Revenue

9 Months Ended

Apr. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue

Note 2—Revenue

Disaggregation of Revenue

The following table summarizes revenue by type of monetization mechanisms of the Zedge app for the periods presented:

	Three Months Ended				Nine Months Ended
	April 30,				April 30,
	2021		2020		2021		2020
	(in thousands)				(in thousands)
Advertising revenue	$	4,227	$	1,501	$	11,612	$	5,428
Paid subscription revenue		899		455		2,358		985
Other revenues		126		123		358		343
Total Revenues	$	5,252	$	2,079	$	14,328	$	6,756

Contract Balances

Deferred revenues

The Company records deferred revenues related to the unsatisfied performance obligations with respect to subscription revenue. As of April 30, 2021, the Company’s deferred revenue balance related to paid subscriptions was approximately $1,607,000, representing approximately 753,000 active subscribers including those under the account hold designation implemented by Google Play on November 1, 2020. Account hold is a subscription state that begins when a user's form of payment fails and the three-day grace period has ended without payment resolution. The account hold period lasts for up to 30 days. As of July 31, 2020, the Company’s deferred revenue balance related to paid subscriptions was approximately $1,169,000, representing approximately 504,000 active subscribers. The amount of revenue recognized in the nine months ended April 30, 2021 that was included in the deferred balance at July 31, 2020 was $1,078,000.

The Company also records deferred revenues when users purchase or earn Zedge Credits. Unused Zedge Credits represent the value of the Company’s unsatisfied performance obligation to its users. Revenue is recognized when Zedge App users use Zedge Credits to acquire Zedge Premium content or upon expiration of the Zedge Credits upon 180 days of account inactivity. As of April 30, 2021, and July 31, 2020, the Company’s deferred revenue balance related to Zedge Premium was approximately $217,000 and $169,000, respectively.

Total deferred revenues increased $486,000 from $1,338,000 at July 31, 2020 to $1,824,000 at April 30, 2021, primarily attributed to new paid subscriptions and renewals sold in the nine months ended April 30, 2021.

Significant Judgments

The advertising networks and advertising exchanges to which we sell our inventory track and report the impressions and installs to Zedge and Zedge recognizes revenues based on these reports. The networks and exchanges base their payments off of those reports and Zedge independently compares the data to each of the client sites to validate the imported data and identify any differences. The number of impressions and installs delivered by the advertising networks and advertising exchanges is determined at the end of each month, which resolves any uncertainty in the transaction price during the reporting period.

Practical Expedients

The Company expenses the fees retained by Google Play related to subscription revenue when incurred as marketing expense because the duration of the contracts for which the Company pays commissions are less than one year. These costs are included in the selling, general and administrative expenses of the Consolidated Statements of Comprehensive Income (Loss).