Zedge Swings to $2.3M Net Loss in Q2 FY2026 as Operating Expenses Surge

Zedge, Inc. (NASDAQ: ZDGE), a digital content platform for mobile personalization, reported a net loss of $2.29 million for the three months ending January 31, 2026, a 36% deterioration from the $1.68 million loss recorded in the same quarter a year earlier. The company's loss per diluted share widened to $0.18 from $0.12. Read more earnings reports.

Revenue for the quarter reached $8.25 million, up 18% from $6.98 million in the prior-year period. For the six months ending January 31, 2026, total revenue climbed 12% to $15.86 million from $14.17 million year-over-year.

Operating Performance Deteriorates

Operating loss for the second quarter widened to $2.89 million from $2.22 million a year earlier. For the six-month period, the operating loss improved slightly to $1.97 million from $2.68 million in the prior-year half.

A sharp jump in operating expenses weighed on results. For the three months ending January 31, 2026, the company recorded $3.72 million in a specific operating expense category, compared to just $425,000 in the same quarter last year. This line item represented the largest single cost increase during the period.

Balance Sheet and Cash Position

Total assets declined to $33.82 million as of January 31, 2026, from $35.65 million at the end of the prior fiscal year on July 31, 2025. Cash and cash equivalents stood at $19.11 million, up slightly from $18.61 million six months earlier.

Stockholders' equity fell to $23.87 million from $25.90 million at the end of fiscal 2025. The company's accumulated deficit expanded to $17.01 million from $15.51 million over the same period.

Cash Flow and Operations

Cash generated from operations totaled $1.68 million for the six months ending January 31, 2026, down from $1.88 million in the prior-year period. Cash used in investing activities was $257,000, while financing activities consumed $1.04 million, including share repurchases.

The company had 12.52 million shares outstanding as of January 31, 2026, down from 12.69 million shares at the end of fiscal 2025.

Financial Summary

*As of July 31, 2025