Company: DMRC
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001437749-25-014773
Chunk: 20

Company: Digimarc CORP
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 8
Chunk 20
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 June 2024, partially offset by higher commercial subscription revenue from new and existing commercial contracts. Service revenue decreased $0.1 million, reflecting lower government service revenue from the Central Banks, partially offset by higher commercial service revenue related to HolyGrail 2.0 recycling projects. 

We expect that our subscription revenue in fiscal 2025 will be negatively impacted by the termination of a commercial contract that contributed $3.3 million of subscription revenue in fiscal 2024. This contract ended in April 2025 and will contribute $1.1 million of subscription revenue in fiscal 2025. Our subscription revenue in fiscal 2025 may also be impacted negatively, as was the case in the first quarter, by the expiration of a commercial contract in June 2024. This contract contributed $2.1 million of subscription revenue in fiscal 2024. We expect government service revenue in fiscal 2025 to be $1.7 million to $2.0 million lower than fiscal 2024 due to a smaller approved budget for program work in 2025. 

Total operating expenses for the three month period ended March 31, 2025, increased $1.1 million, to $18.2 million, compared to $17.1 million for the corresponding three month period ended March 31, 2024. The increase in operating expenses primarily reflects $3.2 million of higher cash severance costs incurred as a result of the reorganization we announced on February 26, 2025, and $0.9 million of higher professional services costs, partially offset by $1.5 million lower stock compensation costs and $1.4 million of lower cash compensation costs due to lower headcount.

We expect our expenses in fiscal 2025 to be significantly lower than fiscal 2024 due to the reorganization, which is expected to reduce our cash expenses by approximately $16.5 million on an annualized basis. We have also identified approximately $5.5 million of other annualized cash cost savings. 

       21

Revenue

      Three Months Ended March 31, 

      Dollar 

      Percent 

      2025 

      2024 

      Increase/(Decrease) 

      Increase/(Decrease) 

      Revenue: 

      Subscription 
      
     $
     5,314

     $
     5,762

     $
     (448
     )

     (