Veritone Reports Fourth Quarter and Fiscal Year 2024 Results

Fiscal Year 2024 Revenue of $92.6 million, in line with outlook

Q4 Software and Managed Services Revenue of $15.5 million and $6.9 million, respectively

ARR of $58.8 million from 3,237 Total Software Products & Services Customers, including $47.5 million or 81% from subscription-based customers

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

Completed a $20.3 million common stock registered direct offering in January 2025 and entered into a $35.0 million ATM (at-the-market) facility in November 2024, from which Veritone raised $4.7 million in gross proceeds in 2024

Veritone, Inc. (NASDAQ:VERI), a leader in designing human-centered AI solutions, today reported results for the fourth quarter and fiscal year ended December 31, 2024.

"Veritone delivered solid topline performance in the fourth quarter of 2024 and is entering 2025 with strong momentum underpinned by our disruptive Veritone Data Refinery offering and opportunity to drive Public Sector growth," said Ryan Steelberg, Chairman, President and Chief Executive Officer of Veritone. "With Veritone Data Refinery, we are offering a clear solution to one of the market's most pressing challenges—turning raw, unstructured data into high-value AI-ready assets through a secure and scalable process that allows organizations to maintain full control over proprietary data sets. In parallel, our Public Sector strategy is set for a breakout year, as we are now actively deploying aiWARE and associated iDEMS applications in multiple DoD environments, in addition to our FedRAMP deployments for DoJ, DHS and other Fed Civ agencies."

"In 2024 alone, we processed over 10.5 petabytes of data, including more than 58 million hours of video and audio. At this scale, we leveraged over 862 unique AI models—combining proprietary Veritone technology with models from leading third-party partners. This is AI at scale, delivering real-world impact by empowering our customers to unleash the power of AI with confidence and foster a more capable, confident society in 2025 and beyond."

Full Year 2024 Financial Highlights

• Revenue of $92.6 million, a decrease of $7.3 million or 7% year over year.
• Software Products and Services revenues of $61.1 million, a decrease of 11% compared to $68.4 million year over year, driven by lower consumption across our Commercial Enterprise customer base, including Amazon, and declines in one-time non-recurring software revenue.
• Managed Services revenue of $31.6 million, flat year over year.
• GAAP gross profit of $62.7 million, a decrease of $7.6 million or 10.9%, year over year; GAAP gross margin of 67.6% as compared to 70.4% in 2023.
• Non-GAAP gross profit of $66.3 million, a decrease of $6.0 million, or 8.2%, year over year; Non-GAAP gross margin of 71.6% as compared to 72.3% in 2023.
• Total Software Products & Services Customers of 3,237, down 6% year over year, largely driven by planned migration of legacy CareerBuilder customers off the Broadbean software platform.
• Annual Recurring Revenue ("ARR") (as defined below) of $58.8 million, down from $80.1 million in Q4 2023, driven largely by declines in consumption-based revenue, including Amazon.
• Loss from operations of $86.8 million, an improvement of $12.8 million, or 13% year over year.
• Net loss of $37.4 million, as compared to $58.6 million in fiscal year 2023.
• Non-GAAP net loss from continuing operations of $40.8 million, an improvement of $5.3 million as compared to $46.1 million in fiscal year 2023.

Fourth Quarter 2024 Financial Highlights

• Revenue of $22.4 million, a decrease of 17% compared to Q4 2023.
• Software Products and Services revenues of $15.5 million, a decrease of $4.3 million or 22% year over year, driven by lower consumption across our Commercial Enterprise customer base, including Amazon.
• Managed Services revenue of $6.9 million, flat year over year.
• GAAP gross profit of $15.3 million, a decrease of $4.6 million, or 23.3%, year over year; GAAP gross margin of 68.1% as compared to 73.5% in 2023, driven largely by the decline in consumption-based revenue, including Amazon, which has higher gross margin.
• Non-GAAP gross profit of $15.7 million, a decrease of $5.0 million, or 24.1% year over year; Non-GAAP gross margin of 70.2% as compared to 76.5% in 2023, driven largely by a decline in higher margin revenue from consumption-based revenue customers.
• Loss from operations of $19.7 million, flat year over year.
• Net Income of $31.8 million, as compared to $12.2 million in Q4 2023.
• Non-GAAP net loss from continuing operations of $9.7 million, which was relatively flat as compared to Q4 2023.
• Subsequent to the end of the quarter, announced registered direct offering for the definitive purchase and sale of 4,414,878 shares of common stock and pre-funded warrants to purchase up to 3,608,838 shares of common stock for aggregate gross proceeds of approximately $20.3 million for use in the repayment of debt and general corporate purposes.

Divestiture of Veritone One, LLC

Through October 17, 2024, 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.

Commercial Enterprise

• Launched the Veritone Data Refinery ("VDR") solution to help enterprises transform unstructured data into AI-ready assets, empowering organizations to transform and manage their video, audio and text data for training sophisticated AI models and optimize revenue opportunities through data monetization. 13 enterprise customers have signed agreements to harness VDR's capabilities since its launch.
• Executed over 42 Media & Entertainment deals in the fourth quarter, including 28 renewals, 3 upsells, and 11 new customers.
• Signed a multi-year renewal of our exclusive global licensing agreement with CBS News and expanded our partnership to include exclusive local news content from CBS-owned stations.
• Launched Veritone Hire programmatic advertising solutions in both the UK and Australia, with plans to enter the German market in the coming months.
• Signed a strategic partnership with CBRE, expanding the reach of Veritone Hire platform services beyond North America.
• Achieved Platinum-level status within Workday's partnership program, strengthening our collaboration with Workday.
• Launched major integration with Bullhorn for Salesforce, enhancing our ability to work alongside the leading software provider in the staffing industry.

Public Sector

• Added 19 new public safety and government customers, including the Bureau of Alcohol, Tobacco and Firearms.
• Launched product enhancements to Veritone Contact solution with Contact Analytics for California law enforcement to their efforts to comply with California's Racial and Identity Profile Act (RIPA).
• Achieved "Awardable" status on the Department of Defense's Tradewinds Solutions Marketplace, the premiere suite of tools and services designed to accelerate the procurement and adoption of AI/ML, data and analytics capabilities, for three AI solutions: Veritone's Illuminate, Redact and Track applications.

Governance Updates

• Announced the appointment of Francisco Morales, the Co-founder and Executive Chairman of 5.11 Tactical and its former CEO, to our Board of Directors, effective March 20, 2025.
• Subsequent to quarter end, Chad Steelberg resigned from Veritone's Board to pursue other business and philanthropic endeavors. Mr. Steelberg will continue to serve as a strategic advisor to Veritone.

Financial Results for Three Months Ended December 31, 2024

Delivered fourth quarter revenue of $22.4 million, a decrease of $4.7 million or 17% from $27.1 million in the fourth quarter of 2023. Software Products & Services revenue of $15.5 million decreased by $4.3 million or 22% year over year, driven by lower consumption across our Commercial Enterprise customer base, including Amazon. Managed Services revenue of $6.9 million was relatively flat when compared to $7.3 million in fourth quarter of 2023.

GAAP gross profit of $15.3 million decreased $4.6 million from $19.9 million in the fourth quarter of 2023 due to the decline in revenue. GAAP gross margin of 68.1% declined 540 basis points from 73.5% in the fourth quarter of 2023 driven by the decline in consumption-based revenue, including Amazon, which has higher gross margin, coupled with lower margin from content licensing. Non-GAAP gross margin was 70.2% as compared to 76.5%, a decline of 630 basis points.

Loss from operations of $19.7 million was flat year over year, principally driven by improvements made to the operating expense structure over the past two years offset by the decline in revenue. Net loss from continuing operations of $24.3 million as compared to net income from continuing operations of $10.0 million for the fourth quarter of 2023 principally due to a one time gain in the fourth quarter of 2023 that did not recur in 2024. In addition, net loss from continuing operations benefited from a $1.4 million gain from the change in fair value of the Veritone One earnout in the fourth quarter of 2024, which was offset by higher depreciation and amortization expense of $1.2 million. Non-GAAP net loss from continuing operations of $9.7 million was relatively flat when compared to $9.4 million in the fourth quarter of 2023. As of December 31, 2024, Total Software Product & Services Customers of 3,237 was down 6% year over year relative to Total Software Product & Services Customers as of December 31, 2023, principally due to planned migration of legacy CareerBuilder customers off the Broadbean software platform, offset by increases in Public Sector. Annual Recurring Revenue of $58.8 million decreased 27% year over year driven by the expected decline in Commercial Enterprise consumption spending from customers.

Financial Results for the Year Ended December 31, 2024

Delivered revenue of $92.6 million in fiscal year 2024, a decrease of $7.4 million or 7% from $100.0 million in fiscal year 2023. Software Products & Services revenue of $61.1 million decreased by $7.3 million or 11% year over year, driven by lower consumption across our Commercial Enterprise customer base, including Amazon, coupled with a decline in one-time software revenue that did not recur in 2024. Managed Services revenue of $31.6 million was flat when compared to 2023.

GAAP gross profit of $62.7 million decreased $7.6 million from $70.3 million in 2023 largely due to the decline in revenue, coupled with higher depreciation and amortization in 2024 as a result of the June 2023 Broadbean acquisition. GAAP gross margin of 67.6% declined 280 basis points from 70.4% in 2023 driven by higher depreciation and amortization expense from the June 2023 Broadbean acquisition, coupled with year over year declines in higher gross margin revenue from consumption-based and one time software revenue. Non-GAAP gross margin was 71.6% as compared to 72.3% in 2023, a decline of 70 basis points.

Loss from operations of $86.8 million improved by $12.8 million or 13% from $99.6 million in 2023, principally driven by improvements made to the operating expense structure, coupled with year over year declines of $5.0 million in acquisition and due diligence costs and $2.6 million in stock-based compensation expense, offset by the decline in revenue, an increase of $1.8 million in severance and executive transition costs, and higher depreciation and amortization expense principally from the June 2023 Broadbean acquisition. Net loss from continuing operations was $96.3 as compared to $66.0 million in 2023, a $30.3 million increase driven principally by a $30.0 million one-time gain on extinguishment of debt in 2023. Non-GAAP net loss from continuing operations of $40.8 million improved $5.3 million from $46.1 million in 2023 principally due to improvements made to the operating structure throughout fiscal 2024, offset by the decline in revenue.

Business Outlook

First quarter of 2025

• Revenue is expected to be in the range of $23.0 million to $24.0 million, as compared to $24.2 million for the first quarter of 2024.
• Non-GAAP net loss is expected to be in the range of $9.5 million to $8.5 million, as compared to non-GAAP net loss of $10.4 million for the first quarter of 2024.

Full Year 2025

• Revenue is expected to be in the range of $107 million to $122 million, as compared to $92.6 million for fiscal 2024, and a 23.7% implied annual increase at the midpoint.
• Non-GAAP net loss is expected to be in the range of $27.0 million to $17.0 million, as compared to non-GAAP net loss of $40.8 million for fiscal 2024.

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 March 13, 2025, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss its fourth quarter and full year 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 March 20, 2025. The full webcast replay will be available through March 13, 2026. 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: 5366460

* 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 Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP net income (loss), Non-GAAP net income (loss) from continuing operations and Non-GAAP net income from discontinued operations. 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.

Non-GAAP gross profit is defined as gross profit with adjustments to add back depreciation and amortization and stock-based compensation expense. Non-GAAP gross margin is defined as Non-GAAP gross profit divided by revenue. Non-GAAP net income (loss) is the Company's net income (loss), 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. Non-GAAP net income (loss) from continuing operations is Non-GAAP net income (loss) attributable to continuing operations]. Non-GAAP net income from discontinued operations is [Non-GAAP net income (loss) attributable to discontinued operations. 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, 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, gross profit, net income (loss), operating income (loss), net income (loss) from continuing operations, net income (loss) from discontinued operations 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:

Software Products & Services consists of revenues generated from the Company's aiWARE platform and Veritone Hire solutions' talent acquisition solutions (inclusive of Broadbean), 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 content licensing customers and advertising agency customers and related services.

About Veritone

Veritone (NASDAQ:VERI) builds human-centered enterprise AI solutions. Serving customers in the media, entertainment, public sector and talent acquisition industries, Veritone's software and services empower individuals at 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 expected total revenue and non-GAAP net loss for Q1 2025 and for full year 2025, the performance and function of Veritone Data Refinery, the impacts of AI at scale, the success of our Public Sector strategy, and the impact of the sale of Veritone One on our operations and financial results. In addition, words such as "may," "will," "expect," "believe," "anticipate," "intend," "plan," "outlook," "should," "could," "estimate," "confident" 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 continue as a going concern, including our ability to service our debt obligations as they come due over the next twelve months and beyond; 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 and liquidity to support our operations, our business growth, service our debt obligations and refinance maturing debt obligations, 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, sales, divestitures, and other existing or planned cost-saving measures, including the sale of our full-service advertising agency, Veritone One, and our ability to successfully integrate our acquisition of Broadbean; our identification of existing material weaknesses in our internal control over financial reporting and plans for remediation; fluctuations in our results over time; the impact of seasonality on our business; our ability to manage our growth, including through acquisitions and 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 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 third parties with whom we work; the impact of continuing economic disruption caused by macroeconomic and geopolitical factors, including the Russia-Ukraine conflict, the Israel-Hamas war and conflict in the surrounding regions, financial instability, inflation and the responses by central banking authorities to control inflation, monetary supply shifts, high interest rates, the imposition of tariffs and other global trade disputes, 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 Quarterly Reports 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.

SUPPLEMENTAL FINANCIAL INFORMATION

We are providing the following unaudited supplemental financial information as a lookback of prior years to explain our recent historical and year-over-year performance.

Software Products & Services Supplemental Financial Information

View source version on businesswire.com: https://www.businesswire.com/news/home/20250313546267/en/

Company Contact:

Mike Zemetra

Chief Financial Officer

Veritone, Inc.

[email protected]

IR Agency Contact:

Cate Goldsmith

Prosek Partners

914-815-7678

[email protected]