Digimarc Corporation · NASDAQ:DMRC
Digimarc — Q2 2025 Earnings Presentation
17 slides from Digimarc's earnings presentation, Aug 14, 2025
Slide 1: Investor Presentation Second Quarter 2025
Investor Presentation Second Quarter 2025 August 14, 2025 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which reflect management’s current view regarding future events and performan
Slide 3: Q2 2025 Update
Q2 2025 Update Digimarc made significant progress towards future reacceleration of ARR growth with its newly refocused organization Business Highlights • The first Digimarc-protected gift cards will appear on shelves next week; cards are from multiple different issuers, including some of the largest
Slide 4: Three Core Focus Areas
Three Core Focus Areas Digimarc is focused on solving large, urgent problems that deliver immediate ROI Retail Loss Prevention Product Authentication Digital Authentication Fight Fraud, Preserve Convenience, and Secure Authentication for Agents in the Field Protect and Verify Digital Footprint Prote
Slide 5: Retail Loss Prevention: Gift Cards
Retail Loss Prevention: Gift Cards Digimarc’s gift card solution is expected to have the greatest impact on near-term ARR • Estimated 5+ billion gift cards are printed each year in the US alone. • Digimarc’s solution is more secure, less expensive, and – as the only digital solution – more extensibl
Slide 6: Gift Card Ecosystem
Gift Card Ecosystem Digimarc predominantly sells its gift card solution to gift card manufacturers while leveraging our long-term relationships with numerous industry participants to catalyze adoption Gift Card Digimarc Customers Manufacturers Program Retailers Managers Ecosystem Enablers Market Ben
Slide 7: Product Authentication
Product Authentication Digimarc Validate ARR continues to grow, driven by customer upsells & new customer wins • Brands face rampant counterfeiting and IP theft, with bad actors advancing their technology and processes to replicate packaging and security features with alarming accuracy, something ma
Slide 8: Digital Authentication
Digital Authentication We have exceeded our conservative 2025 assumptions in this area and look to accelerate our traction throughout 2026 • AI is creating a vacuum of trust and authenticity, especially acute in the digital world. • Content Credentials (C2PA) has created awareness that our technolog
Slide 9: Future Identification Opportunity Areas
Future Identification Opportunity Areas Digimarc remains well-positioned to execute against large market opportunities when the markets are ripe Digimarc Retail Digimarc Recycle Experience Digimarc Automate Digimarc Engage Initial enhancement of packaging for Continue to support Netto Marken Continu
Slide 10: Financial Update
Y Financial Update DIGIMARC
Slide 11: ARR Comparison: Q2 2025 vs Q2 2024
ARR Comparison: Q2 2025 vs Q2 2024 Q2 2025 Ending ARR was $15.9M vs $23.9M in Q2 2024 (2) • ARR was negatively impacted by churn of the $5.8M retailer contract in 2024 and $3.5M DRS contract in 2025. • ARR as of 6/30/25 is in line with our original 2025 internal budget. • Looking forward, we expect
Slide 12: Q2 2025 Financial Summary
Q2 2025 Financial Summary Q2 2025 non-GAAP loss was ($2.3M), an improvement of $2.7M or 54% from Q2 2024 (1) • The large reduction in operating expenses primarily reflects lower compensation costs due to the reorganization in Q1 2025; annualized cash cost savings from the reorganization are expected
Slide 13: Free Cash Flow Comparison: Q2 2025 vs Q2 2024
Free Cash Flow Comparison: Q2 2025 vs Q2 2024 Q2 2025 free cash flow was ($5.0M), an improvement of $1.9M or 28% from Q2 2024 (1) • Excluding $0.9M of one-time severance payments and $0.3M of one-time legal costs(5), free cash flow(1) would have been ($3.8M), an improvement of $3.2M or 45% from Q2 2
Slide 14: Free Cash Flow Bridge: Q2 2025 vs Q2 2024
Free Cash Flow Bridge: Q2 2025 vs Q2 2024 Q2 2025 free cash flow was ($5.0M), down $1.9M or 28% from Q2 2024. (1) Adjusted free cash flow was ($3.8M) and continues to improve. (1) $’s in Millions Increase Decrease Total $0.0 ($1.0) Primarily related ($2.0) to headcount reductions ($3.0) ($4.0) ($5.0
Slide 15: Concluding Remarks
Concluding Remarks We are realizing significant benefits from our decision to focus on our core authentication use cases as we build the trust layer for the modern world • Digimarc is capitalizing on the convergence of key trends driving increased demand for our solutions. • We are advancing the gif
Slide 16: Q&A
ig = « Q&A | ¥ a _ « * a" \ Z - ) ba ¥ — oe 16 DIGIMARC
Slide 17: Footnotes
Footnotes (1) This presentation contains non-GAAP financial measures including Non-GAAP operating expenses, Non-GAAP net loss, Non-GAAP net loss per share (diluted) and Free Cash Flow. These financial measures are important measures of our operating performance because they allow management, investo