DMRC
$38.35
Digimarc
$.05
.13%
Earnings Details
3rd Quarter September 2017
Thursday, October 26, 2017 4:05:00 PM
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Summary

Digimarc (DMRC) Recent Earnings

Digimarc (DMRC) reported a 3rd Quarter September 2017 loss of $0.39 per share on revenue of $8.7 million. The consensus estimate was a loss of $0.69 per share on revenue of $5.8 million. Revenue grew 55.6% 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
($0.39)
Earnings Whisper
-
Consensus Estimate
($0.69)
Reported Revenue
$8.7 Mil
Revenue Estimate
$5.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Digimarc Reports Third Quarter 2017 Financial Results

Digimarc Corporation (DMRC), the inventor of the Digimarc Discover? platform featuring the Digimarc Barcode for automatically identifying and interacting with virtually any media, reported financial results for the third quarter ended September 30, 2017.

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Third Quarter 2017 Financial Results Revenue for the third quarter of 2017 totaled $8.7 million compared to $5.6 million in the same quarter a year-ago. The increase in revenue was the result of higher license revenue driven by a $3.5 million license fee from an existing licensee. In exchange for the upfront license fee, Digimarc waived any future royalty obligations from this licensee in one of the licensed fields of use.

Operating expenses for the third quarter of 2017 totaled $11.0 million compared to $8.7 million in the third quarter of 2016. The increase in operating expenses was primarily due to higher investment in sales, marketing, and engineering as the company continues to address important opportunities in market development and delivery of Digimarc Discover and Digimarc Barcode.

Operating loss for the third quarter of 2017 totaled $4.4 million compared to an operating loss of $5.3 million in the same quarter a year-ago. The lower operating loss was due to higher license revenue offset by higher operating expenses.

Net loss for the third quarter of 2017 totaled $4.2 million or $(0.39) per diluted share, compared to a net loss of $5.2 million or $(0.55) per diluted share in the third quarter of 2016.

At quarter-end, cash, cash equivalents and marketable securities totaled $60.9 million, compared to $67.8 million at June 30, 2017.

Conference Call Digimarc will hold a conference call later today (Thursday, October 26, 2017) 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 via the investor section of the company’s website here.

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: 8340851

If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.

About Digimarc Digimarc Corporation (DMRC) is a pioneer in the automatic identification of everyday objects such as product packaging and virtually any media, including print, images, and audio. Based on the patented Intuitive Computing Platform (ICP(TM)), Digimarc 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, and more. Digimarc technology is deployed by major retailers and consumer brands, central banks, U.S. states, film and technology companies, among others. Visit digimarc.com and follow us @digimarc to learn more about The Barcode of Everything(TM).

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 and any related inferences regarding higher license revenue and market opportunities for Digimarc Discover and Digimarc Barcode, and other 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, 2016 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,
2017
2016
2017
2016
Revenue:
Service
$
2,986
$
3,252
$
9,935
$
9,650
Subscription
1,306
1,417
4,171
4,374
License
4,385
907
6,249
2,589
Total revenue
8,677
5,576
20,355
16,613
Cost of revenue:
Service
1,332
1,455
4,431
4,288
Subscription
611
600
1,701
1,856
License
129
107
369
302
Total cost of revenue
2,072
2,162
6,501
6,446
Gross profit:
Service
1,654
1,797
5,504
5,362
Subscription
695
817
2,470
2,518
License
4,256
800
5,880
2,287
Total gross profit
6,605
3,414
13,854
10,167
Gross margin:
Service
55%
55%
55%
56%
Subscription
53%
58%
59%
58%
License
97%
88%
94%
88%
Percentage of gross profit to total revenue
76%
61%
68%
61%
Operating expenses:
Sales and marketing
4,075
2,945
12,064
8,756
Research, development and engineering
4,108
3,291
11,503
9,975
General and administrative
2,442
2,039
7,066
6,185
Intellectual property
387
394
1,124
1,290
Total operating expenses
11,012
8,669
31,757
26,206
Operating loss
(4,407)
(5,255)
(17,903)
(16,039)
Other income, net
174
69
408
157
Loss before income taxes
(4,233)
(5,186)
(17,495)
(15,882)
Benefit (provision) for income taxes
(7)
(12)
94
(34)
Net loss
$
(4,240)
$
(5,198)
$
(17,401)
$
(15,916)
Earnings (loss) per common share:
Loss per common share - basic
$
(0.39)
$
(0.55)
$
(1.67)
$
(1.79)
Loss per common share - diluted
$
(0.39)
$
(0.55)
$
(1.67)
$
(1.79)
Weighted average common shares outstanding - basic
10,797
9,506
10,410
8,878
Weighted average common shares outstanding - diluted 10,797
9,506
10,410
8,878
Digimarc Corporation
Consolidated Balance Sheet Information
(in thousands)
(Unaudited)
September 30,
December 31,
2017
2016
Assets
Current assets:
Cash and cash equivalents (1)
$
25,599
$
11,638
Marketable securities (1)
35,288
44,496
Trade accounts receivable, net
7,030
5,078
Other current assets
2,177
1,695
Total current assets
70,094
62,907
Marketable securities (1)
-
4,392
Property and equipment, net
4,273
3,570
Intangibles, net
6,369
6,422
Goodwill
1,114
1,114
Other assets
311
331
Total assets
$
82,161
$
78,736
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and other accrued liabilities $
2,071
$
1,523
Deferred revenue
1,717
2,923
Total current liabilities
3,788
4,446
Deferred rent and other long-term liabilities
989
956
Total liabilities
4,777
5,402
Commitments and contingencies
Shareholders’ equity:
Preferred stock
50
50
Common stock
11
11
Additional paid-in capital
142,461
120,985
Accumulated deficit
(65,138)
(47,712)
Total shareholders’ equity
77,384
73,334
Total liabilities and shareholders’ equity
$
82,161
$
78,736
(1) Aggregate cash, cash equivalents, short- and long-term marketable securities was $60,887 and $60,526 at September 30, 2017 and December 31, 2016, respectively.
Digimarc Corporation
Consolidated Cash Flow Information
(in thousands)
(Unaudited)
Nine Month Information
September 30,
September 30,
2017
2016
Cash flows from operating activities:
Net loss
$
(17,401)
$
(15,916)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and write-off of property and equipment
1,024
1,016
Amortization and write-off of intangibles
775
876
Stock-based compensation
4,872
4,162
Changes in operating assets and liabilities:
Trade accounts receivable
(1,952)
2,095
Other current assets
(482)
(437)
Other assets
20
(56)
Accounts payable and other accrued liabilities
373
680
Deferred revenue
(1,247)
(1,407)
Net cash used in operating activities
(14,018)
(8,987)
Cash flows from investing activities:
Purchase of property and equipment
(1,424)
(1,565)
Capitalized patent costs
(625)
(623)
Maturity of marketable securities
41,231
35,182
Purchase of marketable securities
(27,631)
(40,817)
Net cash provided by (used in) investing activities
11,551
(7,823)
Cash flows from financing activities:
Issuance of common stock, net of issuance costs
17,698
39,700
Exercise of stock options
793
476
Purchase of common stock
(2,063)
(1,879)
Net cash provided by financing activities
16,428
38,297
Net increase in cash and cash equivalents (2)
$
13,961
$
21,487
Cash, cash equivalents and marketable securities at beginning of period
60,526
39,186
Cash, cash equivalents and marketable securities at end of period
60,887
66,308
(2)
Net increase in cash, cash equivalents and marketable securities
$
361
$
27,122

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SOURCE Digimarc Corporation

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