Zedge Reports Fourth Quarter and Full-Year Fiscal 2026 Results
Zedge, Inc. (ZDGE) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Zedge Reports Fourth Quarter and Full-Year Fiscal 2026 Results Subscription revenue increased 26% year-over-year in Q4 and 30% in fiscal 2026 ARPMAU¹ increased 31% to $0.121; active subscriptions¹ grew 35% to approximately 1.3 million Full-year Free Cash Flow² increa
How this was made
The 30-second read
Why it matters
Earnings beat and dividend launch suggest a turning point after restructuring, but declining MAU may temper optimism.
Market read
First‑report earnings for Zedge provide fresh data for traders; modest scale keeps overall market relevance low.
What to watch
Potential headwinds from declining MAU and competition in ad revenue could limit future growth.
Zedge Reports Fourth Quarter and Full-Year Fiscal 2026 Results
Fiscal 2026 revenue increased 7.6% to $31.6 million, subscription revenue increased 29.5% to $6.6 million, and free cash flow increased 46.6% to $4.2 million. Fourth-quarter revenue growth was 4.0%, while MAU declined 16.8% and advertising revenue declined 1.9%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, Q4 FY26GAAP | $7.8M | – | +4.0% |
| Total revenue, FY26GAAP | $31.6M | – | +7.6% |
| GAAP operating income (loss), Q4 FY26GAAP | $300K | – | nm |
| GAAP operating income (loss), FY26GAAP | −$600K | – | +80.0% |
| Operating margin, Q4 FY26GAAP | 3.3% | – | – |
| Operating margin, FY26GAAP | -2.0% | – | – |
| GAAP net income (loss), Q4 FY26GAAP | $400K | – | nm |
| GAAP net income (loss), FY26GAAP | −$100K | – | 94.5% |
| GAAP diluted EPS (loss per share), Q4 FY26GAAP | $0.03 | – | nm |
| GAAP diluted EPS (loss per share), FY26GAAP | $(0.02) | – | +88.2% |
| Non-GAAP net income, Q4 FY26non-GAAP | $500K | – | nm |
| Non-GAAP net income, FY26non-GAAP | $3.1M | – | +357.0% |
| Non-GAAP diluted EPS, Q4 FY26non-GAAP | $0.04 | – | nm |
| Non-GAAP diluted EPS, FY26non-GAAP | $0.24 | – | +383.1% |
| Cash flow from operations, Q4 FY26GAAP | $1.7M | – | +145.0% |
| Cash flow from operations, FY26GAAP | $4.6M | – | +33.1% |
| Free cash flow, Q4 FY26non-GAAP | $1.6M | – | +220.3% |
| Free cash flow, FY26non-GAAP | $4.2M | – | +46.6% |
| Adjusted EBITDA, Q4 FY26non-GAAP | $500K | – | +75.6% |
| Adjusted EBITDA, FY26non-GAAP | $4.1M | – | +134.2% |
| MAU, Q4 FY26other | 19.3M | – | -16.8% |
| MAU in well-developed markets, Q4 FY26other | 4.2M | – | -22.2% |
| MAU in emerging markets, Q4 FY26other | 15.1M | – | -15.2% |
| Active subscriptions, Q4 FY26other | 1,332 (in 000s) | – | +35.3% |
| ARPMAU, Q4 FY26other | $0.121 | – | +30.5% |
| Zedge Premium GTV, Q4 FY26other | $650K | – | +1.9% |
| Deferred revenue, Q4 FY26GAAP | $6.1M | – | +13.4% |
| Cash and cash equivalents, July 31, 2026GAAP | $20.34M | – | – |
| Total assets, July 31, 2026GAAP | $33.92M | – | – |
| Total liabilities, July 31, 2026GAAP | $9.90M | – | – |
| Total stockholders’ equity, July 31, 2026GAAP | $24.02M | – | – |
| Direct cost of revenues, Q4 FY26GAAP | 578K | – | – |
| Direct cost of revenues, FY26GAAP | 2.23M | – | – |
| Selling, general and administrative expense, Q4 FY26GAAP | 6.76M | – | – |
| Selling, general and administrative expense, FY26GAAP | 25.61M | – | – |
| Depreciation and amortization, Q4 FY26GAAP | 171K | – | – |
| Depreciation and amortization, FY26GAAP | 707K | – | – |
| Impairment of intangible assets, FY26GAAP | 3.57M | – | – |
| Impairment of capitalized software and technology development costs, FY26GAAP | 145K | – | – |
| Restructuring charges, FY26GAAP | - | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Advertising Revenue, Q4 FY26Not separately disclosed. | $5.1M | – | -1.9% |
| Digital Goods and Services Revenue, Q4 FY26Not separately disclosed. | $400K | – | -2.2% |
| Subscription Revenue, Q4 FY26Active subscriptions increased 35.3% to 1,332 (in 000s), and ARPMAU increased 30.5% to $0.121. | $1.8M | – | +25.6% |
| Other Revenue, Q4 FY26Not separately disclosed. | $500K | – | +11.6% |
| Advertising Revenue, FY26Not separately disclosed. | $21.2M | – | +4.1% |
| Digital Goods and Services Revenue, FY26Not separately disclosed. | $2M | – | -10.2% |
| Subscription Revenue, FY26Management cited monetization improvement and growth in subscription offerings. | $6.6M | – | +29.5% |
| Other Revenue, FY26Not separately disclosed. | $1.9M | – | +6.5% |
Capital returns
- Repurchased 686,477 shares.
- Shares repurchased were 0.69 (in millions) in FY26, compared to 1.32 (in millions) in FY25.
- Paid a quarterly dividend of $0.02 per share.
- Purchase of treasury stock in connection with share buyback program and stock awards vesting was $(1,913) (in thousands) in FY26.
- Payment of cash dividends was $(940) (in thousands) in FY26.
- The share repurchase was suspended in Q1 FY27 in light of the September capital raise.
What drove it
- Subscription revenue increased 25.6% to $1.8 million in Q4 and 29.5% to $6.6 million in FY26.
- ARPMAU increased 30.5% to $0.121 and active subscriptions increased 35.3% to 1,332 (in 000s) in Q4.
- Management said monetization improvement and the benefits of the FY2025 restructuring contributed to growth in non-GAAP EPS, adjusted EBITDA and free cash flow.
- DataSeeds.AI secured repeat orders from new and existing customers, including its first six-figure order, and reported an initial model-evaluation engagement.
Concerns
- Q4 MAU declined 16.8% to 19.3 million, including a 22.2% decline in well-developed markets.
- Q4 advertising revenue declined 1.9% to $5.1 million, and Q4 digital goods and services revenue declined 2.2% to $0.4 million.
- Management said a marked decline at Emojipedia reduced consolidated fiscal-2026 revenue growth by approximately 300 basis points.
- FY26 included impairment of intangible assets of 3,570 (in thousands) and impairment of capitalized software and technology development costs of 145 (in thousands).
- GAAP operating income was $0.3 million in Q4, but the company reported a FY26 GAAP operating loss of $(0.6) million.
What to watch
- Whether subscription revenue growth, active subscriptions and ARPMAU continue to offset lower MAU and advertising revenue pressure.
- The pace of commercial expansion at DataSeeds.AI, including repeat orders, order sizes and the development of training data, model evaluation, annotation, data enrichment, and specialized datasets for physical AI and robotics.
- The effect of the September capital raise and the suspension of the share-repurchase program in Q1 FY27.
- Whether management can sustain positive operating cash flow and free cash flow while adding cash to the balance sheet.
Balance sheet and cash flow
- Cash and cash equivalents were $20,335 (in thousands) at July 31, 2026, compared to $18,609 (in thousands) at July 31, 2025.
- Net cash provided by operating activities was $4,555 (in thousands) in FY26, compared to $3,422 (in thousands) in FY25.
- Net cash used in investing activities was $(344) (in thousands) in FY26, compared to $(549) (in thousands) in FY25.
- Net cash used in financing activities was $(2,608) (in thousands) in FY26, compared to $(4,371) (in thousands) in FY25.
- Net increase in cash and cash equivalents was $1,726 (in thousands) in FY26, compared to a net decrease of $(1,389) (in thousands) in FY25.
- Total liabilities were $9,898 (in thousands) and total stockholders’ equity was $24,021 (in thousands) at July 31, 2026.
Analysis
Zedge delivered fiscal-2026 revenue of $31.6 million, up 7.6%, with subscription revenue up 29.5% to $6.6 million. The fourth quarter extended that pattern, as subscription revenue increased 25.6% to $1.8 million and total revenue increased 4.0% to $7.8 million. Subscription monetization was supported by a 30.5% increase in ARPMAU to $0.121 and a 35.3% increase in active subscriptions to 1,332 (in 000s).
The revenue mix remains under pressure from the audience and advertising side. Q4 MAU declined 16.8% to 19.3 million, with well-developed-market MAU down 22.2% and emerging-market MAU down 15.2%. Advertising revenue declined 1.9% to $5.1 million in Q4, while digital goods and services revenue declined 2.2% to $0.4 million. Management also stated that a marked decline at Emojipedia reduced consolidated fiscal-2026 revenue growth by approximately 300 basis points.
Profitability and cash generation improved materially. Q4 GAAP operating income was $0.3 million versus a $(0.7) million loss, and FY26 GAAP operating loss narrowed to $(0.6) million from $(3.2) million. FY26 non-GAAP net income increased to $3.1 million from $0.7 million, adjusted EBITDA increased to $4.1 million from $1.8 million, and free cash flow increased to $4.2 million from $2.9 million. FY26 results included impairment of intangible assets of 3,570 (in thousands) and impairment of capitalized software and technology development costs of 145 (in thousands).
The company ended the fiscal year with $20,335 (in thousands) of cash and cash equivalents, compared with $18,609 (in thousands) a year earlier. It repurchased 686,477 shares, paid a quarterly dividend of $0.02 per share, and reported cash payments for dividends of $(940) (in thousands) during FY26. The share-repurchase program was suspended in Q1 FY27 in light of the September capital raise.
DataSeeds.AI is the principal stated growth initiative. Management reported repeat orders from new and existing customers, its first six-figure order, and an initial model-evaluation engagement. No quantitative forward guidance was provided in the filing, leaving subscription monetization, MAU trends, advertising revenue and DataSeeds commercial progress as the key reported operating markers for the next period.
Management, verbatim
Fiscal year 2026 was a strong recovery year for Zedge. Our relentless focus on monetization improvement drove solid revenue gains, especially within our subscription offerings, where revenue grew nearly 30%.
Jonathan Reich, President and COO
Our stronger cash generation enabled us to return approximately $2.7 million to stockholders through share repurchases and quarterly dividends, the latter of which we initiated during the year and subsequently increased by 25%, all while still adding cash to our balance sheet.
Jonathan Reich, President and COO
DataSeeds has the ingredients to become a meaningful growth business for Zedge.
Morris Berger, Chief Executive Officer
Not in the filing
stated, not guessed- Forward quantitative guidance for revenue, gross margin, operating expenses, tax rate, profitability, cash flow, capital expenditures, subscriptions, MAU or DataSeeds.AI.
- Previous-release outlook and prior-guidance comparisons.
- Gross profit and gross margin.
- Debt balance or net debt.
- A reported GAAP effective tax rate.
- Quarterly balance-sheet debt maturity information.
- A separately reported total deferred-revenue prior-year balance on the same line as the $6.1 million supplemental metric.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Zedge operates creator communities and recently launched DataSeeds.AI, a data‑collection business.
Ticker impact
Zedge reported Q4 and full-year FY2026 results with revenue up 4% YoY, GAAP profit, and free cash flow up 220%, marking its first profitable quarter.
upward pressure as market prices in stronger earnings and dividend initiation
Profitability, cash flow growth, and dividend launch are material new facts that can move the stock immediately.
Market effects
Improves outlook for the mobile app/creator community sector, showing monetization potential.
Limited to U.S. small‑cap investors; no broader regional effect.
Minimal global impact beyond niche investors.
Counterpoint
If the revenue growth is modest and user base is declining, the stock may be overvalued despite profit.
Key entities
- InvestorHoward Jonas
Led a $7.7 million insider investment in Zedge.
- CEOMorris Berger
Newly appointed chief executive.
