Zedge Reports 5.8% Revenue Growth to $7.6 Million, Achieves Net Income Turnaround

Zedge, Inc. reported a revenue increase of 5.8% for the three months ended October 31, 2025, reaching $7.6 million compared to $7.2 million in the same period last year. The growth was primarily driven by a 6.0% rise in advertising revenue, which totaled $5.2 million, and a significant 28.6% increase in subscription revenue, amounting to $1.5 million. The company also achieved a net income of $788,000, a notable turnaround from a net loss of $339,000 in the prior year, reflecting a 332.4% improvement in profitability.

In terms of operational metrics, Zedge's monthly active users (MAU) for its app decreased by 11.2% year-over-year, totaling 22.2 million as of October 31, 2025. This decline was attributed to various market conditions, including increased competition and changes in user engagement. Despite the drop in user numbers, the average revenue per monthly active user (ARPMAU) increased by 29.2%, indicating improved monetization strategies, particularly through higher advertising rates and subscription growth.

Strategically, Zedge has focused on enhancing its product offerings, including the introduction of pAInt, a generative AI wallpaper maker, and the expansion of its subscription services. The company also continues to refine its GuruShots platform, which has faced challenges in revenue generation, leading to a 27.3% decline in its digital goods and services revenue. Zedge is implementing a restructuring plan aimed at revitalizing GuruShots and improving its overall performance.

The company’s balance sheet as of October 31, 2025, showed total assets of $35.9 million, a slight increase from $35.7 million at the end of the previous fiscal period. Cash and cash equivalents were reported at $18.5 million, down from $18.6 million. Zedge's total liabilities increased to $10.1 million, up from $9.8 million, primarily due to changes in deferred revenues. The company maintains a revolving credit facility of $4 million, which it expects to utilize for operational needs.

Looking ahead, Zedge anticipates continued challenges due to macroeconomic factors and geopolitical tensions, particularly in regions where it operates. The company is committed to leveraging its digital marketplace and AI technologies to drive growth while closely monitoring market conditions and user engagement trends. Management remains optimistic about the potential for future revenue growth, particularly through its subscription offerings and enhanced advertising strategies.