January 2018

NASDAQ: DMRC

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 Safe Harbor Statement
This presentation includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933, as amended, which reflect management’s current view with respect to future events and performance, including statements
regarding: projected gains in operational efficiency, reduction of labor costs and increased customer satisfaction our customers could realize from implementing
Digimarc Barcode; the size of the total addressable market for Digimarc Barcode and anticipated revenue we could realize from serving that market; potential
applications for and performance of our products and services, and related sources of revenue. Although these statements are based upon expectations and
beliefs concerning future events we believe to be reasonable, they are subject to risks and uncertainties which are difficult to predict and, in many instances, are
beyond our control. These risks and uncertainties include, but are not limited to: the size and growth of our markets; protection, development, enforcement and
monetization of our intellectual property portfolio; adoption or endorsement of our technology by leading companies in the retail and consumer products
industries or standard-setting bodies or institutions; our future profitability; competition from larger companies or alternative technologies; acceptance in our
markets of our revenue models and pricing structures; and the risks detailed in our filings with the U.S. Securities and Exchange Commission from time to time,
including the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016. We believe that the risk factors
specified above and the risk factors identified in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016 and our other filings
with the U.S. Securities and Exchange Commission, among others, could affect our future performance and the liquidity and value of our securities and cause
our actual results to differ materially from those expressed or implied by forward-looking statements made by us or on our behalf. All forward-looking statements
made by us or by persons acting on our behalf apply only as of the date of this presentation. We expressly disclaim any obligation to update or revise any
forward-looking statements to reflect future events, information or circumstances that arise after the date of this presentation or a change in our views or
expectations, or otherwise.

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 20 Years of Innovation in Media Security

Listing
NASDAQ: DMRC

Market Cap
~$400M

Employees
~200

Years Banknotes Driver Licenses Digital Media

~22 Years
Digimarc has a 22-year Digimarc was the leading Digimarc Barcode and Discover
Offices history working with a provider of driver licenses in are used for TV, Ebooks, Music
Portland, USA (HQ) consortium of leading the United States from the and Digital Images, and Photos.
San Mateo, USA central banks developing early to late 2000s. In 2015, Digimarc won an
Cologne, Germany a global counterfeit Emmy Award for Engineering
Tokyo, Japan deterrence system. Creativity in Audio/Video.

Intellectual Property
1,100 Patents issued
and applied for

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 Delivering Shareholder Value

Investment in Long Term Assets Nearing Inflection

• TTM Revenues: $26mm / R&D: $15mm / EBITDAS: ($16mm)
• Core plus growth opportunity
• Clearly articulated market development strategy targeting enormous market opportunity
• Cash consumption $5-6mm per quarter; new revenue streams in early stages
• Working capital: $61mm cash and investments with no debt at 9/30/17
• Raised $12mm of capital in November via reverse inquiry, at market price, with minimal cost

History of Delivering Shareholder Value

• Focus on long term assets has created significant shareholder value
• $310mm in cash to shareholders from 2008 sale of $100mm revenue division
• $46mm in share buybacks at an average price of $26/share
• $7mm in dividends from 2012 to 2014
• 29% CAGR in EV since 2008 sale ($37.35/share on 1/10/18 vs. $11.50/share on 8/1/08)

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 Transformational Tech Targeting Enormous Markets

Transformational Technology for Global Supply Chain

• Consolidated 20 years of R&D into Intuitive Computing software and services platform
• Digimarc “Barcode of Everything™” outperforms conventional UPC barcode
• Rollout underway for retailers and consumer product manufacturers
• Powers many applications to improve operational efficiency and consumer engagement
• Projected to save retailers billions of dollars in labor costs through faster, easier checkout

Enormous Addressable Market

• Generally human imperceptible data carrier for all media that outperforms conventional
barcodes
• Comprehensive mobile discovery software platform
• TAM: 100s of millions of barcodes in global supply chain
• Retail IT services market expected to expand to $117 Billion By 2021*
• Targeting world’s largest retailers and brands

Sustainable Competitive Advantage

• 20 year history in high security; proven proprietary algorithms
• 1,100 patents issued and pending

* IHL Group, “At Your Service: Retail IT Services Market Study”

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 Digimarc Intuitive Computing Platform™ (ICP)

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 History of the Barcode
On June 26, 1974, the first product with a UPC barcode —
a pack of Wrigley gum — passed over a scanner in Ohio.
Universal Product Code Symbology
• Transformative technology
• UPC based on GTIN as pillar of GS1 Standards
• Estimated 700 to 800 million GTINs in active use*
• Five billion retail barcode scans per day

• * https://www.wsj.com/articles/tech-partnership-looks-beyond-the-bar-code-with-digital-watermarks-1452623450

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 What is Digimarc Barcode?

A product code (barcode) is a machine- Digimarc Barcode (or DWCode™) contains the
readable code displayed as a 1D pattern of same information as a Product Code as a human
parallel lines of varying widths. imperceptible, machine-readable 2D pattern of
minimally contrasting dots within artwork elements.

VS

GTIN = 00856107006854 Also contains GTIN = 00856107006854

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 How Does it Work?

Provide File Evaluate Design Enhance Elements Connected Package

Deliver press-ready file Digimarc or enhancement Minor adjustments are Design is printed
from designer, pre-media partner evaluates the made to color and normally with no special
provider, or printer design brightness of dots within inks or substrates
design elements

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 Digimarc Barcode – The Barcode of Everything™

Digimarc Barcode

• Generally imperceptible by
humans in normal use for all
media
• Does everything UPC
barcode does, but better
• Can be applied to audio as
well as images
• Reliable, efficient,
economical, and scalable
Looks Like This Performs Like This

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 The Connected Package

Mobile Handheld Fixed Inspection

Devices Scanners Scanners Systems

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 Retail Market Conditions

Low margins

Intense competition

Amazon forces innovation and demonstrates financial market rewards

Key themes:
• Low prices

• Convenience

• Operational efficiency

Consumers demand more information

Regulators demand more information

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 The Connected Package Lifecycle: Path to IOT

Manufacturing Warehouse Retail Distribution Center

• Monitor on-line production • Scan readily from a distance • Streamlining sorting and delivery
• Reduce manual intervention • Limit orienting for identification • Verify logistics and returns

Home Point of Sale Retail Store

• Access brand and social content • Easily scan products & labels • Scan for branding info & product transparency
• Point and scan to buy now & re-order • Provide frictionless customer experience • Manage planogram & availability (OSA)

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 Easy Checkout with Digimarc Barcode

Benefits to Customers & Self Checkout

• Improve overall customer experience
• Less effort to scan
• Shorter time in line
• Minimize need to lift bottom of basket items

Benefits to Associates
• Easier cashier scanning
• Reduce repetitive motion injuries
• Less time to scan bottom of basket
• Decrease fraud

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 Faster Checkout: One, Six or Dozens of Barcodes?

1
3
6

5
2

Large, visible barcodes on Dozens of barcodes

every side of the package across all surfaces

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 Retailer Associate Mobile Applications

Better Inventory Management

• In-stock availability
• Re-ordering & fulfillment status
• Shelf audits
• Dynamic pricing

Instant Product Knowledge

• Scan for on-floor information for associates
• Respond to customer FAQs
• Instructions for use; health and safety guidance

Less Effort to Scan and Label

• Less handling of products
• Limit human error & intervention
• Quicker, more reliable data entry

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 Improving the Shopping Experience for Consumers

Explore and Purchase Complementary Products

• Multi-modal detection of Digimarc Barcode, UPC/EAN, or
QR
• Instant access to SmartLabel and other information

Inspirational ideas and offers at point of

purchase decision
• Coupons & Special Offers
• Recipes
• Videos

Product Transparency
• Nutritional Data
• Product Origin
• Social Impact Information

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 Improving Marketing Efficiency for Consumer Brands

Improve On-shelf Availability

• Simplify on-shelf availability & planogram audits
• Audit Shelf Edge Label for package accuracy

Information for Consumers & Associates

• Up-to-date detailed information can be provided &
updated by brand when product is scanned
• Coupon delivery at the point of purchase decision

Additional Use Cases

• Cross-promotions
• A/B testing; geographical promotions, etc.

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 Early Adoption by Progressive Retail Grocers & Brands

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 Platform Architecture and Business Model
IDENTIFICATION
Proprietary Digimarc Barcode
Digimarc Barcode
• Platform license fee
• For packaging: $50/year/fee/Barcode; or,
• Enterprise annual license, with broader
scope
• TAM: 700-800M product GTINs; billions
of other addressable items
• Opportunity: billions of dollars of annual
license revenue
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DISCOVERY
Multi-Modal SDK
Multi-Modal Discovery Software
Digimarc Discover
• Software Development Kit
licenses
• Software integration and
maintenance fees; revenue
shares
APPLICATIONS
ICP Solutions
• Licensing home grown applications
• Professional services for design;
implementation; consulting
• Partner Rev Shares: royalties;
software licenses; maintenance and
service fees
 Digimarc Intuitive Computing Platform™ Solutions
Mature Software Solutions
• Guardian (Images &
e-publications)
• Payments (Central Banks &
IDEMIA)
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Investments in Growth Professional Services Research & Development
• Digimarc Barcode for: • Package & Media • Clean Shelf Labels
Enhancement
• Packaging • Serialized Digimarc Barcodes
• Quality Control
• Thermal Labels • Manufacturing Machine Vision
• Integrations
• Hang Tags • Multi-factor Authentication
• Training
• Audio • FMCG Counterfeit Deterrence
• Consulting
• Digital Media • Coupon Offer Delivery via Mobile
• Custom Development
• Commercial Print • Print on corrugated
• Digimarc Mobile Software
Development Kit (SDK)
• Digimarc Embedded Systems
 Digimarc Barcode & Blockchain
Benefits of merging Blockchain with
Digimarc Barcode:
• Shared version of data entries
• Increased security and trust between parties
• Reduced data duplication and reconciliation
• Reduced cost of label production
• Simplified and more accurate scanning process
via increased redundancy
• Competent data carrier across all media

Market development activities:

• Published whitepaper: “Watermarking
Technology and Blockchains in the Music
Industry” – April 2017
• Erudition and Digimarc announce Bitcoin-based
anti-piracy solution for eBooks – Sep 2017
• Early discussions about logistics with major
retailer and suppliers

Farm Transport Production Transport Retail Transport Home

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 Expanding Digimarc Ecosystem
Applications
Store Operations Supply Chain / Retail Automation / Internet of Things /
Industrial Automation System Integrators Blockchain / Track & Trace
Walmart, Wegmans, New WestRock Microsoft, Bossa Nova, EVRYTHNG, HP Inc.,
Seasons, Vestcom, Vestcom, Toshiba, Monic Erudition, AlpVision
FutureProof, Aila

Identification Discovery
Graphic Design Tools Smartphone Application Developers
Adobe, Pantone Walmart, Wegmans, HP Inc., Shazam, ReVision, Future Proof
Design, Prepress and Printing Scanner OEMs
SGS, SGK/Schawk, Perrigo, Sun Branding, WestRock, DNP, Datalogic, Honeywell, NCR, Zebra, IDEC
Berry Global, BeeGraphic, OIA, RockFish, Endeavour Media,
Retail Scale OEMs
Linkz, NAGASE
Bizerba, DIGI, ITW/Hobart, Mettler Toledo
Global Barcode Standards
Machine Vision OEMs
GS1 US, GS1 Germany
To be announced

Established Solutions
Government Security Digital Media Anti-piracy & Copyright Music, Movies, TV
Leading Central Banks, IDEMIA Widen, Adobe Scene7, LibreDigital/LSC Verance, Nielsen, Kantar, Verimatrix, Nagra
Communications Kudelski

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 Example of Scaling of Business Within Accounts
INTIATIVES DESCRIPTION
Thermal Labels Digimarc Barcode is a more reliable
and efficient barcode on thermal
printed labels for fresh foods & bulk
items
Connected Packaging Digimarc Barcode applied to
(Private Brands & Branded packaging for scanning to improve
Products) retail operation efficiencies and
access to consumer product
information
Shelf Labels Digimarc technology applied to both
packaging and shelf labels to
automatically inspect for planogram
compliance and on-shelf availability
High Shrink Items Increase ease of scanning of top
shrink items
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BENEFITS
• More reliable scanning of labels [damaged, unreadable labels in prepared
foods]
• Provide dynamic pricing and discount capabilities
• Simplify markdown and checkout training
• Improve accuracy, reduce waste, and deter shrink [Identify expiration, discount
to sell, and fraud]
• Consumer information and coupons
• Easier, more streamlined checkout
• Mitigate strain of repetitive scanning for associates in front-of-store
• Improved accuracy for shelf/inventory analytics
• Consumer engagement and product transparency initiatives
• Reliable and efficient identification for shelf audit and planning
• Drive accuracy, speed, and consistency for associates/automation
• Improve speed and readability of enhanced items for post-checkout audits
• Provides less intrusive audit experience for customer
 2017 Year In Review
Financial
• Revenues were up, but not as much as we wanted
• Operating loss increased as we expanded operational capabilities to support scale
• Share price appreciated ~20%
• Raised $30mm at market price via two registered direct offerings
• Cash consumption @ ~$5 to $6mm per quarter entering 2018
• Grew contribution margin in established areas of Payments and Media & Entertainment
• Publicized evidence of momentum

Customer
• Added customers: Walmart; two other Top 10 retailers
• Expanded production with undisclosed customers
• Progress with leading CPGs
• Added, trained and improved support for Channel Partners
• Fostered application development: Digimarc Barcode for Thermal Labels, hangtags,
hangers, shelf labels, serialization, manufacturing quality control
• Established footholds in Europe and Asia with GS1 Germany and Japan Study Group

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 Why is This Taking So Long?

WALKING A TIGHTROPE OF BUSINESS TRANSFORMATION

Digimarc Wants: Customers Want:

Supplant the Traditional Barcode Minimal Impact to Business Processes

Customer Revolt Standardization/Customer Equilibrium Customer Appeasement

Benefits: Economies of scale, quality Benefits: Minimal investment and risk of change
control, reliability, and transparency Drawbacks: Delay, waste of resources, sub-
Drawbacks: Risk of delays in orchestrating optimal implementation, complexity, higher cost
support and demonstrating impact due to customization

Goals: Supplant the traditional barcode Goals: Customization, ease of transition,

perceived lower risk

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 2018 Priorities

Financial
• Grow Digimarc Barcode for packaging bookings
• Launch Digimarc Barcode for Thermal Labels for fresh grocery products
• Significantly grow revenues
• Deliver tipping points that further accelerate revenue growth
• Manage working capital effectively
• Publicize evidence of progress among early adopters, collaboration with leaders, and
industry momentum
Customer
• Focus on strategic accounts: implementation, execution, and share of wallet
• Establish collaborations with global leading retailers and CPGs
• Develop key geographical markets: US, Germany, and Japan
Operational
• Elevate industry partnerships: business development, collaboration and service
• Expand and improve effectiveness of Channel Partner program
• Support application developers
• Increase our operational effectiveness
• Innovate for speed and scale: solutions, tools, and support
• Improve cost effectiveness and quality of Digimarc Barcode package enhancement
process

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 NRF Highlights
Fresh Departments
• Unveiled new Digimarc Barcode for Thermal Labels in conjunction with Bizerba, DIGI, ITW, Food Equipment Group
(Hobart) and Mettler Toledo scales
• Demonstrated Aila technologies, utilizing the Digimarc Mobile SDK, in an Apple iOS device-based Interactive Kiosk and
handheld Mobile Imager for scanning perishable food labels
• Featured Future Proof Retail’s app, enhanced with Digimarc’s Mobile SDK, demoing its capabilities for shoppers to easily
scan product packaging for brand content; and scan and pay in the app, skipping traditional checkout

Front Checkout
• Highlighted examples of Digimarc Barcode-enhanced product packaging from Sun-Maid, Wegmans and New Seasons
• Leading original equipment manufacturers (OEM), Datalogic, NCR, Honeywell and Zebra, demonstrated their latest in-
counter and handheld scanners

Center Store
• Vestcom featured @shelf®, its proprietary shelf-edge technology enhanced with Digimarc Barcode
• WestRock featured an in-store display and examples of private label and serialized Rx allergy medicine packaging with
Digimarc Barcode
• Ditto Hangers, in conjunction with OIA Global, demonstrated recycled-content hangers with Digimarc Barcode to provide
efficient, data-rich capture for apparel processing, sales and marketing

Future
• Bossa Nova robot, in the Intel booth, showcased automatic and accurate monitoring of on-shelf inventory with Digimarc
Barcode
• Digimarc and WestRock demonstrated direct printing of Digimarc Barcode on corrugated boxes that lowers costs, and
improves reliability and efficiency, in logistics

Digimarc Technology Goes Global

• Examples of Digimarc Barcode-enhanced product packaging from Japan and Europe were showcased in the booth

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 Digimarc at NRF 2018

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 Digimarc at NRF 2018

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 Digimarc Barcode for Thermal Labels Launch

Get a Reliable Scan with

Damaged Fresh Food Labels

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 Digimarc Barcode for Thermal Labels

Reliable Data Improve Productivity Better Experience

Improve inventory accuracy Easily scan damaged Connected labels for easier
and reduce overrides and ripped labels checkout and content

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 Summary

Validated Mission Critical Compelling Retail & CPG Mobile Discovery for Store Enormous Market and
Proprietary Technology Value Proposition Associates and Consumers Attractive Business Model

• High-security digital • Improves operational • Powerful consumer • Competitive advantages

watermarking pioneer efficiency and consumer engagement tool for clear and documented
engagement brands with minimal
• 20 years in counterfeit • Licensing model indicates
packaging impact
deterrence with Central • Impacts many aspects of enormous potential scale
Banks consumer product life • Visual Search – leveraging with strong margins and
cycle the ubiquity of recurring revenues
• Broad adoption of licensed
smartphones and
solutions in multiple • Can save retail industry • Highly-qualified and
appealing to the
industries billions experienced management
“Snapchat” generation
team with decades of
• High quality partners and • Early adoption by
• Greater Product Lifecycle industry experience
early customers Wegmans, New Seasons,
Management – generates
McCormick, Sun-Maid; • Good stewards of capital
• Vote of confidence from highly valuable consumer
working with other larger with track record of
global barcode licensing insights for retailers and
CPGs and retailers providing attractive returns
authority GS1 brands
to shareholders
• Potential for rapid brand
• 1,100 patent assets and
adoption once a big
proprietary trade secret
retailer adopts
algorithms

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©2018 Digimarc Corporation • www.digimarc.com