth and credibility among international advertisers and other global OEM partners.

Also, notable initial partnerships in the United States with the likes of Verizon VZ, AT&T T Cricket and U.S. Cellular are expected to have helped the company pull demand from its media partners in the United States during the soon-to-be-reported quarter. These companies contributed 70% of total revenues in the fiscal fourth quarter.

Moreover, at the end of the fiscal fourth-quarter, the company’s diversified partner base included T-Mobile TMUS and rollouts with newer U.S.-based partners such as Tracfone to further strengthen content business portfolio.

However, this Zacks Rank #3 (Hold) company’s top line is expected to reflect weakness in advertising demand amid coronavirus outbreak as high profile multinational advertising companies across categories including brands, games, and mobile first applications reduced capital expenditure due to business uncertainties.

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