Greetings and welcome to the Digimarc first quarter 2024 financial results conference call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, George Karamanos, Chief Legal Officer. Thank you, sir. You may begin. Welcome to our Q1 conference call. Riley McCormack, our CEO, and Charles Beck, our CFO, are with me on the call. On the call today, we'll provide a business update and discuss Q1 2024 financial results. This will be followed by a question-and-answer forum. 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. Riley will now provide a business update. Thank you, George, and welcome aboard. Hello, everyone. Thank you for joining today's call. As our world becomes increasingly digital and companies progress their digital transformation journeys, Digimarc maximizes the ways in which products and multimedia can digitally interact with the various systems that surround them. We excel at the identification and authentication of physical goods and digital assets, often at massive scale, and often where other means of identification or authentication don't work well or don't work at all. Our focus is on converting this large total addressable market into substantial free cash flow by positioning ourselves to deliver high and long-lasting top-line growth at world-class operating margins. This starts with our being easy to begin doing business with and excellent at guiding customers along their digital transformation journey and is aided by four tailwinds we've been very intentional to create. One, our incredibly deep and wide modes provide us the ability to offer differentiated products. In turn, our differentiated products allow us the ability to create new markets as well as to disrupt existing ones, all while delivering best-in-class gross margins that will continue to expand as we scale. Two, the need to identify or authenticate physical goods and digital assets is universal, and thus almost every entity in the world is a potential Digimarc customer. At the same time, our technology allows us to identify and authenticate things where other solutions don't work well or don't work at all, which means our ecosystem is comprised of companies incentivized to partner with us as opposed to companies that pose competitive risk. These two truths provide us the exciting opportunity to leverage our partner's customer list pipelines and go-to-market resources and specific domain expertise to deliver quickly scalable and high gross profit margin revenue in a way that is also extremely efficient from an operating expenditure perspective. Three, there are many use cases that require companies to identify or authenticate their physical items and digital assets and many ways we can configure our technology to achieve these goals and therefore our ability to productize new functionalities open-ended. This means our already prodigious TAM will continue to grow as we either launch new products or add opportunity unlocking functionality to existing products. Four, w e engineer our products to be accretive, which means the more Digimarc products a customer buys, the more value each product delivers. This positions us to harvest the low-hanging and highly profitable fruit of cross-sells and upsells for years to come. The combination of these four tailwinds is why we are confident in our ability to deliver high and long-lasting growth at world-class operating margins and in so doing achieve our goal of converting our enormous TAM into massive free cash flow generation. Our first quarter results provide multiple tangible examples I'd like to now share. We signed a multi-year deal with a customer in the collectibles industry that delivered six-figure ARR growth in Q1. Moreover, this deal should see ARR grow to $2 million in year two and into the mid to very high seven figures in year three and beyond. Collectibles is a new industry for us and one we believe is ripe for digital transformation in both how items are identified as well as how they are authenticated. To that end, this customer chose to start their journey with two Digimarc products, Digimarc Automate and Digimarc Validate, and we believe that as we work to ensure our valued customer's success, there's even more we could help them accomplish beyond what is scoped in this initial agreement. Moreover, and unrelated to this deal, we are in discussions with multiple partners, both new and old, regarding opportunities to jointly provide value to other companies in this multi-hundred-billion- dollar-per-year industry. Collectibles is a perfect example of an industry that has been held back by other means of identification and authentication not working well or not working at all, and we are excited to guide this industry along its product digitization journey and in so doing accelerate its growth. We signed a high five-figure ARR Digimarc Automate deal with a division of our largest commercial customer that will grow to six figures in the very near term. We believe this new deal is yet another proof point that we are still just scratching the surface of all the transformational value we can provide this uber-valued and tech-forward customer. We remain laser-focused on doing just that. We have sold a longstanding Digimarc Validate customer that had historically only been focused on B2B and counterfeit applications but is now keenly interested in expanding the authentication capability of Digimarc Validate to end consumers. This upsell allows our customer to unlock new functionality that we just recently productized, and we believe the opportunity with this customer for B2C validation is enormous. We are excited to prove our value and earn the right to capture the entirety of the opportunity this new functionality allows with this specific customer as well as many, many other companies that will benefit from this newly productized functionality. We signed a deal with another customer interested in beginning their journey with two Digimarc products, in this case an iconic European brand interested in the power of Digimarc Engage and Digimarc Validate. While this initial deal was mid-five figures, this relationship has the potential to grow to be much larger even if the customer doesn't expand beyond these two Digimarc products. It is also important to note that this customer understands the accretive nature of our products and has already expressed interest in another Digimarc product beyond Digimarc Engage and Digimarc Validate. We signed a Digimarc Validate deal with an existing Digimarc Automate customer and have additional pipeline opportunities for both products with this extremely large CPG. Our focus is on not only proving the value of Digimarc Validate and Digimarc Automate but also of Digimarc as a digital transformation partner as the upside presented by this single customer is enormous as it is not only a large company but a very viable candidate for our full product suite. We upsold Digimarc Engage to a longstanding Digimarc Validate customer and believe the upside from their planned rollout of Digimarc Engage will see this high five-figure initial deal grow well into the six figures in the near term and future. Our go-to-market strategies are not just increasing our win rates, however, but also our momentum as evidenced by other Q1 deals, including a six-figure upsell of Digimarc Engage to an existing customer just over a year after the initial agreement was signed. Additionally, we secured a Digimarc Validate agreement with a new customer within 38 days of our initial discussion as well as revived a previously inactive relationship by signing a Digimarc Validate deal with another new customer only 45 days after re-engagement. These achievements highlight the effectiveness of our refined approach and the strong demand for our solutions. The final first quarter wins that I want to highlight today involve the closing of two separate Digimarc Validate deals with divisions of an existing Digimarc customer, one with a division new to our offering and one with a division who churned in 2023. This 2023 churn was a result of our holding firm on key terms during the renewal process, and the rebound signing is a testament to the incredible value Digimarc Validate provides. Important to note, even during the period during which this division was not a customer, they continued to act as a Digimarc champion in our conversation with other divisions and were key to our closing the new division we signed this quarter as well as progressing other divisions currently in our pipeline. We are thrilled to have this division back as a customer. While not normally a topic discussed voluntarily in prepared remarks, I do want to spend a few minutes discussing customer churn as this is yet another area in which we differentiate. First, as this example shows, while we are not immune to churn, I expect our churn will always remain much lower than other SaaS companies as the solutions we provide tend to be mission-critical and Digimarc is unique in being able to provide them. Our premium offerings also mean we do more business with established companies, and the overall trends from which we benefit are unlikely to be defunded by companies undergoing organizational change. Also important to note that not all churn is regrettable, especially for a company that has undergone the transformation that we have executed here. As we have productized functionality previously sold as bespoke offerings and been acting with intentionality to not deviate from our long-term vision, we have been guided by a decision we made at the onset of our transformation and shared with you all in an earnings call in 2021. We will build a focused, profitable, and sustainable business versus pursuing ARR growth at all costs. Not every dollar of revenue is created equal, and when forced to choose, we will always prioritize the creation of long-term, not short-term value. While acting as a headwind to our reported net ARR growth since we began our transformation, this headwind of non-regrettable churn is predominantly behind us. And what's more, this discipline will allow us to avoid the distractions that can impede vision realization as well as maximize our overall profitability by maintaining a focus on the profitability of each customer. But this discipline can also lead to short-term benefits as well. And in Q1, we recorded a six-figure ARR upsell as a result of a legacy customer choosing to accept our right-sized pricing despite this pricing being significantly higher than their legacy deal. Before I turn the call over to Charles, I want to touch on what we refer to as our ecosystem-driven opportunities: Digimarc Recycle, Digimarc Validate Media, and Digimarc Retail Experience. While these opportunities provide game-changing upside that will be extremely fast, profitable, and sticky once they each begin to scale, the ultimate timing of when exactly that happens is tough to predict as it is ultimately outside of our direct control. These opportunities require the collaboration of multiple parties and in some cases may be accelerated by regulatory action. Yet once the spark is lit, they should be extremely sticky and grow exponentially due to well-understood network effects and natural incentives for rapid adoption. Do not read any signaling into what I just said. It is something we've said before. And also, let me be very clear in saying that we remain just as excited about these three giant opportunities and just as optimistic about the impact they will each have when they do begin to scale. Instead, I wanted to focus today's prepared remarks on the other pieces of our business which don't receive the attention from investors that we believe they should. While Digimarc Recycle, Digimarc Validate Media, and Digimarc Retail Experience tend to make up the vast majority of investor questions, they don't yet contribute in a meaningful way to the incredibly high and accelerating growth we've been delivering in both ARR and commercial subscription revenue. There are many unique aspects to Digimarc, and this is yet another example. We're delivering strong results in the parts of our business where we directly assert control while progressing and growing the untapped opportunities which will provide stair-step increases in growth and profitability when they do indeed occur. An investment in Digimarc is both an investment in a quickly growing and accelerating software business with best-in-class and expanding gross margins and an investment in a company that is progressing towards becoming the de facto market standard in some really exciting and massive opportunities with a third leg of value provided by our work with the World Central Banks that delivers steadily growing revenue and high inflation-protected operating margins while acting as a profitable source of commercial and intellectual property generation. We are the sum of these three pillars of shareholder value. Before I gave an update on the ecosystem-driven opportunities that I fully agree are incredibly exciting components of our future, I wanted to spend the majority of this call on the incredibly exciting components of our business generating ARR today. Digimarc Recycle. As discussed in the last call, we recently launched a new go-to-market avenue for this revolutionary product, and I am happy to share we are in conversations with multiple parties regarding this new avenue, including two parties in the same country. We are also in conversations on two continents about leveraging our Center of Expertise program as a way to bring our partners considerable heft to bear in opening Digimarc Recycle markets. Success on either of these fronts would speed the time to opening of Digimarc Recycle markets while in parallel reducing the associated costs. Success on the latter front would add the additional benefit of bringing these partners into our COE program and thus allow for the building of pipeline for our other products as well. Turning to other important developments for Digimarc Recycle, the European Packaging and Packaging Waste Regulation has been finalized, and we are all awaiting the final full text. Recall that all previous drafts of this regulation mandated digital marking on all packaging as a means to improve waste sortation, which would provide an incredibly strong tailwind for opening Digimarc Recycle markets in every country in the EU. Moreover, it has already been made public that the PPWR will mandate deposit return schemes in countries where collections are below a very high bar. This will provide equally strong tailwinds for our ability, in conjunction with partners, to apply the power of Digimarc Illuminate to power these schemes across the European Union. Recall that Digimarc Illuminate provides a differentiated and lower-cost means to provide the product authentication required by a performant DRS, and this use case was a key component in the $32 million deal we signed a few quarters ago. Also in Europe, the Holy Grail trial is in its final phase, and while the step change improvement that digital watermarks will bring to plastic recycling is already widely acknowledged, we are excited to support this wonderful group through the end of this trial so Digimarc Recycle can claim the powerful validation that will come from receiving an industry-driven tech readiness level nine designation. We are also supporting this group as they optimize their planning for an initial market launch. While we are unable to speak to any updates on this front, we do want to flag to our investors to be on the lookout for an exciting update on all Holy Grail activities that we are being told will come soon. On Digimarc Validate Media, as regulators worldwide endeavor to strike the right balance between protecting against the harm of generative AI without stifling the incredible advancements it will bring, there is an increasing awareness that tools that can do both, like digital watermarks, must be seized. We are actively involved in these conversations, providing our 30 years of expertise in applying digital watermarks to build massive systems of trust and authenticity. In Q1, Digimarc was appointed as a founding member of the National Institute of Standards and Technology U.S. Artificial Intelligence Safety Institute Consortium. We also announced that, along with Adobe, we are co-chairing the new digital watermark workgroup of the Coalition for Content Provenance and Authenticity, or C2PA. On the product front, we released the world's first browser extension to turn Chrome into a C2PA validator and, along with our value partner DataTrails, put the finishing touches on the industry's first fully integrated content protection solution to fortify digital content using advanced digital watermarks in tandem with cryptographic proofs, a solution we announced in early April. We are big believers that of all the many benefits GenAI will bring, perhaps the greatest will be to act as the catalyst to deliver the safer, fairer, and more authentic internet we all deserve. To help deliver this much-needed future, we announced in January that we have made our safe digital watermarking embedding and detection tools for digital assets free to large ecosystem partners so that our Digimarc Validate customers will have easy access when they are ready to adopt at scale. There is a lot more going on that is not yet ready for broader discussion. But before I close on Digimarc Validate Media, I do want to point everyone to the State of California and Assembly Bill 3211, which is focused on authenticity and watermarking standards and might end up being the catalyst for the catalyst and in so doing build upon California's proud history of leading the world on important issues. Realizing that real damage is being done every day, that action is delayed, the California Assembly has a wonderfully fast time frame in mind, and I was honored to be asked to testify last week on the feasibility of the key provisions in this bill. We are excited to provide our support as this bill continues its fast progress through the California State Assembly and hopefully soon into law. Multiple global regulators are closely watching this bill, and its impact will be felt not just domestically but around the world. On Digimarc Retail Experience, while there is little we can say about this opportunity due to the immense pride we take in being a trusted supplier, I did mention earlier in the call that we signed an Automate deal with our largest commercial customer who is also key to the broad adoption of Retail Experience by the global CPGs. The opportunities presented for digital transformation between the world's leading product digitization company and a company that touches a mind-boggling number of products across multiple touchpoints, both physical and digital, is truly exciting. The two most impactful ways to bring those opportunities to fruition are, A, win their business every day through a maniacal focus on delivering them excellence, and B, not speaking about their business on their behalf. I will now turn the call over to Charles to discuss our financial results. Thank you, Riley. Good afternoon, everyone. Continuing on the positive trends we delivered in the third and fourth quarters last year, we again delivered improved year-over-year financial performance in the first quarter this year. Ending ARR grew to $23.9 million, representing an 85% increase. Commercial subscription revenue increased 52%. Subscription gross profit margin was 87%, a 7.5 percentage point improvement. Operating expenses decreased 10%, and non-GAAP net loss decreased $3.5 million or 39%. I highlight these areas again as they are all critical drivers toward reaching positive free cash flow. Before I begin a deeper review of the quarter, I want to highlight that we've posted a quarterly earnings snapshot presentation to the investor relations section of our website along with our normal quarterly materials. The quarterly earnings snapshot is broken into two parts. The first part provides an overview of our business and contains, among other things, a deeper dive into our three different commercial go-to-market motions as well as key details of the three pillars of shareholder value, which Riley highlighted earlier. The second part provides an overview of the quarter and presents our financial KPIs with relevant comparative and trended data. As you will see, we have delivered accelerating growth in both the year one and three-year periods for ARR and commercial subscription revenue as well as a material improvement in our subscription gross profit margins. We will continue to refine the material in the quarterly earnings snapshot in the quarters ahead, and we welcome your feedback as we strive to provide investors continued clarity and transparency. ARR increased 85% from $13 million at the end of March last year to $23.9 million at the end of March this year. The increase in ARR largely reflects the impact of new customer contracts and several important customer upsells. As a reminder, we believe ARR is the best leading indicator for future commercial subscription revenue growth. Revenue growth will lag ARR growth as commercial subscription revenue is generally recognized ratably over a contract term versus ARR is calculated upfront upon entering into a contract. You can see this in looking at our Q1 results as ARR increased 85% year-over-year while commercial subscription revenue increased 52%. Total revenue for the quarter was $9.9 million, an increase of $2.1 million or 27% from $7.8 million in Q1 last year, reflecting strong growth in subscription revenue. Subscription revenue, which accounted for 58% of total revenue for the quarter, grew 48% from $3.9 million to $5.8 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 52%. Service revenue increased 6% from $4 million to $4.2 million. The increase primarily reflects the timing of program work with the central banks. Subscription gross profit margin improved from 79.5% in Q1 last year to 87% in Q1 this year, representing a 7.5 percentage point improvement. The large increase year-over-year reflects both strong growth in subscription revenue combined with a favorable mix in subscription revenue to our newer products, which have higher gross profit margins than our legacy products. Service gross profit margin was down slightly from 56.7% in Q1 last year to 56% in Q1 this year. It is not unusual to see some fluctuation in service margins depending on labor mix for services work. We expect to generate mid-50% service gross profit margins on a normalized basis. Operating expenses for the quarter were $17.1 million compared to $19 million in Q1 last year, a decrease of 10%. Operating expenses in Q1 last year included $2.1 million of one-time severance costs for organizational changes we made in February 2023. Excluding these severance costs, operating expenses were up only $200,000 year-over-year or 1%, reflecting the impact of annual compensation adjustments for our employees offset by lower headcount. Company-wide, we continue to focus on ways to maximize our productivity and efficiency as an organization in order to minimize the impact of rising labor and other costs. Non-GAAP operating expenses, which excludes non-cash and non-recurring items, were $13.8 million for the quarter, down 11% compared to $15.5 million in Q1 last year. Net loss per share for the quarter was $0.50 versus $0.70 in Q1 last year, and non-GAAP net loss per share was also considerably lower for the quarter at $0.27 versus $0.45 in Q1 last year. We ended the quarter with $48.9 million in cash and short-term investments after raising $32.5 million of gross proceeds through a registered direct offering that closed in February. Free cash flow usage was $8.6 million for the quarter compared to $8.9 million in Q1 last year. As we foreshadowed on the last earnings call, free cash flow usage in Q1 included annual cash incentive payments to our employees. The company paid annual cash incentives of $2.9 million in Q1 to our employees for exceeding our 2023 financial targets and strategic goals. Excluding these cash incentive payments, free cash flow would have been $5.7 million. 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 the small amount of capital expenditures we invest. Our non-GAAP loss was $5.5 million during Q1 this year versus $9 million in Q1 last year, a decrease of 39%. We also used an additional $1.8 million of cash in Q1 for share repurchases. For further discussion of our financial results and risks and prospects for our business, please see our Form 10-Q that will be filed with SEC later this week. I will now turn the call back over to Riley for final remarks. Thanks, Charles. Q1 was another strong quarter for Digimarc. Compared to the quarter a year ago, we grew quarter-ending ARR 85%, grew commercial subscription revenue 52%, and expanded subscription gross profit margin 7.5 percentage points to 87%. While investors remain understandably and rightfully excited about what our massive ecosystem-driven opportunities will contribute to our future, I am so proud of what the team is delivering and the massive opportunities in front of us today. Our top-line growth has been accelerating from already high levels. Our best-in-class gross profit margin continues to expand, and we are positioned to convert an incredibly high percentage of the resultant gross profit dollars to the bottom line by leveraging our partners to further boost our top-line in an incredibly OpEx-efficient way. There are many things that make Digimarc a unique and generational investment opportunity. The fact we have three very real, tangible, and quantifiable pillars to our shareholder value story is one of the most powerful and at the same time, perhaps the least understood. I encourage you all to review the quarterly earnings snapshot that Charles referenced for more on this front. As always, we remain focused on positioning ourselves to convert our large total addressable market into substantial free cash flow by delivering high and long-lasting growth at world-class operating margins. Q1 provided multiple tangible examples of our progress against this focus, and we remain excited for what's ahead. Maria, we will now open the call up for questions. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Our first question comes from Joshua with Reilly Needham. Please proceed with your question. Yeah. Thanks for taking my questions and nice job, and congrats on the 85% ARR growth there. I'm curious, what's the initial response you're hearing from customers on the next-gen digital watermark upgrade here, and how much of a factor was that in some of the deals that you kind of highlighted here in the quarter, or is that more something that's going to be on the come as a growth driver in the second half of the year? Thanks, Joshua. Thanks for dialing in. And yeah, great question. So off the top of my head, I don't think any of the deals that closed in Q1 took advantage of our next-gen digital watermark, but our pipeline is full of them. As we talked about on the last call, there's a lot of key unlocks from the next-gen digital watermark. One of them is the Apply Now, Activate Later functionality that we can roll out. We talked about how important that was going to be to our COE program. And I guess stay tuned for our Q2 call. We'll give you more details on the initial upramp and success in our COE program, but that's key there. But even with the brands that we're currently doing business with, having the understanding that, "Hey, they understand they're taking some of the Digimarc products on some of their products today, maybe regionally," but the idea that now they can, during package refresh, apply this, Apply Now, Activate Later, next-gen digital watermark to all of their packaging, huge, huge, huge unlock. So really excited by the initial reception. It is specifically on the COE program, something that is really driving conversations and getting people to our highest COE tier because that's the only place it's available to our partners. But even with our existing brands and understanding now that they can future-proof all of their packaging, even if they're not ready to adopt immediately a Digimarc product, huge unlock and an ARR increase. Got it. That's helpful. And then on the Digimarc Engage product, with the upgrade now, are you going to be making any changes to your go-to-market there, and how should we just kind of be thinking about the potential growth for that product in general with the upgrade? You mean the upgrade by adding the digital functionality? Yes. Yeah. It's just another differentiator, right? So there's a lot of things that as you know, Digimarc Engage is the one product where potentially the most competitive in terms of having competitors can offer some of the functionality. This is just another differentiation. There's a lot of differentiation we have on the physical side with our thought leadership in Digital Link, our best-in-class redirection engine, the fact that we are a platform, right? And so a lot of consumer engagement offerings are one-stop shops. So the fact that there's so much more with Illuminate people can do besides Engage, the fact that because of Digital Link and Sunrise 2027, this is becoming more of an IT purchase as opposed to a marketing purchase. So all of those things play in there. We've just opened up another front where we differentiate from everybody else, which is we can provide all that amazing functionality in the digital domain. And while that itself is exciting, both with conversations with end customers but also partners who are really wrapping their head around what we can do, just by itself, that would be exciting, the fact that we can provide a unified view and inform campaigns that are cross-domain. This is rarified air, right? This is sort of the HolyG rail of everything that every tech company is trying to do is, "Yeah, it's interesting to track somebody or to provide people content in the digital domain. And it's interesting to do that in the analog world." But man, tying those two together, incredible unlock. And it's a differentiator that's resonating. Got it. That's helpful. And then last question for me. I don't think you guided this specifically, but how are you thinking about the cash burn for the balance of the year relative to the recent capital raise and the cash that you have on your balance sheet and kind of just thinking out in terms of capital allocation for the balance of the year? Thanks, guys. Yeah. So cash can fluctuate quarter to quarter as I highlighted in my prepared remarks. Obviously, Q1 is a lot higher than what we think a normalized level is because of the cash payments. And that's why I highlight back to the non-GAAP loss really being a more normalized level. And so our focus is continuing to grow the top line, expand our margins, reduce costs to continue to decrease our non-GAAP loss, which you can see has been trending down significantly year-over-year, down 39%. So that's our primary focus. We don't give guidance itself on cash flow. Part of that's because it's difficult to predict because of the inflows or outflows. But our mission as a company is really focused on driving down that non-GAAP loss, which will directly translate into improved free cash flow. Got it. That's helpful, guys. Thank you. Thanks, Josh. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Jeff Van Rhee with Craig- Hallum Capital Group. Please proceed with your question. Hey, guys. Congrats. Couple for me tonight. So just if I could start on the ARR, $24 million up from $13 million a year ago. You've added $11 million in incremental ARR. Specifically, as you're willing to, where has the incremental $11 million in ARR come from with respect to use cases? I'd say the majority of it's come from our platform itself. But it's a combination of new contracts is the majority of it over the last year, but then also significant upsells with our customers. And Riley highlighted several of those in Q1. We've highlighted some of those in prior periods. So it's a combination of really our platform itself and then Validate and Engage are the two other primary drivers. Okay. Maybe shift gears to the sales front. As I think about how the sales team operates, I mean, and I'm just looking at slide nine in your deck today, which I appreciate, you got a ton of end-market opportunities. In thinking through how that sales force is structured, I know you've got greatly enhanced leadership. You're really doing some good things there. Take a minute and just talk about your sales org and, in particular, how do the go-to-market, how the reps are tasked, how it's broken down right now would be helpful. Yeah. So we have direct sales, people that are calling on accounts, have industry-focused, geographic focus. And then we have our market development team that are focused on some of the bigger opportunities. We're very specific to call it market development and not business development because business development's like two to three years. Market development is six to 12 months maybe. Let's actually develop a market so we can unlock it and then throw a bunch more of AEs after that market. And so in the market development, some of our bigger opportunities, like the ecosystem-driven opportunities would fall into there, some of the bigger one-off deals, but also lighting up our COE partners, right? And that's the key unlock here is, to your point, there are so many verticals, so many areas that we could be going after where we don't need to go in there and become an expert in every single vertical. And even if we wanted to be the expert, we don't have the 15 years of showing up to the trade shows that people expect, especially vendors in the Validate, the anti-counterfeit space, right? Our partners do. And so we have a team focused on opening up the COE partners. The COE partners then act as legitimizers. It's a speed-to-time to market, right, because they have existing customers. They have pipeline. They have massive sales forces themselves. But it's also the domain expertise. It's coming in and saying, "Hey, we have this incredible anti-counterfeit partner that you should meet called Digimarc," and making those introductions. So then when those introductions come in, the direct reps pick it up. So that's really the focus. Direct, as it's been with market development and the COE openings, comes under market development. Then any leads that come out of the COE program go back to the direct reps unless they're at our highest-level COE where the partners can actually sign deals on their own paper. That's helpful. Then one other for me, if I go back to this slide 9, I know you're saying here that the individual color codes are not breaking down the pipe necessarily per se by percentages for each of these opportunities. And I'm not clear if the general scope of the increase of the annual pipeline that's expressed here is accurate either. So maybe the question would just be, can you give us a sense, some quantification of the expansion of late-stage pipeline now versus 6, 12, 18 months ago? Anything along those lines would help. I would say the expansion of the pipeline's really across all of those key product areas. And I elected to, or I shouldn't say elected, but didn't mention Automate earlier. That's a product too that's contributed to ARR. So I mean, it really goes across the gamut here of opportunities we look at on our pipeline. Obviously, COE is a big area of focus. We're continuing to improve Validate and Engage opportunities there, both upsell and with new customers as well as the platform. And then we highlight on here too security solutions and deposit return systems. Those are big opportunities in our pipeline as we look forward as well. Yeah. And Jeff, we don't talk about our pipeline. We don't quantify our pipeline. But to answer your question, I think your holistic question, it's a lot bigger, obviously, right? I mean, we need to have the pipeline ahead of the ARR. And so look at what our ARR has done, and the pipeline looking forward has to be there to support it. One of the reasons we don't quantify pipeline, right, is we've had this conversation. We have massive opportunities in our pipeline. And no matter what percentage we assign, we're going to be wrong. It's either going to close or it's not going to close, right? So it gets really tough when you're the size that we are, right? This is a reality we're always going to have, I hope. We have these massive boulders in our pipelines. But when they become less massive, related to the size of the existing, it becomes more noise. For us, it gets really hard to quantify externally pipeline because there are some really wonderful singles and doubles-type business, right? Examples like the deals that we talked, I talked about in the prepared remarks today. But there's also these giant boulders. And it's hard to put a. It's not hard. It's impossible to put a percentage on them because whatever percentage probability we assign, that's not right. It's either going to close or it's not going to close. It's either 0 or 100%. Yep. Got it. Great. Thanks, Riley. Thanks, Charles. Thanks, Jeff. Our next question comes from Jeff Bernstein with TD Cowen. Please proceed with your question. Hey, guys. Just wanted to ask a little bit more about the Deposit Return Scheme opportunity. There's a lot written in the last couple of weeks about in order for these European countries to even sort of get into a positioning where they could be on track for the plastic reuse and recycling goals that they have, they almost have to get on Deposit Return Schemes. Can you just flesh that out a little bit and talk a little bit about what kind of timeframes you think that stuff has to happen? And can you tell us if the one that your partner had ongoing has launched yet or kind of any learnings from that? Yeah. So the reason, Jeff, I'm guessing you've seen a lot on the DRS stuff is because of the. I don't want to call it a leak because it came from the EU, but they haven't released the final text for the PPWR. So a lot of the questions you're asking will be in the final text. But they made very clear that one of the things they have talked about because they released a few of the bigger policy things, that if for any country where collection is not above an incredibly high bar and I don't remember exact. I think it's like 90%. It's an incredibly high bar. Yeah. I think that was. They're going to have to roll out DRS. Yeah. So they're going to have to roll out DRS, right? And so one of the key parts of a DRS, I mean, DRS is a pretty simple concept. You put a deposit on a bottle or a can, and then when you return it, you get your deposit back. So the systems themselves are pretty easy. The problem is the fraud. And there's a million examples. There was a family in Arizona that's, I don't know, what happened. I haven't been following the case. But it was a headline where they made $6 million taking products from Arizona and bringing them to California. It's fraud, right? So what they need is a way to authenticate that the products that are being returned actually were part of the deposit return scheme, that there was a $0.05 or $0.10 deposit placed against that product. There's a lot of ways to do product authentication, right? A lot of them are really expensive. Our value that we offer through Digimarc Validate is the same value prop we offer DRS. And in general, lowering the cost of a DRS system because they are expensive is wonderful. We can also democratize it in so far as in a lot of places, it's not just the cost. It's also they don't have 60,000-square-foot supermarkets that can have one of these really expensive RVMs, reverse vending machines. People want to use their cell phone at a bodega in the countryside, right? So that's where we come in. Just like we offer a differentiated offering with Digimarc Validate for any product authentication, we can do the same thing, which is a key component of the DRS. It's not an area that we want to get into directly ourselves. This is an area we'll go through our partners. But a really exciting opportunity. We can't wait to see the final text of the PPWR and move forward from there based on all the marching orders. And again, the key thing about the PPWR, right, is the R stands for regulation, which means it's not negotiable. But member states are going to have to adopt whatever's in this final text. Gotcha. Okay. And then anything on your partner's initial win and how that's progressing and kind of any learnings from that? Yeah. Progressing well. I don't really know if there's any learnings yet to date. But we will just like with our biggest commercial customer, the best way to earn the trust every day is to not talk about our customer's business on their behalf. But obviously, because this is a national scheme, I would assume it would become very public whenever the country's ready to talk about it and it's rolling out, I'm sure. Once we're allowed to amplify it, trust me, Jeff, we will. Yeah. Understand. Okay. And then just wanted to make sure I understood on Automate. Does Automate imply that there is some factory automation element to how something's being used, or is that not the right way to automatically think about it? No, that's right. It's in fulfillment centers, distribution centers. It's a way to apply digital watermarks in the Illuminate platform in the process of some sort of automation, right? So multiple use cases or sorry, multiple locations, right, distribution centers, fulfillment centers, where this could be applied, where there's currently automation today. And either one, there actually is an automation and it's still being done by humans because of other means of identification don't work at all, or there is some automation and it doesn't work well or it's really expensive because other means of identification don't work well. And that's the opportunity. If you see in our deck, we will officially launch Automate in the not-too-distant future. Incredible. We haven't even launched this product yet. We have multiple customers, not just historic, but if you paid attention to the prepared remarks, there was multiple deals in Q1 just from Automate. That is an example of having wonderful partners in this space as well as just a real demand for a high ROI return, which is either we're actually allowing the initial steps of automation where none existed before, or else we're taking an automation that was kind of kludgy or didn't work well and bringing it into the 21st century. Terrific. And then last question. In terms of that newish ability, because I think you only started talking about it pretty recently, of tracking consumer interactions both in the e-commerce world and then in the physical world, it sounds like you already are signing some deals related to that? On the digital side? Yeah. Or on the hybrid of, "Yeah, we're going to follow both the e-commerce and physical world." Yeah. Yeah. So nothing yet signed. We announced this not too long ago. It takes a while for pipeline. But it's an area of interest, not just directly with some existing customers, but really from our partners because this is something that they wrestle with, our partners, right? They're getting asked to do some really difficult things. There's a very big partner of ours that's talking about how they're trying to help customers in the multimedia world, right? And they can offer stuff like content repositories or creating artwork, not just for physical packages, but for e-commerce sites. That's all really, really important and really, really interesting. The more opportunities we can offer in this hybrid world through our partners, it just makes their conversations easier. It gives them a reason to ping their existing customers, say, "Hey, no, we haven't talked in a while. We have this great new partnership with this company called Digimarc. "I tell you more." So I would assume here it's going to be partner-led only because our partners get this. And you have a conversation. This is back to the operating leverage our COEs will give us. You have a conversation with a partner, and that partner's got 1,000 salespeople. You can have 1,000 customers or 1,000 conversations with customers through that entity as opposed to us going back during QBRs with our existing customers and saying, "Hey, let's see about this new functionality." So I would assume this one in particular, and as we've been talking about, a lot of our business, customer-led. But just like I think Jeff was asking about the Apply Now, Activate Later in the next-gen digital watermark, the COEs get it. They get it immediately. There's a lot of excitement. Okay. And just to understand from kind of a real-world example. So you could have a packaging VAR who has been discussing Digimarc watermarked packaging and the interaction that that allows with people who then is going back to say, "Oh, and by the way, the Digimarc's ability to track all of this in a cloud-based database means that we can now also intercept when somebody has interacted online relative to some offer that you made or relative to something on social media, etc., etc. And we can wrap that into a complete view of how the person interacted, not just with the package, but with your other advertising or promotional messages. Good. Kind of, but not really. So two things, right? The two partners that most get this are the premedia/printing partners, right? And this is where customers are coming to them and saying, "Hey, how do we apply with Sunrise 2027? You're the packaging expert." Or, "Hey, we want to put a QR code on our packaging for consumer engagement," right? Up until now, they're like, "Great. We can put a QR code on and do this stuff." They didn't have the technical backend or the expertise or the technology to say, "I'm so glad you asked us about that. Let's talk about how we can apply this not just to your physical packaging, but also to all your own multimedia. Let's have a broader conversation where we're not just talking about packaging," which tends to be a competitive industry, right, for our partners. And say, "Let us talk about this whole thing we can offer even in the digital domain." And that makes their end customers a lot stickier because now they're not just coming to put QR codes on a package. They're coming to them to solve a bigger to get what they wanted to do with QR codes with a direct-to-consumer channel, but across both the packaging but also the internet. The other big area of partners are the advertising agencies, right? So these advertising agencies are in charge of coming up with campaigns. And one of the things we can offer is not just stickier customers or a chance to reach out. They also can monetize building a campaign. We don't want to be in the content creation business of putting together this incredible I mean, some of these campaigns are seven figures because they're incredibly complex and beautiful and detailed. And you've seen the quality of ads like it's Super Bowls, right? That's not an area that we want to get into. But now they, as an advertising agency, can say, "Hey, I know we've been talking about a certain campaign. Can you imagine if we brought your physical products and not just the internet into this?" Or vice versa, if we actually could bring in the internet to your physical, what you're planning to do in the physical world. Maybe it's bus stops. Maybe it's front of store, point of sales in the store. Not only can you follow the consumer and tell them, "As we're rolling out this campaign, you can hit them in both the physical and digital domain," you can also get the data back. That is the most powerful point, is that you know the old adage in advertising is that half your advertising dollars are wasted. You just don't know which half. People advertise because they want to get consumers to buy things. That is the reason advertising exists. Now you can actually run campaigns, whether they're email campaigns or internet campaigns, and say, "Yeah, it wasn't just engagement or open rates. I know which one of these campaigns led to somebody interacting with the physical product within, pick your period of time, 48 hours." It's a HolyG rail. It can the same way that advertising became so much more effective with the advent of online, the next wave is, "Okay, now that you have online, how do you tie online activity to physical behavior?" That's the HolyG rail. Advertising spend's about to get a lot more efficient. Fantastic. Thanks. Thanks for taking my questions. Thanks, Jeff. There are no further questions at this time. I would now like to turn the floor back over to Riley McCormack for closing comments. Well, thank you, everybody, for joining us today. That's all we have. Have a wonderful rest of your day.