Good afternoon, and welcome to the Digital Turbine Fiscal 2025 First Quarter Results Conference Call. All participants will be in listen-only mode. [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.

Thank you, Anthony. Good afternoon, and welcome to the Digital Turbine fiscal 2025 first quarter 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 would 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, 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 summarize our Q1 results. Secondly, I want to provide some operational updates as we continue our return to growth. And finally, we'll conclude with some strategic comments on how we're positioned for the future. For our first quarter results, I'm pleased to announce that we have returned to sequential growth in revenue, EBITDA and non-GAAP earnings per share. As expected, the March quarter was a trough for our business and the June quarter was a positive step on our journey to return to growth. We achieved $118 million of revenue, $15 million of EBITDA and $0.07 of non-GAAP EPS. In addition to the numbers, we made notable progress on numerous investment activities that set us up for the future, including our progress on our new version of Ignite, our new hosting platform has moved from migration phase to optimization phase, Our launch of improved bidding capabilities is showing positive growth with brands and many new back end corporate systems consolidated and launched, which are simplifying and automating our work. I was pleased to see our return to growth both in our ODS and AGP business segments driven by better execution on our controllables. In particular, our revenue per device or RPDs improved 15% despite continued softness in U.S. device sales. U.S. operators have publicly reported another quarter of post pay upgrade rates that were less than 3% of the base for the June quarter or a run rate of approximately 11% per year. This would imply more than an 8 year upgrade cycle, which I think all of us would recognize as unsustainable for the long-term, but this is a reality in the present. We expect…

Thanks, Bill, and good afternoon, everyone. Revenue of $118 million in the quarter was up 5% sequentially with revenues improving sequentially across both segments of our business. On device solutions or ODS and our app growth platform or AGP from the March quarter and EBITDA of $14.5 million improved 18% sequentially. Our ODS segment revenues of $80.7 million were up 3% sequentially from the March quarter and down 18% from the prior year. However, as Bill referenced while macro trends continued with softer U.S. device volumes in Q1, this impact was partially offset by sequential improvement in RPD or revenue per device across both the U.S. and international regions, and growth in our content media revenues which were up 12% year-on-year in the quarter. In our AGP business, Q1 revenues of $38.4 million which increased 11% sequentially. We experienced positive signals on increasing advertising spend levels particularly within brand evidenced by greater than 20% year-on-year revenue increases. Our consolidated Q1 gross margin was 46%. This was a 50 basis point expansion sequentially and compared to 47% in Q1 from the prior year. Sequentially, margins were impacted by positive modest increases across both segments. And as a reminder, margin rates can fluctuate from quarter-to-quarter, but we generally anticipate long term margin expansion as we continue to execute on our growth strategies. With our commitment to financial discipline and resilience, we continue to pursue expense efficiencies maximize the profitability of our growth strategy and we remain disciplined with our cost control measures. Cash operating expenses were $40 million in Q1, decreasing 5% from prior year and represented 34% of revenues in the quarter. Turning to profitability, our adjusted EBITDA of $14.5 million in the quarter increased $2.2 million sequentially and was down from $27 million in the prior year driven primarily from…

We will now begin the question-and-answer session. [Operator Instructions] Our first question will come from Anthony Stoss with Craig-Hallum.

Thanks. Congrats on the return to growth guys. Nice to see you again. Bill, a couple of questions. Can you -- within your full year fiscal guide, are you assuming or do you need on device sales to grow substantially to hit that number or can you hit it even if device sales stay flat? And I have a couple of follow-ups.

Yeah, sure, Tony. Our assumption right now is that we're not going to see an acceleration of devices or deceleration in devices that we're going to kind of see the status quo. What we're seeing is what our expectations are. So anything that would go off kind of the current status quo could either headwind or tailwind for us. And a lot of the growth that will taking right now is coming from the addition of some of the new products I talked about, expansion of media relationships, expansion of the RPDs and so on.

Got you. And then can you confirm that all your systems integration, the Fyber, call it, the combination of the DTX Hub that that's all behind you, that's complete or is there still a little bit more work to go? I know you're seeing some of the fruits of it now, but I'm just curious if you're completely done with that?

No. We still have a little bit to go in a variety of areas, but the lion's share of the work on the -- especially on the exchange consolidation in particular that is really helping us drive a lot of brand growth. We've been talking a long time around how we wanted to take the leverage of the AdColony brand business and the Fyber supply business and bring those together. So getting that piece done is very material for us in terms of and also be a material driver for our future growth. So that was the big one. But there's a variety of other things that so going on here.

Got you. Then one last question and I'll jump back in the queue. You highlighted kind of the EU keep your eye on things. I know SingleTap has been out there for a while in terms of alternative app platforms. Is there something coming with the European guys you can talk about now? Do you expect to land new customers and go live potentially by the end of this year? Just any more detail would be helpful.

Yeah. So, we expect the European situation to be a big tailwind for us and that would obviously be good for things like SingleTap. No question around it. I mentioned in my remarks that we're going to see what European Commission does as it relates to Apple. I think, our view on that is they're not very happy right now and they're going to put some enforcement on app on. The question is when. And then I think you're going to see that be a catalyst not just for us in our activity with the EU telcos, but I think you're going to see other mega cap tech players in a variety of folks coming in more aggressively into the EU market once that regulation comes into place.

[Operator Instructions] It appears we have no further questions. This concludes our question-and-answer session. I would like to turn the conference back over to Bill Stone for any closing remarks.

Thanks everyone for joining the call tonight. We'll talk to you again at our fiscal 2025 second quarter call in a few months. Thanks and have a great night.

Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.