Note 2—Revenue

Disaggregation of Revenue

The following table summarizes revenue by type of monetization for the Zedge Marketplace and GuruShots for the periods presented:

Contract Balances

Contract liabilities consist of deferred revenue, which are recorded for payments received in advance of the satisfaction of performance obligations.

The Company records deferred revenues related to the unsatisfied performance obligations with respect to subscription revenue. As of July 31, 2026, the Company’s deferred revenue balance related to subscriptions was approximately $5.7 million, representing approximately 1.3 million active subscriptions, including approximately 1.1 million lifetime subscriptions. As of July 31, 2025, the Company’s deferred revenue balance related to subscriptions was approximately $5.1 million, representing approximately 984,000 active subscriptions, including approximately 693,000 lifetime subscriptions. As of July 31, 2024, the Company’s deferred revenue balance related to subscriptions was approximately $2.9 million, representing approximately 669,000 active subscriptions, including approximately 210,000 lifetime subscriptions.

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 redeem Zedge Credits to acquire Zedge Premium content or upon expiration of the Zedge Credits upon 180 days of account inactivity. As of July 31, 2026, 2025 and 2024, the Company’s deferred revenue balance related to Zedge Premium was approximately $344,000, $248,000 and $251,000, respectively. 

The amount of deferred revenue recognized in fiscal 2026 that was included in the deferred revenue balance at July 31, 2025 was $3.2 million. The amount of deferred revenue recognized in fiscal 2025 that was included in the deferred revenue balance at July 31, 2024 was $1.9 million.

Unsatisfied Performance Obligations

Substantially all of the Company’s unsatisfied performance obligations relate to contracts with an original expected length of 30 months or less.

Significant Judgments

The advertising networks and advertising exchanges to which the Company sells its inventory track and report the impressions 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 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.

For lifetime subscriptions, revenue is recognized over the estimated retention period during which the customer is expected to benefit from use of the Zedge app, which management has determined to be 30 months based on historical usage and retention patterns. This estimate represents a significant judgement and is reviewed periodically for changes in customer behavior or other relevant factors.