Zedge Stock Plunges 11.35% Amid Mixed Earnings

On June 17, 2025, Zedge's stock experienced a significant drop of 11.35% in pre-market trading, reflecting a notable decline in investor sentiment.

Zedge's recent financial performance has shown mixed results. The company reported a 3% year-on-year increase in total revenue for Q1 2024, reaching $7.1 million. This growth was driven by a 62% increase in ad revenue, bolstered by strong performance from the Zedge marketplace and Emojipedia. Additionally, Zedge Plus, the subscription service, saw a 10% year-on-year growth in revenue and sequential active subscriber growth. The company also achieved a record Average Revenue Per Monthly Active Users (ARPMAU) and a 35% year-on-year growth in Zedge Premium.

However, digital goods and service revenue declined by 29% year-on-year due to external factors such as Apple's ATT framework and broader economic issues. Despite this, advertisement revenue per monthly active user increased by 17% year-on-year, reaching $0.63. The company also reported significant improvements in GAAP net income and EPS compared to the previous year's loss.

Zedge has been actively expanding its business portfolio, with a focus on Paint, a globally available generative AI wallpaper maker. The company has also executed key updates for Zedge Plus, particularly on Android, contributing to sequential revenue growth. Emojipedia continues to be a significant contributor to ad revenue growth, with planned feature launches like emoji text translations and mashup designs. Additionally, the company has rolled out strategies to stabilize and grow GuruShots, including product innovation and user acquisition, with the new feature 'Battles' intended to boost user engagement. AI Art Master, a hybrid casual game, is currently in the soft launch phase.

Zedge continues to leverage AI and believes in driving sustainable, profitable growth through its product portfolio, marketing prowess, data capabilities, and tech stack. The company has repaid a $2 million bank loan and has a remaining cash balance of $16.7 million. Future earnout payments related to the purchase of GuruShots were eliminated through an agreement.