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Digimarc Reports First Quarter 2021 Financial Results
BEAVERTON, Ore., April 28, 2021 /PRNewswire/ -- Digimarc Corporation (NASDAQ: DMRC), creator of the Digimarc Platform for digital identification and detection, reported financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Financial Results
Revenue for the first quarter of 2021 increased eight percent to $6.7 million compared to $6.2 million in the first quarter of 2020. Service revenue increased one percent, reflecting growth in services to Commercial1 customers, partially offset by a decrease in services to a Government customer as a result of timing of program work. Subscription revenue increased 19%, reflecting the impact of a new contract with a Commercial customer.
Operating expenses for the first quarter of 2021 decreased four percent to $12.6 million compared to $13.0 million in the same quarter a year-ago, reflecting lower travel, compensation and marketing costs.
Operating loss for the first quarter of 2021 decreased nine percent to $8.2 million compared to $9.1 million in the first quarter of 2020, due to higher revenue and lower operating expenses.
Net loss for the first quarter of 2021 decreased eight percent to $8.2 million or $(0.50) per diluted share compared to net loss of $8.9 million or $(0.74) per diluted share in the same quarter a year-ago.
At quarter-end, cash, cash equivalents, short- and long-term marketable securities totaled $70.7 million compared to $77.7 million at December 31, 2020.
Conference call
Digimarc will hold a conference call today (Wednesday, April 28, 2021) to discuss these results and provide an update on market conditions and execution of strategy. President and CEO Riley McCormack 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 call in via telephone to ask a question, please dial the number below at least five minutes before the scheduled start time:
Toll-Free Number: 866-562-9934
International Number: 706-679-0638
Conference ID: 9483867
If you have any difficulty connecting with the conference call, please contact Digimarc investor relations team at +1 503-469-4826.
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 takes industry beyond the barcode, providing 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 us at digimarc.com on LinkedIn and follow us on Twitter @digimarc to learn more about The Barcode of Everything®.
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," "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, 2020, 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.
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| 1 Commercial includes customers previously categorized as Retail and Media as well as a small number of customers previously categorized as Government. The change in categorization was made to better align with the structure of our sales and delivery organization and is a more accurate representation of how we view and manage our business. Management will provide comparative information under the new and old reporting structure for each quarter of fiscal 2021 and 2020, along with additional bookings disclosure not historically provided, in the earnings call transcripts, starting with this quarter. These transcripts are posted on our website.
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Digimarc Corporation
| Consolidated Income Statement Information
| (in thousands, except per share amounts)
| (Unaudited)
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| Three Month Information
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| March 31,
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| March 31,
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| 2021
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| 2020
| Revenue:
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| Service
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| $ 3,784
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| $ 3,738
| Subscription
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| 2,916
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| 2,451
| Total revenue
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| 6,700
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| 6,189
| Cost of revenue:
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|
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| Service
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| 1,570
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| 1,684
| Subscription
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| 791
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| 514
| Total cost of revenue
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| 2,361
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| 2,198
| Gross profit:
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| Service
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| 2,214
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| 2,054
| Subscription
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| 2,125
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| 1,937
| Total gross profit
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| 4,339
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| 3,991
| Gross margin:
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| Service
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| 59%
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| 55%
| Subscription
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| 73%
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| 79%
| Percentage of gross profit to total revenue
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| 65%
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| 64%
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| Operating expenses:
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| Sales and marketing
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| 4,941
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| 5,246
| Research, development and engineering
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| 4,131
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| 4,433
| General and administrative
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| 3,493
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| 3,367
| Total operating expenses
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| 12,565
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| 13,046
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| Operating loss
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| (8,226)
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| (9,055)
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| Other income, net
|
| 10
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| 142
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| Loss before income taxes
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| (8,216)
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| (8,913)
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| Benefit (provision) for income taxes
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| (6)
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| 5
| Net loss
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| $ (8,222)
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| $(8,908)
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| Earnings (loss) per common share:
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| Loss per common share - basic
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| $ (0.50)
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| $ (0.74)
| Loss per common share - diluted
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| $ (0.50)
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| $ (0.74)
| Weighted average common shares outstanding - basic
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| 16,333
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| 12,037
| Weighted average common shares outstanding - diluted
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| 16,333
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| 12,037
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Digimarc Corporation
| Consolidated Balance Sheet Information
| (in thousands)
| (Unaudited)
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| March 31,
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| December 31,
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| 2021
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| 2020
| Assets
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| Current assets:
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| Cash and cash equivalents(1)
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| $ 4,705
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| $ 19,696
| Marketable securities(1)
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| 65,796
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| 58,032
| Trade accounts receivable, net
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| 4,141
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| 3,907
| Other current assets
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| 1,978
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| 2,197
| Total current assets
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| 76,620
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| 83,832
| Marketable securities(1)
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| 159
|
| —
| Property and equipment, net
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| 3,144
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| 3,272
| Intangibles, net
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| 6,609
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| 6,612
| Goodwill
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| 1,114
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| 1,114
| Other assets
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| 2,502
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| 2,198
| Total assets
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| $ 90,148
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| $ 97,028
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| Liabilities and Shareholders' Equity
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| Current liabilities:
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| Accounts payable and other accrued liabilities
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| $ 3,008
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| $ 2,827
| Note payable, current
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| 4,799
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| 3,947
| Deferred revenue
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| 2,943
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| 3,002
| Total current liabilities
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| 10,750
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| 9,776
| Lease liability and other long-term liabilities
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| 2,325
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| 2,295
| Note payable, long-term
|
| 280
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| 1,118
| Total liabilities
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| 13,355
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| 13,189
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| Commitments and contingencies
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| Shareholders' equity:
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| Preferred stock
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| 50
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| 50
| Common stock
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| 17
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| 17
| Additional paid-in capital
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| 256,200
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| 255,024
| Accumulated deficit
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| (179,474)
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| (171,252)
| Total shareholders' equity
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| 76,793
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| 83,839
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| Total liabilities and shareholders' equity
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| $ 90,148
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| $ 97,028
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| (1) Aggregate cash, cash equivalents, short- and long-term marketable securities was $70,660 and $77,728 at March 31, 2021 and December 31, 2020, respectively.
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Digimarc Corporation
| Consolidated Cash Flow Information
| (in thousands)
| (Unaudited)
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|
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| Three Month Information
|
|
| March 31,
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| March 31,
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|
| 2021
|
| 2020
| Cash flows from operating activities:
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| Net loss
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| $ (8,222)
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| $(8,908)
| Adjustments to reconcile net loss to net cash used in operating activities:
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| Depreciation, amortization and write-off of property and equipment
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| 363
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| 374
| Amortization and write-off of intangibles
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| 177
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| 201
| Amortization of right of use assets under operating leases
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| 118
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| 117
| Amortization of net premiums and (discounts) on marketable securities
|
| (266)
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| 97
| Stock-based compensation
|
| 2,010
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| 2,195
| Changes in operating assets and liabilities:
|
|
|
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| Trade accounts receivable
|
| (612)
|
| 62
| Other current assets
|
| 219
|
| 338
| Other assets
|
| (44)
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| 19
| Accounts payable and other accrued liabilities
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| 501
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| 61
| Deferred revenue
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| (55)
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| (146)
| Lease liability and other long-term liabilities
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| (177)
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| (159)
| Net cash used in operating activities
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| (5,988)
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| (5,749)
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| Cash flows from investing activities:
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| Purchase of property and equipment
|
| (317)
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| (235)
| Capitalized patent costs
|
| (159)
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| (137)
| Maturity of marketable securities
|
| 17,494
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| 11,594
| Purchase of marketable securities
|
| (25,151)
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| (6,407)
| Net cash provided by (used in) investing activities
|
| (8,133)
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| 4,815
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| Cash flows from financing activities:
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| Issuance of common stock, net of issuance costs
|
| —
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| 574
| Exercise of stock options
|
| —
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| 135
| Purchase of common stock
|
| (870)
|
| (738)
| Net cash used in financing activities
|
| (870)
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| (29)
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| Net decrease in cash and cash equivalents(2)
|
| $(14,991)
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| $ (963)
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| Cash, cash equivalents and marketable securities at beginning of period
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| 77,728
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| 36,817
| Cash, cash equivalents and marketable securities at end of period
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| 70,660
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| 30,570
| (2) Net decrease in cash, cash equivalents and marketable securities
|
| $ (7,068)
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| $(6,247)
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SOURCE Digimarc Corporation
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