Zedge Reports First Quarter Fiscal 2026 Results

About this update from Zedge, Inc.

Active subscriptions 1 reached a record 1.1 million, up 54% year-over-year; subscription revenue grew 29% year-over-year; ARPMAU 1 grew 29% year-over-year Revenue returned to growth at 6%, GAAP and Non-GAAP EPS 2 of $0.06 and $0.07, respectively Repurchased 240,000 shares and paid first quarterly dividend NEW YORK, NY / ACCESS Newswire / December 12, 2025 / Zedge, Inc. (NYSE AMERICAN:ZDGE), $ZDGE, a leader in digital marketplaces and interactive games that provide content, enable creativity, empower self-expression and facilitate community, today announced results for its first quarter fiscal 2026, ended October 31, 2025. Jonathan Reich, Zedge's CEO, commented: "Zedge delivered a solid start to fiscal 2026 with a return to topline growth even as we continued to navigate the anticipated headwinds at Emojipedia and GuruShots. The Zedge Marketplace demonstrated resilience and efficiency amid a broader digital ecosystem that continues to shift. Improved ARPMAU stood out as a key achievement of the quarter, driven by sustained CPMs, a core ad pricing metric, optimization and stronger subscription gains. These serve as strong signals that our core engine remains healthy. "I'm excited by the traction we're experiencing with DataSeeds. While the number of closed deals is still small, the opportunity is huge. AI models' success depends on their ability to secure a critical mass of high-quality training data that meets unique techincal specifications. That's where DataSeeds Production Cloud, our network of creative experts built to fulfill bespoke content requests, is experiencing a surge in demand. In Q1, we received our second order from an existing customer, a leader in the AI space, with an increased dollar size of roughly 25X from the customer's first order. Furthermore, our pipeline is ripe with many six-figure revenue opportunities. It is still early, but our value proposition - mainly access to and experience with a coveted community of creators that can generate rights-cleared, ethically sourced content, at scale, is in great demand. Moreover, it's not only the content that is fueling interest, but also our ability to deliver many other aspects of a customer brief with consistency and accuracy including unique naming and metadata conventions and search capabilities that set us apart. We are proceeding deliberately, for the most part using existing resources to execute. "Turning to our financial results, I want to address free cash flow 2 because the offsets this quarter were meaningful, but fully anticipated. Free cash flow reflected the impact of the timing of restructuring-related compensation tax payments, which are now largely behind us, as well as some quarter-specific timing in receivables and payables. We also chose to reinvest part of our restructuring savings into high-potential initiatives, including DataSeeds, Tapedeck and our product innovation initiative. These items temporarily reduced our free cash flow generation, but they do not change our long-term free cash flow expectations. "Looking forward, we entered the second quarter of fiscal 2026, which is typically seasonally stronger, with a leaner operating structure, a stronger business engine and a growing portfolio of innovation bets. We are executing from a position of confidence, discipline and momentum, and will invest prudently based on where opportunity knocks." First Quarter Highlights (fiscal 2026 versus fiscal 2025) First Quarter Select Financial Metrics: FY26 versus FY25* nm = not measurable/meaningful *numbers/percentages are based off of actuals versus the rounded numbers in the table Select Zedge Marketplace Metrics: FY26 versus FY25* *numbers/percentages are based off of actuals versus the rounded numbers in the table 1 We use the following supplemental business metrics in this release because we believe they are useful in evaluating Zedge's operational performance. 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 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, Free Cash Flow and Adjusted EBITDA and reconciliations to the most directly comparable GAAP measures. Trended Financial Information* 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 11:00 am 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: 866858 Webcast URL: https://www.webcaster5.com/Webcast/Page/2205/53246 Replay: Toll Free: 877-481-4010 International: 919-882-2331 Replay Passcode: 53246 About Zedge Zedge empowers tens of millions of consumers and creators each month with its suite of interconnected platforms that enable creativity, self-expression and e-commerce and foster community through fun competitions. Zedge's ecosystem of product offerings includes the Zedge Marketplace, a freemium marketplace offering mobile phone wallpapers, video wallpapers, ringtones, notification sounds, and pAInt, a generative AI image and audio maker; GuruShots, "The World's Greatest Photography Game," a skill-based photo challenge game; and Emojipedia, the #1 trusted source for ‘all things emoji.' 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 [email protected] [email protected] CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par value data) ZEDGE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands, except per share data) (unaudited) ZEDGE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) (1) Dividend payable was paid on November 7, 2025. 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, Free Cash Flow, a common metric used by investors for valuation, 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. Numbers in the following reconciliation tables may not add due to rounding. *numbers may not add due to rounding *numbers may not add due to rounding SOURCE: Zedge, Inc. View the original press release on ACCESS Newswire

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