Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 28, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Title of 12(b) Security | Common Stock, $0.001 Par Value Per Share | ||
Trading Symbol | DMRC | ||
Security Exchange Name | NASDAQ | ||
Entity Registrant Name | Digimarc CORP | ||
Entity Central Index Key | 0001438231 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 12,611,569 | ||
Entity Public Float | $ 532 | ||
Entity File Number | 001-34108 | ||
Entity Incorporation, State or Country Code | OR | ||
Entity Tax Identification Number | 26-2828185 | ||
Entity Address, Address Line One | 9405 SW Gemini Drive | ||
Entity Address, City or Town | Beaverton | ||
Entity Address, State or Province | OR | ||
Entity Address, Postal Zip Code | 97008 | ||
City Area Code | 503 | ||
Local Phone Number | 469-4800 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | Portions of the registrant’s proxy statement pursuant to Regulation 14A (the “Proxy Statement”) for its 2020 annual meeting of shareholders are incorporated by reference into Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K. The registrant intends to file the Proxy Statement not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 11,213 | $ 27,278 |
Marketable securities | 25,604 | 16,378 |
Trade accounts receivable, net | 4,021 | 3,888 |
Other current assets | 2,456 | 2,100 |
Total current assets | 43,294 | 49,644 |
Property and equipment, net | 3,650 | 3,955 |
Intangibles, net | 6,670 | 6,649 |
Goodwill | 1,114 | 1,114 |
Other assets | 2,660 | 425 |
Total assets | 57,388 | 61,787 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 2,272 | 1,092 |
Deferred revenue | 3,172 | 3,226 |
Total current liabilities | 5,444 | 4,318 |
Lease liability and other long-term liabilities | 2,494 | 854 |
Total liabilities | 7,938 | 5,172 |
Commitments and contingencies (Note 13) | ||
Shareholders’ equity: | ||
Preferred stock (par value $0.001 per share, 2,500 authorized, 10 shares issued and outstanding at December 31, 2019 and 2018) | 50 | 50 |
Common stock (par value $0.001 per share, 50,000 authorized, 12,446 and 11,891 shares issued and outstanding at December 31, 2019 and 2018, respectively) | 12 | 12 |
Additional paid-in capital | 188,103 | 162,428 |
Accumulated deficit | (138,715) | (105,875) |
Total shareholders’ equity | 49,450 | 56,615 |
Total liabilities and shareholders’ equity | $ 57,388 | $ 61,787 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
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 | 12,446 | 11,891 |
Common stock, shares outstanding | 12,446 | 11,891 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue: | ||
Total revenue | $ 22,987 | $ 21,192 |
Cost of revenue: | ||
Total cost of revenue | 8,036 | 8,426 |
Gross profit | 14,951 | 12,766 |
Operating expenses: | ||
Sales and marketing | 19,875 | 19,140 |
Research, development and engineering | 16,467 | 15,971 |
General and administrative | 10,848 | 9,897 |
Intellectual property | 1,492 | 1,282 |
Total operating expenses | 48,682 | 46,290 |
Operating loss | (33,731) | (33,524) |
Other income, net | 912 | 1,057 |
Loss before income taxes | (32,819) | (32,467) |
Provision for income taxes | (21) | (39) |
Net loss | $ (32,840) | $ (32,506) |
Earnings (loss) per common share: | ||
Loss per common share — basic | $ (2.79) | $ (2.86) |
Loss per common share — diluted | $ (2.79) | $ (2.86) |
Weighted average common shares outstanding — basic | 11,762 | 11,360 |
Weighted average common shares outstanding — diluted | 11,762 | 11,360 |
Service [Member] | ||
Revenue: | ||
Total revenue | $ 12,793 | $ 12,774 |
Cost of revenue: | ||
Total cost of revenue | 5,523 | 5,922 |
Subscription [Member] | ||
Revenue: | ||
Total revenue | 8,125 | 6,041 |
Cost of revenue: | ||
Total cost of revenue | 1,840 | 1,907 |
License [Member] | ||
Revenue: | ||
Total revenue | 2,069 | 2,377 |
Cost of revenue: | ||
Total cost of revenue | $ 673 | $ 597 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - 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, 2017 | $ 82,347 | $ 50 | $ 12 | $ 155,793 | $ (73,508) |
Balance, shares at Dec. 31, 2017 | 10 | 11,651 | |||
Exercise of stock options | $ 1,256 | $ 0 | $ 0 | 1,256 | 0 |
Exercise of stock options, shares | 102 | 0 | 102 | ||
Issuance of restricted common stock | $ 0 | $ 0 | $ 0 | 0 | 0 |
Issuance of restricted common stock, shares | 0 | 239 | |||
Forfeiture of restricted common stock | 0 | $ 0 | $ 0 | 0 | 0 |
Forfeiture of restricted common stock, shares | 0 | (24) | |||
Purchase and retirement of common stock | (2,089) | $ 0 | $ 0 | (2,089) | 0 |
Purchase and retirement of common stock, shares | 0 | (77) | |||
Stock-based compensation | 7,468 | $ 0 | $ 0 | 7,468 | 0 |
Cumulative effect of the adoption of the new revenue standard, net of tax | 139 | 0 | 0 | 0 | 139 |
Net loss | (32,506) | 0 | 0 | 0 | (32,506) |
Balance at Dec. 31, 2018 | 56,615 | $ 50 | $ 12 | 162,428 | (105,875) |
Balance, shares at Dec. 31, 2018 | 10 | 11,891 | |||
Issuance of common stock, net of issuance costs | 19,615 | $ 0 | $ 0 | 19,615 | 0 |
Issuance of common stock, net of issuance costs, shares | 0 | 336 | |||
Exercise of stock options | $ 1,178 | $ 0 | $ 0 | 1,178 | 0 |
Exercise of stock options, shares | 55 | 0 | 55 | ||
Issuance of restricted common stock | $ 0 | $ 0 | $ 0 | 0 | 0 |
Issuance of restricted common stock, shares | 0 | 300 | |||
Forfeiture of restricted common stock | 0 | $ 0 | $ 0 | 0 | 0 |
Forfeiture of restricted common stock, shares | 0 | (49) | |||
Purchase and retirement of common stock | (3,506) | $ 0 | $ 0 | (3,506) | 0 |
Purchase and retirement of common stock, shares | 0 | (87) | |||
Stock-based compensation | 8,388 | $ 0 | $ 0 | 8,388 | 0 |
Net loss | (32,840) | 0 | 0 | 0 | (32,840) |
Balance at Dec. 31, 2019 | $ 49,450 | $ 50 | $ 12 | $ 188,103 | $ (138,715) |
Balance, shares at Dec. 31, 2019 | 10 | 12,446 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (32,840) | $ (32,506) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation, amortization and write-off of property and equipment | 1,449 | 1,554 |
Amortization and write-off of intangibles | 758 | 589 |
Stock-based compensation | 8,214 | 7,298 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (133) | 2,516 |
Other current assets | (356) | 92 |
Other assets | 474 | (57) |
Accounts payable and other accrued liabilities | 702 | (744) |
Deferred revenue | (41) | 182 |
Lease liability and other long-term liabilities | (639) | (134) |
Net cash used in operating activities | (22,412) | (21,210) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (1,055) | (1,292) |
Capitalized patent costs | (659) | (747) |
Maturity of marketable securities | 42,084 | 34,558 |
Purchase of marketable securities | (51,310) | (24,021) |
Net cash provided by (used in) investing activities | (10,940) | 8,498 |
Cash flows from financing activities: | ||
Issuance of common stock, net of issuance costs | 19,615 | 0 |
Exercise of stock options | 1,178 | 1,256 |
Purchase of common stock | (3,506) | (2,089) |
Net cash provided by (used in) financing activities | 17,287 | (833) |
Net decrease in cash and cash equivalents | (16,065) | (13,545) |
Cash and cash equivalents at beginning of period | 27,278 | 40,823 |
Cash and cash equivalents at end of period | 11,213 | 27,278 |
Supplemental disclosure of cash flow information: | ||
Cash received for income taxes, net | 90 | 88 |
Supplemental schedule of non-cash activities: | ||
Property and equipment and patent costs in accounts payable | 35 | (79) |
Stock-based compensation capitalized to software and patent costs | 174 | 170 |
Right of use assets obtained in exchange for lease obligations | $ 2,709 | $ 0 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | (1) Description of Business and Summary of Significant Accounting Policies Description of Business Digimarc Corporation (“Digimarc” or the “Company”), an Oregon corporation, enables governments, banks, retailers, consumer brands and other businesses around the world to automatically and reliably identify and interact with virtually any form of media. The Company has pioneered the Digimarc Platform featuring three core functions for the identification, discovery and verification of digitally-enhanced media. Digimarc provides objects with an indelible, imperceptible data carrier—Digimarc Barcode. Data in the carrier uniquely identifies the object. The Platform also provides software for relevant devices to “discover” objects (i.e., decode data from that carrier) using Digimarc software, known as Digimarc Discover. Digimarc Verify, a suite of verification and quality control tools, is used to assess signal quality and validate data at critical stages of production when the Digimarc Barcode is applied to an object. Together, these core functions enable organizations, application developers, and other solution providers to build new features, functionality and additional value on the Digimarc Platform. Principles of Consolidation The consolidated financial statements include the accounts of Digimarc and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. Use of Estimates The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. The Company’s accounting policies for revenue recognition require higher degrees of judgment than others in their application. Management bases its estimates on historical experience and on other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. 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. Cash Equivalents 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 commercial paper and money market funds totaling $10,436 and $25,543 at December 31, 2019 and 2018, respectively. Cash equivalents are carried at either cost or amortized cost depending on the type of security, which approximates fair value. Marketable Securities The Company considers all investments with original maturities over 90 days that mature in less than one-year from the balance sheet date to be short-term marketable securities. Short-term marketable securities primarily include commercial paper, corporate notes and U.S. treasuries. The Company’s marketable securities are classified as held-to-maturity and are reported at amortized cost, which approximates market value. A decline in the market value of any security below amortized cost that is deemed to be other-than-temporary results in a reduction in the carrying amount. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating that the cost of the investment is recoverable outweighs evidence to the contrary. There have been no other-than-temporary impairments identified or recorded by the Company. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using a method that approximates the effective interest method. Under this method, dividend and interest income are recognized when earned. Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820 “ Fair Value Measurements and Disclosures • Level 1—Pricing inputs are quoted prices available in active markets for identical investments as of the reporting date. • Level 2—Pricing inputs are quoted for similar investments, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes investments valued at quoted prices adjusted for legal or contractual restrictions specific to these investments. • Level 3—Pricing inputs are unobservable for the investment; that is, the inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. 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’s fair value hierarchy for its cash equivalents and marketable securities as of December 31, 2019 and 2018, respectively, was as follows: December 31, 2019 Level 1 Level 2 Level 3 Total Money market securities $ 746 $ — $ — $ 746 Commercial paper — 25,481 — 25,481 Corporate notes — 5,773 — 5,773 U.S. treasuries — 4,040 — 4,040 Total $ 746 $ 35,294 $ — $ 36,040 December 31, 2018 Level 1 Level 2 Level 3 Total Money market securities $ 1,472 $ — $ — $ 1,472 Commercial paper — 28,343 — 28,343 Corporate notes — 12,106 — 12,106 Total $ 1,472 $ 40,449 $ — $ 41,921 The fair value maturities of the Company’s cash equivalents and marketable securities as of December 31, 2019 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 $ 36,040 $ 36,040 $ — $ — $ — Concentrations of Business and Credit Risk A significant portion of the Company’s business depends on a limited number of large contracts. The loss of any large contract may result in loss of revenue and margin on a prospective basis. Financial instruments that potentially subject Digimarc to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, and accounts receivable. Digimarc places its cash and cash equivalents with major banks and financial institutions and at times deposits may exceed insured limits. Other than cash used for operating needs, which may include short-term marketable securities with the Company’s principal banks, Digimarc’s investment policy limits its credit exposure to any one financial institution or type of financial instrument by limiting the maximum of 5% of its cash equivalents and marketable securities or $1,000, whichever is greater, to be invested in any one issuer except for the U.S. government, U.S. federal agencies and U.S. backed securities, which have no limits, at the time of purchase. The Company’s investment policy also limits its credit exposure by limiting the maximum of 40% of its cash equivalents and marketable securities, or $15,000, whichever is greater, to be invested in any one industry category, (e.g., financial or energy industries), at the time of purchase. As a result, Digimarc’s credit risk associated with cash and cash equivalents and marketable securities is believed to be minimal. 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 Equity Method Investments The Company accounts for its joint ventures under the equity method of accounting pursuant to ASC 323 “ Investments—Equity Method and Joint Ventures a b c Goodwill The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “ Business Combinations Contingent consideration, if any, is recorded at the acquisition date based upon the estimated fair value of the contingent payments. The fair value of the contingent consideration is re-measured each reporting period with any adjustments in fair value being recognized in earnings from operations. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as 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 estimates 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, 2019 and 2018, it was concluded that there was no impairment to goodwill as the estimated fair value of the Company’s reporting unit exceeded the carrying value. Impairment of Long-Lived Assets The Company assesses long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, in accordance with the provisions of ASC 360 “ Property, Plant and Equipment Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net undiscounted cash flows expected to be generated by the assets over their remaining useful life. If such assets are considered to be impaired, the impairment would be recognized in operating results at the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Research and Development Research and development costs are expensed as incurred in accordance with ASC 730 “ Research and Development Software Development Costs Under ASC 985 “ Software Patent Costs 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 award date, which varies depending on the pendency period of the application, generally approximating seventeen years. Capitalized patent costs, also referred to as patent prosecution costs, include internal legal labor, professional legal fees, government filing fees and translation fees related to expanding the Company’s patent portfolio. Costs associated with the maintenance and annuity fees of patents are accounted for as prepaid assets at the time of payment and amortized over the shorter of the maintenance period or remaining life of the related patent. Revenue Recognition See Note 2 for detailed disclosures of the Company’s revenue recognition policy. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718 “ Compensation—Stock Compensation For stock option awards, the Company uses the Black-Scholes option pricing model as its method of valuation. The Company’s determination of the fair value on the date of grant (measurement date) is affected by its stock price as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, the expected life of the award, the Company’s expected stock price volatility over the term of the award, the risk-free interest rate and the expected dividend yield. Although the fair value of stock-based awards is determined in accordance with ASC 718 and Staff Accounting Bulletin (“SAB”) No. 107 “ Shared-Based Payment ” For restricted stock awards, the Company uses the fair market value of the Company’s common stock on the date of the grant (measurement date) as its method of valuation. Income Taxes The Company accounts for income taxes in accordance with ASC 740 “ Income Taxes The Company records valuation allowances on deferred tax assets if, based on available evidence, it is more-likely-than-not that all or some portion of the assets will not be realized. The Company is subject to income taxes within the U.S. and other countries, and, in the ordinary course of business, there are transactions and calculations where the ultimate tax determination is uncertain. The Company reports a liability (or contra asset) for unrecognized tax benefits resulting from uncertain tax positions taken (or expected to be taken) on a tax return. The Company recognizes interest and penalties, if any, related to the unrecognized tax benefits in income tax expense. 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 (ASC 606) In February 2016, the FASB issued ASU No. 2016-02, “ Leases (ASC 842) , Leases (ASC 840) Leases (ASC 842) Targeted Improvements Leases (ASC 842) Codification Improvements Accounting Pronouncements Issued But Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (ASC 740) Simplifying the Accounting for Income Taxes . |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | (2) Revenue Recognition The Company adopted ASC 606 “ Revenue from Contracts with Customers” 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 obligation(s) in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligation(s) in the contract. Step 5: Recognize when (or as) the entity satisfies the performance obligation(s). The Company derives its revenue primarily from software development and consulting 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 revenue received from software development services with the Central Banks and government agencies. The majority of service revenue arrangements are structured as time and materials consulting agreements. Revenue for software development 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 Digimarc 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. License fees are typically paid in advance and recognized when the customer has the right to the intellectual property and the license period has begun, and royalties are typically billed in arrears and recognized in the quarter in which the royalty was earned. Some customer arrangements contain multiple performance obligations such as software development services, software licenses, and maintenance and support fees. The Company accounts for individual products and services separately if they are distinct. To determine the transaction price, the Company considers the terms of the contract and the Company’s customary business practices. Some contracts may contain variable consideration. In those cases, the Company estimates the amount of variable consideration based on the sum of probability-weighted amounts in a range of possible consideration amounts. As part of this assessment, the Company will evaluate whether any of the variable consideration is constrained and if it is the Company will not include it in the transaction price. 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. For distinct products and services, the Company typically recognizes the revenue associated with these performance obligations as they are delivered to the customer. Goods and services which are not capable of being distinct are combined with other goods or services until a distinct performance obligation is identified. The revenue associated with this performance obligation is typically recognized over the term of the contract as the customer simultaneously receives and consumes the goods and services as we perform them. 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: Year Ended Year Ended December 31, December 31, 2019 2018 Service $ 12,793 $ 12,774 Subscription Digimarc Guardian 3,242 3,660 Digimarc Discover and Digimarc Barcode 4,883 2,381 License 2,069 2,377 Total $ 22,987 $ 21,192 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 6. The Company has contract liabilities from contracts with customers that are classified as “deferred revenue.” Deferred revenue consists of billings in advance for software development 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: December 31, December 31, 2019 2018 Deferred revenue, current $ 3,172 $ 3,226 Deferred revenue, long term 59 46 Total $ 3,231 $ 3,272 The Company recognized $2,979 of revenue during the year ended December 31, 2019 that was included in the contract liability balance as of December 31, 2018. The aggregate amount of the transaction price from contractual obligations that are unsatisfied or partially unsatisfied was $17,759 and $17,496, as of December 31, 2019 and 2018, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | (3) Segment Information Geographic Information The Company derives its revenue from a single reporting segment: media management solutions. Revenue is generated in this segment through software development services, subscriptions and licensing of intellectual property. The Company markets its products in the U.S. and in non-U.S. countries through its sales and licensing personnel and partners. Revenue by geographic area, based upon the “bill-to” location, was as follows: Year Ended Year Ended December 31, December 31, 2019 2018 Domestic $ 7,187 $ 5,573 International (1) 15,800 15,619 Total $ 22,987 $ 21,192 (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 The following customers accounted for 10% or more of revenue: Year Ended Year Ended December 31, December 31, 2019 2018 Central Banks 61 % 65 % 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 | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | (4) 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 patent costs 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 stock option awards on a straight-line basis over the vesting period of the award. 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. Stock Option Valuation Assumptions: Year Ended Year Ended December 31, December 31, 2019 2018 Expected life (years) 3.20 4.50 Expected volatility 58.68 % 57.11 % Risk-free interest rate 1.51 % 2.77 % Expected dividend yield 0 % 0 % 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 Year Ended Year Ended December 31, December 31, 2019 2018 Stock-based compensation: Cost of revenue $ 669 $ 613 Sales and marketing 1,928 1,649 Research, development and engineering 1,466 1,361 General and administrative 3,877 3,386 Intellectual property 274 289 Stock-based compensation expense 8,214 7,298 Capitalized to software and patent costs 174 170 Total stock-based compensation $ 8,388 $ 7,468 The following table sets forth total unrecognized compensation cost related to non-vested stock-based awards granted under all equity compensation plans: Year Ended Year Ended December 31, December 31, 2019 2018 Total unrecognized compensation costs $ 13,535 $ 14,055 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 December 31, 2019 for stock options and restricted stock over weighted average periods through December 31, 2023 as follows: Stock Restricted Options Stock Weighted average period 1.10 years 1.38 years |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | (5) 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 years ended December 31, 2019 and 2018: Year Ended Year Ended December 31, December 31, 2019 2018 Basic Earnings (Loss) per Common Share: Numerator: Net loss $ (32,840 ) $ (32,506 ) Distributed earnings to common shares — — Distributed earnings to participating securities — — Total distributed earnings — — Undistributed loss allocable to common shares (32,840 ) (32,506 ) Undistributed earnings allocable to participating securities — — Total undistributed loss (32,840 ) (32,506 ) Loss to common shares — basic $ (32,840 ) $ (32,506 ) Denominator Weighted average common shares outstanding — basic 11,762 11,360 Basic earnings (loss) per common share $ (2.79 ) $ (2.86 ) Year Ended Year Ended December 31, December 31, 2019 2018 Diluted Earnings (Loss) per Common Share: Numerator: Loss to common shares — basic $ (32,840 ) $ (32,506 ) Undistributed earnings allocated to participating securities — — Undistributed earnings reallocated to participating securities — — Loss to common shares — diluted $ (32,840 ) $ (32,506 ) Denominator Weighted average common shares outstanding — basic 11,762 11,360 Dilutive effect of stock options — — Weighted average common shares outstanding — diluted 11,762 11,360 Diluted earnings (loss) per common share $ (2.79 ) $ (2.86 ) The following table indicates the common stock equivalents related to stock options that were anti-dilutive and excluded from diluted earnings per common share calculations for the years ended December 31, 2019 and 2018: Year Ended Year Ended December 31, December 31, 2019 2018 Anti-dilutive shares due to: Exercise prices higher than the average market price 100 475 Net loss 28 — |
Trade Accounts Receivable and A
Trade Accounts Receivable and Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Trade Accounts Receivable and Allowance for Doubtful Accounts | (6) Trade Accounts Receivable and Allowance for Doubtful Accounts Trade Accounts Receivable Trade accounts receivable are recorded at the invoiced amount. December 31, December 31, 2019 2018 Trade accounts receivable $ 4,036 $ 3,903 Allowance for doubtful accounts (15 ) (15 ) Trade accounts receivable, net $ 4,021 $ 3,888 Unpaid deferred revenue included in trade accounts receivable $ 2,015 $ 2,030 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. Major customers The following customers accounted for 10% or more of trade accounts receivable, net: December 31, December 31, 2019 2018 Central Banks 69 % 48 % |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | (7) Property and Equipment 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. December 31, December 31, 2019 2018 Office furniture and fixtures $ 1,650 $ 1,626 Software 4,379 3,686 Equipment 5,041 4,814 Leasehold improvements 1,721 1,721 Gross property and equipment 12,791 11,847 Less accumulated depreciation and amortization (9,141 ) (7,892 ) Property and equipment, net $ 3,650 $ 3,955 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 8. Leases The Company adopted ASC 842, “ Leases The Company leases office spaces in Beaverton, Oregon, and San Mateo, California. In July 2015, the Company entered into an amendment with the landlord of its corporate offices in Beaverton, Oregon, to extend the lease term through March 2024 with remaining rent payments as of December 31, 2019 totaling $3,484, payable in monthly installments. In February 2015, the Company entered into a new facilities lease agreement in San Mateo, California, with a lease term through March 2020, with remaining rent payments as of December 31, 2019 totaling $59, payable in monthly installments. The Company currently subleases this facility to a third party with a lease term through March 2020. All of the Company’s leases are operating leases. The following table provides additional details of leases presented in the consolidated balance sheets: December 31, 2019 Right of use assets $ 2,263 Lease liabilities, current $ 663 Lease liabilities, long-term $ 2,435 Weighted-average remaining life 4.0 years Weighted-average discount rate 8.20 % The carrying value of the right of use assets is included in “Other assets” and the current and long-term lease liabilities are included in “Accounts payable and other accrued liabilities” and “Lease liability and other long-term liabilities,” respectively, in the consolidated balance sheets. Operating lease expense is included in cost of revenue and operating expenses in the consolidated statements of operations and in cash flows from operating activities in the consolidated statements of cash flows. The operating leases include variable lease costs which are not material and are included in operating lease expense. Additional details of the Company’s operating leases are presented in the following table: Year Ended December 31, 2019 Operating lease expense $ 1,044 Cash paid for operating leases $ 1,339 The table below reconciles the cash payment obligations for the first five years and total of the remaining years for the operating lease liability recorded in the consolidated balance sheet as of December 31, 2019: Cash Payment Year ending December 31: Obligations 2020 $ 890 2021 838 2022 862 2023 867 2024 218 Thereafter — Total lease payments 3,675 Imputed interest (577 ) Total minimum lease payments $ 3,098 Future minimum lease payments as of December 31, 2018 under non-cancelable operating leases were as follows: Operating Year ending December 31: Leases 2019 $ 1,055 2020 890 2021 838 2022 862 2023 867 Thereafter 218 Total minimum lease payments $ 4,730 Rent expense on the operating leases was as follows: Year Ended December 31, 2018 Rent expense $ 1,104 |
Intangibles
Intangibles | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangibles | (9) Intangibles Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No impairment charges were recorded for the years ended December 31, 2019 and 2018. 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 December 31, December 31, (years) 2019 2018 Capitalized patent costs 17-20 $ 9,245 $ 8,757 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 12,515 12,027 Accumulated amortization (5,845 ) (5,378 ) Intangibles, net $ 6,670 $ 6,649 Amortization expense on intangible assets was as follows: Year Ended Year Ended December 31, December 31, 2019 2018 Amortization expense $ 567 $ 516 For intangible assets recorded at December 31, 2019, the estimated future aggregate amortization expense for the years ending December 31, 2020 through December 31, 2024 is approximately as follows: Amortization Year ending December 31: Expense 2020 $ 471 2021 413 2022 398 2023 387 2024 377 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | (10) Shareholders’ Equity Preferred Stock In June 2008, the Board of Directors authorized 2,500 shares of preferred stock, par value $0.001 per share. The Board of Directors has the authority to issue the undesignated preferred stock in one or more series and to determine the powers, preferences and rights and the qualifications, limitations or restrictions granted to or imposed upon any wholly unissued series of undesignated preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by the shareholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change of control of the Company without further action by shareholders and may adversely affect the voting and other rights of the holders of common stock. The Board of Directors authorized 10 shares of Series A Redeemable Nonvoting Preferred stock (“Series A Preferred”) that were issued to certain executive officers at the time of formation. The Series A Preferred has no voting rights, except as required by law, and may be redeemed at the option of the Company’s Board of Directors at any time. The Series A Preferred is redeemable based on the stated fair value of $5.00 per share. The Series A Preferred has no dividend rights and no rights to the undistributed earnings of the Company. Common Stock In June 2008, the Board of Directors authorized 50,000 shares of common stock, par value $0.001 per share. The holders of Digimarc common stock are entitled to one vote for each share held of record on all matters submitted to a vote of its shareholders, including the election of directors. Subject to preferences that may be granted to any then outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends as may be declared by the Board of Directors out of funds legally available for such purpose, as well as any distributions to the Company’s shareholders. In the event of the Company’s liquidation, dissolution or winding up, holders of common stock are entitled to share ratably in all of the Company’s assets remaining after payment of liabilities and the liquidation preference of any then outstanding preferred stock. Holders of common stock have no preemptive or other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable. In May 2019, the Company entered into an Equity Distribution Agreement, whereby the Company may sell from time to time through Wells Fargo Securities, LLC, as its sales agent, the Company’s common stock having an aggregate offering price of up to $30,000. For the year ended December 31, 2019, the Company sold 336 shares at an average price of $60.61 under this Equity Distribution Agreement totaling $20,349 of cash proceeds, less $483 of commissions and $251 of stock issuance costs, for net cash proceeds of $19,615. Stock Incentive Plan In March 2018, the Company’s Board of Directors approved the 2018 Incentive Plan (2018 Plan) which was later approved by the Company’s shareholders at the Company’s 2018 Annual Meeting of Shareholders in April 2018. The 2018 Plan replaced the 2008 Incentive Plan (2008 Plan). The 2018 Plan provides for the grant of incentive and non-qualified stock options, stock appreciation rights, stock awards, restricted stock awards, restricted stock units, performance shares, performance units, and other stock or cash-based awards, which may be granted to officers, directors, employees, consultants, agents, advisors and independent contractors who provide services to the Company and its affiliated companies. The 2018 Plan authorizes the issuance of 1,000 shares of common stock. In addition, up to 770 shares of common stock subject to awards outstanding under the 2008 Plan will become available for issuance under 2018 Plan to the extent that those shares cease to be subject to the awards (as a result of, for example, expiration, cancellation or forfeiture of the award). The shares authorized under the 2018 Plan are subject to adjustment in the event of a stock split, stock dividend, recapitalization or similar event. Shares issued under the 2018 Plan will consist of authorized and unissued shares or shares held by the Company as treasury shares. If an award granted under the 2018 Plan lapses, expires, terminates or is forfeited or surrendered without having been fully exercised or without the issuance of all the shares subject to the award, the shares covered by that award will again be available for issuance under the 2018 Plan. Shares that are (i) tendered by a participant or retained by the Company as payment for the purchase price of an award or to satisfy tax withholding obligations or (ii) covered by an award that is settled in cash, or in some manner that some or all of the shares covered by the award are not issued, will again be available for issuance under the 2018 Plan. In addition, awards granted as substitute awards in connection with acquisition transactions will not reduce the number of shares authorized for issuance under the 2018 Plan. As of December 31, 2019, under all of the Company’s stock-based compensation plans, an additional 1,276 shares remained available for future grants under the 2018 Plan. Stock Options The Company issues new shares upon option exercises. Options granted, exercised and forfeited under the stock incentive plan are summarized as follows: Weighted Weighted Average Average Aggregate Exercise Grant Date Intrinsic Options Price Fair Value Value Options outstanding, December 31, 2017 515 $ 25.13 $ 11.64 Granted 100 $ 29.55 $ 14.46 Exercised (102 ) $ 12.38 $ 7.02 Forfeited or expired — — — Options outstanding, December 31, 2018 513 $ 28.52 $ 13.10 Granted 100 $ 39.54 $ 16.40 Exercised (55 ) $ 21.26 $ 9.76 Forfeited or expired — — — Options outstanding, December 31, 2019 558 $ 31.22 $ 14.03 $ 1,902 Options exercisable, December 31, 2019 358 $ 29.46 $ 1,515 Options unvested, December 31, 2019 200 $ 34.37 $ 387 The aggregate intrinsic value is based on the closing price of $33.56 per share of Digimarc common stock on December 31, 2019, which would have been received by the optionees had all of the options with exercise prices less than $33.56 per share been exercised on that date. The following table summarizes information about stock options outstanding at December 31, 2019: Options Outstanding Options Exercisable Weighted Weighted Remaining Average Remaining Average Number Contractual Exercise Number Contractual Exercise Exercise Price Outstanding Life (Years) Price Outstanding Life (Years) Price $18.01 - $27.61 108 1.74 $ 26.94 108 1.74 $ 26.94 $29.55 - $30.01 150 6.12 $ 29.70 92 4.49 $ 29.80 $30.50 - $39.54 300 8.34 $ 33.51 158 7.78 $ 30.98 $18.01 - $39.54 558 6.47 $ 31.22 358 5.12 $ 29.46 Restricted Stock The Compensation Committee of the Board of Directors has awarded shares of restricted stock under the Company’s 2018 Plan to employees and directors. The shares subject to the restricted stock awards vest over a certain period, usually four years, following the date of the grant. Specific terms of the restricted stock awards are governed by Restricted Stock Agreements between the Company and the award recipients. The following table reconciles the unvested balance of restricted stock: Weighted Average Number of Grant Date Shares Fair Value Unvested balance, December 31, 2017 426 $ 28.44 Granted 239 $ 29.73 Vested (215 ) $ 28.96 Forfeited (24 ) $ 29.29 Unvested balance, December 31, 2018 426 $ 28.85 Granted 300 $ 25.22 Vested (242 ) $ 27.88 Forfeited (49 ) $ 27.43 Unvested balance, December 31, 2019 435 $ 27.05 The following table indicates the fair value of all restricted stock awards that vested during the years ended December 31, 2019 and 2018, respectively: Year Ended Year Ended December 31, December 31, 2019 2018 Fair value of restricted stock awards vested $ 9,495 $ 5,835 |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Defined Contribution Plan | (11) Defined Contribution Plan The Company sponsors an employee retirement savings plan (the “Plan”) which qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. The Plan combines both an employee savings plan and company matching plan into one plan under Section 401(k), including a 401(k) Roth option. Employees become eligible to participate in the Plan at the beginning of the month following the employee’s hire date. Employees may contribute up to 75% of their pay to the Plan, subject to the limitations of the Internal Revenue Service Code. Company matching contributions are mandatory under the Plan. The Company made matching contributions in the aggregate amount as follows: Year Ended Year Ended December 31, December 31, 2019 2018 Matching contributions $ 1,062 $ 1,026 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (12) Income Taxes The benefit (provision) for income taxes reflects current taxes, deferred taxes, and withholding taxes. The effective tax rates for the years ended December 31, 2019 and 2018 were 0% and 0%, respectively. The Company continues to provide for a full valuation allowance to offset its net deferred tax assets until such time it is more likely than not the tax assets or portions thereof will be realized. Components of tax benefit (provision) allocated to continuing operations include the following: Year Ended Year Ended December 31, December 31, 2019 2018 Current: Federal $ (4 ) $ — State 10 (28 ) Foreign (27 ) (11 ) Sub-total $ (21 ) $ (39 ) Deferred: Federal $ — $ — State — — Foreign — — Sub-total $ — $ — Total tax benefit (provision) $ (21 ) $ (39 ) The reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate is as follows: Year Ended Year Ended December 31, December 31, 2019 % 2018 % Income taxes computed at statutory rates $ 6,892 (21 )% $ 6,818 (21 )% (Increases) decreases resulting from: State income taxes, net of federal tax benefit 143 (1 )% (359 ) 1 % Federal and state research and experimentation credits 781 (2 )% 1,064 (4 )% Change in valuation allowance (7,873 ) 24 % (7,611 ) 24 % Impact of expired tax positions — — % 1 — % Impact of recent U.S. tax reform — — % — — % Other 36 — % 48 — % Total $ (21 ) — % $ (39 ) — % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of significant items comprising the Company’s deferred tax assets and deferred tax liabilities are as follows: Year Ended Year Ended December 31, December 31, 2019 2018 Deferred tax assets: Stock based compensation $ 1,166 $ 1,337 Federal and state net operating losses 39,879 32,460 Goodwill 220 341 Accrued compensation 9 11 ASC 842 - lease liabilities 712 — Deferred rent — 290 Federal and state research and experimentation credit 8,173 7,528 Intangible asset differences 122 185 Other 57 76 Total gross deferred tax assets 50,338 42,228 Less valuation allowance (47,809 ) (39,936 ) Net deferred tax assets $ 2,529 $ 2,292 Deferred tax liabilities: Patent expenditures $ (1,481 ) $ (1,781 ) ASC 842 - right of use assets (528 ) — Fixed asset differences (520 ) (511 ) Total gross deferred tax liabilities $ (2,529 ) $ (2,292 ) Total net deferred tax assets $ — $ — The Company had a valuation allowance of $47,809 and $39,936 on deferred tax assets as of December 31, 2019 and 2018, respectively, an increase of $7,873 during the year ended December 31, 2019. As of December 31, 2019, the Company has federal and state net operating loss carry-forwards of $157,557 and $114,825, respectively, which have a carry-forward of 5 years to indefinite depending on the jurisdiction. The gross deferred tax assets for federal and state net operating loss carryforwards acquired in the Attributor Corporation acquisition have been reduced to the amount of losses allowed to be utilized in the post-acquisition period before expiration after considering the applicable limitations of Internal Revenue Code Section 382. As of December 31, 2019, the Company has federal and state research and experimental tax credits of $7,831 and $1,289, respectively, which have a carry-forward of 5 to 20 years depending on the jurisdiction. The Company records accrued interest and penalties associated with uncertain tax positions in the provision for income taxes in the consolidated statements of operations. For the years ended December 31, 2019 and 2018, the Company recognized accrued interest and penalties associated with uncertain tax positions of $0 and $0, respectively. The Company does not anticipate any of its unrecognized benefits will significantly increase or decrease within the next 12 months. A summary reconciliation of the Company’s uncertain tax positions is as follows: Year Ended Year Ended December 31, December 31, 2019 2018 Beginning balance $ 613 $ 549 Addition for current year tax positions 61 88 Addition for prior year tax positions 2 — Reduction for prior year positions — (23 ) Reduction for prior year positions resolved during the current year — (1 ) Ending balance $ 676 $ 613 Uncertain tax positions are classified as a long-term liability (or a contra deferred tax asset) in the consolidated balance sheets for uncertain tax positions taken (or expected to be taken) on a tax return. The Company’s open tax years subject to examination in the U.S. federal jurisdiction are 2015 through 2018 and applicable state jurisdictions for the tax years 2015 through 2018. To the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments up to the amount of the net operating loss or tax credit carryforward. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (13) 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. |
Quarterly Financial Information
Quarterly Financial Information—Unaudited | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information—Unaudited | (14) Quarterly Financial Information—Unaudited Quarter Ended March 31 June 30 September 30 December 31 2019 Service revenue $ 3,635 $ 3,529 $ 3,003 $ 2,626 Subscription revenue 1,563 2,088 2,273 2,201 License revenue 462 563 552 492 Total revenue 5,660 6,180 5,828 5,319 Total cost revenue 2,134 2,185 1,918 1,799 Gross profit 3,526 3,995 3,910 3,520 Gross profit percent, service revenue 58 % 56 % 57 % 56 % Gross profit percent, subscription revenue 72 % 78 % 80 % 79 % Gross profit percent, license revenue 66 % 70 % 69 % 64 % Gross profit percent, total 62 % 65 % 67 % 66 % Sales and marketing $ 4,950 $ 5,087 $ 4,839 $ 4,999 Research, development and engineering 4,038 3,981 4,105 4,343 General and administrative 2,852 2,686 2,656 2,654 Intellectual property 358 393 342 399 Operating loss (8,672 ) (8,152 ) (8,032 ) (8,875 ) Net loss (8,463 ) (7,933 ) (7,761 ) (8,683 ) Earnings (loss) per common share: Loss per common share—basic $ (0.74 ) $ (0.68 ) $ (0.65 ) $ (0.73 ) Loss per common share—diluted $ (0.74 ) $ (0.68 ) $ (0.65 ) $ (0.73 ) Weighted average common shares outstanding—basic 11,487 11,665 11,924 11,967 Weighted average common shares outstanding—diluted 11,487 11,665 11,924 11,967 Quarter Ended March 31 June 30 September 30 December 31 2018 Service revenue $ 3,507 $ 3,336 $ 2,787 $ 3,144 Subscription revenue 1,578 1,444 1,532 1,487 License revenue 528 658 595 596 Total revenue 5,613 5,438 4,914 5,227 Total cost revenue 2,185 2,205 1,935 2,101 Gross profit 3,428 3,233 2,979 3,126 Gross profit percent, service revenue 55 % 54 % 53 % 52 % Gross profit percent, subscription revenue 69 % 65 % 69 % 71 % Gross profit percent, license revenue 73 % 77 % 74 % 74 % Gross profit percent, total 61 % 59 % 61 % 60 % Sales and marketing $ 4,887 $ 4,757 $ 4,741 $ 4,755 Research, development and engineering 3,947 4,058 4,069 3,897 General and administrative 2,632 2,416 2,447 2,402 Intellectual property 315 305 328 334 Operating loss (8,353 ) (8,303 ) (8,606 ) (8,262 ) Net loss (8,112 ) (8,038 ) (8,342 ) (8,014 ) Earnings (loss) per common share: Loss per common share—basic $ (0.72 ) $ (0.71 ) $ (0.73 ) $ (0.70 ) Loss per common share—diluted $ (0.72 ) $ (0.71 ) $ (0.73 ) $ (0.70 ) Weighted average common shares outstanding— basic 11,266 11,337 11,394 11,443 Weighted average common shares outstanding— diluted 11,266 11,337 11,394 11,443 |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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, retailers, consumer brands and other businesses around the world to automatically and reliably identify and interact with virtually any form of media. The Company has pioneered the Digimarc Platform featuring three core functions for the identification, discovery and verification of digitally-enhanced media. Digimarc provides objects with an indelible, imperceptible data carrier—Digimarc Barcode. Data in the carrier uniquely identifies the object. The Platform also provides software for relevant devices to “discover” objects (i.e., decode data from that carrier) using Digimarc software, known as Digimarc Discover. Digimarc Verify, a suite of verification and quality control tools, is used to assess signal quality and validate data at critical stages of production when the Digimarc Barcode is applied to an object. Together, these core functions enable organizations, application developers, and other solution providers to build new features, functionality and additional value on the Digimarc Platform. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Digimarc and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. The Company’s accounting policies for revenue recognition require higher degrees of judgment than others in their application. Management bases its estimates on historical experience and on other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
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. |
Cash Equivalents | Cash Equivalents 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 commercial paper and money market funds totaling $10,436 and $25,543 at December 31, 2019 and 2018, respectively. Cash equivalents are carried at either cost or amortized cost depending on the type of security, which approximates fair value. |
Marketable Securities | Marketable Securities The Company considers all investments with original maturities over 90 days that mature in less than one-year from the balance sheet date to be short-term marketable securities. Short-term marketable securities primarily include commercial paper, corporate notes and U.S. treasuries. The Company’s marketable securities are classified as held-to-maturity and are reported at amortized cost, which approximates market value. A decline in the market value of any security below amortized cost that is deemed to be other-than-temporary results in a reduction in the carrying amount. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating that the cost of the investment is recoverable outweighs evidence to the contrary. There have been no other-than-temporary impairments identified or recorded by the Company. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using a method that approximates the effective interest method. Under this method, dividend and interest income are recognized when earned. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820 “ Fair Value Measurements and Disclosures • Level 1—Pricing inputs are quoted prices available in active markets for identical investments as of the reporting date. • Level 2—Pricing inputs are quoted for similar investments, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes investments valued at quoted prices adjusted for legal or contractual restrictions specific to these investments. • Level 3—Pricing inputs are unobservable for the investment; that is, the inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. 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’s fair value hierarchy for its cash equivalents and marketable securities as of December 31, 2019 and 2018, respectively, was as follows: December 31, 2019 Level 1 Level 2 Level 3 Total Money market securities $ 746 $ — $ — $ 746 Commercial paper — 25,481 — 25,481 Corporate notes — 5,773 — 5,773 U.S. treasuries — 4,040 — 4,040 Total $ 746 $ 35,294 $ — $ 36,040 December 31, 2018 Level 1 Level 2 Level 3 Total Money market securities $ 1,472 $ — $ — $ 1,472 Commercial paper — 28,343 — 28,343 Corporate notes — 12,106 — 12,106 Total $ 1,472 $ 40,449 $ — $ 41,921 The fair value maturities of the Company’s cash equivalents and marketable securities as of December 31, 2019 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 $ 36,040 $ 36,040 $ — $ — $ — |
Concentrations of Business and Credit Risk | Concentrations of Business and Credit Risk A significant portion of the Company’s business depends on a limited number of large contracts. The loss of any large contract may result in loss of revenue and margin on a prospective basis. Financial instruments that potentially subject Digimarc to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, and accounts receivable. Digimarc places its cash and cash equivalents with major banks and financial institutions and at times deposits may exceed insured limits. Other than cash used for operating needs, which may include short-term marketable securities with the Company’s principal banks, Digimarc’s investment policy limits its credit exposure to any one financial institution or type of financial instrument by limiting the maximum of 5% of its cash equivalents and marketable securities or $1,000, whichever is greater, to be invested in any one issuer except for the U.S. government, U.S. federal agencies and U.S. backed securities, which have no limits, at the time of purchase. The Company’s investment policy also limits its credit exposure by limiting the maximum of 40% of its cash equivalents and marketable securities, or $15,000, whichever is greater, to be invested in any one industry category, (e.g., financial or energy industries), at the time of purchase. As a result, Digimarc’s credit risk associated with cash and cash equivalents and marketable securities is believed to be minimal. |
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 |
Equity Method Investments | Equity Method Investments The Company accounts for its joint ventures under the equity method of accounting pursuant to ASC 323 “ Investments—Equity Method and Joint Ventures a b c |
Goodwill | Goodwill The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “ Business Combinations Contingent consideration, if any, is recorded at the acquisition date based upon the estimated fair value of the contingent payments. The fair value of the contingent consideration is re-measured each reporting period with any adjustments in fair value being recognized in earnings from operations. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as 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 estimates 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, 2019 and 2018, it was concluded that there was no impairment to goodwill as the estimated fair value of the Company’s reporting unit exceeded the carrying value. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company assesses long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, in accordance with the provisions of ASC 360 “ Property, Plant and Equipment Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net undiscounted cash flows expected to be generated by the assets over their remaining useful life. If such assets are considered to be impaired, the impairment would be recognized in operating results at the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Research and Development | Research and Development Research and development costs are expensed as incurred in accordance with ASC 730 “ Research and Development |
Software Development Costs | Software Development Costs Under ASC 985 “ Software |
Patent Costs | Patent Costs 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 award date, which varies depending on the pendency period of the application, generally approximating seventeen years. Capitalized patent costs, also referred to as patent prosecution costs, include internal legal labor, professional legal fees, government filing fees and translation fees related to expanding the Company’s patent portfolio. Costs associated with the maintenance and annuity fees of patents are accounted for as prepaid assets at the time of payment and amortized over the shorter of the maintenance period or remaining life of the related patent. |
Revenue Recognition | Revenue Recognition See Note 2 for detailed disclosures of the Company’s revenue recognition policy. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718 “ Compensation—Stock Compensation For stock option awards, the Company uses the Black-Scholes option pricing model as its method of valuation. The Company’s determination of the fair value on the date of grant (measurement date) is affected by its stock price as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, the expected life of the award, the Company’s expected stock price volatility over the term of the award, the risk-free interest rate and the expected dividend yield. Although the fair value of stock-based awards is determined in accordance with ASC 718 and Staff Accounting Bulletin (“SAB”) No. 107 “ Shared-Based Payment ” For restricted stock awards, the Company uses the fair market value of the Company’s common stock on the date of the grant (measurement date) as its method of valuation. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740 “ Income Taxes The Company records valuation allowances on deferred tax assets if, based on available evidence, it is more-likely-than-not that all or some portion of the assets will not be realized. The Company is subject to income taxes within the U.S. and other countries, and, in the ordinary course of business, there are transactions and calculations where the ultimate tax determination is uncertain. The Company reports a liability (or contra asset) for unrecognized tax benefits resulting from uncertain tax positions taken (or expected to be taken) on a tax return. The Company recognizes interest and penalties, if any, related to the unrecognized tax benefits in income tax expense. |
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 (ASC 606) In February 2016, the FASB issued ASU No. 2016-02, “ Leases (ASC 842) , Leases (ASC 840) Leases (ASC 842) Targeted Improvements Leases (ASC 842) Codification Improvements Accounting Pronouncements Issued But Not Yet Adopted In December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (ASC 740) Simplifying the Accounting for Income Taxes . |
Earnings Per Share | The Company calculates basic and diluted earnings per common share in accordance with ASC 260 “ Earnings Per Share |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Fair Value Hierarchy for Financial Assets | The Company’s fair value hierarchy for its cash equivalents and marketable securities as of December 31, 2019 and 2018, respectively, was as follows: December 31, 2019 Level 1 Level 2 Level 3 Total Money market securities $ 746 $ — $ — $ 746 Commercial paper — 25,481 — 25,481 Corporate notes — 5,773 — 5,773 U.S. treasuries — 4,040 — 4,040 Total $ 746 $ 35,294 $ — $ 36,040 December 31, 2018 Level 1 Level 2 Level 3 Total Money market securities $ 1,472 $ — $ — $ 1,472 Commercial paper — 28,343 — 28,343 Corporate notes — 12,106 — 12,106 Total $ 1,472 $ 40,449 $ — $ 41,921 |
Summary of Fair Value Maturities for Financial Asset | The fair value maturities of the Company’s cash equivalents and marketable securities as of December 31, 2019 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 $ 36,040 $ 36,040 $ — $ — $ — |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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: Year Ended Year Ended December 31, December 31, 2019 2018 Service $ 12,793 $ 12,774 Subscription Digimarc Guardian 3,242 3,660 Digimarc Discover and Digimarc Barcode 4,883 2,381 License 2,069 2,377 Total $ 22,987 $ 21,192 |
Schedule of Contract Liabilities from Contracts with Customers | The following table provides information about contract liabilities from contracts with customers: December 31, December 31, 2019 2018 Deferred revenue, current $ 3,172 $ 3,226 Deferred revenue, long term 59 46 Total $ 3,231 $ 3,272 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Geographical Segment Revenue | Revenue by geographic area, based upon the “bill-to” location, was as follows: Year Ended Year Ended December 31, December 31, 2019 2018 Domestic $ 7,187 $ 5,573 International (1) 15,800 15,619 Total $ 22,987 $ 21,192 (1) Revenue from the Central Banks, consisting of a consortium of central banks around the world, is classified as international revenue. Reporting revenue by country for this customer is not practicable. |
Customers Accounted for 10% or More of Revenue | The following customers accounted for 10% or more of revenue: Year Ended Year Ended December 31, December 31, 2019 2018 Central Banks 61 % 65 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Option Valuation Assumptions | Stock Option Valuation Assumptions: Year Ended Year Ended December 31, December 31, 2019 2018 Expected life (years) 3.20 4.50 Expected volatility 58.68 % 57.11 % Risk-free interest rate 1.51 % 2.77 % Expected dividend yield 0 % 0 % |
Allocation of Stock-Based Compensation | Stock-based Compensation Year Ended Year Ended December 31, December 31, 2019 2018 Stock-based compensation: Cost of revenue $ 669 $ 613 Sales and marketing 1,928 1,649 Research, development and engineering 1,466 1,361 General and administrative 3,877 3,386 Intellectual property 274 289 Stock-based compensation expense 8,214 7,298 Capitalized to software and patent costs 174 170 Total stock-based compensation $ 8,388 $ 7,468 |
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: Year Ended Year Ended December 31, December 31, 2019 2018 Total unrecognized compensation costs $ 13,535 $ 14,055 |
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 December 31, 2019 for stock options and restricted stock over weighted average periods through December 31, 2023 as follows: Stock Restricted Options Stock Weighted average period 1.10 years 1.38 years |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Reconciliation of Earnings (Loss) Per Common Share | The following table reconciles earnings (loss) per common share for the years ended December 31, 2019 and 2018: Year Ended Year Ended December 31, December 31, 2019 2018 Basic Earnings (Loss) per Common Share: Numerator: Net loss $ (32,840 ) $ (32,506 ) Distributed earnings to common shares — — Distributed earnings to participating securities — — Total distributed earnings — — Undistributed loss allocable to common shares (32,840 ) (32,506 ) Undistributed earnings allocable to participating securities — — Total undistributed loss (32,840 ) (32,506 ) Loss to common shares — basic $ (32,840 ) $ (32,506 ) Denominator Weighted average common shares outstanding — basic 11,762 11,360 Basic earnings (loss) per common share $ (2.79 ) $ (2.86 ) Year Ended Year Ended December 31, December 31, 2019 2018 Diluted Earnings (Loss) per Common Share: Numerator: Loss to common shares — basic $ (32,840 ) $ (32,506 ) Undistributed earnings allocated to participating securities — — Undistributed earnings reallocated to participating securities — — Loss to common shares — diluted $ (32,840 ) $ (32,506 ) Denominator Weighted average common shares outstanding — basic 11,762 11,360 Dilutive effect of stock options — — Weighted average common shares outstanding — diluted 11,762 11,360 Diluted earnings (loss) per common share $ (2.79 ) $ (2.86 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table indicates the common stock equivalents related to stock options that were anti-dilutive and excluded from diluted earnings per common share calculations for the years ended December 31, 2019 and 2018: Year Ended Year Ended December 31, December 31, 2019 2018 Anti-dilutive shares due to: Exercise prices higher than the average market price 100 475 Net loss 28 — |
Trade Accounts Receivable and_2
Trade Accounts Receivable and Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Summary of Trade Accounts Receivable | Trade accounts receivable are recorded at the invoiced amount. December 31, December 31, 2019 2018 Trade accounts receivable $ 4,036 $ 3,903 Allowance for doubtful accounts (15 ) (15 ) Trade accounts receivable, net $ 4,021 $ 3,888 Unpaid deferred revenue included in trade accounts receivable $ 2,015 $ 2,030 |
Customers Accounted for 10% or More of Trade Accounts Receivable, Net | The following customers accounted for 10% or more of trade accounts receivable, net: December 31, December 31, 2019 2018 Central Banks 69 % 48 % |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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. December 31, December 31, 2019 2018 Office furniture and fixtures $ 1,650 $ 1,626 Software 4,379 3,686 Equipment 5,041 4,814 Leasehold improvements 1,721 1,721 Gross property and equipment 12,791 11,847 Less accumulated depreciation and amortization (9,141 ) (7,892 ) Property and equipment, net $ 3,650 $ 3,955 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Additional Details of Leases Presented in Consolidated Balance Sheets | All of the Company’s leases are operating leases. The following table provides additional details of leases presented in the consolidated balance sheets: December 31, 2019 Right of use assets $ 2,263 Lease liabilities, current $ 663 Lease liabilities, long-term $ 2,435 Weighted-average remaining life 4.0 years Weighted-average discount rate 8.20 % |
Additional Details of Operating Lease Expense | Operating lease expense is included in cost of revenue and operating expenses in the consolidated statements of operations and in cash flows from operating activities in the consolidated statements of cash flows. The operating leases include variable lease costs which are not material and are included in operating lease expense. Additional details of the Company’s operating leases are presented in the following table: Year Ended December 31, 2019 Operating lease expense $ 1,044 Cash paid for operating leases $ 1,339 |
Reconciliation of Cash Payment Obligations of Operating Lease Liability | The table below reconciles the cash payment obligations for the first five years and total of the remaining years for the operating lease liability recorded in the consolidated balance sheet as of December 31, 2019: Cash Payment Year ending December 31: Obligations 2020 $ 890 2021 838 2022 862 2023 867 2024 218 Thereafter — Total lease payments 3,675 Imputed interest (577 ) Total minimum lease payments $ 3,098 |
Future Minimum Lease Payments under Non-Cancelable Operating Leases | Future minimum lease payments as of December 31, 2018 under non-cancelable operating leases were as follows: Operating Year ending December 31: Leases 2019 $ 1,055 2020 890 2021 838 2022 862 2023 867 Thereafter 218 Total minimum lease payments $ 4,730 |
Operating Leases Rent Expense | Rent expense on the operating leases was as follows: Year Ended December 31, 2018 Rent expense $ 1,104 |
Intangibles (Tables)
Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 December 31, December 31, (years) 2019 2018 Capitalized patent costs 17-20 $ 9,245 $ 8,757 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 12,515 12,027 Accumulated amortization (5,845 ) (5,378 ) Intangibles, net $ 6,670 $ 6,649 |
Amortization Expense on Intangible Assets | Amortization expense on intangible assets was as follows: Year Ended Year Ended December 31, December 31, 2019 2018 Amortization expense $ 567 $ 516 |
Estimated Future Aggregate Amortization Expense | For intangible assets recorded at December 31, 2019, the estimated future aggregate amortization expense for the years ending December 31, 2020 through December 31, 2024 is approximately as follows: Amortization Year ending December 31: Expense 2020 $ 471 2021 413 2022 398 2023 387 2024 377 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Options Granted, Exercised and Forfeited | Options granted, exercised and forfeited under the stock incentive plan are summarized as follows: Weighted Weighted Average Average Aggregate Exercise Grant Date Intrinsic Options Price Fair Value Value Options outstanding, December 31, 2017 515 $ 25.13 $ 11.64 Granted 100 $ 29.55 $ 14.46 Exercised (102 ) $ 12.38 $ 7.02 Forfeited or expired — — — Options outstanding, December 31, 2018 513 $ 28.52 $ 13.10 Granted 100 $ 39.54 $ 16.40 Exercised (55 ) $ 21.26 $ 9.76 Forfeited or expired — — — Options outstanding, December 31, 2019 558 $ 31.22 $ 14.03 $ 1,902 Options exercisable, December 31, 2019 358 $ 29.46 $ 1,515 Options unvested, December 31, 2019 200 $ 34.37 $ 387 |
Summary of Information about Stock Options Outstanding | The following table summarizes information about stock options outstanding at December 31, 2019: Options Outstanding Options Exercisable Weighted Weighted Remaining Average Remaining Average Number Contractual Exercise Number Contractual Exercise Exercise Price Outstanding Life (Years) Price Outstanding Life (Years) Price $18.01 - $27.61 108 1.74 $ 26.94 108 1.74 $ 26.94 $29.55 - $30.01 150 6.12 $ 29.70 92 4.49 $ 29.80 $30.50 - $39.54 300 8.34 $ 33.51 158 7.78 $ 30.98 $18.01 - $39.54 558 6.47 $ 31.22 358 5.12 $ 29.46 |
Reconciliation of Unvested Balance of Restricted Stock | The following table reconciles the unvested balance of restricted stock: Weighted Average Number of Grant Date Shares Fair Value Unvested balance, December 31, 2017 426 $ 28.44 Granted 239 $ 29.73 Vested (215 ) $ 28.96 Forfeited (24 ) $ 29.29 Unvested balance, December 31, 2018 426 $ 28.85 Granted 300 $ 25.22 Vested (242 ) $ 27.88 Forfeited (49 ) $ 27.43 Unvested balance, December 31, 2019 435 $ 27.05 |
Fair Value of Restricted Stock Awards Vested | The following table indicates the fair value of all restricted stock awards that vested during the years ended December 31, 2019 and 2018, respectively: Year Ended Year Ended December 31, December 31, 2019 2018 Fair value of restricted stock awards vested $ 9,495 $ 5,835 |
Defined Contribution Plan (Tabl
Defined Contribution Plan (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Statement of Company Made Matching Contributions | The Company made matching contributions in the aggregate amount as follows: Year Ended Year Ended December 31, December 31, 2019 2018 Matching contributions $ 1,062 $ 1,026 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Tax Benefit (Provision) Allocated to Continuing Operations | Components of tax benefit (provision) allocated to continuing operations include the following: Year Ended Year Ended December 31, December 31, 2019 2018 Current: Federal $ (4 ) $ — State 10 (28 ) Foreign (27 ) (11 ) Sub-total $ (21 ) $ (39 ) Deferred: Federal $ — $ — State — — Foreign — — Sub-total $ — $ — Total tax benefit (provision) $ (21 ) $ (39 ) |
Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate | The reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate is as follows: Year Ended Year Ended December 31, December 31, 2019 % 2018 % Income taxes computed at statutory rates $ 6,892 (21 )% $ 6,818 (21 )% (Increases) decreases resulting from: State income taxes, net of federal tax benefit 143 (1 )% (359 ) 1 % Federal and state research and experimentation credits 781 (2 )% 1,064 (4 )% Change in valuation allowance (7,873 ) 24 % (7,611 ) 24 % Impact of expired tax positions — — % 1 — % Impact of recent U.S. tax reform — — % — — % Other 36 — % 48 — % Total $ (21 ) — % $ (39 ) — % |
Components of Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of significant items comprising the Company’s deferred tax assets and deferred tax liabilities are as follows: Year Ended Year Ended December 31, December 31, 2019 2018 Deferred tax assets: Stock based compensation $ 1,166 $ 1,337 Federal and state net operating losses 39,879 32,460 Goodwill 220 341 Accrued compensation 9 11 ASC 842 - lease liabilities 712 — Deferred rent — 290 Federal and state research and experimentation credit 8,173 7,528 Intangible asset differences 122 185 Other 57 76 Total gross deferred tax assets 50,338 42,228 Less valuation allowance (47,809 ) (39,936 ) Net deferred tax assets $ 2,529 $ 2,292 Deferred tax liabilities: Patent expenditures $ (1,481 ) $ (1,781 ) ASC 842 - right of use assets (528 ) — Fixed asset differences (520 ) (511 ) Total gross deferred tax liabilities $ (2,529 ) $ (2,292 ) Total net deferred tax assets $ — $ — |
Summary of Reconciliation of Uncertain Tax Positions | A summary reconciliation of the Company’s uncertain tax positions is as follows: Year Ended Year Ended December 31, December 31, 2019 2018 Beginning balance $ 613 $ 549 Addition for current year tax positions 61 88 Addition for prior year tax positions 2 — Reduction for prior year positions — (23 ) Reduction for prior year positions resolved during the current year — (1 ) Ending balance $ 676 $ 613 |
Quarterly Financial Informati_2
Quarterly Financial Information—Unaudited (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Quarter Ended March 31 June 30 September 30 December 31 2019 Service revenue $ 3,635 $ 3,529 $ 3,003 $ 2,626 Subscription revenue 1,563 2,088 2,273 2,201 License revenue 462 563 552 492 Total revenue 5,660 6,180 5,828 5,319 Total cost revenue 2,134 2,185 1,918 1,799 Gross profit 3,526 3,995 3,910 3,520 Gross profit percent, service revenue 58 % 56 % 57 % 56 % Gross profit percent, subscription revenue 72 % 78 % 80 % 79 % Gross profit percent, license revenue 66 % 70 % 69 % 64 % Gross profit percent, total 62 % 65 % 67 % 66 % Sales and marketing $ 4,950 $ 5,087 $ 4,839 $ 4,999 Research, development and engineering 4,038 3,981 4,105 4,343 General and administrative 2,852 2,686 2,656 2,654 Intellectual property 358 393 342 399 Operating loss (8,672 ) (8,152 ) (8,032 ) (8,875 ) Net loss (8,463 ) (7,933 ) (7,761 ) (8,683 ) Earnings (loss) per common share: Loss per common share—basic $ (0.74 ) $ (0.68 ) $ (0.65 ) $ (0.73 ) Loss per common share—diluted $ (0.74 ) $ (0.68 ) $ (0.65 ) $ (0.73 ) Weighted average common shares outstanding—basic 11,487 11,665 11,924 11,967 Weighted average common shares outstanding—diluted 11,487 11,665 11,924 11,967 Quarter Ended March 31 June 30 September 30 December 31 2018 Service revenue $ 3,507 $ 3,336 $ 2,787 $ 3,144 Subscription revenue 1,578 1,444 1,532 1,487 License revenue 528 658 595 596 Total revenue 5,613 5,438 4,914 5,227 Total cost revenue 2,185 2,205 1,935 2,101 Gross profit 3,428 3,233 2,979 3,126 Gross profit percent, service revenue 55 % 54 % 53 % 52 % Gross profit percent, subscription revenue 69 % 65 % 69 % 71 % Gross profit percent, license revenue 73 % 77 % 74 % 74 % Gross profit percent, total 61 % 59 % 61 % 60 % Sales and marketing $ 4,887 $ 4,757 $ 4,741 $ 4,755 Research, development and engineering 3,947 4,058 4,069 3,897 General and administrative 2,632 2,416 2,447 2,402 Intellectual property 315 305 328 334 Operating loss (8,353 ) (8,303 ) (8,606 ) (8,262 ) Net loss (8,112 ) (8,038 ) (8,342 ) (8,014 ) Earnings (loss) per common share: Loss per common share—basic $ (0.72 ) $ (0.71 ) $ (0.73 ) $ (0.70 ) Loss per common share—diluted $ (0.72 ) $ (0.71 ) $ (0.73 ) $ (0.70 ) Weighted average common shares outstanding— basic 11,266 11,337 11,394 11,443 Weighted average common shares outstanding— diluted 11,266 11,337 11,394 11,443 |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Highly liquid marketable securities with original maturities | 90 days or less | ||||
Cash equivalents include commercial paper and money market funds | $ 10,436,000 | $ 25,543,000 | |||
Short-term marketable securities maturity description | Over 90 days that mature in less than one-year | ||||
Marketable securities other-than temporary impairments | $ 0 | ||||
Credit exposure to any one financial institution or type of financial instrument | 5% of its cash equivalents and marketable securities or $1,000, whichever is greater | ||||
Percentage of credit exposure to any one financial institution or type of financial instrument | 5.00% | ||||
Maximum amount of credit exposure to any one financial institution or type of financial instrument | $ 1,000,000 | ||||
Credit exposure limits of cash and cash equivalents and marketable securities | 40% of its cash equivalents and marketable securities, or $15,000, whichever is greater | ||||
Percentage of credit exposure limits based on cash and cash equivalents and marketable securities | 40.00% | ||||
Credit exposure limits of cash and cash equivalents and marketable securities under option two | $ 15,000,000 | ||||
Purchase price adjustment date | 1 year | ||||
Impairment of goodwill | $ 0 | $ 0 | |||
Term of patent | 17 years | ||||
Increase to opening retained earnings | $ 139,000 | ||||
Estimated right of use assets | $ 2,263,000 | $ 2,709,000 | |||
Estimated lease liabilities | 3,098,000 | 3,792,000 | |||
Deferred rent liability | $ 1,083,000 | ||||
ASU No. 2014-09 [Member] | |||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Increase to opening retained earnings | $ 139,000 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies - Summary of Fair Value Hierarchy for Financial Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 36,040 | |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 36,040 | $ 41,921 |
Fair Value, Measurements, Recurring [Member] | Money Market Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 746 | 1,472 |
Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 25,481 | 28,343 |
Fair Value, Measurements, Recurring [Member] | Corporate Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 5,773 | 12,106 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 4,040 | |
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 746 | 1,472 |
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 | 746 | 1,472 |
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] | U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | |
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 35,294 | 40,449 |
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 | 25,481 | 28,343 |
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 | 5,773 | 12,106 |
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 | 4,040 | |
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] | U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 0 |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies - Summary of Fair Value Maturities for Financial Asset (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Fair Value Disclosures [Abstract] | |
Cash equivalents and marketable securities, Maturities by Period, Total | $ 36,040 |
Cash equivalents and marketable securities, Maturities by Period, Less than 1 year | 36,040 |
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 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue Recognition [Abstract] | ||
Period of revenue from services | 1 month | |
Subscription revenue term, minimum | 1 year | |
Subscription revenue term, maximum | 3 years | |
Deferred revenue, revenue recognized | $ 2,979 | |
Aggregate amount of transaction price from contractual obligations | $ 17,759 | $ 17,496 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated Revenue By Major Product Line in Single Reporting Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||||||||
Total | $ 5,319 | $ 5,828 | $ 6,180 | $ 5,660 | $ 5,227 | $ 4,914 | $ 5,438 | $ 5,613 | $ 22,987 | $ 21,192 |
Service [Member] | ||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||
Total | 2,626 | 3,003 | 3,529 | 3,635 | 3,144 | 2,787 | 3,336 | 3,507 | 12,793 | 12,774 |
Subscription Digimarc Guardian [Member] | ||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||
Total | 3,242 | 3,660 | ||||||||
Subscription Digimarc Discover And Digimarc Barcode [Member] | ||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||
Total | 4,883 | 2,381 | ||||||||
License [Member] | ||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||
Total | $ 492 | $ 552 | $ 563 | $ 462 | $ 596 | $ 595 | $ 658 | $ 528 | $ 2,069 | $ 2,377 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Contract Liabilities from Contracts with Customers (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue Recognition [Abstract] | ||
Deferred revenue, current | $ 3,172 | $ 3,226 |
Deferred revenue, long term | 59 | 46 |
Total | $ 3,231 | $ 3,272 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2019Segment | |
Revenue, Major Customer [Line Items] | |
Number of reporting segment | 1 |
Customer Concentration Risk [Member] | Minimum [Member] | Sales [Member] | |
Revenue, Major Customer [Line Items] | |
Percentage of revenue from major customers | 10.00% |
Segment Information - Geographi
Segment Information - Geographical Segment Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||
Total revenue | $ 5,319 | $ 5,828 | $ 6,180 | $ 5,660 | $ 5,227 | $ 4,914 | $ 5,438 | $ 5,613 | $ 22,987 | $ 21,192 |
Domestic [Member] | ||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||
Total revenue | 7,187 | 5,573 | ||||||||
International [Member] | ||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||
Total revenue | $ 15,800 | $ 15,619 |
Segment Information - Customers
Segment Information - Customers Accounted for 10% or More of Revenue (Detail) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Customer Concentration Risk [Member] | Sales [Member] | Central Banks [Member] | ||
Revenue, Major Customer [Line Items] | ||
Entity wide revenue major customers percentage | 61.00% | 65.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
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 |
Restricted Stock [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] | 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 - Stoc
Stock-Based Compensation - Stock Option Valuation Assumptions (Detail) - Stock Options [Member] | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 3 years 2 months 12 days | 4 years 6 months |
Expected volatility | 58.68% | 57.11% |
Risk-free interest rate | 1.51% | 2.77% |
Expected dividend yield | 0.00% | 0.00% |
Stock-Based Compensation - Allo
Stock-Based Compensation - Allocation of Stock-Based Compensation (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 8,214 | $ 7,298 |
Capitalized to software and patent costs | 174 | 170 |
Total stock-based compensation | 8,388 | 7,468 |
Cost of Revenue [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 669 | 613 |
Sales and Marketing [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 1,928 | 1,649 |
Research, Development and Engineering [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 1,466 | 1,361 |
General and Administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 3,877 | 3,386 |
Intellectual Property [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 274 | $ 289 |
Stock-Based Compensation - Unre
Stock-Based Compensation - Unrecognized Compensation Cost Related to Non-Vested Stock-Based Awards Granted (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Total unrecognized compensation costs | $ 13,535 | $ 14,055 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Period for Recognition of Unrecognized Compensation Cost for Stock Options and Restricted Stock (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average period | 1 year 1 month 6 days |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average period | 1 year 4 months 17 days |
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 | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basic Earnings (Loss) per Common Share: | ||||||||||
Net loss | $ (8,683) | $ (7,761) | $ (7,933) | $ (8,463) | $ (8,014) | $ (8,342) | $ (8,038) | $ (8,112) | $ (32,840) | $ (32,506) |
Distributed earnings to common shares | 0 | 0 | ||||||||
Distributed earnings to participating securities | 0 | 0 | ||||||||
Total distributed earnings | 0 | 0 | ||||||||
Undistributed loss allocable to common shares | (32,840) | (32,506) | ||||||||
Undistributed earnings allocable to participating securities | 0 | 0 | ||||||||
Total undistributed loss | (32,840) | (32,506) | ||||||||
Loss to common shares — basic | $ (32,840) | $ (32,506) | ||||||||
Weighted average common shares outstanding — basic | 11,967 | 11,924 | 11,665 | 11,487 | 11,443 | 11,394 | 11,337 | 11,266 | 11,762 | 11,360 |
Basic earnings (loss) per common share | $ (0.73) | $ (0.65) | $ (0.68) | $ (0.74) | $ (0.70) | $ (0.73) | $ (0.71) | $ (0.72) | $ (2.79) | $ (2.86) |
Diluted Earnings (Loss) per Common Share: | ||||||||||
Loss to common shares — basic | $ (32,840) | $ (32,506) | ||||||||
Undistributed earnings allocated to participating securities | 0 | 0 | ||||||||
Undistributed earnings reallocated to participating securities | 0 | 0 | ||||||||
Loss to common shares — diluted | $ (32,840) | $ (32,506) | ||||||||
Weighted average common shares outstanding — basic | 11,967 | 11,924 | 11,665 | 11,487 | 11,443 | 11,394 | 11,337 | 11,266 | 11,762 | 11,360 |
Dilutive effect of stock options | 0 | 0 | ||||||||
Weighted average common shares outstanding — diluted | 11,967 | 11,924 | 11,665 | 11,487 | 11,443 | 11,394 | 11,337 | 11,266 | 11,762 | 11,360 |
Diluted earnings (loss) per common share | $ (0.73) | $ (0.65) | $ (0.68) | $ (0.74) | $ (0.70) | $ (0.73) | $ (0.71) | $ (0.72) | $ (2.79) | $ (2.86) |
Earnings Per Common Share - Sch
Earnings Per Common Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
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 | 28 | 0 |
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 | 100 | 475 |
Trade Accounts Receivable and_3
Trade Accounts Receivable and Allowance for Doubtful Accounts - Summary of Trade Accounts Receivable (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable Net Current [Abstract] | ||
Trade accounts receivable | $ 4,036 | $ 3,903 |
Allowance for doubtful accounts | (15) | (15) |
Trade accounts receivable, net | 4,021 | 3,888 |
Unpaid deferred revenue included in trade accounts receivable | $ 2,015 | $ 2,030 |
Trade Accounts Receivable and_4
Trade Accounts Receivable and Allowance for Doubtful Accounts - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
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 and_5
Trade Accounts Receivable and Allowance for Doubtful Accounts - Customers Accounted for 10% or More of Trade Accounts Receivable, Net (Detail) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Central Banks [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of trade accounts receivable of major customers | 69.00% | 48.00% |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
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 | Dec. 31, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Abstract] | ||
Office furniture and fixtures | $ 1,650 | $ 1,626 |
Software | 4,379 | 3,686 |
Equipment | 5,041 | 4,814 |
Leasehold improvements | 1,721 | 1,721 |
Gross property and equipment | 12,791 | 11,847 |
Less accumulated depreciation and amortization | (9,141) | (7,892) |
Property and equipment, net | $ 3,650 | $ 3,955 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2015 | Feb. 28, 2015 | Dec. 31, 2019 | |
Lessee Operating Lease [Line Items] | |||
Remaining rent payments | $ 3,675 | ||
Beaverton, Oregon [Member] | |||
Lessee Operating Lease [Line Items] | |||
Existence of option to extend | true | ||
Option to extend operating lease | extend the lease term through March 2024 | ||
Option to extend operating lease, month and year | 2024-03 | ||
Remaining rent payments | $ 3,484 | ||
San Mateo, California [Member] | |||
Lessee Operating Lease [Line Items] | |||
Remaining rent payments | $ 59 | ||
Operating lease term, month and year | 2020-03 | ||
Sublease term, month and year | 2020-03 |
Leases - Additional Details of
Leases - Additional Details of Leases Presented in Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Right of use assets | $ 2,263 | $ 2,709 |
Lease liabilities, current | 663 | |
Lease liabilities, long-term | $ 2,435 | |
Weighted-average remaining life | 4 years | |
Weighted-average discount rate | 8.20% |
Leases - Additional Details o_2
Leases - Additional Details of Operating Lease Expense (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 1,044 |
Cash paid for operating leases | $ 1,339 |
Leases - Reconciliation of Cash
Leases - Reconciliation of Cash Payment Obligations of Operating Lease Liability (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2020 | $ 890 | |
2021 | 838 | |
2022 | 862 | |
2023 | 867 | |
2024 | 218 | |
Thereafter | 0 | |
Total lease payments | 3,675 | |
Imputed interest | (577) | |
Total minimum lease payments | $ 3,098 | $ 3,792 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments under Non-Cancelable Operating Leases (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 1,055 |
2020 | 890 |
2021 | 838 |
2022 | 862 |
2023 | 867 |
Thereafter | 218 |
Total minimum lease payments | $ 4,730 |
Leases - Operating Leases Rent
Leases - Operating Leases Rent Expense (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Leases [Abstract] | |
Rent expense | $ 1,104 |
Intangibles - Additional Inform
Intangibles - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
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 | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized patent costs | $ 9,245 | $ 8,757 |
Intangible assets acquired: | ||
Gross intangible assets | 12,515 | 12,027 |
Accumulated amortization | (5,845) | (5,378) |
Intangibles, net | $ 6,670 | 6,649 |
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 |
Intangibles - Amortization Expe
Intangibles - Amortization Expense on Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 567 | $ 516 |
Intangibles - Estimated Future
Intangibles - Estimated Future Aggregate Amortization Expense (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2020 | $ 471 |
2021 | 413 |
2022 | 398 |
2023 | 387 |
2024 | $ 377 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2019 | May 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2008 | |
Shareholders Equity [Line Items] | |||||
Preferred stock, shares authorized | 2,500,000 | 2,500,000 | 2,500,000 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Shares of common stock subject to awards outstanding | 558,000 | 513,000 | 515,000 | ||
Stock Options [Member] | |||||
Shareholders Equity [Line Items] | |||||
Stock-based compensation plans, number of additional shares available for future grants | 1,276,000 | ||||
Closing price per share of Digimarc common stock | $ 33.56 | ||||
Vesting period for stock options and restricted stock | 3 years | ||||
Restricted Stock [Member] | |||||
Shareholders Equity [Line Items] | |||||
Vesting period for stock options and restricted stock | 4 years | ||||
Common Stock [Member] | |||||
Shareholders Equity [Line Items] | |||||
Issuance of common stock | 336,000 | ||||
Common stock price per share | $ 60.61 | ||||
Cash proceeds from sale of common stock | $ 20,349,000 | ||||
Sale of common stock, sales agent commissions | 483,000 | ||||
Stock issuance cost | 251,000 | ||||
Net cash proceeds from sale of common stock | $ 19,615,000 | ||||
Common Stock [Member] | Stock Incentive Plan [Member] | |||||
Shareholders Equity [Line Items] | |||||
Stock-based compensation, number of shares authorized | 1,000,000 | ||||
Common Stock [Member] | Maximum [Member] | |||||
Shareholders Equity [Line Items] | |||||
Aggregate offering price of common stock | $ 30,000,000 | ||||
Common Stock [Member] | Maximum [Member] | Stock Incentive Plan [Member] | |||||
Shareholders Equity [Line Items] | |||||
Shares of common stock subject to awards outstanding | 770,000 | ||||
Series A Preferred Stock [Member] | |||||
Shareholders Equity [Line Items] | |||||
Stock-based compensation, number of shares authorized | 10,000 | ||||
Series A Preferred redeemable stated fair value | $ 5 | ||||
Series A Preferred stock dividend rights | $ 0 | ||||
Series A Preferred stock undistributed earnings | $ 0 |
Shareholders' Equity - Reconcil
Shareholders' Equity - Reconciliation of Outstanding Balance of Stock Options (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Options, Outstanding at beginning | 513 | 515 |
Options, Granted | 100 | 100 |
Options, Exercised | (55) | (102) |
Options, Forfeited or expired | 0 | 0 |
Options, Outstanding at ending | 558 | 513 |
Options, Exercisable at ending | 358 | |
Options, Unvested at ending | 200 | |
Weighted Average Exercise Price, Outstanding at beginning | $ 28.52 | $ 25.13 |
Weighted Average Exercise Price, Granted | 39.54 | 29.55 |
Weighted Average Exercise Price, Exercised | 21.26 | 12.38 |
Weighted Average Exercise Price, Forfeited or expired | 0 | 0 |
Weighted Average Exercise Price, Outstanding at ending | 31.22 | 28.52 |
Weighted Average Exercise Price, Exercisable at ending | 29.46 | |
Weighted Average Exercise Price, Unvested at ending | 34.37 | |
Weighted Average Grant Date Fair Value, Outstanding at beginning | 13.10 | 11.64 |
Weighted Average Grant Date Fair Value, Granted | 16.40 | 14.46 |
Weighted Average Grant Date Fair Value, Exercised | 9.76 | 7.02 |
Weighted Average Grant Date Fair Value, Forfeited or expired | 0 | 0 |
Weighted Average Grant Date Fair Value, Outstanding at ending | $ 14.03 | $ 13.10 |
Aggregate Intrinsic Value, Outstanding | $ 1,902 | |
Aggregate Intrinsic Value, Exercisable | 1,515 | |
Aggregate Intrinsic Value, Unvested | $ 387 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Information about Stock Options Outstanding (Detail) shares in Thousands | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Exercise Price $18.01 - $27.61 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit | $ 18.01 |
Exercise Price, Upper Range Limit | $ 27.61 |
Number Outstanding | shares | 108 |
Remaining Contractual Life (Years), Outstanding | 1 year 8 months 26 days |
Weighted Average Price, Outstanding | $ 26.94 |
Number Exercisable | shares | 108 |
Remaining Contractual Life (Years), Exercisable | 1 year 8 months 26 days |
Weighted Average Price, Exercisable | $ 26.94 |
Exercise Price $29.55 - $30.01 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit | 29.55 |
Exercise Price, Upper Range Limit | $ 30.01 |
Number Outstanding | shares | 150 |
Remaining Contractual Life (Years), Outstanding | 6 years 1 month 13 days |
Weighted Average Price, Outstanding | $ 29.70 |
Number Exercisable | shares | 92 |
Remaining Contractual Life (Years), Exercisable | 4 years 5 months 26 days |
Weighted Average Price, Exercisable | $ 29.80 |
Exercise Price $30.50 - $39.54 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit | 30.50 |
Exercise Price, Upper Range Limit | $ 39.54 |
Number Outstanding | shares | 300 |
Remaining Contractual Life (Years), Outstanding | 8 years 4 months 2 days |
Weighted Average Price, Outstanding | $ 33.51 |
Number Exercisable | shares | 158 |
Remaining Contractual Life (Years), Exercisable | 7 years 9 months 10 days |
Weighted Average Price, Exercisable | $ 30.98 |
Exercise Price $18.01 - $39.54 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit | 18.01 |
Exercise Price, Upper Range Limit | $ 39.54 |
Number Outstanding | shares | 558 |
Remaining Contractual Life (Years), Outstanding | 6 years 5 months 19 days |
Weighted Average Price, Outstanding | $ 31.22 |
Number Exercisable | shares | 358 |
Remaining Contractual Life (Years), Exercisable | 5 years 1 month 13 days |
Weighted Average Price, Exercisable | $ 29.46 |
Shareholders' Equity - Reconc_2
Shareholders' Equity - Reconciliation of Unvested Balance of Restricted Stock (Detail) - Restricted Stock [Member] - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Unvested, beginning balance | 426 | 426 |
Granted | 300 | 239 |
Vested | (242) | (215) |
Forfeited | (49) | (24) |
Unvested, ending balance | 435 | 426 |
Weighted Average Grant Date Fair Value | ||
Unvested, beginning balance | $ 28.85 | $ 28.44 |
Granted | 25.22 | 29.73 |
Vested | 27.88 | 28.96 |
Forfeited | 27.43 | 29.29 |
Unvested, ending balance | $ 27.05 | $ 28.85 |
Shareholders' Equity - Fair Val
Shareholders' Equity - Fair Value of Restricted Stock Awards Vested (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of restricted stock awards vested | $ 9,495 | $ 5,835 |
Defined Contribution Plan - Add
Defined Contribution Plan - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Employees may contribute their pay to the Plan | 75.00% |
Defined Contribution Plan - Sta
Defined Contribution Plan - Statement of Company Made Matching Contributions (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | ||
Matching contributions | $ 1,062 | $ 1,026 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 0.00% | 0.00% |
Deferred tax assets, valuation allowance | $ 47,809 | $ 39,936 |
Change in valuation allowance | 7,873 | |
Federal net operating loss carry-forwards | 157,557 | |
State net operating loss carry-forwards | $ 114,825 | |
Minimum maturity period for federal net operating loss carry-forward | 5 years | |
Minimum maturity period for state net operating loss carry-forward | 5 years | |
Federal research and experimental tax credits | $ 7,831 | |
State research and experimental tax credits | $ 1,289 | |
Minimum maturity period for federal research and experimental tax credit carry-forward | 5 years | |
Maximum maturity period for federal research and experimental tax credit carry-forward | 20 years | |
Minimum maturity period for state research and experimental tax credit carry-forward | 5 years | |
Maximum maturity period for state research and experimental tax credit carry-forward | 20 years | |
Accrued interest and penalties associated with uncertain tax positions | $ 0 | $ 0 |
Income Taxes - Components of Ta
Income Taxes - Components of Tax Benefit (Provision) Allocated to Continuing Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | ||
Federal | $ (4) | $ 0 |
State | 10 | (28) |
Foreign | (27) | (11) |
Sub-total | (21) | (39) |
Deferred: | ||
Federal | 0 | 0 |
State | 0 | 0 |
Foreign | 0 | 0 |
Sub-total | 0 | 0 |
Total tax benefit (provision) | $ (21) | $ (39) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income taxes computed at statutory rates | $ 6,892 | $ 6,818 |
(Increases) decreases resulting from: | ||
State income taxes, net of federal tax benefit | 143 | (359) |
Federal and state research and experimentation credits | 781 | 1,064 |
Change in valuation allowance | (7,873) | (7,611) |
Impact of expired tax positions | 0 | 1 |
Impact of recent U.S. tax reform | 0 | 0 |
Other | 36 | 48 |
Total tax benefit (provision) | $ (21) | $ (39) |
Income taxes computed at statutory rates, Percentage | (21.00%) | (21.00%) |
(Increases) decreases resulting from: | ||
State income taxes, net of federal tax benefit, Percentage | (1.00%) | 1.00% |
Federal and state research and experimentation credits, Percentage | (2.00%) | (4.00%) |
Change in valuation allowance, Percentage | 24.00% | 24.00% |
Impact of expired tax positions, Percentage | (0.00%) | (0.00%) |
Impact of recent U.S. tax reform, Percentage | (0.00%) | (0.00%) |
Other, Percentage | (0.00%) | (0.00%) |
Total, Percentage | (0.00%) | (0.00%) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Deferred Tax Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Stock based compensation | $ 1,166 | $ 1,337 |
Federal and state net operating losses | 39,879 | 32,460 |
Goodwill | 220 | 341 |
Accrued compensation | 9 | 11 |
ASC 842 - lease liabilities | 712 | 0 |
Deferred rent | 0 | 290 |
Federal and state research and experimentation credit | 8,173 | 7,528 |
Intangible asset differences | 122 | 185 |
Other | 57 | 76 |
Total gross deferred tax assets | 50,338 | 42,228 |
Less valuation allowance | (47,809) | (39,936) |
Net deferred tax assets | 2,529 | 2,292 |
Deferred tax liabilities: | ||
Patent expenditures | (1,481) | (1,781) |
ASC 842 - right of use assets | (528) | 0 |
Fixed asset differences | (520) | (511) |
Total gross deferred tax liabilities | (2,529) | (2,292) |
Total net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation of Uncertain Tax Positions (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 613 | $ 549 |
Addition for current year tax positions | 61 | 88 |
Addition for prior year tax positions | 2 | 0 |
Reduction for prior year positions | 0 | (23) |
Reduction for prior year positions resolved during the current year | 0 | (1) |
Ending balance | $ 676 | $ 613 |
Quarterly Financial Informati_3
Quarterly Financial Information - Schedule of Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Income Statements Captions [Line Items] | ||||||||||
Total revenue | $ 5,319 | $ 5,828 | $ 6,180 | $ 5,660 | $ 5,227 | $ 4,914 | $ 5,438 | $ 5,613 | $ 22,987 | $ 21,192 |
Total cost of revenue | 1,799 | 1,918 | 2,185 | 2,134 | 2,101 | 1,935 | 2,205 | 2,185 | 8,036 | 8,426 |
Gross profit | $ 3,520 | $ 3,910 | $ 3,995 | $ 3,526 | $ 3,126 | $ 2,979 | $ 3,233 | $ 3,428 | 14,951 | 12,766 |
Gross profit percent, service revenue | 56.00% | 57.00% | 56.00% | 58.00% | 52.00% | 53.00% | 54.00% | 55.00% | ||
Gross profit percent, subscription revenue | 79.00% | 80.00% | 78.00% | 72.00% | 71.00% | 69.00% | 65.00% | 69.00% | ||
Gross profit percent, license revenue | 64.00% | 69.00% | 70.00% | 66.00% | 74.00% | 74.00% | 77.00% | 73.00% | ||
Gross profit percent, total | 66.00% | 67.00% | 65.00% | 62.00% | 60.00% | 61.00% | 59.00% | 61.00% | ||
Sales and marketing | $ 4,999 | $ 4,839 | $ 5,087 | $ 4,950 | $ 4,755 | $ 4,741 | $ 4,757 | $ 4,887 | 19,875 | 19,140 |
Research, development and engineering | 4,343 | 4,105 | 3,981 | 4,038 | 3,897 | 4,069 | 4,058 | 3,947 | 16,467 | 15,971 |
General and administrative | 2,654 | 2,656 | 2,686 | 2,852 | 2,402 | 2,447 | 2,416 | 2,632 | 10,848 | 9,897 |
Intellectual property | 399 | 342 | 393 | 358 | 334 | 328 | 305 | 315 | 1,492 | 1,282 |
Operating loss | (8,875) | (8,032) | (8,152) | (8,672) | (8,262) | (8,606) | (8,303) | (8,353) | (33,731) | (33,524) |
Net loss | $ (8,683) | $ (7,761) | $ (7,933) | $ (8,463) | $ (8,014) | $ (8,342) | $ (8,038) | $ (8,112) | $ (32,840) | $ (32,506) |
Earnings (loss) per common share: | ||||||||||
Loss per common share — basic | $ (0.73) | $ (0.65) | $ (0.68) | $ (0.74) | $ (0.70) | $ (0.73) | $ (0.71) | $ (0.72) | $ (2.79) | $ (2.86) |
Loss per common share — diluted | $ (0.73) | $ (0.65) | $ (0.68) | $ (0.74) | $ (0.70) | $ (0.73) | $ (0.71) | $ (0.72) | $ (2.79) | $ (2.86) |
Weighted average common shares outstanding—basic | 11,967 | 11,924 | 11,665 | 11,487 | 11,443 | 11,394 | 11,337 | 11,266 | 11,762 | 11,360 |
Weighted average common shares outstanding—diluted | 11,967 | 11,924 | 11,665 | 11,487 | 11,443 | 11,394 | 11,337 | 11,266 | 11,762 | 11,360 |
Service [Member] | ||||||||||
Condensed Income Statements Captions [Line Items] | ||||||||||
Total revenue | $ 2,626 | $ 3,003 | $ 3,529 | $ 3,635 | $ 3,144 | $ 2,787 | $ 3,336 | $ 3,507 | $ 12,793 | $ 12,774 |
Total cost of revenue | 5,523 | 5,922 | ||||||||
Subscription [Member] | ||||||||||
Condensed Income Statements Captions [Line Items] | ||||||||||
Total revenue | 2,201 | 2,273 | 2,088 | 1,563 | 1,487 | 1,532 | 1,444 | 1,578 | 8,125 | 6,041 |
Total cost of revenue | 1,840 | 1,907 | ||||||||
License [Member] | ||||||||||
Condensed Income Statements Captions [Line Items] | ||||||||||
Total revenue | $ 492 | $ 552 | $ 563 | $ 462 | $ 596 | $ 595 | $ 658 | $ 528 | 2,069 | 2,377 |
Total cost of revenue | $ 673 | $ 597 |