DMRC
$15.68
Digimarc
($.08)
(.51%)
Earnings Details
1st Quarter March 2020
Wednesday, April 29, 2020 4:05:00 PM
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Summary

Digimarc (DMRC) Recent Earnings

Digimarc (DMRC) reported a 1st Quarter March 2020 loss of $0.74 per share on revenue of $6.2 million.. Revenue grew 9.3% on a year-over-year basis.

Digimarc Corporation develops solutions, licenses intellectual property, and provides development services to global business partners across industries.

Results
Reported Earnings
($0.74)
Earnings Whisper
-
Consensus Estimate
Reported Revenue
$6.2 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Digimarc Reports First Quarter 2020 Financial Results

BEAVERTON, Ore., April 29, 2020 /PRNewswire/ -- Digimarc Corporation (NASDAQ: DMRC), creator of the Digimarc Platform for automatic identification, reported financial results for the first quarter ended March 31, 2020.

First Quarter 2020 Financial Results
Revenue for the first quarter of 2020 increased nine percent to $6.2 million compared to $5.7 million in the first quarter of 2019. The increase in revenue was primarily due to higher subscription revenue from Retail customers.

Operating expenses for the first quarter of 2020 increased seven percent to $13.0 million compared to $12.2 million in the same quarter a year-ago. The increase in operating expenses was primarily due to higher headcount and routine annual compensation adjustments for employees.

Operating loss for the first quarter of 2020 increased four percent to $9.1 million compared to $8.7 million in the first quarter of 2019. The increased operating loss was primarily due to higher operating expenses, partially offset by higher revenue.

Net loss for the first quarter of 2020 increased five percent to $8.9 million or $(0.74) per diluted share compared to net loss of $8.5 million or $(0.74) per diluted share in the same quarter a year-ago.

At quarter-end, cash, cash equivalents and marketable securities totaled $30.6 million compared to $36.8 million at December 31, 2019.

Conference Call
Digimarc will hold a conference call today (Wednesday, April 29, 2020) to discuss these results, as well as provide an update on market conditions and execution of strategy. Chairman and CEO Bruce Davis 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 presentation.

The conference call will be broadcast live and available for replay here and in the investor section of the company's website. The conference call script will also be posted to the company's website shortly before the call.

For those who wish to listen to the call via telephone, please dial the number below at least five minutes prior to the scheduled start time:

Toll-Free Number: 866-562-9934
International Number: 706-679-0638
Conference ID: 7861309

If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.

About Digimarc
Digimarc Corporation (NASDAQ: DMRC) is a pioneer in the automatic identification of media, including packaging, other commercial print, digital images, audio and video. The Digimarc Platform provides innovative and comprehensive automatic identification software and services to simplify search, and transform information discovery through unparalleled reliability, efficiency and security. The Digimarc Platform enables applications that benefit retailers and consumer brands, national and state government agencies, media and entertainment industries, and others. Digimarc is based in Beaverton, Oregon with a growing supplier network around the world. Visit digimarc.com and follow us @digimarc to learn more about The Barcode of Everything®.

Forward-looking Statements
With the exception of 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," "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/or regulatory factors. More detailed information about risk factors that may affect actual results are set forth in the company's Form 10-K for the year ended December 31, 2019 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.

Digimarc Corporation

Consolidated Income Statement Information

(in thousands, except per share amounts)

(Unaudited)






Three-Month Information


March 31,


March 31,


2020


2019

Revenue:




   Service

$    3,738


$    3,814

   Subscription

2,451


1,846

      Total revenue

6,189


5,660





Cost of revenue:




   Service

1,684


1,645

   Subscription

514


489

      Total cost of revenue

2,198


2,134





Gross profit:




   Service

2,054


2,169

   Subscription

1,937


1,357

      Total gross profit

3,991


3,526





Gross margin:




   Service

55%


57%

   Subscription

79%


74%

      Percentage of gross profit to total revenue

64%


62%





Operating expenses:




   Sales and marketing

5,246


4,950

   Research, development and engineering

4,433


4,038

   General and administrative

3,367


3,210

      Total operating expenses

13,046


12,198





Operating loss

(9,055)


(8,672)





Other income, net

142


237





Loss before income taxes

(8,913)


(8,435)





Benefit (provision) for income taxes

5


(28)

Net loss

$   (8,908)


$   (8,463)





Earnings (loss) per common share:




Loss per common share - basic

$    (0.74)


$    (0.74)

Loss per common share - diluted

$    (0.74)


$    (0.74)

   Weighted average common shares outstanding - basic

12,037


11,487

   Weighted average common shares outstanding - diluted

12,037


11,487

 

Digimarc Corporation

Consolidated Balance Sheet Information

(in thousands)

(Unaudited)










March 31,


December 31,


2020


2019

Assets




Current assets:




Cash and cash equivalents (1)

$  10,250


$         11,213

Marketable securities (1)

20,320


25,604

Trade accounts receivable, net 

3,959


4,021

Other current assets 

2,118


2,456

Total current assets 

36,647


43,294

Property and equipment, net 

3,539


3,650

Intangibles, net 

6,629


6,670

Goodwill

1,114


1,114

Other assets

2,524


2,660

Total assets 

$  50,453


$         57,388





Liabilities and Shareholders' Equity




Current liabilities:




Accounts payable and other accrued liabilities

$    2,349


$          2,272

Deferred revenue

3,015


3,172

Total current liabilities 

5,364


5,444

Lease liability and other long-term liabilities

2,346


2,494

Total liabilities 

7,710


7,938





Commitments and contingencies








Shareholders' equity:




   Preferred stock

50


50

   Common stock

13


12

   Additional paid-in capital

190,303


188,103

   Accumulated deficit

(147,623)


(138,715)

Total shareholders' equity 

42,743


49,450





Total liabilities and shareholders' equity 

$  50,453


$         57,388



(1)

Aggregate cash, cash equivalents, short-term marketable securities was $30,570 and $36,817 at March 31, 2020 and December 31, 2019, respectively.

 

Digimarc Corporation

Consolidated Cash Flow Information

(in thousands)

(Unaudited)






Three-Month Information


March 31,


March 31,


2020


2019

Cash flows from operating activities:




  Net loss

$   (8,908)


$   (8,463)

  Adjustments to reconcile net loss to net cash used in operating activities:




    Depreciation, amortization and write-off of property and equipment

374


357

    Amortization and write-off of intangibles

201


180

    Stock-based compensation

2,195


2,037

  Changes in operating assets and liabilities:




      Trade accounts receivable

62


161

      Other current assets

338


74

      Other assets

136


(33)

      Accounts payable and other accrued liabilities

61


800

      Deferred revenue

(146)


(393)

      Lease liability and other long-term liabilities

(159)


(174)

        Net cash used in operating activities

(5,846)


(5,454)





Cash flows from investing activities:




    Purchase of property and equipment

(235)


(194)

    Capitalized patent costs

(137)


(153)

    Maturity of marketable securities

11,691


6,744

    Purchase of marketable securities

(6,407)


(3,559)

        Net cash provided by investing activities

4,912


2,838





Cash flows from financing activities:




    Issuance of common stock, net of issuance costs

574


-

    Exercise of stock options

135


99

    Purchase of common stock

(738)


(486)

        Net cash used in financing activities

(29)


(387)





        Net decrease in cash and cash equivalents (2)

$     (963)


$   (3,003)









     Cash, cash equivalents and marketable securities at beginning of period

36,817


43,656

     Cash, cash equivalents and marketable securities at end of period

30,570


37,468

(2)    Net decrease in cash, cash equivalents and marketable securities

$   (6,247)


$   (6,188)

 

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SOURCE Digimarc Corporation