Zedge Reports 3% Revenue Growth to $7.99 Million, Net Income Improvement in Latest Quarter

Zedge, Inc. reported a revenue increase of 3% for the three months ended April 30, 2026, totaling $7.99 million, compared to $7.76 million in the same period last year. For the nine months ending April 30, 2026, revenue rose by 8.8% to $23.86 million, up from $21.93 million. The company achieved a net income of $926,000 for the quarter, a significant improvement from the $185,000 reported in the prior year, while the nine-month net loss narrowed to $575,000 from $1.83 million. This positive shift in profitability was attributed to increased subscription revenue and effective cost management, particularly in selling, general, and administrative expenses, which decreased by 1.7% for the quarter and 7.1% for the nine months.

In terms of operational metrics, Zedge's Monthly Active Users (MAU) for its app decreased by 11.3% year-over-year to 19.6 million as of April 30, 2026. The decline was primarily driven by a reduction in users from developed markets, which fell by 17.3%. However, the company reported a 32.5% increase in subscription revenue, indicating a successful shift towards monetizing its user base more effectively. The total number of active subscribers reached approximately 1.3 million, reflecting a 40.6% increase compared to the previous year.

Strategically, Zedge has focused on enhancing its product offerings, including the introduction of a generative AI wallpaper maker, pAInt, and improvements to its subscription service, Zedge+. The company also launched DataSeeds.AI, a B2B service providing ethically sourced datasets for AI development, which contributed to revenue growth in the GuruShots segment. Despite these advancements, the GuruShots segment reported a revenue decline of 12.4% for the nine months, attributed to a significant drop in Monthly Active Payers (MAPs) by 37.7% due to challenges in user acquisition.

The company’s balance sheet showed total assets of $34.30 million as of April 30, 2026, down from $35.65 million at the end of the previous fiscal year. Cash and cash equivalents increased to $19.69 million, up from $18.61 million. Zedge's total liabilities remained relatively stable at $9.75 million. The company continues to manage its capital effectively, with a focus on maintaining sufficient liquidity to support ongoing operations and strategic initiatives.

Looking ahead, Zedge anticipates continued challenges in user engagement and market conditions, particularly in light of geopolitical tensions affecting its operations in Israel. The company remains committed to leveraging its creator communities and expanding its product offerings to drive future growth. Management is closely monitoring market trends and user behavior to adapt its strategies accordingly, aiming to enhance user retention and revenue generation in the evolving digital landscape.