Zedge reports Q1 EPS 0c vs. 4c last year

Reports Q1 revenue $7.2M vs. $7.1M last year. Jonathan Reich, Zedge’s (ZDGE) CEO, commented: “We are encouraged by the underlying trends in our business, which provide a strong foundation for future growth despite a mixed bag of results at the start of the fiscal year. The Zedge Marketplace continued to shine with subscription revenue growing 21% year-over-year and accelerated growth in lifetime subscriptions drove an 8% increase in overall subscribers. Zedge Premium’s GTV surged by 62%, fueled by the popularity of our parallax wallpapers, optimization of rewarded video CPMs and the expansion of pAInt, our AI image generator, demonstrating our ability to fuel growth with innovative features. These achievements and a shift towards users with higher return profiles led to an impressive 22% increase in Average Revenue per Monthly Active User. Additionally, Zedge Marketplace iOS growth continues to be a bright spot for the Company with revenue up over 60% in the quarter. However, we did encounter some advertising challenges in the quarter, including a now resolved coding error that limited our supply of selected ad inventory for a short period, a delay in an ad partner’s testing of our platform, and start up complexities from adding a new advertising mediation platform to our mix. Additionally, we adopted a more conservative short-term approach to user acquisition, prioritizing higher returns on ad spend over rapid scaling. Despite these hurdles, we are confident in our ability to return to advertising revenue growth in the quarters ahead. Emojipedia delivered an outstanding quarter with record revenue up 33% year-over-year, showcasing its continued appeal as the go-to resource for emoji-related information and its strength as a revenue generator within our portfolio. We are thrilled to see Emojipedia’s sustained growth, further validating its value to our ecosystem and validating our original acquisition thesis. GuruShots remains in transition as we focus on initiatives aimed at attracting new users who will convert into recurring, paying players. We’re currently rolling out Duels, a player-versus-player game mechanic that will cap the new onboarding, economy and Missions enhancements we introduced in 2024. Despite limiting marketing spend, we are seeing early signs of growth with higher engagement and retention among new players. Our next area of focus relates to effectively monetizing new players and efficiently growing paid user acquisition, which we believe will pave the way for sustainable growth. In summary, while we had some near-term challenges, we remain focused on executing on our strategy, driving innovation and delivering value for our stockholders, and the progress we’ve made reaffirms our confidence that we are headed in the right direction.”