User Engagement and Growth - As of January 31, 2025, the Zedge App had been installed nearly 696 million times and had 24.7 million monthly active users (MAU), a decrease of 14.2% compared to the same period last year[100][118] - Users in emerging markets represented about 77.3% of MAU as of January 31, 2025, slightly down from 78.1% in the same period last year[118] - MAU for the Zedge App decreased by 14.2% to 24.7 million in Q1 2025 from 28.8 million in Q1 2024[120] Revenue Performance - Average Revenue Per Monthly Active User (ARPMAU) for the three months ended January 31, 2025, increased by 8.7% year-over-year, driven by higher advertising prices and strong subscription revenue growth[119] - Subscription revenue for the three months ended January 31, 2025, increased by 13.3% year-over-year, while subscription billings rose by 26.7% in the same period[119] - Total revenues decreased by 10.2% to $6,979,000 in Q1 2025 from $7,771,000 in Q1 2024[127] - Advertising revenue decreased by 14.3% to $4,698,000 in Q1 2025 from $5,482,000 in Q1 2024[128] - Subscription revenue increased by 13.3% to $1,233,000 in Q1 2025 from $1,088,000 in Q1 2024[130] - Other revenues increased by 53.2% to $432,000 in Q1 2025 from $282,000 in Q1 2024[130] - Zedge Premium net revenue increased by 55.6% to $431,000 in Q1 2025 from $277,000 in Q1 2024[131] User Acquisition and Engagement Strategies - The acquisition of GuruShots in April 2022 has faced challenges, with revenue declining, prompting the company to cut costs and restructure its user acquisition strategy[104][108] - GuruShots has introduced a revamped onboarding experience, resulting in improved engagement, retention, and revenue from new users[107] - The company is exploring new features for Emojipedia, including artificial intelligence enhancements, expected to be released by the end of the calendar year[112] Financial Metrics and Losses - Monthly Active Payers (MAPs) decreased by 22.2% to 4,672 in Q1 2025 from 6,009 in Q1 2024[124] - Average Revenue Per Monthly Active Payer (ARPMAP) decreased by 21.0% to $39.8 in Q1 2025 from $50.4 in Q1 2024[124] - Net loss decreased by 81.8% to $1,679,000 in Q1 2025 from $9,230,000 in Q1 2024[127] - For the six months ended January 31, 2025, income from operations related to the Zedge Marketplace decreased to $976,000 from $3.3 million, a decline of 70.7%[165] - For the three months ended January 31, 2025, loss from operations related to GuruShots decreased to $2.3 million from $13.6 million, primarily due to a prior period impairment loss of $11.9 million[163] - Total segment income (loss) from operations for the three months ended January 31, 2025, was a loss of $2.2 million, representing an 81.4% decrease compared to the prior year[162] Cost Management and Restructuring - The company recorded approximately $0.5 million in restructuring charges for the three and six months ended January 31, 2025, related to global restructuring implemented in January 2025[152] - Global headcount as of January 31, 2025, totaled 106, reflecting a 22% reduction due to corporate restructuring[145] - SG&A expenses increased 9.2% to $7,126,000 in Q1 2025 and 15.9% to $13,935,000 for the six months ended January 31, 2025, primarily due to higher PUA and compensation expenses[143][144] - Stock-based compensation expenses decreased 11.7% to $603,000 in Q1 2025 and 17.5% to $982,000 for the six months ended January 31, 2025[146][147] - Depreciation and amortization expenses decreased 58.4% to $317,000 in Q1 2025 and 54.6% to $698,000 for the six months ended January 31, 2025, primarily due to an $11.9 million impairment charge recorded in Q2 of fiscal 2024[149][150] Cash Flow and Capital Management - Cash and cash equivalents as of January 31, 2025, were $20.0 million, unchanged from July 31, 2024, while working capital decreased to $16.8 million from $17.7 million[168] - Cash provided by operating activities decreased by $934,000 to $1.9 million for the six months ended January 31, 2025, compared to $2.8 million in the prior year[170] - In the six months ended January 31, 2025, the company repurchased 464,419 shares of Class B common stock for approximately $1.5 million[175] Tax and Foreign Exchange - The benefit from income taxes decreased by $2.0 million in Q1 2025 compared to the same period in the prior year, resulting from changes in deferred tax assets related to impairment losses[160] - Net loss from foreign exchange transactions was $86,000 in Q1 2025, compared to a net gain of $76,000 in Q1 2024, primarily due to unfavorable FX movements[157] Customer Concentration - One major customer represented 31% of total revenue for the six months ended January 31, 2025, compared to two customers representing 29% and 11% in the prior year[177]
Zedge(ZDGE) - 2025 Q2 - Quarterly Report