Zedge(ZDGE) - 2025 Q4 - Annual Results

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]