Zedge, Inc.
For the period ended Jan 31, 2026. Filed Mar 16, 2026.
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, 2026 · Filed Mar 16, 2026
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 2025-10-31; filed 2025-12-12.
0001213900-25-121203
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-01-31; filed 2026-03-16.
0001213900-26-028295
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 109 previous paragraphs and 136 current paragraphs.
53 unchanged; 49 reworded; 20 added; 7 removed; 0 previous and 14 current paragraphs rearranged.
Tables are not compared: 27 previous and 17 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 (20)
Current report
On February 28, 2026, the United States and Israel launched a joint military campaign against Iran, with the stated objectives of eliminating Iran’s nuclear and ballistic missile programs. The strikes killed Supreme Leader Ali Khamenei and numerous senior IRGC and government officials. Iran has responded with sustained waves of ballistic missiles and drone attacks against Israel, U.S. military installations across the region, and Gulf states.
Current report
The November 2024 Israel-Lebanon ceasefire collapsed when Hezbollah launched a fresh barrage of rockets and missiles into Israel following the killing of Iranian Supreme Leader Ali Khamenei. Israel responded with intensive strikes on Beirut and southern Lebanon and has authorized a ground incursion in southern Lebanon; the Lebanese government has proscribed Hezbollah’s military activities and ordered the expulsion of Iranian IRGC personnel from Lebanese territory, though implementation remains uncertain.
Current report
Our Israel office and schools have been closed under shelter-in-place orders, and the ongoing bombardment has materially interrupted our operations. As of the date of this filing, active combat operations continue and no ceasefire is in place. The duration, scale, and outcome of this conflict remain highly uncertain, and the risk of further escalation across the region is significant.
Current report
For the three months ended January 31, 2026, our other revenue increased 19.7% compared to the same period in the prior year, primarily attributable to an increase in Zedge Premium net revenue which increased 18.6% during the corresponding period.
Current report
For the six months ended January 31, 2026, our advertising revenue increased 12.0% compared to the same period in the prior year, primarily due to higher average prices per advertising impression paid by advertisers on our Zedge App platform, reflecting increased competition for our ad inventory. The strong growth in the advertising revenue from our Zedge App was partially offset by a 46.9% decline in Emojipedia’s revenue during the corresponding periods.
Current report
For the six months ended January 31, 2026, our other revenue increased 5.1% compared to the same period in the prior year, primarily attributable to a 4.4% increase in Zedge Premium net revenue.
Current report
SG&A decreased 6.2% for the three months ended January 31, 2026, compared to the prior-year period. The decrease was primarily attributable to lower PUA and reduced net personnel-related expenses following the global restructuring initiated in January 2025 as well as the expiration of the $8 million retention bonus program related to the GuruShots acquisition. These cost savings were partially offset by the strengthening of the EUR and ILS against the USD, merit-based compensation increases, and certain one-time severance payments.
Current report
SG&A decreased 9.6% for the six months ended January 31, 2026, compared to the prior-year period. The decrease was primarily attributable to lower PUA and reduced net personnel-related expenses following the global restructuring initiated in January 2025 as well as the expiration of the $8 million retention bonus program related to the GuruShots acquisition. These cost savings were partially offset by the strengthening of the EUR and ILS against the USD, merit-based compensation increases, and certain one-time severance payments.
Current report
For the six months ended January 31, 2026, PUA spending for the Zedge App were relatively flat and we significantly reduced PUA spending for GuruShots, compared to the prior-year period. Combined PUA spending decreased 11.6% to $3.3 million for the six months ended January 31, 2026, from $3.8 million in the prior-year period.
Current report
As a percentage of revenue, SG&A was 79.4% for the three months ended January 31, 2026, compared to 98.3% for the same period in the prior year.
Current report
Impairment of intangible assets. For the three and six months ended January 31, 2026, we recorded an approximately $3.6 million impairment of intangible assets of our Emojipedia assets group, as more fully described in Note 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 charge primarily consisting of severance and employee benefits in connection with the global restructuring initiated in January 2025, as more fully described in Note 15Restructuring 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
For the three and six months ended January 31, 2026, we wrote off approximately $145,000 of Emojipedia’s capitalized software and technology development costs in connection with the allocation of impairment loss of the Emojipedia assets group, as more fully described in Note 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
For the three and six months ended January 31, 2025, we wrote off approximately $0.8 million of GuruShots’ capitalized software and technology development costs in connection with the global restructuring initiated in January 2025, as more fully described in Note 15Restructuring 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
Provision for Income taxes
Current report
In the three months ended January 31, 2026, we generated a pretax loss of $2.9 million and recorded an income tax benefit of $0.6 million, representing an effective tax rate of 21.2%. This rate falls below our estimated effective tax rate for fiscal 2026 of 24.4%, primarily due to a discrete tax item related to the impairment charges of Emojipedia group assets with an estimated tax rate of 22.4%.
Current report
For the three months ended January 31, 2026, loss from operations related to the Zedge Marketplace increased to $2.1 million, compared to income from operations of $41,000 for the three months ended January 31, 2025, primarily attributable to impairment charges of $3.7 million related to the Emojipedia assets group offset by higher revenue during the current period.
Current report
For the six months ended January 31, 2026, loss from operations related to the Zedge Marketplace was $.6 million, compared to income from operations of $1.0 million for the six months ended January 31, 2025, primarily attributable to impairment charges of $3.7 million related to the Emojipedia assets group offset by higher revenue during the current period.
Current report
For the six months ended January 31, 2026, loss from operations related to GuruShots decreased 61.2% to $1.4 million, compared to $3.7 million for the six months ended January 31, 2025. The decrease in operating loss was primarily attributable to the restructuring charge of $0.9 million in the prior period coupled with lower SG&A resulting from the global restructuring initiated in January 2025 and lower PUA spend year on year.
Current report
Under the Inflation Reduction Act signed into law in 2022, the excise tax on stock repurchases was approximately $44,000 and $8,000 for the fiscal years ended July 31, 2025 and 2023. There was no excise tax due for the fiscal year ended July 31, 2024 due to the de minimis exception threshold.
Removed paragraphs (7)
Previous report
Three months Ended October 31, 2025 Compared to Three months Ended October 31, 2024
Previous report
For the three months ended October 31, 2025, our other revenue declined 7.7% compared to the same period in the prior year, principally due to a reduction in Zedge Premium net revenue. Zedge Premium net revenue decreased 7.9% over the same period, primarily reflecting lower revenue contributions from certain AI-generative features and reduced royalty forfeiture.
Previous report
SG&A decreased 13.0% for the three months ended October 31, 2025, compared to the same period in the prior year. The decrease was primarily driven by lower net personnel-related expenses, including stock-based compensation, resulting from the global restructuring initiative implemented in January 2025, which reduced our headcount by approximately 21%. SG&A also declined due to the expiration of the $8 million retention bonus program (evenly split between cash and stock) associated with the GuruShots acquisition, which concluded in April 2025.
Previous report
Income tax expense
Previous report
In the three months ended October 31, 2024, we incurred a pretax loss of $290,000 and recorded an income tax expense of $49,000. The tax expense in this period primarily reflects discrete tax items of $115,000 related to the vesting of restricted stock and DSUs in the prior period, which more than offset an accrued tax benefit of $66,000 based on an estimated effective tax rate of 22.7%.
Previous report
Three months Ended October 31, 2025 Compared to Three months Ended October 31, 2024
Previous report
For the three months ended October 31, 2025, income from operations related to the Zedge Marketplace increased 66.4% to $1.6 million, compared to $0.9 million for the three months ended October 31, 2024. The increase was primarily attributable to higher revenue and lower SG&A during the current period.
Reworded paragraphs (49)
Previous wording
The majority of our users and employees are located outside of the United States exposing us to a range of economic factors and regulations including foreign exchange fluctuations. There is uncertainty surrounding macroeconomic factors in the U.S. and globally. We believe these macroeconomic conditions coupled with the global political climate and unrest, including the ongoing wars between Ukraine and Russia and Israel and Iran, the Gaza Strip, Lebanon, and Syria, may negatively impact our performance.
Current wording
The majority of our users and employees are located outside of the United States exposing us to a range of economic factors and regulations including foreign exchange fluctuations. There is uncertainty surrounding macroeconomic factors in the U.S. and globally. We believe these macroeconomic conditions coupled with the global political climate and unrest, including the ongoing wars between Ukraine and Russia, the war being waged against Iran by Israel and the United States, and the ongoing conflicts between Israel and the Gaza Strip, Lebanon, and Syria, may negatively impact our performance.
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, a designated terrorist organization, launched a savage terror attack in Israel, along with launching thousands of rockets into Israeli sovereign territory. The State of Israel declared war against Hamas resulting in the mobilization of more than 450,000 army reserve. In addition, Hezbollah, another designated terrorist organization, based in Lebanon, has been indiscriminately shelling Israeli territory. Since October 8, 2023, the Houthi rebels based in Yemen have also launched ballistic missiles and kamikaze drones at Israel. In June of 2025 Israel and Iran engaged in the ’12-Day War’ during which Israel launched strikes on Iranian nuclear and military facilities, assassinating key leaders and scientists, prompting Iranian retaliation with hundreds of missiles on Israeli cities; our office and schools were closed amid shelter-in-place orders, and the constant barrage of ballistic missiles launched from Iran and Yemen severely interrupted our operations. A U.S.-brokered ceasefire ended that direct clash on June 24, 2025, but tensions persist as Iran rebuilds its missile stocks and nuclear capabilities, raising fears of renewed confrontation. Compounding these threats, since the fall of the Assad regime in December 2024, Israel has conducted airstrikes and ground incursions in Syria to neutralize remaining Iranian-linked militias, secure the border, and protect the Druze minority amid sectarian clashes. Although ceasefires are in place—with the Gaza truce under the U.S.-backed 20-point plan holding broadly since October 10, 2025, following the release of all 20 remaining living Israeli hostages, and the Hezbollah agreement extended into 2025 amid Israeli withdrawals from southern Lebanon—these remain fragile amid violations. The extent and duration of these conflicts remain uncertain. Israel’s response to Hamas’ unprecedented attack, compounded by escalations with Hezbollah, the Houthis, Iran, and now intensified operations in Syria, has led to repeated IDF reservist mobilizations, 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 and its proxies, 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, a designated terrorist organization, launched a savage terror attack in Israel, along with launching thousands of rockets into Israeli sovereign territory. The State of Israel responded by attacking Hamas in Gaza resulting in the mobilization of more than 450,000 army reservists. In addition, Hezbollah, another designated terrorist organization, based in Lebanon, was indiscriminately shelling Israeli territory, and the Houthi rebels based in Yemen also launched ballistic missiles and kamikaze drones at Israel.
Previous wording
A key component of our growth strategy involves the adoption and utilization of AI, which introduces certain risks that may materially and adversely affect our business, financial condition, results of operations, and reputation. We incorporate AI into products such as pAInt and rely on AI for content moderation, personalization, and user engagement, but market demand for AI-driven offerings remains uncertain and may be outpaced by competitors. Compliance with evolving AI laws, such as the EU AI Act, may impose significant operational costs. Additionally, in late September 2025, Google released an update to its Search Engine Results Page (SERP) enabling users to copy emojis directly from search results rather than being directed to third-party sites such as Emojipedia, and AI platforms, including ChatGPT and Claude, now return emoji results in response to user queries. While it is too early to accurately quantify the impact of these changes on Emojipedia’s MAU, we believe they are likely to result in reduced traffic and adversely affect revenue. These uncertainties could significantly diminish the value of our services and materially and adversely affect our revenue, profitability, and prospects.
Current wording
A key component of our growth strategy involves the adoption and utilization of AI, which introduces certain risks that may materially and adversely affect our business, financial condition, results of operations, and reputation. We incorporate AI into products such as pAInt and rely on AI for development, content moderation, personalization, marketing assets, finance, legal, user engagement, and other functions across our business, but our ability to compete effectively in AI-driven markets and keep pace with better-resourced competitors remains uncertain. Compliance with evolving AI laws, such as the EU AI Act, may impose significant operational costs. Additionally, in late September 2025, Google released an update to its Search Engine Results Page (SERP) enabling users to copy emojis directly from search results rather than being directed to third-party sites such as Emojipedia, and AI platforms, including ChatGPT and Claude, now return emoji results in response to user queries. These developments could significantly diminish the value of our services and materially and adversely affect our revenue, profitability, and prospects. As a result, we recorded a non-cash impairment charge of approximately $3.7 million to reduce the carrying amount of the Emojipedia assets group to its estimated fair value, please refer to Note 5 to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Previous wording
Zedge builds digital marketplaces and friendly competitive games around content that people use to express themselves. Our leading products include Zedge Ringtones and Wallpapers, which we refer to as our “Zedge App,” a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones, and notification sounds as well as pAInt, a generative AI wallpaper and ringtone maker, GuruShots, a skill-based photo challenge game, and Emojipedia, the #1 trusted source for ‘all things emoji’, and DataSeeds.AI, a B2B offering which creates ethically sourced and fully rights-cleared custom image, video, and audio datasets that companies use to train their AI systems. Our vision is to enable and connect creators who enjoy friendly competitions with a community of prospective consumers in order to drive commerce.
Current wording
Zedge builds digital marketplaces and friendly competitive games around content that people use to express themselves. Our leading products include Zedge Ringtones and Wallpapers, which we refer to as our “Zedge App,” a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones, and notification sounds as well as pAInt, a generative AI wallpaper and ringtone maker, GuruShots, a skill-based photo challenge game, DataSeeds.AI, a B2B offering which offers ethically sourced and fully rights-cleared multimodal - image, video, and audio - datasets that companies use to train AI models, and Emojipedia, the #1 trusted source for ‘all things emoji’. Our vision is to enable and connect creators who enjoy friendly competitions with a community of prospective consumers in order to drive commerce.
Previous wording
We are part of the ‘Creator Economy,’ which is estimated to be worth between $191 billion and $250 billion globally in 2025, with some forecasts placing the global market size as high as $848 billion by 20321,2,3. According to multiple reports, there are now over 207 million active content creators worldwide.4,5 Furthermore, between 45% and 47% of creators identify as working full-time in this space 6,7,8. Most creators earn modest incomes, and studies suggest that only a small portion, approximately 4%, of creators earn more than $100,000 per year 9,10,11. We view the Creator Economy as an opportunity for Zedge to expand our business, especially as we execute by connecting our gamers with our marketplace.
Current wording
We are part of the ‘Creator Economy,’ which is estimated to be worth between $191 billion and $250 billion globally in 2025, with some forecasts placing the global market size as high as $848 billion by 2032123. According to multiple reports, there are now over 207 million active content creators worldwide.45 Furthermore, between 45% and 47% of creators identify as working full-time in this space 678. Most creators earn modest incomes, and studies suggest that only a small portion, approximately 4%, of creators earn more than $100,000 per year 91011. We view the Creator Economy as an opportunity for Zedge to expand our business, especially as we execute by connecting our gamers with our marketplace.
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. Over the past two years, our Zedge App has had between 22.1 million and 28.7 million monthly active users (“MAU”), ending with 22.2 million MAU as of October 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.
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. Over the past two years, our Zedge App has had between 20.4 million and 27.7 million monthly active users (“MAU”), ending with 20.4 million MAU as of January 31, 2026. MAU is a key performance indicator (“KPI”) for our Zedge App that captures the number of unique users that used our Zedge App during the final 30 days of the relevant period. Our platform allows creators to upload content to our marketplace and avail it to our users either for free or, via ‘Zedge Premium,’ the section of our marketplace where we offer premium content for purchase. In turn, our users utilize the content to personalize their phones and express their individuality.
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 or annual subscription. In April 2023, we introduced a subscription tier in the iOS version of the app. As of October 31, 2025, we had approximately 1.1 million 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, 2026, we had approximately 1.2 million active subscribers.
Previous wording
In fiscal 2025, we introduced DataSeeds.AI (“DataSeeds”). DataSeeds builds custom, fully rights-cleared image, video, and audio datasets for enterprise AI teams that need controlled inputs, bespoke content, and consistent metadata at scale. We draw on a large and long-standing creator ecosystem built through GuruShots and the Zedge Marketplace, complemented by an extensive global network of vetted professional photographers, videographers, and domain specialists. This unified sourcing model gives predictable, spec-driven control over subject matter, diversity parameters, environments, and capture conditions. It enables fast, high-volume delivery of custom datasets used to support frontier model training, robust computer vision performance, and grounded generative AI.
Current wording
In fiscal 2025, we introduced DataSeeds.AI (“DataSeeds”). DataSeeds offers ethically sourced and fully rights-cleared multimodal - image, video, and audio - datasets that companies use to build and train their AI models. We draw on a large and long-standing creator ecosystem built through GuruShots and the Zedge Marketplace, complemented by an extensive global network of vetted professional photographers, videographers, and domain specialists to create “Made-to-Order” bespoke datasets. This unified sourcing model gives predictable, spec-driven control over subject matter, diversity parameters, environments, and capture conditions. It enables fast, high-volume delivery of custom datasets used to support frontier model training, robust computer vision performance, and grounded generative AI. We also have started assembling a diverse catalog of “Off-the-Shelf” dataset spanning different content types and verticals.
Previous wording
In April 2022, we acquired GuruShots Ltd (“GuruShots”) a gamified photography platform that engages a global community of photographers through daily challenges, real-time feedback, and a competitive, interactive experience. 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 513,000 photographs and casting close to 2.8 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
GuruShots offers a platform spanning iOS, Android, and the web that provides a fun, educational and structured way for amateur photographers to compete in a wide variety of contests showcasing their photos while gaining recognition with votes, badges, and awards. We estimate that the total addressable market of amateur photographers using their smartphones to take and publicly share artistic photos is 30-40 million people per month and that the market is still in its infancy. Every month, GuruShots stages more than 300 competitions that result in players uploading in excess of 463,000 photographs and casting close to 2.7 billion “perceived votes,” which are calculated by multiplying the number of votes that each player casts by a weighting factor based on various factors related to that user. To improve engagement, GuruShots has adopted a set of retention dynamics focused on individual, team and community dynamics that create a sense of belonging, inspiration, recognition, improvement, and competition.
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 nine years, the monthly average paying player spend has increased in excess of 6.1% annually to more than $40.5 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 6.4% annually to more than $44.4 per player.
Previous wording
Emojipedia Pty Ltd (“Emojipedia”) is the world’s leading authority dedicated to providing up-to-date and well-researched emoji definitions, information, and news, 43.6 million monthly page views and has approximately 7.2 million monthly active users as of October 31, 2025 of which approximately 42.1% are located in well-developed markets. It is the top resource for all things emoji, offering insights into data and cultural trends. In the past year, we have implemented multiple changes to Emojipedia including an AI-powered emoji sticker generator tool as well as an extensive emoji sticker library.
Current wording
Emojipedia Pty Ltd (“Emojipedia”) is the world’s leading authority dedicated to providing up-to-date and well-researched emoji definitions, information, and news, as well as World Emoji Day and the annual World Emoji Awards. In January 2026, Emojipedia received approximately 40.7 million monthly page views and has approximately 6.7 million monthly active users as of January 31, 2026 of which approximately 40.9% are located in well-developed markets. It is the top resource for all things emoji, offering insights into data and cultural trends. In the past year, we have implemented multiple changes to Emojipedia including an AI-powered emoji sticker generator tool as well as an extensive emoji sticker library.
Previous wording
In late September 2025, Google released an update to its Search Engine Results Page (SERP) enabling users to copy emojis directly from search results rather than being directed to third-party sites such as Emojipedia. In addition, AI platforms, including ChatGPT and Claude, now return emoji results in response to user queries. While it is too early to accurately quantify the impact of these changes on Emojipedia’ s monthly active users (MAU), we believe they are likely to result in reduced traffic and adversely affect revenue. In light of these developments, we are evaluating potential mitigation strategies and will determine whether such measures warrant investment given the associated costs and expected benefits.
Current wording
In late September 2025, Google released an update to its Search Engine Results Page (SERP) enabling users to copy emojis directly from search results rather than being directed to third-party sites such as Emojipedia. In addition, AI platforms, including ChatGPT and Claude, now return emoji results in response to user queries. While it is too early to accurately quantify the impact of these changes on Emojipedia’ s monthly active users (MAU), we believe they are likely to result in reduced traffic and adversely affect revenue. As a result, we recorded an impairment charge of $3.7 million for the quarterly results ended January 31, 2026.
Previous wording
MAU decreased 11.2% in the three months ended October 31, 2025 when compared to the same period a year ago. As of October 31, 2025, users in emerging markets represented about 77.9% of our MAU, as compared to 78.0% from the same period a year ago.
Current wording
MAU decreased 17.4% in the three months ended January 31, 2026 when compared to the same period a year ago. As of January 31, 2026, users in emerging markets represented about 76.5% of our MAU, as compared to 77.3% from the same period a year ago.
Previous wording
ARPMAU for the three months ended October 31, 2025 increased 29.2% 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, 2025 increased 28.6% and 6.1%, respectively, when compared to the same period a year ago, as discussed below.
Current wording
ARPMAU for the three months ended January 31, 2026 increased 47.5% when compared to the same period a year ago, primarily due to the increase in price per advertising impression from the same period a year ago, which was driven by increased competition for our ad inventory as well as strong year-over-year subscription revenue growth. Subscription revenue and subscription billings for the three months ended January 31, 2026 increased 32.5% and 2.0%, respectively, when compared to the same period a year ago, as discussed below.
Previous wording
MAP decreased 28.4% in the three months ended October 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. ARPMAP increased 4.4% to $45.2 in the three months ended October 31, 2025 from $43.3 in the three months ended October 31, 2024.
Current wording
MAP decreased 43.1% in the three months ended January 31, 2026 when compared to the same period a year ago, primarily attributable to Apple’s App Tracking Transparence (“ATT”) framework which impedes our ability to invest in paid user acquisition (“PUA”) campaigns profitably in terms of return on ad spend or (“ROAS”). As such, we continued to scale back our PUA spend for GuruShots while testing new campaigns and creatives in order to unearth attractive ROAS scaling opportunities. ARPMAP increased 25.6% to $50.0 in the three months ended January 31, 2026 from $39.8 in the three months ended January 31, 2025.
Previous wording
Comparison of Our Results of Operations for the Three months ended October 31, 2025 and 2024
Current wording
Comparison of Our Results of Operations for the Three and Six Months ended January 31, 2026 and 2025
Previous wording
The following table sets forth the composition of our revenues for the three months ended October 31, 2025 and 2024:
Current wording
The following table sets forth the composition of our revenues for the three and six months ended January 31, 2026 and 2025:
Previous wording
The following table summarizes our subscription revenue for the three months ended October 31, 2025 and 2024:
Current wording
The following table summarizes our subscription revenue for the three and six months ended January 31, 2026 and 2025:
Previous wording
The following table summarizes Zedge Premium gross and net revenue for the three months ended October 31, 2025 and 2024:
Current wording
The following table summarizes Zedge Premium gross and net revenue for the three and six months ended January 31, 2026 and 2025:
Previous wording
For the three months ended October 31, 2025, our total revenue increased by 5.8% compared to the same period in the prior year, primarily attributable to the increase in advertising and subscription revenue, partially offset by the 27.3% decline in GuruShots’ revenue during the corresponding periods.
Current wording
For the three months ended January 31, 2026, our total revenue increased 18.3% compared to the same period in the prior year, primarily attributable to an increase in advertising and subscription revenue, partially offset by an 11.5% decline in GuruShots’ revenue during the corresponding periods.
Previous wording
For the three months ended October 31, 2025, our advertising revenue increased by 6.0% compared to the same period in the prior year, primarily due to higher average prices per advertising impression paid by advertisers on our platform, reflecting increased competition for our ad inventory. This growth was partially offset by an 11.3% decline in MAUs during the corresponding periods.
Current wording
For the three months ended January 31, 2026, our advertising revenue increased 18.3% compared to the same period in the prior year, primarily due to higher average prices per advertising impression paid by advertisers on our Zedge App platform, reflecting increased competition for our ad inventory. The strong growth in the advertising revenue from our Zedge App was partially offset by a 51.9% decline in Emojipedia’s revenue during the corresponding periods.
Previous wording
For the three months ended October 31, 2025, our subscription revenue increased 28.6%, and our subscription billings increased 6.1% compared to the same period in the prior year, primarily due to the lifetime subscription offering for Android and iOS users we rolled out in August 2023 and August 2024, respectively.
Current wording
For the three months ended January 31, 2026, our subscription revenue increased 32.5%, and our subscription billings increased 2.0%, compared to the same period in the prior year, primarily due to the lifetime subscription offering for Android and iOS users we rolled out in August 2023 and August 2024, respectively.
Previous wording
For the three months ended October 31, 2025, digital goods and services revenue declined 27.3% compared to the same period in the prior year primarily due to the 28.4% decrease in GuruShots’ MAP, partially offset by the 4.4% increase in ARPMAP during the corresponding periods.
Current wording
For the three months ended January 31, 2026, digital goods and services revenue declined 11.5% compared to the same period in the prior year primarily due to a 43.1% decline in GuruShots’ MAP partially offset by revenue contribution from DataSeeds.
Previous wording
Direct cost of revenues increased 20.4% in the three months ended October 31, 2025 compared to the same period in the prior year primarily due to higher data center costs and additional costs related to certain new initiatives, including DataSeeds and other products under development. As a percentage of revenue, direct cost of revenues in the three months ended October 31, 2025 increase to 7.3% from 6.4% for the same period in the prior year.
Current wording
Direct cost of revenues increased 25.5% in the three months ended January 31, 2026 compared to the same period in the prior year primarily due to higher data center costs and additional costs related to certain new initiatives, including DataSeeds and other products under development. As a percentage of revenue, direct cost of revenues in the three months ended January 31, 2026 increased to 6.8% from 6.4% for the same period in the prior year.
Previous wording
For the three months ended October 31, 2025, we increased PUA spending for the Zedge App while reducing PUA spending for GuruShots relative to the prior-year period. Combined PUA spending decreased 5%, to $1.7 million in the three months ended October 31, 2025, from $1.8 million in the same period of the prior year. We expect to continue investing in PUA for the Zedge App in the near term, provided that return on ad spend (“ROAS”) remains attractive.
Current wording
For the three months ended January 31, 2026, we modestly reduced PUA spending for the Zedge App and significantly reduced PUA spending for GuruShots compared to the prior-year period. Combined PUA spending decreased 17.6% to $1.6 million for the three months ended January 31, 2026, from $2.0 million in the prior-year period. We expect to continue investing in PUA for the Zedge App in the near term, subject to maintaining attractive return on ad spend (“ROAS”).
Previous wording
As a percentage of revenue, SG&A was 77.9% for the three months ended October 31, 2025, compared to 94.6% for the same period in the prior year.
Current wording
As a percentage of revenue, SG&A was 81.0% for the three months ended January 31, 2026, compared to 102.1% for the same period in the prior year.
Previous wording
Global headcount as of October 31, 2025 totaled 81 (including 14 at GuruShots) compared to 102 (including 28 at GuruShots) as of October 31, 2024 with the majority of our employees currently based in Lithuania and Israel.
Current wording
Global headcount as of January 31, 2026 totaled 85 (including 18 at GuruShots) compared to 106 (including 29 at GuruShots) as of January 31, 2025 with the majority of our employees currently based in Lithuania and Israel.
Previous wording
The following table summarizes stock-based compensation expense included in the SG&A for the three months ended October 31, 2025 and 2024:
Current wording
The following table summarizes stock-based compensation expense included in the SG&A for the three and six months ended January 31, 2026 and 2025:
Previous wording
Stock-based compensation expense decreased 72.6**%** for the three months ended October 31, 2025, compared to the same period in the prior year. The decrease was primarily driven by the full amortization of $4 million in stock-based compensation associated with the restricted stock issued in connection with the GuruShots acquisition, which was amortized over a three-year period that concluded in March 2025. Certain stock options, DSUs and restricted stock grants are more fully described in Note 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 expense decreased 54.4% for the three months ended January 31, 2026, compared to the same period in the prior year. The decrease was primarily driven by the full amortization of $4 million in stock-based compensation associated with the restricted stock issued in connection with the GuruShots acquisition, which was amortized over a three-year period that concluded in March 2025.
Previous wording
Depreciation and amortization. Depreciation and amortization expense consist mainly of amortization of intangible assets at GuruShots and Emojipedia and capitalized software and technology development costs of our internal developers on various projects that we invested in specific to the various platforms on which we operate our service.
Current wording
Depreciation and amortization. Depreciation and amortization expense consists mainly of amortization of intangible assets at GuruShots and Emojipedia and capitalized software and technology development costs of our internal developers on various projects that we invested in specific to the various platforms on which we operate our service.
Previous wording
Depreciation and amortization expense decreased by 43.3% for the three months ended October 31, 2025, compared to the corresponding period in the prior year. This decline was principally attributable to the $0.8 million impairment charge recognized in the second quarter of fiscal 2025 related to GuruShots’ capitalized software and technology development costs, which was incurred in connection with the global restructuring initiative.
Current wording
Depreciation and amortization expense decreased by 41.0% for the three months ended January 31, 2026, compared to the corresponding period in the prior year. This decline was principally attributable to the $0.8 million impairment charge recognized in the second quarter of fiscal 2025 related to GuruShots’ capitalized software and technology development costs, which was incurred in connection with the global restructuring initiative.
Previous wording
In the three months ended October 31, 2025, interest and other income, net decreased by 15.5% for the three months ended October 31, 2025, compared to the corresponding period in the prior year primarily due to lower cash and cash equivalent balance in the current period.
Current wording
In the three months ended January 31, 2026, interest and other income, net decreased by 27.5% compared to the corresponding period in the prior year primarily due to lower cash and cash equivalent balance coupled with lower interest yield in the current period.
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 resulting from foreign exchange transactions. Net loss resulting from foreign exchange transactions is comprised of gains and losses generated from movements in NOK, EUR and ILS relative to the U.S. Dollar, including gains or losses from our hedging activities.
Previous wording
For the three months ended October 31, 2025, net loss from foreign exchange transactions increased by $32,000 compared to the same period in the prior year, primarily due to unfavorable foreign exchange rate movements.
Current wording
For the three months ended January 31, 2026, net loss from foreign exchange transactions increased 60.5% compared to the same period in the prior year, primarily due to unfavorable foreign exchange rate movements.
Previous wording
We recognized mark-to-market (” MTM”) losses of $0 and $58,000 from NOK and EUR hedging activities for the three months ended October 31, 2025 and 2024, 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”) gains of $0 and $18,000 from NOK and EUR hedging activities as of January 31, 2026 and July 31, 2025, respectively, as more fully described in Note 4,Derivative Instruments, to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Previous wording
As a result of the global restructuring initiative implemented in January 2025, which included the closure of the Company’s Norway operations, we no longer have exposure to USD/NOK foreign exchange risk. Accordingly, there were no outstanding NOK forward contracts as of July 31, 2025. We have also concluded that there is no current requirement to enter into USD/EUR forward contracts beyond August 2025. As a result, there were no outstanding EUR forward contracts and no MTM adjustment as of October 31, 2025.
Current wording
As a result of the global restructuring initiated in January 2025, which included the closure of the Company’s Norway operations, we no longer have exposure to USD/NOK foreign exchange risk. Accordingly, there were no outstanding NOK forward contracts as of January 31, 2026 and July 31, 2025. We have also concluded that there is no current requirement to enter into USD/EUR forward contracts beyond August 2025. As a result, there were no outstanding EUR forward contracts as of January 31, 2026. Therefore, there was no MTM adjustment as of January 31, 2026.
Previous wording
In the three months ended October 31, 2025, we generated pretax income of $1.0 million and recorded an income tax expense of $233,000, representing an effective tax rate of 22.8%. This rate exceeds our estimated effective tax rate for fiscal 2026 of 22.3%, primarily due to discrete tax items of $9,700 associated with the vesting DSUs during the current period.
Current wording
In the six months ended January 31, 2026, we incurred a pretax loss of $1.9 million and recorded an income tax benefit of $0.4 million representing an effective tax rate of 20.4%. This rate falls below our estimated effective tax rate for fiscal 2026 of 24.4%, primarily due to a discrete tax item related to the impairment charges of Emojipedia group assets with an estimated tax rate of 22.4% and a discrete tax item of $9,700 associated with the vesting DSUs during the current period.
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, 2025 and 2024:
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, 2026 and 2025:
Previous wording
For the three months ended October 31, 2025, loss from operations related to GuruShots decreased 54.0% to $0.6 million, compared to $1.4 million for the three months ended October 31, 2024. The decrease in operating loss was primarily driven by lower SG&A resulting from the global restructuring initiative implemented in January 2025, partially offset by lower revenue in the current period.
Current wording
For the three months ended January 31, 2026, loss from operations related to GuruShots decreased 65.6% to $0.8 million, compared to $2.3 million for the three months ended January 31, 2025. The decrease in operating loss was primarily attributable to the restructuring charge of $0.9 million in the prior period coupled with lower SG&A resulting from the global restructuring initiated in January 2025 and lower PUA spend year on year.
Previous wording
At October 31, 2025, we had cash and cash equivalents of $18.5 million and working capital (current assets less current liabilities) of $14.6 million, compared to $18.6 million and $14.7 million, respectively, at July 31, 2025. We expect that our cash and cash equivalents on hand and our cash flow from operations will be sufficient to meet our anticipated cash requirements for the twelve-month period ending December 12, 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,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, 2026, we had cash and cash equivalents of $19.1 million and working capital (current assets less current liabilities) of $15.3 million, compared to $18.6 million and $14.7 million, respectively, at July 31, 2025. We expect that our cash and cash equivalents on hand and our cash flow from operations will be sufficient to meet our anticipated cash requirements for the twelve-month period ending March 16, 2027. We maintain a revolving credit facility of $4 million, including a foreign exchange contract facility of up to $7.5 million with WAB, as discussed below under Financing Activities and in Note 10,Revolving Credit Facility, to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
Showing the first 40 of 49 pairs. Open the source sections for the rest.
Rearranged current paragraphs (14)
Current report — wording carried from elsewhere
In June of 2025, Israel and Iran engaged in the ‘12-Day War’ during which Israel and the Unites States launched strikes on Iranian nuclear and military facilities, assassinating key leaders and scientists, prompting Iranian retaliation with hundreds of missiles on Israeli cities; offices and schools were closed amid shelter-in-place orders, and the constant barrage of ballistic missiles launched from Iran and Yemen severely interrupted our operations. A U.S.-brokered ceasefire ended that direct clash on June 24, 2025, but tensions persisted as Iran rebuilt its missile stocks and nuclear capabilities, raising fears of renewed confrontation. Compounding these threats, since the fall of the Assad regime in December 2024, Israel has conducted airstrikes and ground incursions in Syria to neutralize remaining Iranian-linked militias, secure the border, and protect the Druze minority amid sectarian clashes. The Gaza ceasefire under the U.S.-backed framework, reached following the release of all remaining living Israeli hostages, has held broadly, though it remains fragile.
Current report — wording carried from elsewhere
The foregoing conflicts have led to repeated IDF reservist mobilizations, affecting our workforce. The cumulative effect of these conflicts, combined with broader regional instability, risks impacting foreign investment, currency fluctuations, credit ratings, interest rates, oil prices, and security markets. Furthermore, regional political unrest and threats from extremist groups, notably Iran and its proxies, pose additional risks. The Houthis, while having reduced commercial shipping attacks since a May 2025 ceasefire with the U.S., continue to threaten Israeli and U.S. targets and may escalate in conjunction with Iran’s ongoing retaliation campaign. Management and our Board of Directors are closely monitoring the situation in Israel to address potential business disruptions and implications.
Current report — wording carried from elsewhere
In April 2022, we acquired GuruShots Ltd (“GuruShots”) a gamified photography platform that engages a global community of photographers through daily challenges, real-time feedback, and a competitive, interactive experience.
Current report — wording carried from elsewhere
For the six months ended January 31, 2026, our total revenue increased 11.9% compared to the same period in the prior year, primarily attributable to an increase in advertising and subscription revenue, partially offset by a 19.6% decline in GuruShots’ revenue during the corresponding periods.
Current report — wording carried from elsewhere
For the six months ended January 31, 2026, our subscription revenue increased 30.6%, and our subscription billings increased 4.0%, compared to the same period in the prior year, primarily due to the lifetime subscription offering for Android and iOS users we rolled out in August 2023 and August 2024, respectively.
Current report — wording carried from elsewhere
For the three months ended January 31, 2026, digital goods and services revenue declined 19.6% compared to the same period in the prior year primarily due to a 35.8% decline in GuruShots’ MAP partially offset by revenue contribution from DataSeeds.
Current report — wording carried from elsewhere
Direct cost of revenues increased 22.9% in the six months ended January 31, 2026 compared to the same period in the prior year primarily due to higher data center costs and additional costs related to certain new initiatives, including DataSeeds and other products under development. As a percentage of revenue, direct cost of revenues in the three months ended January 31, 2026 increased to 7.0% from 6.4% for the same period in the prior year.
Current report — wording carried from elsewhere
Stock-based compensation expense decreased 61.4% for the six months ended January 31, 2026, compared to the same period in the prior year. The decrease was primarily driven by the full amortization of $4 million in stock-based compensation associated with the restricted stock issued in connection with the GuruShots acquisition, which was amortized over a three-year period that concluded in March 2025.
Current report — wording carried from elsewhere
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 report — wording carried from elsewhere
Depreciation and amortization expense decreased by 42.3% for the six months ended January 31, 2026, compared to the corresponding period in the prior year. This decline was principally attributable to the $0.8 million impairment charge recognized in the second quarter of fiscal 2025 related to GuruShots’ capitalized software and technology development costs, which was incurred in connection with the global restructuring initiative.
Current report — wording carried from elsewhere
Impairment of capitalized software and technology development costs.
Current report — wording carried from elsewhere
In the six months ended January 31, 2026, interest and other income, net decreased by 23.9% compared to the corresponding period in the prior year primarily due to lower cash and cash equivalent balance coupled with lower interest yield in the current period.
Current report — wording carried from elsewhere
For the six months ended January 31, 2026, net loss from foreign exchange transactions increased 84.0% compared to the same period in the prior year, primarily due to unfavorable foreign exchange rate movements.
Current report — wording carried from elsewhere
On October 14, 2025, we declared a quarterly cash dividend of $0.016 per share, aggregating approximately $208,000 which was paid on November 7, 2025, to stockholders of record as of October 24, 2025.