Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $7.2 million, up 1.6% year-over-year, primarily impacted by advertising challenges and the transition at GuruShots [24] - Subscription revenue increased by 21% year-over-year, with net active subscriber counts up nearly 8% year-over-year [24] - Adjusted EBITDA for the quarter was $0.3 million compared to $1.5 million in the prior year [29] Business Line Data and Key Metrics Changes - Zedge Premium's gross transaction value (GTV) reached approximately $700,000, a 62% increase year-over-year [25] - Average Revenue Per Monthly Active User (ARPMAU) grew 22% year-over-year to $0.077 [25] - GuruShots experienced a 32% decline in revenue year-over-year, attributed to a strategic shift towards new player acquisition [26] Market Data and Key Metrics Changes - iOS revenue grew over 60% year-over-year, indicating significant potential for further growth in this segment [9] - Advertising revenue faced challenges due to a coding issue, delays with ad-partner testing, and integration complexities, but management remains optimistic about recovery [9][42] Company Strategy and Development Direction - The company is focused on leveraging generative AI to transform users into creators and drive growth across all business units [16] - Plans to enhance technology development infrastructure for faster and more efficient app development are underway [17] - The marketing team is prioritizing ROAS-positive user acquisition, particularly in developed economies [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver strong results despite challenges faced in Q1 [7] - The company is optimistic about the growth trajectory of GuruShots, with early positive returns from new feature releases [39] - Management aims to return to EBITDA positive territory for the remainder of the fiscal year [47] Other Important Information - The board authorized a new $5 million share repurchase program, with over $20 million in cash and cash equivalents on the balance sheet [22][29] - The company is committed to smart capital allocation and has completed its previous buyback program [29] Q&A Session Summary Question: Current monthly active payers for GuruShots - Management did not disclose the current number but indicated they would follow up offline [36] Question: Impact of GuruShots on overall results and cash flow positivity - Management believes there is no rationale to shut down GuruShots and is optimistic about its transformation and future revenue growth [38][40] Question: Quantifying the impact of coding issues on results - Management acknowledged the issues but stated they have been resolved and are not expected to impact future performance [42][45] Question: Managing SG&A to remain EBITDA positive - Management confirmed their commitment to managing SG&A expenses to achieve EBITDA positivity [46][48] Question: Updates on WishCraft and AI Art Master - Management decided to keep these projects in beta for further testing before full production [51][52] Question: Insights on subscription growth and lifetime subscriptions - Management explained the benefits of lifetime subscriptions and their strategy for user acquisition and revenue generation [58] Question: Trends in monthly active users and strategies for improvement - Management highlighted a focus on acquiring high-value users and enhancing product features to drive engagement [60][62] Question: Stock buyback activity during the quarter - Management confirmed no stock was bought back during the quarter due to being in a closed period [64] Question: Outlook for revenue growth in the next quarter - Management expressed confidence in revenue growth for Q2, driven by advertising and subscription revenue [67] Question: Factors influencing advertising rates for monthly active users - Management discussed the importance of a strong economy and ongoing optimization of ad inventory to maintain advertising rates [70] Question: Attributing the 62% increase in Zedge Premium GTV - Management attributed the growth to an attractive platform for artists and ongoing optimization efforts [72]
Zedge(ZDGE) - 2025 Q1 - Earnings Call Transcript