Q4 2025 Zedge Inc Earnings Call

This year fiscal 2025 results.

During managements prepared remarks, all participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation by such as management there'll be an opportunity to ask questions to ask a question. Please press Star then one on your Touchtone phone to withdraw your question. Please press star two I will now turn the call over to Brian Segal.

Thank you operator during todays call Jonathan Reich.

As Chief Executive Officer, and East side, such as Chief Financial Officer will discuss <unk>.

Financial and operational results that we reported today.

Forward looking statements made during this conference call during the prepared remarks or in the question and answer session, whether general or specific in nature are subject to risks and uncertainties that may cause actual results in the future could differ materially from those discussed on today's calls. These risks and uncertainties include but are not limited to specific risks and uncertainties disclosed.

That's just periodic SEC filings.

<unk> assumes no obligation to update any forward looking statements or to update the factors that may cause actual results to differ materially from those that they forecast.

Please note that our earnings release is available on the Investor Relations page of <unk> website and has also been filed on form 8-K with the SEC.

Finally on this call we will use non-GAAP measures. Examples include non-GAAP EPS non-GAAP net income and adjusted EBITDA. Please see our earnings release for an explanation of our use of these non-GAAP measures now I would like to turn the call over to Jonathan.

Thank you, Brian and good afternoon, everyone fiscal 2025 was a year of transition in which we reshaped the edge to be more efficient financially disciplined and positioned it for scalable and sustainable innovation.

During the year, we completed a major restructuring aimed at positioning <unk> for sustainable profitable growth. This included closing operations in Norway, and a targeted right sizing of Guru shots. These actions when combined with the completion of the Guru shots retention program that was implemented.

At the time of the acquisition in 2022 are expected to reduce our gross annualized expenses by about $4 million. We also incurred approximately $1 $5 million in cash restructuring costs and $1 million in noncash charges, which <unk> will discuss in more detail shortly.

Speaker #2: Good day and welcome to Zedge Inc earnings conference call for the fourth quarter and end of year fiscal 2020 . Five results . During management's prepared remarks , all participants will be in listen only mode .

Operator: Good day and welcome to Zedge Inc.'s earnings conference call for the fourth quarter and end-of-year fiscal 2025 results. During management's prepared remarks, all participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation by Zedge Inc.'s management, there will be an opportunity to ask questions. To ask a question, please press star then one on your touch-tone phone. To withdraw your question, please press star two. I will now turn the call over to Brian Siegel.

Fortunately as we enter fiscal year 2006, the vast majority of these charges in cash expenditures are behind us providing greater operating flexibility. This leaner cost base enables us to reinvest selectively in initiatives that offer the highest return potential focusing.

Speaker #2: Should you need assistance , please signal a conference specialist by pressing the star key , followed by zero . After today's presentation by Zedge Inc management , there will be an opportunity to ask questions , to ask a question , please press star .

Speaker #2: Then one on your touch tone phone . To withdraw your question , please press star two . I will now turn the call over to Brian Siegel .

On accelerating growth improving margins and enhancing free cash flow generation.

Speaker #3: Thank you . Operator . During today's call , Jonathan Reich Zedge Inc , Chief Executive Officer and Esai Chief Financial Officer will discuss Zedge Inc financial and operational results that were reported today .

Brian Siegel: Thank you, operator. During today's call, Jonathan Reich, Zedge's Chief Executive Officer, and Yi Tsai, Zedge's Chief Financial Officer, will discuss Zedge's financial and operational results that were reported today. Any forward-looking statements made during this conference call, during the prepared remarks, or in the question and answer session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results in the future to differ materially from those discussed on today's calls. These risks and uncertainties include, but are not limited to, specific risks and uncertainties disclosed in Zedge's periodic SEC filings. Zedge assumes no obligation to update any forward-looking statements or to update the factors that may cause actual results to differ materially from those that they forecast.

Operationally business performance was mixed in Q4, <unk> edge marketplace, which includes zed premium subscriptions and advertising performed well, while guru shots appears to be plateauing separately subscription revenue increased 21% year over year and we ended.

Speaker #3: Any forward looking statements made during this conference call ? During the prepared remarks or in the question and answer session , whether general or specific in nature , are subject to risks and uncertainties that may cause actual results in the future to differ materially from those discussed on today's calls .

The year at record levels with nearly 1 million active subscribers, an increase of 47% compared with Q4 of fiscal 'twenty. Four. We also saw continued growth in <unk> premiums G television fourth quarter as edge marketplace AD revenue grew year over year, but total ad.

Speaker #3: These risks and uncertainties include , but are not limited to , risks and uncertainties disclosed in Zedge Inc periodic SEC filings . Zedge assumes no obligation to update any forward looking statements or to update the factors that may cause actual results to differ materially from those that they forecast .

Revenue for the company was softer than expected due to a decline in <unk> from the competitive impact of AI search going into Q1, Google introduced a change to its search engine results page whereby users can now directly copy and paste emojis from the search page.

Speaker #3: Please note that our earnings release is available on the Investor Relations page of the website , and it has also been filed on form 8-K with the SEC .

Brian Siegel: Please note that our earnings release is available on the Investor Relations page of the Zedge website, and it has also been filed on Form 8-K with the SEC. Finally, on this call, we will use non-GAAP measures. Examples include non-GAAP EPS, non-GAAP net income, and adjusted EBITDA. Please see our earnings release for an explanation of our use of these non-GAAP measures. Now I would like to turn the call over to Jonathan.

Speaker #3: Finally , on this call , we will use non-GAAP measures . Examples include non-GAAP EPs , non-GAAP net income , and adjusted EBITDA .

Speaker #3: Please see our earnings release for an explanation of our use of these non-GAAP measures . Now , I'd like to turn the call over to Jonathan .

<unk> <unk> PD is still ranks first or second across search Google's change is diverting traffic away from the site. We are actively testing strategies to mitigate this outcome and strengthen <unk> performance. We also made advances with data seeds dot AI our platform for providing rights.

Speaker #4: Thank you . Brian , and good afternoon , everyone . Fiscal 2025 was a year of transition in which we reshaped Zedge Inc to be more efficient , financially disciplined and positioned it for scalable and sustainable innovation .

Jonathan Reich: Thank you, Brian, and good afternoon, everyone. Fiscal 2025 was a year of transition in which we reshaped Zedge Inc. to be more efficient, financially disciplined, and positioned it for scalable and sustainable innovation. During the year, we completed a major restructuring aimed at positioning Zedge Inc. for sustainable, profitable growth. This included closing operations in Norway and a targeted rightsizing of GuruShots. These actions, when combined with the completion of the GuruShots retention program that was implemented at the time of the acquisition in 2022, are expected to reduce our gross annualized expenses by about $4 million. We also incurred approximately $1.5 million in cash restructuring costs and $1 million in non-cash charges, which Yi will discuss in more detail shortly. Fortunately, as we enter fiscal year 2026, the vast majority of these charges and cash expenditures are behind us, providing greater operating flexibility.

Speaker #4: During the year , we completed a major restructuring aimed at positioning zedge for sustainable , profitable growth . This included closing operations in Norway and a targeted rightsizing of guru shots .

<unk> ethically sourced datasets for AI training.

Since launching earlier this year data seeds has secured contracts from several leading AI customers underscoring the value and credibility of our approach what makes data seeds uniquely positioned for success.

Speaker #4: These actions , when combined with the completion of the guru shots retention program that was implemented at the time of the acquisition in 2022 , are expected to reduce our gross annualized expenses by about $4 million .

Is our community of skilled photographers and graphic artists.

<unk>. This group has produced a large and diverse image library of close to $30 million assets, which can be licensed for AI training. We can also leverage our creator community to generate customized on demand datasets tailored to specific customer requirements by launching themed guru.

Speaker #4: We also incurred approximately $1.5 million in cash restructuring costs and $1 million in non-cash charges , which we will discuss in more detail shortly .

Speaker #4: Fortunately , as we enter fiscal year 26 , the vast majority of these charges and cash expenditures are behind us , providing greater operating flexibility .

Shots competitions aligned with client objectives, we can rapidly produce a critical mass of high quality Reits clear data that directly supports each customer's unique AI training needs in parallel we have started building the data seeds production cloud a managed global production network.

Speaker #4: This leaner cost base enables us to reinvest selectively in initiatives that offer the highest return potential , focusing on accelerating growth , improving margins and enhancing free cash flow generation .

Jonathan Reich: This leaner cost base enables us to reinvest selectively in initiatives that offer the highest return potential, focusing on accelerating growth, improving margins, and enhancing free cash flow generation. Operationally, business performance was mixed in Q4. Our Zedge Marketplace, which includes Zedge Premium, subscriptions, and advertising, performed well, while GuruShots appears to be plateauing. Separately, subscription revenue increased 21% year over year, and we ended the year at record levels with nearly 1 million active subscribers, an increase of 47% compared with Q4 of fiscal 2024. We also saw continued growth in Zedge Premium's GTV. In the fourth quarter, Zedge Marketplace ad revenue grew year over year, but total ad revenue for the company was softer than expected due to a decline at Emojipedia from the competitive impact of AI search.

That mobilizes domain experts, including professional photographers videographers and graphic artists to deliver highly unique and specific datasets at scale that don't lend themselves to photo competitions. This creates a scalable and differentiated advantage for data seeds in this fast emerging.

Speaker #4: Operationally , business performance was mixed in Q4 . Our Zedge marketplace , which includes Zedge premium subscriptions and advertising , performed well while Guru Shots appears to be plateauing .

Speaker #4: Separately , subscription revenue increased 21% year over year and we ended the year at record levels with nearly 1 million active subscribers , an increase of 47% compared with Q4 of fiscal 24 .

And explosive market turning to capital allocation, we repurchased approximately 640000 shares in the fourth quarter and a total of one 3 million shares for the full year using cash generated from operations for the fourth quarter or more aggressive share re.

Speaker #4: We also saw continued growth in Zedge Premium's GTV . Fourth quarter Zedge marketplace ad revenue grew year over year , but total ad revenue for the company was softer than expected due to a decline at Emojipedia from the competitive impact of AI search .

Repurchases, along with restructuring and retention related payouts temporarily reduced our cash position.

We ended the year with approximately $19 million in cash and cash equivalents, reflecting our decision to strategically deploy capital where we see the greatest long term value. These actions also underscore our confidence that <unk> intrinsic value is not fully reflected in its current share price.

Speaker #4: Going into Q1 , Google introduced a change to its search engine results page , whereby users can now directly copy and paste emojis from the search page .

Jonathan Reich: Going into Q1, Google introduced a change to its search engine results page, whereby users can now directly copy and paste emojis from the search page. Although Emojipedia still ranks first or second across search, Google's change is diverting traffic away from the site. We are actively testing strategies to mitigate this outcome and strengthen Emojipedia's performance. We also made advances with DataSeeds.AI, our platform for providing rights-cleared, ethically sourced datasets for AI training. Since launching earlier this year, DataSeeds.AI has secured contracts from several leading AI customers, underscoring the value and credibility of our approach. What makes DataSeeds.AI uniquely positioned for success is our community of skilled photographers and graphic artists. Collectively, this group has produced a large and diverse image library of close to 30 million assets, which can be licensed for AI training.

Speaker #4: Although Emojipedia still ranks first or second across search , Google's change is diverting traffic away from the site . We are actively testing strategies to mitigate this outcome and strengthen Emojipedia performance .

In fact, following the end of the quarter, we also announced the initiation of our first quarterly dividend of $1 six per share further reinforcing our confidence in the strength of the company's cash flow generation and balance sheet. The.

Speaker #4: We also made advances with data , AI . Our platform for providing rights cleared , ethically sourced datasets for AI training . Since launching earlier this year , datasets have secured contracts from several leading AI customers , underscoring the value and credibility of our approach .

The share repurchase and dividend reflect a disciplined balanced capital allocation strategy focused on returning value to shareholders, while preserving the flexibility to invest in high impact innovation and future growth opportunities.

Speaker #4: What makes Data Seeds uniquely positioned for success is our community of skilled photographers and graphic artists. Collectively, this group has produced a large and diverse image library of close to 30 million assets, which can be licensed for AI training.

Fiscal 2006 is going to be a year, where we invest in growth and innovation. Our strategy is centered around five key areas of focus first expand and diversify our revenue base for our core products. We plan to continue to innovate new features and optimize our monetization.

Speaker #4: We can also leverage our creator community to generate customized on demand datasets tailored to specific customer requirements . By launching themed guru shots competitions aligned with client objectives .

Jonathan Reich: We can also leverage our creator community to generate customized, on-demand datasets tailored to specific customer requirements. By launching themed GuruShots competitions aligned with client objectives, we can rapidly produce a critical mass of high-quality, rights-cleared data that directly supports each customer's unique AI training needs. In parallel, we have started building the DataSeeds.AI Production Cloud, a managed global production network that mobilizes domain experts, including professional photographers, videographers, and graphic artists, to deliver highly unique and specific datasets at scale that do not lend themselves to photo competitions. This creates a scalable and differentiated advantage for DataSeeds.AI in this fast-emerging and explosive market. Turning to capital allocation, we repurchased approximately 640,000 shares in the fourth quarter and a total of 1.3 million shares for the full year, using cash generated from operations.

Strategies.

Late in fiscal 'twenty, five we integrated audio AI capabilities into the paint suite and we intend to further expand those creative tools. In 2006. We are also evaluating how best to evolve Guru shots one.

Speaker #4: We can rapidly produce a critical mass of high quality rights , cleared data that directly supports each customer's unique AI training needs . In parallel , we have started building the data seeds production Cloud , a managed global production network that mobilizes domain experts including professional photographers , videographers and graphic artists to deliver highly unique and specific data sets at scale that don't lend themselves to photo competitions .

One of the biggest questions. We are working through is do we focus on making the game more engaging or do we more closely couple it with data seeds has a massive content acquisition platform or both it's too early to commit to a specific direction, but it's fair to say that we are monitoring performance and opportunity closely.

Second is to accelerate product innovation, our product innovation team has adopted a model that launches test marketing campaigns to measure interest before writing one line of code and then capitalizes on the benefits that AI vibe coding and automation is offered to accelerate the development of the new.

Speaker #4: This creates a scalable and differentiated advantage for data seeds in this fast emerging and explosive market . Turning to capital allocation , we repurchased approximately 640,000 shares in the fourth quarter and a total of 1.3 million shares for the full year .

Potential winners sink at our recently introduced App that turns still photos into fund and potentially viral video clips was the first example of this new strategy. This approach allows us to build smaller more focused products rapidly.

Speaker #4: Using cash generated from operations for the fourth quarter . Our more aggressive share repurchases , along with restructuring and retention related payouts temporarily reduced our cash position .

Jonathan Reich: For the fourth quarter, our more aggressive share repurchases, along with restructuring and retention-related payouts, temporarily reduced our cash position. We ended the year with approximately $19 million in cash and cash equivalents, reflecting our decision to strategically deploy capital where we see the greatest long-term value. These actions also underscore our confidence that Zedge Inc.'s intrinsic value is not fully reflected in its current share price. In fact, following the end of the quarter, we also announced the initiation of our first quarterly dividend of $0.016 per share, further reinforcing our confidence in the strength of the company's cash flow generation and balance sheet. The share repurchase and dividend reflect a disciplined, balanced capital allocation strategy focused on returning value to shareholders while preserving the flexibility to invest in high-impact innovation and future growth opportunities.

Speaker #4: We ended the year with approximately $19 million in cash and cash equivalents, reflecting our decision to strategically deploy capital where we see the greatest long-term value.

First them against defined key performance indicators and scale those that show promise.

We call. These early stage launches alphas, and we expect to introduce at least six new alphas in fiscal 'twenty six under this framework third scale tape deck and data seeds Dot AI.

Speaker #4: These actions also underscore our confidence that zeise's intrinsic value is not fully reflected in its current share price . In fact , following the end of the quarter , we also announced the initiation of our first quarterly dividend of 1.6 cents per share .

In September we launched <unk> in the U S on iOS tape that because the music platform dedicated to indie artists and designed to allow them to make a living from their music by offering transparency and fairness to them.

Speaker #4: Further reinforcing our confidence in the strength of the company's cash flow generation and balance sheet . The share repurchase and dividend reflect a disciplined , balanced capital allocation strategy focused on returning value to shareholders while preserving the flexibility to invest in high impact innovation and future growth opportunities .

The tape deck pilot started with approximately 500000 tracks and allows artists labels and distributors to set their own pricing and keep 80% of each sale or stream. In addition, it allows their fans the ability to pay extra or tip their favorite artist directly although it's too early.

Speaker #4: Fiscal 26 is going to be a year where we invest in growth and innovation . Our strategy is centered around five key areas of focus .

Jonathan Reich: Fiscal 2026 is going to be a year where we invest in growth and innovation. Our strategy is centered around five key areas of focus. First, expand and diversify our revenue base. For our core products, we plan to continue to innovate new features and optimize our monetization strategies. Late in fiscal 2025, we integrated audio AI capabilities into the pAInt Suite, and we intend to further expand those creative tools in 2026. We are also evaluating how best to evolve GuruShots. One of the biggest questions we are working through is, do we focus on making the game more engaging, or do we more closely couple it with DataSeeds.AI as a massive content acquisition platform, or both? It's too early to commit to a specific direction, but it's fair to say that we are monitoring performance and opportunity closely. Second is to accelerate product innovation.

To comment about performance our goal is to expand to Android web and international markets during fiscal 2006.

Speaker #4: First , expand and diversify our revenue base for our core products . We plan to continue to innovate new features and optimize our monetization strategies .

Similar to all <unk> edge products taped ex expansion will be tied to performance and we plan to refine its creator tools and explore additional monetization models for.

Speaker #4: Late in fiscal 25 , we integrated audio AI capabilities into the paint suite , and we intend to further expand those creative tools in 26 .

For data seeds, our priority is centered on expanding the creator ecosystem expanding the pipeline of qualified enterprise prospects and converting prospects into customers.

Speaker #4: We are also evaluating how best to evolve guru shots . One of the biggest questions we are working through is do we focus on making the game more engaging , or do we more closely couple it with data , seeds has a massive content acquisition platform or both ?

Our focus remains on delivering bespoke Reits cleared and ethically sourced datasets that meet the rigorous standards and evolving needs of the AI industry fourth is improving operational efficiency fiscal 'twenty six will begin to show the full benefit of our restructuring efforts will continue to.

Speaker #4: It's too early to commit to a specific direction, but it's fair to say that we are monitoring performance and opportunity closely. Second is to accelerate product innovation.

Allocate resources to the most attractive opportunities improved process automation through the implementation of AI across the company and reinvest savings into projects with measurable returns and fifth execute a balanced capital allocation strategy, we will continue returning capital to shareholders.

Speaker #4: Our product innovation team has adopted a model that launches test marketing campaigns to measure interest . Before writing one line of code and then capitalizes on the benefits that AI vibe , coding and automations offer to accelerate the development of the new potential winners .

Jonathan Reich: Our product innovation team has adopted a model that launches test marketing campaigns to measure interest before writing one line of code, and then capitalizes on the benefits that AI, Vibe Coding, and automations offer to accelerate the development of the new potential winners. SyncAt, our recently introduced app that turns still photos into fun and potentially viral video clips, was the first example of this new strategy. This approach allows us to build smaller, more focused products rapidly, test them against defined key performance indicators, and scale those that show promise. We call these early-stage launches alphas, and we expect to introduce at least six new alphas in fiscal 2026 under this framework. Third, scale TapeDeck and DataSeeds.AI. In September, we launched TapeDeck in the U.S. on iOS.

Through buybacks and dividends, while maintaining the flexibility to invest in initiatives that enhance our long term value in summary, we enter fiscal 2006 with positive momentum. We have three early stage products data seeds tape deck and sin cat that are evolving and the completed restructuring positions.

Speaker #4: Singkat . Our recently introduced app that turns still photos into fun and potentially viral video clips , was the first example of this new strategy .

Speaker #4: This approach allows us to build smaller, more focused products, rapidly test them against defined key performance indicators, and scale those that show promise.

US for improved cash flow and profitability combined with our innovation pipeline. These initiatives give us confidence that fiscal 'twenty six will mark the next stage in <unk> evolution, one which is focused creative and financially disciplined now I'll turn the call over to E E.

Speaker #4: We call these early stage launches alphas , and we expect to introduce at least six new alphas in fiscal 20 . Six . Under this framework , third scale tape deck and data seeds dot AI .

Speaker #4: In September, we launched Tape Deck in the U.S. on iOS. Tape Deck is a music platform dedicated to indie artists and designed to allow them to make a living from their music by offering transparency and fairness to them.

Total revenue for the fourth quarter was seven 5 million.

Jonathan Reich: TapeDeck is a music platform dedicated to indie artists and designed to allow them to make a living from their music by offering transparency and fairness to them. The TapeDeck pilot started with approximately 500,000 tracks and allows artists, labels, and distributors to set their own pricing and keep 80% of each sale or stream. In addition, it allows their fans the ability to pay extra or tip their favorite artists directly. Although it's too early to comment about performance, our goal is to expand to Android, web, and international markets during fiscal 2026. Similar to all Zedge Inc. products, TapeDeck's expansion will be tied to performance, and we plan to refine its creator tools and explore additional monetization models. For DataSeeds.AI, our priorities center on expanding the creator ecosystem, expanding the pipeline of qualified enterprise prospects, and converting prospects into customers.

Down one 5% from last year.

There were a couple of items to note here.

Speaker #4: The tape Deck pilot started with approximately 500,000 tracks and allows artists , labels and distributors to set their own pricing and keep 80% of each sale or stream .

First <unk> marketplace revenue was up mid single digits for the quarter and we would have performed even better if it were not for one time $144000 benefit.

Speaker #4: In addition , it allows their fans the ability to pay extra or tip their favorite artists directly . Although it's too early to comment about performance , our goal is to expand to Android , web and international markets during fiscal 26 .

Related to that premium in the year ago quarter.

Also offsetting growth at <unk> marketplace was an 11% decline at the multimedia consistent with China, <unk> earlier comments and <unk>.

Expected, 39% year over year drop it grew shots.

Speaker #4: Similar to all Zedge products, Tape Decks expansion will be tied to performance, and we plan to refine its creator tools and explore additional monetization models for data and seeds.

Although sequentially the business was down less than $25000 showing stabilization advertising revenue was up slightly for the quarter as growth in the <unk> marketplace was offset by lower AD revenue at <unk>.

Speaker #4: Our priorities center on expanding the creator ecosystem , expanding the pipeline of qualified enterprise prospects , and converting prospects into customers . Our focus remains on delivering bespoke rights cleared and ethically sourced data that meet the rigorous standards and evolving needs of the AI industry .

<unk> plus subscription revenue increased 21% year over year, and our net active subscriber base grew 47%.

Jonathan Reich: Our focus remains on delivering bespoke, rights-cleared, and ethically sourced datasets that meet the rigorous standards and evolving needs of the AI industry. Fourth is improving operational efficiency. Fiscal 2026 will begin to show the full benefit of our restructuring efforts. We'll continue to reallocate resources to the most attractive opportunities, improve process automation through the implementation of AI across the company, and reinvest savings into projects with measurable returns. Fifth, execute a balanced capital allocation strategy. We will continue returning capital to shareholders through buybacks and dividends, while maintaining the flexibility to invest in initiatives that enhance our long-term value. In summary, we enter fiscal 2026 with positive momentum. We have three early-stage products: DataSeeds.AI, TapeDeck, and SyncAt that are evolving, and the completed restructuring positions us for improved cash flow and profitability.

Reaching nearly 1 million subscribers.

Speaker #4: Fourth is improving operational efficiency . Fiscal 26 will begin to show the full benefit of our restructuring efforts . We'll continue to reallocate resources to the most attractive opportunities , improve process automation through the implementation of AI across the company , and reinvest savings into projects with measurable returns .

We continue to optimize our subscription plan.

Seeing the benefits of those changes.

Deferred revenue, which primarily represents subscription related revenue reached $5 4 million.

10% sequentially and 73% year over year.

Speaker #4: And fifth , execute a balanced capital allocation strategy . We will continue returning capital to shareholders through buybacks and dividends while maintaining the flexibility to invest in initiatives that enhance our long term value .

This is an important metric as it reflects future revenue that carries essentially 100% gross margin that's premium TV grew 7% from the year ago quarter.

Speaker #4: In summary , we enter fiscal 26 with positive momentum . We have three early stage products data , seeds , tape deck , and syn cat that are evolving and the completed restructuring positions us for improved cash flow and profitability .

And Ah PMA you increased 17%.

<unk> the shift toward higher value users and improve monetization efficiency.

As noted earlier grew shots, which is reported under digital goods and services revenue remained a challenge.

Speaker #4: Combined with our innovation pipeline , these initiatives give us confidence that fiscal 26 will mark the next stage in Zeise's evolution . One , which is focused , creative and financially disciplined .

Jonathan Reich: Combined with our innovation pipeline, these initiatives give us confidence that fiscal 2026 will mark the next stage in Zedge Inc.'s evolution, one which is focused, creative, and financially disciplined. Now, I'll turn the call over to Yi.

139% year over year.

As part of our cost optimization initiatives.

Significantly reduce user acquisition spending for Guru shots.

Speaker #4: Now I'll turn the call over to .

We evaluate the best path forward.

Speaker #5: Total revenue for the fourth quarter was $7.5 million , down 1.5% from last year . There were a couple of items to note here .

Yi Tsai: Total revenue for the fourth quarter was $7.5 million, down 1.5% from last year. There were a couple of items to note here. First, Zedge Marketplace revenue was up mid-single digits for the quarter and would have performed even better if it were not for a one-time $144,000 benefit related to Zedge Premium in the year-ago quarter. Also offsetting growth at Zedge Marketplace was an 11% decline at Emojipedia, consistent with Jonathan's earlier comments, and the expected 39% year-over-year drop at GuruShots. Although sequentially, the business was down less than $25,000, showing stabilization. Advertising revenue was up slightly for the quarter, as growth in the Zedge Marketplace was offset by lower ad revenue at Emojipedia. Zedge Plus subscription revenue increased 21% year-over-year, and our net active subscriber base grew 47%, reaching nearly 1 million subscribers. We continue to optimize our subscription plans and are seeing the benefits of those changes.

These revenue declines were expected and encouragingly the year over year rate of decline improved by 600 basis points.

Speaker #5: First , Zedge Inc marketplace revenue was up mid-single digits for the quarter , and would have performed even better if it were not for a one time $144,000 benefit related to Zedge premium in the year ago quarter .

We expect to begin lapping some of these weaker comparisons in fiscal 2026.

Cost of revenue was six 4% rough.

Roughly flat year over year in absolute dollars.

G&A increase about 1% to $6 9 million for the quarter.

Speaker #5: Also offsetting growth at Zedge marketplace was an 11% decline at Emojipedia , consistent with Jonathan's earlier comments and the expected 39% year over year drop at guru shots .

This reflects higher paid user acquisition, where we are achieving strong returns.

Approximately $400000 in reinvestment from restructuring savings into consulting professional services and product development to support the ramp of data C dot AI and tape deck.

Speaker #5: Although sequentially , the business was down less than $25,000 , showing stabilization , advertising revenue was up slightly for the quarter as growth in the Zedge marketplace was offset by lower ad revenue at Emojipedia , Zedge plus subscription revenue increased 21% year over year , and our net active subscriber base grew 47% , reaching nearly 1 million subscribers .

It's partially offset restructuring savings.

We also recorded zero point $6 million in restructuring charges in connection with the actions announced in late January early February compared to no restructuring or.

Asset impairment charges last year.

As a result, GAAP loss from operations was zero point $7 million.

Speaker #5: We continue to optimize our subscription plans and are seeing the benefits of those changes . Deferred revenue , which primarily represents subscription related revenue , reached $5.4 million , up 10% sequentially and 73% year over year .

Compared to a loss of zero point $1 million last year, primarily due to those restructuring costs and growth investments.

Yi Tsai: Deferred revenue, which primarily represents subscription-related revenue, reached $5.4 million, up 10% sequentially and 73% year-over-year. This is an important metric, as it reflects future revenue that carries essentially 100% gross margin. Zedge Premium GTV grew 7% from the year-ago quarter, and ARPMAU increased 17%, continuing the shift toward higher-value users and improved monetization efficiency. As noted earlier, GuruShots, which is reported under digital goods and services revenue, remained a challenge, down 39% year-over-year. As part of our cost optimization initiatives, we significantly reduced user acquisition spending for GuruShots while we evaluate the best path forward. These revenue declines were expected, and encouragingly, the year-over-year rate of decline improved by 600 basis points. We expect to begin lapping some of these weaker comparisons in fiscal 2026. Cost of revenue was 6.4%, roughly flat year-over-year in absolute dollars. SG&A increased about 1% to $6.9 million for the quarter.

GAAP net loss and EPS was zero point $6 million and negative one cents compared to breakeven results last year.

Speaker #5: This is an important metric , as it reflects future revenue that carries essentially 100% gross margin . Zedge premium GTV grew 7% from the year ago quarter , and AARP more increased 17% , continuing the shift toward higher value users and improved monetization efficiency .

On a non-GAAP basis net income was zero point $1 million.

And EPS was zero cents compared to zero point $3 million in <unk> last year.

Cash flow from operations was zero point $7 million.

And free cash flow was zero point $5 million for the quarter.

As Jonathan mentioned cash payments related to the restructuring and retention bonuses tied to our 2022 acquisition of Guru shots reduce free cash flow by about $600000 in the quarter and $1.5 million for the year.

Speaker #5: As noted earlier , guru Shots , which is reported under Digital Goods and Services revenue , remained a challenge , down 39% year over year .

Speaker #5: As part of our cost optimization initiatives with significantly reduced user acquisition spending for guru shots . While we evaluate the best path forward , these revenue declines were expected and encouragingly , the year over year rate of decline improved by 600 basis points .

These payments are now complete and will not impact results in fiscal 'twenty 'twenty six.

Adjusted EBITDA for the quarter was zero point $3 million.

From a liquidity perspective, we ended the year with $18 6 million in cash and cash equivalents and no debt.

Speaker #5: We expect to begin lapping some of these weaker comparisons in fiscal 2026 . Cost of revenue was 6.4% , roughly flat year over year .

The sequential decrease reflects our repurchase of approximately 640000 share during the quarter.

Speaker #5: In absolute dollars . Cigna increased about 1% to $6.9 million for the quarter . This reflects higher paid user acquisition , where we are achieving strong returns and approximately $400,000 .

And nearly one 3 million shares for the year.

Yi Tsai: This reflects higher paid user acquisition, where we are achieving strong returns, and approximately $400,000 in reinvestment from restructuring saving into consulting, professional services, and product development to support the ramp of DataSeeds.AI and TapeDeck, which partially offset restructuring saving. We also recorded $0.6 million in restructuring charges in connection with the actions announced in late January and early February, compared to no restructuring or asset impairment charges last year. As a result, GAAP loss from operations was $0.7 million, compared to a loss of $0.1 million last year, primarily due to those restructuring costs and growth investments. GAAP net loss and EPS was $0.6 million and negative $0.01, compared to break-even results last year. On a non-GAAP basis, net income was $0.1 million, and EPS was $0.00, compared to $0.3 million and $0.02 last year.

As of mid October about $600000 remains available under our current buyback authorization.

Speaker #5: In reinvestment from restructuring savings into consulting professional services and product development to support the ramp of data, Sea AI, and Tape Deck, partially offset restructuring savings.

Thank you for listening to our fourth quarter earnings call. We look forward to updating you again soon when we report results for the first quarter of fiscal 2026, operator. Please open the line for questions.

Speaker #5: We also recorded $0.6 million in restructuring charges in connection with the actions announced in late January and early February, compared to no restructuring or asset impairment charges last year.

Certainly we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

If youre using a speakerphone please pick up your handset before pressing the keys.

Speaker #5: As a result , GAAP loss from operations was which $0.7 million , compared to a loss of $0.1 million last year . Primarily due to those restructuring costs and growth investments .

To withdraw your question. Please press star two.

At this time, we will pause momentarily to assemble our roster.

Okay.

Your first question for today is from Allen Klee with Maxim Group.

Speaker #5: GAAP net loss and EPs were $0.6 million and negative $0.01 . Compared to break even results last year . On a non-GAAP basis , net income was $0.1 million , an EPs was $0.00 , compared to $0.3 million and $0.02 last year .

Alright.

Good morning.

If you could touch a little more on <unk>.

Derek.

And data sees AI in terms of.

Actions, you're looking to take going forward and how are you.

Think about what the opportunity is in both of these offerings. Thank you.

Speaker #5: Cash flow from operations was $0.7 million , and free cash flow was $0.5 million for the quarter . As Jonathan mentioned , cash payments related to the restructuring and retention bonuses tied to our 2022 acquisition of Guru Shots reduced free cash flow by about $600,000 in the quarter , and $1.5 million for the year .

Yi Tsai: Cash flow from operations was $0.7 million, and free cash flow was $0.5 million for the quarter. As Jonathan mentioned, cash payments related to the restructuring and retention bonuses tied to our 2022 acquisition of GuruShots reduced free cash flow by about $0.6 million in the quarter and $1.5 million for the year. These payments are now complete and will not impact results in fiscal 2026. Adjusted EBITDA for the quarter was $0.3 million. From a liquidity perspective, we ended the year with $18.6 million in cash and cash equivalents and no debt. The sequential decrease reflects our repurchase of approximately 640,000 shares during the quarter and nearly 1.3 million shares for the year. As of mid-October, about $0.6 million remains available under our current buyback authorization. Thank you for listening to our fourth quarter earning call.

Okay.

Hi, Alan Thanks for asking the question.

So I think that.

There are really sort of three.

Buckets here, we've got APAC, which has been an initiative.

We have built two.

Address.

<unk>.

The world of music, mainly in the artist.

Yes.

There are.

Speaker #5: These payments are now complete and will not impact results in fiscal 2026. Adjusted EBITDA for the quarter was $0.3 million. From a liquidity perspective, we ended the year with $18.6 million in cash and cash equivalents and no debt.

Underserved today in terms of revenue generation as you know.

<unk>, our SVP of product comes from that World.

And.

The.

Goal of this product is to provide a transparent.

Platform, where fans of indie artist can support there.

Speaker #5: The sequential decrease reflects our repurchase of approximately 640,000 shares during the quarter , and nearly 1.3 million shares for the year as of mid-October .

Bands and do so in a fashion that allows for these in the artists to make a good living from.

There.

<unk> work.

The <unk>.

Speaker #5: About $600,000 remains available under our current buyback authorization . Thank you for listening to our fourth quarter earnings call . We look forward to updating you again soon .

Product has been built.

Many of the folks needed in order to facilitate that outcome.

And we've launched with 500000 tracks.

Yi Tsai: We look forward to updating you again soon when we report results for the first quarter of fiscal 2026. Operator, please open the line for questions.

The need for additional music is there.

Speaker #5: When we report results for the first quarter of fiscal 2026 . Operator please open the line for questions .

And based upon performance.

We will make a decision in calendar year 'twenty 'twenty six whether to continue this initiative.

Speaker #2: Certainly , we will now begin the question and answer session . To ask a question , you may press star then one on your touch tone phone .

Operator: Certainly. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star two. At this time, we will pause momentarily to assemble our roster. Your first question for today is from Allan Klee with Maxim Group.

Or two.

Really put it on the back burner moving to data see is similar.

Speaker #2: If you're using a speakerphone , please pick up your handset before pressing the keys to withdraw your question , please press star two .

<unk>.

Speaker #2: At this time, we will pause momentarily to assemble our roster. Your first question for today is from Alan Klee with Maxim Group.

Really managing the business towards the Kpis data see is as I've described is.

Hey, <unk>.

<unk>, our first <unk> offering.

<unk> is focused on providing founding.

Speaker #6: Good morning. If we could touch a little more on Tape Deck and Data Seeds, and AI in terms of the actions you're looking to take going forward, and how you might think about what the opportunity is in both of these offerings.

[Analyst]: Good morning. If you could touch a little more on TapeDeck and DataSeeds.AI in terms of the actions you're looking to take going forward and how you might think about what the opportunity is in both of these offerings. Thank you.

Foundational AI companies.

With datasets.

They are in need of an order to.

Meet their development calls.

And.

We are hard at work at.

Taking.

Content that we have access to.

Speaker #6: Thank you . Hi , Alan .

Through your shots content that we can create.

Speaker #4: Thanks for asking . The question . So I think that there are really sort of three buckets here .

Jonathan Reich: Hi, Allan. Thanks for asking the question. I think that there are really sort of three buckets here. We've got TapeDeck, which has been an initiative that we have built to address a portion of the world of music, mainly indie artists that are underserved today in terms of revenue generation. As you know, Tim Cork, our SVP of Product, comes from that world. The goal of this product is to provide a transparent platform where fans of indie artists can support their fans and do so in a fashion that allows for these indie artists to make a good living from their artwork. The product has been built with many of the hooks needed in order to facilitate that outcome. We've launched with 500,000 tracks. The need for additional music is there.

With the with collaboration with our.

Creator community, whether that be through shop players or is it a premium arda.

Speaker #6: We've got tape .

Speaker #4: Deck , which has been an initiative that we have built to address . a portion of the world of music , mainly .

He then.

Creating very very bespoke content.

With professionals.

Professionals that extend beyond.

Speaker #6: In the artist's . . They are .

Our existing user base.

We had.

Speaker #4: Underserved today in terms of revenue generation . As you know , Tim Cook .

<unk> signed.

Two contracts in fiscal Q4.

Speaker #6: , our SVP of product , comes from that world . And the goal of this product is to provide a transparent platform .

One of the partners that we signed and these are well known global brand.

And so on and so forth one of those partners.

Signed a new contract with us in Q1.

Speaker #4: Where .

Speaker #6: Fans of indie artists can support their bands and do so in a fashion that allows these indie artists to make a good living from their artwork.

Significantly larger order sizes were.

And belief is that many of these prospects will start off doing something small with us we will need to prove that we can provide the data that is needed in a fashion, which adds value to.

Speaker #6: The product has been built with many of the hooks needed in order to facilitate that outcome , and we've launched with 500,000 tracks the need for additional music .

There <unk>.

Development process and the goals that they are trying to achieve and if we are successful there some portion of those.

Speaker #6: Is there and based upon performance and KPIs , we will make a decision . In calendar year 2026 as to whether to continue this initiative or to really put it on the back burner .

Customers will come back and.

Jonathan Reich: Based upon performance and KPIs, we will make a decision in calendar year 2026 as to whether to continue this initiative or to really put it on the back burner. Moving to DataSeeds.AI, similar notion of really managing the business towards KPIs. DataSeeds.AI, as I've described, is a B2B offering, our first B2B offering, which is focused on providing foundational AI companies with datasets that they are in need of in order to meet their development goals. We are hard at work at taking content that we have access to through GuruShots, content that we can create with collaboration with our creator community, whether that be GuruShots players or Zedge Premium artists, or even creating very, very bespoke content with professionals that extend beyond our existing user base. We have signed two contracts in fiscal Q4.

Our order more content from us.

To the tune of larger amounts of money.

And then finally, we've got <unk>, which is the first of our.

New innovation.

Product that is being or that are being rolled off.

Speaker #6: Moving to data seeds similar notion of really managing the business towards KPIs , data seeds as I've described , is a B2B offering .

Conveyor belt.

Quickly through the <unk>.

Okay.

And Bob coding and automation and other tool sets.

And the goal there again is to manage to.

Speaker #6: Our first B2B offering , which is focused on providing foundational AI companies with data sets that they are in need of in order to meet their development goals and we are hard at work at taking content that we have access to through guru shots , content that we can create with the with collaboration with our creator community , whether that be guru shop players or Zedge premium artists or even creating very , very bespoke content with professionals that extend beyond our existing user base .

Two specific kpis in order to demonstrate.

That if we meet the Kpis, we can double down if we are unsuccessful in meeting.

That we can fail fast and move on to the next.

If you all our product concept I want to underscore and it's really important that before we even one line of code part of the process is too.

Ron marketing tests in order to determine that the marketing funnel is one which is affordable.

And we will yield customers that we feel that we can monetize.

And earn a good return on if we see that the marketing tests are unsuccessful. There is no justification to move forward.

And.

Develop that concept that we have.

Speaker #6: We have signed two contracts in fiscal Q4. One of the partners that we signed are well-known global brands and so on and so forth.

So there's a lot of innovation tied to.

Jonathan Reich: One of the partners that we signed, and these are well-known global brands, one of those partners has signed a new contract with us in Q1 with a significantly larger order size. We believe that many of these prospects will start off doing something small with us. We will need to prove that we can provide the data that's needed in a fashion which adds value to their development process and the goals that they are trying to achieve. If we are successful there, some portion of those customers will come back and order more content from us to the tune of larger amounts of money. Finally, we've got SyncAt, which is the first of our new innovation products that are being rolled off the conveyor belt quickly through the embracing of AI and Vibe Coding and automations and other tool sets.

Meeting kpis doubling down on the ones that are successful and continually continuing with that path, we're doing that with our existing resources.

Speaker #6: One of those partners has signed a new contract with us in Q1 with a significantly larger order size . What we're in belief of is that many of these prospects will start off doing something small with us .

And we're not looking to hire.

Hi.

Additional heads one could imagine to do such an initiative, we would need to bring on a lot of new people that is not what our intention is.

Speaker #6: We will need to prove that we can provide the data that's needed in a fashion that adds value to their development process and the goals that they're trying to achieve.

And we're doing that across.

The three tracks, whether it be data seeds.

Whether it be innovation track or whether it be with payback.

I hope that answers your question.

Speaker #6: And if we are successful , there some portion of those customers will come back and order more content from us to the tune of larger amounts of money .

That was great. Thank you.

One of the encouraging things I saw in the results was a sequential improvement in monthly active users.

Which maybe suggests.

Speaker #6: And then finally , we've got Symcat , which is the first of our new innovation products . That is being or that are being rolled off the conveyor belt quickly through the embracing of AI and vibe coding and automations and other tool sets and the goal there again , is to manage to specific KPIs in order to demonstrate that if we meet the KPIs , we can double down .

There is a possibility of some stability potential.

Growth eventually.

<unk>.

What would you point to.

Steps you've been taking too.

To.

Get those results.

So as you had indicated in his comments we are being.

Jonathan Reich: The goal there again is to manage two specific KPIs in order to demonstrate that if we meet the KPIs, we can double down. If we are unsuccessful in meeting the KPIs, we can fail fast and move on to the next MVP, if you will, or product concept. I want to underscore, and this is really important, that before we even write one line of code, part of the process is to run marketing tests in order to determine that the marketing funnel is one which is affordable and will yield customers that we feel we can monetize and earn a good return on. If we see that the marketing tests are unsuccessful, there is no justification to move forward and develop that concept that we have.

Very discerning about our marketing spend and ensuring that we are.

Focusing on bringing on.

High value customers.

Speaker #6: If we are unsuccessful in meeting the KPIs, we can fail fast and move on to the next MVP, if you will, or product concept.

That and generate an attractive ROE off profile and our spend is.

Linked to what's happening in the market in real time.

Speaker #6: I want to underscore in this really important that before we even write one line of code , part of the process is to run marketing tests in order to determine that the marketing funnel is one , which is affordable and will yield customers that we feel that we can monetize and earn a good return on .

Specific to the marketplace.

We need to see Ros return in a very short period of time.

Because that marketplace is not an app that people will come back on a daily basis like they would with a social network or communications App or you in the game.

Speaker #6: If we see that the marketing tests are unsuccessful , there is no justification to move forward and develop that concept that we have .

And therefore, we are able to react quickly.

And.

We're able to ratchet our marketing spend based upon what is happening in the market at any particular point in time, we have.

Speaker #6: So there's a lot of innovation tied to . Meeting KPIs , doubling down on the ones that are successful and continuing continuing with that path .

Jonathan Reich: There is a lot of innovation tied to meeting KPIs, doubling down on the ones that are successful, and continuing with that path. We're doing that with our existing resources, and we're not looking to hire additional heads. One could imagine to do such an initiative, we would need to bring on a lot of new people. That is not what our intention is. We're doing that across the three tracks, whether it be DataSeeds.AI, whether it be the innovation track, or whether it be with TapeDeck. I hope that answers your question.

At our data scientists develop a model that we are using in order to make investment decisions and Paydown paid Yue.

Speaker #6: We're doing that with our existing resources and we're not looking to hire additional heads . One could imagine to do such an initiative , we would need to bring on a lot of new people .

And.

I think that that lend itself to.

Some of the improvement that Youre seeing clearly.

Our product evolution.

Is something that contributes to that as well.

Speaker #6: That is not what our intention is , and we're doing that across the three tracks , whether it be data , seeds , whether it be the innovation track or whether it be with tape deck , I hope that answers your question .

And.

And then there are.

The market dynamics, where certain things are going on.

Just say.

The holidays people get new car they want to.

Speaker #6: That was great. Thank you. One of the encouraging.

[Analyst]: That was great. Thank you. One of the encouraging things I saw in your results was a sequential improvement in monthly active users, which maybe suggests that there's a possibility of some stability and potential growth eventually. What would you point to of the steps you've been taking to get those results?

Personalize their phone they will then come to the edge.

Speaker #7: Things I saw in your results was a sequential improvement in monthly active users , which may be suggests that there's a possibility of some stability or potential growth eventually .

And download.

Accordingly so.

Some of those are within our control and others are seasonal.

But the ones that were in our control we are.

Really being very discerning about.

Speaker #7: What would you point to of the steps you've been taking to to to get those results ?

How we allocate our.

Pay user acquisition spend in order to.

Yield a good return and.

Speaker #6: So as he had indicated in his comments , we are being very discerning about our marketing spend and ensuring that we are focusing on bringing on high , high value customers that can generate and attractive Roas profile .

Jonathan Reich: As Yi had indicated in his comments, we are being very discerning about our marketing spend and ensuring that we are focusing on bringing on high-value customers that can generate an attractive ROAS profile. Our spend is linked to what's happening in the market in real time. Specific to the Zedge Marketplace, we need to see ROAS return in a very short period of time because the Zedge Marketplace is not an app that people will come back to on a daily basis like they would with a social network or a communications app or even a game. Therefore, we are able to react quickly, and we're able to ratchet our marketing spend based upon what is happening in the market at any particular point in time. We have had our data scientists develop a model that we are using in order to make investment decisions in paid UA.

That I think is.

A critical part of.

Answering your question.

That's very helpful. Thank you.

So I heard you say that you took some of the risk.

Restructuring savings and reinvest it back in.

Speaker #6: And our spend is . Linked to what's happening in the market in real time . Specific to the Zedge Inc marketplace , we need to see Roas return in a very short period of time because the marketplace is not an app that people will come back to on a daily basis , like they would with a social network or communications app , or even a game .

And then paid user acquisition spend or some other things.

Could you just kind of.

Go into kind of.

Where that was focus then is that something as far as you can tell now.

You would continue to prioritize those areas.

So generally speaking.

We've had a couple of cash expenditures.

Speaker #6: And therefore, we are able to react quickly, and we're able to ratchet our marketing spend based upon what is happening in the market at any particular point in time.

Around.

Marketing we've talked about.

The share repurchase.

And.

You had said that we've got around 600000 less in the share repurchase program, which totaled.

Speaker #6: We have had our data scientists develop a model that we are using in order to make investment decisions in paid , paid UA and I think that that lends itself to some of the improvement that you're seeing .

$5 million share repurchase program underway.

And Ah <unk>.

Jonathan Reich: I think that that lends itself to some of the improvement that you're seeing. Clearly, our product evolution is something that contributes to that as well. There are just market dynamics where certain things are going on. Let's just say the holidays. People get new phones. They want to personalize their phone. They will then come to Zedge and download accordingly. Some of those are within our control, and others are seasonal. The ones that are in our control, we are really being very discerning about how we allocate our paid user acquisition spend in order to yield a good return. That, I think, is a critical part of answering your question.

Now with the initiation of the dividend that will also consume.

Some cash our goal is to fund all of these.

With our existing cash flow.

Speaker #6: Clearly . Our product evolution is something that contributes to that as well . And then there are just market dynamics where certain things are going on .

Not to have to dip into.

The reserves ultimately.

And.

If and when we see.

A tremendous growth opportunity is.

Backed up by numbers, we may spend more on marketing in order to seize that opportunity.

Speaker #6: Let's just say the holidays , people get new phones . They want to personalize their phone . They will then come to Zedge and download accordingly .

I had mentioned earlier, even with respect to data seats. There is product that is being developed in order to meet enterprise client needs, but we are aligning.

Speaker #6: So some of those are within our control . And others are seasonal . But the ones that were in our control , we are really being very discerning about how we allocate our paid user acquisition spend in order to yield a good return and that I think , is is a critical part of answering your question .

That development with signed contracts and revenue in order to.

Align expense and revenue as opposed to taking a perspective of bills and then they will come.

Do you have anything that you want to add to that.

Okay.

I'm sorry, do you have anything that you want to add to that.

Speaker #7: That's very helpful . Thank you . So I heard you say that you took some of the restructuring savings and reinvested it back in , maybe paid user acquisition spend or some other things .

[Analyst]: That's very helpful. Thank you. I heard you say that you took some of the restructuring savings and reinvested it back in maybe paid user acquisition spend or some other things. Could you just go into where that was focused, and is that something, as far as you can tell now, that you would continue to prioritize those areas?

We may have lost the I don't know where he is.

Okay.

Brian.

Your comments on <unk>.

Could you tell us.

Explain again, what kind of what Google changed in and what actions you're taking to try to.

Speaker #7: Could you just kind of go into kind of where that was focused ? And is that something as far as you can tell now that that you would continue to prioritize those areas ?

Remediate that and how you're thinking of.

The timing of how you are hoping that those actions.

And the results.

Sure. So there are really two different things that are going on.

Speaker #6: Generally speaking , we've had a couple of cash expenditures around marketing . We've talked about the share repurchase and he had said that we've got around 600,000 left in the share repurchase program , which totaled .

Jonathan Reich: Generally speaking, we've had a couple of cash expenditures around marketing. We've talked about the share repurchase. Yi had said that we've got around $600,000 left in the share repurchase program, which totaled a $5 million share repurchase program underway. Now, with the initiation of the dividend, that will also consume some cash. Our goal is to fund all of these with our existing cash flow, not to have to dip into reserves ultimately. If and when we see a tremendous growth opportunity that is backed up by numbers, we may spend more on marketing in order to seize that opportunity.

With a motor PD, one is a industry wide phenomenon relating to.

The advent of AI search.

And that can be.

Tap GPT perplexity anthropic, Claude whatever the case may be.

Speaker #6: We had a $5 million share repurchase program underway , and now with the initiation of the dividend , that will also consume some some cash , our goal is to fund all of these with our existing cash flow , not to have to dip into reserves .

Whereby user just goes in and types with a smiley emoji.

And.

Chassis BT will respond by.

Hosting a smiling emoji usable then copy that emoji and put it into their E mail or into their text message whatever the case may be.

Speaker #6: Ultimately . And if and when we see a tremendous growth opportunity that is backed up by numbers , we may spend more on marketing in order to seize that opportunity .

That is.

Independent of Google of course Gemini.

Provided the same store experience set.

Separately.

Google consistent regularly and consistently.

Updates the algorithm and the results for their search engine results page.

Speaker #6: I mentioned earlier that, even with respect to data and seeds, there is a product that is being developed in order to meet enterprise client needs. However, we are aligning that development with side contracts and revenue in order to align expenses and revenue, as opposed to taking the perspective of build.

Jonathan Reich: I had mentioned earlier, even with respect to DataSeeds.AI, there is product that is being developed in order to meet enterprise client needs, but we are aligning that development with signed contracts and revenue in order to align expense and revenue as opposed to taking a perspective of build, and then they will come. Yi, do you have anything that you want to add to that? I'm sorry, Yi? Do you have anything that you want to add to that? We may have lost Yi. I don't know where he is.

And.

What they had rolled out.

Being brand new.

Not ever happened in the past is at least.

For a limited number of annuity is if someone were to go in and search.

Smiling emoji.

On the search results page, there will be a small emoji with a little copy.

Speaker #6: And then they will come. Do you have anything that you want to add to that? I'm sorry, E, do you have anything that you want to add to that?

Our cut or paste button underneath it and then immediately following that we would find the link to <unk>. We are still ranked number one or two in terms of overall search results, but the functionality of the search results page now allows for a user to immediately acquire the con.

Speaker #6: We may have lost the I don't know where he is .

And that they are looking for.

In the case of emergent <unk> is much more than just copy paste, but clearly we have copy paste users and let me explain other users in the world of <unk>.

Speaker #7: Okay . That that's fine . Your comments on Emojipedia , could you just explain again what kind of what Google changed and and what actions you're taking to try to remediate that and how you're thinking about the timing of how you're hoping that those actions might kick in .

[Analyst]: Okay. That's fine. Your comments on Emojipedia, could you just explain again what kind of what Google changed and what actions you're taking to try to remediate that and how you're thinking about the timing of how you're hoping that those actions might kick in the results?

<unk>, we have a lot of digital agencies, we have news outlets, we have researchers that need to have detailed information behind each.

Each individual emoji that they are using a digital campaign writing about.

Speaker #7: The result .

Speaker #6: Sure . So there are really two different things that are going on with Emojipedia . One is a industry wide phenomenon relating to the advent of AI search , and that can be .

Jonathan Reich: Sure. There are really two different things that are going on with Emojipedia. One is an industry-wide phenomenon relating to the advent of AI search. That can be ChatGPT, Perplexity, Anthropic, Claude, whatever the case may be, whereby a user just goes in and types, let's say, smiley emoji. ChatGPT will respond by posting a smiley emoji. The user will then copy that emoji and put it into their email or into their text message, whatever the case may be. That is independent of Google. Of course, Gemini provides the same sort of experience. Separately, Google regularly and consistently updates the algorithm and the results for their search engine results page. What they had rolled out as being brand new has not ever happened in the past.

Or the like.

And that information is available.

Available only in <unk>.

Primarily in orthopedics.

And.

The.

Copy paste users.

Speaker #6: ChatGPT perplexity , anthropic Claude , whatever the case may be , whereby user just goes in and types , let's say smiley emoji and ChatGPT will respond by posting a smiley emoji .

Are the ones that are.

So to speak.

Being affected.

They no longer would go to motor PDF first street copy paste type of experience.

Speaker #6: The user will then copy that emoji and put it into their email or into their text message . Whatever the case may be , that is independent of Google , of course , Gemini provides the same sort of experience separately , Google consistently , regularly , and consistently updates .

I hope that.

Answers your question.

Yes. Thank you.

A question on deferred revenue, which you.

You highlighted how that's been growing and how that can provide.

Provide future revenue of close to 100% margin.

<unk>.

Speaker #6: The algorithm and the results for their search engine results page and what they had rolled out as being brand new has not ever happened in the past .

How do we think about the amount of deferred revenue.

Timing of how it gets recognized.

Okay, and then Jim Allen.

Yes, yes, hi.

Speaker #6: Is , at least for a limited number of emojis . If someone were to go in and search smiley emoji on the search results page , there would be a smiley emoji with a little copy or cut or paste button underneath it , and then immediately following that , you would find the link to emojipedia .

Jonathan Reich: At least for a limited number of emojis, if someone were to go in and search smiley emoji, on the search results page, there would be a smiley emoji with a little copy or cut or paste button underneath it. Immediately following that, you would find the link to Emojipedia. We are still ranked number one or two in terms of overall search results, but the functionality of the search results page now allows for a user to immediately acquire the content that they are looking for. In the case of Emojipedia, Emojipedia is much more than just copy-paste, but clearly, we have copy-paste users. Let me explain other users in the world of Emojipedia. We have a lot of digital agencies. We have news outlets.

Hi, sorry.

Sorry about that some of the roll my headphone.

I taught but <unk> got Couldnt, Jeremy yes, so the way to full revenue working today as we sell the lifetime.

Subscription.

We take the cash that we amortize the revenue over 30 months.

So whatever will not recognize the revenue we put it on those differ which we will recognize over the next three months. So that doesn't mean that we just recognize those deferred revenue over time and as soon as we kept the such water pool of fee.

Speaker #6: We are still ranked number one or two in terms of overall search results, but the functionality of the search results page now allows for a user to immediately acquire the content that they are looking for.

Speaker #6: In the case of Emojipedia , Emojipedia is much more than just copy paste , but clearly we have copy paste users . And let me explain .

We would level out the revenue.

Based on what we sell now while we've recognized.

Speaker #6: Other users in the world of Emojipedia, we have a lot of digital agencies. We have news outlets; we have researchers that need to have detailed information behind each individual emoji that they are using in a digital campaign.

I hope that answer your question now.

Yes, that's great.

Jonathan Reich: We have researchers that need to have detailed information behind each individual emoji that they are using in a digital campaign, writing about, or the like. That information is available only in Emojipedia, or primarily in Emojipedia. The copy-paste users are the ones that are, so to speak, being affected because they no longer would go to Emojipedia for a straight copy-paste type of experience. I hope that answers your question.

The one other question here.

SG&A.

<unk>.

Roughly flat year over year, but up sequentially.

Speaker #6: Writing about or the like , and that information is available only in Emojipedia or primarily in Emojipedia and the . Copy , paste users are the ones that are , so to speak , being affected .

And you highlighted a few things.

Things that was spent on is it reasonable to think that this quarter is kind of a decent run rate for SG&A might be going forward.

Okay.

This quarter SG&A as Jonathan mentioned, we save them from the.

The restructuring was used to.

To pay for the ramp up of <unk> and payroll for some consulting fees related to new initiatives.

Speaker #6: Because they no longer would go to Emojipedia for a street copy paste type of experience . I hope that answers your question .

So yes going forward, the SG&A will probably decline.

<unk> declined a little bit because we are not spending the same amount.

In PE UA com silicon solar new projects as we did in Q4 25.

Speaker #7: Yes . Thank you . I had a question on deferred revenue , which you highlighted how that's been growing and how that can provide a future revenue as close to 100% margin .

[Analyst]: Yes. Thank you. I had a question on deferred revenue, which you highlighted, how that's been growing and how that can provide a future revenue at close to 100% margin. How do we think about the amount of deferred revenue, the timing of how it gets recognized?

Okay. Thank you.

So those are my questions. Thank you so much and good job.

Speaker #7: How do we think about of the amount of deferred revenue , the timing of how it gets recognized ?

Thank you.

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Speaker #5: Can you hear me, Alan?

Yi Tsai: Can you hear me, Allan?

Speaker #7: Yes, yes. Hi. Hi.

Jonathan Reich: Yes. Hi.

Speaker #5: So sorry about that . Something wrong with my headphone ? I talk , but you guys couldn't hear me . Yeah , so the way deferred revenue works is as we sell the lifetime subscription , we take the cash .

Yi Tsai: Hi. Sorry about that. Something wrong with my headphone. I talked, but you guys couldn't hear me. Yeah. The way deferred revenue works is that as we sell the lifetime subscription, we take the cash, but we amortize the revenue over 30 months. Whatever we're not recognized as revenue, we put it under deferred, which we will recognize over the next 30 months. That means that we'll just recognize those deferred revenue over time. As long as we keep the subscriber pool steady, we would level up the revenue based on what we sell, not what we recognize. I hope that answered your question now.

Speaker #5: But we amortize the revenue over 30 months . So whatever . We're not recognize as a revenue , we put it under deferred , which we will recognize over the next 30 months .

Speaker #5: So with that , that means that we will just recognize those deferred revenue over time . And as long as we keep the subscriber pool steady , we would , you know , level up the revenue based on what we sell .

Speaker #5: Not not what we recognize . I hope that answer your question now .

Speaker #7: Yeah , that's great . So one other question . You're you're a is roughly flat year over year . But up sequentially . And you highlighted a few things that were spent on .

[Analyst]: That's great. One other question. Your SG&A was roughly flat year-over-year, but up sequentially. You highlighted a few things that was spent on. Is it reasonable to think that this quarter is kind of a decent run rate for what SG&A might be going forward?

Speaker #7: Is it reasonable to think that this quarter is kind of a decent run rate for what SG&A might be going forward ?

Speaker #5: This quarter is just mentioned . We , the savings from the restructuring was used to pay for the ramp up in PUA and pay for some consulting fees related to a new initiatives .

Yi Tsai: This quarter, SG&A, as Jonathan mentioned, the savings from the restructuring was used to pay for the ramp-up in PayUA and pay for some consulting fee related to a new initiative. Going forward, the SG&A will probably decline a little bit because we're not spending the same amount in PayUA and the consortium for the new project as we did.

Speaker #5: So yeah , going forward , it will probably , you know , decline a little bit because we we're not spending the same amount in PUA and consulting for the new project as we did in Q4 of 25 .

Operator: in Q4 2025.

Operator: Okay. Thank you. Those are my questions. Thank you so much. Good job.

Operator: Thank you.

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