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]

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 - 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]

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]