Digimarc Corporation — Earnings Quality Grade F
DMRC · Technology
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 70 days, change +9 days YoY
AR outpaced revenue for 2 consecutive years
Revenue -11.7%, CFFO 55.7%. Cash follows revenue
Expense Quality
No material inventory
CapEx growth 90.4% is >2x revenue growth -11.7%
SG&A/Gross Profit = 155.3%, exceeds 70%
Gross margin 61.6%, change -1.5pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
Small-cap context: Small-cap CFFO/NI often diverges from working-capital swings, not necessarily manipulation.
FCF is negative ($-0.0B)
Accruals ratio = -38.8%. Low accruals
Cash $0.0B covers debt $0.0B
Balance Sheet Health
Goodwill+Intangibles $0.0B = 65% of equity. Over 50%
Debt/EBITDA = -0.2x. Healthy
Other assets 16.0% vs revenue -11.7%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions negative for 3 years
Small-cap context: A single acquisition on a small balance sheet can trip serial-acquirer logic.
Goodwill+Intangibles change -15% YoY. Normal
Manipulation Score
M-Score = -4.26 (< -2.22). Unlikely manipulator
Portfolio monitoring
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Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25