Digital Turbine, Inc. · NASDAQ:APPS

Digital Turbine — Mandalay Digital Group — Craig-Hallum Alpha Select Conference 2014

27 slides from Digital Turbine's conference presentation, Sep 18, 2014

  1. Slide 1: Mandalay Digital Group, Inc. Craig-Hallum Alpha Select Conference

    Mandalay Digital Group, Inc. Craig - Hallum Alpha Select Conference September 18, 2014

  2. Slide 2: Safe Harbor Statements

    Safe Harbor Statements. Statements in this presentation concerning future results from operations, financial position, economic conditions, product releases and any other statement that may be construed as a prediction of future performance or events, including without limitation statements regardin

  3. Slide 3: Digital Turbine

    Digital Turbine

  4. Slide 4: Topics

    Topics. • The Big Picture. • Connecting Digital Turbine to the Big Picture. • Digital Turbine Updates: – Products. – Customers and Case Studies. – Metrics. • Q and A. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 4

  5. Slide 5: The Big Picture

    The Big Picture. • Smartphones. • Operating Systems. • Mobile Content. • Mobile Advertising and Applications. • Operators versus Over - the - top (OTT ). MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 5

  6. Slide 6: Smartphone Users: Still lots of upside

    Smartphone Users = Still lots of upside… @ 30% of 5.2B Mobile phone user base. Global smartphone quarterly unit shipments and smartphone users as % of mobile phone users, 2009 – 2013. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 6 Source: Smartphone shipments per Morgan Stan

  7. Slide 7: Global smartphone operating systems "Made in the USA"

    Global smartphone operating systems “Made in the USA”: 97% share from 5% eight years ago. Global smartphone operating system market share (by units shipped), 2005 versus 2010 versus 2013. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 7 Source: 2005 and 2010 data per Gartner,

  8. Slide 8: Mobile app revenue still trumps mobile ad revenue

    Mobile app revenue = Still trumps Mobile ad revenue… @ 68% of Mobile monetization. Global mobile app + advertising revenue, 2008 – 2013. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 8 Source: Global Mobile App revenue per Strategy Analytics; comprises virtual goods, in - app

  9. Slide 9: Apps versus Mobile web

    Apps versus Mobile web. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 9 86% of time spent on mobile on Applications. Monetization of other apps lagging Google and Facebook.

  10. Slide 10: Optimistic about Mobile Ad spend growth

    Remain optimistic about Mobile Ad spend growth… print remains way over - extended. % of time spent in media versus % of Advertising Spending, USA 2013. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 10 Source: Advertising Spend based on IAB data for full year 2013. Print inclu

  11. Slide 11: Facebook and App-Installs

    Facebook and App - Installs. • FB stock hits low of $17.73 on September 4, 2012. • Launches app install ads on October 17, 2012. • 350 million app installs through Q1 2014. • 945 million mobile monthly active users. • Driving more than $5 billion in annual mobile ad revenue from app install ads. MAN

  12. Slide 12: Mobile Operators versus Over-the-top (OTT)

    Mobile Operators versus Over - the - top (OTT ). • Operators over $2T in revenue. • Google, Apple, Facebook are approximately 25 % of operator revenue (including non - mobile ). • OTT competing against operator services. • Operator history of competing and monetizing mobile content distribution is p

  13. Slide 13: Takeaways from the Big Picture

    Takeaways from the Big Picture. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 13 Trend Implication Smartphones Global and g rowing Operating Systems Android dominates … for now Mobile Content Business Models About Apps AND Advertising not Apps OR Advertising Mobile Advertisin

  14. Slide 14: How does Digital Turbine capitalize?

    How does Digital Turbine capitalize? MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 14 Trend Implication for Digital Turbine Smartphones Global opportunity, not just a US one Operating Systems Focus on Android today; however, platform architected for flexibility Mobile Content

  15. Slide 15: Digital Turbine product mix

    Digital Turbine product mix. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 15

  16. Slide 16: Product: pre-loads, customization, platform agnostic

    • Pre - loads a problem for operators. • Customization. • Platform and device agnostic. • Flexible. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 16

  17. Slide 17: Product: discovery, recommendation, app drawer and search

    • Discovery. • Recommendation. • Organization. • App drawer and search. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 17

  18. Slide 18: Product: Sphere in the Cloud

    • Sphere in the Cloud. • Full - service , all categories. • Business models changing. • Integrated billing. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 18

  19. Slide 19: Product: strategic and expansion

    • Strategic. • Content providers concerned. • Operators limit connectivity. • Expansion. MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 19

  20. Slide 20: Closing the loop: Bringing the products together

    Closing the loop: Bringing the products together. • Bundled versus a - la - carte. • Today versus tomorrow. • Google Play problem. • Revenue “double - dipping.” MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 20

  21. Slide 21: Customers

    Customers MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 21

  22. Slide 22: Customers

    Customers MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 22

  23. Slide 23: Media

    Media. • > $6.5M of media sold to date for summer / fall device launches globally. • Strong demand from advertisers. • CPI ranges from $ .25 (Emerging markets) to $ 3.50 (USA ). • Across multiple categories (eg: games, travel, etc. ). • Open rates ? MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digit

  24. Slide 24: Metrics: Operators and Advertisers

    Metrics: Operators and Advertisers • Ignite: – 12M by end of FY 2015. – VZ ramp Q3 and Q4. – $ 1 CPI, three - slots and 50/50 rev share is “ average of averages. ” • IQ: – 1M by end of FY 2015. – T - Mo and Vodafone launches. • Content Management and Pay: – 30M month. – 2M pay. – $3 Average ARPU. –

  25. Slide 25: Metrics: Revenue variability (Ignite and IQ)

    Metrics: Revenue variability (Ignite and IQ) MANDALAY DIGITAL GROUP, INC. © 2014 Mandalay Digital Group, Inc. Page 25 • Baseline: 4 slots @ $2.50, 50% open rate on 1mm devices = $5 million in gross revenue • Device sell - through: – Devices increase to 1.5mm = $7.5mm in gross revenue – Devices decre

  26. Slide 26: Wall Street Guidance

    Wall Street Guidance. • Fiscal 2015 (3/31/15) – Revenues of $44 million to $48 million – Gross margin mid 40% range – Adjusted EBITDA positive for full Q3 • Fiscal 2016 (3/31/16) – Revenues of $110 million to $130 million • Expected Cash OPEX increase of 10% to 15% MANDALAY DIGITAL GROUP, INC. © 201

  27. Slide 27: IR Contact

    IR Contact: Laurie Berman PondelWilkinson Inc. Direct: 310 - 279 - 5962 Mobile: 310 - 867 - 4365 lberman@pondel.com

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