Zedge Inc ((ZDGE)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Zedge Inc’s recent earnings call painted a mixed picture of the company’s financial health and strategic direction. While there was notable growth in subscription revenue and new business contracts, the call also highlighted challenges such as a decline in total revenue and setbacks in specific business segments like GuruShots and Emojipedia. The company is committed to driving future growth through innovation and strategic investments.
Subscription Revenue Growth
Zedge Inc reported a significant increase in subscription revenue, which rose by 21% year-over-year. The company now boasts nearly 1 million active subscribers, marking a 47% increase compared to the fourth quarter of fiscal ’24. This growth in subscription revenue is a positive indicator of the company’s ability to attract and retain users in a competitive market.
DataSeeds.AI Contracts
The company’s DataSeeds.AI division secured contracts from several leading AI customers, expanding its content library to nearly 30 million assets. This development underscores Zedge’s strategic focus on leveraging AI to enhance its offerings and tap into new revenue streams.
Share Repurchase and Dividend Initiation
In a move to return value to shareholders, Zedge repurchased approximately 640,000 shares in the fourth quarter and announced the initiation of its first quarterly dividend of $0.016 per share. This demonstrates the company’s confidence in its financial stability and commitment to shareholder returns.
Revenue Decline
Despite positive developments in some areas, Zedge’s total revenue for the fourth quarter was $7.5 million, down 1.5% from the previous year. This decline highlights the challenges the company faces in maintaining overall revenue growth amidst a competitive landscape.
GuruShots Revenue Drop
GuruShots, one of Zedge’s business segments, experienced a 39% decline in revenue year-over-year. However, the business showed signs of stabilization, with a sequential decline of less than $25,000, indicating potential for recovery.
Emojipedia Ad Revenue Decline
Emojipedia’s ad revenue fell short of expectations due to competitive pressures from AI search and changes in Google’s search engine. This decline contributed to the overall softness in the company’s ad revenue.
Forward-Looking Guidance
Looking ahead, Zedge has outlined several strategic initiatives to drive future growth. The company completed a significant restructuring to reduce gross annualized expenses by about $4 million, despite incurring some restructuring costs. Zedge aims to expand its revenue base, accelerate product innovation, and enhance operational efficiency in fiscal 2026, reflecting a proactive approach to overcoming current challenges.
In summary, Zedge Inc’s earnings call revealed a mixed sentiment, with promising growth in subscription revenue and strategic initiatives offset by declines in total revenue and specific business segments. The company’s focus on innovation and strategic investments is expected to drive future growth, making it a company to watch in the coming fiscal year.