Zedge, Inc.

Zedge, Inc. operates at the intersection of the Creator Economy and the market for AI training data. The Creator Economy was estimated by Coherent Market Insights to be worth approximately $252 billion globally in 2025 ¹ and is projected to reach approximately $1.3 trillion by 2033 ². The market for AI training data is also growing rapidly, with Grand View Research estimating it will reach $3.9 billion in 2026 ³, with image and video representing the largest data modality at 41.9% of the market in 2025 ⁴. The company describes its business as consisting of two reportable segments: Zedge Marketplace and GuruShots (which includes DataSeeds) ⁵. Within the consumer mobile personalization landscape, the Zedge App has had between 19.3 million and 20.5 million monthly active users over the past two fiscal years ⁶, and the company estimates the total addressable market of amateur photographers using their smartphones to take and publicly share artistic photos at 30-40 million people per month ⁷.

Zedge competes in all aspects of its business, including against digital marketplaces, gaming companies, and providers of data and data services to companies building artificial intelligence models ⁸. For consumers, it competes for leisure time, attention, and spending against alternative forms of entertainment as well as online platforms and marketplaces offering mobile phone personalization ⁹. For creators and contributors, many online platforms offer content creators an ecosystem, and a growing number of companies recruit individuals to supply content, annotation, evaluation and other human input used in AI model development, frequently for cash compensation, with many of these companies substantially better capitalized than Zedge ¹⁰. For enterprise customers for AI data and related services, Zedge competes against providers of licensed image, video and audio libraries, human data and annotation platforms, managed data collection and data services firms, and specialist providers focused on physical AI and robotics data, many of which are substantially larger and better capitalized ¹¹. The company believes its competitive strengths include a large global user base, with the Zedge App having 19.3 million MAU as of July 31, 2026 ¹², of which approximately 25.9% were in well-developed markets and 74.1% were in emerging markets ¹³; a proven ability to acquire, onboard and engage large numbers of users at low cost; a proprietary, rights-cleared content catalog with AI-training rights to approximately 50 million images contributed by its creator communities ¹⁴; infrastructure for consent, compliance and contributor payment at scale; the ability to produce content to specification; the ability to generate structured human judgment from gameplay; high-quality products, with the Zedge App having received more than 17.9 million reviews in Google Play where it holds a 4.5 star rating out of a maximum of five stars ¹⁵, and GuruShots holding a 4.4 star rating in the App Store ¹⁶; an experienced team; and scalable and reliable technology and infrastructure.

Zedge generates revenue through two reportable segments: Zedge Marketplace and GuruShots (which includes DataSeeds) . The Zedge Marketplace's monetization stack consists of advertising revenue generated when users view advertisements when using the Zedge App (and the related functionality under the zedge.net website), the in-app sale of Zedge Credits, a virtual currency used to purchase Zedge Premium content, and a paid-subscription offering that provides an ad-free experience to users that purchase a monthly, annual or lifetime subscription ¹⁷. As of July 31, 2026, the company had approximately 1.3 million active subscriptions ¹⁸. GuruShots utilizes a "Free-to-Play" business model and generates revenue through in-app purchases of virtual currency, with players able to use this currency to unlock competitions or gain an edge by purchasing resources and participating in additional gameplay ¹⁹. Monthly average spend per paying player was approximately $47.6 in fiscal 2026 ²⁰. DataSeeds is the company's business-to-business offering, delivering multimodal datasets spanning images, video and audio, including egocentric video for robotics training, that are rights-cleared and built to customer specification ²¹. The company's user base consists of approximately 19.3 million monthly active users across two platforms, Zedge Marketplace and GuruShots ²², and from that audience the company mobilizes a managed network of contributors that produce spec-matched images, audio, and video training data ²³.

The Zedge App, named "Zedge Ringtones & Wallpapers" in Google Play and the App Store, offers a wide array of mobile personalization content including wallpapers, video wallpapers, ringtones, and notification sounds ²⁴. The platform allows creators to upload content to the marketplace and make it available to users either for free or, via "Zedge Premium," the section of the marketplace where premium content is offered for purchase ²⁵. In fiscal 2023, the company introduced pAInt, a generative AI wallpaper maker in the Zedge App, which today is available for text-to-image, image-to-image, and text-to-audio creation ²⁶. The company also upgraded its paid subscription offering by bundling together an ad-free experience with value adds ²⁷. In April 2023, the company introduced a subscription tier in the iOS version of the app ²⁸. The Android version of the Zedge App is available in 14 languages ²⁹. MAU for the Zedge App has been declining, ending with 19.3 million MAU as of July 31, 2026 ³⁰, and in fiscal 2026, 78.2% of the Zedge App's users were located in emerging markets with 21.8% of users in well-developed regions, compared to 76.7% and 23.3% respectively in fiscal 2025 ³¹. India comprised 37.0% of MAU as of July 31, 2026 ³².

GuruShots is a photo competition game in which photographers of all skill levels compete, vote and improve through gamified photo challenges, offering a platform spanning iOS, Android, and the web ³³. Every month, GuruShots stages more than 300 competitions that result in players uploading in excess of 400,000 photographs and casting close to 2.3 billion "perceived votes," which are calculated by multiplying the number of votes that each player casts by a weighting factor based on various factors related to that user ³⁴. The company has secured AI training rights to approximately 50 million of these photographs and continues to expand the licensable catalog by securing rights to additional photographs ³⁵. In addition, the company introduced a minigame feature within GuruShots through which it makes model evaluation services available to AI developers, and it entered into its first agreement for these services in August 2026 ³⁶. Participation in the minigame is limited to human players, and automated participants are excluded ³⁷. Since the acquisition, GuruShots has faced challenges in growth and profitability, and its revenue has declined; the company has cut costs at GuruShots, including as part of the restructuring initiated in January 2025, and has materially scaled back on paid user acquisition ³⁸. Emojipedia Pty Ltd is the world's leading authority dedicated to providing up-to-date and well-researched emoji definitions, information, and news, as well as World Emoji Day and the annual World Emoji Awards ³⁹. In late September 2025, Google released an update to its Search Engine Results Page enabling users to copy emojis directly from search results rather than being directed to third-party sites such as Emojipedia, and AI platforms including ChatGPT and Claude now return emoji results in response to user queries, resulting in reduced traffic and reduced revenue ⁴⁰. Emojipedia revenue declined 49.4% in fiscal 2026 compared to fiscal 2025 ⁴¹. In July 2026, Emojipedia had approximately 34.4 million monthly page views, down 29.0% from July 2025, and approximately 5.7 million monthly active users, down 35.1% from July 2025, of which approximately 38.7% were located in well-developed markets ⁴². The company recorded an impairment charge of $3.7 million during the three months ended January 31, 2026, and is managing Emojipedia for cash generation rather than for growth ⁴³.

During fiscal 2026, the company launched six mobile app MVPs, developed in a matter of weeks by streamlined teams, and continues to iterate on and invest in three of them based on threshold KPIs needed for continued investment ⁴⁴. The company established a Product Innovation Team to leverage AI, including AI-assisted coding, and automation in order to accelerate the development of minimally viable products ⁴⁵. In August 2026, the company agreed to issue shares of its Class B common stock and warrants in a direct investment of approximately $7.7 million, with the intention to use the proceeds, together with cash generated by existing businesses, to accelerate the growth of DataSeeds ⁴⁶. The investors include members of the board of directors and other insiders ⁴⁷. Effective October 1, 2026, Morris Berger became Chief Executive Officer, and Jonathan Reich, who had served as Chief Executive Officer, retained his role as President and became Chief Operating Officer ⁴⁸. In January 2025, the company implemented a global restructuring that reduced its workforce by 22% ⁴⁹. Headcount totaled 82 as of July 31, 2026 ⁵⁰. The company has secured AI training rights to approximately 50 million images contributed by its creator communities , and it sources content for DataSeeds primarily through three channels: an Off-the-Shelf catalog of images, video and audio, content created to order by contributors recruited directly, and the DataSeeds Production Cloud, a curated global network of professional production partners ⁵¹.

In fiscal 2026, the company's largest customer accounted for approximately 34.2% of consolidated revenue and its two largest customers accounted for approximately 40.9% in the aggregate ⁵². In fiscal 2026, approximately 71% of revenues (excluding GuruShots and DataSeeds) were generated from selling advertising inventory ⁵³, and approximately 71.4% of revenues excluding GuruShots were generated from advertising sales ⁵⁴. Three advertising demand partners, mainly Google, Liftoff and Digital Turbine, were responsible for 70.2% of advertising revenue in fiscal 2026 ⁵⁵. In fiscal 2026, revenue from well developed economies accounted for approximately 80.5% of total revenues ⁵⁶. The company experienced a 29.6% increase in subscription revenue and a 1.9% decrease in subscription billings in fiscal 2026 ⁵⁷, and ended fiscal 2026 with 1,332,000 subscribers, a 35.3% increase from approximately 984,000 at the end of fiscal 2025 ⁵⁸. Over the past 10 years, GuruShots has successfully increased the compounded annual growth rate of monthly spending per paying player by around 6.7% ⁵⁹. The company's net loss in fiscal 2026 was $0.1 million, compared with a net loss of $2.4 million in fiscal 2025 ⁶⁰. The company's effective tax rate for fiscal 2026 was 50.8% compared with 11.9% for fiscal 2025 ⁶¹. In fiscal 2026 and fiscal 2025, the company recorded losses of $172,000 and $151,000, respectively, from foreign currency movements relative to the U.S. Dollar, including a $1,000 loss from hedging activities in fiscal 2026 and gains of $44,000 from hedging activities in fiscal 2025 ⁶². In fiscal 2026 and 2025, marketing expenses were approximately $7.2 million and $8.2 million, respectively ⁶³.

The company's long-term strategy calls for a flywheel in which its consumer products build and sustain creator communities, those communities produce the content and human judgment that companies building AI models require, and DataSeeds monetizes that output with enterprise customers in a market substantially larger than the one its consumer products address ⁶⁴. The company intends to use the proceeds from a direct investment of approximately $7.7 million, together with cash generated by existing businesses, to accelerate the growth of DataSeeds . Planned areas of investment include recruiting experienced personnel, expanding technology and infrastructure, and acquiring or licensing specialized datasets, and the company may pursue acquisitions or the hiring of teams in order to add capabilities, expertise or industry relationships ⁶⁵. The company's plans assume that demand for the kinds of services it intends to offer will develop broadly enough, and at prices sufficient, to justify the investment ⁶⁶.

The company intends to grow and diversify the DataSeeds customer base and deepen existing customer relationships, broadening the set of companies it serves across frontier model developers, large technology companies and robotics manufacturers, enterprises applying AI within specific industries, consumer and creative software platforms, and data services companies that incorporate its content into their own offerings ⁶⁷. As customers move from one-time dataset purchases toward ongoing data relationships, the company's goal is to convert individual transactions into recurring relationships that supply not only initial training data but also the labeling, evaluation and feedback that keep models improving after deployment ⁶⁸. Pursuing this breadth will require additional commercial, engineering, and operational capacity, and the company expects to prioritize opportunities selectively ⁶⁹. The company also intends to move up the AI data value chain, having entered into its first agreement for model evaluation services in August 2026, and intends to expand further along the AI data value chain, including into annotation and labeling, synthetic data generation and continuous learning pipelines, with a particular focus on physical AI and robotics ⁷⁰. The company does not currently perform data annotation itself, and where a customer requires annotation, it expects to engage a third-party provider that specializes in those services ⁷¹. The company also intends to expand its content supply while maintaining rigorous rights and consent standards, continuing to grow its licensed catalog, expanding the network of contributors it recruits directly, and adding production partners with professional and specialized capabilities ⁷².

On the consumer side, the company is focused on the value it generates per user rather than on the absolute size of its user base, and it expects to continue devoting resources to this goal by analyzing user demographics to identify key segments that yield the highest profitability and optimal ROAS, testing to determine which user segments are most responsive to new offerings, studying users' needs and enhancing products to align with the preferences of its most profitable segments, developing and offering new features and services attractive to both new and existing users, investing selectively in paid user acquisition campaigns that yield profitable users based on empirical data and focused primarily on well-developed markets while managing spend to improve ROAS, deploying its full-stack marketing team, data and business analytics capabilities and AI-assisted tooling to scale both paid and organic acquisition including through search engine optimization, app store optimization and an expanded program of A/B testing, working to stabilize and over time rebuild its user base in the segments that monetize best, and exploring crossover marketing opportunities between user segments to maximize reach and engagement ⁷³. The company continues to develop monetization methods including advancements of the in-app economy, subscription models, e-commerce, and new advertising products, implementations and optimizations, and operates dual mediation platforms in parallel in order to optimize revenue ⁷⁴. The company plans to make continued, selected investments in product feature sets and functionality to both engage and retain its existing user base and attract new users, including personalized recommendations and content feeds, enhanced search and content discovery, and optimized pricing ⁷⁵. The company launched an alarm feature in Zedge, a daily-use tool designed to bring users back to the app on a recurring basis, and early results indicate that users who adopt the alarm feature return to the app more frequently and engage more with its content ⁷⁶. The company is also committed to operating a marketplace in which artists' needs are prioritized and in which they can generate incremental income from their artwork, both by selling to consumers in its marketplace and, over time, by participating in the economics of DataSeeds ⁷⁷.

The company has established a Product Innovation Team to leverage AI, including AI-assisted coding, and automation in order to accelerate the development of minimally viable products and rapidly determine, based on empirical data, which concepts merit further investment . The company's enterprise-wide adoption of AI is yielding efficiencies that are enabling it to achieve this goal, allowing it to reallocate employees from existing product responsibilities to new product development ⁷⁸. The company expects to allocate a portion of this team's capacity to build creator tooling for DataSeeds ⁷⁹. The company also intends to selectively pursue strategic investments, partnerships, and acquisitions, looking primarily for audience, content, and complementary product capability for its consumer businesses, and primarily for production capacity, tooling, and access to specialized content and expertise for DataSeeds ⁸⁰.

The company's ability to source content and human judgment at attractive cost depends on continuing to offer creators compelling reasons to participate, including recognition, gameplay, and opportunities to earn ⁸¹. The company compensates GuruShots players in part with virtual currency that can be used within the game, and provides recognition and competitive standing rather than cash consideration in many cases ⁸². A growing number of companies recruit individuals to supply content, annotation, evaluation and other human input used in the development of AI models, frequently for cash compensation, and many of these companies are substantially better capitalized than Zedge . If contributors conclude that the company's incentives are insufficient, the company may be required to increase cash compensation, which would increase its cost of content and reduce its margins, or it may be unable to source content of the volume, diversity or quality that its customers require ⁸³. The company also depends on the DataSeeds Production Cloud, a curated global network of professional production partners, to produce content that requires professional equipment, controlled conditions or specialized expertise; it does not own production facilities and generally contracts for capacity on a project basis ⁸⁴. Third-party production costs represent a significant component of cost of revenue for that work, and growth in this channel may reduce overall gross margin ⁸⁵.

The company provides DataSeeds datasets and services through discrete projects rather than under recurring contracts, and its results may fluctuate significantly from period to period ⁸⁶. Customers typically engage DataSeeds to deliver a unique content need, with each engagement separately sourced and separately specified, and completing one does not necessarily generate follow-on work, so the company must continuously identify new opportunities ⁸⁷. Many engagements begin as limited initial orders that allow a customer to evaluate the company's content against its specification and to compare it with other suppliers before committing to larger or recurring volumes ⁸⁸. An initial order generates only modest revenue relative to the engagement that may follow, and the company may perform satisfactorily and still not be selected for the larger engagement for reasons unrelated to the quality of its work, including price, a customer's preference for an existing supplier, or a decision to source the content internally ⁸⁹. Because revenue is generally recognized as datasets and other deliverables are delivered or accepted, the timing of large deliveries can cause revenue and results of operations to fluctuate significantly from quarter to quarter and may make forecasting difficult ⁹⁰. The company frequently prices commissioned collection and studio production work on a fixed-fee or per-deliverable basis, which requires it to estimate in advance the cost and time required to source, produce, validate and deliver content to specification; if estimates prove inaccurate, if contributor or production partner costs increase, or if a project requires additional rounds of collection or quality assurance, a project may generate lower margins than anticipated or may be unprofitable ⁹¹.

The company expects to face pricing pressure from customers and from competitors, many of whom are substantially larger and better capitalized, and it may be unable to raise prices to offset increases in contributor compensation, production partner fees or other input costs ⁹². The largest current budgets for externally sourced training and evaluation data sit with frontier model developers, large technology companies and robotics manufacturers, whose spending is discretionary, is influenced by their own funding levels and research priorities, and may decline for reasons unrelated to the company's performance, including a shift toward data they generate internally, acquire through direct arrangements with content producers, or obtain from competitors ⁹³. Consolidation among these organizations, or a decision by any of them to build in-house data operations, could reduce the demand available to the company ⁹⁴. The company intends to reduce this concentration by broadening the range of customers it serves, but those customers are reached through a different sales approach, individual engagements are typically smaller, and the cost of winning and serving each customer is higher relative to the revenue it produces, so diversifying the customer base will require the company to add commercial and operational resources and may not produce meaningful revenue in the near term ⁹⁵. Techniques for generating synthetic training data continue to advance, and customers may conclude that synthetic data is adequate for some or all of their requirements, particularly where real-world capture is expensive or slow; customers may also develop their own collection capabilities or contract directly with content producers, reducing the role of intermediaries such as the company ⁹⁶.

The company's consumer businesses face continued pressure. MAU declined in fiscal 2026 compared with fiscal 2025, and in fiscal 2025 compared with fiscal 2024, and the company expects that the size of its user base will continue to decline (or fluctuate) in one or more markets over time ⁹⁷. In Q4 of fiscal 2026, the Zedge App's users in emerging markets declined by 15.2% while its users in well-developed regions declined 22.2%, when compared to fiscal 2025 ⁹⁸. The company expects to fund a substantial part of its investment in DataSeeds from cash generated by its consumer businesses, whose monthly active user base has declined, which links the pace at which it can pursue that strategy to the performance of businesses that are themselves under pressure ⁹⁹. Growing DataSeeds requires enterprise sales, solutions engineering, project management, data engineering and quality assurance capabilities that differ from those required to operate consumer applications and that the company has only recently begun to build ¹⁰⁰. The company also expects to add personnel in the United States ¹⁰¹. Competition for personnel across all of these functions is intense, particularly from companies developing artificial intelligence models, many of which have substantially greater resources than the company and can offer compensation that it may not be able to match, and the company's ability to grow profitably depends on adding this capacity at a cost that preserves acceptable margins ¹⁰².

The most material risks to Zedge center on its declining consumer user base, its concentrated revenue, and the execution demands of its DataSeeds pivot. MAU declined in fiscal 2026 compared with fiscal 2025, and in fiscal 2025 compared with fiscal 2024, and the company expects the size of its user base will continue to decline (or fluctuate) in one or more markets over time ; in Q4 of fiscal 2026, Zedge App users in emerging markets declined by 15.2% while users in well-developed regions declined 22.2% . Revenue is highly concentrated: in fiscal 2026, the largest customer accounted for approximately 34.2% of consolidated revenue and the two largest customers accounted for approximately 40.9% in the aggregate , while three advertising demand partners were responsible for 70.2% of advertising revenue . The DataSeeds business is provided through discrete projects rather than recurring contracts, so results may fluctuate significantly from period to period, and an initial order generates only modest revenue relative to the engagement that may follow . The company also depends on a network of third-party production partners, and third-party production costs represent a significant component of cost of revenue for that work, with growth in this channel potentially reducing overall gross margin . Substantially all personnel are located in Israel and Lithuania, and armed conflict or instability affecting either country could disrupt operations and the ability to serve customers ¹⁰³. The company also recently changed its chief executive officer, effective October 1, 2026, which could disrupt the business ¹⁰⁴.

Management's message to shareholders centers on a strategic pivot in which the company's vision is to build and engage a global community of creators and to convert the content and human judgment they produce into commerce, while continuing to invest in its consumer businesses, the Zedge Marketplace and GuruShots, and applying the same competency in managing creators at scale to DataSeeds ¹⁰⁵. The company remains committed to continued investment in and support of its existing products while also scaling DataSeeds and searching for new opportunities to fuel its growth ¹⁰⁶. Management has chosen to emphasize three strategic priorities for the period ahead. First, on the consumer side, prioritizing the profitability of the user base rather than the absolute size of the user base, with the company working to stabilize and, over time, rebuild its user base in the segments that monetize best ¹⁰⁷. Second, on the enterprise side, growing and diversifying the DataSeeds customer base and deepening existing customer relationships, with the goal of converting individual transactions into recurring relationships that supply not only initial training data but also the labeling, evaluation and feedback that keep models improving after deployment . Third, moving up the AI data value chain, having entered into its first agreement for model evaluation services in August 2026, and intending to expand further along the AI data value chain, including into annotation and labeling, synthetic data generation and continuous learning pipelines, with a particular focus on physical AI and robotics . Across the company, management has established a Product Innovation Team to leverage AI, including AI-assisted coding, and automation in order to accelerate the development of minimally viable products and rapidly determine, based on empirical data, which concepts merit further investment; in fiscal 2026, the company launched six mobile app MVPs, developed in a matter of weeks by streamlined teams, and continues to iterate on and invest in three of them based on threshold KPIs needed for continued investment . Management has also stated that the company intends to use the proceeds from a direct investment of approximately $7.7 million, together with cash generated by existing businesses, to accelerate the growth of DataSeeds , and that the company may selectively pursue strategic investments, partnerships, and acquisitions . The company's stated competitive advantage rests on its ability to attract, onboard, engage and compensate very large numbers of everyday creators at low cost, a competency developed over more than a decade of operating consumer mobile applications and now being applied to the production of enterprise-grade AI training data ¹⁰⁸.