Financial Data and Key Metrics Changes - Total revenue for the first quarter was $7.6 million, up 5.8% year-over-year [14] - Advertising revenue increased by 6% for the quarter, driven by strong growth in the Zedge marketplace [15] - GAAP income from operations was $0.9 million, compared to a loss of $0.5 million last year [17] - Non-GAAP net income was $0.9 million, with EPS of $0.07, compared to break-even last year [17] - Free cash flow was negatively impacted by approximately $350,000 due to tax withholding payments related to restructuring [18] Business Line Data and Key Metrics Changes - Zedge marketplace revenue increased significantly, supported by strong advertising CPMs and subscription revenues [14][15] - Zedge Plus subscription revenue rose by 29% year-over-year, with net active subscribers growing by 54% to nearly 1.1 million [15] - Deferred revenue reached $5.7 million, up 7% sequentially and 55% year-over-year, indicating future revenue potential [16] - Cost of revenue increased to 7.3% from 6.4% last year due to reduced partner discounts and new licensing fees [17] Market Data and Key Metrics Changes - The company is seeing a growing interest in its Data Seeds offering, with a robust pipeline of prospective customers [5][7] - The market for rights-cleared and high-quality datasets is expanding, as evidenced by significant licensing agreements in the industry [8] Company Strategy and Development Direction - The company aims to build products that resonate with users, scale successful ones, and allocate capital to enhance long-term shareholder value [12] - The focus remains on innovation, with plans to introduce additional alpha products throughout fiscal 2026 [10] - The company is committed to a disciplined approach to capital allocation, including share repurchases and dividends [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's leaner cost structure and efficient operating model entering fiscal 2026 [11] - The company anticipates strong cash generation for the remainder of fiscal 2026, despite temporary pressures this quarter [11] - Management is optimistic about the growth potential in both consumer and enterprise markets [12] Other Important Information - The company repurchased 240,000 Class B shares during the quarter and paid its first quarterly dividend [12] - The restructuring actions taken earlier this year are expected to yield ongoing savings and operational efficiencies [11] Q&A Session Summary Question: How is Data Seeds recognized as revenue? - Revenue from Data Seeds is recognized when the product is delivered and accepted, currently grouped under digital goods and services [20][21] Question: What is the typical sales process for Data Seeds? - The sales process involves operational steps beyond content production, including contract negotiations, and clarity on timelines is expected in the coming quarters [24][25] Question: What is the current operating status of GuruShots? - GuruShots is currently incurring losses, with operating losses partially attributed to Data Seeds, and is stabilizing at around $150,000 per month [29][30] Question: What is the outlook for Emojipedia? - Management is monitoring the impact of AI Overviews on Emojipedia and hopes to stabilize its performance in the coming quarters [31] Question: What was the impact of restructuring costs on free cash flow? - Restructuring costs included approximately $330,000 in tax withholding payments, which impacted free cash flow during Q1 2026 [36] Question: How much is left in the share buyback program? - There is approximately $600,000 remaining under the current buyback authorization [37]

OpenAI agreed to buy Neptune, a startup that makes tools for analyzing progress during AI model training. https://t.co/MJ8KnAj0jx ...

Core Insights - Nvidia has been the dominant player in the AI semiconductor market, holding an estimated 80% market share, but faces emerging competition that could challenge its position [2][12] - Broadcom is positioning itself as a significant competitor in the AI chip market, particularly with its custom application-specific integrated circuits (ASICs) designed for AI inference applications [4][8] Company Performance - Nvidia reported $41 billion in revenue in the last quarter, while Broadcom's AI revenue was $5.2 billion, indicating a substantial gap [4] - Broadcom's AI revenue grew by 63% year-over-year, surpassing Nvidia's 56% growth in data center revenue, suggesting a shift in market dynamics [6][12] Market Trends - The demand for AI inference applications is increasing, outpacing the need for AI model training, which is beneficial for Broadcom's custom processors [7][8] - By 2030, it is projected that 80% of chips performing AI inference tasks will be ASICs, a significant increase from 15% last year, indicating a growing market for Broadcom [12] Strategic Partnerships - Broadcom has secured a deal with OpenAI to design and deploy 10 gigawatts of custom AI processors from 2026 to 2029, potentially adding $100 billion to its revenue during this period [10][11] - The company has a strong revenue backlog of $110 billion, which is expected to grow further due to recent contracts, including the one with OpenAI [11] Competitive Positioning - Broadcom holds a 70% share in the custom AI processor market and aims to increase its overall AI chip market share to 24% by 2027, more than doubling its estimated share of 11% in 2025 [13] - The company's growth potential is underscored by its price/earnings-to-growth (PEG) ratio of 0.55, indicating it may be undervalued relative to its growth prospects [15][16]