Quarterly report [Sections 13 or 15(d)]

Debt

v3.25.3
Debt
 6 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
Debt Debt
The following table summarizes borrowings under the Company’s debt obligations and the associated interest rates:
September 30, 2025
Balance Interest Rate
Term loans (subject to variable interest rate)
 $ 419,908  12.05  %
March 31, 2025
Balance Interest Rate Unused Line Fee
Revolver (subject to variable interest rate) $ 411,000  8.17  % 0.35  %
Debt obligations on the consolidated balance sheets consist of the following:
September 30, 2025 March 31, 2025
Revolver $ —  $ 411,000 
Term loans 419,908  — 
Less: Original issuance discount (14,344)
Less: Debt issuance costs (9,123) (2,313)
Total debt, net 396,441  408,687 
Less: Current portion of debt (2,688) — 
Long-term debt, net of debt discount and issuance costs
 $ 393,753  $ 408,687 
Revolver
On April 29, 2021, the Company entered into an amended and restated credit agreement (the “Amended and Restated Credit Agreement”) with Bank of America, N.A. (“BoA”), as a lender and administrative agent, and a syndicate of other lenders, which provided for a revolving line of credit and which was amended from time to time before being refinanced as described below under “Financing Agreement”. At the time of such refinancing, the Amended and Restated Credit Agreement provided for the following terms: (i) the amount of the revolver was $411,000, (ii) the maturity date was August 29, 2026, (iii) the annual interest rate was, at the Company’s election, (a) SOFR plus 5.50% from June 13, 2025 to August 29, 2025 and 7.50% from August 30, 2025 and thereafter or (b) Base Rate (means for any day the highest of (x) the Federal Funds Rate plus 0.50%, (y) BoA prime rate, and (z) SOFR plus 1.00%) plus 4.50% from June 13, 2025 to August 29, 2025 and 6.50% from August 30, 2025 and thereafter, (iv) the letter of credit fee was 5.5% through August 29, 2025, with an increase to 7.5% after August 29, 2025, (v) financial covenants of a decreasing consolidated secured net leverage ratio starting at 5.25 and decreasing to 4.00 on and after June 30, 2026 and an increasing fixed charge coverage ratio starting at 1.10 increasing to 1.30 on and after June 30, 2026, (vi) mandatory prepayments of net cash proceeds from equity issuances and certain other extraordinary receipts, and (vii) certain covenants including additional monthly reporting obligations, quarterly projections, biweekly 13-week cash flow forecast reporting, access rights, engagement of a financial advisor to, among other things, provide written analyses, including variance analyses, of actual amounts and projected amounts as set forth in the Company’s business plan and budget and 13-week cash flow forecasts, and provide the lenders with reasonable access to the financial advisor. The Company’s payment and performance obligations under the Amended and Restated Credit Agreement and related loan documents were secured by its grant of a security interest in substantially all of its personal property assets, whether now existing or hereafter
acquired, subject to certain exclusions, and the issued and outstanding equity of certain foreign subsidiaries, including Digital Turbine (EMEA) LTD., Fyber B.V. and Digital Turbine (IL) Ltd. If the Company were to acquire any real property assets with a fair market value in excess of $5,000, it is required to grant a security interest in such real property as well. All such security interests were required to be first priority security interests, subject to certain permitted liens.
The Company incurred debt issuance costs of $15,861 for the Amended and Restated Credit Agreement, inclusive of costs incurred for the prior amendments. Deferred debt issuance costs are recorded as a reduction of the carrying value of the debt on the consolidated balance sheets. All deferred debt issuance costs are amortized on a straight-line basis over the term of the loan to interest expense.
Because the Company refinanced the Amended and Restated Credit Agreement as described below, the Company terminated and fully paid off the outstanding balance of the revolver as of September 30, 2025.
Financing Agreement
On August 29, 2025 (the “Closing Date”), the Company refinanced the Amended and Restated Credit Agreement. The Amended and Restated Credit Agreement was repaid in full with the proceeds of the loans provided under the Financing Agreement (defined below) and terminated.
On the Closing Date, the Company and certain wholly-owned subsidiaries of the Company, as guarantors (the “Guarantors”), entered into a Financing Agreement (the “Financing Agreement”) with Blue Torch Finance LLC, as administrative agent and as collateral agent (“Administrative Agent”), and the lenders from time to time party thereto (“Lenders”), pursuant to which the Lenders made loans and other extensions to the Company under certain term loan credit facilities on the terms and conditions as set forth therein.
The Financing Agreement (i) has a four-year term from the Closing Date and (ii) provides for three separate tranches of term loans in an aggregate principal amount of $430,000 (the “Loans”), all of which were borrowed in full by the Company on the Closing Date. The Loans are secured by substantially all of the assets of the Company and the Guarantors, subject to certain exceptions.
Pursuant to the Financing Agreement, the Company issued warrants to the lenders providing the term loans. The Company recorded the warrants as a liability at their full fair value and allocated the remaining proceeds from the incremental borrowings of the Financing Agreement to the Term Loans, net of a discount.
The Loans accrue interest, at the Company’s option, at a term SOFR rate or a reference rate for U.S. dollar borrowings, plus an applicable margin. The applicable margin for Loans accruing interest at the term SOFR rate ranges from 7.50% to 8.00% and ranges from 6.50% to 7.00% for loans accruing interest at the reference rate. The outstanding principal amount of the Loans is subject to scheduled repayment as follows: (i) on the last day of each fiscal quarter, beginning September 30, 2026, until the maturity of the Loans, the Company will repay the outstanding principal amount of term loans in an amount equal to $2,688 in the aggregate across all three tranches and (ii) on the maturity date, the Company will pay the remaining aggregate outstanding principal amount, including
all accrued and unpaid interest thereon. As of September 30, 2025, $2,688 was recorded under current portion of debt, with the remainder of the principal of the Loans recorded as long-term debt, net of debt issuance costs.
As of September 30, 2025, the future principal payments for the outstanding debt are as follows:
Future principal payments due for fiscal years ended March 31:
2026 $ — 
2027 8,064 
2028 10,752 
2029 10,752 
2030
 390,340 
Total payments
 $ 419,908 
The remaining principal amount is scheduled to be repaid at maturity in fiscal year 2030. The Company would be required to pay certain escalating exit fees and duration fees if two tranches of term loans are not repaid by certain dates.
During the three months ended September 30, 2025, subsequent to the execution of the Financing Agreement, the Company made a payment of $10,092 on the principal of the Loans with proceeds raised from utilizing the Company’s At-the-Market offering (see Note 12—At-the-Market Offering). Under the Financing Agreement, any and all proceeds raised from an equity issuance during the term of the Loans are subject to use for mandatory prepayment of the Loans.
The Financing Agreement contains various customary affirmative and negative covenants, as well as financial covenants. The Financing Agreement requires the Company to maintain (i) a maximum leverage ratio with step-downs every fiscal quarter and (ii) minimum liquidity of (A) $10,000 from the Closing Date until March 31, 2026 and (B) $20,000 from and after April 1, 2026 until the maturity date. In addition, the Financing Agreement contains certain mandatory prepayment provisions, including from proceeds raised from equity issuances and, beginning in fiscal year 2027, 50% of any excess cash flows, and the Company would also be required to pay certain escalating exit fees and duration fees if two tranches of term loans are not repaid by certain dates.
As of September 30, 2025, the Company was in compliance with all covenants under the Financing Agreement.
Warrants to Purchase Common Stock
In connection with the Financing Agreement, on the Closing Date, the Company issued warrants (the “August 2025 Warrants”) to purchase an aggregate of 824,421 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), to certain affiliates of the Lenders (in such capacity, the “August Holders”) at an exercise price of $4.84 per share (the “Exercise Price”), which is equal to the 30-day volume-weighted average price per share of Common Stock ending on and including the trading day immediately preceding the Closing Date. In addition, the Company issued, on September 15, 2025, an additional warrant to purchase an aggregate of 397,997 shares of Common Stock to an affiliate of a Lender (in such capacity, the “September Holder” and, together with the August Holders, the “Holders”) at the Exercise Price (the “September 2025 Warrant” and, together with the August 2025 Warrants, the “2025 Warrants”).
The 2025 Warrants expire on March 1, 2030. The Exercise Price and the number of shares underlying the 2025 Warrants are subject to adjustment in the event of specified events, including a subdivision or combination of the Common Stock, a reclassification of the Common Stock, certain change of control transactions, certain rights offerings or specified dividend payments, subject to certain limitations as set forth in the 2025 Warrants. Upon exercise, the aggregate exercise price may be paid, at each warrant holder’s election, in cash or on a net issuance basis, based upon the fair market value of the Common Stock at the time of exercise.
The Company agreed to provide certain customary registration rights with respect to the resale of shares of Common Stock underlying 2025 Warrants held by or issuable to the holders from time to time. The 2025 Warrants also contain customary indemnity and contribution obligations in connection with such registration.
The Company uses the Black-Scholes option valuation model for estimating fair value of common stock warrants. During the six months ended September 30, 2025, the Company recorded $2,335 loss on changes in the
fair value of the derivative liability. The table below is a summary of changes in the fair value of the Company’s valuations for the derivative liability for the six months ended September 30, 2025:
Derivative Liability
Balance as of March 31, 2025 $ — 
Issuance of 2025 Warrants 3,667 
Change in fair value 2,335 
Balance as of September 30, 2025
 $ 6,002 
Interest expense, net
Interest expense, net, and unused line of credit fees were recorded in interest expense, net, on the condensed consolidated statements of operations and comprehensive (loss) income, as follows:
Three months ended September 30,
Six months ended September 30,
2025 2024 2025 2024
Interest expense, net $ (11,490) $ (8,722) $ (20,278) $ (16,562)
Unused line of credit fees and other (8) (54) (20) (163)
Total interest expense, net $ (11,498) $ (8,776) $ (20,298) $ (16,725)