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ZI

Zedge, Inc. (ZDGE)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue of $7.47M declined 1.5% YoY but was a clear beat vs S&P Global consensus ($6.73M), while Primary EPS (non-GAAP) printed $0.00 vs -$0.05 est; GAAP diluted EPS was -$0.04. Beat was driven by strength in subscriptions and monetization (ARPMAU), offset by GuruShots and Emojipedia softness [Values retrieved from S&P Global].
  • Mix shifting to subscriptions: Active subs reached a record 984K (+47% YoY), subscription revenue rose 21% YoY, ARPMAU rose 16.9% YoY, and Zedge Premium GTV grew 7.3% YoY .
  • Profitability bridged by non-GAAP and cash: Q4 Adjusted EBITDA of $0.3M; free cash flow of $0.5M despite ~$0.6M restructuring outlays that will not recur. Cash was $18.6M with no debt; buybacks accelerated (640K shares in Q4; 1.32M FY) and the company introduced its first dividend post year-end .
  • FY26 narrative: cost structure reset (~$4M annualized savings), six new “alpha” products planned, and new growth vectors (DataSeeds.AI; TapeDeck) alongside capital returns (dividends + repurchases) are the likely stock catalysts into FY26 .

What Went Well and What Went Wrong

What Went Well

  • Subscriptions and monetization: “Zedge+ subscription revenue increased 21%, ARPMAU rose 17% and Zedge Premium GTV continued to expand,” with active subs at 984K (+47% YoY) .
  • Cash discipline and returns: Ended FY25 with ~$18.6M in cash and no debt; Q4 free cash flow of $0.5M; 640K shares repurchased in Q4 (1.32M for FY), and a first dividend initiated post year-end .
  • Strategic pipeline: “Fiscal 2026 will be a year of innovation…launch six new ‘alphas’…scale DataSeeds.AI and TapeDeck” leveraging an AI-first development model .

What Went Wrong

  • User base pressure: MAU fell 11.1% YoY (23.2M vs 26.1M), reflecting continued emerging market pressure and macro ad dynamics .
  • Segment headwinds: Digital Goods & Services revenue fell 39.2% YoY in Q4; Emojipedia declined ~11% YoY, and GuruShots declined ~39% YoY (though stabilized sequentially) .
  • Non-recurring costs weighed GAAP: Q4 included ~$0.6M restructuring charges, driving a GAAP operating loss (-$0.7M) and GAAP diluted EPS of -$0.04 .

Financial Results

Headline metrics vs prior periods and vs estimates

MetricQ4 2024Q3 2025Q4 2025Vs Consensus (Q4 2025)
Revenue ($USD Millions)$7.6 $7.76 $7.47 Estimate: $6.73; Beat: $0.74M* [Values retrieved from S&P Global]
GAAP Diluted EPS$0.00 $0.01 -$0.04 —
Primary EPS (Non-GAAP, “Primary EPS” per S&P)$0.02 $0.06 $0.00 Estimate: -$0.05; Beat: +$0.05* [Values retrieved from S&P Global]
Operating Margin-0.9% 2.1% -9.6% —
Adjusted EBITDA ($M)$0.8 $1.2 $0.3 —

Notes: S&P Global consensus inputs marked with an asterisk and S&P Global disclaimer. Actuals are cited to company documents.

Revenue breakdown by category

Revenue ($USD Millions)Q4 2024Q3 2025Q4 2025
Advertising$5.2 $5.6 $5.2
Digital Goods & Services$0.7 $0.5 $0.5
Subscription$1.2 $1.3 $1.4
Other$0.5 $0.4 $0.4
Total$7.6 $7.8 $7.5

KPIs

KPIQ4 2024Q3 2025Q4 2025
MAU (Millions)26.1 22.1 23.2
Active Subscriptions (000s)669 896 984
ARPMAU ($)0.079 0.099 0.093
Zedge Premium GTV ($M)0.60 0.61 0.64

Cash flow and capital returns (Q4 2025)

  • Cash from operations: $0.7M; Free cash flow: $0.5M .
  • Cash and equivalents: $18.6M; No debt .
  • Share repurchases: 640K shares in Q4 (1.32M FY) .

Guidance Changes

No formal quantitative revenue/EPS/margin guidance was issued. Management emphasized FY26 priorities and capital allocation.

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2026n/aNo formal guidance; focus on expanding/diversifying revenue across Marketplace, DataSeeds.AI, TapeDeck Maintained (no formal)
Operating expensesFY2026n/a~$4M annualized savings already actioned (restructuring complete); reinvest selectively in AI/product Maintained/clarified execution
Capital returnsFY2026$5M buyback (announced earlier)Continued repurchases (1.32M FY) and first dividend introduced post year-end Expanded (added dividend)

Earnings Call Themes & Trends

TopicQ2 FY2025 (prior-2)Q3 FY2025 (prior-1)Q4 FY2025 (current)Trend
AI/technology initiativespAInt engagement; more AI features coming in H2 FY25 Launched DataSeeds.AI; audio AI generator coming; Zedge Premium enhancements AI-first dev model; six “alphas” in FY26; scaling DataSeeds.AI & TapeDeck Accelerating
Macro/ads (TikTok, tariffs)Ad softness tied to TikTok uncertainty; CPM pressure Ads returned to growth QoQ as TikTok re-entered bidding; sequential improvement Advertising up slightly; offset by Emojipedia weakness Stabilizing
Product performanceZedge Premium GTV +27% YoY in Q2 GTV +3.8% YoY; subscriptions +13%; subs ~900K GTV +7.3% YoY; subs 984K (+47% YoY); ARPMAU +16.9% Strong subscription/monetization
GuruShotsDrag on growth; restructuring to rightsize Ongoing softness; losses reduced; planning 2.0 -39% YoY; sequentially stable (down < $25K) Stabilized at lower base
Capital allocationBegan buyback; restructuring to unlock savings Repurchased 219K shares; $3.8M auth remaining 640K shares repurchased; first dividend post year-end Increasing returns

Management Commentary

  • CEO (press release): “We closed the year with solid operating performance, healthy underlying metrics and positive cash flow… Zedge+ subscription revenue increased 21%, ARPMAU rose 17% and Zedge Premium GTV continued to expand” .
  • CEO (FY26 focus): “Launch six new product concepts or ‘alphas’ in fiscal 2026…AI-first development model…scale DataSeeds.AI and TapeDeck while returning cash to shareholders through dividends and share repurchases” .
  • CFO (call): “Zedge Marketplace revenue was up mid-single digits…offset by a one-time $144,000 benefit in the year-ago quarter…Emojipedia down 11% and GuruShots down 39% YoY…Zedge Plus subscription revenue increased 21% YoY; active subscribers grew 47% to nearly 1 million” .
  • CFO (cash/costs): “We recorded $0.6 million in restructuring charges…Free cash flow was $0.5 million…These payments are now complete and will not impact results in fiscal 2026…ended the year with $18.6 million in cash and no debt” .

Q&A Highlights

  • Deferred revenue mechanics: CFO clarified lifetime subscriptions are amortized over ~30 months, creating a high-margin recurring tail; deferred revenue build supports forward revenue recognition .
  • Ads and mix: Discussion on ad market normalization post TikTok’s re-entry and the shift toward higher-CPM rewarded video/premium experiences to support ARPMAU .
  • GuruShots 2.0: Management is deliberate on onboarding/voting/progression redesign, and potential synergy with DataSeeds.AI; near-term focus on stabilizing revenue .
  • Capital returns and liquidity: Team reiterated strong liquidity, completion of restructuring/retention payments, and intent to balance investment in AI initiatives with dividends and buybacks .

Estimates Context

  • Q4 FY2025: Revenue $7.47M vs $6.73M consensus; Primary EPS (non-GAAP) $0.00 vs -$0.05. Revenue and EPS both beat; only one estimate was available for each metric [Values retrieved from S&P Global].
  • With the mix shift to subscriptions and lifetime subs amortization, Street models may raise revenue and non-GAAP EPS run-rate for FY26, while GAAP can vary with restructuring and reinvestment cadence .
Q4 FY2025ConsensusActualSurprise
Revenue ($M)$6.733*$7.468 +$0.735*
Primary EPS-$0.05*$0.00 +$0.05*
# of EstimatesRev: 1*; EPS: 1*——

Asterisk indicates S&P Global data; Values retrieved from S&P Global.

Key Takeaways for Investors

  • Subscription monetization is the growth engine: Active subs +47% YoY, ARPMAU +16.9% YoY, and GTV up, underpinned by AI features (pAInt, audio generator) and premium experiences .
  • GuruShots/Emojipedia are drags but manageable: GuruShots stabilized sequentially and is being rethought; Emojipedia softness weighed ads, but overall ads stabilized as market bidding recovered .
  • FY26 is about AI-first velocity and optionality: Six “alphas” and B2B DataSeeds.AI open diversified revenue paths beyond the core Marketplace .
  • Cost reset largely complete: ~$0.6M Q4 restructuring is behind them; ~$4M annualized savings provide operating leverage into FY26, supporting non-GAAP profitability and FCF .
  • Capital returns add support: Completed 1.32M shares repurchased in FY25 and initiated first dividend, signaling confidence and providing a shareholder yield buffer .
  • Trading setup: Narrative likely pivots from “turnaround/cost-out” to “subscription/AI-led growth + cash returns.” Watch for DataSeeds.AI customer adds, TapeDeck KPIs, and sustained ARPMAU/sub growth as catalysts .
  • Risk monitor: MAU declines in emerging markets, continued weakness in Emojipedia/GuruShots, and macro ad CPM volatility could cap near-term revenue growth; however, deferred revenue from lifetime subs creates visibility .

Additional Sources Read

  • Q4 FY2025 8-K/press release (full document set, including financials and reconciliations) .
  • Q3 FY2025 8-K/press release for trend analysis .
  • Q2 FY2025 8-K/press release for trend analysis .
  • Q4 FY2025 earnings call transcript and summaries .

S&P Global disclaimer: Consensus estimates and related “Primary EPS” metrics marked with an asterisk are sourced from S&P Global; Values retrieved from S&P Global.