Financial Data and Key Metrics Changes - Total revenue for the second quarter was $8.3 million, up 18.3% year-over-year, marking the seasonally strongest quarter due to holidays [15] - Advertising revenue increased by 18.3% for the quarter, driven by strong growth in the Zedge Marketplace, despite lower ad revenue at Emojipedia [16] - GAAP loss from operations was $2.9 million, compared to a loss of $2.2 million last year, with a non-cash impairment charge of $3.7 million related to Emojipedia [21] - Non-GAAP net income was $0.8 million, with an EPS of $0.06, compared to a loss of $0.2 million and a loss per share of $0.01 last year [21] - Cash strengthened to $19.1 million with zero debt, and free cash flow yield remains in the double digits [13][22] Business Line Data and Key Metrics Changes - Zedge Marketplace revenue was up over 21% year-over-year, driven by strong advertising CPMs and subscription revenue [15] - Zedge Plus subscription revenue increased by 33% year-over-year, with the net active subscriber base growing by 49% to nearly 1.2 million subscribers [17] - Deferred revenue reached $6 million, up 5% sequentially and 39% year-over-year, reflecting future revenue with a 100% gross margin [17] - Zedge Premium GTV was up 15.7% from the year-ago quarter, and ARPM increased by 47.6%, indicating improved monetization efficiency [18] Market Data and Key Metrics Changes - The company is experiencing MAU contraction but is focused on acquiring higher-value users and monetizing the audience more effectively [5] - The operational focus includes building a high-quality outbound pipeline and better qualifying inbound requests [9] Company Strategy and Development Direction - The company aims to strengthen monetization in the marketplace, build DataSeeds deliberately, and expand the innovation pipeline in a disciplined manner [14] - Investments in optimizing ad inventory and subscription offerings are yielding positive results, with a focus on innovation in AI training data through DataSeeds.AI [5][7] - The company is exploring multimodal data, including images, audio, and video, to enhance its offerings [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential of DataSeeds.AI and the ongoing interest from enterprise customers [8] - The company is cautious about scaling operations to avoid impacting profitability while building infrastructure and operational rigor [10] - Management acknowledged structural headwinds affecting Emojipedia and the need to adapt to changes in the search landscape [12] Other Important Information - The company has launched two more alpha products, bringing the total to four out of six planned for the fiscal year [11] - The cost of revenue was 6.8% of revenue, up from 6.4% last year due to increased production costs [19] - SG&A expenses decreased by about 6% to $6.7 million for the quarter, reflecting net savings from restructuring [20] Q&A Session Summary Question: Insights on DataSeeds and pipeline delivery - Management indicated that the progression of deals in DataSeeds.AI depends on successful proof of concepts and customer needs, with attractive margins thus far [26][28] Question: Updates on alpha product launches - Management shared that the new products are built on an evolving foundation for modular development, allowing for faster market entry [31][32] Question: Subscription revenue trends - The ongoing investment in optimizing subscription offerings is driving growth, with a focus on attracting prospective subscribers [34] Question: Zedge Marketplace performance - The strong performance is attributed to the overlap with year-end advertising spend and enhanced data science efforts for user segmentation [36][38] Question: Strategy for increasing active users - The company is employing new marketing strategies, testing product features, and utilizing data science to attract new users [40] Question: Progress on Tapedeck and music catalog - Management emphasized the importance of building a substantial and diverse music catalog to attract users, with ongoing efforts to promote the app [42][44]

Financial Data and Key Metrics Changes - Total revenue for the second quarter was $8.3 million, up 18.3% from last year, marking the seasonally strongest quarter due to holidays [9] - Advertising revenue increased by 18.3% for the quarter, driven by strong growth in the Zedge Marketplace [10] - GAAP loss from operations was $2.9 million, compared to a loss of $2.2 million last year, with a GAAP net loss of $2.3 million and loss per share of $0.18 [12] - Non-GAAP net income was $0.8 million with an EPS of $0.06, compared to a loss of $0.2 million and a loss per share of $0.01 last year [12][13] - Cash strengthened to $19.1 million with zero debt, and free cash flow remained in the double digits [8][14] Business Line Data and Key Metrics Changes - Zedge Marketplace revenue was up over 21% year-over-year, driven by strong advertising and subscription revenue [9] - Zedge Plus subscription revenue increased by 33% year-over-year, with the net active subscriber base growing by 49% to nearly 1.2 million subscribers [10] - Deferred revenue reached $6 million, up 5% sequentially and 39% year-over-year, reflecting future revenue with a 100% gross margin [10] - GuruShots appears to be stabilizing, while DataSeeds.AI is expected to increase its contribution in the second half of fiscal 2026 [11] Market Data and Key Metrics Changes - The appetite for AI training data is described as virtually insatiable, with ongoing interest and larger orders from enterprise customers [5] - The company is focusing on multimodal data, including images, audio, and video, to expand its offerings [20] Company Strategy and Development Direction - The company aims to strengthen monetization in the marketplace, build DataSeeds deliberately, and expand its innovation pipeline in a disciplined manner [8] - The operational focus includes building a high-quality outbound pipeline and better qualifying inbound requests to ensure long-term credibility in the enterprise market [6] - The company is adopting a framework for product innovation that emphasizes rapid development and objective measurement of success [7] Management's Comments on Operating Environment and Future Outlook - Management noted that MAU contraction remains, but the focus is on acquiring higher value users and improving monetization efficiency [4] - The company is optimistic about the growth potential of DataSeeds.AI and is committed to making the right investments in this area [5] - Management acknowledged structural headwinds tied to the evolving field of search affecting Emojipedia, leading to a non-cash impairment this quarter [7] Other Important Information - The company generated solid free cash flow even after investing in innovation priorities, and it is now paying a quarterly dividend while repurchasing shares when market conditions are favorable [8] - The cost of revenue was 6.8% of revenue, up from 6.4% last year due to various factors including partner discounts and new licensing fees [11] Q&A Session Summary Question: Can you walk us through the DataSeeds pipeline and margin perspective? - Management explained that the progression of a deal depends on the success of proof of concept, with margins being attractive but variable based on deal type [17][18] Question: How are you thinking about multimodal data? - The company is focusing on images, audio, and video, with completed proof of concept on the video side and discussions on audio work [20] Question: Can you comment on the new alpha products launched? - Management stated that the new products are built on an evolving foundation, allowing for modular development and faster market entry [21][22] Question: What is driving the momentum in subscription revenues? - The ongoing investment in optimizing subscription offerings is attracting prospective subscribers [23] Question: What is driving the success of the Zedge Marketplace? - The fiscal Q2 coincides with year-end advertising spend, and efforts in data science are enhancing user segmentation and monetization [25][27] Question: How is the Tapedeck product progressing? - The company is focusing on expanding the music catalog to attract users, with ongoing product development slowing down [29][30] Question: How important is discovery for the success of Tapedeck? - Discovery is crucial, and the app recommends alternative artists and genres to users, while also promoting the app through artists' fan bases [31]

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]

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, while Zedge+ subscription revenue rose by 29% year-over-year [15] - 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 - Active subscriptions reached a record 1.1 million, up more than 50% year-over-year [4] - Deferred revenue, primarily from subscriptions, reached $5.7 million, up 7% sequentially and 55% year-over-year [16] - Cost of revenue increased to 7.3% from 6.4% last year due to reduced partner discounts and new licensing fees [16] Market Data and Key Metrics Changes - The Zedge Marketplace showed strong growth, offsetting declines at Emojipedia and GuruShots [15] - Average revenue per monthly active user increased by 29.2%, indicating improved monetization efficiency [16] Company Strategy and Development Direction - The company is focused on building products that customers love and scaling successful ones while maintaining disciplined capital allocation [12] - DataSeeds is emerging as a key enterprise business, with a robust pipeline of prospective customers [6] - The company is investing in innovation and product development, with plans to introduce additional alpha products throughout fiscal 2026 [10] 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 monitoring the impact of AI advancements on Emojipedia and is hopeful for stabilization [30] Other Important Information - The company repurchased 240,000 Class B shares and paid its first quarterly dividend, reflecting confidence in long-term value creation [12] - The DataSeeds Production Cloud is a key asset that allows the company to deliver custom datasets for AI training [7] Q&A Session Summary Question: How is DataSeeds recognized as revenue? - Revenue from DataSeeds is recognized when the product is delivered and accepted, grouped under digital goods and services for now [20][22] Question: What is the typical sales process for DataSeeds? - The sales process involves operational steps beyond content production, and clarity on conversion timelines is expected in the coming quarters [24] Question: What is the current operating status of GuruShots? - GuruShots is currently incurring losses, with operating losses partially attributed to DataSeeds, but stabilization is expected [28] Question: What is the outlook for Emojipedia? - The future of Emojipedia is uncertain, with management needing more time to assess the impact of AI advancements [30] Question: What was the impact of restructuring costs on free cash flow? - Restructuring costs included approximately $330,000 in withholding taxes, impacting free cash flow for Q1 2026 [34] Question: How much is left in the share buyback program? - There is $600,000 remaining under the current buyback authorization [35]

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 [14] - GAAP net income was $0.8 million, compared to a loss of $0.3 million last year, with EPS of $0.06 [17] - Free cash flow was negatively impacted by approximately $350,000 due to restructuring-related tax payments [18] Business Line Data and Key Metrics Changes - Zedge marketplace revenue increased significantly, supported by strong advertising CPMs and subscription revenues [14] - Zedge Plus subscription revenue rose by 29% year-over-year, with net active subscribers growing 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] Market Data and Key Metrics Changes - The core business remains healthy and resilient, with a strong subscription engine scaling effectively [12] - The Data Seeds initiative is gaining traction, with a robust pipeline of prospective customers [6][12] Company Strategy and Development Direction - The company is focused on building products that customers love, scaling successful ones, and allocating capital to enhance long-term shareholder value [12] - The strategy includes a disciplined approach to capital allocation, with share repurchases and dividends reflecting confidence in long-term value creation [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory for fiscal 2026, emphasizing innovation and expanding operating leverage [12] - The company is monitoring the impact of AI developments on its products, particularly regarding Emojipedia [31] Other Important Information - The company has a leaner cost structure and a more efficient operating model entering fiscal 2026 [11] - The Data Seeds Production Cloud is a key asset that allows for the delivery of high-quality datasets for AI training [8] 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 [21] Question: What is the typical sales process for Data Seeds? - The sales process involves operational steps beyond production, including contract negotiations, and clarity on timelines will develop over the next few quarters [25] Question: What is the operating status of GuruShots? - GuruShots is currently incurring losses, with stabilization around $150,000 per month, and efforts are underway to evolve it towards break-even [29] Question: What is the outlook for Emojipedia? - The future of Emojipedia is uncertain, with management needing more time to assess the impact of AI developments on its performance [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 for the quarter [35] Question: How much is left in the share buyback program? - There is approximately $600,000 remaining under the current buyback authorization [37]

Financial Data and Key Metrics Changes - Total revenue for Q4 was $7.5 million, down 1.5% year over year, with Zedge Marketplace revenue up mid-single digits but offset by an 11% decline at Emojipedia and a 39% drop at GuruShots [14][15] - Subscription revenue increased by 21% year over year, with nearly 1 million active subscribers, a 47% increase compared to Q4 of fiscal 2024 [5][15] - Deferred revenue reached $5.4 million, up 10% sequentially and 73% year over year, indicating future revenue potential with high gross margins [15][17] - GAAP loss from operations was $0.7 million, compared to a loss of $0.1 million last year, primarily due to restructuring costs [16][17] Business Line Data and Key Metrics Changes - Zedge Marketplace performed well, while GuruShots showed signs of plateauing, with a 39% year-over-year revenue decline [5][14] - Advertising revenue was slightly up for the quarter, but total ad revenue was softer than expected due to a decline at Emojipedia [5][14] - Zedge Premium's GTV grew by 7% year over year, and ARPMAU increased by 17%, reflecting a shift towards higher-value users [15] Market Data and Key Metrics Changes - The introduction of a new Google search feature allowing users to copy emojis directly from search results has diverted traffic away from Emojipedia, impacting its performance [6][32] - The competitive impact of AI search has also affected Emojipedia's traffic, as users can now obtain emojis without visiting the site [6][32] Company Strategy and Development Direction - The company aims to expand and diversify its revenue base, focusing on innovation and optimizing monetization strategies [9][12] - Plans include further integration of audio AI capabilities into products and evaluating the future direction of GuruShots [9][11] - The company is committed to improving operational efficiency and executing a balanced capital allocation strategy, including share repurchases and dividends [12][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's cash flow generation and balance sheet, initiating a quarterly dividend of $0.016 per share [8] - The completed restructuring is expected to provide greater operating flexibility and improved cash flow and profitability in fiscal 2026 [4][12] - Management is optimistic about the potential of early-stage products like Dataseeds.ai, TapeDeck, and SyncAt, which are evolving and positioned for growth [12][13] Other Important Information - The company repurchased approximately 640,000 shares in Q4 and a total of 1.3 million shares for the full year, reflecting a disciplined capital allocation strategy [7][8] - Cash and cash equivalents at year-end were approximately $19 million, with no debt [17] Q&A Session Summary Question: Actions regarding TapeDeck and Dataseeds.ai - Management highlighted that TapeDeck aims to support indie artists and will evaluate its future based on performance metrics, while Dataseeds.ai focuses on providing datasets for AI companies [21][23] Question: Sequential improvement in monthly active users - Management attributed the improvement to discerning marketing spend and seasonal dynamics, ensuring high-value customer acquisition [27][28] Question: Focus of restructuring savings - Management indicated that restructuring savings were reinvested in marketing and user acquisition, with plans to continue prioritizing these areas if growth opportunities arise [29][30] Question: Changes affecting Emojipedia - Management explained that Google's new search feature has impacted Emojipedia's traffic, and they are exploring strategies to mitigate this effect [31][32] Question: Deferred revenue recognition - Management clarified that deferred revenue is recognized over 30 months, and maintaining a steady subscriber pool will help level up revenue recognition [35] Question: SG&A expenses outlook - Management suggested that SG&A may decline slightly going forward as spending on user acquisition and consulting for new projects is expected to decrease [37]

Core Insights - Zedge's Dataseeds.AI is experiencing growing demand for its B2B offering, which provides scalable, rights-cleared image datasets for AI training, catering to leading AI companies [1][9] - The platform leverages a global creator community to fulfill bespoke customer requests, enhancing its ability to deliver custom image datasets at scale [2][4] Product Features - Dataseeds.AI utilizes a catalog of approximately 30 million rights-cleared images, curated through the GuruShots platform, which engages thousands of photographers worldwide [3][9] - The platform's enhanced search technology allows for the discovery of imagery that meets specific customer requirements, including ancillary content that may not be immediately obvious [5][6] Customer Engagement - When niche visual requests arise, Dataseeds.AI can quickly launch targeted GuruShots challenges to source bespoke content, ensuring rapid turnaround and full rights clearance [4][6] - The solution is designed to be flexible and scalable, making it suitable for organizations needing diverse and contextually rich visual content delivered quickly and cost-effectively [6][9]

Core Points - Zedge, Inc. will report its financial and operational results for the Fourth Quarter and End of Fiscal Year 2025 on October 28, 2025 [1][2] - The earnings release will be filed on Form 8-K and made available on Zedge's investor relations website at approximately 6:30 AM Eastern [2] - Management will host an earnings conference call at 11 AM Eastern to discuss the results, outlook, and strategy, followed by a Q&A session with investors [2] Company Overview - Zedge empowers millions of consumers and creators monthly through interconnected platforms that promote creativity, self-expression, and e-commerce [3] - The company's ecosystem includes the Zedge Marketplace, which offers mobile phone wallpapers, video wallpapers, ringtones, notification sounds, and a generative AI image maker called pAInt [3] - Other offerings include GuruShots, a skill-based photography game, and Emojipedia, the leading source for emoji-related information [3]

Group 1 - Zedge, Inc. will present at the LD Micro Main Event XIX on October 20, 2025, with CEO Jonathan Reich as the speaker [1] - The event will take place at the Hotel del Coronado in San Diego, starting at 1:30 PM Eastern / 10:30 AM Pacific [2] - Zedge empowers millions of consumers and creators monthly through its interconnected platforms, including the Zedge Marketplace, GuruShots, Emojipedia, and DataSeeds.AI [2] Group 2 - Zedge Marketplace offers a freemium model for mobile phone wallpapers, video wallpapers, ringtones, and notification sounds [2] - GuruShots is described as "The World's Greatest Photography Game," focusing on skill-based photo challenges [2] - DataSeeds.AI provides datasets for AI model training, utilizing Zedge's consumer games and marketplaces [2]

Financial Data and Key Metrics Changes - Total revenue returned to growth in Q3, up 1.3% to $7,800,000, despite challenges in the advertising market [14][15] - Adjusted EBITDA increased 46% year over year to $1,200,000, with GAAP net income of $200,000 compared to a loss of $100,000 last year [17][18] - Free cash flow was $800,000 for the quarter, impacted by restructuring and retention bonus payments totaling approximately $1,000,000 [6][17] Business Line Data and Key Metrics Changes - Zedge Plus subscriber base grew to nearly 900,000, a 37% year over year increase, with subscription revenue up 13% [7][14] - Deferred revenue reached $4,900,000, growing by 111% over the past seven quarters, indicating a strong recurring revenue stream [14][15] - Zedge Premium revenue more than doubled, driven by expanded offerings and increased usage of the paint.ai image generator [7][15] Market Data and Key Metrics Changes - Monthly active users (MAU) declined year over year, but the focus has shifted to attracting higher lifetime value (LTV) users in developed markets [8][30] - Average revenue per monthly active user increased by 33% year over year, reflecting improved monetization strategies [8][15] Company Strategy and Development Direction - The company is focusing on AI innovation, creator community empowerment, and B2B expansion through initiatives like dataseeds.ai, a B2B content marketplace [10][13] - Plans to roll out an AI audio generator as part of the Paint GenAI creation suite, enhancing user-generated content capabilities [11][40] - The company aims to stabilize and grow its user base by prioritizing high-value users in well-developed markets [30][31] Management's Comments on Operating Environment and Future Outlook - Management noted the resilience of the business despite macroeconomic volatility and challenges in the advertising market [5][6] - The restructuring efforts are expected to yield significant cash flow improvements in the upcoming quarters, with a focus on sustaining growth and higher margins [18][46] - Management expressed confidence in the performance marketing efforts and product roadmap to achieve growth targets [9][13] Other Important Information - The company ended the quarter with $20,400,000 in cash and no debt, even after share repurchases [6][18] - The introduction of new features like digital stickers and the Mojipedia sandbox is aimed at enhancing user engagement [11][32] Q&A Session Summary Question: How would you rank the different pieces of advertising revenue? - Management indicated that advertising is a comprehensive effort, making it difficult to rank specific components [20][21] Question: How long was TikTok back in the market during the quarter? - Management clarified that TikTok returned mid-February, impacting advertising revenue for part of the quarter [22][23] Question: Should we expect monthly active users to continue declining? - Management is focused on stabilizing MAU by prioritizing high-value users in developed markets [30][31] Question: Can you comment on the new features in Mojipedia? - Management mentioned testing new features like creating emojis with AI and the upcoming release of digital stickers [32][33] Question: How is Zedge Premium performing? - Management noted that Zedge Premium continues to be a core part of the marketplace, with new artist onboarding and web availability driving growth [34][35] Question: What is the rollout plan for dataseeds.ai? - Management is actively building relationships with prospective customers and has published a research paper to demonstrate the advantages of their dataset [36][37] Question: What will the AI audio generator look like? - Management plans to roll out the AI audio generator on a limited basis before June, allowing users to create custom ringtones [40][41]