DMRC - Earnings call transcript Q3 2020

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Operator

Good afternoon and thank you for participating in today’s conference call.

Now I will turn the call over to Chairman and CEO of Digimarc, Mr. Bruce Davis. Sir, please proceed.

Bruce Davis

Thank you and good afternoon. call. conference our to Welcome Charles Beck, with CFO, is me. our

important our charge provide plastics of also this update have joining recycling. in Chamness, Bob increasingly in prospects to We Sustainability, platform EVP, us progress and of use our on in an today

developments on On business progress of we and discuss today, and conditions call review QX execution market the results, provide financial will significant and an update strategy.

this website webcast remarks in the Relations and posted will have our archive these prepared We there. section Investor of

begin, refer we everyone more today’s press Before differ factors me let that to Charles? risks for results risk materially. discussion remind and statements that and contains actual could information release to forward-looking on the uncertainties. cause Please our

Charles Beck

were for essentially include year. Revenue X.X projects. deals XX% million, not increased as early million $X.X QX Subscription the third to Thank signed production XX% pilot QX provided supply Bruce on during to pandemic $X.X growth in some you, quarter to new operations, services from flat $X.X ago. $X.X the Service government revenue unchanged QX they to significant to Revenue million, last X% year. from Golden to growth same $X.X that I $X.X The media level from did and primarily million million $X.X the customers. and Thread the solutions, bookings a good bookings, XXXX due We effect everyone. service store retail factor X% most decreased for moment the government with $X.X million was in million, that significantly revenue as HolyGrail million recycling reflecting organization up renegotiated growth contract of by retail on planning of partner quarter was projects. bookings impact with a the was and was the first revenue. contribute revenue which the have $XXX,XXX. in calls. affecting due Revenue Revenue quarter impact supplier discussed to the contract prior of the down last chain from the referenced in from was driven renegotiated we around of were at to and Retail afternoon

revenue quarters. major will during packages. However, we grow To QX retailer enhancement larger Japan. included expect Bookings initial in strategic have developments. started than coming these several XX activities in into Barcode of Digimarc packages completed more label streams a for notable do date, we We with private

a in We during expect to to transition QX. process enhancement Japan trusted partner the

We last with year, increase due lower year severance nonrecurring bookings were laser-engraving brand were up restructuring also quarter began We Subscription the to announced and the costs during last variable of global week we I generated $XX.X million margins And quarter relating XX% to commercial Catalog, down last XX%, $XX.X call. solution mix to corporate data our non-labor margins subscription in last from year, suppliers. were Gross the to that of margin a revenue QX Operating July. an expenses customer-funded QX Operating earnings in mentioned expenses. serialization of expenses revenue. labor primarily in mix million, favorable included about XX%, and study down expenses X% $XXX,XXX year. in from of the we due on with billable a from viability higher circulating from ago. due lower its a follow-on XX%, XX% the for Toy the which shift began a services. to completed Service Walmart a was printing for XX%

costs. these lower operating and expenses Excluding would to declined have travel, consulting by costs, X% due other

$X.XX share net loss fourth per for of the per loss diluted $X.XX diluted the diluted $X.X versus to million in million share million accounted range in to per for QX expenses $XX.X or costs third $X.XX severance loss. or quarter operating expect Non-recurring last of million year. We share a $XX.X $XXX,XXX net was quarter. Net of the from $X.X

Our to the investment million investment. balance $XX.X TCM million added sheet has TCM been prior ATM under program We of cash. The raised considerably strengthened. $X.X the

no We to the plans further have use ATM.

also million from from shelving working million filed stock review proceeds in We We was the issued million and to Protection including the X the was then mid-September. received preferred issuance forgiveness financing it. the loan XX initiative remaining has and on million. convertible quarter are the time ended We October Program strategic our substantial the the when preferred approve in the increase application, our cash stock TCM. administration investment for common Cash for of stock issued. investments, proceeds small of of proceeds to light the business $XX.X has of Paycheck in XX We The of $XX for days $XX.X in convertible being days and capital. the receipt $XX.X bank after to investments with entire

XXXX for next operating planning that for views have working and allocation on the share our resources are plan of of guiding preliminary to on We our views year. assumptions are some

is Our well. functioning government business

revenue of second when quarter-to-quarter digits are on than year in expect with based to grow services the first timing performed, of half. We work mid-single the and vary half the slightly to more

warrant from XXXX. has expect incremental the as stabilized currently area We and same revenue business does not This level around investment. be of media to

growth have continues to XXXX. expected great plastics protection, area growth. software to operations. recycling and triple-digit growth currently services expected yet brand and associated we recycling retail for Growth in business, small the retail projecting end In opportunities work in are by traceability, fueled that with retention projects and primarily to account on efficiencies to Europe. and bookings is revenues logistics, the include and retail development of margin primary team growth applications retail initiative the subscriptions in users. partners Key store to We be consulting from licensing in is come explore in a contribution The maximize and

revenue incremental margin software grow the as licensing gross than for nearly revenue, expansion XXX%. subscription contribution at rate service of higher to is a margins, expect an to We leading

outcomes we when the of acceleration of predict. development, adoption to rest leaders rate retail industry. market the of of contracts area to including remains of and and much possible range to growth range other of Although a by effects We is nature due for bookings, developments consistent market key the due the uncertainties revenues, in closing the likely this the the market of growth most accelerate timing significant is outcome largely of timing a how think tipping and in our and an of theory account business factors, function pandemic. continuing hard will potential of expect is of wide in effect the about outcomes momentum the points the the The potential on bookings with

expenses of XXXX, adjustments employees. up our total to additional XXXX, the routine in support increase for modest a projecting and headcount single-digits growing existing opportunities in cost-of-living reflecting sustainability are impact in from plastics We and

For and execution that results and Bob to we of on further our expect business, will Form of Bruce discussion now our market file our prospects comment and XX-Q strategy. financial for shortly. significant risks conditions and Bruce? developments, please see business

Bruce Davis

Strategic’s prominent our very positive investment. have among a Charles. game-changer. million is last Most call. since $XX several been There them It’s TCM developments Thanks,

building in progress our the platform great made have and We developing market.

artificial Digimarc to chain progress broadly, and global fuel intelligence, more cornerstone to supply have reality. profitability path the the capital and more establishing on we machine in and augmented a identification of as Now, learning of automatic

was between He Most and and Riley redefine longtime a will everyday he people a well, shareholders. shares opportunity platform Strategic held in and is visionary the by collaborate many elected McCormack, well the about I representative dozen long-term shareholder less yesterday. by things expect be of our life. Our a to Riley him. informed is led shareholder. are of am institutional personally by Digimarc and Knowing board terrific with to commerce advocate. in respected our I and manager, its high-quality relationships him TCM investors largest aspects well-known ably fund excited than to

We these she, record have and stage the the coverage of reward to markets, career of extraordinary accomplishments business diversity markets financial community also media. Her has Alicia to base disciplines understanding European in and equity remarkable public small-cap practices, financial demonstrate from to communicate that investors, too, are for the of I will a qualities our opportunities. perspectives Sell-side extraordinary Board. focused and impressive failing positioning markets. many mastery my ESG and In next development. an view, areas our its exploit elected talent business of risk I of investment performance, the of expand expect profitable understanding, financial our including underserved and historically and a entrepreneurial the to built development funds markets, bring leadership advocacy across assistance the of outreach the consistent particularly markets. the asymmetry short-term we and and in into advance modern and stage market a track enormous in on capital rising awareness of capabilities as the look the forward we assets flowing optionality value of is we millennial limited of Syrett contributor. our of capital new effort in new Alicia into with rounding be market experience significant and creating a target tide better planning to to a communicate our and and These investors. out platform the great advice of directors and directors understanding of board, to a better

these implemented in areas and expect improvements that important in and appreciate the segments governance, will the we like corporate this year. food We Circular roles our Economy safety have

seen reported to NASDAQ. an as by Holdings institutional have by XX% expansion funds European We of of ownership, Digimarc nearly

more where considerable Circular and in potential do the waste, be outreach may the addressing contribution will better are compared in the Europe, of to U.S. of plastic We actions and societal as contributions importance there these to understanding There Europe. governmental our Economy decisive a

Last to in the for and of We the company deal of and significant and working approach us sustainability capital. involving to initiative plastic our to we trials. primary on recycling drivers shareholder to need have focus communicate The surfacing investors relationships The the TCM many revolved aspects to acquisition. many the growth limited on board optimal XXXX developments. corporate light strategy. been the position expect opportunities initiatives expansion time-being capital environmental to shelved manufacturing of span demonstrated our use the that We investment allows becoming identification EU product involving with recycling impact consumer great helpful base. focus from to a we initiative access our Explorations leverage technical are a strengthening rather of other The for influenced strategic waste around crisis. activity constructively during in a global for investors It’s in there that lifecycles and of recycling. there. of the is now plastic unique Opportunities investment organic better execution and year, cash capital with of the to our operational on auto of of improve AIM, be relevance these than to

promise of in Our broader much platform we sorting unprecedented improvements role can demonstration waste obvious the Economy. and in materials a showed also streams. It’s in recyclable Circular quality quantity play that of of

have determine of the path leaders plastics industry gotten galvanized to in impressive capabilities involved HolyGrail initiative, Global known to an commercialization have watermarking. the to Our form digital as industry. together X.X

our have We us our and executive enormous TCM is resources to provide charge Chamness, business, this area this and allows on Bob more initiative. to here update Strategic play in today role an central the Bob? The market overview to of to prospects. a opportunity. of investment in progress address this deploy

Bob Chamness

investment to Bruce. Bruce and recent has global damage regarding discussed consumer and notwithstanding recycling Europe you, the and and my thank of the to landfills; oceans, our collectively and GSX incineration. have out streams, of in the in Grail themselves waterways, In Economy. more and and and a The sustainability nor Circular the for massive, waste both a call the increasing education, economy oceans, development. publicity SKUs active crisis. pollution of $XXX of was plastic plastic negative our superior and quality is initiatives. air published returns the for and the of over to share Circular to pleasure X.X the members. waterways of enduring outstanding known Any undertaken formal in Well, to join or address The the as launch our as due previous as in landfills system estimates long-term of significant with currently of aggregate reasonable product members keep here municipalities of Neither this our to now very goal the its XX% that many The as plans resilience initiative than sortation developments Economy It’s recyclable a would as for The have is calls, opportunity demand that America. and products we on on suggest other in more commerce. million is across states reduce the improve the collection, of government HolyGrail quantity mission, scrutiny and market, the opportunity some to This XX efficient September suppliers global of design, foundation are and number the data penetration a processing lead plastic company. North Best Holy has plastics-based the involvement which in products to plastic. product,

test the Grail addressing facilities will on scale of can mixed waste past demonstrations role high-speed at technology the least vital years, X high-speed became waste centerpiece of X.X, two We of we HolyGrail Holy plastics play in we our which equipment. in sortation Over at demonstrated sortation industrial at countries. in in the two formation the crisis the

world has of platform. The the during accelerating few in past of the as the are new enhancement robust on quarters, normal Still, the the the During projects ecosystem both Barcode Digimarc new are COVID our of is brand the the the first environment. and Digimarc operating of pace and discovery focused launched aiding a slowed quarters year. of three being among sides to now adapting pandemic owners team a for speeding adoption development initiatives and

side, ecosystem a progress adoption. much the broad enhancement prelude broad and we is On to made developing diverse a that necessary have

support sustainability who members initiatives global Grail. and top of XX and are top XX the in So of recycling Holy with X are the engaging we of X far, brands retailers, of

We materials converters. are packaging working and with mould and their suppliers, makers

environment. shape with trade of of critical of legislative engaged this and supply help and actively and the chain now suppliers and public influencers ecosystem success. the key to who academic associations perception up members and long-term XX Lighting X.X regulatory nearly are the We is of HolyGrail partners all

agreements the XX% in provide Recovery trials together of and units high-speed who to, On assistance detection Facilities deployment development have work the globally. of manufacturers shortly systems the our This side completed for prototype and industrial equipment, sorting lines and accelerated two largest with, we of use the includes commercial detection sortation thereafter. Materials over of in

of provide delayed components our mobile now of marked in We are packaging with the test and in several quality but launching waste exploring visual streams and discussion involved and to additional engagement, and companies projects the of suppliers traction. the education use Plans analysis in systems to are consumer for identity systems Thread assurance. for Golden due three gaining countries pandemic were software

budget better of QX. recyclability, collection, submitted. customer scoped during last least and Two been and commercialization recovery one manufacturers, these requests other and aim will systems have stated retailers, education, players. for believe enable projects to ecosystem and provide for we facilities true sortation to We that at circularity. strategies projects intended test dual start As to brands, are models develop operators, sorting They these quarter,

been and HolyGrail formative anticipate potential we Two the in planning for A X.X, North The emerging in second early other in and QX. meaningful is subsumed initiative within progress front discussions. funding America. during Threads Golden third has are

the environment initiatives from are ecosystem political momentum. strikingly While gaining and several the different EU, are

initiatives to and the harmonization supporting to trade with globalization. with relations the European and Holy leverage along government American from Grail groups are to We and learnings North aligning efficiencies key path gain

in call case investment Fund I MacArthur of Holy and Pollution. plastics the Our signs Bruce compliance a over business now global we Consulting operational pollution global treaty Nature to coordination, this eventual brand support customers Treaty markets increase all at calls mic a Grail inevitable. for in Foundation, point, green coordinated development will Their on as planning Ellen to closing Wide to need and we for and such and collaborated across XXXX. to standards Boston reduce Globalization project, pass the key for World markets. for for innovation. the efforts the Group approaches Plastic complexity are our support their UN a summary, enter sponsor remarks. original risks infrastructure to for are coordination In with is has The reduce and

Bruce Davis

Thank transformation need evident expected effects the digital in from evidence of Secular in you, enduring the initiatives, the for serialization increasing the to trends are plastics and UPC growing and demand of move Bob. the the pandemic. beyond businesses

New customer by in media are doubt forms that opportunities the and of community. pipeline in I contemplated industries investment the are

of of maturation supplier. breadth and our and I ecosystem become product on evolve will in as We The efficiencies. As accelerate expanding evolve cloud, organization changed customer-centric platform. a development supplier being with of execution and to our am between alignment focus the and is the the positioning dramatically to relationship of on our to goals opportunities proud built are strategy, Everything between the obvious and changes accountability has of company not universe from are challenging. the for The QX. operational primary increasingly of the gain we result the hyperbole. mature, size, leadership the significant made observing better outcomes, IP-licensing these growth changes as The Barcode profiles demand in company’s continues we such the sophistication a it as sales, software in of versatility, customer services and organization applications that to transition organization and changes and team create improve were the mission loyalty of strengthen employees an

to effectively users, both platform of value spectrum about building of enabled it’s and fundamental great end customers, partners the applications. efficiently blocks in a obsess With time across delivering our the place, and

they adoption initiative problems Digimarc. bringing European There industries, for product affected, we very uniquely our and to progress are now demand geographies include, believe call. revenue platform development seem sustainability, persist making serialization spending, growing progress end takeaways is thermoform enter Japanese brand Key key including many make and additional a great very traceability, to these the and impressive a we total demand in adoption reliable suppliers, I in the since supply million, developments going front support leading And tobacco, were Threads chain techniques opportunities users sheet raised another last theme, supply at cost HolyGrail by be banks, and Walmart, and industrial $XX in by for that cash with platform, in with more is and looks provide of market met now solutions; America we development the lower stable, foreseeable protection, margin analyst balance address serialization indicates value and revenue are healthy, positive chain revenues in visibility area and as new IoT in expanding visibility the us can new of impact recycling a safe, the demand highly substantial navigate growth. key opportunity; their Our excellent can exceeded a delivering expand informed trials knowledge Aim X.X expanding addressed small for better future, parallel workforce accelerate management retailers brand on in advancements success, board, central executing effects in, services, shift for gross and we EPS to with to skilled expanding in on marking; protection into delivering from participate the enhancement retailer owners and new relevant in higher to established pandemic; to row experience, fuel in and tent-pole begin good and customer automotive ownership the customers increase our shape; themes we and well, meet of or to in is owner we U.S. institutional our directors ecosystem brand be and of of quarter the laser the to for to COVID-XX and operate preliminary broadening easier opportunities with growth minimal less stimulate some and supplier the effectively estimates pandemic supply third should ecosystems, area continued and R&D enhancement productive for added the infrastructure slowed while for in unrivaled XXXX here revenues initiatives and quality for and for increased two the substantial with bookings and keys big including encourage of the Golden plastic to that’s faster, despite what skills the expect rapidly interfaces our the designs North brand plastics success, and integrated, chain the view pharmaceuticals, footprint some, with initiatives, engaged that XXXX, is and as and promising, is era, maintaining mix rapport and flow. the planning second and obsessing increasingly with exceptional bookings science our keep

with your Board, for prepared to achieve new in now, we looks funding skills in all you questions. our for the ability in for the to That’s and the wish demand for confidence uptick mission an you best We the these the it. long-term it floor will secured, our experience of times. platform future difficult new Thank X.X, our And open remarks. applications ever. and brighter support of and works, than of the formation emergence our our So solutions HolyGrail on chain many supply in

Operator

Instructions] [Operator you. Craig-Hallum Van Jeff And our Rhee comes Thank with Capital. first question from

proceed. may You

Jeff Van Rhee

back COVID. I got over to label in think because the up on X,XXX rollout SKUs, delayed, and said you put thermal of then February, hold

know Just update respect things the got there? you But the to Toy Where stand out. in do there thermal started the labeling have I things back products of now? labels, Catalog up private-label with sort pick the what’s to

Bruce Davis

quarters. we experiences store the last enabling also So of digital began in the in low-touch couple

footprint. brand where grocery in that’s respect motoring initial expanding discussing we and area fine, to Well, along, consumables move beyond and work. concentrated been are we’ve we’ve products private to our the doing the So with means

exploring are more We also applications throughout mobile the store.

hundred couple that Walmart moving stores forward. to shopping You they announcement seen embracing may a hope an of lit mobile-centric are have model by and have up a

and order shopping from that’s by an in others their With safer in it’s will the are still associates to significant respect just a too efficient who the for thermal, store their it and and customers excellent uncertainty because operations and initiative And provide engaging to parties yet store it’s for implemented. impact to going others. for that Walmart shopping have third and all right much hold, experience think rollout on I on in now stores and this on on is too still a when environment. in hold begin there much stores them

I It’s So don’t know pretty to when ready it will close online. come back go. to

improvements So just that and on prepare developing rollout. can system a the work his I the point and some focus operating budget and longer-term to there to who John model. that presentation much urgent store and are can the is environment, have the CEO forth about and U.S. at for unsettled. they needs to or But by on the And is Furner, am we hoping was priorities deploy yesterday so retail talking immediate two on broad of things not effect Walmart a so still an fully and on

Jeff Van Rhee

Got it. Helpful.

next right are impacted guys in a triple-digit what that see that? obviously, primary the bookings talked when expecting of triple-digit about But COVID growth year, that cases now that drive used bookings bookings, the you about pipe to ‘XX. You ‘XX, bit are going think preliminarily in because in you growth

Bruce Davis

potentially Supply chain recycling. and

growth the areas. expect largest we in will So be those

geographies this Europe watching it don’t to operations, a I more says where today, at disrupted store U.S. As the causing more in is news the other But point. some I if be noted bit the and know remarks, you retail shutdowns forth. my so trouble appear are in than in

for really that to will driven it’s predict retail I chain increase year. believe the is being solutions the in by pandemic. demand But how next hard go So supply

a So indicator to plastics with it’s voice, now, contra a not to respect – the world need impeded situation the plastics something to has that by is And growing the obviously there but be got as of kind do is which right it. And growing of will lot of getting motivate and seems being driven to awareness concerns opposed a better. by it’s worse, pandemic change.

So the I plastics encouraged progress COVID of progress crisis. actually recent very uptick and on the the about in continuing am midst the in

Jeff Van Rhee

handed then couple Got Golden What with of of minded. of guys But those that what there of last are these then a just do sure. do on milestones and industrial recycling. are milestones COVID lot tests sort might – Thread objectives? not some some of sounds near-term extent, to key the Obviously, it. think of to with you sort on of you of you projects? into think revenue? the you’re also, a respect and And to some might part some it You these When the players. key And that, objectives working when like your products products mentioned turn follow meaningful

Bruce Davis

questions about over I the to Okay. your plastics. call recycling Well, have turn floor will and to Bob our expert the answer on today, Jeff, I so

Bob Chamness

the supply Holy and things suppliers couple with providers, producers, organizations sorting a of project we companies, mother-load is political plastic supply the effect, working And retailers, of to purposes the in The are chain chain. kind Grail recycling immediately. come and equipment partner Well, of involvement. the of mind brands, several Aim and project for the

active look to we year. so And next be for project that relatively

We are of is working that it team and planning the terms scheduling. so with players, unpredictable, are in a many little of project Jeff. Because its there

unpredictability. are to focused are dependencies. countries. some those be of be easier They that working And Golden we respects, to Again, some specific in forward. less there Threads in The will And drive some more so through tend pan-European. are

to look for also those year. revenuing We next start

Jeff Van Rhee

ramp the $XX Got now. I then next where if really lastly, months? it. close could, And X sheet you plan Are to balance million there XX just you over to the any on guys got obviously to areas investments

Charles Beck

Yes.

increasing be in plastics those Economy will to We Circular crisis. investments helping and solve our the

Jeff Van Rhee

That Helpful. me. is it. for Got it

Charles Beck

Thank you.

Operator

Cowen. Bernstein And our with comes next Jeff from question

You may proceed.

Jeff Bernstein

guys. Hi,

of couple questions a Just for you.

bit you the about application about can a with more a and little members laser-engraving work you are bit guess, little there? doing talk I the that First, CPG, talk supply chain and

Bruce Davis

to three are has do just versus a confidential presses. of respect with technological we much, project. actually means talk the overprint, there We for packaging. traditionally been Inkjet, gating or presses presses, had had scale because was too past economies serialization, one in digital the with primary and allowing the a breakthrough year a serialized that major Industrial digital It’s Not traditional of serialization The data. called factor printed as that it’s to what’s Marker deliver Coder that to about

So breakthrough that’s us the to business that’s in scale be our been able materially area. that big caused to

And want do, going suppliers of that be a means of in with brings for third change is be products yet there. if at see What assure I in might relevant lasers. world, imagine through that to we collaboration R&D. can to is some a it’s in we all is do have it doing that prominent we if and more products brand get the tremendous scale the is that actually to you we The serialization would you it very a outstanding opportunity beginning a frankly, It’s available. to the where think not And commercially to kinds. substrate – But than labels.

have the do to labels. means we So

platform. unique really marvelous do the We advantage got are combine working two, We provided and we our opportunity on for growth substrates. by to for a the have means

Jeff Bernstein

is siloed still key for there That’s etcetera? etcetera, you kind are these that who there you any, little supply cross-fertilization bit customers obviously going about already talk if the Is synergy, of And then things Holy are the right for members or there traceability, also great. talked can about now? between a on chain, have your Grail

Bruce Davis

will my refer I Bob, Once on to one. that colleague, again,

Bob Chamness

their synergy organizations. is There great the between two and within a particularly

in And can really that it. motivator. alone all can driven And party. invest of that cases supply including And manufacturing, multiple so other of want those platform for we the makes front-of-store is some are and companies, the platform. bring for all others recycling safety these we or attractive retailers of they is other that use others, the working what use cases, want implementing part so or or efficiency sides to our a brands, food support from things those But be chain to to

spreads that it held, across closely the company. most, So, is but effort for for some, an it’s

Jeff Bernstein

very Thanks Great. much.

Operator

And [Operator next question Instructions] Tomkins our & from with Oppenheimer comes Company. Steve

proceed. may You

Steve Tomkins

is, don’t away any you all other for global are so so that’s do us. turning involved the Holy you question yourself spread not and with you become too the find in with Grail of strayed, because Europe, in members And and you retail having demand business, ever my thank Yes, increase the thin?

Bob Chamness

Well, will resolve I – again, go our ahead. start,

Bruce Davis

Go ahead. Go ahead, Bob.

you to ahead? start, If want go

Bob Chamness

and that be focus is on we the companies investing to and their resources supporting that in the make the to Where we technology. just as our everyone obsessing look to engage quality most on clearly deliver I customer success. wants we the and necessary involved, are to But individuals will prioritize key try that sure project satisfy in or high

Bruce Davis

are answer. business away Steve, see the don’t two need. to in generally, the turn more there we opportunity where threads my adequate of particular will promise is, And One we beyond yes, of scaling terms the

that problems all opportunities we increasingly the and driving however, of to empower out they suppliers. are said, we in is that of uniquely can we us one increasingly think with product With development We and are which model that have needs, coming address. customer customers

suppliers, application then that so suppliers we empower layer that on gets hopefully who by And complexity. increasingly as the served take

profitable growth from business. we their layer, gets their increasingly on does get increasingly in because understanding gain our application the So and will complex. service It requirements, the business will take suppliers not and income

Steve Tomkins

Great.

Thank Sounds you. good.

Operator

Bernstein from a have follow-up we And with question Cowen. Jeff

You may proceed.

Jeff Bernstein

new read on Yes, past, have of bit talked have the and thoughts you group a U.S. approach of more individualist suppliers. your adopting a a the stuff the Great, Japan. to we collective about on more rather bit across and just of goes I little than chain there’s think that wanted to is consolidated a in I Where the kind hear supply technologies little in what more what of

So the a kind adoption, of breaking there ice you but accelerated the prelude to tell us? maybe is first with a more player

Bruce Davis

market. executive Charles, provides Well, who and for Japanese direction actually, primary oversight our is the

So I to will that Charles ask respond question. to

Charles Beck

Yes.

in boots the is strategy heavily ground. Japan in have our So on invested we not

we sales that projects going our a retailers of enabling brands. have really deliver on. to a partners number strategy executive and to have is centered We around And the

got We was engagement breakthrough. our good of kind our have from This partners. first

wasn’t the was technology just we before, hardware didn’t in some As optics things. that had the of as the with having fact or just well challenge I’ve that that those mentioned the hardware sorts the or work in our Japan of latest CPU

less suboptimal. was than So it

to of of hardware the we was there. software make started make have in enabled then more And to utilize kind scanner to had front to there And significant this the supportive retailer improvements are technology the where lot to technology. continuing progress ecosystem the we store. where instance a We our is ability of that the significant first for a update

that good partners the tie will think a We additional I for have there up doors alignment opportunities. of open number got with key

Jeff Bernstein

Thank great. you. That’s

Operator

have questions not do in we And any queue. further

Bruce Davis

to forward Well, Terrific. any soon. questions to you thank may we and for look speaking follow-up have you and you, Alright. to participating, everyone,

So much. Stay safe, be thanks and well. very

Operator

Ladies conference have call. may disconnect. a Thank and Everyone, great participating day. you concludes and gentlemen, today’s for this you now

Digimarc (DMRC) 29 Oct 202020 Q3 Earnings call transcript