Cover
Cover - shares | 6 Months Ended | |
Jan. 31, 2024 | Mar. 13, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Jan. 31, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Information [Line Items] | ||
Entity Registrant Name | ZEDGE, INC. | |
Entity Central Index Key | 0001667313 | |
Entity File Number | 1-37782 | |
Entity Tax Identification Number | 26-3199071 | |
Entity Incorporation, State or Country Code | DE | |
Current Fiscal Year End Date | --07-31 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Contact Personnel [Line Items] | ||
Entity Address, Address Line One | 1178 Broadway | |
Entity Address, Address Line Two | 3rd Floor #1450 | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10001 | |
Entity Phone Fax Numbers [Line Items] | ||
City Area Code | (330) | |
Local Phone Number | 577-3424 | |
Entity Listings [Line Items] | ||
Title of 12(b) Security | Class B common stock, par value $.01 per share | |
Trading Symbol | ZDGE | |
Security Exchange Name | NYSE | |
Class A common stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 524,775 | |
Class B common stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 14,033,055 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 31, 2024 | Jul. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 18,064 | $ 18,125 |
Trade accounts receivable | 3,363 | 2,883 |
Prepaid expenses and other receivables | 675 | 569 |
Total current assets | 22,102 | 21,577 |
Property and equipment, net | 2,608 | 2,186 |
Intangible assets, net | 5,593 | 18,709 |
Goodwill | 1,902 | 1,961 |
Deferred tax assets, net | 4,461 | 1,842 |
Other assets | 431 | 556 |
Total assets | 37,097 | 46,831 |
Current liabilities: | ||
Trade accounts payable | 933 | 669 |
Accrued expenses and other current liabilities | 2,852 | 2,676 |
Deferred revenues | 2,056 | 2,414 |
Total current liabilities | 5,841 | 5,759 |
Term loan, net of deferred financing costs | 1,985 | |
Deferred revenues--non-current | 411 | |
Other liabilities | 163 | 223 |
Total liabilities | 6,415 | 7,967 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Preferred stock, $.01 par value; authorized shares—2,400; no shares issued and outstanding | ||
Additional paid-in capital | 47,313 | 46,122 |
Accumulated other comprehensive loss | (1,654) | (1,537) |
Accumulated deficit | (13,187) | (3,942) |
Treasury stock, 839 shares at January 31, 2024 and 833 shares at July 31, 2023, at cost | (1,943) | (1,930) |
Total stockholders’ equity | 30,682 | 38,864 |
Total liabilities and stockholders’ equity | 37,097 | 46,831 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock value | 5 | 5 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock value | $ 148 | $ 146 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares shares in Thousands | Jan. 31, 2024 | Jul. 31, 2023 |
Preferred stock par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,400 | 2,400 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Treasury stock, shares | 839 | 833 |
Class A Common Stock | ||
Common stock, par value (in Dollars per share) | $ 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 (in Dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 40,000 | 40,000 |
Common stock, shares issued | 14,756 | 14,634 |
Common stock, shares outstanding | 13,917 | 13,801 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Income Statement [Abstract] | ||||
Revenues | $ 7,771 | $ 6,983 | $ 14,852 | $ 13,883 |
Costs and expenses: | ||||
Direct cost of revenues (excluding amortization of capitalized software and technology development costs which is included below) | 458 | 632 | 944 | 1,264 |
Selling, general and administrative | 6,523 | 5,871 | 12,022 | 11,697 |
Depreciation and amortization | 762 | 815 | 1,537 | 1,608 |
Impairment of intangible assets | 11,958 | 11,958 | ||
Change in fair value of contingent consideration | (1,793) | (1,943) | ||
(Loss) income from operations | (11,930) | 1,458 | (11,609) | 1,257 |
Interest and other income, net | 165 | 77 | 246 | 112 |
Net gain (loss) resulting from foreign exchange transactions | 76 | 160 | (143) | 84 |
(Loss) income before income taxes | (11,689) | 1,695 | (11,506) | 1,453 |
Income tax (benefit) provision | (2,459) | 89 | (2,260) | 16 |
Net (loss) income | (9,230) | 1,606 | (9,246) | 1,437 |
Other comprehensive gain (loss): | ||||
Changes in foreign currency translation adjustment | 250 | 152 | (117) | (107) |
Total other comprehensive gain (loss) | 250 | 152 | (117) | (107) |
Total comprehensive (loss) income | $ (8,980) | $ 1,758 | $ (9,363) | $ 1,330 |
(Loss) income per share attributable to Zedge, Inc. common stockholders: | ||||
Basic (in Dollars per share) | $ (0.66) | $ 0.11 | $ (0.66) | $ 0.1 |
Diluted (in Dollars per share) | $ (0.66) | $ 0.11 | $ (0.66) | $ 0.1 |
Weighted-average number of shares used in calculation of income (loss) per share: | ||||
Basic (in Shares) | 14,068 | 14,087 | 14,022 | 14,208 |
Diluted (in Shares) | 14,068 | 14,259 | 14,022 | 14,440 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock | Total |
Balance at Jul. 31, 2022 | $ 5 | $ 139 | $ 43,609 | $ (1,391) | $ 2,160 | $ (334) | $ 44,188 |
Balance (in Shares) at Jul. 31, 2022 | 525 | 13,951 | 74 | ||||
Stock-based compensation | $ 1 | 589 | 590 | ||||
Stock-based compensation (in Shares) | 30 | ||||||
Purchase of treasury stock | $ (310) | (310) | |||||
Purchase of treasury stock (in Shares) | 130 | ||||||
Foreign currency translation adjustment | (259) | (259) | |||||
Net income (loss) | (169) | (169) | |||||
Balance at Oct. 31, 2022 | $ 5 | $ 140 | 44,198 | (1,650) | 1,991 | $ (644) | 44,040 |
Balance (in Shares) at Oct. 31, 2022 | 525 | 13,981 | 204 | ||||
Balance at Jul. 31, 2022 | $ 5 | $ 139 | 43,609 | (1,391) | 2,160 | $ (334) | $ 44,188 |
Balance (in Shares) at Jul. 31, 2022 | 525 | 13,951 | 74 | ||||
Exercise of stock options (in Shares) | 223 | ||||||
Net income (loss) | $ 1,437 | ||||||
Balance at Jan. 31, 2023 | $ 5 | $ 147 | 44,979 | (1,498) | 3,597 | $ (1,323) | 45,907 |
Balance (in Shares) at Jan. 31, 2023 | 525 | 14,674 | 522 | ||||
Balance at Oct. 31, 2022 | $ 5 | $ 140 | 44,198 | (1,650) | 1,991 | $ (644) | $ 44,040 |
Balance (in Shares) at Oct. 31, 2022 | 525 | 13,981 | 204 | ||||
Exercise of stock options (in Shares) | 163 | ||||||
Restricted stock issuance in connection with GuruShots acquisition | $ 6 | (6) | |||||
Restricted stock issuance in connection with GuruShots acquisition (in Shares) | 617 | ||||||
Stock-based compensation | $ 1 | 787 | 788 | ||||
Stock-based compensation (in Shares) | 76 | ||||||
Purchase of treasury stock | $ (679) | (679) | |||||
Purchase of treasury stock (in Shares) | 318 | ||||||
Foreign currency translation adjustment | 152 | 152 | |||||
Net income (loss) | 1,606 | 1,606 | |||||
Balance at Jan. 31, 2023 | $ 5 | $ 147 | 44,979 | (1,498) | 3,597 | $ (1,323) | 45,907 |
Balance (in Shares) at Jan. 31, 2023 | 525 | 14,674 | 522 | ||||
Balance at Jul. 31, 2023 | $ 5 | $ 146 | 46,122 | (1,537) | (3,942) | $ (1,930) | 38,864 |
Balance (in Shares) at Jul. 31, 2023 | 525 | 14,634 | 833 | ||||
Exercise of stock options | 3 | 3 | |||||
Exercise of stock options (in Shares) | 2 | ||||||
Stock-based compensation | $ 1 | 506 | 507 | ||||
Stock-based compensation (in Shares) | 33 | ||||||
Purchase of treasury stock | $ (13) | (13) | |||||
Purchase of treasury stock (in Shares) | 6 | ||||||
Foreign currency translation adjustment | (367) | (367) | |||||
Net income (loss) | (15) | (15) | |||||
Balance at Oct. 31, 2023 | $ 5 | $ 147 | 46,631 | (1,904) | (3,957) | $ (1,943) | 38,979 |
Balance (in Shares) at Oct. 31, 2023 | 525 | 14,669 | 839 | ||||
Balance at Jul. 31, 2023 | $ 5 | $ 146 | 46,122 | (1,537) | (3,942) | $ (1,930) | $ 38,864 |
Balance (in Shares) at Jul. 31, 2023 | 525 | 14,634 | 833 | ||||
Exercise of stock options (in Shares) | |||||||
Net income (loss) | $ (9,246) | ||||||
Balance at Jan. 31, 2024 | $ 5 | $ 148 | 47,313 | (1,654) | (13,187) | $ (1,943) | 30,682 |
Balance (in Shares) at Jan. 31, 2024 | 525 | 14,756 | 839 | ||||
Balance at Oct. 31, 2023 | $ 5 | $ 147 | 46,631 | (1,904) | (3,957) | $ (1,943) | $ 38,979 |
Balance (in Shares) at Oct. 31, 2023 | 525 | 14,669 | 839 | ||||
Exercise of stock options (in Shares) | |||||||
Stock-based compensation | $ 1 | 682 | $ 683 | ||||
Stock-based compensation (in Shares) | 87 | ||||||
Foreign currency translation adjustment | 250 | 250 | |||||
Net income (loss) | (9,230) | (9,230) | |||||
Balance at Jan. 31, 2024 | $ 5 | $ 148 | $ 47,313 | $ (1,654) | $ (13,187) | $ (1,943) | $ 30,682 |
Balance (in Shares) at Jan. 31, 2024 | 525 | 14,756 | 839 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Operating activities | ||
Net (loss) income | $ (9,246) | $ 1,437 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation | 28 | 30 |
Amortization of intangible assets | 1,158 | 1,158 |
Amortization of capitalized software and technology development costs | 351 | 420 |
Amortization of deferred financing costs | 15 | 1 |
Stock-based compensation | 1,190 | 1,378 |
Impairment charge of intangible assets | 11,958 | |
Impairment of investment in privately-held company | 50 | |
Change in fair value of contingent consideration | (1,943) | |
Deferred income taxes | (2,619) | 33 |
Change in assets and liabilities: | ||
Trade accounts receivable | (480) | (377) |
Prepaid expenses and other current assets | (106) | (938) |
Other assets | 15 | 22 |
Trade accounts payable and accrued expenses | 445 | 497 |
Deferred revenue | 53 | (597) |
Net cash provided by operating activities | 2,812 | 1,121 |
Investing activities | ||
Final payments for asset acquisitions | (962) | |
Capitalized software and technology development costs | (777) | (668) |
Purchase of property and equipment | (23) | (53) |
Net cash used in investing activities | (800) | (1,683) |
Financing activities | ||
Prepayment of term loan | (2,000) | |
Proceeds from term loan payable | 2,000 | |
Payment of deferred financing costs | (18) | |
Proceeds from exercise of stock options | 3 | |
Purchase of treasury stock in connection with share buyback program and stock awards vesting | (13) | (989) |
Net cash (used in) provided by financing activities | (2,010) | 993 |
Effect of exchange rate changes on cash and cash equivalents | (63) | (57) |
Net (decrease) increase in cash and cash equivalents | (61) | 374 |
Cash and cash equivalents at beginning of period | 18,125 | 17,085 |
Cash and cash equivalents at end of period | 18,064 | 17,459 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash payments made for income taxes | 67 | 711 |
Cash payments made for interest expenses | $ 65 | $ 31 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jan. 31, 2024 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 1—Basis of Presentation and Summary of Significant Accounting Policies Description of Business Zedge, Inc. (“Zedge”) builds digital marketplaces and friendly competitive games around content that people use to express themselves. Our leading products include Zedge Ringtones and Wallpapers, which we refer to as our Zedge App, a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones, and notification sounds as well as pAInt, a generative AI wallpaper maker, GuruShots, a skill-based photo challenge game, and Emojipedia, the #1 trusted source for ‘all things emoji’. Our vision is to enable and connect creators who enjoy friendly competitions with a community of prospective consumers in order to drive commerce. Except where the context clearly indicates otherwise, the terms the “Company,” “Zedge” “we,” “us” or “our” refer to Zedge, Inc. and its consolidated subsidiaries. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Zedge, Inc. and its subsidiaries: GuruShots Ltd. (“GuruShots”); Zedge Europe AS; and Zedge Lithuania UAB (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 8 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 six months ended January 31, 2024 and 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2024 or any other period. The balance sheet at July 31, 2023 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 fiscal year ended July 31, 2023 (the “2023 Form 10-K”), as filed with the U.S. Securities and Exchange Commission (the “SEC”). 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 2023 refers to the fiscal year ended July 31, 2023). Reportable Segments Effective August 1, 2022, we revised the presentation of segment information to reflect our acquisition of GuruShots. As such, we now report operating results through two reportable segments: Zedge Marketplace and GuruShots, as further discussed in Note 11, Segment and Geographic Information Use of Estimates The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ materially from the Company’s estimates due to risks and uncertainties, including uncertainty in the economic environment due to various global events. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The guidance in ASU 2023-07 seeks to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU require a public entity to disclose the following: significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss; an amount for other segment items by reportable segment and a description of its composition; and the title and position of the CODM and how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. This ASU requires public entities to provide all annual disclosures about a reportable segment's profit or loss and assets currently required by Topic 280 in interim periods. ASU 2023-07 clarifies that if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-07 is a requirement for additional disclosure and is not expected to materially impact the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance in this ASU enhances the transparency and decision functionality of income tax disclosures to provide investors information to better assess how an entity's operations and related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flow. The amendments in this ASU require public entities to disclose the following specific categories in the rate reconciliation by both percentages and reporting currency amounts: the effect of state and local income tax, net of federal (national) income tax, foreign tax effects, effects of changes in tax laws or rates enacted in the current period, effects of cross-border tax laws, tax credits, changes in valuation allowances, nontaxable or nondeductible items and changes in unrecognized tax benefits. The amendments in ASU 2023-09 also require public entities to provide additional information for reconciling items that meet the qualitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pre-tax income (loss) by the applicable statutory income tax rate). The ASU requires reporting entities to annually disclose the year-to-date amount of income taxes paid (net of refunds received) disaggregated by federal, state and foreign localities. The amendments in this ASU should be applied on a prospective basis and retrospective application is permitted. For public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements not yet issued. ASU 2023-09 is a requirement for additional disclosure and is not expected to materially impact the consolidated financial statements. Related Party Transactions 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-held company. IDT charges the Company for services it provides, and the Company charges IDT for services it provides, pursuant to a Transition Services Agreement (“TSA”). The Company is party to a consulting agreement with Activist Artist Management, LLC (“Activist”), which assists the Company in strategic business development. A member of the Company’s Board of Directors owns a significant minority stake in Activist. Transactions with these related parties did not have a material impact to the consolidated balance sheets as of January 31, 2024 or July 31, 2023, or the consolidated statements of operations and comprehensive loss for the three and six months ended January 31, 2024 and 2023. |
Revenue
Revenue | 6 Months Ended |
Jan. 31, 2024 | |
Revenue [Abstract] | |
Revenue | Note 2—Revenue Disaggregation of Revenue The following table presents revenue disaggregated by segment and type: Three Months Ended Six Months Ended January 31, January 31, 2024 2023 2024 2023 (in thousands) Zedge Marketplace Advertising revenue $ 5,482 $ 4,630 $ 10,421 $ 9,120 Paid subscription revenue 1,088 875 2,064 1,766 Other revenues 282 230 504 420 Total Zedge App revenue 6,852 5,735 12,989 11,306 GuruShots Digital goods and services 919 1,248 1,863 2,577 Total revenue $ 7,771 $ 6,983 $ 14,852 $ 13,883 Contract Balances The Company enters into contracts with its customers, which may give rise to contract liabilities (deferred revenue) and contract assets (unbilled revenue). The payment terms and conditions within the Company’s contracts vary by products or services purchased, substantially all of which are due in less than one year. When the timing of revenue recognition differs from the timing of payments made by customers, the Company recognizes deferred revenue (when customer payment is received in advance of performance). The Company does not have unbilled revenue (when the Company’s performance precedes the billing date). Deferred revenues On April 1, 2022, the AppLovin Corporation paid the Company a one-time integration bonus of $2 million for migrating to their mediation platform. This amount is being amortized over an estimated service period of 24 months. The Company’s deferred revenue balance related to this bonus was approximately $0.2 million and $0.7 million as of January 31, 2024 and July 31, 2023, respectively. The Company records deferred revenues related to the unsatisfied performance obligations with respect to subscription revenue. The Company’s deferred revenue balance for paid subscriptions was approximately $2.0 million related to approximately 648,000 active subscribers, and approximately $1.5 million, related to approximately 647,000 active subscribers as of January 31, 2024 and July 31, 2023, respectively. The Company also 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 or upon expiration of the Zedge Credits upon 180 days of account inactivity (“Breakage”). As of January 31, 2024, and July 31, 2023, the Company’s deferred revenue balance related to Zedge Premium was approximately $257,000 and $255,000, respectively. The amount of deferred revenue recognized in the six months ended January 31, 2024 that was included in the deferred revenue balance at July 31, 2023 was $1.6 million. Significant Judgments The advertising networks and advertising exchanges to which the Company sells its inventory track and report the impressions and revenues 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 revenues 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. Practical Expedients The Company expenses the fees retained by Google Play and App Store related to subscription revenue when incurred as marketing expense because the duration of the contracts for which the Company pays commissions are less than one year, except for the new lifetime subscriptions we rolled out in August 2023. These costs are included in the selling, general and administrative expenses of the condensed consolidated statements of operations and comprehensive (loss) income. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jan. 31, 2024 | |
Fair Value Measurements [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 (in thousands): Level 1 Level 2 Level 3 Total January 31, 2024 Liabilities: Foreign exchange forward contracts $ - $ 54 $ - $ 54 July 31, 2023 Assets: Foreign exchange forward contracts $ - $ 19 $ - $ 19 (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 Contingent Consideration Contingent consideration related to business combinations are classified within Level 3 of the fair value hierarchy as the determination of fair value uses considerable judgement and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability. The following table provides a rollforward of the contingent consideration related to our acquisition of GuruShots (in thousands): Balance at July 31, 2022 $ 1,943 Change in fair value (1,943 ) Balance at January 31, 2023 $ 0 The overall fair value of the contingent consideration decreased by $1,943,000 during the six months ended January 31, 2023, due primarily to the decrease in the likelihood that certain contingent milestones would be achieved. Fair Value of Other Financial Instruments Fair value of the outstanding foreign exchange forward contracts are marked to market price at the end of each measurement period. The Company’s other financial instruments at January 31, 2024 and July 31, 2023 included trade accounts receivable and trade accounts payable. The carrying amounts of other assets and liabilities such as prepaid expenses, trade accounts receivable and trade accounts payable approximated fair value due to their short-term nature. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jan. 31, 2024 | |
Derivative Instruments [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 (USD) to Norwegian Kroner (NOK) and USD to Euro (EUR) exchange rates. The Company is party to a Foreign Exchange Agreement with Western Alliance Bank (“WAB”) allowing the Company to enter into foreign exchange contracts under its revolving credit facility with the bank (see Note 10 Term Loan and Revolving Credit Facility The outstanding contracts at January 31, 2024, were as follows: Settlement Date U.S. Dollar Amount NOK Feb-24 225,000 2,246,265 Mar-24 225,000 2,242,823 Apr-24 225,000 2,240,550 May-24 225,000 2,237,738 Total 900,000 8,967,375 Settlement Date U.S. Dollar Amount EUR Feb-24 225,000 205,893 Mar-24 225,000 205,611 Apr-24 225,000 205,386 May-24 225,000 205,142 Total 900,000 822,032 The fair value of outstanding derivative instruments recorded in the accompanying unaudited condensed consolidated balance sheets were as follows: January 31, July 31, (in thousands) 2024 2023 Assets and Liabilities Derivatives: Balance Sheet Location Derivatives not designated or not qualifying as hedging instruments Foreign exchange forward contracts Other current assets $ - $ 19 Foreign exchange forward contracts Accrued expenses and other current liabilities $ 54 $ - The effects of derivative instruments on the condensed consolidated statements of operations and comprehensive (loss) income were as follows: Three Months Ended Six Months Ended Amount of Loss Recognized on Derivatives 2024 2023 2024 2023 Derivatives not designated or not qualifying as hedging instruments Location of income (loss) recognized on derivatives (in thousands) (in thousands) Foreign exchange forward contracts Net loss resulting from foreign exchange transactions $ 131 $ 185 (151 ) $ 64 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jan. 31, 2024 | |
Intangible Assets and Goodwill [Abstract] | |
Intangible Assets and Goodwill | Note 5—Intangible Assets and Goodwill Intangible assets are initially recorded at fair value and stated net of accumulated amortization and impairments. The Company amortizes its intangible assets that have finite lives using either the straight-line method, or if reliably determinable, based on the pattern in which the economic benefit of the asset is expected to be utilized. Amortization is recorded over the estimated useful lives ranging from 5 to 15 years. The Company evaluates the recoverability of its definite lived intangible assets whenever events or changes in circumstances or business conditions indicate that the carrying value of these assets may not be recoverable based on expectations of future undiscounted cash flows for each asset group. If the carrying value of an asset or asset group exceeds its undiscounted cash flows, the Company estimates the fair value of the assets, generally utilizing a discounted cash flow analysis based on the present value of after-tax cash flows to be generated by the assets using a risk-adjusted discount rate. To estimate the fair value of the assets, the Company uses market participant assumptions pursuant to ASC 820, Fair Value Measurements. The following table presents the detail of intangible assets, net as of January 31, 2024 and July 31, 2023 (in thousands): January 31, 2024 July 31, 2023 Gross Accumulated Allocation of Net Gross Accumulated Net Emojipedia.org and other internet domains acquired 6,711 1,118 - 5,593 6,711 894 5,817 Acquired developed technology 3,950 1,422 2,528 - 3,950 1,028 2,922 Customer relationships 7,800 1,403 6,397 - 7,800 1,013 6,787 Trade names 3,570 537 3,033 - 3,570 387 3,183 Total intangible assets $ 22,031 $ 4,480 11,958 $ 5,593 $ 22,031 $ 3,322 $ 18,709 During the second quarter of fiscal 2024, in connection with its company-wide strategic planning process as well as evaluating the current operating performance of its GuruShots reporting unit, including product enhancement and marketing, the Company reassessed its short-term and long-term commercial plans for this business. The Company made certain operational and strategic decisions to invest in, and increase its focus on, the long-term success of this business, which resulted in the Company significantly reducing its forecasted revenues and operating results. As a result, the Company identified indicators of impairment and performed an undiscounted cash flow analysis pursuant to ASC 360, Property, Plant, and Equipment - Overall To record the adjustment of the carrying value of the asset group to fair value, the Company recorded an impairment charge of $11.9 million during the second quarter of fiscal 2024. The impairment charge was allocated to the long-lived assets on a pro-rata basis as follows: $2.5 million to acquired developed technology, $6.4 million to customer relationships, and $3.0 million to trade names. The Company believes its assumptions used to determine the fair value of the asset group were reasonable. Estimated future amortization expense as of January 31, 2024 is as follows (in thousands): Fiscal 2024 $ 224 Fiscal 2025 447 Fiscal 2026 447 Fiscal 2027 447 Fiscal 2028 447 Thereafter 3,581 Total $ 5,593 The Company’s amortization expense for intangible assets were $1.2 million and $1.2 million for the six months ended January 31, 2024 and 2023, respectively. Goodwill The following table summarizes the changes in the carrying amount of goodwill for the six months ended January 31, 2024. (in thousands) Carrying Amounts Balance as of July 31, 2023 1,961 Impact of currency translation (59 ) Balance as of January 31, 2024 $ 1,902 The total accumulated impairment loss of the Company’s goodwill as of January 31, 2024 was $8.7 million. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jan. 31, 2024 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 6—Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): January 31, July 31, 2024 2023 Accrued payroll and bonuses $ 964 $ 1,136 Accrued vacation 711 593 Accrued payroll taxes 271 237 Due to artists 301 226 Accrued expenses 301 301 Operating lease liability-current portion 115 124 Derivative liability for foreign exchange contracts 54 - Accrued income taxes payable 133 51 Due to related party - IDT 2 8 Total accrued expenses and other current liabilities $ 2,852 $ 2,676 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jan. 31, 2024 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 7—Stock-Based Compensation 2016 Incentive Plan On March 23, 2022, the Company’s Board of Directors amended the Company’s 2016 Stock Option and Incentive Plan (as amended to date, 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 an additional 685,000 shares to an aggregate of 2,531,000 shares, including 626,000 shares for the retention pool for GuruShots employees established under the agreement related to that acquisition. This amendment was ratified by the Company’s stockholders at the Annual Meeting of Stockholders held on January 18, 2023. At January 31, 2024, there were 457,000 shares of Class B common stock available for awards under the 2016 Incentive Plan before accounting for 204,000 contingently issuable shares related to deferred stock units (“DSUs”) with both service and market conditions. Stock-based compensation The Company recognizes stock-based compensation for stock-based awards, including stock options, restricted stock and DSUs based on the estimated fair value of the awards and recognized over the relevant service period and/or market conditions. The Company estimates the fair value of stock options on the measurement date using the Black-Scholes option valuation model. The Company estimates the fair value of the restricted stock and DSU’s with service conditions only using the current market price of the stock. The Company estimates the fair value of the DSU’s with both service and market conditions using the Monte Carlo Simulation valuation model. The Black-Scholes and Monte Carlo Simulation valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate and dividend yield. The Company recognizes stock-based compensation expense related to options and restricted stock units on a straight-line basis over the service period of the award, which is generally 4 years for options and 3 years for restricted stock units. In our accompanying unaudited condensed consolidated statements of operations and comprehensive (loss) income, the Company recognized stock-based compensation expense for our employees and non-employees as follows: Three Months Ended Six Months Ended 2024 2023 2024 2023 (in thousands) Stock-based compensation expense $ 683 $ 788 $ 1,190 $ 1,378 As of January 31, 2024, the Company’s unrecognized stock-based compensation expense was $263,000 for unvested stock options, $321,000 for unvested DSUs and $1.4 million for unvested restricted stock including the $4 million portion of the GuruShots retention bonus pool to be paid in the Company’s Class B common stock. In the six months ended January 31, 2024 and 2023, awards of restricted stock and DSUs with respect to 124,000 shares and 30,000 shares, respectively, vested, and in connection with these vesting events, the Company purchased 6,328 shares and 6,310 shares respectively, of Class B Stock from certain employees for $13,000 and $17,000, respectively, to satisfy tax withholding obligations. Repricing of Outstanding and Unexercised Options On October 20, 2022, the Board unanimously approved the repricing of all then outstanding and unexercised stock options granted under the 2016 Incentive Plan with exercise prices above the then current market value held by then current employees, executive officers, and consultants of the Company (the “Eligible Stock Options”). Effective October 20, 2022, the exercise price of the eligible stock options was reduced to $2.27, the closing price of its common stock on October 19, 2022. Except for the modification to the exercise price of the Eligible Stock Options, all other terms and conditions of each of the Eligible Stock Options remained in full force and effect. Pursuant to the 2016 Incentive Plan, the Compensation Committee of the Board of Directors, as the administrator, has discretionary authority, exercisable on such terms and conditions that it deems appropriate under the circumstances, to reduce the exercise price in effect for outstanding options under the 2016 Incentive Plan. In approving the repricing, the Compensation Committee considered the impact of the current exercise prices of outstanding stock options on the incentives provided to employees and consultants, the lack of retention value provided by the outstanding stock options to employees and consultants, and the impact of such options on the capital structure of the Company. As of October 20, 2022, there were 532,750 stock options outstanding under the 2016 Incentive Plan, of which 191,663 outstanding stock options had exercise prices in excess of the market price of the Company’s common stock as of October 20, 2022, which is why the Compensation Committee made the determination to deem all outstanding and unexercised stock options held by current employees, executive officers, and consultants as Eligible Stock Options. Jonathan Reich, the Company’s Chief Executive Officer, and Yi Tsai, the Company’s Chief Financial Officer, held Eligible Stock Options exercisable for an aggregate of 64,898 and 15,000 shares of the Company’s common stock, respectively, which options were repriced. The option repricing resulted in incremental stock-based compensation of $87,000, of which $39,000 was recorded as expense in the three months ended January 31, 2023, and $48,000 will be recognized as expense over the requisite service periods over which the Eligible Stock Options vest. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jan. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 8—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, issuances to be made on the vesting of unvested DSUs and the exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive. The rights of holders of Class A common stock and Class B common stock are identical except for certain voting and conversion rights and restrictions on transferability. As such, the Company is not required to break out earnings per share by class. 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 (in thousands): Three Months Ended Six Months Ended January 31, January 31, 2024 2023 2024 2023 Basic weighted-average number of shares 14,068 14,087 14,022 14,208 Effect of dilutive securities: Stock options - 163 - 223 Non-vested restricted Class B common stock - 4 - 5 Deferred stock units - 5 - 4 Diluted weighted-average number of shares 14,068 14,259 14,022 14,440 The following shares were excluded from the dilutive earnings per share computations because their inclusion would have been anti-dilutive (in thousands): Three Months Ended Six Months Ended January 31, January 31, 2024 2023 2024 2023 Stock options 860 227 861 106 Non-vested restricted Class B common stock 308 617 308 617 Deferred stock units 203 228 203 228 Shares excluded from the calculation of diluted earnings per share 1,371 1,072 1,372 951 For the three and six months ended January 31, 2024, the diluted earnings per share equals basic earnings per share because the Company incurred a net loss during those periods and the impact of the assumed exercise of stock options and vesting of restricted stock and DSUs would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jan. 31, 2024 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 9—Commitments and Contingencies Commitments In connection with the acquisition of GuruShots, the Company (i) committed to a retention pool of $4 million in cash to be paid to the founders and employees of GuruShots payable over three years from April 1, 2022 based on the beneficiaries thereof remaining employed by the Company or a subsidiary; and (ii) agreed to invest a minimum in user acquisition in the first 24 months following the closing subject to the acquired users generating minimum ROAS thresholds and payment of an earnout if certain growth targets were met. The Company’s obligations with respect to a potential earnout have been terminated. At the end of the first quarter of fiscal 2024, the Company and the prior owners of GuruShots agreed to withdraw and settle claims related to the purchase agreement pursuant to which the Company purchased the equity of GuruShots, including any dispute about minimum user acquisition spend for GuruShots, any right of the prior owners to an earnout payment and the Company’s claim for indemnification related to alleged misrepresentations in the agreement. Legal Proceedings 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. |
Term Loan and Revolving Credit
Term Loan and Revolving Credit Facility | 6 Months Ended |
Jan. 31, 2024 | |
Term Loan and Revolving Credit Facility [Abstract] | |
Term Loan and Revolving Credit Facility | Note 10—Term Loan and Revolving Credit Facility As of September 27, 2016, the Company entered into a loan and security agreement with WAB for a revolving credit facility of up to $2.5 million for an initial two-year term which was extended twice for another two-year term which expired September 26, 2022 and was amended on October 28, 2022 as discussed below. The revolving credit facility was secured by a lien on substantially all of the Company’s assets. Effective with the September 2020 extension, the outstanding principal amount bore interest per annum at the greater of 3.5% or the prime rate plus 1.25%. Interest was payable monthly and all outstanding principal and any accrued and unpaid interest was due on the maturity date of September 26, 2022. The Company was required to pay an annual facility fee of $10,000 to WAB. The Company was 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 included a prohibition on the Company paying any dividend on its capital stock. On October 28, 2022, the Company entered into an Amended and Restated Loan and Security Agreement (“Amended Loan Agreement”) with WAB. Pursuant to the Amended Loan Agreement, WAB agreed to provide the Company with a new term loan facility in the maximum principal amount of $7 million for a four-year term and a $4 million revolving credit facility for a two-year term expiring October 28, 2024. Amounts outstanding under the term loan and credit facility of the Amended Loan Agreement bear interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 0.5%, with a Prime “floor” rate of 4.00%. Pursuant to the Amended Loan Agreement, the Company discontinued the then existing $2 million revolving credit facility under the prior version of the Loan and Security Agreement. At the time of the discontinuance, there was no outstanding balance on the revolving credit facility. Pursuant to the Amended Loan Agreement, $2 million was advanced in a single-cash advance on October 28, 2022, with the remaining $5 million available for drawdown during twenty-four (24) months after closing. Each drawdown must be in an amount of not less than One Million Dollars ($1,000,000). On May 11, 2023, the Company entered into a Modification Agreement pursuant to which the Company agreed to modify the Amended Loan Agreement to reduce the remaining $5 million availability to $0. Interest accrued under the Amended Loan Agreement is due monthly, and the Company shall make monthly interest-only payments related to the term loan through the eighteen (18) month anniversary of the closing date. From the nineteen (19) month anniversary of the Closing Date through the maturity date, the Company shall repay each outstanding term loan by paying the Applicable Term Advance Amortization Payment equal to 1/12 th th On November 15, 2023, the Company elected to prepay the entire principal amount of $2 million. The Amended Loan Agreement may also require early repayments if certain conditions are met. Borrowings under the Amended Loan Agreement is secured by substantially all of the assets of the Company, its subsidiaries, and certain of its affiliates. The Amended Loan Agreement includes the following financial covenants: a) Debt Service Coverage Ratio b) Maximum Debt to EBITDA Maximum Debt to Quarter Ending EBITDA October 31, 2022 1.75 to 1.00 January 31, 2023 1.75 to 1.00 April 30, 2023 1.75 to 1.00 July 31, 2023 1.75 to 1.00 October 31, 2023 1.25 to 1.00 January 31, 2024 1.25 to 1.00 April 30, 2024 1.25 to 1.00 July 31, 2024 1.25 to 1.00 Thereafter To be agreed upon The Amended Loan Agreement also includes customary negative covenants, subject to exceptions, which limit transfers, capital expenditures, indebtedness, certain liens, investments, acquisitions, dispositions of assets, restricted payments and the business activities of the Company, as well as customary representations and warranties, affirmative covenants and events of default, including cross defaults and a change of control default. As of November 16, 2016, the Company entered into a Foreign Exchange Agreement with WAB 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 $7.5 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 WAB, in its reasonable discretion from time to time, which was set at 10% of the nominal amount of the foreign exchange contracts in effect at the relevant time. At January 31, 2024, there were $1.8 million of outstanding foreign exchange contracts, which reduced the available borrowing under the revolving credit facility by $180,000. |
Segment and Geographic Informat
Segment and Geographic Information | 6 Months Ended |
Jan. 31, 2024 | |
Segment and Geographic Information [Abstract] | |
Segment and Geographic Information | Note 11—Segment and Geographic Information Segment Information Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer as of January 31, 2024. Beginning in the first quarter of fiscal 2023, the Company revised the presentation of segment information to align with changes to how the Company’s CODM manages the business, allocates resources and assesses operating performance reports operating results based on two reportable segments, which are the Zedge Marketplace and GuruShots. The CODM evaluates the performance of each operating segment using revenue and income (loss) from operations. The following table provides information about the Company’s two reportable segments (in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Revenue: Zedge Marketplace $ 6,852 $ 5,735 $ 12,989 $ 11,306 GuruShots 919 1,248 1,863 2,577 Total Revenue $ 7,771 $ 6,983 $ 14,852 $ 13,883 Segment income (loss) from operations: Zedge Marketplace $ 1,677 $ 1,563 $ 3,331 $ 2,935 GuruShots (13,607 ) (105 ) (14,940 ) (1,678 ) Total (loss) income from operations: $ (11,930 ) $ 1,458 $ (11,609 ) $ 1,257 The CODM does not evaluate operating segments using asset information and, accordingly, the Company does not report asset information by segment. Geographic Information Net long-lived assets and total assets held outside of the United States, which are located primarily in Israel and Norway, were as follows (in thousands): United States Foreign Total Long-lived assets, net: January 31, 2024 $ 6,746 $ 1,886 $ 8,632 July 31, 2023 $ 7,054 $ 14,346 $ 21,400 Total assets: January 31, 2024 $ 30,385 $ 6,712 $ 37,097 July 31, 2023 $ 33,401 $ 13,430 $ 46,831 |
Operating Leases
Operating Leases | 6 Months Ended |
Jan. 31, 2024 | |
Operating Leases [Abstract] | |
Operating Leases | Note 12— Operating Leases The Company has operating leases primarily for office space. Operating lease right-of-use assets recorded and included in other assets were $288,000 and $360,000 at January 31, 2024 and July 31, 2023, respectively. There were no material changes in the Company’s operating and finance leases in the six months ended January 31, 2024, as compared to the disclosure regarding such leases in the Company’s 2023 Form 10-K. |
Income Taxes
Income Taxes | 6 Months Ended |
Jan. 31, 2024 | |
Income Taxes [Abstract] | |
Income Taxes | Note 13—Income Taxes The Company’s tax provision or benefit from income taxes for interim periods has generally been determined using an estimate of its annual effective tax rate applied to year-to-date income and records the discrete tax items in the period to which they relate. In each quarter, the Company updates the estimated annual effective tax rate and makes a year-to-date adjustment to the tax provision as necessary. The Company’s estimated annual effective tax rate for the fiscal year ending July 31, 2024 differs from the U.S. federal statutory tax rate due to certain items primarily related to stock-based compensation expense, jurisdictional mix of earnings, foreign derived intangible income deduction, global intangible low-taxed income and the change in basis differences associated with tax deductible goodwill. As of January 31, 2024, the Company had $6.3 million of deferred tax assets, for which it has established a valuation allowance of $1.8 million for a certain international subsidiary. The Company is subject to taxation in the United States and certain foreign jurisdictions. Earnings from non-U.S. activities are subject to local country income tax. The material jurisdictions where the Company is subject to potential examination by tax authorities include the United States, Norway, Lithuania and Israel. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jan. 31, 2024 | |
Subsequent Event [Abstract] | |
Subsequent Event | Note 14—Subsequent Event On March 1, 2024 the Company entered into the following FX forward contracts with WAB, which reduced the available borrowing under the revolving credit facility by $285,000. Settlement Date U.S. Dollar Amount NOK Jun-24 225,000 2,357,321 Jul-24 225,000 2,355,836 Aug-24 225,000 2,354,450 Sep-24 225,000 2,353,262 Oct-24 225,000 2,352,197 Nov-24 225,000 2,349,801 Total 1,350,000 14,122,867 Settlement Date U.S. Dollar Amount EUR Jun-24 250,000 227,975 Jul-24 250,000 227,678 Aug-24 250,000 227,337 Sep-24 250,000 227,019 Oct-24 250,000 226,679 Nov-24 250,000 226,296 Total 1,500,000 1,362,984 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jan. 31, 2024 | Oct. 31, 2023 | Jan. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2024 | Jan. 31, 2023 | |
Pay vs Performance Disclosure | ||||||
Net Income (Loss) | $ (9,230) | $ (15) | $ 1,606 | $ (169) | $ (9,246) | $ 1,437 |
Insider Trading Arrangements
Insider Trading Arrangements | 6 Months Ended |
Jan. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jan. 31, 2024 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Description of Business | Description of Business Zedge, Inc. (“Zedge”) builds digital marketplaces and friendly competitive games around content that people use to express themselves. Our leading products include Zedge Ringtones and Wallpapers, which we refer to as our Zedge App, a freemium digital content marketplace offering mobile phone wallpapers, video wallpapers, ringtones, and notification sounds as well as pAInt, a generative AI wallpaper maker, GuruShots, a skill-based photo challenge game, and Emojipedia, the #1 trusted source for ‘all things emoji’. Our vision is to enable and connect creators who enjoy friendly competitions with a community of prospective consumers in order to drive commerce. Except where the context clearly indicates otherwise, the terms the “Company,” “Zedge” “we,” “us” or “our” refer to Zedge, Inc. and its consolidated subsidiaries. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Zedge, Inc. and its subsidiaries: GuruShots Ltd. (“GuruShots”); Zedge Europe AS; and Zedge Lithuania UAB (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 8 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 six months ended January 31, 2024 and 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2024 or any other period. The balance sheet at July 31, 2023 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 fiscal year ended July 31, 2023 (the “2023 Form 10-K”), as filed with the U.S. Securities and Exchange Commission (the “SEC”). 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 2023 refers to the fiscal year ended July 31, 2023). |
Reportable Segments | Reportable Segments Effective August 1, 2022, we revised the presentation of segment information to reflect our acquisition of GuruShots. As such, we now report operating results through two reportable segments: Zedge Marketplace and GuruShots, as further discussed in Note 11, Segment and Geographic Information |
Use of Estimates | Use of Estimates The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ materially from the Company’s estimates due to risks and uncertainties, including uncertainty in the economic environment due to various global events. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. |
Recent Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The guidance in ASU 2023-07 seeks to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU require a public entity to disclose the following: significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss; an amount for other segment items by reportable segment and a description of its composition; and the title and position of the CODM and how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. This ASU requires public entities to provide all annual disclosures about a reportable segment's profit or loss and assets currently required by Topic 280 in interim periods. ASU 2023-07 clarifies that if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-07 is a requirement for additional disclosure and is not expected to materially impact the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance in this ASU enhances the transparency and decision functionality of income tax disclosures to provide investors information to better assess how an entity's operations and related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flow. The amendments in this ASU require public entities to disclose the following specific categories in the rate reconciliation by both percentages and reporting currency amounts: the effect of state and local income tax, net of federal (national) income tax, foreign tax effects, effects of changes in tax laws or rates enacted in the current period, effects of cross-border tax laws, tax credits, changes in valuation allowances, nontaxable or nondeductible items and changes in unrecognized tax benefits. The amendments in ASU 2023-09 also require public entities to provide additional information for reconciling items that meet the qualitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pre-tax income (loss) by the applicable statutory income tax rate). The ASU requires reporting entities to annually disclose the year-to-date amount of income taxes paid (net of refunds received) disaggregated by federal, state and foreign localities. The amendments in this ASU should be applied on a prospective basis and retrospective application is permitted. For public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements not yet issued. ASU 2023-09 is a requirement for additional disclosure and is not expected to materially impact the consolidated financial statements. |
Related Party Transactions | Related Party Transactions 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-held company. IDT charges the Company for services it provides, and the Company charges IDT for services it provides, pursuant to a Transition Services Agreement (“TSA”). The Company is party to a consulting agreement with Activist Artist Management, LLC (“Activist”), which assists the Company in strategic business development. A member of the Company’s Board of Directors owns a significant minority stake in Activist. Transactions with these related parties did not have a material impact to the consolidated balance sheets as of January 31, 2024 or July 31, 2023, or the consolidated statements of operations and comprehensive loss for the three and six months ended January 31, 2024 and 2023. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Revenue [Abstract] | |
Schedule of Revenue Disaggregated by Segment and Type | The following table presents revenue disaggregated by segment and type: Three Months Ended Six Months Ended January 31, January 31, 2024 2023 2024 2023 (in thousands) Zedge Marketplace Advertising revenue $ 5,482 $ 4,630 $ 10,421 $ 9,120 Paid subscription revenue 1,088 875 2,064 1,766 Other revenues 282 230 504 420 Total Zedge App revenue 6,852 5,735 12,989 11,306 GuruShots Digital goods and services 919 1,248 1,863 2,577 Total revenue $ 7,771 $ 6,983 $ 14,852 $ 13,883 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Fair Value Measurements [Abstract] | |
Schedule of Balance of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present the balance of assets and liabilities measured at fair value on a recurring basis (in thousands): Level 1 Level 2 Level 3 Total January 31, 2024 Liabilities: Foreign exchange forward contracts $ - $ 54 $ - $ 54 July 31, 2023 Assets: Foreign exchange forward contracts $ - $ 19 $ - $ 19 |
Schedule of Contingent Consideration | The following table provides a rollforward of the contingent consideration related to our acquisition of GuruShots (in thousands): Balance at July 31, 2022 $ 1,943 Change in fair value (1,943 ) Balance at January 31, 2023 $ 0 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Derivative Instruments [Abstract] | |
Schedule of Outstanding Contracts | The outstanding contracts at January 31, 2024, were as follows: Settlement Date U.S. Dollar Amount NOK Feb-24 225,000 2,246,265 Mar-24 225,000 2,242,823 Apr-24 225,000 2,240,550 May-24 225,000 2,237,738 Total 900,000 8,967,375 Settlement Date U.S. Dollar Amount EUR Feb-24 225,000 205,893 Mar-24 225,000 205,611 Apr-24 225,000 205,386 May-24 225,000 205,142 Total 900,000 822,032 |
Schedule of Fair Value of Outstanding Derivative Instruments | The fair value of outstanding derivative instruments recorded in the accompanying unaudited condensed consolidated balance sheets were as follows: January 31, July 31, (in thousands) 2024 2023 Assets and Liabilities Derivatives: Balance Sheet Location Derivatives not designated or not qualifying as hedging instruments Foreign exchange forward contracts Other current assets $ - $ 19 Foreign exchange forward contracts Accrued expenses and other current liabilities $ 54 $ - |
Schedule of Derivative Instruments on the Consolidated Statements of Operations and Comprehensive Loss | The effects of derivative instruments on the condensed consolidated statements of operations and comprehensive (loss) income were as follows: Three Months Ended Six Months Ended Amount of Loss Recognized on Derivatives 2024 2023 2024 2023 Derivatives not designated or not qualifying as hedging instruments Location of income (loss) recognized on derivatives (in thousands) (in thousands) Foreign exchange forward contracts Net loss resulting from foreign exchange transactions $ 131 $ 185 (151 ) $ 64 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Intangible Assets and Goodwill [Line Items] | |
Schedule of Intangible Assets | The following table presents the detail of intangible assets, net as of January 31, 2024 and July 31, 2023 (in thousands): January 31, 2024 July 31, 2023 Gross Accumulated Allocation of Net Gross Accumulated Net Emojipedia.org and other internet domains acquired 6,711 1,118 - 5,593 6,711 894 5,817 Acquired developed technology 3,950 1,422 2,528 - 3,950 1,028 2,922 Customer relationships 7,800 1,403 6,397 - 7,800 1,013 6,787 Trade names 3,570 537 3,033 - 3,570 387 3,183 Total intangible assets $ 22,031 $ 4,480 11,958 $ 5,593 $ 22,031 $ 3,322 $ 18,709 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense as of January 31, 2024 is as follows (in thousands): Fiscal 2024 $ 224 Fiscal 2025 447 Fiscal 2026 447 Fiscal 2027 447 Fiscal 2028 447 Thereafter 3,581 Total $ 5,593 |
Schedule of Carrying Amount of Goodwill | The following table summarizes the changes in the carrying amount of goodwill for the six months ended January 31, 2024. (in thousands) Carrying Amounts Balance as of July 31, 2023 1,961 Impact of currency translation (59 ) Balance as of January 31, 2024 $ 1,902 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): January 31, July 31, 2024 2023 Accrued payroll and bonuses $ 964 $ 1,136 Accrued vacation 711 593 Accrued payroll taxes 271 237 Due to artists 301 226 Accrued expenses 301 301 Operating lease liability-current portion 115 124 Derivative liability for foreign exchange contracts 54 - Accrued income taxes payable 133 51 Due to related party - IDT 2 8 Total accrued expenses and other current liabilities $ 2,852 $ 2,676 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Stock-Based Compensation [Abstract] | |
Schedule of Operations and Comprehensive Loss | In our accompanying unaudited condensed consolidated statements of operations and comprehensive (loss) income, the Company recognized stock-based compensation expense for our employees and non-employees as follows: Three Months Ended Six Months Ended 2024 2023 2024 2023 (in thousands) Stock-based compensation expense $ 683 $ 788 $ 1,190 $ 1,378 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted-Average Number of Shares Basic and Diluted | 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 (in thousands): Three Months Ended Six Months Ended January 31, January 31, 2024 2023 2024 2023 Basic weighted-average number of shares 14,068 14,087 14,022 14,208 Effect of dilutive securities: Stock options - 163 - 223 Non-vested restricted Class B common stock - 4 - 5 Deferred stock units - 5 - 4 Diluted weighted-average number of shares 14,068 14,259 14,022 14,440 |
Schedule of the Dilutive Earnings per Share | The following shares were excluded from the dilutive earnings per share computations because their inclusion would have been anti-dilutive (in thousands): Three Months Ended Six Months Ended January 31, January 31, 2024 2023 2024 2023 Stock options 860 227 861 106 Non-vested restricted Class B common stock 308 617 308 617 Deferred stock units 203 228 203 228 Shares excluded from the calculation of diluted earnings per share 1,371 1,072 1,372 951 |
Term Loan and Revolving Credi_2
Term Loan and Revolving Credit Facility (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Term Loan and Revolving Credit Facility [Abstract] | |
Schedule of Maximum Debt | Maximum Debt to Quarter Ending EBITDA October 31, 2022 1.75 to 1.00 January 31, 2023 1.75 to 1.00 April 30, 2023 1.75 to 1.00 July 31, 2023 1.75 to 1.00 October 31, 2023 1.25 to 1.00 January 31, 2024 1.25 to 1.00 April 30, 2024 1.25 to 1.00 July 31, 2024 1.25 to 1.00 Thereafter To be agreed upon |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Segment and Geographic Information [Abstract] | |
Schedule of Operating Segment Using Revenue and Income (Loss) from Operations | The CODM evaluates the performance of each operating segment using revenue and income (loss) from operations. The following table provides information about the Company’s two reportable segments (in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Revenue: Zedge Marketplace $ 6,852 $ 5,735 $ 12,989 $ 11,306 GuruShots 919 1,248 1,863 2,577 Total Revenue $ 7,771 $ 6,983 $ 14,852 $ 13,883 Segment income (loss) from operations: Zedge Marketplace $ 1,677 $ 1,563 $ 3,331 $ 2,935 GuruShots (13,607 ) (105 ) (14,940 ) (1,678 ) Total (loss) income from operations: $ (11,930 ) $ 1,458 $ (11,609 ) $ 1,257 |
Schedule of Net Long-Lived Assets and Total Assets Held Outside of the United States | Net long-lived assets and total assets held outside of the United States, which are located primarily in Israel and Norway, were as follows (in thousands): United States Foreign Total Long-lived assets, net: January 31, 2024 $ 6,746 $ 1,886 $ 8,632 July 31, 2023 $ 7,054 $ 14,346 $ 21,400 Total assets: January 31, 2024 $ 30,385 $ 6,712 $ 37,097 July 31, 2023 $ 33,401 $ 13,430 $ 46,831 |
Subsequent Event (Tables)
Subsequent Event (Tables) | 6 Months Ended |
Jan. 31, 2024 | |
Subsequent Event [Abstract] | |
Schedule of Revolving Credit Facility | On March 1, 2024 the Company entered into the following FX forward contracts with WAB, which reduced the available borrowing under the revolving credit facility by $285,000. Settlement Date U.S. Dollar Amount NOK Jun-24 225,000 2,357,321 Jul-24 225,000 2,355,836 Aug-24 225,000 2,354,450 Sep-24 225,000 2,353,262 Oct-24 225,000 2,352,197 Nov-24 225,000 2,349,801 Total 1,350,000 14,122,867 Settlement Date U.S. Dollar Amount EUR Jun-24 250,000 227,975 Jul-24 250,000 227,678 Aug-24 250,000 227,337 Sep-24 250,000 227,019 Oct-24 250,000 226,679 Nov-24 250,000 226,296 Total 1,500,000 1,362,984 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 6 Months Ended |
Jan. 31, 2024 | |
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Number of segments | 2 |
Tax rate | 5% |
Revenue (Details)
Revenue (Details) - USD ($) | 6 Months Ended | ||
Jul. 31, 2023 | Apr. 01, 2022 | Jan. 31, 2024 | |
Revenue [Line Items] | |||
Deferred revenue | $ 257,000 | ||
Deferred revenue description | The Company records deferred revenues related to the unsatisfied performance obligations with respect to subscription revenue. The Company’s deferred revenue balance for paid subscriptions was approximately $2.0 million related to approximately 648,000 active subscribers, and approximately $1.5 million, related to approximately 647,000 active subscribers as of January 31, 2024 and July 31, 2023, respectively. | ||
Zedge Premium [Member] | |||
Revenue [Line Items] | |||
Deferred revenue | $ 255,000 | ||
Deferred revenues decreased | 1,600,000 | ||
Deferred Revenue [Member] | |||
Revenue [Line Items] | |||
Integration bonus received | $ 2,000,000 | ||
Estimated service period | 24 months | ||
Deferred revenue | $ 700,000 | $ 200,000 | |
Deferred Revenue [Member] | |||
Revenue [Line Items] | |||
Payment terms | 1 year |
Revenue (Details) - Schedule of
Revenue (Details) - Schedule of Revenue Disaggregated by Segment and Type - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Zedge Marketplace | ||||
Revenue | $ 7,771 | $ 6,983 | $ 14,852 | $ 13,883 |
Advertising revenue [Member] | ||||
Zedge Marketplace | ||||
Revenue | 5,482 | 4,630 | 10,421 | 9,120 |
Paid subscription revenue [Member] | ||||
Zedge Marketplace | ||||
Revenue | 1,088 | 875 | 2,064 | 1,766 |
Other revenues [Member] | ||||
Zedge Marketplace | ||||
Revenue | 282 | 230 | 504 | 420 |
Total Zedge App revenue [Member] | ||||
Zedge Marketplace | ||||
Revenue | 6,852 | 5,735 | 12,989 | 11,306 |
Digital goods and services [Member] | ||||
Zedge Marketplace | ||||
Revenue | $ 919 | $ 1,248 | $ 1,863 | $ 2,577 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | Jan. 31, 2024 USD ($) |
Fair Value Measurements [Abstract] | |
Fair value of contingent consideration | $ 1,943,000 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Schedule of Balance of Assets and Liabilities Measured at Fair Value on a Recurring Basis - USD ($) $ in Thousands | Jan. 31, 2024 | Jul. 31, 2023 |
Liabilities: | ||
Foreign exchange forward contracts | $ 54 | |
Assets: | ||
Foreign exchange forward contracts | $ 19 | |
Level 1 [Member] | Fair Value, Recurring [Member] Total | ||
Liabilities: | ||
Foreign exchange forward contracts | ||
Assets: | ||
Foreign exchange forward contracts | ||
Level 2 [Member] | Fair Value, Recurring [Member] Total | ||
Liabilities: | ||
Foreign exchange forward contracts | 54 | |
Assets: | ||
Foreign exchange forward contracts | 19 | |
Level 3 [Member] | Fair Value, Recurring [Member] Total | ||
Liabilities: | ||
Foreign exchange forward contracts | ||
Assets: | ||
Foreign exchange forward contracts |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details) - Schedule of Contingent Consideration Related Acquisition $ in Thousands | 6 Months Ended |
Jan. 31, 2023 USD ($) | |
Schedule of Contingent Consideration Related Acquisition [Abstract] | |
Balance | $ 1,943 |
Change in fair value | (1,943) |
Balance | $ 0 |
Derivative Instruments (Details
Derivative Instruments (Details) - Schedule of Outstanding Contracts - Jan. 31, 2024 € in Thousands, kr in Thousands, $ in Thousands | USD ($) | NOK (kr) | EUR (€) |
Derivative Instruments (Details) - Schedule of Outstanding Contracts [Line Items] | |||
Total | $ 900,000 | kr 8,967,375 | € 822,032 |
Feb-24 [Member] | |||
Derivative Instruments (Details) - Schedule of Outstanding Contracts [Line Items] | |||
Total | 225,000 | 2,246,265 | 205,893 |
Mar-24 [Member] | |||
Derivative Instruments (Details) - Schedule of Outstanding Contracts [Line Items] | |||
Total | 225,000 | 2,242,823 | 205,611 |
Apr-24 [Member] | |||
Derivative Instruments (Details) - Schedule of Outstanding Contracts [Line Items] | |||
Total | 225,000 | 2,240,550 | 205,386 |
May-24 [Member] | |||
Derivative Instruments (Details) - Schedule of Outstanding Contracts [Line Items] | |||
Total | $ 225,000 | kr 2,237,738 | € 205,142 |
Derivative Instruments (Detai_2
Derivative Instruments (Details) - Schedule of Fair Value of Outstanding Derivative Instruments - USD ($) $ in Thousands | Jan. 31, 2024 | Jul. 31, 2023 |
Other current assets [Member] | ||
Derivatives not designated or not qualifying as hedging instruments | ||
Foreign exchange forward contracts | $ 19 | |
Accrued expenses and other current liabilities [Member] | ||
Derivatives not designated or not qualifying as hedging instruments | ||
Foreign exchange forward contracts | $ 54 |
Derivative Instruments (Detai_3
Derivative Instruments (Details) - Schedule of Derivative Instruments on the Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Schedule of Derivative Instruments on the Consolidated Statements of Operations and Comprehensive Loss [Abstract] | ||||
Foreign exchange forward contracts | $ 131 | $ 185 | $ (151) | $ 64 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Intangible Assets and Goodwill (Details) [Line Items] | ||
Impairment charge | $ 11,900 | |
Acquired developed technology | 2,500 | |
Customer relationships | 6,400 | |
Trade names | 3,000 | |
Amortization expense | 1,158 | $ 1,158 |
Goodwill impairment charge | $ 8,700 | |
Minimum [Member] | ||
Intangible Assets and Goodwill (Details) [Line Items] | ||
Estimated useful lives ranging | 5 years | |
Maximum [Member] | ||
Intangible Assets and Goodwill (Details) [Line Items] | ||
Estimated useful lives ranging | 15 years | |
WACC [Member] | ||
Intangible Assets and Goodwill (Details) [Line Items] | ||
Discount rate | 30.50% | |
Intangible Assets [Member] | ||
Intangible Assets and Goodwill (Details) [Line Items] | ||
Amortization expense | $ 1,200 | $ 1,200 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details) - Schedule of Intangible Assets - USD ($) $ in Thousands | 6 Months Ended | |
Jan. 31, 2024 | Jul. 31, 2023 | |
Gross Carrying Value [Member] | ||
Schedule of intangible assets [Abstract] | ||
Gross Carrying Value | $ 22,031 | $ 22,031 |
Accumulated Amortization [Member] | ||
Schedule of intangible assets [Abstract] | ||
Accumulated Amortization | 4,480 | 3,322 |
Allocation of Impairment Loss [Member] | ||
Schedule of intangible assets [Abstract] | ||
Allocation of Impairment Loss | 11,958 | |
Net Carrying Value [Member] | ||
Schedule of intangible assets [Abstract] | ||
Net Carrying Value | 5,593 | 18,709 |
Emojipedia.org and other internet domains acquired [Member] | Gross Carrying Value [Member] | ||
Schedule of intangible assets [Abstract] | ||
Gross Carrying Value | 6,711 | 6,711 |
Emojipedia.org and other internet domains acquired [Member] | Accumulated Amortization [Member] | ||
Schedule of intangible assets [Abstract] | ||
Accumulated Amortization | 1,118 | 894 |
Emojipedia.org and other internet domains acquired [Member] | Allocation of Impairment Loss [Member] | ||
Schedule of intangible assets [Abstract] | ||
Allocation of Impairment Loss | ||
Emojipedia.org and other internet domains acquired [Member] | Net Carrying Value [Member] | ||
Schedule of intangible assets [Abstract] | ||
Net Carrying Value | 5,593 | 5,817 |
Acquired developed technology [Member] | Gross Carrying Value [Member] | ||
Schedule of intangible assets [Abstract] | ||
Gross Carrying Value | 3,950 | 3,950 |
Acquired developed technology [Member] | Accumulated Amortization [Member] | ||
Schedule of intangible assets [Abstract] | ||
Accumulated Amortization | 1,422 | 1,028 |
Acquired developed technology [Member] | Allocation of Impairment Loss [Member] | ||
Schedule of intangible assets [Abstract] | ||
Allocation of Impairment Loss | 2,528 | |
Acquired developed technology [Member] | Net Carrying Value [Member] | ||
Schedule of intangible assets [Abstract] | ||
Net Carrying Value | 2,922 | |
Customer Relationships [Member] | Gross Carrying Value [Member] | ||
Schedule of intangible assets [Abstract] | ||
Gross Carrying Value | 7,800 | 7,800 |
Customer Relationships [Member] | Accumulated Amortization [Member] | ||
Schedule of intangible assets [Abstract] | ||
Accumulated Amortization | 1,403 | 1,013 |
Customer Relationships [Member] | Allocation of Impairment Loss [Member] | ||
Schedule of intangible assets [Abstract] | ||
Allocation of Impairment Loss | 6,397 | |
Customer Relationships [Member] | Net Carrying Value [Member] | ||
Schedule of intangible assets [Abstract] | ||
Net Carrying Value | 6,787 | |
Trade names [Member] | Gross Carrying Value [Member] | ||
Schedule of intangible assets [Abstract] | ||
Gross Carrying Value | 3,570 | 3,570 |
Trade names [Member] | Accumulated Amortization [Member] | ||
Schedule of intangible assets [Abstract] | ||
Accumulated Amortization | 537 | 387 |
Trade names [Member] | Allocation of Impairment Loss [Member] | ||
Schedule of intangible assets [Abstract] | ||
Allocation of Impairment Loss | 3,033 | |
Trade names [Member] | Net Carrying Value [Member] | ||
Schedule of intangible assets [Abstract] | ||
Net Carrying Value | $ 3,183 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill (Details) - Schedule of Estimated Future Amortization Expense $ in Thousands | Jan. 31, 2024 USD ($) |
Schedule of Estimated Future Amortization Expense [Abstract] | |
Fiscal 2024 | $ 224 |
Fiscal 2025 | 447 |
Fiscal 2026 | 447 |
Fiscal 2027 | 447 |
Fiscal 2028 | 447 |
Thereafter | 3,581 |
Total | $ 5,593 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill (Details) - Schedule of Carrying Amount of Goodwill $ in Thousands | 6 Months Ended |
Jan. 31, 2024 USD ($) | |
Schedule of Carrying Amount of Goodwill [Abstract] | |
Balance beginning | $ 1,961 |
Impact of currency translation | (59) |
Balance ending | $ 1,902 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - Schedule of Accrued Expenses and Other Current Liabilities - USD ($) $ in Thousands | Jan. 31, 2024 | Jul. 31, 2023 |
Accrued Expenses and Other Current Liabilities [Abstract] | ||
Accrued payroll and bonuses | $ 964 | $ 1,136 |
Accrued vacation | 711 | 593 |
Accrued payroll taxes | 271 | 237 |
Due to artists | 301 | 226 |
Accrued expenses | 301 | 301 |
Operating lease liability-current portion | 115 | 124 |
Derivative liability for foreign exchange contracts | 54 | |
Accrued income taxes payable | 133 | 51 |
Due to related party - IDT | 2 | 8 |
Total accrued expenses and other current liabilities | $ 2,852 | $ 2,676 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Oct. 20, 2022 | Jan. 31, 2024 | Oct. 31, 2023 | Jan. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2024 | Jan. 31, 2023 | Mar. 23, 2022 | |
Stock-Based Compensation [Line Items] | ||||||||
Grant term years | 4 years | |||||||
Restricted stock units | 3 years | |||||||
Unrecognized compensation cost (in Dollars) | $ 263,000 | |||||||
Unvested stock options | 321,000 | 321,000 | ||||||
Unvested restricted stock (in Dollars) | $ 4,000,000 | $ 4,000,000 | ||||||
Purchased from employees, value (in Dollars) | $ 13,000 | $ 17,000 | ||||||
Exercise price (in Dollars per share) | $ 2.27 | |||||||
Vesting percentage, description | Except for the modification to the exercise price of the Eligible Stock Options, all other terms and conditions of each of the Eligible Stock Options remained in full force and effect. | |||||||
Outstanding stock option | 191,663 | |||||||
Stock-based compensation (in Dollars) | $ 683,000 | $ 507,000 | $ 788,000 | $ 590,000 | ||||
Stock-based compensation, expense (in Dollars) | 39,000 | |||||||
Recognized expenses (in Dollars) | $ 48,000 | |||||||
2016 Incentive Plan [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Outstanding stock option | 532,750 | |||||||
Class B Common Stock [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Additional shares | 457,000 | 457,000 | ||||||
Number of shares | 204,000 | 204,000 | ||||||
Class B Common Stock [Member] | Employees [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Number of shares, vested | 6,328 | 6,310 | ||||||
Class B Common Stock [Member] | 2016 Incentive Plan [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Additional shares | 685,000 | |||||||
Number of shares | 2,531,000 | |||||||
Chief Executive Officer [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Number of shares | 64,898 | 64,898 | ||||||
Chief Financial Officer [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Number of shares | 15,000 | 15,000 | ||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Unvested restricted stock (in Dollars) | $ 1,400,000 | $ 1,400,000 | ||||||
Share-Based Payment Arrangement [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Number of shares, vested | 124,000 | 30,000 | ||||||
Gurushots Retention Pool [Member] | 2016 Incentive Plan [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Number of shares | 626,000 | |||||||
Jonathan Reich [Member] | ||||||||
Stock-Based Compensation [Line Items] | ||||||||
Stock-based compensation (in Dollars) | $ 87,000 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Schedule of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Schedule of Operations and Comprehensive (Loss) Income [Abstract] | ||||
Stock-based compensation expense | $ 683 | $ 788 | $ 1,190 | $ 1,378 |
Earnings Per Share (Details) -
Earnings Per Share (Details) - Schedule of Weighted-Average Number of Shares Basic and Diluted - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Schedule of Weighted-Average Number of Shares Basic and Diluted [Abstract] | ||||
Basic weighted-average number of shares | 14,068 | 14,087 | 14,022 | 14,208 |
Effect of dilutive securities: | ||||
Stock options | 163 | 223 | ||
Non-vested restricted Class B common stock | 4 | 5 | ||
Deferred stock units | 5 | 4 | ||
Diluted weighted-average number of shares | 14,068 | 14,259 | 14,022 | 14,440 |
Earnings Per Share (Details) _2
Earnings Per Share (Details) - Schedule of the Dilutive Earnings per Share - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Schedule of the Dilutive Earnings per Share [Abstract] | ||||
Stock options | 860 | 227 | 861 | 106 |
Non-vested restricted Class B common stock | 308 | 617 | 308 | 617 |
Deferred stock units | 203 | 228 | 203 | 228 |
Shares excluded from the calculation of diluted earnings per share | 1,371 | 1,072 | 1,372 | 951 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jan. 31, 2024 | Jul. 31, 2023 | |
Commitments and Contingencies [Line Items] | ||
Committed retention pool | ||
Payable over period | 3 years | |
GuruShots [Member] | ||
Commitments and Contingencies [Line Items] | ||
Committed retention pool | $ 4 |
Term Loan and Revolving Credi_3
Term Loan and Revolving Credit Facility (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |||
May 11, 2023 | Nov. 15, 2023 | Oct. 28, 2022 | Jan. 31, 2024 | Sep. 27, 2016 | |
Term Loan and Revolving Credit Facility (Details) [Line Items] | |||||
Revolving credit facility | $ 2,500,000 | ||||
Interest rate, description | Interest was payable monthly and all outstanding principal and any accrued and unpaid interest was due on the maturity date of September 26, 2022. | ||||
Line of credit facility annual fee | $ 10,000 | ||||
Amended loan agreement description | On October 28, 2022, the Company entered into an Amended and Restated Loan and Security Agreement (“Amended Loan Agreement”) with WAB. Pursuant to the Amended Loan Agreement, WAB agreed to provide the Company with a new term loan facility in the maximum principal amount of $7 million for a four-year term and a $4 million revolving credit facility for a two-year term expiring October 28, 2024. | ||||
Amended Loan Agreement, | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | ||
Remaining available drawdown | $ 5,000,000 | ||||
Principal amount | $ 1,000,000 | ||||
Outstanding term loan percentage | 10% | ||||
Foreign exchange agreement | $5.0 | ||||
Loan agreement | $ 7,500,000 | ||||
Percentage of foreign exchange | 10% | ||||
Foreign Exchange Contract [Member] | |||||
Term Loan and Revolving Credit Facility (Details) [Line Items] | |||||
Outstanding foreign exchange | $ 1,800,000 | ||||
Borrowing under the revolving credit facility | $ 180,000 | ||||
Maximum [Member] | |||||
Term Loan and Revolving Credit Facility (Details) [Line Items] | |||||
Prime rate percentage | 3.50% | ||||
Interest rate percentage | 4% | ||||
Loan agreement | $ 5,000,000 | ||||
Debt service coverage ratio | 1.25 | ||||
Minimum [Member] | |||||
Term Loan and Revolving Credit Facility (Details) [Line Items] | |||||
Prime rate percentage | 1.25% | ||||
Interest rate percentage | 0.50% | ||||
Loan agreement | $ 0 | ||||
Debt service coverage ratio | 1 |
Term Loan and Revolving Credi_4
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt | 6 Months Ended |
Jan. 31, 2024 | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | To be agreed upon |
October 31, 2022 [Member] | Minimum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.75 |
October 31, 2022 [Member] | Maximum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.00 |
January 31, 2023 [Member] | Minimum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.75 |
January 31, 2023 [Member] | Maximum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.00 |
April 30, 2023 [Member] | Minimum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.75 |
April 30, 2023 [Member] | Maximum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.00 |
July 31, 2023 [Member] | Minimum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.75 |
July 31, 2023 [Member] | Maximum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.00 |
October 31, 2023 [Member] | Minimum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.25 |
October 31, 2023 [Member] | Maximum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.00 |
January 31, 2024 [Member] | Minimum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.25 |
January 31, 2024 [Member] | Maximum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.00 |
April 30, 2024 [Member] | Minimum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.25 |
April 30, 2024 [Member] | Maximum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.00 |
July 31, 2024 [Member] | Minimum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.25 |
July 31, 2024 [Member] | Maximum [Member] | |
Term Loan and Revolving Credit Facility (Details) - Schedule of Maximum Debt [Line Items] | |
Balance of Maximum Debt | 1.00 |
Segment and Geographic Inform_3
Segment and Geographic Information (Details) | 6 Months Ended |
Jan. 31, 2024 | |
Zedge Marketplace [Member] | |
Segment and Geographic Information [Line Items] | |
Reportable segments | 2 |
GuruShots [Member] | |
Segment and Geographic Information [Line Items] | |
Reportable segments | 2 |
Segment and Geographic Inform_4
Segment and Geographic Information (Details) - Schedule of Operating Segment Using Revenue and Income (Loss) from Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Revenue: | ||||
Total Revenue | $ 7,771 | $ 6,983 | $ 14,852 | $ 13,883 |
Segment income (loss) from operations: | ||||
Segment income (loss) from operations | (11,930) | 1,458 | (11,609) | 1,257 |
Zedge Marketplace [Member] | ||||
Revenue: | ||||
Total Revenue | 6,852 | 5,735 | 12,989 | 11,306 |
Segment income (loss) from operations: | ||||
Segment income (loss) from operations | 1,677 | 1,563 | 3,331 | 2,935 |
GuruShots [Member] | ||||
Revenue: | ||||
Total Revenue | 919 | 1,248 | 1,863 | 2,577 |
Segment income (loss) from operations: | ||||
Segment income (loss) from operations | $ (13,607) | $ (105) | $ (14,940) | $ (1,678) |
Segment and Geographic Inform_5
Segment and Geographic Information (Details) - Schedule of Net Long-Lived Assets and Total Assets Held Outside of the United States - USD ($) $ in Thousands | Jan. 31, 2024 | Jul. 31, 2023 |
Long-lived assets, net: | ||
Long-lived assets, net | $ 8,632 | $ 21,400 |
Total assets: | ||
Total assets | 37,097 | 46,831 |
United States [Member] | ||
Long-lived assets, net: | ||
Long-lived assets, net | 6,746 | 7,054 |
Total assets: | ||
Total assets | 30,385 | 33,401 |
Foreign [Member] | ||
Long-lived assets, net: | ||
Long-lived assets, net | 1,886 | 14,346 |
Total assets: | ||
Total assets | $ 6,712 | $ 13,430 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) $ in Thousands | Jan. 31, 2024 | Jul. 31, 2023 |
Operating Leases [Abstract] | ||
Operating lease right of use assets | $ 288,000 | $ 360,000 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Jan. 31, 2024 USD ($) |
Income Taxes [Abstract] | |
Deferred tax assets | $ 6.3 |
Deferred tax assets valuation allowance | $ 1.8 |
Subsequent Event (Details)
Subsequent Event (Details) | Mar. 01, 2024 USD ($) |
Forecast [Member] | |
Subsequent Event [Line Items] | |
Other Borrowings | $ 285,000 |
Subsequent Event (Details) - Sc
Subsequent Event (Details) - Schedule of Revolving Credit Facility - Jan. 31, 2024 € in Thousands, kr in Thousands, $ in Thousands | USD ($) | NOK (kr) | EUR (€) |
Subsequent Events [Line Items] | |||
Total | $ 1,500,000 | ||
Jun-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 250,000 | ||
Jul-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 250,000 | ||
Aug-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 250,000 | ||
Sep-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 250,000 | ||
Oct-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 250,000 | ||
Nov-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 250,000 | ||
UNITED STATES | |||
Subsequent Events [Line Items] | |||
Total | 1,350,000 | ||
UNITED STATES | Jun-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 225,000 | ||
UNITED STATES | Jul-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 225,000 | ||
UNITED STATES | Aug-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 225,000 | ||
UNITED STATES | Sep-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 225,000 | ||
UNITED STATES | Oct-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | 225,000 | ||
UNITED STATES | Nov-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | $ 225,000 | ||
NORWAY | |||
Subsequent Events [Line Items] | |||
Total | kr | kr 14,122,867 | ||
NORWAY | Jun-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | kr | 2,357,321 | ||
NORWAY | Jul-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | kr | 2,355,836 | ||
NORWAY | Aug-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | kr | 2,354,450 | ||
NORWAY | Sep-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | kr | 2,353,262 | ||
NORWAY | Oct-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | kr | 2,352,197 | ||
NORWAY | Nov-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | kr | kr 2,349,801 | ||
Europe [Member] | |||
Subsequent Events [Line Items] | |||
Total | € | € 1,362,984 | ||
Europe [Member] | Jun-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | € | 227,975 | ||
Europe [Member] | Jul-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | € | 227,678 | ||
Europe [Member] | Aug-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | € | 227,337 | ||
Europe [Member] | Sep-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | € | 227,019 | ||
Europe [Member] | Oct-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | € | 226,679 | ||
Europe [Member] | Nov-24 [Member] | |||
Subsequent Events [Line Items] | |||
Total | € | € 226,296 |