Zedge Navigates AI Shifts, GuruShots Woes Amidst Flat User Growth

Ticker: ZDGE · Form: 10-K · Filed: Oct 28, 2025 · CIK: 1667313

Zedge, INC. 10-K Filing Summary
FieldDetail
CompanyZedge, INC. (ZDGE)
Form Type10-K
Filed DateOct 28, 2025
Risk Levelhigh
Pages15
Reading Time18 min
Key Dollar Amounts$0.01, $2.71, $191 billion, $250 billion, $848 billion
Sentimentmixed

Sentiment: mixed

Topics: Mobile Apps, Generative AI, Digital Content, Creator Economy, Subscription Services, B2B Data, Gaming

TL;DR

**ZDGE is making a risky bet on AI and B2B data to offset declining legacy assets; watch for DataSeeds.AI traction or prepare for further downside.**

AI Summary

Zedge, Inc. (ZDGE) reported a challenging fiscal year ended July 31, 2025, with declining revenue from its GuruShots segment and anticipated adverse impacts on Emojipedia due to Google and AI platform changes. The company's Zedge App maintained 23.3 million monthly active users (MAU) as of July 31, 2025, and its subscription offering grew to approximately 984,000 active subscribers. Zedge introduced pAInt, a generative AI wallpaper and ringtone maker, and launched DataSeeds.AI, a B2B marketplace for AI training images, leveraging its global creator network and GuruShots' photo library. Despite these innovations, GuruShots faced growth and profitability challenges, leading to cost cuts and reduced paid user acquisition (PUA) investment. The company is developing 'GuruShots 2.0' to revamp the offering and is evaluating mitigation strategies for Emojipedia's expected traffic reduction. Zedge's strategic outlook focuses on user base growth, monetization improvements, and diversification of revenue streams beyond historical advertising reliance.

Why It Matters

Zedge's strategic pivot towards AI-driven content creation and B2B data licensing with DataSeeds.AI could unlock new revenue streams, crucial for investors given the declining performance of GuruShots and competitive pressures on Emojipedia from tech giants like Google and ChatGPT. The company's ability to monetize its 23.3 million MAU and nearly 1 million subscribers, while integrating its diverse platforms, will determine its long-term viability against larger content and gaming competitors. Employees face potential restructuring as Zedge reallocates resources to new product development, while customers may see enhanced personalization options through AI and expanded content offerings.

Risk Assessment

Risk Level: high — Zedge faces high risk due to declining revenue and profitability challenges in its GuruShots segment, coupled with anticipated adverse impacts on Emojipedia's traffic and revenue from Google's SERP update and AI platforms like ChatGPT. The company's reliance on new, unproven ventures like DataSeeds.AI and the 'GuruShots 2.0' revamp introduces significant execution risk, with no guaranteed return on investment.

Analyst Insight

Investors should closely monitor the performance of DataSeeds.AI and the 'GuruShots 2.0' revamp for concrete signs of revenue growth and profitability. Given the high risk and declining segments, a cautious approach is warranted; consider waiting for clear evidence of successful strategic execution before making significant investment decisions.

Financial Highlights

debt To Equity
N/A
revenue
$N/A
operating Margin
N/A
total Assets
$N/A
total Debt
$N/A
net Income
$N/A
eps
$N/A
gross Margin
N/A
cash Position
$N/A
revenue Growth
N/A

Revenue Breakdown

SegmentRevenueGrowth
Zedge AppN/AN/A
GuruShotsN/AN/A
EmojipediaN/AN/A
DataSeeds.AIN/AN/A

Key Numbers

Key Players & Entities

FAQ

What is Zedge's strategy to address the decline in GuruShots' growth and profitability?

Zedge is developing 'GuruShots 2.0' to revamp the offering, focusing on attracting new users and converting them into recurring, paying players. This includes a new onboarding experience and a migration to a coin-based economy, while significantly reducing paid user acquisition (PUA) investment to improve Return-on-Ad-Spend (ROAS).

How is Zedge leveraging AI in its product offerings?

Zedge introduced pAInt, a generative AI wallpaper and ringtone maker within the Zedge App, offering text-to-image, image-to-image, and text-to-audio creation. Additionally, the company established a Product Innovation Team to leverage AI for rapid development of minimally viable products (MVPs) and launched an AI-powered emoji sticker generator tool for Emojipedia.

What is DataSeeds.AI and its significance for Zedge?

DataSeeds.AI is a new business-to-business marketplace offering access to Zedge's catalog of over 30 million high-quality, fully rights-cleared images for AI training, e-commerce, and stock photos. It leverages Zedge's global creator network and the extensive library of photographs from GuruShots players, addressing the need for edge-case visual content for foundational AI models.

What impact are Google and AI platforms having on Emojipedia's performance?

In late September 2025, Google updated its Search Engine Results Page (SERP) to allow direct emoji copying, bypassing third-party sites like Emojipedia. AI platforms such as ChatGPT and Claude also now return emoji results. Zedge believes these changes are likely to result in reduced traffic and adversely affect Emojipedia's revenue, though the exact impact is still being quantified.

How many monthly active users does the Zedge App have?

As of July 31, 2025, the Zedge App had 23.3 million monthly active users (MAU). Over the past two fiscal years, the MAU for the Zedge App has ranged between 22.1 million and 28.7 million.

What is Zedge's long-term strategic vision?

Zedge's long-term strategy is to create a 'Strategic Flywheel' that leverages content creation, gaming, and marketplaces. This involves empowering consumers with easy-to-use content creation utilities, connecting creators through friendly competitions, and exposing content to prospective consumers to drive commerce, expanding beyond existing offerings into other content verticals.

How is Zedge diversifying its revenue streams?

Historically, the majority of Zedge's revenue has been derived from advertising. The company plans to diversify by enabling GuruShots' players to monetize their content, with Zedge retaining a portion of the proceeds, and through new ventures like DataSeeds.AI, which offers B2B licensing of images.

What is the market value of Zedge's non-affiliate voting and non-voting stock?

The aggregate market value of the voting and non-voting stock held by non-affiliates of Zedge, Inc. was approximately $37.9 million, based on the adjusted closing price of $2.71 per share on January 31, 2025.

What is the 'Creator Economy' and how does Zedge fit into it?

The 'Creator Economy' is estimated to be worth between $191 billion and $250 billion globally in 2025, with over 207 million active content creators worldwide. Zedge views this as an opportunity to expand its business by enabling and connecting creators who enjoy friendly competitions with a community of prospective consumers to drive commerce, especially by connecting its gamers with its marketplace.

What are the key goals for Zedge's strategic execution?

Zedge's strategic goals include investing in growing its user base profitably, improving monetization through in-app economies and subscriptions, continuing product and technology investments, better utilizing data for user acquisition and engagement, building compelling marketplaces for artists, increasing marketing efforts, and selectively pursuing strategic investments, partnerships, and acquisitions.

Risk Factors

Industry Context

Zedge operates in the digital content and AI-driven personalization markets. The competitive landscape includes numerous app developers, content platforms, and emerging AI companies. Key industry trends involve the increasing demand for personalized digital experiences, the rapid advancement and adoption of generative AI, and evolving platform dynamics driven by major tech players like Google.

Regulatory Implications

Zedge faces potential regulatory scrutiny related to data privacy and AI ethics, particularly with its new AI-focused ventures. Changes in platform policies by entities like Google can significantly impact traffic and revenue streams, highlighting the need for adaptability and compliance.

What Investors Should Do

  1. Monitor Emojipedia's traffic trends post-Google updates.
  2. Evaluate the success of 'GuruShots 2.0' and DataSeeds.AI.
  3. Track subscriber growth for Zedge's paid offerings.
  4. Assess the competitive positioning of pAInt.

Key Dates

Glossary

Monthly Active Users (MAU)
The number of unique users who engaged with a product or service within a given month. (Key metric for Zedge App (23.3 million) and Emojipedia (8.9 million), indicating user base size and potential reach.)
Paid User Acquisition (PUA)
Costs incurred by a company to acquire customers who pay for a product or service. (Reduced investment in PUA for GuruShots signals a strategic shift due to profitability challenges.)
Generative AI
Artificial intelligence capable of creating new content, such as text, images, or music. (Central to Zedge's new offerings like pAInt and DataSeeds.AI, representing a strategic pivot into AI-driven products.)
B2B Marketplace
A platform where businesses can buy and sell products or services to other businesses. (Describes the model for DataSeeds.AI, targeting businesses needing AI training data.)

Year-Over-Year Comparison

The fiscal year ending July 31, 2025, appears to be a period of strategic transition and challenge for Zedge. While the Zedge App maintained a stable user base of 23.3 million MAU and subscription numbers grew to 984,000, the company faced declining revenue and profitability in its GuruShots segment. New risks have emerged concerning Emojipedia's traffic due to platform changes, contrasting with potentially more stable performance in prior periods. The introduction of AI-driven products like pAInt and DataSeeds.AI signals a proactive diversification strategy, aiming to mitigate historical reliance on advertising and address segment-specific headwinds.

Filing Stats: 4,458 words · 18 min read · ~15 pages · Grade level 13.3 · Accepted 2025-10-28 16:15:59

Key Financial Figures

Filing Documents

Business

Business 1 Item 1A. Risk Factors 9 Item 1B. Unresolved Staff Comments 45 Item 1C. Cybersecurity 45 Item 2.

Properties

Properties 48 Item 3. Legal Proceedings 48 Item 4. Mine Safety Disclosures 48 PART II 49 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 49 Item 6. [Reserved] 50 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 50 Item 7A. Quantitative and Qualitative Disclosures about Market Risks 69 Item 8. Financial 69 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 69 Item 9A. Controls and Procedures 69 Item 9B. Other Information 69 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 69 PART III 70 Item 10. Directors and Executive Officers of the Registrant, and Corporate Governance 70 Item 11. Executive Compensation 70 Item 12. Security 70 Item 13. Certain Relationships and Related Transactions, and Director Independence 70 Item 14. Principal Accounting Fees and Services 70 PART IV 71 Item 15. Exhibits, Financial Statement Schedules 71 Item 16. Form 10-K Summary 72

SIGNATURES

SIGNATURES 73 PART I As used in this Annual Report, unless the context otherwise requires, the terms the "Company," "Zedge," "we," "us," and "our" refer to Zedge, Inc., a Delaware corporation, and its subsidiaries, collectively. Our fiscal year runs from August 1 through July 31. Each reference to a fiscal year in this Annual Report refers to the fiscal year ending in the calendar year indicated (for example, fiscal 2025 refers to the fiscal year ended July 31, 2025). Item 1. Business Company Overview Zedge builds digital marketplaces and friendly competitive games around content that people use to express themselves. Our leading products include Zedge Ringtones and Wallpapers, which we refer to as our "Zedge App," a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones, and notification sounds as well as pAInt, a generative AI wallpaper and ringtone 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. We are part of the Creator Economy,' which is estimated to be worth between $191 billion and $250 billion globally in 2025, with some forecasts placing the global market size as high as $848 billion by 2032 123 . According to multiple reports, there are now over 207 million active content creators worldwide. 45 Furthermore, between 45% and 47% of creators identify as working full-time in this space 678 . Most creators earn modest incomes, and studies suggest that only a small portion, approximately 4%, of creators earn more than $100,000 per year 91011 . We view the Creator Economy as an opportunity for Zedge to expand our business, especially as we execute by connecting our gamers with our marketplace. Our Zedge App (which is named "Zedge Wallpapers" in the App Store) offers a wide array of mobile pers

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