Exhibit 99.1





Zedge Announces Third Quarter Fiscal 2016 Results


New York, NY & Trondheim, Norway – June 9, 2016: Zedge, Inc. (NYSE MKT: ZDGE) today announced results for the third quarter of its 2016 fiscal year, the three months ended April 30, 2016.


Third Quarter FY 2016 Financial Highlights


(Results compared to the third quarter 2015 unless otherwise noted)


■ MAU (Monthly Active Users) for the last 30 days of the quarter increased 18% year over year to 31.6 million from 26.7 million;
Average revenue per MAU declined 1.6% to $0.0247 from $0.0251;
Revenue increased 17% to $2.6 million from $2.2 million;
Direct cost of revenue of $327 thousand, stated as a percentage of revenue was 12.7% compared to 13.1%;
Income from Operations decreased to $243 thousand from $404 thousand reflecting increased spending on growth initiatives;
Net income increased to $326 thousand from $211 thousand;
Diluted EPS increased to $0.04 from $0.02;
Cash and cash equivalents increased to $4.0 million at April 30, 2016 from $2.2 million at July 31, 2015. The total of cash, cash equivalents and trade accounts receivable increased to $5.8 million from $3.7 million at July 31, 2015;
Total current assets less total current liabilities increased to $3.9 million at April 30, 2016 from $2.3 million at July 31, 2105;
Net cash provided by operating activities increased to $2.5 million from $1.9 million in the nine months ended April 30, 2016 and 2015, respectively;
The Zedge app was relaunched in iTunes with wallpapers only in late March.





Management Remarks


“At the end of April, Zedge’s app surpassed its 200 millionth organic install as people around the world continue to select Zedge as their app of choice to personalize and express their emotions, tastes and interests on their smartphones” said Tom Arnoy, CEO and co-founder of Zedge.


“We are excited by our new status as an independent company and our listing on the NYSE MKT last week and are hard at work developing new products and rolling out a robust set of enhancements to increase usage and engagement in the Zedge app. I am proud to announce that we have started rolling out an early version of Snakk in three test markets. Snakk provides users with a rich array of social content optimized for use in messaging and social media. It is the first new app that we’ve launched since we embarked on the app journey in late 2009. Thus far, the rollout is encouraging and I look forward to sharing progress with you over the coming quarters.”


Jonathan Reich, CFO and COO of Zedge, commented, “We now have more than 31 million monthly active users globally. Our active install count, that is the number of devices that have the Zedge app installed has grown nicely to more than 90 million from around 70 million a year ago. Active installs are important because we can market new products and enhancements to them even if they aren't currently using our app. Growth in our monthly active user base drove a 17% year over year increase in revenue. Our impressive direct costs as a percentage of revenues continued in the 10%-15% range and our cash plus net receivables totaled nearly $6 million at the end of the quarter.


“Looking ahead, we are focused on accelerating product development, growing our user base, and increasing revenues. We anticipate carefully increasing our investment in product development to take advantage of the extraordinary opportunities before us, mindful that our growth path may have some bumps and air pockets along the way. We are trying to build a long-term, stable and sustainable business organically and not judging performance or success by artificial quarters.”


Financial Results by Quarter (in thousands)


FY 2016
FY 2016
FY 2016
FY 2015
FY 2015
3Q16 to
Revenue  $2,573   $3,530   $2,559   $2,428   $2,199    17.0%  $11,090 
Direct Cost of Revenue  $327   $310   $295   $259   $289    13.1%  $1,191 
Total SG&A  $1,850   $1,781   $1,685   $1,426   $1,362    35.9%  $6,742 
Depreciation & Amortization  $153   $156   $160   $123   $145    5.5%  $592 
Income from Operations  $243   $1,282   $419   $621   $404    (39.9%)  $2,565 
Total FX gains (losses) and Other  $129   $(104)  $(54)  $87   $(44)   +$173   $58 
Provision for (benefit from) Income Taxes  $46   $67   $40   $(19)  $149    (69.1%)  $134 
Net income  $326   $1,111   $325   $727   $211    54.5%  $2,489 




Earnings Announcement and Supplemental Information


Zedge will host a conference call at 5:30 PM ET today, June 9th, beginning with management’s discussion of results, outlook and strategy followed by Q&A with investors.


To participate in the call, please start dial toll-free 1-888-317-6003 (from the U.S.) or 1-412-317-6061 (outside the U.S.) and enter the conference ID: 3166208# several minutes before the 5:30 PM Eastern start.


The conference call will also be webcast, and can be accessed both live and for three months following the call through this URL: http://services.choruscall.com/links/zdge160609aNTLMe2k.


Copies of the complete earnings release including the financial statements were filed on a Form 8-K and are available in the Investor Relations portion of Zedge’s website: http://investor.zedge.net.


# # #


All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks, and should be consulted along with this release. To the extent permitted under applicable law, we assume no obligation to update any forward-looking statements.


About Zedge:


Zedge (NYSE MKT: ZDGE) provides a highly popular content platform centered on self-expression, pairing both creators and brands looking to promote their content with consumers who utilize the content – wallpapers, ringtones, app icons and notification sounds - to personalize their phones. The Zedge app has surpassed 200 million installs globally and is available in both the Google Play and iTunes stores.



Jonathan Reich








   April 30,
   July 31,
   (in thousands) 
Current assets:        
Cash and cash equivalents   $3,976   $2,170 
Trade accounts receivable, net of allowance for doubtful accounts of $0 at April 30, 2016 and July 31, 2015    1,780    1,622 
Prepaid expenses    87    103 
Other current assets    190    180 
Total current assets    6,033    4,075 
Property and equipment, net    1,931    1,724 
Goodwill    2,478    2,438 
Other assets    128    115 
Total assets  $10,570   $8,352 
Liabilities and stockholders’ equity          
Current liabilities:          
Trade accounts payable   $59   $116 
Accrued expenses    1,618    1,319 
Deferred revenue    3    4 
Due to IDT Corporation    458    369 
Total current liabilities    2,138    1,808 
Mezzanine equity:          
Series B convertible preferred stock        100 
Commitments and contingencies          
Stockholders’ equity:          
Preferred stock, $.01 par value; authorized shares—2,400; no shares issued         
Class A common stock, $.01 par value; authorized shares—2,600; 525 shares issued and outstanding at April 30, 2016 and July 31, 2015    5    5 
Class B common stock, $.01 par value; authorized shares—40,000; 7,704 and 7,637 shares issued and outstanding at April 30, 2016 and July 31, 2015, respectively    77    76 
Additional paid-in capital    17,844    17,726 
Accumulated other comprehensive loss    (548)   (655)
Accumulated deficit    (8,946)   (10,708)
Total stockholders’ equity    8,432    6,444 
Total liabilities and stockholders’ equity   $10,570   $8,352 







   Three Months Ended
April 30,
   Nine Months Ended
April 30,








   (in thousands, except per share data) 
Revenues   $2,573   $2,199   $8,661   $6,624 
Costs and expenses:                    
Direct cost of revenues (exclusive of amortization of capitalized software and technology development costs included below)    327    289    932    823 
Selling, general and administrative   1,850    1,361    5,316    4,298 
Depreciation and amortization    153    145    470    501 
Income from operations    243    404    1,943    1,002 
Interest (expense) income, net    (1)       2    4 
Net gains (losses) resulting from foreign exchange transactions    130    (44)   (31)   84 
Income before income taxes    372    360    1,914    1,090 
Provision for income taxes    (46)   (149)   (152)   (231)
Net income    326    211    1,762    859 
Other comprehensive income (loss):                    
Change in foreign currency translation adjustments    266    48    107    (574)
Total other comprehensive income (loss)   266    48    107    (574)
Total comprehensive income   $592   $259   $1,869   $285 
Earnings per share attributable to Zedge, Inc. common stockholders:                    
Basic   $0.04   $0.03   $0.22   $0.11 
Diluted   $0.04   $0.02   $0.20   $0.10 
Weighted-average number of shares used in calculation of earnings per share:                    
Basic    8,199    8,161    8,174    8,147 
Diluted    9,186    8,934    9,027    8,919 








   Nine Months Ended
April 30,
   2016   2015 
   (in thousands) 
Operating activities        
Net income   $1,762   $859 
Adjustments to reconcile net income to net cash provided by operating activities:           
Depreciation and amortization    470    501 
Stock-based compensation    10    68 
Change in assets and liabilities:          
Trade accounts receivable    (158)   (63)
Prepaid expenses and other current assets    6    18 
Other assets    (13)   (17)
Trade accounts payable and accrued expenses    305    699 
Due to IDT Corporation    89    (177)
Deferred revenue    (1)   7 
Net cash provided by operating activities    2,470    1,895 
Investing activities          
Purchase of property and equipment    (680)   (679)
Net cash used in investing activities    (680)   (679)
Financing activities          
Proceeds from exercise of stock options    9    9 
Net cash provided by financing activities    9    9 
Effect of exchange rate changes on cash and cash equivalents    7    (115)
Net increase in cash and cash equivalents    1,806    1,110 
Cash and cash equivalents at beginning of period    2,170    765 
Cash and cash equivalents at end of period   $3,976   $1,875