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]

Veritone (VERI) FY Conference Summary Company Overview - **Company Name**: Veritone - **Founded**: 2014 - **CEO**: Ryan Stielberg - **IPO Revenue**: $100 million - **Core Business**: AI-driven audio and video indexing and understanding [1][27] Industry Context - **Industry**: AI and Media Technology - **Market Dynamics**: Shift towards leveraging unstructured data (80% of new data) for advertising and content management [11][12] - **Emerging Trends**: Increased demand for training data for AI models, particularly with the rise of large language models [37][39] Key Points and Arguments Historical Context and Evolution - Veritone's journey began in the mid-90s with ad tech, evolving through various phases to focus on AI and unstructured data [3][4][10] - The company initially aimed to build a large infrastructure (aiWARE) but pivoted to develop end applications due to market readiness [28][30][31] Business Model and Revenue Streams - Current revenue is primarily derived from applications built on the aiWARE platform, with a significant focus on media and entertainment [31][36] - The introduction of Veritone Data Refinery (VDR) is expected to drive substantial growth, targeting a $17 billion market for training data in the next 5-7 years [37][41] Customer Engagement and Use Cases - Major clients include ESPN and Disney, with Veritone automating content ingestion and indexing processes [16][24] - The company processes over 60 million hours of audio and video annually, equating to approximately 11 petabytes of data [25] Public Sector Expansion - Veritone has made significant inroads into the public sector, working with the Department of Defense (DOD) and Department of Justice (DOJ) [48][55] - The technology aids in data management for law enforcement, enhancing the speed and efficiency of investigations [53][54] Additional Insights - Veritone's platform is agnostic, operating on AWS and Azure, allowing flexibility for clients [26] - The company maintains a high customer retention rate (90 percentile), indicating strong client satisfaction and loyalty [58] - Veritone positions itself as a leader in audio and video understanding, claiming no other company matches its capabilities in this domain [27] Financial Metrics - Revenue from end applications is approximately $60 million, with expectations for significant growth from VDR in 2025 and beyond [31][43] - Contracts for VDR are six figures and higher, indicating strong market interest and potential for revenue generation [44] Conclusion - Veritone is transitioning back to its core AI focus after diversifying into various sectors, with a strong emphasis on leveraging unstructured data for both commercial and public sector applications [36][60] - The company is poised for growth, particularly with the introduction of VDR and its established presence in the media and public sectors, making it a potentially undervalued stock in the AI market [62]

Financial Performance - Revenue for Q1 2025 was $22,463,000, a decrease of 7% compared to $24,153,000 in Q1 2024[19] - Operating loss for Q1 2025 was $21,634,000, an improvement from a loss of $24,370,000 in Q1 2024[19] - Net loss from continuing operations for Q1 2025 was $19,875,000, compared to a net loss of $26,200,000 in Q1 2024, reflecting a 24% reduction[19] - The company reported a comprehensive loss of $20,295,000 for Q1 2025, compared to a comprehensive loss of $24,979,000 in Q1 2024[19] - The Company reported a net loss of $(19,875,000) for the three months ended March 31, 2025, compared to a net loss of $(25,198,000) for the same period in 2024, reflecting a reduction in losses[47] - A net loss of $19.9 million was reported for Q1 2025, an improvement from a net loss of $25.2 million in Q1 2024[161] - Non-GAAP net loss for the three months ended March 31, 2025, was $11.13 million, compared to a non-GAAP net loss of $7.62 million for the same period in 2024, representing an increase of 46.5%[171] Assets and Liabilities - Total current assets increased to $61,289,000 as of March 31, 2025, up from $59,406,000 as of December 31, 2024[18] - Total liabilities remained relatively stable at $184,893,000 as of March 31, 2025, compared to $184,608,000 as of December 31, 2024[18] - Cash and cash equivalents decreased to $16,082,000 as of March 31, 2025, down from $16,911,000 as of December 31, 2024[18] - Stockholders' equity increased to $14,754,000 as of March 31, 2025, compared to $13,452,000 as of December 31, 2024[18] - As of March 31, 2025, the company had cash and cash equivalents of $16.1 million and outstanding debt obligations of $39.2 million under the Term Loan and $91.3 million under Convertible Notes[198][199] Revenue Breakdown - Software Products & Services revenue was $14.5 million, down from $15.2 million year-over-year, while Managed Services revenue decreased from $8.9 million to $8.0 million[144] - Commercial Enterprise Software Products & Services revenue decreased by $0.6 million, or 4.0%, to $13.149 million for the three months ended March 31, 2025, compared to $13.703 million in the prior year[187] - Public Sector Software Products & Services revenue decreased by $0.2 million, or 12.1%, to $1.334 million for the three months ended March 31, 2025, compared to the prior year[188] - Total revenue for the three months ended March 31, 2025, was $22.463 million, a decrease from $24.153 million in the prior year, reflecting a decline of 7.0%[186] Cash Flow and Financing - Cash used in operating activities for continuing operations was $17,044,000 in Q1 2025, compared to $15,898,000 in Q1 2024[24] - Net cash used in operating activities was $17.0 million for the three months ended March 31, 2025, an increase of $1.1 million from $15.9 million in the prior year[203] - Net cash provided by financing activities was $17.9 million for the three months ended March 31, 2025, an increase of $19.6 million compared to net cash used of $1.7 million in the prior year[205] - The Company raised approximately $20,300 in gross proceeds from a registered direct offering on January 2, 2025, selling 4,414,878 shares at $2.53 each[119] Strategic Actions and Future Outlook - The Company is evaluating additional strategies to obtain funding for future operations, which may include equity financing and operational restructuring[34] - The Company has substantial doubt about its ability to continue as a going concern over the next twelve months due to current debt service obligations and historical negative cash flows[33] - The Company expects substantial growth in 2025 from new product launches, including the Intelligent Digital Evidence Management System and Veritone Data Refinery[156] - The company achieved $40.0 million in net annualized strategic cost reductions since January 1, 2023, due to organizational restructuring efforts[154] Divestitures and Acquisitions - The divestiture of Veritone One has been classified as discontinued operations, impacting the Company's financial results and operations significantly[30] - The Company completed the divestiture of its subsidiary Veritone One for a cash proceeds of $59,053, reflecting an aggregate purchase price of $104,000, subject to adjustments and earnout provisions[53] - The divestiture of Veritone One allowed the Company to focus on its core software and applications, reducing dependency on advertising-related services[51] - The acquisition of Broadbean in June 2023 expanded the customer base throughout Europe and Asia Pacific, with plans for further international expansion[162] Internal Controls and Compliance - As of March 31, 2025, the company's disclosure controls and procedures were not effective at the reasonable assurance level due to material weaknesses in internal control over financial reporting[212] - A material weakness was identified during the preparation of the Quarterly Report for the quarter ended June 30, 2024, related to ineffective information and communication processes[214] - The identified material weaknesses have not been remediated as of March 31, 2025[215] - Management is taking remediation actions, emphasizing the importance of internal controls and a strong control environment[216]

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]