- Zedge Inc (NYSE:ZDGE) reported third-quarter revenue growth of 18.6% year-over-year to $6.2 million, above the consensus of $5.4 million.
- Subscription revenue increased 1.2% Y/Y, and active subscriptions decreased 5.3% Y/Y to 713K. EPS was $0.05, missing the consensus of $0.07.
- The operating income declined 32.2% Y/Y to $1.3 million, and the margin contracted to 21.5% from 37.7% in 3Q21.
- Adjusted EBITDA improved by 21.8% Y/Y to $2.9 million, and margin expanded 150 bps to 46.8%.
- Cash flow from operations totaled $11.3 million year-to-date, compared to $7.7 million a year ago.
- Zedge Premium GTV increased 62.7% Y/Y to $0.41 million. MAU decreased by 7% Y/Y.
- "We remain cautiously optimistic about our fourth quarter as MAU trends have been moving in the right direction to date. We also expect a number of product enhancements to be released in June, including most of the new social and community features for the Zedge app that were delayed by the AppLovin transition; new NFT features and capabilities, including adding wallpapers as a content category, adding audio functionality to video wallpaper NFTs and allowing numbered editions of up to 100 copies of the same NFT versus one today; and finally the launch of the new Emojipedia website, with localized support in five languages beyond English," commented Jonathan Reich, chief executive officer.
- FY22 Outlook: Zedge expects revenue growth of over 30%, as the company expects to realize the bulk of these benefits in fiscal 2023.
- It also expects growth in Adjusted EBITDA and cash flow from operations.
- Price Action: ZDGE shares are trading lower by 16% at $3.99 during the post-market session on Monday.
