Digital Turbine Closes AdColony Acquisition

Digital Turbine (APPS) has closed the acquisition of mobile advertising platform AdColony. The acquisition is central to Digital Turbine’s goal of offering complete media and advertising solutions to its operator and OEM partners.

Digital Turbine CEO Bill Stone said, “We believe that this strategic transaction, along with the previously completed acquisition of Appreciate and pending completion of the Fyber acquisition, will synergistically accelerate our growth and is a real positive for our partners, advertisers, employees, and shareholders.”  

Digital Turbine also announced its 4Q preliminary numbers. It expects 4Q revenue to jump 142% year-on-year to $95.1 million. Revenue for fiscal year 2021 is expected to come in at $313.6 million, a 126% gain over the previous year.

Looking ahead, Digital Turbine estimates 1Q 2022 revenue to be in the range of $135 million to $140 million. It estimates non-GAAP adjusted EBITDA will land between $25 million and $27 million.

Stone commented, “Our breakout momentum continued to accelerate in the March quarter. We more than doubled our revenue year-over-year on a pro forma basis during the quarter, as we continue to see strong demand for both our Application Media and Content Media offerings.” (See Digital Turbine stock analysis on TipRanks)

Furthermore, Digital Turbine expanded its credit facility with Bank of America to $400 million, with an optional increase of up to $75 million. The move offers Digital Turbine space for financial maneuvering to support its growth and acquisition initiatives.

Recently, Maxim Group analyst Allen Klee reiterated a Buy rating on the stock and increased the price target to $111 (47.2% upside potential) from $85.

Klee believes that Digital Turbine’s recently announced acquisitions should increase the company’s share in the mobile advertising dollar market while also expanding its presence from the present level.

Consensus on the Street is that Digital Turbine is a Strong Buy, based on 5 Buys and 1 Hold. The average analyst price target of $96.83 implies 28.4% upside potential. Shares have gained about 1,289% over the past year.

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