株探米国株
日本語 英語
エドガーで原本を確認する
false 0001667313 0001667313 2023-12-13 2023-12-13 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 13, 2023

 

 

 

Zedge, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   1-37782   26-3199071

(State or other jurisdiction
of incorporation)

  (Commission File Number)  

(IRS Employer
Identification No.)

 

1178 Broadway, Ste. 1450 (3rd Floor)

New York, NY

  10001
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (330) 577-3424

 

Not Applicable

(Former name or former address, if changed since last report.)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol  

Name of each exchange on which registered

Class B common stock, par value $0.01 per share   ZDGE   NYSE American

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 


 

Item 2.02. Results of Operations and Financial Condition

 

On December 13, 2023, Zedge, Inc. (the “Registrant”) issued a press release announcing its results of operations for its fiscal quarter ended October, 31, 2023. A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

 

The Registrant is furnishing the information contained in this Report, including Exhibit 99.1, pursuant to Item 2.02 of Form 8-K promulgated by the Securities and Exchange Commission (the “SEC”). This information shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC unless otherwise expressly stated in such filing. In addition, this Report and the press release contain statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in the press release.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Document
99.1   Earnings Release, dated December 13, 2023, reporting the results of operations for Zedge, Inc.’s fiscal quarter ended October 31, 2023.
     
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

1


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ZEDGE, INC.
     
  By:

/s/ Jonathan Reich

  Name: Jonathan Reich
  Title: Chief Executive Officer

 

Dated: December 13, 2023

 

2


 

EXHIBIT INDEX

 

Exhibit No.

  Document
99.1   Earnings Release, dated December 13, 2023, reporting the results of operations for Zedge, Inc.’s fiscal quarter ended October 31, 2023.
     
104   Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

3

 
EX-99.1 2 ea189975ex99-1_zedgeinc.htm EARNINGS RELEASE, DATED DECEMBER 13, 2023, REPORTING THE RESULTS OF OPERATIONS FOR ZEDGE, INC.'S FISCAL QUARTER ENDED OCTOBER 31, 2023

Exhibit 99.1

 

 

 

Zedge Announces First Quarter Fiscal 2024 Results

 

New York, NY – December 13, 2023: Zedge, Inc. (NYSE AMERICAN: ZDGE), a leader in building digital marketplaces and friendly competitive games around content that people use to express themselves, today announced results for its first quarter fiscal 2024, ended October 31, 2023.

 

“Our first quarter financial results reflect the positive trends we discussed during the fourth quarter,” said Jonathan Reich, Zedge’s chief executive officer. “Zedge+, the Zedge Marketplace’s subscription offering, which returned to sequential active subscriber growth last quarter after six quarters of sequential declines, continued delivering net active subscriber gains in the first quarter. Furthermore, Zedge+ revenue was up by nearly 10% from last year, driven by the introduction of iOS subscriptions and continued interest in the overhauled Android offering. Emojipedia’s revenue was up 62% from last year and, combined with the Zedge Marketplace, drove double-digit ad revenue growth. These factors led to record ARPMAU1 with 17% year-over-year growth.

 

“We are also making steady progress from a product and feature development perspective. We have completed the global rollout of pAInt, our generative AI wallpaper maker, and launched pAInt’s print-on-demand feature immediately before Thanksgiving. Additionally, we benefited from redesigning Emojipedia’s website, as its enhanced site performance yielded much faster load times and continued optimization of the advertising experience. We also rolled out the Battles feature to a limited number of GuruShots users to gain insights into how we can optimally integrate this feature into the Gurushots game. While these initiatives are all starting to show positive momentum, we plan to continue enhancing these features and products in 2024 to drive sustainable, longer-term growth.”

 

First Quarter Highlights (fiscal 2024 versus fiscal 2023)

 

Revenue increased 2.6% to $7.1 million;
     
GAAP operating income of $0.3 million, compared to an operating loss of ($0.2) million;
     
GAAP net loss and loss per share were nil compared to ($0.2) million and ($0.01), respectively:
     
Adjusted EBITDA2 increased by 60.8% to $1.5 million;
     
Zedge Premium Gross Transaction Value1, or GTV, increased 35.0% to $0.42 million.

 

First Quarter Select Financial Metrics: FY24 versus FY23*

 

(in $M except for EPS)   Q124     Q123     Change  
Total Revenue   $ 7.1     $ 6.9       2.6 %
Advertising Revenue   $ 4.9     $ 4.5       10.0 %
Digital goods and services   $ 0.9     $ 1.3       -29.0 %
Subscription Revenue   $ 1.0     $ 0.9       9.5 %
Other Revenue   $ 0.2     $ 0.2       17.6 %
GAAP Operating Income (Loss)   $ 0.3     $ (0.2 )     nm  
Operating Margin     4.5 %     -2.9 %        
GAAP Net Loss   $ (0.0 )   $ (0.2 )     108.3 %
GAAP Diluted Loss Per Share   $ (0.0 )   $ (0.01 )     nm  
Adjusted EBITDA   $ 1.5     $ 1.0       60.8 %
Cash Flow from Operations   $ 1.3     $ 1.1       16.5 %

 

nm = not measurable/meaningful

* numbers may not add due to rounding

 

 


 

Select Zedge Marketplace Metrics: FY24 versus FY23*1

 

(in MM except for ARPMAU and where noted)   Q1 ’24     Q1 ’23     Change  
Total Installs - Cumulative     625.3       583.0       7.3 %
MAU     28.5       31.9       -10.7 %
Well-developed Markets     6.2       7.1       -13.1 %
Emerging Markets     22.3       24.8       -10.0 %
Active Subscriptions (in 000s)     648       674       -3.8 %
ARPMAU   $ 0.063     $ 0.054       17.0 %
Zedge Premium - GTV   $ 0.42     $ 0.31       35.0 %

 

* numbers may not add due to rounding

 

1 We use the following business metrics in this release because we believe they are useful in evaluating Zedge’s operational performance.

 

Monthly active users, or MAU, captures the number of unique users that used our Zedge App during the previous 30-days of the relevant period, is useful for evaluating consumer engagement with our App, which correlates to advertising revenue as more users drive more ad impressions for sale. It also allows readers and potential advertisers to evaluate the size of our user base.
     
Zedge Premium Gross Transaction Value, or GTV, is the total dollar amount of transactions conducted through the Zedge Premium Marketplace. As Zedge Premium is an internal focus for growth, we believe this metric will help investors evaluate our progress in growing this part of our business.
     
Average Revenue Per Monthly Active User for our Zedge App, or ARPMAU, is useful in evaluating how well we monetize our user base.
     
An Active Subscription is a subscription that has commenced and not been canceled, including paused subscriptions and subscriptions in free trials, grace periods, or account hold.
     
Total Installs - Cumulative measures the cumulative number of times the Zedge App has been downloaded since inception.

 

2 Throughout this release, Adjusted EBITDA is a non-GAAP financial measure intended to provide useful information that supplements Zedge’s results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measure at the end of this release for an explanation of Zedge’s formulation of Adjusted EBITDA and reconciliations to the most directly comparable GAAP measure.

 

2


 

Trended Financial Information*

 

(in $M except for EPS, ARPMAU, Active Subscriptions)   Q123     Q223     Q323     Q423     Q124     FY 2022     FY 2023  
Total Revenue   $ 6.9     $ 7.0     $ 6.7     $ 6.6     $ 7.1     $ 26.5     $ 27.2  
Advertising Revenue   $ 4.5     $ 4.6     $ 4.6     $ 4.6     $ 4.9     $ 20.3     $ 18.3  
Digital goods and services   $ 1.3     $ 1.2     $ 1.1     $ 1.0     $ 0.9     $ 1.7     $ 4.6  
Subscription Revenue   $ 0.9     $ 0.9     $ 0.8     $ 0.9     $ 1.0     $ 3.7     $ 3.5  
Other Revenue   $ 0.2     $ 0.2     $ 0.2     $ 0.2     $ 0.2     $ 0.8     $ 0.8  
GAAP Operating Income (Loss)   $ (0.2 )   $ 1.5     $ (8.4 )   $ 0.2     $ 0.3     $ 11.8     $ (6.9 )
GAAP Net Income (Loss)   $ (0.2 )   $ 1.6     $ (7.7 )   $ 0.2     $ (0.0 )   $ 9.7     $ (6.1 )
GAAP Diluted Earnings (Loss) Per Share   $ (0.01 )   $ 0.11     $ (0.55 )   $ 0.01     $ (0.00 )   $ 0.65     $ (0.44 )
Adjusted EBITDA   $ 1.0     $ 1.4     $ 1.7     $ 1.6     $ 1.5     $ 12.4     $ 5.7  
Adjusted EBITDA Margin     13.8 %     20.5 %     25.4 %     24.2 %     21.7 %     46.6 %     20.9 %
Cash Flow from Operations   $ 1.1     $ 0.0     $ 1.6     $ 0.4     $ 1.3     $ 11.5     $ 3.2  
MAU     31.9       32.2       32.0       30.9       28.5       nm       nm  
Well-developed Markets     7.1       7.4       7.2       6.8       6.2       nm       nm  
Emerging Markets     24.8       24.8       24.8       24.1       22.3       nm       nm  
Active Subscriptions (in 000s)     674       654       631       647       648       nm       nm  
ARPMAU   $ 0.054     $ 0.052     $ 0.053     $ 0.055     $ 0.063       nm       nm  
Zedge Premium – GTV   $ 0.31     $ 0.44     $ 0.41     $ 0.38     $ 0.42     $ 1.51     $ 1.54  

 

nm = not measurable/meaningful

* numbers may not add due to rounding

 

Fiscal 2024 Commentary

 

Reich continued, “We continue to believe that we have never been better positioned to create sustainable, long-term and profitable growth, and we are excited about moving our growth strategy forward in fiscal 2024. Adding to this, our continued positive cash flow generation and the fact that we will not have to make any earnout payments to Gurushots’ sellers gave us the confidence to pay off the remaining principal on our term loan in mid-November, making us debt-free.

 

“As indicated during our last call, one of our goals for FY ’24 is to build out a full-stack marketing team to enable growth. To this end, we have already added several key hires, and we are already benefitting from their expertise as we continue to ramp up our paid user acquisition spending for the Zedge Marketplace. Of course, we closely monitor performance to ensure acceptable returns on our investment. As we previously said, this is an ongoing process where we continually test and optimize programs to drive higher returns through increasing engagement from existing users and new user growth.

 

“We’ve also been executing on our generative AI initiatives, with a global rollout of pAInt within the Zedge Marketplace, including the release of this feature on the web with print-on-demand capabilities. The initial results from the soft launch of AI Art Master, our hybrid casual game, are attractive, encouraging us to continue its development with a focus on improving onboarding, game mechanics and retention. In the coming months, we expect to expand the rollout by adding more countries and iterating based on what the KPIs tell us.

 

“November was Emojipedia’s best revenue month ever, and we will continue to make enhancements to this product, as we believe there is additional untapped upside. Starting with our second quarter, we are targeting releasing more features and enhancements, with many more initiatives still in development.

 

“Finally, Battles, the new GuruShots game mechanic, has also been rolled out to around 5% of its user base, and we expect to increase this number over the next several months. We believe this new feature will help draw new players to the game and help convert them into paying customers.”

 

3


 

Earnings Announcement and Supplemental Information

 

Management will host an earnings conference call beginning at 4:30 p.m. Eastern today to discuss its first-quarter fiscal 2024 results, outlook and strategy, which will be followed by a Q&A with investors.

 

Live Call-in Info:

 

Toll Free: 888-506-0062

International: 973-528-0011

Participant Access Code: 575696

Webcast URL: 1Q24 Earnings Webcast

 

Replay:

 

Toll Free: 877-481-4010

International: 919-882-2331

Replay Passcode: 49574

 

About Zedge

 

Zedge builds digital marketplaces and friendly competitive games around content people use to express themselves. Our leading products include Zedge Ringtones and Wallpapers, a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones, notification sounds, and 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. In July 2023, we served approximately 40 million active users across our offerings. For more information, visit: investor.zedge.net

 

Forward-Looking Statements

 

All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, we assume no obligation to update any forward-looking statements.

 

Contact:

 

Brian Siegel, IRC, MBA

Senior Managing Director

Hayden IR

(346) 396-8696

ir@zedge.net

 

4


 

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value data)

 

    October 31,     July 31,  
    2023     2023  
    (Unaudited)        
Assets            
Current assets:            
Cash and cash equivalents   $ 18,745     $ 18,125  
Trade accounts receivable     3,183       2,883  
Prepaid expenses and other receivables     635       569  
Total current assets     22,563       21,577  
Property and equipment, net     2,423       2,186  
Intangible assets, net     18,130       18,709  
Goodwill     1,784       1,961  
Deferred tax assets, net     1,842       1,842  
Other assets     439       556  
Total assets   $ 47,181     $ 46,831  
Liabilities and stockholders’ equity                
Current liabilities:                
Trade accounts payable   $ 815     $ 669  
Accrued expenses and other current liabilities     2,906       2,676  
Deferred revenues     2,250       2,414  
Total current liabilities     5,971       5,759  
Term loan, net of deferred financing costs     1,986       1,985  
Deferred revenues–non-current     74       -  
Other liabilities     171       223  
Total liabilities     8,202       7,967  
Commitments and contingencies (Note 9)                
Stockholders’ equity:                
Preferred stock, $.01 par value; authorized shares—2,400; no shares issued and outstanding     -       -  
Class A common stock, $.01 par value; authorized shares—2,600; 525 shares issued and outstanding at October 31, 2023 and July 31, 2023     5       5  
Class B common stock, $.01 par value; authorized shares—40,000; 14,669 shares issued and 13,830 shares outstanding at October 31, 2023, and 14,634 shares issued and 13,801 outstanding at July 31, 2023     147       146  
Additional paid-in capital     46,631       46,122  
Accumulated other comprehensive loss     (1,904 )     (1,537 )
Accumulated deficit     (3,957 )     (3,942 )
Treasury stock, 839 shares at October 31, 2023 and 833 shares at July 31, 2023, at cost     (1,943 )     (1,930 )
Total stockholders’ equity     38,979       38,864  
Total liabilities and stockholders’ equity   $ 47,181     $ 46,831  

 

5


 

ZEDGE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share data)

 

    Three Months Ended  
    October 31,  
    2023     2022  
Revenues   $ 7,081     $ 6,900  
Costs and expenses:                
Direct cost of revenues (excluding amortization of capitalized software and technology development costs which is included below)     486       632  
Selling, general and administrative     5,499       5,826  
Depreciation and amortization     775       793  
Change in fair value of contingent consideration     -       (150 )
Income (loss) from operations     321       (201 )
Interest and other income, net     81       35  
Net loss resulting from foreign exchange transactions     (219 )     (76 )
Income (loss) before income taxes     183       (242 )
Provision for (benefit from) income taxes     198       (73 )
Net loss   $ (15 )   $ (169 )
Other comprehensive loss:                
Changes in foreign currency translation adjustment     (367 )     (259 )
Total other comprehensive loss     (367 )     (259 )
Total comprehensive loss   $ (382 )   $ (428 )
Loss per share attributable to Zedge, Inc. common stockholders:                
Basic   $ -     $ (0.01 )
Diluted   $ -     $ (0.01 )
Weighted-average number of shares used in calculation of income (loss) per share:                
Basic     13,975       14,330  
Diluted     13,975       14,330  

 

6


 

ZEDGE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

    Three Months Ended  
    October 31,  
    2023     2022  
Operating activities            
Net loss   $ (15 )   $ (169 )
Adjustments to reconcile net loss to net cash provided by operating activities:                
Depreciation     14       14  
Amortization of intangible assets     579       579  
Amortization of capitalized software and technology development costs     182       200  
Amortization of deferred financing costs     1       -  
Impairment of investment in privately-held company     50       -  
Change in fair value of contingent consideration     -       (150 )
Stock-based compensation     507       589  
Change in assets and liabilities:                
Trade accounts receivable     (300 )     (70 )
Prepaid expenses and other current assets     (66 )     (205 )
Other assets     14       14  
Trade accounts payable and accrued expenses     384       598  
Deferred revenue     (90 )     (318 )
Net cash provided by operating activities     1,260       1,082  
Investing activities                
Final payments for asset acquisitions     -       (962 )
Capitalized software and technology development costs     (423 )     (310 )
Purchase of property and equipment     (22 )     (39 )
Net cash used in investing activities     (445 )     (1,311 )
Financing activities                
Proceeds from term loan payable     -       2,000  
Payment of deferred financing costs     -       (18 )
Proceeds from exercise of stock options     3       -  
Purchase of treasury stock in connection with share buyback program and stock awards vesting     (13 )     (310 )
Net cash (used in) provided by financing activities     (10 )     1,672  
Effect of exchange rate changes on cash and cash equivalents     (185 )     (109 )
Net increase in cash and cash equivalents     620       1,334  
Cash and cash equivalents at beginning of period     18,125       17,085  
Cash and cash equivalents at end of period   $ 18,745     $ 18,419  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                
Cash payments made for income taxes   $ 36     $ -  
Cash payments made for interest expenses   $ 46     $ -  

 

7


 

Use of Adjusted EBITDA as a Non-GAAP Measure

 

Adjusted EBITDA, defined as earnings (loss) before interest, taxes, depreciation and amortization, stock compensation expense, transaction-related expenses and other non-recurring expenses, and Adjusted EBITDA Margin, represents measures that we believe are customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures we present. Our management also believes these measures are useful in evaluating our core operating results. However, Adjusted EBITDA/Margin are not measures of financial performance under GAAP and should not be considered an alternative to net income or operating income/margin as an indicator of our operating performance or to net cash provided by operating activities as a measure of our liquidity.

 

Reconciliation of Adjusted EBITDA to Net Income (Loss)   Q123     Q223     Q323     Q423     Q124     FY 2022     FY 2023  
GAAP Net (Loss) Income   $ (0.2 )   $ 1.6     $ (7.7 )   $ 0.2     $ (0.0 )   $ 9.7     $ (6.1 )
Excluding:                                                        
Interest and other income (expense), net   $ (0.0 )   $ (0.1 )   $ (0.1 )   $ (0.1 )   $ (0.1 )   $ (0.0 )   $ (0.3 )
Provision for (benefit from) income taxes   $ (0.1 )   $ 0.1     $ (0.7 )   $ 0.2     $ 0.2     $ 1.9     $ (0.5 )
Depreciation and amortization   $ 0.8     $ 0.8     $ 0.9     $ 0.8     $ 0.8     $ 2.0     $ 3.3  
EBITDA   $ 0.5     $ 2.4     $ (7.6 )   $ 1.0     $ 0.9     $ 13.5     $ (3.6 )
Change in FV of contingent consideration/Goodwill impairment   $ (0.2 )   $ (1.8 )   $ 8.7     $ 0.0     $ 0.0     $ (4.0 )   $ 6.8  
Stock-based compensation   $ 0.6     $ 0.8     $ 0.6     $ 0.6     $ 0.5     $ 1.9     $ 2.5  
Transaction costs related to business combination   $ 0.0     $ 0.0     $ 0.0     $ 0.0     $ 0.2     $ 0.9     $ 0.0  
Adjusted EBITDA   $ 1.0     $ 1.4     $ 1.7     $ 1.6     $ 1.5     $ 12.4     $ 5.7  

 

* numbers may not add due to rounding

 

 

8