Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 22, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | DMRC | |
Entity Registrant Name | Digimarc CORP | |
Entity Central Index Key | 1438231 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 8,544,154 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $5,064 | $6,122 |
Marketable securities | 32,031 | 32,201 |
Trade accounts receivable, net | 3,620 | 4,545 |
Other current assets | 2,518 | 2,611 |
Total current assets | 43,233 | 45,479 |
Marketable securities | 749 | |
Property and equipment, net | 2,895 | 2,976 |
Intangibles, net | 6,692 | 6,720 |
Goodwill | 1,114 | 1,114 |
Other assets | 337 | 378 |
Total assets | 54,271 | 57,416 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 1,473 | 1,379 |
Deferred revenue | 2,984 | 3,660 |
Total current liabilities | 4,457 | 5,039 |
Deferred rent and other long-term liabilities | 158 | 203 |
Total liabilities | 4,615 | 5,242 |
Commitments and contingencies (Note 12) | ||
Shareholders' equity: | ||
Preferred stock (par value $0.001 per share, 2,500 authorized, 10 shares issued and outstanding at March 31, 2015 and December 31, 2014) | 50 | 50 |
Common stock (par value $0.001 per share, 50,000 authorized, 8,540 and 8,427 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively) | 9 | 8 |
Additional paid-in capital | 61,853 | 60,222 |
Accumulated deficit | -12,256 | -8,106 |
Total shareholders' equity | 49,656 | 52,174 |
Total liabilities and shareholders' equity | $54,271 | $57,416 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 2,500 | 2,500 |
Preferred stock, shares issued | 10 | 10 |
Preferred stock, shares outstanding | 10 | 10 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 50,000 | 50,000 |
Common stock, shares issued | 8,540 | 8,427 |
Common stock, shares outstanding | 8,540 | 8,427 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue: | ||
Service | $3,501 | $2,988 |
Subscription | 1,716 | 1,412 |
License | 772 | 2,805 |
Total revenue | 5,989 | 7,205 |
Cost of revenue: | ||
Service | 1,578 | 1,414 |
Subscription | 754 | 649 |
License | 84 | 83 |
Total cost of revenue | 2,416 | 2,146 |
Gross profit | 3,573 | 5,059 |
Operating expenses: | ||
Sales and marketing | 2,090 | 1,879 |
Research, development and engineering | 3,084 | 3,546 |
General and administrative | 2,206 | 2,421 |
Intellectual property | 367 | 534 |
Total operating expenses | 7,747 | 8,380 |
Operating loss | -4,174 | -3,321 |
Other income, net | 23 | 27 |
Loss before income taxes | -4,151 | -3,294 |
Benefit for income taxes | 1 | 1,308 |
Net loss | ($4,150) | ($1,986) |
Earnings (loss) per common share: | ||
Loss per common share-basic | ($0.52) | ($0.29) |
Loss per common share-diluted | ($0.52) | ($0.29) |
Weighted average common shares outstanding-basic | 7,960 | 7,000 |
Weighted average common shares outstanding-diluted | 7,960 | 7,000 |
Cash dividends declared per common share | $0.11 |
Consolidated_Statements_of_Sha
Consolidated Statements of Shareholders' Equity (USD $) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] |
In Thousands | |||||
Balance at Dec. 31, 2013 | $50,923 | $50 | $7 | $41,498 | $9,368 |
Balance, shares at Dec. 31, 2013 | 10 | 7,401 | |||
Exercise of stock options | 712 | 1 | 711 | ||
Exercise of stock options, shares | 122 | ||||
Issuance of restricted common stock | 0 | 0 | 0 | 0 | 0 |
Issuance of restricted common stock, shares | 57 | ||||
Forfeiture of restricted common stock | 0 | 0 | 0 | 0 | 0 |
Forfeiture of restricted common stock, shares | -7 | ||||
Purchase and retirement of common stock | -850 | -850 | |||
Purchase and retirement of common stock, shares | -51 | ||||
Stock-based compensation | 1,304 | 1,304 | |||
Tax impact from stock-based awards | 72 | 72 | |||
Net loss | -1,986 | -1,986 | |||
Cash dividends declared | -824 | -824 | |||
Balance at Mar. 31, 2014 | 49,351 | 50 | 8 | 42,735 | 6,558 |
Balance, shares at Mar. 31, 2014 | 10 | 7,522 | |||
Balance at Dec. 31, 2014 | 52,174 | 50 | 8 | 60,222 | -8,106 |
Balance, shares at Dec. 31, 2014 | 10 | 8,427 | |||
Exercise of stock options | 874 | 1 | 873 | ||
Exercise of stock options, shares | 45 | 45 | |||
Issuance of restricted common stock | 0 | 0 | 0 | 0 | 0 |
Issuance of restricted common stock, shares | 90 | ||||
Forfeiture of restricted common stock | 0 | 0 | 0 | 0 | 0 |
Forfeiture of restricted common stock, shares | -5 | ||||
Purchase and retirement of common stock | -496 | -496 | |||
Purchase and retirement of common stock, shares | -17 | ||||
Stock-based compensation | 1,254 | 1,254 | |||
Net loss | -4,150 | -4,150 | |||
Balance at Mar. 31, 2015 | $49,656 | $50 | $9 | $61,853 | ($12,256) |
Balance, shares at Mar. 31, 2015 | 10 | 8,540 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net loss | ($4,150) | ($1,986) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation, amortization and write-off of property and equipment | 328 | 231 |
Amortization and write-off of intangibles | 277 | 308 |
Changes in allowance for doubtful accounts | 10 | -7 |
Stock-based compensation | 1,217 | 1,259 |
Deferred income taxes | -509 | |
Excess tax benefit from stock-based awards | -72 | |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | 915 | 1,809 |
Other current assets | 93 | -699 |
Other assets | 41 | 84 |
Accounts payable and other accrued liabilities | -99 | -314 |
Deferred revenue | -668 | -1,484 |
Net cash used in operating activities | -2,036 | -1,380 |
Cash flows from investing activities: | ||
Purchase of property and equipment | -125 | -117 |
Capitalized patent costs | -194 | -295 |
Maturity of marketable securities | 21,976 | 11,192 |
Purchase of marketable securities | -21,057 | -9,266 |
Net cash provided by investing activities | 600 | 1,514 |
Cash flows from financing activities: | ||
Exercise of stock options | 874 | 712 |
Purchase of common stock | -496 | -850 |
Cash dividends paid | -824 | |
Excess tax benefit from stock-based awards | 72 | |
Net cash provided by (used in) financing activities | 378 | -890 |
Net decrease in cash and cash equivalents | -1,058 | -756 |
Cash and cash equivalents at beginning of period | 6,122 | 3,811 |
Cash and cash equivalents at end of period | 5,064 | 3,055 |
Supplemental disclosure of cash flow information: | ||
Cash paid (received) for income taxes, net | 2 | -12 |
Supplemental schedule of non-cash investing activities: | ||
Stock-based compensation capitalized to patent costs and software | $37 | $45 |
Description_of_Business_and_Si
Description of Business and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Description of Business and Significant Accounting Policies | 1. Description of Business and Significant Accounting Policies |
Description of Business | |
Digimarc Corporation (“Digimarc” or the “Company”), an Oregon corporation, enables governments and enterprises around the world to give digital identities to media and objects that computers can sense and recognize and to which they can react. The Company has developed an intuitive computing platform that is intended to optimize the identification of consumer brand impressions, facilitating modern mobile-centric shopping. The platform includes means to infuse persistent digital information, “Digimarc IDs,” perceptible only to computers and digital devices, into all forms of media content, including consumer products packaging. Digimarc IDs for packaging, often referred to as “Digimarc Barcodes,” facilitate remarkably faster scanning of items at retail checkout as well as improved interaction with consumers. The unique digital identifier placed in media generally persists with it regardless of the distribution path and whether it is copied, manipulated or converted to a different format, and does not affect the quality of the content or the enjoyment or other traditional uses of it. The Company’s technology permits computers and digital devices to quickly and reliably identify relevant data from vast amounts of media content. | |
Interim Consolidated Financial Statements | |
The Company has adhered to the accounting policies set forth in its Annual Report on Form 10-K for the year ended December 31, 2014 in preparing the accompanying interim consolidated financial statements. | |
The accompanying interim consolidated financial statements have been prepared from the Company’s records without audit and, in management’s opinion, include all adjustments (consisting of only normal recurring adjustments) necessary to fairly reflect the financial condition and the results of operations for the periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (the “U.S. GAAP”) have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). | |
These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on February 20, 2015. The results of operations for the interim periods presented in these consolidated financial statements are not necessarily indicative of the results for the full year. | |
Reclassifications | |
Certain prior period amounts in the accompanying consolidated financial statements and notes thereto have been reclassified to conform to current period presentation. These reclassifications had no material effect on the results of operations or financial position for any period presented. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU No 2014-09 provides specific guidance to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The amendments in this update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The amendments in this update permit the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is currently assessing the potential future impact of this standard on the financial condition or results of operations of the Company. | |
On April 1, 2015, the FASB tentatively agreed to propose a one-year deferral of the effect date for ASU 2014-09, but would permit all entities to adopt the standard as of the original effective date for public business entities (i.e., annual periods beginning after December 15, 2016, and interim periods therein). The FASB expects to issue an Exposure Draft for this issue in the near term. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||
Fair Value of Financial Instruments | 2. Fair Value of Financial Instruments | ||||||||||||||||||||
The estimated fair values of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable and other accrued liabilities approximate their carrying values due to the short-term nature of these instruments. The Company records marketable securities at amortized cost, which approximates fair value. | |||||||||||||||||||||
The Company’s fair value hierarchy for its cash equivalents and marketable securities as of March 31, 2015 and December 31, 2014, respectively, was as follows: | |||||||||||||||||||||
March 31, 2015 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Money market securities | $ | 3,367 | $ | — | $ | — | $ | 3,367 | |||||||||||||
Corporate notes | — | 19,995 | — | 19,995 | |||||||||||||||||
Pre-refunded municipal bonds (1) | — | 9,067 | — | 9,067 | |||||||||||||||||
Commercial paper | — | 1,947 | — | 1,947 | |||||||||||||||||
Certificates of deposits | — | 1,442 | — | 1,442 | |||||||||||||||||
Total | $ | 3,367 | $ | 32,451 | $ | — | $ | 35,818 | |||||||||||||
December 31, 2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Money market securities | $ | 3,556 | $ | — | $ | — | $ | 3,556 | |||||||||||||
Corporate notes | — | 19,245 | — | 19,245 | |||||||||||||||||
Pre-refunded municipal bonds (1) | — | 13,317 | — | 13,317 | |||||||||||||||||
Certificates of deposits | — | 2,176 | — | 2,176 | |||||||||||||||||
Total | $ | 3,556 | $ | 34,738 | $ | — | $ | 38,294 | |||||||||||||
-1 | Pre-refunded municipal bonds are collateralized by U.S. treasuries. | ||||||||||||||||||||
The fair value maturities of the Company’s cash equivalents and marketable securities as of March 31, 2015 are as follows: | |||||||||||||||||||||
Maturities by Period | |||||||||||||||||||||
Total | Less than | 1-5 years | 5-10 years | More than | |||||||||||||||||
1 year | 10 years | ||||||||||||||||||||
Cash equivalents and marketable securities | $ | 35,818 | $ | 35,818 | $ | — | $ | — | $ | — | |||||||||||
The Company considers all highly liquid marketable securities with original maturities of 90 days or less at the date of acquisition to be cash equivalents. Cash equivalents include money market funds and certificates of deposit totaling $3,787 and $5,344 at March 31, 2015 and December 31, 2014, respectively. Cash equivalents are carried at cost or amortized cost, which approximates fair value. |
Revenue_Recognition
Revenue Recognition | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Text Block [Abstract] | ||||
Revenue Recognition | 3. Revenue Recognition | |||
The Company derives its revenue primarily from development services, subscriptions and licensing of its intellectual property: | ||||
• | Service revenue consists primarily of software development and consulting services. The majority of service revenue arrangements are structured as time and materials consulting agreements. | |||
• | Subscription revenue includes Digimarc Discover, Barcode and Guardian products and services, is generally recurring, paid in advance and recognized over the term of the subscription. | |||
• | License revenue originates primarily from licensing the Company’s intellectual property where the Company receives license fees and/or royalties as its income stream. | |||
Revenue is recognized in accordance with ASC 605 “Revenue Recognition” and ASC 985 “Software” when the following four criteria are met: | ||||
(i) | persuasive evidence of an arrangement exists, | |||
(ii) | delivery has occurred, | |||
(iii) | the fee is fixed or determinable, and | |||
(iv) | collection is reasonably assured. | |||
Some customer arrangements encompass multiple deliverables, such as patent licenses, professional services, software licenses, and maintenance and support fees. For arrangements that include multiple deliverables, the Company identifies separate units of accounting at inception based on the consensus reached under ASC 605-25 “Multiple-Element Arrangements,” which provides that revenue arrangements with multiple deliverables should be divided into separate units of accounting if certain criteria are met. The Company applies ASC 985 to software deliverables when relevant. The consideration for the arrangement under ASC 605-25 is allocated to the separate units of accounting using the relative selling price method. | ||||
The relative selling price method allocates the consideration based on the Company’s specific assumptions rather than assumptions of a marketplace participant, and any discount in the arrangement proportionally to each deliverable on the basis of each deliverable’s selling price. | ||||
Applicable revenue recognition criteria is considered separately for each separate unit of accounting as follows: | ||||
• | Service revenue is generally determined based on time and materials. Revenue for professional services is recognized as the services are performed. Billing for services rendered generally occurs within one month after the services are provided. | |||
• | Subscription revenue, which includes Digimarc Discover, Barcode and Guardian products and services, is generally paid in advance and recognized over the term of the subscription, which is generally one to three years. | |||
• | License revenue is recognized when amounts owed to the Company have been earned, are fixed or determinable (within the Company’s normal 30 to 60 day payment terms), and collection is reasonably assured. If the payment terms extend beyond the normal 30 to 60 days, the fee may not be considered to be fixed or determinable, and the revenue would then be recognized when installments are due. | |||
• | The Company records revenue from certain license agreements upon cash receipt as a result of collectability not being reasonably assured. | |||
• | The Company’s standard payment terms for license arrangements are 30 to 60 days. Extended payment terms on patent license arrangements are not considered to be fixed or determinable if payments are due beyond the Company’s standard payment terms, primarily because of the risk of substantial modification present in the Company’s patent licensing business. As such, revenue on license arrangements with extended payment terms are recognized as fees become fixed or determinable. | |||
Deferred revenue consists of billings in advance for service, subscription and license contracts for which revenue has not been earned. |
Segment_Information
Segment Information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Segment Information | 4. Segment Information | ||||||||
Geographic Information | |||||||||
The Company derives its revenue from a single reporting segment: media management solutions. Revenue is generated in this segment through development services, subscriptions and licensing of intellectual property. The Company markets its products in the U.S. and in non-U.S. countries through its sales and licensing personnel. | |||||||||
Revenue by geographic area, based upon the “bill-to” location, was as follows: | |||||||||
Three | Three | ||||||||
Months | Months | ||||||||
Ended | Ended | ||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Domestic | $ | 1,687 | $ | 3,117 | |||||
International (1) | 4,302 | 4,088 | |||||||
Total | $ | 5,989 | $ | 7,205 | |||||
-1 | Revenue from the Central Banks, consisting of a consortium of central banks around the world, is classified as international revenue. Reporting revenue by country for this customer is not practicable. | ||||||||
Major Customers | |||||||||
Customers who accounted for 10% or more of the Company’s revenue are as follows: | |||||||||
Three | Three | ||||||||
Months | Months | ||||||||
Ended | Ended | ||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Central Banks | 59 | % | 43 | % | |||||
The Nielsen Company (“Nielsen”) | — | 16 | % | ||||||
Verance Corporation (“Verance”) | — | 10 | % | ||||||
In the first quarter of 2014, Nielsen made its final quarterly license fee payment under its patent license agreement. | |||||||||
In the third quarter of 2014, the Company extended the patent license agreement with Verance through 2023, in effect waiving any future royalties and license fees, in exchange for a $1.0 million license fee payment. |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Stock-Based Compensation | 5. Stock-Based Compensation | ||||||||||||||||
Stock-based compensation includes expense charges for all stock-based awards to employees and directors. These awards include stock option grants and restricted stock awards. | |||||||||||||||||
Stock-based compensation expense related to internal labor is capitalized to patent costs and software based on direct labor hours charged to capitalized patent costs and software. | |||||||||||||||||
Determining Fair Value | |||||||||||||||||
Stock Options | |||||||||||||||||
Valuation and Amortization Method. The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model. The Company amortizes the fair value of all awards on a straight-line basis over the requisite service periods, which are generally the vesting periods. | |||||||||||||||||
Expected Life. The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and pre-vesting and post-vesting forfeitures. Stock options granted generally vest over three to four years for employee grants and one to two years for director grants, and have contractual terms of ten years. | |||||||||||||||||
Expected Volatility. The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of its common stock based on historical prices over the most recent period commensurate with the expected life of the award. | |||||||||||||||||
Risk-Free Interest Rate. The Company determines the risk-free interest rate using current U.S. treasury yields for bonds with a maturity commensurate with the expected life of the award. | |||||||||||||||||
Expected Dividend Yield. The expected dividend yield is derived by the Company’s expected annual dividend rate over the expected term divided by the fair value of the Company’s common stock at the grant date. | |||||||||||||||||
There were no stock options granted during the three-month periods ended March 31, 2015 and 2014. | |||||||||||||||||
The Company records stock-based compensation expense for stock option awards only for those awards that are expected to vest. | |||||||||||||||||
Restricted Stock | |||||||||||||||||
The fair value of restricted stock awarded is based on the fair market value of the Company’s common stock on the date of the grant (measurement date), and is recognized over the vesting period using the straight-line method. | |||||||||||||||||
The Company records stock-based compensation expense for restricted stock awards only for those awards that are expected to vest. | |||||||||||||||||
Stock-based Compensation | |||||||||||||||||
Three | Three | ||||||||||||||||
Months | Months | ||||||||||||||||
Ended | Ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Stock-based compensation: | |||||||||||||||||
Cost of revenue | $ | 185 | $ | 142 | |||||||||||||
Sales and marketing | 159 | 142 | |||||||||||||||
Research, development and engineering | 287 | 356 | |||||||||||||||
General and administrative | 518 | 550 | |||||||||||||||
Intellectual property | 68 | 69 | |||||||||||||||
Stock-based compensation expense | 1,217 | 1,259 | |||||||||||||||
Capitalized to patent costs and software | 37 | 45 | |||||||||||||||
Total stock-based compensation | $ | 1,254 | $ | 1,304 | |||||||||||||
The following table sets forth total unrecognized compensation cost related to non-vested stock-based awards granted under all equity compensation plans, including stock options and restricted stock: | |||||||||||||||||
As of | As of | ||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Total unrecognized compensation costs | $ | 12,411 | $ | 11,206 | |||||||||||||
Total unrecognized compensation costs will be adjusted for any future changes in estimated forfeitures. | |||||||||||||||||
The Company expects to recognize the unrecognized compensation costs as of March 31, 2015 for stock options and restricted stock over weighted average periods through March 2019 as follows: | |||||||||||||||||
Stock | Restricted | ||||||||||||||||
Options | Stock | ||||||||||||||||
Weighted average period | 0.0 years | 1.6 years | |||||||||||||||
Stock Option Activity | |||||||||||||||||
As of March 31, 2015, under all of the Company’s stock-based compensation plans, equity awards to purchase an additional 1,411 shares were authorized for future grants under the plans. The Company issues new shares upon option exercises. The following table reconciles the outstanding balance of stock options: | |||||||||||||||||
Three-months ended March 31, 2015: | Options | Weighted | Weighted | Aggregate | |||||||||||||
Average | Average | Intrinsic | |||||||||||||||
Exercise | Grant Date | Value | |||||||||||||||
Price | Fair Value | ||||||||||||||||
Outstanding at December 31, 2014 | 601 | $ | 16.97 | $ | 8.42 | ||||||||||||
Options granted | — | — | — | ||||||||||||||
Options exercised | (45 | ) | 19.45 | 8.66 | |||||||||||||
Options canceled or expired | — | — | — | ||||||||||||||
Outstanding at March 31, 2015 | 556 | $ | 16.76 | $ | 8.4 | $ | 4,055 | ||||||||||
Exercisable at March 31, 2015 | 556 | $ | 16.76 | $ | 4,055 | ||||||||||||
The aggregate intrinsic value is based on the closing price of $21.95 per share of Digimarc common stock on March 31, 2015, which would have been received by the optionees had all of the options with exercise prices less than $21.95 per share been exercised on that date. | |||||||||||||||||
Restricted Stock Activity | |||||||||||||||||
The following table reconciles the unvested balance of restricted stock: | |||||||||||||||||
Three-months ended March 31, 2015: | Number of | Weighted | |||||||||||||||
Shares | Average | ||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Unvested balance, December 31, 2014 | 502 | $ | 23.09 | ||||||||||||||
Granted | 90 | $ | 28.66 | ||||||||||||||
Vested | (42 | ) | $ | 23.14 | |||||||||||||
Canceled | (5 | ) | $ | 27.01 | |||||||||||||
Unvested balance, March 31, 2015 | 545 | $ | 23.97 | ||||||||||||||
The fair value of all restricted stock awards that vested during the three-months ended March 31, 2015 and 2014 was $1,213 and $1,367, respectively. |
Earnings_Loss_Per_Common_Share
Earnings (Loss) Per Common Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Earnings (Loss) Per Common Share | 6. Earnings (Loss) Per Common Share | ||||||||
The Company calculates basic and diluted earnings per common share in accordance with ASC 260 “Earnings Per Share,” using the two-class method because the Company’s unvested restricted stock is a participating security since these awards contain non-forfeitable rights to receive dividends. Under the two-class method, earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. | |||||||||
Basic earnings per common share excludes dilution and is calculated by dividing earnings to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing earnings to common shares by the weighted-average number of common shares, as adjusted for the potentially dilutive effect of stock options. The following table reconciles earnings (loss) per common share for the three-months ended March 31, 2015 and 2014: | |||||||||
Three Months | Three Months | ||||||||
Ended | Ended | ||||||||
March 31, 2015 | March 31, 2014 | ||||||||
Basic Earnings (Loss) per Common Share: | |||||||||
Numerator: | |||||||||
Net loss | $ | (4,150 | ) | $ | (1,986 | ) | |||
Distributed earnings to common shares | — | 773 | |||||||
Distributed earnings to participating securities | — | 51 | |||||||
Total distributed earnings | — | 824 | |||||||
Undistributed loss allocable to common shares | (4,150 | ) | (2,810 | ) | |||||
Undistributed earnings allocable to participating securities | — | — | |||||||
Total undistributed loss | (4,150 | ) | (2,810 | ) | |||||
Loss to common shares—basic | $ | (4,150 | ) | $ | (2,037 | ) | |||
Denominator | |||||||||
Weighted average common shares outstanding—basic | 7,960 | 7,000 | |||||||
Basic earnings (loss) per common share | $ | (0.52 | ) | $ | (0.29 | ) | |||
Three Months | Three Months | ||||||||
Ended | Ended | ||||||||
March 31, 2015 | March 31, 2014 | ||||||||
Diluted Earnings (Loss) per Common Share: | |||||||||
Numerator: | |||||||||
Loss to common shares—basic | $ | (4,150 | ) | $ | (2,037 | ) | |||
Undistributed earnings allocated to participating securities | — | — | |||||||
Undistributed earnings reallocated to participating securities | — | — | |||||||
Loss to common shares—diluted | $ | (4,150 | ) | $ | (2,037 | ) | |||
Denominator: | |||||||||
Weighted average common shares outstanding—basic | 7,960 | 7,000 | |||||||
Dilutive effect of stock options | — | — | |||||||
Weighted average common shares outstanding—dilutive | 7,960 | 7,000 | |||||||
Diluted earnings (loss) per common share | $ | (0.52 | ) | $ | (0.29 | ) | |||
There were 212 and 220 common stock equivalents related to stock options that were anti-dilutive and excluded from diluted earnings per common share for the three-months ended March 31, 2015 and 2014, respectively, as the Company incurred a net loss for the period. |
Trade_Accounts_Receivable
Trade Accounts Receivable | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Receivables [Abstract] | |||||||||
Trade Accounts Receivable | 7. Trade Accounts Receivable | ||||||||
Trade Accounts Receivable | |||||||||
Trade accounts receivable are recorded at the invoiced amount. | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Trade accounts receivable | $ | 3,652 | $ | 4,567 | |||||
Allowance for doubtful accounts | (32 | ) | (22 | ) | |||||
Trade accounts receivable, net | $ | 3,620 | $ | 4,545 | |||||
Unpaid deferred revenue included in trade accounts receivable | $ | 542 | $ | 1,974 | |||||
Allowance for doubtful accounts | |||||||||
The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing trade accounts receivable. The Company determines the allowance based on historical write-off experience and current information. The Company reviews its allowance for doubtful accounts each reporting period. Account balances are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. | |||||||||
Unpaid deferred revenue | |||||||||
The unpaid deferred revenue that is included in trade accounts receivable is billed in accordance with the provisions of the contracts with the Company’s customers. Unpaid deferred revenue from the Company’s cash-basis customers is not included in trade accounts receivable nor deferred revenue. | |||||||||
Major customers | |||||||||
Customers who accounted for 10% or more of trade accounts receivable, net are as follows: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Central Banks | 61 | % | 61 | % | |||||
Civolution | * | 13 | % | ||||||
* | Less than 10% |
Property_and_Equipment
Property and Equipment | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment | 8. Property and Equipment | ||||||||
Property and equipment are stated at cost. Repairs and maintenance are charged to expense when incurred. | |||||||||
Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, generally two to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life or the lease term. | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Office furniture fixtures | $ | 848 | $ | 845 | |||||
Software | 1,392 | 1,312 | |||||||
Equipment | 3,089 | 3,072 | |||||||
Leasehold improvements | 1,229 | 1,198 | |||||||
Gross property and equipment | 6,558 | 6,427 | |||||||
Less accumulated depreciation and amortization | (3,663 | ) | (3,451 | ) | |||||
Property and equipment, net | $ | 2,895 | $ | 2,976 | |||||
Intangibles
Intangibles | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Intangibles | 9. Intangibles | ||||||||
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | |||||||||
Amortization of capitalized patent costs associated with the application and award of patents in the U.S. and various other countries are capitalized and amortized on a straight-line basis over the term of the patents as determined at the award date, which varies depending on the pendency period of the application, generally approximating seventeen years. | |||||||||
Amortization of intangible assets acquired is calculated using the straight-line method over the estimated useful lives of the assets. | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Capitalized patent costs | $ | 6,334 | $ | 6,183 | |||||
Intangible assets acquired: | |||||||||
Purchased patents and intellectual property | 250 | 250 | |||||||
Existing technology | 1,560 | 1,560 | |||||||
Customer relationships | 290 | 290 | |||||||
Backlog | 760 | 760 | |||||||
Tradenames | 290 | 290 | |||||||
Non-solicitation agreements | 120 | 120 | |||||||
Gross intangible assets | 9,604 | 9,453 | |||||||
Accumulated amortization | (2,912 | ) | (2,733 | ) | |||||
Intangibles, net | $ | 6,692 | $ | 6,720 | |||||
Joint_Ventures_and_Related_Par
Joint Ventures and Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Joint Ventures and Related Party Transactions | 10. Joint Ventures and Related Party Transactions |
In March 2012, Digimarc and Nielsen decided to reduce the investments in their two joint ventures, TVaura LLC (in which Digimarc holds a 51% ownership interest) and TVaura Mobile LLC (in which Digimarc holds a 49% ownership interest), to minimal levels while assessing alternative approaches to achieving each of their goals in the emerging market opportunity of synchronized second screen television. Payment of all expenses incurred after the suspension of operations of each joint venture is unconditionally the responsibility of the majority owner, which expenses for TVaura LLC, if any, will be paid by Digimarc. As of March 31, 2015, both Digimarc and Nielsen continued to assess the market opportunities of each of the joint ventures. | |
Summarized financial information for the joint ventures has not been provided as the disclosures are immaterial to the Company’s filing given the operations of the joint ventures have been suspended. The joint ventures had no revenue or expenses for the three months ended March 31, 2015 and 2014. The Company’s investment in each joint venture was $0 as of March 31, 2015 and December 31, 2014. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes |
The benefit for income taxes for the three-months ended March 31, 2015 and 2014 reflects current taxes, deferred taxes, and withholding taxes in certain foreign jurisdictions. The effective tax rate for the three-months ended March 31, 2015 and 2014 was 0% and 40%, respectively. The valuation allowance against net deferred tax assets as of March 31, 2015 was $8,858, an increase of $1,570 from $7,288 as of December 31, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies |
Certain of the Company’s product license and services agreements include an indemnification provision for claims from third parties relating to the Company’s intellectual property. Such indemnification provisions are accounted for in accordance with ASC 450 “Contingencies.” To date, there have been no claims made under such indemnification provisions. | |
The Company is subject from time to time to other legal proceedings and claims arising in the ordinary course of business. |
Description_of_Business_and_Si1
Description of Business and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Description of Business | Description of Business |
Digimarc Corporation (“Digimarc” or the “Company”), an Oregon corporation, enables governments and enterprises around the world to give digital identities to media and objects that computers can sense and recognize and to which they can react. The Company has developed an intuitive computing platform that is intended to optimize the identification of consumer brand impressions, facilitating modern mobile-centric shopping. The platform includes means to infuse persistent digital information, “Digimarc IDs,” perceptible only to computers and digital devices, into all forms of media content, including consumer products packaging. Digimarc IDs for packaging, often referred to as “Digimarc Barcodes” facilitate remarkably faster scanning of items at retail checkout as well as improved interaction with consumers. The unique digital identifier placed in media generally persists with it regardless of the distribution path and whether it is copied, manipulated or converted to a different format, and does not affect the quality of the content or the enjoyment or other traditional uses of it. The Company’s technology permits computers and digital devices to quickly and reliably identify relevant data from vast amounts of media content. | |
Interim Consolidated Financial Statements | Interim Consolidated Financial Statements |
The Company has adhered to the accounting policies set forth in its Annual Report on Form 10-K for the year ended December 31, 2014 in preparing the accompanying interim consolidated financial statements. | |
The accompanying interim consolidated financial statements have been prepared from the Company’s records without audit and, in management’s opinion, include all adjustments (consisting of only normal recurring adjustments) necessary to fairly reflect the financial condition and the results of operations for the periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (the “U.S. GAAP”) have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). | |
These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on February 20, 2015. The results of operations for the interim periods presented in these consolidated financial statements are not necessarily indicative of the results for the full year. | |
Reclassifications | Reclassifications |
Certain prior period amounts in the accompanying consolidated financial statements and notes thereto have been reclassified to conform to current period presentation. These reclassifications had no material effect on the results of operations or financial position for any period presented. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU No 2014-09 provides specific guidance to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The amendments in this update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The amendments in this update permit the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is currently assessing the potential future impact of this standard on the financial condition or results of operations of the Company. | |
On April 1, 2015, the FASB tentatively agreed to propose a one-year deferral of the effect date for ASU 2014-09, but would permit all entities to adopt the standard as of the original effective date for public business entities (i.e., annual periods beginning after December 15, 2016, and interim periods therein). The FASB expects to issue an Exposure Draft for this issue in the near term. | |
Earnings Per Share | The Company calculates basic and diluted earnings per common share in accordance with ASC 260 “Earnings Per Share,” using the two-class method because the Company’s unvested restricted stock is a participating security since these awards contain non-forfeitable rights to receive dividends. Under the two-class method, earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. |
Contingencies | Certain of the Company’s product license and services agreements include an indemnification provision for claims from third parties relating to the Company’s intellectual property. Such indemnification provisions are accounted for in accordance with ASC 450 “Contingencies.” To date, there have been no claims made under such indemnification provisions. |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||
Summary of Fair Value Hierarchy for Financial Assets | The Company’s fair value hierarchy for its cash equivalents and marketable securities as of March 31, 2015 and December 31, 2014, respectively, was as follows: | ||||||||||||||||||||
March 31, 2015 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Money market securities | $ | 3,367 | $ | — | $ | — | $ | 3,367 | |||||||||||||
Corporate notes | — | 19,995 | — | 19,995 | |||||||||||||||||
Pre-refunded municipal bonds (1) | — | 9,067 | — | 9,067 | |||||||||||||||||
Commercial paper | — | 1,947 | — | 1,947 | |||||||||||||||||
Certificates of deposits | — | 1,442 | — | 1,442 | |||||||||||||||||
Total | $ | 3,367 | $ | 32,451 | $ | — | $ | 35,818 | |||||||||||||
December 31, 2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Money market securities | $ | 3,556 | $ | — | $ | — | $ | 3,556 | |||||||||||||
Corporate notes | — | 19,245 | — | 19,245 | |||||||||||||||||
Pre-refunded municipal bonds (1) | — | 13,317 | — | 13,317 | |||||||||||||||||
Certificates of deposits | — | 2,176 | — | 2,176 | |||||||||||||||||
Total | $ | 3,556 | $ | 34,738 | $ | — | $ | 38,294 | |||||||||||||
-1 | Pre-refunded municipal bonds are collateralized by U.S. treasuries. | ||||||||||||||||||||
Summary of Fair Value Maturities for Financial Asset | The fair value maturities of the Company’s cash equivalents and marketable securities as of March 31, 2015 are as follows: | ||||||||||||||||||||
Maturities by Period | |||||||||||||||||||||
Total | Less than | 1-5 years | 5-10 years | More than | |||||||||||||||||
1 year | 10 years | ||||||||||||||||||||
Cash equivalents and marketable securities | $ | 35,818 | $ | 35,818 | $ | — | $ | — | $ | — | |||||||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Geographical Segment Revenue | Revenue by geographic area, based upon the “bill-to” location, was as follows: | ||||||||
Three | Three | ||||||||
Months | Months | ||||||||
Ended | Ended | ||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Domestic | $ | 1,687 | $ | 3,117 | |||||
International (1) | 4,302 | 4,088 | |||||||
Total | $ | 5,989 | $ | 7,205 | |||||
-1 | Revenue from the Central Banks, consisting of a consortium of central banks around the world, is classified as international revenue. Reporting revenue by country for this customer is not practicable. | ||||||||
Customers Who Accounted for 10% or More of Company's Revenue | Customers who accounted for 10% or more of the Company’s revenue are as follows: | ||||||||
Three | Three | ||||||||
Months | Months | ||||||||
Ended | Ended | ||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Central Banks | 59 | % | 43 | % | |||||
The Nielsen Company (“Nielsen”) | — | 16 | % | ||||||
Verance Corporation (“Verance”) | — | 10 | % |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Allocation of Stock-Based Compensation | Stock-based Compensation | ||||||||||||||||
Three | Three | ||||||||||||||||
Months | Months | ||||||||||||||||
Ended | Ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Stock-based compensation: | |||||||||||||||||
Cost of revenue | $ | 185 | $ | 142 | |||||||||||||
Sales and marketing | 159 | 142 | |||||||||||||||
Research, development and engineering | 287 | 356 | |||||||||||||||
General and administrative | 518 | 550 | |||||||||||||||
Intellectual property | 68 | 69 | |||||||||||||||
Stock-based compensation expense | 1,217 | 1,259 | |||||||||||||||
Capitalized to patent costs and software | 37 | 45 | |||||||||||||||
Total stock-based compensation | $ | 1,254 | $ | 1,304 | |||||||||||||
Unrecognized Compensation Cost Related to Non-Vested Stock-Based Awards Granted | The following table sets forth total unrecognized compensation cost related to non-vested stock-based awards granted under all equity compensation plans, including stock options and restricted stock: | ||||||||||||||||
As of | As of | ||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Total unrecognized compensation costs | $ | 12,411 | $ | 11,206 | |||||||||||||
Weighted Average Period for Recognition of Unrecognized Compensation Cost for Stock Options and Restricted Stock | The Company expects to recognize the unrecognized compensation costs as of March 31, 2015 for stock options and restricted stock over weighted average periods through March 2019 as follows: | ||||||||||||||||
Stock | Restricted | ||||||||||||||||
Options | Stock | ||||||||||||||||
Weighted average period | 0.0 years | 1.6 years | |||||||||||||||
Reconciliation of Outstanding Balance of Stock Options | The following table reconciles the outstanding balance of stock options: | ||||||||||||||||
Three-months ended March 31, 2015: | Options | Weighted | Weighted | Aggregate | |||||||||||||
Average | Average | Intrinsic | |||||||||||||||
Exercise | Grant Date | Value | |||||||||||||||
Price | Fair Value | ||||||||||||||||
Outstanding at December 31, 2014 | 601 | $ | 16.97 | $ | 8.42 | ||||||||||||
Options granted | — | — | — | ||||||||||||||
Options exercised | (45 | ) | 19.45 | 8.66 | |||||||||||||
Options canceled or expired | — | — | — | ||||||||||||||
Outstanding at March 31, 2015 | 556 | $ | 16.76 | $ | 8.4 | $ | 4,055 | ||||||||||
Exercisable at March 31, 2015 | 556 | $ | 16.76 | $ | 4,055 | ||||||||||||
Reconciliation of Unvested Balance of Restricted Stock | The following table reconciles the unvested balance of restricted stock: | ||||||||||||||||
Three-months ended March 31, 2015: | Number of | Weighted | |||||||||||||||
Shares | Average | ||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Unvested balance, December 31, 2014 | 502 | $ | 23.09 | ||||||||||||||
Granted | 90 | $ | 28.66 | ||||||||||||||
Vested | (42 | ) | $ | 23.14 | |||||||||||||
Canceled | (5 | ) | $ | 27.01 | |||||||||||||
Unvested balance, March 31, 2015 | 545 | $ | 23.97 | ||||||||||||||
Earnings_Loss_Per_Common_Share1
Earnings (Loss) Per Common Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Summary of Reconciliation of Earnings (Loss) Per Common Share | The following table reconciles earnings (loss) per common share for the three-months ended March 31, 2015 and 2014: | ||||||||
Three Months | Three Months | ||||||||
Ended | Ended | ||||||||
March 31, 2015 | March 31, 2014 | ||||||||
Basic Earnings (Loss) per Common Share: | |||||||||
Numerator: | |||||||||
Net loss | $ | (4,150 | ) | $ | (1,986 | ) | |||
Distributed earnings to common shares | — | 773 | |||||||
Distributed earnings to participating securities | — | 51 | |||||||
Total distributed earnings | — | 824 | |||||||
Undistributed loss allocable to common shares | (4,150 | ) | (2,810 | ) | |||||
Undistributed earnings allocable to participating securities | — | — | |||||||
Total undistributed loss | (4,150 | ) | (2,810 | ) | |||||
Loss to common shares—basic | $ | (4,150 | ) | $ | (2,037 | ) | |||
Denominator | |||||||||
Weighted average common shares outstanding—basic | 7,960 | 7,000 | |||||||
Basic earnings (loss) per common share | $ | (0.52 | ) | $ | (0.29 | ) | |||
Three Months | Three Months | ||||||||
Ended | Ended | ||||||||
March 31, 2015 | March 31, 2014 | ||||||||
Diluted Earnings (Loss) per Common Share: | |||||||||
Numerator: | |||||||||
Loss to common shares—basic | $ | (4,150 | ) | $ | (2,037 | ) | |||
Undistributed earnings allocated to participating securities | — | — | |||||||
Undistributed earnings reallocated to participating securities | — | — | |||||||
Loss to common shares—diluted | $ | (4,150 | ) | $ | (2,037 | ) | |||
Denominator: | |||||||||
Weighted average common shares outstanding—basic | 7,960 | 7,000 | |||||||
Dilutive effect of stock options | — | — | |||||||
Weighted average common shares outstanding—dilutive | 7,960 | 7,000 | |||||||
Diluted earnings (loss) per common share | $ | (0.52 | ) | $ | (0.29 | ) | |||
Trade_Accounts_Receivable_Tabl
Trade Accounts Receivable (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Receivables [Abstract] | |||||||||
Summary of Trade Accounts Receivable | Trade accounts receivable are recorded at the invoiced amount. | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Trade accounts receivable | $ | 3,652 | $ | 4,567 | |||||
Allowance for doubtful accounts | (32 | ) | (22 | ) | |||||
Trade accounts receivable, net | $ | 3,620 | $ | 4,545 | |||||
Unpaid deferred revenue included in trade accounts receivable | $ | 542 | $ | 1,974 | |||||
Customers Who Accounted for 10% or More of Trade Accounts Receivable, Net | Customers who accounted for 10% or more of trade accounts receivable, net are as follows: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Central Banks | 61 | % | 61 | % | |||||
Civolution | * | 13 | % | ||||||
* | Less than 10% |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Depreciation and Amortization on Property and Equipment Using the Straight-Line Method | Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, generally two to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life or the lease term. | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Office furniture fixtures | $ | 848 | $ | 845 | |||||
Software | 1,392 | 1,312 | |||||||
Equipment | 3,089 | 3,072 | |||||||
Leasehold improvements | 1,229 | 1,198 | |||||||
Gross property and equipment | 6,558 | 6,427 | |||||||
Less accumulated depreciation and amortization | (3,663 | ) | (3,451 | ) | |||||
Property and equipment, net | $ | 2,895 | $ | 2,976 | |||||
Intangibles_Tables
Intangibles (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Amortization of Intangible Assets Acquired | Amortization of intangible assets acquired is calculated using the straight-line method over the estimated useful lives of the assets. | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Capitalized patent costs | $ | 6,334 | $ | 6,183 | |||||
Intangible assets acquired: | |||||||||
Purchased patents and intellectual property | 250 | 250 | |||||||
Existing technology | 1,560 | 1,560 | |||||||
Customer relationships | 290 | 290 | |||||||
Backlog | 760 | 760 | |||||||
Tradenames | 290 | 290 | |||||||
Non-solicitation agreements | 120 | 120 | |||||||
Gross intangible assets | 9,604 | 9,453 | |||||||
Accumulated amortization | (2,912 | ) | (2,733 | ) | |||||
Intangibles, net | $ | 6,692 | $ | 6,720 | |||||
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Summary of Fair Value Hierarchy for Financial Assets (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $35,818 | |
Fair value, measurements, recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 35,818 | 38,294 |
Fair value, measurements, recurring [Member] | Pre-refunded municipal bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 9,067 | 13,317 |
Fair value, measurements, recurring [Member] | Money market securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 3,367 | 3,556 |
Fair value, measurements, recurring [Member] | Corporate notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 19,995 | 19,245 |
Fair value, measurements, recurring [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 1,947 | |
Fair value, measurements, recurring [Member] | Certificates of deposits [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 1,442 | 2,176 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 3,367 | 3,556 |
Fair value, measurements, recurring [Member] | Level 1 [Member] | Money market securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 3,367 | 3,556 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 32,451 | 34,738 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Pre-refunded municipal bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 9,067 | 13,317 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Corporate notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 19,995 | 19,245 |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 1,947 | |
Fair value, measurements, recurring [Member] | Level 2 [Member] | Certificates of deposits [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $1,442 | $2,176 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments - Summary of Fair Value Maturities for Financial Asset (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Fair Value Disclosures [Abstract] | |
Maturities, Total | $35,818 |
Maturities, Less than 1 year | 35,818 |
Maturities, 1-5 years | 0 |
Maturities, 5-10 years | 0 |
Maturities, More than 10 years | $0 |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value Disclosures [Abstract] | ||
Highly liquid marketable securities with original maturities | 90 days or less | |
Cash equivalents include money market funds and certificates of deposit | $3,787 | $5,344 |
Revenue_Recognition_Additional
Revenue Recognition - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Revenue Recognition [Abstract] | |
Period of revenue from services | 1 month |
Subscription revenue term, minimum | 1 year |
Subscription revenue term, maximum | 3 years |
License revenue recognized payment terms, maximum | 60 days |
License revenue recognized payment terms, minimum | 30 days |
Segment_Information_Additional
Segment Information - Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Sep. 30, 2014 | Mar. 31, 2014 |
Segment | |||
Revenue, Major Customer [Line Items] | |||
Number of reporting segment | 1 | ||
Verance Corporation ("Verance") [Member] | |||
Revenue, Major Customer [Line Items] | |||
Patent license agreement expiration, year | 2023 | ||
License fee | $1 | ||
Sales [Member] | Customer Concentration Risk [Member] | Verance Corporation ("Verance") [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue from segment | 10.00% | ||
Sales [Member] | Minimum [Member] | Customer Concentration Risk [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue from segment | 10.00% |
Segment_Information_Geographic
Segment Information - Geographical Segment Revenue (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total | $5,989 | $7,205 |
Domestic [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total | 1,687 | 3,117 |
International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total | $4,302 | $4,088 |
Segment_Information_Customers_
Segment Information - Customers Who Accounted for 10% or More of Company's Revenue (Detail) (Customer Concentration Risk [Member], Sales [Member]) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Central Banks [Member] | ||
Revenue, Major Customer [Line Items] | ||
Entity wide revenue major customers percentage | 59.00% | 43.00% |
The Nielsen Company ("Nielsen") [Member] | ||
Revenue, Major Customer [Line Items] | ||
Entity wide revenue major customers percentage | 16.00% | |
Verance Corporation ("Verance") [Member] | ||
Revenue, Major Customer [Line Items] | ||
Entity wide revenue major customers percentage | 10.00% |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Contractual terms | 10 years | ||
Stock options granted | 0 | 0 | |
Options with exercise prices less than per share | $16.76 | $16.97 | |
Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation plans, shares authorized for future grants | 1,411 | ||
Intrinsic value is based on closing price of per share of Digimarc common stock | $21.95 | ||
Options with exercise prices less than per share | $21.95 | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of restricted stock awards vested | $1,213 | 1,367 | |
Minimum [Member] | Employee [Member] | Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for stock options and restricted stock | 3 years | ||
Minimum [Member] | Director [Member] | Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for stock options and restricted stock | 1 year | ||
Maximum [Member] | Employee [Member] | Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for stock options and restricted stock | 4 years | ||
Maximum [Member] | Director [Member] | Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for stock options and restricted stock | 2 years |
StockBased_Compensation_Alloca
Stock-Based Compensation - Allocation of Stock-Based Compensation (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $1,217 | $1,259 |
Capitalized to patent costs and software | 37 | 45 |
Total stock-based compensation | 1,254 | 1,304 |
Cost of revenue [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 185 | 142 |
Sales and marketing [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 159 | 142 |
Research, development and engineering [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 287 | 356 |
General and administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 518 | 550 |
Intellectual property [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $68 | $69 |
StockBased_Compensation_Unreco
Stock-Based Compensation - Unrecognized Compensation Cost Related to Non-Vested Stock-Based Awards Granted (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Total unrecognized compensation costs | $12,411 | $11,206 |
StockBased_Compensation_Weight
Stock-Based Compensation - Weighted Average Period for Recognition of Unrecognized Compensation Cost for Stock Options and Restricted Stock (Detail) | 3 Months Ended |
Mar. 31, 2014 | |
Stock options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average period | 0 years |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average period | 1 year 7 months 6 days |
StockBased_Compensation_Reconc
Stock-Based Compensation - Reconciliation of Outstanding Balance of Stock Options (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Outstanding at beginning | 601 | |
Options granted | 0 | 0 |
Options exercised | -45 | |
Options canceled or expired | 0 | |
Outstanding at ending | 556 | |
Exercisable at ending | 556 | |
Weighted Average Exercise Price at beginning | $16.97 | |
Weighted Average Exercise Price, Options granted | $0 | |
Weighted Average Exercise Price, Options exercised | $19.45 | |
Weighted Average Exercise Price, Options canceled or expired | $0 | |
Weighted Average Exercise Price at ending | $16.76 | |
Weighted Average Exercise Price, Exercisable at ending | $16.76 | |
Weighted Average Grant Date Fair Value at beginning | $8.42 | |
Weighted Average Grant Date Fair Value, Options granted | $0 | |
Weighted Average Grant Date Fair Value, Options exercised | $8.66 | |
Weighted Average Grant Date Fair Value, Options canceled or expired | $0 | |
Weighted Average Grant Date Fair Value at ending | $8.40 | |
Weighted Average Grant Date Fair Value, Exercisable at ending | $0 | |
Aggregate Intrinsic Value Outstanding at ending | $4,055 | |
Aggregate Intrinsic Value, Exercisable at ending | $4,055 |
StockBased_Compensation_Reconc1
Stock-Based Compensation - Reconciliation of Unvested Balance of Restricted Stock (Detail) (Restricted Stock [Member], USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 |
Restricted Stock [Member] | |
Number of Shares | |
Unvested, beginning balance | 502 |
Granted | 90 |
Vested | -42 |
Canceled | -5 |
Unvested, ending balance | 545 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning balance | $23.09 |
Granted | $28.66 |
Vested | $23.14 |
Canceled | $27.01 |
Unvested, ending balance | $23.97 |
Earnings_Loss_Per_Common_Share2
Earnings (Loss) Per Common Share - Summary of Reconciliation of Earnings (Loss) Per Common Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Basic Earnings (Loss) per Common Share: | ||
Net loss | ($4,150) | ($1,986) |
Distributed earnings to common shares | 773 | |
Distributed earnings to participating securities | 51 | |
Total distributed earnings | 824 | |
Undistributed loss allocable to common shares | -4,150 | -2,810 |
Undistributed earnings allocable to participating securities | 0 | 0 |
Total undistributed loss | -4,150 | -2,810 |
Loss to common shares-basic | -4,150 | -2,037 |
Weighted average common shares outstanding-basic | 7,960 | 7,000 |
Basic earnings (loss) per common share | ($0.52) | ($0.29) |
Diluted Earnings (Loss) per Common Share: | ||
Loss to common shares-basic | -4,150 | -2,037 |
Undistributed earnings allocated to participating securities | 0 | 0 |
Undistributed earnings reallocated to participating securities | 0 | 0 |
Loss to common shares-diluted | ($4,150) | ($2,037) |
Weighted average common shares outstanding-basic | 7,960 | 7,000 |
Dilutive effect of stock options | 0 | 0 |
Weighted average common shares outstanding-dilutive | 7,960 | 7,000 |
Diluted earnings (loss) per common share | ($0.52) | ($0.29) |
Earnings_Loss_Per_Common_Share3
Earnings (Loss) Per Common Share - Additional Information (Detail) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Common stock equivalents related to stock options that were anti-dilutive and excluded from diluted net income per share | 212 | 220 |
Trade_Accounts_Receivable_Summ
Trade Accounts Receivable - Summary of Trade Accounts Receivable (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Accounts Receivable, Net, Current [Abstract] | ||
Trade accounts receivable | $3,652 | $4,567 |
Allowance for doubtful accounts | -32 | -22 |
Trade accounts receivable, net | 3,620 | 4,545 |
Unpaid deferred revenue included in trade accounts receivable | $542 | $1,974 |
Trade_Accounts_Receivable_Addi
Trade Accounts Receivable - Additional Information (Detail) (Accounts receivable [Member], Minimum [Member], Credit Concentration Risk [Member]) | 3 Months Ended |
Mar. 31, 2015 | |
Accounts receivable [Member] | Minimum [Member] | Credit Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Revenue from segment | 10.00% |
Trade_Accounts_Receivable_Cust
Trade Accounts Receivable - Customers Who Accounted for 10% or More of Trade Accounts Receivable, Net (Detail) (Accounts receivable [Member], Credit Concentration Risk [Member]) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Central Banks [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of trade accounts receivable of major customers | 61.00% | 61.00% |
Civolution [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of trade accounts receivable of major customers | 13.00% |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 2 years |
Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of the assets | 7 years |
Property_and_Equipment_Depreci
Property and Equipment - Depreciation and Amortization on Property and Equipment Using the Straight-Line Method (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Abstract] | ||
Office furniture fixtures | $848 | $845 |
Software | 1,392 | 1,312 |
Equipment | 3,089 | 3,072 |
Leasehold improvements | 1,229 | 1,198 |
Gross property and equipment | 6,558 | 6,427 |
Less accumulated depreciation and amortization | -3,663 | -3,451 |
Property and equipment, net | $2,895 | $2,976 |
Intangibles_Additional_Informa
Intangibles - Additional Information (Detail) (Capitalized patent costs [Member]) | 3 Months Ended |
Mar. 31, 2015 | |
Capitalized patent costs [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 17 years |
Intangibles_Amortization_of_In
Intangibles - Amortization of Intangible Assets Acquired (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized patent costs | $6,334 | $6,183 |
Intangible assets acquired: | ||
Gross intangible assets | 9,604 | 9,453 |
Accumulated amortization | -2,912 | -2,733 |
Intangibles, net | 6,692 | 6,720 |
Purchased patents and intellectual property [Member] | ||
Intangible assets acquired: | ||
Intangible assets amount | 250 | 250 |
Existing technology [Member] | ||
Intangible assets acquired: | ||
Intangible assets amount | 1,560 | 1,560 |
Customer relationships [Member] | ||
Intangible assets acquired: | ||
Intangible assets amount | 290 | 290 |
Backlog [Member] | ||
Intangible assets acquired: | ||
Intangible assets amount | 760 | 760 |
Tradenames [Member] | ||
Intangible assets acquired: | ||
Intangible assets amount | 290 | 290 |
Non-solicitation agreements [Member] | ||
Intangible assets acquired: | ||
Intangible assets amount | $120 | $120 |
Joint_Ventures_and_Related_Par1
Joint Ventures and Related Party Transactions - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2012 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||||
Joint ventures revenue or expenses | $0 | $0 | ||
TVaura LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity method investment, ownership percentage | 51.00% | |||
Investment in joint venture | 0 | 0 | ||
TVaura Mobile LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Equity method investment, ownership percentage | 49.00% | |||
Investment in joint venture | $0 | $0 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 0.00% | 40.00% | |
Deferred tax assets, valuation allowance | $8,858 | $7,288 | |
Change in valuation allowance | $1,570 |