Zedge, Inc.
For the period ended Jan 31, 2025. Filed Mar 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jan 31, 2025 · Filed Mar 14, 2025
ZDGE$2.24-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-10-31; filed 2024-12-16.
0001213900-24-109313
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-01-31; filed 2025-03-14.
0001213900-25-024149
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 119 current paragraphs.
52 unchanged; 41 reworded; 18 added; 8 removed; 1 previous and 8 current paragraphs rearranged.
Tables are not compared: 20 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Since the acquisition, GuruShots has faced challenges in growth and profitability and its revenue has declined. As such the Company is cutting costs through the restructuring discussed earlier and materially scaling back on paid user acquisition, or PUA, in order to approach breakeven. In parallel, we are developing a plan, that we refer to as GuruShots 2.0, to revamp GuruShots’ offering in order to put it on a growth trajectory and unlock the potential value in this asset. Our strategy focuses on attracting new users and converting them into recurring, paying players. To date, we 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 possibilities to reward and monetize players. We also launched Missions, a set of tasks that players need to complete in exchange for earning rewards, and Duels, a fast-paced, real-time player-versus-player game mechanic that adds an exciting competitive layer to GuruShots.
Current report
Historically, we marketed GuruShots to prospective players, primarily via PUA channels. We utilize a host of creative formats including static and video ads in order to promote the game. As a part of the restructuring plan discussed earlier, we have materially reduced PUA for GuruShots and do not expect to ramp up until we finalize the GuruShots 2.0 plan.
Current report
Please see Note 1 to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Current report
Six Months Ended January 31, 2025 Compared to Six Months Ended January 31, 2024
Current report
Direct cost of revenues decreased 3.8% in the six months ended January 31, 2025 compared to the same period in the prior year primarily due to continuing optimizing of our backend infrastructure. As a percentage of revenue, direct cost of revenues in the six months ended January 31, 2025 was flat at 6.4% when compared to the same period in the prior year primarily due to the cost savings offset by lower revenue in the current year period.
Current report
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 5Intangible 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 report
Restructuring charges. For the three and six months ended January 31, 2025, we recorded an approximately $0.5 million restructuring charges primarily consists of severance and employee benefits in connection with the global restructuring implemented in January 2025, as more fully described in Note 14Restructuring 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.
Current report
Impairment of capitalized software and technology development costs. 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 implemented in January 2025, as more fully described in Note 14Restructuring 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.
Current report
In the three months ended January 31, 2025, net loss resulting from foreign exchange transactions was $86,000 compared to a net gain of $76,000 for the same period in the prior year primarily due to unfavorable FX movement related to our NOK and EUR hedging activities in the current period.
Current report
Benefit from Income taxes
Current report
In the three months ended January 31, 2025, income tax benefit decreased by $2.0 million compared to the same period in the prior year, resulting primarily from the $2.5 million increase in deferred tax assets related to the $11.9 million impairment loss on GuruShot’s intangible assets recorded in the prior period offset by $0.2 million increase in deferred tax assets related to the impairment charge of GuruShot’s capitalized software and technology development costs of $0.8 million recorded in the current period.
Current report
In the six months ended January 31, 2025, income tax benefit decreased by $1.9 million compared to the same period in the prior year, resulting primarily from the $2.5 million increase in deferred tax assets related to the $11.9 million impairment loss on GuruShot’s intangible assets recorded in the prior period offset by $0.2 million increase in deferred tax assets related to the impairment charge of GuruShot’s capitalized software and technology development costs of $0.8 million recorded in the current period.
Current report
For the three months ended January 31, 2025, our income from operations related to the Zedge Marketplace decreased to $42,000 from $1.7 million for the same period in the prior year, primarily due to lower revenue coupled with higher SG&A expenses incurred in the current period. Additionally, we recorded $0.4 million in restructuring charges in the current year period which contributed in part to the decrease in the segment income from operation related to the Zedge Marketplace.
Current report
For the three months ended January 31, 2025, our loss from operations related to GuruShots decreased to $2.3 million from $13.6 million for the same period in the prior year, primarily due to the $11.9 million impairment loss of intangible assets recorded in the prior period. Additionally, we recorded $0.9 million restructuring and other related charges in the current period which contributed in part to the increase in the loss from operation for GuruShots.
Current report
Excluding the restructuring and other related charges of $0.9 million in the current period and impairment loss of $11.9 million in the prior period, loss from operation related to GuruShots would have been $1.4 million in the three months ended January 31, 2025 compared to $1.7 million for the same period in the prior year. The $0.3 million decrease in loss from operations can be attributed to lower SG&A and lower depreciation and amortization, the combination thereof more than offset the decline in revenue in the three months ended January 31, 2025 compared to the same period in the prior year.
Current report
Six months Ended January 31, 2025 Compared to Six Months Ended January 31, 2024
Current report
For the six months ended January 31, 2025, our loss from operations related to GuruShots decreased to $3.7 million from $14.9 million for the same period in the prior year, primarily due to the $11.9 million impairment loss of intangible assets recorded in the prior period. Additionally, we recorded $0.9 million restructuring and other related charges in the current period which contributed in part to the increase in the loss from operation related to GuruShots.
Current report
Excluding the restructuring and other related charges of $0.9 million in the current period and impairment loss of $11.9 million in the prior period, loss from operation related to GuruShots would have been $2.8 million in the six months ended January 31, 2025 compared to $3.0 million for the same period in the prior year. The $0.2 million decrease in loss from operations can be attributed to lower SG&A and lower depreciation and amortization, the combination thereof more than offset the decline in revenue in the six months ended January 31, 2025 compared to the same period in the prior year.
Removed paragraphs (8)
Previous report
We market GuruShots to prospective players, primarily via paid user acquisition channels, and utilize a host of creative formats including static and video ads in order to promote the game. Our marketing team invests material resources in analyzing all attributes of a campaign ranging from, among others, the creative assets, offer acquisition channel and platform (i.e., iOS, Android, and web), with the goal of determining whether a specific campaign is likely to yield a profitable customer. When we unearth a successful combination of these variables we scale up until we experience diminishing returns. Ultimately, we believe that the efforts we are making to advance the product coupled with the investment in user acquisition can significantly increase GuruShots’ player base.
Previous report
Since the start of fiscal 2025 Cost per Install (CPI) have trended down leading us to believe that our efforts are yielding fruit. It’s too early to say with conviction whether this trend is sustainable as we scale user acquisition and whether these users will provide sufficient long-term ROI; however, we believe that these early results are encouraging.
Previous report
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Previous report
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Previous report
Provision for Income taxes
Previous report
In the three months ended October 31, 2024, we had pretax loss of $290,000 in respect of which we accrued $49,000 in income tax expense, primarily due to discrete tax items of $115,000 associated with the vesting of restricted stock and DSUs in the current period more than offsetting the accrued tax benefit of $66,000 based on an estimated effective tax rate of 22.7%.
Previous report
In the three months ended October 31, 2023, we had pretax income of $183,000 in respect of which we accrued $198,000 in income tax expense, an effective tax rate of 108% which is higher than the statutory rate primarily due to discrete tax items of $128,000 associated with the vesting of restricted stock and DSUs in the prior period.
Previous report
For the three months ended October 31, 2024, our loss from operations related to GuruShots was $1.4 million compared to a loss of $1.3 million for the same period in the prior year, primarily due to lower revenue in the current period coupled with higher SG&A (primarily attributable to lower capitalized software and technology development costs) and offset by the decrease in amortization expenses related to intangible assets impairment as discussed above.
Reworded paragraphs (41)
Previous wording
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, 2024 (the “2024 Form 10-K”), as filed with the U.S. Securities and Exchange Commission (the “SEC”).
Current wording
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, 2024 (the “2024 Form 10-K”), as filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 29, 2024.
Previous wording
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 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; (3) delay or failure to realize the expected synergies and benefits of the GuruShots acquisition; (4) the impact of the Covid-19 pandemic on our employees, customers, partners, and the global financial markets; (5) Russia’s invasion of Ukraine, and the international community’s response; and (6) recent attack by Hamas and other terrorist organizations from the Gaza Strip and Lebanon and Israel’s war against them. For further information regarding risks and uncertainties associated with our business, please refer to Item 1A to Part I “Risk Factors” in the 2024 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 2024 Form 10-K.
Current wording
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) delay or failure to realize the expected synergies and benefits of the GuruShots acquisition; (3) Russia’s invasion of Ukraine, and the international community’s response; and (4) recent attack by Hamas and other terrorist organizations from the Gaza Strip and Lebanon and Israel’s war against them. For further information regarding risks and uncertainties associated with our business, please refer to Item 1A to Part I “Risk Factors” in the 2024 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 2024 Form 10-K.
Previous wording
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 launched attacks in southern Israel, resulting in casualties and military engagement. In addition, Hezbollah, another terrorist organization based in Lebanon has been indiscriminately shelling Israel since October 8, 2023. The extent and duration of this conflict remain uncertain, potentially involving other groups. Israel’s response led to the mobilization of reservists, affecting our workforce. Prior to this, changes in Israel’s judicial system had already raised concerns about the business environment, compounded by recent events, potentially impacting foreign investment, currency fluctuations, credit ratings, interest rates, and security markets. Furthermore, regional political unrest and threats from extremist groups, notably Iran, pose additional risks. Management and our Board of Directors are closely monitoring the situation in Israel to address potential business disruptions and implications.
Current wording
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 launched attacks in southern Israel, resulting in casualties and military engagement. In addition, Hezbollah, another terrorist organization based in Lebanon has been indiscriminately shelling Israel since October 8, 2023, the Houthi rebels based in Yemen have also launched ballistic missiles and kamikaze drones at Israel and the Islamic Republic of Iran has on two occasions attacked Israel with a barrage of ballistic missiles. Although a temporary ceasefire is in place, it is unclear if it is sustainable. The extent and duration of this conflict remains uncertain. Israel’s response to Hamas’ unprecedented attack led to the mobilization of IDF reservists, affecting our workforce. Prior to this, changes in Israel’s judicial system had already raised concerns about the business environment, compounded by recent events, potentially impacting foreign investment, currency fluctuations, credit ratings, interest rates, and security markets. Furthermore, regional political unrest and threats from extremist groups, notably Iran, pose additional risks. Management and our Board of Directors are closely monitoring the situation in Israel to address potential business disruptions and implications.
Previous wording
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. As of October 31, 2024, our Zedge App had been installed nearly 686 million times since inception and, over the past two fiscal years, has had between 25.0 million and 32.2 million monthly active users (“MAU”), ending with 25.0 million MAU as of October 31, 2024. 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.
Current wording
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. As of January 31, 2025, our Zedge App had been installed nearly 696 million times since inception and, over the past two fiscal years, has had between 24.7 million and 32.0 million monthly active users (“MAU”), ending with 24.7 million MAU as of January 31, 2025. 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.
Previous wording
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 October 31, 2024, we had approximately 698,000 active subscribers.
Current wording
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, 2025, we had approximately 791,000 active subscribers.
Previous wording
In April 2022, we acquired GuruShots Ltd, 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 600,000 photographs and casting close to 2.4 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 Ltd, 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 550,000 photographs and casting close to 3.0 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.
Previous wording
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 seven years, the monthly average paying player spend has increased in excess of 8.4% annually to more than $49.0 per player.
Current wording
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 6.1% annually to more than $40.5 per player.
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 GuruShots players to become Zedge Premium artists and sell their photos to our audience of 25+ million MAU (as of October 31, 2024) as standard digital images. In addition, we are benefitting from the experience that the GuruShots team possesses in 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. One example is our hybrid casual title, ‘AI Art Master,’ which has been 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
Current wording
Beyond our commitment to growing both the Zedge App and GuruShots on a standalone basis, we believe that there are untapped opportunities that we can capitalize on to unlock additional value. Specifically, we plan to enable GuruShots players the ability to sell their content both in the Zedge Marketplace and elsewhere. In addition, we are benefitting from the experience that the GuruShots team possesses in gamifying the Zedge App. Longer term, we believe that there are complementary content verticals that lend themselves to gamification.
Previous wording
In August 2021, we acquired Emojipedia Pty Ltd, 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 October 2024, Emojipedia received approximately 38.8 million monthly page views and has approximately 10.3 million monthly active users as of October 31, 2024 of which approximately 48.9% 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, formerly known as Twitter.
Current wording
We own and operate Emojipedia, 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 2025, Emojipedia received approximately 33.7 million monthly page views and has approximately 10.0 million monthly active users as of January 31, 2025 of which approximately 48.8% 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, formerly known as Twitter.
Previous wording
MAU decreased 12.3% in the three months ended October 31, 2024 when compared to the same period a year ago. As of October 31, 2024, users in emerging markets represented about 78.0% of our MAU, as compared to 78.2% from the same period a year ago.
Current wording
MAU decreased 14.2% in the three months ended January 31, 2025 when compared to the same period a year ago. As of January 31, 2025, users in emerging markets represented about 77.3% of our MAU, as compared to 78.1% from the same period a year ago.
Previous wording
ARPMAU for the three months ended October 31, 2024 increased 22.1% 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 October 31, 2024 increased 21.1% and 56.0%, respectively, when compared to the same period a year ago, as discussed below.
Current wording
ARPMAU for the three months ended January 31, 2025 increased 8.7% 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. Subscription revenue and subscription billings for the three months ended January 31, 2025 increased 13.3% and 26.7%, respectively, when compared to the same period a year ago, as discussed below.
Previous wording
MAP decreased 25.9% in the three months ended October 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 15.4% to $43.3 in the three months ended October 31, 2024 from $51.2 in the three months ended October 31, 2023
Current wording
MAP decreased 22.2% in the three months ended January 31, 2025 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. As part of the restructuring implemented in January 2025, we expect to materially decrease PUA at least through the end of fiscal 2025.
Previous wording
The following table shows our MAP and ARPMAP for the three months ended October 31, 2024 and 2023.
Current wording
ARPMAP decreased 21.0% to $39.8 in the three months ended January 31, 2025 from $50.4 in the same period a year ago. The following table shows our MAP and ARPMAP for the three months ended January 31, 2025 and 2024:
Previous wording
Comparison of Our Results of Operations for the Three months ended October 31, 2024 and 2023
Current wording
Comparison of Our Results of Operations for the Three and Six Months Ended January 31, 2025 and 2024
Previous wording
The following table sets forth the composition of our revenues for the three months ended October 31, 2024 and 2023 (in thousands):
Current wording
The following table sets forth the composition of our revenues for the three and six months ended January 31, 2025 and 2024 (in thousands):
Previous wording
The following table summarizes our subscription revenue for the three months ended October 31, 2024 and 2023:
Current wording
The following table summarizes our subscription revenue for the three and six months ended January 31, 2025 and 2024:
Previous wording
The following table summarizes Zedge Premium gross and net revenue for the three months ended October 31, 2024 and 2023:
Current wording
The following table summarizes Zedge Premium gross and net revenue for the three and six months ended January 31, 2025 and 2024:
Previous wording
For the three months ended October 31, 2024, our advertising revenue decreased 1.3% compared to the same period in the prior year primarily due to a 12.3% decrease in MAU partially offset by an 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.
Current wording
For the three months ended January 31, 2025, our advertising revenue decreased 14.3% compared to the same period in the prior year primarily due to a 14.2% decrease in MAU partially offset by an 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 October 31, 2024, our subscription revenue increased 21.1%, and our subscription billings increased 56.0% 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 subscription product for Android users we rolled out in August 2023.
Current wording
For the three months ended January 31, 2025, our subscription revenue increased 13.3%, and our subscription billings increased 26.7% 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 subscription product for Android users we rolled out in August 2023.
Previous wording
For the three months ended October 31, 2024, our other revenue increased 122.5% compared to the same period in the prior year primarily due to the increase in Zedge Premium net revenue. For the three months ended October 31, 2024, Zedge Premium net revenue increased 141.7% compared to the same period in the prior year primarily attributable to additional revenue from certain AI generative features we rolled out in our Zedge App in fiscal 2024.
Current wording
For the three months ended January 31, 2025, our other revenue increased 53.2% compared to the same period in the prior year primarily due to the increase in Zedge Premium net revenue. For the three months ended January 31, 2025, Zedge Premium net revenue increased 55.6% compared to the same period in the prior year primarily attributable to additional revenue from certain AI generative features we rolled out in our Zedge App in fiscal 2024.
Previous wording
For the three months ended October 31, 2024, digital goods and services revenue declined 31.8% compared to the same period in the prior year primarily due to the 25.9% decrease in GuruShots’ MAP coupled with 15.4% decrease in ARPMAP for the corresponding periods.
Current wording
For the three months ended January 31, 2025, digital goods and services revenue declined 33.0% compared to the same period in the prior year primarily due to the 22.2% decrease in GuruShots’ MAP coupled with 21.0% decrease in ARPMAP for the corresponding periods.
Previous wording
Direct cost of revenues decreased 5.1% in the three months ended October 31, 2024 compared to the same period in the prior year primarily due to the revamping of our backend infrastructure implemented during fiscal 2023. As a percentage of revenue, direct cost of revenues in the three months ended October 31, 2024 declined to 6.4% from 6.9% for the same period in the prior year.
Current wording
Direct cost of revenues decreased 2.4% in the three months ended January 31, 2025 compared to the same period in the prior year primarily due to continuing optimizing of our backend infrastructure. As a percentage of revenue, direct cost of revenues in the three months ended January 31, 2025 increased to 6.4% from 5.9% for the same period in the prior year primarily due to lower revenue in the current year period.
Previous wording
SG&A expense increased 23.8% in the three months ended October 31, 2024 compared to the same period in the prior year primarily due to higher PUA, higher compensation expenses (resulting primarily from lower capitalized software and technology development costs) and higher platform fee paid to Google and Apple offset by lower discretionary spends and lower stock-based compensation expense. In the three months ended October 31, 2024, we ramped up PUA for our Zedge App significantly but scaled back PUA spend for GuruShots 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 October 31, 2024 was 94.6% compared to 77.7% in the three months ended October 31, 2023.
Current wording
SG&A expense increased 9.2% in the three months ended January 31, 2025 compared to the same period in the prior year primarily due to higher PUA, higher compensation expenses (resulting primarily from lower capitalized software and technology development costs) and higher platform fee paid to Google and Apple offset by lower discretionary spends and lower stock-based compensation expense. In the three months ended January 31, 2025, we ramped up PUA for our Zedge App significantly but scaled back PUA spend for GuruShots 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 while materially cutting back on PUA for GuruShots, at least through the end of the fiscal year. As a percentage of revenue, SG&A expense in the three months ended January 31, 2025 was 102.1% compared to 83.9% for the same period in the prior year.
Previous wording
Global headcount as of October 31, 2024 totaled 102 (including 28 at GuruShots) compared to 95 (including 29 at GuruShots) as of October 31, 2023 with the majority of our employees currently based in Lithuania and Israel.
Current wording
Global headcount as of January 31, 2025 totaled 106 (including 28 at GuruShots) compared to 99 (including 30 at GuruShots) as of January 31, 2025 with the majority of those employees based in Lithuania and Israel. In January 2025, we implemented a corporate restructuring and reduced our global headcount by approximately 22%. Details are more fully described in Note 14Restructuring and Other Related Chargesto the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Previous wording
The following table summarizes stock-based compensation expense included in the SG&A for the three months ended October 31, 2024 and 2023:
Current wording
The following table summarizes stock-based compensation expense included in SG&A expense for the three and six months ended January 31, 2025 and 2024:
Previous wording
Stock-based compensation expenses decreased 25.2% in the three months ended October 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, DSUs 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 11.7% in the three months ended January 31, 2025 compared to the same period in the prior year. The decrease was primarily attributable to the lower compensation expense related to the DSUs granted in September 2021 with both service and market conditions which were recognized based on the graded vesting method. Certain stock options, DSUs 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
Depreciation and amortization expenses decreased 50.8% in three months ended October 31, 2024 compared to the same period in the prior year primarily due to the $11.9 million impairment charge recorded in Q2 of fiscal 2024
Current wording
Depreciation and amortization expenses decreased 58.4% in three months ended January 31, 2025 compared to the same period in the prior year primarily due to the $11.9 million impairment charge recorded in Q2 of fiscal 2024.
Previous wording
In the three months ended October 31, 2024, interest and other income, net increased by $101,000 compared to the same period in the prior year, which included a deduction of $46,000 in interest expense related to the $2 million term loan which was repaid in November 2023 and 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 six months ended January 31, 2025, interest and other income, net increased by $106,000 compared to the same period in the prior year, which included a deduction of $65,000 in interest expense related to the $2 million term loan which was repaid in November 2023 and 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 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.
Current wording
Net (loss) gain resulting from foreign exchange transactions. Net (loss) gain 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 October 31, 2024, net loss resulting from foreign exchange transactions decreased by $215,000 or 93.6% compared to the same period in the prior year primarily due to higher Mark to Market (“MTM”) loss recorded in prior period.
Current wording
In the six months ended January 31, 2025, net loss resulting from foreign exchange transactions decreased by $43,000 from $143,000 to $100,000 when compared to the same period in the prior year primarily due to favorable FX movement related to our NOK and EUR hedging activities in the current period.
Previous wording
We recognized MTM losses of $58,000 and $208,000 from NOK and EUR hedging activities for the three months ended October 31, 2024 and 2023, 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.
Current wording
We recognized Mark to Market (“MTM”) losses of $111,000 and $51,000 from NOK and EUR hedging activities, respectively, as of January 31, 2025 and July 31, 2024, 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.
Previous wording
The following table presents the results for our Zedge Marketplace and GuruShots segment income (loss) from operations for the three months ended October 31, 2024 and 2023:
Current wording
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, 2025 and 2024:
Previous wording
For the three months ended October 31, 2024, our income from operations related to the Zedge Marketplace decreased to $0.9 million from $1.7 million for the same period in the prior year, primarily due to higher SG&A expenses incurred in the current period.
Current wording
For the six months ended January 31, 2025, our income from operations related to the Zedge Marketplace decreased to $976,000 from $3.3 million for the same period in the prior year, primarily due to higher SG&A expenses incurred in the current period. Additionally, we recorded $0.4 million restructuring charges in the current period which contributed in part to the decrease in the segment income from operation related to the Zedge Marketplace.
Previous wording
At October 31, 2024, we had cash and cash equivalents of $20.2 million and working capital (current assets less current liabilities) of $17.5 million, compared to $20.0 million and $17.7 million, respectively, at July 31, 2024. 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 December 16, 2025. 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,Term Loan and 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.
Current wording
At January 31, 2025, we had cash and cash equivalents of $20.0 million and working capital (current assets less current liabilities) of $16.8 million, compared to $20.0 million and $17.7 million, respectively, at July 31, 2024. 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 14, 2026. 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,Term Loan and 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.
Previous wording
The following tables present selected financial information for the three months ended October 31, 2024 and 2023:
Current wording
The following tables present selected financial information for the six months ended January 31, 2025 and 2024:
Previous wording
Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Cash provided by operating activities decreased by $90,000 in the three months ended October 31, 2024 to $1.2 million compared to $1.3 million in the same period in the prior year, primarily attributable to a higher net loss before accounting for the acquisition related charges and changes in assets and liabilities.
Current wording
Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Cash provided by operating activities decreased by $934,000 in the six months ended January 31, 2025 to $1.9 million from $2.8 million in the same period in the prior year, primarily attributable to the $1.4 million loss from operation in the current period compared to $0.3 million income from operation in the prior period, before accounting for the restructuring and acquisition related charges, and changes in assets and liabilities.
Previous wording
Gross trade accounts receivable decreased $0.2 million to $3.2 million at October 31, 2024 from $3.4 million at July 31, 2024, primarily due to lower revenue in the preceding two months ended October 31, 2024 when compared to the same period ended July 31, 2024.
Current wording
Gross trade accounts receivable decreased $0.4 million to $3.0 million at January 31, 2025 from $3.4 million at July 31, 2024, primarily due to lower revenue in the preceding two months ended January 31, 2025 when compared to the same period ended July 31, 2024.
Previous wording
Cash used in investing activities in the three months ended October 31, 2024 and 2024 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.
Current wording
Cash used in investing activities in the six months ended January 31, 2025 and 2024 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.
Previous wording
In the three months ended October 31, 2024 and 2023, we purchased 6,903 shares and 6,328 shares, respectively, of our Class B common stock from certain employees for $22,000 and $13,000, respectively, to satisfy tax withholding obligations in connection with the vesting of DSUs.
Current wording
In the six months ended January 31, 2025 and 2024, we purchased 6,903 shares and 6,328 shares, respectively, of our Class B common stock from certain employees for $22,000 and $13,000, respectively, to satisfy tax withholding obligations in connection with the vesting of DSUs.
Previous wording
In the three months ended October 31, 2024 and 2023, we repurchased - in connection with the share repurchase program - 219,573 shares and 0 shares, respectively, of our Class B common stock for approximately $782,000 and $0, respectively.
Current wording
In the six months ended January 31, 2025, we repurchased - in connection with the share repurchase program - 464,419 shares of our Class B common stock for approximately $1.5 million. We did not buy back any shares in the six months ended January 31, 2024.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
For the six months ended January 31, 2025, our advertising revenue decreased 8.1% compared to the same period in the prior year primarily due to a 12.3% and 14.2% decrease in MAU in our Q1 and Q2 of our fiscal 2025, respectively, partially offset by an increase in price per advertising impression paid by the advertisers on our platform when compared to the same periods a year ago, which was driven by increased competition for our ad inventory.
Current report — wording carried from elsewhere
For the six months ended January 31, 2025, our subscription revenue increased 17.0%, and our subscription billings increased 39.4% 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 subscription product for Android users we rolled out in August 2023.
Current report — wording carried from elsewhere
For the six months ended January 31, 2025, our other revenue increased 83.7% compared to the same period in the prior year primarily due to the increase in Zedge Premium net revenue. For the six months ended January 31, 2025, Zedge Premium net revenue increased 92.1% compared to the same period in the prior year primarily attributable to additional revenue from certain AI generative features we rolled out in our Zedge App in fiscal 2024.
Current report — wording carried from elsewhere
For the six months ended January 31, 2025, digital goods and services revenue declined 32.4% compared to the same period in the prior year primarily due to the 25.9% decrease in GuruShots’ MAP coupled with 15.4% decrease in ARPMAP in Q1 of our fiscal 2025 and the 22.2% decrease in GuruShots’ MAP coupled with 21.0% decrease in ARPMAP in Q2 of our fiscal 2025.
Current report — wording carried from elsewhere
SG&A expense increased 15.9% in the six months ended January 31, 2025 compared to the same period in the prior year primarily due to higher PUA, higher compensation expenses (resulting primarily from lower capitalized software and technology development costs) and higher platform fee paid to Google and Apple offset by lower discretionary spends and lower stock-based compensation expense. In the six months ended January 31, 2025, we ramped up PUA for our Zedge App significantly but scaled back PUA spend for GuruShots 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 while materially cutting back on PUA for GuruShots, at least through the end of the fiscal year. As a percentage of revenue, SG&A expense in the six months ended January 31, 2025 was 98.3% compared to 80.9% for the same period in the prior year.
Current report — wording carried from elsewhere
Stock-based compensation expenses decreased 17.5% in the six months ended January 31, 2025 compared to the same period in the prior year. The decrease was primarily attributable to the lower compensation expense related to the DSUs granted in September 2021 with both service and market conditions which were recognized based on the graded vesting method.
Current report — wording carried from elsewhere
Depreciation and amortization expenses decreased 54.6% in six months ended January 31, 2025 compared to the same period in the prior year also due to the $11.9 million impairment charge recorded in Q2 of fiscal 2024.
Current report — wording carried from elsewhere
In the three months ended January 31, 2025, interest and other income, net increased by $6,000 compared to the same period in the prior year, which included a deduction of $19,000 in interest expense related to the $2 million term loan which was repaid in November 2023.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.