Zedge, Inc. — Q4 and Full-Year Fiscal 2026 Earnings Summary

Financial Performance:

• Total revenue increased 4.0% to $7.8 million in Q4 FY26 and 7.6% to $31.6 million for full-year FY26, compared to $7.5 million and $29.4 million respectively in the prior year periods.
• Subscription revenue grew 25.6% to $1.8 million in Q4 and 29.5% to $6.6 million for the full year.
• GAAP operating income turned positive at $0.3 million in Q4 (vs. $0.7 million loss) and narrowed to a $0.6 million loss for the full year (vs. $3.2 million loss).
• GAAP net income was $0.4 million in Q4 ($0.03 diluted EPS) and a $0.1 million loss ($0.02 diluted EPS) for the full year, compared to a $0.6 million loss and $2.4 million loss respectively in the prior year.
• Non-GAAP net income was $0.5 million ($0.04 diluted EPS) in Q4 and $3.1 million ($0.24 diluted EPS) for the full year.
• Free cash flow increased 220.3% to $1.6 million in Q4 and 46.6% to $4.2 million for the full year.
• Adjusted EBITDA rose 75.6% to $0.5 million in Q4 and 134.2% to $4.1 million for the full year.
• Deferred revenue increased 13.4% to $6.1 million.
• Cash and cash equivalents were $20.3 million as of July 31, 2026.

Guidance and Future Outlook:

• No specific forward financial guidance or quantitative outlook for future periods was provided in the press release.
• Management highlighted the potential to expand DataSeeds.AI into training data, model evaluation, annotation, data enrichment, and specialized datasets for physical AI and robotics.

Business Segments and Product Lines:

• DataSeeds.AI was established as a commercial business, securing repeat orders including the company's first six-figure order.
• Howard Jonas led a $7.7 million insider investment in September to accelerate DataSeeds' growth and is taking a more active role.
• Morris Berger was hired as CEO earlier in the month.
• Zedge Premium Gross Transaction Value (GTV) increased 1.9% in Q4.
• Active subscriptions grew 35.3% to approximately 1.3 million.
• Average Revenue Per Monthly Active User (ARPMAU) increased 30.5% to $0.121.
• Monthly Active Users (MAU) declined 16.8% to 19.3 million in Q4, with well-developed markets down 22.2% and emerging markets down 15.2%.

Market and Competitive Landscape:

• Consolidated revenue growth was negatively impacted by a marked decline at Emojipedia, which reduced growth by approximately 300 basis points.
• The company serves 20 million monthly active users across its platforms.

Risks and Challenges:

• The press release notes a decline in MAU and a specific decline in revenue at the Emojipedia business unit.
• Share repurchases were suspended in Q1 FY27 following the September capital raise.

Management Commentary and Tone:

• President and COO Jonathan Reich described FY26 as a "strong recovery year" driven by monetization improvements and FY25 restructuring benefits.
• CEO Morris Berger stated DataSeeds has the ingredients to become a "meaningful growth business" leveraging Zedge's creator communities and data collection technology.
• Management expressed confidence in DataSeeds' ability to produce rights-cleared, multimodal datasets tailored to complex customer requirements.

Other Key Points:

• The company returned approximately $2.7 million to stockholders through share repurchases and quarterly dividends.
• A quarterly dividend of $0.02 per share was paid; the dividend was initiated during the year and subsequently increased by 25%.
• The company repurchased 686,477 shares during the full fiscal year.
• A $7.7 million insider investment was led by Howard Jonas in September 2026.
• The company incurred a $3.57 million impairment charge of intangible assets and a $145,000 impairment charge of capitalized software during the full year.
• Stock-based compensation decreased to $0.5 million for the full year compared to $1.4 million in the prior year.