Core Insights - C3.ai and Veritone are small-cap companies leading in enterprise artificial intelligence software, with C3.ai focusing on a broad industry reach and Veritone on human-centered AI solutions [1] - Both companies are at critical junctures following their recent earnings results, with C3.ai showing strong revenue growth but facing operating losses, while Veritone is expanding its software revenues despite challenges in legacy services [2] C3.ai Overview - C3.ai reported $108.7 million in revenues for the fourth quarter of fiscal 2025, a 26% year-over-year increase, driven by demand for its AI applications [4] - The company has strategic partnerships with major tech firms like Microsoft, Amazon, and Google, enhancing its market presence across 19 industries [4] - Preliminary first-quarter fiscal 2026 revenues are projected to be $70.2-$70.4 million, down approximately 19% from $87.2 million a year earlier, significantly missing prior guidance [5] - C3.ai's GAAP operating loss is estimated between $124.7 million and $124.9 million, with non-GAAP losses between $57.7 million and $57.9 million [5] - The company maintains a strong liquidity position with about $711.9 million in cash and equivalents as of late July 2025 [8] Veritone Overview - Veritone is experiencing growth driven by its AI training data and public sector initiatives, with a near-term pipeline exceeding $20 million, more than doubling since the first quarter [10] - The company signed 35 new public sector customers and expanded its public sector pipeline to $189 million, indicating strong demand for its aiWARE platform [11] - Despite revenue stability, Veritone's GAAP gross profit fell 7% year-over-year to $15.3 million, and the net loss widened to $26.8 million due to a non-cash charge [13] - Veritone has initiated a cost reduction program targeting $10 million in annual savings and raised about $10 million in fresh equity capital [14] Stock Performance - C3.ai stock has declined 37.8% over the past three months, with a significant drop of around 25% following disappointing preliminary results [15] - In contrast, Veritone stock has surged 95.5% in the same period, reflecting positive sentiment around its path to profitability [16] Valuation and Earnings Estimates - C3.ai has a forward price-to-sales ratio of 5.44, indicating a discount relative to its industry, while Veritone's market capitalization is around $168 million, suggesting potential upside if it executes well [18] - The Zacks Consensus Estimate for C3.ai's fiscal 2026 loss per share has widened to $1.39, while Veritone's estimate has narrowed to 55 cents, indicating a positive shift in sentiment [19][22] Conclusion - C3.ai has a larger scale and established partnerships but is currently facing execution challenges and declining sales momentum [25] - Veritone is positioned for growth with improving core revenues and significant contracts, suggesting more upside potential moving forward [26]

Core Viewpoint - Veritone, Inc. (VERI) has experienced a downtrend, losing 12.9% over the past week, but a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging to counteract selling pressure [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottoming out, with reduced selling pressure, suggesting that bulls may be regaining control [2][5]. - A hammer pattern forms when there is a small candle body with a long lower wick, indicating that the stock opened lower, made a new low, but closed near or above the opening price, reflecting buying interest [4][5]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for VERI, which is a bullish indicator, as it typically leads to price appreciation [7]. - The consensus EPS estimate for the current year has increased by 10.3% over the last 30 days, indicating strong agreement among analysts regarding improved earnings potential [8]. Zacks Rank - VERI currently holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which historically outperform the market [9]. - The Zacks Rank serves as a timing indicator, suggesting that the company's prospects are beginning to improve, further supporting the case for a potential trend reversal [10].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements and detailed notes for periods ended June 30, 2025 and 2024 [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands) | ASSETS (June 30, 2025) | Amount ($) | ASSETS (Dec 31, 2024) | Amount ($) | | :--------------------- | :--------- | :-------------------- | :--------- | | Cash and cash equivalents | 13,568 | Cash and cash equivalents | 16,911 | | Accounts receivable, net | 31,859 | Accounts receivable, net | 31,997 | | Total current assets | 57,940 | Total current assets | 59,406 | | Total assets | 186,806 | Total assets | 198,060 | | LIABILITIES & EQUITY (June 30, 2025) | Amount ($) | LIABILITIES & EQUITY (Dec 31, 2024) | Amount ($) | | :--------------------- | :--------- | :-------------------- | :--------- | | Accounts payable | 15,088 | Accounts payable | 11,023 | | Deferred revenue | 12,345 | Deferred revenue | 12,056 | | Total current liabilities | 64,842 | Total current liabilities | 60,957 | | Total liabilities | 185,588 | Total liabilities | 184,608 | | Total stockholders' equity | 1,218 | Total stockholders' equity | 13,452 | - Total assets decreased from **$198.06 million** at December 31, 2024, to **$186.81 million** at June 30, 2025[19](index=19&type=chunk) - Total stockholders' equity significantly decreased from **$13.45 million** to **$1.22 million** over the same period[19](index=19&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section details the company's financial performance, including revenue, operating loss, and net loss for the reported periods Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric (Three Months Ended June 30) | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :---------------------------------- | :------- | :------- | :--------- | :--------- | | Revenue | 24,013 | 24,058 | (45) | (0.2%) | | Operating loss | (19,318) | (20,306) | 988 | (4.9%) | | Net loss | (26,798) | (22,231) | (4,567) | 20.5% | | Loss per share, basic and diluted | (0.54) | (0.59) | 0.05 | (8.5%) | | Metric (Six Months Ended June 30) | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :---------------------------------- | :------- | :------- | :--------- | :--------- | | Revenue | 46,476 | 48,211 | (1,735) | (3.6%) | | Operating loss | (40,952) | (44,676) | 3,724 | (8.3%) | | Net loss | (46,673) | (47,429) | 756 | (1.6%) | | Loss per share, basic and diluted | (0.95) | (1.26) | 0.31 | (24.6%) | - Net loss increased by **20.5%** for the three months ended June 30, 2025, reaching **$(26.8) million**[20](index=20&type=chunk) - For the six months ended June 30, 2025, net loss slightly decreased by **1.6%** to **$(46.7) million**, and loss per share improved by **24.6%** to **$(0.95)**[20](index=20&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section outlines changes in the company's equity, reflecting capital transactions and net losses Changes in Stockholders' Equity (in thousands) | Item | Dec 31, 2024 ($) | Mar 31, 2025 ($) | June 30, 2025 ($) | | :--------------------------------------- | :--------------- | :--------------- | :---------------- | | Total Stockholders' Equity | 13,452 | 14,754 | 1,218 | | Common stock issued (registered direct offering) | - | 19,942 | 8,160 | | Stock-based compensation | - | 1,800 | 1,764 | | Net loss | - | (19,875) | (26,798) | - Total stockholders' equity decreased significantly from **$13.45 million** at December 31, 2024, to **$1.22 million** at June 30, 2025, primarily due to net losses and foreign currency translation adjustments, despite capital raises[22](index=22&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 ($) | 2024 ($) | | :--------------------------------- | :------- | :------- | | Net cash used in operating activities | (25,277) | (27,791) | | Net cash used in investing activities | (2,311) | (1,599) | | Net cash provided by (used in) financing activities | 25,259 | (3,959) | | Net change in cash, cash equivalents, and restricted cash | (3,462) | (33,349) | | Cash, cash equivalents, and restricted cash, end of period | 13,856 | 46,957 | - Net cash used in operating activities decreased by **$2.5 million** (from **$27.8 million** to **$25.3 million**) for the six months ended June 30, 2025[25](index=25&type=chunk) - Net cash provided by financing activities significantly increased to **$25.3 million** in 2025, compared to net cash used of **$4.0 million** in 2024, primarily due to proceeds from stock and warrant issuances[25](index=25&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Description of Business](index=14&type=section&id=1.%20Description%20of%20Business) Veritone, Inc. provides AI computing solutions through its aiWARE™ operating system, focusing on software and managed services - Veritone's core business revolves around its aiWARE™ AI operating system, which uses machine learning algorithms to derive insights from structured and unstructured data[28](index=28&type=chunk) - The company offers Software Products & Services (aiWARE platform, Veritone Hire solutions) and Managed Services (digital content management, content licensing, representation services)[29](index=29&type=chunk)[30](index=30&type=chunk) - Veritone divested its full-service advertising agency, Veritone One, on October 17, 2024, to strategically shift focus to core software and applications, reclassifying its financial results as discontinued operations[31](index=31&type=chunk) [2. Significant Accounting Policies](index=14&type=section&id=2.%20Significant%20Accounting%20Policies) This note outlines the basis of financial statement presentation, going concern assumption, and key accounting practices - The financial statements are prepared assuming the Company will continue as a going concern, but management identified substantial doubt about this ability over the next twelve months due to debt obligations, historical negative cash flows, and recurring losses[34](index=34&type=chunk) - The Company is exploring potential financing structures, including discussions with current debt holders, equity financing, and operational restructurings to improve liquidity and address going concern issues[35](index=35&type=chunk) - The Company operates as one reportable segment, with the CEO assessing performance and allocating resources based on consolidated net loss and loss from operations[46](index=46&type=chunk) - The Company experiences seasonal fluctuations in revenue, particularly with Commercial Enterprise revenues (including Veritone Hire) being higher in the second half of the fiscal year[49](index=49&type=chunk) [3. Discontinued Operations, Business Combinations, and Divestiture](index=20&type=section&id=3.%20Discontinued%20Operations%2C%20Business%20Combinations%2C%20and%20Divestiture) This note details the strategic divestiture of Veritone One and other asset sales, reclassifying their financial results - Veritone completed the sale of its wholly-owned subsidiary, Veritone One, on October 17, 2024, for an aggregate purchase price of **$104 million**, including an **$18 million** earnout[52](index=52&type=chunk)[54](index=54&type=chunk) - The divestiture of Veritone One was a strategic shift to focus on core software and applications, leading to its reclassification as discontinued operations[52](index=52&type=chunk) Operating Results of Discontinued Operations (Veritone One) (in thousands) | Metric (Three Months Ended June 30, 2024) | Amount ($) | | :---------------------------------------- | :--------- | | Revenue | 6,934 | | Operating income | 2,644 | | Net income | 1,146 | | Metric (Six Months Ended June 30, 2024) | Amount ($) | | :---------------------------------------- | :--------- | | Revenue | 14,417 | | Operating income | 5,174 | | Net income | 2,148 | - In April 2024, the Company sold its interest in GridBeyond for **$1.8 million** in cash, resulting in a loss on sale of **$172 thousand**[58](index=58&type=chunk) [4. Debt](index=21&type=section&id=4.%20Debt) This note details the company's debt structure, including the Senior Secured Term Loan and Convertible Senior Notes, and recent amendments - As of June 30, 2025, Veritone had **$37.3 million** aggregate principal amount outstanding under its Senior Secured Term Loan, which matures on December 13, 2027[60](index=60&type=chunk)[73](index=73&type=chunk) - The Term Loan's minimum Consolidated Liquidity covenant was amended multiple times in 2025, reducing it to **$5 million** for June-August 2025, then increasing to **$10 million** for July-August 2025, and **$15 million** from September 1, 2025, through maturity[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - The Company issued common stock to lenders in connection with the First (**$500 thousand** value) and Second (**$373 thousand** value) Amendments to the Credit Agreement[63](index=63&type=chunk)[64](index=64&type=chunk) - As of June 30, 2025, Veritone had **$91.25 million** in aggregate principal amount of 1.75% Convertible Senior Notes outstanding, maturing on November 15, 2026[74](index=74&type=chunk)[75](index=75&type=chunk) [5. Loss Per Share](index=28&type=section&id=5.%20Loss%20Per%20Share) This note explains the calculation of basic and diluted loss per share, identifying anti-dilutive securities - Pre-funded warrants issued in January and June 2025 are considered outstanding for basic loss per share calculation due to immediate exercisability for little or no consideration[88](index=88&type=chunk) Anti-Dilutive Securities Excluded from Diluted Loss Per Share (in thousands) | Security Type | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------ | :------------------------------- | :----------------------------- | | Stock options and restricted stock units | 10,175 | 10,107 | | Warrants to purchase common stock | 2,655 | 2,655 | | Common stock issuable (convertible notes) | 2,483 | 2,483 | | **Total** | **15,313** | **15,245** | [6. Fair Value Measurements](index=28&type=section&id=6.%20Fair%20Value%20Measurements) This note describes the company's fair value measurement methodologies, categorizing assets and liabilities by input levels - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[90](index=90&type=chunk)[96](index=96&type=chunk) - The Veritone One earnout receivable is recorded at fair value using a Monte Carlo simulation pricing model, categorized as Level 3, with significant assumptions including internal rate of return (**22.5%**), risk-free rate (**4.8%**), and revenue volatility (**45.0%**) as of June 30, 2025[93](index=93&type=chunk)[94](index=94&type=chunk) Fair Value of Veritone One Earnout Receivable (in thousands) | Metric | Amount ($) | | :-------------------------------------- | :--------- | | Fair value as of December 31, 2024 | 7,667 | | Change in fair value (Other expense (income), net) | 784 | | Fair value as of June 30, 2025 | 8,451 | [7. Goodwill and Other Intangible Assets](index=31&type=section&id=7.%20Goodwill%20and%20Other%20Intangible%20Assets) This note details the company's goodwill and finite-lived intangible assets, including their carrying amounts and amortization expense - Goodwill remained at **$53.11 million** as of June 30, 2025, with no additions or impairments during the three and six months ended June 30, 2025 and 2024[99](index=99&type=chunk) Finite-Lived Intangible Assets (Net Carrying Amount, in thousands) | Asset Type | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------ | :---------------- | :-------------------- | | Developed technology | 6,126 | 10,539 | | Customer relationships | 40,989 | 48,134 | | Trademarks and trade names | 617 | 827 | | **Total** | **47,732** | **59,500** | - Amortization expense for finite-lived intangible assets was **$5.88 million** for the three months and **$11.83 million** for the six months ended June 30, 2025[100](index=100&type=chunk) - The Company performed annual goodwill impairment assessments as of May 31, 2025, and an updated analysis as of June 30, 2025, concluding that goodwill was not impaired[102](index=102&type=chunk)[103](index=103&type=chunk) [8. Consolidated Financial Statement Details](index=33&type=section&id=8.%20Consolidated%20Financial%20Statement%20Details) This note provides detailed breakdowns of balance sheet accounts and revenue by customer group and service type Revenue Breakdown by Customer Group and Service Type (Three Months Ended June 30, in thousands) | Revenue Category | June 30, 2025 ($) | June 30, 2024 ($) | | :------------------------------- | :---------------- | :---------------- | | **Software Products & Services** | | | | Commercial Enterprise | 15,334 | 14,510 | | Public Sector | 2,135 | 1,122 | | **Total Software Products & Services** | **17,469** | **15,632** | | **Managed Services** | | | | Representation Services | 1,529 | 3,541 | | Licensing | 5,015 | 4,885 | | **Total Managed Services** | **6,544** | **8,426** | | **Total Revenue** | **24,013** | **24,058** | Revenue Breakdown by Customer Group and Service Type (Six Months Ended June 30, in thousands) | Revenue Category | June 30, 2025 ($) | June 30, 2024 ($) | | :------------------------------- | :---------------- | :---------------- | | **Software Products & Services** | | | | Commercial Enterprise | 28,483 | 28,212 | | Public Sector | 3,469 | 2,640 | | **Total Software Products & Services** | **31,952** | **30,852** | | **Managed Services** | | | | Representation Services | 4,301 | 7,033 | | Licensing | 10,223 | 10,326 | | **Total Managed Services** | **14,524** | **17,359** | | **Total Revenue** | **46,476** | **48,211** | - For the three months ended June 30, 2025, Software Products & Services revenue increased by **$1.8 million (11.8%)** year-over-year, while Managed Services revenue decreased by **$1.9 million (22.3%)**[111](index=111&type=chunk) - The effective tax rate was an expense of **3.4%** for Q2 2025 (vs. benefit of **0.3%** in Q2 2024) and an expense of **1.2%** for YTD 2025 (vs. benefit of **2.2%** in YTD 2024), primarily due to valuation allowance on domestic deferred tax assets and foreign operations[116](index=116&type=chunk) [9. Leases, Commitments, and Contingencies](index=36&type=section&id=9.%20Leases%2C%20Commitments%2C%20and%20Contingencies) This note details lease obligations, deferred purchase consideration, and the absence of material legal proceedings - In January 2025, the Company entered into a new non-cancellable lease for office space in London with a base rent of approximately **$2.53 million** over 71 months[120](index=120&type=chunk) - Deferred purchase consideration payments for the March 2022 Acquisition (**$1.5 million**) and VSL acquisition (**$300 thousand**) were completed in Q1 2024[121](index=121&type=chunk)[122](index=122&type=chunk) - The Company is not currently involved in any legal proceedings that would have a material adverse effect on its financial position[123](index=123&type=chunk) [10. Stockholders' Equity](index=36&type=section&id=10.%20Stockholders%27%20Equity) This note details significant activities impacting stockholders' equity, including capital raises through stock and warrant issuances - In January 2025, the Company issued **4,414,878 shares** of common stock and pre-funded warrants for **3,608,838 shares**, raising approximately **$20.3 million** in gross proceeds[125](index=125&type=chunk) - In June 2025, the Company agreed to issue **6,452,293 shares** of common stock and pre-funded warrants for **1,804,587 shares**, with gross proceeds of approximately **$9.0 million**, completed on July 1, 2025[128](index=128&type=chunk) - A concurrent private placement with the RSS Trust (affiliated with CEO Ryan Steelberg) for up to **709,220 shares** of common stock is expected to raise **$1.0 million**[131](index=131&type=chunk) - Through June 30, 2025, the 'at-the-market' (ATM) equity offering program generated **$7.8 million** in net proceeds from the sale of **3,716,873 shares** of common stock[134](index=134&type=chunk) [11. Stock-Based Compensation](index=39&type=section&id=11.%20Stock-Based%20Compensation) This note details the company's stock-based compensation plans, including stock options and restricted stock units Stock Options Activity (Six Months Ended June 30, 2025, in thousands) | Metric | Number of Options Outstanding | | :----------------------------------- | :---------------------------- | | Outstanding as of December 31, 2024 | 8,438 | | Forfeited or expired | (295) | | Outstanding as of June 30, 2025 | 8,140 | | Weighted Average Exercise Price (June 30, 2025) | $12.98 | Restricted Stock Units (RSUs) Activity (Six Months Ended June 30, 2025, in thousands) | Metric | Number of Shares | | :----------------------------------- | :--------------- | | Outstanding and nonvested as of December 31, 2024 | 1,902 | | Granted | 1,035 | | Vested | (495) | | Forfeited | (517) | | Outstanding and nonvested as of June 30, 2025 | 1,925 | | Weighted Average Grant Date Fair Value Per Share (June 30, 2025) | $3.98 | Total Stock-Based Compensation Expense (in thousands) | Period (Ended June 30) | 2025 ($) | 2024 ($) | | :--------------------- | :------- | :------- | | Three Months | 1,710 | 2,058 | | Six Months | 3,453 | 3,593 | [12. Related Party Transactions](index=42&type=section&id=12.%20Related%20Party%20Transactions) This note describes transactions with related parties, including consulting agreements and private placements - The Company has an Amended Consulting Agreement with Steel Holdings, LLC (affiliated with former CEO Chad Steelberg) for technical advisory services, with payments of **$50 thousand** per month through December 2025[146](index=146&type=chunk) - Ryan Steelberg, current CEO, was appointed Chairman of the Board effective January 22, 2024[149](index=149&type=chunk) - A private placement of up to **709,220 shares** of common stock for **$1.0 million** is being made to the RSS Trust, of which Ryan Steelberg is trustee[150](index=150&type=chunk) [13. Subsequent Events](index=42&type=section&id=13.%20Subsequent%20Events) This note discloses the enactment of the One Big Beautiful Bill Act (OBBBA) and its potential financial impact - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, amending U.S. tax law regarding bonus depreciation, R&D, and foreign derived intangible income[152](index=152&type=chunk) - The Company is currently evaluating the impact of OBBBA on its condensed consolidated financial statements, anticipating impacts to deferred tax liability and income tax payable[119](index=119&type=chunk)[152](index=152&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, strategic shifts, and liquidity challenges [Overview](index=43&type=section&id=Overview) Veritone is an AI solutions provider leveraging its aiWARE™ operating system, with a recent strategic divestiture of Veritone One - Veritone is an AI solutions provider, leveraging its aiWARE™ operating system for Commercial Enterprise and Public Sector customers, offering Software Products & Services and Managed Services[154](index=154&type=chunk) - The company divested its full-service advertising agency, Veritone One, on October 17, 2024, reclassifying its historical financial results as discontinued operations[155](index=155&type=chunk) Revenue Summary (in millions) | Period (Ended June 30) | 2025 ($) | 2024 ($) | | :--------------------- | :------- | :------- | | Three Months Revenue | 24.0 | 24.1 | | Six Months Revenue | 46.5 | 48.2 | - Software Products & Services revenue increased to **$17.5 million** (Q2 2025) and **$32.0 million** (YTD 2025) from **$15.6 million** and **$30.9 million** in the corresponding prior-year periods, respectively[156](index=156&type=chunk) [Recent Developments](index=43&type=section&id=Recent%20Developments) This section highlights recent amendments to the Credit Agreement and capital raising activities through stock and warrant offerings - The Credit Agreement was amended three times in 2025, reducing the minimum Consolidated Liquidity covenant to **$5 million** for June-August 2025, then increasing to **$10 million** for July-August 2025, and **$15 million** from September 1, 2025[157](index=157&type=chunk)[159](index=159&type=chunk)[161](index=161&type=chunk) - The Company issued common stock to lenders as consideration for the First (**$500 thousand** value) and Second (**$373 thousand** value) Amendments to the Credit Agreement[158](index=158&type=chunk)[160](index=160&type=chunk) - In January 2025, a registered direct offering of common stock and pre-funded warrants generated approximately **$20.3 million** in gross proceeds[163](index=163&type=chunk) - In June 2025, another registered direct offering and a private placement with the CEO's trust generated approximately **$9.0 million** and **$1.0 million** in gross proceeds, respectively[165](index=165&type=chunk)[167](index=167&type=chunk) [One Big Beautiful Bill Act (OBBBA)](index=46&type=section&id=One%20Big%20Beautiful%20Bill%20Act%20%28OBBBA%29) This section discusses the recent enactment of the OBBBA and its potential impact on the company's financial statements - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, introducing changes to U.S. tax law, including provisions for bonus depreciation and R&D expenditures[169](index=169&type=chunk) - The Company is currently evaluating the potential impact of OBBBA on its financial position, results of operations, and cash flows[169](index=169&type=chunk) [Opportunities, Challenges, and Risks](index=46&type=section&id=Opportunities%2C%20Challenges%2C%20and%20Risks) This section outlines the company's strategic initiatives, cost reductions, customer trends, and the impact of global economic factors - Software Products & Services revenue improved by **11.8%** (Q2 2025) and **3.6%** (YTD 2025) compared to prior-year periods, despite persistent economic and geopolitical challenges[171](index=171&type=chunk) - The Company enacted significant cost reductions, achieving over **$50.0 million** of net annualized strategic cost reductions since January 1, 2023, including a **19%** workforce reduction and an additional **$8.0 million** in 2025 cost reductions[172](index=172&type=chunk) - Software Products & Services customers declined by **10.8%** to **3,067** as of June 30, 2025, primarily due to fewer consumption-based customers and sunsetting legacy Career Builder customers, offset by public safety customer growth[173](index=173&type=chunk) - New product launches like iDEMs and VDR are expected to drive substantial growth in 2025, with the VDR sales pipeline increasing to over **$10.0 million**[174](index=174&type=chunk) - The divestiture of Veritone One in October 2024 was a strategic decision to enhance focus on core AI solutions, streamline operations, and improve financial liquidity[177](index=177&type=chunk) - Global economic and geopolitical factors, including conflicts in Ukraine and Israel, inflation, and high interest rates, continue to create uncertainty and may negatively impact demand for products and services[181](index=181&type=chunk)[182](index=182&type=chunk) [Non-GAAP Financial Measures and Key Performance Indicators](index=51&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Key%20Performance%20Indicators) This section presents non-GAAP financial measures and key performance indicators, including net loss, gross profit, and customer metrics - Non-GAAP net loss for the three months ended June 30, 2025, was **$(8.7) million**, an increase from **$(6.9) million** in the prior-year period[190](index=190&type=chunk) - For the six months, non-GAAP net loss was **$(19.8) million**, up from **$(14.5) million**[190](index=190&type=chunk) Non-GAAP Net Loss Reconciliation (in thousands) | Metric (Three Months Ended June 30) | 2025 ($) | 2024 ($) | | :---------------------------------- | :------- | :------- | | Net loss | (26,798) | (22,231) | | Adjustments (total) | 18,085 | 15,381 | | Non-GAAP net loss | (8,713) | (6,850) | | Metric (Six Months Ended June 30) | 2025 ($) | 2024 ($) | | :---------------------------------- | :------- | :------- | | Net loss | (46,673) | (47,429) | | Adjustments (total) | 26,830 | 32,960 | | Non-GAAP net loss | (19,843) | (14,469) | Non-GAAP Gross Profit and Margin (in thousands, percentages) | Metric (Three Months Ended June 30) | 2025 ($) | 2024 ($) | 2025 (%) | 2024 (%) | | :---------------------------------- | :------- | :------- | :------- | :------- | | Non-GAAP gross profit | 16,535 | 17,716 | | | | Non-GAAP gross margin | | | 68.9% | 73.6% | | Metric (Six Months Ended June 30) | 2025 ($) | 2024 ($) | 2025 (%) | 2024 (%) | | :---------------------------------- | :------- | :------- | :------- | :------- | | Non-GAAP gross profit | 31,164 | 34,922 | | | | Non-GAAP gross margin | | | 67.1% | 72.4% | - Non-GAAP gross margin decreased by **470 basis points** (QoQ) and **530 basis points** (YoY) due to a higher mix of lower gross margin revenue from consumption-based and one-time software[194](index=194&type=chunk) Software Products & Services Key Performance Indicators (in thousands) | KPI | June 30, 2024 | March 31, 2025 | June 30, 2025 | | :-------------------------------- | :------------ | :------------- | :------------ | | Total Software Products & Services Customers | 3,437 | 3,156 | 3,067 | | Annual Recurring Revenue (SaaS) | $49,223 | $47,494 | $50,350 | | Annual Recurring Revenue (Consumption) | $18,701 | $11,223 | $12,249 | | Total New Bookings | $14,047 | $15,835 | $15,766 | | Gross Revenue Retention | >90% | >90% | >90% | [Results of Operations](index=55&type=section&id=Results%20of%20Operations) This section analyzes revenue by customer group and service type, along with detailed operating expenses Revenue Breakdown by Customer Group and Service Type (Three Months Ended June 30, in thousands) | Revenue Category | June 30, 2025 ($) | June 30, 2024 ($) | Change ($) | Change (%) | | :------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Commercial Enterprise Software Products & Services | 15,334 | 14,510 | 824 | 5.7% | | Commercial Enterprise Managed Services | 6,544 | 8,426 | (1,882) | (22.3%) | | Public Sector Software Products & Services | 2,135 | 1,122 | 1,013 | 90.3% | | **Total Revenue** | **24,013** | **24,058** | **(45)** | **(0.2%)** | Operating Expenses (Three Months Ended June 30, in thousands) | Operating Expense Category | June 30, 2025 ($) | June 30, 2024 ($) | Change ($) | Change (%) | | :------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Cost of revenue (excl. D&A) | 7,478 | 6,342 | 1,136 | 17.9% | | Sales and marketing | 11,096 | 11,208 | (112) | (1.0%) | | Research and development | 4,932 | 6,082 | (1,150) | (18.9%) | | General and administrative | 12,653 | 13,855 | (1,202) | (8.7%) | | Depreciation and amortization | 7,172 | 6,877 | 295 | 4.3% | - Cost of revenue (exclusive of D&A) increased by **17.9%** for the three months ended June 30, 2025, primarily due to a higher mix of lower margin revenue, including VDR[211](index=211&type=chunk) - Research and development expenses decreased by **18.9%** (QoQ) and **30.1%** (YTD) due to personnel-related cost reductions, capitalized internal-use software costs, and reduced consulting services[215](index=215&type=chunk)[216](index=216&type=chunk) - Net income from discontinued operations (Veritone One) was **$1.1 million** for the three months and **$2.1 million** for the six months ended June 30, 2024, primarily from **$6.9 million** and **$14.4 million** in revenue, respectively[226](index=226&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, debt obligations, and ongoing efforts to address going concern issues - As of June 30, 2025, the Company had **$13.6 million** in cash and cash equivalents[229](index=229&type=chunk) - The Company has **$37.3 million** outstanding under its Term Loan (matures Dec 2027) and **$91.3 million** under Convertible Notes (matures Nov 2026)[230](index=230&type=chunk) - Management determined there is substantial doubt about the Company's ability to continue as a going concern over the next twelve months due to debt service obligations, historical negative cash flows, and recurring losses[230](index=230&type=chunk) - The Company is exploring various financing structures, including discussions with current debt holders, equity financing, and operational restructurings to improve liquidity[231](index=231&type=chunk) [Cash Flows](index=63&type=section&id=Cash%20Flows) This section analyzes cash flows from continuing operations, highlighting changes in operating, investing, and financing activities Cash Flows Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 ($) | 2024 ($) | | :--------------------------------- | :------- | :------- | | Net cash used in operating activities – continuing operations | (25,277) | (31,338) | | Net cash used in investing activities – continuing operations | (2,311) | (1,447) | | Net cash provided by (used in) financing activities – continuing operations | 25,259 | (3,959) | | Net change in cash, cash equivalents, and restricted cash from continuing operations | (3,462) | (36,744) | - Net cash used in continuing operating activities decreased by **$6.0 million** to **$25.3 million** for the six months ended June 30, 2025, driven by lower net loss and favorable changes in operating assets and liabilities[234](index=234&type=chunk) - Net cash provided by continuing financing activities increased by **$29.2 million** to **$25.3 million**, primarily due to proceeds from stock and pre-funded warrant issuances[236](index=236&type=chunk) [Contractual Obligations and Known Future Cash Requirements](index=65&type=section&id=Contractual%20Obligations%20and%20Known%20Future%20Cash%20Requirements) This section outlines the company's debt obligations and other known future cash commitments - As of June 30, 2025, debt obligations include **$37.3 million** principal on the Term Loan (matures Dec 2027) and **$91.3 million** on Convertible Notes (matures Nov 2026)[237](index=237&type=chunk) - The Term Loan requires full repayment if **$30.0 million** or more of Convertible Notes are outstanding on August 14, 2026[237](index=237&type=chunk) - The Company has recorded a **$2.4 million** gross liability for uncertain tax positions, but cannot reasonably estimate the timing of payment[238](index=238&type=chunk) [Critical Accounting Policies and Estimates](index=65&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms no material changes to the company's critical accounting policies and estimates - There have been no material changes to the Company's critical accounting policies and estimates as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[240](index=240&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Veritone is not required to provide quantitative and qualitative disclosures about market risk - Veritone, Inc. is a smaller reporting company and is therefore not required to provide disclosures about market risk[241](index=241&type=chunk) [Item 4. Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective due to material weaknesses in internal control over financial reporting, with remediation ongoing - As of June 30, 2025, the Company's disclosure controls and procedures were not effective at the reasonable assurance level[242](index=242&type=chunk) - Material weaknesses identified include ineffective information and communication processes, insufficient entity-level controls, issues with foreign exchange consolidation, and deficiencies in IT general controls[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) - Remediation actions include engaging an outside firm, developing a robust risk assessment plan, implementing training programs for ITGCs, documenting ITGCs, and hiring additional staff[247](index=247&type=chunk)[252](index=252&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, despite ongoing remediation efforts[250](index=250&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that would materially adversely affect its financial position - The Company is not currently involved in any legal proceedings that would materially adversely affect its financial results[254](index=254&type=chunk) [Item 1A. Risk Factors](index=69&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[255](index=255&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report during the period - No unregistered sales of equity securities or use of proceeds to report[256](index=256&type=chunk) [Item 3. Defaults Upon Senior Securities](index=69&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report during the period - No defaults upon senior securities to report[257](index=257&type=chunk) [Item 4. Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[258](index=258&type=chunk) [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) There is no other information to report in this section - No other information to report[259](index=259&type=chunk) [Item 6. Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various agreements, amendments, and certifications - The report includes exhibits such as the Equity Purchase Agreement for Veritone One, amendments to the Credit and Guaranty Agreement, and forms of pre-funded warrants[260](index=260&type=chunk)[261](index=261&type=chunk) - Certifications by the Principal Executive Officer and Principal Financial Officer are furnished as Exhibit 32.1[261](index=261&type=chunk)[262](index=262&type=chunk) [Signatures](index=72&type=section&id=Signatures) The report is duly signed on behalf of Veritone, Inc. by Michael L. Zemetra on August 8, 2025 - The report was signed by Michael L. Zemetra, Executive Vice President, Chief Financial Officer and Treasurer, on August 8, 2025[267](index=267&type=chunk)[268](index=268&type=chunk)

Core Insights - C3.ai, Inc. closed fiscal 2025 with strong momentum, positioning its Generative AI and agentic AI platforms as central growth drivers for fiscal 2026 [1] - The company reported fiscal fourth-quarter revenues of $108.7 million, up 26% year over year, exceeding estimates, with subscription and prioritized engineering services comprising 96% of total sales [1][10] Revenue Growth - Generative AI revenue more than doubled in fiscal 2025, driven by 66 initial production deployments across 16 industries, including significant contracts with Bristol-Myers Squibb, Dow, the U.S. Navy, and the USC Shoah Foundation [2] - The deployment with the USC Shoah Foundation is expected to save over $33 million and reduce archival processing time by a decade, highlighting the business and societal value of C3.ai's solutions [2] Market Strategy - C3.ai's partner-driven go-to-market approach, supported by alliances with Microsoft, AWS, Google Cloud, and collaborations with PwC and McKinsey QuantumBlack, enhances distribution and adoption [3] - Federal contracts, such as the expanded $450 million U.S. Air Force PANDA program, contribute to a recurring, high-credibility revenue stream [3] Future Projections - With 95% of fiscal 2025 bookings tied to AI applications and over 130 turnkey enterprise AI solutions deployed, C3.ai differentiates itself from infrastructure and model providers [4] - Management projects fiscal 2026 revenues of $447.5 million to $484.5 million, with free cash flow expected to turn positive by the fourth quarter of fiscal 2026 [4] Competitive Landscape - C3.ai faces competition from Palantir Technologies and Veritone, both targeting leadership in AI-driven enterprise solutions [6] - Palantir has established a strong presence in government and defense sectors, while Veritone focuses on AI-powered media, legal, and energy applications [6][7] Stock Performance - C3.ai shares have lost 3% in the past three months but have outperformed the Zacks Computers - IT Services industry [8] - The stock is currently trading at a discount compared to industry peers, with a forward 12-month price-to-sales (P/S) ratio of 6.15 [11] Earnings Estimates - The consensus estimate for fiscal 2026 and 2027 sales implies growth of 20.1% and 21.8%, respectively, with an expected improvement in the bottom line from a year-ago loss of 41 cents per share [12]

Group 1 - Veritone, Inc. reported a quarterly loss of $0.18 per share, slightly better than the Zacks Consensus Estimate of a loss of $0.19, and the same as the loss reported a year ago [1] - The company posted revenues of $24.01 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.98%, but down from $30.99 million year-over-year [2] - Veritone shares have declined approximately 29.9% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is -$0.12 on revenues of $28.45 million, and for the current fiscal year, it is -$0.58 on revenues of $108.01 million [7] - The Zacks Industry Rank indicates that the Technology Services sector is in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was over $24 million, at the high end of updated guidance, reflecting strong demand for the aiWARE platform and AI applications, with organic non-Veritone higher software revenue growth exceeding 45% [5][24] - GAAP gross profit was $15.3 million, down from $16.4 million in Q2 2024, with GAAP gross margins at 63.9% compared to 68.2% in the prior year [29] - Non-GAAP net loss from continuing operations was $8.7 million, an improvement from $9.7 million in Q2 2024, driven by lower operating losses despite a decline in non-GAAP gross profit [31] Business Line Data and Key Metrics Changes - Software products and services revenue, excluding Veritone Hire, grew over 45% year over year, with public sector revenue increasing over 90% due to larger deals [24][25] - The Veritone Data Refinery (VDR) pipeline surpassed $20 million, more than doubling since early May, indicating strong demand for high-quality training data [6][13] - Managed services revenue declined by $1.9 million, primarily due to a drop in representation services and a one-time event campaign that did not recur [27] Market Data and Key Metrics Changes - The public sector pipeline grew to $189 million from $110 million at the end of Q1, reflecting significant opportunities in government spending on AI [8][19] - The AI landscape is evolving, with a shift towards agentic AI and a growing demand for high-quality domain-specific training datasets, projected to reach $17 billion by 2032 [11][9] Company Strategy and Development Direction - The company is focused on expanding its core AI software solutions in both commercial and public sectors, with a strong emphasis on the VDR and public sector pipelines [6][8] - Recent cost-saving initiatives are expected to generate $10 million in annualized savings, enhancing the company's financial position and growth strategy [8][32] - The company aims to capture opportunities in the evolving AI value chain, particularly in training data, as demand from major tech companies surges [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth prospects, citing a strong pipeline and the successful execution of contracts, particularly in the public sector [19][24] - The company anticipates substantial growth in public sector revenue, driven by recent contracts with the U.S. Air Force and other government agencies [17][35] - The outlook for Q3 2025 includes expected revenue between $28 million and $30 million, representing a 32% increase year over year [37] Other Important Information - The company completed a registered direct offering, raising approximately $10 million, which will support its growth initiatives [33] - As of June 30, 2025, the company held cash and restricted cash of $13.9 million, down from $17.3 million at the end of 2024, reflecting cash outflows from operations [32] Q&A Session Summary Question: What needs to convert to support the acceleration in growth? - Management indicated that the gap to realize revenue for Q3 is the smallest it has ever been, with contracted opportunities already generating revenue from new DoD contracts and VDR customers [42][43] Question: How does Veritone differentiate itself in regulated industries? - The company highlighted its platform, aiWARE, which manages the full end-to-end stack and is agnostic to various AI models, allowing customers to rely on its technology as models mature [46][48] Question: What does winning the Air Force contract mean for future contracts? - The Air Force contract serves as a significant reference point, leading to increased demand across the DoD and other agencies, with expectations for expansion into various use cases [55][57] Question: Can you provide more details on the VDR pipeline? - The near-term VDR pipeline is qualified at $20 million, with high visibility for revenue realization within the next 3 to 12 months, indicating strong product-market fit [60][62]

Investor Presentation August 2025 Before you invest, you should read our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, Quarterly Reports on Form 10-Q and the other documents we have filed and may in the future file with the SEC for more complete information about the Company. You may obtain these documents for free on our website or by visiting EDGAR on the SEC website at www.sec.gov. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any ...

[Veritone Second Quarter 2025 Earnings Release](index=1&type=section&id=Veritone%20Second%20Quarter%202025%20Earnings%20Release) This report details Veritone's Q2 2025 financial and operational performance, highlighting revenue, software growth, pipeline expansion, cost savings, and future outlook [Executive Summary and Highlights](index=1&type=section&id=Executive%20Summary%20and%20Highlights) Veritone reported Q2 2025 revenue of $24.0 million, with core AI software growing over 45%, significant pipeline expansion, $10.0 million in annualized cost savings, and a $10.0 million equity raise - Total revenue for Q2 2025 was **$24.0 million**, achieving the top end of updated guidance[2](index=2&type=chunk) - Software Products & Services revenue grew **12% YoY**; excluding the relatively flat Veritone Hire, this segment grew over **45%**[2](index=2&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) - The Veritone Data Refinery's near-term pipeline grew to over **$20.0 million**, a **100% increase** from Q1 2025[2](index=2&type=chunk) - Awarded a sole source contract with the United States Air Force for the deployment of aiWARE & iDEMS[2](index=2&type=chunk) - Cost reduction initiatives are anticipated to provide up to **$10.0 million** in annualized savings, with **$8.0 million** already achieved[2](index=2&type=chunk) - Announced a **$10.0 million** equity raise, with net proceeds intended for working capital and general corporate purposes[2](index=2&type=chunk)[7](index=7&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) Veritone's Q2 2025 revenue was flat at $24.0 million, with Software Products & Services growth offset by Managed Services decline, leading to a GAAP net loss of $26.8 million [Three Months Ended June 30, 2025](index=1&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025) Q2 2025 results show flat total revenue at $24.0 million, a GAAP net loss of $26.8 million, and a decline in total software customers and ARR Q2 2025 vs. Q2 2024 Financial Results (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$24.0** | **$24.1** | **0%** | | Software Products & Services | $17.5 | $15.6 | +11.8% | | Managed Services | $6.5 | $8.4 | -22.3% | | **GAAP Gross Profit** | **$15.3** | **$16.4** | **-6.5%** | | GAAP Gross Margin | 63.9% | 68.2% | -430 bps | | **Non-GAAP Gross Profit** | **$16.5** | **$17.7** | **-6.7%** | | Non-GAAP Gross Margin | 68.9% | 73.6% | -470 bps | | **Operating Loss** | **$(19.3)** | **$(20.3)** | **-4.9%** | | **Net Loss** | **$(26.8)** | **$(22.2)** | **+21%** | | **Non-GAAP Net Loss (Continuing Ops)** | **$(8.7)** | **$(9.7)** | **-10.2%** | - The increase in net loss was primarily driven by a **$2.9 million** non-cash charge related to the change in fair value of an earnout from the Veritone One divestiture[7](index=7&type=chunk)[15](index=15&type=chunk) - The number of Total Software Product & Services Customers decreased by **10.8% YoY** to **3,067**, mainly due to fewer consumption-based customers and the sunsetting of legacy Career Builder customers[16](index=16&type=chunk) - Annual Recurring Revenue (ARR) decreased by **7.8% YoY** to **$62.6 million**, driven by an expected decline in Commercial Enterprise consumption spending[17](index=17&type=chunk) [Six Months Ended June 30, 2025](index=4&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025) For the first half of 2025, total revenue decreased by 4% to $46.5 million, while operating loss improved by 8% to $41.0 million Six Months 2025 vs. Six Months 2024 Financial Results (in millions) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$46.5** | **$48.2** | **-4%** | | Software Products & Services | $32.0 | $30.9 | +4% | | Managed Services | $14.5 | $17.4 | -16% | | **GAAP Gross Profit** | **$29.1** | **$32.7** | **-11%** | | **Operating Loss** | **$(41.0)** | **$(44.7)** | **-8%** | | **Net Loss from Continuing Ops** | **$(46.7)** | **$(49.6)** | **-6%** | | **Non-GAAP Net Loss from Continuing Ops** | **$(19.8)** | **$(20.0)** | **-1%** | - The decline in Managed Services revenue for the six-month period was primarily due to a **$2.7 million** decrease in representation services, including VeriAds, impacted by a challenging macro environment[18](index=18&type=chunk) - The improvement in operating loss was driven by enhancements to the operating expense structure and a one-time **$1.5 million** expense in Q1 2024 associated with the former CEO[20](index=20&type=chunk) [Business and Operational Highlights](index=3&type=section&id=Business%20and%20Operational%20Highlights) Veritone achieved strong Q2 2025 operational momentum, with the Data Refinery pipeline doubling to over $20.0 million and Public Sector pipeline growing to $189 million, securing a key U.S. Air Force contract [Commercial Enterprise](index=3&type=section&id=Commercial%20Enterprise) The Commercial Enterprise segment saw its Veritone Data Refinery pipeline double to over $20.0 million and closed 11 new enterprise software deals - The Veritone Data Refinery (VDR) solution's qualified and near-term pipeline grew to over **$20.0 million**, up **100%** from Q1 2025[16](index=16&type=chunk) - Veritone aiWARE processed an estimated **5 trillion tokens** from millions of hours of audio and video in Q2 2025[16](index=16&type=chunk) - Closed **11 new enterprise software deals** with notable clients including Inter Milan, Laver Cup, United States Soccer Federation, ESPN, and Big Ten Network[16](index=16&type=chunk) [Public Sector](index=3&type=section&id=Public%20Sector) The Public Sector pipeline expanded to $189 million, securing 35 new customers and a multi-year contract with the United States Air Force - The qualified and near-term pipeline for Public Sector solutions grew to **$189 million**, up from **$110 million** in Q1 2025[16](index=16&type=chunk) - Signed **35 new Public Sector customers**, including the Riverside County Sheriff's Department and a top 5 U.S. police agency, along with **95 renewal contracts**[16](index=16&type=chunk) - Awarded a sole source contract (one year plus four option years) with the United States Air Force to provide advanced intelligence capabilities via the aiWARE platform and iDEMS[16](index=16&type=chunk) [Business Outlook](index=4&type=section&id=Business%20Outlook) Veritone projects Q3 2025 revenue between $28.0 million and $30.0 million, and full-year 2025 revenue between $108 million and $115 million, representing 20% annual growth at the midpoint Q3 2025 Guidance | Metric | Q3 2025 Guidance | Q3 2024 Actual | | :--- | :--- | :--- | | Revenue | $28.0M - $30.0M | $22.0M | | Non-GAAP Net Loss | $(6.5)M - $(6.0)M | $(11.1)M | Full Year 2025 Guidance | Metric | FY 2025 Guidance | FY 2024 Actual | Implied Change (Midpoint) | | :--- | :--- | :--- | :--- | | Revenue | $108M - $115M | $92.6M | +20% | | Non-GAAP Net Loss | $(30.0)M - $(25.0)M | $(40.8)M | -33% | [Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) Unaudited financial statements detail a decrease in total assets to $186.8 million, a Q2 2025 net loss of $26.8 million, and $25.3 million net cash used in operating activities for the first six months [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets decreased to $186.8 million, with cash at $13.6 million, and total liabilities at $185.6 million as of June 30, 2025 Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $13,568 | $16,911 | | Total current assets | $57,940 | $59,406 | | Goodwill & Intangibles, net | $100,842 | $112,610 | | **Total assets** | **$186,806** | **$198,060** | | **Liabilities & Equity** | | | | Total current liabilities | $64,842 | $60,957 | | Convertible Notes & Term Loan | $116,847 | $119,201 | | **Total liabilities** | **$185,588** | **$184,608** | | **Total stockholders' equity** | **$1,218** | **$13,452** | [Condensed Consolidated Statements of Operations](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations for Q2 2025 reports revenue of $24.0 million and a net loss of $26.8 million, with a six-month net loss of $46.7 million Statement of Operations Summary (in thousands) | Account | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Revenue | $24,013 | $46,476 | | Total operating expenses | $43,331 | $87,428 | | **Operating loss** | **$(19,318)** | **$(40,952)** | | **Net loss from continuing operations** | **$(26,798)** | **$(46,673)** | | **Net loss** | **$(26,798)** | **$(46,673)** | | Loss per share, basic and diluted | $(0.54) | $(0.95) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow for the first six months shows $25.3 million used in operating activities, offset by $25.3 million provided by financing activities, resulting in a net cash decrease of $3.5 million Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(25,277) | $(27,791) | | Net cash used in investing activities | $(2,311) | $(1,599) | | Net cash provided by (used in) financing activities | $25,259 | $(3,959) | | **Net change in cash** | **$(3,462)** | **$(33,349)** | | Cash, end of period (continuing ops) | $13,856 | $7,600 | [Supplemental Financial Information and Reconciliations](index=12&type=section&id=Supplemental%20Financial%20Information%20and%20Reconciliations) This section provides detailed revenue breakdowns, key performance indicators, and reconciliations from GAAP to non-GAAP measures for net loss and gross profit [Revenue Detail](index=12&type=section&id=Revenue%20Detail) Q2 2025 revenue breakdown shows Software Products & Services at $17.5 million and Managed Services at $6.5 million, with Public Sector contributing $2.1 million Q2 2025 Revenue Breakdown (in thousands) | Segment | Commercial Enterprise | Public Sector | Total | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Software Products & Services | $15,334 | $2,135 | $17,469 | +12% | | Managed Services | $6,544 | $— | $6,544 | -22% | | **Total Revenue** | **$21,878** | **$2,135** | **$24,013** | **0%** | [Reconciliation of GAAP to Non-GAAP Measures](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Reconciliations detail adjustments from GAAP to non-GAAP net loss and gross profit, primarily for depreciation, amortization, and stock-based compensation - For Q2 2025, the reconciliation from a GAAP Net Loss of **$26.8 million** to a Non-GAAP Net Loss from continuing operations of **$8.7 million** includes adjustments for depreciation & amortization (**$7.2M**), change in fair value of earnout receivable (**$2.9M**), and stock-based compensation (**$1.7M**)[45](index=45&type=chunk) - The reconciliation of Q3 2025 guidance shows an expected GAAP Net Loss of **$(19.0)M to $(16.5)M** adjusted to a Non-GAAP Net Loss of **$(6.5)M to $(6.0)M**, primarily by excluding estimated depreciation & amortization (**$7.5M to $7.0M**) and interest expense (**$3.0M to $2.5M**)[48](index=48&type=chunk) - Non-GAAP gross profit for Q2 2025 was **$16.5 million** (**68.9% margin**), compared to GAAP gross profit of **$15.3 million** (**63.9% margin**), with the difference being the add-back of **$1.2 million** in depreciation and amortization related to the cost of revenue[52](index=52&type=chunk) [Key Performance Indicators (KPIs)](index=16&type=section&id=Key%20Performance%20Indicators%20%28KPIs%29) Key performance indicators show a decrease in total software customers to 3,067, while SaaS Annual Recurring Revenue increased to $50.4 million in Q2 2025 Quarterly KPI Trends | Metric (in thousands, except customers) | Q2 2024 | Q1 2025 | Q2 2025 | | :--- | :--- | :--- | :--- | | Total Software Products & Services Customers | 3,437 | 3,156 | 3,067 | | Annual Recurring Revenue (SaaS) | $49,223 | $47,494 | $50,350 | | Annual Recurring Revenue (Consumption) | $18,701 | $11,223 | $12,249 | | Total New Bookings | $14,047 | $15,835 | $15,766 | | Gross Revenue Retention | >90% | >90% | >90% |

Core Insights - The article discusses the emerging niche of artificial intelligence analytics, highlighting BigBear.ai (BBAI) and Veritone (VERI) as notable small-cap players in this sector [1][2]. Company Overview - BigBear.ai focuses on "decision intelligence" for government and defense clients, specializing in mission-critical AI applications for national security and defense [2]. - Veritone provides an enterprise AI platform (aiWARE) targeting media, public sector, and commercial markets, with a suite of audio/video data analytics tools [2]. Market Position and Strategy - BigBear.ai has a backlog of $385 million as of March 31, 2025, with significant government contracts, including a $165 million contract from the U.S. Army [4][8]. - Veritone has shifted its focus solely to AI software, achieving an Annual Recurring Revenue (ARR) of $58.7 million, with 81% from subscriptions [9][10]. Financial Performance - BigBear.ai eliminated $57.7 million of long-term debt and raised $64.7 million in gross proceeds, strengthening its balance sheet [6][8]. - Veritone's revenue declined by 7% year-over-year to $22.5 million, but it has a higher gross margin of 61.1%, significantly above BigBear.ai's 21.3% [9][10]. Growth Prospects - BigBear.ai is positioned for growth in defense AI, leveraging its backlog and government contracts [4][8]. - Veritone's growth strategy includes vertical-specific AI solutions and expanding into government applications, indicating a competitive edge in software sales [10][12]. Stock Performance - BigBear.ai's stock has increased by nearly 382% over the past year, while Veritone's shares have recently rebounded, rising 111.1% in the past month [14][15]. - Over the past three months, BigBear.ai shares rose by 153.3%, outperforming the broader market, while Veritone gained 25.9% [15]. Valuation Comparison - BigBear.ai trades at a forward Price-to-Sales (P/S) ratio of 12.02, significantly higher than Veritone's 1.13, indicating a premium valuation for BigBear.ai [18][19]. - Veritone's expected revenue growth of 18% in 2025 and narrowing losses suggest a more attractive valuation and clearer path to profitability [19][26].

Core Viewpoint - The artificial intelligence sector, particularly voice AI technologies, is attracting investor attention, with SoundHound AI Inc. and Veritone Inc. being notable players in this space [1][3][7] Group 1: SoundHound AI Inc. (SOUN) - SoundHound AI has reported a significant revenue increase of 151% year-over-year, reaching $29.1 million in Q1 2025, driven by partnerships and acquisitions [3][4] - Recent acquisitions, including SYNQ3 and Amelia, are expected to add $45 million in recurring revenue in 2025, with a forecast of over $150 million in total revenue for the year [4][5] - The company has a strong financial position with $246 million in cash and no debt, providing a solid foundation for growth and R&D [5] - Despite its growth, SoundHound remains unprofitable, posting an adjusted loss of $0.06 per share in Q1 2025, and faces competition from major players like Amazon and Apple [6] Group 2: Veritone Inc. (VERI) - Veritone is undergoing a turnaround, focusing on enterprise AI software, with a revenue of $22.5 million in Q1 2025, down 7% year-over-year [7][8] - The divestiture of its media services division provided $59.1 million in cash and allowed Veritone to concentrate on its software products, resulting in a stable SaaS customer base with an ARR of $58.7 million [8][9] - Veritone's gross margin was approximately 61.1% GAAP in Q1 2025, indicating potential profitability if scale is achieved [9] - The company is focusing on vertical-specific AI solutions and has seen a 22% increase in new bookings year-over-year, suggesting a path toward recovery [10] Group 3: Stock Performance and Valuation - Both SoundHound and Veritone have experienced significant stock declines year-to-date, with SoundHound down 43.9% and Veritone down 47.6% [12] - SoundHound's stock trades at a forward price-to-sales ratio of 24.56X, reflecting market optimism for future growth, while Veritone trades at 0.68X [14][15] - Analysts expect SoundHound's revenue to double in 2025, while Veritone's revenue is projected to decline by 0.7% [16][17] Group 4: Conclusion - SoundHound appears to have better upside potential due to its strong revenue growth, solid balance sheet, and expanding partnerships [22][24] - Veritone, while focusing on enterprise and government AI solutions, faces challenges with declining revenue and high debt, indicating a longer path to recovery [23][24]