Zedge, Inc.

Please continue to hold, ladies and gentlemen. Your conference will begin momentarily. Please continue to hold. Good day and welcome to ZEDGE's earnings conference call for the third quarter fiscal 2025 results. During management's prepared remarks, all participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation by ZEDGE's management, there will be an opportunity to ask questions. To ask a question, please press star then one on your touchtone phone. To withdraw your question, please press star two. I will now turn the call over to Brian Segal.

Thank you, Operator. During today's call, Jonathan Wright, ZEDGE's Chief Executive Officer, and Isai, ZEDGE's Chief Financial Officer, will discuss ZEDGE's financial and operational results that were reported today. Any forward-looking statements made during this conference call during the prepared marks or in the question and answer session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results in the future to differ materially from those discussed on today's calls. These risks and uncertainties include, but are not limited to, specific risks and uncertainties disclosed in ZEDGE's periodic SEC filings. ZEDGE assumes no obligation to update any forward-looking statements or to update the factors that may cause actual results to differ materially from those that they forecast. Please note that our earnings release is available on the Investor Relations page of the ZEDGE website, and it has also been filed on Form 8K of the SEC. Finally, on this call, we will use non-GAAP measures. Examples include non-GAAP EPS, non-GAAP net income, and adjusted EBITDA. Please see our earnings release for an explanation of our use of these non-GAAP measures. Now I would like to turn the call over to Jonathan.

Thank you, Brian. Good afternoon, everyone, and thank you for joining us today to discuss ZEDGE's third quarter fiscal 2025 results. Q3 marked a return to revenue growth for Zedge, highlighting the resilience of our business despite an ad market that saw some disruption due to TikTok's absence from the U.S. until mid-February, along with tariff-related uncertainty that caused macroeconomic volatility and expected softness at GuruShots, where we scaled back user acquisition to focus on what GuruShots 2.0 will become. The $4 million in annualized gross cost savings from our global restructuring and other cost reduction items also began to materialize during the quarter. The closure of our operations in Norway, the streamlining of the GuruShots team, and the associated decrease in discretionary spend, especially in lowering GuruShots' marketing investment, helped return us to profitability on a gap basis in and boosted our profitability on a non-gap basis. Furthermore, adjusted EBITDA increased 46% year-over-year, and we generated $0.8 million in free cash flow. Notably, free cash flow includes approximately $1 million for certain payments made during the quarter, primarily severance related to our restructuring and a portion of the final installment of the retention bonus stemming from the 2022 Guru Shots acquisition. In Q4, the benefits to free cash flow should further improve as we anticipate a total of about $600,000 in restructuring-related severance and the final payout of the Guru Shots retention pool. We expect to complete restructuring-related cash severance payments in the first half of fiscal year 2026, totaling approximately $200,000 Our balance sheet remains strong. We ended the quarter with $20.4 million in cash and no debt, even after repurchasing 219,000 shares under our previously announced $5 million buyback authorization. Key business highlights for the quarter included we grew the Zedge Plus subscriber base to an all-time high of nearly 900,000, a 37% year-over-year increase. Zedge Plus subscription revenue grew 13% year-over-year, while deferred revenue, primarily representing future recurring subscription revenue, reached $5 million, up 83% year-over-year and 13% sequentially. And Zedge Premium revenue more than doubled, driven by expanding the offering to our web users, increased usage of our Paint AI image generator, and ongoing demand for 3D parallax wallpapers. While monthly active users, or MAU, declined year over year, the narrative is more nuanced. For a while now, we have focused on attracting and retaining higher lifetime value, or LTV users, which are reported as MAU in well-developed markets in the supplemental tables of our earnings release. The overall MAU decrease was the outcome of a mix shift away from lower LTV users globally to higher LTV users in well-developed markets. These efforts to focus on higher LTV users who are more likely to subscribe, make purchases, and engage more often and more deeply with our content and features are bearing fruit, and thus we continue to focus on attracting and retaining this part of our base. Additionally, Our focused investment in paid user acquisition plays an important role in this success across both Android and iOS, and the positive trends are clearly reflected in our key performance metrics. Average revenue per monthly active user increased by 33% year over year, indicating that we're monetizing each user more efficiently. Deferred subscription revenue continued to climb, with lifetime plans capturing a larger part of the overall mix. For lifetime plans, the user prepays the full amount at purchase, requiring us to pay the entire App Store fee upfront. This allows us to recognize 100% gross margins on the deferred revenue as it is recognized monthly over the subsequent 30 months. And critically, key user metrics within well-developed economies have started to stabilize, hopefully positioning us for a return to growth in the future and reinforcing that the product and monetization strategies we have implemented to grow our customer base of high LTV users who engage with our product regularly. And we're confident that our performance marketing efforts and product roadmap are assisting us in achieving these goals. Looking ahead, innovation across our platform remains key to driving growth. We recently announced the launch of DataSeeds.ai, a B2B content marketplace that focuses on supplying enterprise customers in need of both on-demand and off-the-shelf datasets, initially focused on images, enriched with detailed metadata for AI training. DataSeeds.ai leverages our growing content library of over 30 million rights-cleared images, our prolific community of photographers and graphic designers, and our existing marketplace infrastructure and know-how. We aim to become the go-to source for pre-training and fine-tuning AI datasets, meeting the needs of foundational model developers for high-quality, authentic, and diverse rights-cleared content at scale. Last week, we signed our first agreement with a leading global AI technology company, validating both the market opportunity and the value of what we have to offer. This initiative opens up a nascent new revenue source with the potential for not only reoccurring revenue but also potential recurring revenue streams for us, while also providing our creators with more ways to monetize their work. Looking ahead, we are exploring opportunities to expand our offerings beyond images and provide additional mediums, including video and audio, as well as other commercially viable data types. We believe that this seminal business expansion supports our conviction that investing in and nurturing our vibrant artist community is a critical differentiator that will enable us to scale up quickly. We are also about to roll out an AI audio generator as part of Paint, our GenAI creation suite that allows users to harness the power of AI to generate custom ringtones and notification sounds with simple text prompts. This is a major milestone in our AI roadmap, positioning us as one of the first consumer platforms to enable user-generated audio content at scale. It also solidifies our leadership in mobile personalization. Emojipedia remained stable during the quarter and continues to evolve with the expected release of digital stickers, a new vertical on World Emoji Day, which is celebrated in July. We're also inching toward the introduction of a full site redesign to improve user experience and engagement. As discussed last quarter, we are ideating about what GuruShots 2.0 can and will be. Part of the undertaking revolves around the core game, including onboarding, progression, the voting mechanic, and reward dynamics. At the same time, we are also thinking about how to better meet the needs that we envision are critical for DataSeeds.ai to scale effectively. As expected, GuruShots' revenue declined year over year, primarily due to our decision to materially decrease our paid user acquisition spend. Fortunately, the investments we have made are yielding customers with attractive ROAS profiles, but we want to keep much of our powder dry until we're ready for prime time with GuruShots 2.0. Across the company, we've identified five core strategic priorities for the remainder of the calendar year. AI innovation, mainly expanding the rollout of tools like our AI audio generator and embedding AI across all departments in the company, including design, engineering, quality assurance, marketing, monetization, and finance. Creator community empowerment, by strengthening our creator community with opportunities to make money, gain recognition, and improve their skill base. User and subscription growth with a particular focus on high-value users. GuruShots 2.0, that is, imagining what the next generation of GuruShots can be in order to drive standalone growth in concert with meeting the needs of DataSeeds.ai. And finally, B2B expansion, scaling DataSeeds.ai to and exploring new enterprise content licensing opportunities. We believe the structural improvements we've made will continue to become evident in Q4 fiscal year 25 and be fully visible as we move into fiscal 26. When combined with continued product innovation and strategic discipline, we are positioned well to deliver sustained growth, higher margins, and long-term value creation for shareholders. I would now like to call on E to provide insights into our financial performance. E?