Financial Data and Key Metrics Changes - Total revenue returned to growth, up 1.3% to $7,800,000, despite challenges in the advertising market [15][19] - Adjusted EBITDA increased 46% year over year to $1,200,000 [19] - Free cash flow generated was $800,000, impacted by restructuring payments and retention bonuses [6][19] - GAAP net income was $200,000, compared to $100,000 in the prior year, with non-GAAP net income at $900,000, up from $500,000 [18][19] Business Line Data and Key Metrics Changes - Zedge Plus subscriber base grew to nearly 900,000, a 37% year over year increase [7] - Zedge Premium revenue more than doubled, driven by expanded offerings and increased usage [7][16] - Deferred revenue reached $4,900,000, growing by 111% over the past seven quarters [15][19] - Gurushots revenue declined 45% year over year due to reduced user acquisition spending [16][19] Market Data and Key Metrics Changes - Monthly active users (MAU) declined year over year, but the focus shifted to attracting higher lifetime value users [8][31] - Average revenue per monthly active user increased by 33% year over year, indicating improved monetization [8][16] Company Strategy and Development Direction - The company is focusing on AI innovation, creator community empowerment, and B2B expansion through dataseeds.ai [13][14] - Plans to roll out an AI audio generator and enhance user-generated content capabilities [11][41] - The introduction of dataseeds.ai aims to supply enterprise customers with high-quality datasets for AI training [10][38] Management's Comments on Operating Environment and Future Outlook - Management highlighted resilience despite macroeconomic volatility and disruptions in the ad market [5][15] - The company expects to see the benefits of restructuring initiatives materialize in Q4 and into fiscal year 2026 [19][44] - Management remains optimistic about future growth driven by product innovation and strategic discipline [15][47] Other Important Information - The company ended the quarter with $20,400,000 in cash and no debt, after share repurchases [6][19] - Restructuring charges of $600,000 were recorded, with expectations for further reductions in Q4 [17][50] Q&A Session Summary Question: Can you rank the different pieces of advertising revenue? - Management stated that advertising efforts are comprehensive and difficult to rank precisely, but highlighted the optimization of CPMs [22][30] Question: How long was TikTok back in the market during the quarter? - Management clarified that TikTok returned mid-February, impacting advertising revenue positively after their reentry [24][29] Question: What is being done to stabilize and grow monthly active users? - The focus is on well-developed markets, with efforts to optimize user acquisition for high-value users [31][32] Question: Can you comment on the new features for Emojipedia? - Management mentioned testing new features like creating emojis with AI and the upcoming release of digital stickers [33] Question: How did Zedge Premium perform this quarter? - Zedge Premium continues to be a core part of the marketplace, with new content available on the web [36] 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 advantages [37][38] Question: What will the AI audio generator look like? - The feature will allow users to create custom ringtones and sounds based on text prompts, with a limited rollout planned [41][42]
Zedge(ZDGE) - 2025 Q3 - Earnings Call Transcript