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

Company: Digimarc CORP
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 14
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 a service condition and a market condition, such as the Company exceeding shareholder returns as compared to an index of peer companies, is determined on the date of grant (measurement date) using the Monte Carlo valuation model. The Company recognizes the fair value of the award on a straight-line basis over the service period of the award, which is generally three years for employee grants.
    
   The following inputs are used in the Monte Carlo valuation model to estimate the fair value:
    
   Stock Price. The stock price represents the fair market value of the Company’s common stock on the date of the grant.
    
   Expected Volatility. The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of its common stock based on historical prices over the most recent period commensurate with the term of the award.
    
   Risk-Free Interest Rate. The Company determines the risk-free interest rate using current U.S. treasury yields for bonds with a maturity commensurate with the term of the award.
    
   Monte Carlo valuation inputs:

       Three Months Ended June 30,    Six Months Ended June 30,  
   2025    2024    2025    2024  
 Stock price  $13.16  $25.39  $13.16  $36.64 
 Expected volatility   70.9%  66.3%  70.9%  66.3%
 Risk-free interest rate   3.8%  4.3%  3.8%  4.3%

   Stock-Based Compensation

       Three Months Ended June 30,    Six Months Ended June 30,  
   2025    2024    2025    2024  
 Stock-based compensation:                 
 Cost of revenue  $253  $156  $390  $409 
 Sales and marketing   795   798   1,150   1,510 
 Research, development and engineering   1,221   645   1,628   1,263 
 General and administrative   1,502   807   1,863   2,055 
 Stock-based compensation expense   3,771   2,406   5,031   5,237 
 Capitalized to software and patent costs   49