Revenue growth has turned negative with a 19.1% year-over-year decline in 2026Q1, while operating margins remain deeply negative at -94.2%.
| 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 |
|---|
| Sales/Revenue | 32.12M | 33.91M | 38.42M | 34.85M | 30.2M | 26.52M | 23.99M | 22.99M | 21.19M | 25.21M | 21.79M | 22.19M | 25.66M | 34.96M | 44.38M | 36.04M | 31.15M | 19.07M | 19.78M | 13.03M | 11.07M |
| Revenue Growth % | -15.12% | -11.73% | 10.23% | 15.41% | 13.87% | 10.55% | 4.36% | 8.47% | -15.95% | 15.69% | -1.78% | -13.52% | -26.62% | -21.21% | 23.13% | 15.7% | 63.34% | -3.59% | 51.88% | 17.65% | - |
| Cost of Goods Sold | 13.06M | 15.7M | 14.18M | 14.69M | 14.87M | 8.78M | 7.93M | 8.04M | 8.43M | 8.56M | 8.5M | 8.95M | 8.43M | 8.21M | 6.51M | 6.94M | 6.7M | 6.3M | 6.03M | 4.03M | 3.77M |
| COGS % of Revenue | - | 46.29% | 36.91% | 42.14% | 49.26% | 33.1% | 33.07% | 34.96% | 39.76% | 33.94% | 38.99% | 40.32% | 32.86% | 23.47% | 14.67% | 19.25% | 21.51% | 33.04% | 30.46% | 30.96% | 34.04% |
| Gross Profit | 19.06M | 18.21M | 24.24M | 20.16M | 15.32M | 17.74M | 16.06M | 14.95M | 12.77M | 16.66M | 13.3M | 13.24M | 17.23M | 26.76M | 37.87M | 29.1M | 24.45M | 12.77M | 13.76M | 8.99M | 7.3M |
| Gross Margin % | 59.33% | 53.71% | 63.09% | 57.86% | 50.74% | 66.9% | 66.93% | 65.04% | 60.24% | 66.06% | 61.01% | 59.68% | 67.14% | 76.53% | 85.33% | 80.75% | 78.49% | 66.96% | 69.54% | 69.04% | 65.96% |
| Gross Profit Growth % | - | -24.85% | 20.2% | 31.6% | -13.64% | 10.51% | 7.39% | 17.12% | -23.35% | 25.26% | 0.41% | -23.13% | -35.62% | -29.33% | 30.12% | 19.03% | 91.46% | -7.17% | 52.96% | 23.16% | - |
| Operating Expenses | 46.4M | 51.56M | 65.55M | 68.37M | 77.13M | 57.61M | 48.87M | 48.68M | 46.29M | 43.22M | 35.22M | 31.22M | 32.45M | 29.17M | 23.27M | 22.71M | 18.3M | 15.34M | 13.28M | 10.3M | 11.21M |
| OpEx % of Revenue | - | 152.03% | 170.61% | 196.18% | 255.43% | 217.23% | 203.71% | 211.78% | 218.43% | 171.42% | 161.59% | 140.7% | 126.47% | 83.43% | 52.45% | 63.02% | 58.74% | 80.41% | 67.12% | 79.1% | 101.26% |
| Selling, General & Admin | 29.82M | 32.44M | 38.24M | 40.48M | 48.66M | 32.57M | 31.55M | 30.72M | 29.04M | 26.32M | 20.19M | 17.23M | 16.95M | 15.77M | 13.28M | 14.29M | 12.61M | 10.35M | 9.43M | 7.39M | 7.17M |
| SG&A % of Revenue | - | 95.67% | 99.54% | 116.15% | 161.15% | 122.8% | 131.53% | 133.65% | 137.02% | 104.37% | 92.63% | 77.65% | 66.05% | 45.1% | 29.94% | 39.66% | 40.49% | 54.25% | 47.69% | 56.74% | 64.79% |
| Research & Development | 16.59M | 20.48M | 26.21M | 26.58M | 26.49M | 17.54M | 17.31M | 17.96M | 17.25M | 16.9M | 15.03M | 13.99M | 15.5M | 13.4M | 9.99M | 7.33M | 5.69M | 4.99M | 3.84M | 2.91M | 2.45M |
| R&D % of Revenue | - | 60.4% | 68.22% | 76.26% | 87.72% | 66.15% | 72.17% | 78.13% | 81.41% | 67.04% | 68.97% | 63.05% | 60.43% | 38.33% | 22.51% | 20.33% | 18.26% | 26.16% | 19.43% | 22.36% | 22.11% |
| Other Operating Expenses | -20K | -1.37M | 1.1M | 1.31M | 1.98M | 7.5M | 0 | 0 | 0 | 0 | 258K | 109K | 55K | 109K | 0 | 1.09M | 0 | 0 | 0 | 0 | 1.59M |
| Operating Income | -27.34M | -33.34M | -41.31M | -48.21M | -61.81M | -39.87M | -32.81M | -33.73M | -33.52M | -26.57M | -21.92M | -17.98M | -15.22M | -2.41M | 14.59M | 6.39M | 6.15M | -2.56M | 479K | -1.31M | -3.91M |
| Operating Margin % | -85.1% | -98.32% | -107.52% | -138.32% | -204.69% | -150.32% | -136.78% | -146.74% | -158.19% | -105.36% | -100.58% | -81.02% | -59.33% | -6.9% | 32.89% | 17.73% | 19.75% | -13.45% | 2.42% | -10.06% | -35.3% |
| Operating Income Growth % | - | 19.28% | 14.31% | 22.01% | -55.04% | -21.49% | 2.72% | -0.62% | -26.2% | -21.19% | -21.93% | -18.09% | -531.14% | -116.53% | 128.42% | 3.87% | 339.81% | -635.49% | 136.56% | 66.48% | - |
| EBITDA | -20.22M | -25.05M | -33.71M | -40.08M | -53.23M | -37.82M | -30.04M | -31.52M | -31.38M | -24.14M | -19.46M | -15.54M | -12.91M | -423K | 15.58M | 7.13M | 6.79M | -1.98M | 1.25M | -698K | -3.29M |
| EBITDA Margin % | -62.95% | -73.88% | -87.75% | -115% | -176.28% | -142.6% | -125.22% | -137.14% | -148.08% | -95.74% | -89.31% | -70.05% | -50.31% | -1.21% | 35.11% | 19.77% | 21.81% | -10.36% | 6.29% | -5.36% | -29.74% |
| EBITDA Growth % | 42.58% | 25.68% | 15.89% | 24.71% | -40.75% | -25.89% | 4.7% | -0.46% | -30% | -24.03% | -25.21% | -20.41% | -2951.77% | -102.72% | 118.62% | 4.87% | 443.88% | -258.71% | 278.37% | 78.8% | - |
| D&A (Non-Cash Add-back) | 7.12M | 8.29M | 7.59M | 8.13M | 8.58M | 2.05M | 2.77M | 2.21M | 2.14M | 2.43M | 2.46M | 2.43M | 2.31M | 1.99M | 985K | 737K | 644K | 589K | 766K | 612K | 616K |
| EBIT | -27.97M | -33.34M | -40.76M | -47.27M | -59.63M | -32.37M | -32.81M | -33.73M | -33.52M | -26.57M | -21.92M | -17.98M | -15.22M | -2.41M | 13.67M | 3.87M | 6.15M | -2.56M | 479K | -1.31M | -3.91M |
| Net Interest Income | 724K | 681K | 1.82M | 1.68M | 744K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 179K | 195K | 245K | 522K | 0 | 0 | 0 |
| Interest Income | 724K | 681K | 1.82M | 1.68M | 744K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 179K | 195K | 245K | 522K | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -195K | 884K | 2.34M | 2.45M | 2.11M | 5.12M | 277K | 912K | 1.06M | 588K | 258K | 109K | 55K | 109K | -928K | -2.52M | -1.94M | -169K | 1.03M | 1.39M | 1.24M |
| Pretax Income | -27.53M | -32.46M | -38.97M | -45.76M | -59.7M | -34.74M | -32.54M | -32.82M | -32.47M | -25.98M | -21.66M | -17.87M | -15.17M | -2.3M | 13.67M | 3.87M | 4.22M | -2.73M | 1.51M | 77K | -2.67M |
| Pretax Margin % | -85.71% | -95.72% | -101.43% | -131.29% | -197.71% | -131.01% | -135.62% | -142.77% | -153.2% | -103.03% | -99.4% | -80.53% | -59.12% | -6.59% | 30.8% | 10.74% | 13.53% | -14.34% | 7.64% | 0.59% | -24.08% |
| Income Tax | 12K | -151K | 44K | 204K | 97K | 16K | 1K | 21K | 39K | -206K | 10K | 66K | 652K | -1.8M | 5.39M | -1.79M | 42K | 23K | 21K | 22K | 21K |
| Effective Tax Rate % | -0.04% | 0.47% | -0.11% | -0.45% | -0.16% | -0.05% | -0% | -0.06% | -0.12% | 0.79% | -0.05% | -0.37% | -4.3% | 77.99% | 39.47% | -46.15% | 1% | -0.84% | 1.39% | 28.57% | -0.79% |
| 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 |
| Net Margin % | -85.75% | -95.27% | -101.54% | -131.87% | -198.03% | -131.07% | -135.63% | -142.86% | -153.39% | -102.21% | -99.44% | -80.82% | -61.66% | -1.45% | 18.64% | 15.69% | 13.4% | -14.46% | 7.54% | 0.42% | -24.27% |
| Net Income Growth % | 31.82% | 17.18% | 15.12% | 23.14% | -72.04% | -6.83% | 0.92% | -1.03% | -26.13% | -18.91% | -20.84% | -13.36% | -3020.32% | -106.13% | 46.25% | 35.51% | 251.4% | -284.91% | 2610.91% | 102.05% | - |
| Net Income (Continuing) | -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 |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -1.25 | -1.49 | -1.83 | -2.26 | -3.12 | -2.11 | -3.41 | -2.79 | -2.86 | -2.44 | -2.36 | -2.19 | -2.20 | -0.07 | 1.12 | 0.76 | 0.55 | -0.39 | 0.21 | 0.01 | -0.38 |
| EPS Growth % | 32.45% | 18.58% | 19.03% | 27.56% | -47.87% | 38.12% | -22.22% | 2.45% | -17.21% | -3.39% | -7.76% | 0.45% | -2881.03% | -106.59% | 47.37% | 38.18% | 241.03% | -285.71% | 2000% | 102.63% | - |
| EPS (Basic) | - | -1.49 | -1.83 | -2.26 | -3.12 | -2.11 | -3.41 | -2.79 | -2.86 | -2.44 | -2.36 | -2.19 | -2.21 | -0.07 | 1.16 | 0.84 | 0.59 | -0.39 | 0.21 | 0.01 | -0.38 |
| Diluted Shares Outstanding | 22.01M | 21.66M | 21.26M | 20.32M | 19.14M | 16.46M | 12.91M | 11.76M | 11.36M | 10.57M | 9.19M | 8.2M | 7.19M | 6.87M | 6.99M | 7.43M | 7.62M | 7.14M | 7.16M | 7.14M | 7.14M |
| Basic Shares Outstanding | 22.01M | 21.66M | 21.26M | 20.32M | 19.14M | 16.46M | 12.91M | 11.76M | 11.36M | 10.56M | 9.18M | 8.19M | 7.17M | 6.87M | 6.76M | 6.74M | 7.12M | 7.14M | 7.16M | 7.14M | 7.14M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 28.34% | - | - | - | - | - | - |
Insufficient liquidity runway
As reported in recent financial filings, Digimarc's revenue growth has turned negative, with a 19.1% year-over-year decline in 2026Q1, suggesting that the transition from legacy government contracts to commercial SaaS subscriptions is failing to offset the erosion of the company's traditional, high-margin project-based revenue streams.
The persistent negative growth trend indicates that the commercial adoption of the Illuminate platform is not yet achieving the scale required to replace legacy business. Investors should monitor whether this contraction reflects a structural loss of market relevance or merely the timing of lumpy government contract renewals.
Based on the company's historical income statements, gross margins have fluctuated between 56% and 66%, indicating that the shift toward commercial software services has not yet established a stable, high-margin profile capable of absorbing the company's significant fixed-cost base and ongoing research and development requirements.
The variability in gross margins suggests that the company is still heavily reliant on professional services or implementation work, which carries lower margins than pure-play SaaS. This lack of margin consistency complicates the path to profitability, as the company remains unable to leverage its intellectual property effectively.
According to quarterly data, Digimarc's operating margin of -94.2% in 2026Q1 highlights a severe lack of operating leverage, as the company continues to spend aggressively on SG&A and R&D without achieving the revenue scale necessary to cover its substantial fixed operating expenses and specialized labor costs.
The company's inability to scale operating income alongside its revenue suggests that the current business model is structurally inefficient at its present size. Without a significant inflection in commercial volume, the company appears trapped in a cycle of high overhead that continues to erode shareholder equity.
Financial statements reveal that R&D and SG&A expenses consistently exceed gross profit, with R&D spending alone reaching $3.7 million in 2026Q1, a level of investment that appears unsustainable given the company's dwindling cash reserves and the absence of a clear, near-term path to positive operating cash flow.
Management's commitment to maintaining a high-cost R&D structure suggests a focus on long-term patent protection and product development at the expense of immediate financial stability. This strategy warrants further investigation into whether the company can survive long enough to realize the commercial potential of its digital watermarking technology.
While bulls point to the potential of the HolyGrail 2.0 initiative, the company's cash position of approximately $9.8 million against persistent quarterly operating losses suggests a high probability of dilutive financing, which could significantly impair shareholder value before the commercial pivot reaches a sustainable, cash-generative inflection point.
Short-sellers likely focus on the widening gap between the company's technological ambitions and its deteriorating financial reality. The market's current valuation appears to ignore the immediate risk of a liquidity crunch, which may force management to prioritize survival over the long-term strategic goals that currently underpin the investment thesis.
Quick answers to the most common questions about buying DMRC stock.
For fiscal year 2025, Digimarc Corporation (DMRC) reported total revenue of $33.9M. This represents a 206.3% increase compared to $11.1M in 2006.
Digimarc Corporation (DMRC) reported a net loss of $32.3M for the fiscal year ending 2025.
Digimarc Corporation (DMRC) reported an operating income of $-33.3M, resulting in an operating profit margin of -98.3%. This margin reflects the operational efficiency of the business before interest and taxes.
Digimarc Corporation (DMRC) generated $18.2M in gross profit for the year, representing a gross profit margin of 53.7%. This demonstrates the company's core pricing power and production efficiency.