2021 Strategy Series: Digital Turbine – APPS (Post 2)

Vested with initial price at US$38.30. 

I am supposed to write about other companies under this series. But Digital Turbine has announced their results on 3 Feb 2021 and it was amazing!

Thus, I just had to write another article on it. (Read the previous article here).

As you see from the featured image, Digital Turbine’s revenue had once again increases more than 100% year on year in this quarter. Furthermore, the gross margin increased too!

 

The share price as of writing has since jumped over 20% to US$78+. This is more than doubled my initial purchase price.

So Did I Sell? NOPE. In fact I bought a bit more. Why?

This is because from the earnings call, the CEO had stated lots of good stuff.

Here is my summary of positive points where Digital Turbine is expected to grow in the future:

  1. International expansion is increasing at a significant pace and it should continue to grow! The company have just expanded in Latin America and Europe recently. The company is also aiming for the Asia Pacific.
  2. Adding of over 65 million new devices per quarter could be the new norm.
  3. With international penetration and more devices adding very quarter – they expect more and more DAU to increase in terms of their mobile content business.
  4. As quoted in the earnings call, “We continue to make progress on our TV offerings as we discussed on our last earnings calls and look forward to those launches occurring later this year.” – The company will enter the TV market soon!
  5. Another quote from the earnings call highlights the quality of their customers – “…Chinese companies like; Alibaba, Tencent and ByteDance spending in Latin America, and Europe, and U.S. and European companies such as Pinterest, Uber, McDonald’s and King all spending with us outside of their respective home geographies.”
  6. Samsung is a top partner of the company. Samsung has released a 5G phone recently.
  7. As quoted from the earnings call, the company has upsize its revolver and this sentence caught my eye – “…greater flexibility and liquidity to take advantage of potential opportunities to further accelerate our growth plans…”. This may meant that the company is looking for more acquisitions.

Conclusion

The earnings call has stated the guidance for FY2021 with revenue expected to grow to between $298 million and $300 million, and expect adjusted EBITDA to grow to between $71 million and $72 million.

This is a whooping 115% increase in revenue and 260% increase in EBITDA.

Despite such significant gain in revenue as per the guidance, I still expect FY2022 results to be even better due to their amazing focus growth plan ahead

Therefore, I bought a bit more today. I will also continue to add if there is any pull back in the short term.

The above is first produced on Financial Mall and will be re-produce on TUBInvesting Blog with some amendments