GET DAILY SIGNALSZedge (ZDGE) Posts +4% Q4 Revenue Growth as Subscriptions Climb 25.6%
Key Takeaways
- Zedge reported fourth-quarter fiscal 2026 revenue of $7.77 million, up 4% year over year and ahead of Wall Street estimates.
- GAAP net income swung to a profit of $0.4 million, or $0.03 per diluted share, compared with a loss of $0.04 per share a year earlier.
- Subscription revenue climbed 25.6% to $1.8 million, offsetting a 16.8% decline in monthly active users.
- Adjusted EBITDA rose 75.6% to $0.5 million, while free cash flow jumped more than 220% to $1.6 million.
- Full-year fiscal 2026 revenue grew 7.6% to $31.6 million, with adjusted EBITDA up 134% and non-GAAP diluted EPS of $0.24 versus $0.05 in fiscal 2025.
- Management raised its quarterly dividend by 25%, underscoring confidence in its cash generation.
- For additional details, explore Zedge's Major News, Today's Price Move, Price Targets, and Forecast on dedicated pages.
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Putting the Earnings in Context
Zedge, Inc. operates a portfolio of digital consumer brands anchored by its Zedge Marketplace, alongside Emojipedia and the GuruShots photo game, and is building a newer B2B AI data business called DataSeeds. The fourth-quarter report matters because it closes out a fiscal year defined by restructuring and a strategic pivot toward higher-value subscription monetization. After several quarters of shrinking user counts, investors are watching closely to see whether rising revenue per user can keep revenue growing. This print also offers an early read on DataSeeds, a potential new growth engine serving AI developers, and on whether management's discipline around costs and cash flow is translating into durable profitability. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
What the Numbers Show
For the fourth quarter ended July 31, 2026, Zedge reported total revenue of $7.77 million, a 4% increase from $7.47 million in the prior-year period and above consensus estimates. Subscription revenue was the standout, rising 25.6% to $1.8 million, while advertising revenue slipped 1.9% to $5.1 million and digital goods and services declined 2.2% to $0.4 million.
On the bottom line, the company posted GAAP net income of $0.4 million, or $0.03 per diluted share, a turnaround from a net loss of $0.6 million, or $0.04 per share, a year earlier. Non-GAAP diluted earnings per share came in at $0.04, roughly in line with analyst expectations. Adjusted EBITDA increased 75.6% to $0.5 million, and free cash flow surged more than 220% to $1.6 million.
For the full fiscal year, revenue grew 7.6% to $31.6 million. Subscription revenue climbed 29.5% to $6.6 million, adjusted EBITDA rose 134% to $4.1 million, and free cash flow improved 46.6% to $4.2 million. The company ended the year with approximately $20.3 million in cash and no debt. From what I see, the cash position provides a solid buffer as the company navigates its transition.
Market Reaction and Investor Sentiment
The fourth-quarter report delivered a split result, and the stock traded modestly lower in after-hours activity. Revenue topped estimates, but non-GAAP EPS was essentially in line with expectations, giving investors little upside surprise on profitability. Sentiment remains cautious: shares were down roughly 7% over the prior three months and about 27% over the prior year, reflecting ongoing concerns about the shrinking user base. Still, the sharp improvement in adjusted EBITDA, free cash flow, and the dividend increase signal that management is prioritizing cash generation and shareholder returns. The tension between a declining audience and rising per-user monetization is likely to remain the central debate for the stock. I’m watching this closely as the market digests the mixed signals.
What to Watch Going Forward
Investors should watch whether Zedge can keep growing revenue while its monthly active users decline. In the fourth quarter, average revenue per monthly active user rose 30.5% to $0.121, and active subscriptions grew 35.3% to roughly 1.3 million. That mix shift is working for now, but it depends on continued conversion of remaining users into higher-value subscribers. One thing that stands out is how this metric could sustain momentum if the trend holds.
A second factor is DataSeeds, the company's AI data business. Management has said revenue recognition there is still minimal and lumpy, tied to the delivery and acceptance of custom, rights-cleared datasets. Early traction, including repeat orders, suggests potential, but it remains too small to move the consolidated top line.
Cost discipline also bears watching. Selling, general, and administrative expenses declined on the year, helped by prior restructuring, and management has signaled it will calibrate paid user acquisition to return on advertising spend. That could moderate marketplace growth while protecting margins. Finally, watch Emojipedia, which continues to weigh on consolidated growth despite high margins, and the company's capital-return posture following the dividend increase.
Tracking Patterns With AI Tools
In my analysis of names like Zedge, I often turn to Tickeron’s AI Real Time Patterns to spot emerging technical setups alongside the fundamental data. It helps surface potential entry or exit points based on historical pattern matches, which adds another layer to earnings reviews without replacing core research. The tool has become a regular part of how I cross-check momentum after reports like this one.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
ZDGE's RSI Indicator recovers from oversold territory
The RSI Oscillator for ZDGE moved out of oversold territory on October 16, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 29 similar instances when the indicator left oversold territory. In 25 of the 29 cases the stock moved higher. This puts the odds of a move higher at 86%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.
Following a +1.45% 3-day Advance, the price is estimated to grow further. Considering data from situations where ZDGE advanced for three days, in 178 of 230 cases, the price rose further within the following month. The odds of a continued upward trend are 77%.
ZDGE may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on September 29, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on ZDGE as a result. In 74 of 93 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 80%.
The Moving Average Convergence Divergence Histogram (MACD) for ZDGE turned negative on September 29, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 56 similar instances when the indicator turned negative. In 48 of the 56 cases the stock turned lower in the days that followed. This puts the odds of success at 86%.
ZDGE moved below its 50-day moving average on October 07, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for ZDGE crossed bearishly below the 50-day moving average on October 08, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 16 of 19 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 84%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ZDGE declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 81%.
The Aroon Indicator for ZDGE entered a downward trend on October 23, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 9 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.442) is normal, around the industry mean (0.984). P/E Ratio (-33.875) is within average values for comparable stocks, (-48.977). Projected Growth (PEG Ratio) (0.100) is also within normal values, averaging (17.274). Dividend Yield (0.030) settles around the average of (0.980) among similar stocks. P/S Ratio (1.255) is also within normal values, averaging (71.888).
The Tickeron PE Growth Rating for this company is 27 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 72 (best 1 - 100 worst), indicating slightly worse than average price growth. ZDGE’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 92 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ZDGE’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock worse than average.
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