Veritone Posts Q3 Revenue of $22.0 million

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Veritone Stock Highlights

– Q3 Revenue of $22.0 million, in line with our previous preliminary estimates –

– Q3 Software and Managed Services Revenue of $14.7 and $7.3 million –

– ARR of $63.3 million from 3,291 Total Software Products & Services Customers, including $48.3 million or 76% from subscription-based customers demonstrating diversified & stable revenue streams –

– Completed restructuring through Q3 resulting in forecasted annualized savings of over 15% in operating expense from FY 2023 accelerating expected profitability into fiscal 2025 –

– Completed divestiture of media agency in October 2024 for total consideration of up to $104 million, including $59.1 million of cash at closing and up to $18 million in earnout subject to the media agency’s revenue performance in calendar year 2025. Net proceeds used to paydown $30.5 million in term debt –

– Announced fiscal 2025 business outlook with up to 30% year over year forecasted revenue growth and over 45% forecasted improvement in Non-GAAP Net Loss as compared to fiscal 2024 guidance led by over $100 million in sales pipeline at Q3 2024 –

Veritone, Inc. (NASDAQ:VERI), a leader in designing human-centered AI solutions, today reported results for the third quarter ended September 30, 2024.

“The divestiture of Veritone One marks a defining moment in our company’s evolution, positioning us as a pure-play enterprise AI company at a pivotal time in the technology landscape,” said Ryan Steelberg, Chief Executive Officer of Veritone. “With over 3,000 existing customers across Commercial and Public Sectors, we’re now poised to capitalize on the unprecedented growth in the AI solutions market. As we look toward 2025, we’re energized by our streamlined operational focus and enhanced ability to invest in innovation that will truly differentiate Veritone in the enterprise AI marketplace.”

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Third Quarter 2024 Financial Highlights

  • Revenue of $22.0 million, a decrease of 21% compared to Q3 2023.
  • Software Products and Services revenues of $14.7 million, a decrease of 28% compared to $20.4 million in Q3 2023 driven by expected declines in consumption- based revenue customers, including Amazon and declines in one-time non-recurring software revenue.
  • Managed Services revenue of $7.3 million as compared to $7.6 million in Q3 2023.
  • Total Software Products & Services Customers of 3,291, down 7% year over year, as compared to September 30, 2023, largely driven by Commercial Enterprise, which began sunsetting legacy Career Builder customers following the June 2023 acquisition of Broadbean, offset by an increase across Public Sector from growth in public safety customers.
  • Total New Bookings of $16.5 million, up 17% sequentially from Q2 2024 and 6% year over year, as compared to Q3 2023.
  • Annual Recurring Revenue (“ARR”) (as defined below) of $63.3 million, down from $89.3 million in Q3 2023 driven by declines in consumption-based revenue, including Amazon, offset by a slight increase from recurring subscription-based SaaS revenue customers.
  • Net loss from Continuing Operations of $22.5 million, as compared to a loss of $26.7 million in Q3 2023 driven by lower overall operating expenses resulting from our past cost reduction plans and offset by decline in revenue.
  • Non-GAAP gross profit of $15.7 million, a decrease of 25% or $5.3 million as compared to Q3 2023 primarily due to the decline in revenue.
  • Non-GAAP gross margins of 71.2% as compared to 74.9% in Q3 2023.
  • Net Loss of $21.7 million, as compared to $24.5 million in Q3 2023.
  • Non-GAAP Net Loss of $7.1 million, which was relatively flat as compared to Q3 2023.
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Divestiture of Veritone One, LLC

Through October 17, 2024 (the “Divestiture Closing Date”), we operated Veritone One, LLC (“Veritone One”), a full-service advertising agency, to provide differentiated Managed Services to our customers. On October 17, 2024, we sold all of the issued and outstanding equity of Veritone One to an affiliate of Insignia Capital Group L.P. (such transaction, the “Divestiture”). Veritone One’s services include media planning and strategy, advertisement buying and placement, campaign messaging, clearance verification and attribution, and custom analytics, specializing in host-endorsed and influencer advertising across primarily radio, podcasting, streaming audio, social media and other digital media channels. We determined that the Divestiture represents a strategic shift that will have a material effect on our operations and financial results. Therefore, the historical financial results of Veritone One are reflected in this earnings release as discontinued operations and, as such, have been excluded from continuing operations for all periods presented on a retrospective basis, unless otherwise stated.

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