Digimarc Corporation

Greetings. Welcome to the Digimart Q2 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Charles Beck, Chief Financial Officer. Thank you, Charles. You may begin.

Thank you, Max. Welcome, everyone, to our Q2 earnings call. I'm Charles Beck, Digimark's CFO, and I'm joined today by Paul Carrero, Digimark's CEO. On the call today, Paul will share his plans for the next 90 days, and I will provide a business update and discuss our Q2 2026 financial results. This will be followed by a question and answer forum. 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 specific risk factors Paul, I'll turn the call over to you now. Great. Thank you, Charles.

Hello, everyone. Before I walk through the plan, I want to spend a moment on why I took this role, just to lend through which everything else I say today should be understood. When I looked at DigiMark, I saw a company trading well below the value of what had actually been built on, proprietary technology, a genuinely differentiated platform, and real provable customer outcomes already in production. held back by commercial execution gap that is entirely fixable. That is rare and frankly an exciting setup. The hardest part, building durable technological differentiation has already been done. What was missing was leadership focus, structure, and accountability to convert that differentiation into revenue at the pace it deserves. I built my career around finding exactly this kind of situation and I'm genuinely energized by how much upside sits on the other side of straightforward execution discipline. That conviction is the foundation for everything you'll hear from me on this call. 30 days into this seat, my conclusion is not that DigiMark lacks a differentiated technology position. The platform, the IP underlying our digital and physical watermarking capability, and the depth of our Illuminate stack should not be in question. What has been in question is commercial execution. whether the organization could reliably convert genuine technological differentiation into a forecastable and repeatable revenue motion. That is the constraint we will address, and it is the lens through which I would ask you to evaluate everything else in this plan. The first concrete evidence of that shift are two early leadership items. We have brought in a chief revenue officer who now holds quota, pipeline, and forecast accountability, across every vertical, a single point of ownership that simply did not exist before. And that alone is one of the highest leverage changes we can make. Diffuse commercial accountability is one of the more common and, importantly, one of the more correctable causes of underperformance in businesses our size. And we've now closed that gap. Alongside that, we've hired a VP of retail solutions who I know well. They give our largest and fastest moving vertical dedicated leadership. rather than share part-time attention it received historically. Both hires matter to this narrative for the same underlying reason. They provide focused and dedicated ownership and accountability, and that is what produces forecast results and reliability. We are standing up a real go-to-market engine and leadership team, which I have built successfully a number of times over my career. External messaging discipline, a functioning revenue operations capability, a pre-sales value engineering capacity in support of our new leadership model rather than layered into the old structure. We are tightening forecasts and pipeline rigor to the standard this market should expect. And I'm confident we'll get there quickly because the underlying demand signals and proof points I'll walk you through shortly are already strong. We are redesigning our organization in order to achieve disciplined, focused, and accelerated growth. We have a plan already in motion, and that is the difference between a company with a problem and a company executing an accelerated transformation. The plan itself rests on four priorities. I want to walk you through not just what they are, but why they are sequenced the way they are. Because the sequencing is itself a statement about capital and operating discipline.