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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 2026 Start Shows Promising Growth

Zedge's financial results for the start of fiscal 2026 were encouraging, with total revenue reaching $7.6 million, a 5.8% increase from the previous year. The company's earnings per share (EPS) came in at $0.07, surpassing analyst estimates of $0.02. Zedge Marketplace revenue saw a notable increase, driven by a rise in active subscriptions to a record 1.1 million and higher average revenue per monthly active user. The net active subscriber base for Zedge Plus grew 54% year-over-year, contributing to a 29% increase in subscription revenue.

Publication Date: Dec -20

📋 Highlights
  • Revenue Growth:: Total revenue increased 5.8% YoY to $7.6 million, driven by Zedge Marketplace and advertising revenue up 6%, with Zedge Plus subscriptions rising 29% to 1.1 million active subscribers.
  • Active Subscribers & ARPU:: Zedge Marketplace active subscriptions reached 1.1 million, with average revenue per monthly active user increasing due to higher CPMs, optimized ad stacks, and higher-value users.
  • DataSeeds Traction:: DataSeeds focuses on custom visual/audio datasets for clients, with a multi-quarter sales cycle and potential to address high-demand technical needs in AI/data markets.
  • GuruShots & Emojipedia Losses:: GuruShots incurred ~$150,000 monthly losses (stable), while Emojipedia declined, though offset by growth in other segments.
  • Restructuring Costs & Buybacks:: $350,000 restructuring costs impacted Q1 free cash flow, with $600,000 remaining in the $5 million share buyback program and $330,000 in severance taxes paid in July 2026.

Revenue Stream Analysis

The growth in revenue was largely driven by the Zedge Marketplace, with advertising revenue increasing by 6%. While Emojipedia and GuruShots experienced declines, the overall strength across the rest of the ecosystem offset these headwinds. Yi Tsai noted that GuruShots is still incurring losses, but has stabilized at around $150,000 per month. The company is exploring the potential evolution of GuruShots 2.0, indicating a proactive approach to addressing challenges.

DataSeeds Traction and Future Prospects

Jonathan Reich highlighted the traction gained by DataSeeds, a managed global network of professionals producing high-quality datasets. DataSeeds is focused on creating custom and structured visual and audio datasets that meet specific customer needs, positioning Zedge well for the current demand environment. The typical sales process for DataSeeds can take several quarters, indicating a potential for future revenue growth as leads convert.

Valuation and Future Estimates

With a P/E Ratio of -33.77 and a P/S Ratio of 1.43, the market's expectations for Zedge's future growth are evident. Analysts estimate next year's revenue growth at 4.1%. Considering the current valuation metrics, it appears that the market has priced in some level of growth, but the actual EPS beating estimates suggests a positive surprise. The company's share buyback program, with $600,000 remaining under the current $5 million authorization, also indicates a commitment to returning value to shareholders.

Restructuring Costs and Free Cash Flow Impact

The company incurred restructuring costs, including severance pay for two senior employees in Norway, resulting in a $330,000 impact on free cash flow due to withholding taxes. Yi Tsai explained that the company plans to reinvest some of the savings into new products, such as DataSeeds, and the innovation pipeline, indicating a focus on driving future growth. The Free Cash Flow Yield of 7.78% suggests a relatively healthy cash generation capability.

3. NewsRoom

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Zedge To Report Second Quarter 2026 Results

Mar -03

Source: accessnewswire.com

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Zedge (NYSEAMERICAN:ZDGE) Shares Cross Below 50-Day Moving Average – Here’s Why

Feb -17

Source: defenseworld.net

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Zedge (NYSEAMERICAN:ZDGE) Stock Passes Below 50-Day Moving Average – Here’s What Happened

Feb -07

Source: defenseworld.net

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Zedge, Inc. (ZDGE) Q1 2026 Earnings Call Transcript

Dec -12

Source: seekingalpha.com

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Zedge Reports First Quarter Fiscal 2026 Results

Dec -12

Source: accessnewswire.com

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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

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
IZEA

A-Score: 4.4/10

Value: 8.1

Growth: 2.0

Quality: 4.0

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
MediaAlpha

A-Score: 4.2/10

Value: 8.3

Growth: 3.2

Quality: 5.6

Yield: 0.0

Momentum: 5.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
NextNav

A-Score: 4.0/10

Value: 8.0

Growth: 7.3

Quality: 4.9

Yield: 0.0

Momentum: 2.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Zedge

A-Score: 3.7/10

Value: 7.5

Growth: 3.3

Quality: 4.9

Yield: 0.0

Momentum: 5.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
BuzzFeed

A-Score: 3.1/10

Value: 8.0

Growth: 3.1

Quality: 4.8

Yield: 0.0

Momentum: 1.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
TrueCar

A-Score: 3.0/10

Value: 8.5

Growth: 3.0

Quality: 3.4

Yield: 0.0

Momentum: 2.0

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

3.1$

Current Price

3.1$

Potential

-0.00%

Expected Cash-Flows