Free cash flow remains structurally negative at -25.0% of revenue in 2026Q1, even as the company continues to deploy $885,000 toward share repurchases.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 |
|---|
| Cash from Operations | -8.14M | -11.78M | -26.57M | -22M | -44.41M | -26.12M | -19.94M | -22.41M | -21.21M | -17.61M | -13.86M | -9.74M | -6.73M | 3.47M | 15.6M | 10.23M | 10.43M | 779K | 3.9M | 1.02M | -1.77M |
| Operating CF Margin % | - | -34.73% | -69.17% | -63.11% | -147.06% | -98.48% | -83.11% | -97.5% | -100.08% | -69.85% | -63.62% | -43.9% | -26.24% | 9.93% | 35.16% | 28.4% | 33.49% | 4.08% | 19.73% | 7.87% | -15.96% |
| Operating CF Growth % | 284.45% | 55.67% | -20.81% | 50.47% | -70.04% | -30.99% | 11.04% | -5.67% | -20.44% | -27.03% | -42.34% | -44.66% | -293.87% | -77.74% | 52.44% | -1.9% | 1239.15% | -80.04% | 280.78% | 158.01% | - |
| Net Income | -27.55M | -32.31M | -39.01M | -45.96M | -59.8M | -34.76M | -32.54M | -32.84M | -32.51M | -25.77M | -21.67M | -17.93M | -15.82M | -507K | 8.27M | 5.66M | 4.17M | -2.76M | 1.49M | 55K | -2.69M |
| Depreciation & Amortization | 7.11M | 6.46M | 7.59M | 8.13M | 8.58M | 2.54M | 2.77M | 2.21M | 2.14M | 2.43M | 2.46M | 2.43M | 2.31M | 1.99M | 985K | 737K | 644K | 589K | 766K | 612K | 616K |
| Stock-Based Compensation | 4.49M | 11.97M | 10.03M | 11.16M | 11.29M | 11.94M | 9.12M | 8.21M | 7.3M | 6.76M | 5.55M | 5.08M | 5.4M | 4.5M | 5.26M | 4.22M | 3.07M | 2.44M | 1.45M | 0 | 790K |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -12.06M | 0 | 0 | -5.55M | -5.08M | 2.08M | -1.57M | 3.4M | -1.77M | -888K | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | 10.25M | 2.39M | 17K | 270K | 1M | -4.38M | 204K | 12.06M | 9.95M | 12.35M | 5.55M | 5.08M | -23K | -346K | -1.94M | 1.65M | 3.07M | 691K | 362K | 1.21M | -13K |
| Working Capital Changes | -2.44M | -293K | -5.2M | 4.41M | -5.48M | -1.45M | 508K | 7K | 1.85M | -1.02M | -202K | 691K | -692K | -595K | -379K | -254K | 366K | -188K | -161K | -851K | -473K |
| Change in Receivables | -1.14M | -718K | -687K | -335K | 2.23M | -2.65M | 114K | -133K | 2.52M | -1.33M | -462K | -64K | 1.32M | -1.67M | -187K | -21K | 89K | 269K | -44K | 0 | 0 |
| Change in Inventory | 0 | 0 | 0 | 2.46M | 0 | -2.08M | 0 | -702K | 35K | -471K | 0 | 0 | -1.59M | -746K | 420K | 240K | -198K | -174K | 0 | 0 | 0 |
| Change in Payables | -359K | -434K | -1.61M | 660K | 0 | 2.08M | 0 | 702K | -878K | 585K | 637K | 125K | 124K | 124K | -228K | -668K | 507K | 122K | 0 | 0 | 0 |
| Cash from Investing | 10.32M | 12.1M | -11.28M | 12.56M | 3.76M | 25.98M | -34.26M | -10.94M | 8.5M | 18.97M | -15.49M | -5.19M | -4.39M | -1.71M | -9.75M | 6.17M | -10.2M | -9.32M | -24.74M | -3.94M | 203K |
| Capital Expenditures | -636K | -570K | -212K | -314K | -934K | -1.57M | -1.02M | -1.71M | -2.04M | -3.01M | -2.63M | -2.11M | -2.59M | -2.74M | -1.74M | -1.37M | -1.7M | -1.3M | -1.32M | -367K | -536K |
| CapEx % of Revenue | 1.98% | 1.68% | 0.55% | 0.9% | 3.09% | 5.93% | 4.25% | 7.46% | 9.62% | 11.93% | 12.05% | 9.52% | 10.09% | 7.84% | 3.92% | 3.8% | 5.44% | 6.83% | 6.69% | 2.82% | 4.84% |
| Acquisitions | 0 | 0 | 0 | 0 | -3.51M | 0 | 0 | 659K | 747K | 819K | 790K | 895K | -92K | 1.1M | -5.78M | 2.1M | 2.8M | 1.1M | 448K | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -566K | -654K | -431K | -426K | -533K | -2M | -612K | -659K | -747K | -819K | -790K | -895K | 92K | -1.1M | -9.18M | -2.1M | -2.8M | -1.1M | -448K | 0 | 136.95M |
| Cash from Financing | -2.24M | -2.91M | 28.77M | -2.76M | 60.5M | -5.77M | 62.69M | 17.29M | -833K | 27.83M | 37.83M | 11.97M | 13.43M | -4.82M | -2.4M | -19.33M | -2.78M | -1.5M | 10.62M | -1.02M | 3.39M |
| Debt Issued (Net) | -20K | -32K | -37K | -36K | -35K | 0 | 5.03M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -39K | -6K | 0 | 0 |
| Equity Issued (Net) | -2.22M | -2.88M | 28.8M | -2.72M | 60.53M | -5.77M | 51.73M | 16.11M | -2.09M | 26.65M | 37.16M | 10.45M | 13.6M | -1.82M | -3.1M | -20.39M | -2.78M | -1.46M | 23.86M | 2.19M | 242K |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1.65M | -3.2M | -2.34M | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -2.22M | -2.88M | -3.42M | -2.72M | -2.36M | -5.77M | -3.76M | -3.51M | -2.09M | -3.03M | -2.54M | -2.44M | -2.39M | -1.82M | -4.76M | -22.05M | -5.82M | -1.74M | 0 | 0 | 0 |
| Other Financing | 0 | 0 | 0 | 0 | 0 | 0 | 5.92M | 1.18M | 1.26M | 1.18M | 668K | 1.51M | 1.49M | 201K | 3.04M | 1.07M | 0 | 0 | -13.24M | -3.21M | 3.15M |
| Net Change in Cash | -84K | -2.54M | -9.09M | -12.14M | 19.81M | -5.91M | 8.48M | -16.07M | -13.54M | 29.18M | 8.48M | -2.96M | 2.31M | -3.06M | 3.45M | -2.92M | -2.54M | -3.13M | -10.22M | -3.93M | 1.83M |
| Free Cash Flow | -8.82M | -12.35M | -26.78M | -22.73M | -45.88M | -27.69M | -21.57M | -24.13M | -23.25M | -20.62M | -16.49M | -11.85M | -9.32M | 731K | 13.86M | 8.86M | 8.74M | -523K | 2.58M | 658K | -2.3M |
| FCF Margin % | -27.45% | -36.41% | -69.72% | -65.23% | -151.92% | -104.4% | -89.91% | -104.95% | -109.71% | -81.78% | -75.67% | -53.42% | -36.33% | 2.09% | 31.24% | 24.59% | 28.05% | -2.74% | 13.04% | 5.05% | -20.8% |
| FCF Growth % | 63.26% | 53.89% | -17.81% | 50.44% | -65.69% | -28.36% | 10.59% | -3.77% | -12.76% | -25.03% | -39.13% | -27.15% | -1375.24% | -94.73% | 56.39% | 1.44% | 1770.55% | -120.27% | 292.1% | 128.57% | - |
| FCF per Share | -0.40 | -0.57 | -1.26 | -1.12 | -2.40 | -1.68 | -1.67 | -2.05 | -2.05 | -1.95 | -1.79 | -1.45 | -1.30 | 0.11 | 1.98 | 1.19 | 1.15 | -0.07 | 0.36 | 0.09 | -0.32 |
| FCF Conversion (FCF/Net Income) | 0.32x | 0.36x | 0.68x | 0.48x | 0.74x | 0.75x | 0.61x | 0.68x | 0.65x | 0.68x | 0.64x | 0.54x | 0.43x | -6.85x | 1.89x | 1.81x | 2.50x | -0.28x | 2.62x | 18.64x | 0.66x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 9K | 0 | 0 |
| Taxes Paid | 25K | 0 | 63K | 233K | 61K | 40K | 0 | 0 | 88K | 37K | 38K | 1.23M | 263K | 46K | 1.82M | 13K | 42K | 0 | 21K | 0 | 0 |
Insufficient liquidity runway
According to quarterly financial data, Digimarc consistently reports net losses that significantly exceed operating cash outflows, with OCF/NI ratios frequently oscillating between 0.27 and 0.81, suggesting that non-cash expenses like stock-based compensation are masking the true severity of the company's underlying cash burn.
The persistent gap between net income and operating cash flow indicates that the company's accounting earnings are heavily influenced by non-cash charges, which obscures the actual cash-generative capacity of the business. Investors should monitor whether this divergence narrows as the company attempts to scale its commercial SaaS platform, as current levels suggest the business model remains fundamentally cash-consumptive.
As reported in recent financial statements, Digimarc's free cash flow trajectory remains firmly in negative territory, with FCF margins reaching -25.0% in 2026Q1, highlighting a structural inability to fund operations through internal cash generation despite the company's ongoing pivot toward recurring subscription-based revenue models.
The consistent failure to achieve positive free cash flow suggests that the company's commercial expansion is currently being subsidized by existing capital rather than operational success. This trajectory warrants further investigation into whether the current cost structure can be rationalized without compromising the technical moat that the company relies upon for its long-term value proposition.
Based on reported figures, Digimarc continues to utilize limited cash reserves for share repurchases, with $885,000 deployed in 2026Q1 alone, a decision that appears counterintuitive given the company's urgent need to preserve liquidity to fund its ongoing commercial transition and bridge the gap to profitability.
The decision to prioritize share buybacks while the company is actively burning cash and facing revenue contraction may indicate a management focus on supporting the stock price rather than strengthening the balance sheet. This capital allocation strategy appears risky, as it accelerates the depletion of the company's $9.8 million cash position at a time when financial flexibility is paramount.
Analysis of the cash flow statement reveals that stock-based compensation, which reached $3.8 million in 2025Q2, serves as a significant non-cash adjustment that effectively hides the true economic cost of the company's specialized engineering talent and the actual cash burn required to sustain its current R&D efforts.
By relying heavily on equity-based compensation, the company manages to report lower cash outflows than would otherwise be required to attract and retain its workforce. Investors should be wary of this dynamic, as it suggests that the true cost of operations is higher than the cash flow statement implies, potentially leading to future dilution if the company is forced to raise capital.
Quick answers to the most common questions about buying DMRC stock.
Digimarc Corporation (DMRC) generated $-11.8M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Digimarc Corporation (DMRC) reported negative free cash flow of $12.3M in 2025, indicating capital requirements exceeded cash from operations.
Digimarc Corporation (DMRC) spent $0.6M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Digimarc Corporation (DMRC) spent $2.9M on share repurchases. This shows the company's commitment to returning capital to its equity investors.