Zedge reports $31.63M revenue and $131K net loss

Cover page 21 changes

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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Fiscal Year Ended July 31 , 2025 2026 or

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exact

Commission File Number: 1-37782

(Exact Name of Registrant as Specified in its Charter)

4 unchanged paragraphs

(Registrant s Telephone Number, Including Area Code)

1 unchanged paragraph

Class B common stock, par value $0.01 per share ZDGE NYSE American registered pursuant to Section 12(g) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer , smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer , smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.

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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.

Indicate by check mark whether the registrant has filed a report on and attestation to its management s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant s executive officers during the relevant recovery period pursuant to 240.10D-1(b).

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

by check mark whether The registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, based on the adjusted closing price on January 31, 2025 30, 2026 (the last business day of the registrant s most recently completed second fiscal quarter) of the Class B common stock of $2.71 $3.11 per share, as reported on the New York Stock Exchange, was approximately $ 37.9 31.9 million.

As of October 24, 2025, 26, 2026, the registrant had outstanding 524,775 shares of Class A common stock and 12,479,136 14,998,014 shares of Class B common stock.

DOCUMENTS INCORPORATED BY REFERENCE

The definitive proxy statement relating to the registrant s Annual Meeting of Stockholders, to be held January 14, 2026, 2027, is incorporated by reference into Part III of this Form 10-K to the extent described therein.

Business 120 changes

We build and operate creator communities that collectively serve approximately 19.3 million monthly active users across the Zedge Marketplace and GuruShots. Zedge Marketplace, our flagship platform, is a leading marketplace for mobile personalization content and includes pAInt, our generative AI creation suite. GuruShots is a photo competition game in which photographers of all skill levels compete, vote and improve through gamified photo challenges. DataSeeds.AI ( DataSeeds ) is our 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. We use the term rights-cleared herein to mean that, based on the licenses, assignments, consents, releases, and other permissions obtained from contributors, production partners, or other rights holders, as applicable, and the representations made to us in connection with those arrangements, we believe we have obtained from the asserted creator (or, if applicable, the owner or any depicted individual) the rights necessary to license the content for the agreed purposes, including for AI training where applicable, and rely on those rights or other authorizations to address any claims that the intended use of the content violates the rights of a third party. These measures reduce, but do not eliminate, the risk of competing ownership claims, invalid or insufficient permissions, or other third-party claims relating to the content. Demand for this kind of data comes from organizations that develop, train, fine-tune or evaluate models on real-world imagery, video and audio. That includes frontier model developers, large technology companies and robotics manufacturers, and it extends to enterprises applying AI within specific industries, consumer and creative software platforms, and data services companies that incorporate our content into their own offerings. We have delivered datasets at scale over multiple quarters, produced to customer specifications. To date, we have served a small number of these customers. The content foundation for DataSeeds is supplied by our proprietary creator communities across the Zedge Marketplace and GuruShots. Our portfolio also includes Emojipedia, a leading reference for emoji definitions, information and news.

We are part of the Creator Economy, which Coherent Market Insights estimated to be worth approximately $252 billion globally in 2025 and projected to reach approximately $1.3 trillion by 2033 1 . We view the Creator Economy as an opportunity to expand our business, particularly as we expand into the business-to-business market with DataSeeds. The market for AI training data is also growing rapidly, and Grand View Research estimates it will reach $3.9 billion in 2026, with image and video representing the largest data modality at 41.9% of the market in 2025. 2

Our business consists of two reportable segments: Zedge Marketplace and GuruShots (which includes DataSeeds).

1 Coherent Market Insights, Global Creator Economy Market, https://www.coherentmarketinsights.com/industry-reports/global-creator-economy-market.

2 Grand View Research, AI Training Dataset Market Size, Share & Trends Analysis Report, https://www.grandviewresearch.com/industry-analysis/ai-training-dataset-market.

Our Zedge App (which is 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, and is available both in Google Play and the App Store. Over the past two fiscal years, our Zedge App has had between 19.3 million and 20.5 million monthly active users ( MAU ). MAU for our Zedge App has been declining, and ended with 19.3 million MAU as of July 31, 2026. MAU is a key performance indicator ( KPI ) for our Zedge App that captures the number of unique users that used our Zedge App during the final 30 days of the relevant period. Our platform allows creators to upload content to our marketplace and avail it to our users either for free or, via Zedge Premium, the section of our marketplace where we offer premium content for purchase. In turn, our users utilize the content to personalize their phones and express their individuality.

In fiscal 2023, we introduced pAInt, a generative AI wallpaper maker in the Zedge App. Today, pAInt is available for text-to-image, image-to-image, and text-to-audio creation. In addition, we upgraded our paid subscription offering by bundling together an ad-free experience with value adds making the offering more compelling.

We often refer to our freemium ringtones and wallpapers, our subscription offering, the functionality for creators to market their products, and ancillary offerings and features both in our Zedge App and website, as our Zedge Marketplace.

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, our virtual currency that is 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. In April 2023, we introduced a subscription tier in the iOS version of the app. As of July 31, 2026, we had approximately 1.3 million active subscriptions.

In fiscal 2025, we introduced DataSeeds, which produces rights-cleared multimodal datasets, including egocentric video for robotic training, at scale. Our user base consists of approximately 19.3 million monthly active users across two platforms, Zedge Marketplace, our marketplace for mobile personalization content, and GuruShots, our photo competition game. From that audience, we mobilize a managed network of contributors that produce spec-matched images, audio, and video training data. Our deep experience in consumer mobile products, including onboarding, compliance, gamification, micropayments, and user acquisition, enables us to maintain high contributor quality and consistent production at volume while delivering managed crowd solutions.

We source content for DataSeeds primarily through three channels: an Off-the-Shelf catalog of images, video and audio, content created to order by contributors we recruit directly, and the DataSeeds Production Cloud, our curated global network of professional production partners.

Models are only as good as the data used to train and refine them, and we believe the need for documented, rights-cleared data extends well beyond the largest model developers. Our ability to serve the full range of buyers described above will depend on adding commercial, engineering, and operational capacity that we do not have today. Our plans to extend further along the AI data value chain are described under Our Strategy below.

In April 2022, we acquired GuruShots Ltd ( GuruShots ), our photo competition game in which photographers of all skill levels compete, vote and improve through gamified photo challenges. GuruShots offers a platform spanning iOS, Android, and the web that provides a fun, educational and structured way for amateur photographers to compete in a wide variety of contests showcasing their photos while gaining recognition with votes, badges, and awards. We estimate that the total addressable market of amateur photographers using their smartphones to take and publicly share artistic photos is 30-40million people per month. Every month, GuruShots stages more than 300competitions 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. To improve engagement, GuruShots has adopted a set of retention dynamics focused on individual, team and community dynamics that create a sense of belonging, inspiration, recognition, improvement, and competition.

GuruShots utilizes a Free-to-Play business model and generates revenue through in-app purchases of virtual currency. Players can use this currency to unlock competitions or gain an edge by purchasing resources and participating in additional gameplay. Monthly average spend per paying player was approximately $47.6 in fiscal 2026.

In fiscal 2024, we revamped GuruShots customer onboarding experience by guiding new players through simplified photo competitions of limited size and duration. The upgrade was designed to enhance the gaming experience for new players by increasing their potential for winning and providing immediate gratification. The new onboarding has shown improvements in engagement, retention, and revenue from new users. In addition, we migrated to a coin-based economy with multiple currencies in order to enable more players to earn and spend their currency on in-game resources.

Since the acquisition, GuruShots has faced challenges in growth and profitability, and its revenue has declined. We have cut costs at GuruShots, including as part of the restructuring initiated in January 2025, and have materially scaled back on paid user acquisition ( PUA ). Our strategy focuses on attracting new users and converting them into recurring, paying players.

Historically, we marketed GuruShots to prospective players primarily via PUA channels including Google, Meta, TikTok and other platforms, utilizing a variety of advertising media and formats, including static and video advertisements. We have significantly reduced PUA investment for GuruShots to improve Return-on-Ad-Spend ( ROAS ) and intend to continue managing PUA spend to prioritize return on ad spend.

We believe that the extensive library of photographs generated by GuruShots players through submissions to GuruShots competitions represents a valuable dataset for DataSeeds. We have secured AI training rights to approximately 50 million of these photographs, and we continue to expand the licensable catalog by securing rights to additional photographs. In addition, we introduced a minigame feature within GuruShots through which we make model evaluation services available to AI developers, and we entered into our first agreement for these services in August 2026. The experience is game-like, fun and competitive, and offers a valuable capability to technology companies that need human-ranked content review. Participation in the minigame is limited to human players, and automated participants are excluded.

Emojipedia Pty Ltd ( Emojipedia ) 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. It is the top resource for all things emoji, offering insights into data and cultural trends. In the past year, we have implemented multiple changes to Emojipedia including an AI-powered emoji sticker generator tool as well as an extensive emoji sticker library.

In late September 2025, Google released an update to its Search Engine Results Page ( SERP ) enabling users to copy emojis directly from search results rather than being directed to third-party sites such as Emojipedia. In addition, AI platforms, including ChatGPT and Claude, now return emoji results in response to user queries. These changes have resulted in reduced traffic and reduced revenue. Emojipedia revenue declined 49.4% in fiscal 2026 compared to fiscal 2025. 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. In light of these developments, we recorded an impairment charge of $3.7 million during the three months ended January 31, 2026, and we are managing Emojipedia for cash generation rather than for growth.

Our vision is to build and engage a global community of creators and to convert the content and human judgment they produce into commerce. We continue to invest in our consumer businesses, the Zedge Marketplace and GuruShots, and we are applying the same competency in managing creators at scale to DataSeeds. In August 2026, we agreed to issue shares of our Class B common stock and warrants in a direct investment of approximately $7.7 million, and we intend to use the proceeds, together with cash generated by our existing businesses, to accelerate the growth of DataSeeds.

We refer to the individuals who supply content to us as our creators and contributors, whether they participate in our consumer products or are recruited directly for a specific customer requirement, and to the enterprises to which we provide datasets and related services from DataSeeds as our customers.

Our Strategic Flywheel

Our long-term strategy calls for a flywheel in which our 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 our consumer products address.

The competency at the center of this strategy is our ability to attract, onboard, engage and compensate very large numbers of everyday creators at low cost. We developed it over more than a decade of operating consumer mobile applications, and we are now applying it to the production of enterprise-grade AI training data.

We source content through three channels, each suited to a different customer requirement.

Our Off-the-Shelf catalog. We have secured AI training rights to approximately 50 million images contributed by our creator communities. We obtained rights to previously uploaded content by inviting players to opt in, in exchange for virtual currency they can use in the game, and our terms of service now grant us these rights for newly uploaded content. Each month, GuruShots stages more than 300 competitions in which players upload in excess of 403,000 photographs, continually expanding the catalog. We further supplement the catalog with datasets we commission from a network of production partners, based on our view of industry demand in areas such as object and scene detection and egocentric video, and to which we hold exclusive ownership.

Managed crowd creation. When a customer requires content that does not yet exist and can be created by consumers, we recruit contributors directly, onboard them through a purpose-built mobile experience, obtain the necessary consents and releases, distribute the brief, support the collection, validate the submissions against the specification, and pay the contributors. Recent projects have included selfie videos and imagery of household pets.

DataSeeds Production Cloud. Where a specification requires professional equipment, controlled conditions or specialized expertise, our curated global network of professional production partners produces made-to-order image, video and audio content, including egocentric video for robotics training.

Our consumer products also generate human judgment at scale. Each month, GuruShots players cast close to 2.3 billion perceived votes on one another s photographs, which demonstrates both the scale of the community and its willingness to perform ranking and review at volume. We make model evaluation services available that draw on this capability, delivered through a minigame within GuruShots in which participation is limited to human players, and we entered into our first agreement for these services in August 2026. We do not currently perform data annotation ourselves, and where a customer requires annotation, we expect to engage a third-party provider that specializes in those services.

The cycle reinforces itself. Enterprise demand tells us what to collect. Our consumer products and our user acquisition capability let us collect it at a cost structure we believe is difficult to replicate. The resulting revenue funds continued investment in our communities, our acquisition capability and our production network, which expands what we are able to collect next. Over time, we intend to broaden the opportunity for our creators to participate in the economics of our enterprise business.

These enterprise sales typically begin with a relatively small initial order that allows a customer to evaluate our content and our ability to deliver to its specification. Depending on our performance and other competitive factors, an initial order may lead to substantially larger and recurring engagements.

We remain committed to continued investment in and support of our existing products while also scaling DataSeeds and searching for new opportunities to fuel our growth. Executing this strategy calls for concentrating our efforts on the following goals:

Our consumer businesses

Prioritize the profitability of our user base. We are focused on the value we generate per user rather than on the absolute size of our user base, and we expect 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 and crafting targeted marketing strategies based on those insights;

studying our users needs and enhancing our products to align with the preferences of our most profitable segments;

developing and offering new features and services that are 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 our full-stack marketing team, our 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 our user base in the segments that monetize best; and exploring crossover marketing opportunities between user segments to maximize reach and engagement.

Improve monetization. We continue to develop monetization methods that will help us grow, including advancements of the in-app economy, subscription models, e-commerce, and new advertising products, implementations and optimizations. To this end we operate dual mediation platforms in parallel in order to optimize our revenue. We believe that our products and user base are attractive to advertisers, brands, artists and players and will yield new monetization opportunities, and we expect to capitalize on cross marketing our suite of products to our users.

Continue investing in products and technology across our consumer portfolio. We plan to make continued, selected investments in product feature sets and functionality to both engage and retain our existing user base and attract new users, including personalized recommendations and content feeds, enhanced search and content discovery, and optimized pricing. In addition, we envision applying our product expertise to verticals that we currently do not have in our portfolio. For example, we launched an alarm feature in Zedge, a daily-use tool designed to bring users back to the app on a recurring basis. Early results indicate that users who adopt the alarm feature return to the app more frequently and engage more with our content.

Build our marketplace into a compelling platform for artists and creators. We are 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 our marketplace and, over time, by participating in the economics of DataSeeds.

Our enterprise business

Grow and diversify the DataSeeds customer base and deepen our existing customer relationships. We intend to broaden the set of companies we serve across the categories described under Company Overview above, and to expand the scope of our work with existing customers. As customers move from one-time dataset purchases toward ongoing data relationships, our 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. Pursuing this breadth will require additional commercial, engineering, and operational capacity, and we expect to prioritize opportunities selectively.

Expand our content supply while maintaining rigorous rights and consent standards. We intend to continue growing our licensed catalog, expanding the network of contributors we recruit directly, and adding production partners with professional and specialized capabilities. We regard the rigor of our consent, licensing and release practices as a competitive advantage as well as a legal obligation, and we intend to maintain standards that withstand our customers diligence.

Move up the AI data value chain. While rights-cleared multimodal data creation at scale is our foundation, we make model evaluation services available and entered into our first agreement for these services in August 2026, and we intend 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.

Invest in the technology and operating capability that power data production at scale. Our ability to recruit contributors, onboard them, capture the necessary consents and releases, distribute a brief, support and validate submissions against a specification, and pay contributors is proprietary to us, and we intend to keep investing in it. We believe this capability, built on more than a decade of consumer mobile experience, is what allows us to deliver bespoke, spec-compliant content quickly and at a cost structure that is difficult to replicate.

Accelerate new product development through our Product Innovation Team. We have established a Product Innovation Team to leverage AI, including AI-assisted coding, and automation in order to accelerate the development of minimally viable products ( MVPs ) and rapidly determine, based on empirical data, which concepts merit further investment. Our enterprise-wide adoption of AI is yielding efficiencies that are enabling us to achieve this goal, allowing us to reallocate employees from existing product responsibilities to new product development. In fiscal 2026, we launched six mobile app MVPs, developed in a matter of weeks by streamlined teams, and we continue to iterate on and invest in three of them based on threshold KPIs needed for continued investment. We expect to allocate a portion of this team s capacity to build creator tooling for DataSeeds.

Selectively pursue strategic investments, partnerships, and acquisitions. On a selective basis, we may look to invest in, partner with, or purchase entities that can provide synergistic growth opportunities. For our consumer businesses, we would look primarily for audience, content, and complementary product capability. For DataSeeds, we would look primarily for production capacity, tooling, and access to specialized content and expertise.

Our Competitive Advantages

We believe that the following competitive strengths will drive the growth of our business:

Large, global user base. As of July 31, 2026, the Zedge App had 19.3 million MAU, of which approximately 25.9% were in well-developed markets and 74.1% were in emerging markets. Users in well-developed markets typically monetize at a material premium when compared to those in emerging markets. The Android version of the Zedge App is available in 14 languages. Our global reach supports a highly diversified catalog of wallpapers, video wallpapers, ringtones, notification sounds, custom app icons (available on iOS) , as well as the ability for users to create bespoke wallpapers with pAInt, our generative AI creation suite. We believe this makes us attractive to creators seeking to meet a wide range of tastes and preferences, and that we are among the leading providers of mobile personalization content globally. Our scale also draws advertisers seeking users with adequate disposable income to purchase their products and services, and artists and brands looking to reach a critical mass of users.

Proven ability to acquire, onboard and engage large numbers of users at low cost. We have operated consumer mobile applications for more than a decade and have built a full-stack marketing organization, a data and business analytics capability, and onboarding and engagement systems refined across tens of millions of users. This capability underpins both our consumer businesses and our enterprise business, where it allows us to recruit and mobilize contributors against a specific customer brief rather than relying solely on content that already exists.

Proprietary, rights-cleared content catalog. We have secured AI-training rights to approximately 50 million images contributed by our creator communities making the content commercially usable by companies building AI models.

Infrastructure for consent, compliance and contributor payment at scale. We have built systems to onboard contributors, capture opt-ins and releases, distribute a brief, validate submissions against a specification and pay contributors. As customers and regulators pay closer attention to the provenance of AI training data, we believe the rigor of this infrastructure is a commercial advantage and not only a legal safeguard.

Ability to produce content to specification. Through contributors we recruit directly and the DataSeeds Production Cloud, our curated global network of professional production partners, we can produce image, video and audio content built to a customer s specification, including content that requires professional equipment, controlled conditions or specialized expertise. We select and vet each production partner against our quality and compliance standards. We do not own studios or other production facilities, and we engage production partners for the specific content each customer requires rather than building and maintaining that capability ourselves.

Ability to generate structured human judgment from gameplay. We have years of experience building and operating competitive consumer mobile apps, including games, across iOS, Android and the web, and we understand design, onboarding, game mechanics, LiveOps, feedback loops and in-game resource balancing. In the case of GuruShots, we have combined these together focusing on photography competitions. By generating ranked preference data, we are able to present structured ranking and review tasks to an engaged community at scale in an environment in which participation is limited to human players.

High-quality products. We prioritize our users needs and invest significant resources in product development, design and usability. We beta test product enhancements extensively and closely monitor user feedback to ensure that we meet our users needs. To date, our Zedge App has 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, and GuruShots holds a 4.4 star rating in the App Store.

Experienced team. Our employees possess deep expertise in product design and management, development, marketing, monetization, data and analytics, and operations, and many have long tenure with the Company. Our management team has deep knowledge of the mobile app landscape and experience operating and restructuring consumer mobile businesses. With offices in two countries and a hybrid in-person attendance policy, we have built a culture founded on respect and empowerment in which our employees can be autonomous and creative.

Scalable and reliable technology and infrastructure. Our products are built upon technology and infrastructure that reliably serve tens of millions of monthly active users globally. We use a combination of off-the-shelf and proprietary solutions that scale efficiently to meet the needs of our user base and the delivery requirements of our enterprise customers.

A small number of customers account for a significant portion of our revenue. In fiscal 2026, our largest customer accounted for approximately 34.2% of our consolidated revenue and our two largest customers accounted for approximately 40.9% in the aggregate. Our advertising revenue is concentrated in a small number of demand partners, and DataSeeds revenue is concentrated in a small number of enterprise customers. The loss of any of these relationships, or a material reduction in the volume of business they do with us, would have a material adverse effect on our results of operations. See Item 1A, Risk Factors.

We face competition in all aspects of our business, including from digital marketplaces, gaming companies, and providers of data and data services to companies building artificial intelligence models. In running our business, we compete for:

Consumers. We compete for consumers leisure time, attention, and spending versus alternative forms of entertainment that are available to them as well as against online platforms and marketplaces that offer utility and content for mobile phone personalization.

Creators and contributors. Many online platforms offer content creators an ecosystem in which they can make their content available to consumers, and some may have better incentives, paid or otherwise, that potentially make them more attractive than our marketplace. In addition, 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. Many of these companies are substantially better capitalized than we are. Our 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.

Specialized production capacity. Where a customer requirement calls for professional equipment, controlled conditions or specialized expertise, we compete for the capacity and attention of professional production partners whose facilities and skills are sought by others.

Enterprise customers for AI data and related services. We compete for the budgets of organizations that train, fine-tune and evaluate AI models against providers of licensed image, video and audio libraries, human data and annotation platforms that recruit specialized contributors, managed data collection and data services firms, and specialist providers focused on physical AI and robotics data. Many of these competitors are substantially larger and better capitalized than we are. Some of these companies are also channels through which we sell, engaging us to fulfill part of a requirement for their own customers, so the same company may be a competitor in one engagement and a customer in another. We also compete with our customers own internal capabilities, as some build in-house data operations or contract directly with content producers, and with providers of synthetic data, whose output may substitute for content captured in the real world for certain applications.

Advertisers. We face significant competition in securing spend from advertisers.

We also compete with, and are affected by:

Other game and mobile app developers. Game and mobile app developers that offer engaging and interesting products are competitors, and we may not be aware of many of them, some of whom may be more proficient at capitalizing on user acquisition channels in order to gain access to large user bases and their network effects to expand virally and quickly.

Alternative options and products for mobile personalization, generative AI creation tools, games and emojis. There are many other marketplaces and platforms that offer mobile personalization content, generative AI creation tools, games, and emoji resources, some of whom are better funded than we are.

Rapid-paced and changing markets. The mobile app ecosystem changes quickly and regularly, with new apps capturing massive audiences competing for consumers time, mindshare, and money. The market for AI training data and related services is likewise early and evolving rapidly, with new entrants, shifting customer requirements, and developing norms regarding data provenance, consent, licensing and regulations. Both require us to adapt as necessary to remain relevant and meaningful.

Distribution and discovery platforms including, but not limited to, Google, Apple, OpenAI, and other large intermediaries. Their algorithms, policies and AI-driven results increasingly surface answers and content within the platform UI, which may diminish referral traffic to our properties and impact acquisition costs and monetization.

We believe the competitive strengths described above under Our Competitive Advantages position us to compete effectively.

Available Information

Our internet address is https://www.zedge.net/. We make available free of charge through the investor relations page of our web site ( investor.zedge.net ) our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, and all beneficial ownership reports on Forms 3, 4 and 5 filed by directors, officers and beneficial owners of more than 10% of our equity, as soon as reasonably practicable after such reports are electronically filed with the Securities and Exchange Commission. We have adopted codes of business conduct and ethics for all of our employees, including our principal executive officer, principal financial officer and principal accounting officer. Copies of the codes of business conduct and ethics are available on our investor relations page.

Our web site and the information contained therein or incorporated therein are not intended to be incorporated into this Annual Report on Form 10-K or our other filings with the Securities and Exchange Commission.

Government Regulation

and 40 more changes in the filing

Risk factors 380 changes

Our business, operating results or financial condition could be materially adversely affected by any of the following risks associated with any one of our businesses, as well as the other risks highlighted elsewhere in this document, particularly the discussions about competition. The trading price of our Class B common stock could decline due to any of these risks.

Our business operations are subject to numerous risks and uncertainties, including those outside of our control, that could cause our business, financial condition or operating results to be harmed, including, but not limited to, risks regarding the following:

If we fail to keep up with rapid technological changes in the internet, smartphone industries, and artificial intelligence ( AI ), and adapt our products and services accordingly, our results of operations and future growth may be adversely affected.

A key component of our growth strategy involves the adoption, integration, and effective utilization of AI technologies across our products, services, and internal operations, which introduces significant and evolving risks.

Our monthly active users have declined, and if we are unsuccessful in adding new users or in retaining existing users, or if our users decrease their level of engagement with our products or do not make optional purchases of tokens, coins, resources, or content, or convert into paying subscribers and renew periodic paid subscriptions, our revenue, financial results and business may be significantly harmed.

We may not be successful in acquiring a sufficient number of users that become purchasers or retain existing users who generate profitable revenue for our apps.

We may not manage our in-app economy well and as a result, disincentivize users from making in-app purchases. Any failure to do so could adversely affect our business, financial condition, and results of operations.

If we are unable to compete for advertisers or if advertisers reduce their spend with us, our revenues, profitability and prospects may be materially and adversely affected.

The digital advertising market may deteriorate, which could materially harm our business and results of operations.

A material amount of our revenue is generated from a limited number of geographies and third-party advertising demand partners. Any change to this mix could result in negatively impacting our business, financial condition, and results of operations.

Our apps user base is heavily weighted to the Android operating system and our revenues and profitability may suffer if the market demand for Android smartphones decreases.

We rely on third-party platforms, primarily the iOS App Store, Meta, and Google Play Store, to distribute our apps, process payments, and collect revenues generated on these platforms. These platforms exercise significant control over app distribution, monetization, advertising, and privacy policies, and frequently update their algorithms and terms of service. In addition, the integration of AI-driven content and search results by these platforms (e.g., Google s AI Overviews and similar generative AI features from Apple and Meta) may reduce organic traffic to our properties by embedding content directly in platform experiences. If these platforms adopt policies including those relating to AI integration, advertising, privacy, monetization, or content display that are counter to our strategy, our business could be materially and adversely affected.

We operate in a highly competitive industry with low barriers to entry, and our failure to compete effectively, particularly with our AI-based offerings, could adversely affect our business and results of operations.

Our efforts to develop and expand DataSeeds, our business-to-business data offering, expose us to a number of risks that could limit our ability to grow, achieve commercial success, and maintain our business, results of operations, and financial condition. Contributors may choose not to make their content available for AI training and related uses, which could prevent us from scaling DataSeeds.

Our catalog may not contain the types of content that our customers seek, which could limit demand for DataSeeds.

We provide DataSeeds datasets and services through discrete projects rather than under recurring contracts, and our results may fluctuate significantly from period to period.

A downturn in the AI market could reduce demand for our datasets and services and adversely affect our growth prospects.

Sales of DataSeeds dataset and service offerings have been concentrated among a small number of customers, and a reduction in their spending, or our inability to broaden our customer base, could materially reduce our revenue.

If we fail to maintain and enhance our various brands, or if we incur excessive expenses in this effort, our business, results of operations and prospects may be materially and adversely affected.

We may not be able to effectively manage our growth or implement our future business strategies, in which case our business and results of operations may be materially and adversely affected.

Substantially all of our personnel are located in Israel and Lithuania, and armed conflict or instability affecting either country could disrupt our operations and our ability to serve our customers.

We recently changed our chief executive officer, and the transition in senior leadership could disrupt our business.

Privacy, data protection and emerging artificial intelligence laws expose us to sanctions, litigation and increased costs of compliance.

Laws regulating online platforms and digital content services may impose additional compliance obligations and penalties on us.

Content depicting identifiable individuals may expose us to privacy, right of publicity, artificial intelligence, and other data processing-related laws, including with respect to alleged processing of biometric data, geographic information, and minors information, as well as to evolving regulatory obligations, including, for example, with respect to data brokers, and non-compliance could result in liability.

Our business depends on our ability to collect and effectively use data to serve relevant advertising, deliver suitable content, and identify prospective advertisers, and any limitation on the collection and use of this data could significantly diminish the value of our services, cause us to lose advertisers, make us less attractive to prospective advertisers, and harm our revenues.

Any significant system or network disruption or cyberattack could have a material adverse effect on our business prospects and results of operations.

We are controlled by our majority stockholder, which limits the ability of other stockholders to affect our management.

If we face intellectual property infringement claims arising from content offered through Zedge Marketplace, GuruShots, or DataSeeds, or are unable to license, acquire or otherwise obtain access to compelling content and services at reasonable cost, or if we do not develop or commission compelling content of our own, the number of users may not grow as anticipated, or may decline, or users level of engagement may decline, all or any of which could materially harm our business and operating results.

Our ability to grant rights to customers may be limited by the rights we obtain from contributors and production partners, and defects in rights associated with content already used to train AI models may be difficult or impossible to remedy.

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

If we fail to keep up with rapid technological changes in the internet, smartphone industries, and artificial intelligence ( AI ), and adapt our products and services accordingly, our results of operations and future growth may be adversely affected.

The internet and smartphone industries are characterized by rapid and innovative technological changes. Our future success will depend, in part, on our ability to respond to fast changing technologies, adapt our products and services, including those of Emojipedia, to evolving industry standards and improve the performance, functionality and reliability of our products and services. For example, AI platforms, including ChatGPT and Claude, now return emoji results in response to user queries. The impact of these changes on Emojipedia s monthly active users (MAU) was 3.1 million, or 35% year over year decline in MAU, resulting in reduced traffic and adversely affecting revenue. As a result, we recorded an impairment charge of $3.7 million for the quarterly results ended January 31, 2026. Our increasing reliance on AI technologies for various operational aspects, such as content moderation, personalization, and user engagement, may pose risks if these systems fail or produce unintended outcomes. Technical issues, data inaccuracies, or system malfunctions could disrupt our services and negatively impact user experience. Ensuring the reliability and accuracy of AI systems requires ongoing maintenance, testing, and potential human oversight, which may increase operational complexity and costs. Our failure to continue to adapt to such changes could harm our business. If we are slow to develop products and services that are compatible with smartphones, or if the products and services we develop are not widely accepted and used by smartphone users, we may not be able to capture a significant share of this important market. In addition, the widespread adoption of new internet, networking or telecommunications technologies or other technological changes for smartphones could require substantial expenditures to modify or adapt our products, services or infrastructure. If we fail to keep up with rapid and innovative technological changes to remain competitive, our future growth may be materially and adversely affected and our results of operations could be materially and adversely affected.

A key component of our growth strategy involves the adoption, integration, and effective utilization of AI technologies across our products, services, and internal operations, which introduces significant and evolving risks.

We currently incorporate AI into certain existing and planned products, as well as our internal operations. For example, in fiscal 2023 we launched pAInt, a generative AI creation suite within the Zedge App. We also rely on AI tooling, automation platforms, and emerging practices such as vibe coding to improve operational efficiency, enhance content creation workflows, and accelerate product development. Developing, testing, and deploying these AI systems, particularly those leveraging third-party services, may increase our cost profile due to high computing costs, which could reduce our margins and adversely affect our financial results. Achieving consistent, secure, and compliant AI adoption across departments including Product & Engineering, Content Operations, Trust & Safety, Customer Support, Finance, and Legal/Compliance requires ongoing investment in training, governance, and change management. Failure by any function to adopt or appropriately use these tools could reduce productivity, impair product quality, or cause compliance or security issues.

AI technologies are complex, resource-intensive, and rapidly evolving. Market demand and acceptance of AI-driven offerings, such as pAInt and Zedge Premium, remain uncertain, and our product development efforts may not achieve widespread adoption or may be outpaced by competitors. Competitors with greater financial, technical, data, or distribution resources may gain an advantage in attracting and retaining AI talent and in acquiring training data and compute capacity, which could impair our ability to maintain competitive AI capabilities. If our AI solutions, or those of others in our industry, draw controversy due to their perceived or actual societal impact such as generating biased, harmful, or misleading content we may experience brand or reputational harm, competitive harm, or legal liability, which could slow user adoption of our products.

The use of AI also raises ethical, reputational, and legal concerns. AI systems can generate or amplify content that is inaccurate, misleading, biased, discriminatory, harmful, or otherwise controversial, or be misused by third parties. If our AI tools produce, or are perceived to produce, such outputs, or if we fail to implement adequate human oversight, testing, and safeguards (including data governance, evaluation, and post-deployment monitoring), our brand and competitive standing could be harmed and we could face complaints, investigations, or litigation. Potential litigation or government regulation related to AI may increase the burden and cost of research and development, further subjecting us to reputational harm, competitive harm, or legal liability. Failure to address perceived or actual technical, legal, compliance, privacy, security, or ethical issues could undermine public confidence in AI, slowing customer adoption of our AI-driven products and services, such as pAInt and Zedge Premium.

We are susceptible to platform and competitive risks arising from the rapid adoption and integration of AI by established technology platforms, app stores, search engines, and new market entrants. For example, platforms may incorporate AI-driven wallpaper, emoji, or other personalization features directly into their services or AI overviews, reduce referral traffic, alter algorithms or terms governing AI content, or restrict use of third-party AI tools, any of which could decrease usage of our products or increase customer acquisition costs. Over time, improvements in AI accuracy, efficiency, and capabilities could disrupt our business model if we fail to anticipate and respond effectively.

Laws and regulations focused on the development, use, and provision of AI technologies and other digital products and services are proliferating in many jurisdictions around the world. Staying compliant with evolving laws, regulations, and industry standards pertaining to AI may impose significant operational costs and constrain our ability to develop, deploy, or employ AI technologies. Failing to adapt appropriately to this evolving regulatory environment could result in legal liability, regulatory actions, monetary penalties and damage to our brand and reputation.

Operationally, AI models depend on the quality, provenance, and security of data and on reliable third-party infrastructure. Inadequate, outdated, biased, or compromised datasets can produce flawed outputs and model drift. Our reliance on third-party models, APIs, datasets, and cloud providers exposes us to outages, cost volatility, performance degradation, or changes in licensing or acceptable-use terms, which could disrupt our operations if these services become unavailable or are no longer offered on commercially reasonable terms. Integrating AI introduces new cybersecurity risks, including prompt-injection, data exfiltration, model poisoning, and supply-chain vulnerabilities, as well as the risk that employees inadvertently input confidential or personal data into external systems.

Intellectual property ownership surrounding AI technologies has not been fully addressed by U.S. courts or federal and state laws, nor by international legal frameworks globally. Our ongoing development and use of generative AI tools may result in copyright infringement claims, disputes over ownership and licensing, and potential patent infringement claims, among other things. These legal challenges could be costly to defend against, leading to substantial financial obligations and reputational damage. The evolving regulatory environment and uncertain legal precedents in this field further increase our exposure to litigation risks, which could materially affect our business, financial condition, and results of operations.

Additionally, laws and regulations focused on the development and use of AI are proliferating globally and continue to evolve (for example, comprehensive AI frameworks in the EU and emerging federal and state guidance in the U.S.). Compliance may require significant documentation, transparency and record-keeping, risk assessments, model governance, content provenance or watermarking, impact assessments, vendor oversight, and restrictions on certain use cases. Noncompliance could result in investigations, fines, injunctions, remediation obligations, or other sanctions. Cross-border data transfer rules, sanctions, and export controls may affect access to datasets, models, or compute resources in some jurisdictions.

Further, our use of generative AI in aspects of our platforms may present risks and challenges that could increase as AI solutions become more prevalent. AI algorithms may be flawed. Datasets may be insufficient or contain biased information. These deficiencies and other failures of AI systems could have negative impacts on our users experience and subject us to competitive harm, regulatory action, legal liability, and brand or reputational harm. Contractual indemnities from vendors may be unavailable or insufficient. We may also face claims related to privacy (including the processing of personal or biometric or other sensitive information), publicity rights, deceptive practices, or content moderation failures. Defending such claims can be costly and time-consuming, could require changes to our products or processes, and could harm our reputation and financial results.

Finally, AI-related development and inference can increase energy consumption and costs, and investor or regulatory focus on sustainability may impose additional constraints. If we fail to implement robust AI governance, align employee practices with our policies, maintain sufficient human oversight, and continuously evaluate and improve our systems, the risks described above could materially and adversely affect our business, financial condition, results of operations, and reputation.

Our monthly active users have declined, and if we are unsuccessful in adding new users or in retaining existing users, or if our users decrease their level of engagement with our products or do not make optional purchases of tokens, coins, resources, or content, or convert into paying subscribers and renew periodic paid subscriptions, our revenue, financial results and business may be significantly harmed.

The size of our user base and our users level of engagement and paid conversion are fundamental to our success. Our financial performance has been and will continue to be dependent on our ability to successfully add new users, retain and engage existing users and convert them into paying users and/or subscribers. Our MAU declined in fiscal 2026 compared with fiscal 2025, and in fiscal 2025 compared with fiscal 2024, and we expect that the size of our user base will continue to decline (or fluctuate) in one or more markets over time. If consumers and/or creators do not perceive our products as useful, effective, entertaining, reliable, and/or trustworthy, we may not be able to attract or keep users or otherwise maintain or increase the frequency and duration of their engagement or the percentage of users that are converted into or remain paying subscribers. We may continue to see declines in our user base or engagement levels, which could further erode our ability to maintain or grow revenue. User engagement can be difficult to measure, particularly as we introduce new and different products and services, and as various privacy regulations evolve. Any number of factors can negatively affect user retention, growth, engagement and conversion, including if:

users opt to utilize other competitive products or services instead of our own;

user behavior changes with respect to our products and services, resulting in a decrease of engagement and/or session time;

users decrease their engagement, session time, or uninstall our apps because they feel their experience is diminished due to product decisions that we make with respect to introducing new features, feature enhancements, and/or monetization techniques;

users become concerned about our user data practices or other matters related to privacy, security and the sharing of user data;

users are no longer willing to pay for subscriptions or in-app purchases or we are unable to increase the price of our subscriptions or in-app purchases;

users have difficulty installing, updating or otherwise accessing our products and services as a result of our actions or those of third parties that we rely on to distribute our products and deliver our services;

we fail to introduce new features, products or services that users find engaging or enhance the existing products and services with improvements that users are interested in;

we are unable to acquire users through cost-effective marketing efforts, including both organic and paid channels;

we are unable attract sufficient new paying users to offset and exceed those lost through natural churn, thus making it more difficult to maintain and grow revenues;

initiatives designed to attract and maintain users and increase engagement are unsuccessful because of errors that we make or policies instituted by third parties that we use to distribute our products or deliver our services;

third-party initiatives that may enable greater use of our products, including low-cost or discounted data plans, are discontinued;

we adopt terms, policies or procedures related to areas such as privacy, user data, content ownership, use for training AI models, or monetization techniques that are received negatively by our users or creators;

we fail to combat inappropriate or abusive activity on our platforms;

we are unable to offer relevant content to our users;

we fail to provide adequate support for our users and creators;

there are outages or other technical problems that result in making our products and services inaccessible, unreliable or that result in a poor user experience;

there are actions by governments that affect accessibility to our products and services in any market; or there are regulations and/or litigation that result in users not accepting our terms of use because of measures that we have taken in order to ensure compliance.

Certain of these factors have negatively impacted user and creator growth, MAU and engagement, and have contributed to the declines in our MAU described elsewhere in this Annual Report. If we are unable to maintain or increase our user base and user engagement, our revenue and financial results may be materially adversely affected.

We may not be successful in acquiring a sufficient number of users that become purchasers or retain existing users who generate profitable revenue for our apps.

Revenues of freemium apps and websites typically rely on a small percentage of users that convert into paying users by making in-app purchases of digital goods and/or paid subscriptions; however, the vast majority of users play for free or only occasionally make purchases or opt-in for paid subscriptions. Accordingly, only a small percentage of our users are paying users. In addition, a small portion of paying users generate a disproportionate percentage of revenue. Because of this, it is imperative for us to both retain these valuable customers and to maintain or increase their spend over time. In fiscal 2026, we experienced a 29.6% increase in subscription revenue and a 1.9% decrease in subscription billings. Conversely, over the past 10 years, GuruShots has successfully increased the compounded annual growth rate of monthly spending per paying player by around 6.7%. There can be no assurance that we will be able to continue to retain paying users, grow or maintain subscription levels or that paying users will maintain or increase their spending. We may experience a net decline in paying players, resulting in a decrease in revenue and a materially adverse outcome for our business and financial results.

We may not manage our in-app economy well and as a result, disincentivize users from making in-app purchases. Any failure to do so could adversely affect our business, financial condition, and results of operations.

Our apps are available to players for free and each brand generates a material portion of its revenue by selling digital goods and/or paid subscriptions. The perceived value of these digital goods and/or paid subscriptions can be impacted by various factors including, but not limited to, their price, discounting policies, promotional strategies, market competition, user reviews, and user engagement levels. If we fail to manage our economy well, we risk confusing or upsetting users to the point that they reduce their purchases which could negatively hurt the business.

If we are unable to compete for advertisers or if advertisers reduce their spend with us, our revenues, profitability and prospects may be materially and adversely affected.

In fiscal 2026, approximately 71% of our revenues (excluding GuruShots and DataSeeds) were generated from selling advertising inventory. We generally enter into arrangements with the major programmatic advertising networks to monetize our advertising inventory. We need to maintain good relationships with these advertising networks to provide us with a sufficient inventory of advertisements. Online advertising, including through mobile applications, is an intensely competitive industry. Many large companies, such as AppLovin, Meta and Google, invest significantly in data analytics to make their properties and platforms more attractive to advertisers. Our advertising revenue is primarily a function of the number and hours of engagement of our free users and our ability to provide innovative advertising products that are relevant to our users, maintain or increase user engagement and satisfaction with our products, and enhance returns and add incremental gains for our advertising partners. If our relationship with any advertising partners terminates for any reason, or if the commercial terms of our relationships are changed or do not continue to be renewed on favorable terms, or if we cannot source high-quality ads consistent with our brand or product experience, we would need to qualify new advertising partners, which could negatively impact our revenues, at least in the short term.

In addition, internet-connected devices and operating systems controlled by third parties increasingly contain features that allow device users to disable functionality that allows for the delivery of advertising on their devices or reduce the ability to provide personalized or targeted advertising, which results in less valuable ads. Device and browser manufacturers may include or expand these features as part of their standard device specifications. For example, Apple s App Tracking Transparency framework requires users to affirmatively opt in before an application may access the Identifier for Advertisers ( IDFA ), the device identifier historically used to target and measure advertising on iOS, and widespread opt-out has reduced the availability of that identifier and made targeting and measurement materially more difficult. Furthermore, laws and regulations may also make it more difficult to deliver personalized or targeted advertising or impose requirements that result in more users making elections to block our ability to deliver targeted ads. If users do not elect to participate in functionality that supports the delivery of targeted advertising on their devices, our ability to deliver effective advertising campaigns could suffer, which could cause our business, financial condition, or operating results to be adversely affected.

We anticipate that our growth and profitability will continue to depend on our ability to sell our advertising inventory. Companies that advertise with us may choose to utilize other advertising channels or may reduce or eliminate their marketing altogether for a variety of reasons, many of which are out of our control, including, without limitation, if the demand for mobile phone personalization content declines or otherwise falls out of favor with advertisers or consumers. In addition, we previously disclosed that disruptions caused by U.S. regulatory action, specifically the regulatory restrictions and uncertainty affecting TikTok in early 2025 shortly after President Trump assumed office, had an immediate impact on advertiser behavior. During that period, U.S. advertising revenue fell, with TikTok advertising spend for the most part disappearing. This experience illustrates how government-mandated restrictions on a major advertiser can impact revenue quickly. Should future regulation or restrictions on other platforms result, our revenue could be materially and adversely affected.

If the size of the digital advertising market does not increase from current levels, or if our digital brands are unable to capture and retain a sufficient share of that market, our ability to maintain or increase our current level of advertising revenues and our revenues, profitability and prospects could be materially and adversely affected.

The digital advertising market may deteriorate, which could materially harm our business and results of operations.

We generate the substantial majority of our revenue from selling advertising inventory. We anticipate that our growth and profitability will continue to depend on our ability to sell advertising inventory across some if not all of our digital brands.

Future demand for mobile advertising is uncertain. Many advertisers still have limited experience with mobile advertising and may continue to devote larger portions of their advertising budgets to more traditional offline or online personal computer-based advertising, instead of shifting additional advertising resources to mobile advertising.

Further, our advertisers ability to effectively target their advertising to our user s interests may be negatively impacted by the degree to which our privacy control measures that we have implemented or may implement in the future in connection with regulations, regulatory actions, the user experience, or otherwise, and our advertising revenue may decrease or otherwise be curtailed as a result. Changes to operating systems practices and policies, such as Apple s App Tracking Transparency requirements limiting access to the IDFA and changes by Google to its advertising and tracking policies, including its April 2025 decision to retain third-party cookies in Chrome and its October 2025 decision to discontinue most Privacy Sandbox technologies on Chrome and Android, which leaves the longer-term availability of advertising identifiers and measurement signals unresolved, as well as efforts to block covert tracking techniques like fingerprinting, may also reduce the quantity and quality of the data and metrics that can be collected or used by us and our partners. These limitations may adversely affect our advertisers ability to effectively target advertisements and measure their performance, which could reduce the demand and pricing for our advertising products and harm our business. As such, our digital properties current and potential advertiser clients may ultimately find digital advertising to be less effective than traditional advertising media or marketing methods or other technologies for promoting their products and services, and they may even reduce their spending on mobile advertising from current levels as a result or for other reasons.

If the market for mobile advertising deteriorates, we may not be able to increase our revenues or our revenues and profitability could decline materially.

A material amount of our revenue is generated from a limited number of geographies and third-party advertising demand partners. Any change to this mix could result in negatively impacting our business, financial condition, and results of operations.

Our advertising revenue is sensitive to the geographic composition of our Zedge App user base because advertising rates in developed markets are generally materially higher than those in emerging markets. During the past five years, the portion of our total MAU from emerging markets has increased, and the portion from well-developed markets has decreased. In fiscal 2026, 78.2% of our 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. In fiscal 2026, revenue from well developed economies accounted for approximately 80.5% of our total revenues and 70.2% of our total advertising revenues were generated by three advertising demand partners. Although we are investing in reversing this trend, we may not be successful in this effort - which may result in lower revenues and profitability. In Q4 of fiscal 2026, our 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. India comprised 37.0% of our MAU as of July 31, 2026. While our end users are located around the world, the revenue is generated in the United States from our advertising partners. Although GuruShots and Emojipedia s user bases are more heavily weighted to well-developed economies, our overall revenue remains sensitive to the regional composition of our Zedge App s user base.

and 300 more changes in the filing

Cybersecurity 34 changes

Cybersecurity Risk Management and Strategy

Our cybersecurity framework (which includes management of related risks) is based on recognized cybersecurity industry frameworks and standards, including those of the National Institute of Standards and Technology, the Center for Internet Security Controls, and ISO 27001. We do not certify that we meet any particular technical standards, specifications, or requirements, but we use the aforementioned frameworks and standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. We use these frameworks, together with information collected from internal assessments, to develop policies for the use of our information assets (e.g., IT business information and information resources such as mobile phones, computers and workstations), access to specific intellectual property or technologies, and protection of personal information. We seek to protect these information assets through a variety of technical and organizational measures and identity and access management frameworks, including role-based access control, attribute-based access control, least privilege, need-to-know access and multi-factor authentication, which we require for access to our core resources. We also use endpoint detection and response tools intended to reduce the risk posed by emerging malware, rootkits, spyware, ransomware and similar threats to our endpoints and systems.

We also work with internal stakeholders across the Company to integrate foundational cybersecurity principles into our operations, including the employment of multiple layers of cybersecurity defenses, restricted access based on business needs, and measures designed to support the integrity of our business information. We train our employees on cybersecurity awareness topics, including social engineering attacks, confidential information protection, and emerging threats and we conduct simulated phishing attacks designed to improve their awareness.

We classify licensed datasets, content, annotations, metadata, and provenance records as high-value information assets subject to enhanced access controls which may include role-based and attribute-based permissions, audit logging, and encryption at rest and in transit and we seek to restrict access to those assets to personnel with a business need. Content delivered or transferred to enterprise customers is governed by customer-specific entitlement controls designed to limit access to authorized recipients under the terms of applicable agreements, and transfers are generally subject to monitoring and logging. Certain personal data relating to contributors including identity, tax, payment, and consent and release information is maintained in systems logically separated from our content and production environments and is subject to a dedicated data protection program based on applicable legal requirements across the jurisdictions in which we operate.

We maintain a business continuity program designed to address material risks to business operations, and our disaster recovery planning is reviewed and updated on a periodic basis.

We have standing engagements with incident response experts and external counsel, including through our cyber insurance. We collaborate with industry experts and cybersecurity practitioners at other companies to exchange information about potential cybersecurity threats, security practices and trends. The sources we review as part of our threat monitoring include information on vulnerabilities, attack patterns and TTPs (Tactics, Techniques, and Procedures) released by the Cybersecurity and Infrastructure Security Agency (CISA) and the National Institute of Standards and Technology (NIST) and the Threat Landscape report published by the European Union Agency for Cybersecurity (ENISA).

We also have an internal incident response team that addresses security events triggered by our Security Information and Event Management (SIEM) system. Monitoring of our infrastructure, from endpoint devices to virtual clusters, is intended to help detect potential interception of internal communications and to reduce the risk of leakage of business-critical data.

Our cybersecurity risk management extends to risks associated with our use of third-party service providers. We perform risk-based security and compliance diligence on new vendors before they are engaged , with the results considered against the risk tolerance set by management. Where a vendor s engagement involves the processing of personal data on our behalf, this diligence is conducted as part of the same vendor management process designed to address applicable data protection requirements, which, as applicable to the particular engagement, may include execution of a written data processing agreement, assessment of whether the vendor acts as our processor or as an independent controller, flow-down of sub-processor obligations, and implementation of a cross-border transfer mechanism.

Our vulnerability management program involves scanning and testing of systems, endpoints, virtual environments, and cloud-based assets to identify potential software flaws, misconfigurations, or exposure points. Once vulnerabilities are detected, we prioritize remediation based on risk impact and business criticality, and we seek to address identified gaps in a timely manner. This approach is intended to harden our infrastructure, reduce our attack surface and align our practices with recognized industry frameworks.

As part of our secure development lifecycle (SDLC), we conduct both automated and manual code reviews intended to assess whether the applications we deliver to our users are resilient against exploitation and designed to limit data leakage. By incorporating security controls throughout the development process, from design to deployment, we seek to protect the confidentiality, integrity and reliability of our systems and data. This approach is also intended to support our compliance with applicable regulatory requirements.

In response to the growing use of AI by bad actors, we seek to adapt our internal policies, procedures, and control mechanisms to address AI-driven threats, including:

Automated phishing campaigns and deepfake content used for impersonation or fraud.

Malicious code generation via large language models.

Adversarial attacks that manipulate input data to bypass security algorithms.

AI-assisted vulnerability scanning and exploitation of system weaknesses.

Our multi-layered defense strategy includes:

Monitoring and anomaly detection, including machine learning-based tools, designed to help identify AI-driven attack patterns.

Overseeing the integration of security requirements into our software development practices.

Employee training on AI-related risks, such as synthetic media, prompt injection, and suspicious automation.

Third-party risk assessments that evaluate the AI capabilities of vendors and partners to help identify and reduce external exposures.

Incident response procedures that take into account AI-related scenarios, such as automated botnet coordination or synthetic identity fraud and our regulatory requirements in respect of notification to regulators and affected individuals where relevant.

These practices are intended to help us adapt our defenses as AI-driven threats evolve. The measures described in this Item reduce but do not eliminate cybersecurity risk, and we cannot assure that our controls will prevent or detect every incident. See Item 1A, Risk Factors.

Governance of Cybersecurity Risk Management

The board of directors, as a whole, has oversight responsibility for our strategic and operational risks and sets associated risk parameters and tolerance levels. The audit committee assists the board of directors with this responsibility by reviewing and discussing the defined risks, its assessment and proposed mitigation strategies, including cybersecurity risks, with members of management. The audit committee, in turn, periodically reports on its review with the board of directors.

Management is responsible for day-to-day assessment and management of cybersecurity risks and reports regularly to the audit committee. Our data protection officer assists the organization with monitoring internal compliance and informing and advising on data protection obligations in respect of cybersecurity.

Zedge s cybersecurity risk governance helps our organization understand and implement cybersecurity governance practices that support long-term cybersecurity goals beyond the day-to-day information security tasks, and to align with legal and regulatory requirements and with the direction of the Company, by:

Developing a cybersecurity culture in which employees understand that they are stakeholders in cybersecurity and are expected to be proactive in risk mitigation and remediation.

Cyber risk assessments which identify cybersecurity business risks and the Company s cybersecurity gaps and vulnerabilities. Using agreed-upon key performance indicators (KPIs), stakeholders can measure the Company s cybersecurity capabilities. This supports our ability to assess the effectiveness of our vulnerability identification and remediation activities.

An Accountability Framework which measures performance across departments and systems and is designed to make those identified as responsible for meeting objectives aware of the results and to have them work with the cyber risk governance team leader to improve them. Established metrics and consistent feedback support our ability to monitor, review and enforce cyber risk governance plans. In turn, through these processes, we improve our framework, remediate serious issues, and update organizational cyber risk governance roadmaps accordingly.

Embedding cybersecurity within the broader enterprise risk management (ERM) strategies to evaluate cyber risks alongside financial, operational, and reputational risks, enabling executive leadership to make informed decisions.

Leveraging external threat intelligence and collaborating with industry peers, regulatory bodies, and national cybersecurity agencies to adapt to emerging threats.

Embedding security into software development through deployment, with regular code reviews, SDLC checkpoints, and secure architecture principles.

Reviewing governance practices, incorporating lessons learned from incidents, audits, and tabletop exercises to refine policies, controls, and strategic priorities.

Providing transparent cyber risk metrics and governance outcomes to the board of directors, with the aim of aligning cybersecurity with our strategic priorities.

Properties 1 change

Since July 2020, we have not maintained a physical headquarters, but maintain a virtual presence as our headquarters as our corporate staff has been working remotely. We lease a 4,900 square-foot office in Trondheim, Norway, as well as a development center in Vilnius, Lithuania, that accommodate our product, design, monetization, marketing and technology teams. The Trondheim lease is due to expire in March 2027 and we are exploring alternatives for that space in light of the restructuring we implemented in January 2025 and the shutdown of that office. On June 6, 2025, we signed a lease for a 3,600 square feet office space in Vilnius and moved in on October 1, 2025. We lease approximately 2,200 square feet of office space in Tel Aviv, Israel that accommodates members of both the GuruShots and Zedge teams. The Tel Aviv lease was renewed on August 6, 2026 for another one-year term through October 2027. Our servers are hosted in leased data centers in different geographic locations in the United States. These data centers are owned and maintained by third-party data center providers. The Company believes it has sufficient space to accommodate its employees and operations.

Financial statements 2 changes

in and Disagreements with Accountants on Accounting and Financial Disclosure and Procedures

The Consolidated Financial Statements of the Company and the report of the independent registered public accounting firm thereon starting on page F-1 are included herein.

Other information 2 changes

Regarding Foreign Jurisdictions that Prevent Inspections

and Executive Officers of the Registrant, and Corporate Governance

Executive compensation 1 change

The information required by this Item will be contained in our Proxy Statement for our Annual Stockholders Meeting, which will be filed with the Securities and Exchange Commission within 120 days after July 31, 2026, and which is incorporated by reference herein.

Principal stockholders 1 change

The information required by this Item will be contained in our Proxy Statement for our Annual Stockholders Meeting, which will be filed with the Securities and Exchange Commission within 120 days after July 31, 2026, and which is incorporated by reference herein.

Related-party transactions 2 changes

Accounting Fees and Services

The information required by this Item will be contained in our Proxy Statement for our Annual Stockholders Meeting, which will be filed with the Securities and Exchange Commission within 120 days after July 31, 2026, and which is incorporated by reference herein.

Form 10-K Summary 25 changes

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

By: /s/ Morris Berger

1 unchanged paragraph

Date: October 28, 2026

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature Titles Date

/s/ Morris Berger Chief Executive Officer October 28, 2026

Morris Berger (Principal Executive Officer)

/s/ Yi Tsai Chief Financial Officer October 28, 2026

Yi Tsai (Principal Financial Officer and

Principal Accounting Officer)

/s/ Michael Jonas Director October 28, 2026

/s/ Howard S. Jonas Director October 28, 2026

/s/ Mark Ghermezian Director October 28, 2026

/s/ Elliot Gibber Director October 28, 2026

/s/ Paul Packer Director October 28, 2026

/s/ Gregory Suess Director October 28, 2026

Index to Consolidated Financial Statements

1 unchanged paragraph

Consolidated Balance Sheets as of July 31, 2025 and 2024 F-4

Consolidated Statements of Operations and Comprehensive Loss for the Fiscal Years Ended July 31, 2025 and 2024 F-5

Consolidated Statements of Stockholders Equity for the Fiscal Years Ended July 31, 2025 and 2024 F-6

Consolidated Statements of Cash Flows for the Fiscal Years Ended July 31, 2025 and 2024 F-7

Consolidated Balance Sheets F-3

Consolidated Statements of Operations and Comprehensive Income (Loss ) F-4

Consolidated Statements of Stockholders Equity F-5

Consolidated Statements of Cash Flows F-6

Notes to the financial statements 360 changes

1 Description of Business and Summary of Significant Accounting Policies of Business 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 and ringtone 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.

Company is headquartered in New York, New York, and has international office locations in Lithuania and Israel.

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 2025 refers to the fiscal year ended July 31, 2025).

Company was formerly a majority-owned subsidiary of IDT Corporation ( IDT ). On June 1, 2016, IDT spun off its interest in the Company to IDT s stockholders and the Company became an independent public company through a pro rata distribution of the Company s common stock held by IDT to IDT s stockholders (the Spin-Off ).

consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Company has two reportable segments: Zedge Marketplace and GuruShots, as further discussed in Note 15, Segment and Geographic Information .

preparation of our 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 our 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, our financial condition or operating results will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.

generate revenue from the following sources: (1) Advertising; (2) Paid Subscription; (3) Other revenues including primarily Zedge Premium (the section of our marketplace where we offer premium content for purchase), and (4) Digital Goods and Services. The substantial majority of our revenue is generated from selling our advertising inventory ( Advertising Revenue ) to advertising networks and advertising exchanges. Our weekly, monthly, yearly and life-time subscriptions allow users to prepay a fixed fee to remove unsolicited advertisements from our Zedge App. In Zedge Premium, we receive 30 % of the net purchase price, after payment of fees to Google Play or the App Store, when users purchase licensed content using Zedge Credits or unlock licensed content by watching a video or taking a survey on Zedge Premium.

Sales and other similar taxes are excluded from revenues.

Revenue : We generate the bulk of our revenue from selling the Zedge Marketplace s advertising inventory to advertising networks and advertising exchanges.

Advertising Networks. An advertising network is a third-party relationship where buyers of advertising inventory go to purchase either specific targeted inventory or a large scale of inventory at a set price. Advertising Networks serve as an indirect source of advertising fill to a variety of branded ad campaigns and performance-based ad campaigns.

Advertising Exchanges. An advertising exchange is similar to an advertising network, except that the exchange typically bids in real-time for advertising inventory. Advertisers may utilize an exchange when looking for scale or specific audiences, and accept that the price will vary based on when and how much volume of inventory they wish to buy.

recognize advertising revenue as advertisements are delivered to users through impressions or ad views (depending on the terms agreed upon with the advertiser). For in-app display ads, in-app offers, engagement advertisements and other advertisements, our performance obligations are satisfied over the life of the relevant contract (i.e., over time), with revenue being recognized as advertising units are delivered, which is Zedge s performance obligation. The advertiser may compensate us on a cost-per-impression, cost-per-click, cost-per-action basis.

Subscription Revenue: Beginning in January 2019 and April 2023, we started offering paid subscription services sold through Google Play and the App Store, respectively. When a customer subscribes, they execute a clickthrough agreement with Zedge outlining the terms and conditions between Zedge and the subscriber. Google Play and the App Store process subscription prepayment on Zedge s behalf, and retain a fee of up to 30 %. Subscriptions are nonrefundable after a period of seven days. Paid subscriptions are automatically renewed at expiration unless cancelled by subscribers. While customers can cancel at any time, they will not receive any refund, and will continue to receive the ad-free service until the end of the subscription period. The duration of these contracts is daily, and revenue for these contracts is recognized on a daily ratable basis. The payment terms for subscriptions sold through

Google Play is net 30 days after month-end. The payment terms for subscriptions sold through the App Store is net 45 days after month-end. We recognize subscription revenue ratably over the subscription periods which range from weekly, monthly, yearly and lifetime with lifetime subscriptions deemed to have an estimated lifespan of 30 months.

Premium : Zedge Premium is our marketplace where artists and brands can market, distribute and sell their digital content to our users. The content owner sets the price and end users can purchase the content by paying for it with Zedge Credits, our closed virtual currency. Alternatively, the content owner may opt to place some items behind video ad gates, in which case end users can acquire the content by watching a brief video ad. A user can earn Zedge Credits when taking specific actions such as watching rewarded videos or completing electronic surveys. Alternatively, users can buy Zedge Credits with an in-app purchase.

If a user purchases Zedge Credits, Google Play or the App Store retains a fee of 30 % of the purchase price. When a user purchases Zedge

Premium content using Zedge credits or watching a rewarded video, the artist or brand receives 70 % of the actual revenue after the Google

Play or App Store fee ( Royalty Payment ) and we receive the remaining 30 %, which is recognized as revenue.

Goods and Services : GuruShots generates the substantial majority of its revenues by selling virtual goods (e.g. power-ups and in-game resources) to its users. GuruShots distributes its game to users through mobile platforms such as Apple s App Store and

Google Play, as well as via the internet. Through these platforms, users can download the free-to-play game and can purchase virtual goods which are redeemed in the game to enhance their game-playing experience.

can pay for their virtual item purchases through various widely accepted payment methods offered in the game. Payments from players for virtual goods are required at the time of purchase, are non-cancellable and relate to non-cancellable contracts that specify GuruShots obligations and cannot be redeemed for cash nor exchanged for anything other than virtual goods within the GuruShots game. The purchase price is a fixed amount which reflects the consideration that GuruShots expects to be entitled to receive in exchange for use of virtual goods by its customers. The platform providers collect proceeds from the game players and remit the proceeds to GuruShots after deducting their respective platform fees. Sales and other taxes collected from customers on behalf of governmental authorities are accounted for on a net basis and are not included in revenues or operating expenses. GuruShots performance obligation is to display the virtual goods in game play based upon the nature of the virtual item.

categorizes its virtual goods as consumable. GuruShots game sells only consumable virtual goods. Consumable virtual goods represent items that can be consumed by a specific player action and do not provide the player any continuing benefit following consumption. GuruShots has determined - through a review of game play behavior - that players generally do not purchase additional virtual goods until their existing virtual goods balances have been substantially consumed. This review includes an analysis of game players historical play behavior, purchase behavior, and the amounts of virtual goods outstanding. Revenue is recognized once the virtual goods are sold.

GuruShots monitors its analysis of customer play behavior on a quarterly basis.

discussed above, GuruShots concluded that revenue related to the promise of enhancing users gaming experience through in-game resource purchases should be recognized ratably over the period of benefit period (i.e., the period over which the enhanced gaming experience is provided). However, for practical reasons, GuruShots does not defer the portion of revenue attributable to future uses of resources as of any given balance sheet date. This is due to the duration of the enhanced gaming experience that is provided being, in substantially all of the cases, and applying the portfolio approach (as GuruShots reasonably expects that the effects on the financial statements of applying Accounting Standards Codification ( ASC ) 606 guidance to the portfolio would not differ materially from applying

ASC 606 guidance to the individual contracts), a very short time frame ranging from a few hours to less than two weeks. Therefore, the result of recognizing the related revenues at the point in time which user first consumes the respective resource would yield a result that is not substantially different then ratable recognition over the period of benefit. Accordingly, revenue is recognized once the virtual goods are sold.

Versus Net Revenue Recognition

report revenue on a gross or net basis based on management s assessment of whether we act as a principal or agent in the transaction.

To the extent we act as the principal, revenue is reported on a gross basis. To the extent we act as the agent, revenue is reported on a net basis. The determination of whether we act as a principal or an agent in a transaction is based on an evaluation of whether we control the good or service prior to transfer to the customer.

generally report our advertising revenue net of amounts due to agencies and brokers because we are not the primary obligor in the relevant arrangements, we do not finalize the pricing, and we do not establish or maintain a direct relationship with the advertiser.

is primarily responsible for providing the virtual goods, has control over the content and functionality of games and has the discretion to establish the virtual goods prices. Therefore, GuruShots is the principal and, accordingly revenues are recorded on a gross basis. Payment processing fees paid to platform providers are recorded within selling, general and administrative expenses.

report subscription revenue gross of the fee retained by Google Play and the App Store, as the subscriber is our customer in the contract and we control the service prior to the transfer to the subscriber.

respect to Zedge Premium, Zedge, as provider of the platform, is effectively operating as a broker or intermediary connecting online content providers with the end user. While we use gross revenue (net of the 30 % fee retained by Google Play or the App Store when a user purchases Zedge Credits) as a performance metric, we record revenue on a net basis from Zedge Premium which consists of a 30 % platform fee, in-app purchases profit and breakage. Content providers are paid their portion of revenue which is a 70 % share of the gross revenue calculated.

of Credit Risk and Significant Customers

instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and trade accounts receivable. We hold cash and cash equivalents at several major financial institutions, which may exceed FDIC insured limits.

Historically, the Company has not experienced any losses due to such concentration of credit risk. The Company s temporary cash investments policy is to limit the dollar amount of investments with any one financial institution and monitor the credit ratings of those institutions. While we may be exposed to credit losses due to the nonperformance of the holders of its deposits, we do not expect the settlement of these transactions to have a material effect on its results of operations, cash flows or financial condition.

routinely assess the financial strength of our customers. As a result, we believe that our accounts receivable credit risk exposure is limited and have not experienced significant write-downs in our accounts receivable balances. In the fiscal year ended July 31, 2025, two largest customers represented 37 % and 6 % of our revenue. In the fiscal year ended July 31, 2024, two largest customers represented

31 % and 9 % of our revenue. At July 31, 2025, two customers represented 48 % and 13 % of our accounts receivable balance and at July 31,

2024, three customers represented 37 %, 15 % and 10 % of our accounts receivable balance. All of these significant customers are advertising exchanges operated by leading companies, and the receivables represent many smaller amounts due from advertisers.

cost of revenues for the Company consists of fees paid to third parties that provide the Company with internet hosting, content serving and filtering, data analytic tools and marketing automation services. Such costs are charged to expense as incurred.

and equipment is recorded at cost less accumulated depreciation and amortization, and depreciated or amortized on a straight-line basis over its estimated useful lives, which range as follows: capitalized software and technology development costs 3 years; and other 5 years. Other is comprised of furniture and fixtures, office equipment, video conference equipment, computer hardware and computer software.

Normal repairs and maintenance are expensed as incurred. Replacement property and equipment is capitalized and the property and equipment accounts are relieved of the items being replaced or disposed of if no longer of value. The related cost and accumulated depreciation of the disposed assets are eliminated and any gain or loss on disposition is included in the results of operations in the year of disposal.

Software and Technology Development Costs-Internal-Use Software related to Zedge Marketplace and technology development activities generally fall into three stages:

Stage activities include developing a project or business plan that outlines the goals for the content distribution platform or new product or service; determining the functionality; identifying hardware and software applications that will achieve functionality, security, and traffic flows; and selecting the internal resources that will be assigned to the project as well as the external vendors where applicable.

and Infrastructure Development Stage activities focus on acquiring or developing hardware and software to operate a content distribution platform or new product and service; and

Post-Implementation/Operating

Stage activities address training, administration, maintenance, and all other activities to operate an existing content distribution platform or new product or service.

the Planning Stage, we charge all costs to expense as incurred.

the Application and Infrastructure Development Stage, we begin to capitalize costs when the project has been properly authorized and we determine that completion is probable. If a project is subsequently cancelled prior to placement in service, costs that have been capitalized to date will be reviewed for potential impairment. Capitalization ceases no later than the point at which a computer software project is substantially complete and ready for its intended use. Amortization, which is generally over three years , begins for each project when the code is ready for use, whether or not it is actually placed in service at that time (an exception being if the project s functionality completely depends on the completion of another project, in which case, amortization begins when that other project is ready for use).

the Post-Implementation/Operating Stage, we expense training costs and maintenance costs as incurred. However, upgrades and enhancements, defined as modifications to existing internal-use software that result in additional functionality (modifications to enable the software to perform tasks that it was previously incapable of performing, normally requiring new software specifications and perhaps a change to all or part of the existing software specifications) are treated as though they were new projects, and are assessed utilizing the same stages and criteria on a project-by-project basis. As such, internal costs incurred for upgrades and enhancements are expensed or capitalized based on the requirements noted above, while costs incurred for maintenance are expensed as incurred. These projects are tracked individually, such that the beginning and ending of the capitalization can be appropriately established, as well as the amounts capitalized therein.

of these costs is included in depreciation and amortization in the consolidated statements of operations and comprehensive loss.

Software and Technology Development Costs-Software to Be Sold, Leased, or Marketed related to GuruShots expense research and development costs incurred in the process of software development until technological feasibility has been established for the product. Once technological feasibility has been established, software costs are capitalized until the product is available for general release to customers. Costs incurred from the time that the product is available for general release to customers are expensed as incurred. Costs related to upgrades and enhancements are capitalized only if they result in added functionality or marketability of the original product.

amortization of these capitalized costs begins when a product is available for general release to customers and is computed on a product-by-product basis at a rate not less than straight-line basis over the product s estimated economic life. At each balance sheet date, we compare the unamortized capitalized costs to the net realizable value of that product and write off the amount by which the unamortized capitalized costs of that product exceed its net realizable value.

of these costs is included in depreciation and amortization in the consolidated statements of operations and comprehensive loss.

evaluate these long-lived assets for impairment whenever circumstances arise that indicate the carrying amount of an asset may not be recoverable. The Company s strategic reassessment of GuruShots operations in connection with the restructuring initiative resulted in a $ 0.8 million impairment of capitalized software and technology development costs which is recorded in the Company s consolidated statements of operations and comprehensive loss for the fiscal year ended July 31, 2025. See Note 18, Restructuring,

Impairments, and Related Charges , for additional information.

test the recoverability of its intangible assets (see Note 7, Intangible Assets, Net and Goodwill , for additional information)

with finite useful lives whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

We test for recoverability based on the projected undiscounted cash flows to be derived from such asset. If the projected undiscounted future cash flows are less than the carrying value of the asset, we will record an impairment loss, if any, based on the difference between the estimated fair value and the carrying value of the asset. We generally measure fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. Cash flow projections and fair value estimates require significant estimates and assumptions by management. Should the estimates and assumptions prove to be incorrect, we may be required to record impairments in future periods and such impairments could be material.

assets are carried at cost, less accumulated amortization, unless a determination has been made that their value has been impaired. Intangible assets are amortized on a straight-line basis over their estimated useful lives of between five to fifteen years . We review identifiable amortizable intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. Measurement of any impairment loss is based on the excess of the carrying value of the asset over its fair value.

performed an interim impairment test during the second quarter of fiscal 2024 and concluded that the carrying value of the intangible assets of GuruShots reporting unit exceeded its fair value. Accordingly, we recorded a non-cash impairment charge of $ 11.9 million during the second quarter of fiscal 2024. See Note 7, Intangible, Net and Goodwill , for additional information.

represents the excess of purchase price and related costs over the fair value of assets acquired and liabilities assumed of the business acquired. Under ASC 350, Intangibles-Goodwill and Other , goodwill is not amortized, but instead is tested for impairment annually, or if certain circumstances indicate a possible impairment may exist.

test goodwill for impairment on the first day of the fourth fiscal quarter or upon the occurrence of events or changes in circumstances that indicate that the asset might be impaired. Goodwill is assigned to our reporting units, which are our operating segments, or components of an operating segment, that constitute a business for which discrete financial information is available, and for which segment management regularly reviews the operating results. During the annual impairment review process we have the option to first perform a qualitative assessment (commonly referred to as step zero ) over relative events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, or to perform a quantitative assessment ( step one ) where we estimate the fair value of each reporting unit using primarily a market capitalization approach.

would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Additionally, we consider income tax effects from any tax-deductible goodwill on the carrying amount of its reporting unit when measuring the goodwill impairment loss, if applicable.

time to time, when opportunities present themselves, the Company considers strategic investments in privately-held companies. The Company s sole investment at August 1, 2024, is a simple agreement for future equity (SAFE) in which the Company holds the right to receive equity at some later date and upon certain events. Investments in SAFE s are carried at cost due to insufficient observable market inputs to determine fair value. The Company adjusts the carrying value of its investments to fair value upon observable transactions for identical or similar investments of the same issuer or upon impairment (referred to as the measurement alternative). All gains and losses on investments, realized and unrealized, are recognized in interest and other income, net in the consolidated statements of operations and comprehensive loss.

Company periodically evaluates the carrying value of its investments, when events and circumstances indicate that the carrying amount of the investment may not be recovered. The Company estimates the fair value of the investment to assess whether impairment losses shall be recorded using Level 3 inputs. This investment includes the Company s holding that is not exchange traded and therefore not supported with observable market prices; hence, the Company may determine the fair value by reviewing equity valuation reports, current financial results, long-term plans of the private company, the amount of cash that the privately-held company has on-hand, the ability to obtain additional financing and overall market conditions in which the private company operates or based on the price observed from the most recent completed financing.

the first quarter of fiscal 2024, we reduced the carrying value of this SAFE investment to $ 0 and recorded $ 50 ,000 loss in the accompanying consolidated financial statements.

and Cash Equivalents

The Company considers all highly liquid investments

with an original maturity of three months or less when purchased to be cash equivalents. There were $ 13.9 million and $ 10.9 million in cash equivalents as of July 31, 2025 and 2024, respectively.

accompanying consolidated financial statements include provisions for federal, state and foreign income taxes. We recognize deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. We consider the scheduled reversal of deferred tax assets and liabilities, projected future taxable income and tax planning strategies in its assessment of a valuation allowance. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of such change.

use a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return. We determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, we presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. Tax positions that meet the more-likely-than-not recognition threshold are measured to determine the amount of tax benefit to recognize in the consolidated financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the consolidated financial statements will generally result in one or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax asset, or an increase in a deferred tax liability.

classify interest and penalties on income taxes as a component of income tax expense included in the provision for (benefit from) income taxes line item in the accompanying consolidated statements of operations and comprehensive loss.

accrue for loss contingencies when both (a) information available prior to issuance of the consolidated financial statements indicates that it is probable that a liability had been incurred at the date of the consolidated financial statements and (b) the amount of loss can reasonably be estimated. When we accrue for loss contingencies and the reasonable estimate of the loss is within a range, we record its best estimate within the range. When no amount within the range is a better estimate than any other amount, we accrue the minimum amount in the range. We disclose an estimated possible loss or a range of loss when it is at least reasonably possible that a loss may have been incurred.

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 and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive.

disclosed in Note-9 Equity , 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 EPS by class.

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):

Effect of dilutive securities:

Non-vested restricted Class B common stock

and 280 more changes in the filing

Legal proceedings 289 changes

The Company may from time to time be subject to

Company reviews the impairment of ROU assets consistent with the approach applied for the Company s other long-lived assets. The

as of July 31, 2025 and 2024:

claims, demands and The Company may from time to time be subject to 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.

Note 10 Operating Leases

The Company has operating leases primarily for office space located in Vilnius, Lithuania and Tel Aviv, Israel. as well as a short-term lease in Vilnius, Lithuania.

The Company reviews the impairment of right-of-use assets ( ROU ) assets consistent with the approach applied for the Company s other long-lived assets. The Company reviews the recoverability of long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company s ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations.

In connection with the restructuring we implemented in January 2025 (See Note 18 17 Restructuring, Impairments, and Related Charges for more details), we have determined that the carrying value of the ROU asset for our office in Trondheim are were not recoverable and recorded an impairment charge of approximately $ 140 ,000 140,000 in the fourth quarter of fiscal 2025. Operating lease right-of-use assets recorded and included in other assets were approximately $ 64 ,000 and $ 214 ,000 at July 31, 2025 and 2024, respectively. The remaining $ 139 ,000 lease liabilities 61,000 l ease liabilitie s as of July 31, 2026 related to the office in Trondheim is included and presented under accrued expenses and other current liabilities and other liabilities. The Company will continue to make lease payments under the lease until the end of the lease term on March 31, 2027, or sooner upon signing of an early lease termination agreement.

The Company s ROU assets recorded and included in other assets were approximately $ 226,000 and $ 64,000 at July 31, 2026 and 2025, respectively.

The following table presents the lease-related assets and liabilities for leases recorded on the consolidated balance sheets (in thousands) as of July 31, 2026 and 2025:

Other assets $ 226 $ 64

Accrued expenses and other current liabilities $ 153 $ 144

Other liabilities 126 53

Total operating lease liabilities $ 279 $ 196

The following table includes the components of our occupancy costs in our consolidated statements of operations and comprehensive income (loss):

1 unchanged paragraph

(In thousands) 2026 2025

Operating lease cost (1) $ 250 $ 142

Short-term lease cost $ 10 $ 49

Variable lease cost (2) $ 22 $ 94

2 unchanged paragraphs

The following table summarizes the weighted average remaining lease term and weighted average discount rate as of July 31, 2025 2026 and 2024: 2025:

1 unchanged paragraph

Operating leases 1.48 years 2.55 years

Operating leases 2.07 years 1.48 years

1 unchanged paragraph

Operating leases 4.86 % 3.77 %

Income taxes benefit

During the fiscal year ended July 31, 2025, the

Operating leases 5.55 % 4.86 %

Future minimum lease payments under non-cancellable leases at July 31, 2024 2026 are as follows (in thousands):

Years ending July 31, Operating Leases

Total future minimum lease payments 311

Less: imputed interest 17

Lithuania UAB is Effective October 1, 2025, the lessee under Company commenced a three-year new lease agreement (through October 2028) with a three-year term for a 3,600 square feet foot office space. The annual lease cost is approximately $ 103 ,000, 103,000 , including eight parking spaces. See Note 19, Subsequent Events .

Note 11 Income Taxes

The components of loss before income taxes are as follows (in thousands):

Fiscal year ended July 31, 2026 2025

Domestic $ ( 794 ) $ ( 3,240 )

Loss before income taxes $ ( 266 ) $ ( 2,717 )

taxes Income tax expense (benefit) consisted of the following (in thousands):

Fiscal year ended July 31, 2026 2025

Total current expense 168 155

Federal ( 310 ) ( 406 )

Total deferred expense ( 303 ) ( 479 )

Income tax benefit $ ( 135 ) $ ( 325 )

Company has early adopted ASU 2023-09 to enhance The income taxes disclosures regarding income taxes paid and the rate reconciliation disclosure. The income taxes paid by the Company are as follows: (in thousands):

Fiscal year ended July 31, 2026 2025

Total income taxes paid $ 198 $ 220

1 unchanged paragraph

Fiscal year ended July 31, 2026 2025

1 unchanged paragraph

The differences between income taxes expected at the U.S. federal statutory income tax rate and income taxes reported were as follows (in thousands):

Fiscal Year ended July 31, 2026 2025

Loss before income taxes $ ( 266 ) $ ( 2,717 )

U.S. Federal Statutory Tax Rate ( 56 ) 21.1 % ( 571 ) 21.0 %

Current State and Local Income Taxes, Net of Federal Income Tax Effect 8 - 3.0 % ( 56 ) 2.1 %

Statutory tax rate difference between Norway and United States - 0.0 % 1 0.0 %

Other 1 - 0.4 % 2 - 0.1 %

Statutory tax rate difference between Lithuania and United States ( 26 ) 9.8 % ( 22 ) 0.8 %

Other - 0.0 % - 0.0 %

Effect of Changes in Tax Laws or Rates Enacted in the Current Period - 0.0 % - 0.0 %

1 unchanged paragraph

Global intangible low-taxed income 129 - 48.5 % 90 - 3.3 %

Foreign-derived intangible income ( 86 ) 32.3 % - 0.0 %

Foreign Tax Credit - 0.0 % - 0.0 %

1 unchanged paragraph

Foreign-Derived Intangible Income deduction ( FDII ).

Share-based payment awards ( 30 ) 11.3 % 401 - 14.8 %

Other - 0.0 % 2 - 0.1 %

Changes in Valuation Allowances - 0.0 % ( 185 ) 6.8 %

Other Adjustments ( 75 ) 28.2 % 12 - 0.4 %

Effective Tax Rate $ ( 135 ) 50.8 % $ ( 325 ) 11.9 %

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 and Lithuania.

The Tax Cuts and Jobs Act of 2017 (the Tax Act ) contains a provision which subjects a U.S parent of a foreign subsidiary to current U.S. tax on its global intangible low-taxed income ( GILTI ). The GILTI income is eligible for a deduction, which lowers the effective tax. The Company will report the tax impact of GILTI as a period cost when incurred. Accordingly, the Company is not providing deferred taxes for basis differences expected to reverse as GILTI.

U.S companies are eligible for a deduction that lowers the effective tax rate on certain foreign income. This regime is referred to as the Foreign-Derived Intangible Income deduction ( FDII ).

Significant components of the Company s deferred tax assets and are as follows (in thousands):

Fiscal year ended July 31, 2026 2025

1 unchanged paragraph

1 unchanged paragraph

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and 218 more changes in the filing