Digimarc(US:DMRC)2025-10-30 21:00Financial Performance - Q3'25 ending Annual Recurring Revenue (ARR) was $15.8 million, compared to $18.7 million in Q3'24[29] - Q3'25 non-GAAP net loss was $2.2 million, a 64% improvement from Q3'24's $6.0 million loss[32] - Q3'25 free cash flow was -$3.1 million, a 58% improvement from Q3'24's -$7.3 million[34] - Operating expenses in Q3'25 decreased by 26% year-over-year, while non-GAAP operating expenses decreased by 39%[10] Business Strategy & Outlook - The company expects ARR to trough in Q4'25 and re-accelerate into 2026, driven by gift card solutions and digital authentication growth[31] - The company remains on track to generate positive non-GAAP net income and positive free cash flow in Q4'25[10] - The first Digimarc-protected gift cards reached shelves in August, and multiple major retailers are expected to start selling them within the next two quarters[10] - The company is in discussions with 8 gift card manufacturers to support the broader rollout of Digimarc-protected gift cards[18] Market Focus - An estimated 5+ billion gift cards are printed each year in the US alone[18] - The company closed multiple upsell opportunities in the product authentication space, including expansion to the 6th country of a global tobacco company[10] - The company has narrowed its focus in digital authentication to four use cases: leak detection, internal compliance, piracy prevention, and royalty monitoring[22]