Zedge Reports Second Quarter Fiscal 2026 Results
Rhea-AI Summary
Zedge (NYSE:ZDGE) reported record monetization in Q2 FY2026 with revenue up 18.3% to $8.3M, subscription revenue up 32.5% and active subscriptions rising 48.5% to ~1.2M.
ARPMAU hit a quarterly record of $0.115, adjusted EBITDA was $1.1M, free cash flow rose 31% to $0.8M, cash totaled $19.1M, and the company paid a quarterly dividend.
Positive
- Total revenue +18.3% YoY to $8.3M
- Subscription revenue +32.5% YoY
- Active subscriptions +48.5% to 1.175M
- ARPMAU +47.6% to $0.115
- Adjusted EBITDA of $1.1M (positive)
- Free cash flow +31.2% to $0.8M and $19.1M cash
Negative
- GAAP operating loss widened to ($2.9M) in Q2
- Impairment charge $3.57M related to Emojipedia
- MAU declined 17.4% YoY to 20.4M
- Digital goods revenue down 11.5% YoY to $0.5M
- GAAP net loss ($2.3M) and GAAP diluted EPS ($0.18)
Market Reaction – ZDGE
Following this news, ZDGE has gained 3.54%, reflecting a moderate positive market reaction. Argus tracked a peak move of +17.9% during the session. Our momentum scanner has triggered 3 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $3.22. This price movement has added approximately $1M to the company's valuation.
Data tracked by StockTitan Argus (15 min delayed). Upgrade to Silver for real-time data.
Key Figures
Market Reality Check
Peers on Argus
ZDGE fell about 6.1% while peers were mixed: BODI +9.15%, SJ +3.83%, GIFT +1.18%, and PODC -1.32%, SCOR -1.37%. This points to a stock-specific reaction rather than a sector-wide move.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Mar 03 | Earnings call timing | Neutral | +0.3% | Announcement of Q2 FY26 earnings release date and conference call details. |
| Dec 12 | Q1 FY26 earnings | Positive | +14.4% | Revenue growth, return to GAAP profit, strong subscription and ARPMAU expansion. |
| Dec 02 | Earnings call timing | Neutral | -0.9% | Notice of upcoming Q1 FY26 results release and investor conference call. |
| Oct 28 | Q4/FY25 earnings | Negative | -24.3% | FY25 revenue decline and net loss despite strong cash, buybacks, and new dividend. |
| Oct 20 | AI product update | Positive | +4.8% | Dataseeds.AI customer growth and demand for rights‑cleared AI training datasets. |
Price has generally reacted directionally in line with the tone of prior earnings and AI/product updates.
Over the past six months, Zedge has focused on earnings execution and its AI‑driven initiatives. Q4 FY25 results showed rising subscriptions and ARPMAU but declining revenue and a full‑year net loss, while maintaining roughly $19M in cash and no debt. Q1 FY26 results then returned to GAAP profitability with non‑GAAP EPS and adjusted EBITDA improving meaningfully, driving a strong positive price reaction. Separate Dataseeds.AI news also drew a favorable response. Today’s Q2 FY26 release continues the theme of subscription and ARPMAU growth alongside ongoing GAAP losses.
Market Pulse Summary
This announcement highlights record Q2 FY26 revenue of $8.3M, strong subscription growth, and ARPMAU reaching $0.115, alongside a $2.3M GAAP net loss driven in part by a $3.6M Emojipedia impairment. Non‑GAAP net income, free cash flow of $0.8M, and a quarterly dividend underscore cash generation. Investors may watch trends in MAU decline versus monetization, the DataSeeds pipeline, and whether innovation spending keeps non‑GAAP profitability on track.
Key Terms
arpMau financial
gross transaction value financial
free cash flow financial
adjusted ebitda financial
non-gaap financial
gaap financial
AI-generated analysis. Not financial advice.
Record quarterly results across total revenue, advertising and subscription revenue, active subscriptions1, ARPMAU1, Zedge Premium GTV1
Revenue increased
Subscription revenue increased
ARPMAU increased
NEW YORK CITY, NY / ACCESS Newswire / March 12, 2026 / Zedge, Inc. (NYSE AMERICAN:ZDGE), $ZDGE, a leader in digital marketplaces and interactive games that provide content, enable creativity, empower self-expression and facilitate community, today announced results for its second quarter fiscal 2026, ended January 31, 2026.
Jonathan Reich, Zedge's CEO, commented:
"We delivered a strong second quarter, highlighted by record monetization performance in the Zedge Marketplace. Revenue increased
"Innovation remains a central focus across the organization. Within our current portfolio, we are excited by the prospects for DataSeeds as the demand for high-quality AI training data is substantial and not likely to slow down any time soon. DataSeeds continues to generate interest from both new and existing customers, including repeat customers placing larger orders. While revenue remains early-stage and lumpy given the limited number of deals, the pipeline is expanding, and we are investing thoughtfully to support that growth.
"For Tapedeck, we are currently focusing on expanding the music catalog. Separately, our Innovation Team recently launched two new alpha products as part of our commitment to introduce up to six alphas this fiscal year, placing us halfway toward that goal. Our framework is disciplined - launch quickly, measure performance against clear thresholds and invest behind the opportunities that demonstrate traction This approach increases our shots on goal while maintaining thoughtful capital allocation.
"Financially, free cash flow2 increased
Second Quarter Highlights (fiscal 2026 versus fiscal 2025)
Revenue increased
18.3% to$8.3 million ;GAAP operating loss of (
$2.9) million , compared to a loss of ($2.2) million GAAP operating loss included a (
$3.7) million asset impairment charge related to Emojipedia in the second quarter of fiscal 2026 and ($1.3) million in restructuring charges in the prior year's quarter;
GAAP net loss and diluted loss per share (EPS) of (
$2.3) million and ($0.18) , compared to a net loss of ($1.7) million and ($0.12) per share;Non-GAAP net income2 and diluted EPS2 of
$0.8 million and$0.06 , compared to a non-GAAP net loss and EPS of ($0.2) million and ($0.01) ;Free cash flow of
$0.8 million , compared to$0.6 million ;Adjusted EBITDA2 of
$1.1 million , compared to ($0.1) million ;ARPMAU increased
47.6% ;Zedge Premium GTV increased
15.7% ;Active subscriptions increased
48.5% to 1.2 million;Cash and cash equivalents were
$19.1 million at quarter's end;Paid a quarterly dividend of
$0.01 6 per share.
Second Quarter Select Financial Metrics: FY26 versus FY25*
(in M except for EPS) | Q2 '26 | Q2 '25 | Change | 1H'26 | 1H'25 | Change | ||||||||||||||||||
Total Revenue | $ | 8.3 | $ | 7.0 | 18.3 | % | $ | 15.9 | $ | 14.2 | 11.9 | % | ||||||||||||
Advertising Revenue | $ | 5.6 | $ | 4.7 | 18.3 | % | $ | 10.7 | $ | 9.6 | 12.1 | % | ||||||||||||
Digital Goods and Services Revenue | $ | 0.5 | $ | 0.6 | -11.5 | % | $ | 1.0 | $ | 1.3 | -19.6 | % | ||||||||||||
Subscription Revenue | $ | 1.6 | $ | 1.2 | 32.5 | % | $ | 3.2 | $ | 2.4 | 30.6 | % | ||||||||||||
Other Revenue | $ | 0.5 | $ | 0.4 | 19.6 | % | $ | 1.0 | $ | 0.9 | 5.0 | % | ||||||||||||
GAAP Operating Income (Loss) | $ | (2.9 | ) | $ | (2.2 | ) | -30.3 | % | $ | (2.0 | ) | $ | (2.7 | ) | 26.1 | % | ||||||||
Operating Margin | -35.0 | % | -31.8 | % | -12.5 | % | -18.9 | % | ||||||||||||||||
GAAP Net Income (Loss) | $ | (2.3 | ) | $ | (1.7 | ) | -36.3 | % | $ | (1.5 | ) | $ | (2.0 | ) | 25.7 | % | ||||||||
GAAP Diluted EPS (Loss per share) | $ | (0.18 | ) | $ | (0.12 | ) | -50.0 | % | $ | (0.12 | ) | $ | (0.14 | ) | 14.3 | % | ||||||||
Non-GAAP Net Income (loss) | $ | 0.8 | $ | (0.2 | ) | 476.6 | % | $ | 1.7 | $ | (0.3 | ) | 744.7 | % | ||||||||||
Non- GAAP Diluted EPS (loss per share) | $ | 0.06 | $ | (0.01 | ) | 503.7 | % | $ | 0.13 | $ | -0.02 | 782.5 | % | |||||||||||
Cash Flow from Operations | $ | 0.9 | $ | 0.7 | 21.2 | % | $ | 1.7 | $ | 1.9 | -10.4 | % | ||||||||||||
Free Cash Flow | $ | 0.8 | $ | 0.6 | 31.2 | % | $ | 1.4 | $ | 1.6 | -11.5 | % | ||||||||||||
Adjusted EBITDA | $ | 1.1 | $ | (0.1 | ) | 1580.7 | % | $ | 2.3 | $ | 0.2 | 1009.1 | % | |||||||||||
Shares Repurchased | 0.01 | 0.24 | -95.7 | % | 0.25 | 0.46 | -46.4 | % | ||||||||||||||||
nm = not measurable/meaningful
*numbers/percentages are based off of actuals versus the rounded numbers in the table
Select Zedge Marketplace Metrics: FY26 versus FY25*
(in MM except for ARPMAU and where noted) | Q2 '26 | Q2 '25 | Change | |||||||||
MAU | 20.4 | 24.7 | -17.4 | % | ||||||||
Well-Developed Markets | 4.8 | 5.6 | -14.3 | % | ||||||||
Emerging Markets | 15.6 | 19.1 | -18.3 | % | ||||||||
Active Subscriptions (in 000s) | 1,175 | 791 | 48.5 | % | ||||||||
ARPMAU | $ | 0.115 | $ | 0.078 | 47.6 | % | ||||||
Zedge Premium - Gross Transaction Value (GTV) | $ | 0.79 | $ | 0.68 | 15.7 | % | ||||||
*numbers/percentages are based off of actuals versus the rounded numbers in the table
1 We use the following supplemental business metrics in this release because we believe they are useful in evaluating Zedge's operational performance.
Monthly active users, or MAU, captures the number of unique users that used our Zedge App during the previous 30 days of the relevant period, is useful for evaluating consumer engagement with our App, which correlates to advertising revenue as more users drive more ad impressions for sale. It also allows readers and potential advertisers to evaluate the size of our user base.
Zedge Premium Gross Transaction Value, or GTV, is the total dollar amount of transactions conducted through Zedge Premium. As Zedge Premium is an internal focus for growth, we believe this metric will help investors evaluate our progress in growing this part of our business.
Average Revenue Per Monthly Active User for our Zedge Marketplace, or ARPMAU, is useful in evaluating how well we monetize our user base.
An Active Subscription is a subscription that has commenced and not been canceled, including paused subscriptions and subscriptions in free trials, grace periods, or account hold. This is important because it is a source of recurring revenue.
2 Throughout this release, Non-GAAP Net Income, Non-GAAP EPS, Free Cash Flow (FCF) and Adjusted EBITDA are non-GAAP financial measures intended to provide useful information that supplement Zedge's results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial measures at the end of this release for an explanation of Zedge's formulations of Non-GAAP Net Income, Non-GAAP EPS, Free Cash Flow and Adjusted EBITDA and reconciliations to the most directly comparable GAAP measures.
Trended Financial Information*
(in M except for EPS, ARPMAU, Paid Subscriptions) | Q125 | Q225 | Q325 | Q425 | Q126 | Q226 | FY24 | FY25 | YTD FY26 | |||||||||||||||||||||||||||
Total Revenue | $ | 7.2 | $ | 7.0 | $ | 7.8 | $ | 7.5 | $ | 7.6 | $ | 8.3 | $ | 30.1 | $ | 29.4 | $ | 15.9 | ||||||||||||||||||
Advertising Revenue | $ | 4.9 | $ | 4.7 | $ | 5.6 | $ | 5.2 | $ | 5.2 | $ | 5.6 | $ | 21.0 | $ | 20.3 | $ | 10.7 | ||||||||||||||||||
Digital Goods and Services Revenue | $ | 0.6 | $ | 0.6 | $ | 0.5 | $ | 0.5 | $ | 0.5 | $ | 0.5 | $ | 3.5 | $ | 2.2 | $ | 1.0 | ||||||||||||||||||
Subscription Revenue | $ | 1.2 | $ | 1.2 | $ | 1.3 | $ | 1.4 | $ | 1.5 | $ | 1.6 | $ | 4.3 | $ | 5.1 | $ | 3.2 | ||||||||||||||||||
Other Revenue | $ | 0.5 | $ | 0.4 | $ | 0.4 | $ | 0.4 | $ | 0.5 | $ | 0.5 | $ | 1.2 | $ | 1.8 | $ | 1.0 | ||||||||||||||||||
GAAP Operating Income (Loss) | $ | (0.5 | ) | $ | (2.2 | ) | $ | 0.2 | $ | (0.7 | ) | $ | 0.9 | $ | (2.9 | ) | $ | (11.8 | ) | $ | (3.2 | ) | $ | (2.0 | ) | |||||||||||
GAAP Net Income (Loss) | $ | (0.3 | ) | $ | (1.7 | ) | $ | 0.2 | $ | (0.6 | ) | $ | 0.8 | $ | (2.3 | ) | $ | (9.2 | ) | $ | (2.4 | ) | $ | (1.5 | ) | |||||||||||
GAAP Diluted EPS (Loss per share) | $ | (0.02 | ) | $ | (0.12 | ) | $ | 0.01 | $ | (0.04 | ) | $ | 0.06 | $ | (0.18 | ) | $ | (0.65 | ) | $ | (0.17 | ) | $ | (0.12 | ) | |||||||||||
Non GAAP Net Income (Loss) | $ | (0.0 | ) | $ | (0.2 | ) | $ | 0.9 | $ | 0.1 | $ | 0.9 | $ | 0.8 | $ | 1.8 | $ | 0.7 | $ | 1.7 | ||||||||||||||||
Non-GAAP Diluted EPS (Loss per share) | $ | (0.00 | ) | $ | (0.01 | ) | $ | 0.06 | $ | 0.00 | $ | 0.07 | $ | 0.06 | $ | 0.13 | $ | 0.05 | $ | 0.12 | ||||||||||||||||
Cash Flow from Operations | $ | 1.2 | $ | 0.7 | $ | 0.9 | $ | 0.7 | $ | 0.8 | $ | 0.9 | $ | 5.9 | $ | 3.4 | $ | 1.7 | ||||||||||||||||||
Free Cash Flow | $ | 1.0 | $ | 0.6 | $ | 0.8 | $ | 0.5 | $ | 0.6 | $ | 0.8 | $ | 4.7 | $ | 2.9 | $ | 1.4 | ||||||||||||||||||
Adjusted EBITDA | $ | 0.3 | $ | (0.1 | ) | $ | 1.2 | $ | 0.3 | $ | 1.2 | $ | 1.1 | $ | 4.7 | $ | 1.8 | $ | 2.3 | |||||||||||||||||
MAU | 25.0 | 24.7 | 22.1 | 23.2 | 22.2 | 20.4 | nm | nm | nm | |||||||||||||||||||||||||||
Well-developed Markets | 5.5 | 5.6 | 5.2 | 5.4 | 4.9 | 4.8 | nm | nm | nm | |||||||||||||||||||||||||||
Emerging Markets | 19.5 | 19.1 | 16.9 | 17.8 | 17.3 | 15.6 | nm | nm | nm | |||||||||||||||||||||||||||
Active Subscriptions (in 000s) | 698 | 791 | 896 | 984 | 1,075 | 1,175 | nm | nm | nm | |||||||||||||||||||||||||||
ARPMAU | $ | 0.077 | $ | 0.078 | $ | 0.099 | $ | 0.093 | $ | 0.099 | $ | 0.115 | nm | nm | nm | |||||||||||||||||||||
Zedge Premium - GTV | $ | 0.68 | $ | 0.68 | $ | 0.61 | $ | 0.64 | $ | 0.66 | $ | 0.79 | $ | 2.15 | $ | 2.62 | $ | 1.44 | ||||||||||||||||||
Shares Repurchased | 0.22 | 0.24 | 0.22 | 0.64 | 0.24 | 0.01 | 0.21 | 1.32 | 0.25 | |||||||||||||||||||||||||||
nm = not measurable/meaningful
*numbers may not add due to rounding
Earnings Announcement and Supplemental Information
Management will host an earnings conference call today at 4:30 pm Eastern to discuss its earnings results, outlook, and strategy, followed by a Q&A session with investors.
Live Call-in Info:
Toll Free: 888-506-0062
International: 973-528-0011
Participant Access Code: 238586
Webcast URL: https://www.webcaster5.com/Webcast/Page/2205/53597
Replay:
Toll Free: 877-481-4010
International: 919-882-2331
Replay Passcode: 53597
About Zedge
Zedge empowers tens of millions of consumers and creators each month with its suite of interconnected platforms that enable creativity, self-expression and e-commerce and foster community through fun competitions. Zedge's ecosystem of product offerings includes the Zedge Marketplace, a freemium marketplace offering mobile phone wallpapers, video wallpapers, ringtones, notification sounds, and pAInt, a generative AI image and audio maker; GuruShots, "The World's Greatest Photography Game," a skill-based photo challenge game; and Emojipedia, the #1 trusted source for 'all things emoji.'
For more information, visit: investor.zedge.net
Follow us on X: @Zedge
Follow us on LinkedIn
Forward-Looking Statements
All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate," "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, we assume no obligation to update any forward-looking statements.
Contact:
Brian Siegel, IRC, MBA
Senior Managing Director
Hayden IR
(346) 396-8696
brian@haydenir.com
ir@zedge.net
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value data)
January 31, | July 31, | |||||||
2026 | 2025 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 19,106 | $ | 18,609 | ||||
Trade accounts receivable | 3,765 | 3,164 | ||||||
Prepaid expenses and other current assets | 1,062 | 671 | ||||||
Total Current assets | 23,933 | 22,444 | ||||||
Property and equipment, net | 1,238 | 1,290 | ||||||
Intangible assets, net | 1,128 | 4,922 | ||||||
Goodwill | 2,069 | 1,931 | ||||||
Deferred tax assets, net | 4,982 | 4,823 | ||||||
Other assets | 473 | 244 | ||||||
Total assets | $ | 33,823 | $ | 35,654 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 1,437 | $ | 1,471 | ||||
Accrued expenses and other current liabilities | 2,305 | 2,867 | ||||||
Deferred revenues | 3,994 | 3,425 | ||||||
Total Current liabilities | 7,736 | 7,763 | ||||||
Deferred revenues--non-current | 2,041 | 1,937 | ||||||
Other liabilities | 180 | 53 | ||||||
Total liabilities | 9,957 | 9,753 | ||||||
Commitments and contingencies (Note 9) | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, $.01 par value; authorized shares-2,400; no shares issued and outstanding | - | - | ||||||
Class A common stock, $.01 par value; authorized shares-2,600; 525 shares issued and outstanding at January 31, 2026 and July 31, 2025 | 5 | 5 | ||||||
Class B common stock, $.01 par value; authorized shares-40,000; 15,189 shares issued and 12,554 outstanding at January 31, 2026 and 15,073 shares issued and 12,692 shares outstanding at July 31, 2025 | 152 | 151 | ||||||
Additional paid-in capital | 49,774 | 49,768 | ||||||
Accumulated other comprehensive loss | (1,174 | ) | (1,509 | ) | ||||
Accumulated deficit | (17,006 | ) | (15,505 | ) | ||||
Treasury stock, 2,635 shares at January 31, 2026 and 2,381 shares at July 31, 2025, at cost | (7,885 | ) | (7,009 | ) | ||||
Total stockholders' equity | 23,866 | 25,901 | ||||||
Total liabilities and stockholders' equity | $ | 33,823 | $ | 35,654 | ||||
ZEDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except per share data)
(unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
January 31, | January 31, | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Revenues | $ | 8,254 | $ | 6,979 | $ | 15,864 | $ | 14,173 | ||||||||
Costs and expenses: | ||||||||||||||||
Direct cost of revenues (excluding amortization of capitalized software and technology development costs which is included below) | 561 | 447 | 1,116 | 908 | ||||||||||||
Selling, general and administrative | 6,683 | 7,126 | 12,599 | 13,935 | ||||||||||||
Depreciation and amortization | 187 | 317 | 403 | 698 | ||||||||||||
Impairment of intangible assets | 3,570 | - | 3,570 | - | ||||||||||||
Restructuring charges | - | 481 | - | 481 | ||||||||||||
Impairment of capitalized software and technology development costs | 145 | 827 | 145 | 827 | ||||||||||||
Loss from operations | (2,892 | ) | (2,219 | ) | (1,969 | ) | (2,676 | ) | ||||||||
Interest and other income, net | 124 | 171 | 268 | 352 | ||||||||||||
Net loss resulting from foreign exchange transactions | (138 | ) | (86 | ) | (184 | ) | (100 | ) | ||||||||
Loss before income taxes | (2,906 | ) | (2,134 | ) | (1,885 | ) | (2,424 | ) | ||||||||
Income taxes benefit | (617 | ) | (455 | ) | (384 | ) | (406 | ) | ||||||||
Net loss | $ | (2,289 | ) | $ | (1,679 | ) | $ | (1,501 | ) | $ | (2,018 | ) | ||||
Other comprehensive income (loss): | ||||||||||||||||
Changes in foreign currency translation adjustment | 236 | (132 | ) | 335 | (161 | ) | ||||||||||
Total other comprehensive income (loss) | 236 | (132 | ) | 335 | (161 | ) | ||||||||||
Total comprehensive loss | $ | (2,053 | ) | $ | (1,811 | ) | $ | (1,166 | ) | $ | (2,179 | ) | ||||
Income loss per share attributable to Zedge, Inc. common stockholders: | ||||||||||||||||
Basic and diluted | $ | (0.18 | ) | $ | (0.12 | ) | $ | (0.12 | ) | $ | (0.15 | ) | ||||
Weighted-average number of shares used in calculation of income (loss) per share: | ||||||||||||||||
Basic and diluted | 12,950 | 13,882 | 12,988 | 13,872 | ||||||||||||
ZEDGE, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended | ||||||||
January 31, | ||||||||
2026 | 2025 | |||||||
Operating activities | ||||||||
Net loss | $ | (1,501 | ) | $ | (2,018 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation | 28 | 30 | ||||||
Amortization of intangible assets | 224 | 224 | ||||||
Amortization of capitalized software and technology development costs | 151 | 444 | ||||||
Stock-based compensation | 379 | 982 | ||||||
Impairment charge of capitalized software and technology development costs | 145 | 827 | ||||||
Impairment charge of intangible assets | 3,570 | - | ||||||
Deferred income taxes | (159 | ) | (184 | ) | ||||
Change in assets and liabilities: | ||||||||
Trade accounts receivable | (601 | ) | 416 | |||||
Prepaid expenses and other current assets | (391 | ) | (360 | ) | ||||
Other assets | (18 | ) | (39 | ) | ||||
Trade accounts payable and accrued expenses | (817 | ) | 322 | |||||
Deferred revenues | 673 | 1,234 | ||||||
Net cash provided by operating activities | 1,683 | 1,878 | ||||||
Investing activities | ||||||||
Capitalized software and technology development costs | (237 | ) | (236 | ) | ||||
Purchase of property and equipment | (20 | ) | (30 | ) | ||||
Net cash used in investing activities | (257 | ) | (266 | ) | ||||
Financing activities | ||||||||
Purchase of treasury stock in connection with share buyback program and stock awards vesting | (876 | ) | (1,494 | ) | ||||
Payment of cash dividends | (208 | ) | - | |||||
Proceeds from exercise of stock options | 45 | - | ||||||
Net cash used in financing activities | (1,039 | ) | (1,494 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 110 | (62 | ) | |||||
Net increase in cash and cash equivalents | 497 | 56 | ||||||
Cash and cash equivalents at beginning of period | 18,609 | 19,998 | ||||||
Cash and cash equivalents at end of period | $ | 19,106 | $ | 20,054 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for income taxes | $ | 114 | $ | 130 | ||||
Non-cash operating and financing activities: | ||||||||
ROU assets obtained in exchange for lease liabilities | $ | 286 | $ | 111 | ||||
Dividend payable included in accrued expenses and other current liabilities (1) | $ | 209 | $ | - | ||||
(1) Dividend payable was paid on February 10, 2026.
Use of Non-GAAP Measures
Adjusted EBITDA, defined as earnings (loss) before interest, taxes, depreciation and amortization, stock compensation expense, transaction-related expenses and other non-recurring expenses, Free Cash Flow, a common metric used by investors for valuation, and non-GAAP net income (loss) and EPS (or loss per share) (which adjust out stock compensation expense, transaction-related expenses and other non-recurring expenses from GAAP net income (loss) and EPS (loss per share)), represent measures that we believe are customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures we present. Our management also believes these measures are useful in evaluating our core operating results. However, these are not measures of financial performance under GAAP and should not be considered an alternative to net income or operating income/margin as an indicator of our operating performance or to net cash provided by operating activities as a measure of our liquidity. Numbers in the following reconciliation tables may not add due to rounding.
Reconciliation of Adjusted EBITDA to Net Income (Loss) | Q125 | Q225 | Q325 | Q425 | Q126 | Q226 | FY24 | FY25 | YTD FY26 | |||||||||||||||||||||||||||
Net Income (Loss) | $ | (0.3 | ) | $ | (1.7 | ) | $ | 0.2 | $ | (0.6 | ) | $ | 0.8 | $ | (2.3 | ) | $ | (9.2 | ) | $ | (2.4 | ) | $ | (1.5 | ) | |||||||||||
Excluding: | ||||||||||||||||||||||||||||||||||||
Interest and other income (expense), net | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.1 | ) | $ | (0.6 | ) | $ | (0.7 | ) | $ | (0.3 | ) | |||||||||
Income tax expense (benefit) | $ | 0.0 | $ | (0.5 | ) | $ | 0.1 | $ | (0.0 | ) | $ | 0.2 | $ | (0.6 | ) | $ | (2.2 | ) | $ | (0.3 | ) | $ | (0.4 | ) | ||||||||||||
Depreciation and amortization | $ | 0.4 | $ | 0.3 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 2.5 | $ | 1.1 | $ | 0.4 | ||||||||||||||||||
EBITDA | $ | (0.1 | ) | $ | (2.0 | ) | $ | 0.3 | $ | (0.5 | ) | $ | 1.1 | $ | (2.8 | ) | $ | (9.5 | ) | $ | (2.2 | ) | $ | (1.8 | ) | |||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||
Asset impairments and restructuring charges | $ | 0.0 | $ | 1.3 | $ | 0.6 | $ | 0.6 | $ | 0.0 | $ | 3.7 | $ | 12.0 | $ | 2.5 | $ | 3.7 | ||||||||||||||||||
Stock-based compensation | $ | 0.4 | $ | 0.6 | $ | 0.3 | $ | 0.1 | $ | 0.1 | $ | 0.3 | $ | 2.1 | $ | 1.4 | $ | 0.4 | ||||||||||||||||||
Expenses related to restructuring activities and business combination | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.1 | $ | 0.0 | $ | 0.0 | $ | 0.2 | $ | 0.1 | $ | 0.0 | ||||||||||||||||||
Adjusted EBITDA | $ | 0.3 | $ | (0.1 | ) | $ | 1.2 | $ | 0.3 | $ | 1.2 | $ | 1.1 | $ | 4.7 | $ | 1.8 | $ | 2.3 | |||||||||||||||||
*numbers may not add due to rounding
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income | Q125 | Q225 | Q325 | Q425 | Q126 | Q226 | FY24 | FY25 | YTD FY26 | |||||||||||||||||||||||||||
GAAP Net Income (Loss) | $ | (0.3 | ) | $ | (1.7 | ) | $ | 0.2 | $ | (0.6 | ) | $ | 0.8 | $ | (2.3 | ) | $ | (9.2 | ) | $ | (2.4 | ) | $ | (1.5 | ) | |||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||
Asset impairments and restructuring charges | $ | 0.0 | $ | 1.3 | $ | 0.6 | $ | 0.6 | $ | 0.0 | $ | 3.7 | $ | 12.0 | $ | 2.5 | $ | 3.7 | ||||||||||||||||||
Stock-based compensation | $ | 0.4 | $ | 0.6 | $ | 0.3 | $ | 0.1 | $ | 0.1 | $ | 0.3 | $ | 2.1 | $ | 1.4 | $ | 0.4 | ||||||||||||||||||
Expenses related to restructuring activities and business combination | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.1 | $ | 0.0 | $ | 0.0 | $ | 0.2 | $ | 0.1 | $ | 0.0 | ||||||||||||||||||
Income tax effect on non-GAAP items | $ | (0.1 | ) | $ | (0.4 | ) | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.0 | ) | $ | (0.9 | ) | $ | (3.3 | ) | $ | (0.9 | ) | $ | (0.9 | ) | |||||||||
Non-GAAP Net Income (Loss) | $ | (0.0 | ) | $ | (0.2 | ) | $ | 0.9 | $ | 0.1 | $ | 0.9 | $ | 0.8 | $ | 1.8 | $ | 0.7 | $ | 1.7 | ||||||||||||||||
Non-GAAP basic EPS (loss per share) | $ | (0.00 | ) | $ | (0.01 | ) | $ | 0.06 | $ | 0.00 | $ | 0.07 | $ | 0.06 | $ | 0.13 | $ | 0.05 | $ | 0.13 | ||||||||||||||||
Non-GAAP diluted EPS (loss per share) | $ | (0.00 | ) | $ | (0.01 | ) | $ | 0.06 | $ | 0.00 | $ | 0.07 | $ | 0.06 | $ | 0.13 | $ | 0.05 | $ | 0.12 | ||||||||||||||||
Weighted average shares used to compute Non-GAAP basic earnings per share | 14.1 | 13.9 | 13.7 | 13.4 | 13.0 | 13.0 | 14.1 | 13.7 | 13.0 | |||||||||||||||||||||||||||
Weighted average shares used to compute Non-GAAP diluted earnings per share | 14.1 | 13.9 | 13.9 | 13.4 | 13.3 | 13.0 | 14.1 | 13.7 | 13.3 | |||||||||||||||||||||||||||
*numbers may not add due to rounding
Free Cash Flow Calculation | Q125 | Q225 | Q325 | Q425 | Q126 | Q2260 | FY24 | FY25 | YTD FY26 | |||||||||||||||||||||||||||
Cash Flow from Operations | $ | 1.2 | $ | 0.7 | $ | 0.9 | $ | 0.7 | $ | 0.8 | $ | 0.9 | $ | 5.9 | $ | 3.4 | $ | 1.7 | ||||||||||||||||||
Capital Expenditures | $ | 0.2 | $ | 0.1 | $ | 0.1 | $ | 0.2 | $ | 0.2 | $ | 0.1 | $ | 1.2 | $ | 0.5 | $ | 0.3 | ||||||||||||||||||
Free Cash Flow | $ | 1.0 | $ | 0.6 | $ | 0.8 | $ | 0.5 | $ | 0.6 | $ | 0.8 | $ | 4.7 | $ | 2.9 | $ | 1.4 | ||||||||||||||||||
SOURCE: Zedge, Inc.
View the original press release on ACCESS Newswire
FAQ
What were Zedge's Q2 FY2026 revenue and growth (ZDGE)?
How many active subscriptions did ZDGE report in Q2 FY2026 and why it matters?
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Did Zedge generate positive cash flow in Q2 FY2026 (ZDGE)?
Why did Zedge report a GAAP operating loss in Q2 FY2026 for ZDGE?
How did Zedge's MAU trend affect Q2 FY2026 performance for ZDGE?
