Company: DMRC
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001437749-25-014773
Chunk: 21

Company: Digimarc CORP
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 8
Chunk 21
---
8
     )%

      Service 

     4,054

     4,176

     (122
     )

     (3
     )%

      Total 
      
     $
     9,368

     $
     9,938

     $
     (570
     )

     (6
     )%

      Revenue (as % of total revenue): 

      Subscription 

     57
     %

     58
     %

      Service 

     43
     %

     42
     %

      Total 

     100
     %

     100
     %

Subscription

Subscription revenue consists primarily of revenue earned from subscription fees for access to our SaaS platform and products and, to a lesser extent, licensing fees for our 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.

The $0.4 million decrease in subscription revenue for the three month period ended March 31, 2025, compared to the corresponding three month period ended March 31, 2024, primarily reflects $1.1 million from the expiration of a commercial contract in June 2024, partially offset by higher subscription revenue from new and existing commercial contracts. 

Service

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. Service contracts can range from days to several years in length. Our contract with the Central Banks, which accounts for the majority of our service revenue, has a contract term through December 31, 2029. The contract is subject to work plans that are reviewed and agreed upon quarterly. The contract provides for predetermined billing rates, which are adjusted annually to account for cost of living variables, and provides for the reimbursement of third party costs incurred to support the work plans.

The $0.1 million decrease in service revenue for the three month period ended March 31, 2025, compared to the corresponding three month period ended March 31, 2024, primarily reflects $0.7 million of lower government service revenue due to a smaller approved budget for program work in 2025 and the timing of program work, partially offset by $0.4