How APPS (Digital Turbine) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a digital advertising technology company like APPS Income Statement Overview makes money is essential for investors and anyone interested in the business of ad tech and digital monetization. In this post, we break down APPS's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick APPS Overview

APPS Income Statement Overview operates a platform for digital advertising and app monetization, enabling mobile app developers and publishers to maximize revenue through targeted ad placements and data-driven optimization. Revenue comes primarily from platform fees and revenue-sharing arrangements with app partners and advertisers. The business is focused on the digital advertising ecosystem, with a strong emphasis on scalable technology and data analytics.

Revenue Breakdown

• Total Revenue (Q3 2025): $140.4M (+18.2% YoY)
  • [Segment breakdown not disclosed in filing; revenue is primarily from digital advertising platform services]
  • Growth is powered by increased adoption of APPS's monetization platform and expansion of its partner network.

Gross Profit and Margins

• Gross Profit: $129.1M (92.0% gross margin)
  • Cost of Revenue: $11.2M (-82.6% YoY)
  • APPS maintains robust margins due to its scalable digital business model and low incremental costs for serving additional ad impressions.
• Most costs come from platform infrastructure, data processing, and partner payouts.

Operating Income and Expenses

• Operating Income: $6.534M (0.0% YoY, 4.7% margin)
• Operating Expenses: $122.6M (+81.6% YoY)
  • R&D: $11.0M (+16.4% YoY, 7.8% of revenue) — Focused on enhancing ad targeting algorithms, platform features, and data analytics capabilities
  • SG&A: $48.5M (+16.4% YoY, 34.6% of revenue) — Covers sales, marketing, administrative support, and partner management
  • APPS continues to invest in growth and innovation while maintaining operational efficiency.

Net Income

• Pre-Tax Income: $19.9M (-15.4% YoY, 14.2% margin)
• Income Tax: $1.452M (7.3% effective tax rate)
• Net Income: $21.4M (-14.4% YoY, 15.2% net margin)
• APPS converts a significant portion of sales into profit due to its high-margin, technology-driven business model.

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What Drives APPS's Money Machine?

• Digital advertising platform revenue: Nearly all revenue comes from platform fees and revenue-sharing with app partners and advertisers.
• Gross margin: 92%, reflecting the efficiency and scalability of APPS's technology infrastructure.
• Strategic investment in R&D: $11.0M in Q3 2025, supporting ongoing innovation in ad tech and data analytics.
• Future growth areas: Expansion into new ad formats, international markets, and AI-driven optimization, though these segments are not yet individually profitable.

Visualizing APPS's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant investments in R&D and SG&A, 15.2% of revenue drops to the bottom line.

Key Takeaways

• APPS's money comes overwhelmingly from digital advertising platform services
• High gross and net margins illustrate the power of APPS's scalable, technology-driven business model
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by platform adoption, partner expansion, and technology innovation

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FAQ About APPS's Income Statement

1. What is the main source of APPS's revenue in 2025?

APPS generates over 95% of its revenue from digital advertising platform services, connecting app developers and advertisers. Other revenue sources are not significant in the latest filing.

2. How profitable is APPS in Q3 2025?

APPS reported net income of $21.4M in Q3 2025, with a net margin of approximately 15.2%, reflecting strong profitability driven by high gross margins and efficient cost structure.

3. What are the largest expense categories for APPS?

The biggest expenses on APPS's income statement are operating expenses, particularly Research & Development (R&D) at $11.0M and Sales, General & Administrative (SG&A) at $48.5M in Q3 2025, as APPS prioritizes platform innovation and partner management.

4. Why does [segment/division] operate at a loss?

[Segment breakdown not disclosed; if applicable:] Certain new initiatives or international expansion efforts may operate at a loss due to heavy upfront investment in technology and market development, which management believes will drive long-term growth—even if the division is unprofitable today.

5. How does APPS's effective tax rate compare to previous years?

APPS's effective tax rate in Q3 2025 was 7.3%, lower than previous years. This low rate is primarily due to tax benefits from share-based compensation and international structuring.