UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
FOR THE QUARTERLY PERIOD ENDED
or
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
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(I.R.S.
Employer |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| ☒ | Smaller reporting company | |||
| Emerging growth company |
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As of March 12, 2026, the registrant had the following shares outstanding:
| Class A common stock, $.01 par value: | |
| Class B common stock, $.01 par value: | (excluding 2,671,766 shares held in treasury) |
ZEDGE,
INC.
TABLE OF CONTENTS
i
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
ZEDGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value data)
| January 31, | July 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Trade accounts receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Deferred tax assets, net | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Trade accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Deferred revenues | ||||||||
| Total Current liabilities | ||||||||
| Deferred revenues--non-current | ||||||||
| Other liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 9) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ | ||||||||
| Class A common stock, $ | ||||||||
| Class B common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Treasury stock, | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to unaudited condensed consolidated financial statements.
1
ZEDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except for per share data)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| January 31, | January 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Direct cost of revenues (excluding amortization of capitalized software and technology development costs which is included below) | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Impairment of intangible assets | ||||||||||||||||
| Restructuring charges | ||||||||||||||||
| Impairment of capitalized software and technology development costs | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest and other income, net | ||||||||||||||||
| Net loss resulting from foreign exchange transactions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income taxes benefit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income (loss): | ||||||||||||||||
| Changes in foreign currency translation adjustment | ( | ) | ( | ) | ||||||||||||
| Total other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income loss per share attributable to Zedge, Inc. common stockholders: | ||||||||||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-average number of shares used in calculation of income (loss) per share: | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
2
ZEDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands)
(Unaudited)
| Accumulated | ||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid-in | Other Comprehensive | Accumulated | Treasury Stock | Total Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Shares | Amount | Equity | |||||||||||||||||||||||||||||||
| Balance – July 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Cash dividends paid | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | |||||||||||||||||||||||||||||||||||||
| Net income | - | - | - | |||||||||||||||||||||||||||||||||||||
| Balance – October 31, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options | - | - | - | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Dividends payable | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | |||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Balance – January 31, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid-in | Other Comprehensive | Accumulated | Treasury Stock | Total Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Loss | Deficit | Shares | Amount | Equity | |||||||||||||||||||||||||||||||
| Balance – July 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Balance – October 31, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Balance – January 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
3
ZEDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| Six Months Ended | ||||||||
| January 31, | ||||||||
| 2026 | 2025 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of capitalized software and technology development costs | ||||||||
| Stock-based compensation | ||||||||
| Impairment charge of capitalized software and technology development costs | ||||||||
| Impairment charge of intangible assets | ||||||||
| Deferred income taxes | ( | ) | ( | ) | ||||
| Change in assets and liabilities: | ||||||||
| Trade accounts receivable | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Other assets | ( | ) | ( | ) | ||||
| Trade accounts payable and accrued expenses | ( | ) | ||||||
| Deferred revenues | ||||||||
| Net cash provided by operating activities | ||||||||
| Investing activities | ||||||||
| Capitalized software and technology development costs | ( | ) | ( | ) | ||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Financing activities | ||||||||
| Purchase of treasury stock in connection with share buyback program and stock awards vesting | ( | ) | ( | ) | ||||
| Payment of cash dividends | ( | ) | ||||||
| Proceeds from exercise of stock options | ||||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| Net increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Cash paid for income taxes | $ | $ | ||||||
| Non-cash operating and financing activities: | ||||||||
| ROU assets obtained in exchange for lease liabilities | $ | $ | ||||||
| Dividend payable included in accrued expenses and other current liabilities (1) | $ | $ | ||||||
| (1) |
See accompanying notes to unaudited condensed consolidated financial statements.
4
ZEDGE, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1—Basis of Presentation and Summary of Significant Accounting Policies
Description of Business
Zedge builds digital marketplaces and friendly competitive games around content that people use to express themselves. Our leading products include Zedge Ringtones and Wallpapers, which we refer to as our “Zedge App,” a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones, and notification sounds as well as pAInt, a generative AI wallpaper and ringtone maker, GuruShots, a skill-based photo challenge game, DataSeeds.AI, a B2B offering which offers ethically sourced and fully rights-cleared multimodal - image, video, and audio datasets that companies use to train AI models and Emojipedia, the #1 trusted source for ‘all things emoji’, . Our vision is to enable and connect creators who enjoy friendly competitions with a community of prospective consumers in order to drive commerce. Except where the context clearly indicates otherwise, the terms the “Company,” “Zedge” “we,” “us” or “our” refer to Zedge, Inc. and its consolidated subsidiaries.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Zedge, Inc. and its subsidiaries: GuruShots Ltd. (“GuruShots”); Zedge Europe AS; and Zedge Lithuania UAB (the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended January 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2026 or any other period. The balance sheet at July 31, 2025 has been derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2025 (the “2025 Form 10-K”), as filed with the U.S. Securities and Exchange Commission (the “SEC”).
The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2025 refers to the fiscal year ended July 31, 2025).
Significant Accounting Policies and Estimates
There have been no material changes to the Company’s significant accounting policies and critical accounting estimates described in the 2025 Form 10-K.
Use of Estimates
The preparation of our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ materially from our estimates due to risks and uncertainties, including uncertainty in the economic environment due to various global events. To the extent that there are material differences between these estimates and actual results, our financial condition or operating results will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.
5
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”), ASU 2024-03 will require public entities to disaggregate, within the notes to the financial statements, certain expenses presented on the face of the financial statements to enhance transparency and help investors better understand an entity’s performance. The amendment will specifically require that an entity disclose the amounts related to purchases of inventory, employee compensation, depreciation and intangible asset amortization. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company will not be required to adopt ASU 2024-03 until August 1, 2027. The Company is currently evaluating the impact of the adoption of ASU 2024-03 on the Company’s financial statement disclosures.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Accounting Standards Codification 606, Revenue from Contracts with Customers. The provisions of ASU 2025-05 are effective for fiscal years beginning after December 15, 2025 and interim periods within those fiscal years, with early adoption permitted, and are to be applied prospectively. We do not expect the adoption of ASU 2025-05 to have a material impact on our consolidated financial statements and accompanying Notes.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 removes the prescriptive software development “project stages” and requires capitalization of software costs once (1) management authorizes and commits funding and (2) completion and use are probable. Entities must evaluate significant development uncertainty related to technological innovations or performance requirements. The amendments also require Subtopic 360-10 disclosures for all capitalized internal-use software costs and clarify that intangible asset disclosures under Subtopic 350-30 are not required. The standard is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. The Company will not be required to adopt ASU 2025-06 until August 1, 2028. The Company is currently evaluating the impact of the adoption of ASU 2025-06 on the Company’s consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 clarifies the applicability of interim reporting guidance, provides a comprehensive list of required interim disclosures, and establishes a disclosure principle that requires disclosure of material events that occurred after the end of the last annual reporting period. The standard is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. The Company will not be required to adopt ASU 2025-11 until August 1, 2028. The Company is currently evaluating the impact of the adoption of ASU 2025-11 on the Company’s financial statement disclosures.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements (“ASU 2025-12”). The amendments in ASU 2025-12 represent changes to certain FASB Accounting Standards Codification topics that clarify, correct errors, or make minor improvements. The standard is effective for annual periods beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted, and may be applied prospectively or retrospectively. Early adoption and transition method may be elected on an issue-by-issue basis. We do not expect the adoption of ASU 2025-12 to have a material impact on our consolidated financial statements and accompanying Notes.
All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.
Related Party Transactions
The Company was formerly a majority-owned subsidiary of IDT Corporation (“IDT”). On June 1, 2016, IDT’s interest in the Company was spun-off by IDT to IDT’s stockholders and the Company became an independent publicly held company. IDT charges the Company for services it provides, and the Company charges IDT for services it provides, pursuant to Services Agreements between the companies.
6
The Company is party to a consulting agreement with Activist Artist Management, LLC (“Activist”), which assists the Company in strategic business development. A member of the Company’s Board of Directors owns a significant minority stake in Activist.
The Company is party to a revenue sharing agreement with National Retail Services, Inc. (“NRS”), a subsidiary of IDT, under which Zedge and certain of its subsidiaries (Emojipedia and GuruShots) provide a selection of their digital content for display on NRS screens and share in the revenue generated from the resulting advertisements.
Transactions with these related parties did not have a material impact on the consolidated balance sheets as of January 31, 2026 or July 31, 2025, or the condensed consolidated statements of operations and comprehensive loss for the three and six months ended January 31, 2026 or 2025.
Note 2—Revenue
Disaggregation of Revenue
The following table presents revenue disaggregated by segment and type (in thousands):
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||
| (in thousands, except percentage) | ||||||||||||||||||||||||
| Zedge Marketplace | ||||||||||||||||||||||||
| Advertising revenue | $ | $ | % | $ | $ | % | ||||||||||||||||||
| Paid subscription revenue | % | % | ||||||||||||||||||||||
| Other revenues | % | % | ||||||||||||||||||||||
| Total Zedge Marketplace revenue | % | % | ||||||||||||||||||||||
| GuruShots | ||||||||||||||||||||||||
| Digital goods and services | - | % | - | % | ||||||||||||||||||||
| Total revenue | $ | $ | % | $ | $ | % | ||||||||||||||||||
Contract Balances
Contract liabilities consist of deferred revenue, which are recorded for payments received in advance of the satisfaction of performance obligations.
The Company records deferred revenues related to the unsatisfied performance obligations with respect to subscription revenue. The Company’s deferred revenue balance for paid subscriptions was approximately $
The Company also records deferred revenues when users purchase or earn Zedge Credits. Unused Zedge Credits represent the value of the Company’s unsatisfied performance obligation to its users. Revenue is recognized when Zedge App users use Zedge Credits to acquire Zedge Premium content or upon expiration of the Zedge Credits upon 180 days of account inactivity (“Breakage”). As of January 31, 2026, and July 31, 2025, the Company’s deferred revenue balance related to Zedge Premium was approximately $
The amount of deferred revenue recognized in the six months ended January 31, 2026 that was included in the deferred revenue balance at July 31, 2025 was $
Unsatisfied Performance Obligations
Substantially all of the Company’s unsatisfied performance obligations relate to contracts with an original expected length of 30 months or less.
7
Significant Judgments
The advertising networks and advertising exchanges to which the Company sells its inventory track and report the impressions and revenues to Zedge, and Zedge recognizes revenues based on these reports. The networks and exchanges base their payments off of those reports and Zedge independently compares the data to each of the client sites to validate the imported data and identify any differences. The number of impressions and revenues delivered by the advertising networks and advertising exchanges is determined at the end of each month, which resolves any uncertainty in the transaction price during the reporting period.
For lifetime subscriptions, revenue is recognized over the estimated retention period during which the customer is expected to benefit from use of the Zedge app, which management has determined to be 30 months based on historical usage and retention patterns information available to us to date. This estimate represents a significant judgement and is reviewed periodically for changes in customer behavior or other relevant factors.
Note 3—Fair Value Measurements
The fair value measurement of cash equivalents invested in money market funds is based on quoted market prices in active markets (Level 1). The fair value measurement of foreign exchange forward contracts is based on observable market-based inputs principally derived from or corroborated by observable market data (Level 2).
The following table presents the balance of assets and liabilities measured at fair value on a recurring basis (in thousands):
| January 31, 2026 | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Assets: | ||||||||||||||||
| Cash equivalents | $ | $ | $ | $ | ||||||||||||
| Foreign exchange forward contracts | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| July 31, 2025 | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Assets: | ||||||||||||||||
| Cash equivalents | $ | $ | $ | $ | ||||||||||||
| Foreign exchange forward contracts | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Fair Value of Other Financial Instruments
The Company’s other financial instruments at January 31, 2026 and July 31, 2025 included trade accounts receivable, prepaid expenses and other current assets, trade accounts payable and accrued expenses and other liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date.
Note 4—Derivative Instruments
The primary risk managed by the Company using derivative instruments is foreign exchange risk. Foreign exchange forward contracts are entered into as hedges against unfavorable fluctuations in the USD to NOK and USD to EUR exchange rates. The Company is party to a Foreign Exchange Agreement with Western Alliance Bank allowing the Company to enter into foreign exchange contracts under its revolving credit facility with the bank (see Note 10 Revolving Credit Facility). The Company does not apply hedge accounting to these contracts because these are not qualified as hedging accounting pursuant to ASC 815; therefore the changes in fair value are recorded in the condensed consolidated statements of operations and comprehensive loss. By using derivative instruments to mitigate exposures to changes in foreign exchange rates, the Company is exposed to credit risk from the failure of the counterparty to perform under the terms of the contract. The credit or repayment risk is minimized by entering into transactions with high-quality counterparties.
As a result of the global restructuring initiated in January 2025, which included the closure of the Company’s Norway operations, the Company no longer has exposure to USD/NOK foreign exchange risk. Accordingly, there were no outstanding NOK forward contracts as of July 31, 2025 or January 31, 2026.
8
Management has further concluded that there were no current requirement to enter into USD/EUR forward contracts beyond August 2025. As a result, there were no outstanding EUR forward contracts as of January 31, 2026.
The fair value of outstanding derivative instruments recorded in the accompanying unaudited condensed consolidated balance sheets were as follows (in thousands):
| January 31, 2026 | July 31, 2025 | |||||||||
| Assets and Liabilities Derivatives: | Balance Sheet Location | |||||||||
| Derivatives not designated or not qualifying as hedging instruments | ||||||||||
| Foreign exchange forward contracts | Prepaid expenses and other current assets | $ | $ | |||||||
The effects of derivative instruments on the condensed consolidated statements of operations and comprehensive loss were as follows (in thousands):
| Amount of Income (Loss) | Three Months Ended January 31, | Six Months Ended January 31, | ||||||||||||||||
| Recognized on Derivatives | 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Derivatives not designated or not qualifying as hedging instruments | Location of income (loss) recognized on derivatives | |||||||||||||||||
| Foreign exchange forward contracts | Net income (loss) resulting from foreign exchange transactions | $ | $ | ( | ) | $ | ( | ) | ||||||||||
Note 5—Intangible Assets and Goodwill
Intangible assets are initially recorded at fair value and are stated net of accumulated amortization and impairment losses. The Company amortizes intangible assets with finite useful lives using either the straight-line method or, when reliably determinable, based on the pattern in which the economic benefits of the assets are expected to be consumed. Amortization is recorded over estimated useful lives ranging from five to fifteen years.
The Company evaluates the recoverability of its finite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. In accordance with ASC 360, Property, Plant, and Equipment, recoverability is assessed by comparing the carrying amount of the asset group to the sum of the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset group. If the carrying amount exceeds the undiscounted cash flows, the Company estimates the fair value of the asset group. Fair value is generally determined using an income approach, which includes a discounted cash flow analysis based on the present value of projected after-tax cash flows using a risk-adjusted discount rate. The Company’s fair value estimates incorporate market participant assumptions in accordance with ASC 820, Fair Value Measurement.
The following table presents the detail of intangible assets, net as of January 31, 2026 and July 31, 2025 (in thousands):
| January 31, 2026 | July 31, 2025 | |||||||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Allocation of Impairment Loss | Net Carrying Value | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||||||
| Emojipedia.org and other internet domains acquired | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Total intangible assets | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Impairment of Emojipedia Intangible Assets
In September 2025, Google implemented changes to its Search Engine Results Page (“SERP”) that allow users to copy emojis directly from the search engine results page, reducing referrals to third-party websites such as Emojipedia. In addition, artificial intelligence platforms, including Gemini, ChatGPT, Claude and others, now provide emoji results directly in response to user queries. These developments have adversely affected traffic and monetization for Emojipedia in the second quarter of fiscal 2026 and are expected to reduce future cash flows. As a result, management has determined that future investment in feature development and growth initiatives for Emojipedia will be limited, and the business will be operated primarily to maintain existing functionality. Accordingly, these factors represent a triggering event under ASC 360.
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As a result, the Company performed a recoverability test in accordance with ASC 360 to determine whether the carrying amount of the Emojipedia asset group was recoverable based on estimated undiscounted future cash flows over the remaining useful life of the primary asset. Based on this analysis, the sum of the estimated undiscounted future cash flows was not sufficient to recover the carrying amount of the Emojipedia asset group including intangible asset and capitalized software and technology development costs.
Accordingly, the Company measured the impairment loss by estimating the fair value of the asset group. The Company utilized an income approach based on a discounted cash flow (“DCF”) analysis, which estimates the fair value by projecting after-tax cash flows attributable to the asset group and discounting those cash flows to present value using a risk-adjusted discount rate. The DCF analysis requires significant judgment, including assumptions related to revenue projections, growth rates, terminal values, and the timing and amount of expected future cash flows.
The forecasted cash flows were based on the Company’s most recent strategic plan, and for periods beyond the strategic plan, the Company applied revenue assumptions including a continued decline in revenue considered reasonable as of the measurement date and consistent with market participant expectations. The discount rate was based on an estimate of the weighted average cost of capital (“WACC”) of market participants and was intended to reflect the risks inherent in the projected cash flows. The Company applied a discount rate of
Based on the DCF analysis, the estimated fair value of the Emojipedia asset group was determined to be $
As a result, the Company recorded a non-cash impairment charge of approximately $
| 1/31/26 | ||||||||||||||||
| Net Carrying Amount | Pro rata allocation factor | Impairment loss | Adjusted Net Carrying Amount | |||||||||||||
| Long-lived assets | ||||||||||||||||
| Capitalized software and technology development costs | $ | % | ||||||||||||||
| Emojipedia.org and other internet domains acquired | % | |||||||||||||||
| Total net carrying value | $ | % | $ | $ | ||||||||||||
Estimated future amortization expense for intangible assets as of January 31, 2026 is as follows (in thousands):
| Fiscal 2026 | ||||
| Fiscal 2027 | ||||
| Fiscal 2028 | ||||
| Fiscal 2029 | ||||
| Fiscal 2030 | ||||
| Total | $ |
The Company’s amortization expense for intangible assets were $
Goodwill
The following table summarizes the changes in the carrying amount of goodwill for the six months ended January 31, 2026 (in thousands).
| Carrying Amounts | ||||
| Balance as of July 31, 2025 | ||||
| Impact of currency translation | ||||
| Balance as of January 31, 2026 | $ | |||
The total accumulated impairment loss of the Company’s goodwill as of January 31, 2026 was $
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Note 6—Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
| January 31, | July 31, | |||||||
| 2026 | 2025 | |||||||
| Accrued payroll and bonuses | $ | $ | ||||||
| Accrued vacation | ||||||||
| Accrued expenses | ||||||||
| Dividend payable | ||||||||
| Due to artists | ||||||||
| Operating lease liability-current portion | ||||||||
| Accrued payroll taxes | ||||||||
| Accrued income taxes payable | ||||||||
| Due to related party - IDT | ||||||||
| Others | ||||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||
Note 7—Stock-Based Compensation
In November 2025, the Company’s Board of Directors amended the Company’s 2016 Stock Option and Incentive Plan (as amended to date, the “2016 Incentive Plan”) to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional
The Company recognizes stock-based compensation for stock-based awards, including stock options, restricted stock and deferred stock units (“DSUs”) based on the estimated fair value of the awards and recognized over the relevant service period and/or market conditions. The Company estimates the fair value of stock options on the measurement date using the Black-Scholes option valuation model. The Company estimates the fair value of the restricted stock and DSU’s with service conditions only using the current market price of the stock. The Company estimates the fair value of the DSU’s with both service and market conditions using the Monte Carlo Simulation valuation model.
The Black-Scholes and Monte Carlo Simulation valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate and dividend yield. The Company recognizes stock-based compensation expense related to options and restricted stock units on a straight-line basis over the service period of the award, which is generally
In the accompanying condensed consolidated statements of operations and comprehensive loss, the Company recognized stock-based compensation expense for our employees and non-employees as follows (in thousands):
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
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As of January 31, 2026, the Company’s unrecognized stock-based compensation expense was $
In the six months ended January 31, 2026 and 2025, awards of restricted stock and DSUs with respect to
In the six months ended January 31, 2026 and 2025, the Compensation Committee approved grants of options to purchase
Note 8—Earnings Per Share
Basic earnings per share is computed by dividing net income attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture, issuances to be made on the vesting of unvested DSUs and the exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive.
The rights of holders of Class A common stock and Class B common stock are identical except for certain voting and conversion rights and restrictions on transferability. As such, the Company is not required to break out earnings per share by class.
The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||||
| January 31, | January 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Basic weighted-average number of shares | ||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||
| Stock options | ||||||||||||||||
| Non-vested restricted Class B common stock | ||||||||||||||||
| Deferred stock units | ||||||||||||||||
| Diluted weighted-average number of shares | ||||||||||||||||
The following shares were excluded from the dilutive earnings per share computations because their inclusion would have been anti-dilutive (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||||
| January 31, | January 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Stock options | ||||||||||||||||
| Non-vested restricted Class B common stock | ||||||||||||||||
| Deferred stock units | ||||||||||||||||
| Shares excluded from the calculation of diluted earnings per share | ||||||||||||||||
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For the three and six months ended January 31, 2026 and 2025, diluted earnings per share equals basic earnings per share because the Company incurred a net loss during those periods and the impact of the assumed exercise of stock options and vesting of restricted stock and DSUs would have been anti-dilutive.
Note 9—Commitments and Contingencies
Legal Proceedings
The Company may from time to time be subject to legal proceedings that arise in the ordinary course of business. Although there can be no assurance in this regard, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition.
Note 10—Revolving Credit Facility
On October 28, 2022, the Company entered into an Amended and Restated Loan and Security Agreement (“Amended Loan Agreement”) with WAB. Pursuant to the Amended Loan Agreement, WAB agreed to provide the Company with a new term loan facility in the maximum principal amount of $
On October 28, 2024, the Company entered into an Amended and Restated Loan and Security Agreement Modification Agreement with WAB. Pursuant to the modification agreement, WAB agreed to renew the $
The Amended Loan Agreement, as amended, includes customary negative covenants, subject to exceptions, which limit transfers, capital expenditures, indebtedness, certain liens, investments, acquisitions, dispositions of assets, restricted payments and the business activities of the Company, as well as customary representations and warranties, affirmative covenants and events of default, including cross defaults and a change of control default.
As of November 16, 2016, the Company entered into a Foreign Exchange Agreement with WAB to allow the Company to enter into foreign exchange contracts not to exceed $
Note 11—Segment and Geographic Information
Segment Information
The Company determines its operating segments based on how its maker (“CODM”) manages the business, allocates resources, makes operating decisions and evaluates operating performance. The Company’s CODM was its Chief Executive Officer as of January 31, 2026.
The CODM evaluates the performance of each operating segment using segment income (loss) from operations. The Company defines segment income (loss) from operations as revenue less costs and expenses. Expenses include indirect costs that are allocated to operating segments based on a reasonable allocation methodology, which are generally related to sales and marketing activities and general and administrative overhead. Revenue and expenses exclude transactions between the Company’s operating segments.
The CODM uses segment income (loss) from operations to allocate resources during the annual budgeting and forecasting process.
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The Company has reportable segments - Zedge Marketplace and GuruShots. The following table provides information about these reportable segments (in thousands):
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Zedge Marketplace: | ||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Less: | ||||||||||||||||
| Personnel related expenses | ||||||||||||||||
| Users acquisition costs | ||||||||||||||||
| Data center and SaaS costs | ||||||||||||||||
| Acquisition and restructuring related charges | ||||||||||||||||
| Other expenses 1 | ||||||||||||||||
| Zedge Marketplace segment (loss) income from operations | ( | ) | ( | ) | ||||||||||||
| GuruShots: | ||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Less: | ||||||||||||||||
| Personnel related expenses | ||||||||||||||||
| Users acquisition costs | ||||||||||||||||
| Platform fees | ||||||||||||||||
| Data center and SaaS costs | ||||||||||||||||
| Acquisition and restructuring related charges | ||||||||||||||||
| Other expenses 2 | ||||||||||||||||
| GuruShots segment loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total segment loss from operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 1. |
| 2. |
The CODM does not evaluate operating segments using asset information and, accordingly, the Company does not report asset information by segment.
Geographic Information
Net long-lived assets and total assets held outside of the United States, which are located primarily in Israel and Lithuania, were as follows (in thousands):
| United States | Foreign | Total | ||||||||||
| Long-lived assets, net: | ||||||||||||
| January 31, 2026 | $ | $ | $ | |||||||||
| July 31, 2025 | $ | $ | $ | |||||||||
| Total assets: | ||||||||||||
| January 31, 2026 | $ | $ | $ | |||||||||
| July 31, 2025 | $ | $ | $ | |||||||||
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Note 12—Operating Leases
The Company has operating leases primarily for office space. Operating lease right-of-use assets recorded and included in other assets were $
Effective October 1, 2025, the Company commenced a new lease and relocated to its new office in Vilnius, Lithuania.
Future minimum lease payments related to this new lease are as follows (in thousands):
| Years ending July 31, | Operating Leases | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total future minimum lease payments | $ | |||
| Less imputed interest | ||||
| Total | $ | |||
There were no other material changes in the Company’s operating or finance leases in the six months ended January 31, 2026, as compared to the disclosure regarding such leases in the 2025 Form 10-K.
Note 13—Income Taxes
The Company’s income tax expense (or benefit) has generally been determined using an estimate of its annual effective tax rate (“ETR”) applied to year-to-date income and records the discrete tax items in the period to which they relate. In each quarter, the Company updates the estimated annual effective tax rate and makes a year-to-date adjustment to the tax provision as necessary. During the second quarter of fiscal 2026, we recorded an unusual and infrequent item related to the Emojipedia asset group impairment, which was treated as a discrete item and reduced our ETR from
The Company’s estimated annual effective tax rate for the fiscal year ending July 31, 2026 differs from the U.S. federal statutory tax rate due to certain items primarily related to stock-based compensation expense, jurisdictional mix of earnings, foreign derived intangible income deduction, global intangible low-taxed income and the change in basis differences associated with tax deductible intangible assets and goodwill.
As of January 31, 2026, the Company had $
The Company is subject to taxation in the United States and certain foreign jurisdictions. Earnings from non-U.S. activities are subject to local country income tax. The material jurisdictions where the Company is subject to potential examination by tax authorities include the United States, Norway, Lithuania and Israel.
Note 14—Shareholder Distributions and Earnings and Profits (E&P)
On October 14, 2025, the Company issued a press release announcing that its Board of Directors had declared a quarterly cash dividend of $
On January 14, 2026, the Company issued a press release announcing that its Board of Directors had declared a quarterly cash dividend of $
15
As of the declaration dates in October 2025 and January 2026, the Company had accumulated deficits of approximately $
For U.S. federal income tax purposes, the Company had accumulated earnings and profits (“E&P”) of approximately $
The difference between the book and tax characterization of the distribution results from timing and permanent differences between financial reporting income and taxable income, primarily related to the impairment of intangible assets and stock-based compensation.
Note 15—Restructuring, Impairments, and Related Charges
In January 2025, the Company initiated a corporate restructuring aimed to reduce headcount and other operating expenses, including the closure of our Norway operations. As a result of the restructuring steps, the Company’s workforce was consolidated in Lithuania and Israel. We expect this to allow for more efficient operations and cost savings beyond the compensation expenses of the terminated employees.
In connection with this initiative, the Company reduced its total global headcount by approximately
The Company capitalizes certain costs related to software to be sold, leased, or marketed in accordance with ASC 985-20, Costs of Software to Be Sold, Leased, or Marketed related to GuruShots. The Company evaluates these long-lived assets for impairment whenever circumstances arise that indicate the carrying amount of an asset may not be recoverable. The Company’s strategic reassessment of GuruShots’ operations resulted in a $
The following table summarizes total restructuring, impairments, and related charges for the Company’s two reportable segments (in thousands):
| Three and six months Ended January 31, 2025 | ||||
| Zedge Marketplace | $ | |||
| GuruShots | ||||
| Total restructuring, impairments, and related charges | $ | |||
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The following table provides information about restructuring, impairments, and related charges for the Company’s two reportable segments (in thousands):
| Restructuring, Impairment, and Related Charges | ||||||||||||
| Termination Benefits (1) | Impairments and Assets Disposal (2) | Total | ||||||||||
| Zedge Marketplace | $ | $ | $ | |||||||||
| GuruShots | ||||||||||||
| Three and six months Ended January 31, 2025 | $ | $ | $ | |||||||||
| 1) |
| 2) |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following information should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended July 31, 2025 (the “2025 Form 10-K”), as filed with the U.S. Securities and Exchange Commission (the “SEC”).
As used below, unless the context otherwise requires, the terms “the Company,” “Zedge,” “we,” “us,” and “our” refer to Zedge, Inc., a Delaware corporation and its subsidiaries, GuruShots Ltd., Zedge Europe AS and Zedge Lithuania UAB, collectively.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from future results. Factors that may cause such differences include, but are not limited to: (1) economic, geopolitical and market conditions can adversely affect our business, results of operations and financial condition, including our revenue growth and profitability, which in turn could adversely affect our stock price; (2) our ability to keep pace with rapid technological changes in the Internet, mobile and AI industries and to adapt our products and services accordingly; (3) risks associated with our reliance on the adoption, integration and effective utilization of AI technologies, which is a key component of our growth strategy; (4) our ability to acquire a sufficient number of users that become purchasers, retain existing users, and generate profitable revenue from our apps; (5) our ability to successfully make acquisitions and/or successfully integrate acquisitions that we have made into Zedge without incurring unanticipated costs or without being subject to other integration issues that may disrupt our existing operations; and (6) the threat of continued hostilities against Israel from Iran, the Gaza Strip, Lebanon, and Syria. For further information regarding risks and uncertainties associated with our business, please refer to Item 1A to Part I “Risk Factors” in the 2025 Form 10-K. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including the 2025 Form 10-K.
Trends and Uncertainties
Current Economic Conditions
The majority of our users and employees are located outside of the United States exposing us to a range of economic factors and regulations including foreign exchange fluctuations. There is uncertainty surrounding macroeconomic factors in the U.S. and globally. We believe these macroeconomic conditions coupled with the global political climate and unrest, including the ongoing wars between Ukraine and Russia, the war being waged against Iran by Israel and the United States, and the ongoing conflicts between Israel and the Gaza Strip, Lebanon, and Syria, may negatively impact our performance.
The Israel-Hamas and Israel-Hezbollah Conflicts
Given our operations in Israel, the impact of economic, political, geopolitical, and military conditions in the region directly affects us, including conflicts involving missile strikes, infiltrations, and terrorism. Notably, on October 7, 2023, Hamas, a designated terrorist organization, launched a savage terror attack in Israel, along with launching thousands of rockets into Israeli sovereign territory. The State of Israel responded by attacking Hamas in Gaza resulting in the mobilization of more than 450,000 army reservists. In addition, Hezbollah, another designated terrorist organization, based in Lebanon, was indiscriminately shelling Israeli territory, and the Houthi rebels based in Yemen also launched ballistic missiles and kamikaze drones at Israel.
18
In June of 2025, Israel and Iran engaged in the ‘12-Day War’ during which Israel and the Unites States launched strikes on Iranian nuclear and military facilities, assassinating key leaders and scientists, prompting Iranian retaliation with hundreds of missiles on Israeli cities; offices and schools were closed amid shelter-in-place orders, and the constant barrage of ballistic missiles launched from Iran and Yemen severely interrupted our operations. A U.S.-brokered ceasefire ended that direct clash on June 24, 2025, but tensions persisted as Iran rebuilt its missile stocks and nuclear capabilities, raising fears of renewed confrontation. Compounding these threats, since the fall of the Assad regime in December 2024, Israel has conducted airstrikes and ground incursions in Syria to neutralize remaining Iranian-linked militias, secure the border, and protect the Druze minority amid sectarian clashes. The Gaza ceasefire under the U.S.-backed framework, reached following the release of all remaining living Israeli hostages, has held broadly, though it remains fragile.
On February 28, 2026, the United States and Israel launched a joint military campaign against Iran, with the stated objectives of eliminating Iran’s nuclear and ballistic missile programs. The strikes killed Supreme Leader Ali Khamenei and numerous senior IRGC and government officials. Iran has responded with sustained waves of ballistic missiles and drone attacks against Israel, U.S. military installations across the region, and Gulf states.
The November 2024 Israel-Lebanon ceasefire collapsed when Hezbollah launched a fresh barrage of rockets and missiles into Israel following the killing of Iranian Supreme Leader Ali Khamenei. Israel responded with intensive strikes on Beirut and southern Lebanon and has authorized a ground incursion in southern Lebanon; the Lebanese government has proscribed Hezbollah’s military activities and ordered the expulsion of Iranian IRGC personnel from Lebanese territory, though implementation remains uncertain.
Our Israel office and schools have been closed under shelter-in-place orders, and the ongoing bombardment has materially interrupted our operations. As of the date of this filing, active combat operations continue and no ceasefire is in place. The duration, scale, and outcome of this conflict remain highly uncertain, and the risk of further escalation across the region is significant.
The foregoing conflicts have led to repeated IDF reservist mobilizations, affecting our workforce. The cumulative effect of these conflicts, combined with broader regional instability, risks impacting foreign investment, currency fluctuations, credit ratings, interest rates, oil prices, and security markets. Furthermore, regional political unrest and threats from extremist groups, notably Iran and its proxies, pose additional risks. The Houthis, while having reduced commercial shipping attacks since a May 2025 ceasefire with the U.S., continue to threaten Israeli and U.S. targets and may escalate in conjunction with Iran’s ongoing retaliation campaign. Management and our Board of Directors are closely monitoring the situation in Israel to address potential business disruptions and implications.
AI Technology Trends
A key component of our growth strategy involves the adoption and utilization of AI, which introduces certain risks that may materially and adversely affect our business, financial condition, results of operations, and reputation. We incorporate AI into products such as pAInt and rely on AI for development, content moderation, personalization, marketing assets, finance, legal, user engagement, and other functions across our business, but our ability to compete effectively in AI-driven markets and keep pace with better-resourced competitors remains uncertain. Compliance with evolving AI laws, such as the EU AI Act, may impose significant operational costs. Additionally, in late September 2025, Google released an update to its Search Engine Results Page (SERP) enabling users to copy emojis directly from search results rather than being directed to third-party sites such as Emojipedia, and AI platforms, including ChatGPT and Claude, now return emoji results in response to user queries. These developments could significantly diminish the value of our services and materially and adversely affect our revenue, profitability, and prospects. As a result, we recorded a non-cash impairment charge of approximately $3.7 million to reduce the carrying amount of the Emojipedia assets group to its estimated fair value, please refer to Note 5 to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Overview
Zedge builds digital marketplaces and friendly competitive games around content that people use to express themselves. Our leading products include Zedge Ringtones and Wallpapers, which we refer to as our “Zedge App,” a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones, and notification sounds as well as pAInt, a generative AI wallpaper and ringtone maker, GuruShots, a skill-based photo challenge game, DataSeeds.AI, a B2B offering which offers ethically sourced and fully rights-cleared multimodal - image, video, and audio - datasets that companies use to train AI models, and Emojipedia, the #1 trusted source for ‘all things emoji’. Our vision is to enable and connect creators who enjoy friendly competitions with a community of prospective consumers in order to drive commerce.
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We are part of the ‘Creator Economy,’ which is estimated to be worth between $191 billion and $250 billion globally in 2025, with some forecasts placing the global market size as high as $848 billion by 2032123. According to multiple reports, there are now over 207 million active content creators worldwide.45 Furthermore, between 45% and 47% of creators identify as working full-time in this space678. Most creators earn modest incomes, and studies suggest that only a small portion, approximately 4%, of creators earn more than $100,000 per year91011. We view the Creator Economy as an opportunity for Zedge to expand our business, especially as we execute by connecting our gamers with our marketplace.
Our Zedge App (which is named “Zedge Wallpapers” in the App Store) offers a wide array of mobile personalization content including wallpapers, video wallpapers, ringtones, and notification sounds, and is available both in Google Play and the App Store. Over the past two years, our Zedge App has had between 20.4 million and 27.7 million monthly active users (“MAU”), ending with 20.4 million MAU as of January 31, 2026. MAU is a key performance indicator (“KPI”) for our Zedge App that captures the number of unique users that used our Zedge App during the final 30 days of the relevant period. Our platform allows creators to upload content to our marketplace and avail it to our users either for free or, via ‘Zedge Premium,’ the section of our marketplace where we offer premium content for purchase. In turn, our users utilize the content to personalize their phones and express their individuality.
In fiscal 2023, we introduced pAInt, a generative AI wallpaper maker in the Zedge App. A generative AI wallpaper maker is an implementation of artificial intelligence software that can create images from text descriptions. To interface with a generative AI image maker, a user enters a text description of the image they want to create, and the software generates an image based on that description. Today, pAInt is available for text-to-image, image-to-image, and text-to-audio creation. In addition, we upgraded Zedge+, our paid subscription offering by bundling together an ad-free experience with value adds making the offering more compelling.
We often refer to our freemium ringtones and wallpapers, our subscription offering, the functionality for creators to market their products and ancillary offering and features both in our Zedge App and website, as our Zedge Marketplace.
The Zedge Marketplace’s monetization stack consists of advertising revenue generated when users view advertisements when using the Zedge App (and the related functionality under the zedge.net website), the in-app sale of Zedge Credits, our virtual currency, that is used to purchase Zedge Premium content, and a paid-subscription offering that provides an ad-free experience to users that purchase a monthly, annual or lifetime subscription. In April 2023, we introduced a subscription tier in the iOS version of the app. As of January 31, 2026, we had approximately 1.2 million active subscribers.
In fiscal 2025, we introduced DataSeeds.AI (“DataSeeds”). DataSeeds offers ethically sourced and fully rights-cleared multimodal - image, video, and audio - datasets that companies use to build and train their AI models. We draw on a large and long-standing creator ecosystem built through GuruShots and the Zedge Marketplace, complemented by an extensive global network of vetted professional photographers, videographers, and domain specialists to create “Made-to-Order” bespoke datasets. This unified sourcing model gives predictable, spec-driven control over subject matter, diversity parameters, environments, and capture conditions. It enables fast, high-volume delivery of custom datasets used to support frontier model training, robust computer vision performance, and grounded generative AI. We also have started assembling a diverse catalog of “Off-the-Shelf” dataset spanning different content types and verticals.
In April 2022, we acquired GuruShots Ltd (“GuruShots”) a gamified photography platform that engages a global community of photographers through daily challenges, real-time feedback, and a competitive, interactive experience.
| 1 | https://www.coherentmarketinsights.com/industry-reports/global-creator-economy-market |
| 2 | https://market.us/report/creator-economy-market/ |
| 3 | https://inbeat.agency/blog/creator-economy-statistics |
| 4 | https://demandsage.com/creator-economy-statistics/ |
| 5 | https://www.forbes.com/sites/stevenbertoni/2025/06/16/forbes-top-creators-2025/ |
| 6 | https://www.wpbeginner.com/research/creator-economy-statistics-that-will-blow-you-away/ |
| 7 | https://nealschaffer.com/creator-economy-statistics/ |
| 8 | https://www.spiralytics.com/blog/content-creator-statistics-2025/ |
| 9 | https://blog.invitemember.com/how-much-do-content-creators-make/ |
| 10 | https://brentonway.com/top-influencer-marketing-statistics/ |
| 11 | https://blog.hootsuite.com/instagram-statistics/ |
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GuruShots offers a platform spanning iOS, Android, and the web that provides a fun, educational and structured way for amateur photographers to compete in a wide variety of contests showcasing their photos while gaining recognition with votes, badges, and awards. We estimate that the total addressable market of amateur photographers using their smartphones to take and publicly share artistic photos is 30-40 million people per month and that the market is still in its infancy. Every month, GuruShots stages more than 300 competitions that result in players uploading in excess of 463,000 photographs and casting close to 2.7 billion “perceived votes,” which are calculated by multiplying the number of votes that each player casts by a weighting factor based on various factors related to that user. To improve engagement, GuruShots has adopted a set of retention dynamics focused on individual, team and community dynamics that create a sense of belonging, inspiration, recognition, improvement, and competition.
GuruShots utilizes a ‘Free-to-Play’ business model and generates revenue through in-app purchases of virtual currency. Players can use this currency to unlock competitions or gain an edge by purchasing resources and participating in additional gameplay. Over the past nine years, the monthly average paying player spend has increased in excess of 6.4% annually to more than $44.4 per player.
In fiscal 2024, we revamped GuruShots’ customer onboarding experience by guiding new players through simplified photo competitions of limited size and duration. The upgrade was designed to enhance the gaming experience for new players by increasing their potential for winning and providing immediate gratification. The new onboarding has shown improvements in engagement, retention, and revenue from new users. In addition, we migrated to a coin-based economy with multiple currencies in order to enable more players to earn and spend their currency on in-game resources.
Since the acquisition, GuruShots has faced challenges in growth and profitability, and its revenue has declined. We have cut costs at GuruShots, including as part of the restructuring implemented in January 2025, and have materially scaled back on paid user acquisition (PUA) for the unit. In parallel, we are developing a plan, referred to as GuruShots 2.0, to revamp GuruShots’ offering in order to put it on a growth trajectory and unlock the potential value of this asset. Our strategy focuses on attracting new users and converting them into recurring, paying players. To date, we have introduced a fun and comprehensive onboarding experience to draw new users into the gameplay with ease and migrated to a coin-based in-game economy to enable more opportunities to reward and monetize players
Historically, we marketed GuruShots to prospective players primarily via PUA channels including Google, Meta, TikTok and other platforms, utilizing a variety of advertising media, formats, such as static and video ads. As part of the GuruShots 2.0 development plan, we have significantly reduced PUA investment for GuruShots to improve Return-on-Ad-Spend (ROAS) and intend to continue managing PUA spend in the current timeframe.
As set forth above, we believe that the extensive library of photographs generated by GuruShots players through submissions to GuruShots’ competitions represents a valuable dataset for our DataSeeds offering. To date, we have secured rights to license a portion of this library for various applications, including AI training, and we continue to expand the licensable catalog by securing rights to additional photographs.
Emojipedia Pty Ltd (“Emojipedia”) is the world’s leading authority dedicated to providing up-to-date and well-researched emoji definitions, information, and news, as well as World Emoji Day and the annual World Emoji Awards. In January 2026, Emojipedia received approximately 40.7 million monthly page views and has approximately 6.7 million monthly active users as of January 31, 2026 of which approximately 40.9% are located in well-developed markets. It is the top resource for all things emoji, offering insights into data and cultural trends. In the past year, we have implemented multiple changes to Emojipedia including an AI-powered emoji sticker generator tool as well as an extensive emoji sticker library.
In late September 2025, Google released an update to its Search Engine Results Page (SERP) enabling users to copy emojis directly from search results rather than being directed to third-party sites such as Emojipedia. In addition, AI platforms, including ChatGPT and Claude, now return emoji results in response to user queries. While it is too early to accurately quantify the impact of these changes on Emojipedia’ s monthly active users (MAU), we believe they are likely to result in reduced traffic and adversely affect revenue. As a result, we recorded an impairment charge of $3.7 million for the quarterly results ended January 31, 2026.
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Critical Accounting Policies
Our unaudited condensed consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our significant accounting policies are described in Note 1 to the consolidated financial statements included in the 2025 Form 10-K. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities. Critical accounting policies are those that require application of management’s most subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. Our critical accounting policies include those related to revenue recognition, intangible assets-net, goodwill, capitalized software and technology development costs, stock-based compensation, restructuring charges and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. For additional discussion of our critical accounting policies, see our Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2025 Form 10-K.
Recently Issued Accounting Pronouncements
Please refer to Note 1 to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Key Performance Indicators (KPIs)
Zedge App-MAU and ARPMAU
The presentation of our results of operations related to our Zedge App includes disclosure of two key performance indicators – Monthly Active Users (MAU) and Average Revenue Per Monthly Active User (ARPMAU). MAU is a key performance indicator that we define as the number of unique users that used our Zedge App during the previous 30-day period, which is important to understanding the size of our active user base which is a main driver of our revenue. Changes and trends in MAU are useful for measuring the general health of our business, gauging both present and potential users/customers’ experience, assessing the efficacy of product improvements and marketing campaigns and overall user engagement.
ARPMAU is defined as (i) the total revenue derived from Zedge App in a monthly period, divided by (ii) MAU in that same period. ARPMAU for a particular time period longer than one month is the average ARPMAU for each month during that period. ARPMAU is valuable because it provides insight into how well we monetize our users and, changes and trends in ARPMAU are indications of how effective our monetization investments are.
MAU decreased 17.4% in the three months ended January 31, 2026 when compared to the same period a year ago. As of January 31, 2026, users in emerging markets represented about 76.5% of our MAU, as compared to 77.3% from the same period a year ago.
ARPMAU for the three months ended January 31, 2026 increased 47.5% when compared to the same period a year ago, primarily due to the increase in price per advertising impression from the same period a year ago, which was driven by increased competition for our ad inventory as well as strong year-over-year subscription revenue growth. Subscription revenue and subscription billings for the three months ended January 31, 2026 increased 32.5% and 2.0%, respectively, when compared to the same period a year ago, as discussed below.
The following tables present the MAU – Zedge App and ARPMAU – Zedge App for the three months ended January 31, 2026 as compared to the same period in the prior year:
| Three Months Ended January 31, | ||||||||||||
| (in millions, except ARPMAU - Zedge App) | 2026 | 2025 | % Change | |||||||||
| MAU- Zedge App | 20.4 | 24.7 | -17.4 | % | ||||||||
| Developed Markets MAU - Zedge App | 4.8 | 5.6 | -14.3 | % | ||||||||
| Emerging Markets MAU - Zedge App | 15.6 | 19.1 | -18.3 | % | ||||||||
| Emerging Markets MAU - Zedge App/Total MAU - Zedge App | 76.5 | % | 77.3 | % | -1.1 | % | ||||||
| ARPMAU - Zedge App | $ | 0.1146 | $ | 0.0777 | 47.5 | % | ||||||
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The following charts present the MAU – Zedge App and ARPMAU – Zedge App for the consecutive eight fiscal quarters ended January 31, 2026:
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GuruShots-MAPs and ARPMAP
The presentation of our results of operations related to our GuruShots segment includes disclosure of two key performance indicators – Monthly Active Payers (MAP) and Average Revenue Per Monthly Active Payer (ARPMAP) as discussed below:
Monthly Active Payers (“MAPs”). We define a MAP as a unique active user on the GuruShots app or GuruShots.com in a month who completed at least one in-app purchase (“IAP”) during that time period. MAPs for a time period longer than one month are the average MAPs for each month during that period. We estimate the number of MAPs by aggregating certain data from third-party attribution platforms. MAP is a key performance indicator because it shows the size of GuruShots’ active paying user base which is a main driver of GuruShots’ revenue. Changes and trends in MAP are useful for measuring the general health of GuruShots’ business, gauging both present and potential users/customers’ experience, assessing the efficacy of product improvements and marketing campaigns and overall user engagement.
Average Revenue Per Monthly Active Payer (“ARPMAP”). We define ARPMAP as (i) the total revenue from IAPs derived from GuruShots and GuruShots.com in a monthly period, divided by (ii) MAPs in that same period. ARPMAP for a particular time period longer than one month is the average ARPMAP for each month during that period. ARPMAP shows how efficiently we are monetizing each MAP.
MAP decreased 43.1% in the three months ended January 31, 2026 when compared to the same period a year ago, primarily attributable to Apple’s App Tracking Transparence (“ATT”) framework which impedes our ability to invest in paid user acquisition (“PUA”) campaigns profitably in terms of return on ad spend or (“ROAS”). As such, we continued to scale back our PUA spend for GuruShots while testing new campaigns and creatives in order to unearth attractive ROAS scaling opportunities. ARPMAP increased 25.6% to $50.0 in the three months ended January 31, 2026 from $39.8 in the three months ended January 31, 2025.
The following table shows our MAP and ARPMAP for the three months ended January 31, 2026 and 2025.
| Three Months Ended January 31, | ||||||||||||
| 2026 | 2025 | % Change | ||||||||||
| Monthly Active Payers | 2,659 | 4,672 | -43.1 | % | ||||||||
| Average Revenue per Monthly Active Payer | $ | 50.0 | $ | 39.8 | 25.6 | % | ||||||
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The following charts present the MAP and ARPMAP – GuruShots for the consecutive eight quarters ended January 31, 2026:
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Our KPIs related to GuruShots are not based on any standardized industry methodology and are not necessarily calculated in the same manner that other companies or third parties may use to calculate these or similarly titled measures. The numbers that we use to calculate MAP and ARPMAP are derived from data that we generate internally. While these numbers are based on what we believe to be reasonable judgments and estimates for the applicable period of measurement, there are inherent challenges in measuring usage and engagement. We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy.
Results of Operations
The following table summarizes our historical condensed consolidated statements of operations data:
| Three Months Ended January 31, | Changes | Six Months Ended January 31, | Changes | |||||||||||||||||||||
| 2026 | 2025 | % | 2026 | 2025 | % | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Revenues | $ | 8,254 | $ | 6,979 | 18.3 | % | $ | 15,864 | $ | 14,173 | 11.9 | % | ||||||||||||
| Direct cost of revenues | 561 | 447 | 25.5 | % | 1,116 | 908 | 22.9 | % | ||||||||||||||||
| Selling, general and administrative | 6,683 | 7,126 | -6.2 | % | 12,599 | 13,935 | -9.6 | % | ||||||||||||||||
| Depreciation and amortization | 187 | 317 | -41.0 | % | 403 | 698 | -42.3 | % | ||||||||||||||||
| Restructuring charges | - | 481 | -100.0 | % | - | 481 | -100.0 | % | ||||||||||||||||
| Impairment of intangible assets | 3,570 | - | nm | 3,570 | - | nm | ||||||||||||||||||
| Impairment of capitalized software and technology development costs | 145 | 827 | -82.5 | % | 145 | 827 | -82.5 | % | ||||||||||||||||
| Loss from operations | (2,892 | ) | (2,219 | ) | -30.3 | % | (1,969 | ) | (2,676 | ) | 26.4 | % | ||||||||||||
| Interest and other income, net | 124 | 171 | -27.5 | % | 268 | 352 | -23.9 | % | ||||||||||||||||
| Net loss resulting from foreign exchange transactions | (138 | ) | (86 | ) | -60.5 | % | (184 | ) | (100 | ) | -84.0 | % | ||||||||||||
| Income taxes benefit | (617 | ) | (455 | ) | -35.6 | % | (384 | ) | (406 | ) | 5.4 | % | ||||||||||||
| Net loss | $ | (2,289 | ) | $ | (1,679 | ) | -36.3 | % | $ | (1,501 | ) | $ | (2,018 | ) | 25.6 | % | ||||||||
Comparison of Our Results of Operations for the Three and Six Months ended January 31, 2026 and 2025
Revenues
The following table sets forth the composition of our revenues for the three and six months ended January 31, 2026 and 2025:
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||
| (in thousands, except percentage) | ||||||||||||||||||||||||
| Zedge Marketplace | ||||||||||||||||||||||||
| Advertising revenue | $ | 5,558 | $ | 4,698 | 18.3 | % | $ | 10,724 | $ | 9,572 | 12.0 | % | ||||||||||||
| Paid subscription revenue | 1,634 | 1,233 | 32.5 | % | 3,154 | 2,415 | 30.6 | % | ||||||||||||||||
| Other revenues | 517 | 432 | 19.7 | % | 973 | 926 | 5.1 | % | ||||||||||||||||
| Total Zedge Marketplace revenue | 7,709 | 6,363 | 21.2 | % | 14,851 | 12,913 | 15.0 | % | ||||||||||||||||
| GuruShots | ||||||||||||||||||||||||
| Digital goods and services | 545 | 616 | -11.5 | % | 1,013 | 1,260 | -19.6 | % | ||||||||||||||||
| Total revenue | $ | 8,254 | $ | 6,979 | 18.3 | % | $ | 15,864 | $ | 14,173 | 11.9 | % | ||||||||||||
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The following table summarizes our subscription revenue for the three and six months ended January 31, 2026 and 2025:
| Three Months Ended January 31, |
Six Months Ended January 31, |
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| 2026 | 2025 | % Change | 2026 | 2025 | % Changes | |||||||||||||||||||
| (in thousands, except revenue per subscriber and percentages) | ||||||||||||||||||||||||
| Subscription Revenue | $ | 1,634 | $ | 1,233 | 32.5 | % | $ | 3,154 | $ | 2,415 | 30.6 | % | ||||||||||||
| Active subscriptions net increase | 100 | 93 | 7.5 | % | 191 | 122 | 56.6 | % | ||||||||||||||||
| Active subscriptions at end of period | 1,175 | 791 | 48.5 | % | 1,175 | 791 | 48.5 | % | ||||||||||||||||
| Average active subscriptions during the period | 1,125 | 693 | 62.3 | % | 1,077 | 686 | 57.0 | % | ||||||||||||||||
| Average monthly revenue per active subscription | $ | 0.48 | $ | 0.59 | -18.4 | % | $ | 0.49 | $ | 0.59 | -16.9 | % | ||||||||||||
Our measure of subscription billings is a non-GAAP measure. The following table presents a reconciliation of subscription billings to the most directly comparable GAAP financial measures, for each of the periods indicated. We calculate subscription billings by adding the change in subscription deferred revenue between the start and end of the period to subscription revenue recognized in the same period. Subscription billings is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the growth of the subscription-based portion of our business, which is a critical part of our business plan.
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Subscription Revenue | $ | 1,634 | $ | 1,233 | $ | 3,154 | $ | 2,415 | ||||||||||||||||
| Changes in subscription deferred revenue | 274 | 638 | 640 | 1,232 | ||||||||||||||||||||
| Subscription Billings (Non-GAAP) | $ | 1,908 | $ | 1,871 | 2.0 | % | $ | 3,794 | $ | 3,647 | 4.0 | % | ||||||||||||
The following table summarizes Zedge Premium gross and net revenue for the three and six months ended January 31, 2026 and 2025:
| Three Months Ended January 31, | Six Months Ended July 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Changes | 2026 | 2025 | % Changes | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Zedge Premium – gross revenue (GTV) | $ | 786 | $ | 679 | 15.8 | % | $ | 1,441 | $ | 1,360 | 6.0 | % | ||||||||||||
| Zedge Premium – net revenue | $ | 511 | $ | 431 | 18.6 | % | $ | 965 | $ | 924 | 4.4 | % | ||||||||||||
| Gross margin | 65 | % | 63 | % | 67 | % | 68 | % | ||||||||||||||||
Three Months Ended January 31, 2026 Compared to Three Months Ended January 31, 2025
For the three months ended January 31, 2026, our total revenue increased 18.3% compared to the same period in the prior year, primarily attributable to an increase in advertising and subscription revenue, partially offset by an 11.5% decline in GuruShots’ revenue during the corresponding periods.
For the three months ended January 31, 2026, our advertising revenue increased 18.3% compared to the same period in the prior year, primarily due to higher average prices per advertising impression paid by advertisers on our Zedge App platform, reflecting increased competition for our ad inventory. The strong growth in the advertising revenue from our Zedge App was partially offset by a 51.9% decline in Emojipedia’s revenue during the corresponding periods.
For the three months ended January 31, 2026, our subscription revenue increased 32.5%, and our subscription billings increased 2.0%, compared to the same period in the prior year, primarily due to the lifetime subscription offering for Android and iOS users we rolled out in August 2023 and August 2024, respectively.
For the three months ended January 31, 2026, our other revenue increased 19.7% compared to the same period in the prior year, primarily attributable to an increase in Zedge Premium net revenue which increased 18.6% during the corresponding period.
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For the three months ended January 31, 2026, digital goods and services revenue declined 11.5% compared to the same period in the prior year primarily due to a 43.1% decline in GuruShots’ MAP partially offset by revenue contribution from DataSeeds.
Six Months Ended January 31, 2026 Compared to Six Months Ended January 31, 2025
For the six months ended January 31, 2026, our total revenue increased 11.9% compared to the same period in the prior year, primarily attributable to an increase in advertising and subscription revenue, partially offset by a 19.6% decline in GuruShots’ revenue during the corresponding periods.
For the six months ended January 31, 2026, our advertising revenue increased 12.0% compared to the same period in the prior year, primarily due to higher average prices per advertising impression paid by advertisers on our Zedge App platform, reflecting increased competition for our ad inventory. The strong growth in the advertising revenue from our Zedge App was partially offset by a 46.9% decline in Emojipedia’s revenue during the corresponding periods.
For the six months ended January 31, 2026, our subscription revenue increased 30.6%, and our subscription billings increased 4.0%, compared to the same period in the prior year, primarily due to the lifetime subscription offering for Android and iOS users we rolled out in August 2023 and August 2024, respectively.
For the six months ended January 31, 2026, our other revenue increased 5.1% compared to the same period in the prior year, primarily attributable to a 4.4% increase in Zedge Premium net revenue.
For the three months ended January 31, 2026, digital goods and services revenue declined 19.6% compared to the same period in the prior year primarily due to a 35.8% decline in GuruShots’ MAP partially offset by revenue contribution from DataSeeds.
Direct cost of revenues. Direct cost of revenues consists primarily of content hosting and content delivery costs.
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Changes | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Direct cost of revenues | $ | 561 | $ | 447 | 25.5 | % | $ | 1,116 | $ | 908 | 22.9 | % | ||||||||||||
| As a percentage of revenues | 6.8 | % | 6.4 | % | 7.0 | % | 6.4 | % | ||||||||||||||||
Direct cost of revenues increased 25.5% in the three months ended January 31, 2026 compared to the same period in the prior year primarily due to higher data center costs and additional costs related to certain new initiatives, including DataSeeds and other products under development. As a percentage of revenue, direct cost of revenues in the three months ended January 31, 2026 increased to 6.8% from 6.4% for the same period in the prior year.
Direct cost of revenues increased 22.9% in the six months ended January 31, 2026 compared to the same period in the prior year primarily due to higher data center costs and additional costs related to certain new initiatives, including DataSeeds and other products under development. As a percentage of revenue, direct cost of revenues in the three months ended January 31, 2026 increased to 7.0% from 6.4% for the same period in the prior year.
Selling, general and administrative expense. Selling, general and administrative expense (“SG&A”) consists mainly of payroll and benefits, stock-based compensation expense (as discussed below), PUA expenses, third-party payment processing fee relate to in-app purchases, marketing, consulting, professional fees, software licensing (“SaaS”), recruiting fees, facilities and public company related expenses.
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Changes | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Selling, general and administrative | $ | 6,683 | $ | 7,126 | -6.2 | % | $ | 12,599 | $ | 13,935 | -9.6 | % | ||||||||||||
| As a percentage of revenues | 81.0 | % | 102.1 | % | 79.4 | % | 98.3 | % | ||||||||||||||||
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Three Months Ended January 31, 2026 Compared to Three Months Ended January 31, 2025
SG&A decreased 6.2% for the three months ended January 31, 2026, compared to the prior-year period. The decrease was primarily attributable to lower PUA and reduced net personnel-related expenses following the global restructuring initiated in January 2025 as well as the expiration of the $8 million retention bonus program related to the GuruShots acquisition. These cost savings were partially offset by the strengthening of the EUR and ILS against the USD, merit-based compensation increases, and certain one-time severance payments.
For the three months ended January 31, 2026, we modestly reduced PUA spending for the Zedge App and significantly reduced PUA spending for GuruShots compared to the prior-year period. Combined PUA spending decreased 17.6% to $1.6 million for the three months ended January 31, 2026, from $2.0 million in the prior-year period. We expect to continue investing in PUA for the Zedge App in the near term, subject to maintaining attractive return on ad spend (“ROAS”).
As a percentage of revenue, SG&A was 81.0% for the three months ended January 31, 2026, compared to 102.1% for the same period in the prior year.
Six Months Ended January 31, 2026 Compared to Six Months Ended January 31, 2025
SG&A decreased 9.6% for the six months ended January 31, 2026, compared to the prior-year period. The decrease was primarily attributable to lower PUA and reduced net personnel-related expenses following the global restructuring initiated in January 2025 as well as the expiration of the $8 million retention bonus program related to the GuruShots acquisition. These cost savings were partially offset by the strengthening of the EUR and ILS against the USD, merit-based compensation increases, and certain one-time severance payments.
For the six months ended January 31, 2026, PUA spending for the Zedge App were relatively flat and we significantly reduced PUA spending for GuruShots, compared to the prior-year period. Combined PUA spending decreased 11.6% to $3.3 million for the six months ended January 31, 2026, from $3.8 million in the prior-year period.
As a percentage of revenue, SG&A was 79.4% for the three months ended January 31, 2026, compared to 98.3% for the same period in the prior year.
Global headcount as of January 31, 2026 totaled 85 (including 18 at GuruShots) compared to 106 (including 29 at GuruShots) as of January 31, 2025 with the majority of our employees currently based in Lithuania and Israel.
The following table summarizes stock-based compensation expense included in the SG&A for the three and six months ended January 31, 2026 and 2025:
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Changes | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Stock-based compensation expense | $ | 275 | $ | 603 | -54.4 | % | $ | 379 | $ | 982 | -61.4 | % | ||||||||||||
Stock-based compensation expense decreased 54.4% for the three months ended January 31, 2026, compared to the same period in the prior year. The decrease was primarily driven by the full amortization of $4 million in stock-based compensation associated with the restricted stock issued in connection with the GuruShots acquisition, which was amortized over a three-year period that concluded in March 2025.
Stock-based compensation expense decreased 61.4% for the six months ended January 31, 2026, compared to the same period in the prior year. The decrease was primarily driven by the full amortization of $4 million in stock-based compensation associated with the restricted stock issued in connection with the GuruShots acquisition, which was amortized over a three-year period that concluded in March 2025.
Certain stock options, DSUs and restricted stock grants are more fully described in Note 7 Stock-Based Compensation to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
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Depreciation and amortization. Depreciation and amortization expense consists mainly of amortization of intangible assets at GuruShots and Emojipedia and capitalized software and technology development costs of our internal developers on various projects that we invested in specific to the various platforms on which we operate our service.
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Changes | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Depreciation and amortization | $ | 187 | $ | 317 | -41.0 | % | $ | 403 | $ | 698 | -42.3 | % | ||||||||||||
| As a percentage of revenues | 2.3 | % | 4.5 | % | 2.5 | % | 4.9 | % | ||||||||||||||||
Depreciation and amortization expense decreased by 41.0% for the three months ended January 31, 2026, compared to the corresponding period in the prior year. This decline was principally attributable to the $0.8 million impairment charge recognized in the second quarter of fiscal 2025 related to GuruShots’ capitalized software and technology development costs, which was incurred in connection with the global restructuring initiative.
Depreciation and amortization expense decreased by 42.3% for the six months ended January 31, 2026, compared to the corresponding period in the prior year. This decline was principally attributable to the $0.8 million impairment charge recognized in the second quarter of fiscal 2025 related to GuruShots’ capitalized software and technology development costs, which was incurred in connection with the global restructuring initiative.
Impairment of intangible assets. For the three and six months ended January 31, 2026, we recorded an approximately $3.6 million impairment of intangible assets of our Emojipedia assets group, as more fully described in Note 5 Intangible Assets and Goodwill to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Restructuring charges. For the three and six months ended January 31, 2025, we recorded an approximately $0.5 million restructuring charge primarily consisting of severance and employee benefits in connection with the global restructuring initiated in January 2025, as more fully described in Note 15 Restructuring and Other Related Charges to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Impairment of capitalized software and technology development costs.
For the three and six months ended January 31, 2026, we wrote off approximately $145,000 of Emojipedia’s capitalized software and technology development costs in connection with the allocation of impairment loss of the Emojipedia assets group, as more fully described in Note 5 Intangible Assets and Goodwill to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
For the three and six months ended January 31, 2025, we wrote off approximately $0.8 million of GuruShots’ capitalized software and technology development costs in connection with the global restructuring initiated in January 2025, as more fully described in Note 15 Restructuring and Other Related Charges to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Interest and other income, net.
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Changes | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Interest and other income, net | $ | 124 | $ | 171 | -27.5 | % | $ | 268 | $ | 352 | -23.9 | % | ||||||||||||
| As a percentage of revenues | 1.5 | % | 2.5 | % | 1.7 | % | 2.5 | % | ||||||||||||||||
In the three months ended January 31, 2026, interest and other income, net decreased by 27.5% compared to the corresponding period in the prior year primarily due to lower cash and cash equivalent balance coupled with lower interest yield in the current period.
In the six months ended January 31, 2026, interest and other income, net decreased by 23.9% compared to the corresponding period in the prior year primarily due to lower cash and cash equivalent balance coupled with lower interest yield in the current period.
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Net loss resulting from foreign exchange transactions. Net loss resulting from foreign exchange transactions is comprised of gains and losses generated from movements in NOK, EUR and ILS relative to the U.S. Dollar, including gains or losses from our hedging activities.
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Changes | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Net loss resulting from foreign exchange transactions | $ | (138 | ) | $ | (86 | ) | -60.5 | % | $ | (184 | ) | $ | (100 | ) | -84.0 | % | ||||||||
| As a percentage of revenues | -1.7 | % | -1.2 | % | -1.2 | % | -0.7 | % | ||||||||||||||||
For the three months ended January 31, 2026, net loss from foreign exchange transactions increased 60.5% compared to the same period in the prior year, primarily due to unfavorable foreign exchange rate movements.
For the six months ended January 31, 2026, net loss from foreign exchange transactions increased 84.0% compared to the same period in the prior year, primarily due to unfavorable foreign exchange rate movements.
We recognized mark-to-market (“MTM”) gains of $0 and $18,000 from NOK and EUR hedging activities as of January 31, 2026 and July 31, 2025, respectively, as more fully described in Note 4, Derivative Instruments, to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
As a result of the global restructuring initiated in January 2025, which included the closure of the Company’s Norway operations, we no longer have exposure to USD/NOK foreign exchange risk. Accordingly, there were no outstanding NOK forward contracts as of January 31, 2026 and July 31, 2025. We have also concluded that there is no current requirement to enter into USD/EUR forward contracts beyond August 2025. As a result, there were no outstanding EUR forward contracts as of January 31, 2026. Therefore, there was no MTM adjustment as of January 31, 2026.
Provision for Income taxes
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Changes | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Income taxes benefit | $ | (617 | ) | $ | (455 | ) | -35.6 | % | $ | (384 | ) | $ | (406 | ) | 5.4 | % | ||||||||
| As a percentage of revenues | -7.5 | % | -6.5 | % | -2.4 | % | -2.9 | % | ||||||||||||||||
In the three months ended January 31, 2026, we generated a pretax loss of $2.9 million and recorded an income tax benefit of $0.6 million, representing an effective tax rate of 21.2%. This rate falls below our estimated effective tax rate for fiscal 2026 of 24.4%, primarily due to a discrete tax item related to the impairment charges of Emojipedia group assets with an estimated tax rate of 22.4%.
In the six months ended January 31, 2026, we incurred a pretax loss of $1.9 million and recorded an income tax benefit of $0.4 million representing an effective tax rate of 20.4%. This rate falls below our estimated effective tax rate for fiscal 2026 of 24.4%, primarily due to a discrete tax item related to the impairment charges of Emojipedia group assets with an estimated tax rate of 22.4% and a discrete tax item of $9,700 associated with the vesting DSUs during the current period.
Comparison of our Segment Results of Operations
The following table presents the results for our Zedge Marketplace and GuruShots segment income (loss) from operations for the three and six months ended January 31, 2026 and 2025:
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Changes | |||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Segment income (loss) from operations: | ||||||||||||||||||||||||
| Zedge Marketplace: | $ | (2,115 | ) | $ | 41 | -5258.5 | % | $ | (552 | ) | $ | 976 | -156.6 | % | ||||||||||
| GuruShots: | (777 | ) | (2,260 | ) | 65.6 | % | (1,417 | ) | (3,652 | ) | 61.2 | % | ||||||||||||
| Total | $ | (2,892 | ) | $ | (2,219 | ) | -30.3 | % | $ | (1,969 | ) | $ | (2,676 | ) | 26.4 | % | ||||||||
Three Months Ended January 31, 2026 Compared to Three Months Ended January 31, 2025
For the three months ended January 31, 2026, loss from operations related to the Zedge Marketplace increased to $2.1 million, compared to income from operations of $41,000 for the three months ended January 31, 2025, primarily attributable to impairment charges of $3.7 million related to the Emojipedia assets group offset by higher revenue during the current period.
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For the three months ended January 31, 2026, loss from operations related to GuruShots decreased 65.6% to $0.8 million, compared to $2.3 million for the three months ended January 31, 2025. The decrease in operating loss was primarily attributable to the restructuring charge of $0.9 million in the prior period coupled with lower SG&A resulting from the global restructuring initiated in January 2025 and lower PUA spend year on year.
Six Months Ended January 31, 2026 Compared to Six Months Ended January 31, 2025
For the six months ended January 31, 2026, loss from operations related to the Zedge Marketplace was $.6 million, compared to income from operations of $1.0 million for the six months ended January 31, 2025, primarily attributable to impairment charges of $3.7 million related to the Emojipedia assets group offset by higher revenue during the current period.
For the six months ended January 31, 2026, loss from operations related to GuruShots decreased 61.2% to $1.4 million, compared to $3.7 million for the six months ended January 31, 2025. The decrease in operating loss was primarily attributable to the restructuring charge of $0.9 million in the prior period coupled with lower SG&A resulting from the global restructuring initiated in January 2025 and lower PUA spend year on year.
Liquidity and Capital Resources
General
At January 31, 2026, we had cash and cash equivalents of $19.1 million and working capital (current assets less current liabilities) of $15.3 million, compared to $18.6 million and $14.7 million, respectively, at July 31, 2025. We expect that our cash and cash equivalents on hand and our cash flow from operations will be sufficient to meet our anticipated cash requirements for the twelve-month period ending March 16, 2027. We maintain a revolving credit facility of $4 million, including a foreign exchange contract facility of up to $7.5 million with WAB, as discussed below under Financing Activities and in Note 10, Revolving Credit Facility, to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
The following tables present selected financial information for the six months ended January 31, 2026 and 2025:
| Six Months Ended January 31, | ||||||||||||
| (in thousands) | 2026 | 2025 | $ Changes | |||||||||
| Cash flows provided by (used in): | ||||||||||||
| Operating activities | $ | 1,683 | $ | 1,878 | $ | (195 | ) | |||||
| Investing activities | (257 | ) | (266 | ) | 9 | |||||||
| Financing activities | (1,039 | ) | (1,494 | ) | 455 | |||||||
| Effect of exchange rate changes on cash and cash equivalents | 110 | (62 | ) | 172 | ||||||||
| Increase in cash and cash equivalents | $ | 497 | $ | 56 | $ | 441 | ||||||
Operating Activities
Our cash flow from operations can vary significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, particularly those related to trade accounts receivable and trade accounts payable.
Net cash provided by operating activities was $1.7 million for the six months ended January 31, 2026. This amount primarily reflects a net loss of $1.5 million, adjusted for non-cash items of $4.4 million, including $0.4 million of amortization and depreciation, $0.3 million of stock-based compensation expense, and $3.7 million of impairment charges. These adjustments were partially offset by a $1.2 million net decrease resulting from changes in operating assets and liabilities, driven primarily by a $0.6 million increase in accounts receivable from a large customer, $0.4 million increase in prepaid expenses and other current assets primarily attributable to the current tax provision related to the impairment charges and a $0.8 million decrease in accrued expenses related to payroll and board compensation, partially offset by a $0.6 million increase in deferred revenue associated with lifetime subscriptions sold during the period.
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Net cash provided by operating activities was $1.9 million for the six months ended January 31, 2025. This amount primarily reflects a net loss of $2.0 million, adjusted for $2.3 million of non-cash items, including $0.7 million of amortization and depreciation, $1.0 million of stock-based compensation expense, and $0.6 million of net-of-tax impairment charges related to capitalized software and technology development costs. These adjustments were further augmented by a $1.6 million net decrease resulting from changes in operating assets and liabilities, driven primarily by a $0.5 million increase in accrued expenses related to restructuring charges and a $1.2 million increase in deferred revenue associated with lifetime subscriptions sold during the period.
Changes in Trade Accounts Receivable
Gross trade accounts receivable increased $0.6 million to $3.8 million at January 31, 2026 from $3.2 million at July 31, 2025, primarily due to higher revenue generated from one large customer plus initial revenue contribution from DataSeeds in the three months period ended January 31, 2026 when compared to the three months period ended July 31, 2025.
Investing Activities
Cash used in investing activities in the three and six months ended January 31, 2026 and 2025 consisted primarily of capitalized software and technology development costs related to various projects that we invested in specific to the various platforms on which we operate our service.
Financing Activities
In the six months ended January 31, 2026 and 2025, we repurchased – under our Board-approved share repurchase program – 248,948 shares and 464,419 shares, respectively, of our Class B common stock for approximately $811,000 and $1,472,000 respectively.
In the six months ended January 31, 2026 and 2025, we repurchased 4,312 shares and 6,903 shares from certain employees respectively, of our Class B common stock for $13,000 and $22,000, respectively, to administratively facilitate the withholding and subsequent remittance of personal income and payroll taxes in connection with the vesting of DSUs.
Under the Inflation Reduction Act signed into law in 2022, the excise tax on stock repurchases was approximately $44,000 and $8,000 for the fiscal years ended July 31, 2025 and 2023. There was no excise tax due for the fiscal year ended July 31, 2024 due to the de minimis exception threshold.
On October 14, 2025, we declared a quarterly cash dividend of $0.016 per share, aggregating approximately $208,000 which was paid on November 7, 2025, to stockholders of record as of October 24, 2025.
On January 14, 2026, we declared a quarterly cash dividend of $0.016 per share, aggregating approximately $209,000. The dividend was included in Accrued expenses and other current liabilities (see Note 6) as of January 31, 2026, and was paid on February 10, 2026, to stockholders of record as of January 30, 2026. as more fully described in Note 14, Shareholder Distributions and Earnings and Profits (E&P), to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Concentration of Credit Risk and Significant Customers
Historically, we have had very little or no bad debt, which is common with other platforms of our size that derive their revenue from mobile advertising, as we aggressively manage our collections and perform due diligence on our customers. In addition, the majority of our revenue is derived from large, credit-worthy customers, e.g. Google, Facebook, Vungle and AppLovin, and we terminate our services with smaller customers immediately upon balances becoming past due. Since these smaller customers rely on us to derive their own revenue, they generally pay their outstanding balances on a timely basis.
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In the six months ended January 31, 2026 and 2025, we had only one large customer who represented 34% and 31% of our revenue respectively. At January 31, 2026, two customers represented 33% and 19% of our accounts receivable balance, respectively. At July 31, 2025, two customers represented 48% and 13% of our accounts receivable balance, respectively. All of these significant customers were advertising exchanges operated by leading companies, and the receivables represent many smaller amounts due from their advertisers.
Contractual Obligations and Other Commercial Commitments
Smaller reporting companies are not required to provide the information required by this item.
Off-Balance Sheet Arrangements
At January 31, 2026, we did not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Item 3. Quantitative and Qualitative Disclosures About Market Risks
Smaller reporting companies are not required to provide the information required by this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level as of January 31, 2026.
Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended January 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Legal proceedings in which we are involved are more fully described in Note 9, Commitments and Contingencies, to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
There are no material changes from the risk factors previously disclosed in Item 1A to Part I of the 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
In October 2021, our Board of Directors authorized a repurchase program of up to 1.5 million shares of our Class B common stock at a maximum aggregate purchase price of $3 million. In September 2024, upon the completion of the initial $3.0 million repurchase program, our Board of Directors authorized additional $5 million for the repurchase program with no limitation on the number of shares that may be repurchased. Repurchases may be made from time to time through open market purchases or through privately negotiated transactions, subject to market conditions, applicable legal requirements and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. We may also, from time to time, enter into “Rule 10b5-1” trading plans to facilitate repurchases of our shares. The repurchase program does not obligate us to acquire any particular amount of our Class B common stock, has no expiration date and may be modified, suspended, or terminated at any time at our discretion.
The following table summarizes the share repurchase activity for the second quarter of fiscal 2026:
| Period | Total Number of Shares Purchased(1) | Average Price Paid Per Share (2) | Total Number of Shares Purchased as Part of Publicly Announced Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | ||||||||||||
| (in thousands) | (in thousands) | (in thousands) | ||||||||||||||
| November 1, 2025 to November 30, 2025 | - | $ | - | - | $ | 602 | ||||||||||
| December 1, 2025 to December 31, 2025 | 3 | $ | 3.29 | 3 | $ | 592 | ||||||||||
| January 1, 2025 - January 31, 2026 | 7 | $ | 3.34 | 7 | $ | 567 | ||||||||||
| Total | 10 | 10 | ||||||||||||||
| (1) | The total number of shares purchased includes shares repurchased as part of publicly announced programs and shares repurchased in connection with tax payments due upon vesting of DSUs. |
| (2) | The average price paid per share includes any broker commissions. |
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable
Item 5. Other Information
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Item 6. Exhibits
| * | Filed or furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ZEDGE, INC. | ||
| March 16, 2026 | By: | /s/ JONATHAN REICH |
|
Jonathan Reich Chief Executive Officer | ||
| March 16, 2026 | By: | /s/ YI TSAI |
|
Yi Tsai Chief Financial Officer | ||
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