DMRC
$34.19
Digimarc
$.09
.26%
Earnings Details
3rd Quarter September 2019
Wednesday, October 30, 2019 4:05:00 PM
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Summary

Digimarc (DMRC) Recent Earnings

Digimarc (DMRC) reported a 3rd Quarter September 2019 loss of $0.65 per share on revenue of $5.8 million. The consensus estimate was a loss of $0.71 per share. Revenue grew 18.6% 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
($0.65)
Earnings Whisper
-
Consensus Estimate
($0.71)
Reported Revenue
$5.8 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Digimarc Reports Third Quarter 2019 Financial Results

BEAVERTON, Ore., Oct. 30, 2019 /PRNewswire/ -- Digimarc Corporation (NASDAQ: DMRC), creator of the Digimarc Platform for digital identification and detection, reported financial results for the third quarter ended September 30, 2019.

Digimarc The Barcode of Everything(TM)

Third Quarter 2019 Financial Results
Revenue for the third quarter of 2019 increased 19 percent to $5.8 million, compared to $4.9 million in the third quarter of 2018. The increase in revenue was due to higher subscription and service revenue.

Operating expenses for the third quarter of 2019 increased three percent to $11.9 million, compared to $11.6 million in the same quarter a year-ago. The increase in operating expenses was primarily due to routine annual compensation adjustments for employees.

Operating loss for the third quarter of 2019 decreased seven percent to $8.0 million, compared to $8.6 million in the third quarter of 2018. The lower operating loss was primarily due to higher revenue, partially offset by higher operating expenses.

Net loss for the third quarter of 2019 decreased seven percent to $7.8 million or $(0.65) per diluted share compared to net loss of $8.3 million or $(0.73) per diluted share in the same quarter a year-ago.

At quarter-end, cash, cash equivalents and marketable securities totaled $42.8 million, compared to $50.0 million at June 30, 2019.

Conference Call
Digimarc will hold a conference call today (Wednesday, October 30, 2019) 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: 96755405

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 everyday objects such as product packaging and virtually any media, including print, images and audio. The Digimarc Platform provides innovative and comprehensive automatic recognition technologies to simplify search, and transform information discovery through unparalleled reliability, efficiency and security. Digimarc has a global patent portfolio, which includes over 1,100 granted and pending patents. These innovations include state-of-the-art identification technology, Digimarc Barcode, as well as Digimarc Discover® software for barcode scanning, image recognition, as layers of its ground-breaking Platform. Digimarc is based in Beaverton, Oregon. The Digimarc Platform enables applications that benefit retailers and consumer brands, national and state government agencies, media and entertainment industries, and others. 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, 2018 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


Nine Month Information


September 30,


September 30,


September 30,


September 30,


2019


2018


2019


2018

Revenue:








   Service

$              3,003


$              2,787


$            10,167


$              9,630

   Subscription

2,273


1,532


5,924


4,554

   License

552


595


1,577


1,781

      Total revenue

5,828


4,914


17,668


15,965









Cost of revenue:








   Service

1,287


1,301


4,371


4,412

   Subscription

459


480


1,369


1,470

   License

172


154


497


443

      Total cost of revenue

1,918


1,935


6,237


6,325









Gross profit:








   Service

1,716


1,486


5,796


5,218

   Subscription

1,814


1,052


4,555


3,084

   License

380


441


1,080


1,338

      Total gross profit

3,910


2,979


11,431


9,640









Gross margin:








   Service

57%


53%


57%


54%

   Subscription

80%


69%


77%


68%

   License

69%


74%


68%


75%

      Percentage of gross profit to total revenue

67%


61%


65%


60%









Operating expenses:








   Sales and marketing

4,839


4,741


14,876


14,385

   Research, development and engineering

4,105


4,069


12,124


12,074

   General and administrative

2,656


2,447


8,194


7,495

   Intellectual property

342


328


1,093


948

      Total operating expenses

11,942


11,585


36,287


34,902









Operating loss

(8,032)


(8,606)


(24,856)


(25,262)









Other income, net

259


273


727


799









Loss before income taxes

(7,773)


(8,333)


(24,129)


(24,463)









Benefit (provision) for income taxes

12


(9)


(28)


(29)

Net loss

$             (7,761)


$             (8,342)


$           (24,157)


$           (24,492)









Earnings (loss) per common share:








Loss per common share - basic

$               (0.65)


$               (0.73)


$               (2.07)


$               (2.16)

Loss per common share - diluted

$               (0.65)


$               (0.73)


$               (2.07)


$               (2.16)

   Weighted average common shares outstanding - basic

11,924


11,394


11,693


11,333

   Weighted average common shares outstanding - diluted

11,924


11,394


11,693


11,333

 

Digimarc Corporation

Consolidated Balance Sheet Information

(in thousands)

(Unaudited)










September 30,


December 31,


2019


2018

Assets




Current assets:




Cash and cash equivalents (1)

$            16,414


$            27,278

Marketable securities (1)

24,921


16,378

Trade accounts receivable, net 

3,570


3,888

Other current assets 

2,882


2,100

Total current assets 

47,787


49,644

Marketable securities (1)

1,497


Property and equipment, net 

3,594


3,955

Intangibles, net 

6,723


6,649

Goodwill

1,114


1,114

Other assets

2,871


425

Total assets 

$            63,586


$            61,787





Liabilities and Shareholders' Equity




Current liabilities:




Accounts payable and other accrued liabilities

$              2,615


$              1,092

Deferred revenue

2,391


3,226

Total current liabilities 

5,006


4,318

Deferred rent and other long-term liabilities

2,739


854

Total liabilities 

7,745


5,172





Commitments and contingencies








Shareholders' equity:




   Preferred stock

50


50

   Common stock

12


12

   Additional paid-in capital

185,811


162,428

   Accumulated deficit

(130,032)


(105,875)

Total shareholders' equity 

55,841


56,615





Total liabilities and shareholders' equity 

$            63,586


$            61,787









(1) Aggregate cash, cash equivalents and marketable securities was $42,832 and $43,656 at September 30, 2019 and December 31, 2018, respectively.

 

Digimarc Corporation

Consolidated Cash Flow Information

(in thousands)

(Unaudited)






Nine Month Information


September 30,


September 30,


2019


2018

Cash flows from operating activities:




  Net loss

$           (24,157)


$           (24,492)

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




    Depreciation, amortization and write-off of property and equipment

1,098


1,167

    Amortization and write-off of intangibles

533


437

    Stock-based compensation

6,094


5,345

  Changes in operating assets and liabilities:




      Trade accounts receivable

318


3,447

      Other current assets

(782)


(261)

      Other assets

263


(148)

      Accounts payable and other accrued liabilities

1,086


(299)

      Deferred revenue

(735)


(1,225)

      Lease liability and other long-term liabilities

(481)


(75)

        Net cash used in operating activities

(16,763)


(16,104)





Cash flows from investing activities:




    Purchase of property and equipment

(692)


(1,023)

    Capitalized patent costs

(524)


(571)

    Maturity of marketable securities

27,997


30,179

    Purchase of marketable securities

(38,037)


(18,904)

        Net cash provided by (used in) investing activities

(11,256)


9,681





Cash flows from financing activities:




    Issuance of common stock, net of issuance costs

19,615


    Exercise of stock options

293


1,064

    Purchase of common stock

(2,753)


(1,689)

        Net cash provided by (used in) financing activities

17,155


(625)





        Net decrease in cash and cash equivalents (2)

$           (10,864)


$             (7,048)









     Cash, cash equivalents and marketable securities at beginning of period

43,656


67,738

     Cash, cash equivalents and marketable securities at end of period

42,832


49,415

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

$                (824)


$           (18,323)

 

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SOURCE Digimarc Corporation