Company: DMRC
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001437749-25-034816
Chunk: 10

Company: Digimarc CORP
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 10
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 revenue earned from subscription fees for access to the Company’s SaaS platform and products and, to a lesser extent, licensing fees for software products. The majority of subscription contracts are recurring, paid in advance and recognized over the term of the subscription, which is typically one to three years.

     • Service revenue consists primarily of revenue earned from the performance of software development services and, to a lesser extent, professional services. The majority of software development contracts are structured as time and materials agreements. Revenue for services is generally recognized as the services are performed. Billing for services rendered generally occurs within one month after the services are provided.

   Customer arrangements  may contain multiple deliverables such as software platform subscriptions, software product subscriptions, and professional services. Subscriptions and services offered are usually distinct performance obligations. When they are not capable of being distinct, they are combined with other subscriptions or services until a distinct performance obligation is identified. To determine the transaction price, management considers the terms of the contract and the Company’s customary business practices. Some contracts  may contain variable consideration. In those cases, management estimates the amount of variable consideration based on the sum of probability-weighted amounts in a range of possible consideration amounts. As part of this assessment, management evaluates whether any of the variable consideration is constrained and if it is, it is not included in the transaction price. The consideration is allocated between distinct performance obligations based on their stand-alone selling prices. When the standalone selling prices are not directly observable, management makes estimates based on reasonably available information, including market conditions, specific factors affecting the Company, and information about the customer. The Company recognizes the revenue associated with each performance obligation as the obligation is fulfilled, which for subscriptions is typically recognized ratably over time, and for services is typically recognized when they are performed.
    
   All revenue recognized in the Consolidated Statements of Operations and Comprehensive Loss is considered to be revenue from contracts with customers.
    
   The following table provides information about disaggregated revenue by major target market in the Company’s single reporting segment:

       Three Months Ended September 30,    Nine Months Ended September 30,  
   2025    2024    2025    2024  
 Commercial:                 
 Subscription  $4,267  $4,952  $13,605  $16,494 
 Service   41   430   876   864 
 Total Commercial  $4,308  $5,382