Total revenue for the fourth quarter of 2023 increased to $9.3 million compared to $7.2 million for the fourth quarter of 2022. Digimarc Reports Fourth Quarter and Fiscal Year 2023 Financial Results Annual Recurring Revenue(1) Increases 71% Beaverton, Ore. – February 28, 2024 – Digimarc Corporation (NASDAQ: DMRC) reported financial results for the fourth quarter and fiscal year ended December 31, 2023. "Q4 was another strong quarter for Digimarc. On a year-over-year basis, we accelerated our ARR growth to 7 ...

BEAVERTON, Ore.--(BUSINESS WIRE)--Digimarc Corporation (NASDAQ: DMRC), the pioneer and global leader in digital watermarking, today announced it has joined more than 200 of the nation’s leading artificial intelligence (AI) stakeholders to participate in a Department of Commerce initiative to support the development and deployment of trustworthy and safe AI. Established by the Department of Commerce’s National Institute of Standards and Technology (NIST), the U.S. Artificial Intelligence Safety Institute Con ...

Digimarc, the pioneer and global leader in digital watermarking technologies, released its next-generation digital watermarks featuring more advanced security and greater access control. Digimarc's next-generation digital watermarks represent a step change in state-of-the-art digital watermarking, which is critical to the identification and authentication of physical and digital items. (Graphic: Business Wire)Digimarc, the pioneer and global leader in digital watermarking technologies, released its next-gen ...

Digimarc Corporation (NASDAQ:DMRC) Q3 2023 Results Conference Call November 6, 2023 5:00 PM ET Company Participants Joel Meyer - Chief Legal Officer Riley McCormack - CEO Charles Beck - CFO Conference Call Participants James Ricchiuti - Needham & Company Jeff Van Rhee - Craig-Hallum Capital Operator Greetings, and welcome to the Digimarc Corporation Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your h ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) The company's unaudited consolidated financial statements for Q3 2023 show increased revenue, reduced net loss, and a decrease in total assets [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements for the period ended September 30, 2023, show a year-over-year increase in revenue and a reduction in net loss [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2023, total assets decreased to **$88.8 million** from **$113.8 million**, primarily due to reduced marketable securities Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $44,951 | $64,141 | | **Total Assets** | **$88,842** | **$113,777** | | **Total Current Liabilities** | $13,522 | $10,134 | | **Total Liabilities** | $19,959 | $16,187 | | **Total Shareholders' Equity** | **$68,883** | **$97,590** | [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For Q3 2023, revenue increased to **$9.0 million**, and the net loss narrowed to **$(10.7) million**, reflecting improved financial performance Q3 2023 vs Q3 2022 Financial Performance (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | **Total Revenue** | $8,994 | $7,821 | | Subscription Revenue | $4,811 | $4,086 | | Service Revenue | $4,183 | $3,735 | | Gross Profit | $5,223 | $4,165 | | Operating Loss | $(11,156) | $(15,527) | | **Net Loss** | **$(10,723)** | **$(14,930)** | | Loss Per Share (basic) | $(0.53) | $(0.76) | Nine Months 2023 vs 2022 Financial Performance (in thousands, except per share data) | Metric | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | | **Total Revenue** | $25,567 | $22,979 | | Subscription Revenue | $13,374 | $11,121 | | Service Revenue | $12,193 | $11,858 | | Gross Profit | $14,336 | $11,506 | | Operating Loss | $(37,191) | $(48,492) | | **Net Loss** | **$(35,386)** | **$(47,350)** | | Loss Per Share (basic) | $(1.76) | $(2.51) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly improved to **$(16.7) million** for the nine months ended September 30, 2023 Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(16,679) | $(36,888) | | Net Cash Provided by Investing Activities | $17,529 | $6,926 | | Net Cash (Used in) Provided by Financing Activities | $(2,069) | $56,628 | | **Net (Decrease) Increase in Cash** | **$(1,263)** | **$26,566** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's SaaS platform, revenue disaggregation, significant customer concentration, and other financial disclosures - The company's business is centered on its Digimarc Illuminate SaaS platform, which digitizes products using identifiers like digital watermarks and QR codes to create a 'digital twin' for each item[21](index=21&type=chunk)[22](index=22&type=chunk) Revenue by Major Market (Nine Months Ended Sep 30, in thousands) | Market | 2023 | 2022 | | :--- | :--- | :--- | | Commercial | $13,323 | $11,884 | | Government | $12,244 | $11,095 | | **Total** | **$25,567** | **$22,979** | - The company has significant customer concentration, with Customer A accounting for **48%** of revenue and Customer B for **21%** for the nine months ended Sep 30, 2023[47](index=47&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q3 2023 revenue growth to increased subscription and service revenue, alongside reduced operating expenses, while maintaining sufficient liquidity [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q3 2023 revenue increased by **$1.2 million** (15%) year-over-year, driven by higher subscription and service revenue, while operating expenses decreased by 17% - Q3 revenue growth was driven by higher subscription revenue from new and existing commercial contracts and a larger annual budget from the Central Banks for project work[129](index=129&type=chunk) - Q3 operating expenses decreased by **17%** year-over-year, mainly due to lower severance costs (**$1.4 million**), reduced compensation from lower headcount (**$1.1 million**), and lower contractor expenses (**$0.6 million**)[131](index=131&type=chunk) Annual Recurring Revenue (ARR) Growth (in thousands) | Metric | As of Sep 30, 2023 | As of Sep 30, 2022 | % Increase | | :--- | :--- | :--- | :--- | | ARR | $19,559 | $12,682 | 54% | [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP net loss for Q3 2023 improved to **$(5.9) million**, with gross profit margin increasing to **76%** due to favorable revenue mix and lower costs GAAP vs. Non-GAAP Net Loss (in thousands) | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | GAAP Net Loss | $(10,723) | $(14,930) | | **Non-GAAP Net Loss** | **$(5,936)** | **$(9,300)** | - The increase in Non-GAAP gross profit margin to **76%** in Q3 2023 from **72%** in Q3 2022 was primarily due to higher subscription revenue with a favorable mix and lower platform costs[186](index=186&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Total cash, cash equivalents, and marketable securities decreased to **$33.3 million**, but management believes current liquidity is sufficient for the next 12 months Liquidity Position (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Working Capital | $31,429 | $54,007 | | Total cash, cash equivalents and marketable securities | $33,331 | $52,542 | - Net cash used in operating activities for the first nine months of 2023 improved significantly to **$(16.7) million** from **$(36.9) million** in the prior year period, mainly due to a lower net loss and favorable changes in working capital[194](index=194&type=chunk) - The company believes its current cash and marketable securities will be sufficient to satisfy projected working capital and capital expenditure requirements for at least the next 12 months[197](index=197&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal controls - The CEO and CFO have concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[208](index=208&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[209](index=209&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and required exhibits [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings but expects no material adverse effect on its financial position - There are no ongoing legal proceedings expected to have a material adverse effect on the company's financial statements[211](index=211&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K - As of September 30, 2023, no material changes have been made to the risk factors disclosed in the 2022 Annual Report[212](index=212&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2023, the company repurchased **21,561 shares** at **$35.12 per share** to satisfy tax withholding obligations for restricted stock awards Issuer Purchases of Equity Securities (Q3 2023) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2023 | — | — | | August 2023 | 21,561 | $35.12 | | September 2023 | — | — | | **Total** | **21,561** | **$35.12** | - The share purchases were conducted to satisfy required income tax withholding upon the vesting of employee restricted stock, not as part of a publicly announced buyback program[213](index=213&type=chunk)[214](index=214&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL financial data files - The report includes standard exhibits such as CEO/CFO certifications and interactive data files (Inline XBRL)[216](index=216&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (Exact name of registrant as specified in its charter) Oregon 26-2828185 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) (Address of principal executive offices) (Zip Code) (503) 469-4800 (Registrant's telephone number, including area code) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly ...

Digimarc Corporation (NASDAQ:DMRC) Q2 2023 Earnings Conference Call August 2, 2023 5:00 PM ET Company Participants Joel Meyer - Chief Legal Officer Riley McCormack - Chief Executive Officer Charles Beck - Chief Financial Officer Conference Call Participants Chris Grenga - Needham & Company Jeff Bernstein - Silverberg Bernstein Capital Robin Knipp - Janney Montgomery Scott Operator Ladies and gentlemen, greetings, and welcome to the Digimarc Corporation Second Quarter 2023 Earnings Conference Call. [Operator ...

Digimarc Corporation (NASDAQ:DMRC) Q1 2023 Results Conference Call May 10, 2023 5:00 PM ET Company Participants Joel Meyer - EVP, Chief Legal Officer, Compliance Officer & Corporate Secretary Riley McCormack - CEO, President & Director Charles Beck - EVP, CFO & Treasurer Conference Call Participants Jeff Van Rhee - Craig-Hallum Robin Knipp - Janney Montgomery Matt Collard - PCB Advisory Operator Greetings, and welcome to the Digimarc Corporation First Quarter 2023 Financial Results Conference Call. [Operato ...

Revenue Performance - Total revenue for the three-month period ended March 31, 2023, increased by $0.4 million, or 6%, to $7.8 million compared to $7.4 million in the same period in 2022[120] - Subscription revenue for the three-month period ended March 31, 2023, was $3.885 million, a 2% increase from $3.791 million in 2022[122] - Service revenue for the same period increased by $0.338 million, or 9%, to $3.958 million compared to $3.620 million in 2022[122] - Domestic revenue increased by $0.404 million, or 17%, to $2.767 million in Q1 2023 compared to $2.363 million in Q1 2022[126] - International revenue saw a slight increase of $0.028 million, or 1%, totaling $5.076 million in Q1 2023 compared to $5.048 million in 2022[126] - The government segment's total revenue increased by $0.388 million, or 11%, to $3.960 million in Q1 2023 compared to $3.572 million in Q1 2022[129] Profitability Metrics - Gross profit margin improved to 54% in Q1 2023 from 45% in Q1 2022[119] - Total gross profit for the three months ended March 31, 2023, increased by $0.9 million to $4.244 billion, a 27% increase compared to the same period in 2022[132] - Subscription gross profit rose by $0.3 million, reflecting higher subscription revenue and a favorable mix, resulting in a gross profit margin of 80%, up from 73%[131][133] - Service gross profit increased by $0.5 million, with a gross profit margin of 57%, up from 49%, due to higher service revenue and lower professional services costs[131][134] - Non-GAAP gross profit for the three months ended March 31, 2023, increased by $0.8 million to $5.715 million compared to $4.880 million for the same period in 2022[156] - Non-GAAP gross profit margin improved to 73% for the three months ended March 31, 2023, up from 66% in the same period in 2022[157] Operating Expenses - Total operating expenses decreased by $2.3 million, or 11%, to $19.0 million in Q1 2023 compared to $21.4 million in Q1 2022[121] - Sales and marketing expenses decreased by $1.647 million to $6.298 billion, a 21% reduction, representing 80% of total revenue[135][136] - Research, development, and engineering expenses increased by $1.735 million to $7.826 billion, accounting for 100% of total revenue[136][137] - General and administrative expenses decreased by $1.781 million to $4.627 billion, representing 59% of total revenue[140][142] - Non-GAAP operating expenses decreased by $1.6 million to $15.480 million for the three months ended March 31, 2023, compared to $17.042 million for the same period in 2022[158] Net Loss and Cash Flow - The company reported an operating loss of $188 thousand for Q1 2023, an improvement from a loss of $243 thousand in Q1 2022[119] - The net loss for the three months ended March 31, 2023, was $14.040 million, a reduction of 21% from the net loss of $17.781 million in the same period in 2022[162] - Cash, cash equivalents, and short-term marketable securities totaled $43.025 million as of March 31, 2023, down from $52.542 million as of December 31, 2022[159] - Net cash used in operating activities decreased by $3.112 million to $8.744 million for the three months ended March 31, 2023, compared to $11.856 million for the same period in 2022[162] - Cash flows provided by investing activities increased by $6.217 million for the three months ended March 31, 2023, compared to the same period in 2022[163] Future Outlook and Risks - The company anticipates incurring an additional $21.576 million in stock-based compensation expense through March 31, 2027, for outstanding awards[146] - A significant portion of the company's revenue is concentrated among a few customers, which poses a risk to future revenue stability[171] - The company believes it has one of the world's most extensive patent portfolios in digital watermarking and related fields, which could enhance its competitive advantage[171] - Future investments in research, development, and engineering of products and technology are anticipated to drive growth and market opportunities[171] - The company is participating in the HolyGrail 2.0 initiative, which is expected to demonstrate the utility of its products in the recycling industry[171] - The company is focused on international growth opportunities and plans to invest in these markets in the future[172] - The company anticipates variability in contracted arrangements due to changes in circumstances, which could affect revenue projections[172] - Future financial obligations are expected to be met within the coming fiscal year, indicating a stable liquidity position[172] - The company is monitoring capital market conditions and credit risk exposure, which could impact its cost of capital[172] - The company does not undertake any obligation to publicly update or revise forward-looking statements, emphasizing the uncertainty of future performance[174]

Digimarc Corp (NASDAQ:DMRC) Q4 2022 Earnings Conference Call March 1, 2023 5:00 PM ET Company Participants Joel Meyer - EVP, Chief Legal Officer, Compliance Officer & Corporate Secretary Riley McCormack - CEO, President & Director Charles Beck - EVP, CFO & Treasurer Conference Call Participants James Ricchiuti - Needham & Company Operator Greetings, and welcome to the Digimarc Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recor ...