• Total Revenue: $7.2 million, up 1.6% year over year.
• Subscription Revenue: Increased by 21% for the quarter.
• Net Active Subscribers: Up nearly 8% year over year.
• Zedge Premium GTV: Approximately $700,000, up 62% year over year.
• Average Revenue Per Monthly Active User (ARPMAU): Grew 22% year over year to $0.077.
• GuruShots Revenue: Declined by 32% year over year.
• Cost of Revenue: 6% of total revenue, roughly flat year over year.
• SG&A Expenses: Increased by 24% to $6.8 million.
• GAAP Loss from Operations: $0.5 million compared to income of $0.3 million last year.
• GAAP Net Loss: $0.3 million, or $0.02 per share.
• Non-GAAP Break Even: Compared to non-GAAP net income of $0.5 million last year.
• Adjusted EBITDA: $0.3 million versus $1.5 million last year.
• Cash and Cash Equivalents: Over $20 million at the end of the quarter.
• Share Repurchase Program: New $5 million program authorized.

• Warning! GuruFocus has detected 4 Warning Signs with ZDGE.

Release Date: December 16, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Subscription revenue grew 21% year over year, with an 8% increase in overall subscriber counts.
• Zedge Premium's gross transaction value surged 62% year over year, driven by new features and optimizations.
• Emojipedia achieved a 33% revenue increase, marking its highest ever quarterly results.
• The company has over $20 million in cash and cash equivalents, supporting a strong balance sheet.
• A $5 million share repurchase program has been authorized, indicating confidence in long-term shareholder value.

Negative Points

• Advertising revenue faced challenges due to a temporary bug, delays with an ad partner, and integration complexities.
• GuruShots experienced a 32% year-over-year revenue decline, impacting overall results.
• SG&A expenses increased by 24% due to higher marketing expenses, affecting profitability.
• GAAP loss from operations was $0.5 million for the quarter, compared to income from operations last year.
• Adjusted EBITDA decreased to $0.3 million from $1.5 million in the prior year, reflecting financial pressures.

Q & A Highlights

Q: Can you provide the current figures for monthly active payers and average revenue per monthly active payer for GuruShots? A: Jonathan Reich, CEO: We haven't shared those specific numbers publicly. However, we are focusing on transforming GuruShots to improve its growth trajectory and are optimistic about its future performance.

Q: How significant was the impact of the coding issue on your quarterly results, and has it been resolved? A: Jonathan Reich, CEO: The coding issue, along with other challenges, was significant but has been resolved. These were one-time issues, and we are not facing ongoing struggles from them.

Q: Will you manage SG&A to remain adjusted EBITDA positive? A: Jonathan Reich, CEO: Yes, we aim to be EBITDA positive for the rest of the fiscal year. We would only consider going negative if there was a significant growth opportunity that justified increased marketing spend.

Q: What is the status of WishCraft and AI Art Master, and when might they move out of beta? A: Jonathan Reich, CEO: Both remain in beta as we rigorously test them to ensure they can scale and generate returns. We are cautious about optimizing them before full release.

Q: Can you explain the benefits of lifetime subscriptions and how they impact financials? A: Jonathan Reich, CEO: Lifetime subscriptions provide upfront revenue and are amortized over the expected customer lifetime. They offer value to customers and are beneficial from a cash flow perspective, despite the upfront costs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.