Zedge subscription revenue rises 29.5% in fiscal 2026 as non-GAAP free cash flow climbs 46.6%

Zedge, Inc. reported a 7.6% increase in fiscal 2026 revenue to $31.6 million and a 29.5% jump in subscription revenue to $6.6 million, with non-GAAP free cash flow up 46.6% to $4.2 million, in an earnings release attached as Exhibit 99.1 to a Form 8-K under Item 2.02. Fourth-quarter revenue rose 4.0% to $7.8 million from a year earlier.

Subscription revenue carries a quarter that advertising could not

Zedge reported $7.8 million of revenue for the three months ended July 31, 2026, up 4.0% from a year earlier, in an earnings release attached as Exhibit 99.1 to a Form 8-K under Item 2.02. Subscription revenue rose 25.6% to $1.8 million from a year earlier in the quarter and 29.5% to $6.6 million for the fiscal year. Advertising, still the largest line, slipped 1.9% to $5.1 million from a year earlier in the quarter even as it added 4.1% for the full year to $21.2 million. Digital goods and services revenue fell 10.2% from a year earlier to $2.0 million for the year, and other revenue rose 6.5% to $1.9 million.

The subscription line is climbing while the user base shrinks. Monthly active users were 19.3 million in the quarter, down 16.8% from 23.2 million, but active subscriptions rose 35.3% to 1.33 million and average revenue per monthly active user rose 30.5% to $0.121. Deferred revenue, cash collected for subscriptions not yet recognized, increased 13.4% to $6.1 million. That combination — fewer people, more paying subscribers, higher revenue per user — is the mechanism behind a 4.0% quarterly revenue gain that advertising alone would not have produced.

Charges grew even as the GAAP loss narrowed

For the full year, the GAAP net loss narrowed to $100,000 from $2.4 million. The per-share figure depends on which table you read: the release's highlights report a diluted loss of $(0.02), while its statement of operations divides a $131,000 net loss by 12.99 million diluted shares to compute $(0.01) a share, against $(0.17) a year earlier. The one-time charges behind those losses grew rather than shrank. Fiscal 2026 absorbed a $3.57 million impairment of intangible assets that fiscal 2025 did not carry, but its $145,000 capitalized-software write-down was smaller than the $827,000 software impairment fiscal 2025 recorded, and the prior year also carried a $140,000 right-of-use asset impairment and $1.61 million of restructuring charges. The release's own reconciliation counts $3.7 million of asset impairments and restructuring charges in fiscal 2026 against $2.5 million in fiscal 2025, so the narrower GAAP loss came from operations rather than from a lighter burden of one-time items. Adjusted EBITDA, which excludes those items along with stock compensation, reached $4.1 million, up 134.2%, and non-GAAP net income was $3.1 million, or $0.24 a diluted share, against $700,000 and $0.05.

Cash followed the adjusted numbers. Free cash flow, a non-GAAP measure the release defines as operating cash flow less capital expenditures, rose 46.6% from a year earlier to $4.2 million: operating cash flow of $4.56 million less $344,000 of capital spending. Cash and cash equivalents ended the year at $20.34 million, up 9.28% from $18.61 million. In the fourth quarter alone, operating income was $258,000, net income was $444,000 and diluted earnings were $0.03 a share, against an operating loss of $715,000 and a net loss of $559,000 a year earlier, a swing flattered by $547,000 of restructuring charges and a $21,000 loss on disposal booked in that year-earlier quarter.

A new chief executive, a $7.7 million insider check and a paused buyback

Morris Berger, who took over as chief executive earlier this month, framed DataSeeds.AI as the growth engine: “DataSeeds has the ingredients to become a meaningful growth business for Zedge.” The unit sells managed data creation to AI developers and won its first six-figure order during the year, the company said.

Jonathan Reich, the president and chief operating officer, tied the year's slower top line to one asset: “Overall revenue increased approximately 8%, despite a marked decline at Emojipedia that reduced our consolidated revenue growth by approximately 300 basis points.” Howard Jonas led a $7.7 million insider investment in Zedge in September, and Zedge said it suspended its share repurchase program in Q1 FY27 in light of that capital raise. The company bought back 686,477 shares during fiscal 2026 and returned about $2.7 million to stockholders through repurchases and dividends, having initiated a quarterly dividend during the year at $0.02 a share and later raised it 25%.

Preliminary figures, no guidance and the order book

Two constraints bound these numbers. The release states that fiscal 2026 amounts are preliminary and subject to audit completion, so the full-year balance sheet and cash flow figures can still move; an annual report on Form 10-K was not among the documents in the filing index checked, which lists the Form 8-K and its earnings exhibit. The release also contains no revenue or earnings guidance, leaving the October 26 conference call, which the release said would cover outlook and strategy, as the next scheduled discussion of outlook.

Financially, the year leaves Zedge with a $100,000 GAAP loss, $20.34 million of cash and a dividend it has already raised once, while the growth story shifts from mobile personalization toward a data business that does not report its own revenue line. The measurable test is whether DataSeeds converts early orders into repeat revenue large enough to matter against a $31.6 million base, and whether subscription growth keeps outrunning the decline in monthly active users.