Quarterly Earnings Snapshot

First Quarter 2024

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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 performance.

Although we believe these statements are based on reasonable expectations and beliefs, they are subject to risks and uncertainties that are difficult to predict and, often, beyond our control. These risks include, but are not limited to, the risk factors set forth in Part I, Item 1A of our latest Annual Report on Form 10-K and the risks detailed in our other filings with the U.S. Securities and Exchange Commission.

We believe that these risk factors could affect our future performance and cause our actual results to differ materially from those expressed or implied by forward-looking statements made by us or on our behalf.

All forward-looking statements made by us or by persons acting on our behalf apply only as of the date of this presentation. We expressly disclaim any obligation to update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this presentation or a change in our views or expectations, or otherwise.

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Business Overview

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About Digimarc

Digimarc is the pioneer and global leader in digital watermarking technologies.

For nearly 30 years, Digimarc has been deployed in solutions built upon two things that we do better than anyone else: the identification and the authentication of physical and digital items.

F E A T U R E S

Imperceptible

Ubiquitous

Redundant

Secure

Adaptable

Identification + Authentication

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Trending Use Cases | Identification and Authentication

Digimarc technology has successfully been used for:

Brand Protection | Anti Counterfeit

Protect consumers from counterfeits, fraud, or misinformation

Consumer Engagement

Enable advanced consumer engagement & redirection

Industrial Automation

Automate error-prone manufacturing, fulfillment, & distribution

Retail Experience

Improve in-store or supply chain efficiency including checkout

Sustainability

Increase the quality and quantity of recycled materials

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Digimarc Illuminate Platform

Scalable SaaS products powered by extensible and enterprise-scale product digitization platform

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Commercial Go-to-Market Motions

Traditional SaaS

Products: Digimarc Engage, Digimarc Validate, Digimarc Automate, new products

GTM: Traditional SaaS GTM; large cross sell and

upsell opportunities (accretive value for every product added)

Initial Deal Size: $

($50K to $1M+ ARR)

Initial Deal Term: 1-3years

Traditional PaaS

Product: Digimarc Illuminate Platform

GTM: Traditional PaaS GTM; large upsell opportunities (capacity and functionality)

Initial Deal Size: $$

($250K to $5M+ ARR)

Initial Deal Term: 3-5years

Ecosystem Driven

Opportunities

Products: Digimarc Recycle, Digimarc Validate (Media), Digimarc Retail Experience, new products

GTM: Industry-wide or country-wide deployments; sometimes driven by a regulatory component; timing can be unpredictable/uncontrollable, but uber-rapid and scalable adoption once market is opened

Market Size: $$$$

(Varied)

Initial Deal Term: N/A (de-facto market standard)

Power of Partners: Revenue Ramp Acceleration + Massive Operating Leverage

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Three Pillars of Shareholder Value

Government Business:

Commercial Business:

Commercial Business:

Central Banks

Traditional SaaS & PaaS

Ecosystem Driven Opportunities

• 4.8% CAGR since the ID

Systems spin-out in 2008

• ~60% Gross profit margin with

minimal operating expenses

• Inflation protected

• 25-year relationship, current

• Extremely high growth (see

• Extremely high growth potential

current ARR and commercial

(not yet reflected in current ARR

revenue growth rates)

and commercial revenue)

    • 90%+ incremental gross profit margin
  • Massive operating leverage/high operating margin potential

contract runs through Dec

31 2029

• No counter-party risk (world's

central banks)

• Keep intellectual property for

application in the commercial

business; profitable R&D

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  • Digimarc Engage: Consumer engagement for physical products and digital assets; see morehere
  • Digimarc Validate: Anti- counterfeit for physical products; see morehere
  • Digimarc Automate: Automation at manufacturing, fulfillment and distribution centers; official product launch coming soon
  • Digimarc Recycle: Active on multiple continents; see more hereand here

TAM: ~$1/capita/year

  • Digimarc Retail Experience: Platform and Product opportunity; see morehere

TAM: > $1 Billion

  • Digimarc Validate (Media): Digital watermarks included in multiple GenAI regulation bills; see morehereandhere

TAM: TBD - provide tools for free, product upsell (freemium model); see more here

Growing Commercial Product Suite

The product pipeline has expanded. New product categories are helping grow ARR.

  • Note: Pipeline graphic is for illustrative purposes only and is not proportionate to any company-reported metric. The graphic serves solely to demonstrate pipeline growth over time.

ARR Growth Characteristics

Digimarc's pipeline is expanding but incremental ARR can be lumpy

  • Deals can be significant with the ability to generate 8-figure ARR over multiple years
  • $32M+ contract in May 2023 extended Digimarc Illuminate functionality (Security Solutions and Deposit Return Systems)
  • Several large deals in the sales pipeline, some of which are for new products/functionality

85% YoY

Growth

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Attachments

Disclaimer

Digimarc Corporation published this content on 02 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 20:35:15 UTC.