DIGITAL TURBINE, INC. (APPS): what the price assumes

In the published model solve dated 2026-Q2, anchored at $13.19, DIGITAL TURBINE, INC. (APPS) is priced for today's economics sustained for ~27.5 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/APPS

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 9: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 15.4% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~4.1 years.

Reconcile: at the x-ray's 9.3% required return this reads ~10.6 years; the models below use their own rates.

How unusual the bet is: high

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.

Per-Model Detail (n=6)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Digital Turbine's product sits inside the handset rather than beside it: SingleTap works by delivering apps to devices with a single touch, resulting in higher conversion rates, and the placement is won through carrier and handset-maker agreements rather than through an open ad auction.
• The suppliers are also the rivals, with the 10-K naming internally developed operator solutions and specific media distribution solutions built in-house by OEMs and wireless carriers as its more material competition, and a carrier that builds its own stack removes the placement rather than merely outbidding for it.
• Scheduled repayment of the secured loans begins September 30, 2026 against 37.7 million dollars of liquid assets, so the refinancing, not the ad cycle, is the next thing on the calendar.

Bull Case

One number decides this company, and it is not revenue. Over the trailing year Digital Turbine earned an operating margin of 1.9%. Measured across the full cycle rather than the trough, the same business has run closer to 6%. Everything else in the file is commentary on which of those two figures honestly describes what this business earns.

What makes a recovery plausible is where the product physically lives. Most mobile advertising competes for attention after the phone is already in someone's hand. On Device Solutions gets there before that, through what the 10-K calls both exclusive and non-exclusive agreements with our supply partners, which consist of wireless carriers and OEMs, and it converts through tooling built for that position: SingleTap, described in the filing as delivering apps to devices with a single touch, resulting in higher conversion rates. An install that takes one touch instead of five is not a marketing claim. It is conversion arithmetic an advertiser can measure, and it is why a revenue-share model works at all here.

The economics of that share are also moving the right way. Revenue share is the largest single cost in the business, the money handed back to the carriers and device makers whose handsets carry the placements, and the 10-K reports it was 43.1% as a percentage of total net revenue for the year ended March 31, 2026, against 48.0% the year before. Nearly five points of net revenue stayed with the company that previously did not. On a business this size, that shift alone is worth more than most of what gets discussed on an earnings call.

Growth in the most recent year came from outside the home market. The 10-K attributes the improvement to improved performance in the Asia Pacific and China regions, with application media revenue lifted by higher device volumes internationally. That is visible in how the revenue is now spread: the United States and Canada carry about 40% of it, Asia Pacific and China 31%, Europe, the Middle East and Africa 29%. A company that was once a wager on a handful of American carrier relationships is now majority non-domestic, which widens the pool of handsets its software can occupy.

The operating leverage is showing up in the balance sheet as well as the income statement. Fiscal 2026 revenue rose 15% to 565 million dollars while total debt fell to 361 million dollars from 409 million dollars over the same year. Retiring 48 million dollars of secured borrowings in twelve months while growing the top line is not the profile of a company out of options, and shareholders have not been the source of that cash: the share count has risen 3.9% a year across the four years to December 2025, real dilution but nowhere near what a distressed borrower gets forced into.

Bear Case

The wager embedded in these shares is not really about advertising volumes. It is about a margin recovery and about how long that recovery has to be held, and both assumptions are load-bearing. Digital Turbine earned 1.9% at the operating line over the trailing year and has run near 6% through the cycle. What the shares now assume is an operating margin around 7.2%, reached and then held across the better part of a decade rather than touched once. Stated in absolute terms that sounds modest, which is exactly the problem: it looks reachable, and it sits above anything the company has actually held.

The other half of the assumption is duration, and it is the fragile half. Today's quote works out to roughly 39 times the operating income the business earns through the cycle, and the arithmetic that supports it needs operating growth pinned at the 25% self-funding ceiling for close to 18 years. Every percentage point of shortfall against that ceiling adds about 2.8 years to the wait. Of comparable fast-growers, only about 14% held such a pace even a decade. The recent pace is not the stretch. The persistence is.

Where the thesis could break is on the supply side, and the 10-K says so without hedging. Distribution runs through wireless carriers and handset makers, and the filing names as its most material threat internally developed operator solutions and specific media distribution solutions built in-house by OEMs and wireless carriers, noting that Some of our existing wireless carriers could make a strategic decision to develop their own capability. A supplier turning into a competitor does not simply take share. It removes the placement, and there is no auction in which to win it back.

Then there is the financing, which is where a margin disappointment would actually bite. Gross debt of about 361 million dollars sits against 37.7 million dollars of liquid assets, leaving a net position near 323.2 million dollars. That is roughly 9.6 times operating profit on a through-the-cycle basis, and operating profit covers only about four fifths of the interest bill. The loans are secured on substantially all of the company's assets, they carry a margin running from 7.50 % to 8.00 % over term SOFR, scheduled repayment begins in the September 2026 quarter, and the company has told shareholders it is currently seeking to refinance certain Loan tranches. On what the agreement forbids the filing is blunt: Our Financing Agreement essentially prevents all payments of dividends to our stockholders.

None of this touches the fact that the product works, and the bull is right that a recovering revenue share and an amortizing loan can coexist happily for years. But the bottom line has not turned yet, with fiscal 2026 closing on a net loss of 37.7 million dollars, and the share count has been climbing 3.9% a year while that happened. An amortizing secured loan, a margin requirement above anything demonstrated, and a supplier base that can become a competitor add up to a thesis with very little slack in it.

Valuation

Two of the four ways of reading this business reach today's quote and two fall well short, and the split is the whole story. Peer-multiple approaches land above it, but they get there on revenue rather than earnings, because there are not enough earnings to work with. The forward-growth methods also reach it, sitting only a little under. Asset-based approaches, anchored on a book value of $1.60 a share, land at a small fraction of it, and the earnings-power lens lands lower still. When the frames that clear today's quote are the ones extrapolating and the frames that fall short are the ones counting what already exists, what is being paid for is a recovery rather than a franchise already earning.

The requirement is stateable in a line. Roughly 39 times the operating income the business earns through the cycle, which needs operating growth held at its 25% self-funding ceiling for close to 18 years, or equivalently an operating margin near 7.2% reached and then held across the better part of a decade. Digital Turbine ran 1.9% at the operating line over the trailing year and closer to 6% through the cycle. The near-term pace is inside what the company has recently delivered; the entire stretch lives in how long it must persist.

The mechanism that would deliver the margin is visible in the cost structure rather than in the revenue line. The single largest expense is the share handed back to the partners whose handsets carry the placements, and the 10-K reports it was 43.1% as a percentage of total net revenue for the year ended March 31, 2026, against 48.0% a year earlier. Almost five points of net revenue changed hands in the company's favour in one year. Repeat that even twice more and the through-cycle margin question answers itself; stall it and the duration assumption has to carry the entire load alone.

Geography now spreads the risk in a way it did not a few years ago. About 40% of revenue comes from the United States and Canada, 31% from Asia Pacific and China, and 29% from Europe, the Middle East and Africa, with the 10-K attributing the most recent year's improvement to improved performance in the Asia Pacific and China regions. That does not repair a margin. It does mean no single carrier relationship in a single country is the whole business anymore.

Solvency sets the tolerance for error in everything above. Gross debt near 361 million dollars against 37.7 million dollars of liquid assets is a thin cushion for a borrower whose facility begins amortizing in the September 2026 quarter, and the loans are secured on substantially all of the company's assets. The direction of travel is favourable: total debt fell across fiscal 2026 from 409 million dollars to 361 million dollars, and the company has disclosed it is currently seeking to refinance certain Loan tranches. Measured against through-the-cycle operating profit the balance still runs about 9.6 times operating profit, with roughly four fifths interest coverage, which leaves the recovery no room to arrive late.

Catalysts

Fiscal 2026 closed on March 31, 2026, and the results arrived on May 26, 2026. Fourth-quarter revenue was $142.5 million, up 20% year over year, and full-year revenue reached $565 million, up 15%. The reported bottom line stayed negative through both: a quarterly net loss of $7.3 million and a full-year net loss of 37.7 million dollars. Management guided fiscal 2027 revenue to a range of $630 million to $650 million.

The financing calendar is the nearer event. Scheduled repayment of the secured loans begins in the September 2026 quarter, and the company has disclosed that it is currently seeking to refinance certain Loan tranches. The existing borrowings carry a margin running from 7.50 % to 8.00 % over term SOFR, so the spread the refinancing clears at determines how much of any operating recovery actually reaches shareholders rather than lenders. Total debt already fell to 361 million dollars from 409 million dollars over fiscal 2026.

Beyond that, the reporting cadence itself is the information. Because the fiscal year ends in March, the next quarterly print covers the June quarter and is the first read on whether the revenue-share improvement the 10-K disclosed, where the partner share was 43.1% as a percentage of total net revenue, carries into fiscal 2027, and on whether the international device volumes that drove last year's gain hold up.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• ARLO (ARLO TECHNOLOGIES, INC.)
• FY2025 10-K: …of our products may increase. These duties may also make our products more expensive for consumers, which may reduce consumer demand. We may need to offset the financial impact by, among other things, moving even more of our product manufacturing to other locations, modifying other business practices or raising…
• FY2025 10-K: …operations. The inability to raise additional financing may have a material adverse effect on our future performance. Some of our competitors have substantially greater resources than we do, and to be competitive we may be required to lower our prices or increase our sales and marketing expenses, which could result…
• MCRI (MONARCH CASINO & RESORT, INC)
• FY2025 10-K: …rooms where the guests do not show up for their stay and lose their deposit. The calculations of the occupancy rate and ADR include the impact of rooms provided on a complimentary basis. Revenue per available room ("RevPAR") represents total hotel revenue per available room and is a representation of the occupancy…
• FY2025 10-K: USINESS MAY BE ADVERSELY IMPACTED IF WE ARE UNABLE TO ADEQUATELY STAFF OUR OPERATIONS ​ From time to time, the competition for employees increases. During such times, new and growing business in the area may create job opportunities that at times have exceeded the area's supply of qualified employees. If we are unable…
• MSTR (Strategy Inc)
• FY2025 10-K: , and other third-party expenses. The income tax benefit in the Software Business category mainly relates to the tax benefit of the share-based compensation for employees. (5) Due to the adoption of ASU 2023-08, segment assets allocated to the Corporate & Other category as of December 31, 2025 included only the…
• FY2025 10-K: 8226; announcements by us or our competitors of acquisitions, dispositions, new offerings, significant contracts, commercial relationships, or capital commitments; • our ability to develop, market, and deliver new and enhanced offerings on a timely basis; • commencement of, or our involvement in, litigation; •…
• SFL (SFL Corporation Ltd.)
• FY2025 20-F: …are self-propelled, and can therefore easily move between geographic areas. Jack-up drilling rigs are not self-propelled, but it is common to move these assets over long distances on heavy-lift vessels. Therefore, the markets and competition for these rigs are effectively world-wide. Competition for charters in all…
• FY2025 20-F: …or territories pursuant to contracts with third parties that are unrelated to those countries or territories or entities controlled by their governments. Investor perception of the value of our common shares may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental…
• WLFC (WILLIS LEASE FINANCE CORP)
• FY2025 10-K: …31, 2025, spare parts inventory had a carrying value of $56.6 million. COMPETITION The markets for our products and services are very competitive, and we face competition from a number of sources. These competitors include aircraft engine and aircraft parts manufacturers, aircraft and aircraft engine lessors, airline…
• FY2025 10-K: …Engines Holding AG, SMBC Aero Engine Lease B.V., and StandardAero, Inc. Our primary competitors generally have significantly greater financial, personnel and other resources, as well as a physical presence in more locations, than we do. In addition, competing engine lessors may have lower costs of capital and may…
• CHPT (CHPT)
• FY2025 10-K: 3.3 % 2.6 % Cost of other revenue increased for the fiscal year ended January 31, 2025 compared to fiscal year ended January 31, 2024 primarily due to higher driver-related processing costs on Networked Charging Stations. 58 Table of Content Gross Profit and Gross Margin Gross profit is revenue less cost of revenue…
• FY2025 10-K: …or other security in support of accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers' financial condition. Concentration of credit risk with respect to trade accounts receivable is considered to be limited due to the diversity of the Company's customer base and…
• DFIN (Donnelley Financial Solutions, Inc.)
• FY2025 10-K: …service leader in this evolving industry. The Company's competitors for SEC filing services for capital markets public company clients include full service financial communications providers, technology point solution providers focused on financial communications and general technology providers (through…
• FY2025 10-K: …alternative providers. The Company expects competition to increase from existing competitors as well as new and emerging market entrants. In addition, as the Company expands its services and product offerings, it may face competition from new and existing competitors, including those offering AI-enabled or…
• IDCC (INTERDIGITAL, INC.)
• FY2025 10-K: …$29 million for CIR credit on patent related costs. New Accounting Guidance Refer to Note 2, " Summary of Significant Accounting Policies and New Accounting Guidance " within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for a discussion of recently issued accounting…
• FY2025 10-K: …that utilize technologies that are competitive with our technologies or that are not covered by our patents, we could lose market opportunities, which could negatively impact our revenue and financial condition. We may not be successful in growing our business inorganically, and any acquisitions or strategic…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.