Zedge (ZDGE) Earnings Date & Reports

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 (earnings before interest, taxes, depreciation, and amortization) 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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Earnings Context and Why It Matters

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 (business-to-business) 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.

Reported Results

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 (Generally Accepted Accounting Principles) 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 (EPS) 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.

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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.

Forward Outlook and Key Factors to Monitor

Investors should watch whether Zedge can keep growing revenue while its monthly active users (MAUs) decline. In the fourth quarter, average revenue per monthly active user (ARPMAU) 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.

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 (SG&A) 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.

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