Good afternoon and welcome to the Digital Turbine First Quarter 2016 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ghen Laraya, VP Business Affairs and Legal Affairs. Please go ahead.

Thank you. And welcome everyone to Digital Turbine's fiscal 2016 first quarter earnings conference call. I’m Ghen Laraya. With me today are Bill Stone, Digital Turbine's Chief Executive Officer; Andrew Schleimer, our Executive Vice President and Chief Financial Officer. Statements made on this call including those during the question-and-answer session may contain forward-looking statements that are subject to risks and uncertainties. Please refer to the Safe Harbor Statement included in today’s press release, as well as Digital Turbine's periodic filings with the SEC for a complete discussion of the risks and uncertainties that could cause actual results to differ materially from those you may perceive today. We will be discussing certain non-GAAP financial results. The press release issued earlier today contains a reconciliation of these non-GAAP financial results to their most comparable GAAP measures. Please note that on March 06, 2015, Digital Turbine, Inc., a Delaware corporation acquired Appia, Inc. Digital Turbine, Inc. and Appia, Inc. had different fiscal year ends. As such, amounts related to the historical operations of Appia have been adjusted to align the period over which those operations occurred and also adjusted to reflect as if Appia, Inc. had been owned for the entire quarter ended March 31, 2015. The pro forma financial information presented on this call is unaudited and does not represent actual combined results of operations of the two companies, which might have been materially different had the acquisition actually occurred at the beginning of our fourth fiscal 2015 quarter. Now it is my pleasure to turn the call over to Bill Stone.

Thanks, Ghen. Good afternoon, everyone, and thanks for joining us on our first quarter fiscal 2016 earnings call. I will cover off an overview of our businesses, including our advertising ramp before I turn it over to Andrew to walk through the numbers. However, before I get into the details on the quarter, I want to start with some news. As I mentioned at the Needham conference earlier this week, I’m pleased to announce we have added American Mobile to our list of customers. This is a material 2-1 win for us as it brings an additional 280 million potential subscribers to our adjustable market. American Mobile is adding approximately 3 million android devices per month which is more than the historical run rate of the top two wireless carriers in the U.S. combined. Our relationship is going to be broken into two phases. The first phase will be using our Appia demand network to supply app installed ads into the American Mobile application on the home screen of all android devices. The second phase will be able to allow us to preload applications in addition to the American Mobile applications including providing recommendations for these customers after activation. We expect Phase 1 to begin next quarter and Phase 2 to begin in our fiscal fourth quarter. We are also in very advanced discussions with many other U.S. and global customers and expect to have news on some of those imminently. Now to close out fiscal first quarter, the first quarter was the best quarter in the history of the company. From a fundamentals perspective, we are achieving everything we are setting out to do. The marketplace is validating our strategies and this validation is showing up in our reported results. We are winning and I am very excited about…

Thanks, Bill. I’ll start with a review of our financial results for fiscal 2016 first quarter and then offer some additional color on how we expect growth to flow towards the end of our full year. Please note that since the Appia acquisition closed on March 6, consolidated fourth quarter 2015 results include an only 26 days of Appia’s operation and therefore first quarter results are not directly comparable to this prior quarter’s results. For that reason, we are providing both sequential pro forma comparisons as if Appia had been owned for the entirety of the fourth quarter fiscal 2015 and on an as reported basis for Q4. Please reference the press release for a more detailed discussion of our pro forma measures. In addition, all comparisons I will discuss today are being made to the prior sequential quarter unless specifically noted. We believe that this is a better indicator of how our business is performing given the vast differences between our company today and at this time last year. Finally, as I laid out in our Q4 call, there is a reminding that we have two reportable segments, advertising and content with advertising comprise of Appia Core and DT Media and content comprised of DT Marketplace and DT Pay. Recall in our content business, out customer is the wireless carrier and we provide content and billing services to them. But in the advertising business, our customer is the advertiser and we distribute application through a network of publishers that include mobile websites, mobile applications and the carrier home screen. While we continue to cultivate new partnerships with publishers and when spaced on screens with OEMs and carriers, the distinction of who our customer is, is important as we cultivate and broaden our relationships with advertisers by demonstrating the value…

Thank you. [Operator Instructions] Our first question comes from Mike Malouf at Craig-Hallum Capital Group.

Great guys. Thanks for taking my questions. Can you hear me okay?

Yes, Mike. Sorry.

Okay. So can we start off with a little bit on the revenue per phone? I think that clarity is really helpful and I applaud if you’re doing that. It sounds like you had some pretty dramatic increases from April to now July. So I am wondering Bill if you could just talk a little bit about how you got from $0.72 to $1.60? What was the main drivers of that, was it the number of floats, was it the pricing, was it the open rate, so just add some color on that path from $0.72 to $1.60? Thanks.

Yes, absolutely. The first point I want to make sure is that, we were able to – we said with everybody is, this is a global metric. So I can point to operators that are higher, I can point to operators that are lower around the world. And as I mentioned as we get more operators and more geographies we will break that out to give more granular as we go forward. But for today in terms of depriving global things, I think there were a number of drivers, Mike. I think the first one is that, we are just getting better in optimizing yield. We are learning what’s working across, what devices in what target segments and learning what types of campaigns work better with other campaigns. The mix of our advertisers has improved and this drives increased demand as you get more competition into it. So if you had stable of 50 campaigns to choose from, now you have a stable of 100 campaigns to choose from we have a lot more levers, disposal to optimize it. And then the final thing is we’re looking better also at quality and targeting. We are seeing different results for different campaigns, so if I want to run for example Pandora or Xperia or Huber [ph], we see different results across different devices. So we are getting better at optimizing those even within specific geographies, we will see different performance. So the integration in our third party data source that I mentioned, we anticipate that being a nice catalyst for us to that scale, as we get into the holiday season. So I am really excited about that, that we put in our ability to integrate and execute that. But in terms of starting from April to the present, those were the three or four major drivers of that.

Great. Thanks. And then Andrew, if I could just talk a little bit about the model, if I look at gross margin for the year in the mid-30s, that sort of equates and I know you will be ramping throughout the year but it equates to about an average of 38% if you just use 35% for the rest of the three quarters. Does that make sense to you?

Yes. We reported today DT Media margins of 55% for the quarter. So as DT Media becomes a larger proportion of the overall revenue given some of the customers we’ve announced driven by obviously more phone to the marketplace and accretion, RPS and yield, that sounds great Mike.

The next question comes from Brian Alger, ROTH Capital.

Good afternoon guys. Really love the color and the detail. I think it does go a long way. So, I’ll echo Mike’s commentary there. If I could drill down a little bit as well, the growth that we are seeing in that yield per device, one of the things that you said Bill was that, you saw pretty big jump in terms of what occur when started using the third party data. Was that a small trial? Was that something that was meaningful in moving to that $1.60 for the month of July or is that just something that was off on the side where we have a data point?

Yes. I would characterize this is early days, confident first innings on that. So two things I will say on that. Number one is we successfully integrated the data. That’s a big milestone when you’re talking about significant amounts of data to integrate with your own existing systems and processes. Secondly though we did see that our control group and target groups generate different results by campaigns. I don’t want to celebrate that, I just want to point out as a data point. However, what I am excited about is less around the control group versus the target but what we see from our advertising partners is a willingness to pay higher rates for specific segment. So if I can have an advertiser, he says okay, I’ll pay you $0.50 CPP across your entire base but I’ll give you $0.60 or $0.70 CPP as you can target mails between the ages of 18 to 34, and now we’ve got that ability to do that with this dataset. That demand is sitting on the sidelines right now. So it offers us the ability to generate incremental yield per device because now we’ve got that targeting capability. So as I think about what’s going to accrete the yield per device as we go forward in time, that is really in my view is going to be the major driver although the control group versus the target group will be an impact as well.

It’s great. Seems like you are doing a really good job of controlling what you can control in terms of that targeting and yield, devices obviously with some of them winning and some of them not we got to convey for full penetration. I want to understand the full year guidance a little bit better. It’s great that we are maintaining it and I think that’s certainly prudent here, but we are now talking about Appia Core growing from its current levels and we’re talking about seeing good strength within that content business. Just to be clear here, in maintain that level, we are not reducing our expectations for the advertising portion. Are we?

No. Let me start and I’ll let Andrew add some color here. I think what we are really seeing right now Brian is a result of the customer announcement we had today and some of the other ones that I signaled that we believe that are happening soon. What we really see is the combination of the holiday quarter plus the additional of these new customers really driving material ramp in the back end of the year for the DT Media business that we have visibility to right now. Obviously we look forward to having the high class problem that the Content and Appia business drive favorability to our results and that creates a mix issue for us, but do not interpret that as we are altering our views at DT Media in anyway.

Great, just wanted to clarify that. And then on the American Mobile, obviously a huge win. Can’t think of a better international carrier to bring over to the board. I am really interested in what you said with regards to Phase 1? Putting the Appia inventory or the Appia demand as you put it up against the installed app for American Mobile. As I understand it, they have their own application that works somewhat like IQ. Are you going to be supplying apps into that for them and how deep is that penetration of that app across the subscriber set within American Mobile?

For the Appia demand part, currently today American Mobile loads this app which is really about discovery recommendations as well as their own branded apps and other third party things where they may have relationships such as for example Verizon is the equivalent of NFL here in the United States, American Mobile made those in certain Latin American countries. All of those things get loaded within this American Mobile container app. They have not historically done as much as they would have liked on the monetization and that’s why we are starting to partner with them to help power that demand from our existing campaign sources and that will be going across their entire android subscriber base, so that’s something we are quite excited about. But I would be a little bit cautious that we don’t have any operating history or empirical results on that business yet, so we are not really comfortable doing anything in terms of our guidance or go forward specifically a result of this Phase I. I think more than anything what approves is the broader thesis that mobile operators are looking to outsource these kinds of capabilities to companies like us who have expertise in doing it.

The next question comes from Mike Malouf at Craig-Hallum Capital Group.

Hi, Mike. I think you got cut off.

Sorry, I got cut off. I just had one more follow-up. Can you help us understand the seasonality as we get into the third and the fourth quarter? You sort of fighting two things, one is certainly the dramatic increase typically with sales of the devices into the December quarter but also you have as you pointed out with American Mobile, new carriers coming on and broadened distribution as you go through the end of the year. So how should we think about that third and fourth quarter? Thanks.

So, Mike, especially for some of the new customers announced in our existing customers that we have, what we generally see is that for the holiday season historically I don’t know what it will be for this current carrier, but historically around 40% of smart phone sales for example here in the United States will occur in November and December. So you definitely have seasonality as it relates to new device sales and upgrades. We expect that to be a positive catalyst for us for that fiscal third quarter. And then going to the fourth quarter, we expect to ramp really around the seasonality because that quarter tend to be lower than the holiday but more around the new customers that we’ve already talked about and launched, and we continue to ramp across more devices and some other ones we haven’t talked about yet. That will drive material increased demand for us, but that’s not a seasonality issue that’s just us bringing on new demand from new customers.

But when you take a look at your guidance, would you expect the third quarter to be the highest of the year or would you expect the fourth quarter to be higher?

I think right now, Mike, I would lean it towards that fiscal fourth quarter based upon some visibility we have on new customers but the seasonality from the December quarter will be also very material.

Okay, great. Thanks.

Next question is from Bill Sutherland, Emerging Growth Equities.

Hi, Bill. I was curious if precision has gotten going with you at Verizon and whether that’s going to be enough to move the needle a bit more.

Yes. I talked about the third party demand source. I don’t want to get into any customer specifics on the call today. But I think as we talk about third party demand source, that’s something that we definitely see as important to drive quality and that’s going to drive improved yield per device.

But that’s kind of incremental going forward, that’s not in…

That’s incremental, correct.

On American Mobile, that number in terms of android shipments, are those – is that all postpaid?

No, that’s a blend of postpaid and prepaid. So that would be a total number. But the app that I reference on Brian’s question earlier does give loaded on both prepaid and postpaid devices.

And then when you go into Phase 2 you will just be on postpaid right?

No, we will again that American Mobile will be the difference and some operators here in the United States, but we haven’t noticed. Our anticipation is – we are working these details real time but our anticipation is this will be across both prepaid and postpaid.

Great. And I know it’s a kind of an unfair question but should we think about American Mobile as a little bit of an addition to your prior mapping of that 16 or it’s a kind of thing that you are just – with some sort of risk adjusted basis baking in. Thanks.

Yes. So Bill, we see this really as part of the risk adjusting. So I get mentioned many of you individually and for those of you on rest of the call I haven’t. We tend to have visibility of new customers before we announce them as we start working many months in advance of actually when we announce the agreements. This is one of those examples where we’ve got visibility into what’s happening. So yes, I would now view this as something incremental. The incremental opportunity is just going to be delta between the discount rate and the timing of the launch, but not necessarily in terms of whether it was in our radar or not.

Okay. Thanks, Bill.

Next question is from Andrew D'Silva of Merriman Capital.

Good afternoon guys. Thanks for taking my call. Just a couple I guess quick question. The first one, can you give us a sense of what the American Mobile deal means in a comparative sense. Some of your past relationships have been large operators but the deals are regional or not with a lot of devices. Any intend as far as – does it correlate to any one subsidiary of theirs or over the entire parent? And has there been any progress with MSAI, are they doing a pilot or has that been dropped, it will probably provide get inside as to what emerging markets could look like?

Sure. So first on the American Mobile side, yeah, I can speak for their roll up plans. I do know that they tend to put these current apps that are referenced on some of the earlier questions across all the devices and all the geographies. So I don’t have a reason to assume why it would be different but ultimately that’s American Mobile’s decision not Digital Turbine. So we see that as a little bit different than for example some European operators like with Deutsche Telekom where we launched in a couple of countries and we look to expand to other countries as time goes on. Regarding the MSAI question, when we got some experience in the Philippines with both Globe and CloudFone in terms of how the emerging market trends and we’re starting to get some experience into our belts there in terms of trends and what’s happening. With MSAI India, we do expect to see material volume of devices here shortly as the test to see how we work this scale. As I mentioned on prior calls, we are excited about the opportunity. We haven’t really crack the code on the execution there and that market – there is just a lot of issues and complications and nuances that are different than what we see in other markets. So I hope on the next call, we’ll provide an update on that but nothing specific or nothing material today to report around MSAI.

Okay. And then I just through the process of due diligence and talking to developers kind of CPI and trends in general, and you said it’s been quite volatile over the past year or so and the majority of them have discussed with, they seem kind of declining trend as far as maybe price per install although obviously maybe volumes increasing somewhat. I was kind of curious if you saw that as well and then maybe elaborate a little bit on how your programmatic RTB technology as you feel like it’s robust enough, is that something we should be thinking about from an acquisition standpoint and any clarity there would be great.

Yes, absolutely. So first on the RTB front, we are not making any material investments in that today. That’s something we see as a growth driver for the future. We have to figure out how to get that business the right amount of capital and that’s something that we as a management team and the board are talking about. So we are not using any material way today, but it is live and in production and we see it as a strategic thing as we go into the future. So with that, let say that RTB is something we are excited about but nothing really materially happening today around that.

And CPI rates, are you seeing it trend?

On CPI rates, what we are seeing right now is that, we are actually seeing emergence of brand advertising begin to happen and this is really driven by a secular trend of media dollars that are moving from different formats into mobile and its application specifically. I think you saw CNBC was doing a big thing this week around the Instagram APIs are opened up for mobile advertisers and brands in particular. And that’s just reiterate the secular trend that we are seeing of media dollars catching up to iBall. So I expect to see that rates continue to increase but it’s going to be driven more by brands coming in that tend to be more price elastic versus just developers that have to go out and acquire apps, installs to justify valuations. Although I do see that we will continue to have both in the marketplace. So as you are out, you are doing your channels checks and I would make sure you’re talking to the brands and the advertisers as well as the developers.

Okay. Got it. Just there is really quick question, can you break out what your margins were for Pay and Content and Appia Core and then also for Ignite and IQ, so I get a sense of how to model each of the segments.

Yes, sure. So what we’ve spoken about in this earnings call for the first quarter Andy within our advertising business - DT Media business achieve margins of 55%, our Appia Core business achieved margins of 18%. We did make the point on the call that Sun’s overspend credits which we are working to mitigate real time, margins were north of 20% and again we expect them to accrete back to over 20% overtime for Appia Core. And then on the Content side, overall margins were 18% as we continue to mix shift towards DT Pay which carriers carry lower margins in the Content marketplace business.

But do you have percentage break out as far as what was Pay versus what was Content? Is Pay starting to dominate the whole content side of the business as far as being the majority like it was last quarter? I think it was 70% last quarter or something like that.

I don’t know if I’ve used the word dominate but I would say definitely it’s the majority. We are starting to see some nice rebound in the content business for some of the factors that I mentioned on my comments around full-track downloads in application billing and those kind of things. So we are starting to see some nice movements in the content part of the business as well as some expansion opportunities in new geographies in Asia Pacific. So I wouldn’t think about it as the content is necessarily going backwards. Really it’s more about the – the growth is definitely from content providers that want to diversify away from the Apple app store or the Google play store and have other means to distribute their content, and that’s where we come into help facilitate that.

Okay. In services, was there a lot of services revenue in DT IQ?

We did have some services revenue, I’ll characterize that in 100 to 1,000.

Okay. Perfect. Thanks a lot of guys. Good luck going forward.

Thanks, Andy.

The next question is from Jon Hickman of Ladenburg.

Just two quick questions guys. Can you explain or just – I guess I was a little perplex that you did in press release the American Mobile, can you talk about why you didn’t do that versus put it in an 8-K?

Sure, Jon. So one of the things as we work with our operator partners, generally speaking I’ll make a global comment there. The operator partners generally don’t like to do any sort of third party releases, especially it evolves forward-looking statements and services so that’s just on something they do as a matter of practice. Occasionally in certain circumstances, we will be able to work that. In this particular case, I made the decision that I was more valuable to communicate this news to the marketplace rather than trying to work through different channels to put something out that would have potentially created additional delays in getting information to investors for American Mobile specifically but I will say it’s a general rule. Operators and third party releases are generally something that you don’t see independent of Digital Turbine.

Okay. Two other questions, can you explain Phase 2 of American Mobile?

Absolutely. So American Mobile has a little bit different approach. For those of you that are familiar with the operators here in the United States, they have an application that they preload on all the phones that includes their own branded apps as well as other apps that are brought to customers, recommended to customers. So think about when you power on a Verizon phone here, you will see many, many apps on the device as it preloaded. There may be 20ish on the phone. American Mobile takes a more coordinated approach. They have 1 app and they will preload all of those other apps inside of it. So you just click on it and opens up a variety of them. So what happens today is that, app is hardcoded and burned on to the phone. So if they want to make updates or changes to it as they add additional features, functionalities, services, information etc it’s quite limiting to them. So what they are looking for is a software development kit or STK that can be able to dynamically preload those which is what we’re going to use Ignite for and then the ability for them to do changes as they make changes to the app, plus the ability for us to preload other applications on similar to what we do with operators today as well as the ongoing revenue stream with operators would say things like IQ, that will all be bundled in. So I’m very excited about the opportunity American Mobile is very forward thinking and proactive in this space. And so far it’s been tremendous customer excited working with them.

Okay. And then the last thing when you talked about the first five weeks of I guess Q2 the September quarter versus the first five weeks of the June quarter, can you give us that statistic again. I think you said it was 65%?

Yes that’s correct, Jon. So what we’ve seen is and we really wanted it to make the point on is that our first five weeks of the quarter were 63% higher than the first five weeks of the prior quarter.

And that’s with immediate DT Media.

Yes and as well as that July results for DT Media were better than our June results for DT Media. So we continue to ramp and I’ll just voice track that what we have is that, July especially the early part of July, if you’re in the fireworks business, sort of barbeque business and things like that, those are good places to be in the first weeks of July. But generally speaking, for other things like any business, that’s not the best time of the year from a seasonality perspective. So the fact that our July was better than our June, now we’re getting into back to school and new device launches give us a lot of optimism on our continued ramp.

Okay. And my last question has to do with your, the German acquisition you made, I can’t remember the name of it, XYO.

Yes, XYO.

So are you using their discovery and recommendation technology yet into your – has that been or you’ve moved on to something else.

No, absolutely. Today, we are live in the XYO technologies integrated in our IQ deployments with Vodafone and T-Mobile. We are actually in the process of bringing some of the XYO development engineers and relocating them to offset to help with some synergies with our broader efforts that we are doing around data science. So very much a strategic acquisition and part of our go forward plans.

Are you seeing that in your third party data meaning is that part of the data.

So that’s part of the as I read the comments at the Needham conference earlier this week in our new Investor Presentation and we have a slide that specifically talked about how these elements become delivered and integrated together. And by all means, we view that is happening. From where I talk about today with the early trial results, that was not part of XYO because that was strictly through Ignite, but yeah we definitely view that as a roadmap feature to integrate the XYO features into all of our data sources including the third party one we just talked about.

Okay. Thanks and great quarter.

Thanks, Jon.

Thank you.

The next question is from Brian Alger, ROTH Capital.

Hi guys, just a couple of quick follow-ups, obviously it sounds like we’re really build up in terms of the seasonal demand going into the fourth calendar quarter, your fiscal third and then as we layer in deeper, full penetration with this year’s carriers as well as the new carriers, we end up with growth in Q4 or potentially growth in Q4 over the seasonally strong Q3. I guess I am left with as I am penciling out what the implications are here. I am really not seeing anything that would give me pause as to the June numbers – sorry, as to the September numbers. Given what you said mentioned in terms of the first five weeks, is there any reason as we go into August due to vacations or I would think back-to-school should be strong as well. Shouldn’t we continue to see this ramp that you saw July versus June kind of continue through the third quarter as well?

Yes. We absolutely expect the business to continue to ramp, Brian. Although the announcements that we’ve made, the future ones that I have referenced, as well as the seasonality factors I think are going to be your big drivers for this particular quarter. We will see what the back-to-school season looks like at a promotional period historically it does a good. We will see we’re just getting into it right now and then also there is a few high profile devices that are launching and we have to see when the launch dates. Are those between August, September and October. And so I think the note five at the top of that list in terms of how that performs, but there is a variety of others you can read about on the blogs. So a lot of it will depend upon those devices and some of the same factors we talked about in the past. I think the holiday quarter, you really see in terms of a much material breakthrough for the drivers we’ve already talked about.

Okay, great. And just one last follow-up, in a prior discussion you talked about having multiple tier 1 close, obviously we’re taking American Mobile today and very happy to be doing so, but in the category of what’s next, I presume multiple tier 1 is still the case and we are still working forward with people outside of the American Mobile.

Absolutely.

Great. Guys, great stuff today. Lot of good information. Appreciate it.

Thanks, Brian.

Thanks, Brian.

The next question is from Ian Corydon at B. Riley.

Hi, good afternoon. This is [indiscernible] for Ian Corydon. I wanted to ask a question about the – related to your guidance, you guidance is for EBITDA positive for the year. Could you comment on when you expect to be operating cash positive and do you foresee any situation that as you grow there maybe expenditures that may delay your route to cash flow positivity.

Yes, I think the best way is to think about that one is just a continued ramp of our high margin DT Media business. Just to reiterate north of 50% this quarter as we’ve been consistent with our messaging to street. As DT Media becomes a more material share of the overall revenue base, given some of the indications we’re getting today particularly around holiday ramp and otherwise the higher margin business given the fixed cost nature, it should get to a point where we are adjusted EBITDA positive. So for the full year, we will be positive inclusive of a bonus accrual based on today’s guidance and I think the key indicator – or the key point of differentiation here is that, third and fourth quarter when DT Media becomes a much more material percentage of the overall revenue base.

Okay. Thank you.

The last question is from Ilya Grozovsky at National Securities.

Thanks guys. I kind of wanted to get a little bit of a better sense of the seasonality in the quarter itself. So it sounds like the last weeks of the quarter you guys did about $4 million in revenues and that brought you to slightly higher than the midpoint of your range. So what was going on the first two and a half months that brought you to position where that you needed that much revenues at the end of the quarter to make the numbers.

So usually what you see in almost every quarter by the way not just the June quarter, they tend to be stronger at the end of the quarter than the beginning. So usually you see March is better than January, June is better than April, September is better than July, December is better than October just as a general rule in our business, so that’s across all quarters. For the June quarter specifically, you usually see a lot of activity in June around what usually promoted as [indiscernible] season and that tends to be something that drives additional handset volumes. And so we benefited from that, we also added some pro services benefiting an overall stream from a variety of advertisers including Pandora that Andrew mentioned. So those are really the catalyst and really the point we want to make sure investors understand and communicate it today as far as July versus June is we started the month of July much stronger at the first quarter than we start at the month of April. And so we know there is a lot of questions out there and wanting to demonstrate continued results on our DT Media ramp. So hopefully we are continuing to put results upon the board to demonstrate that.

Okay great. And then my last question is on the balance sheet you guys talked about Silicon Valley Bank trying to expand your line of credit. What type of an expansion are you looking for? How close you are right now to the limit of that line and what are you looking to expand it to?

Yes, we recently up the limit LVF [ph] from 3.5 million to 5 million, so we have capacity available since there were no additional borrowings in the quarter ended June 30. The original goal here when we acquired Appio was to get as much leverage as possible at the parent company in the form of senior debt. So the expectation is that as our receivables grow and Silicon Valley Bank relationship being the receivable line to determine our borrowing capacity. We would use that line in sort of an accordion feature to take our subordinated debt which is equivalent to $8 million per day. That debt is due in your mid 2017 but our goal is to – as this business ramps from scale, particularly the DT Media business, where all of those receivables flow here through in the United States. We will then see the capacity to upscale or upsize the SBB loan.

Got it. Great. Thank you very much guys. Nice quarter.

Thanks, Ilya.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Stone for closing remarks.

Great. Thank you operator. We are accelerating our revenue ramp as we talked about. We are scaling our business model by pulling all the levers for growth and we look forward to continuing to report the progress to you on upcoming calls. Thank you all for joining.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.