Business
Digimarc Reports Second Quarter 2023 Financial Results
Subscription Revenue Increases 59% on Current Products Subscription Gross Profit Margin Reaches 84% BEAVERTON, Ore.--(BUSINESS WIRE)-- Digimarc Corporation
About this update from Digimarc Corporation
[{"type":"text","content":"\nSubscription Revenue Increases 59% on Current Products\n\n\nSubscription Gross Profit Margin Reaches 84%\n\n\n BEAVERTON, Ore.--(BUSINESS WIRE)--\nDigimarc Corporation (NASDAQ: DMRC) reported financial results for the second quarter ended June 30, 2023.\n\n\n\"Q2 was a strong quarter on many fronts, a testament to our focus on being easy to begin doing business with and excellent at guiding customers along their product digitization journey,\" said Digimarc CEO Riley McCormack. \"A combination of our adding new customers as well as expanding our relationships with existing customers drove a 59% year-over-year increase in subscription revenue from current products, and that, along with our continuing platform unification work, drove a 1,100 basis point year-over-year increase in subscription gross profit margin to 84%. The results of our transformation are beginning to become obvious, and we are excited and energized by what's ahead.\"\n\n\nSecond Quarter 2023 Financial Results\n\n\nSubscription revenue for the second quarter of 2023 increased 44% to $4.7 million compared to $3.2 million in the second quarter of 2022, primarily reflecting higher subscription revenue from new commercial contracts, partially offset by $0.3 million of lower subscription revenue as a result of sunsetting our Piracy Intelligence product last year.\n\n\nService revenue for the second quarter of 2023 decreased 10% to $4.1 million compared to $4.5 million in the second quarter of 2022, primarily reflecting $0.7 million of lower service revenue from HolyGrail recycling projects, partially offset by $0.3 million of higher service revenue from the Central Banks.\n\n\nTotal revenue for the second quarter of 2023 increased 13% to $8.7 million compared to $7.7 million in the second quarter of 2022.\n\n\nGross profit margin for the second quarter of 2023 increased to 56% compared to 52% in the second quarter of 2022. Excluding amortization expense on acquired intangible assets, subscription gross profit margin improved to 84% from 73% while service gross profit margin decreased to 51% from 61% in the second quarter of 2023 compared to the second quarter of 2022.\n\n\nNon-GAAP gross profit margin for the second quarter of 2023 increased to 74% compared to 71% in the second quarter of 2022.\n\n\nOperating expenses for the second quarter of 2023 decreased $2.8 m...