--- title: "Digimarc | 8-K: FY2026 Q1 Revenue Beats Estimate at USD 7.579 M" type: "News" locale: "en" url: "https://longbridge.com/en/news/286149409.md" datetime: "2026-05-12T20:09:02.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286149409.md) - [en](https://longbridge.com/en/news/286149409.md) - [zh-HK](https://longbridge.com/zh-HK/news/286149409.md) --- # Digimarc | 8-K: FY2026 Q1 Revenue Beats Estimate at USD 7.579 M Revenue: As of FY2026 Q1, the actual value is USD 7.579 M, beating the estimate of USD 7.029 M. EPS: As of FY2026 Q1, the actual value is USD -0.32, beating the estimate of USD -0.36. EBIT: As of FY2026 Q1, the actual value is USD -7.136 M. #### Revenue - Total revenue for the first quarter of 2026 was $7.6 million, a decrease of $1.8 million, compared to $9.4 million for the first quarter of 2025. - Subscription revenue for the first quarter of 2026 was $4.4 million, accounting for 58% of total revenue, compared to $5.3 million for the first quarter of 2025. This decrease reflects $1.5 million lower subscription revenue from the expiration of two commercial contracts in 2025, partially offset by an increase from new and existing commercial contracts. - Service revenue for the first quarter of 2026 was $3.2 million, compared to $4.1 million for the first quarter of 2025, representing an $800 thousand decrease. This decrease primarily reflects $0.5 million of lower commercial service revenue from HolyGrail 2.0 recycling projects, as that work was previously completed, with no such revenue this year. #### Gross Profit Margin - Total gross profit margin for the first quarter of 2026 was 60%, compared to 65% for the first quarter of 2025. - Subscription gross profit margin increased to 90% for the first quarter of 2026, from 86% for the first quarter of 2025, largely due to lower subscription platform costs. - Service gross profit margin decreased to 57% for the first quarter of 2026, from 65% for the first quarter of 2025, primarily due to an abnormally favorable mix of revenue and costs in Q1 last year. - Non-GAAP gross profit margin for the first quarter of 2026 was 83%, compared to 81% for the first quarter of 2025. #### Operating Expenses - Total operating expenses for the first quarter of 2026 were $11.7 million, down $6.5 million or 36% from $18.2 million for the first quarter of 2025. This decrease primarily reflects $7.4 million in lower cash compensation costs (due to lower headcount and $3.2 million in severance costs incurred last year), $500 thousand lower consulting costs, and $300 thousand lower software and hardware costs. - Sales and marketing expenses were $2.082 million in Q1 2026, down from $5.078 million in Q1 2025. - Research, development and engineering expenses were $3.747 million in Q1 2026, down from $7.634 million in Q1 2025. - General and administrative expenses were $5.555 million in Q1 2026, up from $5.181 million in Q1 2025. - Non-GAAP operating expenses for the first quarter of 2026 were $8.1 million, down $8.4 million or 51% from $16.5 million for the first quarter of 2025. #### Operating Loss - Operating loss for the first quarter of 2026 was -$7.136 million, compared to -$12.079 million for the first quarter of 2025. #### Net Loss - Net loss for the first quarter of 2026 was -$7.0 million, compared to -$11.7 million for the first quarter of 2025. - Non-GAAP net loss for the first quarter of 2026 was -$1.6 million, an improvement of $6.9 million or 81%, compared to -$8.5 million for the first quarter of 2025. #### Cash Flow and Cash Position - Free cash flow usage for the first quarter of 2026 was -$2.0 million, compared to -$5.6 million for the first quarter of 2025. Free cash flow usage improved $3.7 million from Q1 last year, despite a headwind to revenue and an unfavorable change in working capital and other activity of -$3.4 million year-over-year. - Cash flows from operating activities for the first quarter of 2026 were -$1.847 million, compared to -$5.486 million for the first quarter of 2025. - At March 31, 2026, cash, cash equivalents and marketable securities totaled $10.0 million, compared to $12.9 million at December 31, 2025. - Digimarc Corporation ended Q1 with $10.0 million in cash and short-term investments, with no debt. #### Unique Metrics - Annual Recurring Revenue (ARR) as of March 31, 2026, was $15.0 million, compared to $20.0 million as of March 31, 2025. This decrease primarily reflects the expiration of two commercial contracts (accounting for $3.7 million and $3.1 million of ARR respectively, totaling $6.8 million), partially offset by $1.8 million of net increases to ARR from new and existing commercial contracts. Sequential ARR growth was 9%. - Digimarc Corporation used -$900 thousand to buy back 169 thousand shares as part of its employee stock program in Q1. - Digimarc Corporation closed its first commercial order for the Secure Gift Card solution in Q1, representing over $500 thousand of ARR, covering six Closed-Loop and Open-Loop brands. - The company is advancing initial rollout plans with fifteen North American retailers, including eight of the 20 largest as measured by sales. - Digimarc Corporation closed three upsell deals with existing customers in pharmaceuticals, food and beverage, and consumer goods verticals for its anti-counterfeiting solution. - The company secured a six-figure upsell with a global technology company for its Leak Detection for Web Content solution and is progressing discussions with an important industry group. #### Outlook / Guidance - Digimarc Corporation expects to deliver significant ARR growth in 2026, although the composition of that growth has changed, with Gift Cards no longer expected to be the largest contributor due to timing of initial rollouts caused by scanner delays. - The company plans to increase overall investment to support future growth while continuing to pursue efficiency. - The new corporate structure, approved by shareholders, is expected to finalize around May 16th, resulting in a CUSIP change. ### Related Stocks - [DMRC.US](https://longbridge.com/en/quote/DMRC.US.md) ## Related News & Research - [Linde's Q2 2026 Earnings: What to Expect](https://longbridge.com/en/news/293494879.md) - [RingCentral announces R$ 0.02-per-unit distribution for Q3 2026](https://longbridge.com/en/news/293794732.md) - [The Cooper Companies’ Q2 2026 Earnings: What to Expect](https://longbridge.com/en/news/293747625.md) - [Sherwin-Williams declares R$ 0.27 per unit dividend for Q3 2026](https://longbridge.com/en/news/293755410.md) - [5 Best ETFs for the Rest of 2026](https://longbridge.com/en/news/293484852.md)