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1. Company Snapshot

1.a. Company Description

Zedge, Inc.operates a digital publishing and content platform worldwide.Its platform enables consumers to personalize their mobile devices with ringtones, home screen app icons, wallpapers, widgets, and notification sounds.


The company was incorporated in 2008 and is based in New York, New York.

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1.b. Last Insights on ZDGE

Here is a 90-word analysis of the negative drivers behind Zedge, Inc.'s recent stock performance: Zedge's recent performance was negatively impacted by its mixed Q1 2025 results, with a 22% workforce reduction and additional cost-cutting measures aimed at saving $4 million annually. The company's efforts to streamline operations and enhance profitability come amid a challenging environment. The GuruShots game overhaul and restructuring initiatives, including a 14% headcount reduction, are expected to lower costs by $1.7 million annually. However, these efforts may not be enough to offset the company's struggles, as it faces intense competition in the digital marketplaces and interactive games space.

1.c. Company Highlights

2. Zedge's Fiscal 2025 Earnings: A Year of Transition and Restructuring

Total revenue for the fourth quarter was $7.5 million, down 1.5% from last year, while Zedge Marketplace revenue was up mid-single digits for the quarter. The company's subscription revenue increased 21% year-over-year, with nearly 1 million active subscribers, an increase of 47% compared with Q4 of fiscal '24. The net active subscriber base growth and the increase in deferred revenue, which reached $5.4 million, up 10% sequentially and 73% year-over-year, indicate a positive trend in the company's subscription business. As Yi Tsai mentioned, "Deferred revenue is recognized over 30 months, and as long as we keep the subscriber pool steady, we would level out the revenue based on what we sell, not what we recognize."

Publication Date: Nov -20

📋 Highlights
  • Restructuring Cost Savings: $4M annualized savings from Norway closure and GuruShots rightsizing, offset by $1.5M cash costs and $1M noncash charges.
  • Subscription Growth: 21% YoY revenue increase and 47% active subscriber surge to nearly 1 million, driven by Zedge Plus optimization.
  • Deferred Revenue Expansion: $5.4M deferred revenue (+73% YoY), reflecting strong subscription demand and improved cash flow visibility.
  • Ad Revenue Challenges: Zedge Marketplace ad growth offset by Emojipedia decline due to AI search competition, impacting total ad revenue.

Operational Performance

The company's operational performance was mixed in Q4, with Zedge Marketplace performing well, while GuruShots appears to be plateauing. The decline in ad revenue at Emojipedia due to the competitive impact of AI search was a negative factor, but the company is actively testing strategies to mitigate this outcome. The restructuring efforts, including closing operations in Norway and rightsizing GuruShots, are expected to reduce annualized expenses by about $4 million.

Valuation and Outlook

With a P/S Ratio of 1.08, the market is pricing in moderate growth expectations. The company's efforts to invest in growth and innovation, including the development of new products such as DataSeeds and tapedeck, are expected to drive future growth. Analysts estimate next year's revenue growth at 3.0%. The dividend yield of 0.66% and Free Cash Flow Yield of 11.56% are also attractive. However, the negative ROE of -8.48% and ROIC of -2.44% indicate that the company's profitability is still a concern.

Restructuring and Cost Savings

The company's restructuring efforts are expected to result in significant cost savings, with a reduction in annualized expenses of about $4 million. The cash restructuring costs and non-cash charges incurred during the quarter were approximately $1.5 million and $1 million, respectively. The company's SG&A expenses were higher in the quarter due to the ramp-up in paid user acquisition and consulting fees, but are expected to decline going forward.

3. NewsRoom

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Zedge To Report First Fiscal Quarter 2026 Results

Dec -02

Source: accessnewswire.com

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Zedge, Inc. (ZDGE) Q4 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

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Zedge Reports Fourth Quarter and Full Year Fiscal 2025 Results

Oct -28

Source: accessnewswire.com

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Zedge's Dataseeds.AI Grows its Enterprise Customer Base for Rights-Cleared, On-Demand Visual Datasets

Oct -20

Source: accessnewswire.com

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Zedge To Report Fourth Quarter & End of Fiscal Year 2025 Results

Oct -20

Source: accessnewswire.com

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Zedge Announces Initiation of Quarterly Cash Dividend

Oct -14

Source: accessnewswire.com

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Zedge to Present at The LD Micro Main Event XIX on October 20, 2025

Oct -10

Source: newsfilecorp.com

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Zedge Introduces its AI-Powered Product Innovation Team to Drive New Growth

Oct -09

Source: accessnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.64%)

6. Segments

Zedge Marketplace

Expected Growth: 14%

Zedge Marketplace's 14% growth is driven by increasing demand for personalized mobile content, expansion into new markets, and strategic partnerships. The platform's user-generated content model and AI-powered content discovery features also contribute to its growth. Additionally, the rise of 5G networks and increasing mobile internet penetration in emerging markets further fuel the demand for Zedge's offerings.

GuruShots

Expected Growth: 12%

GuruShots' 12% growth driven by increasing demand for personalized mobile content, Zedge's strong brand recognition, and strategic partnerships. Additionally, the app's user-generated content and social features foster engagement, while its gamification elements encourage user retention. The growing adoption of 5G networks and advancements in AI-powered content creation also contribute to the segment's growth.

7. Detailed Products

Ringtones

A wide variety of ringtones for mobile devices, including popular songs, sound effects, and voice tones.

Wallpapers

A vast collection of high-quality wallpapers for mobile devices, including abstract designs, scenic landscapes, and celebrity images.

Live Wallpapers

Interactive and dynamic wallpapers that come to life on mobile devices, including 3D animations and interactive designs.

Icon Packs

Custom icon packs that allow users to personalize their mobile device's home screen with unique and stylish icons.

Notification Sounds

A collection of custom notification sounds that users can download and set as their default notification tone.

Fonts

A variety of custom fonts that users can download and apply to their mobile device to change the look and feel of their interface.

8. Zedge, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Zedge, Inc. faces moderate threat from substitutes, as users can opt for alternative platforms for mobile content, but the company's strong brand recognition and user base mitigate this threat.

Bargaining Power Of Customers

Zedge, Inc. has a large user base, which reduces the bargaining power of individual customers, and the company's free content offerings further reduce customer bargaining power.

Bargaining Power Of Suppliers

Zedge, Inc. has a diverse supplier base, and the company's digital nature reduces its dependence on physical suppliers, minimizing supplier bargaining power.

Threat Of New Entrants

The digital nature of Zedge, Inc.'s business and low barriers to entry make it vulnerable to new entrants, which could potentially disrupt the market and threaten the company's position.

Intensity Of Rivalry

Zedge, Inc. operates in a competitive market, but its established brand and user base help to mitigate the intensity of rivalry, although the company still faces competition from other mobile content providers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 5.15%
Debt Cost 3.95%
Equity Weight 94.85%
Equity Cost 9.32%
WACC 9.05%
Leverage 5.43%

11. Quality Control: Zedge, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NextNav

A-Score: 5.2/10

Value: 8.0

Growth: 7.3

Quality: 3.6

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
IZEA

A-Score: 4.1/10

Value: 7.8

Growth: 2.0

Quality: 4.0

Yield: 0.0

Momentum: 8.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
MediaAlpha

A-Score: 3.6/10

Value: 7.0

Growth: 4.7

Quality: 5.8

Yield: 0.0

Momentum: 1.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Zedge

A-Score: 3.5/10

Value: 8.0

Growth: 3.3

Quality: 4.6

Yield: 1.0

Momentum: 3.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
BuzzFeed

A-Score: 3.3/10

Value: 8.3

Growth: 3.1

Quality: 4.8

Yield: 0.0

Momentum: 2.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
TrueCar

A-Score: 2.9/10

Value: 8.4

Growth: 3.0

Quality: 4.5

Yield: 0.0

Momentum: 0.5

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.51$

Current Price

2.52$

Potential

-0.00%

Expected Cash-Flows