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 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]