Zedge (ZDGE) 10-Q 13 Dec 16 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Oct. 31, 2016	Dec. 08, 2016
Entity Registrant Name	Zedge, Inc.
Entity Central Index Key	1,667,313
Amendment Flag	false
Current Fiscal Year End Date	--07-31
Document Type	10-Q
Document Period End Date	Oct. 31, 2016
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Entity Filer Category	Smaller Reporting Company
Class A common stock
Entity Common Stock, Shares Outstanding		524,775
Class B common stock
Entity Common Stock, Shares Outstanding		8,867,110

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Oct. 31, 2016	Jul. 31, 2016
Current assets:
Cash and cash equivalents	$ 5,983	$ 5,978
Trade accounts receivable, net of allowance for doubtful accounts of $0 at October 31, 2016 and July 31, 2016	1,679	1,668
Prepaid expenses	192	210
Other current assets	332	107
Total current assets	8,186	7,963
Property and equipment, net	2,058	1,843
Goodwill	2,411	2,361
Other assets	262	266
Total assets	12,917	12,433
Current liabilities:
Trade accounts payable	74	36
Accrued expenses	1,835	1,487
Deferred revenue	8	15
Due to IDT Corporation	73	299
Total current liabilities	1,990	1,837
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; authorized shares-2,400; no shares issued
Additional paid-in capital	21,139	21,045
Accumulated other comprehensive loss	(744)	(817)
Accumulated deficit	(9,562)	(9,725)
Total stockholders' equity	10,927	10,596
Total liabilities and stockholders' equity	12,917	12,433
Class A common stock
Stockholders' equity:
Common stock, value	5	5
Class B common stock
Stockholders' equity:
Common stock, value	$ 89	$ 88

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Oct. 31, 2016	Jul. 31, 2016
Allowance for doubtful accounts	$ 0	$ 0
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,400	2,400
Preferred stock, shares issued
Class A common stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	2,600	2,600
Common stock, shares issued	525	525
Common stock, shares outstanding	525	525
Class B common stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	40,000	40,000
Common stock, shares issued	8,865	8,819
Common stock, shares outstanding	8,865	8,819

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Oct. 31, 2016	Oct. 31, 2015
Consolidated Statements of Comprehensive Income [Abstract]
Revenues	$ 2,383	$ 2,559
Costs and expenses:
Direct cost of revenues (exclusive of amortization of capitalized software and technology development costs included below)	367	295
Selling, general and administrative	1,756	1,685
Depreciation and amortization	138	160
Write-off of capitalized software and technology development costs	9
Income from operations	113	419
Interest and other income	1	1
Net gain (loss) resulting from foreign exchange transactions	50	(55)
Income before income taxes	164	365
Provision for income taxes	(1)	(40)
Net income	163	325
Other comprehensive income (loss):
Changes in foreign currency translation adjustment	73	(92)
Total other comprehensive income (loss)	73	(92)
Total comprehensive income	$ 236	$ 233
Earnings per share attributable to Zedge, Inc. common stockholders:
Basic	$ 0.02	$ 0.04
Diluted	$ 0.02	$ 0.04
Weighted-average number of shares used in calculation of earnings per share:
Basic	9,261	8,161
Diluted	10,458	8,934

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2016	Oct. 31, 2015
Operating activities
Net income	$ 163	$ 325
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	138	160
Deferred income taxes	5
Stock-based compensation	27	6
Change in assets and liabilities:
Trade accounts receivable	(11)	(330)
Prepaid expenses and other current assets	(264)	(106)
Other assets	(2)	4
Trade accounts payable and accrued expenses	392	511
Due to IDT Corporation	(226)	(93)
Deferred revenue	(7)	(4)
Net cash provided by operating activities	215	473
Investing activities
Capitalized software and technology development costs and purchase of equipment	(349)	(183)
Net cash used in investing activities	(349)	(183)
Financing activities
Proceeds from exercise of stock options	124
Net cash provided by financing activities	124
Effect of exchange rates on cash and cash equivalents	15	(27)
Net increase in cash and cash equivalents	5	263
Cash and cash equivalents at beginning of period	5,978	2,170
Cash and cash equivalents at end of period	$ 5,983	$ 2,433

Basis of Presentation

Basis of Presentation	3 Months Ended
	Oct. 31, 2016
Basis of Presentation [Abstract]
Basis of Presentation	Note 1—Basis of Presentation The accompanying unaudited consolidated financial statements of Zedge, Inc. and its subsidiaries, Zedge Europe AS and Zedge Canada, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended October 31, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2017. The balance sheet at July 31, 2016 has been derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2016, as filed with the U.S. Securities and Exchange Commission (“SEC”). The Company was formerly a majority-owned subsidiary of IDT Corporation (“IDT”). On June 1, 2016, IDT’s interest in the Company was spun-off by IDT to IDT’s stockholders and the Company became an independent public company through a pro rata distribution of the Company’s common stock held by IDT to IDT’s stockholders (the “Spin-Off”). The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2017 refers to the fiscal year ending July 31, 2017).

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Oct. 31, 2016
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 2—Fair Value Measurements The following tables present the balance of assets and liabilities measured at fair value on a recurring basis: Level 1 (1) Level 2 (2) Level 3 (3) Total (in thousands) October 31, 2016 Assets: Foreign exchange forward contracts $ — $ 68 $ — $ 68 Liabilities: Foreign exchange forward contracts $ — $ 2 $ — $ 2 July 31, 2016 Assets: Foreign exchange forward contracts $ — $ 21 $ — $ 21 Liabilities: Foreign exchange forward contracts $ — $ 15 $ — $ 15 (1) – quoted prices in active markets for identical assets or liabilities (2) – observable inputs other than quoted prices in active markets for identical assets and liabilities (3) – no observable pricing inputs in the market Fair Value of Other Financial Instruments The Company’s other financial instruments at October 31, 2016 and July 31, 2016 included trade accounts receivable, trade accounts payable and due to IDT Corporation. The carrying amounts of the trade accounts receivable, trade accounts payable and due to IDT Corporation balances approximated fair value due to their short-term nature. This fair value estimate was classified as Level 2 of the fair value hierarchy.

Derivative Instruments

Derivative Instruments	3 Months Ended
	Oct. 31, 2016
Derivative Instruments [Abstract]
Derivative Instruments	Note 3—Derivative Instruments The primary risk managed by the Company using derivative instruments is foreign exchange risk. Foreign exchange forward contracts are entered into as hedges against unfavorable fluctuations in the U.S. Dollar - NOK exchange rate. Subsequent to the Spin-Off, IDT is providing hedging services to Zedge pursuant to the Transition Services Agreement until such time Zedge is able to enter into foreign exchange contracts (see Notes 7 and 8). The Company does not apply hedge accounting to these contracts; therefore the changes in fair value are recorded in earnings. By using derivative instruments to mitigate exposures to changes in foreign exchange rates, the Company is exposed to credit risk from the failure of the counterparty to perform under the terms of the contract. The credit or repayment risk is minimized by entering into transactions with high-quality counterparties. The outstanding contracts at October 31, 2016 were as follows: Settlement Date U.S. Dollar Amount NOK Amount November 2016 250,000 2,052,909 December 2016 1,000,000 8,464,667 January 2017 500,000 4,299,044 February 2017 500,000 4,235,537 March 2017 500,000 4,234,454 April 2017 250,000 2,067,554 May 2017 500,000 4,132,484 The fair value of outstanding derivative instruments recorded as assets in the accompanying consolidated balance sheets were as follows: Asset Derivatives Balance Sheet Location October 31, July 31, (in thousands) Derivatives not designated or not qualifying as hedging instruments: Foreign exchange forward contracts Other current assets $ 68 $ 21 The fair value of outstanding derivative instruments recorded as liabilities in the accompanying consolidated balance sheets were as follows: Liability Derivatives Balance Sheet Location October 31, 2016 July 31, 2016 (in thousands) Derivatives not designated or not qualifying as hedging instruments: Foreign exchange forward contracts Accrued expenses $ 2 $ 15 The effects of derivative instruments on the consolidated statements of comprehensive income were as follows: Amount of Gain (Loss) Three Months Ended October 31, Derivatives not designated or not qualifying as hedging instruments Statement of Comprehensive Income Location 2016 2015 (in thousands) Foreign exchange forward contracts Net gain (loss) resulting from foreign exchange transactions $ 67 $ (102 )

Accrued Expenses

Accrued Expenses	3 Months Ended
	Oct. 31, 2016
Accrued Expenses [Abstract]
Accrued Expenses	Note 4—Accrued Expenses Accrued expenses consist of the following: October 31, July 31, (in thousands) Accrued vacation $ 516 $ 494 Accrued payroll taxes 492 210 Accrued payroll and bonuses 127 72 Accrued direct cost of revenues 7 111 Accrued advertising 209 242 Accrued income taxes 93 119 Other 391 239 Total accrued expenses $ 1,835 $ 1,487

Equity

Equity	3 Months Ended
	Oct. 31, 2016
Equity [Abstract]
Equity	Note 5—Equity Changes in the components of stockholders’ equity were as follows: Three Months Ended October 31, 2016 (in thousands) Balance, July 31, 2016 $ 10,596 Exercise of stock options 68 Stock-based compensation 27 Comprehensive income: Net income 163 Foreign currency translation adjustments 73 Total comprehensive income 236 Balance, October 31, 2016 $ 10,927 Stock Options In the three months ended October 31, 2016, the Company received proceeds of $67,579 from the exercise of stock options for which the Company issued 48,299 shares of its Class B common stock. In addition, in the three months ended October 31, 2016, the Company received proceeds of $56,840 from the exercise of stock options in fiscal 2016 which was recorded as a receivable as of July 31, 2016. In September 2016, the Compensation Committee of the Company’s Board of Directors approved an equity grant of options to purchase 231,327 shares of the Company’s Class B common stock to its executive officers, a consultant and a non-executive employee. The options vest over a three year period. Unrecognized compensation expense related to this grant was an aggregate of $681,000 based on the estimated fair value of the options on the grant date. The unrecognized compensation expense will be recognized on a straight-line basis over the vesting period.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Oct. 31, 2016
Earnings Per Share [Abstract]
Earnings Per Share	Note 6—Earnings Per Share Basic earnings per share is computed by dividing net income attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive. The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following: Three Months Ended 2016 2015 (in thousands) Basic weighted-average number of shares 9,261 8,161 Effect of dilutive securities: Stock options 1,079 773 Non-vested restricted Class B common stock 118 — Diluted weighted-average number of shares 10,458 8,934 The following outstanding stock options were excluded from the calculation of diluted earnings per share because the exercise price of the stock option was greater than the average market price of the Company’s stock during the period: Three Months Ended 2016 2015 (in thousands) Shares excluded from the calculation of diluted earnings per share 247 707

Related Party Transactions

Related Party Transactions	3 Months Ended
	Oct. 31, 2016
Related Party Transactions [Abstract]
Related Party Transactions	Note 7—Related Party Transactions Prior to the Spin-Off, IDT charged the Company for certain transactions and allocated routine expenses based on company specific items covered under a Master Services Agreement. This agreement provided for, among other things: (1) the allocation between the Company and IDT of costs of employee benefits, taxes and other liabilities and obligations; (2) services provided by IDT relating to human resources and employee benefits administration; and (3) finance, accounting, tax, facilities and legal services to be provided by IDT to the Company. Following the Spin-Off, IDT charges the Company for services it provides pursuant to the Transition Services Agreement. The services provided pursuant to the Transition Services Agreement include human resources, payroll, investor relations, legal, accounting, tax, financial systems, management consulting and foreign exchange risk management. The Transition Services Agreement has a twelve month term with automatic renewals for additional six month terms unless terminated by either party upon 90 days’ notice prior to the end of the then-current term. IDT’s charges are included in “Selling, general and administrative expense” in the consolidated statements of comprehensive income. Three Months Ended 2016 2015 (in thousands) Payments by IDT on behalf of the Company $ 477 $ 313 Cash repayments, net of advances $ (703 ) $ (406 )

Revolving Credit Facility

Revolving Credit Facility	3 Months Ended
	Oct. 31, 2016
Revolving Credit Facility [Abstract]
Revolving Credit Facility	Note 8—Revolving Credit Facility As of September 27, 2016, the Company entered into a loan and security agreement with Western Alliance Bank for a revolving credit facility of up to $2.5 million. Advances under this facility may not exceed the lesser of $2.5 million or 80% of the Company’s eligible accounts receivable subject to certain concentration limits. The revolving credit facility is secured by a lien on substantially all of the Company’s assets. The outstanding principal amount bears interest per annum at the greater of 3.5% or the prime rate plus 1.25%. Interest is payable monthly and all outstanding principal and any accrued and unpaid interest is due on the maturity date of September 27, 2018. The Company is required to pay an annual facility fee of $12,500 to Western Alliance Bank. The Company is also required to comply with various affirmative and negative covenants as well as maintain certain financial ratios during the term of the revolving credit facility. The covenants include a prohibition on the Company paying any dividend on its capital stock. The Company may terminate this agreement at any time without penalty or premium provided that it pays down any outstanding principal, accrued interest and bank expenses. At October 31, 2016, there were no amounts outstanding under the revolving credit facility and the Company was in compliance with all of the covenants. As of November 16, 2016, the Company entered into a Foreign Exchange Agreement with Western Alliance Bank to allow the Company to enter into foreign exchange contracts not to exceed $5.0 million under its revolving credit facility. The available borrowing under the revolving credit facility shall be reduced by an applicable foreign exchange reserve percentage as determined by Bank, in its reasonable discretion from time to time, which shall initially be 10%.

Business Segment and Geographic

Business Segment and Geographic Information	3 Months Ended
	Oct. 31, 2016
Business Segment and Geographic Information [Abstract]
Business Segment and Geographic Information	Note 9—Business Segment and Geographic Information The Company provides a content distribution platform, worldwide, centered on self-expression, attracting both creators looking to promote their content and consumers who utilize such content to express their identity, feelings, tastes and interests. The Company’s platform enables consumers to personalize their mobile devices with free, high quality ringtones, wallpapers, home screen app icons and notification sounds. The Company conducts business as one operating segment. There were no revenues from customers located outside of the United States in all periods presented. Net long-lived assets and total assets held outside of the United States, which are located primarily in Norway, were as follows: United States Foreign Total (in thousands) Long-lived assets, net: October 31, 2016 $ 1,935 $ 247 $ 2,182 July 31, 2016 1,719 247 1,966 Total assets: October 31, 2016 $ 9,021 $ 3,896 $ 12,917 July 31, 2016 8,576 3,857 12,433

Legal Proceeding and Tax Matter

Legal Proceeding and Tax Matters	3 Months Ended
	Oct. 31, 2016
Legal Proceeding and Tax Matters [Abstract]
Legal Proceeding and Tax Matters	Note 10— Legal Proceeding and Tax Matters Legal Proceedings In March 2014, Saregama India, Limited filed a lawsuit against the Company before the Barasat District Court, seeking approximately $1,595,700 as damages and an injunction for copyright infringement. The main ground for the lawsuit was an allegation that the Company avails the plaintiff’s sound recordings through the Company’s platform with full knowledge that the sound recordings have been uploaded and are being communicated to the public without obtaining any license from the plaintiff. The Company believes that material liability on the matter is remote. The Company may from time to time be subject to other legal proceedings that arise in the ordinary course of business. Although there can be no assurance in this regard, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition. Tax Audits In September 2016, the Company was notified that the Zedge Europe AS tax returns for 2013 and 2014 were going to be audited by the tax authorities in Norway. The initial audit meeting took place in October 2016 and preliminary information was provided. No significant issues have been identified at this time. Amounts asserted by taxing authorities or the amount ultimately assessed against the Company could be greater than any accrued amount. Accordingly, provisions may be recorded in the future as estimates are revised or underlying matters are settled or resolved. Imposition of assessments as a result of tax audits could have an adverse effect on the Company’s results of operations, cash flows and financial condition. Research and Development Credits As of October 31, 2016, the Company has recorded a $0.2 million receivable from Norway’s SkatteFUNN government program designed to stimulate research and development in Norwegian trade and industry, which related to previous periods.

Recently Issued Accounting Stan

Recently Issued Accounting Standards Not Yet Adopted	3 Months Ended
	Oct. 31, 2016
Recently Issued Accounting Standards Not Yet Adopted [Abstract]
Recently Issued Accounting Standards Not Yet Adopted	Note 11—Recently Issued Accounting Standards Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new provisions will be applied as a cumulative-effect adjustment to retained earnings. The Company will adopt the new standard on August 1, 2020. The Company is evaluating the impact that the new standard will have on its consolidated financial statements. In March 2016, the FASB issued an ASU to improve the accounting for employee share-based payments. The new standard simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company will adopt the new standard on August 1, 2017. The Company is evaluating the impact that the new standard will have on its consolidated financial statements. In February 2016, the FASB issued an ASU related to the accounting for leases. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company will adopt the new standard on August 1, 2019. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is evaluating the impact that the new standard will have on its consolidated financial statements. In May 2014, the FASB and the International Accounting Standards Board jointly issued a comprehensive new revenue recognition standard that will supersede most of the current revenue recognition guidance under U.S. GAAP and IFRS. The goals of the revenue recognition project were to clarify and converge the revenue recognition principles under U.S. GAAP and IFRS and to develop guidance that would streamline and enhance revenue recognition requirements. To accomplish this objective, the standard requires five basic steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company will adopt this standard on August 1, 2018. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. The Company is evaluating the impact that the standard will have on its consolidated financial statements.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Oct. 31, 2016
Fair Value Measurements [Abstract]
Summary of balance of assets and liabilities measured at fair value on a recurring basis	Level 1 (1) Level 2 (2) Level 3 (3) Total (in thousands) October 31, 2016 Assets: Foreign exchange forward contracts $ — $ 68 $ — $ 68 Liabilities: Foreign exchange forward contracts $ — $ 2 $ — $ July 31, 2016 Assets: Foreign exchange forward contracts $ — $ 21 $ — $ 21 Liabilities: Foreign exchange forward contracts $ — $ 15 $ — $ 15 (1) – quoted prices in active markets for identical assets or liabilities (2) – observable inputs other than quoted prices in active markets for identical assets and liabilities (3) – no observable pricing inputs in the market

Derivative Instruments (Tables)

Derivative Instruments (Tables)	3 Months Ended
	Oct. 31, 2016
Derivative Instruments [Abstract]
Schedule of derivative instruments outstanding contracts	Settlement Date U.S. Dollar Amount NOK Amount November 2016 250,000 2,052,909 December 2016 1,000,000 8,464,667 January 2017 500,000 4,299,044 February 2017 500,000 4,235,537 March 2017 500,000 4,234,454 April 2017 250,000 2,067,554 May 2017 500,000 4,132,484
Schedule of derivative assets fair value	Asset Derivatives Balance Sheet Location October 31, July 31, (in thousands) Derivatives not designated or not qualifying as hedging instruments: Foreign exchange forward contracts Other current assets $ 68 $ 21
Schedule of derivative liability fair value	Liability Derivatives Balance Sheet Location October 31, 2016 July 31, 2016 (in thousands) Derivatives not designated or not qualifying as hedging instruments: Foreign exchange forward contracts Accrued expenses $ 2 $ 15
Schedule of derivative instruments on consolidated statements of comprehensive income	Amount of Gain (Loss) Three Months Ended October 31, Derivatives not designated or not qualifying as hedging instruments Statement of Comprehensive Income Location 2016 2015 (in thousands) Foreign exchange forward contracts Net gain (loss) resulting from foreign exchange transactions $ 67 $ (102 )

Accrued Expenses (Tables)

Accrued Expenses (Tables)	3 Months Ended
	Oct. 31, 2016
Accrued Expenses [Abstract]
Summary of accrued expenses	October 31, July 31, (in thousands) Accrued vacation $ 516 $ 494 Accrued payroll taxes 492 210 Accrued payroll and bonuses 127 72 Accrued direct cost of revenues 7 111 Accrued advertising 209 242 Accrued income taxes 93 119 Other 391 239 Total accrued expenses $ 1,835 $ 1,487

Equity (Tables)

Equity (Tables)	3 Months Ended
	Oct. 31, 2016
Equity [Abstract]
Summary of changes in the components of stockholders' equity	Three Months Ended October 31, 2016 (in thousands) Balance, July 31, 2016 $ 10,596 Exercise of stock options 68 Stock-based compensation 27 Comprehensive income: Net income 163 Foreign currency translation adjustments 73 Total comprehensive income 236 Balance, October 31, 2016 $ 10,927

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Oct. 31, 2016
Earnings Per Share [Abstract]
Summary of weighted-average number of shares used in the calculation of basic and diluted earnings per share	Three Months Ended 2016 2015 (in thousands) Basic weighted-average number of shares 9,261 8,161 Effect of dilutive securities: Stock options 1,079 773 Non-vested restricted Class B common stock 118 — Diluted weighted-average number of shares 10,458 8,934
Shares excluded from the diluted earnings per share computations	Three Months Ended 2016 2015 (in thousands) Shares excluded from the calculation of diluted earnings per share 247 707

Related Party Transactions (Tab

Related Party Transactions (Tables)	3 Months Ended
	Oct. 31, 2016
Related Party Transactions [Abstract]
Schedule of related party transactions	Three Months Ended 2016 2015 (in thousands) Payments by IDT on behalf of the Company $ 477 $ 313 Cash repayments, net of advances $ (703 ) $ (406 )

Business Segment and Geograph23

Business Segment and Geographic Information (Tables)	3 Months Ended
	Oct. 31, 2016
Business Segment and Geographic Information [Abstract]
Schedule of net long-lived assets and total assets by geographic areas	United States Foreign Total (in thousands) Long-lived assets, net: October 31, 2016 $ 1,935 $ 247 $ 2,182 July 31, 2016 1,719 247 1,966 Total assets: October 31, 2016 $ 9,021 $ 3,896 $ 12,917 July 31, 2016 8,576 3,857 12,433

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands		Oct. 31, 2016	Jul. 31, 2016
Assets:
Foreign exchange forward contracts		$ 68	$ 21
Liabilities:
Foreign exchange forward contracts		2	15
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Assets:
Foreign exchange forward contracts	[1]
Liabilities:
Foreign exchange forward contracts	[1]
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Assets:
Foreign exchange forward contracts	[2]	68	21
Liabilities:
Foreign exchange forward contracts	[2]	2	15
Fair Value, Measurements, Recurring [Member] | Level 3 [Member]
Assets:
Foreign exchange forward contracts	[3]
Liabilities:
Foreign exchange forward contracts	[3]
[1]	quoted prices in active markets for identical assets or liabilities
[2]	observable inputs other than quoted prices in active markets for identical assets and liabilities
[3]	no observable pricing inputs in the market

Derivative Instruments (Details

Derivative Instruments (Details)	3 Months Ended
	Oct. 31, 2016USD ($)	Oct. 31, 2016NOK
November 2016 [Member]
Derivative [Line Items]
Settlement Date	Nov. 30, 2016	Nov. 30, 2016
Amount	$ 250,000	NOK 2,052,909
December 2016 [Member]
Derivative [Line Items]
Settlement Date	Dec. 31, 2016	Dec. 31, 2016
Amount	$ 1,000,000	NOK 8,464,667
January 2017 [Member]
Derivative [Line Items]
Settlement Date	Jan. 31, 2017	Jan. 31, 2017
Amount	$ 500,000	NOK 4,299,044
February 2017 [Member]
Derivative [Line Items]
Settlement Date	Feb. 28, 2017	Feb. 28, 2017
Amount	$ 500,000	NOK 4,235,537
March 2017 [Member]
Derivative [Line Items]
Settlement Date	Mar. 31, 2017	Mar. 31, 2017
Amount	$ 500,000	NOK 4,234,454
April 2017 [Member]
Derivative [Line Items]
Settlement Date	Apr. 30, 2017	Apr. 30, 2017
Amount	$ 250,000	NOK 2,067,554
May 2017 [Member]
Derivative [Line Items]
Settlement Date	May 31, 2017	May 31, 2017
Amount	$ 500,000	NOK 4,132,484

Derivative Instruments (Detai26

Derivative Instruments (Details 1) - USD ($) $ in Thousands	Oct. 31, 2016	Jul. 31, 2016
Derivatives not designated or not qualifying as hedging instruments:
Foreign exchange forward contracts	$ 68	$ 21

Derivative Instruments (Detai27

Derivative Instruments (Details 2) - USD ($) $ in Thousands	Oct. 31, 2016	Jul. 31, 2016
Derivatives not designated or not qualifying as hedging instruments:
Foreign exchange forward contracts	$ 2	$ 15

Derivative Instruments (Detai28

Derivative Instruments (Details 3) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2016	Oct. 31, 2015
Derivatives not designated or not qualifying as hedging instruments
Foreign exchange forward contracts	$ 67	$ (102)

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Oct. 31, 2016	Jul. 31, 2016
Accrued Expenses [Abstract]
Accrued vacation	$ 516	$ 494
Accrued payroll taxes	492	210
Accrued payroll and bonuses	127	72
Accrued direct cost of revenues	7	111
Accrued advertising	209	242
Accrued income taxes	93	119
Other	391	239
Total accrued expenses	$ 1,835	$ 1,487

Equity (Details)

Equity (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2016	Oct. 31, 2015
Equity [Abstract]
Balance, July 31, 2016	$ 10,596
Exercise of stock options	68
Stock-based compensation	27
Comprehensive income:
Net income	163	$ 325
Foreign currency translation adjustments	73	$ (92)
Total comprehensive income	236
Balance, October 31, 2016	$ 10,927

Equity (Details Textual)

Equity (Details Textual) - USD ($)	1 Months Ended	3 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Equity (Textual)
Exercise of stock options		$ 68,000
Stock Option [Member]
Equity (Textual)
Options to purchase shares of the Company's Class B common stock	231,327
Unrecognized compensation expense	$ 681,000
Vesting period	3 years
Collection of receivable from stockholder for stock option exercise		$ 56,840
Stock Option [Member] | Class B common stock [Member]
Equity (Textual)
Options to purchase shares of the Company's Class B common stock		48,299
Exercise of stock options		$ 67,579

Earnings Per Share (Details)

Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended
	Oct. 31, 2016	Oct. 31, 2015
Weighted-average number of shares used in the calculation of basic and diluted earnings per share
Basic weighted-average number of shares	9,261	8,161
Effect of dilutive securities:
Stock options	1,079	773
Non-vested restricted Class B common stock	118
Diluted weighted-average number of shares	10,458	8,934

Earnings Per Share (Details 1)

Earnings Per Share (Details 1) - shares shares in Thousands	3 Months Ended
	Oct. 31, 2016	Oct. 31, 2015
Stock options excluded from the diluted earnings per share computations
Shares excluded from the calculation of diluted earnings per share	247	707

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Oct. 31, 2016	Oct. 31, 2015
Related Party Transactions [Abstract]
Payments by IDT on behalf of the Company	$ 477	$ 313
Cash repayments, net of advances	$ (703)	$ (406)

Revolving Credit Facility (Deta

Revolving Credit Facility (Details) - Revolving Credit Facility [Member] - USD ($)	1 Months Ended
	Nov. 16, 2016	Sep. 27, 2016
Revolving Credit Facility (Textual)
Loan and security agreement with Western Alliance Bank for revolving credit facility		$ 2,500,000
Line of credit facility, borrowing capacity, description		Advances under this facility may not exceed the lesser of $2.5 million or 80% of the Company's eligible accounts receivable subject to certain concentration limits.
Interest rate description		The outstanding principal amount bears interest per annum at the greater of 3.5% or the prime rate plus 1.25%.
Line of credit maturity date		Sep. 27, 2018
Line of credit facility annual fee		$ 12,500
Foreign Exchange Agreement [Member] | Subsequent Event [Member]
Revolving Credit Facility (Textual)
Loan and security agreement with Western Alliance Bank for revolving credit facility	$ 5,000,000
Line of credit facility, borrowing capacity, description	The revolving credit facility shall be reduced by an applicable foreign exchange reserve percentage as determined by Western Alliance Bank, in its reasonable discretion from time to time, which shall initially be 10%.

Business Segment and Geograph36

Business Segment and Geographic Information (Details) - USD ($) $ in Thousands	Oct. 31, 2016	Jul. 31, 2016
Business Segment Information [Line Items]
Long-lived assets, net	$ 2,182	$ 1,966
Total assets	12,917	12,433
United States [Member]
Business Segment Information [Line Items]
Long-lived assets, net	1,935	1,719
Total assets	9,021	8,576
Foreign [Member]
Business Segment Information [Line Items]
Long-lived assets, net	247	247
Total assets	$ 3,896	$ 3,857

Legal Proceeding and Tax Matt37

Legal Proceeding and Tax Matters (Details) - USD ($)	Mar. 31, 2014	Oct. 31, 2016
Legal Proceeding and Tax Audits (Textual)
Lawsuit description	Saregama India, Limited filed a lawsuit against the Company before the Barasat District Court, seeking approximately $1,595,700 as damages and an injunction for copyright infringement.
Lawsuit approximate amount	$ 1,595,700
Amounts receivable from Norway's SkatteFUNN government		$ 200,000