- DMRC
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Key Points
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Q3 results declined as revenue fell to $6.4 million from $7.6 million and ARR dropped to $10.8 million from $15.8 million, largely due to two previously disclosed contract changes.
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Digimarc reported signs of new demand: it signed a European consumer packaged goods contract expected to generate more than $1.1 million in annual revenue and has over 68 retailers engaged in its Secure Gift Card program.
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Gift card deployments are expanding, including completed rollouts at Schnucks and Stater Bros. and an initial Kroger rollout, with further expansion targeted for 2027. The company ended the quarter with $22.1 million in cash and short-term investments and no debt.
Digimarc (NASDAQ:DMRC) reported lower third-quarter revenue and annual recurring revenue as previously disclosed contract changes weighed on results, while executives pointed to new gift card security orders and a consumer packaged goods contract as signs of emerging demand.
Revenue fell to $6.4 million from $7.6 million a year earlier, and ending annual recurring revenue, or ARR, declined to $10.8 million from $15.8 million. CFO Charles Beck attributed the ARR decline primarily to the expiration of a $3.1 million contract in October 2025 and a $2.6 million contract reduction in June 2026.
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CEO Paul Carreiro said Digimarc had received additional Secure Gift Card orders from large retailers earlier than expected and had more than 68 retailers engaged, compared with one at the start of the year. The company also signed a large European consumer packaged goods customer for more than $1.1 million in expected annual revenue, covering two of the customer’s 24 regions.
Beck said the consumer packaged goods contract was signed in the fourth quarter and was not included in the third-quarter ARR figure. Carreiro cautioned that the company still needs to turn demand into deployments and recurring revenue, and that its visibility into 2027 bookings and revenue remains below the level he expects.
Gift Card Rollouts Expand
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Carreiro said Digimarc’s Secure Gift Card program is moving from validation into staged retailer rollouts. Schnucks is live across all 115 stores, and Stater Bros. has completed a 165-store rollout. At Schnucks, Carreiro said the deployment had achieved 100% activation with no reported fraud incidents to date.
