Zedge, Inc. (NYSE MKT:ZDGE) today announced results for the first quarter of its fiscal year 2017, the three months ended October 31, 2016.
First Quarter FY 2017 Operational and Financial
Highlights
(Results are for the 1st
quarter FY 2017 and are compared to the 1st
quarter FY 2016 except where otherwise noted.)
- MAU (Monthly Active Users) for the last 30 days of the quarter increased 2.6% to 31.6 million
- Total installs at October 31, 2016 increased 32.6% to 230.5 million
- Revenue decreased 6.9% to $2.4 million
- Average revenue per MAU decreased 10.7% to $0.0233
- Income from operations decreased 73.0% to $113 thousand
- Net income per diluted share of $0.02 compared to $0.04
- Working capital – current assets less current liabilities - increased 150% to $6.2 million at October 31, 2016 from $2.5 million at October 31, 2015
Management Remarks
“Zedge
remains focused on growing our user base and improving engagement to
facilitate future revenue growth. We are energized seeing the early
fruits of this commitment in the first quarter results, particularly the
uptick in our monthly active user base,” commented Tom Arnoy, co-founder
and CEO. “We are confident that there is substantial untapped potential
in this category and believe that our continued investments in building
the right team, optimizing the user experience and expanding our product
portfolio will help us in realizing our goals.”
Jonathan Reich, CFO and COO of Zedge, said, “Our first quarter results generate optimism, particularly with the return to user growth. The increase in MAU, one of our key performance indicators, is a good harbinger for revenue expansion and we remain focused on improving this metric in coming quarters. Furthermore, we re-introduced Zedge Ringtones on iTunes in November in the U.S. and Canada before releasing it globally in December. We expect that this will positively impact ARPMAU in the second quarter.”
Financial Results by Quarter (in thousands of USD)
| Q1 FY2017 | Q4 FY2016 | Q1 FY2016 | Change | ||||||||||
| Revenue | $2,383 | $2,452 | $2,559 | (6.9%) | |||||||||
| Direct cost of revenue | $367 | $367 | $295 | +24.4% | |||||||||
| SG&A | $1,756 | $2,439 | $1,685 | +4.2% | |||||||||
| Depreciation & amortization | $138 | $135 | $160 | (13.8%) | |||||||||
| Write-off of software and technology development operating expense | $9 | $281 | - | +$9 | |||||||||
| Income (loss) from operations | $113 | ($771) | $419 | ($306) | |||||||||
| Net gain (loss) from FX and other | $51 | ($17) | ($54) | +$105 | |||||||||
| (Provision for) benefit from income taxes | ($1) | $9 | ($40) | +$39 | |||||||||
| Net income (loss) | $163 | ($780) | $325 | ($162) | |||||||||
| Diluted earnings (loss) per share | $0.02 | ($0.08) | $0.04 | ($0.02) | |||||||||
| Total current assets less total current liabilities | $6,196 | $6,126 | $2,476 | +$3,720 | |||||||||
Earnings Conference Call
Zedge’s
management will host an earnings conference call beginning at 5:30 PM
Eastern time today, December 8th. Management’s presentation
of the results, outlook and strategy will be followed by Q&A with
investors.
To participate in the call, please dial toll-free 1-888-317-6003 (from the U.S.) or 1-412-317-6061 (outside the U.S.) at least five minutes before the 5:30 PM Eastern start, ask for the Zedge earnings conference call, and enter the conference ID: 5453687.
The conference call will also be webcast, and can be accessed both live and for three months following the call through this URL: http://services.choruscall.com/links/zdge161205nbyzxpUE.html.
Forward Looking Statements
All
statements above that are not purely about historical facts, including,
but not limited to, those in which we use the words “believe,”
“anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and
similar expressions, are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. While
these forward-looking statements represent our current judgment of what
may happen in the future, actual results may differ materially from the
results expressed or implied by these statements due to numerous
important factors. Our filings with the SEC provide detailed
information on such statements and risks, and should be consulted along
with this release. To the extent permitted under applicable law,
we assume no obligation to update any forward-looking statements.
About Zedge
Zedge is a content
platform, and global leader in smartphone personalization, with more
than 230 million app installs and 32 million monthly active users.
People use Zedge to make their smartphones more personal; to express
their emotions, tastes and interests using wallpapers, icons, widgets,
ringtones and more. The Zedge platform enables brands, artists and
creators to share their smartphone personalization content with their
fans in order to extend their reach, reinforce their message and gain
valuable insight into how customers interact with their content.
ZEDGE, INC. | |||||||||
| October 31, 2016 | July 31, 2016 | ||||||||
| (Unaudited) | |||||||||
| (in thousands, except par value) | |||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 5,983 | $ | 5,978 | |||||
| Trade accounts receivable, net of allowance for doubtful accounts of $0 at October 31, 2016 and July 31, 2016 | 1,679 | 1,668 | |||||||
| Prepaid expenses | 192 | 210 | |||||||
| Other current assets | 332 | 107 | |||||||
| Total current assets | 8,186 | 7,963 | |||||||
| Property and equipment, net | 2,058 | 1,843 | |||||||
| Goodwill | 2,411 | 2,361 | |||||||
| Other assets | 262 | 266 | |||||||
| Total assets | $ | 12,917 | $ | 12,433 | |||||
Liabilities and stockholders’ equity | |||||||||
| Current liabilities: | |||||||||
| Trade accounts payable | $ | 74 | $ | 36 | |||||
| Accrued expenses | 1,835 | 1,487 | |||||||
| Deferred revenue | 8 | 15 | |||||||
| Due to IDT Corporation | 73 | 299 | |||||||
| Total current liabilities | 1,990 | 1,837 | |||||||
| Commitments and contingencies | |||||||||
| Stockholders’ equity: | |||||||||
| Preferred stock, $.01 par value; authorized shares—2,400; no shares issued | — | — | |||||||
Class A common stock, $.01 par value; authorized shares—2,600; 525
shares issued and | 5 | 5 | |||||||
Class B common stock, $.01 par value; authorized shares—40,000;
8,865 and 8,819 shares issued | 89 | 88 | |||||||
| Additional paid-in capital | 21,139 | 21,045 | |||||||
| Accumulated other comprehensive loss | (744 | ) | (817 | ) | |||||
| Accumulated deficit | (9,562 | ) | (9,725 | ) | |||||
| Total stockholders’ equity | 10,927 | 10,596 | |||||||
| Total liabilities and stockholders’ equity | $ | 12,917 | $ | 12,433 | |||||
ZEDGE, INC. | |||||||||
Three Months Ended | |||||||||
| 2016 | 2015 | ||||||||
| (in thousands, except per share data) | |||||||||
| Revenues | $ | 2,383 | $ | 2,559 | |||||
| Costs and expenses: | |||||||||
Direct cost of revenues (exclusive of amortization of capitalized | 367 | 295 | |||||||
| Selling, general and administrative | 1,756 | 1,685 | |||||||
| Depreciation and amortization | 138 | 160 | |||||||
| Write-off of capitalized software and technology development costs | 9 | — | |||||||
| Income from operations | 113 | 419 | |||||||
| Interest and other income | 1 | 1 | |||||||
| Net gain (loss) resulting from foreign exchange transactions | 50 | (55 | ) | ||||||
| Income before income taxes | 164 | 365 | |||||||
| Provision for income taxes | (1 | ) | (40 | ) | |||||
| Net income | 163 | 325 | |||||||
| Other comprehensive income (loss): | |||||||||
| Changes in foreign currency translation adjustment | 73 | (92 | ) | ||||||
| Total other comprehensive income (loss) | 73 | (92 | ) | ||||||
| Total comprehensive income | $ | 236 | $ | 233 | |||||
| Earnings per share attributable to Zedge, Inc. common stockholders: | |||||||||
| Basic | $ | 0.02 | $ | 0.04 | |||||
| Diluted | $ | 0.02 | $ | 0.04 | |||||
| Weighted-average number of shares used in calculation of earnings per share: | |||||||||
| Basic | 9,261 | 8,161 | |||||||
| Diluted | 10,458 | 8,934 | |||||||
ZEDGE, INC. | |||||||||||
Three Months Ended | |||||||||||
| 2016 | 2015 | ||||||||||
| (in thousands) | |||||||||||
| Operating activities | |||||||||||
| Net income | $ | 163 | $ | 325 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 138 | 160 | |||||||||
| Deferred income taxes | 5 | — | |||||||||
| Stock-based compensation | 27 | 6 | |||||||||
| Change in assets and liabilities: | |||||||||||
| Trade accounts receivable | (11 | ) | (330 | ) | |||||||
| Prepaid expenses and other current assets | (264 | ) | (106 | ) | |||||||
| Other assets | (2 | ) | 4 | ||||||||
| Trade accounts payable and accrued expenses | 392 | 511 | |||||||||
| Due to IDT Corporation | (226 | ) | (93 | ) | |||||||
| Deferred revenue | (7 | ) | (4 | ) | |||||||
| Net cash provided by operating activities | 215 | 473 | |||||||||
| Investing activities | |||||||||||
| Capitalized software and technology development costs and purchase of equipment | (349 | ) | (183 | ) | |||||||
| Net cash used in investing activities | (349 | ) | (183 | ) | |||||||
| Financing activities | |||||||||||
| Proceeds from exercise of stock options | 124 | — | |||||||||
| Net cash provided by financing activities | 124 | — | |||||||||
| Effect of exchange rates on cash and cash equivalents | 15 | (27 | ) | ||||||||
| Net increase in cash and cash equivalents | 5 | 263 | |||||||||
| Cash and cash equivalents at beginning of period | 5,978 | 2,170 | |||||||||
| Cash and cash equivalents at end of period | $ | 5,983 | $ | 2,433 | |||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161208005203/en/
Contacts:
Jonathan Reich
ir@zedge.net
