Zedge Reports Third Quarter Fiscal 2026 Results
Rhea-AI Summary
Zedge (NYSE American: ZDGE) reported Q3 FY26 revenue of $8.0 million, up 3% year over year, with GAAP net income of $0.9 million and diluted EPS of $0.07. Subscription revenue rose 32% to $1.7 million and active subscriptions grew 41% to nearly 1.3 million.
ARPMAU increased 21% to $0.119 and Zedge Premium GTV grew 17%. Free cash flow rose 55% to $1.2 million, cash reached $19.7 million with no debt, and deferred revenue increased 26% to $6.2 million. The company also fulfilled DataSeeds.AI’s first six-figure order.
AI-generated analysis. Not financial advice.
Positive
- Total revenue grew 3.0% year over year to $8.0 million
- GAAP net income increased to $0.9 million from $0.2 million
- Free cash flow rose 54.9% to $1.2 million in Q3
- Subscription revenue grew 31.9% to $1.7 million in Q3
- ARPMAU increased 21.2% to $0.119 in the Zedge Marketplace
- Deferred revenue rose 25.7% year over year to $6.2 million
- Cash and cash equivalents reached $19.7 million with no debt
- Quarterly dividend increased 25% and paid at $0.02 per share
- Board expanded share repurchase authorization to about $2.2 million
- DataSeeds.AI delivered its first six-figure enterprise order
Negative
- Monthly active users declined 11.3% year over year to 19.6 million
- Advertising revenue decreased 4.0% year over year to $5.4 million
- Digital goods and services YTD revenue fell 12.3% to $1.5 million
- Total assets declined to $34.3 million from $35.7 million
- YTD GAAP net loss remained $0.6 million despite improvement
News Market Reaction – ZDGE
On the day this news was published, ZDGE gained 25.68%, reflecting a significant positive market reaction. Argus tracked a peak move of +44.0% during that session. Argus tracked a trough of -9.9% from its starting point during tracking. Our momentum scanner triggered 42 alerts that day, indicating elevated trading interest and price volatility. This price movement added approximately $11M to the company's valuation, bringing the market cap to $54.77M at that time. Trading volume was exceptionally heavy at 8.2x the daily average, suggesting very strong buying interest.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
Sector peers in Internet Content & Information were mixed, with names like BODI and SCOR down while PODC, SJ, and GIFT were up. Only one peer (FENG, +5.36%) appeared in momentum scans, suggesting ZDGE’s setup is stock-specific rather than part of a broad sector rotation.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Jun 08 | Capital return update | Positive | -1.1% | Raised buyback authorization and reiterated dividend, highlighting cash generation. |
| Jun 01 | Earnings date notice | Neutral | +9.1% | Announced timing of Q3 FY26 results and conference call details. |
| May 28 | Conference presentation | Neutral | +4.9% | Disclosed CEO presentation at Planet MicroCap Las Vegas with investor meetings. |
| Mar 25 | Dividend increase | Positive | -2.3% | Boosted quarterly dividend 25% to $0.02 on back of FCF growth and cash. |
| Mar 12 | Q2 FY26 results | Positive | -14.5% | Reported record monetization with revenue, ARPMAU, and subscriptions all rising. |
Recent history shows several instances where shareholder-friendly or strong operational updates were followed by negative next-day moves, indicating a tendency for good news to meet selling pressure.
Over the past six months, Zedge has focused on shareholder returns and monetization. It raised the quarterly dividend to $0.02, expanded buyback capacity by $2.0M, and highlighted record Q2 FY26 monetization with revenue of $8.3M and strong subscription growth. Yet, reactions were mixed: the March Q2 earnings (news_id 1026455) saw a -14.47% move, while a simple earnings-date notice on Jun 1, 2026 coincided with a +9.09% move. Today’s Q3 release fits into this pattern of improving fundamentals alongside uneven price responses.
Market Pulse Summary
The stock surged +25.7% in the session following this news. A strong positive reaction aligns with Zedge’s progress toward profitable growth in subscriptions and monetization. Q3 FY26 revenue reached $8.0M, GAAP EPS improved to $0.07, and free cash flow rose to $1.2M with cash of $19.7M and no debt. However, past events show good news sometimes preceded pullbacks, so investors have historically reassessed gains after upbeat releases.
Key Terms
arpMAU financial
free cash flow financial
adjusted ebitda financial
non-gaap financial
deferred revenue financial
impairment of intangible assets financial
restructuring charges financial
AI-generated analysis. Not financial advice.
Subscription revenue increased
ARPMAU1 for the Zedge Marketplace increased
GAAP net income of
DataSeeds.AI fulfilled first six-figure order, demonstrating enterprise-scale execution capability
NEW YORK, NY / ACCESS Newswire / June 11, 2026 / Zedge, Inc. (NYSE American:ZDGE), $ZDGE, a company that builds and operates creator communities serving 20 million monthly active users, today announced results for its third quarter fiscal 2026, ended April 30, 2026.
Jonathan Reich, Zedge's CEO, commented:
"In our third quarter, we continued to demonstrate that the core Zedge Marketplace business is resilient and becoming more efficient. Subscription revenue grew
"On the DataSeeds.AI front, I am excited to report that we fulfilled our first six-figure order this quarter stemming from an existing customer relationship with a leading technology company. At the same time, we are beginning to see interest from new prospects, which strengthens our confidence in this offernig. This milestone reflects our growing capacity to deepen customer relationships and scale production. While revenue remains lumpy at this stage, successfully delivering projects of this size, on spec and within tight timeframes, is a necessary capability for DataSeeds' future growth.
"Our Innovation Team continues to advance - with four alpha products now live, and we remain on track to achieve our goal of six alpha launches this fiscal year. Our framework remains consistent: pre-validate, build fast, measure against clear KPIs and invest in the winners while quickly ceasing to spend on those that do not meet our criteria. Each launch compounds the next, as reusable infrastructure and lessons from prior releases shorten our time-to-market.
"Financially, cash flow from operations increased over
Third Quarter Highlights (fiscal 2026 versus fiscal 2025)
Revenue increased
3.0% to$8.0 million ;GAAP operating income of
$1.1 million , compared to$0.2 million ;GAAP net income and diluted EPS of
$0.9 million and$0.07 , compared to$0.2 million and$0.01 , respectively;Non-GAAP net income and diluted Non-GAAP EPS of
$1.0 million and$0.07 , compared to$0.9 million and$0.06 , respectively;Free cash flow of
$1.2 million , compared to$0.8 million ;Adjusted EBITDA2 of
$1.3 million , compared to$1.2 million ;ARPMAU increased
21.2% to$0.119 ;Zedge Premium GTV increased
16.6% ;Active subscriptions increased
40.6% to nearly 1.3 million;Deferred revenue of
$6.2 million , up25.7% year over year;Cash and cash equivalents were
$19.7 million at quarter's end;Paid a quarterly dividend of
$0.02 per share.
Third Quarter Select Financial Metrics: FY26 versus FY25*
($ in MM except for per share amounts) | Q3 '26 | Q3 '25 | Change | YTD '26 | YTD '25 | Change | ||||||||||||||||||
Total Revenue | $ | 8.0 | $ | 7.8 | 3.0 | % | $ | 23.9 | $ | 21.9 | 8.8 | % | ||||||||||||
Advertising Revenue | $ | 5.4 | $ | 5.6 | -4.0 | % | $ | 16.1 | $ | 15.1 | 6.1 | % | ||||||||||||
Digital Goods and Services Revenue | $ | 0.5 | $ | 0.5 | 6.9 | % | $ | 1.5 | $ | 1.7 | -12.3 | % | ||||||||||||
Subscription Revenue | $ | 1.7 | $ | 1.3 | 31.9 | % | $ | 4.8 | $ | 3.7 | 31.1 | % | ||||||||||||
Other Revenue | $ | 0.5 | $ | 0.4 | 4.6 | % | $ | 1.4 | $ | 1.4 | 4.9 | % | ||||||||||||
GAAP Operating Income (Loss) | $ | 1.1 | $ | 0.2 | 571.3 | % | $ | (0.9 | ) | $ | (2.5 | ) | 64.1 | % | ||||||||||
Operating Margin | 13.4 | % | 2.1 | % | -3.8 | % | -11.5 | % | ||||||||||||||||
GAAP Net Income (Loss) | $ | 0.9 | $ | 0.2 | 400.5 | % | $ | (0.6 | ) | $ | (1.8 | ) | 68.7 | % | ||||||||||
GAAP Diluted EPS | $ | 0.07 | $ | 0.01 | 600.0 | % | $ | (0.05 | ) | $ | (0.13 | ) | 61.5 | % | ||||||||||
Non-GAAP Net Income | $ | 1.0 | $ | 0.9 | 12.0 | % | $ | 2.6 | $ | 0.6 | 322.6 | % | ||||||||||||
Non-GAAP Diluted EPS | $ | 0.07 | $ | 0.06 | 17.7 | % | $ | 0.20 | $ | 0.04 | 342.1 | % | ||||||||||||
Cash Flow from Operations | $ | 1.2 | $ | 0.9 | 40.3 | % | $ | 2.9 | $ | 2.7 | 5.7 | % | ||||||||||||
Free Cash Flow | $ | 1.2 | $ | 0.8 | 54.9 | % | $ | 2.6 | $ | 2.4 | 9.7 | % | ||||||||||||
Adjusted EBITDA | $ | 1.3 | $ | 1.2 | 1.0 | % | $ | 3.6 | $ | 1.5 | 146.6 | % | ||||||||||||
Shares Repurchased (M) | 0.08 | 0.22 | 0.33 | 0.68 | ||||||||||||||||||||
nm = not measurable/meaningful
*percentages are based off of actuals versus the rounded numbers in the table
Select Zedge Marketplace Metrics: FY26 versus FY25*
(in MM except ARPMAU and where noted) | Q3 '26 | Q3 '25 | Change | |||||||||
MAU | 19.6 | 22.1 | -11.3 | % | ||||||||
Well-Developed Markets | 4.3 | 5.2 | -17.3 | % | ||||||||
Emerging Markets | 15.3 | 16.9 | -9.5 | % | ||||||||
Active Subscriptions (in 000s) | 1,260 | 896 | 40.6 | % | ||||||||
ARPMAU | $ | 0.119 | $ | 0.099 | 21.2 | % | ||||||
Zedge Premium GTV | $ | 0.72 | $ | 0.61 | 16.6 | % | ||||||
*percentages are based off of actuals versus the rounded numbers in the table
Non-GAAP and Supplemental Metrics (Please see our 10-Q for full explanation of these terms)
1 We use the following supplemental 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.
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 Marketplace, 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.
2 Throughout this release, Non-GAAP Net Income, Non-GAAP EPS, Free Cash Flow (FCF) and Adjusted EBITDA are non-GAAP financial measures intended to provide useful information that supplements 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, Free Cash Flow and Adjusted EBITDA and reconciliations to the most directly comparable GAAP measures.
Trended Financial Information*
(in M except for EPS, ARPMAU, Paid Subscriptions)
Q125 | Q225 | Q325 | Q425 | Q126 | Q226 | Q326 | FY24 | FY25 | YTD FY26 | |||||||||||||||||||||||||||||||
Total Revenue | $ | 7.2 | $ | 7.0 | $ | 7.8 | $ | 7.5 | $ | 7.6 | $ | 8.3 | $ | 8.0 | $ | 30.1 | $ | 29.4 | $ | 23.9 | ||||||||||||||||||||
Advertising Revenue | $ | 4.9 | $ | 4.7 | $ | 5.6 | $ | 5.2 | $ | 5.2 | $ | 5.6 | $ | 5.4 | $ | 21.0 | $ | 20.3 | $ | 16.1 | ||||||||||||||||||||
Digital Goods and Services Revenue | $ | 0.6 | $ | 0.6 | $ | 0.5 | $ | 0.5 | $ | 0.5 | $ | 0.5 | $ | 0.5 | $ | 3.5 | $ | 2.2 | $ | 1.5 | ||||||||||||||||||||
Subscription Revenue | $ | 1.2 | $ | 1.2 | $ | 1.3 | $ | 1.4 | $ | 1.5 | $ | 1.6 | $ | 1.7 | $ | 4.3 | $ | 5.1 | $ | 4.8 | ||||||||||||||||||||
Other Revenue | $ | 0.5 | $ | 0.4 | $ | 0.4 | $ | 0.4 | $ | 0.5 | $ | 0.5 | $ | 0.5 | $ | 1.2 | $ | 1.8 | $ | 1.4 | ||||||||||||||||||||
GAAP Operating Income (Loss) | $ | (0.5 | ) | $ | (2.2 | ) | $ | 0.2 | $ | (0.7 | ) | $ | 0.9 | $ | (2.9 | ) | $ | 1.1 | $ | (11.8 | ) | $ | (3.2 | ) | $ | (0.9 | ) | |||||||||||||
GAAP Net Income (Loss) | $ | (0.3 | ) | $ | (1.7 | ) | $ | 0.2 | $ | (0.6 | ) | $ | 0.8 | $ | (2.3 | ) | $ | 0.9 | $ | (9.2 | ) | $ | (2.4 | ) | $ | (0.6 | ) | |||||||||||||
GAAP Diluted EPS (Loss per share) | $ | (0.02 | ) | $ | (0.12 | ) | $ | 0.01 | $ | (0.04 | ) | $ | 0.06 | $ | (0.18 | ) | $ | 0.07 | $ | (0.65 | ) | $ | (0.17 | ) | $ | (0.05 | ) | |||||||||||||
Non GAAP Net Income (Loss) | $ | (0.0 | ) | $ | (0.2 | ) | $ | 0.9 | $ | 0.1 | $ | 0.9 | $ | 0.8 | $ | 1.0 | $ | 1.8 | $ | 0.7 | $ | 2.6 | ||||||||||||||||||
Non-GAAP Diluted EPS (Loss per share) | $ | (0.00 | ) | $ | (0.01 | ) | $ | 0.06 | $ | 0.00 | $ | 0.07 | $ | 0.06 | $ | 0.07 | $ | 0.13 | $ | 0.05 | $ | 0.20 | ||||||||||||||||||
Cash Flow from Operations | $ | 1.2 | $ | 0.7 | $ | 0.9 | $ | 0.7 | $ | 0.8 | $ | 0.9 | $ | 1.2 | $ | 5.9 | $ | 3.4 | $ | 2.9 | ||||||||||||||||||||
Free Cash Flow | $ | 1.0 | $ | 0.6 | $ | 0.8 | $ | 0.5 | $ | 0.6 | $ | 0.8 | $ | 1.2 | $ | 4.7 | $ | 2.9 | $ | 2.6 | ||||||||||||||||||||
Adjusted EBITDA | $ | 0.3 | $ | (0.1 | ) | $ | 1.2 | $ | 0.3 | $ | 1.2 | $ | 1.1 | $ | 1.3 | $ | 4.7 | $ | 1.8 | $ | 3.6 | |||||||||||||||||||
Adjusted EBITDA Margin | 4.0 | % | -1.1 | % | 16.1 | % | 4.1 | % | 15.6 | % | 13.9 | % | 15.8 | % | 15.6 | % | 6.0 | % | 15.1 | % | ||||||||||||||||||||
MAU | 25.0 | 24.7 | 22.1 | 23.2 | 22.2 | 20.4 | 19.6 | nm | nm | nm | ||||||||||||||||||||||||||||||
Well-developed Markets | 5.5 | 5.6 | 5.2 | 5.4 | 4.9 | 4.8 | 4.3 | nm | nm | nm | ||||||||||||||||||||||||||||||
Emerging Markets | 19.5 | 19.1 | 16.9 | 17.8 | 17.3 | 15.6 | 15.3 | nm | nm | nm | ||||||||||||||||||||||||||||||
Active Subscriptions (in 000s) | 698 | 791 | 896 | 984 | 1,075 | 1,175 | 1,260 | nm | nm | nm | ||||||||||||||||||||||||||||||
ARPMAU | $ | 0.077 | $ | 0.078 | $ | 0.099 | $ | 0.093 | $ | 0.099 | $ | 0.115 | $ | 0.119 | nm | nm | nm | |||||||||||||||||||||||
Zedge Premium - GTV | $ | 0.68 | $ | 0.68 | $ | 0.61 | $ | 0.64 | $ | 0.66 | $ | 0.79 | $ | 0.72 | $ | 2.15 | $ | 2.62 | $ | 2.16 | ||||||||||||||||||||
Shares Repurchased | 0.22 | 0.24 | 0.22 | 0.64 | 0.24 | 0.01 | 0.08 | 0.21 | 1.32 | 0.33 | ||||||||||||||||||||||||||||||
nm = not measurable/meaningful
*numbers may not add due to rounding
Earnings Announcement and Supplemental Information
Management will host an earnings conference call today at 4:30 pm Eastern to discuss its earnings results, outlook, and strategy, followed by a Q&A session with investors.
Live Call-in Info:
Toll Free: 888-506-0062
International: 973-528-0011
Participant Access Code: 184704
Webcast URL: https://www.webcaster5.com/Webcast/Page/2205/53991
Replay:
Toll Free: 877-481-4010
International: 919-882-2331
Replay Passcode: 53991
About Zedge
Zedge builds and operates creator communities that serve 20 million monthly active users across its platforms. Zedge Marketplace, our flagship platform, is a leading marketplace for mobile personalization content that powers a vibrant creator ecosystem including a full generative AI creation suite. DataSeeds.AI is our B2B business, delivering managed, multimodal datasets that are ethically sourced, rights-cleared, built to spec and delivered at scale to frontier AI developers. The content foundation for DataSeeds.AI is supplied by Zedge's proprietary creator communities, including Zedge Marketplace contributors and photo competition community GuruShots, the world's most popular photo competition game, which is supplemented by crowdsourced content. For more information please visit: investor.zedge.net
Follow us on X: @Zedge
Follow us on LinkedIn
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
brian@haydenir.com
ir@zedge.net
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value data)
April 30, | July 31, | |||||||
2026 | 2025 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 19,692 | $ | 18,609 | ||||
Trade accounts receivable | 3,908 | 3,164 | ||||||
Prepaid expenses and other current assets | 799 | 671 | ||||||
Total Current assets | 24,399 | 22,444 | ||||||
Property and equipment, net | 1,224 | 1,290 | ||||||
Intangible assets, net | 1,065 | 4,922 | ||||||
Goodwill | 2,138 | 1,931 | ||||||
Deferred tax assets, net | 5,041 | 4,823 | ||||||
Other assets | 437 | 244 | ||||||
Total assets | $ | 34,304 | $ | 35,654 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 1,258 | $ | 1,471 | ||||
Accrued expenses and other current liabilities | 2,178 | 2,867 | ||||||
Deferred revenues | 4,159 | 3,425 | ||||||
Total Current liabilities | 7,595 | 7,763 | ||||||
Deferred revenues--non-current | 1,998 | 1,937 | ||||||
Other liabilities | 153 | 53 | ||||||
Total liabilities | 9,746 | 9,753 | ||||||
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, 2026 and July 31, 2025 | 5 | 5 | ||||||
Class B common stock, $.01 par value; authorized shares-40,000; 15,238 shares issued and 12,523 outstanding at April 30, 2026 and 15,073 shares issued and 12,692 shares outstanding at July 31, 2025 | 152 | 151 | ||||||
Additional paid-in capital | 49,676 | 49,768 | ||||||
Accumulated other comprehensive loss | (1,057 | ) | (1,509 | ) | ||||
Accumulated deficit | (16,080 | ) | (15,505 | ) | ||||
Treasury stock, 2,715 shares at April 30, 2026 and 2,381 shares at July 31, 2025, at cost | (8,138 | ) | (7,009 | ) | ||||
Total stockholders' equity | 24,558 | 25,901 | ||||||
Total liabilities and stockholders' equity | $ | 34,304 | $ | 35,654 | ||||
ZEDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except per share data)
(unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
April 30, | April 30, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Revenues | $ | 7,992 | $ | 7,757 | $ | 23,856 | $ | 21,930 | ||||||||
Costs and expenses: | ||||||||||||||||
Direct cost of revenues (excluding amortization of capitalized software and technology development costs which is included below) | 550 | 452 | 1,651 | 1,360 | ||||||||||||
Selling, general and administrative | 6,235 | 6,343 | 18,848 | 20,278 | ||||||||||||
Depreciation and amortization | 133 | 225 | 536 | 924 | ||||||||||||
Impairment of intangible assets | - | - | 3,570 | - | ||||||||||||
Restructuring charges | - | 577 | - | 1,058 | ||||||||||||
Impairment of capitalized software and technology development costs | - | - | 145 | 827 | ||||||||||||
Income (loss) from operations | 1,074 | 160 | (894 | ) | (2,517 | ) | ||||||||||
Interest and other income, net | 135 | 154 | 403 | 507 | ||||||||||||
Net loss resulting from foreign exchange transactions | (26 | ) | (41 | ) | (211 | ) | (141 | ) | ||||||||
Income (loss) before income taxes | 1,183 | 273 | (702 | ) | (2,151 | ) | ||||||||||
Income tax expense (benefit) | 257 | 88 | (127 | ) | (318 | ) | ||||||||||
Net income (loss) | $ | 926 | $ | 185 | $ | (575 | ) | $ | (1,833 | ) | ||||||
Other comprehensive income: | ||||||||||||||||
Changes in foreign currency translation adjustment | 117 | 448 | 452 | 287 | ||||||||||||
Total other comprehensive income | 117 | 448 | 452 | 287 | ||||||||||||
Total comprehensive income (loss) | $ | 1,043 | $ | 633 | $ | (123 | ) | $ | (1,546 | ) | ||||||
Income (loss) per share attributable to Zedge, Inc. common stockholders: | ||||||||||||||||
Basic | $ | 0.07 | $ | 0.01 | $ | (0.04 | ) | $ | (0.13 | ) | ||||||
Diluted | $ | 0.07 | $ | 0.01 | $ | (0.04 | ) | $ | (0.13 | ) | ||||||
Weighted-average number of shares used in calculation of income (loss) per share: | ||||||||||||||||
Basic | 13,002 | 13,720 | 12,992 | 13,835 | ||||||||||||
Diluted | 13,272 | 13,940 | 12,992 | 13,835 | ||||||||||||
ZEDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended | ||||||||
April 30, | ||||||||
2026 | 2025 | |||||||
Operating activities | ||||||||
Net loss | $ | (575 | ) | $ | (1,833 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation | 43 | 48 | ||||||
Amortization of intangible assets | 286 | 335 | ||||||
Amortization of capitalized software and technology development costs | 207 | 541 | ||||||
Stock-based compensation | 457 | 1,308 | ||||||
Impairment charge of capitalized software and technology development costs | 145 | 827 | ||||||
Impairment charge of intangible assets | 3,570 | - | ||||||
Deferred income taxes | (218 | ) | (184 | ) | ||||
Change in assets and liabilities: | ||||||||
Trade accounts receivable | (744 | ) | 87 | |||||
Prepaid expenses and other current assets | (128 | ) | (353 | ) | ||||
Other assets | (42 | ) | (54 | ) | ||||
Trade accounts payable and accrued expenses | (892 | ) | 229 | |||||
Deferred revenues | 795 | 1,797 | ||||||
Net cash provided by operating activities | 2,904 | 2,748 | ||||||
Investing activities | ||||||||
Capitalized software and technology development costs | (278 | ) | (329 | ) | ||||
Purchase of property and equipment | (26 | ) | (49 | ) | ||||
Net cash used in investing activities | (304 | ) | (378 | ) | ||||
Financing activities | ||||||||
Purchase of treasury stock in connection with share buyback program and stock awards vesting | (1,129 | ) | (2,030 | ) | ||||
Payment of cash dividends | (677 | ) | - | |||||
Proceeds from exercise of stock options | 129 | - | ||||||
Net cash used in financing activities | (1,677 | ) | (2,030 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 160 | 95 | ||||||
Net increase in cash and cash equivalents | 1,083 | 435 | ||||||
Cash and cash equivalents at beginning of period | 18,609 | 19,998 | ||||||
Cash and cash equivalents at end of period | $ | 19,692 | $ | 20,433 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for income taxes | $ | 176 | $ | 194 | ||||
Non-cash operating and financing activities: | ||||||||
ROU assets obtained in exchange for lease liabilities | $ | 286 | $ | 111 | ||||
Use of Non-GAAP Measures and Key Performance Indcators (KPI)
Adjusted EBITDA, defined as earnings (loss) before interest, taxes, depreciation and amortization, stock compensation expense, transaction-related expenses and other non-recurring expenses, Free Cash Flow, a common metric used by investors for valuation, and non-GAAP net income (loss) and EPS (or loss per share) (which adjust out stock compensation expense, transaction-related expenses and other non-recurring expenses from GAAP net income (loss) and EPS (loss pershare)), 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. Numbers in the following reconciliation tables may not add due to rounding.
Reconciliation of Adjusted EBITDA to Net Income (Loss) | Q125 | Q225 | Q325 | Q425 | Q126 | Q226 | Q326 | FY24 | FY25 | YTD FY26 | ||||||||||||||||||||||||||||||
Net Income (Loss) | $ | (0.3 | ) | $ | (1.7 | ) | $ | 0.2 | $ | (0.6 | ) | $ | 0.8 | $ | (2.3 | ) | $ | 0.9 | $ | (9.2 | ) | $ | (2.4 | ) | $ | (0.6 | ) | |||||||||||||
Excluding: | ||||||||||||||||||||||||||||||||||||||||
Interest and other income (expense), net | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.6 | ) | $ | (0.7 | ) | $ | (0.4 | ) | ||||||||||
Income tax expense (benefit) | $ | 0.0 | $ | (0.5 | ) | $ | 0.1 | $ | (0.0 | ) | $ | 0.2 | $ | (0.6 | ) | $ | 0.3 | $ | (2.2 | ) | $ | (0.3 | ) | $ | (0.1 | ) | ||||||||||||||
Depreciation and amortization | $ | 0.4 | $ | 0.3 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.1 | $ | 2.5 | $ | 1.1 | $ | 0.5 | ||||||||||||||||||||
EBITDA | $ | (0.1 | ) | $ | (2.0 | ) | $ | 0.3 | $ | (0.5 | ) | $ | 1.1 | $ | (2.8 | ) | $ | 1.2 | $ | (9.5 | ) | $ | (2.2 | ) | $ | (0.6 | ) | |||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||
Asset impairments and restructuring charges | $ | 0.0 | $ | 1.3 | $ | 0.6 | $ | 0.6 | $ | 0.0 | $ | 3.7 | $ | 0.0 | $ | 12.0 | $ | 2.5 | $ | 3.7 | ||||||||||||||||||||
Stock-based compensation | $ | 0.4 | $ | 0.6 | $ | 0.3 | $ | 0.1 | $ | 0.1 | $ | 0.3 | $ | 0.1 | $ | 2.1 | $ | 1.4 | $ | 0.5 | ||||||||||||||||||||
Expenses related to restructuring activities and business combination | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.1 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.2 | $ | 0.1 | $ | 0.0 | ||||||||||||||||||||
Adjusted EBITDA | $ | 0.3 | $ | (0.1 | ) | $ | 1.2 | $ | 0.3 | $ | 1.2 | $ | 1.1 | $ | 1.3 | $ | 4.7 | $ | 1.8 | $ | 3.6 | |||||||||||||||||||
*numbers may not add due to rounding
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income | Q125 | Q225 | Q325 | Q425 | Q126 | Q226 | Q326 | FY24 | FY25 | YTD FY26 | ||||||||||||||||||||||||||||||
GAAP Net Income (Loss) | $ | (0.3 | ) | $ | (1.7 | ) | $ | 0.2 | $ | (0.6 | ) | $ | 0.8 | $ | (2.3 | ) | $ | 0.9 | $ | (9.2 | ) | $ | (2.4 | ) | $ | (0.6 | ) | |||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||
Asset impairments and restructuring charges | $ | 0.0 | $ | 1.3 | $ | 0.6 | $ | 0.6 | $ | 0.0 | $ | 3.7 | $ | 0.0 | $ | 12.0 | $ | 2.5 | $ | 3.7 | ||||||||||||||||||||
Stock-based compensation | $ | 0.4 | $ | 0.6 | $ | 0.3 | $ | 0.1 | $ | 0.1 | $ | 0.3 | $ | 0.1 | $ | 2.1 | $ | 1.4 | $ | 0.5 | ||||||||||||||||||||
Expenses related to restructuring activities and business combination | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.1 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.2 | $ | 0.1 | $ | 0.0 | ||||||||||||||||||||
Income tax effect on non-GAAP items | $ | (0.1 | ) | $ | (0.4 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.0 | ) | $ | (0.9 | ) | $ | (0.0 | ) | $ | (3.3 | ) | $ | (0.9 | ) | $ | (1.0 | ) | ||||||||||
Non-GAAP Net Income (Loss) | $ | (0.0 | ) | $ | (0.2 | ) | $ | 0.9 | $ | 0.1 | $ | 0.9 | $ | 0.8 | $ | 1.0 | $ | 1.8 | $ | 0.7 | $ | 2.6 | ||||||||||||||||||
Non-GAAP basic EPS (loss per share) | $ | (0.00 | ) | $ | (0.01 | ) | $ | 0.06 | $ | 0.00 | $ | 0.07 | $ | 0.06 | $ | 0.08 | $ | 0.13 | $ | 0.05 | $ | 0.20 | ||||||||||||||||||
Non-GAAP diluted EPS (loss per share) | $ | (0.00 | ) | $ | (0.01 | ) | $ | 0.06 | $ | 0.00 | $ | 0.07 | $ | 0.06 | $ | 0.07 | $ | 0.13 | $ | 0.05 | $ | 0.20 | ||||||||||||||||||
Weighted average shares used to compute Non-GAAP basic earnings per share | 14.1 | 13.9 | 13.7 | 13.4 | 13.0 | 13.0 | 13.0 | 14.1 | 13.7 | 13.0 | ||||||||||||||||||||||||||||||
Weighted average shares used to compute Non-GAAP diluted earnings per share | 14.1 | 13.9 | 13.9 | 13.4 | 13.3 | 13.0 | 13.3 | 14.1 | 13.7 | 13.3 | ||||||||||||||||||||||||||||||
*numbers may not add due to rounding
Free Cash Flow Calculation | Q125 | Q225 | Q325 | Q425 | Q126 | Q226 | Q326 | FY24 | FY25 | YTD FY26 | |||||||||||||||||||||||||||||
Cash Flow from Operations | $ | 1.2 | $ | 0.7 | $ | 0.9 | $ | 0.7 | $ | 0.8 | $ | 0.9 | $ | 1.2 | $ | 5.9 | $ | 3.4 | $ | 2.9 | |||||||||||||||||||
Capital Expenditures | $ | 0.2 | $ | 0.1 | $ | 0.1 | $ | 0.2 | $ | 0.2 | $ | 0.1 | $ | 0.0 | $ | 1.2 | $ | 0.5 | $ | 0.3 | |||||||||||||||||||
Free Cash Flow | $ | 1.0 | $ | 0.6 | $ | 0.8 | $ | 0.5 | $ | 0.6 | $ | 0.8 | $ | 1.2 | $ | 4.7 | $ | 2.9 | $ | 2.6 | |||||||||||||||||||
SOURCE: Zedge, Inc.
View the original press release on ACCESS Newswire