Now presenting CEO Jonathan Reich for Zedge.
Thank you. Good afternoon, everyone. Thanks for joining today. I look forward to sharing with you more about the company. Just for everyone's knowledge, our fiscal year closes at the end of July, and everything that I say today is subject to our safe harbor statement. What is Zedge? Zedge provides marketplaces for user-generated content. We have got a portfolio of digital assets, large customer base, around 35 million Monthly Active Users across our entire suite. We are experts at monetizing these users. We provide artists with the ability to have community, with tool sets, and the ability to make money. We provide users with great types of content and with a lot of fun. We are creating this flywheel. We have got creators. They can interact with us through fun competitions, make money, and have a sense of community.
By investing in marketing and bringing in new users and new artists, we can continue to grow that pie. Some quick financials: market cap around $29 million. We've got enterprise value around $9 million. We've got $20 million-plus of cash on our balance sheet with no debt. We are in the midst of a $5 million stock repurchase, which dovetailed with a $3 million repurchase that we completed this past December. Let me talk a little bit about the properties.
First, the flagship, the Zedge Marketplace for mobile personalization content: ringtones, wallpapers, app icons, video wallpapers, notification sounds, and more recently, a full AI generation creation suite where users can go in, they can text to create an image, they can take an image and upgrade it, or they can take a photo with their phone and use Gen AI in order to yield all sorts of different really cool things. We've surpassed 725 million installs of that app globally. That's a pretty big number for any app provider. We've got, give or take, around 25 million Monthly Active Users. Around 20% of those are in Tier 1 markets, and the others are located throughout the world: India, Latin America, Europe, and so on and so forth. We've got Emojipedia. Emojipedia is the be-all and end-all for anything having to do with emojis. It provides research.
It provides copy and paste functionality. It even allows users to go out and create emojis with Gen AI. We've got around 10 million Monthly Active Users on that property. We've got GuruShots, an acquisition which we made around three years ago. It's actually a work in process right now. We announced the restructuring, which I'll get into a little bit later. GuruShots has essentially gamified the world of photography. We've created a gamified approach for users to play and get recognition, gain experience in terms of how to improve their photographs and so on and so forth. We've had over 180 million photographs that have been uploaded to the platform in these various competitions over time. Some quick investor highlights. We've got a strong core business that has been proven to generate good revenue and is highly profitable through Zedge and Emojipedia.
We have disciplined capital allocation. We use our profits, we use our cash flow in order to fund new growth, undertake new initiatives, and also to fund our repurchase. We announced the restructuring around two months ago. The net-net of that restructuring really will yield around $4 million in cost savings. That is on top of the free cash flow that we currently throw off. We've focused on two areas with that restructuring. First is we closed down our operations in Norway and have consolidated across two geographies in terms of our resource investment. We've got a very strong office in Vilnius, Lithuania, and a very strong operation in Tel Aviv, Israel. In addition to that, we have focused on restructuring GuruShots in order to see that it is approaching break-even.
We can really focus our efforts on what we call GuruShots 2.0, which will be a much more modernized game built on modern infrastructure with some really, really outstanding gameplay and other features. Finally, we are really, really into AI. You will see through the presentation everything that we are focused on, both from a product perspective as well as how we operate. Engineering, marketing, monetization, and so on and so forth is very, very much dependent upon AI. Our customers ultimately are able to benefit from that. I want to point one thing out that's really important. A lot of the AI companies in this space are charging users subscription fees. We do not require that. We are a freemium app. Users can interact with the AI features, and we support that through generating advertising revenue.
Let's talk a little bit more about our products. We have the Zedge Marketplace. As I mentioned, this is a marketplace for mobile phone personalization content, ringtones, wallpapers, live wallpapers, notification sounds, as well as the full Gen AI creation suite. We offer both user-generated content, that is content that users upload free of charge for users, for our customers to download and decorate their phone, as well as we offer a premium section where artists will open up a little virtual store within our ecosystem and sell their content to our users. Our users can purchase those either by amassing Zedge virtual currency, let's say through watching a rewarded ad, or they can buy Token Packs. We have the AI creation suite, which I discussed. The app is currently localized across 13 different languages.
As I'd mentioned, around 80% of our users are located outside of the Tier 1 markets. We are very sensitive to seeing to it that we are culturally relevant, not only through localization of the actual language, but the content that we serve and the experience that those users have. We monetize this through three different revenue streams. One is through advertising. We do an exceptionally good job in terms of optimizing the CPMs associated with our advertising. I say that not because I know it, but I say that because of the feedback that we get from partners like Google and AppLovin. In their QBRs, their quarterly business reviews, they will typically show us how we trend compared to our competition, and we are at the top of the chart.
Our CPMs continue to grow, and we are very, very excited about how we continue to monetize those users. We also introduced a subscription Tier, and we've seen some really nice growth in that subscription business: 17% growth for the first half of the fiscal year. The subscription offers value-added features for our users, and the users are very, very happy with it. Finally, we participate in the creator economy and generate money by selling premium content. Our artists are able to open up their own little virtual store and sell it accordingly. I think that there's a very important dynamic here which goes unnoticed. We are essentially available to an infinite amount of content. Since we have both premium artists and just regular consumers that are uploading content, we can gain access to anything based upon what's going on at any particular point in time.
If there is a cultural trend, you will see in the app that there are a lot of uploads that mimic and that highlight that cultural trend in order to meet the need of our users. Why do users do that for free? Because they get bragging rights. They will see how many times their piece of content has been downloaded and the like. Obviously, for paid creators, they want to make money. We are a great platform with a lot of customers where they can do that. Let's talk a little bit more about Paint and our focus on AI. Paint is the brand name that we use for our AI creation suite. As I mentioned, today, it supports anything that is image-related: text to image, image to image. Take a selfie, and you can also run that through, create an avatar or whatever.
We're constantly adding new features and new filters that will mimic what's going on in the world at large. The product or this feature is available to anyone across the globe. They don't have to pay for it. I'm excited to say that we will be adding to Paint by offering an audio AI creation tool this spring. We are going to be very early in that market, and we're excited about that because we think that that can not only drive continued engagement from our users, but can also bring in new users that want to create great-sounding stuff. It could be music. It could be something that's humorous. It could be an interesting sound. All of this is something which feeds into an area that we are very, very passionate about, and that is innovation. We'll get to that later. Let's move to Emojipedia.
Emojipedia is a fully ad-supported product. It is a web-based product, and it has anything and everything that you could imagine about emojis. Our users consist of both consumers and businesses. Think about digital marketers. The amount of emojis that are included in campaigns, they have to be very cautious about making sure that they're selecting the right emoji. There is nuance in terms of how people use emojis. If you pick the wrong one, you're going to be sending the wrong message to your prospective customers. We monetize, as I said, through advertising, and we've got around 10 million Monthly Active Users that engage with Emojipedia. We have also embedded AI into Emojipedia, and we allow users today to create their own emojis simply by texting a prompt and then seeing the output. We expect to roll out an adjacent content vertical, mainly digital stickers, this year.
That very much aligns with that user base. We are excited about where we might be able to go with that. In addition to that, we are going to be rolling out a subscription Tier in order to further enhance our revenue. Moving to GuruShots. As I said, GuruShots is a work in progress. We announced the restructuring, but GuruShots has gamified the photography vertical. Most people do not think about photography as a potential game. Take Duolingo. I think many of you know that it is a language learning platform. What it has done is it has made language learning pretty boring into something that is fun by making it more game-like. That is exactly where GuruShots is.
In GuruShots 2.0, post the restructuring, we will have a much more engaging user experience. Today, the game dynamic is a user enters a competition, let's say it's best black and white skyscraper photograph. They start voting on the other photographs that have been submitted to that competition. As they vote, they gain more visibility of their content. People vote on their content. The more votes that a user ultimately receives, they win the competition accordingly. It's both a single-player or team-play experience. It is interesting because this demographic is one which has significant access to capital. It's a rich demographic which allows for us to monetize well. We are excited about where we can go with this in terms of GuruShots 2.0. Finally, it is a learning platform in a certain sense.
Not only is it something where users have the satisfaction of gaining visibility with high-quality photographs, but they also can learn about how to take better photographs. To date, we've amassed over 180 million photographs that have been used in these competitions. By and large, these are all very high-quality photographs. Why would you enter a photo competition game if you did not have high quality there? We are thinking about other things that may be relevant with respect to that catalog, other ways of monetizing that content over time. As I had mentioned, around two months ago, we announced the restructuring of GuruShots. We expect that restructuring will deliver around $3 million in cost savings over the course of the next year. We had a reduction in force of around 50% of the team. There were other cost-cutting initiatives that were part of that.
Essentially, let's talk about what were the causes. We acquired GuruShots around three years ago. When we acquired it, there was a new world that was evolving because Apple began to degrade the fidelity of information that marketers could use in order to target prospective users. That was very early, and we struggled, as the entire ecosystem did with that at first. In addition to that, we did not have our own internal marketing team. We outsourced. We began to build a marketing team. When you have insourced marketing in our domain, you usually do much better. It's a very, very data-driven domain, and we live on data. Outsourcing, it gets to be you have another customer, you make your percentage and move on. Finally, we did not evolve our features as quickly as we needed to. What have we done in order to remediate?
First of all, we wrote off this acquisition last year. We're starting from ground zero. That's a great opportunity from an investor's perspective. Second of all, as I had mentioned, we reduced headcount. We upgraded the team as well with true gaming experts. Many of those team members are based in Tel Aviv. Israel is known for being one of the gaming capitals of the world. Number three, we've decreased our marketing spend, and we have now pegged our marketing spend to what is known as ROAS, return on ad spend. We want to make sure that we have a very, very tight window during which we earn back the spend that we dedicate to bringing on a new customer. Our run rate will approach break-even in Q3. We are in Q3 now, and we are well underway in terms of defining what GuruShots 2.0 will be.
For the company, we've got a disciplined capital allocation strategy. First of all, around 16% of the stock is owned by insiders, which means that when we make a decision, it impacts us. We are very, very careful about acting as owners, not simply making decisions without really impacting us. Number two, we're very, very into innovation. We are innovating with new technology. We are innovating with new marketing trends. We are innovating with new monetization capabilities. The things that work, we double down on. The things that do not, we try to fail fast and move forward. Finally, we've got a share repurchase underway, and that dovetails upon a share repurchase that had concluded in December of 2024. That was for $3 million. We currently have a $5 million share repurchase underway. In aggregate, we have acquired over 1.6 million shares since the original share repurchase.
We've got around 14 million shares out there right now. Talking about our DNA, innovation is in everything that we do. As I had mentioned, Zedge Marketplace, we're about to roll out audio AI. This is groundbreaking, very early phase for the overall market. We think that we can gain great recognition there and benefit from hypergrowth. Number two, print on demand. We've enabled the capability. Any piece of content that someone creates, they can actually go out and get that printed on a T-shirt, baseball cap, coffee mug, regular sticker, whatever it is. We've also moved our Premium Marketplace to the web, allowing for other opportunities for prospective purchasers of that content. Through our AI suite, we're no longer limited to the footprint of the phone. Our AI suite allows for users to create any type of content, any size.
That is something which is exciting, and we will continue to invest in. Turning to GuruShots, as I had mentioned, we're in the midst of really defining what is GuruShots 2.0 going to be. How are we going to benefit from AI? How are we going to improve the gameplay? How do we improve engagement? How do we make sure that users are getting better feedback and gaining experience and using it as an educational tool that is fun to engage with and has great social benefit to it? That is all underway. All of those are going to be built upon new infrastructure so that we will be much more modernized in terms of how we build this game going forward. Finally, Emojipedia, as I had mentioned, we're about to roll out a subscription offering.
We offer the ability for users to create their own emojis today through Gen AI. We are going to soon be launching a vertical that is adjacent to emojis, mainly stickers, digital stickers that we all use in our social feeds, emails, and so on and so forth. We have got an experienced management team. I have been the CEO since 2020. I have had the opportunity of working for the Jonas family, which is the controlling shareholder of the business for around 25 years, and have had great successes with previous ventures that I was involved in, whether it be Net2Phone, Fabrics, and the like. We have Yi Tsai. He is a very seasoned financial wizard who has worked in the high-tech space for many, many years and does an excellent job in terms of really managing everything that we have from a financial reporting perspective, both externally as well as internally.
Finally, we have Tim Quirk. Tim came to us. He's SVP of Product through an acquire that we had made around seven years ago. Tim, prior to his own company, had been employee number four at Google Play. As I mentioned, we're controlled by the Jonas family, Howard Jonas, and his son Michael, who is our Chairman. We've got a great board, a lot of experience, both in terms of entrepreneurial management as well as hardcore business growth and the like. From a financial perspective, as you can see, we have revenues on the right broken out by category. I want to highlight our gross margin. Our gross margin is outstanding, around 94%-95%. We have been able to maintain gross margins north of 90% for literally many, many, many years. Interestingly, take a look at the free cash flow.
You can see we're free cash flow positive. Think about the restructuring that I mentioned. We could add another $4 million to that free cash flow in the upcoming 12 months. Why invest now? As I'd mentioned, we've got strong core business with both the Zedge Marketplace and Emojipedia. These are businesses that have been around, have lots of customers. We have been successful in managing them profitably. We announced the restructuring, which is going to yield around $4 million in cost savings and started to kick in in Q3, this current quarter. We're unlocking product growth with AI. AI is still bottom of the first. There is so much that is going to happen with AI. Our ability to ride that wave and to continue to embrace it in order to fuel growth is going to benefit our users and ultimately benefit our investors.
Finally, we're very disciplined in terms of our capital allocation, making sure that we're using our profits in order to innovate and in order to fund our stock repurchase. I'll be glad to take any questions. Please.
Maybe a little bit on the $20 million on your balance sheet plan to create cash. Sure. Creating cash going forward.
Great question. Sure. Right now, we believe that there are going to be potential M&A opportunities with all of the headwinds that we're seeing in the economy. We are not actively looking for something right now. Selectively, opportunities do come to us. We're very discerning in terms of what we would invest in. That means not only in terms of product, but growth as well as financials. For now, we don't see anything immediately available on the horizon. Who knows?
Maybe we'll distribute that to investors at some point in time if something else doesn't come along. Yes.
You talked about the difference between the Apple and the Android platforms in terms of download, but mainly, is there a revenue margin difference between them?
Sure. For the Zedge Marketplace, we are highly dominant on Android. The reason for that is really straightforward, and that is that Google has embedded mobile phone personalization into the operating system. You see something that you like, you click on it, it's on your phone. Apple, it's more complicated. You've got to go into your photo roll and then apply it, or you have to go to iTunes, and then you've got to get it into iTunes on your phone, and so on and so forth. With that being said, in terms of margin, Apple users are typically more valuable.
Now, if you go to GuruShots, it's a little bit different. A third of our users are Apple, a third are Android, and a third are playing from desktop. That makes sense because photographers keep their photos on their machines. Emojipedia is a web-based property, and we see around a 50/50 between Apple and Android. Specific, though, going back to Zedge, an Apple user will generate more. Just to give you an idea, from a subscription perspective, in the U.S., we charge $20 for an annual subscription to Zedge, whereas an annual subscription for Android is like $5. I think there was someone over on the other side of the room that had a question. Please.
John, GuruShots, could you share in the rights to the photo? In other words, could you use it? Tell the photo rights.
Yeah. Sure, sure. That's a great question.
Today, the rights that we have allow for us to use it for marketing purposes. We have started to reach out to our photographers in order to see that we can use it for other purposes. In certain instances, they would actually receive hard dollars for that, or in other instances, they would receive in-game currency for that. There is a lot that could potentially be done with that catalog. That was one of the underlying theses that we had when making this acquisition. Sure. Anything else? Thanks for your time.