Digimarc Corporation (NASDAQ:DMRC) Q4 2023 Earnings Conference Call February 28, 2024 5:00 PM ET

Company Participants

Joel Meyer - Executive Vice President, Chief Legal Officer and Corporate Secretary

Riley McCormack - President and Chief Executive Officer

Charles Beck - Executive Vice President, Chief Financial Officer and Treasurer

Conference Call Participants

Robin Knipp - Janney Montgomery Scott

Jeff Bernstein - Silverberg

Matt Collard - PCB Advisory

Operator

Greetings, and welcome to the Digimarc Corporation Fourth Quarter Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Joel Meyer, Chief Legal Officer. Please go ahead.

Joel Meyer

Thank you. Welcome to our Q4 conference call. Riley McCormack, our CEO; and Charles Beck, our CFO, are with me on the call. On the call today, we will provide a business update and discuss Q4 2023 and fiscal year 2023 financial results. This will be followed by a question-and-answer forum. We have posted our prepared remarks in the Investor Relations section of our website and will archive this webcast there.

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

Riley will now provide a business update.

Riley McCormack

Thank you, Joel, and hello, everyone. Q4 was another strong quarter for Digimarc. On a year-over-year basis, we accelerated our ARR growth to 71%, accelerated our subscription revenue growth to 37%, and expanded our subscription Gross Profit Margins more than 1,000 basis points to 87.3%.

This performance was the result of our continued execution against our transformation strategy, but it is important to note that our transformation strategy itself continues to evolve, as I hope it always will. While the rate of change is attenuating as we move from the radical transformation stage we entered in Q2 2021 to the constant iteration and continuous improvement stage in which we are now, the fact is we can always be better tomorrow, and thus that will always be our goal.

Constant iteration and continuous improvement can be confusing if not anchored by a consistent true north, and our true north is beautifully simple. Our goal is to support companies progressing in their digital transformation journey, and to achieve that we need to be easy to begin doing business with and excellent at guiding customers along their journey.