Zedge(US:ZDGE)2025-12-12 11:30Financial Performance - Active subscriptions reached a record 1.1 million, up 54% year-over-year; subscription revenue grew 29% year-over-year [2] - Total revenue increased by 5.8% to $7.6 million; advertising revenue rose by 6.0% to $5.2 million [9] - GAAP net income was $0.8 million, compared to a net loss of $0.3 million in the previous year; GAAP EPS improved to $0.06 from a loss of $0.02 [10] - Revenues for the three months ended October 31, 2025, increased to $7,610,000, up 5.8% from $7,194,000 in the same period of 2024 [27] - Net income for the three months ended October 31, 2025, was $788,000, compared to a net loss of $339,000 for the same period in 2024 [27] - Total comprehensive income for the three months ended October 31, 2025, was $887,000, compared to a loss of $368,000 in the same period of 2024 [27] - Net Income for Q126 was $0.8 million, showing improvement from a loss of $0.6 million in Q425 [31] - Adjusted EBITDA for Q126 was $1.2 million, compared to $0.3 million in Q425, indicating a positive trend [31] - Non-GAAP Net Income for Q126 was $0.9 million, a significant increase from $0.1 million in Q425 [31] Cash Flow and Assets - Free cash flow decreased by 36.8% to $0.6 million, impacted by restructuring-related compensation tax payments and reinvestments in high-potential initiatives [6] - Cash and cash equivalents at the end of the period were $18,496,000, down from $18,609,000 at the beginning of the period [29] - The company reported a net cash provided by operating activities of $825,000 for the three months ended October 31, 2025, down from $1,170,000 in the same period of 2024 [29] - Total Cash Flow from Operations for FY24 reached $5.9 million, demonstrating strong operational performance [31] Market and Growth Outlook - The company is optimistic about future growth, entering the second quarter of fiscal 2026 with a leaner operating structure and a stronger business engine [7] - DataSeeds Production Cloud is experiencing increased demand, with a significant order size increase of roughly 25X from an existing customer in the AI space [5] - The company expects to achieve a Non-GAAP diluted EPS of $0.07 for FY25, signaling growth potential [31] Shareholder Actions and Equity - The company repurchased approximately 240,000 shares of Class B Common Stock during the quarter [10] - Stockholders' equity as of October 31, 2025, was $25,895,000, slightly down from $25,901,000 as of July 31, 2025 [24] - The weighted average shares used for Non-GAAP basic EPS calculation was 14.1 million for Q125, indicating a stable share count [31] Liabilities and Expenses - Total liabilities increased to $10,064,000 as of October 31, 2025, compared to $9,753,000 as of July 31, 2025 [24] - Deferred revenues increased to $3,735,000 for current liabilities as of October 31, 2025, compared to $3,425,000 as of July 31, 2025 [24] - The company incurred $12.0 million in asset impairments and restructuring charges for FY24, impacting overall profitability [31] - Stock-based compensation expenses totaled $2.1 million for FY24, reflecting ongoing employee incentive programs [31] Other Metrics - ARPMAU increased by 29.2% to $0.099, indicating improved monetization of the user base [11] - The Zedge Marketplace showed resilience, with a GAAP operating income of $0.9 million compared to an operating loss of $0.5 million in the prior year [10] - Zedge Premium's Gross Transaction Value (GTV) decreased by 3.7% to $0.66 million [11] - Capital Expenditures for FY24 are projected at $1.2 million, with a focus on strategic investments [31]