2021 Strategy Series - 15 Must Know Points of Digital Turbine (APPS)

Vested with initial price at US$38.30 and average price of US$52+.

I have already written 2 posts on Digital Turbine (aka APPS)

Click on the tags below of this post to read my previous write up.

But I believe this will be the most important post as I highlights the information you need to know before 1 Jun 21. 

APPS is one of my 2 major super conviction companies and my 2nd largest US market position. 

So here are the 15 points...

1. This post is time sensitive as APPS – they have delayed and will be announcing their results in 1 Jun 2021 (US Time).

2. As per their press release, the rescheduling of its conference call and webcast is “to accommodate certain scheduling matters, including the anticipated completion of a recently announced acquisition.” In my opinion, this is highly possible to be Fyber. 

3. If that is the case, there will be a dilution of shares. As per CEO in the latest Needham Interview, “…Fyber will receive $400 million worth of Digital Turbine stock based upon the 30 day VWAP before the close of the deal…”. I suspect the 30 days VWAP to be between US$61 to US$65.

4. Nevertheless, their revenue may also increase to US$256m for the quarter. Note that prior to the addition of AdColony and Fyber, the revenue has already increased 142% year on year. This should also be the announcement of the FY2021 results for APPS. 

5. With the acquisition, the potential FY2022 (as of March 2022) revenue will also deem to be US$1bn. 

6. Right now, the market cap is only around US$6bn. Thus, the forward looking 1 year FY2021 PS ratio is only 6 times. It is about 23 times currently.

7. For those that still don’t know, they have access to IOS now.

8. Even without the acquisitions, their on-device solutions is amazing. As per the words of the CEO, “…So when our software goes on a device, whether that's a Samsung device, whether that's a Verizon device, we have a moat around that. And so we, in concert with those partners, decided what goes on the device. We're not competing with 10 other players to decide what goes on, we decide that. And so that competitive moat that is there is really strategic important to what we're trying to accomplish…”

9. For their on-device solutions, they have no competitors. Read my 1st post to understand more.

10. Their strategy revolves around the network effects and they have over 600m devices using their On-device solutions.
11. Another of their services – SingleTaps – Earn US$1m a week. Prior to Jul 2020, it took 3 months to earn US$1m.

12. They are getting into the apps – meaning they will get involved in the advertisement in the apps itself. They could also get into the connected TV advertising space. They are also still looking for acquisition. This meant that they intend to become a major digital advertising juggernaut.

13. 5G will eventually require everyone to change their phones. Meaning their current and adding 40+ relationships with OEM and Telco operators will come in very handy.

14. IronSource as stated is a competitor in the Needham Interview. It is getting listed through a SPAC deal at US$11.1bn. That is almost twice the current market cap of APPS, while projecting a revenue of only US$455m in FY2021 and US$622m in FY2022. 

15. Oh.. and APPS is profitable and FCF positive.

I hope this helps you understand more of APPS and please do your own due diligence. 

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