ZDGE - AMEX

Good day, and welcome to

Thank you, operator. During today's call, Jonathan Reich,

Thank you, Brian, and good afternoon, everyone. Fiscal 2025 was a year of transition in which we reshaped

Total revenue for the fourth quarter was $7.5 million, down 1.5% from last year. There were a couple of items to note here. First,

[Operator Instructions] Your first question for today is from Allen Klee with Maxim Group.

If you could touch a little more on tapedeck and DataSeeds.AI in terms of the actions you're looking to take going forward and how you might think about what the opportunity is in both of these offerings?

Allen, thanks for asking the question. So I think that there are really sort of three buckets here. We've got tapedeck, which has been an initiative that we have built to address a portion of the world of music, mainly in the artists that are underserved today in terms of revenue generation. As you know, Tim Quirk, our SVP of Product, comes from that world. And the goal of this product is to provide a transparent platform where fans of indie artists can support their fans and do so in a fashion that allows for these Indie artists to make a good living from their artwork. The product has been built with many of the hooks needed in order to facilitate that outcome. And we've launched with 500,000 tracks. The need for additional music is there. And based upon performance and KPIs, we will make a decision in calendar year 2026 as to whether to continue this initiative or to really put it on the back burner. Moving to DataSeeds, similar notion of really managing the business towards KPIs. DataSeeds, as I've described, is a B2B offering, our first B2B offering, which is focused on providing foundational AI companies with data sets that they are in need of in order to meet their development goals. And we are hard at work at taking content that we have access to through GuruShots, content that we can create with the -- with collaboration with our creator community, whether that be GuruShots players or

That was great. One of the encouraging things I saw in your results was a sequential improvement in monthly active users, which maybe suggests that there's a possibility of some stability or potential growth eventually. What would you point to of the steps you've been taking to get those results?

So as Yi had indicated in his comments, we are being very discerning about our marketing spend and ensuring that we are focusing on bringing on high-value customers that can generate an attractive ROAS profile. And our spend is linked to what's happening in the market in real time. Specific to the

That's very helpful. So I heard you say that you took some of the restructuring savings and reinvested it back in maybe paid user acquisition spend or some other things. Could you just kind of go into kind of where that was focused? And is that something as far as you can tell now that you would continue to prioritize those areas?

Generally speaking, we've had a couple of cash expenditures around marketing. We've talked about the share repurchase and Yi said that we've got around $600,000 less than the share repurchase program, which totaled with a $5 million share repurchase program underway. And now with the initiation of the dividend, that will also consume some cash. Our goal is to fund all of these with our existing cash flow, not to have to dip into reserves ultimately. And if and when we see a tremendous growth opportunity that is backed up by numbers, we may spend more on marketing in order to seize that opportunity. I mentioned earlier, even with respect to DataSeeds, there is product that is being developed in order to meet enterprise client needs, but we are aligning that development with signed contracts and revenue in order to align expense and revenue as opposed to taking a perspective of build and then they will come. Yi, do you have anything that you want to add to that? I'm sorry Yi, do you have anything that you want to add to that? We may have lost, I don't know where he is.

Okay. That's fine. Your comments on Emojipedia, could you just explain again what kind of what Google changed and what actions you're taking to try to remediate that and how you're thinking about the timing of how you're hoping that those actions might kick in the results?

Sure. So there are really two different things that are going on with Emojipedia. One is an industry-wide phenomenon relating to the advent of AI search. And that can be ChatGPT, Perplexity, Anthropic's Claude, whatever the case may be, whereby user just goes in and types, let's say, Smile emoji. And ChatGPT will respond by posting a Smile emoji. User will then copy that emoji and put it into their e-mail or into their text message, whatever the case may be. That is independent of Google. Of course, Gemini provides the same sort of experience. Separately, Google consistent -- regularly and consistently updates the algorithm and the results for their search engine results page. And what they had rolled out as being brand new, has not ever happened in the past is at least for a limited number of emojis, if someone were to go in and search Smiley emoji, on the search results page, there would be a Smile emoji with a little copy or cut or paste button underneath it. And then immediately following that, you would find the link to Emojipedia. We are still ranked #1 or #2 in terms of overall search results, but the functionality of the search results page now allows for a user to immediately acquire the content that they are looking for. In the case of Emojipedia, Emojipedia is much more than just copy paste, but clearly, we have copy paste users. And let me explain other users in the world of Emojipedia. We have a lot of digital agencies. We have news outlets. We have researchers that need to have detailed information behind each individual emoji that they are using in a digital campaign writing about or the like. And that information is available only in Emojipedia or primarily in Emojipedia. And the copy paste users are the ones that are, so to speak, being affected because they no longer would go to Emojipedia for a straight copy paste type of experience. I hope that answers your question.

Yes. I had a question on deferred revenue, which you highlighted how that's been growing and how that can provide future revenue at close to 100% margin. How do we think about the amount of deferred revenue, the timing of how it gets recognized?

Can you hear me, Allen?

Yes.

Sorry about that, something wrong with my headphone. I talked, but you guys couldn't hear me. Yes. So the way deferred revenue work is that as we sell the lifetime subscription, we take the cash, but we amortize the revenue over 30 months. So whatever we not recognize as a revenue, we put it under deferred, which we will recognize over the next 30 months. So would that mean that we will just recognize those deferred revenue over time. And as long as we keep the subscriber pool steady, we would level out the revenue based on what we sell, not what we recognize. I hope I answered your question now.

Yes, that's great. So one other question. Your SG&A was roughly flat year-over-year, but up sequentially. And you highlighted a few things that was spent on. Is it reasonable to think that this quarter is kind of a decent run rate for what SG&A might be going forward?

This quarter, SG&A, as Jonathan mentioned, we -- the savings from the restructuring was used to pay for the ramp-up in PUA and pay for some consulting fee related to new initiatives. So yes, going forward, the SG&A will probably decline a little bit because we're not spending the same amount in PUA and consulting for the new project as we did in Q4 of '25.