Zedge (NYSEAMERICAN:ZDGE) is expanding into artificial intelligence data and services through its DataSeeds initiative, which President and COO Jonathan Reich described as the company’s core growth effort during a presentation to investors.
Reich said the company is applying its experience operating consumer mobile apps and creator communities to serve AI model developers, robotics companies and other technology customers that need training data, data annotation and model evaluations.
DataSeeds Targets AI Training and Evaluation Demand
According to Reich, DataSeeds is designed to provide multimodal data, including audio, video, imagery, synthetic data and robotics-related egocentric and exocentric video. The offering also includes the sensor data needed to train robots for physical tasks, he said.
The company recently announced model-evaluation services, using photography experts from its community to assess AI model outputs. Reich said the company believes expert human evaluators can offer more useful feedback than general-purpose evaluators in certain visual applications.
Reich cited a Grand View Research estimate that the annual market for data could reach approximately $16 billion by 2033. He said Zedge is speaking with frontier model labs, major technology companies, robotics manufacturers and AI-focused startups.
DataSeeds has three methods for fulfilling customer requests, Reich said:
- Licensing or selling data from an off-the-shelf catalog of imagery, audio and video.
- Using a managed crowd model in which creators produce content to customer specifications in exchange for virtual currency or cash payments.
- Using the DataSeeds Production Cloud for projects requiring more professional production facilities.
Reich said the company obtains creator rights and consent and maintains auditable records of that consent. He contrasted that process with the legal disputes involving AI companies that allegedly obtained internet content without appropriate rights.
Creator Community and GuruShots Assets
Zedge operates the Zedge Marketplace mobile-personalization platform and the GuruShots photo competition platform. Reich said the company’s creator community has roughly 20 million monthly active users, while the Zedge Marketplace application has been downloaded nearly 800 million times, primarily through organic channels.
The company acquired GuruShots about five years ago, Reich said. At the time of the acquisition, the platform had a catalog of approximately 150 million photographs. Zedge has secured AI training rights for about 50 million of those images, according to Reich.
He said the GuruShots community also provides photography enthusiasts with expertise that can support the company’s model-evaluation work. Zedge’s innovation team is shifting more of its focus toward developing DataSeeds-related solutions, he added.
Early Commercial Activity and Product Roadmap
Reich said Zedge announced its first repeat DataSeeds order exceeding $100,000 during its third quarter. He said the company’s pipeline includes prospective six-figure orders, while cautioning that DataSeeds revenue is expected to remain “a little bit lumpy” during the fiscal year that began Aug. 1.
He characterized the business as a business-to-business sales model in which a proof of concept may lead to scaled orders if the provider performs well. Zedge has operating capabilities in place to work with customers and production partners, he said.
The company expects to introduce a video-annotation solution during the first half of fiscal 2027. Reich said that product would give DataSeeds a fuller stack of capabilities across data production, annotation and evaluations.
Capital Position and Financial Metrics
Reich said controlling shareholder Howard Jonas and other investors completed a $7.7 million private placement. On a pro forma basis, he said Zedge had about $27.4 million of cash and no debt, though he also referenced a balance-sheet cash figure approaching $30 million earlier in the presentation.
The company plans to use capital to add talent in sales, marketing and engineering, with an emphasis on recruiting industry salespeople with existing customer relationships, Reich said. He added that Zedge intends to continue its dividend, which he described as having an approximate 3% yield.
For the third quarter, Reich reported approximately $24 million in total revenue, $4.8 million in subscriber revenue, up 31% year over year, and $6.2 million in deferred revenue. He also cited GAAP net income of $0.6 million, free cash flow of $2.6 million and adjusted EBITDA of $3.6 million, up 147% from the prior year.
Reich said Zedge’s consumer offerings remain profitable and that the company plans to continue growing them while investing in DataSeeds. He also said Zedge planned to hold its fiscal 2026 annual earnings call the following Monday.
About Zedge (NYSEAMERICAN:ZDGE)
Zedge, Inc operates a digital content marketplace that enables users to discover, personalize and share content for mobile devices. Its flagship Zedge platform offers wallpapers, ringtones, notification sounds, app icons, fonts and other personalization products, including content created by independent artists and other members of its community.
The company provides its services through mobile applications and online platforms, with products available to users internationally. Zedge also offers premium digital content and tools designed to help creators distribute and monetize their work.
Founded in 2003, Zedge has expanded beyond mobile personalization through digital entertainment and creator-focused offerings.
