Company: DMRC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001437749-25-026996
Chunk: 29

Company: Digimarc CORP
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 29
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     )%

     (—
     )%

      Net loss 

     (103
     )%

     (89
     )%

     (115
     )%

     (97
     )%

      (1) 
      Cost of revenue for Subscription and Service excludes amortization expense on acquired intangible assets. 

Summary

Our commercial subscription revenue in fiscal 2025 will be negatively impacted by the termination of a commercial contract that ended in April 2025 with an international customer. The contract contributed $0.8 million and $1.6 million of subscription revenue during the three and six months ended June 30, 2024 compared to $0.2 million and $1.1 million of subscription revenue during the three and six months ended June 30, 2025. Our commercial subscription revenue in fiscal 2025 will also be negatively impacted by the expiration of a commercial contract that ended in June 2024 with a domestic customer. The contract contributed $1.1 million and $2.1 million of subscription revenue during the three and six months ended June 30, 2024. Our commercial subscription revenue in fiscal 2025 may also be negatively impacted by the renegotiation currently underway of a $3.1 million contract, which will most likely result in a reduction of up to $3.0 million in annual revenue. Our government service revenue in fiscal 2025 will be negatively impacted by a smaller approved budget by the Central Banks for program work in 2025. We expect government service revenue in fiscal 2025 to be $1.7 million to $1.9 million lower than in fiscal 2024.

Total revenue for the three months ended June 30, 2025, decreased $2.4 million, to $8.0 million, compared to $10.4 million for the corresponding three months ended June 30, 2024. Subscription revenue decreased $1.8 million, primarily reflecting the expiration of the two commercial contracts referenced above. Service revenue decreased $0.6 million, primarily reflecting lower government service revenue from the Central Banks. 

Total revenue for the six months ended June 30, 2025, decreased $2.9 million, to $17.4 million, compared to $20.3 million for the corresponding six months ended June 30, 2024. Subscription revenue decreased $2.2 million, primarily reflecting