Q1 aiWARE SaaS Solutions and Advertising
Revenue up 51% and 72% year over year, respectively
- Posted Record Revenue in Q1 of $18.3 Million, Up 54% Year
over Year
- Grew Q1 aiWARE SaaS Solutions and Advertising Revenues to
$4.7 Million and $10.3 Million, Respectively
- Increased Q1 Gross Profit 56% Year over Year to $13.5
Million
- GAAP Net Loss in Q1 of $30.6 Million, including $25.0
Million of Charges Related to Stock-based Compensation and a
Facility Sublease
- Improved Q1 Non-GAAP Net Loss 41% Year over Year to $3.9
Million
- Improved Full Year 2021 Guidance
Veritone, Inc. (NASDAQ: VERI), a leading provider of
artificial intelligence (AI) technology and solutions, today
reported results for the first quarter ended March 31, 2021.
Veritone reported record revenue of $18.3 million for the first
quarter of 2021, reflecting its fourth consecutive quarter of
record contributions from aiWARE SaaS Solutions and Advertising.
For the first quarter of 2021, GAAP net loss was $30.6 million,
including $21.6 million in non-cash stock-based compensation
expenses and $3.4 million in one-time charges related to a facility
sublease. Non-GAAP net loss was $3.9 million, improving $2.8
million compared with the first quarter of 2020.
“With a tremendous start to 2021, Veritone is in the strongest
position in our history. We have over $125 million in cash, no debt
and a rapidly growing pipeline,” said Chad Steelberg, Chairman and
CEO of Veritone. “Our total year-over-year revenue growth
accelerated to 54% in Q1, compared with 35% in Q4. Underpinning
this growth, and everything we do at Veritone, is aiWARE, the
world’s leading operating system for AI. aiWARE’s unique
architecture enables unparalleled scalability and deployment
flexibility, delivering over 500 machine learning models, dozens of
applications and a developer suite that accelerates enterprise AI
adoption. The market is rapidly shifting their focus to aiWARE, as
more and more organizations come to realize the need for an
operating system for their machine learning applications and
solutions.”
Ryan Steelberg, President of Veritone, added, “The first quarter
was truly exceptional. Our AI-driven advertising business grew 72%
year over year, and our aiWARE SaaS business grew 51% year over
year, with particular strength from our Government, Legal and
Compliance market, where partnerships with Microsoft, Deloitte,
CACI, PAE, Leidos and others are all rapidly expanding our
pipeline. Content licensing also posted strong growth as sporting
events and creative content production is beginning to resume. The
broad applicability of aiWARE as a technology has never been more
evident.”
Recent Business
Highlights
- Extended partnership with Audacy, giving its 235+ stations
nationwide the ability to seamlessly ingest, index, organize and
analyze their audio content in depth with Veritone’s AI-powered
analytics.
- Unveiled Grid Reliability in Device (GRID) asset modeling and
control initiative to standardize and improve energy grid
reliability in the global transition to green energy.
- Received an Artificial Intelligence Excellence Award for a
second year in a row from Business Intelligence Group and the
Industry Star Award from the 13th Annual Media Excellence
Awards.
Business Outlook
Second Quarter 2021
- Revenue is expected to be in the range of $18.8 million to
$19.2 million, representing a 43% increase year over year at the
midpoint.
- Non-GAAP net loss is expected to be in the range of $5.0
million to $4.5 million, representing a 17% improvement year over
year at the midpoint.
Full Year 2021
- The Company increased its 2021 revenue expectations to be in
the range of $78.5 million to $83.5 million, representing a
year-over-year increase of over 40% at the midpoint, with aiWARE
SaaS Solutions revenue expected to grow over 65% year over
year.
- The Company narrowed its 2021 non-GAAP net loss expectations to
be in the range of $17.0 million to $14.0 million, representing a
25% improvement year over year at the midpoint.
Financial Results for First Quarter
Ended March 31, 2021
Revenue was a record $18.3 million, compared with $11.9 million
in the first quarter of 2020. The growth reflects a 72% increase in
Advertising, including contributions from both the VeriAds Network
and Veritone One; a 51% increase in aiWARE SaaS Solutions,
including strong growth in the Company’s Government, Legal and
Compliance solutions; and an 18% increase in aiWARE Content
Licensing and Media Services. Gross profit increased 56% year over
year to $13.5 million, compared with $8.7 million in the first
quarter of 2020, driven largely by the revenue growth in aiWARE
SaaS Solutions and Advertising.
GAAP net loss was $30.6 million, including $21.6 million in
non-cash charges for stock-based compensation and $3.4 million of
one-time charges related to a facility sublease, compared with a
GAAP net loss of $12.7 million in the first quarter of 2020.
Non-GAAP net loss was $3.9 million, or $0.12 per share, compared
with $6.7 million, or $0.25 per share, in the first quarter of
2020. The $2.8 million year-over-year improvement in non-GAAP net
loss was driven by the $3.1 million improvement in Core Operations
non-GAAP net income to $1.2 million, offset slightly by the $0.3
million increase in Corporate non-GAAP net loss to $5.1
million.
As of March 31, 2021, the Company had cash and cash equivalents
of $127.5 million, including approximately $51.0 million of cash
received from Advertising clients for future payments to vendors,
and no long-term debt.
Conference Call
Veritone will hold a conference call on Tuesday, May 4, 2021 at
4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss its
results for the first quarter of 2021 and its outlook for the
second quarter and full year of 2021, provide an update on the
business, and conduct a question and answer session. To listen,
please join the webcast or dial-in. To avoid a wait, if dialing in,
please pre-register or call in 20 minutes in advance.
• Preregister*
https://dpregister.com/sreg/10154254/e62c6b4936
• Live audio webcast:
investors.veritone.com
• Domestic call number:
844-750-4897
• International call number:
412-317-5293
• Call ID:
10154254
* Callers who pre-register will be emailed upon registering a
conference pass code and unique PIN to gain immediate access to the
call and bypass the live operator. Participants may pre-register at
any time, including up to and after the call start time. If you
have any difficulty connecting with the conference call, please
contact LHA Investor Relations at 415-433-3777.
A replay of the audio webcast will be available on the Company’s
website approximately one hour after the call ends. A telephonic
replay of the call will be available through May 18, 2021:
Replay number:
1-877-344-7529
International replay number:
1-412-317-0088
Replay ID:
10154254
Virtual Investor Day and Tech
Expo
Friday, May 14, 2021, 9:00 am PT/12:00 pm ET
RSVP
Management will discuss the Company’s vision, demonstrate new
technologies publicly for the first time, present customer and
partner testimonials, and conduct live question and answer
sessions.
About the Presentation of Supplemental
Non-GAAP Financial Information
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: “gross profit,” “Non-GAAP net loss,” and “Non-GAAP net
loss per share.” Gross profit is the Company’s revenue less its
cost of revenue. Non-GAAP net loss is the Company’s net loss,
adjusted to exclude interest expense, provision for income taxes,
depreciation expense, amortization expense, stock-based
compensation expense, a reserve for state sales taxes, charges
related to a facility sublease, and severance costs. Non-GAAP net
loss should not be considered as an alternative to 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. The items excluded
from Non-GAAP net loss, as well as a breakdown of GAAP net 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. Other companies (including the
Company’s competitors) may define Non-GAAP net loss
differently.
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.
In addition, following the financial statements attached to this
news release, the Company has provided additional supplemental
non-GAAP measures of gross profit, operating expenses, loss from
operations, other (expense) income, 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 applicable
GAAP measures.
The Company presents this supplemental non-GAAP financial
information 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.
These non-GAAP measures may not be indicative of the historical
operating results of Veritone or predictive of potential future
results. Investors should not consider this supplemental non-GAAP
financial information in isolation or as a substitute for analysis
of the Company’s results as reported in accordance with GAAP.
About Veritone
Veritone (NASDAQ: VERI) is a leading provider of artificial
intelligence (AI) technology and solutions. The Company’s
proprietary operating system, aiWARE™, powers a diverse set of AI
applications and intelligent process automation solutions that are
transforming both commercial and government organizations. aiWARE
orchestrates an expanding ecosystem of machine learning models to
transform audio, video, and other data sources into actionable
intelligence. The Company’s AI developer tools enable its customers
and partners to easily develop and deploy custom applications that
leverage the power of AI to dramatically improve operational
efficiency and unlock untapped opportunities. Veritone is
headquartered in Denver, Colorado, and has offices in Costa Mesa,
London and San Diego. To learn more, visit Veritone.com.
Safe Harbor Statement
This news release contains forward-looking statements, including
without limitation statements regarding the Company’s expectations
regarding its rapidly growing pipeline of business, its expectation
that the market is rapidly shifting focus to aiWARE, the Company’s
expected total revenue and Non-GAAP net loss in the second quarter
and full year of 2021, and the Company’s expected year-over-year
growth in aiWARE SaaS Solutions revenue for full year 2021. 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, the impact of the economic
disruption caused by COVID-19 pandemic on the business of the
Company and that of its existing and potential customers; the
Company’s ability to achieve broad recognition and customer
acceptance of its products and services; the Company’s ability to
continue to develop and add additional capabilities and features to
its aiWARE operating system; the development of the market for
cognitive analytics solutions; the ability of third parties to
develop and provide additional high quality, relevant machine
learning models and applications; the Company’s ability to
successfully identify and integrate such additional third-party
models and applications onto its aiWARE operating system, and to
continue to be able to access and utilize such models and
applications, and the cost thereof; as well as 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 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
March 31,
December 31,
2021
2020
ASSETS
Cash and cash equivalents
$
127,459
$
114,817
Accounts receivable, net
24,100
16,666
Expenditures billable to clients
16,129
18,365
Prepaid expenses and other current
assets
5,220
6,719
Total current assets
172,908
156,567
Property, equipment and improvements,
net
385
2,354
Intangible assets, net
9,666
10,744
Goodwill
6,904
6,904
Long-term restricted cash
855
855
Other assets
229
230
Total assets
$
190,947
$
177,654
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable
$
19,186
$
15,632
Accrued media payments
65,391
55,874
Client advances
8,321
6,496
Other accrued liabilities
10,143
10,246
Total current liabilities
103,041
88,248
Other non-current liabilities
2,113
1,196
Total liabilities
105,154
89,444
Total stockholders' equity
85,793
88,210
Total liabilities and stockholders'
equity
$
190,947
$
177,654
VERITONE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
AND COMPREHENSIVE LOSS
(in thousands, except per
share and share data)
Three Months Ended
March 31,
2021
2020
Revenue
$
18,295
$
11,904
Operating expenses:
Cost of revenue
4,823
3,250
Sales and marketing
6,427
4,929
Research and development
4,960
3,646
General and administrative
31,543
11,543
Amortization
1,078
1,348
Total operating expenses
48,831
24,716
Loss from operations
(30,536
)
(12,812
)
Other (expense) income, net
(9
)
131
Loss before provision for income taxes
(30,545
)
(12,681
)
Provision for income taxes
22
3
Net loss
$
(30,567
)
$
(12,684
)
Net loss per share:
Basic and diluted
$
(0.95
)
$
(0.47
)
Weighted average shares outstanding:
Basic and diluted
32,172,038
26,773,163
Comprehensive loss:
Net loss
$
(30,567
)
$
(12,684
)
Foreign currency translation gain, net of
income taxes
7
4
Total comprehensive loss
$
(30,560
)
$
(12,680
)
VERITONE, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
(in thousands)
Three Months Ended
March 31,
2021
2020
Cash flows from operating
activities:
Net loss
$
(30,567
)
$
(12,684
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
1,253
1,604
Loss on disposal of fixed assets
1,894
-
Loss on sublease
1,211
-
Change in fair value of warrant
liability
-
(2
)
Provision for doubtful accounts
5
-
Stock-based compensation expense
21,610
4,456
Changes in assets and liabilities:
Accounts receivable
(7,439
)
(555
)
Expenditures billable to clients
2,236
5,446
Prepaid expenses and other current
assets
1,507
406
Accounts payable
3,554
(763
)
Accrued media payments
9,517
3,334
Client advances
1,825
947
Other accrued liabilities
(103
)
(644
)
Other liabilities
(294
)
(42
)
Net cash provided by operating
activities
6,209
1,503
Cash flows from investing
activities:
Capital expenditures
(100
)
(9
)
Net cash used in investing activities
(100
)
(9
)
Cash flows from financing
activities:
Proceeds from common stock offerings,
net
-
3,505
Proceeds from the exercise of warrants
2,279
-
Proceeds from issuances of stock under
employee stock plans, net
4,254
101
Net cash provided by financing
activities
6,533
3,606
Net increase in cash and cash equivalents
and restricted cash
12,642
5,100
Cash and cash equivalents and restricted
cash, beginning of period
115,672
44,920
Cash and cash equivalents and restricted
cash, end of period
$
128,314
$
50,020
VERITONE, INC.
REVENUE DETAIL
(UNAUDITED)
(in thousands)
Three Months Ended
March 31,
2021
2020
Advertising
$
10,327
$
6,001
aiWARE SaaS Solutions
4,685
3,108
aiWARE Content Licensing and Media
Services
3,283
2,795
Revenue
$
18,295
$
11,904
VERITONE, INC.
RECONCILIATION OF NON-GAAP NET
LOSS TO GAAP NET INCOME (LOSS) (UNAUDITED)
(in thousands)
For the Three Months Ended
March 31,
2021
2020
Core Operations(1)
Corporate(2)
Total
Core Operations(1)
Corporate(2)
Total
Net loss
$
(2,825
)
$
(27,742
)
$
(30,567
)
$
(3,775
)
$
(8,909
)
$
(12,684
)
Provision for income taxes
—
22
22
—
3
3
Depreciation and amortization
1,083
170
1,253
1,356
248
1,604
Stock-based compensation expense
2,695
18,915
21,610
563
3,893
4,456
Change in fair value of warrant
liability
—
—
—
—
(2
)
(2
)
State sales tax reserve
—
138
138
—
—
—
Gain on sale of asset
—
—
—
—
(56
)
(56
)
Charges related to sublease
—
3,367
3,367
—
—
—
Severance costs
250
7
257
—
—
—
Non-GAAP Net Income (Loss)
$
1,203
$
(5,123
)
$
(3,920
)
$
(1,856
)
$
(4,823
)
$
(6,679
)
(1) 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. (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.
VERITONE, INC.
RECONCILIATION OF EXPECTED
NON-GAAP NET LOSS RANGE
TO EXPECTED GAAP NET LOSS
RANGE (UNAUDITED)
(in millions)
Three Months Ending
Year Ending
June 30, 2021
December 31, 2021
Net loss
($12.9) to ($12.4)
($64.0) to ($61.0)
Provision for income taxes
—
—
Charges related to sublease
—
$
3.4
Depreciation and amortization
$
1.1
$
4.6
Stock-based compensation expense
$
6.8
$
39.0
Non-GAAP net loss
($5.0) to ($4.5)
($17.0) to ($14.0)
VERITONE, INC.
RECONCILIATION OF NON-GAAP TO
GAAP FINANCIAL INFORMATION (UNAUDITED)
(in thousands, except per
share data)
Three Months Ended
March 31,
2021
2020
Revenue
$
18,295
$
11,904
Cost of revenue
4,823
3,250
Gross profit
13,472
8,654
GAAP sales and marketing expenses
6,427
4,929
Stock-based compensation expense
(898
)
(178
)
Severance costs
(236
)
—
Non-GAAP sales and marketing expenses
5,293
4,751
GAAP research and development expenses
4,960
3,646
Stock-based compensation expense
(1,019
)
(237
)
Severance costs
(14
)
—
Non-GAAP research and development
expenses
3,927
3,409
GAAP general and administrative
expenses
31,543
11,543
Depreciation
(175
)
(256
)
Stock-based compensation expense
(19,693
)
(4,041
)
Charges related to sublease
(3,367
)
—
State sales tax reserve
(138
)
—
Severance costs
(7
)
—
Non-GAAP general and administrative
expenses
8,163
7,246
GAAP amortization
(1,078
)
(1,348
)
GAAP loss from operations
(30,536
)
(12,812
)
Total non-GAAP adjustments (1)
26,625
6,060
Non-GAAP loss from operations
(3,911
)
(6,752
)
GAAP other (expense) income, net
(9
)
131
Change in fair value of warrant
liability
—
(2
)
Gain on sale of asset
—
(56
)
Non-GAAP other (expense) income, net
(9
)
73
GAAP loss before income taxes
(30,545
)
(12,681
)
Total non-GAAP adjustments (1)
26,625
6,002
Non-GAAP loss before income taxes
(3,920
)
(6,679
)
Income tax provision
22
3
GAAP net loss
(30,567
)
(12,684
)
Total non-GAAP adjustments (1)
26,647
6,005
Non-GAAP net loss
$
(3,920
)
$
(6,679
)
Shares used in computing non-GAAP basic
and diluted net loss per share
32,172
26,773
Non-GAAP basic and diluted net loss per
share
$
(0.12
)
$
(0.25
)
(1) Adjustments are comprised of the adjustments to GAAP gross
profit, sales and marketing expenses, research and development
expenses and general and administrative expenses and other
(expense) income, net (where applicable) listed above.
VERITONE, INC.
KEY PERFORMANCE INDICATORS
(KPI's) (UNAUDITED)
Quarter Ended
Mar 31,
Jun 30,
Sept 30,
Dec 31,
Mar 31,
2020
2020
2020
2020
2021
Advertising
Average gross billings per active client
(in 000's)(1)
533
614
625
632
713
Revenue during quarter (in 000's)
$
5,881
$
6,140
$
7,372
$
8,138
$
8,371
Quarter Ended
Mar 31,
Jun 30,
Sept 30,
Dec 31,
Mar 31,
2020
2020
2020
2020
2021
aiWARE SaaS Solutions
Total accounts on platform at quarter
end
1,587
1,753
1,791
1,896
1,777
New bookings received during quarter (in
000's)(2)
$
1,397
$
2,319
$
2,083
$
1,437
$
1,864
Total contract value of new bookings
received during quarter (in 000’s)(3)
$
2,312
$
2,502
$
2,469
$
2,431
$
4,068
Revenue during quarter (in 000's)
$
3,108
$
3,002
$
3,351
$
4,402
$
4,685
(1) For each quarter, reflects the average gross quarterly
billings per agency client over the twelve month period through the
end of such quarter for agency clients that are active during such
quarter. (2) Represents the contractually committed fees payable
during the first 12 months of the contract term, or the
non-cancellable portion of the contract term (if shorter), for new
contracts received in the quarter, excluding any variable fees
under the contract (i.e., fees for cognitive processing, storage,
professional services and other variable services). (3) 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 (i.e., fees for cognitive processing, storage,
professional services and other variable services).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210504006214/en/
Company Contact: Brian
Alger, CFA SVP, Corporate Development & Investor Relations
Veritone, Inc. (949) 386-4318 investors@veritone.com
Investor Relations Contact:
Kirsten Chapman LHA Investor Relations (415) 433-3777
veritone@lhai.com
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