User Engagement and Growth - Zedge's Zedge App had 23.3 million monthly active users (MAU) as of July 31, 2025, with a range of 22.1 million to 28.7 million MAU over the past two fiscal years [314]. - The Zedge Marketplace generated approximately 984,000 active subscribers as of July 31, 2025, following the introduction of a subscription tier in the iOS version of the app in April 2023 [317]. - GuruShots, acquired in April 2022, engages around 30-40 million amateur photographers monthly, with over 300 competitions staged each month resulting in more than 550,000 photographs uploaded [320]. - The average monthly spend per paying player in GuruShots has increased by over 6.2% annually to more than $40.9 per player [321]. - Emojipedia, acquired in August 2021, received approximately 48.4 million monthly page views and had about 8.9 million MAU as of July 31, 2025 [325]. - Zedge introduced pAInt, a generative AI wallpaper maker, in fiscal 2023, enhancing user engagement through text-to-image and other creative functionalities [315]. Revenue Generation - Zedge's revenue is primarily generated from advertising, paid subscriptions, and Zedge Premium, with a significant portion coming from advertising inventory sales [332]. - Zedge Premium allows content owners to earn 70% of revenue after a 30% fee from Google Play or the App Store, with users able to purchase content using Zedge Credits [339]. - GuruShots generates most of its revenue from virtual tokens, with players purchasing in-game goods and services, reflecting a strong engagement model [340]. - Revenue from virtual goods is recognized upon sale, with consumable virtual goods leading to repeat purchases only after existing balances are depleted [343]. - GuruShots reports revenue on a gross basis as it acts as the principal in transactions, controlling the content and pricing of virtual goods [347]. - Zedge records revenue from Zedge Premium on a net basis, accounting for a 30% platform fee and sharing 70% of gross revenue with content providers [349]. Financial Performance - Total revenues for the fiscal year ended July 31, 2025, were $29.398 million, a decrease of 2.3% from $30.091 million in the previous year [384]. - Subscription revenue increased by 17.1% to $5.093 million for the fiscal year ended July 31, 2025, primarily due to growth in lifetime subscriptions [389]. - Zedge Premium net revenue grew by 48.7% to $1.778 million for the fiscal year ended July 31, 2025, with a gross margin of 68% compared to 56% in the previous year [390]. - Subscription billings increased by 29.0% to $7.360 million for the fiscal year ended July 31, 2025, from $5.705 million in fiscal 2024 [387]. - The company experienced a net loss of $2.392 million for the fiscal year ended July 31, 2025, a significant improvement from a net loss of $9.171 million in the previous year, reflecting a 73.9% reduction [384]. - Digital goods and services revenue decreased by $1.3 million, or 37.1%, primarily due to a 27.0% decrease in GuruShots' MAP year over year [391]. Cost Management - Direct costs of revenues decreased slightly by 1.0% to $1.841 million for the fiscal year ended July 31, 2025 [384]. - Direct cost of revenues decreased by $18,000, or 1.0%, compared to fiscal 2024, remaining relatively flat at about 6.2% of revenues [392]. - Selling, general and administrative (SG&A) expenses increased by $1.6 million, or 6.1%, with SG&A as a percentage of revenues rising to 92.5% from 85.2% [393]. - Stock-based compensation expense decreased by $0.7 million, or 32.5%, primarily due to lower fair value related to deferred stock units granted [397]. - Depreciation and amortization expense decreased by $1.3 million, or 53.2%, primarily due to an $11.9 million impairment charge recorded in Q2 of fiscal 2024 [399]. - The company recorded approximately $1.6 million in restructuring charges related to global restructuring implemented in January 2025 [401]. Cash Flow and Assets - Cash and cash equivalents at July 31, 2025, were $18.6 million, down from $20.0 million at July 31, 2024 [416]. - Operating activities generated cash flows of $3.4 million, a decrease of $2.4 million from $5.9 million in fiscal 2024 [417]. - Net cash provided by operating activities was $3.4 million for the fiscal year ended July 31, 2025, with a net loss of $2.4 million adjusted for non-cash items [419]. - Cash collections for fiscal 2025 were $30.0 million, compared to $29.2 million in fiscal 2024 [421]. - The company repurchased 1,104,142 shares of Class B Common Stock for approximately $3.6 million under the 2024 Share Repurchase Plan during fiscal 2025 [426]. - The company had remaining authorization of approximately $1.4 million for future share repurchases under the 2024 Repurchase Plan as of July 31, 2025 [426]. Market Conditions and Risks - Current economic conditions, including foreign exchange fluctuations and geopolitical unrest, may negatively impact the company's performance [369]. - As of July 31, 2025, Monthly Active Users (MAU) for the Zedge App declined by 11.1% year-over-year to 23.3 million, primarily due to attrition in emerging markets [374]. - Average Revenue Per Monthly Active User (ARPMAU) for the Zedge App increased by 16.9% to $0.0925 for the three months ended July 31, 2025, driven by higher advertising rates and subscription revenue [375]. - Monthly Active Payers (MAP) for GuruShots decreased by 26.4% to 3,326 for the three months ended July 31, 2025, compared to 4,521 in the same period a year ago [380]. - Average Revenue Per Monthly Active Payer (ARPMAP) for GuruShots decreased by 17.1% to $43.5 for the three months ended July 31, 2025 [380]. Impairment and Valuation - The company recorded $11.9 million in impairment charges in Q2 of the fiscal year ending July 31, 2024, indicating potential asset recoverability issues [351]. - A $0.8 million impairment of capitalized software and technology development costs was recorded due to a strategic reassessment of GuruShots' operations [363]. - The company recognizes deferred tax assets and liabilities based on temporary differences, with a valuation allowance applied when realization is uncertain [366]. - The net loss resulting from foreign exchange transactions decreased by $39,000 to $151,000 in fiscal 2025 from $190,000 in fiscal 2024 [406]. Shareholder Returns - The company declared a dividend of $0.01615 per share to be paid on or around November 7, 2025, reflecting operational improvements and positive cash flow [430]. - The two largest customers represented 37% and 6% of revenue in fiscal 2025, compared to 31% and 9% in fiscal 2024 [432]. - The maximum principal amount of the term loan was reduced from $7 million to $2 million as of May 11, 2023, and fully prepaid on November 15, 2023 [424]. - The revolving credit facility was renewed for another four-year term on October 28, 2024 [425].

Financial Data and Key Metrics Changes - Total revenue for Q4 was $7.5 million, down 1.5% year over year, with Zedge Marketplace revenue up mid-single digits but offset by an 11% decline at Emojipedia and a 39% drop at GuruShots [14][15] - Subscription revenue increased by 21% year over year, with nearly 1 million active subscribers, a 47% increase compared to Q4 of fiscal 2024 [5][15] - Deferred revenue reached $5.4 million, up 10% sequentially and 73% year over year, indicating future revenue potential with high gross margins [15][17] - GAAP loss from operations was $0.7 million, compared to a loss of $0.1 million last year, primarily due to restructuring costs [16][17] Business Line Data and Key Metrics Changes - Zedge Marketplace performed well, while GuruShots showed signs of plateauing, with a 39% year-over-year revenue decline [5][14] - Advertising revenue was slightly up for the quarter, but total ad revenue was softer than expected due to a decline at Emojipedia [5][14] - Zedge Premium's GTV grew by 7% year over year, and ARPMAU increased by 17%, reflecting a shift towards higher-value users [15] Market Data and Key Metrics Changes - The introduction of a new Google search feature allowing users to copy emojis directly from search results has diverted traffic away from Emojipedia, impacting its performance [6][32] - The competitive impact of AI search has also affected Emojipedia's traffic, as users can now obtain emojis without visiting the site [6][32] Company Strategy and Development Direction - The company aims to expand and diversify its revenue base, focusing on innovation and optimizing monetization strategies [9][12] - Plans include further integration of audio AI capabilities into products and evaluating the future direction of GuruShots [9][11] - The company is committed to improving operational efficiency and executing a balanced capital allocation strategy, including share repurchases and dividends [12][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's cash flow generation and balance sheet, initiating a quarterly dividend of $0.016 per share [8] - The completed restructuring is expected to provide greater operating flexibility and improved cash flow and profitability in fiscal 2026 [4][12] - Management is optimistic about the potential of early-stage products like Dataseeds.ai, TapeDeck, and SyncAt, which are evolving and positioned for growth [12][13] Other Important Information - The company repurchased approximately 640,000 shares in Q4 and a total of 1.3 million shares for the full year, reflecting a disciplined capital allocation strategy [7][8] - Cash and cash equivalents at year-end were approximately $19 million, with no debt [17] Q&A Session Summary Question: Actions regarding TapeDeck and Dataseeds.ai - Management highlighted that TapeDeck aims to support indie artists and will evaluate its future based on performance metrics, while Dataseeds.ai focuses on providing datasets for AI companies [21][23] Question: Sequential improvement in monthly active users - Management attributed the improvement to discerning marketing spend and seasonal dynamics, ensuring high-value customer acquisition [27][28] Question: Focus of restructuring savings - Management indicated that restructuring savings were reinvested in marketing and user acquisition, with plans to continue prioritizing these areas if growth opportunities arise [29][30] Question: Changes affecting Emojipedia - Management explained that Google's new search feature has impacted Emojipedia's traffic, and they are exploring strategies to mitigate this effect [31][32] Question: Deferred revenue recognition - Management clarified that deferred revenue is recognized over 30 months, and maintaining a steady subscriber pool will help level up revenue recognition [35] Question: SG&A expenses outlook - Management suggested that SG&A may decline slightly going forward as spending on user acquisition and consulting for new projects is expected to decrease [37]

Financial Performance - Active subscriptions reached a record 984K, up 47% year-over-year; subscription revenue grew 21% year-over-year[1] - Fourth quarter revenue decreased 1.5% to $7.5 million; fiscal year revenue decreased 2.3% to $29.4 million[8] - GAAP net loss for Q4 was ($0.6) million, and for the fiscal year was ($2.4) million, compared to ($0.0) million and ($9.2) million in the prior year respectively[8] - Free cash flow for Q4 was $0.5 million, and for the fiscal year was $2.9 million[8] - Total revenue for FY23 was $27.2 million, with a projected increase to $30.1 million in FY24[19] - Non-GAAP Net Income for FY23 was $1.8 million, with a Non-GAAP EPS of $0.13[19][21] - Operating income showed a loss of $11.8 million for FY23, highlighting areas for operational improvement[19] - Net loss for the year ended July 31, 2025, was $2,392,000, compared to a net loss of $9,171,000 in 2024, indicating a significant improvement[31] - The company reported a loss from operations of $3,232,000 for the year ended July 31, 2025, compared to a loss of $11,805,000 in 2024[31] - GAAP Net Income for Q224 was $(9.2) million, while Non-GAAP Net Income for the same quarter was $0.5 million, indicating a significant improvement in performance[37] User Engagement and Growth - Monthly Active Users (MAU) reached 28.5 million, showing a growth trend in user engagement[19][20] - ARPMAU increased 16.9% year-over-year, reflecting ongoing demand for premium and personalized content[12] - Average Revenue Per Monthly Active User (ARPMAU) for Zedge Premium was $0.093, indicating effective monetization strategies[19][25] - Management anticipates continued growth in advertising revenue driven by increased user engagement[20][24] Cash Flow and Liquidity - Free Cash Flow (FCF) for FY23 was $4.7 million, with expectations for continued improvement in FY24[19] - Cash and cash equivalents at the end of the period were $18,609,000, down from $19,998,000 in the previous year[33] - The company ended fiscal 2025 with approximately $19 million in cash and no debt, positioning itself for future growth[4] - Free Cash Flow for FY23 was $3.2 million, with projections of $5.9 million for FY24 and $3.4 million for FY25, showing a positive trend in cash generation[37] - Cash Flow from Operations for Q324 was $2.3 million, demonstrating strong operational efficiency during that period[37] Strategic Initiatives and Product Development - New product initiatives include the launch of Tapedeck and Syncat, with plans to introduce six new product concepts in fiscal 2026[15] - The company plans to expand its product offerings, including generative AI tools and enhanced marketplace features[23] - The company plans to continue its market expansion efforts, focusing on new product development and technology advancements[36] Restructuring and Operational Challenges - The company incurred restructuring charges of $1,605,000 in 2025, compared to no such charges in 2024[31] - The company incurred restructuring charges of $12.0 million in Q2 2024, contributing to the overall losses reported[36] - Restructuring activities are expected to continue, with related expenses anticipated to impact future earnings[36] - The overall financial performance indicates a challenging environment, with a focus on cost management and strategic investments moving forward[36] Shareholder Information - The company repurchased 640,000 shares during Q4 and 1.3 million shares in the fiscal year[1] - The weighted-average number of shares used in the calculation of loss per share was 13,736,000 for the year ended July 31, 2025, compared to 14,092,000 in 2024[31] - Weighted average shares used to compute Non-GAAP diluted EPS were 14.1 million in Q224, reflecting a stable share count[37] Asset and Liability Management - Total assets decreased to $35,654,000 in 2025 from $38,195,000 in 2024, reflecting a decline of 6.4%[28] - Total liabilities increased to $9,753,000 in 2025, up from $7,299,000 in 2024, representing a rise of 33.6%[28] - Stockholders' equity decreased to $25,901,000 in 2025 from $30,896,000 in 2024, a decline of 16.1%[28]

Core Insights - Zedge, Inc. reported a record of 984,000 active subscriptions, representing a 47% increase year-over-year [1] - Subscription revenue grew by 21% year-over-year [1] - Average Revenue Per Monthly Active User (ARPMAU) increased by 17% year-over-year [1] - The company repurchased 640,000 shares during Q4 and a total of 1.3 million shares in the fiscal year [1] - Zedge introduced its first dividend post year-end [1] - CEO Jonathan Reich highlighted solid operating performance, healthy underlying metrics, and positive cash flow at the end of the fiscal year [1]

Core Insights - Zedge Inc. has launched a new music app called Tapedeck, aimed at providing musicians with better control and fairer compensation for their work [1][3] - The initiative is part of Zedge's creator-first model, which has been in place since 2017 and has paid millions to creators globally [1][3] - Tim Quirk, Zedge's SVP of Product, is the concept creator of Tapedeck and has a notable background in the digital music industry [2][3] Company Overview - Zedge Inc. operates digital marketplaces and competitive games that allow users to express themselves through content [3] - The company has a history of focusing on fair artist compensation, referencing past standards in the industry [3] Product Details - Tapedeck is designed to enhance the relationship between artists and their fans, promoting a model where superfans are willing to pay more to support their favorite artists [2][3]

Core Insights - Zedge's Dataseeds.AI is experiencing growing demand for its B2B offering, which provides scalable, rights-cleared image datasets for AI training, catering to leading AI companies [1][9] - The platform leverages a global creator community to fulfill bespoke customer requests, enhancing its ability to deliver custom image datasets at scale [2][4] Product Features - Dataseeds.AI utilizes a catalog of approximately 30 million rights-cleared images, curated through the GuruShots platform, which engages thousands of photographers worldwide [3][9] - The platform's enhanced search technology allows for the discovery of imagery that meets specific customer requirements, including ancillary content that may not be immediately obvious [5][6] Customer Engagement - When niche visual requests arise, Dataseeds.AI can quickly launch targeted GuruShots challenges to source bespoke content, ensuring rapid turnaround and full rights clearance [4][6] - The solution is designed to be flexible and scalable, making it suitable for organizations needing diverse and contextually rich visual content delivered quickly and cost-effectively [6][9]

Core Points - Zedge, Inc. will report its financial and operational results for the Fourth Quarter and End of Fiscal Year 2025 on October 28, 2025 [1][2] - The earnings release will be filed on Form 8-K and made available on Zedge's investor relations website at approximately 6:30 AM Eastern [2] - Management will host an earnings conference call at 11 AM Eastern to discuss the results, outlook, and strategy, followed by a Q&A session with investors [2] Company Overview - Zedge empowers millions of consumers and creators monthly through interconnected platforms that promote creativity, self-expression, and e-commerce [3] - The company's ecosystem includes the Zedge Marketplace, which offers mobile phone wallpapers, video wallpapers, ringtones, notification sounds, and a generative AI image maker called pAInt [3] - Other offerings include GuruShots, a skill-based photography game, and Emojipedia, the leading source for emoji-related information [3]

Core Viewpoint - Zedge, Inc. has announced the initiation of a quarterly cash dividend program, reflecting confidence in its long-term growth prospects and strong financial position [1] Financial Performance - The company maintains a strong cash position and a debt-free balance sheet, which supports ongoing free cash flow generation [1] - The initiation of the dividend program is part of Zedge's capital return initiatives aimed at enhancing shareholder value [1] Management Commentary - CEO Jonathan Reich emphasized that the quarterly dividend reflects the company's confidence in its ability to generate free cash flow and its strong balance sheet [1]

Group 1 - Zedge, Inc. will present at the LD Micro Main Event XIX on October 20, 2025, with CEO Jonathan Reich as the speaker [1] - The event will take place at the Hotel del Coronado in San Diego, starting at 1:30 PM Eastern / 10:30 AM Pacific [2] - Zedge empowers millions of consumers and creators monthly through its interconnected platforms, including the Zedge Marketplace, GuruShots, Emojipedia, and DataSeeds.AI [2] Group 2 - Zedge Marketplace offers a freemium model for mobile phone wallpapers, video wallpapers, ringtones, and notification sounds [2] - GuruShots is described as "The World's Greatest Photography Game," focusing on skill-based photo challenges [2] - DataSeeds.AI provides datasets for AI model training, utilizing Zedge's consumer games and marketplaces [2]

Core Insights - The article highlights Zedge's new AI-driven product development strategy through the launch of the SynCat app, which was developed in a matter of weeks by a small team using AI and vibe coding [1] - Zedge has established a dedicated Product Innovation Team to leverage AI for rapid ideation, validation, and deployment of new product concepts, significantly reducing time and costs compared to traditional development methods [1] - CEO Jonathan Reich emphasizes that Zedge is entering a new phase where AI will increasingly drive the company's operations and product offerings [1] Company Developments - Zedge is positioning itself as a leader in digital marketplaces and interactive games, focusing on content creation, self-expression, and community engagement [1] - The formation of the Product Innovation Team indicates a strategic shift towards integrating AI more deeply into the company's product development processes [1] Industry Trends - The move towards AI-driven product development reflects a broader trend in the industry where companies are increasingly adopting AI technologies to enhance efficiency and innovation [1] - The rapid development capabilities showcased by Zedge may set a precedent for other companies in the digital marketplace and gaming sectors to follow suit [1]