Digimarc Q3 2026 revenue falls to $6.4M from $7.6M
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Digimarc Corp (DMRC) reported third-quarter 2026 revenue of $6.4 million, compared with $7.6 million a year earlier; subscription revenue was $3.2 million versus $4.6 million. Ending ARR was $10.8 million at September 30, 2026, versus $15.8 million at September 30, 2025. The company attributed the ARR decrease mainly to a commercial contract expiration and another contract's step-down, partly offset by $0.7 million of net increases from new and existing contracts.
GAAP gross profit margin was 55%, versus 58%. Net loss attributable to Digimarc was $8.1 million ($0.36 per diluted share), compared with $8.2 million ($0.38); non-GAAP net loss attributable to Digimarc was $2.9 million ($0.13 per diluted share), versus $2.2 million ($0.10). Quarterly free cash flow use was $4.3 million, compared with $3.1 million. For the nine months ended September 30, 2026, operating cash use was $6.8 million, versus $12.8 million in the same period of 2025. Cash, cash equivalents and marketable securities totaled $22.1 million at September 30, 2026, compared with $12.9 million at December 31, 2025.
CEO Paul Carreiro said new customer commitments across retail and CPG moved from pipeline to signed business earlier than expected; management's focus is recurring, predictable revenue growth in 2027.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month operating cash use narrowed to $6.8 million from $12.8 million.
Negative
- Moderate pointQuarterly revenue fell to $6.4 million from $7.6 million year over year.
- Moderate pointEnding ARR declined to $10.8 million from $15.8 million year over year.
- Moderate pointQuarterly non-GAAP net loss widened to $2.9 million from $2.2 million.
- Moderate pointQuarterly free cash flow use rose to $4.3 million from $3.1 million.
Filing Explained
Digimarc reports
8-K Event Classification
Key Figures
Key Terms
Annual Recurring Revenue (ARR) financial
non-GAAP net loss financial
free cash flow financial
non-controlling interest financial
capitalized patent costs financial
Earnings Snapshot
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was DMRC's revenue in Q3 2026?
What drove DMRC's ARR decline?
What was DMRC's non-GAAP net loss in Q3 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
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(Commission
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(IRS Employer
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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The
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Item 2.02.
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Results of Operations and Financial Condition
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Item 9.01.
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Financial Statements and Exhibits
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ExhibitNo.
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Description
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99.1
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Press Release issued by Digimarc Corporation, dated November 12, 2026 (furnished pursuant to Item 2.02 hereof).
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99.2
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Investor Presentation issued by Digimarc Corporation, dated November 12, 2026 (furnished pursuant to Item 2.02 hereof). | |
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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By:
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/s/ Charles Beck
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Charles Beck
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Chief Financial Officer, Treasurer and Secretary
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Exhibit 99.1
Digimarc Reports Third Quarter 2026 Financial Results
Narrowing our Aperture to Accelerate
Beaverton, Ore. – November 12, 2026 – Digimarc Corporation (NASDAQ: DMRC) reported financial results for the third quarter ended September 30, 2026.
"Last quarter we said our new execution focus was starting to show results. Since then, many of those results moved from pipeline to signed business earlier than expected, with new customers committing to our solutions across retail and CPG," said Paul Carreiro, Digimarc CEO. "Our commercial leadership team is mostly in place, and our focus is clear: turn this momentum into recurring and predictable revenue growth in 2027."
Third Quarter 2026 Financial Results
Total revenue for the third quarter of 2026 was $6.4 million compared to $7.6 million for the third quarter of 2025.
Subscription revenue for the third quarter of 2026 was $3.2 million compared to $4.6 million for the third quarter of 2025. The decrease reflects $0.8 million of lower commercial subscription revenue from the expiration of a commercial contract in October 2025 and $0.6 million of lower commercial subscription revenue from the step-down of a commercial contract in June 2026.
Service revenue for the third quarter of 2026 was $3.3 million compared to $3.1 million for the third quarter of 2025. The increase primarily reflects higher service revenue from a commercial customer.
Ending ARR(1) as of September 30, 2026 was $10.8 million compared to $15.8 million as of September 30, 2025. The decrease primarily reflects the expiration of a commercial contract in October 2025 that accounted for $3.1 million of ARR and the step-down in another commercial contract in June 2026 that accounted for $2.6 million of ARR, partially offset by $0.7 million of net increases to ARR from new and existing commercial contracts.
Gross profit margin for the third quarter of 2026 was 55% compared to 58% for the third quarter of 2025. Subscription gross profit margin(2) increased to 87% from 86% and service gross profit margin(2) increased to 60% from 57% for the third quarter of 2026 compared to the third quarter of 2025.
Non-GAAP gross profit margin for the third quarter of 2026 was 82% compared to 81% for the third quarter of 2025.
Operating expenses for the third quarter of 2026 were $11.5 million compared to $12.8 million for the third quarter of 2025. The decrease primarily reflects decreases in stock-based compensation expense of $0.7 million, bad debt expense of $0.5 million, and other costs of $0.3 million, partially offset by a $0.4 million increase in cash severance costs.
Non-GAAP operating expenses for the third quarter of 2026 were $8.0 million compared to $8.6 million for the third quarter of 2025.
Net loss attributable to Digimarc Corporation for the third quarter of 2026 was $8.1 million or ($0.36) per diluted share compared to $8.2 million or ($0.38) per diluted share for the third quarter of 2025.
Non-GAAP net loss attributable to Digimarc Corporation for the third quarter of 2026 was $2.9 million or ($0.13) per diluted share compared to $2.2 million or ($0.10) per diluted share for the third quarter of 2025.
At September 30, 2026, cash, cash equivalents and marketable securities totaled $22.1 million compared to $12.9 million at December 31, 2025. Free cash flow usage for the third quarter of 2026 was $4.3 million compared to $3.1 million for the third quarter of 2025.
(1) Annual Recurring Revenue (ARR) is a company performance metric calculated as the aggregation of annualized subscription fees from all of our commercial contracts as of the measurement date.
(2) Cost of revenue, Gross profit and Gross profit margin for Subscription and Service excludes amortization expense on acquired intangible assets.
Conference Call
Digimarc will hold a conference call today (Thursday, November 12, 2026) to provide an update on strategic priorities, quarterly highlights, and these financial results. CEO Paul Carreiro and CFO Charles Beck will host the call starting at 5:00 p.m. Eastern time (2:00 p.m. Pacific time). A question and answer session will follow management’s prepared remarks.
The conference call and investor presentation will be broadcast live and available for replay here and in the investor section of the company’s website. The investor presentation will also be posted to the company’s website shortly before the call.
For those who wish to call in via telephone to ask a question, please dial the number below at least five minutes before the scheduled start time. We encourage you to also login to the live broadcast so you can follow along with the investor presentation.
Toll Free number: 877-407-0832
International number: 201-689-8433
Conference ID number: 13754825
Company Contact:
Charles Beck
Chief Financial Officer
Charles.Beck@digimarc.com
+1 503-469-4721
###
About Digimarc
Digimarc (NASDAQ: DMRC) helps organizations protect against fraud, verify authenticity and establish trusted identity across physical and digital environments. Through persistent digital identity embedded directly into products, packaging and content, Digimarc enables organizations to identify, authenticate and trace the things that matter. For more than three decades, Digimarc technology has helped protect global currency. Today, organizations use this technology to protect products, strengthen content authenticity and enable more trusted interactions across connected physical and digital environments. Visit www.digimarc.com to learn more.
Forward-Looking Statements
Except for historical information contained in this release, the matters described in this release contain various “forward-looking statements.” These forward-looking statements include statements identified by terminology such as “will,” “should,” "may," “expects,” “estimates,” “predicts” and “continue” or other derivations of these or other comparable terms. These forward-looking statements are statements of management’s opinion and are subject to various assumptions, risks, uncertainties and changes in circumstances. Actual results may vary materially from those expressed or implied from the statements in this release as a result of changes in economic, business and regulatory factors. More detailed information about risk factors that may affect actual results are outlined in the company’s Form 10-K for the year ended December 31, 2025, and in subsequent periodic reports filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date of this release. Except as required by law, Digimarc undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this release.
Non-GAAP Financial Measures
This release contains the following non-GAAP financial measures: Non-GAAP gross profit, Non-GAAP gross profit margin, Non-GAAP operating expenses, Non-GAAP net loss, Non-GAAP net loss per diluted share, and free cash flow. See below for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure. These non-GAAP financial measures are an important measure of our operating performance because they allow management, investors and analysts to evaluate and assess our core operating results from period-to-period after removing non-cash and non-recurring activities that affect comparability. Our management uses these non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparisons.
Digimarc believes that providing these non-GAAP financial measures, together with the reconciliation to GAAP, 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 and the corresponding GAAP measures provided by each company under applicable SEC rules. These non-GAAP financial measures are not measurements of financial performance or liquidity under GAAP. In order to facilitate a clear understanding of its consolidated historical operating results, investors should examine Digimarc’s non-GAAP financial measures in conjunction with its historical GAAP financial information, and investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternatives to, GAAP financial measures. Non-GAAP financial measures may not be indicative of the historical operating results of the Company nor are they intended to be predictive of potential future results.
Digimarc Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
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Three Months Ended |
Nine Months Ended |
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September 30, |
September 30, |
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2026 |
2025 |
2026 |
2025 |
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Revenue: |
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Subscription |
$ | 3,187 | $ | 4,567 | $ | 11,297 | $ | 14,505 | ||||||||
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Service |
3,259 | 3,060 | 10,115 | 10,500 | ||||||||||||
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Total revenue |
6,446 | 7,627 | 21,412 | 25,005 | ||||||||||||
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Cost of revenue: |
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Subscription (2) |
404 | 642 | 1,276 | 2,101 | ||||||||||||
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Service (2) |
1,313 | 1,330 | 4,161 | 4,120 | ||||||||||||
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Amortization expense on acquired intangible assets |
1,204 | 1,209 | 3,613 | 3,546 | ||||||||||||
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Total cost of revenue |
2,921 | 3,181 | 9,050 | 9,767 | ||||||||||||
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Gross profit: |
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Subscription (2) |
2,783 | 3,925 | 10,021 | 12,404 | ||||||||||||
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Service (2) |
1,946 | 1,730 | 5,954 | 6,380 | ||||||||||||
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Amortization expense on acquired intangible assets |
(1,204 | ) | (1,209 | ) | (3,613 | ) | (3,546 | ) | ||||||||
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Total gross profit |
3,525 | 4,446 | 12,362 | 15,238 | ||||||||||||
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Gross profit margin: |
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Subscription (2) |
87 | % | 86 | % | 89 | % | 86 | % | ||||||||
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Service (2) |
60 | % | 57 | % | 59 | % | 61 | % | ||||||||
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Total |
55 | % | 58 | % | 58 | % | 61 | % | ||||||||
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Operating expenses: |
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Sales and marketing |
2,622 | 2,852 | 7,118 | 11,161 | ||||||||||||
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Research, development and engineering |
3,755 | 4,315 | 11,154 | 16,485 | ||||||||||||
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General and administrative |
4,882 | 5,355 | 20,748 | 15,614 | ||||||||||||
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Amortization expense on acquired intangible assets |
287 | 288 | 863 | 847 | ||||||||||||
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Total operating expenses |
11,546 | 12,810 | 39,883 | 44,107 | ||||||||||||
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Operating loss |
(8,021 | ) | (8,364 | ) | (27,521 | ) | (28,869 | ) | ||||||||
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Other income, net |
121 | 217 | 521 | 796 | ||||||||||||
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Loss before income taxes |
(7,900 | ) | (8,147 | ) | (27,000 | ) | (28,073 | ) | ||||||||
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Provision for income taxes |
(37 | ) | (5 | ) | (34 | ) | (29 | ) | ||||||||
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Net loss |
(7,937 | ) | (8,152 | ) | (27,034 | ) | (28,102 | ) | ||||||||
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Net income attributable to non-controlling interest |
152 | — | 135 | — | ||||||||||||
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Net loss attributable to Digimarc Corporation |
$ | (8,089 | ) | $ | (8,152 | ) | $ | (27,169 | ) | $ | (28,102 | ) | ||||
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Net loss per share: |
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Net loss per share attributable to Digimarc Corporation common shareholders — basic |
$ | (0.36 | ) | $ | (0.38 | ) | $ | (1.22 | ) | $ | (1.30 | ) | ||||
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Net loss per share attributable to Digimarc Corporation common shareholders — diluted |
$ | (0.36 | ) | $ | (0.38 | ) | $ | (1.22 | ) | $ | (1.30 | ) | ||||
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Weighted average shares outstanding — basic |
22,508 | 21,709 | 22,263 | 21,614 | ||||||||||||
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Weighted average shares outstanding — diluted |
22,508 | 21,709 | 22,263 | 21,614 | ||||||||||||
Digimarc Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share amounts)
(Unaudited)
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Three Months Ended |
Nine Months Ended |
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September 30, |
September 30, |
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2026 |
2025 |
2026 |
2025 |
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GAAP gross profit |
$ | 3,525 | $ | 4,446 | $ | 12,362 | $ | 15,238 | ||||||||
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Amortization of acquired intangible assets |
1,204 | 1,209 | 3,613 | 3,546 | ||||||||||||
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Amortization and write-off of other intangible assets |
209 | 222 | 622 | 660 | ||||||||||||
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Stock-based compensation |
368 | 336 | 1,116 | 726 | ||||||||||||
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Non-GAAP gross profit |
$ | 5,306 | $ | 6,213 | $ | 17,713 | $ | 20,170 | ||||||||
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Non-GAAP gross profit margin |
82 | % | 81 | % | 83 | % | 81 | % | ||||||||
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GAAP operating expenses |
$ | 11,546 | $ | 12,810 | $ | 39,883 | $ | 44,107 | ||||||||
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Depreciation and write-off of property and equipment |
(124 | ) | (146 | ) | (428 | ) | (430 | ) | ||||||||
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Amortization of acquired intangible assets |
(287 | ) | (288 | ) | (863 | ) | (847 | ) | ||||||||
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Amortization and write-off of other intangible assets |
(114 | ) | (128 | ) | (335 | ) | (329 | ) | ||||||||
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Amortization of lease right of use assets under operating leases |
(128 | ) | (108 | ) | (367 | ) | (309 | ) | ||||||||
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Stock-based compensation |
(2,812 | ) | (3,529 | ) | (11,998 | ) | (8,170 | ) | ||||||||
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Corporate reorganization expenses |
(56 | ) | — | (1,713 | ) | — | ||||||||||
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Non-GAAP operating expenses |
$ | 8,025 | $ | 8,611 | $ | 24,179 | $ | 34,022 | ||||||||
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GAAP net loss |
$ | (7,937 | ) | $ | (8,152 | ) | $ | (27,034 | ) | $ | (28,102 | ) | ||||
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Total adjustments to gross profit |
1,781 | 1,767 | 5,351 | 4,932 | ||||||||||||
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Total adjustments to operating expenses |
3,521 | 4,199 | 15,704 | 10,085 | ||||||||||||
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Non-GAAP net loss |
(2,635 | ) | (2,186 | ) | (5,979 | ) | (13,085 | ) | ||||||||
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Non-GAAP net income attributable to non-controlling interest |
292 | - | 337 | - | ||||||||||||
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Non-GAAP net loss attributable to Digimarc Corporation |
$ | (2,927 | ) | $ | (2,186 | ) | $ | (6,316 | ) | $ | (13,085 | ) | ||||
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GAAP net loss per diluted share |
$ | (0.36 | ) | $ | (0.38 | ) | $ | (1.22 | ) | $ | (1.30 | ) | ||||
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Non-GAAP net loss attributable to Digimarc Corporation |
$ | (2,927 | ) | $ | (2,186 | ) | $ | (6,316 | ) | $ | (13,085 | ) | ||||
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Non-GAAP net loss per diluted share attributable to Digimarc Corporation common shareholders |
$ | (0.13 | ) | $ | (0.10 | ) | $ | (0.28 | ) | $ | (0.61 | ) | ||||
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Free cash flow |
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Cash flows from operating activities |
$ | (4,196 | ) | $ | (2,596 | ) | $ | (6,833 | ) | $ | (12,770 | ) | ||||
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Purchase of property and equipment |
(22 | ) | (221 | ) | (117 | ) | (474 | ) | ||||||||
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Capitalized patent costs |
(130 | ) | (257 | ) | (320 | ) | (465 | ) | ||||||||
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Free cash flow |
$ | (4,348 | ) | $ | (3,074 | ) | $ | (7,270 | ) | $ | (13,709 | ) | ||||
Digimarc Corporation
Consolidated Balance Sheet Information
(in thousands)
(Unaudited)
|
September 30, |
December 31, |
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2026 |
2025 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 20,690 | $ | 9,820 | ||||
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Marketable securities |
1,363 | 3,046 | ||||||
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Trade accounts receivable, net |
4,238 | 6,513 | ||||||
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Other current assets |
3,282 | 1,961 | ||||||
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Total current assets |
29,573 | 21,340 | ||||||
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Property and equipment, net |
780 | 1,104 | ||||||
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Intangibles, net |
12,245 | 17,045 | ||||||
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Goodwill |
8,962 | 9,056 | ||||||
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Lease right of use assets |
2,871 | 3,238 | ||||||
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Other assets |
1,444 | 1,175 | ||||||
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Total assets |
$ | 55,875 | $ | 52,958 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable and other accrued liabilities |
$ | 7,394 | $ | 4,359 | ||||
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Deferred revenue |
3,518 | 3,993 | ||||||
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Total current liabilities |
10,912 | 8,352 | ||||||
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Long-term lease liabilities |
3,553 | 4,314 | ||||||
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Other long-term liabilities |
135 | 63 | ||||||
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Total liabilities |
14,600 | 12,729 | ||||||
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Shareholders’ equity: |
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Preferred stock |
50 | 50 | ||||||
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Common stock |
27 | 22 | ||||||
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Additional paid-in capital |
452,191 | 424,665 | ||||||
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Accumulated deficit |
(410,256 | ) | (383,087 | ) | ||||
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Accumulated other comprehensive loss |
(1,735 | ) | (1,421 | ) | ||||
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Total shareholders’ equity - Digimarc Corporation |
40,277 | 40,229 | ||||||
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Non-controlling interest |
998 | — | ||||||
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Total equity |
41,275 | 40,229 | ||||||
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Total liabilities and equity |
$ | 55,875 | $ | 52,958 | ||||
Digimarc Corporation
Consolidated Cash Flow Information
(in thousands)
(Unaudited)
|
Nine Months Ended |
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September 30, |
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2026 |
2025 |
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Cash flows from operating activities: |
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Net loss |
$ | (27,034 | ) | $ | (28,102 | ) | ||
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and write-off of property and equipment |
424 | 430 | ||||||
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Amortization of acquired intangible assets |
4,476 | 4,393 | ||||||
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Amortization and write-off of other intangible assets |
957 | 989 | ||||||
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Amortization of lease right of use assets under operating leases |
367 | 309 | ||||||
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Stock-based compensation |
12,645 | 8,896 | ||||||
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Increase (decrease) in allowance for doubtful accounts |
(6 | ) | 681 | |||||
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Changes in operating assets and liabilities: |
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Trade accounts receivable |
2,329 | (1,207 | ) | |||||
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Other current assets |
(1,618 | ) | 1,139 | |||||
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Other assets |
(484 | ) | (358 | ) | ||||
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Accounts payable and other accrued liabilities |
2,180 | 245 | ||||||
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Deferred revenue |
(469 | ) | 443 | |||||
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Lease liability and other long-term liabilities |
(600 | ) | (628 | ) | ||||
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Net cash provided by (used in) operating activities |
(6,833 | ) | (12,770 | ) | ||||
|
Cash flows from investing activities: |
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|
Purchase of property and equipment |
(117 | ) | (474 | ) | ||||
|
Capitalized patent costs |
(320 | ) | (465 | ) | ||||
|
Proceeds from maturities of marketable securities |
2,811 | 15,352 | ||||||
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Purchases of marketable securities |
(1,127 | ) | (2,448 | ) | ||||
|
Net cash provided by (used in) investing activities |
1,247 | 11,965 | ||||||
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Cash flows from financing activities: |
||||||||
|
Issuance of common stock, net of issuance costs |
18,265 | — | ||||||
|
Non-controlling interest capital contributions |
56 | — | ||||||
|
Purchase of common stock |
(1,844 | ) | (2,467 | ) | ||||
|
Repayment of loans |
(17 | ) | (31 | ) | ||||
|
Net cash provided by (used in) financing activities |
16,460 | (2,498 | ) | |||||
|
Effect of exchange rate on cash |
(4 | ) | 39 | |||||
|
Net increase (decrease) in cash and cash equivalents |
$ | 10,870 | $ | (3,264 | ) | |||
|
Cash, cash equivalents and marketable securities at beginning of period |
$ | 12,866 | $ | 28,730 | ||||
|
Cash, cash equivalents and marketable securities at end of period |
22,053 | 12,562 | ||||||
|
Net increase (decrease) in cash, cash equivalents and marketable securities |
$ | 9,187 | $ | (16,168 | ) | |||
###
Exhibit 99.2
