Company Performance - Veritone, Inc. reported a quarterly loss of $0.24 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.18, and compared to a loss of $0.20 per share a year ago, indicating a decline in performance [1] - The company posted revenues of $22.46 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 10.86% and down from $31.64 million in the same quarter last year [2] - Over the last four quarters, Veritone has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates during this period [2] Stock Movement and Outlook - Veritone shares have declined approximately 43.3% since the beginning of the year, contrasting with the S&P 500's decline of only 4.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.08 on revenues of $29.08 million, and for the current fiscal year, it is -$0.47 on revenues of $111.59 million [7] - The estimate revisions trend for Veritone is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Technology Services industry, to which Veritone belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a relatively strong industry performance [8] - Another company in the same industry, VerifyMe, Inc., is expected to report a quarterly loss of $0.06 per share, reflecting a year-over-year change of -20%, with revenues projected at $5.18 million, down 10% from the previous year [9]

Financial Data and Key Metrics Changes - Q1 2025 revenue was $22.5 million, down $1.7 million from Q1 2024, primarily due to a decline in managed services and software products [21][20] - Q1 GAAP gross profit was $13.9 million compared to $16.6 million in Q1 2024, resulting in a GAAP gross margin of 61.9%, down from 68.8% [25][26] - Non-GAAP net loss from continuing operations was $11.1 million, compared to $10.3 million in Q4 2024, reflecting lower non-GAAP gross profit [27] Business Line Data and Key Metrics Changes - Managed services revenue in Q1 2025 was $8 million, down $900,000, driven by declines in campaigns and slightly lower licensing [21] - Commercial enterprise revenue for software products and services declined by $600,000 year over year, largely due to decreased consumption-based revenue [23] - Veritone Data Refinery (VDR) generated approximately $900,000 in revenue in Q1 2025, with expectations for substantial year-over-year growth throughout fiscal 2025 [23][10] Market Data and Key Metrics Changes - The public sector pipeline now exceeds $110 million, indicating increasing demand for AI-based applications and services [19] - The global training data market is expected to grow from $2.4 billion in 2023 to over $17 billion by 2032, positioning Veritone strategically to capitalize on this demand [9] - The company anticipates public sector revenue growth of 100% to 150% year over year, driven by near-term deals across the Department of Defense and public safety [34] Company Strategy and Development Direction - Veritone is focused on expanding its reseller network, enhancing ATS integrations, and growing its Media Services solution to drive growth in Veritone Hire [12] - The company is leveraging its AI solutions to address challenges in the media and entertainment industry, providing efficiencies and automated workflows [6][8] - VDR is expected to generate significant revenue with a near-term pipeline of over $10 million, up from $5 million just weeks prior [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth prospects across public sector and VDR initiatives, despite some delays in larger public sector deals [20] - The company is optimistic about maintaining leadership in the AI space and delivering strong sustained growth in 2025 and beyond [11] - Management noted that the timing of contract openings and revenue contributions will be critical in achieving growth targets for Q2 and the second half of 2025 [45][44] Other Important Information - The company completed a registered direct offering, selling 4.4 million shares for gross proceeds of approximately $20.3 million [29] - As of Q1 2025, the company held cash and restricted cash of $16.4 million, down from $17.3 million at the end of 2024 [27] - The company is currently in discussions to improve its cash position and balance sheet [29] Q&A Session Summary Question: What portion of the public pipeline is new customers versus expansions? - Management indicated that the majority is customer expansion, with executed revenue-based contracts for larger pipeline customers expected soon [41] Question: Can you provide more granularity on the second quarter and annual revenue guidance? - Management stated that the second half revenue growth will be driven by VDR and public sector, with good visibility on deal sizes and contributions [42][45] Question: When could public safety deals start generating revenue? - Management confirmed that some high-visibility contracts are ready to deploy and will begin generating revenue almost immediately after contract release [52][53] Question: What steps are being taken in Veritone Hire given the tough market? - Management outlined a three-pronged approach focusing on expanding the reseller network, enhancing media services, and optimizing algorithms for better ROI [55][56] Question: Can you explain the margin flow throughout the year? - Management noted that margins are expected to improve in Q2, Q3, and Q4 as public sector deals come in at higher margins [61][64] Question: What milestones define success for VDR this year? - Management highlighted the importance of establishing credibility on both the sell and buy sides of the equation and the ability to sell the same data asset to multiple buyers [77][78]

Financial Data and Key Metrics Changes - Q1 2025 revenue was $22.5 million, down $1.7 million from Q1 2024, primarily due to a decline in managed services and software products [22][21] - Q1 GAAP gross profit was $13.9 million, compared to $16.6 million in Q1 2024, resulting in a GAAP gross margin of 61.9%, down from 68.8% [25][26] - Non-GAAP net loss from continuing operations was $11.1 million, compared to $10.3 million in Q4 2024, reflecting lower non-GAAP gross profit [27][28] Business Line Data and Key Metrics Changes - Managed services revenue in Q1 2025 was $8 million, down $900,000, driven by declines in campaigns and slightly lower licensing [22] - Software products and services revenue saw a decline of $600,000 year over year, largely due to decreased consumption-based revenue [23] - Veritone Data Refinery (VDR) generated approximately $900,000 in revenue in Q1 2025, with expectations for substantial year-over-year growth [23][10] Market Data and Key Metrics Changes - The public sector pipeline now exceeds $110 million, indicating increasing demand for AI-based applications and services [20] - The global training data market is expected to grow from $2.4 billion in 2023 to over $17 billion by 2032, positioning Veritone strategically to capitalize on this demand [9] - The company anticipates public sector revenue growth of 100% to 150% year over year, driven by near-term deals across the Department of Defense [34] Company Strategy and Development Direction - Veritone is focused on expanding its reseller network, enhancing ATS integrations, and growing its Media Services solution to drive growth in Veritone Hire [12] - The company is leveraging its AI-driven solutions to address challenges in the media and entertainment industry, which is experiencing significant growth [6][11] - VDR is expected to generate significant revenue for the remainder of the year, with a near-term pipeline of over $10 million, up from $5 million [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth prospects for the public sector and VDR initiatives, despite some delays in larger public sector deals [21][44] - The company is optimistic about maintaining leadership in the AI space and delivering strong sustained growth in 2025 and beyond [11] - Management highlighted the importance of timing in revenue generation from public sector deals, indicating readiness to deploy once contracts are signed [54] Other Important Information - The company completed a registered direct offering, raising approximately $20.3 million, which will support its liquidity position [28] - As of Q1 2025, Veritone held cash and restricted cash of $16.4 million, down from $17.3 million at the end of 2024 [27] - The company is currently in discussions to further improve its cash position and balance sheet [28] Q&A Session Summary Question: What portion of the public pipeline is new customers versus expansions? - Management indicated that the majority is customer expansion, with executed revenue-based contracts for larger pipeline customers expected soon [42] Question: Can you provide more granularity on the second quarter and annual revenue guidance? - Management stated that the second half revenue is expected to be driven by VDR and public sector deals, with good visibility on the size and contribution of these deals [44] Question: When could public safety deals start generating revenue? - Management confirmed that some high-visibility contracts are ready to deploy and will begin generating revenue almost immediately after contract release [54] Question: What steps are being taken to address challenges in Veritone Hire? - Management outlined a three-pronged approach focusing on expanding the reseller network, enhancing media services, and optimizing algorithms for better ROI [58] Question: How will margins flow throughout the year? - Management expects margins to improve as public sector deals come in and VDR matures, with a gradual increase anticipated each quarter [66]

Investor Presentation May 2025 Copyright © 2025 Veritone, Inc. All rights reserved. Copyright © 2025 Veritone, Inc. All rights reserved. Trademarks are the property of their respective owners. Forward-Looking Statements & Disclaimers This presentation of Veritone, Inc. (the "Company") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. Without limiting the generality of the foregoing, words such as " ...

Revenue and Loss - Preliminary revenue for Q1 2025 is $22.5 million, a decrease of 7.0% from $24.2 million in Q1 2024[12] - Operating loss for Q1 2025 is between $21.1 million and $20.5 million, compared to a loss of $27.2 million in Q1 2024[12] - Net loss from continuing operations for Q1 2025 is estimated to be between $21.1 million and $19.9 million, compared to a loss of $26.2 million in Q1 2024[12] - Non-GAAP net loss from continuing operations for Q1 2025 is projected at $11.4 million, compared to $10.3 million in Q1 2024[16] Operating Expenses - Total operating expenses for Q1 2025 are $44.6 million, down from $48.6 million in Q1 2024, reflecting a reduction of 8.2%[12] - Interest expense for Q1 2025 is $2.8 million, an increase from $2.4 million in Q1 2024[16] Discontinued Operations - The company reported net income from discontinued operations of $1.0 million in Q1 2024, which is not applicable for Q1 2025[12] - The company completed the sale of its subsidiary Veritone One in October 2024, classifying it as discontinued operations[5] Business Strategy and Outlook - The company is focused on expanding its aiWARE SaaS business and enhancing existing products while introducing new ones[10] - Forward-looking statements indicate potential challenges including reliance on key customers and macroeconomic factors affecting business operations[10]

AI Technology and Platform - Veritone's proprietary AI operating system, aiWARE, enables the transformation of unstructured data into structured data, enhancing business processes and insights [31]. - The aiWARE platform offers over 20 cognitive categories, allowing users to quickly analyze and optimize large volumes of data [39]. - aiWARE's capabilities include advanced analytics, intelligent data lakes, and generative AI, which are being integrated into industry-specific applications [45][46]. - The company has integrated its Veritone Hire solutions with over 120 applicant tracking systems, optimizing hiring processes through predictive AI algorithms [46]. - aiWARE is deployed in various environments, including cloud-based, on-premises, and hybrid models, ensuring flexibility for customers [41]. - The company is focused on expanding its aiWARE SaaS business, which requires increasing its customer base and revenue from existing customers [88]. - The company plans to continue significant investments in developing AI technologies and expanding the functionality of the aiWARE platform [66]. Revenue and Financial Performance - The company generated revenue primarily through Software Products & Services and Managed Services, with a focus on Commercial Enterprise and Public Sector divisions [33]. - The company reported that no single customer accounted for 10% or more of total revenues from Software Products & Services in 2024, compared to one customer accounting for 22% in 2023 [59]. - One customer accounted for 20% of total Managed Services revenues in both 2024 and 2023 [60]. - The company experienced a year-over-year decline in consumption-based revenue from a single customer across Veritone Hire in fiscal 2024 [69]. - The company experienced net losses of $37.4 million and $58.6 million in fiscal years 2024 and 2023, respectively, with an accumulated deficit of $467.3 million as of December 31, 2024 [94]. - The company expects to continue incurring significant losses for the foreseeable future, which may hinder its ability to achieve and sustain profitability [95]. - The company has a history of operating losses and negative cash flows, raising concerns about its ability to achieve profitability in the future [134]. - The ten largest customers accounted for approximately 22% of net revenues in fiscal year 2024, down from 36% in fiscal year 2023, with Amazon's contribution dropping from 25% to less than 1% [147]. Divestiture and Acquisitions - The divestiture of Veritone One, a full-service advertising agency, is expected to have a material effect on operations and financial results, with historical results classified as discontinued operations [34]. - The company sold Veritone One, which represented approximately 25% of its revenue for the twelve months ended December 31, 2024, leading to reduced revenue and less diversification [87]. - The company received net proceeds of $55.9 million from the divestiture of Veritone One, using $30.5 million to repay principal on its outstanding term loan [83]. - The company closed its acquisition of Broadbean in June 2023, as part of its growth strategy to enhance its aiWARE platform and expand its product offerings [96]. - The company expanded its international operations into Europe and Asia Pacific following the Broadbean acquisition, with plans for further international expansion [98]. Market and Competitive Landscape - The company faces competition from major technology firms such as Google, Microsoft, and Amazon in the AI-enabled solutions market [61]. - The market for AI-based software applications is relatively new and unproven, with significant uncertainty regarding its growth potential [90]. - Regulatory scrutiny over AI technologies may hinder the adoption of the company's products, impacting future growth potential [90]. - The company plans to expand into new vertical markets, including the Public Sector, but faces challenges in compliance with regulations such as FedRAMP and CJIS [145]. Risks and Challenges - The company faces substantial doubt about its ability to continue as a going concern due to historical negative cash flows and recurring losses [82]. - The company faces risks related to macroeconomic and geopolitical factors, including inflation and the threat of recession, which could negatively impact its business and financial performance [103]. - The company relies on third parties to develop AI models for its platform, which may pose risks if those third parties cease to provide their technologies [108]. - The company is vulnerable to cybersecurity risks, including supply-chain attacks, which have increased in frequency and severity [114]. - The company may experience increased state taxes due to limitations on the use of net operating loss carryforwards under new California legislation [131]. - The company may require additional capital to service its debt obligations and refinance maturing debt, which may not be available on acceptable terms [135]. - The company has experienced volatility in revenue due to reliance on a limited number of key customers, which may affect future revenue predictability [148]. Compliance and Regulatory Issues - The company is subject to stringent data privacy and security obligations, including compliance with GDPR and CCPA, which may impose additional costs and operational changes [169][171]. - Non-compliance with privacy regulations could result in financial penalties up to €20 million or 4% of annual global revenue under the EU GDPR [171]. - The evolving regulatory framework regarding data protection may require the company to fundamentally change its business model [170]. - The company faces significant challenges in transferring personal data from the EEA and UK to the United States due to stringent privacy laws, which could lead to operational disruptions and increased regulatory scrutiny [172]. - Increased regulatory scrutiny on facial recognition technology could limit market demand for the company's IDentify solution, particularly in jurisdictions with enacted bans [182]. Internal Controls and Governance - Management identified multiple material weaknesses in internal control over financial reporting, including insufficient qualified resources and ineffective risk assessment [198]. - The company has not remediated certain material weaknesses as of December 31, 2024, which could lead to misstatements in financial reporting [198]. - The company faces potential adverse regulatory consequences, including investigations or penalties by the SEC or NASDAQ, due to identified material weaknesses [202]. - The board of directors oversees the company's cybersecurity risk management processes, ensuring effective mitigation of cybersecurity threats [222]. Employee and Organizational Aspects - The company has implemented employee engagement surveys to improve company culture and employee satisfaction [76]. - As of December 31, 2024, the company had a total of 487 employees, with 469 being full-time employees [75]. - The company must attract and retain highly skilled personnel to manage its business effectively, facing intense competition for talent in its industry [106]. Cybersecurity Measures - The company has implemented various information security processes to manage material risks from cybersecurity threats to its critical data and systems [216]. - The Chief Information Officer (CIO) and Chief Information Security Officer (CISO) lead the cybersecurity risk management efforts, utilizing both manual and automated tools for threat assessment [217]. - The company maintains a vendor management program to assess and manage cybersecurity risks associated with third-party service providers [220]. - The incident response plan includes escalation procedures for significant cybersecurity incidents to key management personnel and the board of directors [225].

If there’s one thing that stands out about a potential recession, it’s that the pressure grip will tighten on companies that were already doing poorly heading into it. The tech sector, in particular, has seen a group of smaller-cap tech companies rideWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a ...

Financial Data and Key Metrics Changes - For fiscal year 2024, revenue was $92.6 million, down 7% year-over-year from $100 million in 2023, primarily due to a decline in software products and services [48][50] - GAAP gross profit for 2024 reached $62.7 million, compared to $70.3 million in 2023, reflecting a decline of $7.6 million [50] - Non-GAAP net loss from continuing operations was $48.8 million, an improvement of $5.4 million compared to 2023 [51] Business Line Data and Key Metrics Changes - Software products and services revenue decreased by 10.8% to $61.5 million, driven by a decline in commercial enterprise [48][50] - Managed service revenue remained flat year-over-year at $31.6 million [48] - In Q4 2024, revenue from continuing operations was $22.4 million, down 17.3% from Q4 2023, largely due to a decline in software products and services [52] Market Data and Key Metrics Changes - The public sector is expected to grow year-over-year by 100% to 150%, driven by IDEMS applications [60][72] - The global unstructured data solution market size is estimated to exceed $30 billion in 2024 and is projected to grow to over $90 billion by 2033 [18] - The sales pipeline for public sector opportunities now exceeds $110 million [42] Company Strategy and Development Direction - The company aims to become a leading provider of enterprise AI software applications and services across commercial and public sectors [9][10] - The divestiture of VeritoneOne focused operations on advanced AI solutions, strengthening the financial foundation and reducing debt servicing [15][16] - The launch of Veritone Data Refinery is expected to significantly contribute to revenue growth in 2025 and beyond [27][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to accelerate growth due to trends in enterprise-wide AI adoption and the increasing volume of unstructured data [8][21] - The company is optimistic about the public sector's growth prospects, particularly with ongoing contracts and deployments in the Department of Defense [35][60] - Management highlighted the importance of cost structure improvements and strategic focus on AI solutions as key to achieving profitability by fiscal 2026 [60][78] Other Important Information - The company appointed Francisco J. Morales to the board of directors, replacing Chad Steelberg [44] - The divestiture of VeritoneOne resulted in a gain of $69.6 million, included in discontinued operations for Q4 and fiscal 2024 results [62] - As of December 31, 2024, the company held cash and restricted cash of $17.3 million, down from $47.5 million at the end of 2023 [63] Q&A Session Summary Question: When will the consumption customer headwinds fully anniversary? - Management indicated that Q1 2024 will mark the end of the consumption comparison [82] Question: Are there any disruptions due to the new administration in the federal government? - Management stated that they are not experiencing disruptions for contracts awarded previously, as current deployments are primarily funded by approved 2025 dollars [84][85] Question: What is the potential upsell opportunity from new commercial customers? - Management noted that initial contracts may have lower margins but expect upsell opportunities to normalize over the year, particularly with the VDR segment [88][90]

March 2025 Copyright © 2025 Veritone, Inc. All rights reserved. Trademarks are the property of their respective owners. Copyright © 2025 Veritone, Inc. All rights reserved. Forward-Looking Statements & Disclaimers This presentation of Veritone, Inc. (the "Company") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. Without limiting the generality of the foregoing, words such as "anticipates," "belie ...

Financial Data and Key Metrics Changes - For fiscal year 2024, revenue was $92.6 million, down 7% year-over-year from $100 million in 2023, primarily due to a decline in software products and services revenue [31][32] - GAAP gross profit for 2024 reached $62.7 million, a decline of $7.6 million from 2023, with a GAAP gross margin of 67.6%, down from 70.4% in 2023 [32] - Non-GAAP net loss from continuing operations was $48.8 million, an improvement of $5.4 million compared to 2023 [33] Business Line Data and Key Metrics Changes - Software products and services revenue decreased by $7.4 million or 10.8%, while managed service revenue remained flat at $31.6 million year-over-year [31] - In Q4 2024, revenue from continuing operations was $22.4 million, down $4.7 million from Q4 2023, primarily due to a decline in software products and services [34] - Annual Recurring Revenue (ARR) was $58.8 million, down year-over-year, with 81% of ARR coming from subscription-based customers, up from 61.3% in Q4 2023 [35] Market Data and Key Metrics Changes - The global unstructured data solution market is estimated to be over $30 billion in 2024 and expected to expand to over $90 billion by 2033 [13] - The public sector is projected to grow year-over-year by 100% to 150%, driven by IDEMS applications [47] Company Strategy and Development Direction - The company aims to become a leading enterprise AI software provider across commercial and public sectors, focusing on advanced AI solutions [7][11] - The divestiture of Veritone One was a significant strategic move to concentrate resources on AI solutions, strengthening the financial foundation and reducing debt [11][39] - The launch of Veritone Data Refinery (VDR) is expected to be a major contributor to revenue growth in 2025 and beyond [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to accelerate growth due to trends in enterprise-wide AI adoption and the increasing volume of unstructured data [6][7] - The company anticipates a breakout year in 2025 for its public sector business, with significant opportunities in government contracts [24][47] - Management highlighted the importance of maintaining a diversified revenue base, with no single customer accounting for more than 5% of total revenue [12][33] Other Important Information - The company appointed Francisco J. Morales to the board of directors, replacing Chad Steelberg [28] - The company has executed over $40 million in annualized cost savings, including a 15% reduction in global workforce [38][50] Q&A Session Summary Question: When will the consumption customer headwinds fully anniversary? - Management indicated that Q1 2024 will mark the end of the consumption comparison [54] Question: Are there any disruptions due to administration turnover in the federal government? - Management stated that they are not experiencing disruptions for awarded contracts and are closely monitoring the budget cycle [55] Question: What is the potential for upsell opportunities with new commercial customers? - Management noted that initial contracts may have lower margins but expect normalization over the year, with significant upsell opportunities anticipated [56][57]