Digimarc Corporation Reports $38.4 Million Revenue for Fiscal Year 2024, 10% Increase

Digimarc Corporation reported a total revenue of $38.4 million for the fiscal year ending December 31, 2024, marking a 10% increase from $34.9 million in 2023. This growth was primarily driven by an 18% rise in subscription revenue, which reached $22.4 million, up from $19 million the previous year. However, the company continued to face challenges, posting a net loss of $39 million, a slight improvement from the $46 million loss reported in 2023. The operating loss also decreased to $41.3 million from $48.2 million, reflecting ongoing efforts to manage costs amid fluctuating revenue streams.

The company experienced significant changes in its revenue composition, with subscription revenue now accounting for 58% of total revenue, compared to 54% in the prior year. Service revenue remained relatively stable, increasing marginally to $16 million from $15.9 million. Despite the overall revenue growth, Digimarc anticipates challenges in 2025, particularly due to the termination of a commercial contract that contributed $3.3 million in 2024, which is expected to reduce future subscription revenue significantly.

Strategically, Digimarc has made notable advancements, including the launch of several new products such as Digimarc Engage and Digimarc Automate, aimed at enhancing customer engagement and operational efficiency. The company also announced a reorganization plan in February 2025, which is expected to reduce annual cash expenses by approximately $16.5 million. This restructuring is part of a broader strategy to streamline operations and align with long-term growth objectives.

Operationally, Digimarc reported a decrease in its annual recurring revenue (ARR) to $20 million, down 10% from the previous year, largely due to the expiration of contracts. The company’s workforce consisted of 215 full-time employees as of December 31, 2024, with a voluntary turnover rate of 5%. The company continues to focus on expanding its international presence, with international revenue increasing by 20% to $28.2 million, now representing 73% of total revenue.

Looking ahead, Digimarc's management remains cautious, citing potential revenue impacts from contract expirations and a smaller approved budget for government services in 2025. The company expects to incur one-time reorganization costs of approximately $3 million in the first quarter of 2025 but anticipates that the restructuring will ultimately lead to improved financial performance. The outlook remains contingent on the successful execution of its strategic initiatives and the ability to navigate the competitive landscape of digital watermarking technologies.