Digimarc (NASDAQ:DMRC – Get Free Report) posted its earnings results on Thursday. The information technology services provider reported ($0.13) earnings per share (EPS) for the quarter, topping the consensus estimate of ($0.37) by $0.24, FiscalAI reports. The company had revenue of $6.45 million during the quarter, compared to analyst estimates of $6.25 million. Digimarc had a negative return on equity of 34.31% and a negative net margin of 99.80%.
Here are the key takeaways from Digimarc’s conference call:
- Retail deployments are advancing: Schnucks is live across 115 stores, Stater Bros. completed a 165-store rollout, and Kroger began an initial five-store rollout. Digimarc is targeting a 500-store Kroger expansion and more than 1,000 stores across other retailers in the first half of 2027, though rollout timing depends in part on partners and retailer schedules.
- CPG gained a significant customer: Digimarc signed a contract with a large European customer expected to add more than $1.1 million in annual recurring revenue, covering two of the customer’s 24 regions. The contract was signed in Q4 and was not included in the reported Q3 ARR.
- Q3 revenue and ARR declined year over year: Revenue fell to $6.4 million from $7.6 million, while ending ARR dropped to $10.8 million from $15.8 million. The company attributed the changes primarily to two previously disclosed contract expirations or reductions.
- Execution and visibility remain risks: Management said visibility into 2027 bookings and revenue is below its expectations, and that sales hiring and ramp-up will continue into Q1 and Q2 2027. It also reported $4.3 million of free cash flow use in the quarter, up from $3.1 million a year earlier.
Digimarc Stock Down 3.3%
Shares of NASDAQ:DMRC opened at $7.43 on Friday. The stock has a market cap of $166.51 million, a price-to-earnings ratio of -5.20 and a beta of 2.18. The business’s 50 day moving average is $6.50 and its 200 day moving average is $7.14. Digimarc has a 12-month low of $4.07 and a 12-month high of $17.47.
Analyst Upgrades and Downgrades
Several equities analysts have recently weighed in on the company. Wall Street Zen cut Digimarc from a “hold” rating to a “sell” rating in a report on Sunday, November 8th. Weiss Ratings reiterated a “sell (e+)” rating on shares of Digimarc in a research note on Thursday, October 15th. Finally, Needham & Company LLC restated a “buy” rating and issued a $15.00 price target on shares of Digimarc in a research note on Friday, August 14th. One research analyst has rated the stock with a Buy rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of “Hold” and a consensus target price of $15.00.
View Our Latest Research Report on DMRC
Digimarc Company Profile
Digimarc Corporation develops digital identification and authentication technologies that help businesses identify, track and manage products and media. Its technology uses digital watermarks and other identifiers embedded in or associated with items, allowing information to be detected by compatible devices and software. The company’s offerings include Digimarc Barcode, which can place product identifiers across packaging and printed materials to support retail checkout, inventory management and consumer engagement.
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