Veritone Reports Fourth Quarter and Fiscal Year 2023 Results

– Fiscal Year 2023 Revenue of $127.6 Million, in line with previously stated guidance –

– Q4 Total Revenue and Software Revenue of $34.2 and $19.8 million –

– ARR(1) of $82.1 million from 3,460 Total Software Products & Services Customers(1), including $48 million or 58% from subscription-based customers(1) demonstrating diversified & stable revenue streams –

– Announced restructuring in Q1 2024 resulting in forecasted annualized savings of over 15% in operating expense accelerating profitability into the second half of 2024 –

– Closed $77.5 million four-year Senior Secured Term Debt facility, using $37.5 million of proceeds to repurchase $50.0 million of November 2026 Convertible notes and ended December 2023 with cash and cash equivalents of $79.4 million –

DENVER--(BUSINESS WIRE)-- Veritone, Inc. (Nasdaq: VERI) (“the Company”), a leader in designing human-centered AI solutions, today reported results for the fourth quarter and fiscal year ended December 31, 2023.

“I am pleased with our performance in the fourth quarter, and extremely excited about our prospects for 2024. For the balance of the past year, we executed and progressed against the strategic initiatives we set in motion at the beginning of 2023, continuing through the first quarter of 2024, which have resulted in a series of transformative actions, including the execution of significant cost reductions and the realignment of our organization. More importantly, we believe we now have the appropriate talent and investment to meet the current demands of our customers and partners, and to secure our growth in delivering advanced, efficient AI solutions to our customers in the years to come. These actions, coupled with our large and diverse customer base, high gross margins and industry leading AI software and solutions, set Veritone on the path to accelerating profitability into the second half of 2024,” said Ryan Steelberg, Chairman and Chief Executive Officer of Veritone. “Looking to the year ahead, I am confident that our aiWARE-powered solutions, expertise in the core market verticals we serve and renewed sense of focus will position us to be stronger, more competitive and better aligned to capitalize on the opportunities presented by the dynamic AI market for years to come.”

Full Year 2023 Financial Highlights

  • Revenue of $127.6 million, a decrease of $22.2 million or 14.8% year over year.
  • Loss from operations of $92.3 million, an increase of $54.3 million year over year.
  • Non-GAAP gross profit of $99.3 million, a decrease of $23.0 million or 18.8% year over year.
  • Net loss of $58.6 million, an increase of $33.0 million year over year on a GAAP basis.
  • Non-GAAP Net Loss of $37.3 million, as compared to Non-GAAP Net Loss of $15.9 million in fiscal year 2022.
  • Cash and cash equivalents(1) were $79.4 million as of December 31, 2023, as compared to $184.4 million as of December 31, 2022.

Fourth Quarter 2023 Financial Highlights

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.

  • Revenue of $34.2 million, a decrease of 22.1%, compared to Q4 2022.
  • Software Products and Services revenues of $19.8 million, a decrease of 27.2% compared to Q4 2022.
  • Managed Services revenue of $14.4 million, a decrease of 13.8% compared to Q4 2022.
  • Total Software Products & Services Customers(1) of 3,460, down slightly year over year.
  • Total New Bookings(2) of $17.5 million, down from $26.3 million in Q4 2022.
  • Annual Recurring Revenue (ARR)(2) of $82.1 million, down from $118.0 in Q4 2022 driven by declines in consumption-based revenue from our largest customer, offset by increases from recurring subscription-based revenue customers.
  • Loss from Operations of $17.5 million, as compared to a loss of $10.0 million in Q4 2022.
  • Non-GAAP gross profit of $27.7 million, a decrease of $9.5 million compared to Q4 2022.
  • Net Income of $12.2 million, as compared to Net Income of $5.0 million in Q4 2022 driven by gains from repurchases of our November 2026 convertible notes at discounts in Q4 of 2023 and 2022.
  • Non-GAAP Net Loss of $6.8 million, as compared to Non-GAAP Net Income of $2.2 million in Q4 2022.

(1) Including approximately $45.3 million of cash received from Managed Services clients for future payments to vendors.
(2) 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.

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
December 31,

 

Year Ended
December 31,

 

 

Unaudited
(in $000s, except customers)

 

 

 

 

 

 

 

 

 

 

2023

 

2022

 

Percent
Change

 

2023

 

2022

 

Percent
Change

Revenue

$34, 197

 

$43,890

 

(22%)

 

$127,560

 

$149,728

 

(15%)

Loss from Operations

$(17,505)

 

$(9,951)

 

76%

 

$(92,336)

 

$(37,995)

 

NM

Net Income (Loss)

$12,175

 

$5,032

 

NM

 

$(58,625)

 

$(25,557)

 

NM

Non-GAAP Gross Profit*

$27,702

 

$37,183

 

(25%)

 

$99,304

 

$122,296

 

(19%)

Non-GAAP Net Income (Loss) *

$(6,808)

 

$2,190

 

NM

 

$(37,331)

 

$(15,880)

 

NM

 


Software Products & Services
(in $000s, except customers)

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

2022

 

Percent
Change

 

2023

 

2022

 

Percent
Change

Pro Forma Software Revenue (1)

$19,824

 

$35,612

 

(44%)

 

$83,468

 

$117,814

 

(29%)

Total Software Products & Services Customers(2)

3,460

 

3,824

 

(10%)

 

 

 

 

 

 

Average Annual Revenue (AAR)(3)

$82,128

 

$118,002

 

(30%)

 

 

 

 

 

 

Total New Bookings(4)

$17,457

 

$26,342

 

(33%)

 

 

 

 

 

 

Gross Retention(5)

>90%

 

>90%

 

 

 

 

 

 

 

NM = Not Meaningful
(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 Veritone 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

  • Veritone became a contributing company to the newly launched Generative AI Center of Excellence (CoE) for Amazon Web Services (AWS) Partners in the AWS Partner Network (APN). As an AWS Partner, Veritone will contribute its generative AI expertise and AI for Good principles to the program’s mission.
  • iHeart, the number one audio company in America, extended its licensing agreement for both Discovery and Attribute. iHeart has utilized Veritone’s technology to provide a differentiated service to its customers and advertisers since 2017.
  • Veritone launched its new Intelligent Digital Evidence Management Systems (“iDEMS”), one of the industry’s first cloud-based digital evidence management solutions that integrates AI to help public safety and judicial agencies accelerate investigations. iDEMS combines Veritone’s market-leading solutions for state and local law enforcement agencies – including Investigate, which is now available in the AWS marketplace – to form a centralized repository with AI-enabled applications that automate workflows and extract valuable data and insights, significantly improving upon legacy evidentiary software.
  • Commenced the initial phase of two separate custom implementations of Veritone’s iDEMS solutions with US Federal Government Agencies (DoJ and DoD) to materially reduce the time and cost associated with the organization, review and analysis of video content and evidence.
  • Expanded and extended our license agreement with the California Highway Patrol (CHP) for Veritone Redact unlimited licenses, to significantly reduce the cost and time associated with providing audio and video content to third parties while protecting identities and personal identifiable information.
  • Announced a technology partnership with Dalet, a leading technology and service provider for media-rich organizations, enabling a seamless workflow from content creation through production, creation, packaging and distribution, empowering media, sports and entertainment customers to monetize their digital media archives.
  • Announced restructuring of organization in Q1 2024, resulting in forecasted annualized savings of 15% of operating expenses, accelerating projected near-term cash flow profitability to as early as Q4 2024.
  • Entered into a four-year $77.5 million senior secured Term Loan in December 2023, using $37.5 million of the proceeds to repurchase $50.0 million principal amount of Veritone’s convertible senior notes due 2026 at a purchase price of $37.5 million plus accrued and unpaid interest through the closing date to pay fees and out-of-pocket expenses in connection with the Term Loan. Veritone expects to use the remaining net proceeds of the Term Loan for general corporate purposes.

Financial Results for Three Months Ended December 31, 2023

Delivered fourth quarter revenue of $34.2 million, a decrease of $9.7 million or 22.1% from $43.9 million in the fourth quarter of 2022. Software Products & Services revenue of $19.8 million declined $7.4 million or 27.2% year over year driven by a decline of $5.5 million in certain one-time, non-recurring revenue in Q4 2022 as compared to Q4 2023, coupled with a net decline of $1.9 million from our Veritone Hire solutions offset by a 30% year over year improvement in GRI. Managed Services revenue decreased by $2.3 million, or 13.8%, to $14.4 million, driven by lower advertising revenue and spend. Loss from operations was $17.5 million as compared to a loss of $10.0 million in Q4 2022 driven in part by the corresponding decline in revenue partially offset by various cost reductions enacted in 2023. Non-GAAP gross profit of $27.7 million in Q4 2023 declined by $9.5 million year over year largely due to the decrease in revenue. Non-GAAP gross margin of 81.3% as compared to 84.7% in 2022 driven by the mix of revenue year over year.

GAAP net income was $12.2 million, compared to $5.0 million in the fourth quarter of 2022, driven in part by non-recurring gains of $30.0 million and $19.1 million associated with the repurchases of $50.0 million and $60.0 million of our convertible senior notes due 2026 in Q4 2023 and Q4 2022, respectively, offset by the increase in loss from operations and changes in the income tax provision over the same periods. Non-GAAP net loss was $6.8 million compared to non-GAAP net income of $2.2 million in the fourth quarter of 2022, largely driven by the decline in non-GAAP gross margin, offset by net improvements in our cost structure throughout fiscal 2023.

During Q4 2023, Total Software Product & Services Customers of 3,460 was down slightly year over year on a Pro Forma basis principally due to ongoing run-off of legacy Career Builder customers transitioning off as a result of Veritone’s Q2 2023 acquisition of Broadbean. Total New Bookings on a Pro Forma basis decreased by 33.7% to $17.5 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 30.4% year over year to $82.1 million driven in large part by the decline in consumption revenue from larger customers, including Amazon, over the trailing twelve months ended Q4 2023 as compared to Q4 2022. Excluding the declines in one-time revenue and from Amazon, Software Products & Services revenue growth would have been 64% year over year.

As of December 31, 2023, the Company had cash and cash equivalents of $79.4 million, including approximately $45.3 million of cash received from Managed Services clients for future payments to vendors.

Financial Results Full Year Ended December 31, 2023

Delivered fiscal year 2023 revenue of $127.6 million, a decrease of $22.2 million or 14.8% year over year. Software Products & Services revenue was $68.4 million, a decrease of $16.2 million or 19.1% year over year as a result of lower consumption across our Veritone Hire customer base, offset by the addition of Broadbean in Q2 2023, and the decline of certain non-recurring, one-time software revenue in 2023 versus 2022. Managed Services revenue decreased by $6.0 million, or 9.2%, to $59.2 million, driven by lower advertising revenue and spend. Excluding the declines in certain one-time revenue and from Amazon, Software Products & Services revenue growth would have 44% year over year.

Loss from operations was $92.3 million as compared to a loss of $38.0 million in 2022 driven in part by a benefit of $22.7 million in 2022 associated with a revaluation of certain contingent consideration, coupled with the decline in non-GAAP gross profit and increases in certain non-recurring diligence costs and severance expenses. Non-GAAP gross profit of $99.3 million declined by $23.0 million year over year consistent with the revenue decline over the same period. Non-GAAP gross margin of 77.8% as compared to 81.7% in 2022 driven in large part by the mix of revenue in 2023 as compared to 2022.

Net loss was $58.6 million, compared to $25.2 million for fiscal year 2022, driven in part by the increase in loss from operations offset by the previously discussed gains on debt extinguishments of $30.0 million and $19.1 million in Q4 2023 and 2023, respectively, improvements in interest income year over year and the changes in the income tax provision over the same periods. Non-GAAP net loss was $37.3 million compared to $15.9 million in 2022, largely driven by the decline non-GAAP gross margin and the net impact of various cost reductions made in fiscal 2023 offset by the acquisition of Broadbean operating expenses in Q2 2023.

Business Outlook

First Quarter 2024

  • Revenue is expected to be in the range of $30.5 million to $31.5 million, as compared to $30.3 million in the first quarter of 2023.
  • Non-GAAP net loss is expected to be in the range of $7.0 million to $8.0 million, compared to non-GAAP net loss of $9.6 million in the first quarter of 2023.

Full Year 2024

  • Revenue is expected to be in the range of $134.0 million to $142.0 million, as compared to $127.6 million for fiscal 2023.
  • Non-GAAP net loss is expected to be in the range of $11.0 million to $15.0 million, compared to non-GAAP net loss of $37.5 million for fiscal 2023.

These updated financial guidance ranges supersede any previously disclosed financial guidance and investors should not rely on any previously disclosed financial guidance.

Conference Call

Veritone will hold a conference call to deliver management’s prepared remarks on Tuesday, March 12, 2024, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss its fourth quarter and full year 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.

A replay of the conference call can be accessed one hour after the end of the conference call through March 19, 2024. The full webcast replay will be available through March 12, 2025. 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: 2805175

* 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, adjusted to exclude provision for income taxes, depreciation expense, amortization expense, stock-based compensation expense, changes in fair value of warrant liability, changes in fair value of contingent consideration, interest income, interest expense, foreign currency gains and losses, acquisition and due diligence costs, gain on sale of energy group, contribution of business held for sale, variable consultant performance bonus expense, and severance and executive transition costs. 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 Hiring 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) designs human-centered AI solutions. Serving customers in the talent acquisition, media, entertainment and public sector industries, Veritone's software and services empower individuals at many of the world’s largest and most recognizable brands to run more efficiently, accelerate decision making and increase profitability. Veritone’s leading enterprise AI platform, aiWARE™, orchestrates an ever-growing ecosystem of machine learning models that transforms data sources into actionable intelligence. Guided by its commitment to responsible AI use, Veritone blends human expertise with AI technology to advance human potential and help organizations achieve more than ever before.

To learn more, visit Veritone.com.

Safe Harbor Statement

This news release contains forward-looking statements, including without limitation, statements regarding our prospects for 2024, our ability to deliver AI solutions to our customers, ability to achieve cash flow profitability as early as Q4 2024, and our expected total revenue and non-GAAP net loss for Q1 2024 and for full year 2024. 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, expectations, beliefs and information. As such, our actual results could differ materially and adversely from those expressed in any forward-looking statement as a result of various factors. Important factors that could cause such differences include, among other things, our ability to 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; our identification of existing material weaknesses in our internal control over financial reporting; 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 third party technologies in our aiWARE platform, offering it for free to the public or making it cost prohibitive to continue to incorporate such technologies into our platform; interruptions, performance problems or security issues with our technology and infrastructure, or that of our third party service providers; the impact of the continuing economic disruption caused by macroeconomic and geopolitical factors, including the COVID-19 pandemic, the Russia-Ukraine conflict, the war in Israel, financial instability, inflation rates and the responses by central banking authorities to control inflation, monetary supply shifts and the threat of recession in the United States and around the world on our business operations and those of our existing and potential customers; and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Certain of these judgments and risks are discussed in more detail in our most recently-filed Annual Report on Form 10-K, and other periodic reports filed from time to time with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives or plans will be achieved. The forward-looking statements contained herein reflect the our beliefs, estimates and predictions as of the date hereof, and we undertake no obligation to revise or update the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events for any reason, except as required by law.

VERITONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)

 

 

 

 

 

As of

 

December 31, 2023

 

December 31, 2022

ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

$

79,439

 

$

184,423

Accounts receivable, net

 

69,266

 

 

56,001

Expenditures billable to clients

 

19,608

 

 

22,339

Prepaid expenses and other current assets

 

14,457

 

 

15,242

Total current assets

 

182,770

 

 

278,005

Property, equipment and improvements, net

 

8,656

 

 

5,291

Intangible assets, net

 

83,423

 

 

79,664

Goodwill

 

80,247

 

 

46,498

Long-term restricted cash

 

867

 

 

859

Other assets

 

19,851

 

 

14,435

Total assets

$

375,814

 

$

424,752

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Accounts payable

$

32,756

 

$

36,738

Accrued media payments

 

93,896

 

 

102,064

Client advances

 

15,452

 

 

16,442

Deferred revenue

 

12,813

 

 

2,600

Senior Secured Term Loan, current portion

 

5,813

 

 

Contingent consideration, current

 

1,000

 

 

8,067

Other accrued liabilities

 

27,010

 

 

27,412

Total current liabilities

 

188,825

 

 

193,323

Convertible senior notes, non-current

 

89,572

 

 

137,767

Senior Secured Term Loan, non-current

 

45,012

 

 

Contingent consideration, non-current

 

633

 

 

Other non-current liabilities

 

13,625

 

 

13,811

Total liabilities

 

337,667

 

 

344,901

Total stockholders' equity

 

38,147

 

 

79,851

Total liabilities and stockholders' equity

$

375,814

 

$

424,752

 

VERITONE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share and share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2023

 

2022

 

2023

 

2022

Revenue

$

34,197

 

$

43,890

 

$

127,560

 

$

149,728

Operating expenses:

 

 

 

 

 

 

 

Cost of revenue

 

6,495

 

 

6,707

 

 

28,256

 

 

27,432

Sales and marketing

 

13,318

 

 

13,780

 

 

52,024

 

 

51,345

Research and development

 

9,634

 

 

10,854

 

 

42,090

 

 

43,589

General and administrative

 

16,307

 

 

17,050

 

 

73,811

 

 

44,177

Amortization

 

5,948

 

 

5,450

 

 

23,715

 

 

21,180

Total operating expenses

 

51,702

 

 

53,841

 

 

219,896

 

 

187,723

Loss from operations

 

(17,505)

 

 

(9,951)

 

 

(92,336)

 

 

(37,995)

Gain on debt extinguishment

 

30,023

 

 

19,097

 

 

30,023

 

 

19,097

Other income (expense), net

 

(769)

 

 

(684)

 

 

640

 

 

(4,350)

Loss before provision for income taxes

 

11,749

 

 

8,462

 

 

(61,673)

 

 

(23,248)

(Benefit from) provision for income taxes

 

(426)

 

 

3,430

 

 

(3,048)

 

 

2,309

Net income (loss)

$

12,175

 

$

5,032

 

$

(58,625)

 

$

(25,557)

Net income (loss) per share:

 

 

 

 

 

 

 

Basic

$

12,175

 

$

5,032

 

$

(58,625)

 

$

(25,557)

Diluted

$

(14,356)

 

$

(9,096)

 

$

(58,625)

 

$

(25,557)

Net income (loss) per share:

 

 

 

 

 

 

 

Basic

$

0.33

 

$

0.12

 

$

(1.59)

 

$

(0.71)

Diluted

$

(0.33)

 

$

(0.21)

 

$

(1.59)

 

$

(0.71)

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

37,169,048

 

 

36,359,618

 

 

36,909,919

 

 

36,033,560

Diluted

 

43,599,411

 

 

42,487,004

 

 

36,909,919

 

 

36,033,560

Comprehensive loss:

 

 

 

 

 

 

 

Net income (loss)

$

12,175

 

$

5,032

 

$

(58,625)

 

$

(25,557)

Foreign currency translation (loss) gain, net of income taxes

 

80

 

 

(614)

 

 

66

 

 

28

Total comprehensive loss

$

12,225

 

$

4,418

 

$

(58,559)

 

$

(25,529)

 

VERITONE, INC.

REVENUE DETAIL (UNAUDITED)

(in thousands)

 

 

 

 

Three Months Ended
December 31, 2023

Year Ended
December 31, 2023

 

 

Government &

 

 

Government &

 

 

Commercial

Regulated

 

Commercial

Regulated

 

 

Enterprise

Industries

Total

Enterprise

Industries

Total

Total Software Products & Services

$

18,301

$

1,519

$

19,820

$

62,410

$

5,591

$

68,401

 

 

 

 

Managed Services

 

 

 

Advertising

 

10,376

 

 

10,326

 

38,821

 

 

38,821

Licensing

 

4,501

 

 

4,501

 

20,338

 

 

20,338

Total Managed Services

 

14,827

 

 

14,827

 

59,159

 

 

59,159

 

 

 

 

Total Revenue

$

33,128

$

1,519

$

34,647

$

121,569

$

5,991

$

127,560

 

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31, 2022

Year Ended
December 31, 2022

 

 

 

Government &

 

 

 

 

 

Government &

 

 

 

Commercial

 

Regulated

 

 

 

Commercial

 

Regulated

 

 

 

Enterprise

 

Industries

 

Total

 

Enterprise

 

Industries

 

Total

Total Software Products & Services

$

26,055

$

1,165

$

27,220

$

80,749

$

3,829

$

84,578

 

 

 

 

 

 

 

Managed Services

 

 

 

 

 

 

Advertising

 

12,045

 

 

12,045

 

44,665

 

 

44,665

Licensing

 

4,625

 

 

4,625

 

20,485

 

 

20,485

Total Managed Services

 

16,670

 

 

16,670

 

65,150

 

 

65,150

 

 

 

 

 

 

 

Total Revenue

$

42,725

$

1,165

$

43,890

$

145,899

$

3,829

$

149,728

 

VERITONE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

 

Year Ended
December 31,

 

2023

2022

Cash flows from operating activities:

 

 

Net loss

$

(58,625)

 

$

(25,557)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

Depreciation and amortization

 

26,102

 

 

22,493

Provision for credit losses

 

272

 

 

549

Stock-based compensation expense

 

10,950

 

 

19,115

Gain on sale of energy group

 

(2,572)

 

 

Change in fair value of contingent consideration

 

2,284

 

 

(22,721)

Change in deferred taxes

 

(4,984)

 

 

(1,562)

Amortization of debt issuance costs

 

1,082

 

 

1,191

Amortization of right-of-use assets

 

1,561

 

 

1,053

Imputed non-cash interest income

 

(439)

 

 

Gain on debt extinguishment

 

(30,023)

 

 

(19,097)

Changes in assets and liabilities:

 

 

 

Accounts receivable

 

(5,720)

 

 

29,658

Expenditures billable to clients

 

2,731

 

 

4,841

Prepaid expenses and other assets

 

2,276

 

 

(2,938)

Other assets

 

(2,204)

 

 

(9,558)

Accounts payable

 

(5,449)

 

 

(9,997)

Deferred revenue

 

184

 

 

-

Accrued media payments

 

(8,168)

 

 

14,507

Client advances

 

(982)

 

 

8,481

Other accrued liabilities

 

(2,877)

 

 

(1,600)

Other liabilities

 

(1,820)

 

 

(5,121)

Net cash (used in) provided by operating activities

 

(76,421)

 

 

3,737

 

 

 

 

Cash flows from investing activities:

 

 

 

Minority investment

 

 

 

(2,750)

Proceeds from divestiture

 

504

 

 

Capital expenditures

 

(5,120)

 

 

(4,765)

Acquisitions, net of cash acquired

 

(50,268)

 

 

(4,589)

Net cash used in investing activities

 

(54,884)

 

 

(12,104)

 

 

 

 

Cash flows from financing activities:

 

 

 

Payment of debt issuance costs

 

(3,120)

 

 

Issuance of Senior Secured Term Loan

 

77,500

 

 

Repurchase of convertible senior notes

 

(37,500)

 

 

(39,029)

Payment of debt repurchase costs

 

 

 

(380)

Unwinding of capped calls related to debt repurchase

 

 

 

276

Payment of contingent consideration

 

(2,690)

 

 

(14,376)

Taxes paid related to net share settlement of equity awards

 

(1,153)

 

 

(9,766)

Payment of earnout

 

(7,772)

 

 

Proceeds from issuances of stock under employee stock plans, net

 

1,064

 

 

1,347

Net cash provided by (used in) financing activities

 

26,329

 

 

(61,928)

 

 

 

 

Net decrease in cash and cash equivalents and restricted cash

 

(104,976)

 

 

(70,295)

Cash and cash equivalents and restricted cash, beginning of period

 

185,282

 

 

255,577

Cash and cash equivalents and restricted cash, end of period

$

80,306

 

$

185,282

 

VERITONE, INC.

RECONCILIATION OF NON-GAAP NET INCOME (LOSS) TO GAAP NET LOSS (UNAUDITED)

(in thousands)

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

2023

2022

 

Core
Operations(1)

Corporate(2)

Total

Core
Operations(1)

Corporate(2)

Total

Net income

$

(7,707)

$

19,882

$

12,175

$

3,466

$

1,566

$

5,032

(Benefit from) provision for income taxes

 

386

 

(812)

 

(426)

 

2,310

 

1,120

 

3,430

Depreciation and amortization

 

5,786

 

162

 

5,948

 

5,882

 

117

 

5,999

Stock-based compensation expense

 

1,548

 

632

 

2,180

 

2,526

 

2,010

 

4,536

Change in fair value of contingent consideration

 

 

817

 

817

 

 

355

 

355

Interest (income) expense, net

 

 

704

 

704

 

 

680

 

680

Foreign currency impact

 

458

 

(65)

 

393

 

 

 

Gain on debt extinguishment

 

 

(30,023)

 

(30,023)

 

 

(19,097)

 

(19,097)

Acquisition and due diligence costs

 

 

872

 

872

 

 

1,080

 

1,080

Contribution of business held for sale (3)

 

(98)

 

 

(98)

 

 

 

Variable consultant performance bonus expense

 

(77)

 

 

(77)

 

 

 

Severance and executive transition costs

 

406

 

321

 

727

 

175

 

 

175

Non-GAAP net (loss) income

$

853

$

(7,665)

$

(6,808)

$

14,359

$

(12,169)

$

2,190

 

 

 

 

 

 

 

 

Year Ended December 31,

 

2023

2022

 

Core
Operations(1)

Corporate(2)

Total

Core
Operations(1)

Corporate(2)

Total

Net loss

$

(46,133)

$

(12,492)

$

(58,625)

$

(19,027)

$

(6,530)

$

(25,557)

(Benefit from) provision for income taxes

 

(4,022)

 

974

 

(3,048)

 

1,805

 

504

 

2,309

Depreciation and amortization

 

25,216

 

885

 

26,101

 

21,936

 

557

 

22,493

Stock-based compensation expense

 

7,259

 

3,567

 

10,826

 

10,138

 

8,977

 

19,115

Change in fair value of contingent consideration

 

 

2,284

 

2,284

 

 

(22,721)

 

(22,721)

Interest expense, net

 

10

 

2,438

 

2,448

 

 

4,350

 

4,350

Foreign currency impact

 

 

(133)

 

(133)

 

 

 

Gain on debt extinguishment

 

 

(30,023)

 

(30,023)

 

 

(19,097)

 

(19,097)

Acquisition and due diligence costs

 

 

9,125

 

9,125

 

 

2,688

 

2,688

Gain on sale of energy group

 

 

(2,572)

 

(2,572)

 

 

 

Contribution of business held for sale (3)

 

1,691

 

 

1,691

 

 

 

Variable consultant performance bonus expense

 

951

 

 

951

 

 

 

Severance and executive transition costs

 

2,676

 

968

 

3,644

 

512

 

28

 

540

Non-GAAP Net Loss

$

(12,352)

$

(24,979)

$

(37,331)

$

15,364

$

(31,244)

$

(15,880)

 

(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 Q2 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 Q1 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

 

March 31,
2024

 

December 31,
2024

Net loss

($19.8) to ($18.8)

 

($57.1) to ($53.2)

Provision for income taxes

($0.6)

 

($3.0)

Interest expense, net

$1.6

 

$6.5

Depreciation and amortization

$6.2

 

$24.6

Stock-based compensation expense

$2.3

 

$9.8

Variable consultant performance bonus expense

$0.3

 

$1.3

Change in fair value of contingent consideration

$0.5

 

$1.0

Severance and executive search

$1.5

 

$2.0

Non-GAAP net income (loss)

($8.0) to ($7.0)

 

($15.0) to ($11.0)

 

VERITONE, INC.

RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL INFORMATION (UNAUDITED)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2023

 

2022

 

2023

 

2022

Revenue

$

34,197

 

$

43,890

 

$

127,560

 

$

149,728

Cost of revenue

 

6,495

 

 

6,707

 

 

28,256

 

 

27,432

Non-GAAP gross profit

 

27,702

 

 

37,183

 

 

99,304

 

 

122,296

 

 

 

 

 

 

 

 

GAAP cost of revenue

 

6,495

 

 

6,707

 

 

28,256

 

 

27,432

Stock-based compensation expense

 

(20)

 

 

(26)

 

 

(52)

 

 

(116)

Non-GAAP cost of revenue

 

6,475

 

 

6,681

 

 

28,204

 

 

27,316

 

 

 

 

 

 

 

 

GAAP sales and marketing expenses

 

13,318

 

 

13,780

 

 

52,024

 

 

51,345

Depreciation

 

(27)

 

 

 

 

(60)

 

 

Stock-based compensation expense

 

(388)

 

 

(535)

 

 

(1,301)

 

 

(2,263)

Severance and executive transition costs

 

(85)

 

 

 

 

(831)

 

 

(86)

Non-GAAP sales and marketing expenses

 

12,818

 

 

13,245

 

 

49,832

 

 

48,996

 

 

 

 

 

 

 

 

GAAP research and development expenses

 

9,634

 

 

10,854

 

 

42,090

 

 

43,589

Depreciation

 

(645)

 

 

 

 

(1,499)

 

 

Stock-based compensation expense

 

(823)

 

 

(1,273)

 

 

(4,445)

 

 

(5,056)

Variable consultant performance bonus expense

 

77

 

 

 

 

(951)

 

 

Severance and executive transition costs

 

(138)

 

 

 

 

(1,034)

 

 

(198)

Non-GAAP research and development expenses

 

8,105

 

 

9,581

 

 

34,161

 

 

38,335

 

 

 

 

 

 

 

 

GAAP general and administrative expenses

 

16,307

 

 

17,050

 

 

73,811

 

 

44,177

Depreciation

 

673

 

 

(549)

 

 

(827)

 

 

(1,313)

Stock-based compensation expense

 

(949)

 

 

(2,702)

 

 

(5,028)

 

 

(11,680)

Change in fair value of contingent consideration

 

(817)

 

 

(355)

 

 

(2,284)

 

 

22,721

Acquisition and due diligence costs

 

(872)

 

 

(1,080)

 

 

(9,125)

 

 

(2,688)

Severance and executive transition costs

 

(504)

 

 

(175)

 

 

(1,779)

 

 

(256)

Non-GAAP general and administrative expenses

 

13,838

 

 

12,189

 

 

54,768

 

 

50,961

 

 

 

 

 

 

 

 

GAAP amortization

 

(5,948)

 

 

(5,450)

 

 

(23,715)

 

 

(21,180)

 

 

 

 

 

 

 

 

GAAP loss from operations

 

(17,505)

 

 

(9,951)

 

 

(92,336)

 

 

(37,995)

Total non-GAAP adjustments (1)

 

10,467

 

 

12,145

 

 

52,931

 

 

22,115

Non-GAAP loss (income) from operations

 

(7,038)

 

 

2,194

 

 

(39,405)

 

 

(15,880)

 

 

 

 

 

 

 

 

GAAP other income, net

 

(769)

 

 

18,413

 

 

30,663

 

 

14,747

Contribution of business held for sale (2)

 

(98)

 

 

 

 

1,691

 

 

Gain on debt extinguishment

 

(30,023)

 

 

(19,097)

 

 

(30,023)

 

 

(19,097)

Gain on sale of energy group

 

 

 

 

 

(2,572)

 

 

Foreign currency impact

 

393

 

 

 

 

(133)

 

 

Interest (expense) income, net

 

704

 

 

680

 

 

2,448

 

 

4,350

Non-GAAP other (expense) income, net

 

(29,793)

 

 

(4)

 

 

2,074

 

 

 

 

 

 

 

 

 

 

GAAP income (loss) before income taxes

 

11,749

 

 

8,462

 

 

(61,673)

 

 

(23,248)

Total non-GAAP adjustments (1)

 

(18,557)

 

 

(6,272)

 

 

24,342

 

 

7,368

Non-GAAP (loss) income before income taxes

 

(6,808)

 

 

2,190

 

 

(37,331)

 

 

(15,880)

 

 

 

 

 

 

 

 

(Benefit from) provision for income taxes

 

(426)

 

 

3,430

 

 

(3,048)

 

 

1,988

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

12,175

 

 

5,032

 

 

(58,625)

 

 

(25,236)

Total non-GAAP adjustments (1)

 

(18,983)

 

 

(2,842)

 

 

21,294

 

 

9,356

Non-GAAP net (loss) income

$

(6,808)

 

$

2,190

 

$

(37,331)

 

$

(15,880)

 

 

 

 

 

 

 

 

Shares used in computing non-GAAP basic and diluted net (loss) income per share

 

37,169

 

 

36,360

 

 

36,910

 

 

36,034

Shares used in computing non-GAAP diluted net (loss) income per share (2)

 

43,599

 

 

42,487

 

 

36,910

 

 

36,034

Non-GAAP basic and diluted (net loss) income per share

$

(0.18)

 

$

0.06

 

$

(1.01)

 

$

(0.44)

Non-GAAP diluted net (loss) income per share

$

(0.16)

 

$

0.05

 

$

(1.01)

 

$

(0.44)

(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.

(2) Shares used in computing non-GAAP diluted net income (loss) per share include the dilutive effects of common stock options, RSUs, and warrants as well as the common stock issuable in connection with the Senior Secured Term Loan and convertible senior notes, which for the purposes of diluted net earnings per share will be presented as if the Senior Secured Term Loan and convertible senior notes were converted to common shares as of January 1, 2022.

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

The following table sets forth the results for each of our Software Products & Services supplemental financial information.

 

 

Quarter Ended

 

 

 

 

 

 

Mar 31,

 

 

Jun 30,

 

 

Sept 30,

 

 

Dec 31,

 

 

Mar 31,

 

 

Jun 30,

 

 

Sept 30,

 

 

Dec 31,

 

 

 

2022 (1)

 

 

2022 (1)

 

 

2022 (1)

 

 

2022 (1)

 

 

2023 (1)

 

 

2023 (1)

 

 

2023

 

 

2023

 

Pro Forma Software Revenue (in 000’s) (2)

 

$

26,319

 

 

$

26,650

 

 

$

28,603

 

 

$

35,612

 

 

$

22,423

 

 

$

20,860

 

 

$

20,361

 

 

$

19,824

 

Total Software Products & Services Customers (3)

 

 

3,673

 

 

 

3,718

 

 

 

3,787

 

 

 

3,824

 

 

 

3,773

 

 

 

3,705

 

 

 

3,536

 

 

 

3,460

 

Annual Recurring Revenue (SaaS) (in 000’s) (4)

 

$

48,392

 

 

$

44,465

 

 

$

43,925

 

 

$

46,248

 

 

$

45,453

 

 

$

47,720

 

 

$

47,756

 

 

$

48,026

 

Annual Recurring Revenue (Consumption) (in 000’s) (5)

 

$

87,445

 

 

$

85,901

 

 

$

85,091

 

 

$

71,754

 

 

$

67,242

 

 

$

60,229

 

 

$

50,803

 

 

$

34,102

 

Total New Bookings (in 000’s) (6)

 

$

16,643

 

 

$

22,009

 

 

$

23,793

 

 

$

26,342

 

 

$

22,794

 

 

$

8,388

 

 

$

15,501

 

 

$

17,457

 

Gross Revenue Retention (7)

 

>90%

 

 

>90%

 

 

>90%

 

 

>90%

 

 

>90%

 

 

>90%

 

 

>90%

 

 

>90%

 

 

Trailing Twelve Months Ended

 

 

 

 

 

 

Mar 31,

 

 

Jun 30,

 

 

Sept 30,

 

 

Dec 31,

 

 

Mar 31,

 

 

Jun 30,

 

 

Sept 30,

 

 

Dec 31,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2023

 

 

2023

 

 

2023

 

 

2023

 

Software Products & Services Revenue (in 000’s)

 

$

72,997

 

 

$

85,796

 

 

$

97,581

 

 

$

84,578

 

 

$

80,532

 

 

$

74,529

 

 

$

73,863

 

 

$

66,467

 

Broadbean Revenue (in 000’s) (1)

 

 

29,599

 

 

 

30,006

 

 

 

30,136

 

 

 

29,047

 

 

 

30,998

 

 

 

32,398

 

 

 

33,498

 

 

 

33,931

 

Pro Forma Software Revenue (in 000’s)

 

$

102,596

 

 

$

115,802

 

 

$

127,717

 

 

$

113,625

 

 

$

111,530

 

 

$

106,927

 

 

$

107,361

 

 

$

100,398

 

Managed Services Revenue (in 000’s)

 

 

58,419

 

 

 

60,546

 

 

 

63,406

 

 

 

65,150

 

 

 

65,052

 

 

 

63,071

 

 

 

61,459

 

 

 

59,165

 

Total Pro Forma Revenue (in 000’s)

 

$

161,015

 

 

$

176,348

 

 

$

191,123

 

 

$

178,775

 

 

$

176,582

 

 

$

169,998

 

 

$

168,820

 

 

$

159,563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma Total Number of Customers

 

 

3,673

 

 

 

3,718

 

 

 

3,787

 

 

 

3,824

 

 

 

3,773

 

 

 

3,705

 

 

 

3,536

 

 

 

3,460

 

Pro Forma Annual Recurring Revenue (in 000’s) (2)

 

$

135,837

 

 

$

130,366

 

 

$

129,016

 

 

$

118,002

 

 

$

112,695

 

 

$

107,949

 

 

$

98,549

 

 

$

82,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) All of the supplemental financial information for this period is presented on a Pro Forma basis inclusive of Broadbean.
(2) “Software Revenue - Pro Forma” is a non-GAAP measure that represents Software Products & Services revenue on a Pro Forma basis.
(3) “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.
(4) “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.
(5) “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 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 (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.
(6) “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.
(7) “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.

Managed Services Supplemental Financial Information

The following table sets forth the results for each of the key performance indicators for Managed Services.

 

 

Quarter Ended

 

 

 

Mar 31,

 

 

Jun 30,

 

 

Sept 30,

 

 

Dec 31,

 

 

Mar 31,

 

 

Jun 30,

 

 

Sept 30,

 

 

Dec 31,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2023

 

 

2023

 

 

2023

 

 

2023

 

Avg billings per active Managed Services client (in 000’s) (1)

 

$

684

 

 

$

736

 

 

$

747

 

 

$

823

 

 

$

771

 

 

$

576

 

 

$

630

 

 

$

647

 

Revenue during quarter (in 000’s) (2)

 

$

10,735

 

 

$

9,625

 

 

$

10,035

 

 

$

11,074

 

 

$

9,337

 

 

$

6,876

 

 

$

9,117

 

 

$

8,612

 

(1) 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.
(2) 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
December 31,

 

Year Ended
December 31,