- Q2 Total Revenue and Software Revenue of
$28.0 and $14.1 million, respectively -
- ARR(1) of $108 million from 3,705 Total
Software Products & Services Customers(1), including $47
million from subscription-based customers(1) -
- Cost reduction initiatives achieved to date
resulting in over $17 million of annualized savings, including
successful divestiture of Energy Group in Q2 2023 -
- Successfully completed acquisition of
Broadbean in June 2023, accelerating revenue growth and market
share opportunities across +3,000 HR Solutions customers -
Veritone, Inc. (Nasdaq: VERI), a leader in enterprise AI software and
services, today reported results for the second quarter ended June
30, 2023.
“Veritone executed against its strategy through opportunistic
topline acceleration and long-term margin expansion initiatives in
the second quarter,” said Ryan Steelberg, Chief Executive Officer
and President of Veritone. “We remain at the forefront of the
global AI transformation and are constantly evaluating avenues to
further buildout core competencies, achieve operational excellence
and preserve our first mover advantage. The global demand for
Veritone’s AI software and services that drive productivity and
efficiency gains, as well offer actionable insights from disparate
data sources, has never been greater. We believe the company is
strategically positioned to capitalize on the opportunities that
lie ahead to deliver profitable growth and drive long-term
shareholder value.”
Second Quarter 2023 Financial
Highlights
- GAAP and Pro Forma revenues of $28.0 and $34.7 million, a
decrease of 18% and 19%, respectively, compared to GAAP and Pro
forma revenues, respectively, for Q2 2022 driven primarily by a
decline in one-time nonrecurring Software Products & Services
revenue.
- Pro Forma Software Products & Services revenues of $20.9
million, a decrease of $5.8 million or 22% compared to Pro Forma
Software Products & Services revenue for Q2 2022.
- Managed Services revenue of $13.9 million, as compared to $15.9
million in Q2 2022.
- Total Software Products & Services Customers(1) of 3,705,
flat compared to Total Software Products & Services Customers
for Q2 2022(1) and a 1.8% decrease compared to Q1 2023.
- Total New Bookings(1) of $8.4 million, down 62% compared to Q2
2022, driven by reduced HR consumption from Amazon, a major
customer.
- Annual Recurring Revenue (ARR) (1) of $107.9 million, down 17%
compared to ARR for Q2 2022, driven by drop in consumption-based
ARR.
- Loss from Operations of $28.2 million, as compared to a loss of
$3.6 million in Q2 2022 driven by a one-time non-cash benefit of
$13.8 million in Q2 2022 coupled with a decline in non-GAAP gross
profit.
- Non-GAAP gross profit of $20.2 million, a decrease of $7.3
million compared to Q2 2022 driven by a decrease in one-time
software revenue.
- Net Loss of $23.3 million, as compared to $3.3 million in Q2
2022.
- Non-GAAP Net Loss of $13.0 million, as compared to $7.2 million
in Q2 2022.
- Cash and cash equivalents(2) of $62.7 million on June 30, 2023,
as compared to $139.7 million at March 31, 2023.
(1) Calculated on a Pro Forma basis; for
additional information on these calculations, see “Note Regarding
Pro Forma Information” and the definitions provided for each metric
cited.
(2) Including approximately $52.7 million
of cash received from Managed Services clients for future payments
to vendors.
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
Six Months Ended
June 30,
June 30,
Unaudited
2023
2022
Percent
Change
2023
2022
Percent
Change
(in $000s, except customers)
Revenue
$27,967
$34,235
(18%)
$58,230
$68,642
(15%)
Loss from Operations
($28,180)
($3,629)
677%
$51,769
($24,433)
112%
Net Loss
($23,296)
($3,253)
616%
($46,259)
($25,382)
82%
Non-GAAP Gross Profit *
$20,202
$27,530
(27%)
$43,656
$55,014
(21%)
Non-GAAP Net Loss *
($13,026)
($7,183)
81%
($22,581)
($12,354)
83%
Software Products & Services
Supplemental Financial Information (in $000s, except customers)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
Percent
Change
2023
2022
Percent
Change
Pro Forma Software Revenue (1)
$20,860
$26,650
(22%)
$43,283
$52,969
(18%)
Total Software Products & Services
Customers (2)
3,705
3,718
(0%)
Annual Recurring Revenue (3)
$107,949
$130,366
(17%)
Total New Bookings (5)
$8,388
$22,009
(62%)
Gross Retention (6)
>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
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 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 the monthly recurring revenue in the last
month of the calculated quarter for all active 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
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. Pro Forma 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
our dollar-based gross 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.
Recent Business
Highlights
- Closed the acquisition of Broadbean, a global leader of
software as a service (SaaS) technology that makes talent
acquisition and engagement more efficient. Total consideration paid
was $53 million in cash on a debt-free basis, subject to certain
adjustments in the purchase agreement. The acquisition is expected
to significantly strengthen Veritone’s AI-driven human resources
product suite, building on the Company’s previous acquisition of
PandoLogic.
- Announced a series of product enhancements to Veritone GLC
products, delivering greater customization capabilities to enable
users in the legal and law enforcement sectors to operate with a
higher overall degree of efficiency, effectiveness and
seamlessness.
- Through recent customer bookings, Veritone now services over
275 Law Enforcement Agencies (LEA), and thousands of sworn
officers. This expansion also includes the cross-selling of HR
Solutions with and into the LEA space, with several active
customers.
- Veritone, through its GLC division, has contracted with the
United States Senate to provide them with an intelligent digital
asset management platform utilizing its Digital Media Hub (“DMH”)
solution.
- Completed a partnership with Major League Baseball (MLB) to
distribute short-form video content through SPORTX, Veritone’s
Sports and Media Licensing offering. SPORTX is a premier
intelligent marketplace enabling media buyers direct access to
sports video from around the globe, maximizing additional revenue
streams and increasing visibility for rights holders.
- Secured a three-year HR Solutions SaaS agreement with a large
healthcare and health-tech provider for North American job
distribution with significant opportunities to expand the
relationship globally.
- Executed on $17 million of the annualized strategic cost
reduction initiatives announced in Q1 2023, exceeding the
annualized savings target for 2023.
- Completed the energy group divestiture, effective June 30,
2023, in exchange for a minority interest in GridBeyond Limited, a
privately-held company that delivers intelligent energy
solutions.
- Entered into a Ledgered ABL Agreement with Alterna Capital
Solutions, LLC for a three-year, revolving credit facility totaling
up to $30 million. The credit facility is senior secured by certain
domestic accounts receivable and other assets, bears annual
interest at US Prime + 1% (9.5% floor), with minimum interest of
$0.25 million per year in the event the line is not drawn upon and
has a one-time upfront facility fee of $0.45 million. The credit
facility provides additional financial flexibility and liquidity on
the Company’s balance sheet.
Financial Results for Three Months
Ended June 30, 2023
Delivered second quarter revenue of $28.0 million, a decrease of
$6.3 million or 18% from $34.2 million in the second quarter of
2022. Driving this decrease was Software Products & Services
revenue of $14.1 million, which declined $4.3 million or 23% year
over year attributed to $5.7 million of non-recurring software
revenue in Q2 2022. Managed Services revenue decreased by $2.0
million, or 13%, to $13.9 million, driven by lower advertising
revenue and spend, offset by growth in content licensing services.
Loss from operations was $28.2 million as compared to a loss of
$3.6 million in Q2 2022 driven in part by a non-cash benefit of
$13.8 million in Q2 2022 associated with a revaluation of certain
contingent consideration, coupled with the decline in non-GAAP
gross profit. Non-GAAP gross profit of $20.2 million in Q2 2023
declined by $7.3 million year over year due to the decrease in
one-time software revenue. Non-GAAP gross margin was 72%, as
compared to 80% in the second quarter of 2022, and declined
primarily due to the mix of revenue.
GAAP net loss was $23.3 million, compared to $3.3 million in the
second quarter of 2022, driven in part by the increase in loss from
operations. Non-GAAP net loss was $13.0 million, a decline of $5.8
million compared to $7.2 million in the second quarter of 2022,
largely driven by the decline in revenue and corresponding non-GAAP
gross margins.
During Q2 2023, Total Software Product & Services Customers
of 3,705, on a Pro Forma basis, remained relatively flat year over
year, given the focus of Broadbean over the last 18 months on
customer retention. Total New Bookings on a Pro Forma basis
decreased by 62% to $8.4 million versus the comparable period a
year ago largely driven by a reduction in spend from Amazon. Annual
Recurring Revenue on a Pro Forma basis decreased 17% year over year
to $107.9 million driven in large part by the decline in
consumption revenue from Amazon over the trailing twelve months
ended Q2 2023 as compared to Q2 2022, offset by a 7% increase in
subscription-based revenue year over year to $47.7 million.
Excluding Amazon, Pro Forma Software revenue growth was 19% year
over year.
As of June 30, 2023, the Company had cash and cash equivalents
of $62.7 million, including approximately $52.7 million of cash
received from Managed Services clients for future payments to
vendors.
Business Outlook
Third Quarter 2023
- Revenue is expected to be in the range of $35.5 million to
$37.5 million, as compared to $37.2 million in the third quarter of
2022.
- Non-GAAP net loss is expected to be in the range of $6.5
million to $8.5 million, compared to non-GAAP net loss of $5.7
million in the third quarter of 2022.
Full Year 2023
- Revenue is expected to be in the range of $128.0 million to
$135.0 million, as compared to $149.7 million for fiscal 2022.
- Non-GAAP net loss is expected to be in the range of $28.0
million to $33.0 million, compared to non-GAAP net loss of $15.9
million for fiscal 2022.
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 using its synthetic voice
technology, Veritone Voice, to deliver management’s prepared
remarks on Tuesday, August 8, 2023, at 4:30 p.m. Eastern Time (1:30
p.m. Pacific Time) to discuss its second quarter 2023 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 August 15, 2023. The full
webcast replay will be available through August 8, 2024. 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: 5278672
* 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 is the
Company’s net income (loss) and net income (loss) per share,
respectively, adjusted to exclude interest expense, 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, a
reserve for state sales taxes, charges related to a facility
sublease, gain on sale of asset, warrant expense, acquisition and
diligence costs, and severance and executive search 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 HR 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) is a leader in artificial intelligence
(AI) solutions. Serving organizations in both commercial and
regulated sectors, Veritone’s software, services and industry
applications simplify data management, empowering the largest and
most recognizable brands in the world 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 to transform
audio, video and other data sources into actionable intelligence.
Through its robust partner ecosystem and professional and managed
systems, Veritone develops and builds AI solutions that solve the
problems of today and tomorrow.
To learn more, visit Veritone.com.
Safe Harbor Statement
This news release contains forward-looking statements, including
without limitation, statements regarding the Company’s strategic
position to capitalize in the most attractive market verticals and
drive long-term shareholder value and the Company’s expected total
revenue and Non-GAAP net loss for Q3 2023 and for full year 2023.
In addition, words such as “may,” “will,” “expect,” “believe,”
“anticipate,” “intend,” “plan,” “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, beliefs and information. As such,
the Company’s 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, 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 technology in
our aiWARE platform, offering it for free to the public or making
it cost prohibitive to continue to incorporate their 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 economic disruption
caused by the recent and potential future disruptions in access to
bank deposits or lending commitments due to bank failures, the
impact of the continuing economic disruption caused by the COVID-19
pandemic and the Russian invasion of Ukraine on the business of the
Company and that of our existing and potential customers and
increasing interest rates, inflationary pressures and the threat of
a recession in the United States and around the world; the impact
of future economic, competitive and market conditions, particularly
those related to its strategic end markets; and future business
decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company.
Certain of these judgments and risks are discussed in more detail
in the Company’s most recently-filed Annual Report on Form 10-K,
and other periodic reports filed 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 the
Company or any other person that the Company’s objectives or plans
will be achieved. The forward-looking statements contained herein
reflect the Company’s beliefs, estimates and predictions as of the
date hereof, and the Company undertakes 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
June 30, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$
62,674
$
184,423
Accounts receivable, net
47,618
56,001
Expenditures billable to clients
22,269
22,339
Prepaid expenses and other current
assets
19,861
15,242
Total current assets
152,422
278,005
Property, equipment and improvements,
net
11,397
5,291
Intangible assets, net
96,866
79,664
Goodwill
78,355
46,498
Long-term restricted cash
865
859
Other assets
16,017
14,435
Total assets
$
355,922
$
424,752
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable
$
30,821
$
36,738
Accrued media payments
67,472
102,064
Client advances
14,170
16,442
Deferred revenue
12,742
2,600
Contingent consideration, current
—
8,067
Other accrued liabilities
36,135
27,412
Total current liabilities
161,340
193,323
Convertible senior notes, non-current
138,199
137,767
Other non-current liabilities
17,330
13,811
Total liabilities
316,869
344,901
Total stockholders' equity
39,053
79,851
Total liabilities and stockholders'
equity
$
355,922
$
424,752
VERITONE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
AND COMPREHENSIVE INCOME
(LOSS)
(in thousands, except per
share and share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenue
$
27,967
$
34,235
$
58,230
$
68,642
Operating expenses:
Cost of revenue
7,765
6,705
14,574
13,628
Sales and marketing
13,124
12,576
25,814
23,645
Research and development
10,519
11,068
22,046
20,951
General and administrative
19,025
2,304
36,422
24,625
Amortization
5,714
5,211
11,143
10,226
Total operating expenses
56,147
37,864
109,999
93,075
Loss from operations
(28,180
)
(3,629
)
(51,769
)
(24,433
)
Other income (expense), net
3,510
(1,231
)
3,865
(2,417
)
Loss before provision for income taxes
(24,670
)
(4,860
)
(47,904
)
(26,850
)
Benefit from income taxes
(1,374
)
(1,607
)
(1,645
)
(1,468
)
Net loss
$
(23,296
)
$
(3,253
)
$
(46,259
)
$
(25,382
)
Net loss per share:
Basic and diluted
$
(0.63
)
$
(0.09
)
$
(1.26
)
$
(0.71
)
Weighted average shares outstanding:
Basic and diluted
36,848,602
36,083,515
36,718,994
35,782,766
Comprehensive loss:
Net loss
$
(23,296
)
$
(3,253
)
$
(46,259
)
$
(25,382
)
Foreign currency translation (loss) gain,
net of income taxes
(997
)
386
(1,763
)
576
Total comprehensive loss
$
(24,293
)
$
(2,867
)
$
(48,022
)
$
(24,806
)
VERITONE, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
(in thousands)
Six Months Ended June
30,
2023
2022
Cash flows from operating
activities:
Net loss
$
(46,259
)
$
(25,382
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization
12,296
10,670
Provision for credit losses
(15
)
472
Stock-based compensation expense
6,614
9,562
Gain on sale of energy group
(2,572
)
—
Change in fair value of contingent
consideration
651
(8,785
)
Change in deferred taxes
(1,828
)
(1,940
)
Amortization of debt issuance costs
432
599
Amortization of right-of-use assets
649
531
Imputed non-cash interest income
(65
)
65
Changes in assets and liabilities:
Accounts receivable
16,308
35,545
Expenditures billable to clients
70
9,205
Prepaid expenses and other assets
(3,501
)
(1,546
)
Other assets
(1,613
)
(4,950
)
Accounts payable
(7,286
)
(16,522
)
Deferred revenue
8
(295
)
Accrued media payments
(34,592
)
(5,988
)
Client advances
(2,264
)
1,711
Other accrued liabilities
6,652
(4,278
)
Other liabilities
(2,218
)
(2,959
)
Net cash used in operating activities
(58,533
)
(4,285
)
Cash flows from investing
activities:
Minority investment
—
(2,000
)
Proceeds from divestiture
504
—
Capital expenditures
(2,697
)
(2,258
)
Acquisitions, net of cash acquired
(50,195
)
(2,612
)
Settlement of deferred consideration for
acquisitions
(2,690
)
—
Net cash used in investing activities
(55,078
)
(6,870
)
Cash flows from financing
activities:
Payment of contingent considerations
(7,772
)
(14,376
)
Taxes paid related to net share settlement
of equity awards
(1,003
)
(9,509
)
Proceeds from issuances of stock under
employee stock plans, net
643
782
Net cash used in financing activities
(8,132
)
(23,103
)
Net decrease in cash and cash equivalents
and restricted cash
(121,743
)
(34,258
)
Cash and cash equivalents and restricted
cash, beginning of period
185,282
255,577
Cash and cash equivalents and restricted
cash, end of period
$
63,539
$
221,319
VERITONE, INC.
REVENUE DETAIL
(UNAUDITED)
(in thousands)
Three Months Ended June 30,
2023
Six Months Ended June 30,
2023
Government &
Government &
Commercial
Regulated
Commercial
Regulated
Enterprise
Industries
Total
Enterprise
Industries
Total
Total Software Products &
Services
$
12,492
$
1,601
$
14,093
$
25,224
$
2,996
$
28,220
Managed Services
Advertising
8,417
—
8,417
18,952
—
18,952
Licensing
5,457
—
5,457
11,058
—
11,058
Total Managed Services
13,874
—
13,874
30,010
—
30,010
Total Revenue
$
26,366
$
1,601
$
27,967
$
55,234
$
2,996
$
58,230
Three Months Ended June 30,
2022
Six Months Ended June 30,
2022
Government &
Government &
Commercial
Regulated
Commercial
Regulated
Enterprise
Industries
Total
Enterprise
Industries
Total
Total Software Products &
Services
$
17,508
$
871
$
18,379
$
34,894
$
1,652
$
36,546
Managed Services
Advertising
10,635
—
10,635
21,603
—
21,603
Licensing
5,221
—
5,221
10,493
—
10,493
Total Managed Services
15,856
—
15,856
32,096
—
32,096
Total Revenue
$
33,364
$
871
$
34,235
$
66,990
$
1,652
$
68,642
VERITONE, INC.
RECONCILIATION OF NON-GAAP NET
INCOME (LOSS) TO GAAP NET LOSS (UNAUDITED)
(in thousands)
Three Months Ended June
30,
2023
2022
Core Operations(1)
Corporate(2)
Total
Core Operations(1)
Core Operations(1)
Core Operations(1)
Net income (loss)
$
(15,205
)
$
(8,091
)
$
(23,296
)
$
(8,230
)
$
4,977
$
(3,253
)
Benefit from for income taxes
(742
)
(632
)
(1,374
)
(964
)
(643
)
(1,607
)
Depreciation and amortization
5,818
571
6,389
5,306
150
5,456
Stock-based compensation expense
1,929
768
2,697
2,685
1,976
4,661
Change in fair value of contingent
consideration
—
—
—
—
(13,830
)
(13,830
)
Interest expense, net
—
720
720
—
1,183
1,183
Foreign currency impact
(1,631
)
(28
)
(1,659
)
—
—
—
Acquisition and due diligence costs
—
4,271
4,271
—
207
207
Gain on sale of energy group
—
(2,572
)
(2,572
)
—
—
—
Contribution of business held for sale
(3)
872
—
872
—
—
—
Variable consultant performance bonus
expense
237
—
237
—
—
—
Severance and executive transition
costs
474
215
689
—
—
—
Non-GAAP Net Loss
$
(8,248
)
$
(4,778
)
$
(13,026
)
$
(1,203
)
$
(5,980
)
$
(7,183
)
Six Months Ended June
30,
2023
2022
Core Operations(1)
Corporate(2)
Total
Core Operations(1)
Corporate(2)
Total
Net loss
$
(27,775
)
$
(18,484
)
$
(46,259
)
$
(14,251
)
$
(11,131
)
$
(25,382
)
Benefit from for income taxes
(1,246
)
(399
)
(1,645
)
(846
)
(622
)
(1,468
)
Depreciation and amortization
11,572
724
12,296
10,404
266
10,670
Stock-based compensation expense
4,264
2,350
6,614
4,668
4,809
9,477
Change in fair value of contingent
consideration
—
651
651
—
(8,785
)
(8,785
)
Interest expense, net
9
1,516
1,525
—
2,365
2,365
Foreign currency impact
(2,777
)
(43
)
(2,820
)
—
—
—
Acquisition and due diligence costs
—
5,076
5,076
—
769
769
Gain on sale of energy group
—
(2,572
)
(2,572
)
—
—
—
Contribution of business held for sale
(3)
1,789
—
1,789
—
—
—
Variable consultant performance bonus
expense
631
—
631
—
—
—
Severance and executive transition
costs
1,501
632
2,133
—
—
—
Non-GAAP Net Loss
$
(12,032
)
$
(10,549
)
$
(22,581
)
$
(25
)
$
(12,329
)
$
(12,354
)
(1) Core Operations consists of our 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.
(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 first quarter of 2023. We have
not recast Non-GAAP Net Loss for periods ended prior to March 31,
2023 because the change in business strategy to divest the business
occurred in the first quarter of 2023 and the prior period
contributions were costs to operate the continuing business when
incurred in the prior periods. The historical amounts would not
have a major effect on prior period results.
VERITONE, INC.
RECONCILIATION OF EXPECTED
NON-GAAP NET INCOME (LOSS) RANGE
TO EXPECTED GAAP NET LOSS
RANGE (UNAUDITED)
(in millions)
Three Months Ending
Year Ending
Sept 30, 2023
December 31, 2023
Net loss
($17.9) to ($15.9)
($81.5) to ($76.5)
Provision for income taxes
($0.5)
($3.3)
Interest expense, net
$0.7
$3.1
Depreciation and amortization
$6.0
$24.6
Stock-based compensation expense
$3.0
$13.2
Variable consultant performance bonus
expense
$0.2
$1.2
Acquisition and due diligence costs
-
$5.1
Change in fair value of contingent
consideration
-
$0.7
Severance and executive search
-
$2.1
Contribution of business held for sale
-
$1.8
Non-GAAP net income (loss)
($8.5) to ($6.5)
($33.0) to ($28.0)
VERITONE, INC.
RECONCILIATION OF NON-GAAP TO
GAAP FINANCIAL INFORMATION (UNAUDITED)
(in thousands, except per
share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenue
$
27,967
$
34,235
$
58,230
$
68,642
Cost of revenue
7,765
6,705
14,574
13,628
Non-GAAP gross profit
20,202
27,530
43,656
55,014
GAAP cost of revenue
7,765
6,705
14,574
13,628
Stock-based compensation expense
(17
)
(24
)
(37
)
(44
)
Non-GAAP cost of revenue
7,748
6,681
14,537
13,584
GAAP sales and marketing expenses
13,124
12,576
25,814
23,645
Stock-based compensation expense
(529
)
(727
)
(705
)
(1,190
)
Contribution of business held for sale
(221
)
—
(484
)
—
Severance and executive transition
costs
(190
)
—
(503
)
—
Non-GAAP sales and marketing expenses
12,184
11,849
24,122
22,455
GAAP research and development expenses
10,519
11,068
22,046
20,951
Stock-based compensation expense
(1,127
)
(1,247
)
(2,669
)
(2,251
)
Contribution of business held for sale
(559
)
—
(1,117
)
—
Severance and executive transition
costs
(151
)
—
(680
)
—
Non-GAAP research and development
expenses
8,682
9,821
17,580
18,700
GAAP general and administrative
expenses
19,025
2,304
36,422
24,625
Depreciation
(675
)
(245
)
(1,153
)
(444
)
Stock-based compensation expense
(1,024
)
(2,663
)
(3,203
)
(5,992
)
Change in fair value of contingent
consideration
—
13,830
(651
)
8,785
Variable consultant performance bonus
expense
(237
)
—
(631
)
—
Contribution of business held for sale
(92
)
—
(188
)
—
Acquisition and due diligence costs
(4,271
)
(207
)
(5,076
)
(769
)
Severance and executive transition
costs
(348
)
—
(950
)
—
Non-GAAP general and administrative
expenses
12,378
13,019
24,570
26,205
GAAP amortization
(5,714
)
(5,211
)
(11,143
)
(10,226
)
GAAP loss from operations
(28,180
)
(3,629
)
(51,769
)
(24,433
)
Total non-GAAP adjustments (1)
15,155
(3,506
)
29,190
12,131
Non-GAAP loss from operations
(13,025
)
(7,135
)
(22,579
)
(12,302
)
GAAP other income (expense), net
3,510
(1,231
)
3,865
(2,417
)
Gain on sale of energy group
(2,572
)
—
(2,572
)
—
Foreign currency impact
(1,659
)
—
(2,820
)
—
Interest expense, net
720
1,183
1,525
2,365
Non-GAAP other expense, net
(1
)
(48
)
(2
)
(52
)
GAAP loss before income taxes
(24,670
)
(4,860
)
(47,904
)
(26,850
)
Total non-GAAP adjustments (1)
11,644
(2,323
)
25,323
14,496
Non-GAAP loss before income taxes
(13,026
)
(7,183
)
(22,581
)
(12,354
)
Benefit from income taxes
(1,374
)
(1,607
)
(1,645
)
(1,468
)
GAAP net loss
(23,296
)
(3,253
)
(46,259
)
(25,382
)
Total non-GAAP adjustments (1)
10,270
(3,930
)
23,678
13,028
Non-GAAP net loss
$
(13,026
)
$
(7,183
)
$
(22,581
)
$
(12,354
)
Shares used in computing non-GAAP basic
and diluted net loss per share
36,849
36,084
36,719
35,783
Non-GAAP basic and diluted net loss per
share
$
(0.35
)
$
(0.20
)
$
(0.61
)
$
(0.35
)
(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.
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
Mar 31,
Jun 30,
Sept 30,
Dec 31,
Mar 31,
Jun 30,
2022
2022
2022
2022
2023
2023
Pro Forma Software Revenue (in 000's)
(1)
$
26,319
$
26,650
$
28,603
$
35,612
$
22,423
$
20,860
Total Software Products & Services
Customers (2)
3,673
3,718
3,787
3,824
3,773
3,705
Annual Recurring Revenue (SaaS) (in 000's)
(3)
$
48,392
$
44,465
$
43,925
$
46,248
$
45,453
$
47,720
Annual Recurring Revenue (Consumption) (in
000's) (4)
$
87,445
$
85,901
$
85,091
$
71,754
$
67,242
$
60,229
Total New Bookings (in 000's) (5)
$
16,643
$
22,009
$
23,793
$
26,342
$
22,794
$
8,388
Gross Revenue Retention (6)
>90%
>90%
>90%
>90%
>90%
>90%
(1) “Software Revenue - Pro Forma” is a
non-GAAP measure that represents Software Products & Services
revenue on a Pro Forma basis.
(2) “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.
(3) “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.
(4) “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 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.
(5) “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.
(6) “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.
VERITONE, INC. SUPPLEMENTAL FINANCIAL
INFORMATION
Managed Services Supplemental Financial Information
Quarter Ended
Mar 31,
Jun 30,
Sept 30,
Dec 31,
Mar 31,
Jun 30,
2022
2022
2022
2022
2023
2023
Avg billings per active Managed Services
client (in 000's) (7)
$
684
$
736
$
747
$
823
$
771
$
576
Revenue during quarter (in 000's) (8)
$
10,735
$
9,625
$
10,035
$
11,074
$
9,337
$
6,876
(7) 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.
(8) 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 June
30,
Six Months Ended June
30,
2023
2022
2022
2021
Loss from operations
$
(28,180
)
$
(3,629
)
$
(51,769
)
$
(24,433
)
Sales and marketing
13,124
12,576
25,814
23,645
Research and development
10,519
11,068
22,046
20,951
General and administrative
19,025
2,304
36,422
24,625
Amortization
5,714
5,211
11,143
10,226
Non-GAAP gross profit
$
20,202
$
27,530
$
43,656
$
55,014
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230808973048/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
Grafico Azioni Veritone (NASDAQ:VERI)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Veritone (NASDAQ:VERI)
Storico
Da Mag 2023 a Mag 2024