Zedge Reports Q2 Fiscal 2025 Revenue Decline but Improved Net Loss

Zedge, Inc. reported its financial results for the second quarter of fiscal 2025, revealing a decline in revenue and a significant reduction in net loss compared to the same period last year. For the three months ended January 31, 2025, the company generated revenues of $6.98 million, a decrease of 10.2% from $7.77 million in the prior year. The net loss for the quarter was $1.68 million, a substantial improvement from a net loss of $9.23 million in the same quarter of the previous year. This reduction in loss was attributed to lower operational costs and a decrease in impairment charges.

The company experienced notable changes in its revenue streams. Advertising revenue fell by 14.3% to $4.70 million, primarily due to a 14.2% decrease in monthly active users (MAU) to 24.7 million. However, subscription revenue increased by 13.3% to $1.23 million, driven by the introduction of new subscription offerings. The total number of active subscribers reached approximately 791,000, reflecting a 22.1% increase compared to the previous year. Zedge's other revenue sources also saw a significant rise, with a 53.2% increase attributed to the growth of Zedge Premium services.

Strategically, Zedge has implemented a corporate restructuring plan aimed at reducing headcount and operational costs, which included a 22% reduction in its global workforce. This restructuring is expected to enhance operational efficiency and facilitate a more streamlined focus on its core offerings. The company also recorded restructuring charges of $0.48 million during the quarter. Additionally, Zedge has been focusing on enhancing its product offerings, including the introduction of generative AI features in its Zedge App, which contributed to the increase in subscription revenue.

Operationally, Zedge's engagement metrics showed mixed results. While the MAU decreased, the average revenue per monthly active user (ARPMAU) increased by 8.7%, indicating improved monetization efforts. The company also reported a total of 106 employees as of January 31, 2025, up from 99 a year earlier, reflecting the ongoing integration of its acquisitions and strategic initiatives. Zedge's geographic presence remains strong, with a significant portion of its user base located in emerging markets.

Looking ahead, Zedge's management expressed cautious optimism about future growth, particularly in light of the ongoing restructuring efforts and the potential for new product offerings. The company aims to leverage its existing user base and expand its market share in the creator economy, which is projected to grow significantly. However, Zedge also acknowledged the challenges posed by current economic conditions and geopolitical uncertainties, which could impact its performance in the near term.