8-K
Zedge, Inc. (ZDGE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934
Date of Report (Date of earliest event reported):November 9, 2021
ZEDGE, INC.
(Exact name of registrant as specified in itscharter)
| Delaware | 1-37782 | 26-3199071 |
|---|---|---|
| (State or other jurisdiction ofincorporation) | (Commission File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 1178 Broadway, Ste 1450 (3rd Floor), New York, NY | 10001 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, includingarea code: (330) 577-3424
Not Applicable
(Former name or former address, if changed sincelast report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class B common stock, par value $.01 per share | ZDGE | NYSE American |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On November 9, 2021, Zedge, Inc. (the “Registrant”) issued a press release announcing its results of operations for its fourth fiscal quarter and fiscal year ended July 31, 2021. A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The Registrant is furnishing the information contained in this Report, including Exhibit 99.1, pursuant to Item 2.02 of Form 8-K promulgated by the Securities and Exchange Commission (the “SEC”). This information shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC unless otherwise expressly stated in such filing. In addition, this Report and the press release contain statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in the press release.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No | Document |
|---|---|
| 99.1 | Earnings Release, dated November 9, 2021, reporting the results of operations for Zedge, Inc.’s fourth fiscal quarter and fiscal year ended July 31, 2021. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ZEDGE, INC. | |
|---|---|
| By: | /s/ Jonathan Reich |
| Name: | Jonathan Reich |
| Title: | Chief Executive<br> Officer |
Dated: November 9, 2021
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EXHIBIT INDEX
| ExhibitNumber | Document |
|---|---|
| 99.1 | Earnings Release, dated November 9, 2021, reporting the results of operations for Zedge, Inc.’s fourth fiscal quarter and fiscal year ended July 31, 2021. |
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Exhibit99.1
Zedge Announces Record Fourth-Quarter and Fiscal Year 2021 Results
| ● | Reports record full-year fiscal 2021 with revenue growth of 107% to $19.6 million; Net income of $8.2 million; earnings per share (EPS) of $0.59, EBITDA^1^ of $9.3 million |
|---|---|
| ● | Reports record fourth-quarter year-over-year revenue growth of 93% to $5.2 million; Net income of $2.5 million; EPS of $0.17; EBITDA of $2.7 million; and Monthly Active Users^2^ (MAU) of 34.4 million |
| --- | --- |
| ● | Company introduces initial fiscal 2022 guidance for revenue growth of 25-30% |
| --- | --- |
NewYork, NY – November 9, 2021: Zedge, Inc. (NYSE AMERICAN: ZDGE), a global app publisher with a portfolio of leading digital consumer brands serving 43 million monthly active users, today announced results for both its fourth-quarter and fiscal year 2021 ended July 31, 2021.
“Our record fourth-quarter performance capped off an amazing year for Zedge during which the growth initiatives in which we’ve invested over the past eight quarters began to bear fruit,” said Jonathan Reich, chief executive officer. “The investments we made and will continue to make in optimizing our ad stack drove premium ad prices and strong revenue growth. Furthermore, our Zedge Premium marketplace for creators continued to benefit from the content management system migration that we completed earlier this year, experiencing gross transaction value*^2^* growth of 45%.
“Our full-year results were impressive, including 107% revenue growth, a 40% operating margin and record diluted EPS of $0.59. We also saw MAU return to growth and consistently remain over 32 million while ARPMAU^2^ increased by 76%. Finally, we expanded our product management leadership team to provide a more focused and dedicated approach to product development and go-to-market initiatives going forward.”
FiscalFourth-Quarter Highlights (Fiscal 2021 versus Fiscal 2020)
| ● | Revenue<br> increased 93.0% to $5.2 million versus $2.7 million; |
|---|---|
| ● | Active<br> subscriptions^2^ and subscription revenue increased 49.2% and 55.0%, respectively; |
| --- | --- |
| ● | Operating<br> income and operating margin of $2.2 million and 42.2% versus $0.4 million and 14.4%, respectively; |
| --- | --- |
| ● | Net<br> income and diluted EPS of $2.5 million and $0.17 versus $0.5 million and $0.04, respectively; |
| --- | --- |
| ● | Cash<br> flow from operations increased 344.0% to a record $2.4 million versus $0.5 million; |
| --- | --- |
| ● | EBITDA<br> increased 224.8% to $2.7 million versus $0.8 million; |
| --- | --- |
| ● | MAU<br> increased by 7.8%; |
| --- | --- |
| ● | Zedge<br> Premium Gross Transaction Value^2^ (GTV) of $0.3 million, an increase of 45.0%. |
| --- | --- |
FullYear Fiscal 2021 Highlights (versus Fiscal 2020)
| ● | Revenue<br> increased 106.6% to $19.6 million versus $9.5 million; | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ● | Active<br> subscriptions and subscription revenue increased 49.2% and 100.8%, respectively; | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ● | Operating<br> income and operating margin of $7.8 million and 39.9% versus an operating loss of ($0.4)<br> million and (4.2)%, respectively; | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ● | Net<br> income and diluted earnings per share of $8.2 million and $0.59 versus a net loss and loss<br> per share of ($0.6) million and ($0.05), respectively; | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ● | Cash<br> flow from operations increased 377.4% to $10.1 million versus $2.1 million; | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ● | EBITDA<br> increased 815.1% to $9.3 million versus $1.0 million; | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ● | Zedge<br> Premium GTV of $0.95 million an increase of 29.8% versus last year. | |||||||||||||||||
| --- | --- | |||||||||||||||||
| Select Financial Metrics: Fiscal 2021 versus Fiscal 2020 as of 7/31/21* | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in $M except for EPS) | Q421 | Q420 | Change | FY'21 | FY'20 | Change | ||||||||||||
| Total Revenue | $ | 5.2 | $ | 2.7 | 93.0 | % | $ | 19.6 | $ | 9.5 | 106.6 | % | ||||||
| Advertising Revenue | $ | 4.2 | $ | 2.0 | 113.4 | % | $ | 15.7 | $ | 7.4 | 112.4 | % | ||||||
| Subscription Revenue | $ | 1.0 | $ | 0.6 | 55.0 | % | $ | 3.2 | $ | 1.6 | 100.8 | % | ||||||
| Other Revenue | $ | 0.2 | $ | 0.1 | 34.7 | % | $ | 0.5 | $ | 0.5 | 12.1 | % | ||||||
| Operating Income (Loss) | $ | 2.2 | $ | 0.4 | 465.7 | % | $ | 7.8 | $ | (0.4 | ) | nm | ||||||
| Operating Margin | 42.2 | % | 14.4 | % | 39.9 | % | -4.2 | % | ||||||||||
| Net Income (Loss) | $ | 2.5 | $ | 0.5 | 429.1 | % | $ | 8.2 | $ | (0.6 | ) | nm | ||||||
| Diluted Earnings (Loss) Per Share | $ | 0.17 | $ | 0.04 | 339.3 | % | $ | 0.59 | $ | (0.05 | ) | nm | ||||||
| EBITDA | $ | 2.7 | $ | 0.8 | 224.8 | % | $ | 9.3 | $ | 1.0 | 815.1 | % | ||||||
| Cash Flow from Operations | $ | 2.4 | $ | 0.5 | 344.0 | % | $ | 10.1 | $ | 2.1 | 377.4 | % | ||||||
| Zedge Premium - Gross Transaction Value (GTV) | $ | 0.27 | $ | 0.19 | 45.0 | % | $ | 0.95 | $ | 0.73 | 29.8 | % | ||||||
| nm | = not measurable/meaningful | |||||||||||||||||
| --- | --- | |||||||||||||||||
| * | numbers may not add due to rounding | |||||||||||||||||
| --- | --- | |||||||||||||||||
| Select Business Metrics: 4th Quarter Fiscal 2021 versus Fiscal 2020* | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||
| (in MM except for ARPMAU and where noted) | Q421 | Q420 | Change | |||||||||||||||
| Total Installs - Cumulative | 510.7 | 449.8 | 13.5 | % | ||||||||||||||
| MAU | 34.4 | 31.9 | 7.8 | % | ||||||||||||||
| Well-developed Markets | 8.5 | 9.6 | -11.5 | % | ||||||||||||||
| Emerging Markets | 25.9 | 22.3 | 16.1 | % | ||||||||||||||
| ARPMAU | $ | 0.050 | $ | 0.028 | 76.3 | % | ||||||||||||
| Active Subscriptions (in 000s) | 752 | 504 | 49.2 | % | ||||||||||||||
| * | numbers may not add due to rounding | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ^1^ | Throughoutthis release, EBITDA is a Non-GAAP financial measure intended to provide useful information that supplements Zedge’s results inaccordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measure at the end of this release for an explanationof Zedge’s formulation of EBITDA and reconciliations to the most directly comparable GAAP measure. | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ^2^ | Weuse the following business metrics in this release because we believe they are useful in evaluating Zedge as an investment. | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ● | Monthly active users, or MAU, captures the number of unique users that used our Zedge app during the previous 30-days of the relevant period, is useful for evaluating consumer engagement with our app which correlates to advertising revenue as more users drive more ad impressions for sale. It also allows readers and potential advertisers to evaluate the size of our user base. | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ● | Zedge Premium Gross Transaction Value, or GTV, is the total dollar amount of transactions conducted through the Zedge Premium Marketplace. As Zedge Premium is an internal focus for growth, we believe that this metric will help investors evaluate the progress we are making in growing this part of our business. | |||||||||||||||||
| --- | --- |
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| ● | Average Revenue Per Monthly Active User, or ARPMAU, is a useful statistic in evaluating how well we are monetizing our user base. | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ● | The term Active Subscriptions is replacing “paid subscriptions” due to changes made by Google Play with respect to how they calculate subscriptions. An active subscription is a subscription that has commenced and not been canceled, including paused subscriptions, and subscriptions in free trials, grace periods, or account hold. | |||||||||||||||||||||||||
| --- | --- | |||||||||||||||||||||||||
| ● | Total installs is a measure of the cumulative number of times the Zedge – Wall Papers and Ringtones app has been downloaded since inception. | |||||||||||||||||||||||||
| --- | --- | |||||||||||||||||||||||||
| Trended Financial Information* | ||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in $M except for EPS, ARPMAU, Paid Subscriptions) | Q120 | Q220 | Q320 | Q420 | Q121 | Q221 | Q321 | Q421 | FY 2019 | FY 2020 | FY 2021 | |||||||||||||||
| Total Revenue | $ | 2.0 | $ | 2.6 | $ | 2.1 | $ | 2.7 | $ | 3.8 | $ | 5.3 | $ | 5.3 | $ | 5.2 | $ | 8.8 | $ | 9.5 | $ | 19.6 | ||||
| Advertising Revenue | $ | 1.7 | $ | 2.3 | $ | 1.5 | $ | 2.0 | $ | 3.0 | $ | 4.4 | $ | 4.3 | $ | 4.2 | $ | 7.9 | $ | 7.4 | $ | 15.7 | ||||
| Subscription Revenue | $ | 0.2 | $ | 0.3 | $ | 0.5 | $ | 0.6 | $ | 0.7 | $ | 0.8 | $ | 0.9 | $ | 1.0 | $ | 0.2 | $ | 1.6 | $ | 3.2 | ||||
| Other Revenue | $ | 0.2 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.2 | $ | 0.1 | $ | 0.5 | $ | 0.5 | ||||
| Operating (loss) Income | $ | (0.7 | ) | $ | 0.1 | $ | (0.1 | ) | $ | 0.4 | $ | 1.1 | $ | 2.5 | $ | 2.0 | $ | 2.2 | $ | (2.9 | ) | $ | (0.4 | ) | $ | 7.8 |
| Net (loss) Income | $ | (0.8 | ) | $ | 0.1 | $ | (0.3 | ) | $ | 0.5 | $ | 1.0 | $ | 2.3 | $ | 2.4 | $ | 2.5 | $ | (3.3 | ) | $ | (0.6 | ) | $ | 8.2 |
| Diluted Earnings (Loss) Per Share | $ | (0.08 | ) | $ | 0.01 | $ | (0.03 | ) | $ | 0.04 | $ | 0.08 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | (0.33 | ) | $ | (0.05 | ) | $ | 0.59 |
| EBITDA | $ | (0.3 | ) | $ | 0.5 | $ | 0.0 | $ | 0.8 | $ | 1.4 | $ | 2.9 | $ | 2.3 | $ | 2.7 | $ | (1.7 | ) | $ | 1.0 | $ | 9.3 | ||
| Cash Flow from Operations | $ | 0.4 | $ | 0.6 | $ | 0.7 | $ | 0.5 | $ | 1.5 | $ | 2.3 | $ | 4.0 | $ | 2.4 | $ | 0.1 | $ | 2.1 | $ | 10.1 | ||||
| Zedge Premium – GTV | $ | 0.19 | $ | 0.20 | $ | 0.15 | $ | 0.19 | $ | 0.21 | $ | 0.21 | $ | 0.25 | $ | 0.27 | $ | 0.49 | $ | 0.73 | $ | 0.95 | ||||
| MAU | 29.7 | 34.3 | 28.8 | 31.9 | 32.4 | 35.4 | 34.5 | 34.4 | nm | nm | nm | |||||||||||||||
| Well-developed Markets | 10.0 | 11.3 | 9.0 | 9.6 | 9.2 | 9.5 | 8.9 | 8.5 | nm | nm | nm | |||||||||||||||
| Emerging Markets | 19.7 | 23.0 | 19.8 | 22.3 | 23.2 | 25.9 | 25.6 | 25.9 | nm | nm | nm | |||||||||||||||
| ARPMAU | $ | 0.021 | $ | 0.026 | $ | 0.022 | $ | 0.028 | $ | 0.036 | $ | 0.049 | $ | 0.049 | $ | 0.050 | nm | nm | nm | |||||||
| Active Subscriptions (in 000s) | 200 | 298 | 399 | 504 | 609 | 711 | 753 | 752 | 134 | 504 | 752 | |||||||||||||||
| nm | = not measurable/meaningful | |||||||||||||||||||||||||
| --- | --- | |||||||||||||||||||||||||
| * | numbers may not add due to rounding | |||||||||||||||||||||||||
| --- | --- |
StrategicGrowth Priorities
Reich continued, “I think it’s important to reiterate that we already have a growing business that is highly profitable and also has optionality built into it. With the addition of Emojipedia, Zedge now has a user base in excess of 43 million MAU to support our growth strategy. Our primary areas of focus include growing MAU, particularly in well-developed markets; iterating on the parts of our business that have optionality, like Zedge Premium and Shortz, while managing our downside risk; enhancing our subscriptions; offering more localized products, content and experiences; testing new content categories; and pursuing potential complimentary M&A transactions. We believe this strategy will allow us to continue delivering profits while searching for the next breakout opportunity.”
Fiscal2022 Commentary
“While fiscal 2021 was an outstanding year across almost every key performance indicator, we believe our business still has impressive upside potential and will benefit from the expansion of the creator economy, our massive customer base, the Emojipedia acquisition, our deep technical knowledge and our experience in monetization. Although it is still early in the new fiscal year, we expect to deliver 25%-30% revenue growth for the year with continued strong operating margins, EBITDA growth and cash flow generation,” concluded Reich.
EarningsAnnouncement and Supplemental Information
Zedge's earnings release will be filed on Form 8-K and posted on the Zedge investor relations website (https://investor.zedge.net) at approximately 4:10 p.m. Eastern on November 9, 2021. Management will host an earnings conference call beginning at 4:30 p.m. Eastern. Management's presentation of the results, outlook and strategy will be followed by Q&A with investors.
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To participate in the call, please dial Toll Free: 888-506-0062 or International: 973-528-0011, at least five minutes before the 4:30PM Eastern start. Please ask for the Zedge earnings conference call with Participant Access Code: 358151
The call will also be webcast through the following link: https://www.webcaster4.com/Webcast/Page/2205/42811 and will be available through Wednesday, November 09, 2022.
Following the call and continuing through Tuesday, November 23, 2021, a call replay will be available by dialing Toll Free: 877-481-4010 or International: 919-882-2331 and entering the replay access code: 42811
AboutZedge
Zedge is an app publisher that owns a portfolio of leading digital consumer brands serving 43 million monthly active users across the globe. Our portfolio consists of Zedge Ringtones and Wallpapers, the leading mobile app used for mobile phone personalization, social content, and fandom art; Zedge Premium, a marketplace for artists, celebrities, and emerging creators to market their digital content, to Zedge’s users; Emojipedia, the leading source of all things emoji; and Shortz, a mobile entertainment app in beta, focused on short-form storytelling. Zedge monetizes its content through ad-supported offerings, tokens, and subscriptions. For more information, visit https://www.zedge.net.
Forward-LookingStatements
Allstatements 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. Whilethese forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materiallyfrom the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailedinformation 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.
Contact:
Brian Siegel IRC, MBA Managing Director
Hayden IR
(346) 396-8696
ir@zedge.net
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ZEDGE,INC.
CONSOLIDATEDBALANCE SHEETS
(inthousands, except par value data)
| July 31, | 2020 | ||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | 24,908 | $ | 5,111 | ||
| Trade accounts receivable, net of allowance of 0 at July 31, 2021 and 2020 | 2,545 | 1,407 | |||
| Prepaid expenses | 111 | 123 | |||
| Other current assets | 49 | 113 | |||
| Total current assets | 27,613 | 6,754 | |||
| Property and equipment, net | 1,980 | 2,584 | |||
| Goodwill | 2,262 | 2,196 | |||
| Deferred tax assets, net | 477 | - | |||
| Other assets | 5,145 | 471 | |||
| Total assets | 37,477 | $ | 12,005 | ||
| Liabilities and stockholders’ equity | |||||
| Current liabilities: | |||||
| Trade accounts payable | 585 | $ | 290 | ||
| Accrued expenses and other current liabilities | 1,771 | 1,210 | |||
| Deferred revenues | 1,821 | 1,338 | |||
| Total current liabilities | 4,177 | 2,838 | |||
| Loans Payable | - | 218 | |||
| Other liabilities | 145 | 64 | |||
| Total liabilities | 4,322 | 3,120 | |||
| Commitments and contingencies (Note 9) | |||||
| 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 outstanding at July 31, 2021 and 2020 | 5 | 5 | |||
| Class B common stock, .01 par value; authorized shares—40,000; 13,923 shares issued and 13,865 shares outstanding at July 31, 2021, and 11,788 shares issued and 11,749 ouststanding at July 31, 2020 | 139 | 118 | |||
| Additional paid-in capital | 41,664 | 25,725 | |||
| Accumulated other comprehensive loss | (997 | ) | (1,085 | ) | |
| Accumulated deficit | (7,554 | ) | (15,802 | ) | |
| Treasury stock, 58 shares at July 31, 2021 and 40 shares at July 31, 2020, at cost | (102 | ) | (76 | ) | |
| Total stockholders’ equity | 33,155 | 8,885 | |||
| Total liabilities and stockholders’ equity | 37,477 | $ | 12,005 |
All values are in US Dollars.
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ZEDGE,INC.
CONSOLIDATEDSTATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(inthousands, except per share data)
| Year ended July 31, | 2021 | 2020 | ||||
|---|---|---|---|---|---|---|
| Revenues | $ | 19,569 | $ | 9,470 | ||
| Costs and expenses: | ||||||
| Direct cost of revenues (exclusive of amortization of capitalized software and technology development costs included below) | 1,194 | 1,195 | ||||
| Selling, general and administrative | 9,311 | 7,110 | ||||
| Depreciation and amortization | 1,261 | 1,568 | ||||
| Income (loss) from operations | 7,803 | (403 | ) | |||
| Interest and other income, net | 245 | 11 | ||||
| Net loss resulting from foreign exchange transactions | (2 | ) | (152 | ) | ||
| Income (loss) before income taxes | 8,046 | (544 | ) | |||
| Provision for (benefit from) income taxes | (202 | ) | 15 | |||
| Net income (loss) | 8,248 | (559 | ) | |||
| Other comprehensive income (loss): | ||||||
| Changes in foreign currency translation adjustment | 88 | (100 | ) | |||
| Total other comprehensive income (loss) | 88 | (100 | ) | |||
| Total comprehensive income (loss) | $ | 8,336 | $ | (659 | ) | |
| Income (loss) per share attributable to Zedge, Inc. common stockholders: | ||||||
| Basic | $ | 0.63 | $ | (0.05 | ) | |
| Diluted | $ | 0.59 | $ | (0.05 | ) | |
| Weighted-average number of shares used in calculation of income (loss) per share: | ||||||
| Basic | 13,156 | 11,126 | ||||
| Diluted | 14,038 | 11,126 |
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ZEDGE,INC.
CONSOLIDATEDSTATEMENTS OF CASH FLOWS
(inthousands)
| Year ended July 31, | 2021 | 2020 | ||||
|---|---|---|---|---|---|---|
| Operating activities | ||||||
| Net income (loss) | $ | 8,248 | $ | (559 | ) | |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 1,261 | 1,568 | ||||
| Stock-based compensation | 652 | 492 | ||||
| Deferred income taxes | (477 | ) | - | |||
| PPP loan forgiveness | (218 | ) | - | |||
| Change in assets and liabilities: | ||||||
| Trade accounts receivable | (1,138 | ) | (274 | ) | ||
| Prepaid expenses and other current assets | 257 | 247 | ||||
| Other assets | 232 | (55 | ) | |||
| Trade accounts payable and accrued expenses | 830 | (118 | ) | |||
| Deferred revenue | 483 | 821 | ||||
| Net cash provided by operating activities | 10,130 | 2,122 | ||||
| Investing activities | ||||||
| Deposit made to escrow account related to the Emojipedia acquisition | (4,776 | ) | - | |||
| Capitalized software and technology development costs and purchase of equipment | (653 | ) | (759 | ) | ||
| Investment in SAFE | (50 | ) | - | |||
| Net cash used in investing activities | (5,479 | ) | (759 | ) | ||
| Financing activities | ||||||
| Proceeds from sales of Class B Common Stock | 15,000 | 2,250 | ||||
| Payment of issuance costs | (565 | ) | (141 | ) | ||
| Proceeds from PPP loan payable | - | 218 | ||||
| Repayment of insurance premium loan payable | (181 | ) | (141 | ) | ||
| Proceeds from exercise of stock options | 873 | 12 | ||||
| Purchase of treasury stock in connection with restricted stock vesting | (26 | ) | (29 | ) | ||
| Net cash provided by financing activities | 15,101 | 2,169 | ||||
| Effect of exchange rate changes on cash and cash equivalents | 45 | (30 | ) | |||
| Net increase in cash and cash equivalents | 19,797 | 3,502 | ||||
| Cash and cash equivalents at beginning of year | 5,111 | 1,609 | ||||
| Cash and cash equivalents at end of year | $ | 24,908 | $ | 5,111 | ||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||
| Cash payments made for income taxes | $ | 1 | $ | 1 | ||
| Cash payments made for interest expenses | $ | 3 | $ | 3 | ||
| SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||
| Note payable issued for insurance premium financing | $ | 181 | $ | - |
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Useof EBITDA as a Non-GAAP Measure
EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization. EBITDA represents a measure that we believe is customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures that we present. Our management also believes that EBITDA is useful in evaluating our core operating results. However, EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America and should not be considered an alternative to net income or operating income as an indicator of our operating performance or to net cash provided by operating activities as a measure of our liquidity.
| Reconciliation of EBITDA to Net Income (Loss)* | Q120 | Q220 | Q320 | Q420 | Q121 | Q221 | Q321 | Q421 | FY 2019 | FY 2020 | FY 2021 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net (Loss) Income | $ | (0.8 | ) | $ | 0.1 | $ | (0.3 | ) | $ | 0.5 | $ | 1.0 | $ | 2.3 | $ | 2.4 | $ | 2.5 | $ | (3.3 | ) | $ | (0.6 | ) | $ | 8.2 | |||||||
| Excluding: | |||||||||||||||||||||||||||||||||
| Interest and other income (expense), net | $ | 0.0 | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | 0.2 | $ | (0.0 | ) | $ | (0.0 | ) | ||
| Provision for (benefit from) income taxes | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.3 | $ | (0.5 | ) | $ | (0.1 | ) | $ | 0.0 | $ | 0.0 | $ | (0.2 | ) | ||||||||
| Depreciation and amortization | $ | 0.5 | $ | 0.4 | $ | 0.3 | $ | 0.4 | $ | 0.4 | $ | 0.3 | $ | 0.3 | $ | 0.3 | $ | 1.4 | $ | 1.6 | $ | 1.3 | |||||||||||
| EBITDA | $ | (0.3 | ) | $ | 0.5 | $ | 0.0 | $ | 0.8 | $ | 1.4 | $ | 2.9 | $ | 2.3 | $ | 2.7 | $ | (1.7 | ) | $ | 1.0 | $ | 9.3 |
* numbers may not add due to rounding
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