Company: DMRC
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001437749-25-005471
Chunk: 77

Company: Digimarc CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1
Chunk 77
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 $38.4 million, compared to $34.9 million for the corresponding twelve months ended December 31, 2023, primarily due to $3.4 million of higher subscription revenue, which includes higher subscription revenue from new and existing commercial contracts, partially offset by the expiration of a commercial contract in June 2024.

We expect that our subscription revenue in 2025 will be negatively impacted by the termination of a commercial contract that contributed $3.3 million of subscription revenue in 2024. This contract is expected to end in April 2025 and contribute $1.1 million of subscription revenue in 2025. Our subscription revenue in 2025 may also be impacted negatively by the expiration of a commercial contract in June 2024 that may or may not be extended. This contract contributed $2.1 million of subscription revenue in 2024. We expect government service revenue in 2025 to be $1.7 million to $2.0 million lower than 2024 due to a smaller approved budget for program work in 2025. 

Total operating expenses for the twelve months ended December 31, 2024, decreased $2.8 million, or 4%, to $65.5 million, compared to $68.4 million for the corresponding twelve months ended December 31, 2023, primarily due to lower cash compensation costs of $1.5 million, lower stock compensation costs of $0.7 million, lower depreciation and amortization costs of $0.5 million, and lower lease impairment costs of $0.3 million, partially offset by $0.5 million of higher professional services and consulting costs. The $1.5 million decrease in cash compensation costs includes $1.5 million of cash severance costs in 2023, and lower cash compensation costs of $1.0 million primarily reflecting lower headcount, net of annual compensation adjustments, partially offset by $0.6 million of cash severance costs in 2024 and $0.5 million of lower cash labor costs allocated to cost of revenue due to the amount and mix of billable labor hours incurred. 

We expect our expenses in 2025 to be significantly lower than 2024 due to the reorganization we announced on February 26, 2025. The reorganization is expected to reduce our cash expenses by approximately $16.