Digimarc Corp. (DMRC)
NASDAQ:DMRC
Want to see DMRC full AI Analyst Report?
Top Page
Digimarc
(NASDAQ:DMRC)
Select Model
Select Model
Rating:47Neutral
Price Target:
$9.50
▲(32.68% Upside)
Action:Reiterated
Date:06/19/26
The score is held back primarily by weak financial performance (shrinking revenue, deep losses, and negative cash flow). Technicals are mixed with near-term weakness but some longer-term stabilization. The earnings call adds modest support due to sequential ARR growth, margin expansion, and major cost reductions, but timing delays, YoY ARR/revenue declines, and ongoing cash use keep risk elevated; valuation is also constrained by negative earnings and no dividend yield.
Positive Factors
High subscription gross margins
A 90% subscription gross margin denotes a very low incremental cost to serve license revenue. That durable margin profile supports operating leverage as ARR scales, allowing the company to absorb sales and R&D spending and materially improve profitability without proportionate cost increases.
Negative Factors
Material YoY ARR and revenue declines
A 25% YoY ARR decline and ~19% revenue drop indicate customer losses and concentration risk. This shrinkage undermines scale economics, limits the ability to invest in growth, and requires the company to rebuild a substantial portion of recurring revenue before durable operating profitability can be achieved.
Read all positive and negative factors
Positive Factors
Negative Factors
High subscription gross margins
A 90% subscription gross margin denotes a very low incremental cost to serve license revenue. That durable margin profile supports operating leverage as ARR scales, allowing the company to absorb sales and R&D spending and materially improve profitability without proportionate cost increases.
Read all positive factors
Digimarc (DMRC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$213.90M
Dividend YieldN/A
Average Volume (3M)144.75K
Price to Earnings (P/E)―
Beta (1Y)2.29
Revenue Growth-15.12%
EPS Growth32.79%
CountryUS
Employees215
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)-1.27
Shares Outstanding22,327,310
10 Day Avg. Volume161,879
30 Day Avg. Volume144,755
Financial Highlights & Ratios
PEG Ratio0.24
Price to Book (P/B)3.53
Price to Sales (P/S)4.19
P/FCF Ratio-11.51
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue6.47
Enterprise Value/Gross Profit10.90
Enterprise Value/Ebitda-10.18
Forecast
1Y Price Target
$15.00Price Target Upside109.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)-1.16
Revenue Forecast (FY)$29.13M
Digimarc Business Overview & Revenue Model
Company Description
Digimarc Corporation delivers automated identification technologies to commercial and government clients globally. The company's primary products include Digimarc watermarks, which embed a digital identity into various media; Digimarc Discover, a ...
How the Company Makes Money
Digimarc primarily makes money by licensing its platform and intellectual property (digital watermarking and related identification technologies) through recurring software and service arrangements. A core revenue stream is subscription/term-based...
Digimarc Earnings Call Summary
Earnings Call Date:May 12, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Neutral
The call presented a mixed but constructive picture: material year-over-year declines in ARR and revenue (driven by two lost contracts and lumpy service work) are offset by strong sequential ARR growth, substantial margin expansion, meaningful operating cost reductions, early commercial traction for Secure Gift Cards (first commercial order and rollout plans with major retailers), multiple upsells across product lines, and strategic progress in Digital Trust & Integrity. Near-term timing risks (scanner firmware delays) and continued cash use temper the outlook, but execution metrics and improved non-GAAP profitability indicate momentum toward scaled commercial adoption.Positive Updates
Sequential ARR Growth
Ending ARR grew 9% sequentially to $15.0M, driven by new upsells and initial Secure Gift Card ARR despite prior-year contract losses.
Negative Updates
Year-over-Year ARR Decline
Ending ARR was $15.0M vs $20.0M a year ago (a decline of $5.0M or 25%), primarily due to the previously disclosed loss of two customer contracts in 2025 that accounted for $6.8M of ARR.
Read all updates
Q1-2026 Updates
Positive
Negative
Sequential ARR Growth
Ending ARR grew 9% sequentially to $15.0M, driven by new upsells and initial Secure Gift Card ARR despite prior-year contract losses.
Read all positive updates
Company Guidance
The company reiterated it still expects to deliver "significant" ARR growth in 2026 but said the composition has changed due to scanner firmware delays that mean Secure Gift Cards will no longer be the largest contributor to near‑term growth; Q1 metrics cited include ending ARR of $15.0M (vs. $20.0M a year ago, but excluding two lost contracts ARR grew $1.8M YoY and included $500k from gift cards), sequential ARR growth of 9%, a first commercial gift‑card order of >$500k ARR, total revenue of $7.6M (subscription $4.4M, 58% of revenue; services $3.2M), subscription gross margin 90% (+400 bps YoY), service margin 57%, platform costs down $300k YoY, operating expenses $11.7M (‑36% YoY), non‑GAAP opex $8.1M (‑51% YoY), net loss per diluted share $0.32 (non‑GAAP net loss per diluted share $0.07), non‑GAAP net loss of $1.6M (improved $6.9M, 81% YoY), cash & short‑term investments $10M with no debt, free cash flow used just under $2M (free cash flow usage up $3.7M YoY) and a $900k stock buyback (169k shares); management also expects to implement a new corporate structure (CUSIP change) around mid‑May and is advancing rollout plans with 15 North American retailers, including 8 of the top 20 by sales (up from 8 retailers and 4 top‑20 two months ago), while one near‑600‑store launch was pushed to January 2027.Digimarc Financial Statement Overview
Summary
Income Statement
18
Very Negative
Balance Sheet
62
Positive
Cash Flow
22
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 32.12M | 33.91M | 38.42M | 34.85M | 30.20M | 26.52M |
| Gross Profit | 19.06M | 18.21M | 24.24M | 20.16M | 15.32M | 17.74M |
| EBITDA | -20.42M | -24.17M | -33.16M | -39.15M | -51.05M | -30.32M |
| Net Income | -27.55M | -32.31M | -39.01M | -45.96M | -59.80M | -34.76M |
Balance Sheet | ||||||
| Total Assets | 48.51M | 52.96M | 75.77M | 80.55M | 113.78M | 64.88M |
| Cash, Cash Equivalents and Short-Term Investments | 9.96M | 12.87M | 28.73M | 27.18M | 52.54M | 33.33M |
| Total Debt | 4.07M | 5.21M | 5.99M | 5.99M | 5.98M | 1.03M |
| Total Liabilities | 14.44M | 12.73M | 14.41M | 18.63M | 16.19M | 9.50M |
| Stockholders Equity | 34.07M | 40.23M | 61.36M | 61.93M | 97.59M | 55.38M |
Cash Flow | ||||||
| Free Cash Flow | -8.90M | -12.35M | -26.78M | -22.73M | -45.88M | -27.69M |
| Operating Cash Flow | -8.14M | -11.78M | -26.57M | -22.00M | -44.41M | -26.12M |
| Investing Cash Flow | 10.32M | 12.10M | -11.28M | 12.56M | 3.76M | 25.98M |
| Financing Cash Flow | -2.24M | -2.91M | 28.77M | -2.76M | 60.50M | -5.77M |
Digimarc Technical Analysis
Neutral
7.16
Price Trends
9.95
Negative
7.62
Positive
8.00
Positive
Market Momentum
-0.04
Positive
38.44
Neutral
2.70
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DMRC, the sentiment is Neutral. The current price of 7.16 is below the 20-day moving average (MA) of 12.88, below the 50-day MA of 9.95, and below the 200-day MA of 8.00, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 38.44 is Neutral, neither overbought nor oversold. The STOCH value of 2.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DMRC.
Digimarc Risk Analysis
Digimarc disclosed 32 risk factors in its most recent earnings report. Digimarc reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Digimarc Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $338.18M | -12.87 | -24.08% | ― | 66.50% | 52.19% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
51 Neutral | $85.61M | -804.19 | -0.22% | 0.95% | 5.47% | 92.26% | |
50 Neutral | $1.50B | -3.20 | -63.91% | ― | -35.67% | -49.96% | |
48 Neutral | $258.08M | -0.73 | 125.36% | ― | 0.15% | -359.97% | |
47 Neutral | $213.90M | -7.65 | -67.94% | ― | -15.12% | 32.79% |
* Technology Sector Average
DMRC
Digimarc
9.58
-3.26
-25.39%
UIS
Unisys
3.54
-0.59
-14.29%
CSPI
CSP
8.50
-2.12
-19.95%
TLS
Telos
4.52
2.01
80.08%
AI
C3ai
10.30
-13.11
-56.00%
Digimarc Corporate Events
Business Operations and StrategyDelistings and Listing ChangesRegulatory Filings and Compliance
Digimarc Completes Holding Company Reorganization and Restructuring
Neutral
May 18, 2026
On May 15, 2026, Digimarc Corporation completed a corporate reorganization in which newly created Digimarc Parent, Inc. became the publicly traded holding company, with the original Digimarc converted into a wholly owned LLC subsidiary. All existi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.