Zedge, Inc. (NYSE AMERICAN:ZDGE) reported financial results for the fourth quarter and fiscal year ended July 31, 2026, with higher revenue, subscription activity and free cash flow. The company said its fiscal 2026 amounts are preliminary and subject to completion of the audit.
#Fourth-quarter financial results
Revenue for the fourth quarter increased 4.0% to $7.8 million compared with the same period in fiscal 2025. Subscription revenue rose 25.6% to $1.8 million.
Zedge recorded GAAP operating income of $0.3 million, compared with a ($0.7) million operating loss in the prior-year quarter. GAAP net income was $0.4 million, or $0.03 per diluted share, compared with a net loss of ($0.6) million and a loss per share of ($0.04).
Non-GAAP net income was $0.5 million, while diluted Non-GAAP EPS was $0.04, compared with $0.1 million and $0.00, respectively. Adjusted EBITDA increased 75.6% to $0.5 million, and free cash flow rose 220.3% to $1.6 million from $0.5 million.
#Full-year fiscal 2026 performance
Full-year revenue increased 7.6% to $31.6 million. Subscription revenue rose 29.5% to $6.6 million.
The GAAP operating loss narrowed to ($0.6) million from ($3.2) million. GAAP net loss narrowed to ($0.1) million from ($2.4) million, while diluted EPS was ($0.02), compared with ($0.17) in fiscal 2025.
Full-year Non-GAAP net income was $3.1 million and diluted Non-GAAP EPS was $0.24, compared with $0.7 million and $0.05. Adjusted EBITDA increased 134.2% to $4.1 million from $1.8 million.
Free cash flow increased 46.6% to $4.2 million from $2.9 million. Cash and cash equivalents stood at $20.3 million as of July 31, 2026. The company said these non-GAAP measures supplement, but do not replace, its GAAP results.
#Marketplace and subscription metrics
Average Revenue Per Monthly Active User, or ARPMAU, increased 30.5% to $0.121 in the fourth quarter. Active subscriptions rose 35.3% to approximately 1.3 million.
Zedge Premium Gross Transaction Value increased 1.9%, while deferred revenue increased 13.4% to $6.1 million. Zedge reported 20 million monthly active users across its platforms.
#DataSeeds.AI development
Zedge said DataSeeds.AI secured repeat orders from new and existing customers, including its first six-figure order. The company also said it had put personnel and infrastructure in place for larger and more complex projects.
DataSeeds.AI is Zedge’s B2B AI data business, providing managed, multimodal data creation and related services for AI developers and enterprises. Its activities include training data, model evaluation, annotation, data enrichment and specialised datasets for physical AI and robotics.
Chief Executive Officer Morris Berger said DataSeeds.AI had commercial traction through repeat orders, growing order sizes and a potential expansion into new products and services. These comments are management’s assessment of the business and its possible development.
Howard Jonas led a $7.7 million insider investment in Zedge in September. Zedge said the investment would support the acceleration of DataSeeds.AI, with Jonas taking a more active role in the business. Morris Berger became CEO earlier in October.
#Capital returns and share repurchases
Zedge said it returned approximately $2.7 million to stockholders through share repurchases and quarterly dividends during fiscal 2026. The company initiated the quarterly dividend during the year and subsequently increased it by 25%. It paid a quarterly dividend of $0.02 per share in the fourth quarter.
The company repurchased 686,477 shares. Zedge said the share repurchase programme was suspended in Q1 FY27 in light of the September capital raise.
#Management commentary
Jonathan Reich, President and COO, attributed the fiscal 2026 revenue gains to improvements in monetisation, particularly in subscription offerings, and said the fiscal 2025 restructuring contributed to higher Non-GAAP EPS, Adjusted EBITDA and free cash flow.
Reich also said a marked decline at Emojipedia reduced consolidated revenue growth by approximately 300 basis points.
#Key Takeaways
- Fourth-quarter revenue increased 4.0% to $7.8 million, while subscription revenue rose 25.6% to $1.8 million.
- Full-year revenue increased 7.6% to $31.6 million and subscription revenue rose 29.5% to $6.6 million.
- Full-year free cash flow increased 46.6% to $4.2 million, with cash and cash equivalents of $20.3 million as of July 31, 2026.
- Active subscriptions increased 35.3% to approximately 1.3 million and ARPMAU rose 30.5% to $0.121.
- The share repurchase programme was suspended in Q1 FY27 following the September capital raise.
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