ZDGE 10-K & 10-Q changes, risk factors and insider trading

The size of our user base and our users’ level of engagement and paid conversion are fundamental to our success. Our financial performance has been and will continue to be dependent on our ability to successfully add new users, retain and engage existing users and convert them into paying users and/or subscribers. We expect that the size of our user base will fluctuate or decline in one or more markets from time to time. If consumers and/or creators do not perceive our products as useful, effective, entertaining, reliable, and/or trustworthy, we may not be able to attract or keep users or otherwise maintain or increase the frequency and duration of their engagement or the percentage of users that are converted into or remain paying subscribers. ThereWe ismay nocontinue guaranteeto thatsee we will not experience a declinedeclines in our user base or engagement levels.levels, which could further erode our ability to maintain or grow revenue. User engagement can be difficult to measure, particularly as we introduce new and different products and services, and as various privacy regulations evolve. Any number of factors can negatively affect user retention, growth, engagement and conversion, including if:

Revenues of freemium apps and websites typically rely on a small percentage of users that convert into paying users by making in-app purchases of digital goods and/or paid subscriptions; however, the vast majority of users play for free or only occasionally make purchases or opt-in for paid subscriptions. Accordingly, only a small percentage of our users are paying users. In addition, a small portion of paying users generate a disproportionate percentage of revenue. Because of this, it is imperative for us to both retain these valuable customers and to maintain or increase their spend over time. In fiscal 2024,2025, we experienced ana 8%17% declineincrease in paidsubscription subscriptions.revenue and a 29% increase in subscription billings. Conversely, over the past sevennine years, GuruShots has successfully increased the compounded annual growth rate of monthly spending per paying player by around 9.9%.6.2%. There can be no assurance that we will be able to continue to retain paying users, grow or maintain subscription levels or that paying users will maintain or increase their spending. We may experience a net decline in paying players resulting in a decrease in revenue resulting in a materially adverse outcome for our business and financial results.

In addition, internet-connected devices and operating systems controlled by third parties increasingly contain features that allow device users to disable functionality that allows for the delivery of advertising on their devices or reduce the ability to provide personalized or targeted advertising, which results in less valuable ads. Device and browser manufacturers may include or expand these features as part of their standard device specifications. For example, when Apple announced that UDID,IDFA, a standard device identifier used in some applications, was being superseded and would no longer be supported, application developers were required to update their apps to utilize alternative device identifiers such as universally unique identifier, or, more recently, identifier-for-advertising, which simplifies the process for Apple users to opt out of behavioral targeting. Furthermore, laws and regulations may also make it more difficult to deliver personalized or targeted advertising or impose requirements that result in more users making elections to block our ability to deliver targeted ads. If users do not elect to participate in functionality that supports the delivery of targeted advertising on their devices, our ability to deliver effective advertising campaigns could suffer, which could cause our business, financial condition, or operating results to be adversely affected.

We anticipate that our growth and profitability will continue to depend on our ability to sell our advertising inventory. Companies that advertise with us may choose to utilize other advertising channels or may reduce or eliminate their marketing altogether for a variety of reasons, many of which are out of our control, including, without limitation, if the demand for mobile phone personalization industry declines or otherwise falls out of favor with advertisers or consumers. In addition, we previously disclosed that disruptions caused by U.S. regulatory action, specifically the TikTok ban that took effect in early 2025 shortly after President Trump assumed office, had an immediate impact on advertiser behavior. During that period, U.S. advertising revenue fell, with TikTok advertising spend for the most part disappearing. This experience illustrates how government-mandated restrictions on a major advertiser can impact revenue quickly. Should future regulation, such as a reinstated or expanded ban on TikTok or restrictions on other platforms result, our revenue could be materially and adversely affected.

Further, our advertisers’ ability to effectively target their advertising to our user’s interests may be negatively impacted by the degree to which our privacy control measures that we have implemented or may implement in the future in connection with regulations, regulatory actions, the user experience, or otherwise, and our advertising revenue may decrease or otherwise be curtailed as a result. Changes to operating systems’ practices and policies, such as Apple’s deprecating the Identifier for Advertisers (“IDFA”) and changes by Google to its advertising and Google’stracking policies, including the planned deprecation of third-party cookies in Chrome and a shift away from certain elements of its Privacy Sandbox whichinitiative, isas meant well as efforts to make current tracking mechanisms obsolete, and block covert tracking techniques,techniques like fingerprinting fingerprinting, may also reduce the quantity and quality of the data and metrics that can be collected or used by us and our partners. These limitations may adversely affect our advertisers’ ability to effectively target advertisements and measure their performance, which could reduce the demand and pricing for our advertising products and harm our business. As such, our digital property’s current and potential advertiser clients may ultimately find digital advertising to be less effective than traditional advertising media or marketing methods or other technologies for promoting their products and services, and they may even reduce their spending on mobile advertising from current levels as a result or for other reasons.

In fiscal 2024,2025, revenue from well developed economies accounted for approximately 80%81% of our total revenues and 69%72% of our total advertising revenues were generated by three advertising demand partners. While our end users are located around the world, the revenue is generated in the United States from our advertising partners. During the past five years, we have experienced a shift in our Zedge App’s regional customer make-up with the percentage of our total MAU from emerging markets increasing, while the portion from well-developed markets is decreasing. In fiscal 2024,2025, 79%76.7% of our Zedge App’s users were located in emerging markets with 21%23.3% of users in well-developed regions compared to 78%21.1% and 22%78.9% respectively in fiscal 2023.2024. India comprised 30% 32.5% of our MAU as of July 31, 2024.2025. This shift has negatively impacted revenues because well-developed markets command materially higher advertising rates when compared to those in emerging markets. Although we are investing in reversing this trend, we may not be successful in this effort which may result in lower revenues and profitability. Although GuruShots’ and Emojipedia’sEmojipedia’ s user bases are more heavily weighted to well-developed economies, weour areoverall stillrevenue exposedremains sensitive to the impactregional composition of a shift in our Zedge App’s user base toward emerging markets.base.

Three advertising demand partners, mainly, Google, Vungle Liftoff, and AppLovin were responsible for 69%72% of overall advertising revenue in fiscal 2024.2025. If any of these advertising demand partners were to alter their spend on our digital properties the outcome could result in lowering revenues and profitability.

In fiscal 2024,2025, approximately 79%75% of our revenues excluding GuruShots were generated from advertising sales. We cannot assure you that we will be successful in diversifying our revenue mix by identifying new revenue drivers that complement our advertising-heavy business. Although the Zedge App had initial success in converting freemium users into paid subscribers, starting with zero in January 2019 and ending fiscal 20232024 with approximately 647,000,669,000, we ended fiscal 2024 2025 with 669,000984,000 subscribers, a 3.4%47% increase and there is no guarantee that we willmay not be successful in improving subscriber base growth or in maintaining our current subscriber base. Furthermore, the subscription growth we experienced in fiscal 2025 was fueled by converting users to lifetime subscriptions and offers that aligned with localized pricing dynamics. We may not be able to continue to be able to drive this growth as market dynamics may change. To date, Zedge Premium has taken longer to scale than we originally anticipated. Furthermore, we are still integrating GuruShots and have not achieved its expected growth trajectory or realized synergies between GuruShots and our legacy operations. Finally, Android users constitute approximately 96%95% of our overall MAU and are prone to spend less money in apps than iOS and web users. Even if our new initiatives are successful on one platform, we may not be able to replicate that success across other platforms.

We rely on third-party platforms, such asprimarily the iOS App Store, Meta, and Google Play Store, to distribute our appsapps, process payments, and collect revenues generated on these platforms. These platforms exercise significant control over app distribution, monetization, advertising, and privacy policies, and frequently update their algorithms and terms of service. In addition, the integration of AI-driven content and search results by these platforms (e.g., Google’s “AI Overviews” and similar generative AI features from Apple and Meta) may reduce organic traffic to our properties by embedding content directly in platform experiences. If these platforms adopt adoptpolicies policies— including those relating to AI integration, advertising, privacy, monetization, or monetizationcontent display — that are counter to our strategystrategy, itour business could result inbe materially and adversely affecting our business.affected.

Our products and services depend almost entirely on mobile app stores stores, particularly Google Play and Apple’s App Store, and on other third parties such as data center service providers, as well as third party cloud infrastructure and service providers, payment aggregators, computer systems, internet transit providers and other communications systems and service providers. Our mobile applications are almost exclusively accessed through and depend on the Google Play Store and Apple’s App Store. While our mobileapps applications are generally free to download from these stores, download, we offermonetize our users the opportunity to makethrough in-app purchasespurchases, subscriptions, and/or purchaseadvertising, paidall subscriptions. In certain instances, we determine the prices atof which thesedepend itemson andcompliance subscriptionswith areevolving sold.platform These purchases are processed by Google’spolicies. and Apple’s in-app payment and subscription systems. As of July 31, 20242025, we paid Google and Apple processing fees of up to 30% offor thetransactions, revenueand we generatedremain exposed to changes in fee acrossstructures, theirpayout respective platforms for processing fees. Our revenuestiming, and earningspermitted monetization models. Any interruption, degradation, or policy change, including restrictions on AI-generated content or mandatory labeling of such content, could bematerially negatively impacted should Google or Apple decide to impose higher processing fees. Further,impact our cashflow may be negatively impacted if either platform changes the timing of their payments to us.business. While we do not anticipate any interruption in their distribution platforms or ability to accept customer payments, any such disruptions, even temporary, may have material impacts on our business and operations.

We are subject to the standard policies and terms of service of third-party platforms, which govern the marketing, promotion, distribution, content and operation of our apps on their platforms. Each platform provider has the discretion to make changes to its operating system, payment services, manner in which their mobile operating system operates as well as change and interpret the terms and conditions of its developer policies. These changes may be harmful to our business and result in a negative outcome. For example, in September 2019, our Zedge App was temporarily removed from Google Play because they asserted that the Zedge App violated their malicious behavior policy. As a result, prospective Android users were prevented from installing our Zedge App, freemium users were unable to convert into paying subscribers and existing users wewere unable to purchase Zedge Credits. Shortly after the notice was issued, two of our major advertising suppliers ceased serving advertisements to our Zedge App. In addition, Google Play sent a notification to users that had the problematic version of the app on their phone recommending that they uninstall it. We identified the source of the problem as buggy code from a long-term, third-party advertising partner’s standard technology integration in our app. We corrected the problem by removing the offensive code, releasing a new version of our app and our Zedge App was reinstated after approximately 72 hours and concurrently the two major advertising suppliers resumed purchasing our advertising inventory. We estimate the immediate financial impact of the suspension resulted in approximately $100,000 in lost revenue and a material decline in MAU with the majority of uninstalls in emerging markets.

For example, pursuant to Google’s policy whereby only Google Play’s in-app billing system could be used for transactions in its store, we were mandated to stop the provision of non-native payment options to our users on Android during 2021, which caused disruptions for users and led to a decline in Paying Users. Since announcing this policy in 2020, following industry pushback and country-specific regulations Google has introduced in select markets the option of “user choice billing,” which allows eligible developers to offer users an additional billing system alongside Google Play’s billing system, and in the European Economic Area the option for eligible developers to offer users an alternative to Google Play’s billing system. In July 2025, the Japan Fair Trade Commission approved a settlement requiring Google to allow alternative billing systems in Japan beginning in 2026, and other jurisdictions are considering similar measures. We are exploring such solutions on a country-by-country basis. However, as these solutions are in their infancy, they may evolve following subsequent regulatory mandates or organically at Google’s behest, and as such we will need to be ready to continuously adapt to such changes. Any deadlines imposed on developers by future iterations of Google’s policy will require prompt and active development, anddevelopment; failure to docomply so maycould result in the discontinuation of the provision of alternative billing methods tofor our users. Additionally, a December 2024 ruling in Epic Games v. Google, now under appeal, requires Google to permit third-party app stores and direct app downloads on Android devices in the United States from November 1, 2024 through November 1, 2027, which could alter app distribution economics, fee structures, and competitive dynamics in ways that may materially affect our business.

Although Zedge Premium’s gross transaction revenue has shown modestimpressive growth it is still too early to state with conviction that Zedge Premium will have a materially positive impact on our business. In order to do so, we still need, among other things, to:

Although we had positive cash flow from operating activities fiscal 20232023, 2024 and 2024,2025, we had previously incurred, and may once again incur, net losses and experience negative cash flow from operating activities in the future and may not be able to obtain additional capital in a timely manner or on acceptable terms, or at all.

Tax laws may change as new laws are passed and new interpretations of the law are issued or applied. Our existing corporate structure and intercompany arrangements have been implemented in a manner that we believe comply with current prevailing tax laws. However, the tax positions that we take advantage of could be undermined due to changing tax laws, both in the United States and in other applicable jurisdictions, including Norway, Lithuania, and Israel. In addition, the tax authorities in the United States and other jurisdictions in which we operate regularly examine income and other tax returns and we expect that they may examine our income and other tax returns. The ultimate outcome of these examinations may not benefit our business.

The substantial majority of our revenues are denominated in U.S. dollars, and our operating expenses are generally denominated in the local currencies of the countries where our operations are located. We have significant operations in Europe and Israel that are denominated in foreign currencies, primarily the Norwegian Krone, Euro and Israeli Shekel, subjecting us to foreign currency risk.Shekel. The strengthening or weakening of the U.S. Dollar versus these currencies impacts the expenses generated in these foreign currencies when converted into the U.S. Dollar. In fiscal 20242025 and fiscal 2023,2024, we recorded a losslosses of $190,000$151,000 and a$190,000, respectively, gain of $36,000, respectively, from foreign currency movements relative to the U.S. Dollar. Included in these amounts were lossesgains from hedging activities of $44,000 and losses of $245,000 and gains of $14,000 in fiscal 20242025 and fiscal 2023,2024, respectively. While we regularly enter into transactions to hedge portions of our foreign currency exposure, it is impossible to predict or eliminate the effects of this exposure. Fluctuations in foreign exchange rates rates could significantly impact our financial results.

Our digital presence heavily depends on search engine traffic, primarily from platforms like Google. A key driver of our success in this domain is our website’s visibility and ranking in response to search queries. As searchSearch engines frequently update their algorithms, which affectingmay affect our link placements and rankings werankings, needand torequire regularlyongoing manageinvestment ourin search engine optimization into ordermitigate potential traffic losses. In addition, the integration of artificial intelligence features by search engines, such as AI-generated overviews, summaries, or embedded rich media, may reduce the likelihood that users click through to avoidour aproperties, materialas they may receive the desired content directly within the search results page. These developments could also extend to the direct display of emojis, wallpapers, or other types of content that we currently provide, further diminishing referral traffic. A sustained decrease in weborganic traffic from these or similar changes could require us to increase our onlinereliance properties. Substituting free traffic withon paid alternativesuser couldacquisition alsoor leadother tomarketing increasedchannels, costs.potentially increasing costs and adversely affecting margins. These risks highlight the critical importance of continuous adaptation to the evolving search engine and AI landscape and the potential consequences if we do not adequatelyeffectively navigateanticipate, respond to, and capitalize on these challenges.changes.

Conditions in Israel, including the October 7, 2023 attack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war against them, may adversely affect our operations.operations adversely affect operations and financial condition, particularly given the ongoing war in Gaza, the June 2025 ’12-Day War’ between Israel and Iran, broader regional instability, and potential long-term impacts on Israel’s economy, technology sector, and foreign investment.

Zedge, Inc. (“Zedge”) builds digital marketplaces and friendly competitive games around content that people use to express themselves. Our leading products include Zedge Ringtones and Wallpapers, which we refer to as our “Zedge App,” a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones, and notification sounds as well as pAInt, a generative AI wallpaper maker, GuruShots, a skill-based photo challenge game, and Emojipedia, the #1 trusted source for ‘all things emoji’. Our vision is to enable and connect creators who enjoy friendly competitions with a community of prospective consumers in order to drive commerce.

We are part of the ‘Creator Economy,’ which Goldman Sachs estimates is estimated to be worth between $191 billion and $250 billion globally.5globally in 2025, with some forecasts placing the global market size as high as $848 billion by 2032121314. According to Linktree,multiple reports, there are now over 200207 million individualsactive identify ascontent creators,creators peopleworldwide.1516 whoFurthermore, usebetween their influence, skill,45% and creativity to amass an audience and monetize it.6 Furthermore, Influencer Marketing Hub reports that out47% of 2,000 surveyed creators, 44.9%creators identify as working full-time creators,7in this space171819. Most creators earn modest incomes, and Explodingstudies Topicssuggest reports that 10%only a small portion, approximately 4%, of influencerscreators earn more than $100,000 per year.8year202122. We view the Creator Economy as an opportunity for Zedge to expand our business, especially as we execute by connecting our gamers with our marketplace.

Our Zedge appApp (which is named “Zedge Wallpapers” in the App Store) offers a wide array of mobile personalization content including wallpapers, video wallpapers, ringtones, and notification sounds, and is available both in Google Play and the App Store. AsOver ofthe Julypast two 31,fiscal 2024,years, our Zedge App had been installed nearly 674 million times since inception and, over the past two fiscal years, has had between 26.122.1 million and 32.228.7 million monthlyMAU, active users (“MAU”), ending with 26.123.3 million MAU as of July 31, 2024. 2025. MAU is a key performance indicator (“KPI”) for our Zedge app that captures the number of unique users that used our Zedge App during the final 30 days of the relevant period. Our platform allows creators to upload content to our marketplace and avail it to our users either for free or, via ‘Zedge Premium,’ the section of our marketplace where we offer premium content for purchase. In turn, our users utilize the content to personalize their phones and express their individuality.

In fiscal 2023, we introduced pAInt, a generative AI wallpaper maker in the Zedge App. A generative AI wallpaper maker is an implementation of artificial intelligence software that can create images from text descriptions. To interface with a generative AI image maker, a user enters a text description of the image they want to create, and the software generates an image based on that description. Today, pAInt is available for text-to-image, image-to-image, and text-to-audio creation. In addition, we upgraded Zedge+, our paid subscription offering offering by bundling together an ad-free experience with value adds making the offering more compelling.

We often refer to our freemium ringtones and wallpapers, our subscription offering, the functionality for creators to market their products and ancillary offeringofferings and features both in our Zedge App and website, as our Zedge Marketplace.

The Zedge Marketplace’s monetization stack consists of advertising revenue generated when users view advertisements when using the Zedge App (and the related functionality under the zedge.net website), the in-app sale of Zedge Credits, our virtual currency, that is used to purchase Zedge Premium content, and a paid-subscription offering that provides an ad-free experience to users that purchase a monthly, monthlyannual or annuallifetime subscription. In April 2023, we introduced a subscription tier in the iOS version of the app. As of July 31, 2024,2025, we had approximately 669,0000984,000 active subscribers.

In April 2022, we acquired GuruShots Ltd,Ltd (“GuruShots”), a gamified photography platform that engages a recognizedglobal community of photographers through daily challenges, real-time feedback, and a competitive, categoryinteractive leader focused on gamifying the photography vertical.experience. GuruShots offers a platform spanning iOS, Android, and the web that provides a fun, educational and structured way for amateur photographers to compete in a wide variety of contests showcasing their photos while gaining recognition with votes, badges, and awards. We estimate that the total addressable market of amateur photographers using their smartphones to take and publicly share artistic photos is 30-40 million people per month and that the market is still in its infancy. Every month, GuruShots stages more than 300 competitions that result in players uploading in excess of 670,000550,000 photographs and casting close to 3.22.8 billion “perceived votes,” which are calculated by multiplying the number of votes that each player casts by a weighting factor based on various factors related to that user. To improve engagement, GuruShots has adopted a set of retention dynamics focused on individual, team and community dynamics that create a sense of belonging, inspiration, recognition, improvement, and competition.

GuruShots utilizes a ‘Free-to-Play’ business model and generates revenue through in-app purchases of virtual currency. Players can use this currency to unlock competitions or gain an edge by purchasing resources and participating in additional gameplay. Over the past seven eight years, the monthly average paying player spend has increased in excess of 9.9%6.2% annually to more than $50.9$40.9 per player.

In August 2021, we acquired Emojipedia Pty Ltd, Ltd (“Emojipedia”), the world’s leading authority dedicated to providing up-to-date and well-researched emoji definitions, information, and news, as well as World Emoji Day and the annual World Emoji Awards. In July 2024, 2025, Emojipedia received approximately 37.648.4 million monthly page views and has approximately 9.68.9 million monthly active users as of July 31, 2024 2025 of which approximately 46.7%46.2% are located in well-developed markets. It is the top resource for all things emoji, offering insights into data and cultural trends. As a member of the Unicode Consortium, the standards body responsible for approving new emojis, Emojipedia works alongside major emoji creators including Apple, Google, Meta, and X, formerly known as Twitter.

We generate revenue from the following sources: (1) Advertising; (2) Paid SubscriptionsSubscription; (3) Other revenues (including primarily from Zedge Premium) from (the salesection of our marketplace where we offer premium content (i.e.,for for purchase), and (4) Digital Goods and Services. The substantial majority of our revenue is generated from selling our advertising inventory (“Advertising Revenue”) to advertising networks and advertising exchanges. Our weekly, monthly, yearly and life-time subscriptions allow users to prepay a fixed fee to remove unsolicited advertisements from our Zedge App. In Zedge Premium, we receive 30% asof athe feenet purchase price, after payment of fees to Google Play or the App Store, when users purchase licensed content using Zedge Credits or unlock licensed content by watching a video or taking a survey on Zedge Premium. Sales and other similar taxes are excluded from revenues.

Advertising Revenue: We generate the bulk of our revenue from selling the Zedge Marketplace’s advertising inventory to advertising networks and advertising exchanges and direct sales to advertisers.exchanges.

Paid Subscription Revenue: Beginning in January 2019 and April 2023, we started offering paid subscription services sold through Google Play and the App Store, respectively. When a customer subscribes, they execute a clickthrough agreement with Zedge outlining the terms and conditions between Zedge and the subscriber. Google Play and the App Store process subscription prepayment on Zedge’s behalf, and retain a fee of up to 30%. Subscriptions are nonrefundable after a period of seven days. Paid subscriptions are automatically renewed at expiration unless cancelled by subscribers. While the customercustomers can cancel at any time, he or shethey will not receive any refundrefund, butand will remain entitledcontinue to receive the adservice free service until the end of the subscription period. The duration of these contracts is daily, and revenue for these contracts is recognized on a daily ratable basis. The payment terms for subscriptions sold through Google Play is net 30 days after month-end. The payment terms for subscriptions sold through the App Store is net 45 days after month-end. We recognize subscription revenue ratably over the subscription periods which range from weekly, monthly, yearly and lifetime with lifetime subscriptions deemed to have an estimated lifespan of 30 months.

Zedge Premium: Zedge Premium is our marketplace where artists and brands can market, distribute and sell their digital content to Zedge’sour users. The content owner sets the price and the end userusers can purchase the content by paying for it with Zedge Credits, our closed virtual currency. Alternatively, the content owner may opt to place some items behind video ad gates, in which case the end userusers can acquire the content by watching a brief video ad. A user can earn Zedge Credits when taking specific actions such as watching rewarded videos or completing electronic surveys. Alternatively, users can buy Zedge Credits with an in-app purchase. If a user purchases Zedge Credits, Google Play or the App Store retains a fee of 30% of the purchase price. When a user purchases Zedge Premium content using Zedge credits or watching a rewarded video, the artist or brand receives 70% of the actual revenue after the Google Play or iTunesApp Store fee (“Royalty Payment”) and we receive the remaining 30%, which is recognized as revenue.

Digital Goods Goods and Services: GuruShots generates substantiallythe allsubstantial majority of its revenues byfrom sellingthe sale of virtual goodstokens (ex.that power-ups),players can redeem for in-game resources togoods itsand users.services (e.g., power-ups, entry fees, or resource bundles). GuruShots distributes its game to the end customer users through mobile platforms such as Apple’s App Store and Google Play, as well as via the web.internet. Through these platforms, users can download the free-to-play game and can purchase virtual goods which are redeemed in the game to enhance their game-playing experience.

GuruShots categorizes categorizes its virtual goods as consumable. GuruShots’ game sells only consumable virtual goods. Consumable virtual goods represent items items that can be consumed by a specific player action and do not provide the player any continuing benefit following consumption. GuruShots has determined - through a review of game play behavior - that players generally do not purchase additional virtual goods until their existing existing virtual goods balances have been substantially consumed. This review includes an analysis of game players’ historical play behavior, purchase behavior, and the amounts of virtual goods outstanding. Revenue is recognized once the virtual goods are sold. GuruShots monitors its analysis of customer play behavior on a quarterly basis.

As discussed above, GuruShots concluded that revenue related to the promise of enhancing users’ gaming experience through in-game resource purchases should be recognized ratably over the period of benefit period (i.e., the period over which the enhanced gaming experience is provided). However, for practical reasons, GuruShots does not defer the portion of revenue attributable to future uses of resources as of any given balance sheet date. This is due to the duration of the enhanced gaming experience that is provided being, in substantially all of the cases, and applying the portfolio approach (as GuruShots reasonably expects that the effects on the financial statements of applying applying Accounting Standards Codification (“ASC”) 606 guidance to the portfolio would not differ materially from applying ASC 606 guidance to the individual contracts), a very short time frame ranging from a few hours to less than two weeks. Therefore, the result of recognizing the related revenues at the point in time which user first consumes the respective resource would yield a result that is not substantially different then ratable recognition over the period of benefit. Accordingly, revenue is recognized once the virtual goods are sold.

We generally report our advertising revenue net of amounts due to agencies and brokers because we are not the primary obligor in the relevant arrangements, we do not finalize the pricing, and we do not establish or maintain a direct relationship with the advertiser. Certain advertising arrangements that are directly between us and advertisers are recognized on a gross basis equal to the price paid to us by the customer since we are the primary obligor and we determine the price. Any third-party costs related to such direct relationships are recognized as direct cost of revenues.

We report subscription revenue gross of the fee retained by Google Play and the App Store, as the subscriber is our customer in the contract and we control the service prior to the transfer to the subscriber.

With respect to Zedge Premium, Zedge, as provider of the platform, is effectively operating as a broker or intermediary connecting online content providers with the end user. While we use gross revenue (net of the 30% fee retained by Google Play or the App Store when a user purchases Zedge Credits) as a performance metric, we record revenue on a net revenuebasis from Zedge Premium which consists of a 30% platform fee, in-app purchases profit and breakage. Content providers are paid their portion of revenue which is a 70% share of the gross revenue calculated.

We test the recoverability of itsour intangible assets with finite useful lives whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We test for recoverability based on the projected undiscounted cash flows to be derived from such asset. If the projected undiscounted future cash flows are less than the carrying value of the asset, we will record an impairment loss, if any, based on the difference between the estimated fair value and the carrying value of the asset. We generally measure fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. Cash flow projections and fair value estimates require significant estimates and assumptions by management. Should the estimates and assumptions prove to be incorrect, we may be required to record impairments in future periods and such impairments could be material.

We account for our share-based compensation arrangements in accordance with ASC 718, “Compensation-Stock Compensation”, (“ASC 718”) which requires the measurement and recognition of compensation expense for all share-based payment awards to employees and directors based on estimated fair values on the grant date. Compensation cost for awards is recognized using the straight-line method over the vesting period or the graded vesting method if awards with market or performance conditions include graded vesting features or if an award includes both a service condition and a market or performance condition. Stock-based compensation is included in selling, general and administrative expense in the consolidated statements of operations and comprehensive loss.

As a The majority of our users and our day-to-dayemployees operationsare including software developments and sales and marketings occurslocated outside of the United States,States weexposing areus exposed to a range of economic factors and impacted by global macroeconomic factors, U.S. and foreign government policies andregulations including foreign exchange fluctuations. There is uncertainty surrounding macroeconomic factors in the U.S.,U.S. and globally, characterized by the supply chain environment, inflationary pressure, and workforce reductions.globally. We believe these macroeconomic conditions coupled with the global political climate and unrest, including the ongoing Israel-Hamaswars war,between willUkraine haveand aRussia and significantIsrael and Hamas, may negatively impact on advertising spend which accounts for approximately 70% of our revenue in fiscal 2024. In addition, although we currently do not believe inflation in the costs and expenses will have a material impact on our results of operations, it is possible that elevated inflation could increase our direct cost of revenues and/or operating expenses and reduce our gross profit and net income.performance.

The Israel-Hamas Warand Israel-Hezbollah Conflicts

Given our operations in Israel, the impact of economic, political, geopolitical, and military conditions in the region directly affects us, including conflicts involving missile strikes, infiltrations, and terrorism. Notably, on October 7, 2023, HamasHamas, a designated terrorist organization, launched attacksa savage terror attack in southernIsrael, Israel,along with launching thousands of rockets into Israeli sovereign territory. The State of Israel declared war against Hamas resulting in casualtiesthe andmobilization military engagement.of more than 300,000 army reserve. In addition, Hezbollah, another anotherdesignated terrorist organizationorganization, based in LebanonLebanon, has been indiscriminately shelling Israeli territory. Since October 8, 2023, the Houthi rebels based in Yemen have also launched ballistic missiles and kamikaze drones at Israel, and the Islamic Republic of Iran has on two occasions attacked Israel sincewith Octobera barrage of ballistic missiles. In June of 2025 Israel and Iran entered into the ’12-Day 8,War’ 2023.during which our office and schools were closed and there were shelter in place orders that were issued. The constant barrage of ballistic missiles launched from Iran and Yemen interrupted our operations. Although a temporary ceasefire is in place, it is unclear if it is sustainable. The extent and duration of this conflict remain uncertain, potentially involving other groups.uncertain. Israel’s response to Hamas’ unprecedented attack led to the mobilization of IDF reservists, affecting our workforce. Prior to this, changes in Israel’s judicial system had already raised concerns about the business environment, compounded by recent events, potentially impacting foreign investment, currency fluctuations, fluctuations, credit ratings, interest rates, and security markets. Furthermore, regional political unrest and threats from extremist groups, notably Iran, pose additional risks. Management and our Board of Directors are closely monitoring the situation in Israel to address potential business disruptions and implications.

Our results of operations discussion includes disclosure of four key performance indicators - Monthly Active Users (MAU) and Average Revenue Per Monthly Active User (ARPMAU) for our Zedge App and Monthly Active Payers (MAP) and Average Revenue Per Monthly Active Payer (ARMAPARPMAP) for GuruShots.

As of July 31, 20242025 MAU declined 15.5%11.1% year over year primarily due to attrition in bothemerging developedmarkets, marketsparticular in Latin America and emergingSouth Asia. markets. Additionally, we have experiencedAs a continuing shift in the regional customer make-up with MAU in emerging markets (particularly India) representing an increasing portion of our user base. As of July 31, 2024,result, users in emerging markets represented 78.9%76.7% of our MAU as of July 31, 2025 compared to 78.0%78.9% a year prior. This shift has negatively impacted revenue because advertising rates in emerging markets are materially lower than in well-developed markets.

The following table presents a reconciliation of subscription billings to the most directly comparable GAAP financial measures for the fiscal years ended July 31, 2024 2025 and 2023.2024. We calculate subscription billings by adding the change in subscription deferred revenue between the start and end of the period to subscription revenue recognized in the same period. Subscription billings is a performance measure that we believe provides useful information to our management and investors as it allows us to better track the growth of the subscription-based portion of our business, which is a critical part of our business plan. The $2.3 million and $1.4 million increase in deferred revenue for the 12-monthfiscal periodyears ended July 31, 20242025 wasand 2024, respectively, were primarily attributable to the life-time subscription offering we introduced in fiscal 2024.

For the twelvefiscal monthsyear ended July 31, 2024,2025, our advertising revenue increaseddecreased by $2.8$0.7 million, or 15.2%,3.3%, from the prior 12-monthyear period primarily due to the decrease in our ad inventory. This decrease was partially offset by an increase in price per advertising impression paid by the advertisers on our platform which was driven by increased competition for our ad inventory.platform.

For the twelvefiscal monthsyear ended July 31, 2024,2025, Digital Goodsour and Servicessubscription revenue decreasedincreased by $1.2$0.7 million, or 25.2%17.1%, from the prior year period primarily due to the 26.3% decreasegrowth in GuruShots’lifetime subscriptions. Subscription billings increased by $1.7 million, or 29.0%, to $7.4 million in fiscal 2025 MAPsfrom year$5.7 overmillion year.in fiscal 2024.

Direct cost of revenues in fiscal 2025 decreased by $18,000, or 1.0%, compared to fiscal 2024 primarily due to the savings from continuing optimizing of our backend infrastructure. Direct cost of revenues as percentage of revenue remained relatively flat year over year at about 6.2% Selling, general and administrative expense. Selling, general and administrative expense (“SG&A”) consists mainly of payrollpersonnel related and benefits,expenses, user acquisition costs, stock-based compensation expense (as discussed below), third-party payment processing fee relatefees related to in-app purchases,purchases (“platform fees”), marketing, consulting, professional fees, software licensing fees, recruiting fees, facilities and public company related expenses.

SG&A expense in fiscal 2024 2025 increased by $3.8$1.6 million, or 17.2%,6.1%, compared to fiscal 2023.2024. The increase was primarily due to anthe increase ofin user $3.8 million in user acquisition costscosts, platform fee, consulting, professional fees, software licensing fees offset by athe decrease ofin $0.4personnel millionrelated expenses primarily from the corporate restructuring implemented in stock-basedJanuary compensation.2025. We ramped up paid user acquisition for theour Zedge App App significantly but scaled back paid user acquisition for GuruShots in fiscal 20242025 when compared to fiscal 2023.2024. As a percentage of revenue, revenue, SG&A expense was 92.5% in fiscal 2025 compared to 85.2% in fiscal 2024 compared to 80.2% in fiscal 2023.2024.

Our headcount was 9982 and 9599 as of July 31, 2024 2025 and 20232024, respectively. The reduction in our headcount can be attributed to the corporate restructuring implemented in January 2025. The majority of our employees are based in Lithuania and Israel.

SG&A expense also includedincludes stock-based compensation expense including equity grants to employees and consultants, as well as stock issuances to pay for board compensations and 401(k) matching contributions. Certain stock options, deferred stock unit and restricted stock grants are more fully described in Note 13, Stock-Based Compensation, to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

Stock-based compensation expense in fiscal 2024 2025 decreased by $0.4$0.7 million, or 15.0%,32.5%, compared to fiscal 2023.2024. The decrease was primarily attributable to lower aggregate fair value related to the lowerdeferred stock units (“DSUs”) granted in November 2024 compared to that of the DSUs granted in September 2021 which were being recognized on a graded vesting basis over the requisite service periods. Additionally, our stock-based compensation expense related to deferredthe stockretention unitbonuses (“DSU”)in grantsconnection with boththe serviceGuruShots andacquisition marketwere conditionsfully recognized as of April 1, 2025, which arecontributed recognizedin basedpart onto the graded vestingyear method.over year decrease.

The increase in interest and other income, net in fiscal 20242025 when compared to fiscal 20232024 was primarily due primarily to higherlower interest incomeyield earnedwe received on our cash andin cashfiscal equivalents2025, andwhich lower was partially offset by $65,000 in interest expense resultingrelated fromto the $2 million prepayment of term loan which was repaid in November 2023,2023 offsetand by athe $50,000 impairment charge related to our investment in a privately held company of which the carrying value was reduced to $0 as of October 30, 2023.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from future results. Factors that may cause such differences include, but are not limited to: (1) economic, geopolitical and market conditions can adversely affect our business, results of operations and financial condition, including our revenue growth and profitability, which in turn could adversely affect our stock price; (2) our ability to keep pace with rapid technological changes in the Internet, mobile and AI industries and to adapt our products and services accordingly; (3) risks associated with our reliance on the adoption, integration and effective utilization of AI technologies, which is a key component of our growth strategy; (4) our ability to acquire a sufficient number of users that become purchasers, retain existing users, and generate profitable revenue from our apps; (5) our ability to successfully make acquisitions and/or successfully integrate acquisitions that we have made into Zedge without incurring unanticipated costs or without being subject to other integration issues that may disrupt our existing operations; and (6) the threat of continued hostilities against Israel from Iran, the Gaza Strip, Lebanon, and Syria. For further information regarding risks and uncertainties associated with our business, please refer to Item 1A to Part I “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended July 31, 2025 (the “2025 Form 10-K.10-K”). The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including the 2025 Form 10-K.

The majority of our users and employees are located outside of the United StatesStates, exposing us to a range of economic factors and regulations including foreign exchange fluctuations. There is uncertainty surrounding macroeconomic factors in the U.S. and globally. We believe these macroeconomic conditions coupled with the global political climate and unrest, including the ongoing wars between Ukraine and Russia, the war being waged against Iran by Israel and the United States,States and Israel, and the ongoing conflicts between Israel and the Gaza Strip, Lebanon, and Syria, may negatively impact our performance.

Given our operations in Israel, the impact of economic, political, geopolitical, and military conditions in the region directly affects us, including conflicts involving missile strikes, infiltrations, and terrorism. Notably, onOn October 7, 2023, Hamas, a designated terrorist organization, launched a savage terror attack in Israel, along with launching thousands of rockets into Israeli sovereign territory. The State of Israel responded by attacking Hamas in Gaza resulting in the mobilization of more than 450,000 army reservists. In addition, Hezbollah, another designated terrorist organization, based in Lebanon, was indiscriminately shelling Israeli territory, and the Houthi rebels based in Yemen also launched ballistic missiles and kamikaze drones at Israel.

In June of 2025, Israel and Iran engaged in the ‘12-Day War’ during which Israel and the UnitesUnited States launched strikes on Iranian nuclear and military facilities, assassinating key leaders and scientists, promptingscientists. Iranian retaliation withincluded hundreds of missiles fired on Israeli cities; offices and schools were closed amid shelter-in-place orders, and the constant barrage of ballistic missiles launched from Iran and Yemen severely interrupted our operations. A U.S.-brokered ceasefire ended that direct clash on June 24, 2025, but tensions persisted as Iran rebuilt its missile stocks and nuclear capabilities, raising fears of renewed confrontation. Compounding these threats, since the fall of the Assad regime in December 2024, Israel has conducted airstrikes and ground incursions in Syria to neutralize remaining Iranian-linked militias, secure the border, and protect the Druze minority amid sectarian clashes. The Gaza ceasefire under the U.S.-backed framework, reached following the release of all remaining living Israeli hostages, has held broadly, though it remains fragile.

On February 28, 2026, the United States and Israel launched a joint military campaign against Iran, with the stated objectives of eliminating Iran’s nuclear and ballistic missile programs. The strikes killed Supreme Leader Ali Khamenei and numerous senior IRGC and government officials. Iran has responded with sustained waves of ballistic missiles and drone attacks against Israel, U.S. military installations across the region, and Gulf states. Following more than five weeks of sustained hostilities, the United States and Iran agreed to a ceasefire on April 8, 2026, mediated by Pakistan. The ceasefire is between the United States and Iran; Israel is not a formal party to the agreement, and Israel’s obligations under it remain a matter of dispute. In the weeks following the ceasefire, tensions have continued over Iran’s closure of the Strait of Hormuz and ongoing U.S.-Iran negotiations. As of the date of this filing, the ceasefire remains in effect despite limited level of active measures, though its durability is uncertain and the risk of resumed hostilities is significant.

The foregoing conflicts have led to repeated IDF reservist mobilizations, affecting our workforce. The cumulative effect of these conflicts, combined with broader regional instability, risks impacting foreign investment, currency fluctuations, credit ratings, interest rates, oil prices, and security markets. Furthermore, regional political unrest and threats from extremist groups, notably Iran and its proxies, pose additional risks. The Houthis, while having reduced commercial shipping attacks since a May 2025 ceasefire with the U.S., continue to threaten Israeli and U.S. targets and may escalate in conjunction with Iran’s ongoingactivities retaliationand campaign.any resumed hostilities. Management and our Board of Directors are closely monitoring the situation in Israel to address potential business disruptions and implications.

A key component of our growth strategy involves the adoption and utilization of AI, which introduces certain risks that may materially and adversely affect our business, financial condition, results of operations, and reputation. We incorporate AI into products such as pAInt and rely on AI for development, content moderation, personalization, marketing assets, finance, legal, user engagement, and other functions across our business, but our ability to compete effectively in AI-driven markets and keep pace with better-resourced competitors remains uncertain. Compliance with evolving AI laws, such as the EU AI Act, may impose significant operational costs. Additionally, in late September 2025, Google released an update to its Search Engine Results Page (SERP) enabling users to copy emojis directly from search results rather than being directed to third-party sites such as Emojipedia, and AI platforms, including ChatGPT and Claude, now return emoji results in response to user queries. These developments could significantly diminish the value of our services and materially and adversely affect our revenue, profitability, and prospects. As a result, we recorded a non-cash impairment charge of approximately $3.7 million in the three months ended January 31, 2026 to reduce the carrying amount of the Emojipedia assets group to its estimated fair value, please refer to Note 5 to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.

Our Zedge App (which is named “Zedge Wallpapers” in the App Store) offers a wide array of mobile personalization content including wallpapers, video wallpapers, ringtones, and notification sounds, and is available both in Google Play and the App Store. Over the past two years, our Zedge App has had between 20.419.6 million and 27.7 26.1 million monthly active users (“MAU”), ending with 20.419.6 million MAU as of JanuaryApril 31,30, 2026. MAU is a key performance indicator (“KPI”) for our Zedge App that captures the number of unique users that used our Zedge App during the final 30 days of the relevant period. Our platform allows creators to upload content to our marketplace and avail it to our users either for free or, via ‘Zedge Premium,’ the section of our marketplace where we offer premium content for purchase. In turn, our users utilize the content to personalize their phones and express their individuality.

The Zedge Marketplace’s monetization stack consists of advertising revenue generated when users view advertisements when using the Zedge App (and the related functionality under the zedge.net website), the in-app sale of Zedge Credits, our virtual currency, that is used to purchase Zedge Premium content, and a paid-subscription offering that provides an ad-free experience to users that purchase a monthly, annual or lifetime subscription. In April 2023, we introduced a subscription tier in the iOS version of the app. As of JanuaryApril 31,30, 2026, we had approximately 1.21.3 million active subscribers.

In April 2022, we acquired GuruShots Ltd (“GuruShots”) a gamified photography platform that engages a global community of photographers through daily challenges, real-time feedback, and a competitive, interactive experience. GuruShots offers a platform spanning iOS, Android, and the web that provides a fun, educational and structured way for amateur photographers to compete in a wide variety of contests showcasing their photos while gaining recognition with votes, badges, and awards. We estimate that the total addressable market of amateur photographers using their smartphones to take and publicly share artistic photos is 30-40 million people per month and that the market is still in its infancy. Every month, GuruShots stages more than 300 competitions that result in players uploading in excess of 463,000415,000 photographs and casting close to 2.7 billion “perceived votes,” which are calculated by multiplying the number of votes that each player casts by a weighting factor based on various factors related to that user. To improve engagement, GuruShots has adopted a set of retention dynamics focused on individual, team and community dynamics that create a sense of belonging, inspiration, recognition, improvement, and competition.

GuruShots utilizes a ‘Free-to-Play’ business model and generates revenue through in-app purchases of virtual currency. Players can use this currency to unlock competitions or gain an edge by purchasing resources and participating in additional gameplay. Over the past nineten years, the monthly average paying player spend has increased in excess of 6.4%6.7% annually to more than $44.4$45.5 per player.

Since the acquisition, GuruShots has faced challenges in growth and profitability, and its revenue has declined. We have cut costs at GuruShots, including as part of the restructuring implemented initiated in January 2025, and have materially scaled back on paid user acquisition (“PUA”) for the unit. In parallel, we are developing a plan, referred to as GuruShots 2.0, to revamp GuruShots’ offering in order to put it on a growth trajectory and unlock the potential value of this asset. Our strategy focuses on attracting new users and converting them into recurring, paying players. To date, we have introduced a fun and comprehensive onboarding experience to draw new users into the gameplay with ease and migrated to a coin-based in-game economy to enable more opportunities to reward and monetize players Historically, we marketed GuruShots to prospective players primarily via PUA channels including Google, Meta, TikTok and other platforms, utilizing a variety of advertising media, formats, such as static and video ads. As part of the GuruShots 2.0 development plan, we have significantly reduced PUA investment for GuruShots to improve Return-on-Ad-Spend (ROAS) and intend to continue managing PUA spend in the current timeframe.players.

Emojipedia Pty Ltd (“Emojipedia”) is the world’s leading authority dedicated to providing up-to-date and well-researched emoji definitions, information, and news, as well as World Emoji Day and the annual World Emoji Awards. In JanuaryApril 2026, Emojipedia received approximately 40.737.6 million monthly page views and has approximately 6.76.8 million monthly active users as of JanuaryApril 31,30, 2026 of which approximately 40.9%42.1% are located in well-developed markets. It is the top resource for all things emoji, offering insights into data and cultural trends. In the past year, we have implemented multiple changes to Emojipedia including an AI-powered emoji sticker generator tool as well as an extensive emoji sticker library.

In late September 2025, Google released an update to its Search Engine Results Page (SERP) enabling users to copy emojis directly from search results rather than being directed to third-party sites such as Emojipedia. In addition, AI platforms, including ChatGPT and Claude, now return emoji results in response to user queries. While it is too early to accurately quantify the impact of these changes on Emojipedia’ s monthly active users (MAU), we believe they are likely to result in reduced traffic and adversely affect revenue. As a result, we recorded an impairment charge of $3.7 million for in the quarterlythree resultsmonths period ended January 31, 2026.

MAU decreased 17.4%11.3% in the three months ended January 31,April 30, 2026 when compared to the same period a year ago. As of JanuaryApril 31,30, 2026, users in emerging markets represented about 76.5% 78.1% of our MAU, as compared to 77.3%76.5% from the same period a year ago.

ARPMAU for the three months ended JanuaryApril 31, 30, 2026 increased 47.5%21.2% when compared to the same period a year ago, primarily due to the increase in price per advertising impression from the same period a year ago, which was driven by increased competition for our ad inventory as well as strong year-over-year subscription revenue growth. Subscription revenue andincreased 32.5%, while subscription billings decreased 4.4% for the three months ended JanuaryApril 31,30, 2026 increased 32.5% and 2.0%, respectively,2026, when compared to the same period a year ago, as discussed below.

The following tables present the MAU – Zedge App and ARPMAU – Zedge App for the three months ended JanuaryApril 31,30, 2026 as compared to the same period in the prior year:

The following charts present the MAU – Zedge App and ARPMAU – Zedge App for the consecutive eight fiscal quarters ended JanuaryApril 31,30, 2026:

MAP decreased 43.1%37.7% in the three months ended January 31,April 30, 2026 when compared to the same period a year ago, primarily attributable to Apple’s App Tracking Transparence (“ATT”) framework which impedes our ability to invest in paid user acquisition (“PUA”) campaigns profitably in terms of return on ad spend or (“ROAS”). As such, we continued to scale back our PUA spend for GuruShots while testing new campaigns and creatives in order to unearth attractive ROAS scaling opportunities. ARPMAP increased 25.6%10.2% to $50.0$48.6 in the three months ended JanuaryApril 31,30, 2026 from $39.8$44.1 in the three months ended JanuaryApril 31,30, 2025.

The following table shows our MAP and ARPMAP for the three months ended JanuaryApril 31,30, 2026 and 2025.

The following charts present the MAP and ARPMAP – GuruShots for the consecutive eight quarters ended JanuaryApril 31,30, 2026:

Comparison of Our Results of Operations for the Three and SixNine Monthsmonths ended JanuaryApril 31,30, 2026 and 2025

The following table sets forth the composition of our revenues for the three and sixnine months ended JanuaryApril 31,30, 2026 and 2025:

The following table summarizes our subscription revenue for the three and sixnine months ended JanuaryApril 31,30, 2026 and 2025:

The following table summarizes Zedge Premium gross and net revenue for the three and sixnine months ended JanuaryApril 31,30, 2026 and 2025:

Three Months Ended JanuaryApril 31,30, 2026 Compared to Three Months Ended JanuaryApril 31,30, 2025

For the three months ended JanuaryApril 31,30, 2026, our other total revenue increased 19.7%3.0% compared to the same period in the prior year, primarily attributable to an increase in Zedgesubscription Premiumrevenue net and new DataSeeds revenue which increasedis 18.6%included duringin thedigital correspondinggoods period.and services reported under GuruShots’ segment.

For the sixthree months ended JanuaryApril 31,30, 2026, our total advertising revenue increaseddecreased 11.9%$224,000 or 4.0% compared to the same period in the prior year, primarily attributabledue to ana increaseone-time integration bonus of $450,000 received in advertisingApril and subscription2025 revenue,coupled partiallywith offsetthe by$236,000 aor 19.6%53.1% decline in GuruShots’Emojipedia’s revenue during the corresponding periods.

For the sixthree months ended JanuaryApril 31,30, 2026, our subscription revenue increased 30.6%,31.9%, and our subscription billings increaseddecreased 4.0%,4.4%, compared to the same period in the prior year,year. primarily dueThe decline in subscription billings can be attributed to the lifetime17.3% decrease in MAU in developed markets, as subscription offeringpricing foris Android and iOS users we rolled outhigher in Augustwell-developed 2023 and August 2024, respectively.markets.

For the sixthree months ended JanuaryApril 31,30, 2026, our other revenue increased 5.1%4.6% compared to the same period in the prior year, primarily attributable to a 4.4%an increase in Zedge Premium net revenue.revenue which increased 3.5% during the corresponding periods. Zedge Premium represents approximately 99% of other revenues.

For the three months ended JanuaryApril 31,30, 2026, digital goods and services revenue declinedincreased 19.6%6.9% compared to the same period in the prior year primarily due to revenue contribution from DataSeeds offset by decreased revenue from the GuruShots game driven by a 35.8%37.7% decline in GuruShots’ MAP partially offset by revenue contribution from DataSeeds.MAP.

SixNine Monthsmonths Ended JanuaryApril 31,30, 2026 Compared to SixNine Monthsmonths Ended JanuaryApril 31,30, 2025