Zedge Inc

Previous wording

We are part of the ‘Creator Economy,’ where over 1 billion people create and share their content across social platforms, mobile, and video games, and content marketplaces. According to Linktree, over 200 million identify as creators, people who use their influence, skill, and creativity to amass an audience and monetize it. Furthermore, TechCrunch reports that 12% of full-time creators earn more than $50,000 per year, while Influencer Hub reports 10% of influencers earn more than $100,000 per year. We view the Creator Economy as an opportunity for Zedge to expand its business, especially as we execute by connecting our gamers with our marketplace.

Current wording

We are part of the ‘Creator Economy,’ where over 1 billion people create and share their content across social platforms, mobile, and video games, and content marketplaces. Goldman Sachs Research expects the 50 million global creators to grow at a 10-20% compound annual growth rate during the next five years. Furthermore, Goldman Sachs reports that professional creators earn more than $100,000 per year. We view the Creator Economy as an opportunity for Zedge to expand its business, especially as we execute by connecting our gamers with our marketplace.

Previous wording

The Zedge Ringtones and Wallpapers app (which is named “Zedge Wallpapers” in the App Store), which we refer to as our “Zedge App,” 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. As of January 31, 2024, our Zedge App has been installed nearly 648 million times since inception and had 28.8 million monthly active users (“MAU”) as of January 31, 2024. MAU is a key performance indicator (“KPI”) 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 for a price, via ‘Zedge Premium,’ the section of our marketplace where we offer premium content (i.e., for purchase). In turn, our users utilize the content to personalize their phones and express their individuality.

Current wording

The Zedge Ringtones and Wallpapers app (which is named “Zedge Wallpapers” in the App Store), which we refer to as our “Zedge App,” 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. As of April 30, 2024, our Zedge App had been installed nearly 661 million times since inception and had 27.7 million monthly active users (“MAU”). MAU is a key performance indicator (“KPI”) 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 for a price, via ‘Zedge Premium,’ the section of our marketplace where we offer premium content (i.e., for purchase). In turn, our users utilize the content to personalize their phones and express their individuality.

Previous wording

The Zedge Marketplace 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 (or web-based) 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 weekly, monthly, annual or lifetime subscription. In April 2023, we introduced a subscription tier in the iOS version of the app. As of January 31, 2024, we had approximately 648,000 active subscribers.

Current wording

The Zedge Marketplace 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 weekly, monthly, annual or lifetime subscription. In April 2023, we introduced a subscription tier in the iOS version of the Zedge App. As of April 30, 2024, we had approximately 654,000 active subscribers.

Previous wording

In April 2022, we acquired GuruShots, a recognized category leader focused on gamifying the photography vertical. 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 700,000 photographs and casting close to 3.5 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.

Current wording

In April 2022, we acquired GuruShots, a recognized category leader focused on gamifying the photography vertical. 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 approximately 600,000 photographs and casting close to 3 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.

Previous wording

Beyond our commitment to growing both the Zedge App and GuruShots on a standalone basis, we believe that there are many potential synergies that we can capitalize on that exist between the two businesses. Specifically, we plan to enable the ability for GuruShots players to become Zedge Premium artists and sell their photos to our audience of 28+ million MAU as standard digital images or NFTs. In addition, we look to benefit from the experience that the GuruShots team possesses and test gamifying the Zedge App. We believe that successful gamification can contribute to increasing engagement, retention, and lifetime value, all critical KPIs for our business. Longer term, we believe that there are complementary content verticals that lend themselves to gamification. To this end we have been developing a new hybrid casual title, ‘AI Art Master,’ which enables players to create generative AI images and compete in themed based competitions with these images. Our new mobile game, AI Art Master, is presently in its soft-launch phase across the Philippines, Poland, and India. Based on analyzing user data and performing extensive user testing, we expect to refine the user experience and game mechanics to better convert installs into engaged players, enhance retention, and develop a robust in-game economy and make determinations as to further investment.

Current wording

Beyond our commitment to growing both the Zedge App and GuruShots on a standalone basis, we believe that there are many potential synergies that we can capitalize on that exist between the two businesses. Specifically, we plan to enable the ability for GuruShots players to become Zedge Premium artists and sell their photos to our audience of 27+ million MAU (as of April 30, 2024) as standard digital images or NFTs. In addition, we look to benefit from the experience that the GuruShots team possesses and test gamifying the Zedge App. We believe that successful gamification can contribute to increasing engagement, retention, and lifetime value, all critical performance criteria for our business. Longer term, we believe that there are complementary content verticals that lend themselves to gamification. To this end, we have a new hybrid casual title, ‘AI Art Master,’ which is in soft-launch in the Philippines, Poland, and India, that enables players to create generative AI images and compete in themed-based competitions with these images. Based on analyzing user data and performing extensive user testing, we will determine whether to refine the user experience and scale or cease development of this title.

Previous wording

In August 2021, we acquired the assets of Emojipedia Pty Ltd (“Emojipedia”), including Emojipedia.org 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 2024, Emojipedia received approximately 32 million monthly page views and has approximately 8.7 million monthly active users as of January 31, 2024 of which approximately 50.2% are located in well-developed markets. It is the top resource for all things emoji, offering insights into data and cultural trends. As a member of the Unicode Consortium, the standards body responsible for approving new emojis, Emojipedia works alongside major emoji creators including Apple, Google, Meta, and X, formally known as Twitter.

Current wording

In August 2021, we acquired the assets of Emojipedia Pty Ltd (“Emojipedia”), including Emojipedia.org 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 April 2024, Emojipedia received approximately 36 million monthly page views and has approximately 10.4 million MAU as of April 30, 2024 of which approximately 55.5% are located in well-developed markets. It is the top resource for all things emoji, offering insights into data and cultural trends. As a member of the Unicode Consortium, the standards body responsible for approving new emojis, Emojipedia works alongside major emoji creators including Apple, Google, Meta, and X, formally known as Twitter.

Previous wording

We believe that Emojipedia provides growth potential to the Zedge App, and it was immediately accretive to earnings post acquisition in August 2021. In the past year, we have made many changes to Emojipedia including migrating to a new ad mediation platform, overhauling its backend, and redesigning the Emojipedia website. We will continue to enhance this offering and are exploring new features including a native mobile offering as well as additional monetization opportunities.

Current wording

We believe that Emojipedia provides growth potential to the Zedge App, and it was immediately accretive to earnings post acquisition in August 2021. In the past year, we have made many changes to Emojipedia including overhauling its backend and redesigning the Emojipedia website. We will continue to enhance this offering and are exploring new features, some of which will be released before the end of the calendar year.

Previous wording

MAU decreased 10.6% in the three ended January 31, 2024 when compared to the same period a year ago, primarily attributable to lackluster year-over-year growth in global new mobile phone purchases. Additionally, we have experienced a continuing shift in our regional customer make-up with MAU in emerging markets (particularly India) representing an increasing portion of our user base. As of January 31, 2024, users in emerging markets represented about 78.1% of our MAU, as compared to 77.0% from the same period a year ago. ARPMAU for the three months ended January 31, 2024 increased 36.7% 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 negatively impacted by the geopolitical and macroeconomic conditions in fiscal 2023 as well as strong year-over-year subscription revenue growth.

Current wording

MAU decreased 13.4% in the three ended April 30, 2024 when compared to the same period a year ago. Additionally, we have experienced a continuing shift in our regional customer make-up with MAU in emerging markets (particularly India) representing an increasing portion of our user base. As of April 30, 2024, users in emerging markets represented about 78.3% of our MAU, as compared to 77.5% from the same period a year ago. ARPMAU for the three months ended April 30, 2024 increased 39.7% 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.

Previous wording

Monthly Active Payers (“MAPs”). We define a MAP as a unique active user on the GuruShots app or GuruShots.com in a month that 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 our active paying user base which is a main driver of our 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.

Current wording

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.

Previous wording

MAP decreased 24.3% in the three months ended January 31, 2024 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 decreased 3.8% to $50.4 in the three months ended January 31, 2024 from $52.4 in the three months ended January 31, 2023.

Current wording

MAP decreased 20.7% in the three months ended April 30, 2024 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 decreased 0.4% to $53.0 in the three months ended April 30, 2024 from $53.2 in the three months ended April 30, 2023.

Previous wording

The following table shows our MAP and ARPMAP for the three and six months ended January 31, 2024 and 2023.

Current wording

The following table shows our MAP and ARPMAP for the three months ended April 30, 2024 and 2023.

Previous wording

Comparison of Our Results of Operations for the Three and Six Months Ended January 31, 2024 and 2023

Current wording

Comparison of Our Results of Operations for the Three and Nine months Ended April 30, 2024 and 2023

Previous wording

The following table sets forth the composition of our revenues for the three and six months ended January 31, 2024 and 2023 (in thousands):

Current wording

The following table sets forth the composition of our revenues for the three and nine months ended April 30, 2024 and 2023:

Previous wording

The following table summarizes subscription revenue for the three and six months ended January 31, 2024 and 2023:

Current wording

The following table summarizes our subscription revenue for the three and nine months ended April 30, 2024 and 2023:

Previous wording

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.

Current wording

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.

Previous wording

The following table summarizes Zedge Premium gross and net revenue for the three and six months ended January 31, 2024 and 2023:

Current wording

The following table summarizes Zedge Premium gross and net revenue for the three and nine months ended April 30, 2024 and 2023:

Previous wording

For the three months ended January 31, 2024, our advertising revenue increased 18.4% compared to the same period in the prior year primarily due to a higher price per advertising impression which has recovered from the downturn in the global economic conditions in the prior year period. This revenue growth can be attributable in part to the higher paid user acquisition spent during the current period.

Current wording

For the three months ended April 30, 2024, our advertising revenue increased 19.4% compared to the same period in the prior year primarily due to the increase in price per advertising impression paid by the advertisers on our platform when compared to the same period a year ago, which was driven by increased competition for our ad inventory.

Previous wording

For the three months ended January 31, 2024, our subscription revenue increased 24.3% compared to the same period in the prior year primarily due to our iOS subscription offering introduced in April 2023 and the lifetime subscriptions for Android users we rolled out in August 2023. Both initiatives contributed to the 78.0% increase in subscription billings in the three months ended January 31, 2024 compared to the same period in the prior year.

Current wording

For the three months ended April 30, 2024, our subscription revenue increased 34.9% compared to the same period in the prior year primarily due to the introduction of our iOS subscription offering in April 2023 and the lifetime subscriptions for Android users we rolled out in August 2023. Both initiatives contributed to the 80.3% increase in subscription billings in the three months ended April 30, 2024 compared to the same period in the prior year.

Previous wording

For the three months ended January 31, 2024, our other revenue (primarily Zedge Premium net revenue) increased 22.6% compared to the same period in the prior year primarily due to higher Gross transaction value (the total sales volume transacting through our Zedge Premium platform), or “GTV,” which increased 22.6% in the corresponding period. Zedge Premium net revenue increased 21.0% in the three months ended January 31, 2024 compared to the same period in the prior year.

Current wording

For the three months ended April 30, 2024, our other revenue (primarily Zedge Premium net revenue) decreased 11.2% compared to the same period in the prior year primarily due to the 12.6% decrease in Zedge Premium net revenue in the current year period caused by the write-down of advanced royalties paid to certain contents creators or owners. As a result of this write-down, gross margin decreased to 34% for the three months ended April 30, 2024 from 56% for the same period in the prior year.

Previous wording

For the three months ended January 31, 2024 digital goods and services revenue declined 26.4% compared to the same period in the prior year primarily due to the 24.3% decrease in GuruShots’ MAP for the corresponding periods.

Current wording

For the three months ended April 30, 2024, digital goods and services revenue declined 20.3% compared to the same period in the prior year primarily due to the 20.7% decrease in GuruShots’ MAP for the corresponding periods.

Previous wording

For the six months ended January 31, 2024, our subscription revenue increased 16.9% compared to the same period in the prior year primarily due to new iOS subscription offering introduced in April 2023 and the lifetime subscriptions for Android users we rolled out in August 2023. Both initiatives contributed to the 57.6% increase in subscription billings in the six months ended January 31, 2024 compared to the same period in the prior year.

Current wording

For the nine months ended April 30, 2024, our subscription revenue increased 22.6% compared to the same period in the prior year primarily due to our iOS subscription offering introduced in April 2023 and the lifetime subscriptions for Android users we rolled out in August 2023. Both initiatives contributed to the 65.2% increase in subscription billings in the nine months ended April 30, 2024 compared to the same period in the prior year.

Previous wording

For the six months ended January 31, 2024, our other revenue increased 20.0% compared to the same period in the prior year primarily due to higher GTV which increased 27.7% in the corresponding period. Zedge Premium net revenue increased 15.6% in the six months ended January 31, 2024 compared to the same period in the prior year. For the six months ended January 31, 2024, gross margin was 50% compared to 55% for the same period in the prior year primarily due to lower breakage revenue recognized in current period.

Current wording

For the nine months ended April 30, 2024, our other revenue increased 8.9% compared to the same period in the prior year primarily due to higher Zedge Premium net revenue resulting from higher GTV. Zedge Premium net revenue increased 5.6% in the nine months ended April 30, 2024 compared to the same period in the prior year. For the nine months ended April 30, 2024, gross margin was 44% compared to 56% for the same period in the prior year. Lower gross margin in the current period was caused by the advanced royalty write-downs discussed above.

Previous wording

For the six months ended January 31, 2024, digital goods and services revenue declined 27.7% compared to the same period in the prior year primarily due to the 27.2% decrease in GuruShots’ MAP for the corresponding periods.

Current wording

For the nine months ended April 30, 2024, digital goods and services revenue declined 25.5% compared to the same period in the prior year primarily due to the 25.3% decrease in GuruShots’ MAP for the corresponding periods.

Previous wording

Direct cost of revenues decreased 27.5% in the three months ended January 31, 2024 compared to the same period in the prior year primarily due to the revamping of our backend infrastructure as part of the cost reduction initiatives implemented during fiscal 2023. As a percentage of revenue, direct cost of revenues in the three months ended January 31, 2024 declined to 5.9% from 9.1% for the same period in the prior year.

Current wording

Direct cost of revenues decreased 8.6% in the three months ended April 30, 2024 compared to the same period in the prior year primarily due to the revamping of our backend infrastructure as part of the cost reduction initiatives implemented during fiscal 2023. As a percentage of revenue, direct cost of revenues in the three months ended April 30, 2024 declined to 5.9% from 7.4% for the same period in the prior year.

Previous wording

Direct cost of revenues decreased 25.3% in the six months ended January 31, 2024 compared to the same period in the prior year also due to the revamping of our backend infrastructure as part of the cost reduction initiatives implemented during fiscal 2023. As a percentage of revenue, direct cost of revenues in the six months ended January 31, 2024 declined to 6.4% from 9.1% for the same period in the prior year.

Current wording

Direct cost of revenues decreased 20.6% in the nine months ended April 30, 2024 compared to the same period in the prior year also due to the revamping of our backend infrastructure as part of the cost reduction initiatives implemented during fiscal 2023. As a percentage of revenue, direct cost of revenues in the nine months ended April 30, 2024 declined to 6.2% from 8.5% for the same period in the prior year.

Previous wording

SG&A expense increased 11.1% in the three months ended January 31, 2024 compared to the same period in the prior year primarily due to higher PUA expenses offset by lower stock-based compensation expense as discussed below. We ramped up PUA for the Zedge App and maintain the same PUA spend for GuruShots in the three months ended January 31, 2024 when compared to the same period in the prior year. We expect to continue our investment in PUA for our Zedge App in the second half of fiscal 2024 provided that the ROAS remains compelling. As a percentage of revenue, SG&A expense in the three months ended January 31, 2024 was 83.9% compared to 84.1% in the three months ended January 31, 2023.

Current wording

SG&A expense increased 34.6% in the three months ended April 30, 2024 compared to the same period in the prior year primarily due to higher PUA and higher compensation expenses offset by lower discretionary spends and lower stock-based compensation expense. We ramped up PUA for our Zedge App significantly but scaled back PUA spend for GuruShots in the three months ended April 30, 2024 as compared to the same period in the prior year. We expect to continue our investment in PUA for our Zedge App in the near term provided that the ROAS remains compelling. As a percentage of revenue, SG&A expense in the three months ended April 30, 2024 was 88.2% compared to 74.6% in the three months ended April 30, 2023.

Previous wording

SG&A expense increased 2.8% in the six months ended January 31, 2024 compared to the same period in the prior year primarily due to higher PUA expenses offset by reductions in compensation expenses, stock-based compensation expenses and other discretionary spends. For the six months ended January 31, 2024 we ramped up PUA for the Zedge App significantly but scaled back PUA for GuruShots when compared to the same period in the prior year. As a percentage of revenue, SG&A expense in the six months ended January 31, 2024 was 80.9% compared to 84.3% in the six months ended January 31, 2023.

Current wording

SG&A expense increased 12.3% in the nine months ended April 30, 2024 compared to the same period in the prior year primarily due to higher PUA expenses offset by reductions in stock-based compensation expenses and other discretionary spends. For the nine months ended April 30, 2024 we ramped up PUA for the Zedge App significantly but scaled back PUA for GuruShots when compared to the same period in the prior year. As a percentage of revenue, SG&A expense in the nine months ended April 30, 2024 was 83.4% compared to 81.1% in the nine months ended April 30, 2023.

Previous wording

Global headcount as of January 31, 2024 totaled 99 (including 31 at GuruShots) compared to 101 (including 37 at GuruShots) as of January 31, 2023 with the majority of our employees currently based in Lithuania and Israel.

Current wording

Global headcount as of April 30, 2024 totaled 100 (including 29 at GuruShots) compared to 96 (including 31 at GuruShots) as of April 30, 2023 with the majority of our employees currently based in Lithuania and Israel.

Previous wording

The following table summarizes stock-based compensation expense included in the SG&A for the three and six months ended January 31, 2024 and 2023:

Current wording

The following table summarizes stock-based compensation expense included in the SG&A for the three and nine months ended April 30, 2024 and 2023:

Previous wording

Stock-based compensation expenses decreased 13.3% in the three months ended January 31, 2024 compared to the same period in the prior year. The decrease was primarily attributable to the lower compensation expense related to the DSU grants with both service and market conditions which are recognized based on the graded vesting method. Certain stock options, deferred stock unit and restricted stock grants are more fully described in Note 7Stock-Based Compensation to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.

Current wording

Stock-based compensation expenses decreased 16.6% in the three months ended April 30, 2024 compared to the same period in the prior year. The decrease was primarily attributable to the lower compensation expense related to the DSU grants with both service and market conditions which are recognized based on the graded vesting method. Certain stock options, deferred stock unit and restricted stock grants are more fully described in Note 7Stock-Based Compensation to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.

Previous wording

Stock-based compensation expenses decreased 13.6% in the six months ended January 31, 2024 compared to the same period in the prior year. The decrease was primarily attributable to the lower compensation expense related to the DSU grants with both service and market conditions which are recognized based on the graded vesting method.

Current wording

Stock-based compensation expenses decreased 14.5% in the nine months ended April 30, 2024 compared to the same period in the prior year. The decrease was primarily attributable to the lower compensation expense related to the DSU grants with both service and market conditions which are recognized based on the graded vesting method.

Previous wording

Depreciation and amortization expenses decreased 6.5% in three months ended January 31, 2024 compared to the same period in the prior year.

Current wording

Depreciation and amortization expenses decreased 35.0% in three months ended April 30, 2024 compared to the same period in the prior year primarily due to the $11.9 million impairment charge recorded in the three months ended January 31, 2024 discussed below.

Previous wording

Depreciation and amortization expenses decreased 4.4% in six months ended January 31, 2024 compared to the same period in the prior year.

Current wording

Depreciation and amortization expenses decreased 15.4% in nine months ended April 30, 2024 compared to the same period in the prior year primarily due to the $11.9 million impairment charge recorded in the three months ended January 31, 2024 discussed below.

Previous wording

Impairment of intangible assets. For the three and six months ended January 31, 2024, we recorded an approximately $11.9 million impairment of intangible assets of our GuruShots reporting segment, 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.

Current wording

Impairment of intangible assets. For the nine months ended April 30, 2024, we recorded an approximately $11.9 million impairment of intangible assets of our GuruShots reporting segment, 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.

Previous wording

Change in fair value of contingent consideration. For the three and six months ended January 31, 2023, the fair value of contingent consideration were reduced by approximately $1.8 million and $1.9 million, respectively, due primarily to the decrease in the likelihood that certain contingent milestones would be achieved in connection with the GuruShots acquisition that was consummated in April 2022, please refer to Note 3,Fair Value Measurements, to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.

Current wording

Change in fair value of contingent consideration. For the nine months ended April 30, 2023, the fair value of contingent consideration were reduced by approximately $1.9 million due primarily to the decrease in the likelihood that certain contingent milestones would be achieved in connection with the GuruShots acquisition that was consummated in April 2022, please refer to Note 3,Fair Value Measurements, to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.

Previous wording

In the three months ended January 31, 2024, interest and other income, net increased by $88,000 compared to the same period in the prior year, due primarily to higher interest income earned on our cash and cash equivalents driven by an increase in interest rates and lower interest expense resulting from the $2 million prepayment of term loan in November 2023.

Current wording

In the three months ended April 30, 2024, interest and other income, net increased by $104,000 compared to the same period in the prior year, due primarily to higher interest income earned on our cash and cash equivalents driven by an increase in interest rates and lower interest expense resulting from the $2 million prepayment of term loan in November 2023.

Previous wording

In the six months ended January 31, 2024, interest and other income, net increased by $134,000 compared to the same period in the prior year, due primarily to higher interest income earned on our cash and cash equivalents and lower interest expense resulting from the $2 million prepayment of term loan in November 2023, offset by a $50,000 impairment charge related to our investment in a privately held company of which the carrying value was reduced to $0 as of October 30, 2023.

Current wording

In the nine months ended April 30, 2024, interest and other income, net increased by $238,000 compared to the same period in the prior year, due primarily to higher interest income earned on our cash and cash equivalents and lower interest expense resulting from the $2 million prepayment of term loan in November 2023, offset by a $50,000 impairment charge related to our investment in a privately held company of which the carrying value was reduced to $0 as of October 30, 2023.

Previous wording

Net gain (loss) resulting from foreign exchange transactions. Net gain (loss) resulting from foreign exchange transactions is comprised of gains and losses generated from movements in NOK and EUR relative to the U.S. Dollar, including gains or losses from our hedging activities.

Current wording

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 and EUR relative to the U.S. Dollar, including gains or losses from our hedging activities.

Previous wording

In the three months ended January 31, 2024, net gain resulting from foreign exchange transactions decreased by $84,000 compared to the same period in the prior year.

Current wording

In the three months ended April 30, 2024, net loss resulting from foreign exchange transactions decreased by $4,000 compared to the same period in the prior year.

Previous wording

In the six months ended January 31, 2024, net loss resulting from foreign exchange transactions was $143,000 compared to a net gain of $84,000 in the same period in the prior year.

Current wording

In the nine months ended April 30, 2024, net loss resulting from foreign exchange transactions was $223,000 compared to nil in the same period in the prior year.