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Revenue

3 Months Ended

Oct. 31, 2020

Revenue from Contract with Customer [Abstract]

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
		October 31,
		2020				2019

		(in thousands)
Advertising revenue		$	2,986			$	1,667
Paid subscription revenue			650				207
Other revenues			126				159
Total Revenues		$	3,762			$	2,033

Contract Balances

Deferred revenues

The Company 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 October 31, 2020, and July 31, 2020, the Company’s deferred revenue balance related to Zedge Premium was approximately $177,000 and $169,000, respectively.

The Company also records deferred revenues related to the unsatisfied performance obligations with respect to subscription revenue. As of October 31, 2020, the Company’s deferred revenue balance related to paid subscriptions was approximately $1,382,000, representing approximately 609,000 active subscribers. 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 three months ended October 31, 2020 that was included in the deferred balance at July 31, 2020 was $429,000.

Total deferred revenues increased $221,000 from $1,338,000 at July 31, 2020 to $1,559,000 at October 31, 2020, primarily attributed to new paid subscriptions sold in the three months ended October 31, 2020.

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).