Veritone Reports Third Quarter 2022 Results
Veritone, Inc. (NASDAQ: VERI) reported a robust Q3 2022 with revenue soaring 64% year-over-year to $37.2 million. Driven by a significant 131% surge in Software Products & Services, and a 20% increase in Managed Services, new bookings skyrocketed 393% to $16.5 million. Despite a GAAP net loss of $4.9 million, a substantial decline from $11.5 million the prior year, cash reserves grew to $196.1 million. Ryan Steelberg will become CEO on January 1, 2023, as Chad Steelberg transitions to Chairman of the Board.
- Q3 revenue rose by 64% to $37.2 million.
- Software Products and Services revenue surged 131% to $20.8 million.
- New bookings increased a remarkable 393% to $16.5 million.
- Cash and cash equivalents improved to $196.1 million from $72.6 million YoY.
- Loss from operations decreased by 67% to $3.6 million.
- GAAP net loss of $4.9 million, although improved from $11.5 million in Q3 2021.
- Average Annual Revenue (AAR) per customer declined by 18% on a Pro Forma basis.
- Q3 Revenue Up
- Q3 Ending Software Customers Up
- Record Q3 New Bookings of
-
- Ended Q3 2022 with
“For the third quarter of 2022,
Financial Highlights: Third Quarter 2022 Compared to Third Quarter 2021
-
Revenue increased
64% on a GAAP basis to$37.2 million 5% on a Pro Forma basis. -
Software Products & Services Revenue increased
131% on a GAAP basis to$20.8 million 5% on a Pro Forma basis. -
Ending Software Customers of 618 increased
43% year over year and4% sequentially. -
Managed Services Revenue increased
20% to$16.4 million -
Loss from operations decreased
67% to$3.6 million 79% to$30.1 million 3% on a Pro Forma basis. -
GAAP net loss was
$4.9 million $11.5 million -
Non-GAAP net loss was
$5.7 million $2.3 million -
Cash and cash equivalents(1) were
$196.1 million September 30, 2022 , as compared to$72.6 million September 30, 2021 . -
Average Annual Revenue (AAR) per customer declined by
18% on a Pro Forma basis driven by a higher mix of newer customers offset by a decline in Amazon. -
Record Total New Bookings of
$16.5 million 393% on a Pro Forma basis.
Pro Forma basis assumesVeritone owned PandoLogic since the beginning of 2021. See below for a description of our non-GAAP measures and reconciliations to the most directly comparable GAAP measures.
(1) Including approximately
|
Three Months Ended |
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Nine Months Ended |
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||||||||
Unaudited
|
2022 |
|
2021 |
|
Percent
|
|
2022 |
|
2021 |
|
Percent
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
|
|
NM |
|
|
|
|
|
NM |
Non-GAAP Gross Profit* |
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|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Loss* |
|
|
|
|
NM |
|
|
|
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
|
||||||||
Software Products & Services
|
2022 |
|
2021 |
|
Percent
|
|
2022 |
|
2021 |
|
Percent
|
Software Revenue – Pro Forma (in 000s) |
|
|
|
|
( |
|
|
|
|
|
|
Ending Software Customers |
618 |
|
433 |
|
|
|
|
|
|
|
|
AAR (in 000s) |
|
|
|
|
( |
|
|
|
|
|
|
Total New Bookings (in 000s) |
|
|
|
|
|
|
|
|
|
|
|
* See tables below for reconciliation of non-GAAP financial measures to directly comparable GAAP measures and for the definitions used for Software Products & Services Supplemental Financial Information. |
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NM = Not meaningful |
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Recent Business Highlights
-
Veritone aiWARE selected by Deloitte to advance AI practice focused on helping clients rapidly discover and manage media, text and data at scale. -
Announced that more than
20% ofCalifornia law enforcement agencies have adopted Veritone Contact, increasing approximately80% in 2022. - Launched SPORTX™, a global intelligent marketplace for sports federations and content producers to license short-form sports video directly to media buyers, maximizing additional revenue streams and their visibility amongst media organizations.
- Unveiled Veritone Tracker, a new AI-powered tracking solution that accelerates investigative efforts requiring rapid processing of video-based evidence in both public and private sectors.
- Established a strategic partnership with Stats Perform, the sports tech leader in data and AI, designed to provide real-time game updates.
-
Announced a new strategic partnership with
Exterro , the preferred provider of Legal GRC software specifically designed for in-house legal, privacy and IT teams at Global 2000 and AmLaw 200 organizations, to provide automated redaction for audio and video as part of theExterro platform workflow. -
Released the findings of its second annual nationwide Transparency and Trust Report, focused on the relationship between law enforcement agencies (LEAs) and the communities they serve to provide insight into the broader public opinion on policing in
the United States and how new technologies can improve transparency. - Announced the integration of Veritone Digital Media Hub with iconik’s cloud native media management platform to help media organizations easily manage, share and license their content while speeding the path from media creation to management to monetization.
- Unveiled its next-generation Veritone Voice which gives content creators and publishers one of the most powerful and versatile voice solutions on the market.
- Launched Veritone Voice Network, a multilingual custom AI voice solution and podcast monetization service that combines synthetic voice creation and AI translation services to localize podcasts and grow ad revenues and audiences.
Leadership Transition
Financial Results for Three Months Ended
Achieved third quarter revenue of
Third quarter Pro Forma Revenue improved
As of
Business Outlook
Fourth Quarter 2022
-
Revenue is expected to be in the range of
$44 million $46 million $55.1 million -
Non-GAAP net income is expected to be in the range of
$3.0 million $4.0 million $17.0 million
Full Year 2022
-
Revenue is expected to be in the range of
$150 million $152 million $115.3 million -
Non-GAAP net loss is expected to be in the range of
$14 million $15 million $6.8 million
These updated financial targets supersede any previously disclosed financial targets and investors should not rely on any previously disclosed financial targets.
Conference Call
- Pre-Registration*
- Live Audio Webcast
- Domestic Dial-In: 844-750-4897
- International Dial-In: 412-317-5293
* Please note that pre-registered participants will receive their dial-in number and unique PIN upon registration.
About the Presentation of Supplemental Non-GAAP and Pro Forma Financial Information
In this news release, the Company has supplemented its financial measures prepared in accordance with
Pro Forma Revenue includes historical Software Products & Services revenue from the past seven fiscal quarters of each of
The Company has provided these non-GAAP financial measures 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 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.
These non-GAAP financial measures may not be indicative of the historical operating results of
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 PandoLogic’s talent acquisition software product 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
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 significant opportunity to grow market share and the Company’s expected total revenue and Non-GAAP net income(loss) for Q4 2022 and for full year 2022. 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 the COVID-19 pandemic and the Russian invasion of
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|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
|||||||
(in thousands) |
|||||||
|
|
|
|
|
|
||
|
As of |
|
|||||
|
|
|
|
|
|
||
ASSETS |
|
|
|
|
|
||
|
|
|
|
|
|
||
Cash and cash equivalents |
$ |
196,071 |
|
|
$ |
254,722 |
|
Accounts receivable, net |
|
85,951 |
|
|
|
85,063 |
|
Expenditures billable to clients |
|
23,785 |
|
|
|
27,180 |
|
Prepaid expenses and other current assets |
|
16,963 |
|
|
|
12,117 |
|
Total current assets |
|
322,770 |
|
|
|
379,082 |
|
Property, equipment and improvements, net |
|
4,636 |
|
|
|
1,556 |
|
Intangible assets, net |
|
85,195 |
|
|
|
93,872 |
|
|
|
46,465 |
|
|
|
42,028 |
|
Long-term restricted cash |
|
857 |
|
|
|
855 |
|
Other assets |
|
9,868 |
|
|
|
954 |
|
Total assets |
$ |
469,791 |
|
|
$ |
518,347 |
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
||
|
|
|
|
|
|
||
Accounts payable |
$ |
31,437 |
|
|
$ |
46,711 |
|
Accrued media payments |
|
107,693 |
|
|
|
86,923 |
|
Client advances |
|
13,696 |
|
|
|
10,561 |
|
Contingent consideration, current |
|
7,147 |
|
|
|
20,053 |
|
Other accrued liabilities |
|
25,835 |
|
|
|
27,093 |
|
Total current liabilities |
|
185,808 |
|
|
|
191,341 |
|
Convertible senior notes, non-current |
|
195,984 |
|
|
|
195,082 |
|
Contingent consideration, non-current |
|
546 |
|
|
|
31,533 |
|
Other non-current liabilities |
|
16,680 |
|
|
|
13,891 |
|
Total liabilities |
|
399,018 |
|
|
|
431,847 |
|
Total stockholders' equity |
|
70,773 |
|
|
|
86,500 |
|
Total liabilities and stockholders' equity |
$ |
469,791 |
|
|
$ |
518,347 |
|
|
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
|||||||||||||||
AND COMPREHENSIVE LOSS |
|||||||||||||||
(in thousands, except per share and share data) |
|||||||||||||||
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|
|
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|
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|
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|
||||
|
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|
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||||||||||
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenue |
$ |
37,196 |
|
|
$ |
22,655 |
|
|
$ |
105,838 |
|
|
$ |
60,156 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
7,097 |
|
|
|
5,808 |
|
|
|
20,725 |
|
|
|
15,862 |
|
Sales and marketing |
|
13,920 |
|
|
|
5,906 |
|
|
|
37,565 |
|
|
|
17,586 |
|
Research and development |
|
11,784 |
|
|
|
5,254 |
|
|
|
32,735 |
|
|
|
14,860 |
|
General and administrative |
|
2,502 |
|
|
|
15,084 |
|
|
|
27,127 |
|
|
|
62,272 |
|
Amortization |
|
5,504 |
|
|
|
1,683 |
|
|
|
15,730 |
|
|
|
3,840 |
|
Total operating expenses |
|
40,807 |
|
|
|
33,735 |
|
|
|
133,882 |
|
|
|
114,420 |
|
Loss from operations |
|
(3,611 |
) |
|
|
(11,080 |
) |
|
|
(28,044 |
) |
|
|
(54,264 |
) |
Other expense, net |
|
(1,249 |
) |
|
|
(15 |
) |
|
|
(3,666 |
) |
|
|
(37 |
) |
Loss before provision for income taxes |
|
(4,860 |
) |
|
|
(11,095 |
) |
|
|
(31,710 |
) |
|
|
(54,301 |
) |
Provision for (benefit from) income taxes |
|
26 |
|
|
|
396 |
|
|
|
(1,442 |
) |
|
|
472 |
|
Net loss |
$ |
(4,886 |
) |
|
$ |
(11,491 |
) |
|
$ |
(30,268 |
) |
|
$ |
(54,773 |
) |
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted |
$ |
(0.13 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.84 |
) |
|
$ |
(1.67 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted |
|
36,202,496 |
|
|
|
33,332,668 |
|
|
|
35,924,413 |
|
|
|
32,752,939 |
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
$ |
(4,886 |
) |
|
$ |
(11,491 |
) |
|
$ |
(30,268 |
) |
|
$ |
(54,773 |
) |
Foreign currency translation gain, net of income taxes |
|
66 |
|
|
|
— |
|
|
|
642 |
|
|
|
7 |
|
Total comprehensive loss |
$ |
(4,820 |
) |
|
$ |
(11,491 |
) |
|
$ |
(29,626 |
) |
|
$ |
(54,766 |
) |
|
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|||||||
(in thousands) |
|||||||
|
|
|
|
|
|
||
|
Nine Months Ended
|
|
|||||
|
2022 |
|
|
2021 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
||
Net loss |
$ |
(30,268 |
) |
|
$ |
(54,773 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
16,494 |
|
|
|
4,189 |
|
Loss on disposal of fixed assets |
|
— |
|
|
|
1,894 |
|
Provision for doubtful accounts |
|
(113 |
) |
|
|
14 |
|
Loss on sublease |
|
— |
|
|
|
1,211 |
|
Stock-based compensation expense |
|
14,734 |
|
|
|
33,491 |
|
Change in fair value of contingent consideration |
|
(23,076 |
) |
|
|
303 |
|
Change in deferred taxes |
|
(2,078 |
) |
|
|
— |
|
Amortization of debt issuance costs |
|
902 |
|
|
|
— |
|
Amortization of right-of-use assets |
|
632 |
|
|
|
— |
|
Changes in assets and liabilities: |
|
|
|
|
|
||
Accounts receivable |
|
370 |
|
|
|
(19,907 |
) |
Expenditures billable to clients |
|
3,395 |
|
|
|
(6,871 |
) |
Prepaid expenses and other assets |
|
(4,114 |
) |
|
|
5,014 |
|
Other assets |
|
(4,568 |
) |
|
|
— |
|
Accounts payable |
|
(15,298 |
) |
|
|
4,288 |
|
Accrued media payments |
|
20,136 |
|
|
|
19,297 |
|
Client advances |
|
3,135 |
|
|
|
1,906 |
|
Other accrued liabilities |
|
(3,177 |
) |
|
|
7,016 |
|
Other liabilities |
|
(1,736 |
) |
|
|
(600 |
) |
Net cash used in operating activities |
|
(24,630 |
) |
|
|
(3,528 |
) |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
||
Minority investment |
|
(2,750 |
) |
|
|
— |
|
Capital expenditures |
|
(3,777 |
) |
|
|
(448 |
) |
Acquisitions, net of cash acquired |
|
(4,589 |
) |
|
|
(47,602 |
) |
Net cash used in investing activities |
|
(11,116 |
) |
|
|
(48,050 |
) |
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
||
Payment of contingent considerations |
|
(14,376 |
) |
|
|
— |
|
Taxes paid related to net share settlement of equity awards |
|
(9,726 |
) |
|
|
— |
|
Proceeds from the exercise of warrants |
|
— |
|
|
|
2,279 |
|
Proceeds from issuances of stock under employee stock plans, net |
|
1,199 |
|
|
|
7,127 |
|
Net cash (used in) provided by financing activities |
|
(22,903 |
) |
|
|
9,406 |
|
|
|
|
|
|
|
||
Net decrease in cash and cash equivalents and restricted cash |
|
(58,649 |
) |
|
|
(42,172 |
) |
Cash and cash equivalents and restricted cash, beginning of period |
|
255,577 |
|
|
|
115,672 |
|
Cash and cash equivalents and restricted cash, end of period |
$ |
196,928 |
|
|
$ |
73,500 |
|
|
|||||||||||||||||||||||
REVENUE DETAIL (UNAUDITED) |
|||||||||||||||||||||||
(in thousands) |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||||||||||
|
|
|
|
Government
|
|
|
|
|
|
|
|
|
Government
|
|
|
|
|
||||||
|
Commercial |
|
|
Regulated |
|
|
|
|
|
Commercial |
|
|
Regulated |
|
|
|
|
||||||
|
Enterprise |
|
|
Industries |
|
|
Total |
|
|
Enterprise |
|
|
Industries |
|
|
Total |
|
||||||
Total Software Products & Services |
$ |
19,800 |
|
|
$ |
1,012 |
|
|
$ |
20,812 |
|
|
$ |
54,694 |
|
|
$ |
2,664 |
|
|
$ |
57,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Managed Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Advertising |
|
11,017 |
|
|
|
— |
|
|
|
11,017 |
|
|
|
32,620 |
|
|
|
— |
|
|
|
32,620 |
|
Licensing |
|
5,367 |
|
|
|
— |
|
|
|
5,367 |
|
|
|
15,860 |
|
|
|
— |
|
|
|
15,860 |
|
Total Managed Services |
|
16,384 |
|
|
|
— |
|
|
|
16,384 |
|
|
|
48,480 |
|
|
|
— |
|
|
|
48,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Revenue |
$ |
36,184 |
|
|
$ |
1,012 |
|
|
$ |
37,196 |
|
|
$ |
103,174 |
|
|
$ |
2,664 |
|
|
$ |
105,838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||||||||||
|
|
|
|
Government
|
|
|
|
|
|
|
|
|
Government
|
|
|
|
|
||||||
|
Commercial |
|
|
Regulated |
|
|
|
|
|
Commercial |
|
|
Regulated |
|
|
|
|
||||||
|
Enterprise |
|
|
Industries |
|
|
Total |
|
|
Enterprise |
|
|
Industries |
|
|
Total |
|
||||||
Total Software Products & Services |
$ |
8,069 |
|
|
$ |
958 |
|
|
$ |
9,027 |
|
|
$ |
16,596 |
|
|
$ |
2,696 |
|
|
$ |
19,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Managed Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Advertising |
|
9,648 |
|
|
|
— |
|
|
|
9,648 |
|
|
|
29,943 |
|
|
|
— |
|
|
|
29,943 |
|
Licensing |
|
3,980 |
|
|
|
— |
|
|
|
3,980 |
|
|
|
10,921 |
|
|
|
— |
|
|
|
10,921 |
|
Total Managed Services |
|
13,628 |
|
|
|
— |
|
|
|
13,628 |
|
|
|
40,864 |
|
|
|
— |
|
|
|
40,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Revenue |
$ |
21,697 |
|
|
$ |
958 |
|
|
$ |
22,655 |
|
|
$ |
57,460 |
|
|
$ |
2,696 |
|
|
$ |
60,156 |
|
|
|||||||||||||||||||||||
RECONCILIATION OF NON-GAAP NET INCOME (LOSS) TO GAAP NET LOSS (UNAUDITED) |
|||||||||||||||||||||||
(in thousands) |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Three Months Ended |
|
|||||||||||||||||||||
|
2022 |
|
|
2021 |
|
||||||||||||||||||
|
Core
|
|
|
Corporate(2) |
|
|
Total |
|
|
Core
|
|
|
Corporate(2) |
|
|
Total |
|
||||||
Net loss |
$ |
(7,921 |
) |
|
$ |
3,035 |
|
|
$ |
(4,886 |
) |
|
$ |
(427 |
) |
|
$ |
(11,064 |
) |
|
$ |
(11,491 |
) |
(Benefit from) provision for income taxes |
|
20 |
|
|
|
6 |
|
|
|
26 |
|
|
|
390 |
|
|
|
6 |
|
|
|
396 |
|
Depreciation and amortization |
|
5,650 |
|
|
|
174 |
|
|
|
5,824 |
|
|
|
1,698 |
|
|
|
81 |
|
|
|
1,779 |
|
Stock-based compensation expense |
|
2,944 |
|
|
|
2,158 |
|
|
|
5,102 |
|
|
|
878 |
|
|
|
4,393 |
|
|
|
5,271 |
|
Change in fair value of contingent consideration |
|
— |
|
|
|
(14,291 |
) |
|
|
(14,291 |
) |
|
|
— |
|
|
|
303 |
|
|
|
303 |
|
Interest expense, net |
|
— |
|
|
|
1,305 |
|
|
|
1,305 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Acquisition and due diligence costs |
|
— |
|
|
|
839 |
|
|
|
839 |
|
|
|
— |
|
|
|
1,426 |
|
|
|
1,426 |
|
State sales tax reserve |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
22 |
|
|
|
22 |
|
Severance and executive search |
|
337 |
|
|
|
28 |
|
|
|
365 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Non-GAAP Net Income (Loss) |
$ |
1,030 |
|
|
$ |
(6,746 |
) |
|
$ |
(5,716 |
) |
|
$ |
2,539 |
|
|
$ |
(4,833 |
) |
|
$ |
(2,294 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Nine Months Ended |
|
|||||||||||||||||||||
|
2022 |
|
|
2021 |
|
||||||||||||||||||
|
Core
|
|
|
Corporate(2) |
|
|
Total |
|
|
Core
|
|
|
Corporate(2) |
|
|
Total |
|
||||||
Net loss |
$ |
(22,172 |
) |
|
$ |
(8,096 |
) |
|
$ |
(30,268 |
) |
|
$ |
(3,933 |
) |
|
$ |
(50,840 |
) |
|
$ |
(54,773 |
) |
(Benefit from) provision for income taxes |
|
(826 |
) |
|
|
(616 |
) |
|
|
(1,442 |
) |
|
|
390 |
|
|
|
82 |
|
|
|
472 |
|
Depreciation and amortization |
|
16,054 |
|
|
|
440 |
|
|
|
16,494 |
|
|
|
3,865 |
|
|
|
324 |
|
|
|
4,189 |
|
Stock-based compensation expense |
|
7,612 |
|
|
|
6,967 |
|
|
|
14,579 |
|
|
|
4,589 |
|
|
|
28,902 |
|
|
|
33,491 |
|
Change in fair value of contingent consideration |
|
— |
|
|
|
(23,076 |
) |
|
|
(23,076 |
) |
|
|
— |
|
|
|
303 |
|
|
|
303 |
|
State sales tax reserve |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
306 |
|
|
|
306 |
|
Interest expense, net |
|
— |
|
|
|
3,670 |
|
|
|
3,670 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Acquisition and due diligence costs |
|
— |
|
|
|
1,608 |
|
|
|
1,608 |
|
|
|
— |
|
|
|
2,161 |
|
|
|
2,161 |
|
Charges related to sublease |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,367 |
|
|
|
3,367 |
|
Severance and executive search |
|
337 |
|
|
|
28 |
|
|
|
365 |
|
|
|
— |
|
|
|
349 |
|
|
|
349 |
|
Non-GAAP Net Income (Loss) |
$ |
1,005 |
|
|
$ |
(19,075 |
) |
|
$ |
(18,070 |
) |
|
$ |
4,911 |
|
|
$ |
(15,046 |
) |
|
$ |
(10,135 |
) |
(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. |
|
||||||||||||||||||||||
|
||||
RECONCILIATION OF EXPECTED NON-GAAP NET LOSS RANGE |
||||
TO EXPECTED GAAP NET LOSS RANGE (UNAUDITED) |
||||
(in millions) |
||||
|
Three Months
|
|
Year Ending |
|
|
|
|
|
|
Net loss |
( |
|
( |
|
Provision for income taxes |
|
|
( |
|
Interest expense |
|
|
|
|
Depreciation and amortization |
|
|
|
|
Contingent consideration |
|
|
( |
|
Stock-based compensation expense |
|
|
|
|
Acquisition and due diligence costs |
|
|
|
|
Severance and executive search |
|
|
|
|
Non-GAAP net income (loss) |
|
|
( |
|
|
|||||||||||||||
RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL INFORMATION (UNAUDITED) |
|||||||||||||||
(in thousands, except per share data) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenue |
$ |
37,196 |
|
|
$ |
22,655 |
|
|
$ |
105,838 |
|
|
$ |
60,156 |
|
Cost of revenue |
|
7,097 |
|
|
|
5,808 |
|
|
|
20,725 |
|
|
|
15,862 |
|
Non-GAAP gross profit |
|
30,099 |
|
|
|
16,847 |
|
|
|
85,113 |
|
|
|
44,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP cost of revenue |
|
7,097 |
|
|
|
5,808 |
|
|
|
20,725 |
|
|
|
15,862 |
|
Stock-based compensation expense |
|
(46 |
) |
|
|
— |
|
|
|
(90 |
) |
|
|
— |
|
Non-GAAP cost of revenue |
|
7,051 |
|
|
|
5,808 |
|
|
|
20,635 |
|
|
|
15,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP sales and marketing expenses |
|
13,920 |
|
|
|
5,906 |
|
|
|
37,565 |
|
|
|
17,586 |
|
Stock-based compensation expense |
|
(538 |
) |
|
|
(226 |
) |
|
|
(1,728 |
) |
|
|
(1,358 |
) |
Severance and executive search |
|
(86 |
) |
|
|
— |
|
|
|
(86 |
) |
|
|
(236 |
) |
Non-GAAP sales and marketing expenses |
|
13,296 |
|
|
|
5,680 |
|
|
|
35,751 |
|
|
|
15,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP research and development expenses |
|
11,784 |
|
|
|
5,254 |
|
|
|
32,735 |
|
|
|
14,860 |
|
Stock-based compensation expense |
|
(1,532 |
) |
|
|
(431 |
) |
|
|
(3,783 |
) |
|
|
(2,016 |
) |
Severance and executive search |
|
(198 |
) |
|
|
— |
|
|
|
(198 |
) |
|
|
(14 |
) |
Non-GAAP research and development expenses |
|
10,054 |
|
|
|
4,823 |
|
|
|
28,754 |
|
|
|
12,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP general and administrative expenses |
|
2,502 |
|
|
|
15,084 |
|
|
|
27,127 |
|
|
|
62,272 |
|
Depreciation |
|
(320 |
) |
|
|
(95 |
) |
|
|
(764 |
) |
|
|
(349 |
) |
Stock-based compensation expense |
|
(2,986 |
) |
|
|
(4,615 |
) |
|
|
(8,978 |
) |
|
|
(30,117 |
) |
Change in fair value of contingent consideration |
|
14,291 |
|
|
|
(303 |
) |
|
|
23,076 |
|
|
|
(303 |
) |
Charges related to sublease |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,367 |
) |
State sales tax reserve |
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
|
(306 |
) |
Acquisition and due diligence costs |
|
(839 |
) |
|
|
(1,426 |
) |
|
|
(1,608 |
) |
|
|
(2,161 |
) |
Severance and executive search |
|
(81 |
) |
|
|
— |
|
|
|
(81 |
) |
|
|
(99 |
) |
Non-GAAP general and administrative expenses |
|
12,567 |
|
|
|
8,623 |
|
|
|
38,772 |
|
|
|
25,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP amortization |
|
(5,504 |
) |
|
|
(1,683 |
) |
|
|
(15,730 |
) |
|
|
(3,840 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP loss from operations |
|
(3,611 |
) |
|
|
(11,080 |
) |
|
|
(28,044 |
) |
|
|
(54,264 |
) |
Total non-GAAP adjustments (1) |
|
(2,161 |
) |
|
|
8,801 |
|
|
|
9,970 |
|
|
|
44,166 |
|
Non-GAAP loss from operations |
|
(5,772 |
) |
|
|
(2,279 |
) |
|
|
(18,074 |
) |
|
|
(10,098 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP other expense, net |
|
(1,249 |
) |
|
|
(15 |
) |
|
|
(3,666 |
) |
|
|
(37 |
) |
Interest expense, net |
|
1,305 |
|
|
|
— |
|
|
|
3,670 |
|
|
|
— |
|
Non-GAAP other expense, net |
|
56 |
|
|
|
(15 |
) |
|
|
4 |
|
|
|
(37 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP loss before income taxes |
|
(4,860 |
) |
|
|
(11,095 |
) |
|
|
(31,710 |
) |
|
|
(54,301 |
) |
Total non-GAAP adjustments (1) |
|
(856 |
) |
|
|
8,801 |
|
|
|
13,640 |
|
|
|
44,166 |
|
Non-GAAP loss before income taxes |
|
(5,716 |
) |
|
|
(2,294 |
) |
|
|
(18,070 |
) |
|
|
(10,135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax (benefit) provision |
|
26 |
|
|
|
396 |
|
|
|
(1,442 |
) |
|
|
472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP net loss |
|
(4,886 |
) |
|
|
(11,491 |
) |
|
|
(30,268 |
) |
|
|
(54,773 |
) |
Total non-GAAP adjustments (1) |
|
(830 |
) |
|
|
9,197 |
|
|
|
12,198 |
|
|
|
44,638 |
|
Non-GAAP net loss |
$ |
(5,716 |
) |
|
$ |
(2,294 |
) |
|
$ |
(18,070 |
) |
|
$ |
(10,135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares used in computing non-GAAP basic and diluted net loss per share |
|
36,202 |
|
|
|
33,333 |
|
|
|
35,924 |
|
|
|
32,753 |
|
Non-GAAP basic and diluted net loss per share |
$ |
(0.16 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.50 |
) |
|
$ |
(0.31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(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. |
|
||||||||||||||
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 |
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|||||||
Software Revenue - Pro Forma (in 000's) (1) |
|
$ |
10,183 |
|
|
$ |
20,072 |
|
|
$ |
21,860 |
|
|
$ |
40,223 |
|
|
$ |
18,167 |
|
|
$ |
18,379 |
|
|
$ |
20,812 |
|
Ending Software Customers (2) |
|
|
385 |
|
|
|
419 |
|
|
|
433 |
|
|
|
529 |
|
|
|
559 |
|
|
|
594 |
|
|
|
618 |
|
Average Annual Revenue (AAR) (in 000's) (3) |
|
$ |
199 |
|
|
$ |
203 |
|
|
$ |
208 |
|
|
$ |
209 |
|
|
$ |
207 |
|
|
$ |
187 |
|
|
$ |
170 |
|
Total New Bookings (in 000's) (4) |
|
$ |
2,442 |
|
|
$ |
4,896 |
|
|
$ |
3,356 |
|
|
$ |
8,317 |
|
|
$ |
9,574 |
|
|
$ |
14,658 |
|
|
$ |
16,548 |
|
Gross Revenue Retention (5) |
|
> |
|
|
> |
|
|
> |
|
|
> |
|
|
> |
|
|
> |
|
|
> |
|
|||||||
(1) “Software Revenue - Pro Forma” includes historical Software Products & Services revenue from the past seven (7) fiscal quarters of each of |
||||||||||||||||||||||||||||
(2) “Ending Software Customers” includes Software Products & Services customers as of the end of each respective quarter set forth above with trailing twelve-month revenues in excess of |
||||||||||||||||||||||||||||
(3) “Average Annual Revenue (AAR)” is 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 |
||||||||||||||||||||||||||||
(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). |
||||||||||||||||||||||||||||
(5) “Gross Revenue Retention”: We calculate our dollar-based gross retention rate as of the period end by starting with the revenue from Ending Software Customers for Software Products & Services 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 Ending Software 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 Ending Software Customers from our Software Products & Services as of the year prior that is not lost to customer churn |
||||||||||||||||||||||||||||
Managed Services Supplemental Financial Information
|
|
Quarter Ended |
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|||||||
Avg billings per active Managed Services client (in 000's) (6) |
|
$ |
582 |
|
|
$ |
622 |
|
|
$ |
615 |
|
|
$ |
625 |
|
|
$ |
684 |
|
|
$ |
736 |
|
|
$ |
747 |
|
Revenue during quarter (in 000's) (7) |
|
$ |
10,327 |
|
|
$ |
9,968 |
|
|
$ |
9,647 |
|
|
$ |
10,857 |
|
|
$ |
10,735 |
|
|
$ |
9,625 |
|
|
$ |
10,035 |
|
(6) 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. |
||||||||||||||||||||||||||||
(7) Managed Services revenue and metrics exclude content licensing and media services. |
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
RECONCILIATION OF PRO FORMA REVENUE TO REVENUE AND CALCULATION OF AAR |
||||||||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||
|
|
Quarter Ended |
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|||||||
Software Products & Services Revenue |
|
$ |
4,685 |
|
|
$ |
5,580 |
|
|
$ |
9,027 |
|
|
$ |
40,223 |
|
|
$ |
18,167 |
|
|
$ |
18,379 |
|
|
$ |
20,812 |
|
PandoLogic Revenue (1) |
|
|
5,498 |
|
|
|
14,492 |
|
|
|
12,833 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Software Revenue - Pro Forma |
|
$ |
10,183 |
|
|
$ |
20,072 |
|
|
$ |
21,860 |
|
|
$ |
40,223 |
|
|
$ |
18,167 |
|
|
$ |
18,379 |
|
|
$ |
20,812 |
|
Managed Services Revenue |
|
|
13,610 |
|
|
|
13,626 |
|
|
|
13,628 |
|
|
|
14,926 |
|
|
|
16,240 |
|
|
|
15,856 |
|
|
|
16,384 |
|
Total Pro Forma Revenue |
|
$ |
23,793 |
|
|
$ |
33,698 |
|
|
$ |
35,488 |
|
|
$ |
55,149 |
|
|
$ |
34,407 |
|
|
$ |
34,235 |
|
|
$ |
37,196 |
|
(1) |
||||||||||||||||||||||||||||
|
|
Trailing Twelve Months Ended |
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|||||||
Software Products & Services Revenue |
|
$ |
15,439 |
|
|
$ |
18,017 |
|
|
$ |
23,693 |
|
|
$ |
59,515 |
|
|
$ |
72,997 |
|
|
$ |
85,796 |
|
|
$ |
97,581 |
|
PandoLogic Revenue (1) |
|
|
50,283 |
|
|
|
57,262 |
|
|
|
59,292 |
|
|
|
32,824 |
|
|
|
27,325 |
|
|
|
12,833 |
|
|
|
— |
|
Software Revenue - Pro Forma |
|
$ |
65,722 |
|
|
$ |
75,279 |
|
|
$ |
82,985 |
|
|
$ |
92,339 |
|
|
$ |
100,322 |
|
|
$ |
98,629 |
|
|
$ |
97,581 |
|
Managed Services Revenue |
|
|
43,845 |
|
|
|
52,019 |
|
|
|
53,279 |
|
|
|
55,789 |
|
|
|
58,419 |
|
|
|
60,546 |
|
|
|
63,406 |
|
Total Pro Forma Revenue |
|
$ |
109,567 |
|
|
$ |
127,298 |
|
|
$ |
136,264 |
|
|
$ |
148,128 |
|
|
$ |
158,741 |
|
|
$ |
159,175 |
|
|
$ |
160,987 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Average Number of Customers - Pro Forma |
|
|
330 |
|
|
|
372 |
|
|
|
399 |
|
|
|
442 |
|
|
|
485 |
|
|
|
529 |
|
|
|
575 |
|
Average Annual Revenue (AAR) |
|
$ |
199 |
|
|
$ |
203 |
|
|
$ |
208 |
|
|
$ |
209 |
|
|
$ |
207 |
|
|
$ |
187 |
|
|
$ |
170 |
|
|
|||||||||||||||
RECONCILIATION OF NON-GAAP GROSS PROFIT TO LOSS FROM OPERATIONS |
|||||||||||||||
(in thousands) |
|||||||||||||||
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Loss from operations |
$ |
(3,611 |
) |
|
$ |
(11,080 |
) |
|
$ |
(28,044 |
) |
|
$ |
(54,264 |
) |
Sales and marketing |
|
13,920 |
|
|
|
5,906 |
|
|
|
37,565 |
|
|
|
17,586 |
|
Research and development |
|
11,784 |
|
|
|
5,254 |
|
|
|
32,735 |
|
|
|
14,860 |
|
General and administrative |
|
2,502 |
|
|
|
15,084 |
|
|
|
27,127 |
|
|
|
62,272 |
|
Amortization |
|
5,504 |
|
|
|
1,683 |
|
|
|
15,730 |
|
|
|
3,840 |
|
Non-GAAP gross profit |
$ |
30,099 |
|
|
$ |
16,847 |
|
|
$ |
85,113 |
|
|
$ |
44,294 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20221108006184/en/
Company Contact:
SVP, Investor Relations and Capital Markets
415-203-8265
investors@veritone.com
IR Agency Contact:
203-644-5475
snorbom@prosek.com
Source:
FAQ
What were Veritone's Q3 2022 revenue figures?
How did new bookings perform in Q3 2022 for VERI?
What leadership changes were announced by Veritone?
What was the financial outlook for Veritone for Q4 2022?
What was the cash position of Veritone at the end of Q3 2022?
