Dave Ramsey Presents A Roadmap For A High-Spending Couple That's More Than $200,000 In Debt: 'The Problem Is Not The Credit Card Debt'
Financial radio host Dave Ramsey has spoken with many couples who want to get out of debt. He often starts by figuring out how they got into debt, and this recent conversation on "The Ramsey Show" was no different.
A couple with more than $200,000 in debt asked Ramsey if they should sell their house to pay off the debt. However, as the call unfolded, it became clear that selling the house wasn't the solution.
"The problem is not the credit card debt," Ramsey stated.
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The couple has $50,000 in credit card debt, $115,000 in student loan debt, and a $48,000 home equity loan. It would be better if the credit card debt was zero, but the couple's habits were a bigger red flag for Ramsey than their current financial situation.
Ramsey asked for the couple's age, and the wife mentioned that she is 48 years old. This discovery prompted Ramsey to inquire about why they owed $115,000 on student loans. It turns out the couple made minimum payments on their debt and lived above their means.
Doing that for one year is bad enough, but if you do it for more than 20 years, you can end up in serious debt. The couple currently finds themselves in this situation. Their annual household income jumped to $8,000 per month a few years ago, but that didn't translate into lower debt. The couple just spent more money.
This chain of bad money habits adds more validation to Ramsey's assertion that credit card debt isn't the problem. In fact, the couple later revealed that the home equity line of credit was used as a debt consolidation loan to reduce their credit card debt. Selling the house can solve the couple's current debt, but it would keep their bad money habits intact.
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Ramsey was pretty clear about what it would take for the couple to correct their course. He suggested that they live like broke people. That includes no dining or vacations for at least three years. He said the couple shouldn't be in a restaurant unless one of them is working in it.
He also suggested that the couple look for ways to earn additional money. While $8,000 per month is an above-average household income, the couple is far behind on their debt. If all goes well, the couple will be in their early 50s by the time they pay off their debt. Then, they have to save for retirement.
Ramsey suggested tackling the debt aggressively. He advocated that the couple pay off $2,000 per month toward debt repayment and quickly boost that number to $5,000 per month as the couple increases their earnings with raises, side hustles, and other methods.Ramsey also told the couple to cut up their credit cards and make a game out of how much debt they can pay and how little they can buy. TikTok has some of these challenges, such as "No Spend January" and "No Buy February."
Participating in these types of challenges each month can help the couple curtail their out-of-control discretionary spending. Then, they can pay off debt quicker, have more motivation to build on the initial momentum, and keep their house.
It requires a long-term financial commitment to get out of debt and change bad money habits that have been keeping you down. Ramsey offered the roadmap, and it's up to the couple to follow it.
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Monthly active users, or MAU, captures the number of unique users that used our Zedge App during the previous 30 days of the relevant period, is useful for evaluating consumer engagement with our App, which correlates to advertising revenue as more users drive more ad impressions for sale. It also allows readers and potential advertisers to evaluate the size of our user base. Zedge Premium Gross Transaction Value, or GTV, is the total dollar amount of transactions conducted through Zedge Premium. As Zedge Premium is an internal focus for growth, we believe this metric will help investors evaluate our progress in growing this part of our business. Average Revenue Per Monthly Active User for our Zedge App, or ARPMAU, is useful in evaluating how well we monetize our user base. An Active Subscription is a subscription that has commenced and not been canceled, including paused subscriptions and subscriptions in free trials, grace periods, or account hold. 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Live Call-in Info:Toll Free: 888-506-0062International: 973-528-0011Participant Access Code: 253956Webcast URL: Replay:Toll Free: 877-481-4010International: 919-882-2331Replay Passcode: 52502 About Zedge Zedge empowers tens of millions of consumers and creators each month with its suite of interconnected platforms that enable creativity, self-expression and e-commerce and foster community through fun competitions. Zedge's ecosystem of product offerings includes the Zedge Marketplace, a freemium marketplace offering mobile phone wallpapers, video wallpapers, ringtones, notification sounds, and pAInt, a generative AI image maker; GuruShots, "The World's Greatest Photography Game," a skill-based photo challenge game; and Emojipedia, the #1 trusted source for 'all things emoji.' For more information, visit: Follow us on X: @ZedgeFollow us on LinkedIn Forward-Looking Statements All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate," "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, we assume no obligation to update any forward-looking statements. Contact:Brian Siegel, IRC, MBASenior Managing DirectorHayden IR(346) 396-8696ir@ CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except par value data) April 30, July 31, 2025 2024 (Unaudited) Assets Current assets: Cash and cash equivalents $ 20,433 $ 19,998 Trade accounts receivable 3,319 3,406 Prepaid expenses and other current assets 946 593 Total Current assets 24,698 23,997 Property and equipment, net 1,277 2,306 Intangible assets, net 5,034 5,369 Goodwill 1,917 1,824 Deferred tax assets, net 4,528 4,344 Other assets 377 355 Total assets $ 37,831 $ 38,195 Liabilities and stockholders' equity Current liabilities: Trade accounts payable $ 1,388 $ 1,113 Accrued expenses and other current liabilities 2,832 2,969 Deferred revenues 3,070 2,168 Total Current liabilities 7,290 6,250 Deferred revenues--non-current 1,826 931 Other liabilities 87 118 Total liabilities 9,203 7,299 Commitments and contingencies (Note 9) Stockholders' equity: Preferred stock, $.01 par value; authorized shares-2,400; no shares issued and outstanding - - Class A common stock, $.01 par value; authorized shares-2,600; 525 shares issued and outstanding at April 30, 2025 and July 31, 2024 5 5 Class B common stock, $.01 par value; authorized shares-40,000; 14,969 shares issued and 13,228 shares outstanding at April 30, 2025, and 14,866 shares issued and 13,815 outstanding at July 31, 2024 150 149 Additional paid-in capital 49,570 48,263 Accumulated other comprehensive loss (1,545 ) (1,832 ) Accumulated deficit (14,946 ) (13,113 ) Treasury stock, 1,741 shares at April 30, 2025 and 1,051 shares at July 31, 2024, at cost (4,606 ) (2,576 ) Total stockholders' equity 28,628 30,896 Total liabilities and stockholders' equity $ 37,831 $ 38,195 ZEDGE, CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(in thousands, except per share data)(Unaudited) Three Months Ended Nine Months Ended April 30, April 30, 2025 2024 2025 2024 Revenues $ 7,757 $ 7,658 $ 21,930 $ 22,510 Costs and expenses: Direct cost of revenues (excluding amortization of capitalized software and technology development costs which is included below) 452 455 1,360 1,399 Selling, general and administrative 6,343 6,752 20,278 18,773 Depreciation and amortization 225 583 924 2,120 Impairment of intangible assets - - - 11,958 Restructuring charges 577 - 1,058 - Impairment of capitalized software and technology development costs - - 827 - Income (loss) from operations 160 (132 ) (2,517 ) (11,740 ) Interest and other income, net 154 188 507 434 Net loss resulting from foreign exchange transactions (41 ) (80 ) (141 ) (223 ) Income (loss) before income taxes 273 (24 ) (2,151 ) (11,529 ) Income taxes expense (benefit) 88 (137 ) (318 ) (2,397 ) Net income (loss) $ 185 $ 113 $ (1,833 ) $ (9,132 ) Other comprehensive income (loss): Changes in foreign currency translation adjustment 448 (224 ) 287 (341 ) Total other comprehensive income (loss) 448 (224 ) 287 (341 ) Total comprehensive income (loss) $ 633 $ (111 ) $ (1,546 ) $ (9,473 ) Income (loss) per share attributable to Zedge, Inc. common stockholders: Basic $ 0.01 $ 0.01 $ (0.13 ) $ (0.65 ) Diluted $ 0.01 $ 0.01 $ (0.13 ) $ (0.65 ) Weighted-average number of shares used in calculation of income (loss) per share: Basic 13,720 14,191 13,835 14,077 Diluted 13,940 14,542 13,835 14,077 ZEDGE, CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(Unaudited) Nine Months Ended April 30, 2025 2024 Operating activities Net loss $ (1,833 ) $ (9,132 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 48 42 Amortization of intangible assets 335 1,270 Amortization of capitalized software and technology development costs 541 808 Amortization of deferred financing costs - 15 Stock-based compensation 1,308 1,673 Impairment charge of capitalized software and technology development costs 827 - Impairment charge of intangible assets - 11,958 Impairment of investment in privately-held company - 50 Deferred income taxes (184 ) (2,650 ) Change in assets and liabilities: Trade accounts receivable 87 (442 ) Prepaid expenses and other current assets (353 ) 195 Other assets (54 ) 34 Trade accounts payable and accrued expenses 229 1,073 Deferred revenues 1,797 261 Net cash provided by operating activities 2,748 5,155 Investing activities Capitalized software and technology development costs (329 ) (993 ) Purchase of property and equipment (49 ) (35 ) Net cash used in investing activities (378 ) (1,028 ) Financing activities Prepayment of term loan - (2,000 ) Proceeds from exercise of stock options - 3 Purchase of treasury stock in connection with share buyback program and stock awards vesting (2,030 ) (165 ) Net cash used in financing activities (2,030 ) (2,162 ) Effect of exchange rate changes on cash and cash equivalents 95 (165 ) Net increase in cash and cash equivalents 435 1,800 Cash and cash equivalents at beginning of period 19,998 18,125 Cash and cash equivalents at end of period $ 20,433 $ 19,925 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash payments made for income taxes $ 194 $ 80 Cash payments made for interest expenses $ - $ 66 Use of Non-GAAP Measures Adjusted EBITDA, defined as earnings (loss) before interest, taxes, depreciation and amortization, stock compensation expense, transaction-related expenses and other non-recurring expenses, Free Cash Flow, and non-GAAP net income and EPS (which adjust out stock compensation expense, transaction-related expenses and other non-recurring expenses from GAAP net income and EPS), represent measures that we believe are customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures we present. Our management also believes these measures are useful in evaluating our core operating results. However, these are not measures of financial performance under GAAP and should not be considered an alternative to net income or operating income/margin as an indicator of our operating performance or to net cash provided by operating activities as a measure of our liquidity. Numbers in the following reconciliation tables may not add due to rounding. Reconciliation of Adjusted EBITDA to Net Income (Loss) Q123 Q223 Q323 Q423 Q124 Q224 Q324 Q424 Q125 Q225 Q325 FY23 FY24 YTDFY25 Net Income (Loss) $ (0.2 ) $ 1.6 $ (7.7 ) $ 0.2 $ (0.0 ) $ (9.2 ) $ 0.1 $ (0.0 ) $ (0.3 ) $ (1.7 ) $ 0.2 $ (6.1 ) $ (9.2 ) $ (1.8 ) Excluding: Interest and other income (expense), net $ (0.0 ) $ (0.1 ) $ (0.1 ) $ (0.1 ) $ (0.1 ) $ (0.2 ) $ (0.2 ) $ (0.2 ) $ (0.2 ) $ (0.2 ) $ (0.2 ) $ (0.3 ) $ (0.6 ) $ (0.5 ) Income taxes expense (benefit) $ (0.1 ) $ 0.1 $ (0.7 ) $ 0.2 $ 0.2 $ (2.5 ) $ (0.1 ) $ 0.2 $ 0.0 $ (0.5 ) $ 0.1 $ (0.5 ) $ (2.2 ) $ (0.3 ) Depreciation and amortization $ 0.8 $ 0.8 $ 0.9 $ 0.8 $ 0.8 $ 0.8 $ 0.6 $ 0.3 $ 0.4 $ 0.3 $ 0.2 $ 3.3 $ 2.5 $ 0.9 EBITDA $ 0.5 $ 2.4 $ (7.6 ) $ 1.0 $ 0.9 $ (11.1 ) $ 0.4 $ 0.3 $ (0.1 ) $ (2.0 ) $ 0.3 $ (3.6 ) $ (9.5 ) $ (1.7 ) Adjustments: Asset impairments and restructuring charges $ (0.2 ) $ (1.8 ) $ 8.7 $ 0.0 $ 0.0 $ 12.0 $ 0.0 $ 0.0 $ 0.0 $ 1.3 $ 0.6 $ 6.8 $ 12.0 $ 1.9 Stock-based compensation $ 0.6 $ 0.8 $ 0.6 $ 0.6 $ 0.5 $ 0.7 $ 0.5 $ 0.5 $ 0.4 $ 0.6 $ 0.3 $ 2.5 $ 2.1 $ 1.3 Transaction costs related to business combination $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.2 $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.2 $ 0.0 Adjusted EBITDA $ 1.0 $ 1.4 $ 1.7 $ 1.6 $ 1.5 $ 1.5 $ 0.9 $ 0.8 $ 0.3 $ (0.1 ) $ 1.2 $ 5.7 $ 4.7 $ 1.5 *numbers may not add due to rounding Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income Q123 Q223 Q323 Q423 Q124 Q224 Q324 Q424 Q125 Q225 Q325 FY23 FY24 YTDFY25 GAAP Net Income (Loss) $ (0.2 ) $ 1.6 $ (7.7 ) $ 0.2 $ (0.0 ) $ (9.2 ) $ 0.1 $ (0.0 ) $ (0.3 ) $ (1.7 ) $ 0.2 $ (6.1 ) $ (9.2 ) $ (1.8 ) Adjustments: Asset impairments and restructuring charges $ (0.2 ) $ (1.8 ) $ 8.7 $ 0.0 $ 0.0 $ 12.0 $ 0.0 $ 0.0 $ 0.0 $ 1.3 $ 0.6 $ 6.8 $ 12.0 $ 1.9 Stock-based compensation $ 0.6 $ 0.8 $ 0.6 $ 0.6 $ 0.5 $ 0.7 $ 0.5 $ 0.5 $ 0.4 $ 0.6 $ 0.3 $ 2.5 $ 2.1 $ 1.3 Transaction costs related to business combination $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.2 $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.2 $ 0.0 Income tax effect on non-GAAP items $ (0.1 ) $ 0.2 $ (1.3 ) $ (0.1 ) $ (0.2 ) $ (2.9 ) $ (0.1 ) $ (0.1 ) $ (0.1 ) $ (0.4 ) $ (0.2 ) $ (1.3 ) $ (3.3 ) $ (0.7 ) Non-GAAP Net Income (Loss) $ 0.2 $ 0.8 $ 0.3 $ 0.6 $ 0.5 $ 0.5 $ 0.5 $ 0.3 $ (0.0 ) $ (0.2 ) $ 0.9 $ 1.9 $ 1.8 $ 0.6 Non-GAAP basic EPS (loss per share) $ 0.01 $ 0.06 $ 0.02 $ 0.04 $ 0.04 $ 0.04 $ 0.03 $ 0.02 $ (0.00 ) $ (0.01 ) $ 0.06 $ 0.13 $ 0.13 $ 0.05 Non-GAAP diluted EPS (loss per share) $ 0.01 $ 0.06 $ 0.02 $ 0.04 $ 0.04 $ 0.04 $ 0.03 $ 0.02 $ (0.00 ) $ (0.01 ) $ 0.06 $ 0.13 $ 0.13 $ 0.05 Weighted average shares used to compute Non-GAAP basic earnings per share 14.3 14.1 14.0 13.9 14.0 14.1 14.2 14.1 14.1 13.9 13.7 14.1 14.1 13.8 Weighted average shares used to compute Non-GAAP diluted earnings per share 14.3 14.3 14.0 13.9 14.0 14.1 14.5 14.5 14.1 13.9 13.9 14.1 14.1 13.8 *numbers may not add due to rounding Free Cash Flow Calculation Q123 Q223 Q323 Q423 Q124 Q224 Q324 Q424 Q125 Q225 Q325 FY23 FY24 YTD FY25 Cash Flow from Operations $ 1.1 $ 0.0 $ 1.6 $ 0.4 $ 1.3 $ 1.6 $ 2.3 $ 0.7 $ 1.2 $ 0.7 $ 0.9 $ 3.2 $ 5.9 $ 2.7 Capital Expenditures $ 0.3 $ 0.4 $ 0.4 $ 0.3 $ 0.4 $ 0.4 $ 0.2 $ 0.2 $ 0.2 $ 0.1 $ 0.1 $ 1.5 $ 1.2 $ 0.4 Free Cash Flow $ 0.7 $ (0.3 ) $ 1.2 $ 0.1 $ 0.8 $ 1.2 $ 2.1 $ 0.5 $ 1.0 $ 0.6 $ 0.8 $ 1.7 $ 4.7 $ 2.4 SOURCE: Zedge, Inc. 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