A mobile personalization company that lets people dress up their phones with wallpapers, ringtones, and notification sounds through its free Zedge app. It also runs GuruShots, a photo-challenge game, and Emojipedia, the go-to emoji reference site. Founded in 2003 in Trondheim, Norway, it was once part of IDT Corporation before spinning off as its own public company. Its name is a playful take on the word "edge," hinting at giving phones a sharper look.
Zedge returns to operating profit in Q3 FY2026, but a $3.7M Emojipedia impairment drives a nine-month net loss.
Zedge returned to an of $1.1 million in the third quarter, a clear inflection after two consecutive quarters of operating losses. rose 3.0% to $8.0 million as a 31.9% increase in subscription revenue and new DataSeeds revenue more than offset a 4.0% decline in advertising revenue, while a $3.7 million on Emojipedia recorded in the prior quarter pushed the nine-month to $0.9 million. The core Marketplace is growing profitably, but the shows the business remains exposed to shifts in search and AI platforms.
Key takeaways
A $3.7 million charge was recorded against the Emojipedia assets group in Q2 FY2026, after Google search changes and AI platform competition reduced its traffic and expectations; this charge is the primary reason the nine-month period shows a of only $0.9 million despite a return to operating profitability in Q3.
Zedge Marketplace rose 7.3% , as a 31.9% increase in subscription revenue and the addition of new DataSeeds revenue compensated for a 4.0% decline in advertising revenue, which was affected by a prior-year one-time bonus and Emojipedia's decline.
Section summaries
Management's Discussion and Analysis
Total revenue rose 3% YoY to $8.0M in Q3 FY2026, driven by subscription growth and new DataSeeds revenue, while a $3.7M Emojipedia impairment hurt nine-month results.
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Total Q3 increased 3.0% to $8.0M, with subscription revenue up 31.9% and advertising revenue down 4.0% due to a prior-year one-time bonus and Emojipedia's decline.
Zedge Marketplace MAU fell 11.3% to 19.6M, but ARPMAU rose 21.2% to $0.1194, reflecting higher ad prices and strong subscription growth.
Zedge App Monthly Active Users fell 11.3% to 19.6 million, but Average Per Monthly Active User rose 21.2% to $0.1194, reflecting higher ad impression prices and the growing contribution of higher-monetizing subscription and premium revenue.
Selling, general and administrative expense fell 1.7% , driven by lower paid user acquisition spend and reduced , partially offset by higher compensation costs from currency movements.
GuruShots Monthly Active Payers dropped 37.7% to 2,228 as the company continued to scale back paid user acquisition for the game it began winding down in January 2025, while Average Per Monthly Active Payer increased 10.2% to $48.60.
Cash and equivalents stood at $19.7 million with no debt, and for the nine-month period was $2.9 million; management stated current resources are sufficient to meet cash needs for at least the next twelve months.
What changed
The return to an of $1.1 million in Q3, after a $2.9 million operating loss in Q2 driven by the Emojipedia , confirms that the cost savings from the January 2025 restructuring are now flowing through the income statement as expected.
The Emojipedia flagged as a watch item in Q2 has materialized as a $3.7 million non-cash charge; management has not indicated further impairment is likely, but the underlying traffic and pressure from Google's search update and AI platforms persists.
Zedge App Monthly Active Users continued to decline, falling 11.3% to 19.6 million, a slower rate than the 17.4% drop in Q2, but the trend of a shrinking user base offset by rising ARPMAU remains intact.
Subscription growth accelerated to 31.9% in Q3 from 28.6% in Q1 and 32.5% in Q2, suggesting the lifetime subscription offerings are sustaining momentum even as the comparison periods become more demanding.
The earnout dispute with the former GuruShots owner, flagged in every prior filing, remains unresolved and is still an unquantified liability not reflected on the balance sheet.
What to watch
Whether Zedge App Monthly Active Users stabilize after the 11.3% decline in Q3, or whether the shrinking user base eventually pressures the ARPMAU gains that are currently driving Marketplace growth.
The trajectory of advertising , which fell 4.0% in Q3 after rising 18.3% in Q2; whether the Q2 result was inflated by a one-time item and the underlying trend is flat to declining.
Whether the Emojipedia is a one-time charge or the start of a trend, and whether the Google search update and AI platform changes cause further deterioration in Emojipedia's traffic and .
Any resolution of the earnout dispute with the former GuruShots owner, which remains an unquantified liability not reflected on the balance sheet.
GuruShots MAP dropped 37.7% to 2,228 as paid user acquisition was scaled back, while ARPMAP increased 10.2% to $48.6.
A $3.7M non-cash was recorded on the Emojipedia assets group due to Google SERP changes and AI platform competition reducing its traffic and prospects.
SG&A fell 1.7% in Q3, driven by lower paid user acquisition spend and reduced , partially offset by higher compensation costs from currency movements.
Cash and equivalents stood at $19.7M at quarter-end, with $2.9M in for the nine-month period; the company expects sufficient liquidity for the next twelve months.
Legal proceedings in which we are involved are more fully described in Note 9, Commitments and Contingencies, to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.
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Legal proceedings in which we are involved are more fully described in Note 9, Commitments and Contingencies, to the unaudited condensed consolidated financial statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.