Zedge Reports Second Quarter Fiscal 2026 Results

Record quarterly results across total revenue, advertising and subscription revenue, active subscriptions 1, ARPMAU 1, Zedge Premium GTV 1

Revenue increased 18% year over year to $8.3 million

Subscription revenue increased 33%, and active subscriptions grew 49% to nearly 1.2 million

ARPMAU increased 48% to a quarterly record of $0.115; Zedge Premium GTV increased 16%

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 18% year over year, driven by seasonal strength combined with strong advertising and subscription optimization. Subscription revenue increased 33%, active subscriptions reached a record 1.2 million, ARPMAU increased 48% to a record $0.115 and Zedge Premium GTV also reached a new quarterly high. These results reflect continued improvement in the quality of our revenue and our ability to monetize our audience more effectively, even as overall MAU 1 trended lower.

"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 flow 2 increased 31% year over year to $0.8 million. Cash and cash equivalents increased sequentially to $19.1 million. We continue to operate with no debt, and we are now paying a quarterly dividend, reflecting confidence in our cash generation while continuing to invest in innovation."

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 income 2 and diluted EPS 2 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 EBITDA 2 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 $0.016 per share.

Second Quarter Select Financial Metrics: FY26 versus FY25*

Q2 '26

Q2 '25

Change

1H'26

1H'25

Change

8.3

7.0

18.3

15.9

14.2

11.9

5.6

4.7

18.3

10.7

9.6

12.1

0.5

0.6

-11.5

1.0

1.3

-19.6

1.6

1.2

32.5

3.2

2.4

30.6

0.5

0.4

19.6

1.0

0.9

5.0

(2.9

)

(2.2

)

-30.3

(2.0

)

(2.7

)

26.1

-35.0

-31.8

-12.5

-18.9

(2.3

)

(1.7

)

-36.3

(1.5

)

(2.0

)

25.7

(0.18

)

(0.12

)

-50.0

(0.12

)

(0.14

)

14.3

0.8

(0.2

)

476.6

1.7

(0.3

)

744.7

0.06

(0.01

)

503.7

0.13

-0.02

782.5

0.9

0.7

21.2

1.7

1.9

-10.4

0.8

0.6

31.2

1.4

1.6

-11.5

1.1

(0.1

)

1580.7

2.3

0.2

1009.1

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*

Q2 '26

Q2 '25

Change

20.4

24.7

-17.4

4.8

5.6

-14.3

15.6

19.1

-18.3

1,175

791

48.5

0.115

0.078

47.6

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*

Q125

Q225

Q325

Q425

Q126

Q226

FY24

FY25

YTD FY26

7.2

7.0

7.8

7.5

7.6

8.3

30.1

29.4

15.9

4.9

4.7

5.6

5.2

5.6

21.0

20.3

10.7

0.6

0.5

3.5

2.2

1.0

1.2

1.3

1.4

1.5

1.6

4.3

5.1

3.2

0.5

0.4

0.5

1.2

1.8

1.0

(0.5

)

(2.2

)

0.2

(0.7

)

0.9

(2.9

)

(11.8

)

(3.2

)

(2.0

)

(0.3

)

(1.7

)

0.2

(0.6

)

0.8

(2.3

)

(9.2

)

(2.4

)

(1.5

)

(0.02

)

(0.12

)

0.01

(0.04

)

0.06

(0.18

)

(0.65

)

(0.17

)

(0.12

)

(0.0

)

(0.2

)

0.9

0.1

0.9

0.8

1.8

0.7

1.7

(0.00

)

(0.01

)

0.06

0.00

0.07

0.06

0.13

0.05

0.12

1.2

0.7

0.9

0.7

0.8

0.9

5.9

3.4

1.7

1.0

0.6

0.8

0.5

0.6

0.8

4.7

2.9

1.4

0.3

(0.1

)

1.2

0.3

1.2

1.1

4.7

1.8

2.3

25.0

24.7

22.1

23.2

22.2

20.4

5.5

5.6

5.2

5.4

4.9

4.8

19.5

19.1

16.9

17.8

17.3

15.6

698

791

896

984

1,075

1,175

0.077

0.078

0.099

0.093

0.099

0.115

0.68

0.61

0.64

0.66

0.79

2.15

2.62

1.44

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

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

[email protected]

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value data)

January 31,

July 31,

2026

2025

(Unaudited)

19,106

18,609

3,765

3,164

1,062

671

23,933

22,444

1,238

1,290

1,128

4,922

2,069

1,931

4,982

4,823

473

244

33,823

35,654

1,437

1,471

2,305

2,867

3,994

3,425

7,736

7,763

2,041

1,937

180

9,957

9,753

152

151

49,774

49,768

(1,174

)

(1,509

)

(17,006

)

(15,505

)

(7,885

)

(7,009

)

23,866

25,901

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,

2026

2025

2026

2025

8,254

6,979

15,864

14,173

561

447

1,116

908

6,683

7,126

12,599

13,935

187

317

403

698

3,570

481

145

827

145

827

(2,892

)

(2,219

)

(1,969

)

(2,676

)

124

171

268

352

(138

)

(86

)

(184

)

(100

)

(2,906

)

(2,134

)

(1,885

)

(2,424

)

(617

)

(455

)

(384

)

(406

)

(2,289

)

(1,679

)

(1,501

)

(2,018

)

236

(132

)

335

(161

)

236

(132

)

335

(161

)

(2,053

)

(1,811

)

(1,166

)

(2,179

)

(0.18

)

(0.12

)

(0.12

)

(0.15

)

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

(1,501

)

(2,018

)

224

151

444

379

982

145

827

3,570

(159

)

(184

)

(601

)

416

(391

)

(360

)

(18

)

(39

)

(817

)

322

673

1,234

1,683

1,878

(237

)

(236

)

(20

)

(30

)

(257

)

(266

)

(876

)

(1,494

)

(208

)

(1,039

)

(1,494

)

110

(62

)

497

18,609

19,998

19,106

20,054

114

130

286

111

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.

Q125

Q225

Q325

Q425

Q126

Q226

FY24

FY25

YTD FY26

(0.3

)

(1.7

)

0.2

(0.6

)

0.8

(2.3

)

(9.2

)

(2.4

)

(1.5

)

(0.2

)

(0.2

)

(0.2

)

(0.2

)

(0.2

)

(0.1

)

(0.6

)

(0.7

)

(0.3

)

0.0

(0.5

)

0.1

(0.0

)

0.2

(0.6

)

(2.2

)

(0.3

)

(0.4

)

0.4

0.3

0.2

2.5

1.1

0.4

(0.1

)

(2.0

)

0.3

(0.5

)

1.1

(2.8

)

(9.5

)

(2.2

)

(1.8

)

0.0

1.3

0.6

0.0

3.7

12.0

2.5

3.7

0.4

0.6

0.3

0.1

0.3

2.1

1.4

0.4

0.0

0.1

0.0

0.2

0.1

0.0

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

Q125

Q225

Q325

Q425

Q126

Q226

FY24

FY25

YTD FY26

(0.3

)

(1.7

)

0.2

(0.6

)

0.8

(2.3

)

(9.2

)

(2.4

)

(1.5

)

0.0

1.3

0.6

0.0

3.7

12.0

2.5

3.7

0.4

0.6

0.3

0.1

0.3

2.1

1.4

0.4

0.0

0.1

0.0

0.2

0.1

0.0

(0.1

)

(0.4

)

(0.2

)

(0.2

)

(0.0

)

(0.9

)

(3.3

)

(0.9

)

(0.9

)

(0.0

)

(0.2

)

0.9

0.1

0.9

0.8

1.8

0.7

1.7

(0.00

)

(0.01

)

0.06

0.00

0.07

0.06

0.13

0.05

0.13

(0.00

)

(0.01

)

0.06

0.00

0.07

0.06

0.13

0.05

0.12

14.1

13.9

13.7

13.4

13.0

14.1

13.7

13.0

14.1

13.9

13.4

13.3

13.0

14.1

13.7

13.3

*numbers may not add due to rounding

Q125

Q225

Q325

Q425

Q126

Q2260

FY24

FY25

YTD FY26

1.2

0.7

0.9

0.7

0.8

0.9

5.9

3.4

1.7

0.2

0.1

0.2

0.1

1.2

0.5

0.3

1.0

0.6

0.8

0.5

0.6

0.8

4.7

2.9

1.4

SOURCE: Zedge, Inc.