Zedge, Inc. reported second‑quarter fiscal 2026 revenue of $8.3 million, up 18% year‑over‑year, beating the consensus estimate of $7.99 million by $0.31 million (a 3.9% beat). Subscription revenue rose 33% to $1.6 million, while advertising revenue increased 18.3% to $1.5 million, reversing the previously reported decline. Active subscriptions reached a record 1.2 million, and average revenue per monthly active user (ARPMAU) climbed 48% to $0.115.
The revenue beat was driven by a 16% increase in Zedge Premium gross transaction value and a 33% jump in subscription revenue, both of which offset a 17.4% decline in monthly active users. The company’s marketplace continued to generate incremental revenue, with gross transaction value growing 16% to $2.62 million, reflecting higher demand for creator‑generated content and stronger advertising CPMs. The combination of higher‑margin subscription income and a robust marketplace mix helped lift top‑line growth.
Non‑GAAP earnings per share were $0.06, missing the analyst estimate of $0.0714 by $0.0114 (a 16% miss). The miss was largely attributable to a $3.7 million non‑cash impairment charge related to Emojipedia and a 0.4 percentage‑point increase in cost of revenue, which rose to 6.8% from 6.4% year‑over‑year. These one‑time and cost‑inflationary items eroded profitability despite the strong revenue mix.
Management highlighted that the record subscription performance and marketplace growth signal a successful shift toward higher‑margin recurring revenue. CEO Jonathan Reich noted that “record monetization continues to improve, driving record results in a seasonally strongest quarter driven by continued advertising optimization, record active subscription numbers and record Zedge Premium GTV.” He also emphasized the DataSeeds initiative, describing it as a “high‑quality AI training data” opportunity that is still early‑stage but shows growing interest from new and repeat customers.
The company’s guidance for the next quarter was not disclosed, but analysts projected revenue of approximately $7.23 million and EPS of $0.0306. The revenue beat and subscription momentum suggest management confidence in sustaining growth, while the EPS miss and impairment charge highlight ongoing challenges in user acquisition and cost management. Investors will likely weigh the strong top‑line performance against the profitability headwinds and the company’s continued focus on higher‑margin business lines.
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