Zedge Inc. reported first‑quarter fiscal 2026 revenue of $7.6 million, a 5.8% year‑over‑year increase that surpassed the consensus estimate of $6.9 million. GAAP earnings per share were $0.06 and non‑GAAP earnings per share were $0.07, both beating the analyst expectation of $0.02. The upside was driven by disciplined cost management and a high gross margin of roughly 94%, which allowed the company to convert modest revenue growth into a solid earnings beat.
Active subscriptions reached a record 1.1 million, up 54% from the same period last year, and subscription revenue climbed 29% to $1.5 million. Average revenue per paying monthly active user (ARPMAU) rose 29% to $0.09, reflecting stronger monetization of the core user base. The surge in subscription activity was largely fueled by increased demand for premium features in the Zedge Marketplace, while the company’s pricing strategy helped lift per‑user revenue.
Segment analysis shows the Zedge Marketplace remains the primary revenue driver, while legacy segments such as GuruShots and Emojipedia experienced modest headwinds. Management highlighted that the marketplace’s high‑margin transactions continue to support overall profitability, whereas the other segments are undergoing restructuring to improve efficiency. In addition, the company is advancing new initiatives—DataSeeds, which supplies AI training data, and the Tapedeck pilot for music licensing—positioning it for future growth beyond its core marketplace.
CEO Jonathan Reich described the quarter as a “solid start to fiscal 2026 with a return to topline growth.” He noted that the company’s leaner operating structure, achieved through the 2025 restructuring, is now delivering stronger results, and that a second DataSeeds order was worth roughly 25 times the value of the first. Reich emphasized confidence in the company’s ability to sustain momentum into the second quarter and beyond.
Market reaction was markedly positive, with the stock surging in pre‑market trading. The rally was driven by the earnings beat, the return to revenue growth, and the robust subscription momentum. Analysts cited Zedge’s high gross margin and disciplined cost controls as key factors underpinning the market’s enthusiasm.
Management did not provide new forward guidance in the release, but the company’s performance and commentary suggest a continued focus on scaling high‑margin segments and investing in emerging opportunities such as AI data services and music licensing. Investors will likely view the results as a confirmation of Zedge’s strategic turnaround and a signal of sustained growth potential.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.