Digimarc Corp (DMRC) 2023 Q4 法說會逐字稿

Greetings and welcome to the Digimarc Corporation fourth-quarter fiscal year 2023 earnings conference call. (Operator Instructions)

歡迎參加 Digimarc Corporation 2023 財年第四季財報電話會議。（操作員說明）

As a reminder, this conference is being recorded.

提醒一下，本次會議正在錄製中。

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

現在我很高興向您介紹主持人，首席法務官喬爾·邁耶 (Joel Meyer)。請繼續。

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 form.

謝謝。歡迎參加我們的第四季電話會議。萊利·麥科馬克，我們的執行長；我們的財務長查爾斯貝克 (Charles Beck) 與我一起參加了電話會議。在今天的電話會議上，我們將提供業務更新並討論 2023 年第四季和 2023 財年的財務表現。接下來是問答形式。

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.

我們已在網站的投資者關係部分發布了準備好的評論，並將在此存檔此網路廣播。在開始之前，我要提醒大家，今天的討論包含前瞻性陳述，有風險和不確定性。請參閱我們的新聞稿，以了解有關可能導致實際結果出現重大差異的特定風險因素的更多資​​訊。

Riley will now provide a business update.

萊利現在將提供業務更新。

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%.

謝謝你，喬爾，大家好。第四季是 Digimarc 另一個強勁的季度。與去年同期相比，我們的 ARR 成長加速至 71%，訂閱收入成長加速至 37%，訂閱毛利率擴大超過 1,000 個基點至 87.3%。

This performance was a 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 that continuous improvement stage in which we are now, the fact is we can always be better tomorrow, and that will always be our goal.

這項業績是我們持續執行轉型策略的結果，但重要的是要注意，我們的轉型策略本身會繼續發展，正如我所希望的那樣。雖然隨著我們從2021 年第二季進入的激進轉型階段轉向我們現在所處的不斷迭代、持續改進階段，變化的速度正在減弱，但事實是我們的明天總是可以變得更好，而這將永遠是我們的目標。目標。

Constant iteration and continuous improvement could 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.

如果沒有一致的正向方向，不斷的迭代和持續的改進可能會令人困惑。我們真正的北方非常簡單。我們的目標是支持公司在數位轉型之旅中取得進展。為了實現這一目標，我們需要輕鬆地開展業務，並善於引導客戶完成整個旅程。

The initiatives we are pursuing in pursuit of our true north range maturation from just exiting ideation to already launched and in execution and the quality of both the initiatives as well as our execution of those initiatives will take the strength of our future performance. I want to use today's call to talk about four initiatives in greater detail because I believe all four likely to have outsized impacts in our quarterly results for years to come.

我們為追求真正的北方範圍成熟而採取的舉措，從剛剛存在的構想到已經啟動和執行的舉措，以及這些舉措的質量以及我們對這些舉措的執行，將成為我們未來業績的力量。我想利用今天的電話會議更詳細地討論四項舉措，因為我相信這四項舉措可能會對我們未來幾年的季度業績產生巨大影響。

The first is the recent launch of our next-generation configuration of our digital watermark, an initiative we've been working on for over two years. Our next-gen digital watermark is a culmination of a lot of incredible work by a lot of incredible people and represents not just a step-change improvement in our digital watermarking technology, but also allows us to knock over a barrier that has historically added friction in our quest to digitize the world's products.

第一個是我們最近推出的下一代數位浮水印配置，我們已經為此努力了兩年多。我們的下一代數位浮水印是許多令人難以置信的人們所做的大量令人難以置信的工作的頂峰，不僅代表了我們數位浮水印技術的階躍式改進，而且還使我們能夠克服歷史上增加摩擦的障礙我們致力於將世界產品數位化。

Yes, the latest configuration of our digital watermark delivers dramatic improvement in important areas such as security, adaptability, imperceptibility, and performance. And all of these improvements are important because they all deliver a step-change increase in value to our customers.

是的，我們的數位浮水印的最新配置在安全性、適應性、不可察覺性和性能等重要領域提供了顯著的改進。所有這些改進都很重要，因為它們都為我們的客戶帶來了價值的逐步增加。

But it is the addition of powerful new data access and detection controls that I believe will ultimately be what this new configuration is best known for. Because these controls not only deliver value to our current offerings, they also enable something never before possible. The application of digital watermarking to products and packaging well ahead of adoption of any Digimarc offering.

但我相信，這種新配置最出名的地方在於增加了強大的新資料存取和偵測控制。因為這些控制不僅為我們目前的產品帶來價值，而且還實現了以前不可能實現的目標。數位浮水印在產品和包裝上的應用遠早於任何 Digimarc 產品的採用。

With these new controls, companies can now embed our digital watermarks well ahead of planned activation, future proofing their products during planned packaging refreshes, regional rollouts, or ahead of future product digitization initiatives. This is not only a new capability of ours. It is something that no other data carrier can provide. It becomes yet another point of differentiation for us in our platform, while simultaneously allowing Digimarc and our partners to rapidly plant seeds we can harvest for years to come.

有了這些新的控制措施，公司現在可以在計劃的激活之前嵌入我們的數位浮水印，在計劃的包裝更新、區域推廣或未來的產品數位化計劃之前對其產品進行未來驗證。這不僅僅是我們的一項新能力。這是其他資料載體無法提供的。它成為我們平台的另一個差異化點，同時允許 Digimarc 和我們的合作夥伴快速播種我們可以在未來幾年收穫的種子。

The second initiative that I believe will have an outsized impact on future quarters is the evolution of our partner strategy to encompass and incentivize partners not yet ready to build their own products and services on top of Illuminate. This is another step towards our being easy began doing business with, in this case, not only for our customers, but also our partners.

我認為將對未來幾季產生巨大影響的第二項舉措是我們合作夥伴策略的演變，以涵蓋和激勵尚未準備好在 Illuminate 基礎上建立自己的產品和服務的合作夥伴。這是我們開始輕鬆開展業務的又一步，在這種情況下，不僅是我們的客戶，也是我們的合作夥伴。

Digimarc excels in supporting customers progressing in their digital transformation journey. But the identification or the authentication of physical and digital assets is critical. This superpower is applicable to almost every single industry and brings us in contact with an incredible number of potential partners. These partners in turn possess existing customers, large pipeline of prospects, many salespeople and incredible domain expertise.

Digimarc 擅長支持客戶在數位轉型之旅中取得進展。但實體和數位資產的識別或認證至關重要。這種超能力幾乎適用於每個行業，使我們能夠接觸到數量驚人的潛在合作夥伴。這些合作夥伴反過來又擁有現有客戶、大量潛在客戶、眾多銷售人員和令人難以置信的領域專業知識。

Our new Center of Expertise or COE program allows us to build a mutually beneficial relationship by combining the strengths we both bring to bear while also allowing us to benefit as we support our shared customers and progressing their digital transformation journey. The COE program is new, but the early results have been promising.

我們新的專業知識中心或 COE 計劃使我們能夠透過結合雙方的優勢來建立互惠互利的關係，同時也使我們能夠在支持我們共同的客戶並推進他們的數位轉型之旅時受益。COE 計劃是一個新項目，但早期結果令人鼓舞。

Taking a step back, just like our products themselves, our initiatives should also be accretive in the case of the two just mentioned, they indeed are. While the interest in our COE program was strong ahead of the announcement of our next-generation configuration of our digital watermark.

退一步來說，就像我們的產品本身一樣，我們的舉措也應該對剛才提到的兩個案例產生增值作用，確實如此。在我們宣布下一代數位浮水印配置之前，人們對我們的 COE 計劃表現出濃厚的興趣。

Post that announcement, the interest is notably increased. While all the improvements delivered by our latest digital watermark are resonating, it is the new data access and detection controls that have really spurred partner interest as they understand these controls not only help them ensure their customers, products, and packaging are future-proofed, but also allow them to share in our success. And those customers activate those watermarks by subscribing to a Digimarc offering.

該公告發布後，人們的興趣顯著增加。雖然我們最新的數位浮水印帶來的所有改進都引起了共鳴，但新的數據存取和檢測控制真正激發了合作夥伴的興趣，因為他們了解這些控制不僅有助於他們確保客戶、產品和包裝面向未來，但也讓他們分享我們的成功。這些客戶透過訂閱 Digimarc 產品來啟動這些浮水印。

The third initiative I'd like to discuss was one we announced just a few days ago. In pursuit of being easy began doing business with, we have opened a fifth avenue to market for Digimarc Recycle. Under this new avenue to market, Digimarc will license Digimarc Recycle to qualified partners who would then lead the regional or country-wide rollout of our powerful offering to address the plastic packaging pollution crisis.

我想討論的第三項舉措是我們幾天前宣布的一項舉措。為了追求輕鬆開展業務，我們為 Digimarc Recycle 開闢了第五條市場途徑。在這條新的市場途徑下，Digimarc 將向合格的合作夥伴授權 Digimarc Recycle，然後這些合作夥伴將領導我們強大的產品在區域或全國範圍內的推廣，以解決塑膠包裝污染危機。

To be clear, our other four avenues are still open. This is not a replacement, but an augmentation of the options available. And like I imagine many of our successful initiatives will be, this new avenue market was informed by conversations we had with multiple stakeholders who added their feedback to improve our final offering while sharing their excitement about its potential to open their markets.

需要明確的是，我們的其他四種途徑仍然開放。這不是替代，而是可用選項的增強。正如我想像的那樣，我們的許多成功舉措將是這樣的，這個新的大道市場是透過我們與多個利益相關者的對話得知的，他們添加了反饋以改進我們的最終產品，同時分享了他們對開放市場潛力的興奮。

This new avenue excites us as well because it has potential to not just the time to revenue, but also time to broad adoption. And when it comes to Digimarc Recycle, our interest in shortening time to adoption comes not just from the opportunity Digimarc Recycle presents us as a business, but also the opportunity that widespread adoption of Digimarc Recycle presents us as a planet.

這種新途徑也讓我們感到興奮，因為它不僅有可能縮短創收時間，而且有可能縮短廣泛採用的時間。當談到 Digimarc Recycle 時，我們對縮短採用時間的興趣不僅來自於 Digimarc Recycle 為我們作為企業帶來的機會，也來自於 Digimarc Recycle 的廣泛採用為我們作為一個星球帶來的機會。

Finally, as discussed at an investor conference last month, we are putting the finishing touches on some major updates to Digimarc Engage. Being easy to begin doing business with an excellent guiding customers along the journey sometimes entails providing the market something they've never had the ability to do before, new capabilities that lead to a better end customer experience while also revealing data that has never been -- that has never before been available for the revealing.

最後，正如上個月的投資者會議所討論的那樣，我們正在對 Digimarc Engage 的一些重大更新進行收尾工作。要想在整個旅程中擁有優秀的客戶指導，就可以輕鬆開展業務，有時需要向市場提供他們以前從未有能力做到的事情，新的功能可以帶來更好的最終客戶體驗，同時還可以揭示從未有過的數據—— ——這是以前從未公開過的。

Our upgraded Digimarc Engage will not only provide new functionality for physical products. It will also take the industry-leading capabilities of Digimarc Engage into the digital domain. Moreover, it will allow for a seamless experience between these two domains, something that is not possible with any other consumer engagement offering. We are excited to share more on this very, very soon.

我們升級的 Digimarc Engage 不僅會為實體產品提供新功能。它還將 Digimarc Engage 的行業領先功能帶入數位領域。此外，它將實現這兩個領域之間的無縫體驗，這是任何其他消費者參與產品所不可能實現的。我們很高興很快就此事分享更多資訊。

The results of our initiatives don't just show up in our quarterly results. They also allow our participation in important conversations focused on driving the world forward. As the pioneer and global leader in digital watermarking, we welcome the world's understanding of the power of this technology and believe it is our responsibility to lead our almost 30 years of experience and expertise to conversations in which digital watermarking is a topic.

我們舉措的結果不僅體現在我們的季度業績中。它們也使我們能夠參與致力於推動世界前進的重要對話。作為數位浮水印領域的先驅和全球領導者，我們歡迎全世界了解這項技術的力量，並相信我們有責任將我們近 30 年的經驗和專業知識引導到以數位浮水印為主題的對話中。

Throughout the fourth quarter, we participated in the series of meetings in Washington, DC with leaders from both the executive and legislative branches on the critical topic of AI security. We were afforded this opportunity given our expertise and proven track record of protecting some of the world's most recognized brands and critical assets.

在整個第四季度，我們參加了在華盛頓特區與行政部門和立法部門領導人就人工智慧安全這一關鍵主題舉行的一系列會議。鑑於我們在保護一些世界上最知名的品牌和關鍵資產方面的專業知識和良好記錄，我們獲得了這個機會。

In November, we were invited to participate in one of the Senate AI Insight Forums hosted by Senate Majority Leader Chuck Schumer and Senators Todd Young, Martin Heinrich, and Mike Rounds. It was there that I testified to the need of trustworthy digital watermarks in the fight for online authenticity given the advent of artificial intelligence.

11 月，我們受邀參加由參議院多數黨領袖 Chuck Schumer 以及參議員 Todd Young、Martin Heinrich 和 Mike Rounds 主辦的參議院人工智慧洞察論壇之一。正是在那裡，我證明了隨著人工智慧的出現，在爭取線上真實性的鬥爭中需要可信的數位浮水印。

We remain steadfast in our belief that among the many benefits gen AI will bring perhaps the most powerful will be catalyzing the safer, fairer, and more transparent Internet we all deserve. In addition to our work inside the beltway, Digimarc was appointed Co-Chair of the C2PA working group on digital watermarking, once again establishing our credibility and leadership and the authenticity ecosystem, a position we look forward to maintaining.

我們仍然堅定地相信，在人工智慧將帶來的眾多好處中，最強大的也許是促進我們所有人都應得的更安全、更公平和更透明的網路。除了我們在環城高速內的工作外，Digimarc 還被任命為 C2PA 數位水印工作組聯合主席，再次確立了我們的信譽和領導地位以及真實性生態系統，我們期待保持這一地位。

Whether it be individual events or ongoing engagements, two things are becoming clearer to more and more stakeholders: digital watermarking is a technology of unlimited potential and Digimarc is the company best positioned to bring that technology to the world.

無論是個人活動還是持續參與，有兩件事對於越來越多的利益相關者來說變得越來越清晰：數位浮水印是一項潛力無限的技術，而Digimarc 是最有能力將該技術推向世界的公司。

I will now turn the call over to Charles to discuss our financial results.

我現在將把電話轉給查爾斯，討論我們的財務表現。

Thank you, Riley, and good afternoon, everyone. Building on the positive financial trends we delivered in the third quarter, we saw continued progress in our financial performance during the fourth quarter in several key areas. Ending ARR grew to $22.3 million, representing a 71% year-over-year growth. Subscription revenue increased 37% year over year. Subscription gross profit margin reached 87.3%, a 1,000 basis point improvement. Operating expenses decreased 2% from Q4 last year. Non-GAAP net loss decreased $2.5 million or 31%, and free cash flow usage improved $2.2 million or 29%.

謝謝你，萊利，大家下午好。基於我們在第三季度實現的積極財務趨勢，我們看到第四季度在幾個關鍵領域的財務表現持續取得進展。年末 ARR 增至 2,230 萬美元，年增 71%。訂閱收入較去年同期成長 37%。認購毛利率達87.3%，提高了1,000個基點。營運費用較去年第四季下降 2%。非 GAAP 淨虧損減少 250 萬美元，或 31%，自由現金流使用量增加 220 萬美元，即 29%。

I highlight these areas as they are all critical drivers toward reaching positive free cash flow. ARR increased 71% from $13 million at the end of 2022 to $22.3 million at the end of 2023. The increase in ARR largely reflects the impact of new customer contracts, and to a lesser extent, several important customer upsells during the year.

我強調這些領域，因為它們都是實現正向自由現金流的關鍵驅動因素。ARR 從 2022 年底的 1,300 萬美元增加到 2023 年底的 2,230 萬美元，成長了 71%。ARR 的成長主要反映了新客戶合約的影響，並在較小程度上反映了年內幾個重要客戶追加銷售的影響。

As a reminder, we believe ARR is the best leading indicator for future commercial subscription revenue growth. Subscription revenue will lag ARR growth as subscription revenue is recognized ratably over the contract term versus ARR was recognized upfront upon entering into a contract.

提醒一下，我們認為 ARR 是未來商業訂閱收入成長的最佳領先指標。訂閱收入將滯後於 ARR 成長，因為訂閱收入是在合約期間內按比例確認的，而 ARR 是在簽訂合約時預先確認的。

Total revenue for the quarter was $9.3 million, an increase of $2.1 million or 29% from $7.2 million in Q4 last year, reflecting strong growth in both subscription and commercial and service revenue. Subscription revenue, which accounted for 60% of total revenue for the quarter, grew 37% from $4.1 million to $5.6 million. The increase reflects subscription revenue recognized on new customer contracts as well as upsells on existing customer contracts. Commercial subscription revenue grew at an even higher rate at 40%.

該季度總收入為 930 萬美元，比去年第四季的 720 萬美元增加了 210 萬美元，即 29%，反映出訂閱以及商業和服務收入的強勁增長。訂閱收入佔本季總營收的 60%，成長了 37%，從 410 萬美元增至 560 萬美元。這一增長反映了新客戶合約確認的訂閱收入以及現有客戶合約的追加銷售。商業訂閱收入的成長率更高，達到 40%。

Service revenue increased 18% from $3.1 million to $3.7 million. The increase primarily reflects a larger annual budget from the central banks for project work in 2023 than in 2022. Subscription gross profit margin improved from 77% in Q4 last year to over 87% in Q4 2023.

服務收入成長了 18%，從 310 萬美元增至 370 萬美元。這一增長主要反映了中央銀行用於 2023 年專案工作的年度預算高於 2022 年。訂閱毛利率從去年第四季的 77% 提高到 2023 年第四季的 87% 以上。

The large increase year over year reflects a favorable mix in subscription revenue to our newer products, which have higher gross profit margins than our legacy products. This bodes well for continued expansion of our subscription gross profit margins as we both migrate existing customers to our newer products and we sign up new customers.

年比大幅成長反映了我們新產品訂閱收入的有利組合，這些產品的毛利率高於我們的傳統產品。這預示著我們的訂閱毛利率將持續擴大，因為我們既將現有客戶遷移到我們的新產品，也簽署了新客戶。

Service gross profit margin was flat at 56% in Q4 for both years. We continue to expect service gross profit margin to be in the mid-50s on average going forward with some fluctuation quarter to quarter, depending on labor mix.

第四季服務毛利率連續兩年持平，為 56%。我們仍然預計服務毛利率平均將在 50 多歲左右，每個季度都會有一些波動，具體取決於勞動力結構。

Operating expenses for the quarter were $16.8 million compared to $17.1 million in Q4 last year, a decrease of 2%. Despite the impact of annual compensation adjustments for our employees, we were able to reduce our operating expenses year over year as we continue to focus on ways to maximize our productivity and efficiency as an organization.

本季營運費用為 1,680 萬美元，較去年第四季的 1,710 萬美元下降 2%。儘管年度薪酬調整對我們的員工產生了影響，但我們仍能夠逐年減少營運費用，因為我們繼續專注於最大限度地提高組織生產力和效率的方法。

Non-GAAP operating expenses, which excludes noncash and nonrecurring items, was $13.4 million for the quarter, down 6% compared to the $14.3 million in Q4 last year. Net loss per share for the quarter was $0.52 versus $0.62 in Q4 last year. And non-GAAP net loss per share was also considerably lower for the quarter at $0.28 versus $0.41 in Q4 last year.

本季非 GAAP 營運費用（不包括非現金和非經常性項目）為 1,340 萬美元，比去年第四季的 1,430 萬美元下降 6%。本季每股淨虧損為 0.52 美元，去年第四季為 0.62 美元。本季非 GAAP 每股淨虧損也大幅下降，為 0.28 美元，去年第四季為 0.41 美元。

We ended the year with $27.2 million in cash and investments. Free cash flow usage was $5.6 million for the quarter compared to $7.8 million used in Q4 last year. We used an additional $700,000 of cash in Q4 for share repurchases.

年底，我們擁有 2,720 萬美元的現金和投資。本季自由現金流使用量為 560 萬美元，去年第四季為 780 萬美元。我們在第四季額外使用了 70 萬美元現金用於股票回購。

Our free cash flow usage was down considerably in the second half of 2023 as compared to the first half of the year, largely reflecting the impact of growing our ARR. And as promised, free cash flow usage was noticeably less in the second half of 2023 as compared to Q2.

與上半年相比，2023 年下半年我們的自由現金流使用量大幅下降，很大程度上反映了 ARR 成長的影響。正如所承諾的那樣，與第二季度相比，2023 年下半年的自由現金流使用量明顯減少。

Given cash flows can fluctuate quarter to quarter depending on the timing of cash inflows and outflows, we continue to believe that a good proxy for a normalized level of free cash flow is using non-GAAP loss and adding capital expenditures. While the trend in free cash flow is significantly improved over the past few quarters and we expect it to continue to improve, we do expect Q1 2024 to be higher than Q4 2023 due to year-end related expenses, including annual incentive payments.

鑑於現金流量可能會根據現金流入和流出的時間而逐季度波動，我們仍然認為，自由現金流正常化水準的一個良好指標是使用非公認會計準則虧損和增加資本支出。雖然過去幾季自由現金流的趨勢顯著改善，我們預計將繼續改善，但由於年終相關費用（包括年度激勵付款），我們預計 2024 年第一季將高於 2023 年第四季。

As I'm sure you are all aware by now, we entered into a registered direct stock transaction over the weekend, whereby we raised $32.5 million of gross cash proceeds by selling 929,000 shares of our common stock at a price of $35 per share. The price represented only a 2.5% discount to the last trade.

我相信你們現在都知道，我們在周末進行了一項註冊直接股票交易，透過以每股 35 美元的價格出售 929,000 股普通股，籌集了 3,250 萬美元的現金收益總額。該價格僅較上次交易有 2.5% 的折扣。

This transaction not only topped off our balance sheet; it expanded our roster of both long-term and value-added shareholders. A special thank you to Rishi and the team at Altai Capital for the introduction to the new shareholders, their efforts in bringing this deal together, and their continued partnership.

這項交易不僅使我們的資產負債表達到了頂峰，而且還使我們的資產負債表達到了頂峰。它擴大了我們的長期股東和增值股東名單。特別感謝 Rishi 和阿爾泰資本團隊向新股東的介紹、他們為促成這筆交易所做的努力以及他們持續的合作關係。

After completing this transaction, we also decided to terminate our at-the-market or ATM stock program that we had established back in 2019. The ATM program will be terminated effective March 1, 2024. For the fiscal year, we made considerable progress in the underlying fundamentals of our business. Subscription revenue increased 25% from last year and 33% if you include the impact of our retired Piracy Intelligence product, while commercial subscription revenue grew at an even higher rate at 38%, excluding Piracy Intelligence.

完成本次交易後，我們也決定終止 2019 年建立的市場或 ATM 股票計劃。ATM 計畫將於 2024 年 3 月 1 日起終止。在本財年，我們在業務的基本面方面取得了長足的進步。訂閱收入比去年增長了 25%，如果考慮到我們已退役的盜版情報產品的影響，則增長了 33%，而商業訂閱收入的增長率甚至更高，達到 38%（不包括盜版情報）。

Subscription gross profit margin averaged 84.3% for the year, a 1,000 basis point improvement over last year. And operating expenses decreased $8.8 million or 11%, despite the headwinds from inflation. As a result of accelerating our subscription revenue growth, expanding our subscription gross profit margins, and lowering our operating expenses, non-GAAP loss decreased $12.1 million or 31% for the year, and free cash flow usage was more than cut in half, decreasing from $45.9 million in 2022 to $22.7 million in 2023.

全年認購毛利率平均為84.3%，比去年增加1,000個基點。儘管面臨通貨膨脹的不利影響，營運費用仍減少了 880 萬美元，即 11%。由於加速了我們的訂閱收入成長、擴大了我們的訂閱毛利率並降低了營運費用，全年非 GAAP 虧損減少了 1,210 萬美元，即 31%，自由現金流使用量減少了一半以上，減少了從2022 年的4,590 萬美元增至2023 年的2,270 萬美元。

We took a giant step in 2023 to move the company down the path to cash flow positive. We still have work to do, but we will remain maniacally focused on continuing to grow ARR, expanding our gross profit margins, and effectively managing our expenses to shorten that path.

2023 年，我們邁出了一大步，使公司走上了正現金流的道路。我們仍有工作要做，但我們將繼續瘋狂地專注於繼續提高 ARR、擴大我們的毛利率並有效管理我們的費用以縮短這條路徑。

For further discussion of our financial results and risks and prospects for our business, please see our Form 10-K that will be filed with the SEC later this week.

有關我們的財務業績、風險和業務前景的進​​一步討論，請參閱我們將於本週稍後向 SEC 提交的 10-K 表格。

I'll now turn the call back over to Riley for final remarks.

我現在將把電話轉回給萊利，讓其作最後發言。

Thank you, Charles. Q4 was another strong quarter for Digimarc made possible by the progress we've made on multiple important initiatives we have been pursuing since we began our transformation in Q2 2021. While we are through the most radical part of our transformation, we will always be focused on what's next, guided by our simple mantra of being easy to begin doing business with and excellent guiding customers along their journey.

謝謝你，查爾斯。第四季是 Digimarc 又一個強勁的季度，這得益於自 2021 年第二季度開始轉型以來我們一直在追求的多項重要舉措所取得的進展。雖然我們正在經歷轉型中最根本的部分，但我們將始終專注於下一步，以我們簡單的口號為指導，即輕鬆開展業務並在整個旅程中出色地指導客戶。

I believe the four initiatives we shared today are likely to become inputs to future strong quarterly reports, and it is important to note they are just the sampling of the things on which we are hard at work every day. I share my teammates' excitement about where we are going, as well as our urgency to get there, urgency that comes from knowing there is a massive market waiting for us to unlock it, and that we are in a unique position to do just that.

我相信我們今天分享的四項舉措很可能成為未來強勁季度報告的投入，重要的是要注意它們只是我們每天努力工作的事情的樣本。我和我的隊友一樣對我們要去的地方感到興奮，以及我們到達那裡的緊迫感，這種緊迫感來自於知道有一個巨大的市場等待我們去解鎖，而且我們處於一個獨特的位置來做到這一點。

Strong results are wonderful. And as we've said consistently over the last 2.5 years, we expect you to judge us on nothing but our results. But they are only made possible by never settling for the status quo and by always planting the seeds for future growth. The only constant, at least to, Digimarc is improvement and I don't expect that will ever change. The combination of this team and this tech is a scarily powerful mix. And as a team, we are excited by what the future holds.

強勁的結果是美妙的。正如我們在過去 2.5 年裡一直所說的那樣，我們希望您只根據我們的結果來評價我們。但只有永不滿足於現狀並始終為未來的成長播下種子，它們才有可能實現。唯一不變的，至少對 Digimarc 來說是改進，我不認為這一點會改變。這個團隊和這項技術的結合是一個可怕的強大組合。作為一個團隊，我們對未來感到興奮。

Stacy will now open up the call for questions.

史黛西現在將開始提問。

Thank you. And we will now be conducting a question-and-answer session. (Operator Instructions)

謝謝。我們現在將進行問答環節。（操作員說明）

Robin Knipp, Janney Montgomery Scott.

羅賓·克尼普，珍妮·蒙哥馬利·斯科特。

Thanks for taking the question. Riley, could you elaborate a little bit on the $1 -- less than $1 per capita and what that means? And who that is going to be applying to?

感謝您提出問題。Riley，您能否詳細說明一下 1 美元——人均低於 1 美元，這意味著什麼？這將適用於誰？

Yes. So thanks, Robin, for the question. How are you doing?

是的。謝謝羅賓提出的問題。你好嗎？

I've been well. Thanks.

我一直都很好。謝謝。

Good. Yes. So this is a new go-to market, as I said, perfected. Perhaps we've used the term to use along with some interested parties. So the partners could range from NGOs. They could range from the government. Think about range of systems integrators. And the less than $1 per capita is a total price that our partner would pay to roll out Digimarc Recycle in a region or a country.

好的。是的。因此，正如我所說，這是一個完善的新市場。也許我們已經與一些感興趣的各方一起使用了這個術語。因此，合作夥伴可以是非政府組織。他們的範圍可能來自政府。考慮系統整合商的範圍。人均不到 1 美元是我們的合作夥伴在一個地區或一個國家推出 Digimarc Recycle 所需支付的總價格。

So we're looking at a country's population. The price to our partner who would be in charge of orchestration of a rollout in the country or region will be less than $1 per person in that country or region.

所以我們正在研究一個國家的人口。負責協調在該國家或地區推出的合作夥伴的價格將低於該國或地區每人 1 美元。

So just as a follow-up, have you seen any traction with this pricing model yet?

那麼作為後續行動，您是否看到這種定價模式有任何吸引力？

We just launched it a couple of days ago, right? (laughter) So a little bit early. But I will say -- and I did say in the script though, right, this is not the first people have heard about as far as we started talking about it. And so here we are optimistic and we are excited.

我們幾天前才剛推出，對吧？（笑聲）所以有點早了。但我會說——我確實在劇本中說過，對，這並不是我們開始談論它時人們第一次聽到的。因此，我們對此感到樂觀和興奮。

And as you know, Robin, our excitement about Digimarc is certainly, yes, of course what it means for our business. But also we think this is a proven, powerful technology to address perhaps one of the top three problems this planet faces. So we want to see it get adopted as residents of this planet.

如你所知，Robin，我們對 Digimarc 的興奮當然是它對我們業務的意義。但我們也認為這是一項經過驗證的強大技術，可以解決這個星球面臨的三大問題之一。所以我們希望看到它被接納為這個星球的居民。

Understood. Thanks, and thanks again for the great quarter.

明白了。謝謝，並再次感謝這個偉大的季度。

Thanks, Robin.

謝謝，羅賓。

Jeff Bernstein, Silverberg.

傑夫·伯恩斯坦，西爾弗伯格。

Hi, good afternoon. So, Riley, you mentioned the new Digimarc watermark technology and the improvements there and interceptability being one of them.

嗨，下午好。Riley，您提到了新的 Digimarc 水印技術及其改進，而攔截性就是其中之一。

Can you just talk a little bit more about that? I remember, you know, quite a number of years ago there was discussion by some of the consumer-packaged goods guys about some of their very iconic artwork and whether they really wanted to embed watermark on that artwork, et cetera. So just talk to us a little bit about kind of the history of the perceptability of the watermark and what the improvements are like?

能再多談一點嗎？我記得，你知道，很多年前，一些消費品包裝商討論了他們的一些非常標誌性的藝術品，以及他們是否真的想在這些藝術品上嵌入水印等等。那麼請跟我們談談水印可感知性的歷史以及改進是什麼樣的呢？

Yes. Thanks, Jeff. So perceptability is impacted by two things: size of payload and then also the colors used to embed the watermark. And both of those we made incredible improvements on. I don't know if you've seen any of this stuff, for example, that we've rolled out for Recycle. These are some of the most iconic brands packaging that I think we would have all looked at five years ago. And that is going to be really, really hard to watermark and it's there and you can't see it.

是的。謝謝，傑夫。因此，可感知性受到兩件事的影響：有效負載的大小以及用於嵌入浮水印的顏色。我們在這兩方面都做出了令人難以置信的改進。我不知道你是否看過我們為回收而推出的這些東西。這些是一些最具標誌性的品牌包裝，我想我們五年前都會看過。這將非常非常難以加水印，而且它就在那裡，你看不到它。

So we're constantly looking at ways to knock down barriers. The new configuration of the watermark plays a part of that. So it is an update to our tools that allows for broader use of prominence and luminence keys or inputs, all focused on driving down that perceptability.

因此，我們不斷尋找消除障礙的方法。水印的新配置是其中的一部分。因此，這是對我們工具的更新，允許更廣泛地使用突出度和亮度鍵或輸入，所有這些都致力於降低這種可感知性。

And even ahead of this new watermark, I think we've made great strides as stuff on the shelf with the -- I guess, the fact you can't see it on the shelf maybe is the best proof of that. But it's always a focus how we can knock down barriers.

即使在這個新水印出現之前，我認為我們在貨架上的東西方面已經取得了很大的進步——我想，你在貨架上看不到它的事實也許就是最好的證明。但如何消除障礙始終是我們關注的焦點。

And that's great. And then on out there in the media, there's some discussion of a Sprite bottle, I think, in Europe that was completely laser engraved, so had no shrink wrapped, you know, label around the bottle and had a data carrier on it laser engraved. It didn't specify what kind it was. And I guess it's possible to do both on digital watermarking as well as QR codes or anything else that way.

那太好了。然後在媒體上，我認為在歐洲有一些關於雪碧瓶的討論，它是完全激光雕刻的，所以瓶子周圍沒有收縮包裝，你知道，標籤上有一個激光雕刻的數據載體。它沒有具體說明它是什麼類型。我想可以同時對數位浮水印和二維碼或其他任何方式進行處理。

But just talk about where we are on that laser engraving. And I think there may even be some other technologies that can be brought to bear there. And again, that was something that I know was not completely proven out as of a couple of years ago.

但僅談談我們在雷射雕刻方面的進展。我認為甚至可能還有一些其他技術可以在那裡發揮作用。再說一次，我知道這一點在幾年前還沒有完全得到證實。

Yes, yes. So on the Sprite bottles, I believe that was a limited market test. Would love to see the world move to label as again both as an opportunity for us as a business, but also for what it would mean for the planet. There is -- we've done studies -- this is before my time here, but I recall that there were studies that show that digital watermarks actually read better than QR codes in 3D in embedding.

是的是的。因此，對於雪碧瓶，我相信這是一個有限的市場測試。我很高興看到世界再次將其貼上標籤，這不僅對我們企業來說是一個機會，而且對地球意味著什麼。我們已經做過研究，這是在我來這裡之前，但我記得有研究表明數位水印實際上比 3D 嵌入的 QR 碼讀取得更好。

There's just more. I'm going to be laughed at by my technical team after this call. But there's more angles to which the light the catch digital watermarks we've chartered. So they do read better. The downside, of course, is you do need an app today to read a watermark. So I think there are definitely applications for consumer engagement where watermarks are great. I still think QR code is normally better. Now 3D might be the one that proves that digital watermarking is the best for that.

還有更多。這次通話之後我會被我的技術團隊嘲笑。但我們也可以從更多角度捕捉數位浮水印。所以他們確實讀得更好。當然，缺點是您現在確實需要一個應用程式來讀取水印。所以我認為在消費者參與方面肯定存在浮水印很棒的應用程式。我仍然認為二維碼通常更好。現在 3D 可能證明了數位浮水印是最適合的技術。

In terms of our work with lasers, the conversations are pursuing there. We talked about COEs earlier in the call. There's a couple of potential COEs that are actually laser based. It is just another great way to lay down our signal, whether it be ink, whether it be lasers, whether it be molds. The beautiful thing about digital watermarks, there's a lot of ways to embed them. And I agree I think lasers is a very interesting area in a lot of different ways.

就我們的雷射工作而言，對話正在進行中。我們早些時候在電話會議中討論了 COE。有幾個潛在的 COE 實際上是基於雷射的。這只是另一種表達訊號的好方法，無論是墨水、雷射還是模具。數位浮水印的美妙之處在於有很多方法可以嵌入它們。我同意我認為雷射在很多方面都是一個非常有趣的領域。

Got you. And then last question was in the past, there was an issue about -- and there's been some discussion in the media about reading without having an app on your phone. And I think there was an issue about Apple IOS embedding reading and not embedding reading versus, you know, everyone else. Can you just talk about where we are now on app-less reading?

明白你了。最後一個問題已經過去了，有一個問題是——媒體上有一些關於在手機上沒有應用程式的情況下閱讀的討論。我認為蘋果 IOS 有嵌入閱讀和不嵌入閱讀的問題，你知道，與其他人相比。您能談談我們現在在無應用程式閱讀方面的進展嗎？

Yes. So nothing to talk about publicly here. One of the things, if you think about are -- we've alluded there's a lot of benefits by uniting the digital and physical worlds, right? And for Digimarc validate the detection and Digimarc validate if we were on device would be a wonderful way to get a watermark detection on devices for physical goods as well. But nothing to update on that front, Jeff.

是的。所以這裡沒什麼好公開談論的。如果你想一想，其中一件事是——我們已經提到，將數位世界和物理世界結合起來有很多好處，對吧？對於 Digimarc 驗證檢測和 Digimarc 驗證我們是否在裝置上來說，這也是在實體商品裝置上進行浮水印檢測的絕佳方法。但傑夫，這方面沒有什麼好更新的。

Thanks very much.

非常感謝。

Of course. Thanks.

當然。謝謝。

(Operator Instructions)

（操作員說明）

Matt Collard, PCB Advisory.

Matt Collard，PCB 諮詢。

Hi, Riley. Hey, Charles. Congrats on the quarter. I just wanted to ask if there's an update you can give us on the -- anything on, say, digital watermark registry that was hinted at, I don't know, maybe early fourth quarter.

嗨，萊利。嘿，查爾斯。恭喜本季。我只是想問您是否可以向我們提供關於數位浮水印註冊表的任何更新，我不知道，也許是第四季度初。

Yes. Nothing to update specifically on that. One of the wonderful parts of entering this conversation is that number of people who realize we would be a great addition to their tech stack and maybe there's a partnership opportunity there. And so we are still progressing what we're doing.

是的。沒有什麼可以具體更新的。進入這場對話的美妙之處之一是，許多人意識到我們將成為他們技術堆疊的重要補充，也許那裡有合作機會。所以我們仍在繼續我們正在做的事情。

There is also a couple of people who have incredible registries focused on different end markets, different footprints, different levels of security in terms of government-grade versus non-government-grade. And we'll figure out the best path to market. Do we partner? Do we build our own? Do we do both? So nothing on that yet, Matt.

還有一些人擁有令人難以置信的註冊中心，專注於不同的終端市場、不同的足跡、政府級與非政府級的不同安全等級。我們將找出進入市場的最佳途徑。我們合作嗎？我們自己建造嗎？我們兩者都做嗎？所以還沒有什麼，馬特。

Okay. Fair enough. And I guess my follow-up to that, if I may. Congrats on your leadership and C2PA with Adobe on the working group. That's obviously well earned and impressive. And I understand you're early in your work.

好的。很公平。如果可以的話，我想我會對此採取後續行動。恭喜您在 Adob​​e 工作小組中的領導力和 C2PA。這顯然是值得的並且令人印象深刻。我知道你的工作還處於早期階段。

But could you give us or me a little bit of, I guess if you can, what the landscape might look like post those standards being developed? Is there going to be -- who's going to be ultimately responsible for the management oversight of those standards? Is that something C2PA would evolve into or another regulatory gatekeeper or industry driven?

但您能否給我們或我介紹一下，我想如果可以的話，這些標準制定後的情況會是什麼樣子？誰將最終負責這些標準的管理監督？這是 C2PA 會發展成的東西還是另一個監管看門人或產業驅動的東西？

Yes, I think the efforts now are to get the standard up and then it would probably be some that they would maintain compliance with that.

是的，我認為現在的努力是提高標準，然後他們可能會繼續遵守這個標準。

Joel, I don't know if you have any thoughts on that you want to add.

Joel，我不知道你對此有什麼想法要補充嗎？

No, I think that's right. It's early. The C2PA will set the standard specification, but it's a little early as to how much detail we'll put into that standard in terms of specifying a technology or guide posts for implementation of the digital watermark.

不，我認為這是對的。現在還早。C2PA 將制定標準規範，但就具體說明數位浮水印實施的技術或指南而言，我們將在該標準中加入多少細節還為時過早。

The key is that the digital watermark is going to be used to link the content to the authentication and provenance information. So that's the first part of the standard that will be set and the implementation of the watermarking technology will be figured out later.

關鍵是數位浮水印將用於將內容連結到身份驗證和出處資訊。這是將要製定的標準的第一部分，水印技術的實現將在稍後解決。

Would you envision an oversight body in that, Joel, I guess, as a follow-up?

我想，喬爾，你會設想設立一個監督機構作為後續行動嗎？

Yes, I think C2PA will continue to be that that standard-setting organization who will oversee that.

是的，我認為 C2PA 將繼續作為標準制定組織來監督這一點。

Fair enough. Thanks. I'll jump back into the queue. Appreciate the response.

很公平。謝謝。我會跳回隊列。感謝您的回應。

Thanks, Matt.

謝謝，馬特。

We've come to the end of our Q&A session. I would like to turn the call over to Riley McCormack for closing remarks.

我們的問答環節已經結束了。我想將電話轉給萊利·麥考馬克（Riley McCormack）做總結發言。

Thank you, Stacy, and thank you, everybody, for your time this afternoon. I hope you have a great rest of your day. Thanks.

謝謝你，史黛西，也謝謝大家今天下午抽出寶貴的時間。我希望您今天休息愉快。謝謝。

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.

今天的電話會議到此結束。此時您可以斷開線路，感謝您的參與。