Zedge Announces Third Quarter Fiscal 2024 Results
Zedge (NYSE American: ZDGE) announced its third-quarter fiscal 2024 results with a 14% total revenue growth and a 35% increase in subscription revenue compared to the previous year. The company reported a revenue of $7.7 million, a GAAP net income of $0.1 million, and a non-GAAP net income of $0.5 million. Key metrics included a 44.4% increase in Zedge Premium Gross Transaction Value (GTV) to $0.59 million and a 39.7% rise in average revenue per monthly active user (ARPMAU). The quarter also saw a GAAP operating loss of $0.1 million, an improved figure compared to a loss of $8.4 million in the same period last year. However, the company faced challenges with a 20.3% decline in digital goods and services revenue and a 13.4% drop in monthly active users (MAU).
CEO Jonathan Reich highlighted ongoing efforts to optimize advertising and subscription revenue, especially on iOS platforms, and emphasized future plans for user acquisition and product innovation. Despite some setbacks, the company remains optimistic about its growth trajectory heading into fiscal 2025.
- 14% total revenue growth year-over-year.
- 35% increase in subscription revenue compared to the previous year.
- Revenue of $7.7 million, up from $6.7 million.
- GAAP net income of $0.1 million, compared to a loss of $7.7 million in 2023.
- Non-GAAP net income of $0.5 million, an increase from $0.3 million.
- 44.4% rise in Zedge Premium Gross Transaction Value (GTV) to $0.59 million.
- 39.7% increase in average revenue per monthly active user (ARPMAU).
- Adjusted EBITDA of $0.9 million.
- Cash flow from operations increased by 44.5% to $2.3 million.
- 20.3% decline in digital goods and services revenue.
- 13.4% drop in monthly active users (MAU).
- GAAP operating loss of $0.1 million.
- Operating margin decreased to -1.7%.
- Adjusted EBITDA decreased by 50% from $1.7 million to $0.9 million.
- Well-developed markets MAU decreased by 16.7% to 6.0 million.
- Emerging markets MAU decreased by 12.5% to 21.7 million.
- GAAP diluted EPS decreased from $0.11 to $0.01.
Insights
Zedge's third-quarter results show solid top-line growth with a
Short-term, the revenue uplift is promising and suggests effective strategies in user acquisition and revenue optimization. However, the decline in digital goods and services points to challenges in that segment, potentially affecting future growth unless addressed. Long-term, the emphasis on subscription revenue and new product features could provide recurring revenue streams, vital for stable earnings. Overall, investors should keep an eye on how well Zedge can maintain and expand its subscription base while tackling the underperformance in digital goods.
Zedge's substantial growth in subscription revenue, particularly on the iOS platform, underscores the effectiveness of their app's monetization strategy. It's notable that iOS subscription revenue surged
The mention of a coin-based economy for GuruShots is intriguing. A shift to such an economy could significantly enhance user engagement and in-app purchases by offering more customized reward mechanisms. This model, seen in popular games, can drive higher user retention and spending. Investors should watch for early performance metrics from this initiative to gauge its impact on overall revenue growth.
Zedge's performance metrics reveal an important trend: despite significant growth in revenue and subscriptions, the Monthly Active Users (MAU) are declining, down
The growth in Average Revenue Per Monthly Active User (ARPMAU) is a positive sign, showing the company's ability to monetize its existing user base more effectively. However, focusing solely on extracting more revenue from fewer users can have limits. Sustainable growth will likely require a combination of expanding the user base and improving ARPMAU.
NEW YORK, NY / ACCESSWIRE / June 10, 2024 / Zedge, Inc. (NYSE American:ZDGE), a leader in building digital marketplaces and friendly competitive games around content that people use to express themselves, today announced results for its third quarter of fiscal 2024, ended April 30, 2024.
"Revenue growth accelerated from last quarter as advertising and subscription revenue showed strong growth across Zedge Marketplace's Android and iOS offerings," said Jonathan Reich, Zedge's chief executive officer. "I'm especially encouraged that we followed up record quarterly revenue in Q2 with record Q3 revenue and that we did not see the customary post-holiday hangover. Our work to optimize our advertising stack continues to pay off, and iOS subscription revenue was up more than
Third Quarter Highlights (fiscal 2024 versus fiscal 2023)
- Revenue increased
13.8% to$7.7 million ; - GAAP operating loss of (
$0.1) million , compared to ($8.4) million ;- GAAP operating loss for the third quarter of 2023 included an
$8.7 million non-cash write-down of goodwill;
- GAAP operating loss for the third quarter of 2023 included an
- GAAP net income (loss) and earnings (loss) per share were
$0.1 million and$0.01 compared to ($7.7) million and ($0.55) , respectively, including the impact of the writedown in 2023: - Non-GAAP net income2 and EPS2 were
$0.5 million and$0.03 compared to$0.3 million and$0.02 , respectively; - Adjusted EBITDA2 of
$0.9 million ; - Zedge Premium Gross Transaction Value1, or GTV, increased
44.4% to$0.59 million .
| Third Quarter Select Financial Metrics: FY24 versus FY23* | |||||||||||||||||||||||||
(in $M except for EPS) | Q3 '24 | Q3 '23 | Change | FY24 YTD | FY23 YTD | Change | |||||||||||||||||||
Total Revenue | $ | 7.7 | $ | 6.7 | 13.8 | % | $ | 22.5 | $ | 20.6 | 9.2 | % | |||||||||||||
Advertising Revenue | $ | 5.5 | $ | 4.6 | 19.4 | % | $ | 15.9 | $ | 13.7 | 16.0 | % | |||||||||||||
Digital goods and services | $ | 0.9 | $ | 1.1 | -20.3 | % | $ | 2.7 | $ | 3.7 | -25.5 | % | |||||||||||||
Subscription Revenue | $ | 1.1 | $ | 0.8 | 34.9 | % | $ | 3.2 | $ | 2.6 | 22.6 | % | |||||||||||||
Other Revenue | $ | 0.2 | $ | 0.2 | -11.2 | % | $ | 0.7 | $ | 0.7 | 9.0 | % | |||||||||||||
GAAP Operating Loss | $ | (0.1 | ) | $ | (8.4 | ) | nm | $ | (11.7 | ) | $ | (7.2 | ) | nm | |||||||||||
Operating Margin | -1.7 | % | -125.1 | % | -52.2 | % | -34.7 | % | |||||||||||||||||
GAAP Net Income (Loss) | $ | 0.1 | $ | (7.7 | ) | nm | $ | (9.1 | ) | $ | (6.3 | ) | nm | ||||||||||||
GAAP Diluted Earnings (Loss) Per Share | $ | 0.01 | $ | (0.55 | ) | nm | $ | (0.65 | ) | $ | (0.45 | ) | nm | ||||||||||||
Non-GAAP Net Income | $ | 0.5 | $ | 0.3 | 59.7 | % | $ | 1.5 | $ | 1.3 | 13.3 | % | |||||||||||||
Non- GAAP Diluted EPS | $ | 0.03 | $ | 0.02 | 54.0 | % | $ | 0.11 | $ | 0.09 | 14.9 | % | |||||||||||||
Adjusted EBITDA | $ | 0.9 | $ | 1.7 | -50.0 | % | $ | 3.9 | $ | 4.1 | -3.8 | % | |||||||||||||
Cash Flow from Operations | $ | 2.3 | $ | 1.6 | 44.5 | % | $ | 5.2 | $ | 2.7 | 87.9 | % | |||||||||||||
nm = not measurable/meaningful | |||||||||||||||||||||||||
*numbers may not add due to rounding | |||||||||||||||||||||||||
| Select Zedge Marketplace Metrics: FY24 versus FY23* | |||||||||||||
(in MM except for ARPMAU and where noted) | Q3 '24 | Q3 '23 | Change | ||||||||||
Total Installs - Cumulative | 660.9 | 609.0 | 8.5 | % | |||||||||
MAU | 27.7 | 32.0 | -13.4 | % | |||||||||
Well-developed Markets | 6.0 | 7.2 | -16.7 | % | |||||||||
Emerging Markets | 21.7 | 24.8 | -12.5 | % | |||||||||
Active Subscriptions (in 000s) | 654 | 631 | 3.6 | % | |||||||||
ARPMAU | $ | 0.074 | $ | 0.053 | 39.7 | % | |||||||
Zedge Premium - Gross Transaction Value (GTV) | $ | 0.59 | $ | 0.41 | 44.4 | % | |||||||
*numbers may not add due to rounding | |||||||||||||
Fiscal 2024 Commentary
Reich continued, "We believe we are still in the early stages of benefiting from the organizational and product changes we made in recent quarters in order to drive sustainable, profitable, long-term revenue growth. As we move forward, we expect to continue to test and optimize our paid and organic user acquisition strategies, in conjunction with introducing new features and content for existing products while innovating to bring new products to market.
"For the Zedge Marketplace, we are continuing to optimize our paid user acquisition investments for accelerating growth in both advertising and subscriptions. iOS remains a key focus here, and despite the hockey stick growth we are seeing, we remain diligent in finding ways to tap the significant potential of this market. For Emojipedia, we have a roadmap of new features and services that we plan to roll out over the next 12 months, including emoji mashups, emoji-based mini-games and other user enhancements that we believe will drive new users, increase engagement and enable monetization growth.
"GuruShots remains in transition, but I'm feeling optimistic about our initial progress and current roadmap for returning the game to growth. We recently began beta testing a fully redesigned onboarding flow in the Android app with the goal of both improving engagement and retention, as well as expanding our target market to attract a wider set of potential players. Additionally, we are introducing a new, coin-based economy in June. By transitioning to a coin-based economy with multiple virtual currencies, we can better reward all players in a controlled, bespoke manner to encourage higher engagement and in-app purchases. We believe the cumulative impact of these changes will play a key role in returning GuruShots to growth in the quarters to come.
"Overall, I'm optimistic that we are headed in the right direction across our product portfolio and believe that we will finish 2024 with strong momentum heading into fiscal 2025."
1 We use the following business metrics in this release because we believe they are useful in evaluating Zedge's operational performance.
- Monthly active users, or MAU, captures the number of unique users that used our Zedge App during the previous 30 days of the relevant period, is useful for evaluating consumer engagement with our App, which correlates to advertising revenue as more users drive more ad impressions for sale. It also allows readers and potential advertisers to evaluate the size of our user base.
- Zedge Premium Gross Transaction Value, or GTV, is the total dollar amount of transactions conducted through Zedge Premium. As Zedge Premium is an internal focus for growth, we believe this metric will help investors evaluate our progress in growing this part of our business.
- Average Revenue Per Monthly Active User for our Zedge App, or ARPMAU, is useful in evaluating how well we monetize our user base.
- An Active Subscription is a subscription that has commenced and not been canceled, including paused subscriptions and subscriptions in free trials, grace periods, or account hold. This is important because it is a source of recurring revenue.
- Total Installs - Cumulative measures the number of times the Zedge App has been downloaded since inception.
2 Throughout this release, Non-GAAP Net Income, Non-GAAP EPS and Adjusted EBITDA are non-GAAP financial measures intended to provide useful information that supplement Zedge's results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial measures at the end of this release for an explanation of Zedge's formulations of Non-GAAP Net Income, Non-GAAP EPS and Adjusted EBITDA and reconciliations to the most directly comparable GAAP measures.
Trended Financial Information*
(in $M except for EPS, ARPMAU, Paid Subscriptions) | Q123 | Q223 | Q323 | Q423 | Q124 | Q224 | Q324 | FY22 | FY23 | YTD FY24 | ||||||||||||||||||||||||||||||
Total Revenue | $ | 6.9 | $ | 7.0 | $ | 6.7 | $ | 6.6 | $ | 7.1 | $ | 7.8 | $ | 7.7 | $ | 26.5 | $ | 27.2 | $ | 22.5 | ||||||||||||||||||||
Advertising Revenue | $ | 4.5 | $ | 4.6 | $ | 4.6 | $ | 4.6 | $ | 4.9 | $ | 5.5 | $ | 5.5 | $ | 20.3 | $ | 18.3 | $ | 15.9 | ||||||||||||||||||||
Digital goods and services | $ | 1.3 | $ | 1.2 | $ | 1.1 | $ | 1.0 | $ | 0.9 | $ | 0.9 | $ | 0.9 | $ | 1.7 | $ | 4.6 | $ | 2.7 | ||||||||||||||||||||
Subscription Revenue | $ | 0.9 | $ | 0.9 | $ | 0.8 | $ | 0.9 | $ | 1.0 | $ | 1.1 | $ | 1.1 | $ | 3.7 | $ | 3.5 | $ | 3.2 | ||||||||||||||||||||
Other Revenue | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.3 | $ | 0.2 | $ | 0.8 | $ | 0.8 | $ | 0.7 | ||||||||||||||||||||
GAAP Operating Income (Loss) | $ | (0.2 | ) | $ | 1.5 | $ | (8.4 | ) | $ | 0.2 | $ | 0.3 | $ | (11.9 | ) | $ | (0.1 | ) | $ | 11.8 | $ | (6.9 | ) | $ | (11.7 | ) | ||||||||||||||
GAAP Net Income (Loss) | $ | (0.2 | ) | $ | 1.6 | $ | (7.7 | ) | $ | 0.2 | $ | (0.0 | ) | $ | (9.2 | ) | $ | 0.1 | $ | 9.7 | $ | (6.1 | ) | $ | (9.1 | ) | ||||||||||||||
GAAP Diluted Earnings (Loss) Per Share | $ | (0.01 | ) | $ | 0.11 | $ | (0.55 | ) | $ | 0.01 | $ | 0.00 | $ | (0.66 | ) | $ | 0.01 | $ | 0.65 | $ | (0.44 | ) | $ | (0.65 | ) | |||||||||||||||
Non GAAP Net Income | $ | 0.2 | $ | 0.8 | $ | 0.3 | $ | 0.6 | $ | 0.5 | $ | 0.5 | $ | 0.5 | $ | 8.8 | $ | 1.9 | $ | 1.5 | ||||||||||||||||||||
Non-GAAP Diluted EPS | $ | 0.01 | $ | 0.06 | $ | 0.02 | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.03 | $ | 0.59 | $ | 0.13 | $ | 0.11 | ||||||||||||||||||||
Adjusted EBITDA | $ | 1.0 | $ | 1.4 | $ | 1.7 | $ | 1.6 | $ | 1.5 | $ | 1.5 | $ | 0.9 | $ | 12.4 | $ | 5.7 | $ | 3.9 | ||||||||||||||||||||
Adjusted EBITDA Margin | 13.8 | % | 20.5 | % | 25.4 | % | 24.2 | % | 21.7 | % | 19.9 | % | 11.1 | % | 46.6 | % | 20.9 | % | 17.5 | % | ||||||||||||||||||||
Cash Flow from Operations | $ | 1.1 | $ | 0.0 | $ | 1.6 | $ | 0.4 | $ | 1.3 | $ | 1.6 | $ | 2.3 | $ | 11.5 | $ | 3.2 | $ | 5.2 | ||||||||||||||||||||
MAU | 31.9 | 32.2 | 32.0 | 30.9 | 28.5 | 28.7 | 27.7 | nm | nm | nm | ||||||||||||||||||||||||||||||
Well-developed Markets | 7.1 | 7.4 | 7.2 | 6.8 | 6.2 | 6.2 | 6.0 | nm | nm | nm | ||||||||||||||||||||||||||||||
Emerging Markets | 24.8 | 24.8 | 24.8 | 24.1 | 22.3 | 22.5 | 21.7 | nm | nm | nm | ||||||||||||||||||||||||||||||
Active Subscriptions (in 000s) | 674 | 654 | 631 | 647 | 648 | 648 | 654 | nm | nm | nm | ||||||||||||||||||||||||||||||
ARPMAU | $ | 0.054 | $ | 0.052 | $ | 0.053 | $ | 0.055 | $ | 0.063 | $ | 0.072 | $ | 0.074 | nm | nm | nm | |||||||||||||||||||||||
Zedge Premium - GTV | $ | 0.31 | $ | 0.44 | $ | 0.41 | $ | 0.38 | $ | 0.42 | $ | 0.54 | $ | 0.59 | $ | 1.51 | $ | 1.54 | $ | 1.55 | ||||||||||||||||||||
nm = not measurable/meaningful
*numbers may not add due to rounding
Earnings Announcement and Supplemental Information
Management will host an earnings conference call beginning at 4:30 p.m. Eastern to discuss its results, outlook, and strategy, followed by a Q&A with investors.
Live Call-in Info:
Toll Free: 888-506-0062
International: 973-528-0011
Participant Access Code: 608154
Webcast URL: https://www.webcaster4.com/Webcast/Page/2205/50721
Replay:
Toll Free: 877-481-4010
International: 919-882-2331
Replay Passcode: 50721
About Zedge
Zedge builds digital marketplaces and friendly competitive games around content people use to express themselves. Our leading products include Zedge Ringtones and Wallpapers, a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones, notification sounds, and pAInt, a generative AI wallpaper maker; GuruShots, a skill-based photo challenge game; and Emojipedia, the #1 trusted source for ‘all things emoji'. Our vision is to enable and connect creators who enjoy friendly competitions with a community of prospective consumers in order to drive commerce. We serve 10's of millions of active users across our offerings every month. For more information, visit: investor.zedge.net
Forward-Looking Statements
All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate," "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, we assume no obligation to update any forward-looking statements.
Contact:
Brian Siegel, IRC, MBA
Senior Managing Director
Hayden IR
(346) 396-8696
ir@zedge.net
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value data)
| April 30, | July 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 19,925 | $ | 18,125 | ||||
Trade accounts receivable | 3,325 | 2,883 | ||||||
Prepaid expenses and other receivables | 374 | 569 | ||||||
Total current assets | 23,624 | 21,577 | ||||||
Property and equipment, net | 2,357 | 2,186 | ||||||
Intangible assets, net | 5,481 | 18,709 | ||||||
Goodwill | 1,802 | 1,961 | ||||||
Deferred tax assets, net | 4,492 | 1,842 | ||||||
Other assets | 383 | 556 | ||||||
Total assets | $ | 38,139 | $ | 46,831 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 1,155 | $ | 669 | ||||
Accrued expenses and other current liabilities | 3,272 | 2,676 | ||||||
Deferred revenues | 1,998 | 2,414 | ||||||
Total current liabilities | 6,425 | 5,759 | ||||||
Term loan, net of deferred financing costs | - | 1,985 | ||||||
Deferred revenues--non-current | 677 | - | ||||||
Other liabilities | 135 | 223 | ||||||
Total liabilities | 7,237 | 7,967 | ||||||
Commitments and contingencies (Note 9) | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, $.01 par value; authorized shares-2,400; no shares issued and outstanding | - | - | ||||||
Class A common stock, $.01 par value; authorized shares-2,600; 525 shares issued and outstanding at April 30, 2024 and July 31, 2023 | 5 | 5 | ||||||
Class B common stock, $.01 par value; authorized shares-40,000; 14,866 shares issued and 13,967 shares outstanding at April 30, 2024, and 14,634 shares issued and 13,801 outstanding at July 31, 2023 | 149 | 146 | ||||||
Additional paid-in capital | 47,795 | 46,122 | ||||||
Accumulated other comprehensive loss | (1,878 | ) | (1,537 | ) | ||||
Accumulated deficit | (13,074 | ) | (3,942 | ) | ||||
Treasury stock, 899 shares at April 30, 2024 and 833 shares at July 31, 2023, at cost | (2,095 | ) | (1,930 | ) | ||||
Total stockholders' equity | 30,902 | 38,864 | ||||||
Total liabilities and stockholders' equity | $ | 38,139 | $ | 46,831 | ||||
ZEDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(in thousands, except per share data)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| April 30, | April 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
Revenues | $ | 7,658 | $ | 6,726 | $ | 22,510 | $ | 20,609 | ||||||||
Costs and expenses: | ||||||||||||||||
Direct cost of revenues (excluding amortization of capitalized software and technology development costs which is included below) | 455 | 498 | 1,399 | 1,762 | ||||||||||||
Selling, general and administrative | 6,752 | 5,016 | 18,773 | 16,713 | ||||||||||||
Depreciation and amortization | 583 | 897 | 2,120 | 2,505 | ||||||||||||
Impairment of intangible assets | - | - | 11,958 | - | ||||||||||||
Impairment of goodwill | - | 8,727 | - | 8,727 | ||||||||||||
Change in fair value of contingent consideration | - | - | - | (1,943 | ) | |||||||||||
Loss from operations | (132 | ) | (8,412 | ) | (11,740 | ) | (7,155 | ) | ||||||||
Interest and other income, net | 188 | 84 | 434 | 196 | ||||||||||||
Net loss resulting from foreign exchange transactions | (80 | ) | (84 | ) | (223 | ) | - | |||||||||
Loss before income taxes | (24 | ) | (8,412 | ) | (11,529 | ) | (6,959 | ) | ||||||||
Income tax benefit | (137 | ) | (718 | ) | (2,397 | ) | (702 | ) | ||||||||
Net income (loss) | $ | 113 | $ | (7,694 | ) | $ | (9,132 | ) | $ | (6,257 | ) | |||||
Other comprehensive loss: | ||||||||||||||||
Changes in foreign currency translation adjustment | (224 | ) | (214 | ) | (341 | ) | (321 | ) | ||||||||
Total other comprehensive loss | (224 | ) | (214 | ) | (341 | ) | (321 | ) | ||||||||
Total comprehensive loss | $ | (111 | ) | $ | (7,908 | ) | $ | (9,473 | ) | $ | (6,578 | ) | ||||
Income (loss) per share attributable to Zedge, Inc. common stockholders: | ||||||||||||||||
Basic | $ | 0.01 | $ | (0.55 | ) | $ | (0.65 | ) | $ | (0.44 | ) | |||||
Diluted | $ | 0.01 | $ | (0.55 | ) | $ | (0.65 | ) | $ | (0.44 | ) | |||||
Weighted-average number of shares used in calculation of income (loss) per share: | ||||||||||||||||
Basic | 14,191 | 14,017 | 14,077 | 14,221 | ||||||||||||
Diluted | 14,542 | 14,017 | 14,077 | 14,221 | ||||||||||||
ZEDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| Nine Months Ended | ||||||||
| April 30, | ||||||||
| 2024 | 2023 | |||||||
Operating activities | ||||||||
Net loss | $ | (9,132 | ) | $ | (6,257 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation | 42 | 44 | ||||||
Amortization of intangible assets | 1,270 | 1,738 | ||||||
Amortization of capitalized software and technology development costs | 808 | 723 | ||||||
Amortization of deferred financing costs | 15 | 2 | ||||||
Stock-based compensation | 1,673 | 1,957 | ||||||
Impairment charge of intangible assets | 11,958 | - | ||||||
Impairment of investment in privately-held company | 50 | - | ||||||
Write-off from impairment of goodwill | - | 8,727 | ||||||
Change in fair value of contingent consideration | - | (1,943 | ) | |||||
Deferred income taxes | (2,650 | ) | (955 | ) | ||||
Change in assets and liabilities: | ||||||||
Trade accounts receivable | (442 | ) | (645 | ) | ||||
Prepaid expenses and other current assets | 195 | (501 | ) | |||||
Other assets | 34 | 50 | ||||||
Trade accounts payable and accrued expenses | 1,073 | 653 | ||||||
Deferred revenue | 261 | (850 | ) | |||||
Net cash provided by operating activities | 5,155 | 2,743 | ||||||
Investing activities | ||||||||
Final payment for asset acquisitions | - | (962 | ) | |||||
Capitalized software and technology development costs | (993 | ) | (1,110 | ) | ||||
Purchase of property and equipment | (35 | ) | (57 | ) | ||||
Net cash used in investing activities | (1,028 | ) | (2,129 | ) | ||||
Financing activities | ||||||||
Prepayment of term loan | (2,000 | ) | - | |||||
Proceeds from term loan payable | - | 2,000 | ||||||
Payment of deferred financing costs | - | (18 | ) | |||||
Proceeds from exercise of stock options | 3 | - | ||||||
Purchase of treasury stock in connection with share buyback program and stock awards vesting | (165 | ) | (1,454 | ) | ||||
Net cash (used in) provided by financing activities | (2,162 | ) | 528 | |||||
Effect of exchange rate changes on cash and cash equivalents | (165 | ) | (160 | ) | ||||
Net increase in cash and cash equivalents | 1,800 | 982 | ||||||
Cash and cash equivalents at beginning of period | 18,125 | 17,085 | ||||||
Cash and cash equivalents at end of period | $ | 19,925 | $ | 18,067 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
Cash payments made for income taxes | $ | 80 | $ | 711 | ||||
Cash payments made for interest expenses | $ | 66 | $ | 72 | ||||
Use of Non-GAAP Measures
Adjusted EBITDA, defined as earnings (loss) before interest, taxes, depreciation and amortization, stock compensation expense, transaction-related expenses and other non-recurring expenses, Adjusted EBITDA Margin, and non-GAAP net income and EPS (which adjust out stock compensation expense, transaction-related expenses and other non-recurring expenses from GAAP net income and EPS), represent measures that we believe are customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures we present. Our management also believes these measures are useful in evaluating our core operating results. However, these are not measures of financial performance under GAAP and should not be considered an alternative to net income or operating income/margin as an indicator of our operating performance or to net cash provided by operating activities as a measure of our liquidity.
Reconciliation of Adjusted EBITDA to Net (Loss) Income | Q123 | Q223 | Q323 | Q423 | Q124 | Q224 | Q324 | FY22 | FY23 | YTD FY24 | ||||||||||||||||||||||||||||||
Net (Loss) Income | $ | (0.2 | ) | $ | 1.6 | $ | (7.7 | ) | $ | 0.2 | $ | (0.0 | ) | $ | (9.2 | ) | $ | 0.1 | $ | 9.7 | $ | (6.1 | ) | $ | (9.1 | ) | ||||||||||||||
Excluding: | ||||||||||||||||||||||||||||||||||||||||
Interest and other income (expense), net | $ | (0.0 | ) | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.0 | ) | $ | (0.3 | ) | $ | (0.4 | ) | ||||||||||
Provision for (benefit from) income taxes | $ | (0.1 | ) | $ | 0.1 | $ | (0.7 | ) | $ | 0.2 | $ | 0.2 | $ | (2.5 | ) | $ | (0.1 | ) | $ | 1.9 | $ | (0.5 | ) | $ | (2.4 | ) | ||||||||||||||
Depreciation and amortization | $ | 0.8 | $ | 0.8 | $ | 0.9 | $ | 0.8 | $ | 0.8 | $ | 0.8 | $ | 0.6 | $ | 2.0 | $ | 3.3 | $ | 2.1 | ||||||||||||||||||||
EBITDA | $ | 0.5 | $ | 2.4 | $ | (7.6 | ) | $ | 1.0 | $ | 0.9 | $ | (11.1 | ) | $ | 0.4 | $ | 13.5 | $ | (3.6 | ) | $ | (9.8 | ) | ||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||
GuruShots acquisition related write-offs | $ | (0.2 | ) | $ | (1.8 | ) | $ | 8.7 | $ | 0.0 | $ | 0.0 | $ | 12.0 | $ | 0.0 | $ | (4.0 | ) | $ | 6.8 | $ | 12.0 | |||||||||||||||||
Stock-based compensation | $ | 0.6 | $ | 0.8 | $ | 0.6 | $ | 0.6 | $ | 0.5 | $ | 0.7 | $ | 0.5 | $ | 1.9 | $ | 2.5 | $ | 1.7 | ||||||||||||||||||||
Transaction costs related to business combination | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.2 | $ | 0.0 | $ | 0.0 | $ | 0.9 | $ | 0.0 | $ | 0.2 | ||||||||||||||||||||
Adjusted EBITDA | $ | 1.0 | $ | 1.4 | $ | 1.7 | $ | 1.6 | $ | 1.5 | $ | 1.5 | $ | 0.9 | $ | 12.4 | $ | 5.7 | $ | 3.9 | ||||||||||||||||||||
*numbers may not add due to rounding
Reconciliation of GAAP Net (Loss) Income to Non-GAAP Net Income | Q123 | Q223 | Q323 | Q423 | Q124 | Q224 | Q324 | FY22 | FY23 | YTD FY24 | ||||||||||||||||||||||||||||||
GAAP Net (Loss) Income | $ | (0.2 | ) | $ | 1.6 | $ | (7.7 | ) | $ | 0.2 | $ | (0.0 | ) | $ | (9.2 | ) | $ | 0.1 | $ | 9.7 | $ | (6.1 | ) | $ | (9.1 | ) | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||
GuruShots acquisition related write-offs | $ | (0.2 | ) | $ | (1.8 | ) | $ | 8.7 | $ | 0.0 | $ | 0.0 | $ | 12.0 | $ | 0.0 | $ | (4.0 | ) | $ | 6.8 | $ | 12.0 | |||||||||||||||||
Stock-based compensation | $ | 0.6 | $ | 0.8 | $ | 0.6 | $ | 0.6 | $ | 0.5 | $ | 0.7 | $ | 0.5 | $ | 1.9 | $ | 2.5 | $ | 1.7 | ||||||||||||||||||||
Transaction costs related to business combination | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.2 | $ | 0.0 | $ | 0.0 | $ | 0.9 | $ | 0.0 | $ | 0.2 | ||||||||||||||||||||
Income tax effect on non-GAAP items | $ | (0.1 | ) | $ | 0.2 | $ | (1.3 | ) | $ | (0.1 | ) | $ | (0.2 | ) | $ | (2.9 | ) | $ | (0.1 | ) | $ | 0.3 | $ | (1.3 | ) | $ | (3.2 | ) | ||||||||||||
Non-GAAP Net Income | $ | 0.2 | $ | 0.8 | $ | 0.3 | $ | 0.6 | $ | 0.5 | $ | 0.5 | $ | 0.5 | $ | 8.8 | $ | 1.9 | $ | 1.5 | ||||||||||||||||||||
Non-GAAP basic earnings per share | $ | 0.01 | $ | 0.06 | $ | 0.02 | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.03 | $ | 0.62 | $ | 0.13 | $ | 0.11 | ||||||||||||||||||||
Non-GAAP diluted earnings per share | $ | 0.01 | $ | 0.06 | $ | 0.02 | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.03 | $ | 0.59 | $ | 0.13 | $ | 0.11 | ||||||||||||||||||||
Weighted average shares used to compute Non-GAAP basic earnings per share | 14.3 | 14.1 | 14.0 | 13.9 | 14.0 | 14.1 | 14.2 | 14.2 | 14.1 | 14.0 | ||||||||||||||||||||||||||||||
Weighted average shares used to compute Non-GAAP diluted earnings per share | 14.3 | 14.3 | 14.0 | 13.9 | 14.0 | 14.1 | 14.5 | 14.9 | 14.1 | 14.0 | ||||||||||||||||||||||||||||||
*numbers may not add due to rounding
SOURCE: Zedge, Inc.
View the original press release on accesswire.com
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