- Q1 Total Revenue of $31.6 Million,
Outperforming the High End of Guidance - - Total ARR (SaaS and
Consumption) of $72.1 Million from 3,384 Total Software Products
& Services Customers, Including ARR (SaaS) of $48.6 Million or
67% from Subscription-based Customers – - Q1 Total New Bookings of
$13.0 Million – - Q1 Restructuring Resulted in Over $13.0 Million
in Forecasted Annualized Savings, Accelerating Non-GAAP Net Income
to as Early as Q4 2024 -
Veritone, Inc. (NASDAQ:VERI), a leader in designing
human-centered AI solutions, today reported results for the first
quarter ended March 31, 2024.
“Veritone executed at a high level in the first quarter with
total revenue of $31.6 million, outperforming the high end of our
guidance range. Our customer retention and engagement metrics
remained strong, highlighted by a 7% year-over-year increase in ARR
from subscription-based customers as we work to decrease historical
revenue dependencies from consumption-based customers,” said Ryan
Steelberg, CEO & President of Veritone. “We demonstrated strong
progress against our commitments to right-size our operating
structure and strategically align our investments to position
Veritone for long-term agility and to serve true customer demand.
As the adoption of enterprise-wide generative AI accelerates,
Veritone stands ready to capitalize on the immense opportunities
ahead, partnering with our customers to advance the capabilities of
AI and foster a more empowered society. We look forward to
continuing to execute the opportunities in front of us and strive
to drive long-term shareholder value.”
First Quarter 2024 Financial
Highlights
Calculated on a Pro Forma basis where noted; for additional
information on these calculations, see “Note Regarding Pro Forma
Information” and the definitions provided for each metric
cited.
- Revenue of $31.6 million, an increase of 4.5% compared to Q1
2023.
- Software Products and Services revenues of $15.2 million, an
increase of 7.8% compared to GAAP revenue of $14.1 million in Q1
2023, and a decrease of 32.1% when compared to Pro Forma Software
Revenue for Q1 2023 driven by the decline in consumption-based
revenue from customers, including Amazon, offset by a slight
increase in Broadbean revenue year over year.
- Managed Services revenue of $16.4 million, an increase of 1.9%
compared to Q1 2023.
- Total Software Products & Services Customers of 3,384, down
10% year over year, as compared to March 31, 2023.
- Total New Bookings of $13.0 million, down from $22.8 million in
Q1 2023 driven by a decline in consumption-based customers.
- Annual Recurring Revenue (“ARR”) of $72.1 million, down from
$112.7 in Q1 2023 driven by declines in consumption-based revenue
from our largest customer, offset by a 7% increase from recurring
subscription-based revenue customers.
- Loss from Operations of $21.8 million, as compared to a loss of
$23.6 million in Q1 2023.
- Non-GAAP gross profit of $24.6 million, an increase of $1.1
million as compared to Q1 2023.
- Net Loss of $25.2 million, as compared to $23.0 million in Q1
2023.
- Non-GAAP Net Loss of $7.6 million, improving 20.3% as compared
to Q1 2023.
Note Regarding Pro Forma
Information
"Pro Forma” information provided in this press release
represents the historical information of Veritone combined with the
historical information of Broadbean (as defined below) for the
applicable period on a Pro Forma basis as if Veritone had acquired
Broadbean on January 1, 2022. Veritone completed its acquisition of
(i) all of the issued and outstanding share capital of (a)
Broadbean Technology Pty Ltd ACN 116 011 959 / ABN 79 116 011 959,
a limited company incorporated under the laws of Australia, (b)
Broadbean Technology Limited, a limited company incorporated under
the laws of England and Wales, (c) Broadbean, Inc., a Delaware
corporation and (d) CareerBuilder France S.A.R.L., a limited
liability company organized (société à responsabilité limitée)
under the laws of France, and (ii) certain assets and liabilities
related thereto (the foregoing clauses (i) and (ii) together,
“Broadbean”) on June 13, 2023.
Three Months Ended March
31,
Unaudited
Percent
(in $000s)
2024
2023
Change
Revenue
$
31,636
$
30,263
5
%
Loss from operations
$
(21,840
)
$
(23,589
)
(7
)%
Net income (loss)
$
(25,198
)
$
(22,963
)
10
%
Non-GAAP gross profit*
$
24,590
$
23,454
5
%
Non-GAAP net income (loss)*
$
(7,618
)
$
(9,555
)
20
%
Three Months Ended March
31,
Software Products & Services
Percent
(in $000s, except customers)
2024
2023
Change
Pro Forma Software Revenue(1)*
$
15,220
$
22,423
(32
)%
Total Software Products & Services
Customers(2)
3,384
3,773
(10
)%
Annual Recurring Revenue (ARR)(3)*
$
72,112
$
112,695
(36
)%
Total New Bookings(4)
$
12,964
$
22,794
(43
)%
Gross Retention(5)
>90%
>90%
(1) “Pro Forma Software Revenue” is a
non-GAAP measure that represents Software Products & Services
revenue on a Pro Forma basis.
(2) “Total Software Products &
Services Customers” includes Pro Forma Software Products &
Services customers as of the end of each respective quarter set
forth above with net revenues in excess of $10 and also excludes
any customers categorized by us as trial or pilot status. In prior
periods, we provided “Ending Software Customers,” which represented
Software Products & Services customers as of the end of each
fiscal quarter with trailing twelve-month revenues in excess of
$2,400 for both Veritone, Inc. and PandoLogic Ltd. and/or deemed by
Veritone to be under an active contract for the applicable periods.
Total Software Products & Services Customers is not comparable
to Ending Software Customers. Total Software Products &
Services Customers includes customers based on revenues in the last
month of the quarter rather than on a trailing twelve month basis
and excludes any customers that are on trial or pilot status with
us rather than including customers with active contracts.
Management uses Total Software Products & Services Customers
and we believe Total Software Products & Services Customers are
useful to investors because it more accurately reflects our total
customers for our Software Products & Services inclusive of
Broadbean.
(3) “Annual Recurring Revenue” is
calculated as Annual Recurring Revenue (SaaS), which is an
annualized calculation of monthly recurring revenue during the last
month of the applicable quarter for all Total Software Products
& Services customers, combined with Annual Recurring Revenue
(Consumption), which is the trailing twelve month calculation of
all non-recurring and/or consumption-based revenue for all active
Total Software Products & Services customers. In prior periods,
we provided “Average Annual Revenue,” which was calculated as the
aggregate of trailing twelve-month Software Products & Services
revenue divided by the average number of customers over the same
period for both Veritone, Inc. and PandoLogic Ltd. Annual Recurring
Revenue is not comparable to Average Annual Revenue. Annual
Recurring Revenue is on a Pro Forma basis, is not averaged among
active customers and uses a calculation of recurring revenue as
described above instead of annual revenue. Management uses “Annual
Recurring Revenue” and we believe Annual Recurring Revenue is
useful to investors because Broadbean significantly increases our
mix of subscription-based SaaS revenues as compared to
non-recurring and/or consumption-based revenues.
(4) “Total New Bookings” represents the
total fees payable during the full contract term for new contracts
received in the quarter (including fees payable during any
cancellable portion and an estimate of license fees that may
fluctuate over the term), excluding any variable fees under the
contract (e.g., fees for cognitive processing, storage,
professional services and other variable services), in each case on
a Pro Forma basis.
(5) “Gross Revenue Retention” represents a
calculation of our dollar-based gross revenue retention rate as of
the period end by starting with the revenue from Software Products
& Services Customers as of the 3 months in the prior year
quarter to such period, or Prior Year Quarter Revenue. We then
deduct from the Prior Year Quarter Revenue any revenue from
Software Products & Services Customers who are no longer
customers as of the current period end, or Current Period Ending
Software Customer Revenue. We then divide the total Current Period
Ending Software Customer Revenue by the total Prior Year Quarter
Revenue to arrive at our dollar-based gross retention rate, which
is the percentage of revenue from all Software Products &
Services Customers from our Software Products & Services as of
the year prior that is not lost to customer churn. All numbers used
to determine Gross Revenue Retention are calculated on a Pro Forma
basis.
* See tables below for reconciliation of
non-GAAP financial measures to directly comparable GAAP measures
and for the definitions used for Software Products & Services
Supplemental Financial Information.
Recent Business
Highlights
- Signed 19 Public Safety & Government customers in the first
quarter, which includes three new Federal customers, including a
primary state law enforcement agency, intending to use Veritone
Redact to automate audio and video redaction workflows, aimed at
reducing lengthy manual processes, and addressing their Freedom of
Information Act (“FOIA”) request backlog.
- Announced the launch of Veritone’s AI consulting and services
group to address customer and market-driven needs for increased AI
enterprise-level services.
- Veritone continued its strong advertising momentum, with annual
agency bookings growth year over year and signed several new
customers, including the largest direct-to-consumer, pet supplies
company, Chewy.
- Signed over 20 new Media & Entertainment deals in the first
quarter, including new deals with Summit Media, the U.S. Soccer
Federation, and NBC Universal, and renewals with key customers
including Beasley Media Group, Crawford Broadcasting, and Augusta
National and upsells with Golf Magazine and Sony Pictures
Entertainment.
- Announced a partnership with Grabyo, a leading cloud video
platform for live broadcasting, live clipping, and distribution, to
streamline live digital content production and leverage AI-driven
content management and monetization tools to meet the evolving
needs of sports organizations in today’s fast-paced digital
landscape.
- Achieved AWS Advanced Tier Services status, advancing our AWS
Partner capabilities, further accelerating partner driven revenue
opportunities, and empowering Veritone to expand and deploy
innovative AI solutions.
- Named NAB Product of the Year for the 5th straight year for its
recently launched Ask Veri solution, a new Generative AI media
intelligence and natural language tool.
- Released feature enhancements to its Advertising and Content
Intelligence Suite designed to embrace data privacy while helping
to safeguard ad revenues.
- Q1 restructuring of organization resulted in over $13.0 million
in forecasted annualized cost savings, accelerating non-GAAP net
income to as early as Q4 2024.
Financial Results for Three Months
Ended March 31, 2024
Delivered first quarter revenue of $31.6 million, an increase of
$1.3 million or 4.3% from $30.3 million in the first quarter of
2023. Software Products & Services revenue of $15.2 million
increased $1.1 million or 7.8% year over year driven by the Q2 2023
acquisition of Broadbean, which generated $8.5 million in revenue
in Q1 2024, offset by the decline in legacy Veritone Hire revenue
over the same period, including Amazon. Managed Services revenue
was relatively flat year over year, increasing by $0.3 million, or
1.7%, to $16.4 million.
Loss from operations was $21.8 million as compared to a loss of
$23.6 million in Q1 2023 driven in part by a net $2.5 million
decrease in operating expense including the impact of the Q2 2023
Broadbean Acquisition, a $1.1 million increase in non-GAAP gross
profit driven by higher revenue, and a $0.7 million decline in
non-cash depreciation, amortization, and stock based compensation,
offset by a $2.5 million increase in severance and transition
costs. Non-GAAP gross margin of 77.7% was relatively flat compared
to the first quarter of 2023. GAAP net loss was $25.2 million,
compared to GAAP net loss of $23.0 million in the first quarter of
2023, driven by an increase of $3.2 million in net interest expense
associated with the Company’s December 2023 term loan, which
included $1.3 million of non-cash amortization associated with the
initial discount and issuance costs of the debt, offset by the $1.8
million decrease in loss from operations. Non-GAAP net loss of $7.6
million decreased by over 20% when compared to non-GAAP net loss of
$9.6 million in the first quarter of 2023, largely driven by the
increase in non-GAAP gross profit, coupled with reductions in our
cost structure since the first quarter of 2023.
During Q1 2024, Total Software Product & Services Customers
of 3,384 was down 11% year over year on a Pro Forma basis
principally due to reductions in legacy Career Builder customers
transitioned off our Hire platform following our acquisition of
Broadbean. Total New Bookings on a Pro Forma basis decreased by
43.1% to $13.0 million versus the comparable period a year ago
largely driven by a reduction in revenue from consumption-based
customers, including Amazon. Annual Recurring Revenue on a Pro
Forma basis of $72.1 million decreased 36% year over year driven in
large part by the decline in consumption spending from customers,
offset by 7% year over year increase in subscription-based
customers. Excluding the decline in consumption-based spending from
Amazon, Software Products & Services revenue growth would have
increased over 75% year over year.
As of March 31, 2024, the Company had cash and cash equivalents
of $90.7 million, including approximately $73.3 million of cash
received from Managed Services clients for future payments to
vendors.
Business Outlook
Second Quarter 2024
- Revenue is expected to be in the range of $31.0 million to
$32.0 million, as compared to $30.0 million in the second quarter
of 2023.
- Non-GAAP net loss is expected to be in the range of $5.5
million to $6.5 million, compared to non-GAAP net loss of $13.0
million in the second quarter of 2023.
Full Year 2024
- Revenue is expected to be in the range of $136.0 million to
$142.0 million, as compared to $127.6 million for fiscal 2023.
- Non-GAAP net loss is expected to be in the range of $11.0
million to $15.0 million, compared to non-GAAP net loss of $37.5
million for fiscal 2023.
These updated financial guidance ranges supersede any previously
disclosed financial guidance and investors should not rely on any
previously disclosed financial guidance.
Conference Call
Veritone will hold a conference call to deliver management’s
prepared remarks on Tuesday, May 7, 2024, at 5:00 p.m. Eastern Time
(2:00 p.m. Pacific Time) to discuss its first quarter 2024 results,
provide an update on the business and conduct a question-and-answer
session. To participate, please join the audio webcast or dial-in
and ask to be connected to the Veritone earnings conference call.
To avoid a delay, if dialing in, please pre-register or join the
live audio webcast.
- Pre-Registration*
- Live Audio Webcast
- Domestic Call Number: (844) 750-4897
- International Call Number: (412) 317-5293
A replay of the conference call can be accessed one hour after
the end of the conference call through May 14, 2024. The full
webcast replay will be available through May 7, 2025. To access the
earnings webcast replay please visit the Veritone Investor
Relations website.
- Domestic Replay Number: (877) 344-7529
- International Replay Number: (412) 317-0088
- Replay Access Code: 7195217
* Please note that pre-registered participants will receive
their dial-in number and unique PIN upon registration.
About the Presentation of Supplemental
Non-GAAP Financial Information and Key Performance
Indicators
In this news release, the Company has supplemented its financial
measures prepared in accordance with U.S. generally accepted
accounting principles (GAAP) with certain non-GAAP financial
measures, including Pro Forma Software Revenue, Non-GAAP gross
profit, Non-GAAP gross margin, Non-GAAP net income (loss) and
Non-GAAP net income (loss) per share. The Company also provides
certain key performance indicators (KPIs), including Total Software
Products & Services Customers, Annual Recurring Revenue, Annual
Recurring Revenue (SaaS), Annual Recurring Revenue (Consumption),
Total New Bookings and Gross Revenue Retention. The Company has
posted additional supplemental financial information on its website
at investors.veritone.com concurrently with this press release.
Pro Forma Software Revenue represents Software Products &
Services revenue on a Pro Forma basis. Non-GAAP gross profit is
defined as revenue less cost of revenue. Non-GAAP gross margin is
defined as Non-GAAP gross profit divided by revenue. Non-GAAP net
income (loss) and non-GAAP net income (loss) per share,
respectively, is the Company’s net income (loss) and net income
(loss) per share, adjusted to exclude provision for income taxes,
depreciation expense, amortization expense, stock-based
compensation expense, changes in fair value of warrant liability,
changes in fair value of contingent consideration, interest income,
interest expense, foreign currency gains and losses, acquisition
and due diligence costs, gain on sale of energy group, contribution
of business held for sale, variable consultant performance bonus
expense, and severance and executive transition costs. The items
excluded from these non-GAAP financial measures, as well as a
breakdown of GAAP net income (loss), non-GAAP net income (loss) and
these excluded items between the Company’s Core Operations and
Corporate, are detailed in the reconciliations included following
the financial statements attached to this news release. In
addition, following the financial statements attached to this news
release, the Company has provided additional supplemental non-GAAP
measures of operating expenses, loss from operations, other income
(expense), net, and loss before income taxes, excluding the items
excluded from non-GAAP net loss as noted above, and reconciling
such non-GAAP measures to the most directly comparable GAAP
measures.
The Company has provided these non-GAAP financial measures and
KPIs because management believes such information to be important
supplemental measures of performance that are commonly used by
securities analysts, investors and other interested parties in the
evaluation of companies in its industry. Management also uses this
information internally for forecasting and budgeting. The non-GAAP
financial measures should not be considered as an alternative to
revenue, net income (loss), operating income (loss) or any other
financial measures so calculated and presented, nor as an
alternative to cash flow from operating activities as a measure of
liquidity. Other companies (including the Company’s competitors)
may define these non-GAAP financial measures differently. The
non-GAAP financial measures may not be indicative of the historical
operating results of Veritone or predictive of potential future
results. Investors should not consider these non-GAAP financial
measures in isolation or as a substitute for analysis of the
Company’s results as reported in accordance with GAAP.
In addition, the Company defines the following capitalized terms
in this news release as follows:
Core Operations consists of the Company’s aiWARE operating
platform of software, SaaS and related services; content licensing
and advertising agency services; and their supporting operations,
including direct costs of sales as well as operating expenses for
sales, marketing and product development and certain general and
administrative costs dedicated to these operations.
Corporate principally consists of general and administrative
functions such as executive, finance, legal, people operations,
fixed overhead expenses (including facilities and information
technology expenses), other income (expenses) and taxes, and other
expenses that support the entire Company, including public company
driven costs.
Software Products & Services consists of revenues generated
from commercial enterprise and government and regulated industries
customers using our aiWARE platform and Hiring Solutions, any
related support and maintenance services, and any related
professional services associated with the deployment and/or
implementation of such solutions.
Managed Services consist of revenues generated from commercial
enterprise customers using our content licensing services and
advertising agency and related services.
About Veritone
Veritone (NASDAQ: VERI) designs human-centered AI solutions.
Serving customers in the talent acquisition, media, entertainment
and public sector industries, Veritone's software and services
empower individuals at many of the world’s largest and most
recognizable brands to run more efficiently, accelerate decision
making and increase profitability. Veritone’s leading enterprise AI
platform, aiWARE™, orchestrates an ever-growing ecosystem of
machine learning models, transforming data sources into actionable
intelligence. By blending human expertise with AI technology,
Veritone advances human potential to help organizations solve
problems and achieve more than ever before, enhancing lives
everywhere.
To learn more, visit Veritone.com.
Safe Harbor Statement
This news release contains forward-looking statements, including
without limitation, statements regarding our prospects for the
remainder of 2024, our ability to deliver AI solutions to our
customers and serve customer demand, our ability to capitalize on
actual or potential acceleration of enterprise-wide generative AI,
our ability to accelerate non-GAAP net income as soon as Q4 2024,
our ability to realize annualized cost-savings including from our
recent restructuring, our ability to drive long-term shareholder
value, ability to achieve our annual cost savings forecast, and our
expected total revenue and non-GAAP net loss for Q2 2024 and for
full year 2024. In addition, words such as “may,” “will,” “expect,”
“believe,” “anticipate,” “intend,” “plan,” “outlook,” “should,”
“could,” “estimate” or “continue” or the plural, negative or other
variations thereof or comparable terminology are intended to
identify forward-looking statements, and any statements that refer
to expectations, projections or other characterizations of future
events or circumstances are forward-looking statements. These
forward-looking statements speak only as of the date hereof, and
are based on management’s current assumptions, expectations,
beliefs and information. As such, our actual results could differ
materially and adversely from those expressed in any
forward-looking statement as a result of various factors. Important
factors that could cause such differences include, among other
things, our ability to expand our aiWARE SaaS business; declines or
limited growth in the market for AI-based software applications and
concerns over the use of AI that may hinder the adoption of AI
technologies; our requirements for additional capital to support
our business growth and the availability of such capital on
acceptable terms, if at all; our reliance upon a limited number of
key customers for a significant portion of our revenue, including
declines in key customers’ usage of our products and other
offerings, our ability to realize the intended benefits of our
acquisitions and divestitures, including our ability to
successfully integrate our recent acquisition of Broadbean; our
identification of existing material weaknesses in our internal
control over financial reporting; fluctuations in our results over
time; the impact of seasonality on our business; our ability to
manage our growth, including through acquisitions and our further
expansion into international markets; our ability to enhance our
existing products and introduce new products that achieve market
acceptance and keep pace with technological developments; actions
by our competitors, partners and others that may block us from
using the third party technologies in our aiWARE platform, offering
it for free to the public or making it cost prohibitive to continue
to incorporate such technologies into our platform; interruptions,
performance problems or security issues with our technology and
infrastructure, or that of our third party service providers; the
impact of the continuing economic disruption caused by
macroeconomic and geopolitical factors, including the
Russia-Ukraine conflict, the war in Israel, financial instability,
inflation rates and the responses by central banking authorities to
control inflation, monetary supply shifts and the threat of
recession in the United States and around the world on our business
operations and those of our existing and potential customers; and
future business decisions, all of which are difficult or impossible
to predict accurately and many of which are beyond our control.
Certain of these judgments and risks are discussed in more detail
in our most recently-filed Annual Report on Form 10-K, and our most
recently-filed Quarterly report on Form 10-Q, and other periodic
reports filed from time to time with the Securities and Exchange
Commission. In light of the significant uncertainties inherent in
the forward-looking information included herein, the inclusion of
such information should not be regarded as a representation by us
or any other person that our objectives or plans will be achieved.
The forward-looking statements contained herein reflect our
beliefs, estimates and predictions as of the date hereof, and we
undertake no obligation to revise or update the forward-looking
statements contained herein to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events for any reason, except as required by law.
VERITONE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(in thousands)
As of
March 31, 2024
December 31, 2023
ASSETS
Cash and cash equivalents
$
90,733
$
79,439
Accounts receivable, net
45,749
69,266
Expenditures billable to clients
20,043
19,608
Prepaid expenses and other current
assets
15,844
14,457
Total current assets
172,369
182,770
Property, equipment and improvements,
net
9,165
8,656
Intangible assets, net
77,443
83,423
Goodwill
79,828
80,247
Long-term restricted cash
929
867
Other assets
19,907
19,851
Total assets
$
359,641
$
375,814
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable
$
36,588
$
32,756
Accrued media payments
84,848
93,896
Client advances
28,295
15,452
Deferred revenue
13,415
12,813
Senior Secured Term Loan, current
portion
7,750
5,813
Contingent consideration, current
500
1,000
Other accrued liabilities
26,275
27,095
Total current liabilities
197,671
188,825
Convertible senior notes, non-current
89,717
89,572
Senior Secured Term Loan, non-current
44,407
45,012
Contingent consideration, non-current
450
633
Other non-current liabilities
12,531
13,625
Total liabilities
344,776
337,667
Total stockholders' equity
14,865
38,147
Total liabilities and stockholders'
equity
$
359,641
$
375,814
VERITONE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
AND COMPREHENSIVE INCOME
(LOSS)
(in thousands, except per
share and share data)
Three Months Ended March
31,
2024
2023
Revenue
$
31,636
$
30,263
Operating expenses:
Cost of revenue
7,046
6,809
Sales and marketing
11,804
12,690
Research and development
9,215
11,527
General and administrative
19,420
17,397
Amortization
5,991
5,429
Total operating expenses
53,476
53,852
Loss from operations
(21,840
)
(23,589
)
Other income (expense), net
(4,403
)
355
Loss before provision for income taxes
(26,243
)
(23,234
)
(Benefit from) provision for income
taxes
(1,045
)
(271
)
Net loss
$
(25,198
)
$
(22,963
)
Net loss per share:
Basic and diluted
$
(0.67
)
$
(0.63
)
Weighted average shares outstanding:
Basic and diluted
37,353,228
36,587,946
Comprehensive loss:
Net loss
$
(25,198
)
$
(22,963
)
Foreign currency translation (loss) gain,
net of income taxes
219
(766
)
Total comprehensive loss
$
(24,979
)
$
(23,729
)
VERITONE, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
(in thousands)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities:
Net loss
$
(25,198
)
$
(22,963
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
7,502
5,907
Provision for credit losses
234
(72
)
Stock-based compensation expense
1,608
3,917
Change in fair value of contingent
consideration
—
651
Change in deferred taxes
(1,336
)
(311
)
Amortization of debt issuance costs
1,323
215
Amortization of right-of-use assets
251
300
Imputed non-cash interest income
(107
)
(22
)
Changes in assets and liabilities:
Accounts receivable
23,283
2,002
Expenditures billable to clients
(435
)
9,304
Prepaid expenses and other assets
(1,280
)
631
Other assets
318
234
Accounts payable
3,832
1,277
Deferred revenue
602
—
Accrued media payments
(9,048
)
(19,657
)
Client advances
12,843
(15,630
)
Other accrued liabilities
1,297
2,211
Other liabilities
242
(1,779
)
Net cash provided by (used in) operating
activities
15,931
(33,785
)
Cash flows from investing
activities:
Capital expenditures
(1,901
)
(1,447
)
Acquisitions, net of cash acquired
—
(1,500
)
Net cash used in investing activities
(1,901
)
(2,947
)
Cash flows from financing
activities:
Payment of contingent consideration
(1,000
)
(7,772
)
Taxes paid related to net share settlement
of equity awards
—
(852
)
Proceeds from issuances of stock under
employee stock plans, net
126
643
Settlement of deferred consideration for
acquisitions
(1,800
)
—
Net cash used in financing activities
(2,674
)
(7,981
)
Net increase (decrease) in cash and cash
equivalents and restricted cash
11,356
(44,713
)
Cash and cash equivalents and restricted
cash, beginning of period
80,306
185,282
Cash and cash equivalents and restricted
cash, end of period
$
91,662
$
140,569
VERITONE, INC.
REVENUE DETAIL
(UNAUDITED)
(in thousands)
Three Months Ended March 31,
2024
Three Months Ended March 31,
2023
Government &
Government &
Commercial
Regulated
Commercial
Regulated
Enterprise
Industries
Total
Enterprise
Industries
Total
Total Software Products &
Services
$
13,703
$
1,517
$
15,220
$
12,732
$
1,395
$
14,127
Managed Services
Advertising
10,975
—
10,975
10,535
—
10,535
Licensing
5,441
—
5,441
5,601
—
5,601
Total Managed Services
16,416
—
16,416
16,136
—
16,136
Total Revenue
$
30,119
$
1,517
$
31,636
$
28,868
$
1,395
$
30,263
VERITONE, INC.
RECONCILIATION OF NON-GAAP NET
INCOME (LOSS) TO GAAP NET LOSS (UNAUDITED)
(in thousands)
Three Months Ended March
31,
2024
2023
Core Operations(1)
Corporate(2)
Total
Core Operations(1)
Corporate(2)
Total
Net loss
$
(10,992
)
$
(14,206
)
$
(25,198
)
$
(12,570
)
$
(10,393
)
$
(22,963
)
(Benefit from) provision for income
taxes
(1,045
)
—
(1,045
)
(504
)
233
(271
)
Depreciation and amortization
7,409
93
7,502
5,754
153
5,907
Stock-based compensation expense
1,040
568
1,608
2,335
1,582
3,917
Change in fair value of contingent
consideration
—
—
—
—
651
651
Acquisition compensation expense
—
317
317
—
—
—
Interest expense, net
—
3,991
3,991
9
796
805
Foreign currency impact
—
413
413
(1,146
)
(15
)
(1,161
)
Acquisition and due diligence costs
140
801
941
—
805
805
Contribution of business held for sale
(3)
3
—
3
917
—
917
Variable consultant performance bonus
expense (4)
—
—
—
394
—
394
Severance and executive transition
costs
2,267
1,583
3,850
1,027
417
1,444
Non-GAAP net income (loss)
$
(1,178
)
$
(6,440
)
$
(7,618
)
$
(3,784
)
$
(5,771
)
$
(9,555
)
(1) Core operations consists of our
consolidated Software Products & Services and Managed Services
that include our content, licensing and advertising services, and
their supporting operations, including direct costs of sales as
well as operating expenses for sales, marketing and product
development and certain general and administrative costs dedicated
to these operations.
(2) Corporate consists of general and
administrative functions such as executive, finance, legal, people
operations, fixed overhead expenses (including facilities and
information technology expenses), other income (expenses) and
taxes, and other expenses that support the entire company,
including public company driven costs.
(3) Contribution of business held for sale
relates to the net loss for the periods presented for our energy
group that we divested during the second quarter of 2023.
(4) Variable consultant performance bonus
expense represents the bonus payments paid to Mr. Chad Steelberg as
a result of his achievement of the performance goals pursuant to
his consulting agreement with us.
VERITONE, INC.
RECONCILIATION OF EXPECTED
NON-GAAP NET INCOME (LOSS) RANGE
TO EXPECTED GAAP NET LOSS
RANGE (UNAUDITED)
(in millions)
Three Months Ended
Year Ended
June 30, 2024
December 31, 2024
Net loss
($19.5) to ($18.5)
($72.6) to ($68.6)
Provision for income taxes
($0.6)
($3.0)
Interest expense, net
$4.0
$16.5
Depreciation and amortization
$7.5
$30.0
Stock-based compensation expense
$1.6
$9.8
Acquisition compensation expense
$0.5
$1.0
Severance and executive search
$0.0
$3.3
Non-GAAP net income (loss)
($6.5) to ($5.5)
($15.0) to ($11.0)
VERITONE, INC.
RECONCILIATION OF NON-GAAP TO
GAAP FINANCIAL INFORMATION (UNAUDITED)
(in thousands, except per
share data)
Three Months Ended March
31,
2024
2023
Revenue
$
31,636
$
30,263
Cost of revenue
7,046
6,809
Non-GAAP gross profit
24,590
23,454
GAAP cost of revenue
7,046
6,809
Stock-based compensation expense
1
(20
)
Non-GAAP cost of revenue
7,047
6,789
GAAP sales and marketing expenses
11,804
12,690
Depreciation
(24
)
(6
)
Stock-based compensation expense
(176
)
(176
)
Contribution of business held for sale
(2)
—
(263
)
Severance and executive transition
costs
(503
)
(313
)
Non-GAAP sales and marketing expenses
11,101
11,932
GAAP research and development expenses
9,215
11,527
Depreciation
(790
)
(227
)
Stock-based compensation expense
(532
)
(1,542
)
Contribution of business held for sale
(2)
—
(558
)
Severance and executive transition
costs
(1,192
)
(529
)
Non-GAAP research and development
expenses
6,701
8,671
GAAP general and administrative
expenses
19,420
17,397
Depreciation
(697
)
(245
)
Stock-based compensation expense
(901
)
(2,179
)
Change in fair value of contingent
consideration
—
(651
)
Acquisition compensation expense
(317
)
—
Variable consultant performance bonus
expense
—
(394
)
Contribution of business held for sale
(2)
(3
)
(96
)
Acquisition and due diligence costs
(941
)
(805
)
Severance and executive transition
costs
(2,155
)
(602
)
Non-GAAP general and administrative
expenses
14,406
12,425
GAAP amortization
(5,991
)
(5,429
)
GAAP loss from operations
(21,840
)
(23,589
)
Total non-GAAP adjustments (1)
14,221
14,035
Non-GAAP loss from operations
(7,619
)
(9,554
)
GAAP other income (expense), net
(4,403
)
355
Foreign currency impact
413
(1,161
)
Interest expense, net
3,991
805
Non-GAAP other expense, net
1
(1
)
GAAP loss before income taxes
(26,243
)
(23,234
)
Total non-GAAP adjustments (1)
18,625
13,679
Non-GAAP loss before income taxes
(7,618
)
(9,555
)
(Benefit from) provision for income
taxes
(1,045
)
(271
)
GAAP net loss
(25,198
)
(22,963
)
Total non-GAAP adjustments (1)
17,580
13,408
Non-GAAP net loss
$
(7,618
)
$
(9,555
)
Shares used in computing non-GAAP basic
and diluted net loss per share (in 000's)
37,353
36,588
Non-GAAP basic and diluted net loss per
share
$
(0.20
)
$
(0.26
)
(1) Adjustments are comprised of the
adjustments to GAAP cost of revenue, sales and marketing expenses,
research and development expenses and general and administrative
expenses and other (expense) income, net (where applicable) listed
above.
(2) Contribution of business held for sale
relates to the net loss for the periods presented for our energy
group that we divested during Q2 2023.
VERITONE, INC. SUPPLEMENTAL FINANCIAL
INFORMATION
We are providing the following unaudited supplemental financial
information as a lookback of the trailing twelve months and the
comparative quarter for the prior year to help investors better
understand our recent historical and year-over-year performance.
The Software Products & Services supplemental financial
information is presented on a Pro Forma basis, as further described
below.
Software Products & Services Supplemental Financial
Information
Quarter Ended
Sept 30,
Dec 31,
Mar 31,
Jun 30,
Sept 30,
Dec 31,
Mar 31,
2022 (1)
2022 (1)
2023 (1)
2023 (1)
2023
2023
2024
Pro Forma Software Revenue (in 000's)
(2)
$
28,603
$
35,612
$
22,423
$
20,859
$
20,361
$
19,824
$
15,220
Total Software Products & Services
Customers (3)
3,787
3,824
3,773
3,705
3,536
3,459
3,384
Annual Recurring Revenue (SaaS) (in 000's)
(4)
$
43,925
$
46,248
$
45,453
$
47,720
$
47,756
$
49,159
$
48,602
Annual Recurring Revenue (Consumption) (in
000's) (5)
$
85,091
$
71,754
$
67,242
$
60,229
$
41,543
$
30,967
$
23,510
Total New Bookings (in 000's) (6)
$
23,793
$
26,342
$
22,794
$
8,388
$
15,501
$
17,457
$
12,964
Gross Revenue Retention (7)
>90%
>90%
>90%
>90%
>90%
>90%
>90%
(1) All of the supplemental financial
information for this period is presented on a Pro Forma basis
inclusive of Broadbean.
(2) “Pro Forma Software Revenue” is a
non-GAAP measure that represents Software Products & Services
revenue on a Pro Forma basis.
(3) “Total Software Products &
Services Customers” includes Software Products & Services
customers as of the end of each respective quarter set forth above
with net revenues in excess of $10 and also excludes any customers
categorized by us as trial or pilot status. In prior periods, we
provided “Ending Software Customers,” which represented Software
Products & Services customers as of the end of each fiscal
quarter with trailing twelve-month revenues in excess of $2,400 for
both Veritone, Inc. and PandoLogic Ltd. and/or deemed by the
Company to be under an active contract for the applicable periods.
Total Software Products & Services Customers is not comparable
to Ending Software Customers. Total Software Products &
Services Customers includes customers based on revenues in the last
month of the quarter rather than on a trailing twelve-month basis.
Total Software Products & Services Customers includes customers
based on revenues in the last month of the quarter rather than on a
trailing twelve-month basis and excludes any customers that are on
trial or pilot status with us rather than including customers with
active contracts. Management uses Total Software Products &
Services Customers and we believe Total Software Products &
Services Customers are useful to investors because it more
accurately reflects our total customers for our Software Products
& Services customers inclusive of Broadbean.
(4) “Annual Recurring Revenue (SaaS)”
represents an annualized calculation of monthly recurring revenue
during the last month of the applicable quarter for all Total
Software Products & Services customers, in each case on a Pro
Forma basis. In prior periods, we provided “Average Annual
Revenue,” which was calculated as the aggregate of trailing
twelve-month Software Products & Services revenue divided by
the average number of customers over the same period for both
Veritone, Inc. and PandoLogic Ltd. Annual Recurring Revenue is not
comparable to Average Annual Revenue (SaaS). Annual Recurring
Revenue (SaaS) includes only subscription-based SaaS revenue, is
not averaged among active customers and uses a calculation of
recurring revenue as described above instead of annual revenue.
Management uses “Annual Recurring Revenue (SaaS)” and we believe
Annual Recurring Revenue (SaaS) is useful to investors because
Broadbean significantly increases our mix of subscription-based
SaaS revenues as compared to Consumption revenues and the split
between the two allows the reader to delineate between predictable
recurring SaaS revenues and more volatile Consumption revenues.
(5) “Annual Recurring Revenue
(Consumption)” represents the trailing twelve months of all
non-recurring and/or consumption-based revenue for all active Total
Software Products & Services customers, in each case, on a Pro
Forma basis. In prior periods, we provided “Average Annual
Revenue,” which was calculated as the aggregate of trailing
twelve-month Software Products & Services revenue divided by
the average number of customers over the same period for both
Veritone, Inc. and PandoLogic Ltd. Annual Recurring Revenue
(Consumption) is not comparable to Average Annual Revenue. Annual
Recurring Revenue (Consumption) includes only non-recurring and/or
consumption-based revenue, is not averaged among active customers
and uses a calculation of recurring revenue as described above
instead of annual revenue. Management uses “Annual Recurring
Revenue (Consumption)” and we believe Annual Recurring Revenue
(Consumption) is useful to investors because Broadbean
significantly increases our mix of subscription-based SaaS revenues
as compared to Consumption revenues and the split between the two
allows the reader to delineate between predictable recurring SaaS
revenues and more volatile Consumption revenues.
(6) “Total New Bookings” represents the
total fees payable during the full contract term for new contracts
received in the quarter (including fees payable during any
cancellable portion and an estimate of license fees that may
fluctuate over the term), excluding any variable fees under the
contract (e.g., fees for cognitive processing, storage,
professional services and other variable services), in each case on
a Pro Forma basis.
(7) “Gross Revenue Retention” represents
calculate our dollar-based gross revenue retention rate as of the
period end by starting with the revenue from Software Products
& Services Customers as of the 3 months in the prior year
quarter to such period, or Prior Year Quarter Revenue. We then
deduct from the Prior Year Quarter Revenue any revenue from
Software Products & Services Customers who are no longer
customers as of the current period end, or Current Period Ending
Software Customer Revenue. We then divide the total Current Period
Ending Software Customer Revenue by the total Prior Year Quarter
Revenue to arrive at our dollar-based gross retention rate, which
is the percentage of revenue from all Software Products &
Services Customers from our Software Products & Services as of
the year prior that is not lost to customer churn. All numbers used
to determine Gross Revenue Retention are calculated on a Pro Forma
basis.
The following table sets forth the reconciliation of revenue to
pro forma revenue and the calculation of pro forma annual recurring
revenue.
Quarter Ended
Sept 30,
Dec 31,
Mar 31,
Jun 30,
Sept 30,
Dec 31,
Mar 31,
2022
2022
2023
2023
2023
2023
2024
Software Products & Services Revenue
(in 000’s)
$
20,812
$
27,220
$
14,127
$
14,093
$
20,361
$
19,820
$
15,220
Broadbean Revenue (in 000’s) (1)
7,639
8,230
8,156
8,374
8,739
8,662
8,517
Broadbean Revenue included in Software
Products & Services Revenue (in 000’s)
—
—
—
(1,716
)
(8,739
)
(8,662
)
(8,517
)
Pro Forma Software Revenue (in 000’s)
$
28,451
$
35,450
$
22,283
$
20,751
$
20,361
$
19,820
$
15,220
Managed Services Revenue (in 000’s)
16,384
16,670
16,136
13,874
14,772
14,377
16,416
Total Pro Forma Revenue (in 000’s)
$
44,835
$
52,120
$
38,419
$
34,625
$
35,133
$
34,197
$
31,636
Trailing Twelve Months
Ended
Sept 30,
Dec 31,
Mar 31,
Jun 30,
Sept 30,
Dec 31,
Mar 31,
2022
2022
2023
2023
2023
2023
2024
Software Products & Services Revenue
(in 000’s)
$
97,581
$
84,578
$
80,538
$
76,252
$
75,801
$
68,401
$
69,494
Broadbean Revenue (in 000’s) (1)
30,136
29,047
30,999
32,399
33,499
33,931
34,292
Broadbean Revenue included in Software
Products & Services Revenue (in 000’s)
—
—
—
(1,716
)
(10,455
)
(19,117
)
(27,634
)
Pro Forma Software Revenue (in 000’s)
$
127,717
$
113,625
$
111,537
$
106,935
$
98,845
$
83,215
$
76,152
Managed Services Revenue (in 000’s)
63,406
65,150
65,046
63,064
61,452
59,159
59,439
Total Pro Forma Revenue (in 000’s)
$
191,123
$
178,775
$
176,583
$
169,999
$
160,297
$
142,374
$
135,591
Pro Forma Total Number of Customers
3,787
3,824
3,773
3,705
3,536
3,460
3,384
Pro Forma Annual Recurring Revenue (in
000’s) (2)
$
129,016
$
118,002
$
112,695
$
107,949
$
98,549
$
82,127
$
72,112
(1) “Pro Forma Software Revenue” includes
historical Software Products & Services Revenue from the past
eight (8) fiscal quarters of each of Veritone, Inc. and Broadbean
(unaudited) and presents such revenue on a combined pro forma basis
treating Broadbean as owned by Veritone, Inc. since January 1,
2022.
(2) “Pro Forma Annual Recurring Revenue”
represents an annualized calculation of the monthly recurring
revenue in the last period of the calculated quarter, combined with
the trailing twelve month calculation for all non-recurring and/or
consumption based revenue for all active customers.
Managed Services Supplemental Financial Information
The following table sets forth the results for each of the key
performance indicators for Managed Services.
Quarter Ended
Sept 30,
Dec 31,
Mar 31,
Jun 30,
Sept 30,
Dec 31,
Mar 31,
2022
2022
2023
2023
2023
2023
2024
Avg billings per active Managed Services
client (in 000's)(1)
$
747
$
823
$
771
$
576
$
620
$
647
$
793
Revenue during quarter (in 000's)(2)
$
10,035
$
11,074
$
9,337
$
6,876
$
8,827
$
8,612
$
9,333
(1) Avg billings per active Managed
Services customer for each quarter reflects the average quarterly
billings per active Managed Services customer over the twelve-month
period through the end of such quarter for Managed Services clients
that are active during such quarter.
(2) Managed Services revenue and metrics
exclude content licensing and media services.
VERITONE, INC. RECONCILIATION OF
NON-GAAP GROSS PROFIT TO LOSS FROM OPERATIONS (in
thousands)
Three Months Ended March
31,
2024
2023
Loss from operations
$
(21,840
)
$
(23,589
)
Sales and marketing
11,804
12,690
Research and development
9,215
11,527
General and administrative
19,420
17,397
Amortization
5,991
5,429
Non-GAAP gross profit
$
24,590
$
23,454
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507051776/en/
Company Contact: Mike Zemetra Chief Financial Officer
Veritone, Inc. investors@veritone.com IR Agency Contact:
Stefan Norbom Prosek Partners 203-644-5475 snorbom@prosek.com
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