Digital Turbine posted a 69 percent jump in revenue in its fiscal fourth quarter thanks first and foremost to its recent acquisition of Durham apps purveyor Appia.
Appia accounted for $2.9 million in revenue in the quarter. Appia was acquired in early March, so just 26 days of its results were included in the quarterly numbers.
Overall Digital Turbine, a publicly traded company that moved earlier this year from Los Angeles to Austin, Tex., announced on Thursday that it posted $10.2 million in revenue, up from $6.1 million a year earlier.
Digital Turbine CEO Bill Stone told analysts during a conference call that Appia’s “performance was solid particularly in view of its strong seasonal performance in the December quarter.”
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The company posted a $9.4 million loss in the quarter, versus a loss of $2.6 million a year ago.
Digital Turbine’s acquisition of Appia was valued at $100 million. The end result was that shareholders of privately held Appia received about a 33 percent ownership stake in the business.
Appia’s Durham headquarters boasted 65 employees and became Digital Turbine’s largest U.S. office when the deal was completed. Appia had generated $30 million in revenue for the 12-month period that ended Sept. 30 and was one of the Triangle’s fastest-growing startups.
The company’s revenue was driven by “sponsored apps,” where companies such as Facebook and Vonage pay Appia each time one of their apps is downloaded. In addition to featuring the apps in app stores it built for its customers, Appia also advertises the apps elsewhere to maximize revenue.
Digital Turbine’s acquisition plan called for Appia’s top management – including CEO Jud Bowman, Chief Financial Officer Tim Oakley and Ken Hayes, the chief revenue officer – to leave the company when the sale was completed or following a transition period.
Bowman, who became one of Digital Turbine’s largest shareholders, joined the company’s board of directors. Bowman owns 2.4 million shares, a 4.2 percent ownership stake, according to data compiled by Bloomberg.
Stone said the severance costs for the Appia executive team approached $1.5 million.
Digital Turbine, which changed its name earlier this year from Mandaly Digital Group, projects that its revenue for the current fiscal year will range between $110 million and $130 million.
Digital Turbine shares were trading at $3.63, up 9 percent, Friday morning. Its shares have risen 9 percent this year.