What happened
Shares of Digital Turbine (NASDAQ: APPS) took off on Tuesday, surging as much as 16.5%. As of 2:55 p.m. ET, the stock was still up 12.2%.
The digital advertising specialist expanded its relationship with a strategic partner, which bodes well for the company's future prospects.
So what
In a press release, Digital Turbine said it was expanding its existing relationship with Telefónica, one of the largest telecommunications service providers in the world. The agreement will help Digital Turbine penetrate further into the European and Latin American markets, providing access to more than 365 million new customers.
Image source: Getty Images.
Telefónica will add several of Digital Turbine's app and content discovery tools to its on-device offerings, including Wizard, Notifications, and SingleTap, which the company says will "deliver best-in-class app recommendation experiences to their subscribers."
Now what
This is a much needed win for Digital Turbine. The stock plunged 38% last month after the company released its second-quarter financial report. While sales and non-GAAP (adjusted) earnings per share came in comfortably ahead of expectations, and Digital Turbine issued a robust forecast, investors appeared to want more.
It's important to step back and put those results into perspective, however. For fiscal 2021 (ended March 31) Digital Turbine delivered revenue that surged 126% year over year, while its fourth-quarter revenue jumped 142%. As a result, the stock soared nearly 700% last year, with the majority of those gains coming in the second half of 2020. It appears the stock was merely experiencing a well-earned pullback, which was not surprising given its stratospheric ascent.
Digital Turbine's latest deal provided investors with assurances that the company's growth story is far from over.
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Danny Vena has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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