Revenue Performance - Total revenue for the three-month period ended September 30, 2024, increased by $0.4 million to $9.4 million, compared to $9.0 million for the same period in 2023, primarily driven by a $0.4 million increase in subscription revenue [106]. - Subscription revenue for the nine-month period ended September 30, 2024, increased by $4.0 million to $17.4 million, reflecting a 30% increase compared to $13.4 million for the same period in 2023 [113]. - Subscription revenue accounted for 56% of total revenue for the three-month period ended September 30, 2024, up from 53% in the same period in 2023 [105]. - Total revenue for the three months ended September 30, 2024, was $9.443 billion, reflecting a $449 million (5%) increase compared to the same period in 2023 [121]. - Total commercial revenue for the three months ended September 30, 2024, was $5.382 billion, reflecting a $658 million (14%) increase compared to the same period in 2023 [121]. Operating Expenses - Total operating expenses for the three-month period ended September 30, 2024, increased by $0.9 million to $17.3 million, compared to $16.4 million for the same period in 2023 [108]. - Total operating expenses for the nine-month period ended September 30, 2024, decreased by $0.3 million to $51.2 million, compared to $51.5 million for the same period in 2023 [109]. - Sales and marketing expenses increased by $0.3 million (5%) for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to cash severance costs of $0.6 million [136]. - Research, development, and engineering expenses rose by $0.2 million (3%) for the three months ended September 30, 2024, compared to the same period in 2023, mainly due to higher cash headcount costs [139]. - General and administrative expenses increased by $0.4 million (10%) for the three months ended September 30, 2024, compared to the same period in 2023, driven by higher professional services and consulting costs [142]. Profitability Metrics - Gross profit margin for the three-month period ended September 30, 2024, improved to 62%, compared to 58% for the same period in 2023 [104]. - Total gross profit for the three months ended September 30, 2024, increased by $0.7 million (13%) to $5.897 billion, primarily from higher subscription revenue [129]. - Subscription gross profit margin increased to 86% for the three months ended September 30, 2024, compared to 85% in the same period of 2023 [128]. - Non-GAAP gross profit for the three months ended September 30, 2024, increased by $0.5 million, primarily reflecting higher subscription revenue [162]. - Non-GAAP gross profit margin for the three months ended September 30, 2024, increased to 78% compared to 76% for the same period in 2023 [163]. Revenue Sources - Service revenue for the three-month period ended September 30, 2024, remained flat at $4.2 million compared to the same period in 2023 [115]. - Domestic revenue decreased by $0.9 million (31%) for the three months ended September 30, 2024, primarily due to $0.7 million lower subscription revenue [117]. - International revenue increased by $1.4 million (22%) for the three months ended September 30, 2024, driven by $1.1 million higher subscription revenue from international customers [119]. - Government service revenue decreased by $0.2 million (5%) for the three months ended September 30, 2024, due to timing of program work with Central Banks [123]. Financial Position - The company reported a net loss of $30.36 million for the nine months ended September 30, 2024, compared to a net loss of $35.39 million for the same period in 2023, reflecting a decrease of 14% [170]. - Cash flows used in operating activities for the nine months ended September 30, 2024, increased by $5.7 million compared to the same period in 2023, primarily due to unfavorable timing of changes in operating assets and liabilities [170]. - The company’s working capital as of September 30, 2024, was $35.41 million, up from $24.56 million as of December 31, 2023 [165]. - Total cash, cash equivalents, and marketable securities increased by $6.5 million from December 31, 2023, to September 30, 2024, primarily due to net proceeds from the issuance of common stock [166]. - Cash flows from financing activities for the nine months ended September 30, 2024, increased by $31.4 million, mainly due to $32.2 million of net cash proceeds from a registered direct stock offering [172]. Future Outlook and Risks - The company may seek additional financing to support growth initiatives, acquisitions, or investments in complementary businesses and technologies [175]. - The company anticipates that its future performance could be affected by various risk factors, including concentration of revenue among few customers and market growth opportunities [178]. - The company believes it has one of the world's most extensive patent portfolios in digital watermarking and related fields, which may impact future revenue [176]. Compliance and Controls - The company conducted an evaluation of its disclosure controls and procedures, concluding they were effective as of the end of the reporting period [181]. - There were no changes in internal control over financial reporting that materially affected the company during the three-month period ended September 30, 2024 [182]. - The company does not expect any ongoing legal proceedings to have a material adverse effect on its financial position or results of operations [183].

Revenue Performance - Annual recurring revenue (ARR) decreased to $18.7 million as of September 30, 2024, down from $19.6 million as of September 30, 2023, reflecting a $0.9 million decrease due to delayed contract renewals [3] - Subscription revenue for Q3 2024 increased to $5.3 million, compared to $4.8 million in Q3 2023, primarily driven by higher revenue from new and existing contracts [4] - Total revenue for Q3 2024 increased to $9.4 million, up from $9.0 million in Q3 2023, indicating a growth of approximately 4.4% year-over-year [5] Profitability Metrics - Gross profit margin for Q3 2024 improved to 62%, compared to 58% in Q3 2023, with subscription gross profit margin rising to 86% from 85% [6] - Non-GAAP gross profit margin for Q3 2024 increased to 78%, compared to 76% in Q3 2023, reflecting improved operational efficiency [6] - GAAP gross profit for Q3 2024 was $5,897,000, up from $5,223,000 in Q3 2023, representing a 12.9% increase [18] Operating Expenses and Losses - Operating expenses for Q3 2024 increased to $17.3 million, up from $16.4 million in Q3 2023, primarily due to severance costs and changes in labor costs [7] - Net loss for Q3 2024 was $10.8 million, or ($0.50) per share, compared to a net loss of $10.7 million, or ($0.53) per share, in Q3 2023 [8] - Non-GAAP net loss for Q3 2024 was $6,117,000, compared to $5,936,000 in Q3 2023, indicating a slight increase in losses [18] Cash and Assets - Cash, cash equivalents, and marketable securities totaled $33.7 million as of September 30, 2024, compared to $27.2 million at December 31, 2023 [8] - Total current assets increased to $44,794,000 as of September 30, 2024, compared to $37,080,000 at December 31, 2023, reflecting a 20.5% growth [19] - Cash and cash equivalents, along with marketable securities, totaled $33,686,000 at the end of Q3 2024, up from $27,182,000 at the beginning of the period [21] Liabilities and Equity - Total liabilities decreased to $14,864,000 as of September 30, 2024, from $18,625,000 at December 31, 2023, a reduction of 20.0% [20] - Shareholders' equity increased to $70,160,000 as of September 30, 2024, compared to $61,927,000 at December 31, 2023, reflecting a 13.4% increase [20] Future Outlook - The company anticipates significant future opportunities, despite current revenue not reflecting this potential [2] - Digimarc's partnership with global central banks continues to support its market position in digital watermarking technologies [13] Cash Flow - The company reported a net cash used in operating activities of $22,337,000 for the nine months ended September 30, 2024, compared to $16,679,000 for the same period in 2023 [21] - The company issued common stock net of issuance costs amounting to $32,218,000 during the nine months ended September 30, 2024 [21]

Table of Contents Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol Name of Each Exchange on Which Registered Common Stock, $0.001 Par Value Per Share DMRC The NASDAQ Stock Market LLC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) ...

Digimarc Corporation (NASDAQ:DMRC) Q2 2024 Earnings Conference Call August 13, 2024 5:00 PM ET Company Participants George Karamanos - Chief Legal Officer Riley McCormack - Chief Executive Officer Charles Beck - Chief Financial Officer Conference Call Participants Joshua Reilly - Needham Jeff Van Rhee - Craig-Hallum Jeff Bernstein - Silverberg Bernstein Operator Greetings, and welcome to the Digimarc Corporation's Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, ...

1 Quarterly Earnings Snapshot Second Quarter 2024 Safe Harbor Statement This presentation includes "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which reflect management's current view regarding future events and performance. Although we believe these statements are based on reasonable expectations and beliefs, they are subject to risks and uncertainties that are difficult to predi ...

Exhibit 99.1 Digimarc Reports Second Quarter 2024 Financial Results Annual Recurring Revenue(1) Increases 44% Subscription Gross Profit Margin(2) Expands to 89% Beaverton, Ore. – August 13, 2024 – Digimarc Corporation (NASDAQ: DMRC) reported financial results for the second quarter ended June 30, 2024. "Digimarc made significant progress on multiple fronts in Q2, highlighted by three exciting developments likely to have a profound impact on the second half of this year and beyond," said Digimarc CEO Riley M ...

Digimarc believes that providing non-GAAP financial measures, together with the reconciliation within our SEC filings to GAAP financial measures, helps management and investors make comparisons between us and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measures an ...

Digimarc Corporation (NASDAQ:DMRC) Q1 2024 Earnings Conference Call May 2, 2024 5:00 PM ET Company Participants George Karamanos - Chief Legal Officer Riley McCormack - Chief Executive Officer Charles Beck - Chief Financial Officer Conference Call Participants Joshua Reilly - Needham Jeff Van Rhee - Craig-Hallum Capital Group Jeff Bernstein - TD Cowen Operator Greetings, and welcome to the Digimarc’s First Quarter 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-34108 DIGIMARC CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdictio ...

Exhibit 99.1 Digimarc Reports First Quarter 2024 Financial Results Annual Recurring Revenue(1) Increases 85% Subscription Gross Profit Margin(2) Expands to 87% "Q1 was another strong quarter for Digimarc. Compared to the first quarter of 2023, we grew quarter-ending Annual Recurring Revenue (ARR) 85%, grew commercial subscription revenue 52%, and expanded subscription gross profit margin 7.5 percentage points to 87.0%," said Digimarc CEO Riley McCormack. "We are focused on positioning ourselves to convert o ...