User Engagement and Metrics - As of April 30, 2025, the Zedge App had been installed nearly 707 million times and had 22.1 million monthly active users (MAU), a decrease of 20.2% compared to the same period last year[100][117]. - Zedge App's Monthly Active Users (MAU) decreased by 20.2% to 22.1 million in Q2 2025 from 27.7 million in Q2 2024[119]. - Approximately 896,000 active subscribers were reported as of April 30, 2025, following the introduction of a subscription tier in the iOS version of the app[103]. - Emojipedia received approximately 46.3 million monthly page views and had about 10.9 million MAU as of April 30, 2025, with 49.7% of users located in well-developed markets[111]. Revenue and Financial Performance - Average Revenue Per Monthly Active User (ARPMAU) for the three months ended April 30, 2025, increased by 32.7% year-over-year, driven by higher advertising prices and strong subscription revenue growth[118]. - Total revenues for Q2 2025 were $7,757, a slight increase of 1.3% compared to $7,658 in Q2 2024[130]. - Subscription revenue for the three months ended April 30, 2025, increased by 13.4%, while subscription billings rose by 22.9% compared to the same period last year[118]. - Subscription revenue increased by 13.4% to $1,272 in Q2 2025 from $1,122 in Q2 2024, driven by new subscription offerings[134]. - Other revenues surged by 109.2% to $431 in Q2 2025 from $206 in Q2 2024, primarily due to increased Zedge Premium net revenue[135]. - Zedge Premium net revenue increased by 112.9% to $430 in Q2 2025 from $202 in Q2 2024, attributed to AI generative features[132]. - For the nine months ended April 30, 2025, subscription billings increased by 33.4% compared to the same period in the prior year[138]. Operational Challenges and Restructuring - The acquisition of GuruShots has faced challenges, leading to a restructuring plan aimed at achieving breakeven and revamping the offering to attract new users[108]. - Monthly Active Payers (MAP) for GuruShots decreased by 33.8% to 3,578 in Q2 2025 from 5,408 in Q2 2024[126]. - Average Revenue Per Monthly Active Payer (ARPMAP) for GuruShots decreased by 17.1% to $44.1 in Q2 2025 from $53.2 in Q2 2024[126]. - For the nine months ended April 30, 2025, income from operations related to the Zedge Marketplace decreased by 50.6% to $2.2 million from $4.5 million in the prior year, primarily due to higher user acquisition costs and restructuring charges[170]. - For the nine months ended April 30, 2025, the loss from operations related to GuruShots decreased by 70.8% to $4.8 million from $16.3 million in the prior year, mainly due to the prior period's impairment loss of $11.9 million on intangible assets[171]. Expenses and Cost Management - Selling, general and administrative (SG&A) expenses decreased by 6.1% to $6,343,000 in Q3 2025 compared to Q3 2024, with SG&A as a percentage of revenues at 81.8% compared to 88.2%[145][146]. - SG&A expenses increased by 8.0% to $20,278,000 in the nine months ended April 30, 2025, with SG&A as a percentage of revenues rising to 92.5% from 83.4%[147]. - Stock-based compensation expenses decreased by 11.7% to $603,000 in Q3 2025 compared to Q3 2024, and by 21.8% to $1,308,000 in the nine months ended April 30, 2025 compared to the same period in the prior year[149][150]. - Depreciation and amortization expenses decreased by 61.4% to $583,000 in Q3 2025 compared to Q3 2024, and by 56.4% to $924,000 in the nine months ended April 30, 2025[153][154]. Cash Flow and Financial Position - As of April 30, 2025, the company had cash and cash equivalents of $20.4 million and working capital of $17.5 million, compared to $20.0 million and $17.7 million, respectively, at July 31, 2024[172]. - Net cash provided by operating activities for the nine months ended April 30, 2025, was $2.7 million, a decrease from $5.2 million in the prior year, primarily due to a net loss of $1.8 million adjusted for non-cash items[175][176]. - In the nine months ended April 30, 2025, the company repurchased 683,506 shares of Class B common stock for approximately $2.0 million, compared to 60,206 shares for approximately $152,000 in the prior period[179]. - The company does not anticipate paying dividends on common stock until achieving sustainable profitability and retaining minimum cash reserves[181]. - One major customer represented 35% of revenue for the nine months ended April 30, 2025, compared to two customers representing 31% and 10% in the prior year[183]. - Cash used in investing activities for the nine months ended April 30, 2025, was primarily for capitalized software and technology development costs[177]. External Factors and Risks - The majority of users and employees are located outside the U.S., exposing the company to foreign exchange fluctuations and macroeconomic uncertainties[96]. - The ongoing geopolitical conflicts, particularly in Israel, have raised concerns about potential business disruptions and implications for the company's operations[97]. - Interest and other income, net decreased by 18.1% to $154,000 in Q3 2025 compared to Q3 2024, while it increased by 16.8% to $507,000 in the nine months ended April 30, 2025[158][159]. - The net loss resulting from foreign exchange transactions was $41,000 in Q3 2025, a decrease from a loss of $80,000 in Q3 2024, and for the nine months ended April 30, 2025, the loss was $223,000 compared to $141,000 in the prior year[161][162]. - Income tax expense was $88,000 in Q3 2025 compared to an income tax benefit of $137,000 in Q3 2024, resulting from a pre-tax income of $273,000 in the current year period[166].
Zedge(ZDGE) - 2025 Q3 - Quarterly Report