Quarterly ResultMay 12, 2026, 04:12 PM
Digimarc Q1 Net Loss Narrows to $7.0M; ARR Up 9% Sequentially
AI Summary
Digimarc Corporation reported its first quarter 2026 financial results, with total revenue decreasing to $7.6 million from $9.4 million year-over-year. Despite this, the company significantly narrowed its GAAP net loss to $7.0 million from $11.7 million and non-GAAP net loss to $1.6 million from $8.5 million. Annual Recurring Revenue (ARR) increased 9% sequentially to $15.0 million, and subscription gross profit margin expanded 400 basis points year-over-year to 90%. The company also made significant progress in the adoption of its Secure Gift Card solution, securing its first commercial order and advancing rollout plans with 15 North American retailers.
Key Highlights
- Q1 2026 total revenue was $7.6 million, down from $9.4 million in Q1 2025.
- GAAP net loss for Q1 2026 narrowed to $7.0 million ($0.32 per diluted share) from $11.7 million ($0.55 per diluted share) in Q1 2025.
- Non-GAAP net loss improved to $1.6 million ($0.07 per diluted share) from $8.5 million ($0.40 per diluted share) in Q1 2025.
- Ending Annual Recurring Revenue (ARR) was $15.0 million as of March 31, 2026, a 9% sequential increase.
- Subscription gross profit margin increased to 90% in Q1 2026 from 86% in Q1 2025.
- Operating expenses decreased to $11.7 million in Q1 2026 from $18.2 million in Q1 2025.
- Cash, cash equivalents, and marketable securities totaled $10.0 million at March 31, 2026.
- Free cash flow usage improved to $2.0 million in Q1 2026 from $5.6 million in Q1 2025.