Zedge Reports 18.3% Revenue Growth to $8.3 Million, Faces Net Loss of $2.3 Million

Zedge, Inc. reported a revenue increase of 18.3% for the three months ended January 31, 2026, reaching $8.3 million compared to $7.0 million in the same period last year. For the six months, revenue rose 11.9% to $15.9 million from $14.2 million. The growth was primarily driven by a 32.5% increase in paid subscription revenue and an 18.3% rise in advertising revenue, which benefited from higher average prices per advertising impression. However, the company also faced challenges, including an 11.5% decline in revenue from its GuruShots segment, which contributed to an overall net loss of $2.3 million for the quarter, compared to a loss of $1.7 million in the prior year.

In terms of operational metrics, Zedge's monthly active users (MAU) for its app decreased by 17.4% year-over-year to 20.4 million as of January 31, 2026. This decline was attributed to various market conditions and competitive pressures. Despite the drop in user numbers, the average revenue per monthly active user (ARPMAU) increased by 47.5%, indicating improved monetization efforts. The company reported approximately 1.2 million active subscribers, reflecting a 48.5% increase compared to the previous year.

Strategically, Zedge has been focusing on enhancing its product offerings, including the introduction of a generative AI wallpaper maker, pAInt, and the expansion of its subscription services. The company also recorded a significant impairment charge of $3.6 million related to its Emojipedia assets, which was influenced by changes in Google's search engine results that reduced traffic to the site. This impairment, along with restructuring charges from a global workforce reduction initiated in January 2025, contributed to the company's increased operational losses.

Geographically, Zedge's operations are primarily based in Israel and Lithuania, with a total headcount of 85 employees as of January 31, 2026, down from 106 a year earlier. The company continues to monitor geopolitical risks, particularly in the context of ongoing conflicts in the region, which could impact its operations and financial performance. Zedge maintains a revolving credit facility of $4 million and reported cash and cash equivalents of $19.1 million, indicating a stable liquidity position.

Looking ahead, Zedge anticipates that its cash flow from operations will be sufficient to meet its financial obligations for the next twelve months. The company is focused on leveraging its existing user base and enhancing its product offerings to drive future growth, while also navigating the challenges posed by market conditions and competitive dynamics.