Digital Turbine, Inc. · NASDAQ:APPS
Digital Turbine — Investor Day (June 2018)
56 slides from Digital Turbine's investor day presentation, Jun 21, 2018
Slide 1: Analyst Day June 2018
Analyst Day June 2018
Slide 2: Schedule of Events
Schedule of Events Welcome – Brian Bartholomew, SVP Capital Markets Digital Turbine Today & In The Future – Bill Stone, CEO The Digital Turbine Mobile Delivery Platform Product Demonstrations – Brandon Ayers, Dir. of Product Strategy The Supply Side – Bill Stone, CEO Carrier/OEM Value Proposition Di
Slide 3: Safe Harbor Statement
Safe Harbor Statement This presentation includes "forward-looking statements" unpredictable levels of orders; the challenges inherent in within the meaning of the U.S. federal securities laws. technology development necessary to maintain the Statements in this news release that are not statements of
Slide 4: Digital Turbine Platform Today & In The Future
Digital Turbine Platform Today & In The Future Bill Stone, CEO
Slide 5: Building Blocks of Value
Building Blocks of Value • Demand/Customers • Operating Leverage/ Biz Model • Competitive Landscape/ Moat • Timing (esp. in Tech) Confidential. © 2018 Digital Turbine, Inc. 5
Slide 6: Market Dynamics
Market Dynamics Apps are Ingrained in our Lives Rise of Fraud 3.5 M apps in Google Play Store while The rising cost of fraud per quarter for average user has 30 apps on device using mobile app marketers is estimated 10 per day $700-$800M per quarter Time Spent in Apps Duopoly Users in the US average
Slide 7: Growth Drivers
Growth Drivers Multiple levers to drive accelerated growth x x = New Products More Devices Advertiser Demand Platform Network Effects Confidential. © 2018 Digital Turbine, Inc. 7
Slide 8: Growth Drivers
Growth Drivers Multiple levers to drive accelerated growth x x = New Products More Devices Advertiser Demand Platform Network Effects Confidential. © 2018 Digital Turbine, Inc. 8
Slide 9: Expansion of Product Portfolio Driving New Revenue Streams
PRODUCTS Expansion of Product Portfolio Driving New Revenue Streams DYNAMIC PRELOADS Recurring Revenue with Engagement Opportunities - Device Life (~2 Years) + NOTIFICATIONS /POST OOBE WIZARD SINGLE TAP SMART FOLDER PARTNER FOLDER +1 SCREEN INSTALL ACTION OPEN MARKET Device Activation (Day 1) Confid
Slide 10: Product Demonstrations
Product Demonstrations Brandon Ayers, Director of Product Strategy
Slide 11: Expansion of Product Portfolio Driving New Revenue Streams
PRODUCTS Expansion of Product Portfolio Driving New Revenue Streams DYNAMIC PRELOADS Recurring Revenue with Engagement Opportunities - Device Life (~2 Years) NOTIFICATIONS / POST OOBE WIZARD SINGLE TAP SMART FOLDER P O S TI NISNTSATLA PARTNER FOLDER +1 SCREEN L LALC T AICOTNI O N S OPEN MARKET Devic
Slide 12: Dynamic Preloads
PRODUCTS Dynamic Preloads • Designed to mimic the traditional factory preload experience • Frictionless user-experience, requiring no user interaction • Sponsored and partner applications installed seamlessly • Revenue maximized by real-time ad-serving technology • Dynamic OOBE may be paired with OO
Slide 13: Post Install Actions
PRODUCTS Post Install Actions • Rich media notifications and precise targeting drive increased conversion and revenue. • Shown to increase conversions by more than 100%. • Actions are configured on a per app basis. • Post Install Actions may be instant or delayed – e.g. 48 hours or 30 days. • Multip
Slide 14: Expansion of Product Portfolio Driving New Revenue Streams
PRODUCTS Expansion of Product Portfolio Driving New Revenue Streams DYNAMIC PRELOADS Recurring Revenue with Engagement Opportunities - Device Life (~2 Years) NOTIFICATIONS / POST OOBE WIZARD SINGLE TAP SMART FOLDER PARTNER FOLDER +1 SCREEN INSTALL ACTION OPEN MARKET Device Activation (Day 1) Confide
Slide 15: Out Of The Box Experience (OOBE) Wizard
PRODUCTS Out Of The Box Experience (OOBE) Wizard Curated app list is presented to the user during new device set up. Enables users to opt-in and self-select which apps to install from a recommended selection. • Get discovered - capture users’ attention when they are focused on setting up their devic
Slide 16: Expansion of Product Portfolio Driving New Revenue Streams
PRODUCTS Expansion of Product Portfolio Driving New Revenue Streams DYNAMIC PRELOADS Recurring Revenue with Engagement Opportunities - Device Life (~2 Years) NOTIFICATIONS / POST OOBE WIZARD SINGLE TAP SMART FOLDER PARTNER FOLDER +1 SCREEN INSTALL ACTION OPEN MARKET Device Activation (Day 1) Confide
Slide 17: Open Market / BYOD
PRODUCTS Open Market / BYOD Seamlessly deliver a signature experience to BYOD devices When a customer using a Digital Turbine Platform enabled device registers on a carrier network, a custom experience can be delivered to that device – including but not limited to targeted notifications and applicat
Slide 18: Expansion of Product Portfolio Driving New Revenue Streams
PRODUCTS Expansion of Product Portfolio Driving New Revenue Streams DYNAMIC PRELOADS Recurring Revenue with Engagement Opportunities - Device Life (~2 Years) NOTIFICATIONS / POST OOBE WIZARD SINGLE TAP SMART FOLDER PARTNER FOLDER +1 SCREEN INSTALL ACTION OPEN MARKET Device Activation (Day 1) Confide
Slide 19: Single Tap Installs
PRODUCTS Single Tap Installs™ Install apps from banners without friction Revenue Increase conversion rates by removing friction from the install process Improved UX User experience is simplified by ensuring they are not One Click Install pulled out of the app they are currently using removes frictio
Slide 20: Expansion of Product Portfolio Driving New Revenue Streams
PRODUCTS Expansion of Product Portfolio Driving New Revenue Streams DYNAMIC PRELOADS Recurring Revenue with Engagement Opportunities - Device Life (~2 Years) NOTIFICATIONS/ POST OOBE WIZARD SINGLE TAP SMART FOLDER PPAARRTTN NEER F FOOLLDDEERR +1 SCREEN INSTALL ACTION OPEN MARKET Device Activation (D
Slide 21: Smart Folders / Partner Folder
PRODUCTS Smart Folders / Partner Folder The Smart Folder organizes a users installed apps and seamlessly recommends other relevant titles, all in one convenient hub. Categories The auto-organization of users apps along side contextual, customized recommendations has proven to be very effective. By b
Slide 22: Expansion of Product Portfolio Driving New Revenue Streams
PRODUCTS Expansion of Product Portfolio Driving New Revenue Streams DYNAMIC PRELOADS Recurring Revenue with Engagement Opportunities - Device Life (~2 Years) or NOTIFICATIONS / POST OOBE WIZARD SINGLE TAP SMART FOLDER N OTIFICATIONS INSTALL ACTION PARTNER FOLDER +1 SCREEN OPEN MARKET Device Activati
Slide 23: Notifications
PRODUCTS Notifications Customer Communication Vehicle In addition to app installs, notifications can be sent for a variety of actions, such as: promotions, post-install engagement or any other item in order to stay engaged with the user throughout the life of the device. Single App Post Install Acti
Slide 24: Expansion of Product Portfolio Driving New Revenue Streams
PRODUCTS Expansion of Product Portfolio Driving New Revenue Streams DYNAMIC PRELOADS Recurring Revenue with Engagement Opportunities - Device Life (~2 Years) or NOTIFICATIONS / POST OOBE WIZARD SINGLE TAP SMART FOLDER PARTNER FOLDER ++11 SS C R EEEENN INSTALL ACTION OPEN MARKET Device Activation (Da
Slide 25: Side Screen – Content & Monetization
PRODUCTS Side Screen – Content & Monetization -1 Screen +1 Screen / Widgets • A replacement for default -1 screens. Featuring a blend of • A series of widgets on screen to the right of Home. May feature organic and sponsored content, supporting a variety of ad types. sponsored headlines, app recomme
Slide 26: The Supply Side
GO The Supply Side ‘FF Bill Stone
Slide 27: Devices – Growth Lever
MORE DEVICES Devices – Growth Lever Cumulative Ignite-Installed Devices 160 m 120 m 80 m 40 m m 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Carriers OEM Confidential. © 2018 Digital Turbine, Inc. 27
Slide 28: Large Underpenetrated Global Market - Room to Grow
MORE DEVICES Large Underpenetrated Global Market - Room to Grow Device Growth Drivers Global Android Smartphone Shipments & New Devices w/ Digital Turbine Software • Market share doubling YoY, but only 7% penetrated • OEM Opportunity • OEM benefit & business model • Breakout of underpenetrated oppor
Slide 29: América Móvil
América Móvil Roberto López Diaz
Slide 30: AMX has presence in 25 countries
OVERVIEW AMX has presence in 25 countries, in most of them with fixed and mobile platforms Fixed and mobile operations Mobile operations 1Q18 revenues totaled 14bn dollars up 2.8%. (EBITDA totaled 3.8Bn dollars) 30
Slide 31: About America Movil
ABOUT AMERICA MOVIL • AMX is one of the largest integrated telcos in the world with 362 million accesses and operations in 25 countries. • 1Q18 revenues totaled 14bn dollars up 2.8%. (EBITDA totaled 3.8Bn dollars) • Our postpaid subscriber base was up 7.4% year-on-year • We are well diversified geog
Slide 32: América Móvil: Digital Strategy
América Móvil: Digital Strategy
Slide 33: Data Services are the new Core Business
DIGITAL STRATEGY Data Services are the new “Core Business” and we are working in new revenue sources Data Mobile Services and App IoT Monetization Marketing Content Distribution Enabler 33
Slide 34: Digital Turbine Relationship
DIGITAL STRATEGY Digital Turbine Relationship Why Digital Turbine • Global scale • Proven solution – top tier telecom adoption • Robust platform and products • Media & app ecosystem relationships Next Steps • Simplify operational approach • Deploying additional products 34
Slide 35: AMX and Digital Turbine
DIGITAL STRATEGY AMX and Digital Turbine • Strong relationships with other Carriers: Verizon… • Platform live on over 140 M dollars up 2.8% • Revenue performance and experience in the field • Product and roadmap • APK vs SDK Improved functionality and performance • Single tap installs Incremental Re
Slide 36: AMX and Digital Turbine – Operations update
DIGITAL STRATEGY AMX and Digital Turbine – Operations upate • Headwinds • SDK slow to deploy due to integration with contenedor • Advertisement revenue slow to ramp up. LATAM market not yet educated • Tailwinds • Lots of devices • Improvement in local & global campaigns • APK and new features that w
Slide 37: América Móvil: Gracias!
América Móvil: Gracias!
Slide 38: Q&A – Product & Platform
Q&A – Product & Platform
Slide 39: Coffee Break
Coffee Break
Slide 40: The Demand Side
The Demand Side Matt Tubergen, EVP Digital Turbine Media
Slide 41: Confidential. © 2018 Digital Turbine, Inc.
Confidential. © 2018 Digital Turbine, Inc. 41
Slide 42: Fireside Discussion with Yelp & Oath
Fireside Discussion with Yelp & Oath Matt Tubergen, EVP Digital Turbine Media Guest Panelists David McKie, Yelp and Alexander Matthews, Oath
Slide 43: Financial Overview
Financial Overview Barrett Garrison, CFO
Slide 44: Financial Overview Outline
Financial Overview Outline • SOX Compliance & Wells Notice Update • Strong Revenue Growth ⁃ Proliferation of Digital Turbine Platform Enabled Devices ⁃ Additional Platform Product Offerings ⁃ Increased Advertiser Demand/Revenue Per Device • Margin Expansion & Operating Leverage in the Model • Free C
Slide 45: SOX Compliance & Wells Notice
SOX Compliance & Wells Notice (TBU) • Fully SOX Compliant as of FYE 2018 • Prior “material weaknesses”, which formed the basis for an informal SEC inquiry, have now been fully remediated • SEC-Issued Wells Notice • Given proposed settlement terms, the resolution of this matter is unlikely to have a
Slide 46: Strong Revenue Growth
PLATFORM NETWORK EFFECTS Strong Revenue Growth Annual Mobile Delivery Platform* revenue growth in excess of 80% each of the past two fiscal years $80m $75m 86% Y/Y Growth in FY18 $60m 81% $40m $40m Y/Y Growth in FY17 $22m $20m $0m FY16 FY17 FY18 * Formerly referred to as Operators & OEMs (”O&O”) rev
Slide 47: Growth Drivers
Growth Drivers Multiple levers to drive accelerated growth x x = New Products More Devices Advertiser Demand Platform Network Effects Confidential. © 2018 Digital Turbine, Inc. 47
Slide 48: Growing Installed Base
MORE DEVICES Growing Installed Base Ignite has been installed on more than 155 million total devices to date and was installed on 20+ million new devices in each of the past three quarters Cumulative Ignite-Installed Devices 160 m 120 m 80 m 40 m m 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Carrie
Slide 49: Multiple New Features Expand Revenue Opportunity
PRODUCTS Multiple New Features Expand Revenue Opportunity Single-Tap, Smart Folders and other post-install products are now live with multiple operators and social media platforms % of Total Revenue Derived from Other Products vs Traditional Silent Preload Fiscal Q1 '17 Fiscal Q4 '17 Fiscal Q4 '18 2
Slide 50: Strong RPD Trajectory With Strategic Partners
ADVERTISER DEMAND Strong RPD Trajectory With Strategic Partners Robust demand for unique home screen access drove a 27% Y/Y increase in the average revenue-per-device with U.S.-based partners in fiscal Q4 Revenue-Per-Device Trends with Leading U.S. Carrier Partners $2.25 $2.00 $1.75 $1.50 $1.25 $1.0
Slide 51: Longer-Term Growth Targets
PLATFORM NETWORK EFFECTS Longer-Term Growth Targets Multiple drivers of growth combine to create a $300m opportunity in 3-5 years, representing an implied CAGR of 30-60% Current Annual Rate (TTM) 3-5 Year Growth Targets U.S. ROW Total U.S. ROW Total # of Annual New 45 million 39 million 85 million 7
Slide 52: Operating Model Leverage
PLATFORM NETWORK EFFECTS Operating Model Leverage Revenue and gross profit increased 86% and 95%, respectively, in fiscal 2018 on gross margin expansion and operating expense growth of just 9%, highlighting the inherent operating leverage in the model FY17 FY18 % Change Y/Y Revenue $40.2 $74.8 86% N
Slide 53: Positive Free Cash Flow Generation
Positive Free Cash Flow* Generation Improved profitability from the more scalable, more profitable core Mobile Delivery Platform business drives greater free cash flow generation $6m +$5m $4m $2m $m FY17 FY17 FY18 -$2m -$4m -$6m $18m improvement in free cash flow Y/Y in FY18 vs FY17 -$8m -$10m -$12m
Slide 54: Strengthened Balance Sheet
Strengthened Balance Sheet Free Cash Flow of $5 million and conversion of convertible notes in FY18 resulted in a vastly improved balance sheet with significantly higher cash and reduced leverage at fiscal year end (in millions) March 31, 2017 March 31, 2018 Cash & Cash Equivalents $6.1 $12.7 Net Wo
Slide 55: Appendix: Non-GAAP Measures of Performance
Appendix: Non-GAAP Measures of Performance • Non-GAAP Gross Profit is defined as GAAP gross profit adjusted to exclude the effect of the amortization of intangibles and depreciation of software. • Non-GAAP Free Cash Flow is calculated as GAAP cash flow from continuing operations less capital expendi
Slide 56: Thank you Q&A
Thank you Q&A