Veritone(VERI)2024-11-12 21:32Financial Performance - Total revenue for the three months ended September 30, 2024, was $21,993,000, a decrease of 21.4% compared to $27,968,000 for the same period in 2023[7]. - Net loss for the three months ended September 30, 2024, was $21,746,000, compared to a net loss of $24,541,000 for the same period in 2023, representing a 11.4% improvement[7]. - The company reported a loss from operations of $(22,492,000) for the three months ended September 30, 2024, compared to $(25,183,000) for the same period in 2023, reflecting a 10.7% improvement[7]. - Basic and diluted net loss per share from continuing operations for the three months ended September 30, 2024, was $(0.59), an improvement from $(0.72) in the same period of 2023[7]. - The net loss for the nine months ended September 30, 2023, was $69,175,000, compared to a net loss of $70,800,000 for the same period in 2022, indicating a slight improvement[14]. - The company reported a net loss from continuing operations of $22,511 million for the three months ended September 30, 2024, compared to a net loss of $26,732 million for the same period in 2023[74]. - Non-GAAP net loss from continuing operations for the three months ended September 30, 2024, was $(11,097) million, compared to $(10,411) million for the same period in 2023[161]. Cash and Liquidity - Cash and cash equivalents decreased to $11,422,000 as of September 30, 2024, from $46,609,000 as of December 31, 2023, a decline of 75.5%[5]. - The company reported a net decrease in cash, cash equivalents, and restricted cash of $33.5 million for the nine months ended September 30, 2024[194]. - Cash used in operating activities for the nine months ended September 30, 2024, was $24,223,000, a decrease from $48,111,000 in the same period of 2022[14]. - 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[192]. Expenses - Operating expenses for the three months ended September 30, 2024, were $44,485,000, down 16.3% from $53,151,000 in the prior year[7]. - Research and development expenses for the three months ended September 30, 2024, were $7,528,000, a decrease of 27.5% from $10,410,000 in the same period last year[7]. - Stock-based compensation expense for the three months ended September 30, 2024, was $2,586 thousand, compared to $5,267 thousand in the same period last year, a decrease of 50.9%[156]. - The company incurred $3.9 million in one-time severance and transition expenses related to restructuring initiatives[134]. Assets and Liabilities - Total current liabilities increased to $249,287,000 as of September 30, 2024, from $191,869,000 as of December 31, 2023, an increase of 30%[5]. - Total assets decreased to $336,425,000 as of September 30, 2024, from $378,858,000 as of December 31, 2023, a decline of 11.2%[5]. - The accumulated deficit as of September 30, 2024, was $(499,071,000), worsening from $(429,896,000) as of December 31, 2023[8]. - The company reported a total accumulated deficit of $442,071,000 as of September 30, 2023, compared to $371,271,000 as of December 31, 2022[12]. Acquisitions and Divestitures - The company completed the acquisition of Broadbean, a leader in talent acquisition software, on June 13, 2023, enhancing its service offerings[19]. - The company completed the sale of Veritone One for total consideration up to $104,000, with net cash proceeds of $59,053 after adjustments[24]. - The acquisition of Broadbean was completed on June 13, 2023, for a total purchase consideration of $53,301 million, aimed at enhancing the AI-driven human resources product suite[40][41]. Revenue Streams - Revenue from Commercial Enterprise for the nine months ended September 30, 2024, was $65,968 million, down from $68,411 million in 2023, representing a decline of 3.5%[99]. - Software Products & Services revenue for the three months ended September 30, 2024, was $14.7 million, down 28.0% from $20.4 million in the same period of 2023[146]. - Managed Services revenue for the three months ended September 30, 2024, was $7.3 million, a slight decrease from $7.6 million in the same period of 2023[146]. - The company expanded its customer base in Europe and Asia Pacific following the acquisition of Broadbean in June 2023, with 28.9% of consolidated revenue coming from international customers for the three months ended September 30, 2024[102]. Debt and Financing - A senior secured term loan of $77,500 million was fully drawn on December 13, 2023, with a scheduled maturity date of December 13, 2027[49][52]. - Interest expense related to the term loan for the nine months ended September 30, 2024, was $7,402 million, with an effective annual interest rate of approximately 31.3%[55]. - The Company has $91,250 million in aggregate principal amount of Convertible Notes outstanding as of September 30, 2024, after repurchasing $60,000 million in December 2022 and $50,000 million in December 2023[58]. Future Outlook - The company is evaluating additional strategies to obtain funding for future operations, including equity financing and operational restructuring[24]. - The company expects to achieve over $40.0 million in net annualized strategic cost reductions due to operational realignment and restructuring initiatives[134]. - Current global economic conditions, including inflation and geopolitical factors, may negatively impact the company's operational and financial performance[150].