Zedge (ZDGE) 10-Q 14 Jun 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Apr. 30, 2019	Jun. 12, 2019
Entity Registrant Name	Zedge, Inc.
Entity Central Index Key	0001667313
Entity File Number	1-37782
Amendment Flag	false
Current Fiscal Year End Date	--07-31
Document Type	10-Q
Document Period End Date	Apr. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Class A common stock
Entity Common Stock, Shares Outstanding		524,775
Class B common stock
Entity Common Stock, Shares Outstanding		9,831,963

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 30, 2019	Jul. 31, 2018
Current assets:
Cash and cash equivalents	$ 2,248	$ 3,408
Trade accounts receivable, net of allowance for doubtful accounts of $0 at April 30, 2019 and July 31, 2018	1,204	1,777
Prepaid expenses	259	316
Other current assets	181	302
Total current assets	3,892	5,803
Property and equipment, net	3,590	3,344
Goodwill	2,306	2,447
Other assets	370	125
Total assets	10,158	11,719
Current liabilities:
Trade accounts payable	156	280
Accrued expenses	1,654	1,428
Deferred revenues	284
Due to IDT Corporation		1
Total current liabilities	2,094	1,709
Total liabilities	2,094	1,709
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock, $.01 par value; authorized shares-2,400; no shares issued
Additional paid-in capital	22,958	22,508
Accumulated other comprehensive loss	(926)	(702)
Accumulated deficit	(14,041)	(11,899)
Treasury stock, 14 shares at April 30, 2019 and 0 shares at July 31, 2018, at cost	(31)
Total stockholders' equity	8,064	10,010
Total liabilities and stockholders' equity	10,158	11,719
Class A common stock
Stockholders' equity:
Common stock value	5	5
Class B common stock
Stockholders' equity:
Common stock value	$ 99	$ 98

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Apr. 30, 2019	Jul. 31, 2018
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
Treasury stock, shares	14	0
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	9,832	9,786
Common stock, shares outstanding	9,832	9,786

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Income Statement [Abstract]
Revenues	$ 1,912	$ 2,551	$ 6,866	$ 8,255
Costs and expenses:
Direct cost of revenues (exclusive of amortization of capitalized software and technology development costs included below)	353	378	1,031	1,106
Selling, general and administrative	2,289	2,195	6,761	7,753
Depreciation and amortization	391	317	1,022	699
Loss from operations	(1,121)	(339)	(1,948)	(1,303)
Interest and other income	3	7	48	21
Net (loss) gain resulting from foreign exchange transactions	(72)	26	(236)	(19)
Loss before income taxes	(1,190)	(306)	(2,136)	(1,301)
Provision for income taxes	5	3	6	1
Net loss	(1,195)	(309)	(2,142)	(1,302)
Other comprehensive loss:
Changes in foreign currency translation adjustment	(93)	(152)	(224)	(50)
Total other comprehensive loss	(93)	(152)	(224)	(50)
Total comprehensive loss	$ (1,288)	$ (461)	$ (2,366)	$ (1,352)
Loss per share attributable to Zedge, Inc. common stockholders:
Basic and diluted	$ (0.12)	$ (0.03)	$ (0.21)	$ (0.13)
Weighted-average number of shares used in calculation of loss per share:
Basic and diluted	10,116	9,867	10,063	9,757

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018
Operating activities
Net loss	$ (2,142)	$ (1,302)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	1,022	699
Loss on disposal of furniture and fixtures	3
Deferred income taxes		7
Stock-based compensation	449	429
Stock issued to FreeForm noteholders		242
Change in assets and liabilities:
Trade accounts receivable	573	33
Prepaid expenses and other current assets	178	192
Other assets	6	1
Trade accounts payable and accrued expenses	99	516
Deferred revenues	284
Due to IDT Corporation	(1)	(33)
Net cash provided by operating activities	471	784
Investing activities
Capitalized software and technology development costs and purchase of equipment	(1,277)	(1,295)
Investment in TreSensa	(250)
Net cash used in investing activities	(1,527)	(1,295)
Financing activities
Proceeds from exercise of stock options	2	216
Purchase of treasury stock in connection with restricted stock vesting	(31)
Net cash (used in) provided by financing activities	(29)	216
Effect of exchange rate changes on cash and cash equivalents	(75)	(13)
Net decrease in cash and cash equivalents	(1,160)	(308)
Cash and cash equivalents at beginning of period	3,408	4,580
Cash and cash equivalents at end of period	$ 2,248	$ 4,272

Basis of Presentation and Recen

Basis of Presentation and Recently Adopted Accounting Pronouncements	9 Months Ended
	Apr. 30, 2019
Accounting Policies [Abstract]
Basis of Presentation and Recently Adopted Accounting Pronouncements	Note 1—Basis of Presentation and Recently Adopted Accounting Pronouncements 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 and nine months ended April 30, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2019 or any other period. The balance sheet at July 31, 2018 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, 2018, as filed with the U.S. Securities and Exchange Commission (the "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 2019 refers to the fiscal year ending July 31, 2019). Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities

Revenue

Revenue	9 Months Ended
	Apr. 30, 2019
Revenue from Contract with Customer [Abstract]
Revenue	Note 2—Revenue Adoption of Topic 606, "Revenue from Contracts with Customers" On August 1, 2018, the Company adopted Topic 606, applying the modified retrospective method to those contracts not yet substantially completed as of August 1, 2018. Results for reporting periods beginning after August 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historical accounting practices under Topic 605. The impact of adopting the new revenue standard was not material to our consolidated financial statements and there was no adjustment to beginning retained earnings on August 1, 2018. Pursuant to Topic 606, revenue is recognized in an amount that reflects the consideration to which the entity expects to be entitled in exchange for promised goods or services. An entity applies the following five steps to achieve the core principle of Topic 606: 1. Identify the contract with a customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognize revenue when (or as) the entity satisfies a performance obligation Revenue Recognition The Company generates revenue from three sources: (1) Advertising; (2) Service; and (3) Other. Approximately 90% of the Company’s revenue is generated from selling its advertising inventory (“Advertising Revenue”) to advertising networks, advertising exchanges, and direct arrangements with advertisers. Approximately 9% of the Company’s revenue relates to our managing and optimizing the advertising inventory of a third-party mobile application publisher, as well as overseeing the billing, collections and reporting related to advertising for this publisher (“Service Revenue”). The contract with this publisher is being terminated effective May 31, 2019. The remaining revenue is a combination of subscriptions and Zedge Premium (“Other Revenue”) which were introduced in January 2019 and March 2018 respectively. Currently subscription revenue allows users to pay a monthly or annual fee to remove unsolicited advertisements from the Zedge app although the Company is working on adding additional capabilities to subscriptions including offering subscriptions to iOS customers. The Company retains 30% as fee when users purchase licensed content using Zedge Credits or unlock licensed content by watching a video or taking a survey on Zedge Premium. The following table summarizes revenue by type of service for the periods presented: Three Months Ended Nine Months Ended April 30, April 30, 2019 2018 2019 2018 (in thousands) (in thousands) Advertising revenue $ 1,670 $ 2,279 $ 6,243 $ 7,496 Service revenue 179 213 528 556 Other revenue 63 59 95 203 Total Revenue $ 1,912 $ 2,551 $ 6,866 $ 8,255 Advertising Revenue ● Advertising Networks. An advertising network is a third party relationship where buyers of advertising inventory go to purchase either specific targeted inventory or a large scale of inventory at a set price. Advertising Networks serve as an indirect source of advertising fill to a variety of branded ad campaigns and performance-based ad campaigns. ● Advertising Exchanges. An advertising exchange is similar to an advertising network, except that the exchange typically bids in real-time for inventory. Advertisers may utilize an exchange when looking for scale or specific audiences, and accept that the price will vary based on when and how much volume of inventory they wish to buy. ● Direct Sales to Advertisers. The Company sells advertising directly to advertisers through a contractual relationship. These relationships typically offer higher than average pricing than realized from sales via advertising networks or advertising exchanges. ● App Installs. The Company earns revenue when a Zedge user installs an app offered by a publisher in the Game Channel that pays the Company a pre-negotiated fee for the installation (referred to as Cost Per Install or CPI). In October 2018, the Company replaced the Game Channel with a game wall which offers Zedge users with a mix of interactive playable ads which, if installed by the user, generate revenue for Zedge. The Company recognizes advertising revenue as advertisements are delivered to users through impressions, ad views or app installs (depending on the terms agreed upon with the advertiser). For in-app display ads, in-app offers, engagement advertisements and other advertisements, the Company’s performance obligation is satisfied over the life of the relevant contract (i.e., over time), with revenue being recognized as advertising units are delivered. The advertiser may compensate the Company on a cost-per-impression, cost-per-click, cost-per-action or cost-per-install basis. Service Revenue Other Revenues Zedge Premium Subscription Revenue In the three and nine months ended April 30, 2019, Other Revenue represented revenues derived solely from Zedge Premium and subscription. In prior year periods, Other Revenue represented revenue from assorted monetization trials that the Company tested. Gross Versus Net Revenue Recognition The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction. To the extent the Company acts as the principal, revenue is reported on a gross basis unless the Company is unable to determine the amount on a gross basis, in which case the Company reports revenue on a net basis. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service prior to transfer to the customer. The Company generally reports its advertising revenue net of amounts due to agencies and brokers because the Company is not the primary obligor in the relevant arrangements, it does not finalize the pricing, and it does not establish or maintain a direct relationship with the advertiser. Certain advertising arrangements that are directly between the Company and advertisers are recognized on a gross basis equal to the price paid to the Company by the customer since the Company is the primary obligor and the Company determines the price. Any third-party costs related to such direct relationships are recognized as direct cost of revenues. The Company reports subscription revenue gross of the fee retained by Google Play, as the subscriber is Zedge’s customer in the contract and Zedge controls the service prior to the transfer to the subscriber. Payment terms The majority of Zedge’s Advertising Revenue is derived from large credit-worthy entities, including Twitter, Google, Facebook, Apple and Amazon or affiliates of those entities. The Company invoices its customers monthly. Payment terms are stipulated as a specific number of days subsequent to the end of the month, generally ranging from 30 to 60 days. The Company endeavors to terminate relationships with smaller advertisers promptly if balances become past due. Since these smaller advertisers rely on the Company to derive their own revenue, they generally pay their outstanding balances on a timely basis. Historically, write-offs of revenue have been de minimis. Accordingly, the Company does not maintain a bad debt allowance. The Company makes Royalty Payments to the artists and brands within sixty (60) days after the end of each calendar quarter. If the quarterly royalty amount is less than two hundred dollars ($200), the Company may defer payment to a later period in which the artist or brand surpasses the $200 threshold. The artist or brand forfeits any accrued royalty amounts below the $200 threshold upon expiration or termination of the artist’s license agreement with the Company. This provision will become effective on the first anniversary for all existing license agreements and for all new license agreements entered into on or after November 1, 2018. Additionally, the Company has established a minimum threshold of twenty-five dollars ($25) in accrued Royalty Payments in order for an artist or brand to maintain its license agreement. Accordingly, if an artist hasn’t generated a minimum of $25 in accrued Royalty Payments amount in a year, the Company may deduct up to $25 from the artist’s accrued Royalty Payment account. As of April 30, 2019, the aggregate amount owed by the Company to artists was approximately $38,000. Deferred Revenues and Unsatisfied Performance Obligations The Company records deferred revenues when users purchase or earn Zedge Credits. Unused Zedge Credits represent the value of the Company's unsatisfied performance obligation to its users. Revenue is recognized when Zedge App users use Zedge Credits to acquire Zedge Premium content. As of April 30, 2019, the Company’s deferred revenue balance related to Zedge Premium was approximately $120,000. The Company also records deferred revenues related to the unsatisfied performance obligations with respect to the subscription revenue. Practical Expedients The Company generally expenses the fees retained by Google Play related to the subscriptions revenue when incurred because the duration of the contracts for which the Company pay commissions are less than one year. These costs are included in the selling, general and administrative expenses of the Consolidated Statements of Comprehensive Loss. Significant Judgments The advertising networks and advertising exchanges track and report the impressions and installs to Zedge and Zedge recognizes revenues based on these reports. The networks and exchanges base their payments off of those reports and Zedge independently compares the data to each of the client sites to validate the imported data and identify any differences. The number of impressions and installs delivered by the advertising networks and advertising exchanges is determined at the end of each month, which resolves any uncertainty in the transaction price during the reporting period.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Apr. 30, 2019
Fair Value Disclosures [Abstract]
Fair Value Measurements	Note 3—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) 30-Apr-19 Assets: Foreign exchange forward contracts $ - $ - $ - $ - Liabilities: Foreign exchange forward contracts $ - $ 96 $ - $ 96 31-Jul-18 Assets: Foreign exchange forward contracts $ - $ - $ - $ - Liabilities: Foreign exchange forward contracts $ - $ 41 $ - $ 41 (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 April 30, 2019 and July 31, 2018 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.

Derivative Instruments

Derivative Instruments	9 Months Ended
	Apr. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments	Note 4—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 – Norwegian Kroner (NOK) exchange rate. Subsequent to the Spin-Off and until November 2016, IDT provided hedging services to the Company pursuant to the Transition Services Agreement (see Note 8). As of November 16, 2016, the Company entered into a Foreign Exchange Agreement with Western Alliance Bank allowing the Company to enter into foreign exchange contracts under its revolving credit facility with the bank (see Note 9). 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. As of April 30, 2019, the outstanding foreign exchange contracts entered into with Western Alliance Bank pursuant to the Foreign Exchange Agreement are as follows: Settlement Date U.S. Dollar Amount NOK Amount May-19 $ 500,000 4,107,440 Jun-19 500,000 4,102,240 Jul-19 500,000 4,097,140 Aug-19 500,000 4,091,590 Total $ 2,000,000 16,398,410 The fair value of outstanding derivative instruments recorded as liabilities in the accompanying consolidated balance sheets were as follows: Derivatives Instruments Balance Sheet Location April 30, July 31, (in thousands) Derivatives not designated or not qualifying as hedging instruments: Foreign exchange forward contracts Accrued expenses $ 96 $ 41 The effects of derivative instruments on the consolidated statements of comprehensive loss were as follows: Amount of Loss Recognized on Derivatives Derivatives not designated or Statement of Three Months Ended Nine Months Ended not qualifying as hedging Comprehensive Loss April 30, April 30, instruments Location 2019 2018 2019 2018 (in thousands) (in thousands) Foreign exchange forward contracts Net loss resulting from foreign exchange transactions $ 80 $ - $ 254 $ 1

Accrued Expenses

Accrued Expenses	9 Months Ended
	Apr. 30, 2019
Payables and Accruals [Abstract]
Accrued Expenses	Note 5—Accrued Expenses Accrued expenses consist of the following: April 30, July 31, 2019 2018 (in thousands) Accrued vacation $ 699 $ 559 Accrued payroll taxes 323 184 Accrued payroll and bonuses 278 393 Accrued severance 2 83 Hedge Payable 96 41 Accrued professional fees 57 96 Due to artists 38 - Other 161 72 Total accrued expenses $ 1,654 $ 1,428

Equity

Equity	9 Months Ended
	Apr. 30, 2019
Equity [Abstract]
Equity	Note 6—Equity Changes in the components of equity were as follows: Nine Months Ended (in thousands) Balance, July 31, 2018 $ 10,010 Exercise of stock options 2 Stock-based compensation** 449 Purchase of treasury stock (31 ) Comprehensive loss: Net loss (2,142 ) Foreign currency translation adjustments (224 ) Total comprehensive loss (2,366 ) Balance, April 30, 2019 $ 8,064 ** This amount includes stock issued to pay for the Board of Directors’ compensation of $45,000 and the Company’s matching contribution to employees’ 401(k) plan with a value of $48,000. Stock Options In September 2016, the Compensation Committee of our Board of Directors (the “Compensation Committee”) approved an equity grant of options to purchase an aggregate of 231,327 shares of our Class B common stock to our executive officers, a non-executive employee and a consultant. The options vest over a three-year period from grant. As of the grant date, 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 is being recognized on a straight-line basis over the vesting period. In November 2017, the Company cancelled 53,026 shares of this option grant because they exceeded the annual limit of 60,000 shares per grantee as set forth in Article 5(c) of the Amended and Restated 2016 Stock Option and Incentive Plan dated October 18, 2017 (the “2016 Incentive Plan”). Simultaneously, the Compensation Committee approved an option grant of 53,026 with similar terms. Unrecognized compensation expense related to this option grant was an aggregate of $85,000 based on the estimated fair value of the options on the grant date. On October 18, 2017, the Compensation Committee approved the grant of options to purchase an aggregate of 124,435 shares of the Company’s Class B common stock to 55 of its non-executive employees. The options vest over a three-year period from December 8, 2017. On the grant date, unrecognized compensation expense related to this grant was an aggregate of $159,000 based on the estimated fair value of the options on the grant date. The unrecognized compensation expense is being recognized on a straight-line basis over the vesting period. On October 24, 2018, the Compensation Committee approved the grant of options to purchase an aggregate of 17,493 shares of the Company’s Class B common stock to five of its newly hired non-executive employees. The options vest over a three-year period from October 24, 2018. On the grant date, unrecognized compensation expense related to this grant was an aggregate of $20,000 based on the estimated fair value of the options on the grant date. The unrecognized compensation expense is being recognized on a straight-line basis over the vesting period. At April 30, 2019, unrecognized compensation expense related to unvested stock options was an aggregate of $131,000. 2016 Stock Option and Incentive Plan On October 18, 2017, the Company’s Board of Directors amended the 2016 Incentive Plan to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by 350,000 shares. This amendment was ratified by the Company’s stockholders at the Annual Meeting of Stockholders held on January 17, 2018. At April 30, 2019, there were 373,000 shares of the Company’s Class B common stock available for awards under the 2016 Incentive Plan. Pursuant to the 2016 Incentive Plan, the option exercise price for all stock option awards must not be less than the Fair Market Value of the shares of Class B Common Stock covered by the option award on the date of grant. In general, Fair Market Value means the closing sale price per share of Class B Common Stock on the exchange on which the Class B Common Stock is principally traded for the last preceding date on which there was a sale of Class B Common Stock on such exchange. Freeform Transaction In September 2017, the Company entered into an Agreement and Release with Freeform Development, Inc. (“Freeform”) and certain of its former employees, pursuant to which the Company obtained releases for certain employees from their Freeform employment agreements in exchange for the repayment of certain of Freeform’s liabilities. The Company paid Freeform $125,000 in cash to pay its operating liabilities (with any excess to be refunded to the Company), and the Company paid the holders of Freeform’s convertible promissory notes cash of $97,567 and issued the noteholders a total of 126,679 shares of Zedge Class B common stock with a fair value of $242,000 on issuance, which are subject to a two-year lock-up agreement. The Company believes this transaction did not qualify as a business combination under ASU 2017-01, which the Company adopted early on August 1, 2017, and as such accounted for the payment of the Freeform liabilities that aggregated $465,000, as selling, general and administrative expense in the three months ended October 31, 2017. In July 2018, the Company received a $25,000 refund from Freeform. Accordingly, the Company reduced the Freeform transaction costs from $465,000 to $440,000. In addition to the above payments, the Company also granted a total of 192,953 restricted shares of the Company’s Class B common stock to former Freeform employees, which shall vest over a four-year period subject to continued employment. These shares had an aggregate grant date fair value of $369,000 which is being amortized on a straight-line basis over the vesting period. At April 30, 2019, unrecognized compensation expense related to unvested restricted stock was an aggregate of $223,000. In September 2018, we purchased 14,137 shares of our Class B common stock from former Freeform employees for $30,543 to satisfy tax withholding obligations in connection with the vesting of restricted stock. Restricted Stock Award On February 7, 2018, the Compensation Committee and the Corporate Governance Committee of our Board of Directors approved a grant of 108,553 restricted shares of the Company’s Class B Common Stock to our Executive Chairman Michael Jonas. Mr. Jonas agreed to accept all of his compensation for his service as Executive Chairman during fiscal 2018 in the form of equity in the Company and to make receipt of such equity compensation contingent on the Company achieving certain milestones relative to its fiscal 2018 budget. The grant was made at the time that the milestones previously set were achieved. One-third of the shares have vested in the three months ended April 30, 2019 and the remaining shares shall vest in equal amounts on February 7, 2020 and 2021.These shares had an aggregate grant date fair value of $330,000 which is being amortized on a straight-line basis over the vesting period. At April 30, 2019, unrecognized compensation expense related to unvested restricted stock was an aggregate of $192,000.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Apr. 30, 2019
Loss per share attributable to Zedge, Inc. common stockholders:
Earnings Per Share	Note 7—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 Nine Months Ended April 30, April 30, 2019 2018 2019 2018 (in thousands) Basic weighted-average number of shares 10,116 9,867 10,063 9,757 Effect of dilutive securities: Stock options — — — — Non-vested restricted Class B common stock — — — — Diluted weighted-average number of shares 10,116 9,867 10,063 9,757 The following shares were excluded from the dilutive earnings per share computations because their inclusion would have been anti-dilutive: Three Months Ended Nine Months Ended April 30, April 30, 2019 2018 2019 2018 (in thousands) Stock options 1,277 1,366 1,277 1,366 Non-vested restricted Class B common stock 217 346 217 346 Shares excluded from the calculation of diluted earnings per share 1,494 1,712 1,494 1,712 For the three and nine months ended April 30, 2019 and 2018, the diluted earnings per share equals basic earnings per share because the Company incurred net loss during those periods and the impact of the assumed exercise of stock options and vesting of restricted stock would have been anti-dilutive.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Apr. 30, 2019
Related Party Transactions [Abstract]
Related Party Transactions	Note 8—Related Party Transactions Between the Spin-Off and October 31, 2017, IDT charged the Company for services it provides pursuant to a Transition Services Agreement entered into in connection with the Spin-Off. 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. From October 31, 2017, most of these services have been performed directly by Zedge or vendors retained by Zedge. Amounts charged by IDT to the Company are included in "Selling, general and administrative expense" in the consolidated statements of comprehensive loss. The payments made by IDT on behalf of the Company and the Company's cash repayments made to IDT were as follows: Three Months Ended Nine Months Ended April 30, April 30, 2019 2018 2019 2018 (in thousands) (in thousands) Payments by IDT on behalf of the Company $ - $ 14 $ 21 $ 274 Cash repayments, net of advances $ 2 $ (26 ) $ (21 ) $ (313 )

Revolving Credit Facility

Revolving Credit Facility	9 Months Ended
	Apr. 30, 2019
Revolving Credit Facility [Abstract]
Revolving Credit Facility	Note 9—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 for an initial two years term which was extended for another two years term expiring September 26, 2020. 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 5.0% 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 26, 2020. 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 and to 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 April 30, 2019, 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 in the aggregate at any point in time under its revolving credit facility. This limit was raised to approximately $6.5 million pursuant to the Loan and Security Modification Agreement dated May 30, 2018. The available borrowing under the revolving credit facility is reduced by an applicable foreign exchange reserve percentage as determined by Western Alliance Bank, in its reasonable discretion from time to time, which was initially set at 10% of the nominal amount of the foreign exchange contracts in effect at the relevant time. In December 2016, the applicable foreign exchange reserve percentage was changed so that the reduction of available borrowing for major currency forward contracts of less than six months tenor is set at 10% of the nominal amount of the foreign exchange contracts, and for contracts over six months tenor, 12.5% of the nominal amount of the foreign exchange contracts. At April 30, 2019, there were $2.0 million of outstanding foreign exchange contracts with less than six months tenor under the credit facility, which reduced the available borrowing under the revolving credit facility by $200,000 see Note 4 above.

Investment

Investment	9 Months Ended
	Apr. 30, 2019
Schedule of Investments [Abstract]
Investment	Note 10—Investment In August 2018, the Company made a $250,000 investment in TreSensa, Inc. (“TreSensa”), representing a less than 1% equity ownership interest on a fully-diluted basis, and concurrently entered into a playable ad distribution agreement with TreSensa under which the Company shall be paid a higher percentage (when compared to industry norms) of revenue derived from all playable ads provided by TreSensa, from its available catalogue for distribution through the Zedge App. The Company’s ownership interest in TreSensa, a privately-held company, is comprised of non-marketable equity securities without a readily determinable fair value. On August 1, 2018, the Company adopted ASU 2016-01, a new standard on the classification and measurement for non-marketable securities. The Company adjusts the carrying value of its non-marketable equity securities to fair value upon observable transactions for identical or similar investments of the same issuer or upon impairment (referred to as the measurement alternative). All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in interest and other income (expense), net. The Company’s non-marketable equity securities had a carrying value of $250,000 as of April 30, 2019. The maximum loss the Company can incur for its investment in TreSensa is $250,000. This investment is included within Other Assets on the consolidated balance sheets. The Company periodically evaluates the carrying value of the investments in privately-held companies when events and circumstances indicate that the carrying amount of the investment may not be recovered. The Company estimates the fair value of the investments to assess whether impairment losses shall be recorded using Level 3 inputs. These investments include the Company’s holdings in privately-held companies that are not exchange traded and therefore not supported with observable market prices; hence, the Company may determine the fair value by reviewing equity valuation reports, current financial results, long-term plans of the privately-held companies, the amount of cash that the privately-held companies have on-hand, the ability to obtain additional financing and overall market conditions in which the privately-held companies operate or based on the price observed from the most recent completed financing round. No impairment charge or upward adjustment was recorded in the three and nine months ended April 30, 2019.

Business Segment and Geographic

Business Segment and Geographic Information	9 Months Ended
	Apr. 30, 2019
Segment Reporting [Abstract]
Business Segment and Geographic Information	Note 11—Business Segment and Geographic Information The Company provides a content 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 mostly free, wallpapers, stickers, ringtones, notification sounds and video wallpapers. In March 2018, the Company completed its rollout of 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: 30-Apr-19 $ 3,489 $ 222 $ 3,711 31-Jul-18 $ 3,234 $ 235 $ 3,469 Total assets: 30-Apr-19 $ 6,022 $ 4,136 $ 10,158 31-Jul-18 $ 7,647 $ 4,072 $ 11,719

Commitments & Contingencies and

Commitments & Contingencies and Tax Matters	9 Months Ended
	Apr. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments & Contingencies and Tax Matters	Note 12— Commitments & Contingencies and Tax Matters Legal Proceedings In March 2014, Saregama India, Limited (“Saregama”) filed a lawsuit against the Company before the Barasat District Court, seeking approximately $1.6 million as damages and an injunction for copyright infringement. Saregama claims that the Company availed the plaintiff’s sound recordings to the general public through the Company’s platform without obtaining any licenses from the plaintiff. There have been no material updates to this matter since the filing in March 2014. The Company believes that the likelihood of material liability relating to this matter is remote. On October 5, 2018, Tellagemini Communication LLC (“Tellagemini”) filed a complaint in the U.S. District Court for the District of Delaware claiming that the Company is infringing a U.S. patent owned by the plaintiff and inducing its customers to infringe as well seeking unspecified damages. On November 14, 2018, Tellagemini voluntarily dismissed its complaint against the Company without prejudice. 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 2012 through 2016 were going to be audited by the tax authorities in Norway. The initial audit meeting took place in October 2016. In a report dated December 20, 2018, the Norwegian Tax Authorities informed the Company that they have concluded their audit with no changes. However, they recommended that the Company adopt a profit split method with Zedge Europe AS instead of the cost-plus menthod that the Company has used to set transfer pricing. The Company is evaluating this recommendation. Research and Development Credits As of April 30, 2019, the balance of the Company’s net receivable from SkatteFUNN, a Norwegian government program designed to stimulate research and development in Norwegian trade and industry, was $36,000 which was included in “Other current assets” in the consolidated balance sheet. The Company has not applied for any SkatteFUNN credit since January 2018. For the three and nine months ended April 30, 2018, the Company received SkatteFUNN credits of $0 and $39,200 respectively which were recorded as a reduction of selling, general and administrative expense.

Provision for Income Taxes

Provision for Income Taxes	9 Months Ended
	Apr. 30, 2019
Income Tax Disclosure [Abstract]
Provision for Income taxes	Note 13—Provision for Income taxes The increase in the provision for income taxes in the three and nine months ended April 30, 2019 compared to the corresponding periods in fiscal 2018 was primarily due to the jurisdiction in which loss was incurred in the three and nine months ended April 30, 2019 compared to the same periods in fiscal 2018 and our ability to utilize net operating losses the Company holds in certain jurisdictions. The tax expense consists of minimum state taxes based on allocated net worth. As part of the Tax Cuts and Jobs Act of 2017, Global Intangible Low-Taxed Income inclusion (GILTI) and Foreign Derived Intangible Income (FDII) deduction became effective on January 1, 2018. There was no impact to income tax expense resulting from the GILTI and FDII in light of the Company’s available NOL carry forward and its full valuation allowance.

Recently Issued Accounting Stan

Recently Issued Accounting Standards Not Yet Adopted	9 Months Ended
	Apr. 30, 2019
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recently Issued Accounting Standards Not Yet Adopted	Note 14—Recently Issued Accounting Standards Not Yet Adopted Recently Issued Accounting Standards Not Yet Adopted In August 2018, the FASB issued a new ASU which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new guidance is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted. The Company is evaluating the impact that this ASU will have on its consolidated financial statements. In August 2018, the FASB issued an ASU which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The update eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and introduces a requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. This guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption is permitted. The Company is evaluating the impact that this ASU will have on its consolidated financial statements. In August 2017, the FASB issued an ASU intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the ASU includes certain targeted improvements to simplify the application of hedge accounting guidance in U.S. GAAP. The amendments in this ASU are effective for the Company on August 1, 2019. Early application is permitted. Entities will apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements will be applied prospectively. The Company is evaluating the impact that this ASU will have on its consolidated financial statements. In June 2018, the FASB issued an ASU which expands the scope of ASC Topic 718, Compensation - Stock Compensation In June 2016, the FASB issued an 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 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.

Revenue (Tables)

Revenue (Tables)	9 Months Ended
	Apr. 30, 2019
Revenue from Contract with Customer [Abstract]
Schedule of revenue by type of service	Three Months Ended Nine Months Ended April 30, April 30, 2019 2018 2019 2018 (in thousands) (in thousands) Advertising revenue $ 1,670 $ 2,279 $ 6,243 $ 7,496 Service revenue 179 213 528 556 Other revenue 63 59 95 203 Total Revenue $ 1,912 $ 2,551 $ 6,866 $ 8,255

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Apr. 30, 2019
Fair Value Disclosures [Abstract]
Schedule 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) 30-Apr-19 Assets: Foreign exchange forward contracts $ - $ - $ - $ - Liabilities: Foreign exchange forward contracts $ - $ 96 $ - $ 96 31-Jul-18 Assets: Foreign exchange forward contracts $ - $ - $ - $ - Liabilities: Foreign exchange forward contracts $ - $ 41 $ - $ 41 (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)	9 Months Ended
	Apr. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of outstanding foreign exchange contracts	Settlement Date U.S. Dollar Amount NOK Amount May-19 $ 500,000 4,107,440 Jun-19 500,000 4,102,240 Jul-19 500,000 4,097,140 Aug-19 500,000 4,091,590 Total $ 2,000,000 16,398,410
Schedule of fair value of outstanding derivative instruments	Derivatives Instruments Balance Sheet Location April 30, July 31, (in thousands) Derivatives not designated or not qualifying as hedging instruments: Foreign exchange forward contracts Accrued expenses $ 96 $ 41
Schedule of derivative instruments on consolidated statements of comprehensive loss	Amount of Loss Recognized on Derivatives Derivatives not designated or Statement of Three Months Ended Nine Months Ended not qualifying as hedging Comprehensive Loss April 30, April 30, instruments Location 2019 2018 2019 2018 (in thousands) (in thousands) Foreign exchange forward contracts Net loss resulting from foreign exchange transactions $ 80 $ - $ 254 $ 1

Accrued Expenses (Tables)

Accrued Expenses (Tables)	9 Months Ended
	Apr. 30, 2019
Payables and Accruals [Abstract]
Schedule of accrued expenses	April 30, July 31, 2019 2018 (in thousands) Accrued vacation $ 699 $ 559 Accrued payroll taxes 323 184 Accrued payroll and bonuses 278 393 Accrued severance 2 83 Hedge Payable 96 41 Accrued professional fees 57 96 Due to artists 38 - Other 161 72 Total accrued expenses $ 1,654 $ 1,428

Equity (Tables)

Equity (Tables)	9 Months Ended
	Apr. 30, 2019
Equity [Abstract]
Schedule of changes in the components of equity	Nine Months Ended (in thousands) Balance, July 31, 2018 $ 10,010 Exercise of stock options 2 Stock-based compensation** 449 Purchase of treasury stock (31 ) Comprehensive loss: Net loss (2,142 ) Foreign currency translation adjustments (224 ) Total comprehensive loss (2,366 ) Balance, April 30, 2019 $ 8,064 ** This amount includes stock issued to pay for the Board of Directors’ compensation of $45,000 and the Company’s matching contribution to employees’ 401(k) plan with a value of $48,000.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Apr. 30, 2019
Loss per share attributable to Zedge, Inc. common stockholders:
Schedule of weighted-average number of shares calculation of basic and diluted earnings per share	Three Months Ended Nine Months Ended April 30, April 30, 2019 2018 2019 2018 (in thousands) Basic weighted-average number of shares 10,116 9,867 10,063 9,757 Effect of dilutive securities: Stock options — — — — Non-vested restricted Class B common stock — — — — Diluted weighted-average number of shares 10,116 9,867 10,063 9,757
Schedule of shares excluded from the dilutive earnings per share computations	Three Months Ended Nine Months Ended April 30, April 30, 2019 2018 2019 2018 (in thousands) Stock options 1,277 1,366 1,277 1,366 Non-vested restricted Class B common stock 217 346 217 346 Shares excluded from the calculation of diluted earnings per share 1,494 1,712 1,494 1,712

Related Party Transactions (Tab

Related Party Transactions (Tables)	9 Months Ended
	Apr. 30, 2019
Related Party Transactions [Abstract]
Schedule of related party transactions included in selling, general and administrative expense	Three Months Ended Nine Months Ended April 30, April 30, 2019 2018 2019 2018 (in thousands) (in thousands) Payments by IDT on behalf of the Company $ - $ 14 $ 21 $ 274 Cash repayments, net of advances $ 2 $ (26 ) $ (21 ) $ (313 )

Business Segment and Geograph_2

Business Segment and Geographic Information (Tables)	9 Months Ended
	Apr. 30, 2019
Segment Reporting [Abstract]
Schedule of net long-lived assets and total assets held outside of the United States	United States Foreign Total (in thousands) Long-lived assets, net: 30-Apr-19 $ 3,489 $ 222 $ 3,711 31-Jul-18 $ 3,234 $ 235 $ 3,469 Total assets: 30-Apr-19 $ 6,022 $ 4,136 $ 10,158 31-Jul-18 $ 7,647 $ 4,072 $ 11,719

Revenue (Details)

Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Disaggregation of Revenue [Line Items]
Total Revenue	$ 1,912	$ 2,551	$ 6,866	$ 8,255
Advertising revenue [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	1,670	2,279	6,243	7,496
Service revenue [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	179	213	528	556
Other revenue [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	$ 63	$ 59	$ 95	$ 203

Revenue (Details Textual)

Revenue (Details Textual)	9 Months Ended
	Apr. 30, 2019USD ($)
Revenue (Textual)
Credits, description	If a user purchases Zedge Credits (ranging from 500 credits for $0.99 to 14,000 credits for $19.99), Google Play or iTunes retains 30% of the purchase price as its fee. When a user purchases Zedge Premium content, the artist or brand receives 70% of the actual value of the Zedge Credits used to buy the content item ("Royalty Payment") and the Company receives the remaining 30%, which is recognized as Other Revenue. Some of the Zedge Premium content is available for print on demand merchandise, including phone cases and tee shirts fulfilled through third party vendors. When a user purchases a print-on-demand item the artist or brand is paid 70% of the net profit, after accounting for cost-of-goods sold, shipping and handling, credit card processing, and other direct expenses, and the Company recognizes Other Revenue in the amount of the remaining 30%.
Royalty payments, description	The Company makes Royalty Payments to the artists and brands within sixty (60) days after the end of each calendar quarter. If the quarterly royalty amount is less than two hundred dollars ($200), the Company may defer payment to a later period in which the artist or brand surpasses the $200 threshold. The artist or brand forfeits any accrued royalty amounts below the $200 threshold upon expiration or termination of the artist's license agreement with the Company. This provision will become effective on the first anniversary for all existing license agreements and for all new license agreements entered into on or after November 1, 2018. Additionally, the Company has established a minimum threshold of twenty-five dollars ($25) in accrued Royalty Payments in order for an artist or brand to maintain its license agreement. Accordingly, if an artist hasn't generated a minimum of $25 in accrued Royalty Payments amount in a year, the Company may deduct up to $25 from the artist's accrued Royalty Payment account.
Royalty aggregate amount	$ 38,000
Deferred revenue	$ 120,000
Other revenues, description	Gross revenue and net revenue generated from Zedge Premium were $159,000 and $36,000, respectively. For the nine months ended April 30, 2019, gross revenue and net revenue generated from Zedge Premium were $317,000 and $69,000, respectively.
Subscription revenue, description	The payment terms for subscriptions is 30 days after month-end. The Company sold $187,000 in gross subscription in the three months ended April 30, 2019 and recognized $26,000 in revenue in the same period. The Company had close to 60,000 active subscription accounts as of April 30, 2019, including approximately 14,000 monthly subscription accounts and 46,000 yearly subscription accounts with an aggregate $164,000 in deferred revenue.
Service revenue percentage for advertising inventory	9.00%
Process subscription payments fee percent	30.00%
Fee, percentage	30.00%
Revenue [Member]
Revenue (Textual)
Concentration risk, percentage	90.00%
Minimum [Member]
Revenue (Textual)
Payment terms	30 days
Maximum [Member]
Revenue (Textual)
Payment terms	60 days

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands		Apr. 30, 2019	Jul. 31, 2018
Assets:
Foreign exchange forward contracts
Liabilities:
Foreign exchange forward contracts		96	41
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]
Liabilities:
Foreign exchange forward contracts	[2]	96	41
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) kr in Thousands, $ in Thousands	9 Months Ended
	Apr. 30, 2019USD ($)	Apr. 30, 2019NOK (kr)
Derivative Instruments, Gain (Loss) [Line Items]
Amount | $	$ 2,000,000
NOK [Member]
Derivative Instruments, Gain (Loss) [Line Items]
NOK Amount		kr 16,398,410
May-19 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Settlement Date	May 31, 2019	May 31, 2019
May-19 [Member] | NOK [Member]
Derivative Instruments, Gain (Loss) [Line Items]
NOK Amount		kr 4,107,440
Jun-19 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Settlement Date	Jun. 30, 2019	Jun. 30, 2019
Amount | $	$ 500,000
Jun-19 [Member] | NOK [Member]
Derivative Instruments, Gain (Loss) [Line Items]
NOK Amount		kr 4,102,240
Jul-19 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Settlement Date	Jul. 31, 2019	Jul. 31, 2019
Amount | $	$ 500,000
Jul-19 [Member] | NOK [Member]
Derivative Instruments, Gain (Loss) [Line Items]
NOK Amount		kr 4,097,140
Aug-19 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Settlement Date	Aug. 31, 2019	Aug. 31, 2019
Amount | $	$ 500,000
Aug-19 [Member] | NOK [Member]
Derivative Instruments, Gain (Loss) [Line Items]
NOK Amount		kr 4,091,590

Derivative Instruments (Detai_2

Derivative Instruments (Details 1) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Apr. 30, 2019	Jul. 31, 2018
Derivatives not designated or not qualifying as hedging instruments:
Foreign exchange forward contracts	$ 96	$ 41
Balance Sheet Location	Accrued expenses	Accrued expenses

Derivative Instruments (Detai_3

Derivative Instruments (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Derivatives not designated or not qualifying as hedging instruments
Foreign exchange forward contracts	$ 80		$ 254	$ 1
Statement of Comprehensive Loss Location	Net loss resulting from foreign exchange transactions	Net loss resulting from foreign exchange transactions	Net loss resulting from foreign exchange transactions	Net loss resulting from foreign exchange transactions

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Apr. 30, 2019	Jul. 31, 2018
Payables and Accruals [Abstract]
Accrued vacation	$ 699	$ 559
Accrued payroll taxes	323	184
Accrued payroll and bonuses	278	393
Accrued severance	2	83
Hedge Payable	96	41
Accrued professional fees	57	96
Due to artists	38
Other	161	72
Total accrued expenses	$ 1,654	$ 1,428

Equity (Details)

Equity (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018	Jul. 31, 2018
Equity [Abstract]
Balance, July 31, 2018				$ 10,010
Exercise of stock options				2
Stock-based compensation	[1]			449
Purchase of treasury stock		$ 31		31
Comprehensive loss:
Net loss		(1,195)	$ (309)	(2,142)	$ (1,302)
Foreign currency translation adjustments		(93)	$ (152)	(224)	$ (50)
Total comprehensive loss				(2,366)
Balance, April 30, 2019		$ 8,064		$ 8,064
[1]	This amount includes stock issued to pay for the Board of Directors' compensation of $45,000 and the Company's matching contribution to employees' 401(k) plan with a value of $48,000.

Equity (Details Textual)

Equity (Details Textual) - USD ($)	Oct. 24, 2018	Feb. 07, 2018	Sep. 30, 2018	Nov. 30, 2017	Oct. 18, 2017	Sep. 30, 2017	Sep. 30, 2016	Apr. 30, 2019	Oct. 31, 2017
Freeform Development, Inc. [Member]
Equity (Textual)
Operating liabilities						$ 125,000
Consisting of cash									$ 465,000
Refund received from related party, description								In July 2018, the Company received a $25,000 refund from Freeform. Accordingly, the Company reduced the Freeform transaction costs from $465,000 to $440,000.
Board of Directors [Member]
Equity (Textual)
Contribution amount								$ 48,000
Stock issued to pay compensation								45,000
Restricted Stock Award [Member]
Equity (Textual)
Grant of restricted shares		108,553
Aggregate grant date fair value		$ 330,000
Unrecognized compensation expense								$ 192,000
Vested shares, description		One-third of the shares have vested in the three months ended April 30, 2019 and the remaining shares shall vest in equal amounts on February 7, 2020 and 2021.
Class B common stock [Member]
Equity (Textual)
Options to purchase shares of the Company's Class B common stock								373,000
Fair market value						242,000
Class B common stock [Member] | Freeform Development, Inc. [Member]
Equity (Textual)
Options to purchase shares of the Company's Class B common stock			14,137
Convertible promissory notes cash						$ 97,567
Stock issued shares of common stock						126,679
Unrecognized compensation expense								$ 223,000
Stock issued to pay compensation			$ 30,543
Stock Option [Member]
Equity (Textual)
Options to purchase shares of the Company's Class B common stock							231,327
Vesting period							3 years
Cancelled shares of these options grant				53,026
Annual limit shares per grantee				60,000
Fair market value							$ 681,000
Stock Option [Member] | Non-executive employees [Member]
Equity (Textual)
Options to purchase shares of the Company's Class B common stock					55
Stock Option [Member] | Class B common stock [Member]
Equity (Textual)
Options to purchase shares of the Company's Class B common stock	17,493				124,435			192,953
Unrecognized compensation expense	$ 20,000				$ 159,000
Vesting period	3 years				3 years			4 years
Fair market value								$ 369,000
Unrecognized compensation expense								$ 131,000
2016 Stock Option and Incentive Plan [Member] | Board of Directors [Member]
Equity (Textual)
Option grant								53,026
Unrecognized compensation expense								$ 85,000
2016 Stock Option and Incentive Plan [Member] | Class B common stock [Member]
Equity (Textual)
Options to purchase shares of the Company's Class B common stock					350,000

Earnings Per Share (Details)

Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Weighted-average number of shares used in the calculation of basic and diluted earnings per share
Basic weighted-average number of shares	10,116	9,867	10,063	9,757
Effect of dilutive securities:
Stock options
Non-vested restricted Class B common stock
Diluted weighted-average number of shares	10,116	9,867	10,063	9,757

Earnings Per Share (Details 1)

Earnings Per Share (Details 1) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the calculation of diluted earnings per share	1,494	1,712	1,494	1,712
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the calculation of diluted earnings per share	1,277	1,366	1,277	1,366
Non-vested restricted Class B common stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the calculation of diluted earnings per share	217	346	217	346

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Related Party Transactions [Abstract]
Payments by IDT on behalf of the Company		$ 14	$ 21	$ 274
Cash repayments, net of advances	$ 2	$ (26)	$ (21)	$ (313)

Revolving Credit Facility (Deta

Revolving Credit Facility (Details) - Revolving Credit Facility [Member] - USD ($)	1 Months Ended	9 Months Ended
	Sep. 27, 2016	Apr. 30, 2019	Nov. 16, 2016
Revolving Credit Facility (Textual)
Loan and security agreement with Western Alliance Bank for revolving credit facility	$ 2,500,000	$ 20,000,000
Line of credit facility, borrowing capacity, description	An initial two years term which was extended for another two years term expiring September 26, 2020.	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 5.0% or the prime rate plus 1.25%.
Line of credit maturity date	Sep. 26, 2020
Line of credit facility annual fee	$ 12,500
Foreign Exchange Agreement [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 is reduced by an applicable foreign exchange reserve percentage as determined by Western Alliance Bank, in its reasonable discretion from time to time, which was initially set at 10% of the nominal amount of the foreign exchange contracts in effect at the relevant time.
Foreign exchange, Description		In December 2016, the applicable foreign exchange reserve percentage was changed so that the reduction of available borrowing for major currency forward contracts of less than six months tenor is set at 10% of the nominal amount of the foreign exchange contracts, and for contracts over six months tenor, 12.5% of the nominal amount of the foreign exchange contracts.
Foreign Exchange Agreement [Member] | Maximum [Member]
Revolving Credit Facility (Textual)
Loan and security agreement with Western Alliance Bank for revolving credit facility		$ 200,000
Loan And Security Modification Agreement [Member]
Revolving Credit Facility (Textual)
Loan and security agreement with Western Alliance Bank for revolving credit facility			$ 6,500,000

Investment (Details)

Investment (Details) - USD ($) $ in Thousands	1 Months Ended
	Aug. 31, 2018	Apr. 30, 2019
Investment (Textual)
Investments, description	The Company made a $250,000 investment in TreSensa, Inc. ("TreSensa"), representing a less than 1% equity ownership interest on a fully-diluted basis, and concurrently entered into a playable ad distribution agreement with TreSensa under which the Company shall be paid a higher percentage (when compared to industry norms) of revenue derived from all playable ads provided by TreSensa, from its available catalogue for distribution through the Zedge App.
Non-marketable equity securities carrying value		$ 250
Maximum loss on investment		$ 250

Business Segment and Geograph_3

Business Segment and Geographic Information (Details) - USD ($) $ in Thousands	Apr. 30, 2019	Jul. 31, 2018
Segment Reporting Information [Line Items]
Long-lived assets, net:	$ 3,711	$ 3,469
Total assets	10,158	11,719
United States [Member]
Segment Reporting Information [Line Items]
Long-lived assets, net:	3,489	3,234
Total assets	6,022	7,647
Foreign [Member]
Segment Reporting Information [Line Items]
Long-lived assets, net:	222	235
Total assets	$ 4,136	$ 4,072

Business Segment and Geograph_4

Business Segment and Geographic Information (Details Textual)	9 Months Ended
	Apr. 30, 2019Segments
Business Segment and Geographic Information Details (Textual)
Number of operating segment	1

Commitments & Contingencies a_2

Commitments & Contingencies and Tax Matters (Details) - USD ($)	Mar. 31, 2014	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Commitments & Contingencies and Tax Matters (Textual)
Lawsuit approximate amount	$ 1,600,000
Selling, general and administrative expense		$ 2,289,000	$ 2,195,000	$ 6,761,000	$ 7,753,000
Norway SkatteFUNN [Member]
Commitments & Contingencies and Tax Matters (Textual)
Research and development in Norwegian trade and industry		$ 36,000		$ 36,000
Selling, general and administrative expense			$ 0		$ 39,200