Digimarc Corporation and Honeywell announced a partnership to embed Digimarc’s on‑scanner digital security software into Honeywell’s handheld retail scanners, including the Xenon XP series and the Xenon XP 1950. The integration is slated for early 2026, allowing retailers to detect tampered gift cards at the point of sale and reduce fraud losses while speeding checkout.
The gift‑card fraud market is a significant threat to retailers, with losses rising 364% from 2018 to 2021. The global market was valued at $1.24 trillion in 2024 and is projected to reach $2.31 trillion by 2030, creating a large addressable opportunity for on‑scanner verification technology. By placing its watermarking solution in a high‑volume retail channel, Digimarc positions itself to capture a share of this expanding market.
Digimarc’s recent financials show a challenging environment: Q3 2025 revenue fell 19% to $7.63 million, and the company posted a non‑GAAP net loss of $0.10 per share. In Q2 2025, revenue was $8.0 million, down 23% YoY, with an EPS of –$0.11. Despite the revenue decline, Digimarc’s EPS beat expectations, largely because the company disciplined costs and maintained a high gross‑profit margin of 58% in Q3 2025, down only modestly from 62% the year earlier.
The partnership is a strategic response to Digimarc’s revenue contraction. CEO Riley McCormack emphasized the company’s focus on combating AI‑driven fraud and building a “trust layer for the modern world.” By embedding its technology in Honeywell scanners, Digimarc aims to generate new recurring revenue, offset contract expirations, and accelerate growth in its core gift‑card security segment. Honeywell’s decision to adopt the solution signals confidence in Digimarc’s technology and expands the company’s footprint in a high‑volume retail environment.
Investors have reacted to Digimarc’s earnings with mixed sentiment: a Q2 2025 earnings miss in revenue led to a 5% drop in the stock, while a Q3 2025 EPS beat was offset by a revenue miss that caused a 7% after‑hours decline. The new partnership is expected to improve investor confidence by providing a clear growth engine, but the company will need to demonstrate that the integration translates into measurable revenue and margin gains in the coming quarters.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.