Zedge, Inc.
For the period ended Jul 31, 2026. Filed Oct 28, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Oct 28, 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-K
Period ended 2025-07-31; filed 2025-10-28.
0001213900-25-103098
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-07-31; filed 2026-10-28.
0001213900-26-113312
Item 7. 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 154 previous paragraphs and 166 current paragraphs.
84 unchanged; 54 reworded; 26 added; 15 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 38 previous and 31 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 (26)
Current report
We build and operate creator communities that collectively serve approximately 19.3 million monthly active users across the Zedge Marketplace and GuruShots. Zedge Marketplace, our flagship platform, is a leading marketplace for mobile personalization content and includes pAInt, our generative AI creation suite. GuruShots is a photo competition game in which photographers of all skill levels compete, vote and improve through gamified photo challenges. DataSeeds.AI (“DataSeeds”) is our business-to-business offering, delivering multimodal datasets spanning images, video and audio, including egocentric video for robotics training, that are rights-cleared and built to customer specification. We use the term “rights-cleared” to mean that we have obtained from the asserted creator (or, if applicable, the owner or any depicted individual) ownership or a license (and if required consent or release) permitting use of the content for AI training and any other agreed customer use and rely on those rights or other authorizations to address any claims that the intended use of the content violates the rights of a third party. This reduces but does not eliminate all risk related to our use of the content. Demand for this kind of data comes from organizations that develop, train, fine-tune or evaluate models on real-world imagery, video and audio. That includes frontier model developers, large technology companies and robotics manufacturers, and it extends to enterprises applying AI within specific industries, consumer and creative software platforms, and data services companies that incorporate our content into their own offerings. We have delivered datasets at scale over multiple quarters, produced to customer specifications. To date, we have served a small number of these customers. The content foundation for DataSeeds is supplied by our proprietary creator communities across the Zedge Marketplace and GuruShots. Our portfolio also includes Emojipedia, a leading reference for emoji definitions, information and news.
Current report
We are part of the “Creator Economy,” which Coherent Market Insights estimated to be worth approximately $252 billion globally in 2025 and projected to reach approximately $1.3 trillion by 20333.We view the Creator Economy as an opportunity to expand our business, particularly as we expand into the business-to-business market with DataSeeds. The market for AI training data is also growing rapidly, and Grand View Research estimates it will reach $3.9 billion in 2026, with image and video representing the largest data modality at 41.9% of the market in 20254.
Current report
In fiscal 2025, we introduced DataSeeds, which produces rights-cleared multimodal datasets, including egocentric video for robotic training, at scale. Our user base consists of approximately 19.3 million monthly active users across two platforms, Zedge Marketplace, our marketplace for mobile personalization content, and GuruShots, our photo competition game. From that audience, we mobilize a managed network of contributors that produce spec-matched images, audio, and video training data. Our deep experience in consumer mobile products, including onboarding, compliance, gamification, micropayments, and user acquisition, enables us to maintain high contributor quality and consistent production at volume while delivering managed crowd solutions.
Current report
We source content for DataSeeds primarily through three channels: an Off-the-Shelf catalog of images, video and audio, content created to order by contributors we recruit directly, and the DataSeeds Production Cloud, our curated global network of professional production partners.
Current report
Models are only as good as the data used to train and refine them, and we believe the need for documented, rights-cleared data extends well beyond the largest model developers. Our ability to serve the full range of buyers described above will depend on adding commercial, engineering, and operational capacity that we do not have today. Our plans to extend further along the AI data value chain are described under “Our Strategy” below.
Current report
We believe that the extensive library of photographs generated by GuruShots players through submissions to GuruShots’ competitions represents a valuable dataset for DataSeeds. We have secured AI training rights to approximately 50 million of these photographs, and we continue to expand the licensable catalog by securing rights to additional photographs. In addition, we introduced a minigame feature within GuruShots through which we make model evaluation services available to AI developers, and we entered into our first agreement for these services in August 2026. The experience is game-like, fun and competitive, and offers a valuable capability to technology companies that need human-ranked content review. Participation in the minigame is limited to human players, and automated participants are excluded.
Current report
In fiscal 2025, we introduced DataSeeds.AI (“DataSeeds”). DataSeeds offers 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 recognize DataSeeds revenue when datasets are delivered and accepted by our customers.
Current report
Amortization of these capitalized costs is included in depreciation and amortization in the consolidated statements of operations and comprehensive income (loss).
Current report
Certain Conflicts in the Middle East
Current report
In June of 2025, Israel and Iran engaged in the ’12-Day War’ during which Israel and the United States launched strikes on Iranian nuclear and military facilities, assassinating key leaders and scientists. Iranian retaliation included hundreds of missiles fired 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
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 responded with sustained waves of ballistic missiles and drone attacks against Israel, U.S. military installations across the region, and Gulf states. Following more than five weeks of sustained hostilities, the United States and Iran agreed to a ceasefire on April 8, 2026, mediated by Pakistan. The ceasefire is between the United States and Iran; Israel is not a formal party to the agreement, and Israel’s obligations under it remain a matter of dispute. In the weeks following the ceasefire, tensions have continued over Iran’s closure of the Strait of Hormuz and ongoing U.S.-Iran negotiations. As of the date of this filing, the ceasefire remains in effect despite limited level of active measures, though its durability is uncertain and the risk of resumed hostilities is significant.
Current report
Following the February 28, 2026 joint-U.S. and Israel strikes on Iran, Hezbollah launched a fresh barrage of rockets and missiles into Israel, collapsing the November 2024 ceasefire. Israel responded with intensive strikes on Beirut and southern Lebanon. On April 16, 2026, the United States brokered a ceasefire between Israel and Lebanon. That ceasefire was extended on April 23 for three weeks, and extended again on May 15 for an additional 45 days, with Israel and Lebanon agreeing on a framework for negotiations toward a lasting peace. Notwithstanding the ceasefire between Israel and the Lebanese government, Hezbollah, a designated terrorist organization operating within Lebanon, has continued and escalated its attacks on Israel and Israel has escalated its actions against Hezbollah in Lebanon.
Current report
Our Israel office is currently open and operating.
Current report
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 activities and any resumed hostilities. Management and our Board of Directors are closely monitoring the situation in Israel to address potential business disruptions and implications.
Current report
Direct cost of revenues in fiscal 2026 increased by $388,000, or 21.1%, compared to fiscal 2025 primarily due to production costs related to DataSeeds and higher data center costs and additional costs related to certain new initiatives under development. Direct cost of revenues as percentage of revenue was 7.0% in fiscal 2026 compared to 6.3% in fiscal 2025.
Current report
SG&A expense in fiscal 2026 decreased by $1.6 million, or 5.8%, compared to fiscal 2025. The decrease was primarily attributable to lower PUA and lower stock-based compensation resulting from the expiration, in late fiscal 2025, of the $4 million retention bonus program related to the GuruShots acquisition. The personnel-related expenses savings from the global restructuring initiated in January 2025 were mostly offset by the strengthening of the EUR and ILS against the USD, merit-based compensation increases, certain one-time severance payments and lower capitalized software and technology development costs.
Current report
PUA spending in fiscal 2026 for the Zedge App and GuruShots decreased 7.1% and 57.5%, respectively. Combined PUA spending decreased 12.6% to $7.2 million from $8.2 million in the prior-year period.
Current report
Stock-based compensation expense in fiscal 2026 decreased by $0.9 million, or 63.3%, compared to fiscal 2025. 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
Depreciation and amortization expense in fiscal 2026 decreased by $0.4 million, or 38.5%, compared to fiscal 2025 This decline was principally attributable to the $3.6 million impairment of intangible assets of our Emojipedia assets group recorded in the second quarter of fiscal 2026 and 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
In fiscal 2026, income from operations related to the Zedge Marketplace was $2.3 million, essential unchanged from fiscal 2025, primarily attributable to the impairment charge of $3.7 million related to the Emojipedia assets group offset by higher revenue during the current period.
Current report
In fiscal 2026, loss from operations related to GuruShots decreased 46.8% to $3.0 million, from $5.6 million in fiscal 2025. The decrease in operating loss was primarily attributable to the restructuring charge of $1.2 million in fiscal 2025 coupled with lower personnel-related expenses in fiscal 2026 resulting from the global restructuring initiated in January 2025 and lower PUA spend year on year.
Current report
Net cash provided by operating activities was $4.6 million for the fiscal year ended July 31, 2026. This amount primarily reflected a net loss of $0.1 million, adjusted for non-cash items of $4.7 million, including $0.7 million of amortization and depreciation, $0.5 million of stock-based compensation expense and a $3.5 million impairment charge (net of tax effect). Cash flows from operating activities also reflected changes in operating assets and liabilities, including a $0.2 million increase in accounts receivable, a $0.3 million decrease in prepaid expenses and other current assets, a $0.6 million decrease in accrued expenses related to payroll and board compensation, and a $0.7 million increase in deferred revenue associated with lifetime subscriptions sold during the period.
Current report
During fiscal 2026, we repurchased 554,251 shares of our Class B common stock for approximately $1.8 million pursuant to the 2024 Share Repurchase Plan, including the incremental $2.0 million authorized in June 2026. As of July 31, 2026, approximately $1.6 million remained available for future share repurchases under the 2024 Share Repurchase Plan.
Current report
Under the Inflation Reduction Act of 2022, we paid $52,000 of excise tax on stock repurchases.
Current report
In light of operational improvements, including consistent positive cash flows from operations and cost reductions, as well as our currently anticipated cash needs, we paid four quarterly cash dividends aggregating $0.9 million in fiscal 2026.
Current report
CONTRACTUAL OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS
Removed paragraphs (15)
Previous report
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 maker, GuruShots, a skill-based photo challenge game, 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 report
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 2032 121314. According to multiple reports, there are now over 207 million active content creators worldwide.1516 Furthermore, between 45% and 47% of creators identify as working full-time in this space 171819. Most creators earn modest incomes, and studies suggest that only a small portion, approximately 4%, of creators earn more than $100,000 per year 202122. 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 report
In fiscal 2025, we began building DataSeeds.AI (“DataSeeds”), a business-to-business marketplace offering access to our rapidly growing catalog of over 30 million high-quality, fully rights-cleared images for AI training, ecommerce, and stock photos. Uniquely positioned to deliver custom content at scale, DataSeeds leverages its global creator network, tens of thousands of photographers from GuruShots and creators from Zedge to fulfill highly specific client briefs across geographies, themes, and use cases. DataSeeds addresses a critical challenge facing foundational models today: the need for edge-case visual content to improve accuracy and performance. Each asset can be enhanced with detailed annotations, segmentation masks, technical metadata, and peer-based quality rankings, ensuring datasets are both robust and production-ready. With scalable infrastructure and fast turnaround times, DataSeeds is a powerful partner for enterprises building the next generation of AI-powered applications.
Previous report
In addition to its potential as a standalone game, we believe that the extensive library of photographs generated by GuruShots players through submissions to GuruShots’ competitions represents a valuable dataset for our emerging DataSeeds offering. To date, we have secured rights to license a portion of this library for various applications, including AI training, and we continue to expand the licensable catalog by securing rights to additional photographs. We believe the scale and distinctive characteristics of this dataset position it as a meaningful resource for DataSeeds’ target market.
Previous report
The Israel-Hamas and Israel-Hezbollah Conflicts
Previous report
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.
Previous report
Direct cost of revenues in fiscal 2025 decreased by $18,000, or 1.0%, compared to fiscal 2024 primarily due to the savings from continuing optimizing of our backend infrastructure. Direct cost of revenues as percentage of revenue remained relatively flat year over year at about 6.2%
Previous report
Stock-based compensation expense in fiscal 2025 decreased by $0.7 million, or 32.5%, compared to fiscal 2024. The decrease was primarily attributable to lower aggregate fair value related to the deferred stock units (“DSUs”) granted in November 2024 compared to that of the DSUs granted in September 2021 which were being recognized on a graded vesting basis over the requisite service periods. Additionally, our stock-based compensation expense related to the retention bonuses in connection with the GuruShots acquisition were fully recognized as of April 1, 2025, which contributed in part to the year over year decrease.
Previous report
Depreciation and amortization expense in fiscal 2025 decreased by $1.3 million, or 53.2%, compared to fiscal 2024, primarily due to the $11.9 million impairment charge of intangible assets recorded in Q2 of fiscal 2024 discussed below.
Previous report
nm-not meaningful
Previous report
In fiscal 2025, our income from operations related to the Zedge Marketplace decreased 58.7% to $2.3 million from $5.7 million in fiscal 2024, primarily due to higher users acquisition costs and higher other expenses incurred in the current period. Additionally, we recorded $1.2 million restructuring charges in fiscal 2025 which contributed in part to the decrease in the segment income from operation related to the Zedge Marketplace.
Previous report
In fiscal 2025, our loss from operations related to GuruShots decreased 68.1% to $5.6 million from $17.5 million in fiscal 2024, primarily due to the $11.9 million impairment charge of intangible assets recorded in the prior period.
Previous report
Net cash provided by operating activities was $5.8 million for the fiscal year ended July 31, 2024, primarily consisting of $9.2 million of net loss, adjusted for certain non-cash items, which included a $9.5 million impairment charge (net of tax effect) of intangible assets, $2.5 million of amortization, depreciation, and write-offs, $2.1 million of stock-based compensation expense, and a net increase in operating assets and liabilities of $0.9 million.
Previous report
During fiscal 2024, we repurchased 211,495 shares of our Class B Common Stock outstanding for approximately $0.6 million pursuant to the 2021 Share Repurchase Plan.
Previous report
In light of operational improvements, including consistent positive cash flow from operations and cost cutting, as well as the currently anticipated cash needs, on October 12, 2025 our Board of Directors declared a dividend of $0.01615 per share to be paid on shares of our Class A common stock and Class B common stock held of record on October 24, 2025, to be paid on or around November 7, 2025, as well as the intent to pay a regular quarterly dividend so long as the conditions that allow for it continue.
Reworded paragraphs (54)
Previous wording
Our business consists of two reportable segments: Zedge Marketplace and GuruShots, as further discussed in Note 15,Segment and Geographic Information.
Current wording
Our business consists of two reportable segments: Zedge Marketplace and GuruShots (which includes DataSeeds).
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 fiscal years, our Zedge App has had between 22.1 million and 28.7 million MAU, ending with 23.3 million MAU as of July 31, 2025. MAU is a 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 Ringtones & Wallpapers” in Google Play and 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 fiscal years, our Zedge App has had between 19.3 million and 20.5 million monthly active users (“MAU”). MAU for our Zedge App has been declining, and ended with 19.3 million MAU as of July 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
In fiscal 2023, we introduced pAInt, a generative AI wallpaper maker in the Zedge App. A generative AI wallpaper maker is an implementation of artificial intelligence software that can create images from text descriptions. To interface with a generative AI image maker, a user enters a text description of the image they want to create, and the software generates an image based on that description. Today, pAInt is available for text-to-image, image-to-image, and text-to-audio creation. In addition, we upgraded Zedge+, our paid subscription offering by bundling together an ad-free experience with value adds making the offering more compelling.
Current wording
In fiscal 2023, we introduced pAInt, a generative AI wallpaper maker in the Zedge App. Today, pAInt is available for text-to-image, image-to-image, and text-to-audio creation. In addition, we upgraded our paid subscription offering by bundling together an ad-free experience with value adds making the offering more compelling.
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 July 31, 2025, we had approximately 984,000 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 July 31, 2026, we had approximately 1.3 million active subscriptions.
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 550,000 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
In April 2022, we acquired GuruShots Ltd (“GuruShots”), our photo competition game in which photographers of all skill levels compete, vote and improve through gamified photo challenges. 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 30-40million people per month. Every month, GuruShots stages more than 300competitions that result in players uploading in excess of 400,000 photographs and casting close to 2.3 billion “perceived votes,” which are calculated by multiplying the number of votes that each player casts by a weighting factor based on various factors related to that user. To improve engagement, GuruShots has adopted a set of retention dynamics focused on individual, team and community dynamics that create a sense of belonging, inspiration, recognition, improvement, and competition.
Previous wording
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 eight years, the monthly average paying player spend has increased in excess of 6.2% annually to more than $40.9 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. Monthly average spend per paying player was approximately $47.6 in fiscal 2026.
Previous wording
Since the acquisition, GuruShots has faced challenges in growth and profitability, and its revenue has declined. We have cut costs at GuruShots, including as part of the restructuring implemented in January 2025, and have materially scaled back on PUA for the unit. In parallel, we are developing a plan, referred to as GuruShots 2.0, to revamp GuruShots’ offering in order to put it on a growth trajectory and unlock the potential value of this asset. Our strategy focuses on attracting new users and converting them into recurring, paying players. To date, we have introduced a fun and comprehensive onboarding experience to draw new users into the gameplay with ease and migrated to a coin-based in-game economy to enable more opportunities to reward and monetize players
Current wording
Since the acquisition, GuruShots has faced challenges in growth and profitability, and its revenue has declined. We have cut costs at GuruShots, including as part of the restructuring initiated in January 2025, and have materially scaled back on paid user acquisition (“PUA”). Our strategy focuses on attracting new users and converting them into recurring, paying players.
Previous wording
Historically, we marketed GuruShots to prospective players primarily via PUA channels including Google, Meta, TikTok and other platforms, utilizing a variety of ad formats, such as static and video ads. As part of the restructuring plan, we have significantly reduced PUA investment to improve ROAS and intend to continue managing PUA spend in this framework performance.
Current wording
Historically, we marketed GuruShots to prospective players primarily via PUA channels including Google, Meta, TikTok and other platforms, utilizing a variety of advertising media and formats, including static and video advertisements. We have significantly reduced PUA investment for GuruShots to improve Return-on-Ad-Spend (“ROAS”) and intend to continue managing PUA spend to prioritize return on ad spend.
Previous wording
In August 2021, we acquired Emojipedia Pty Ltd (“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 July 2025, Emojipedia received approximately 48.4 million monthly page views and has approximately 8.9 million monthly active users as of July 31, 2025 of which approximately 46.2% are located in well-developed markets. It is the top resource for all things emoji, offering insights into data and cultural trends.
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. 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 will evaluate potential mitigation strategies and 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. These changes have resulted in reduced traffic and reduced revenue. Emojipedia revenue declined 49.4% in fiscal 2026 compared to fiscal 2025. In July 2026, Emojipedia had approximately 34.4 million monthly page views, down 29.0% from July 2025, and approximately 5.7 million monthly active users, down 35.1% from July 2025, of which approximately 38.7% were located in well-developed markets. In light of these developments, we recorded an impairment charge of $3.7 million during the three months ended January 31, 2026, and we are managing Emojipedia for cash generation rather than for growth.
Previous wording
We generate revenue from the following sources: (1) Advertising; (2) Paid Subscription; (3) Other revenues including primarily Zedge Premium (the section of our marketplace where we offer premium content for purchase), and (4) Digital Goods and Services. The substantial majority of our revenue is generated from selling our advertising inventory (“Advertising Revenue”) to advertising networks and advertising exchanges. Our weekly, monthly, yearly and life-time subscriptions allow users to prepay a fixed fee to remove unsolicited advertisements from our Zedge App. In Zedge Premium, we receive 30% of the net purchase price, after payment of fees to Google Play or the App Store, when users purchase licensed content using Zedge Credits or unlock licensed content by watching a video or taking a survey on Zedge Premium. Sales and other similar taxes are excluded from revenues.
Current wording
We generate revenue from the following sources: (1) advertising; (2) paid subscriptions; (3) other sources, primarily Zedge Premium (the section of our marketplace where we offer premium content for purchase), and (4) digital goods and services. The substantial majority of our revenue is generated from selling our advertising inventory (“Advertising Revenue”) to advertising networks and advertising exchanges. Our weekly, monthly, yearly and life-time subscriptions allow users to prepay a fixed fee to remove unsolicited advertisements from our Zedge App. In Zedge Premium, we receive 30% of the net purchase price, after payment of fees to Google Play or the App Store, when users purchase licensed content using Zedge Credits or unlock licensed content by watching a video or taking a survey on Zedge Premium. Sales and other similar taxes are excluded from revenues.
Previous wording
Paid Subscription Revenue: Beginning in January 2019 and April 2023, we started offering paid subscription services sold through Google Play and the App Store, respectively. When a customer subscribes, they execute a clickthrough agreement with Zedge outlining the terms and conditions between Zedge and the subscriber. Google Play and the App Store process subscription prepayment on Zedge’s behalf, and retain a fee of up to 30%. Subscriptions are nonrefundable after a period of seven days. Paid subscriptions are automatically renewed at expiration unless cancelled by subscribers. While customers can cancel at any time, they will not receive any refund, and will continue to receive the service until the end of the subscription period. The duration of these contracts is daily, and revenue for these contracts is recognized on a daily ratable basis. The payment terms for subscriptions sold through Google Play is net 30 days after month-end. The payment terms for subscriptions sold through the App Store is net 45 days after month-end. We recognize subscription revenue ratably over the subscription periods which range from weekly, monthly, yearly and lifetime with lifetime subscriptions deemed to have an estimated lifespan of 30 months.
Current wording
Paid Subscription Revenue: Beginning in January 2019 and April 2023, we started offering paid subscription services sold through Google Play and the App Store, respectively. When a customer subscribes, they execute a clickthrough agreement with Zedge outlining the terms and conditions between Zedge and the subscriber. Google Play and the App Store process subscription prepayment on Zedge’s behalf, and retain a fee of up to 30%. Subscriptions are nonrefundable after a period of seven days. Paid subscriptions are automatically renewed at expiration unless cancelled by subscribers. While customers can cancel at any time, they will not receive any refund, and will continue to receive the service until the end of the subscription period. The duration of these contracts is daily, and revenue for these contracts is recognized on a daily ratable basis. The payment terms for subscriptions sold through Google Play is net 30 days after month-end. The payment terms for subscriptions sold through the App Store is net 45 days after month-end. We recognize subscription revenue ratably over the subscription periods which range from weekly, monthly, yearly and lifetime with lifetime subscriptions having an estimated lifespan of 30 months.
Previous wording
Zedge Premium: Zedge Premium is our marketplace where artists and brands can market, distribute and sell their digital content to our users. The content owner sets the price and end users can purchase the content by paying for it with Zedge Credits, our closed virtual currency. Alternatively, the content owner may opt to place some items behind video ad gates, in which case end users can acquire the content by watching a brief video ad. A user can earn Zedge Credits when taking specific actions such as watching rewarded videos or completing electronic surveys. Alternatively, users can buy Zedge Credits with an in-app purchase. If a user purchases Zedge Credits, Google Play or the App Store retains a fee of 30% of the purchase price. When a user purchases Zedge Premium content using Zedge credits or watching a rewarded video, the artist or brand receives 70% of the actual revenue after the Google Play or App Store fee (“Royalty Payment”) and we receive the remaining 30%, which is recognized as revenue.
Current wording
Zedge Premium: Zedge Premium is our marketplace where artists and brands can market, distribute and sell their digital content to our users. The content owner sets the price and end users can purchase the content by paying for it with Zedge Credits, our closed virtual currency. Alternatively, the content owner may opt to place some items behind video ad gates, in which case end users can acquire the content by watching a brief video ad. A user can earn Zedge Credits when taking specific actions such as watching rewarded videos or completing electronic surveys. Alternatively, users can buy Zedge Credits with an in-app purchase. If a user purchases Zedge Credits, Google Play or the App Store retains a fee of 30% of the purchase price. When a user purchases Zedge Premium content using Zedge credits or watching a rewarded video, the artist or brand receives 70% of the actual revenue after the Google Play or iTunes fee (“Royalty Payment”) and we receive the remaining 30%, which is recognized as revenue.
Previous wording
GuruShots is primarily responsible for providing the virtual goods, has control over the content and functionality of games and has the discretion to establish the virtual goods’ prices. Therefore, GuruShots is the principal and, accordingly revenues are recorded on a gross basis. Payment processing fees paid to platform providers are recorded within selling, general and administrative expenses.
Current wording
GuruShots is primarily responsible for providing the virtual goods, has control over the content and functionality of games and has the discretion to establish the virtual goods’ prices. Therefore, GuruShots is the principal and, accordingly revenues are recorded on a gross basis. Payment processing fees paid to platform providers are recorded within selling, general and administrative expenses. We report DataSeeds revenue on a gross basis as we are the principal in the transaction.
Previous wording
Intangible assets are carried at cost, less accumulated amortization, unless a determination has been made that their value has been impaired. Intangible assets are amortized on a straight-line basis over their estimated useful lives of between five to fifteen years. We review identifiable amortizable intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. Measurement of any impairment loss is based on the excess of the carrying value of the asset over its fair value. We recorded $11.9 million impairment charges in Q2 of our fiscal year ended July 31, 2024.
Current wording
Intangible assets are carried at cost, less accumulated amortization, unless a determination has been made that their value has been impaired. Intangible assets are amortized on a straight-line basis over their estimated useful lives of between five to fifteen years. We review identifiable amortizable intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. Measurement of any impairment loss is based on the excess of the carrying value of the asset over its fair value. We recorded $3.7 million impairment charges in Q2 of our fiscal year ended July 31, 2026 related to Emojipedia’s intangible assets, See Note 6Intangible, Net and Goodwill, for additional information.
Previous wording
We evaluate these long-lived assets for impairment whenever circumstances arise that indicate the carrying amount of an asset may not be recoverable. The Company’s strategic reassessment of GuruShots’ operations in connection with the restructuring initiative resulted in a $0.8 million impairment of capitalized software and technology development costs which is recorded in the Company’s consolidated statements of operations and comprehensive loss for the fiscal year ended July 31, 2025.
Current wording
We evaluate these long-lived assets for impairment whenever circumstances arise that indicate the carrying amount of an asset may not be recoverable. The Company’s strategic reassessment of GuruShots’ operations in connection with the fiscal 2025 restructuring initiative resulted in a $0.8 million impairment of capitalized software and technology development costs which is recorded in the Company’s consolidated statements of operations and comprehensive income (loss) for the fiscal year ended July 31, 2025. In Q2 of our fiscal year ended July 31, 2026, we recorded $0.1 million impairment charges related to Emojipedia’s capitalized software development costs. See Note 6Intangible, Net and Goodwill, for additional information.
Previous wording
We account for our share-based compensation arrangements in accordance with ASC 718, “Compensation-Stock Compensation” (“ASC 718”) which requires the measurement and recognition of compensation expense for all share-based payment awards to employees and directors based on estimated fair values on the grant date. Compensation cost for awards is recognized using the straight-line method over the vesting period or the graded vesting method if awards with market or performance conditions include graded vesting features or if an award includes both a service condition and a market or performance condition. Stock-based compensation is included in selling, general and administrative expense in the consolidated statements of operations and comprehensive loss.
Current wording
We account for our share-based compensation arrangements in accordance with ASC 718, “Compensation-Stock Compensation” (“ASC 718”) which requires the measurement and recognition of compensation expense for all share-based payment awards to employees and directors based on estimated fair values on the grant date. Compensation cost for awards is recognized using the straight-line method over the vesting period or the graded vesting method if awards with market or performance conditions include graded vesting features or if an award includes both a service condition and a market or performance condition. Stock-based compensation is included in selling, general and administrative expense in the consolidated statements of operations and comprehensive income (loss).
Previous wording
The restructuring charges incurred by the Company in fiscal 2025 consist primarily of cash expenditures for compensation and severance payments, employee benefits, payroll taxes and related facilities restructuring costs associated with the Company’s workforce reduction announced (and substantially implemented) in the second quarter of fiscal 2025. Employee termination benefits are recognized as a liability at estimated fair value, at the time of communication to employees, unless future service is required, in which case the costs are recognized ratably over the future service period. Ongoing termination benefits are recognized as a liability at estimated fair value when the amount of such benefits is probable and reasonably estimable. Charges related to facilities restructuring actions are comprised of costs related to early termination of the lease agreement and impairment of the right-of-use asset in connection with the abandonment of the property.
Current wording
The restructuring charges incurred by the Company in fiscal 2025 consisted primarily of cash expenditures for compensation and severance payments, employee benefits, payroll taxes and related facilities restructuring costs associated with the Company’s workforce reduction announced (and substantially implemented) in the second quarter of fiscal 2025. Employee termination benefits are recognized as a liability at estimated fair value, at the time of communication to employees, unless future service is required, in which case the costs are recognized ratably over the future service period. Ongoing termination benefits are recognized as a liability at estimated fair value when the amount of such benefits is probable and reasonably estimable. Charges related to facilities restructuring actions are comprised of costs related to early termination of the lease agreement and impairment of the right-of-use asset in connection with the abandonment of the property.
Previous wording
We classify interest and penalties on income taxes as a component of income tax expense included in the provision for (benefit from) income taxes line item in our consolidated statements of operations and comprehensive loss.
Current wording
We classify interest and penalties on income taxes as a component of income tax expense included in the income tax expense (benefit) line item in our consolidated statements of operations and comprehensive income (loss).
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 Hamas, 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 the United States and Israel, 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 300,000 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, and the Islamic Republic of Iran has on two occasions attacked Israel with a barrage of ballistic missiles. In June of 2025 Israel and Iran entered into the ’12-Day War’ during which our office and schools were closed and there were shelter in place orders that were issued. The constant barrage of ballistic missiles launched from Iran and Yemen interrupted our operations. Although a temporary ceasefire is in place, it is unclear if it is sustainable. The extent and duration of this conflict remain 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.
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.
Previous wording
As of July 31, 2025 MAU declined 11.1% year over year primarily due to attrition in emerging markets, particular in Latin America and South Asia. As a result, users in emerging markets represented 76.7% of our MAU as of July 31, 2025 compared to 78.9% a year prior.
Current wording
As of July 31, 2026 MAU declined 16.8% year over year primarily due to higher attrition in North America and Europe. As a result, users in emerging markets represented 78.2% of our MAU as of July 31, 2026 compared to 76.7% a year prior.
Previous wording
ARPMAU increased 16.9% for the three months ended July 31, 2025 when compared to the same period a year ago, primarily due to higher advertising rate and higher subscription revenue.
Current wording
ARPMAU increased 30.5% for the three months ended July 31, 2026 when compared to the same period a year ago, primarily due to higher advertising rate and higher subscription revenue.
Previous wording
The following table presents a reconciliation of subscription billings to the most directly comparable GAAP financial measures for the fiscal years ended July 31, 2025 and 2024. We calculate subscription billings by adding the change in subscription deferred revenue between the start and end of the period to subscription revenue recognized in the same period. Subscription billings is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the growth of the subscription-based portion of our business, which is a critical part of our business plan. The $2.3 million and $1.4 million increase in deferred revenue for the fiscal years ended July 31, 2025 and 2024, respectively, were primarily attributable to the life-time subscription offering we introduced in fiscal 2024.
Current wording
The following table presents a reconciliation of subscription billings to the most directly comparable GAAP financial measures for the fiscal years ended July 31, 2026 and 2025. We calculate subscription billings by adding the change in subscription deferred revenue between the start and end of the period to subscription revenue recognized in the same period. Subscription billings is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the growth of the subscription-based portion of our business, which is a critical part of our business plan. The $0.6 million and $2.3 million increase in deferred revenue for the fiscal years ended July 31, 2026 and 2025, respectively, were primarily attributable to the life-time subscription offering we introduced in fiscal 2024.
Previous wording
For the fiscal year ended July 31, 2025, our advertising revenue decreased by $0.7 million, or 3.3%, from the prior year period primarily due to the decrease in our ad inventory. This decrease was partially offset by an increase in price per advertising impression paid by the advertisers on our platform.
Current wording
For the fiscal year ended July 31, 2026, our advertising revenue increased 4.1% from the prior year period primarily due to the increase in price per advertising impression paid by the advertisers on our platform offset by a decrease in our ad inventory.
Previous wording
For the fiscal year ended July 31, 2025, our subscription revenue increased by $0.7 million, or 17.1%, from the prior year period primarily due to the growth in lifetime subscriptions. Subscription billings increased by $1.7 million, or 29.0%, to $7.4 million in fiscal 2025 from $5.7 million in fiscal 2024.
Current wording
For the fiscal year ended July 31, 2026, our subscription revenue increased 29.6% from the prior year period primarily due to the growth in lifetime subscriptions. Subscription billings decreased by $141,000 to $7.2 million in fiscal 2026 from $7.4 million in fiscal 2025. As gross subscription billings have plateaued in fiscal 2026, we recognized more subscription revenue than subscription billings.
Previous wording
For the fiscal year ended July 31, 2025, our other revenue increased by $0.6 million, or 45.5%, from the prior year period. The increase in fiscal 2025 was primarily due to Zedge Premium net revenue growth which increased $0.6 million, or 48.7%, compared to fiscal 2024. Zedge Premium gross margin was 68% in fiscal 2025 compared to 56% in fiscal 2024. We introduced certain generative AI features in our Zedge App in fiscal 2024 which contributed in part to the higher gross margin in fiscal 2025 as we keep 100% of the associated revenue, i.e. no royalty payment owed to the content creators.
Current wording
For the fiscal year ended July 31, 2026, our other revenue increased 6.5% from the prior year period. The increase in fiscal 2026 was primarily due to Zedge Premium net revenue growth which increased 3.8% from the prior year period. Zedge Premium gross margin was 66% in fiscal 2026 compared to 68% in fiscal 2025.
Previous wording
For the fiscal year ended July 31, 2025, digital goods and services revenue decreased by $1.3 million, or 37.1%, from the prior year period primarily due to the 27.0% decrease in GuruShots’ MAP year over year.
Current wording
For the fiscal year ended July 31, 2026, digital goods and services revenue decreased 10.3% from the prior year period primarily due to the 28.5% decrease in GuruShots’ MAP year over year offset by revenue contribution from DataSeeds.
Previous wording
Direct cost of revenues. Direct cost of revenues consists primarily of content hosting, content serving and filtering, and data analytic tools, excluding amortization of capitalized software and technology development costs for both internal used software and software to be sold, leased, or marketed.
Current wording
Direct cost of revenues. Direct cost of revenues consists primarily of content hosting, content serving and filtering, and data analytic tools, excluding amortization of capitalized software and technology development costs for both internal used software and software to be sold, leased, or marketed. Direct cost of revenues also include production costs related to DataSeeds.
Previous wording
SG&A expense in fiscal 2025 increased by $1.6 million, or 6.1%, compared to fiscal 2024. The increase was primarily due to the increase in user acquisition costs, platform fee, consulting, professional fees, software licensing fees offset by the decrease in personnel related expenses primarily from the corporate restructuring implemented in January 2025. We ramped up paid user acquisition for our Zedge App significantly but scaled back paid user acquisition for GuruShots in fiscal 2025 when compared to fiscal 2024. As a percentage of revenue, SG&A expense was 92.5% in fiscal 2025 compared to 85.2% in fiscal 2024.
Current wording
As a percentage of revenue, SG&A expense was 81.0% in fiscal 2026 compared to 92.5% in fiscal 2025.
Previous wording
Our headcount was 82 and 99 as of July 31, 2025 and 2024, respectively. The reduction in our headcount can be attributed to the corporate restructuring implemented in January 2025. The majority of our employees are based in Lithuania and Israel.
Current wording
Our headcount was 82 (including 17 at GuruShots (that also support DataSeeds) and 82 (including 14 at GuruShots) as of July 31, 2026 and 2025, respectively. The majority of our employees are based in Lithuania and Israel.
Previous wording
Depreciation and amortization. Depreciation and amortization expense consists mainly of amortization of intangible assets related to the GuruShots (prior to the full impairment charge of $11.9 million recorded in Q2 of our fiscal 2024) and Emojipedia acquisitions, 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 related to the Emojipedia acquisitions, 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
Impairment of intangible assets. We performed an impairment assessment of intangible assets of our GuruShots reporting segment in Q2 of fiscal 2024 and determined that its fair value was approximately $0 and recorded a full impairment charge of $11.9 million, as more fully described in Note 7,Intangible Assets, Net and Goodwill, to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
Current wording
Impairment of intangible assets. We performed an impairment assessment of Emojipedia’s intangible assets in Q2 of fiscal 2026 and determined that its fair value was approximately $1.1 million and recorded an impairment charge of $3.6 million, as more fully described in Note 6,Intangible Assets, Net and Goodwill, to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
Previous wording
Impairment of capitalized software and technology development costs. In fiscal 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 18Restructuring and Other Related Charges to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
Current wording
Impairment of capitalized software and technology development costs. In fiscal 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 6,Intangible Assets, Net and Goodwill, to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information. In fiscal 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 17Restructuring, Impairments, and Related Chargesto the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
Previous wording
Restructuring charges. In fiscal 2025, we recorded approximately $1.6 million in restructuring charges primarily consisting of severance and employee benefits in connection with the global restructuring implemented in January 2025, as more fully described in Note 18Restructuring and Other Related Charges to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
Current wording
Restructuring charges. In fiscal 2025, we recorded approximately $1.6 million in restructuring charges primarily consisting of severance and employee benefits in connection with the global restructuring implemented in January 2025, as more fully described in Note 17Restructuring, Impairments, and Related Charges to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
Previous wording
Loss on disposal of property and equipment. In fiscal 2025, we incurred a $21,000 loss on disposal of property and equipment from the closing of our office in Norway in connection with the restructuring implemented in January 2025, as more fully described in Note 18Restructuring and Other Related Charges to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K
Current wording
Loss on disposal of property and equipment. In fiscal 2025, we incurred a $21,000 loss on disposal of property and equipment from the closing of our office in Norway in connection with the restructuring implemented in January 2025, as more fully described in Note 17Restructuring, Impairments, and Related Charges to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K
Previous wording
The increase in interest and other income, net in fiscal 2025 when compared to fiscal 2024 was primarily due to lower interest yield we received on our cash in fiscal 2025, which was partially offset by $65,000 in interest expense related to the $2 million term loan which was repaid in November 2023 and the $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
The decrease in interest and other income, net in fiscal 2026 as compared to fiscal 2025 was primarily due to lower interest yield we received on our cash in fiscal 2026.
Previous wording
In fiscal 2025 and 2024, net loss resulting from foreign exchange transactions decreased by $39,000 to $151,000 in fiscal 2025 from $190,000 in fiscal 2024 primarily due to unfavorable FX movement related to our NOK and EUR hedging activities in both periods.
Current wording
In fiscal 2026, net loss resulting from foreign exchange transactions increased by $21,000 to $172,000 from $151,000 in fiscal 2025 primarily due to unfavorable USD/NOK and USD/EUR FX movement in both periods.
Previous wording
We recognized a mark-to-market gain of $18,000 and a mark-to-market loss of $51,000 from NOK and EUR hedging activities, respectively, as of July 31, 2025 and July 31, 2024, as more fully described in Note 4,Derivative Instruments, to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
Current wording
We recognized a mark-to-market gain of $14,000 and $18,000 from EUR hedging activities, respectively, as of July 31, 2026 and July 31, 2025, as more fully described in Note 4,Derivative Instruments, to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
Previous wording
During fiscal 2024 we had a pretax loss of about $11.4 million in respect of which we accrued $2.2 million in income tax benefit, an effective tax rate of 19.3% which is lower than the statutory rate primarily due to the addition of $185,000 in valuation allowances related to certain stock-based compensation and the inclusion for U.S. tax purposes, of foreign earnings partially offset by state taxes and foreign tax differential.
Current wording
Income tax benefit. During fiscal 2026, we had a pretax loss of $0.3 million in respect of which we accrued $0.1 million in income tax benefit, an effective tax rate of 50.8% which is higher than the statutory rate primarily due to adjustments related to certain stock-based compensation and the inclusion for U.S. tax purposes, of foreign earnings partially offset by state taxes and foreign tax differential and other adjustments.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
Our business consists of two reportable segments.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Post its acquisition in August 2021, Emojipedia was immediately accretive to earnings. In the past year, we have made many changes to Emojipedia including an AI-powered emoji sticker generator tool as well as an extensive emoji sticker library.