Digimarc NASDAQ: DMRC executives used a rescheduled fourth quarter 2025 earnings Q&A call to address investor questions focused largely on the company’s gift card initiative and several other recent customer wins, including leak detection, HolyGrail 2.0-related activity in Europe, and a tax stamp authentication deployment.
Chief Financial Officer Charles Beck, joined by Chief Executive Officer Riley McCormack, said the company reconvened the call after technical issues prevented completion of the prior week’s session. Beck also asked shareholders to hold questions related to the company’s Form S-4 filing and annual proxy until the proxy is declared effective by the SEC.
Gift card ecosystem: label provider and network partners
In response to questions about potential single points of failure in the gift card supply chain, management discussed its relationship with STL, which it described as the “dominant label provider for the gift card industry.” McCormack said STL is a key partner because Digimarc’s offering combines software components—watermarking and detection software that includes watermark detection and AI—with a “spec” that includes guidance on labels and materials.
McCormack emphasized STL’s material science capabilities and described the company as both a production partner and an R&D collaborator as Digimarc advances its specification for gift card labels.
Management also addressed the roles of Blackhawk Network and InComm, which McCormack called the two largest gift card networks in the U.S. with significant global scale. He said the networks orchestrate delivery of cards to retailers and have deep relationships across brands, retailers, and the broader ecosystem. McCormack added that Digimarc views both as important partners and said the company “wouldn’t be where we are without the two of them.”
Point-of-sale scanning: firmware progress and bottlenecks
Another investor line of questioning focused on operational bottlenecks and the status of firmware updates needed for point-of-sale scanning. McCormack identified two technological barriers the company has been working on over the last several quarters: scanners and printers.
On scanners, he described scanner vendor readiness as the company’s “greatest source of historic timing risk.” He pointed to three dominant scanner vendors—Zebra, Datalogic, and Honeywell—and noted NCR also participates through white-labeled models from those vendors. McCormack referenced press releases issued around the end of the fourth quarter and early first quarter involving the three scanner partners and said the vendors are working to extend those commitments to retailers, which he characterized as important customers for the scanner companies as well.
For the relevant scanner models, McCormack said the company believes it is “weeks away” from having the scanner-side issue behind it.
On the printer side, management said Digimarc has spent time with the printing industry to ensure sufficient capacity to print gift cards. While the company did not provide quantified guidance for the year, McCormack said the capacity built is “multiples more” than what the company is projecting for gift card volume this year.
Leak detection: second win, use cases, and go-to-market approach
Digimarc also fielded questions about a second leak detection win and the company’s go-to-market strategy for that product line. Management said it has two versions of its leak detection solution: one for web content and another for discrete media assets. The “Fortune 100” customer Digimarc has referenced in recent quarters relates to the web content version, management said.
The other win, which Digimarc said occurred in the fourth quarter, involved the discrete media asset version. McCormack said that customer approached Digimarc directly due to a specific problem: media assets shared with partners under embargo were appearing on social media ahead of scheduled releases.
On go-to-market, management said Digimarc has personnel dedicated to the leak detection space and that members of the team planned to attend an industry conference during the week of the call to engage prospects and run demonstrations. McCormack said leak detection is well suited to partner-led distribution and integrations because it operates entirely in the “digital domain,” enabling a more traditional SaaS-style approach that could include reselling partners and integrations into other software platforms. He added that Digimarc currently has a direct sales motion, while expecting partners to become a source of leads, integrations, and reseller distribution as the business develops.
HolyGrail 2.0: timing and commercialization questions
Investors also asked about HolyGrail 2.0 developments in Europe, including the pace of deployments and when they could translate into meaningful commercialization. McCormack described current activity as what the industry is calling an “end-to-end market demonstration.” He said products marked with the technology are appearing on shelves, being purchased by consumers, and moving through sorting and recycling facilities—work HolyGrail has done to date.
He said the next step is to take the output and create new recyclates, describing it as a “cradle to birth to rebirth” process that produces a tangible recyclate output.
On timing, McCormack said Belgium’s effort is expected to reach “critical mass” in the second quarter as items work their way from shelves to consumers and into waste facilities. He said Germany is expected to be about a quarter behind, with critical mass anticipated in the third quarter.
McCormack also referenced the “2030 sunrise” of the EU’s Packaging and Packaging Waste Regulation (PPWR) requirements, describing the need for new recyclate fractions as one requirement the industry will have to meet. He said Digimarc’s technology can support higher quality and quantity of recyclate, including the ability to create new fractions through deterministic sorting.
In addition to recycling outcomes, McCormack highlighted data as another potential benefit, arguing that post-purchase product data is typically qualitative once items leave the retail environment. He said end-of-life scanning could provide quantitative information that could feed marketing efforts and, increasingly, AI engines. However, he said Digimarc cannot control the pace at which the industry moves and described the company’s role as supporting the value proposition and remaining ready when the market is prepared to proceed.
Tax stamp authentication: partner-led deployment
Digimarc also addressed an announced win related to tax stamp authentication. McCormack said this deployment came through a partner that is incorporating Digimarc’s solution into a broader tax stamp offering being rolled out. According to management, the partner already produces tax stamps and provides a multi-layer solution, using Digimarc as one security layer rather than as a standalone tax stamp system.
McCormack added that Digimarc has an alternative, “higher grade” option with more capabilities and features than its traditional anti-counterfeiting solution, which could be sold directly. For this specific win, he said the partner chose an off-the-shelf Digimarc offering to add as a security layer within its overall solution.
The call concluded after management reiterated apologies for the prior week’s technical disruption and thanked participants for rejoining the Q&A session.
About Digimarc NASDAQ: DMRC
Digimarc Corporation is a technology company specializing in digital identification and authentication solutions. Its core offering centers on embedding imperceptible digital watermarks into images, audio, video and packaging materials. These watermarks carry unique identifiers that enable secure tracking, brand protection and content provenance across print and digital channels.
The company's product suite includes software development kits and cloud-based services that allow enterprises to integrate digital watermarking into their existing workflows.
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