Digimarc (DMRC) 10-Q 2 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 27, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Trading Symbol	DMRC
Entity Registrant Name	Digimarc CORP
Entity Central Index Key	1,438,231
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		11,880,405

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 35,071	$ 40,823
Marketable securities	21,713	26,915
Trade accounts receivable, net	3,843	6,404
Other current assets	1,982	2,171
Total current assets	62,609	76,313
Property and equipment, net	4,068	4,236
Intangibles, net	6,558	6,381
Goodwill	1,114	1,114
Other assets	403	326
Total assets	74,752	88,370
Current liabilities:
Accounts payable and other accrued liabilities	1,695	1,914
Deferred revenue	2,410	3,124
Total current liabilities	4,105	5,038
Deferred rent and other long-term liabilities	944	985
Total liabilities	5,049	6,023
Commitments and contingencies (Note 12)
Shareholders’ equity:
Preferred stock (par value $0.001 per share, 2,500 authorized, 10 shares issued and outstanding at June 30, 2018 and December 31, 2017)	50	50
Common stock (par value $0.001 per share, 50,000 authorized, 11,876 and 11,651 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively)	12	12
Additional paid-in capital	159,160	155,793
Accumulated deficit	(89,519)	(73,508)
Total shareholders’ equity	69,703	82,347
Total liabilities and shareholders’ equity	$ 74,752	$ 88,370

Consolidated Balance Sheets (U3

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	2,500	2,500
Preferred stock, shares issued	10	10
Preferred stock, shares outstanding	10	10
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000	50,000
Common stock, shares issued	11,876	11,651
Common stock, shares outstanding	11,876	11,651

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue:
Total revenue	$ 5,438	$ 5,587	$ 11,051	$ 11,678
Cost of revenue:
Total cost of revenue	2,205	2,120	4,390	4,429
Gross profit	3,233	3,467	6,661	7,249
Operating expenses:
Sales and marketing	4,757	3,997	9,644	7,989
Research, development and engineering	4,058	3,936	8,005	7,395
General and administrative	2,416	2,239	5,048	4,624
Intellectual property	305	345	620	737
Total operating expenses	11,536	10,517	23,317	20,745
Operating loss	(8,303)	(7,050)	(16,656)	(13,496)
Other income, net	274	116	526	234
Loss before income taxes	(8,029)	(6,934)	(16,130)	(13,262)
Benefit (provision) for income taxes	(9)	(9)	(20)	101
Net loss	$ (8,038)	$ (6,943)	$ (16,150)	$ (13,161)
Earnings (loss) per common share:
Loss per common share — basic	$ (0.71)	$ (0.68)	$ (1.43)	$ (1.29)
Loss per common share — diluted	$ (0.71)	$ (0.68)	$ (1.43)	$ (1.29)
Weighted average common shares outstanding — basic	11,337	10,266	11,302	10,214
Weighted average common shares outstanding — diluted	11,337	10,266	11,302	10,214
Service [Member]
Revenue:
Total revenue	$ 3,336	$ 3,253	$ 6,843	$ 6,949
Cost of revenue:
Total cost of revenue	1,548	1,464	3,111	3,099
Subscription [Member]
Revenue:
Total revenue	1,444	1,420	3,022	2,865
Cost of revenue:
Total cost of revenue	508	534	990	1,090
License [Member]
Revenue:
Total revenue	658	914	1,186	1,864
Cost of revenue:
Total cost of revenue	$ 149	$ 122	$ 289	$ 240

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Balance at Dec. 31, 2016	$ 73,334	$ 50	$ 11	$ 120,985	$ (47,712)
Balance, shares at Dec. 31, 2016		10	10,523
Issuance of common stock, net of issuance costs	17,702	$ 0	$ 0	17,702	0
Issuance of common stock, net of issuance costs, shares		0	500
Exercise of stock options	568	$ 0	$ 0	568	0
Exercise of stock options, shares		0	59
Issuance of restricted common stock	0	$ 0	$ 0	0	0
Issuance of restricted common stock, shares		0	236
Forfeiture of restricted common stock	0	$ 0	$ 0	0	0
Forfeiture of restricted common stock, shares		0	(7)
Purchase and retirement of common stock	(1,348)	$ 0	$ 0	(1,348)	0
Purchase and retirement of common stock, shares		0	(48)
Stock-based compensation	3,191	$ 0	$ 0	3,216	(25)
Net loss	(13,161)	0	0	0	(13,161)
Balance at Jun. 30, 2017	80,286	$ 50	$ 11	141,123	(60,898)
Balance, shares at Jun. 30, 2017		10	11,263
Balance at Dec. 31, 2017	82,347	$ 50	$ 12	155,793	(73,508)
Balance, shares at Dec. 31, 2017		10	11,651
Exercise of stock options	$ 914	$ 0	$ 0	914	0
Exercise of stock options, shares	72	0	72
Issuance of restricted common stock	$ 0	$ 0	$ 0	0	0
Issuance of restricted common stock, shares		0	210
Forfeiture of restricted common stock	0	$ 0	$ 0	0	0
Forfeiture of restricted common stock, shares		0	(19)
Purchase and retirement of common stock	(1,120)	$ 0	$ 0	(1,120)	0
Purchase and retirement of common stock, shares		0	(38)
Stock-based compensation	3,573	$ 0	$ 0	3,573	0
Cumulative effect of the adoption of the new revenue standard, net of tax	139	0	0	0	139
Net loss	(16,150)	0	0	0	(16,150)
Balance at Jun. 30, 2018	$ 69,703	$ 50	$ 12	$ 159,160	$ (89,519)
Balance, shares at Jun. 30, 2018		10	11,876

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net loss	$ (16,150)	$ (13,161)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and write-off of property and equipment	764	664
Amortization and write-off of intangibles	287	486
Stock-based compensation	3,480	3,093
Changes in operating assets and liabilities:
Trade accounts receivable	2,561	1,181
Other current assets	210	(163)
Other assets	(35)	50
Accounts payable and other accrued liabilities	(248)	336
Deferred revenue	(658)	(835)
Net cash used in operating activities	(9,789)	(8,349)
Cash flows from investing activities:
Purchase of property and equipment	(557)	(938)
Capitalized patent costs	(402)	(406)
Maturity of marketable securities	20,839	28,636
Purchase of marketable securities	(15,637)	(13,261)
Net cash provided by investing activities	4,243	14,031
Cash flows from financing activities:
Issuance of common stock, net of issuance costs	0	17,702
Exercise of stock options	914	568
Purchase of common stock	(1,120)	(1,348)
Net cash provided by (used in) financing activities	(206)	16,922
Net increase (decrease) in cash and cash equivalents	(5,752)	22,604
Cash and cash equivalents at beginning of period	40,823	11,638
Cash and cash equivalents at end of period	35,071	34,242
Supplemental disclosure of cash flow information:
Cash received (paid) for income taxes, net	98	(25)
Supplemental schedule of non-cash investing activities:
Property and equipment and patent costs in accounts payable	8	(22)
Stock-based compensation capitalized to software and patent costs	$ 93	$ 98

Description of Business and Sig

Description of Business and Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Organization Consolidation And Presentation Of Financial Statements [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, banks and businesses around the world to automatically and reliably identify and interact with virtually any media. The Company has pioneered the Digimarc® Intuitive Computing Platform (ICP TM Interim Consolidated Financial Statements Our significant accounting policies are detailed in "Note 1: Description of Business and Summary of Significant Accounting Policies" of our Annual Report on Form 10-K for the year ended December 31, 2017. Significant changes to our accounting policies as a result of adopting Accounting Standards Codification (“ASC”) 606, “ Revenue from Contracts with Customers 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 (“U.S. GAAP”) have been condensed or omitted in accordance with the rules and regulations of the U.S. 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, 2017, which was filed with the SEC on February 22, 2018. 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. Contingencies The Company evaluates all pending or threatened contingencies or commitments, if any, that are reasonably likely to have a material adverse effect on the Company’s operations or financial position. The Company assesses the probability of an adverse outcome and determines if it is remote, reasonably possible or probable as defined in accordance with the provisions of ASC 450, “ Contingencies Goodwill The Company tests goodwill for impairment annually in June and whenever events or changes in circumstances indicate that the carrying value may exceed the fair value. The Company operates as a single reporting unit. The Company estimated the fair value of its single reporting unit using a market approach, which takes into account the Company’s market capitalization plus an estimated control premium. In connection with the Company’s annual impairment test of goodwill as of June 30, 2018 and 2017, it was concluded that there was no impairment to goodwill as the estimated fair value of the Company’s reporting unit substantially exceeded the carrying value. Accounting Pronouncements Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers (Topic 606) Accounting Pronouncements Issued But Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) Topic 840, Leases

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 2018
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 June 30, 2018 and December 31, 2017, respectively, was as follows: June 30, 2018 Level 1 Level 2 Level 3 Total Money market securities $ 1,232 $ — $ — $ 1,232 Commercial paper — 41,037 — 41,037 Corporate notes — 7,938 — 7,938 Federal agency notes — 3,008 — 3,008 U.S. treasuries — 2,002 — 2,002 Total $ 1,232 $ 53,985 $ — $ 55,217 December 31, 2017 Level 1 Level 2 Level 3 Total Money market securities $ 2,197 $ — $ — $ 2,197 Commercial paper — 49,834 — 49,834 Federal agency notes — 10,715 — 10,715 U.S. treasuries — 1,996 — 1,996 Corporate notes — 1,934 — 1,934 Total $ 2,197 $ 64,479 $ — $ 66,676 The fair value maturities of the Company’s cash equivalents and marketable securities as of June 30, 2018 are as follows: Maturities by Period Total Less 1 year 1-5 years 5 - 10 years More than 10 years Cash equivalents and marketable securities $ 55,217 $ 55,217 $ — $ — $ — 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 commercial paper totaling $33,504 and $39,761 at June 30, 2018 and December 31, 2017, respectively. Cash equivalents are carried at cost or amortized cost, which approximates fair value.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Jun. 30, 2018
Revenue Recognition [Abstract]
Revenue Recognition	3. Revenue Recognition The Company adopted ASC 606 “ Revenue from Contracts with Customers” Revenue Recognition Software. ASC 606 Effective January 1, 2018, revenue is recognized in accordance with ASC 606 by applying the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize when (or as) the entity satisfies a performance obligation. The Company derives its revenue primarily from professional services, subscriptions and licensing of its intellectual property. Applicable revenue recognition criteria are considered separately for each performance obligation as follows: • Service revenue consists primarily of software development and consulting services. The majority of service revenue arrangements are structured as time and materials consulting agreements. Revenue for development and consulting services is recognized as the services are performed. Billing for services rendered generally occurs within one month after the services are provided. • Subscription revenue includes revenue derived from the sale of Digimarc Discover, Digimarc Barcode and Guardian products and services, is generally recurring, paid in advance and recognized over the term of the subscription, which is generally one to three years. • License revenue originates primarily from licensing the Company’s intellectual property where the Company receives license fees and/or royalties as its income stream. License fees are recognized when the customer has the right to the intellectual property and the license period has begun and royalties are recognized in the quarter in which the royalty was earned. Some customer arrangements contain multiple performance obligations such as professional services, software licenses, and maintenance and support fees. The Company accounts for individual products and services separately if they are distinct. The consideration is allocated between distinct products and services based on their stand-alone selling prices. For items that are not sold separately, the Company estimates the standalone selling price based on reasonably available information, including market conditions, specific factors affecting the Company, and information about the customer. ASC 605 and ASC 985 For the comparative periods, revenue was recognized under ASC 605 and ASC 985 when the following four criteria were 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 or probable. All revenue recognized in the Consolidated Statements of Operations is considered to be revenue from contracts with customers. The following table provides information about disaggregated revenue by major product line in the Company’s single reporting segment: Three Six Months Months Ended Ended June 30, June 30, 2018 2018 Service $ 3,336 $ 6,843 Subscription Guardian 888 1,877 Digimarc Discover and Digimarc Barcode 556 1,145 License 658 1,186 Total $ 5,438 $ 11,051 The Company has contract assets from contracts with customers that are classified as “trade accounts receivable.” Financial information about trade accounts receivable is included in Note 8. The Company has contract liabilities from contracts with customers which are classified as “deferred revenue.” Deferred revenue consists of billings in advance for professional services, subscriptions and licenses for which the performance obligation has not been satisfied. The following table provides information about contract liabilities from contracts with customers: June 30, December 31, 2018 2017 Deferred revenue, current $ 2,410 $ 3,124 Deferred revenue, long term 22 42 Total $ 2,432 $ 3,166 In addition to deferred revenue, the Company has backlog of $32,907 representing the transaction price from contractual obligations that are unsatisfied or partially unsatisfied as of June 30, 2018.

Segment Information

Segment Information	6 Months Ended
	Jun. 30, 2018
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 United States (“U.S.”) and in non-U.S. countries through its sales and licensing personnel and channel partners. Revenue by geographic area, based upon the “bill-to” location, was as follows: Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Domestic $ 1,289 $ 1,253 $ 2,740 $ 2,754 International (1) 4,149 4,334 8,311 8,924 Total $ 5,438 $ 5,587 $ 11,051 $ 11,678 (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 per Regulation S-K, Item 101(c)(1)(vii) are as follows: Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Central Banks 67 % 63 % 67 % 63 % Long-lived assets by geographical area The Company’s long-lived assets are all domestic, domiciled in the U.S.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2018
Disclosure Of Compensation Related Costs Sharebased 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 software and patents based on direct labor hours charged to capitalized software and patent costs. Determining Fair Value Stock Options Valuation and Amortization Method. The Company estimates the fair value of stock options on the date of grant (measurement date) 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 and vesting schedules of the awards. Stock options granted generally vest over three years 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 and six months ended June 30, 2018 and 2017. 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 of the award using the straight-line method. Restricted stock awards granted generally vest over three to four years for employee grants and one to three years for director grants. Stock-based Compensation Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Stock-based compensation: Cost of revenue $ 167 $ 175 $ 322 $ 351 Sales and marketing 411 342 756 710 Research, development and engineering 350 354 648 662 General and administrative 814 637 1,615 1,210 Intellectual property 67 82 139 160 Stock-based compensation expense 1,809 1,590 3,480 3,093 Capitalized to software and patent costs 49 53 93 98 Total stock-based compensation $ 1,858 $ 1,643 $ 3,573 $ 3,191 The following table sets forth total unrecognized compensation cost related to non-vested stock-based awards granted under all equity compensation plans: As of As of June 30, December 31, 2018 2017 Total unrecognized compensation costs $ 15,876 $ 13,669 Total unrecognized compensation costs will be adjusted for any future forfeitures if and when they occur. The Company expects to recognize the total unrecognized compensation costs as of June 30, 2018 for stock options and restricted stock over weighted average periods through June 2022 as follows: Stock Restricted Options Stock Weighted average period 1.25 years 1.53 years As of June 30, 2018, under all of the Company’s stock-based compensation plans, equity awards to purchase an additional 1,780 shares were authorized for future grants under the plans. The Company issues new shares upon option exercises. Stock Option Activity The following table reconciles the outstanding balance of stock options: Weighted Weighted Average Average Aggregate Exercise Grant Date Intrinsic Three months ended June 30, 2018: Options Price Fair Value Value Outstanding at March 31, 2018 469 $ 26.38 $ 12.10 Granted — — — Exercised (26 ) 13.62 7.65 Forfeited or expired — — — Outstanding at June 30, 2018 443 $ 27.13 $ 12.37 $ 915 Weighted Weighted Average Average Aggregate Exercise Grant Date Intrinsic Six months ended June 30, 2018: Options Price Fair Value Value Outstanding at December 31, 2017 515 $ 25.13 $ 11.64 Granted — — Exercised (72 ) 12.78 7.14 Forfeited or expired — — — Outstanding at June 30, 2018 443 $ 27.13 $ 12.37 $ 915 Exercisable at June 30, 2018 293 $ 25.41 $ 915 Unvested at June 30, 2018 150 $ 30.50 $ — The aggregate intrinsic value is based on the closing price of $26.80 per share of Digimarc common stock on June 30, 2018, which would have been received by the optionees had all of the options with exercise prices less than $26.80 per share been exercised on that date. Restricted Stock Activity The following table reconciles the unvested balance of restricted stock: Weighted Average Number of Grant Date Three months ended June 30, 2018: Shares Fair Value Unvested balance, March 31, 2018 552 $ 29.01 Granted 32 $ 28.94 Vested (70 ) $ 28.87 Forfeited (9 ) $ 29.35 Unvested balance, June 30, 2018 505 $ 29.02 Weighted Average Number Grant Date Six months ended June 30, 2018: Shares Fair Value Unvested balance, December 31, 2017 426 $ 28.44 Granted 210 $ 30.09 Vested (112 ) $ 28.85 Forfeited (19 ) $ 28.84 Unvested balance, June 30, 2018 505 $ 29.02 The following table indicates the fair value of all restricted stock awards that vested during the three and six months ended June 30, 2018 and 2017: Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Fair value of restricted stock awards vested $ 2,016 $ 2,214 $ 3,272 $ 3,491

Shareholders' Equity

Shareholders' Equity	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Shareholders' Equity	6. Shareholders’ Equity In June 2017, the Company sold 500 shares of its common stock in a registered direct offering to a certain investor at a price of $35.55 per share. The offering was made without an underwriter or placement agent. The Company received $17,775 of cash proceeds from the offering, and paid $72 in stock issuance costs.

Earnings Per Common Share

Earnings Per Common Share	6 Months Ended
	Jun. 30, 2018
Earnings Per Share [Abstract]
Earnings Per Common Share	7. Earnings Per Common Share The Company calculates basic and diluted earnings per common share in accordance with ASC 260 “ Earnings Per Share 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 and six months ended June 30, 2018 and 2017: Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Basic Earnings (Loss) per Common Share: Numerator: Net loss $ (8,038 ) $ (6,943 ) $ (16,150 ) $ (13,161 ) Distributed earnings to common shares — — — — Distributed earnings to participating securities — — — — Total distributed earnings — — — — Undistributed loss allocable to common shares (8,038 ) (6,943 ) (16,150 ) (13,161 ) Undistributed earnings allocable to participating securities — — — — Total undistributed loss (8,038 ) (6,943 ) (16,150 ) (13,161 ) Loss to common shares — basic $ (8,038 ) $ (6,943 ) $ (16,150 ) $ (13,161 ) Denominator Weighted average common shares outstanding — basic 11,337 10,266 11,302 10,214 Basic earnings (loss) per common share $ (0.71 ) $ (0.68 ) $ (1.43 ) $ (1.29 ) Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Diluted Earnings (Loss) per Common Share: Numerator: Loss to common shares — basic $ (8,038 ) $ (6,943 ) $ (16,150 ) $ (13,161 ) Undistributed earnings allocated to participating securities — — — — Undistributed earnings reallocated to participating securities — — — — Loss to common shares — diluted $ (8,038 ) $ (6,943 ) $ (16,150 ) $ (13,161 ) Denominator Weighted average common shares outstanding — basic 11,337 10,266 11,302 10,214 Dilutive effect of stock options — — — — Weighted average common shares outstanding — diluted 11,337 10,266 11,302 10,214 Diluted earnings (loss) per common share $ (0.71 ) $ (0.68 ) $ (1.43 ) $ (1.29 ) There were 275 common stock equivalents related to stock options that were anti-dilutive and excluded from diluted earnings per common share calculations for each of the three and six months ended June 30, 2018, because their exercise prices were higher than the average market price of the underlying common stock for the periods. There were 0 and 75 common stock equivalents related to stock options that were anti-dilutive and excluded from diluted earnings per common share for the three and six months ended June 30, 2017, respectively, because their exercise prices were higher than the average market price of the underlying common stock for the periods. There were 0 common stock equivalents related to stock options that were anti-dilutive and excluded from diluted earnings per common share calculations for each of the three and six months ended June 30, 2018, because the Company incurred a net loss for the periods. There were 131 and 125 common stock equivalents related to stock options that were anti-dilutive and excluded from diluted earnings per common share calculations for the three and six months ended June 30, 2017, respectively, because the Company incurred a net loss for the periods.

Trade Accounts Receivable

Trade Accounts Receivable	6 Months Ended
	Jun. 30, 2018
Receivables [Abstract]
Trade Accounts Receivable	8. Trade Accounts Receivable Trade Accounts Receivable Trade accounts receivable are recorded at the invoiced amount. June 30, December 31, 2018 2017 Trade accounts receivable $ 3,858 $ 6,419 Allowance for doubtful accounts (15 ) (15 ) Trade accounts receivable, net $ 3,843 $ 6,404 Unpaid deferred revenue included in trade accounts receivable $ 995 $ 2,217 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 The following customers accounted for 10% or more of trade accounts receivable, net: June 30, December 31, 2018 2017 Central Banks 56 % 47 %

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2018
Property Plant And Equipment [Abstract]
Property and Equipment	9. 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 ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life or the lease term. June 30, December 31, 2018 2017 Office furniture and fixtures $ 1,575 $ 1,551 Software 3,478 3,068 Equipment 4,480 4,390 Leasehold improvements 1,721 1,720 Gross property and equipment 11,254 10,729 Less accumulated depreciation and amortization (7,186 ) (6,493 ) Property and equipment, net $ 4,068 $ 4,236

Intangibles

Intangibles	6 Months Ended
	Jun. 30, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Intangibles	10. 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. No impairment charges were recorded for the six months ended June 30, 2018 and 2017. 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. Estimated Life June 30, December 31, (years) 2018 2017 Capitalized patent costs 17-20 $ 8,402 $ 7,978 Intangible assets acquired: Purchased patents and intellectual property 3-10 250 250 Existing technology 5 1,560 1,560 Customer relationships 7 290 290 Backlog 2 760 760 Tradenames 3 290 290 Non-solicitation agreements 1 120 120 Gross intangible assets 11,672 11,248 Accumulated amortization (5,114 ) (4,867 ) Intangibles, net $ 6,558 $ 6,381

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	11. Income Taxes The benefit (provision) for income taxes for the six months ended June 30, 2018 and 2017 reflects current taxes, deferred taxes, and withholding taxes. The effective tax rates for the six months ended June 30, 2018 and 2017 were 0% and 1%, respectively. The valuation allowance against net deferred tax assets as of June 30, 2018 was $37,880, an increase of $5,555 from $32,325 as of December 31, 2017. The Company adopted the provisions of ASU No. 2016-09, “ Compensation – Stock Compensation (Topic 718),” The U.S. enacted tax reform legislation on December 22, 2017 commonly known as the Tax Cuts and Jobs Act, (“the Act”), resulting in significant modifications to existing U.S. tax law. The provisions of the Act effective in 2018 have been recorded as applicable as of June 30, 2018.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
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 The Company is subject from time to time to other legal proceedings and claims arising in the ordinary course of business. At this time, the Company does not believe that the resolution of any such matters will have a material adverse effect on its financial position, results of operations or cash flows.

Description of Business and S19

Description of Business and Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Description of Business	Description of Business Digimarc Corporation (“Digimarc” or the “Company”), an Oregon corporation, enables governments, banks and businesses around the world to automatically and reliably identify and interact with virtually any media. The Company has pioneered the Digimarc® Intuitive Computing Platform (ICP TM
Interim Consolidated Financial Statements	Interim Consolidated Financial Statements Our significant accounting policies are detailed in "Note 1: Description of Business and Summary of Significant Accounting Policies" of our Annual Report on Form 10-K for the year ended December 31, 2017. Significant changes to our accounting policies as a result of adopting Accounting Standards Codification (“ASC”) 606, “ Revenue from Contracts with Customers 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 (“U.S. GAAP”) have been condensed or omitted in accordance with the rules and regulations of the U.S. 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, 2017, which was filed with the SEC on February 22, 2018. 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.
Contingencies	Contingencies The Company evaluates all pending or threatened contingencies or commitments, if any, that are reasonably likely to have a material adverse effect on the Company’s operations or financial position. The Company assesses the probability of an adverse outcome and determines if it is remote, reasonably possible or probable as defined in accordance with the provisions of ASC 450, “ Contingencies
Goodwill	Goodwill The Company tests goodwill for impairment annually in June and whenever events or changes in circumstances indicate that the carrying value may exceed the fair value. The Company operates as a single reporting unit. The Company estimated the fair value of its single reporting unit using a market approach, which takes into account the Company’s market capitalization plus an estimated control premium. In connection with the Company’s annual impairment test of goodwill as of June 30, 2018 and 2017, it was concluded that there was no impairment to goodwill as the estimated fair value of the Company’s reporting unit substantially exceeded the carrying value.
Accounting Pronouncements	Accounting Pronouncements Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers (Topic 606) Accounting Pronouncements Issued But Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) Topic 840, Leases
Earnings Per Share	The Company calculates basic and diluted earnings per common share in accordance with ASC 260 “ Earnings Per Share

Fair Value of Financial Instr20

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2018
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 June 30, 2018 and December 31, 2017, respectively, was as follows: June 30, 2018 Level 1 Level 2 Level 3 Total Money market securities $ 1,232 $ — $ — $ 1,232 Commercial paper — 41,037 — 41,037 Corporate notes — 7,938 — 7,938 Federal agency notes — 3,008 — 3,008 U.S. treasuries — 2,002 — 2,002 Total $ 1,232 $ 53,985 $ — $ 55,217 December 31, 2017 Level 1 Level 2 Level 3 Total Money market securities $ 2,197 $ — $ — $ 2,197 Commercial paper — 49,834 — 49,834 Federal agency notes — 10,715 — 10,715 U.S. treasuries — 1,996 — 1,996 Corporate notes — 1,934 — 1,934 Total $ 2,197 $ 64,479 $ — $ 66,676
Summary of Fair Value Maturities for Financial Asset	The fair value maturities of the Company’s cash equivalents and marketable securities as of June 30, 2018 are as follows: Maturities by Period Total Less 1 year 1-5 years 5 - 10 years More than 10 years Cash equivalents and marketable securities $ 55,217 $ 55,217 $ — $ — $ —

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Jun. 30, 2018
Revenue Recognition [Abstract]
Schedule of Disaggregated Revenue By Major Product Line in Single Reporting Segment	The following table provides information about disaggregated revenue by major product line in the Company’s single reporting segment: Three Six Months Months Ended Ended June 30, June 30, 2018 2018 Service $ 3,336 $ 6,843 Subscription Guardian 888 1,877 Digimarc Discover and Digimarc Barcode 556 1,145 License 658 1,186 Total $ 5,438 $ 11,051
Schedule of Contract Liabilities from Contracts with Customers	The following table provides information about contract liabilities from contracts with customers: June 30, December 31, 2018 2017 Deferred revenue, current $ 2,410 $ 3,124 Deferred revenue, long term 22 42 Total $ 2,432 $ 3,166

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Jun. 30, 2018
Segment Reporting [Abstract]
Geographical Segment Revenue	Revenue by geographic area, based upon the “bill-to” location, was as follows: Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Domestic $ 1,289 $ 1,253 $ 2,740 $ 2,754 International (1) 4,149 4,334 8,311 8,924 Total $ 5,438 $ 5,587 $ 11,051 $ 11,678 (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 Per Regulation S-K	Customers per Regulation S-K, Item 101(c)(1)(vii) are as follows: Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Central Banks 67 % 63 % 67 % 63 %

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Allocation of Stock-Based Compensation	Stock-based Compensation Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Stock-based compensation: Cost of revenue $ 167 $ 175 $ 322 $ 351 Sales and marketing 411 342 756 710 Research, development and engineering 350 354 648 662 General and administrative 814 637 1,615 1,210 Intellectual property 67 82 139 160 Stock-based compensation expense 1,809 1,590 3,480 3,093 Capitalized to software and patent costs 49 53 93 98 Total stock-based compensation $ 1,858 $ 1,643 $ 3,573 $ 3,191
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: As of As of June 30, December 31, 2018 2017 Total unrecognized compensation costs $ 15,876 $ 13,669
Weighted Average Period for Recognition of Unrecognized Compensation Cost for Stock Options and Restricted Stock	The Company expects to recognize the total unrecognized compensation costs as of June 30, 2018 for stock options and restricted stock over weighted average periods through June 2022 as follows: Stock Restricted Options Stock Weighted average period 1.25 years 1.53 years
Reconciliation of Outstanding Balance of Stock Options	The following table reconciles the outstanding balance of stock options: Weighted Weighted Average Average Aggregate Exercise Grant Date Intrinsic Three months ended June 30, 2018: Options Price Fair Value Value Outstanding at March 31, 2018 469 $ 26.38 $ 12.10 Granted — — — Exercised (26 ) 13.62 7.65 Forfeited or expired — — — Outstanding at June 30, 2018 443 $ 27.13 $ 12.37 $ 915 Weighted Weighted Average Average Aggregate Exercise Grant Date Intrinsic Six months ended June 30, 2018: Options Price Fair Value Value Outstanding at December 31, 2017 515 $ 25.13 $ 11.64 Granted — — Exercised (72 ) 12.78 7.14 Forfeited or expired — — — Outstanding at June 30, 2018 443 $ 27.13 $ 12.37 $ 915 Exercisable at June 30, 2018 293 $ 25.41 $ 915 Unvested at June 30, 2018 150 $ 30.50 $ —
Reconciliation of Unvested Balance of Restricted Stock	The following table reconciles the unvested balance of restricted stock: Weighted Average Number of Grant Date Three months ended June 30, 2018: Shares Fair Value Unvested balance, March 31, 2018 552 $ 29.01 Granted 32 $ 28.94 Vested (70 ) $ 28.87 Forfeited (9 ) $ 29.35 Unvested balance, June 30, 2018 505 $ 29.02 Weighted Average Number Grant Date Six months ended June 30, 2018: Shares Fair Value Unvested balance, December 31, 2017 426 $ 28.44 Granted 210 $ 30.09 Vested (112 ) $ 28.85 Forfeited (19 ) $ 28.84 Unvested balance, June 30, 2018 505 $ 29.02
Fair Value of Restricted Stock Awards Vested	The following table indicates the fair value of all restricted stock awards that vested during the three and six months ended June 30, 2018 and 2017: Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Fair value of restricted stock awards vested $ 2,016 $ 2,214 $ 3,272 $ 3,491

Earnings Per Common Share (Tabl

Earnings Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2018
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 and six months ended June 30, 2018 and 2017: Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Basic Earnings (Loss) per Common Share: Numerator: Net loss $ (8,038 ) $ (6,943 ) $ (16,150 ) $ (13,161 ) Distributed earnings to common shares — — — — Distributed earnings to participating securities — — — — Total distributed earnings — — — — Undistributed loss allocable to common shares (8,038 ) (6,943 ) (16,150 ) (13,161 ) Undistributed earnings allocable to participating securities — — — — Total undistributed loss (8,038 ) (6,943 ) (16,150 ) (13,161 ) Loss to common shares — basic $ (8,038 ) $ (6,943 ) $ (16,150 ) $ (13,161 ) Denominator Weighted average common shares outstanding — basic 11,337 10,266 11,302 10,214 Basic earnings (loss) per common share $ (0.71 ) $ (0.68 ) $ (1.43 ) $ (1.29 ) Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2018 2017 2018 2017 Diluted Earnings (Loss) per Common Share: Numerator: Loss to common shares — basic $ (8,038 ) $ (6,943 ) $ (16,150 ) $ (13,161 ) Undistributed earnings allocated to participating securities — — — — Undistributed earnings reallocated to participating securities — — — — Loss to common shares — diluted $ (8,038 ) $ (6,943 ) $ (16,150 ) $ (13,161 ) Denominator Weighted average common shares outstanding — basic 11,337 10,266 11,302 10,214 Dilutive effect of stock options — — — — Weighted average common shares outstanding — diluted 11,337 10,266 11,302 10,214 Diluted earnings (loss) per common share $ (0.71 ) $ (0.68 ) $ (1.43 ) $ (1.29 )

Trade Accounts Receivable (Tabl

Trade Accounts Receivable (Tables)	6 Months Ended
	Jun. 30, 2018
Receivables [Abstract]
Summary of Trade Accounts Receivable	Trade accounts receivable are recorded at the invoiced amount. June 30, December 31, 2018 2017 Trade accounts receivable $ 3,858 $ 6,419 Allowance for doubtful accounts (15 ) (15 ) Trade accounts receivable, net $ 3,843 $ 6,404 Unpaid deferred revenue included in trade accounts receivable $ 995 $ 2,217
Customers Accounted for 10% or More of Trade Accounts Receivable, Net	The following customers accounted for 10% or more of trade accounts receivable, net: June 30, December 31, 2018 2017 Central Banks 56 % 47 %

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2018
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 ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life or the lease term. June 30, December 31, 2018 2017 Office furniture and fixtures $ 1,575 $ 1,551 Software 3,478 3,068 Equipment 4,480 4,390 Leasehold improvements 1,721 1,720 Gross property and equipment 11,254 10,729 Less accumulated depreciation and amortization (7,186 ) (6,493 ) Property and equipment, net $ 4,068 $ 4,236

Intangibles (Tables)

Intangibles (Tables)	6 Months Ended
	Jun. 30, 2018
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. Estimated Life June 30, December 31, (years) 2018 2017 Capitalized patent costs 17-20 $ 8,402 $ 7,978 Intangible assets acquired: Purchased patents and intellectual property 3-10 250 250 Existing technology 5 1,560 1,560 Customer relationships 7 290 290 Backlog 2 760 760 Tradenames 3 290 290 Non-solicitation agreements 1 120 120 Gross intangible assets 11,672 11,248 Accumulated amortization (5,114 ) (4,867 ) Intangibles, net $ 6,558 $ 6,381

Description of Business and S28

Description of Business and Significant Accounting Policies - Additional Information (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)Segment	Jun. 30, 2017USD ($)
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Number of reporting segment | Segment	1
Impairment of goodwill	$ 0	$ 0
Increase to opening retained earnings	139
ASU No. 2014-09 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Increase to opening retained earnings	$ 139

Fair Value of Financial Instr29

Fair Value of Financial Instruments - Summary of Fair Value Hierarchy for Financial Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 55,217
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	55,217	$ 66,676
Fair Value, Measurements, Recurring [Member] | Money Market Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	1,232	2,197
Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	41,037	49,834
Fair Value, Measurements, Recurring [Member] | Corporate Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	7,938	1,934
Fair Value, Measurements, Recurring [Member] | Federal Agency Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	3,008	10,715
Fair Value, Measurements, Recurring [Member] | U.S. Treasuries [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	2,002	1,996
Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	1,232	2,197
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Money Market Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	1,232	2,197
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Corporate Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Federal Agency Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Treasuries [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	53,985	64,479
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Money Market Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	41,037	49,834
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Corporate Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	7,938	1,934
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Federal Agency Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	3,008	10,715
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Treasuries [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	2,002	1,996
Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Money Market Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Corporate Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Federal Agency Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | U.S. Treasuries [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 0	$ 0

Fair Value of Financial Instr30

Fair Value of Financial Instruments - Summary of Fair Value Maturities for Financial Asset (Detail) $ in Thousands	Jun. 30, 2018USD ($)
Fair Value Disclosures [Abstract]
Cash equivalents and marketable securities, Maturities by Period, Total	$ 55,217
Cash equivalents and marketable securities, Maturities by Period, Less than 1 year	55,217
Cash equivalents and marketable securities, Maturities by Period, 1-5 years	0
Cash equivalents and marketable securities, Maturities by Period, 5-10 years	0
Cash equivalents and marketable securities, Maturities by Period, More than 10 years	$ 0

Fair Value of Financial Instr31

Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Highly liquid marketable securities with original maturities	90 days or less
Cash equivalents include money market funds and commercial paper	$ 33,504	$ 39,761

Revenue Recognition - Additiona

Revenue Recognition - Additional Information (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)
Revenue Recognition [Abstract]
Period of revenue from services	1 month
Subscription revenue term, minimum	1 year
Subscription revenue term, maximum	3 years
Transaction price from contractual obligations	$ 32,907

Revenue Recognition - Schedule

Revenue Recognition - Schedule of Disaggregated Revenue By Major Product Line in Single Reporting Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Disaggregation Of Revenue [Line Items]
Total	$ 5,438	$ 5,587	$ 11,051	$ 11,678
Service [Member]
Disaggregation Of Revenue [Line Items]
Total	3,336	3,253	6,843	6,949
Subscription Guardian [Member]
Disaggregation Of Revenue [Line Items]
Total	888		1,877
Subscription Digimarc Discover And Digimarc Barcode [Member]
Disaggregation Of Revenue [Line Items]
Total	556		1,145
License [Member]
Disaggregation Of Revenue [Line Items]
Total	$ 658	$ 914	$ 1,186	$ 1,864

Revenue Recognition - Schedul34

Revenue Recognition - Schedule of Contract Liabilities from Contracts with Customers (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Revenue Recognition [Abstract]
Deferred revenue, current	$ 2,410	$ 3,124
Deferred revenue, long term	22	42
Total	$ 2,432	$ 3,166

Segment Information - Additiona

Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018Segment
Segment Reporting [Abstract]
Number of reporting segment	1

Segment Information - Geographi

Segment Information - Geographical Segment Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Total	$ 5,438	$ 5,587	$ 11,051	$ 11,678
Domestic [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total	1,289	1,253	2,740	2,754
International [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total	$ 4,149	$ 4,334	$ 8,311	$ 8,924

Segment Information - Major Cus

Segment Information - Major Customers Per Regulation S-K (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Customer Concentration Risk [Member] | Sales [Member] | Central Banks [Member]
Revenue, Major Customer [Line Items]
Entity wide revenue major customers percentage	67.00%	63.00%	67.00%	63.00%

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	0	0	0	0
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock options and restricted stock			3 years
Contractual terms			10 years
Stock-based compensation plans, number of additional shares authorized for future grants			1,780,000
Closing price per share of Digimarc common stock	$ 26.80		$ 26.80
Restricted Stock [Member] | Minimum [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock options and restricted stock			3 years
Restricted Stock [Member] | Minimum [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock options and restricted stock			1 year
Restricted Stock [Member] | Maximum [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock options and restricted stock			4 years
Restricted Stock [Member] | Maximum [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock options and restricted stock			3 years

Stock-Based Compensation - Allo

Stock-Based Compensation - Allocation of Stock-Based Compensation (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,809	$ 1,590	$ 3,480	$ 3,093
Capitalized to software and patent costs	49	53	93	98
Total stock-based compensation	1,858	1,643	3,573	3,191
Cost of Revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	167	175	322	351
Sales and Marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	411	342	756	710
Research, Development and Engineering [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	350	354	648	662
General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	814	637	1,615	1,210
Intellectual Property [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 67	$ 82	$ 139	$ 160

Stock-Based Compensation - Unre

Stock-Based Compensation - Unrecognized Compensation Cost Related to Non-Vested Stock-Based Awards Granted (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Total unrecognized compensation costs	$ 15,876	$ 13,669

Stock-Based Compensation - Weig

Stock-Based Compensation - Weighted Average Period for Recognition of Unrecognized Compensation Cost for Stock Options and Restricted Stock (Detail)	6 Months Ended
	Jun. 30, 2018
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average period	1 year 3 months
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average period	1 year 6 months 10 days

Stock-Based Compensation - Reco

Stock-Based Compensation - Reconciliation of Outstanding Balance of Stock Options (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Options, Outstanding at beginning	469,000		515,000
Options, Granted	0	0	0	0
Options, Exercised	(26,000)		(72,000)
Options, Forfeited or expired	0		0
Options, Outstanding at ending	443,000		443,000
Weighted Average Exercise Price, Outstanding at beginning	$ 26.38		$ 25.13
Weighted Average Exercise Price, Granted	0		0
Weighted Average Exercise Price, Exercised	13.62		12.78
Weighted Average Exercise Price, Forfeited or expired	0		0
Weighted Average Exercise Price, Outstanding at ending	27.13		27.13
Weighted Average Grant Date Fair Value, Outstanding at beginning	12.10		11.64
Weighted Average Grant Date Fair Value, Granted	0		0
Weighted Average Grant Date Fair Value, Exercised	7.65		7.14
Weighted Average Grant Date Fair Value, Forfeited or expired	0		0
Weighted Average Grant Date Fair Value, Outstanding at ending	$ 12.37		$ 12.37
Aggregate Intrinsic Value, Outstanding	$ 915		$ 915
Options, Exercisable at ending	293,000		293,000
Options, Unvested at ending	150,000		150,000
Weighted Average Exercise Price, Exercisable at ending	$ 25.41		$ 25.41
Weighted Average Exercise Price, Unvested at ending	$ 30.50		$ 30.50
Aggregate Intrinsic Value, Exercisable	$ 915		$ 915
Aggregate Intrinsic Value, Unvested	$ 0		$ 0

Stock-Based Compensation - Re43

Stock-Based Compensation - Reconciliation of Unvested Balance of Restricted Stock (Detail) - Restricted Stock [Member] - $ / shares shares in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Number of Shares
Unvested, beginning balance	552	426
Granted	32	210
Vested	(70)	(112)
Forfeited	(9)	(19)
Unvested, ending balance	505	505
Weighted Average Grant Date Fair Value
Unvested, beginning balance	$ 29.01	$ 28.44
Granted	28.94	30.09
Vested	28.87	28.85
Forfeited	29.35	28.84
Unvested, ending balance	$ 29.02	$ 29.02

Stock-Based Compensation - Fair

Stock-Based Compensation - Fair Value of Restricted Stock Awards Vested (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted stock awards vested	$ 2,016	$ 2,214	$ 3,272	$ 3,491

Shareholders' Equity - Addition

Shareholders' Equity - Additional Information (Detail) - Common Stock [Member] $ / shares in Units, shares in Thousands, $ in Thousands	1 Months Ended	6 Months Ended
	Jun. 30, 2017USD ($)$ / sharesshares	Jun. 30, 2017$ / sharesshares
Shareholders Equity [Line Items]
Issuance of common stock | shares	500	500
Common stock price per share | $ / shares	$ 35.55	$ 35.55
Cash proceeds from sale of common stock	$ 17,775
Stock issuance cost	$ 72

Earnings Per Common Share - Sum

Earnings Per Common Share - Summary of Reconciliation of Earnings (Loss) Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Basic Earnings (Loss) per Common Share:
Net loss	$ (8,038)	$ (6,943)	$ (16,150)	$ (13,161)
Distributed earnings to common shares	0	0	0	0
Distributed earnings to participating securities	0	0	0	0
Total distributed earnings	0	0	0	0
Undistributed loss allocable to common shares	(8,038)	(6,943)	(16,150)	(13,161)
Undistributed earnings allocable to participating securities	0	0	0	0
Total undistributed loss	(8,038)	(6,943)	(16,150)	(13,161)
Loss to common shares — basic	$ (8,038)	$ (6,943)	$ (16,150)	$ (13,161)
Weighted average common shares outstanding — basic	11,337	10,266	11,302	10,214
Basic earnings (loss) per common share	$ (0.71)	$ (0.68)	$ (1.43)	$ (1.29)
Diluted Earnings (Loss) per Common Share:
Loss to common shares — basic	$ (8,038)	$ (6,943)	$ (16,150)	$ (13,161)
Undistributed earnings allocated to participating securities	0	0	0	0
Undistributed earnings reallocated to participating securities	0	0	0	0
Loss to common shares — diluted	$ (8,038)	$ (6,943)	$ (16,150)	$ (13,161)
Weighted average common shares outstanding — basic	11,337	10,266	11,302	10,214
Dilutive effect of stock options	0	0	0	0
Weighted average common shares outstanding — diluted	11,337	10,266	11,302	10,214
Diluted earnings (loss) per common share	$ (0.71)	$ (0.68)	$ (1.43)	$ (1.29)

Earnings Per Common Share - Add

Earnings Per Common Share - Additional Information (Detail) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Common stock equivalents related to stock options that were anti-dilutive and excluded from diluted net income per share	0	131	0	125
Higher Than Average Market Price [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Common stock equivalents related to stock options that were anti-dilutive and excluded from diluted net income per share	275	0	275	75

Trade Accounts Receivable - Sum

Trade Accounts Receivable - Summary of Trade Accounts Receivable (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Accounts Receivable Net Current [Abstract]
Trade accounts receivable	$ 3,858	$ 6,419
Allowance for doubtful accounts	(15)	(15)
Trade accounts receivable, net	3,843	6,404
Unpaid deferred revenue included in trade accounts receivable	$ 995	$ 2,217

Trade Accounts Receivable - Add

Trade Accounts Receivable - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018
Accounts Receivable [Member] | Minimum [Member] | Credit Concentration Risk [Member]
Concentration Risk [Line Items]
Percentage of trade accounts receivable of major customers	10.00%

Trade Accounts Receivable - Cus

Trade Accounts Receivable - Customers Accounted for 10% or More of Trade Accounts Receivable, Net (Detail)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Central Banks [Member]
Concentration Risk [Line Items]
Percentage of trade accounts receivable of major customers	56.00%	47.00%

Property and Equipment - Additi

Property and Equipment - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018
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	10 years

Property and Equipment - Deprec

Property and Equipment - Depreciation and Amortization on Property and Equipment Using the Straight-Line Method (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property Plant And Equipment [Abstract]
Office furniture and fixtures	$ 1,575	$ 1,551
Software	3,478	3,068
Equipment	4,480	4,390
Leasehold improvements	1,721	1,720
Gross property and equipment	11,254	10,729
Less accumulated depreciation and amortization	(7,186)	(6,493)
Property and equipment, net	$ 4,068	$ 4,236

Intangibles - Additional Inform

Intangibles - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Finite-Lived Intangible Assets [Line Items]
Impairment charges on intangible	$ 0	$ 0
Capitalized Patent Costs [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	17 years

Intangibles - Amortization of I

Intangibles - Amortization of Intangible Assets Acquired (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Capitalized patent costs	$ 8,402	$ 7,978
Intangible assets acquired:
Gross intangible assets	11,672	11,248
Accumulated amortization	(5,114)	(4,867)
Intangibles, net	$ 6,558	6,381
Capitalized Patent Costs [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	17 years
Capitalized Patent Costs [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	20 years
Purchased Patents and Intellectual Property [Member]
Intangible assets acquired:
Intangible assets amount	$ 250	250
Purchased Patents and Intellectual Property [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	3 years
Purchased Patents and Intellectual Property [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	10 years
Existing Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	5 years
Intangible assets acquired:
Intangible assets amount	$ 1,560	1,560
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	7 years
Intangible assets acquired:
Intangible assets amount	$ 290	290
Backlog [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	2 years
Intangible assets acquired:
Intangible assets amount	$ 760	760
Tradenames [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	3 years
Intangible assets acquired:
Intangible assets amount	$ 290	290
Non-solicitation Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	1 year
Intangible assets acquired:
Intangible assets amount	$ 120	$ 120

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Line Items]
Deferred tax assets, valuation allowance	$ 37,880		$ 37,880		$ 32,325
Effective tax rates			0.00%	1.00%
Change in valuation allowance			$ 5,555
ASU No. 2016-09 [Member]
Income Tax Disclosure [Line Items]
Unrecognized excess tax benefits of deferred tax assets offset by valuation allowance						$ 6,219
Excess tax benefits recognized in the provision for income taxes offset by valuation allowance	$ 186	$ 923	$ 711	$ 1,101