Zedge exhibits structural gross margins consistently above 90%, yet struggles with operating leverage as evidenced by quarterly operating income swings from a $911,000 loss in 2025Q2 to a $1.1 million profit in 2026Q3.
| Sales/Revenue | 31.32M | 29.4M | 30.09M | 27.24M | 26.55M | 19.57M | 9.47M | 8.82M | 10.83M | 10.03M | 11.11M | 9.05M | 6.53M |
| Revenue Growth % | 6.14% | -2.3% | 10.46% | 2.62% | 35.65% | 106.64% | 7.42% | -18.62% | 8% | -9.74% | 22.77% | 38.64% | - |
| Cost of Goods Sold | 2.91M | 2.99M | 4.31M | 5.51M | 3.61M | 2.46M | 2.76M | 2.81M | 2.55M | 2.21M | 1.9M | 1.71M | 1.49M |
| COGS % of Revenue | - | 10.17% | 14.33% | 20.23% | 13.59% | 12.55% | 29.18% | 31.83% | 23.55% | 22.03% | 17.13% | 18.85% | 22.78% |
| Gross Profit | 28.42M | 26.41M | 25.78M | 21.73M | 22.94M | 17.11M | 6.71M | 6.01M | 8.28M | 7.82M | 9.21M | 7.35M | 5.04M |
| Gross Margin % | 90.72% | 89.83% | 85.67% | 79.77% | 86.41% | 87.45% | 70.82% | 68.17% | 76.45% | 77.97% | 82.87% | 81.15% | 77.22% |
| Gross Profit Growth % | - | 2.44% | 18.63% | -5.27% | 34.03% | 155.17% | 11.6% | -27.43% | 5.89% | -15.07% | 25.36% | 45.7% | - |
| Operating Expenses | 25.75M | 27.19M | 25.63M | 21.86M | 14.2M | 9.31M | 7.11M | 8.9M | 9.66M | 8.47M | 7.75M | 5.67M | 5.07M |
| OpEx % of Revenue | - | 92.48% | 85.16% | 80.24% | 53.5% | 47.58% | 75.08% | 100.92% | 89.16% | 84.42% | 69.78% | 62.58% | 77.62% |
| Selling, General & Admin | 25.74M | 27.19M | 25.63M | 21.86M | 14.2M | 9.31M | 7.11M | 8.9M | 9.62M | 8.47M | 7.75M | 5.67M | 5.07M |
| SG&A % of Revenue | - | 92.48% | 85.16% | 80.24% | 53.5% | 47.58% | 75.08% | 100.92% | 88.8% | 84.42% | 69.78% | 62.58% | 77.62% |
| Research & Development | 972K | 827K | 0 | 0 | 0 | 0 | 0 | 0 | 39K | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | 2.81% | - | - | - | - | - | - | 0.36% | - | - | - | - |
| Other Operating Expenses | -963K | -827K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 2.66M | -779K | 153K | -127K | 8.74M | 7.8M | -403K | -2.89M | -1.38M | -647K | 1.45M | 1.68M | -26K |
| Operating Margin % | 8.5% | -2.65% | 0.51% | -0.47% | 32.91% | 39.87% | -4.26% | -32.75% | -12.71% | -6.45% | 13.08% | 18.57% | -0.4% |
| Operating Income Growth % | - | -609.15% | 220.47% | -101.45% | 11.97% | 2036.23% | 86.04% | -109.66% | -112.83% | -144.5% | -13.5% | 6565.38% | - |
| EBITDA | 3.42M | 370K | 2.61M | 3.14M | 10.7M | 9.06M | 1.17M | -1.46M | -344K | -4K | 2.06M | 2.31M | 552K |
| EBITDA Margin % | 10.93% | 1.26% | 8.66% | 11.53% | 40.32% | 46.32% | 12.3% | -16.56% | -3.18% | -0.04% | 18.53% | 25.46% | 8.45% |
| EBITDA Growth % | 510.52% | -85.81% | -17.03% | -70.64% | 18.08% | 678.03% | 179.79% | -324.42% | -8500% | -100.19% | -10.67% | 317.57% | - |
| D&A (Non-Cash Add-back) | 761K | 1.15M | 2.45M | 3.27M | 1.97M | 1.26M | 1.57M | 1.43M | 1.03M | 643K | 605K | 624K | 578K |
| EBIT | -1.38M | -2.72M | -11.37M | -6.56M | 11.61M | 8.05M | -544K | -3.33M | -1.41M | -627K | 1.13M | 1.8M | -8K |
| Net Interest Income | 572K | 666K | 626K | 311K | 49K | 245K | 11K | -199K | 29K | 19K | 2K | 5K | 6K |
| Interest Income | 572K | 666K | 626K | 311K | 49K | 245K | 11K | 0 | 29K | 19K | 2K | 5K | 6K |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 199K | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -3.93M | -1.94M | -11.52M | -6.44M | 2.87M | 243K | -141K | -441K | -34K | 20K | -328K | 118K | 18K |
| Pretax Income | -1.27M | -2.72M | -11.37M | -6.56M | 11.61M | 8.05M | -544K | -3.33M | -1.33M | -627K | 1.13M | 1.8M | -8K |
| Pretax Margin % | -4.04% | -9.24% | -37.78% | -24.1% | 43.72% | 41.12% | -5.74% | -37.75% | -12.31% | -6.25% | 10.13% | 19.87% | -0.12% |
| Income Tax | -133K | -325K | -2.2M | -462K | 1.89M | -202K | 15K | 16K | 230K | -16K | 143K | 212K | 138K |
| Effective Tax Rate % | 10.5% | 11.96% | 19.33% | 7.04% | 16.3% | -2.51% | -2.76% | -0.48% | -17.25% | 2.55% | 12.7% | 11.78% | -1725% |
| Net Income | -1.13M | -2.39M | -9.17M | -6.1M | 9.71M | 8.25M | -559K | -3.34M | -1.56M | -611K | 983K | 1.59M | -146K |
| Net Margin % | -3.62% | -8.14% | -30.48% | -22.4% | 36.59% | 42.15% | -5.9% | -37.93% | -14.43% | -6.09% | 8.85% | 17.53% | -2.24% |
| Net Income Growth % | 39.42% | 73.92% | -50.3% | -162.82% | 17.77% | 1575.49% | 83.28% | -113.95% | -155.81% | -162.16% | -38.06% | 1186.99% | - |
| Net Income (Continuing) | -1.13M | -2.39M | -9.17M | -6.1M | 9.71M | 8.25M | -559K | -3.34M | -1.56M | -611K | 983K | 1.59M | -146K |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -0.09 | -0.17 | -0.65 | -0.43 | 0.65 | 0.59 | -0.05 | -0.33 | -0.16 | -0.06 | 0.11 | 0.18 | -0.02 |
| EPS Growth % | 30.76% | 73.85% | -51.16% | -166.15% | 10.17% | 1275.3% | 84.79% | -106.25% | -148.06% | -158.64% | -38.89% | 1204.29% | - |
| EPS (Basic) | - | -0.17 | -0.65 | -0.43 | 0.69 | 0.63 | -0.05 | -0.33 | -0.16 | -0.06 | 0.12 | 0.20 | -0.02 |
| Diluted Shares Outstanding | 13.27M | 13.74M | 14.09M | 14.1M | 14.86M | 14.04M | 11.13M | 10.08M | 9.8M | 9.47M | 9.28M | 8.95M | 8.93M |
| Basic Shares Outstanding | 13M | 13.74M | 14.09M | 14.1M | 14.18M | 13.16M | 11.13M | 10.08M | 9.77M | 9.47M | 8.35M | 8.05M | 8.05M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - |
Platform Privacy Policy Changes
According to the company's quarterly financial disclosures, Zedge's revenue growth has exhibited significant inconsistency, fluctuating from a 10.2% contraction in 2025Q2 to an 18.3% expansion in 2026Q2, suggesting that the firm struggles to maintain a predictable top-line trajectory amidst shifting ad-market conditions and user engagement levels.
The erratic revenue performance highlights a reliance on programmatic advertising that appears sensitive to external market cycles. Investors should monitor whether the recent pivot toward subscription models can successfully decouple top-line growth from the inherent volatility of the legacy ad-supported user base.
As reported in recent income statements, Zedge maintains a robust gross margin profile consistently exceeding 90% in recent periods, which underscores the inherent scalability of its digital content distribution model and the minimal marginal costs associated with serving its global user base through mobile applications.
This high-margin structure provides a significant buffer, yet the inability to translate this into consistent operating profitability suggests that the company's fixed-cost base remains disproportionately high relative to its current scale. The stability of these margins indicates that the core product remains efficient, even if the broader business model faces challenges.
Based on the provided financial data, Zedge has struggled to demonstrate meaningful operating leverage, as SG&A expenses frequently track closely with gross profit, leading to erratic operating income that swung from a $911,000 loss in 2025Q2 to a $1.1 million profit by 2026Q3.
The lack of consistent operating margin expansion suggests that the company is currently in a high-investment phase, likely prioritizing user acquisition and platform diversification over immediate bottom-line optimization. Analysts should investigate whether the recent improvement in operating income is a sustainable trend or merely a temporary reduction in discretionary spending.
As indicated by the historical income statements, Zedge's net income is frequently impacted by non-operating items and stock-based compensation, with quarterly results swinging from a $2.3 million loss in 2026Q2 to a $926,000 profit in 2026Q3, complicating the assessment of true underlying earnings power.
The significant variance between operating income and net income suggests that investors should focus on cash-generative metrics rather than headline EPS, which appears susceptible to accounting noise. The periodic spikes in stock-based compensation warrant further investigation to determine their impact on shareholder dilution and management incentive alignment.
Based on the reported figures, skeptics might argue that Zedge's recent revenue gains are insufficient to offset the high fixed costs of its diversification strategy, as the company continues to oscillate between profitability and losses despite maintaining a high-margin core business model.
The primary risk remains that the company's pivot into gamified content and social features may be consuming capital without delivering a commensurate increase in high-quality, recurring revenue. If the core ad-supported business continues to face headwinds from privacy-related targeting restrictions, the current cost structure may prove unsustainable without further rationalization.
Quick answers to the most common questions about buying ZDGE stock.
For fiscal year 2025, Zedge, Inc. (ZDGE) reported total revenue of $29.4M. This represents a 350.3% increase compared to $6.5M in 2014.
Zedge, Inc. (ZDGE) reported a net loss of $2.4M for the fiscal year ending 2025.
Zedge, Inc. (ZDGE) reported an operating income of $-0.8M, resulting in an operating profit margin of -2.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Zedge, Inc. (ZDGE) generated $26.4M in gross profit for the year, representing a gross profit margin of 89.8%. This demonstrates the company's core pricing power and production efficiency.