Veritone, Inc. (NASDAQ: VERI), a leading provider of artificial intelligence (AI) technology and solutions, today reported results for the second quarter and six months ended June 30, 2019.
Chad Steelberg, CEO and Chairman of Veritone, said, “Our second quarter net revenues increased 194% year-over-year to a record $12.3 million, due to a $6.2 million contribution from the companies we acquired last year and organic growth. Our aiWARE SaaS revenue increased by 211% (102% excluding acquisitions) compared with the second quarter of 2018. We achieved new customer wins in all of our end markets in the second quarter, through both direct and channel sales efforts. In the first half of 2019, we saw increasing traction with our new Attribute, Identify and Redact applications for aiWARE and introduced our powerful Illuminate application, positioning us well for growth in the future. We continue to believe that the inherent strategic value of our aiWARE OS is becoming stronger and more evident as we expand our addressable market with these unique and powerful AI-based solutions.”
“Our advertising business continues to deliver outstanding growth, with net revenues reaching $5.8 million in the second quarter of 2019, driven by the differentiation of aiWARE and our leading market share in the rapidly growing podcast segment,” said Ryan Steelberg, President of Veritone. “This morning, we announced Influencer Bridge, the first of three initiatives that we expect to launch this quarter that will expand our served market, leveraging our AI-enabled software and the scale of our platform in Media and Entertainment. We expect this effort, coupled with the increasing traction we are seeing in our public safety and legal markets, to further diversify and accelerate our growth.”
Chad Steelberg concluded, “Executing effectively in the second quarter, we achieved 45% organic net revenue growth, improved our Adjusted EBITDAS loss year-over-year and sequentially in both dollars and rate, more than doubled the number of customer trials for our Identify and Redact applications, and unveiled our innovative new Illuminate application for the Legal and Government markets. Looking ahead, we are very well positioned to accelerate our organic net revenue growth and deliver on our vision to be the AI platform of choice.”
Second Quarter 2019 Financial Highlights:
- Net revenues increased 194% to $12.3 million, compared with $4.2 million in Q2 2018.
- aiWARE SaaS revenues increased 211% compared with Q2 2018 to $2.7 million ($1.7 million, or an increase of 102%, excluding acquisitions).
- Adjusted EBITDAS loss rate improved to 75%, compared with 77% in Q1 2019 and 263% in Q2 2018.
- Cash and cash equivalents and marketable securities totaled $45.3 million at the end of the quarter.
Recent Business Highlights:
- Selected by Cox Media Group (CMG) to provide the aiWARE-powered Veritone Essentials suite of applications for use across 49 of its radio stations in 11 markets.
- Launched Veritone Illuminate, an AI-powered solution that enables legal and law enforcement investigative teams to cost-effectively search, analyze, cull and explore large amounts of audio, video and text-based evidence during early case assessment (ECA) or other digital data culling processes.
- Engaged in 32 customer trials (8 for Identify and 24 for Redact) to date, with two converted into renewed contracts. Nearly 30 public safety and other government agencies are currently in various stages of evaluation of these applications.
- Introduced Influencer Bridge, the first of a series of new audio advertising services, which gives podcasters, influencers and other content creators unprecedented access to advertisers and enables them to monetize their content through sponsored ad placements.
Second Quarter 2019 Financial Results:
Net revenues were $12.3 million, including $6.2 million from the Company’s acquisitions completed in the third quarter of 2018, compared with $4.2 million in the second quarter of 2018. This was comprised of $2.7 million from aiWARE SaaS solutions, $3.8 million from aiWARE content licensing and media services, and $5.8 million from Advertising. Net revenues from the Company’s aiWARE software and services businesses were 52% of total net revenues.
Operating expenses were $24.4 million, an increase of $6.6 million compared with $17.8 million in the second quarter of 2018. The increase was due primarily to the addition of approximately $3.3 million of operating expenses of the businesses acquired in the third quarter of 2018, approximately $0.6 million of amortization of intangibles and earn-out compensation linked to those acquisitions, and approximately $2.5 million of additional stock-based compensation expense.
Loss from operations was $16.7 million, an increase of $2.2 million compared with a loss from operations of $14.5 million in the second quarter of 2018.
Net loss totaled $16.7 million, or $(0.80) per share, compared with $14.3 million, or $(0.88) per share, in the second quarter of 2018. Non-GAAP net loss was $9.2 million, or $(0.44) per share, compared with $11.0 million, or $(0.67) per share, in the second quarter of 2018. See “About the Presentation of Supplemental Non-GAAP Financial Information” below for an explanation of the items excluded from the calculation of non-GAAP net loss and a reconciliation of net loss to non-GAAP net loss following the financial statements below.
Adjusted EBITDAS, a non-GAAP financial measure, totaled a loss of $9.2 million, or 75% of net revenues, compared with a loss of $11.0 million, or 263% of net revenues, in the second quarter of 2018. The lower Adjusted EBITDAS loss was due primarily to the increase in net revenues, offset in part by the increase in operating expenses related to the recent acquisitions. See “About the Presentation of Supplemental Non-GAAP Financial Information” below for an explanation of the items excluded from the calculation of Adjusted EBITDAS and a reconciliation of net loss to Adjusted EBITDAS following the financial statements below.
Cash: As of June 30, 2019, the Company had cash and cash equivalents and marketable securities of $45.3 million, including $8.9 million of cash received from Advertising clients for future payments to vendors, and no long-term debt. During the second quarter, the Company raised net proceeds of $8.1 million through the issuance of 1.0 million shares of its common stock under the ATM facility established in the second quarter of 2018.
First Half 2019 Financial Results:
Net revenues were $24.4 million, including $12.5 million from the Company’s recent acquisitions, compared with $8.6 million in the first half of 2018. This was comprised of $5.5 million from aiWARE SaaS solutions, $7.4 million from aiWARE content licensing and media services, and $11.6 million from Advertising. Net revenues from the Company’s aiWARE software and services businesses were 53% of total revenue.
Operating expenses were $49.2 million, an increase of $14.3 million compared with $34.9 million in the first half of 2018. The increase was due primarily to the addition of approximately $6.7 million of operating expenses of the businesses acquired in the third quarter of 2018, approximately $1.1 million of amortization of intangibles and earn-out compensation linked to those acquisitions, and approximately $5.3 million of additional stock-based compensation expense.
Loss from operations was $33.2 million, an increase of $5.6 million compared with a loss from operations of $27.7 million in the first half of 2018.
Net loss totaled $33.0 million, or $(1.64) per share compared with $27.4 million, or $(1.69) per share, in the first half of 2018. Non-GAAP net loss was $18.5 million, or $(0.92) per share, compared with $21.2 million, or $(1.31) per share, in the first half of 2018. See “About the Presentation of Supplemental Non-GAAP Financial Information” below for an explanation of the items excluded from the calculation of non-GAAP net loss and a reconciliation of net loss to non-GAAP net loss following the financial statements below.
Adjusted EBITDAS, a non-GAAP financial measure, totaled a loss of $18.5 million, or 76% of net revenues, compared with a loss of $21.2 million, or 248% of net revenues, for the first six months of 2018. The lower Adjusted EBITDAS loss was due primarily to the increase in net revenues, offset in part by the increase in operating expenses related to the recent acquisitions. See “About the Presentation of Supplemental Non-GAAP Financial Information” below for an explanation of the items excluded from the calculation of Adjusted EBITDAS and a reconciliation of net loss to Adjusted EBITDAS following the financial statements below.
Third Quarter 2019 Revenue Outlook:
For the third quarter ending September 30, 2019, the Company expects its total net revenues to be in the range of $12.6 million to $13.0 million.
Investor Conference Call:
Veritone will hold a conference call today August 7, 2019, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these results and provide an update on the business. Veritone management will host the presentation, followed by a question and answer session. The call will be open to all interested parties through a live audio webcast at investors.veritone.com. The call will also be available by dialing 877-791-0151 or 647-689-5650 for International.
Please call the conference telephone number 5-10 minutes prior to the start time and reference the conference ID 3646088. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact LHA at 415-433-3777.
A replay of the audio webcast will be available on the Company’s website shortly after the call ends. Additionally, a telephonic replay of the call will be available through August 21, 2019 by dialing the following numbers:
Replay number: 800-585-8367
International replay number: 416-621-4642
Replay ID: 3646088
About Veritone
Veritone (Nasdaq: VERI) is a leading provider of artificial intelligence (AI) technology and solutions. The company’s proprietary operating system, aiWARE™, orchestrates an expanding ecosystem of machine learning models to transform audio, video and other data sources into actionable intelligence. aiWARE can be deployed in a number of environments and configurations to meet customers’ needs. Its open architecture enables customers in the media and entertainment, legal and compliance, and government sectors to easily deploy applications that leverage the power of AI to dramatically improve operational efficiency and effectiveness. Veritone has over 300 employees and is headquartered in Costa Mesa, California, with offices in Denver, London, New York, San Diego and Seattle. To learn more, visit Veritone.com.
About the Presentation of Supplemental Non-GAAP Financial Information
In this news release, the Company has supplemented its financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures: “Non-GAAP net loss,” “Non-GAAP net loss per share,” and “Adjusted EBITDAS.” Non-GAAP net loss is the company’s net loss, adjusted to exclude interest expense, depreciation expense, amortization expense, stock-based compensation expense, and certain acquisition, integration and financing-related costs. Adjusted EBITDAS is defined as earnings before interest expense, depreciation, amortization and stock-based compensation expenses, adjusted to exclude certain acquisition, integration and financing-related costs. Adjusted EBITDAS should not be considered as an alternative to net income (loss), operating income (loss) or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from Non-GAAP net loss and Adjusted EBITDAS are detailed in the reconciliations included following the financial statements attached to this news release. Other companies (including the Company’s competitors) may define Non-GAAP net loss and/or Adjusted EBITDAS differently.
In addition, following the financial statements attached to this news release, the Company has provided additional supplemental non-GAAP measures of gross profit, operating expenses, loss from operations, other income, net, and loss before income taxes, excluding the items excluded from non-GAAP net loss as noted above, and reconciling such non-GAAP measures to the applicable GAAP measures.
The Company presents this supplemental non-GAAP financial information because management believes such information to be important supplemental measures of performance that are commonly used by securities analysts, investors and other interested parties in the evaluation of companies in its industry. Management also uses this information internally for forecasting and budgeting. These non-GAAP measures may not be indicative of the historical operating results of Veritone or predictive of potential future results. Investors should not consider this supplemental non-GAAP financial information in isolation or as a substitute for analysis of the Company’s results as reported in accordance with GAAP.
Safe Harbor Statement
This news release contains forward-looking statements, including without limitation statements regarding the Company’s belief that its new applications have positioned it well for future growth; the Company’s belief regarding the value of its aiWARE OS; the expectation that the Company’s new audio advertising initiatives, together with its increasing traction in the public safety and legal markets, will diversify and accelerate its revenue growth; the Company’s belief that it is very well positioned to accelerate its organic revenue growth and deliver on its vision to be the AI platform of choice; the expected benefits of Influencer Bridge to content creators; and the Company’s expected total net revenues in the third quarter of 2019. 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 Company’s ability to successfully integrate its recent acquisitions; the Company’s ability to achieve broad recognition and customer acceptance of its products and services; the Company’s ability to continue to develop and add additional capabilities and features to its aiWARE operating system, including expanding the capabilities of its Conductor technology and extending it to other cognitive classes; the development of the market for cognitive analytics solutions; the ability of third parties to develop and provide additional high quality, relevant cognitive engines and applications; the Company’s ability to successfully identify and integrate such additional third-party cognitive engines and applications onto its aiWARE operating system, and to continue to be able to access and utilize such engines and applications, and the cost thereof; as well as the impact of future economic, competitive and market conditions, particularly those related to its strategic end markets; and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Certain of these judgments and risks are discussed in more detail in the Company’s Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company’s objectives or plans will be achieved. The forward-looking statements contained herein reflect the Company’s beliefs, estimates and predictions as of the date hereof, and the Company undertakes no obligation to revise or update the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events for any reason, except as required by law.
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VERITONE, INC. |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
|
(in thousands) |
||||||
|
|
|
|
|
|
|
|
|
|
As of |
|||||
|
|
June 30, |
|
|
December 31, |
||
|
|
2019 |
|
|
2018 |
||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
40,275 |
|
|
$ |
37,539 |
|
Marketable securities |
|
4,998 |
|
|
|
13,565 |
|
Accounts receivable, net |
|
26,820 |
|
|
|
29,142 |
|
Expenditures billable to clients |
|
4,806 |
|
|
|
2,695 |
|
Prepaid expenses and other current assets |
|
3,625 |
|
|
|
3,579 |
|
Total current assets |
|
80,524 |
|
|
|
86,520 |
|
|
|
|
|
|
|
|
|
Long-term restricted cash |
|
1,135 |
|
|
|
1,237 |
|
Property, equipment and improvements, net |
|
3,660 |
|
|
|
4,008 |
|
Intangible assets, net |
|
18,823 |
|
|
|
20,480 |
|
Goodwill |
|
5,420 |
|
|
|
5,509 |
|
Total assets |
$ |
109,562 |
|
|
$ |
117,754 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
18,459 |
|
|
$ |
28,714 |
|
Accrued media payments |
|
12,414 |
|
|
|
7,416 |
|
Client advances |
|
14,281 |
|
|
|
9,639 |
|
Accrued compensation |
|
2,819 |
|
|
|
6,570 |
|
Other accrued liabilities |
|
5,721 |
|
|
|
3,746 |
|
Total current liabilities |
|
53,694 |
|
|
|
56,085 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
1,369 |
|
|
|
1,386 |
|
Total liabilities |
|
55,063 |
|
|
|
57,471 |
|
Total stockholders’ equity |
|
54,499 |
|
|
|
60,283 |
|
Total liabilities and stockholders’ equity |
$ |
109,562 |
|
|
$ |
117,754 |
|
VERITONE, INC. |
|||||||||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
|
AND COMPREHENSIVE LOSS |
|||||||||||||||
|
(in thousands, except per share and share data) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
|
2018 |
|
||||||
|
Net revenues |
$ |
12,270 |
|
|
$ |
4,168 |
|
|
$ |
24,395 |
|
|
$ |
8,556 |
|
|
Cost of revenues |
|
4,562 |
|
|
|
820 |
|
|
|
8,434 |
|
|
|
1,384 |
|
|
Gross profit |
|
7,708 |
|
|
|
3,348 |
|
|
|
15,961 |
|
|
|
7,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Sales and marketing |
|
6,448 |
|
|
|
5,142 |
|
|
|
12,581 |
|
|
|
10,890 |
|
|
Research and development |
|
6,351 |
|
|
|
5,146 |
|
|
|
13,289 |
|
|
|
9,674 |
|
|
General and administrative |
|
11,645 |
|
|
|
7,513 |
|
|
|
23,335 |
|
|
|
14,291 |
|
|
Total operating expenses |
|
24,444 |
|
|
|
17,801 |
|
|
|
49,205 |
|
|
|
34,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Loss from operations |
|
(16,736 |
) |
|
|
(14,453 |
) |
|
|
(33,244 |
) |
|
|
(27,683 |
) |
|
Other income, net |
|
51 |
|
|
|
133 |
|
|
|
262 |
|
|
|
316 |
|
|
Loss before provision for income taxes |
|
(16,685 |
) |
|
|
(14,320 |
) |
|
|
(32,982 |
) |
|
|
(27,367 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Provision for income taxes |
|
6 |
|
|
|
10 |
|
|
|
15 |
|
|
|
12 |
|
|
Net loss |
$ |
(16,691 |
) |
|
$ |
(14,330 |
) |
|
$ |
(32,997 |
) |
|
$ |
(27,379 |
) |
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic and diluted |
$ |
(0.80 |
) |
|
$ |
(0.88 |
) |
|
$ |
(1.64 |
) |
|
$ |
(1.69 |
) |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic and diluted |
|
20,759,396 |
|
|
|
16,314,236 |
|
|
|
20,138,756 |
|
|
|
16,192,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net loss |
$ |
(16,691 |
) |
|
$ |
(14,330 |
) |
|
$ |
(32,997 |
) |
|
$ |
(27,379 |
) |
|
Unrealized gain (loss) on marketable securities, net of income taxes |
|
13 |
|
|
|
61 |
|
|
|
48 |
|
|
|
(2 |
) |
|
Foreign currency translation adjustments, net of income taxes |
|
45 |
|
|
|
30 |
|
|
|
24 |
|
|
|
20 |
|
|
Total comprehensive loss |
$ |
(16,633 |
) |
|
$ |
(14,239 |
) |
|
$ |
(32,925 |
) |
|
$ |
(27,361 |
) |
|
VERITONE, INC. |
|||||||
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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|
(in thousands) |
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|
|
|
|
|
|
|
||
|
|
Six Months Ended |
||||||
|
|
June 30, |
||||||
|
|
2019 |
|
2018 |
||||
|
Cash flows from operating activities: |
|
|
|
|
|
||
|
Net loss |
$ |
(32,997 |
) |
|
$ |
(27,379 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
||
|
Depreciation and amortization |
|
2,719 |
|
|
|
828 |
|
|
Costs of warrants issued |
|
— |
|
|
207 |
|
|
|
Change in fair value of warrant liability |
|
50 |
|
|
|
15 |
|
|
Provision for doubtful accounts |
|
44 |
|
|
|
22 |
|
|
Stock-based compensation expense |
|
11,285 |
|
|
|
5,125 |
|
|
Other |
|
(19 |
) |
|
|
— |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
||
|
Accounts receivable |
|
2,278 |
|
|
|
(3,914 |
) |
|
Expenditures billable to clients |
|
(2,111 |
) |
|
|
(900 |
) |
|
Prepaid expenses and other current assets |
|
413 |
|
|
|
(367 |
) |
|
Accounts payable |
|
(10,255 |
) |
|
|
2,421 |
|
|
Accrued media payments |
|
4,998 |
|
|
|
1,945 |
|
|
Client advances |
|
4,642 |
|
|
|
1,148 |
|
|
Other accrued liabilities |
|
2,364 |
|
|
|
(966 |
) |
|
Other liabilities |
|
(17 |
) |
|
|
474 |
|
|
Net cash used in operating activities |
|
(16,606 |
) |
|
|
(21,341 |
) |
|
|
|
|
|
|
|
||
|
Cash flows from investing activities: |
|
|
|
|
|
||
|
Proceeds from sales of marketable securities |
|
8,616 |
|
|
|
14,000 |
|
|
Capital expenditures |
|
(208 |
) |
|
|
(2,899 |
) |
|
Intangible assets acquired |
|
(477 |
) |
|
|
(70 |
) |
|
Acquisition of businesses, net of cash acquired |
|
(883 |
) |
|
|
— |
|
|
Net cash provided by investing activities |
|
7,048 |
|
|
|
11,031 |
|
|
|
|
|
|
|
|
||
|
Cash flows from financing activities: |
|
|
|
|
|
||
|
Proceeds from common stock offerings, net |
|
11,778 |
|
|
|
32,536 |
|
|
Proceeds from exercise of stock options |
|
120 |
|
|
|
— |
|
|
Proceeds from issuances of stock under employee stock plans |
|
294 |
|
|
|
921 |
|
|
Net cash provided by financing activities |
|
12,192 |
|
|
|
33,457 |
|
|
|
|
|
|
|
|
||
|
Net increase in cash, cash equivalents and restricted cash |
|
2,634 |
|
|
|
23,147 |
|
|
Cash, cash equivalents and restricted cash, beginning of period |
|
38,776 |
|
|
|
29,545 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
41,410 |
|
|
$ |
52,692 |
|
|
VERITONE, INC. |
||||||||||||||||
|
UNAUDITED NET REVENUES DETAIL |
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|
(in thousands) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
|
June 30, |
||||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
|
|
2018 |
||||
|
Advertising |
$ |
5,842 |
|
|
$ |
3,308 |
|
|
$ |
11,556 |
|
|
|
|
$ |
6,429 |
|
aiWARE SaaS Solutions |
|
2,677 |
|
|
|
860 |
|
|
|
5,457 |
|
|
|
|
|
2,127 |
|
aiWARE Content Licensing and Media Services |
|
3,751 |
|
|
|
— |
|
|
|
7,382 |
|
|
|
|
|
— |
|
Net revenues |
$ |
12,270 |
|
|
$ |
4,168 |
|
|
$ |
24,395 |
|
|
|
|
$ |
8,556 |
|
VERITONE, INC. |
|||||||||||||||
|
RECONCILIATION OF UNAUDITED GAAP NET LOSS TO ADJUSTED EBITDAS |
|||||||||||||||
|
(in thousands) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
Reconciliation of Net Loss to Adjusted EBITDAS: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net loss |
$ |
(16,691 |
) |
|
$ |
(14,330 |
) |
|
$ |
(32,997 |
) |
|
$ |
(27,379 |
) |
|
Provision for income taxes |
|
6 |
|
|
|
10 |
|
|
|
15 |
|
|
|
12 |
|
|
Depreciation and amortization |
|
1,586 |
|
|
|
473 |
|
|
|
2,719 |
|
|
|
828 |
|
|
Stock-based compensation expense |
|
5,255 |
|
|
|
2,651 |
|
|
|
10,058 |
|
|
|
5,125 |
|
|
Issuance of warrants |
|
— |
|
|
207 |
|
|
|
— |
|
|
207 |
|
||
|
Change in fair value of warrant liability |
|
37 |
|
|
|
15 |
|
|
|
50 |
|
|
|
15 |
|
|
Machine Box contingent payments |
|
530 |
|
|
— |
|
|
1,447 |
|
|
— |
||||
|
Machine Box earn-out fair value adjustment |
|
70 |
|
|
— |
|
|
70 |
|
|
— |
||||
|
Performance Bridge earn-out fair value adjustment |
|
— |
|
— |
|
|
139 |
|
|
— |
|||||
|
Adjusted EBITDAS |
$ |
(9,207 |
) |
|
$ |
(10,974 |
) |
|
$ |
(18,499 |
) |
|
$ |
(21,192 |
) |
|
VERITONE, INC. |
|||||||||||||||
|
RECONCILIATION OF UNAUDITED GAAP TO NON-GAAP FINANCIAL INFORMATION |
|||||||||||||||
|
(in thousands, except share and per share data) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
GAAP gross profit |
$ |
7,708 |
|
|
$ |
3,348 |
|
|
$ |
15,961 |
|
|
$ |
7,172 |
|
|
Depreciation and amortization |
|
535 |
|
|
|
47 |
|
|
|
905 |
|
|
|
96 |
|
|
Non-GAAP gross profit |
|
8,243 |
|
|
|
3,395 |
|
|
|
16,866 |
|
|
|
7,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
GAAP sales and marketing expenses |
|
6,448 |
|
|
|
5,142 |
|
|
|
12,581 |
|
|
|
10,890 |
|
|
Depreciation and amortization |
|
(529 |
) |
|
|
— |
|
|
(742 |
) |
|
|
— |
||
|
Stock-based compensation expense |
|
(271 |
) |
|
|
(248 |
) |
|
|
(514 |
) |
|
|
(569 |
) |
|
Non-GAAP sales and marketing expenses |
|
5,648 |
|
|
|
4,894 |
|
|
|
11,325 |
|
|
|
10,321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
GAAP research and development expenses |
|
6,351 |
|
|
|
5,146 |
|
|
|
13,289 |
|
|
|
9,674 |
|
|
Depreciation and amortization |
|
(275 |
) |
|
|
(256 |
) |
|
|
(502 |
) |
|
|
(512 |
) |
|
Stock-based compensation expense |
|
(376 |
) |
|
|
(266 |
) |
|
|
(757 |
) |
|
|
(507 |
) |
|
Machine Box contingent payments |
|
(600 |
) |
|
|
— |
|
|
(1,517 |
) |
|
|
— |
||
|
Non-GAAP research and development expenses |
|
5,100 |
|
|
|
4,624 |
|
|
|
10,513 |
|
|
|
8,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
GAAP general and administrative expenses |
|
11,645 |
|
|
|
7,513 |
|
|
|
23,335 |
|
|
|
14,291 |
|
|
Depreciation and amortization |
|
(247 |
) |
|
|
(170 |
) |
|
|
(570 |
) |
|
|
(220 |
) |
|
Stock-based compensation expense |
|
(4,608 |
) |
|
|
(2,137 |
) |
|
|
(8,787 |
) |
|
|
(4,049 |
) |
|
Issuance of warrants |
|
— |
|
|
(207 |
) |
|
|
— |
|
|
(207 |
) |
||
|
Performance Bridge earn-out fair value adjustment |
|
— |
|
|
— |
|
|
(139 |
) |
|
|
— |
|||
|
Non-GAAP general and administrative expenses |
|
6,790 |
|
|
|
4,999 |
|
|
|
13,839 |
|
|
|
9,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
GAAP loss from operations |
|
(16,736 |
) |
|
|
(14,453 |
) |
|
|
(33,244 |
) |
|
|
(27,683 |
) |
|
Total non-GAAP adjustments |
|
7,441 |
|
|
|
3,331 |
|
|
|
14,433 |
|
|
|
6,160 |
|
|
Non-GAAP loss from operations |
|
(9,295 |
) |
|
|
(11,122 |
) |
|
|
(18,811 |
) |
|
|
(21,523 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
GAAP other income, net |
|
51 |
|
|
|
133 |
|
|
|
262 |
|
|
|
316 |
|
|
Change in fair value of warrant liability |
|
37 |
|
|
|
15 |
|
|
|
50 |
|
|
|
15 |
|
|
Non-GAAP other income, net |
|
88 |
|
|
|
148 |
|
|
|
312 |
|
|
|
331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
GAAP loss before income taxes |
|
(16,685 |
) |
|
|
(14,320 |
) |
|
|
(32,982 |
) |
|
|
(27,367 |
) |
|
Total non-GAAP adjustments1 |
|
7,478 |
|
|
|
3,346 |
|
|
|
14,483 |
|
|
|
6,175 |
|
|
Non-GAAP loss before income taxes |
|
(9,207 |
) |
|
|
(10,974 |
) |
|
|
(18,499 |
) |
|
|
(21,192 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income tax provision |
|
6 |
|
|
|
10 |
|
|
|
15 |
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
GAAP net loss |
|
(16,691 |
) |
|
|
(14,330 |
) |
|
|
(32,997 |
) |
|
|
(27,379 |
) |
|
Total non-GAAP adjustments |
|
7,484 |
|
|
|
3,356 |
|
|
|
14,498 |
|
|
|
6,187 |
|
|
Non-GAAP net loss |
$ |
(9,207 |
) |
|
$ |
(10,974 |
) |
|
$ |
(18,499 |
) |
|
$ |
(21,192 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Shares used in computing non-GAAP basic and diluted net loss per share |
|
20,759 |
|
|
|
16,314 |
|
|
|
20,139 |
|
|
|
16,193 |
|
|
Non-GAAP basic and diluted net loss per share |
$ |
(0.44 |
) |
|
$ |
(0.67 |
) |
|
$ |
(0.92 |
) |
|
$ |
(1.31 |
) |
1 Adjustments are comprised of the adjustments to GAAP gross profit, sales and marketing expenses, research and development expenses and general and administrative expenses listed above.
|
VERITONE, INC. |
|
|||||||||||||||||||||||
|
UNAUDITED KEY PERFORMANCE INDICATORS (KPIs) |
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising |
Q1 2018 |
|
|
Q2 2018 |
|
|
Q3 2018 |
|
|
Q4 2018 |
|
|
Q1 2019 |
|
|
Q2 2019 |
|
|||||||
|
Including acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net new advertising clients added during quarter |
|
14 |
|
|
|
14 |
|
|
|
10 |
|
|
|
14 |
|
|
|
14 |
|
|
|
21 |
|
|
|
Clients with active advertising campaigns during quarter |
|
60 |
|
|
|
74 |
|
|
|
78 |
|
|
|
115 |
|
|
|
107 |
|
|
|
108 |
|
|
|
Average advertising spend per active client during quarter (in 000’s) |
$ |
490 |
|
|
$ |
425 |
|
|
$ |
540 |
|
|
$ |
478 |
|
|
$ |
486 |
|
|
$ |
497 |
|
|
|
Net revenue during quarter (in 000’s) |
$ |
3,121 |
|
|
$ |
3,308 |
|
|
$ |
4,730 |
|
|
$ |
5,986 |
|
|
$ |
5,714 |
|
|
$ |
5,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net new advertising clients added during quarter |
|
14 |
|
|
|
14 |
|
|
|
10 |
|
|
|
14 |
|
|
|
14 |
|
|
|
21 |
|
|
|
Clients with active advertising campaigns during quarter |
|
60 |
|
|
|
74 |
|
|
|
78 |
|
|
|
76 |
|
|
|
71 |
|
|
|
71 |
|
|
|
Average advertising spend per active client during quarter (in 000’s) |
$ |
490 |
|
|
$ |
425 |
|
|
$ |
540 |
|
|
$ |
616 |
|
|
$ |
604 |
|
|
$ |
542 |
|
|
|
Net revenue during quarter (in 000’s) |
$ |
3,121 |
|
|
$ |
3,308 |
|
|
$ |
4,296 |
|
|
$ |
4,681 |
|
|
$ |
4,186 |
|
|
$ |
4,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
aiWARE SaaS Solutions |
Q1 2018 |
|
|
Q2 2018 |
|
|
Q3 2018 |
|
|
Q4 2018 |
|
|
Q1 2019 |
|
|
Q2 2019 |
|
|||||||
|
Including acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total customers at quarter end |
|
70 |
|
|
|
86 |
|
|
|
93 |
|
|
|
123 |
|
|
|
129 |
|
|
|
136 |
|
|
|
Total accounts on platform at quarter end |
|
591 |
|
|
|
625 |
|
|
|
634 |
|
|
|
840 |
|
|
|
911 |
|
|
|
941 |
|
|
|
Active cognitive engines at quarter end |
|
184 |
|
|
|
214 |
|
|
|
252 |
|
|
|
287 |
|
|
|
343 |
|
|
|
357 |
|
|
|
Hours of data processed during quarter |
|
2,805,000 |
|
|
|
2,729,000 |
|
|
|
2,830,000 |
|
|
|
3,566,000 |
|
|
|
4,061,000 |
|
|
|
4,015,050 |
|
|
|
Total contract value of new bookings received during quarter (in 000’s) |
$ |
237 |
|
|
$ |
583 |
|
|
$ |
226 |
|
|
$ |
1,196 |
|
|
$ |
1,316 |
|
|
$ |
1,362 |
|
|
|
Monthly recurring revenue under agreements in effect at quarter end (in 000’s) |
$ |
169 |
|
|
$ |
214 |
|
|
$ |
191 |
|
|
$ |
544 |
|
|
$ |
494 |
|
|
$ |
545 |
|
|
|
Net revenue during quarter (in 000’s) |
$ |
1,267 |
|
|
$ |
860 |
|
|
$ |
1,406 |
|
|
$ |
2,426 |
|
|
$ |
2,754 |
|
|
$ |
2,677 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total customers at quarter end |
|
70 |
|
|
|
86 |
|
|
|
93 |
|
|
|
97 |
|
|
|
103 |
|
|
|
107 |
|
|
|
Total accounts on platform at quarter end |
|
591 |
|
|
|
625 |
|
|
|
634 |
|
|
|
814 |
|
|
|
885 |
|
|
|
913 |
|
|
|
Active cognitive engines at quarter end |
|
184 |
|
|
|
214 |
|
|
|
252 |
|
|
|
287 |
|
|
|
343 |
|
|
|
357 |
|
|
|
Hours of data processed during quarter |
|
2,805,000 |
|
|
|
2,729,000 |
|
|
|
2,830,000 |
|
|
|
3,566,000 |
|
|
|
4,061,000 |
|
|
|
4,015,050 |
|
|
|
Total contract value of new bookings received during quarter (in 000’s) |
$ |
237 |
|
|
$ |
583 |
|
|
$ |
226 |
|
|
$ |
898 |
|
|
$ |
736 |
|
|
$ |
765 |
|
|
|
Monthly recurring revenue under agreements in effect at quarter end (in 000’s) |
$ |
169 |
|
|
$ |
214 |
|
|
$ |
191 |
|
|
$ |
229 |
|
|
$ |
235 |
|
|
$ |
283 |
|
|
|
Net revenue during quarter (in 000’s) |
$ |
1,267 |
|
|
$ |
860 |
|
|
$ |
1,077 |
|
|
$ |
1,474 |
|
|
$ |
1,639 |
|
|
$ |
1,735 |
|
1 The results of Performance Bridge are included in the results for each KPI for the Company’s Advertising business for the three most recent full quarters. In addition, Performance Bridge’s net revenues are included for the portion of the third quarter of 2018 following the closing date of that acquisition.
2 The results related to Wazee Digital and Machine Box offerings are included in the results for the following KPIs for the Company’s aiWARE SaaS Solutions business for the three most recent full quarters: (i) total number of customers, (ii) total accounts on the platform, (iii) total contract value of new bookings, (iv) monthly recurring revenue under active agreements, and (v) net revenues. In addition, net revenues from the Wazee Digital and Machine Box offerings are included for the portion of the third quarter of 2018 following the closing date of that acquisition.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190807005814/en/