Veritone’s Earnings Call: Strategic Growth Amid Challenges

Veritone ((VERI)) has held its Q4 earnings call. Read on for the main highlights of the call.

Veritone, Inc. recently held its earnings call, revealing a mixed sentiment with a focus on strategic progress and growth potential. The company highlighted strong advancements in the public sector and new product launches, despite facing challenges such as revenue declines and issues with consumption-based revenue. Veritone’s strategic initiatives and growth projections, particularly in AI solutions, suggest a positive momentum moving forward.

Solid Revenue Performance

Veritone’s financial results for Q4 2024 and the full fiscal year reflected solid revenue performance, despite a 7% year-over-year decrease from $100 million in 2023 to $92.6 million in 2024. The company is optimistic about a breakout year in 2025, projecting a significant revenue growth of 24%.

Strategic Divestiture

The sale of VeritoneOne, the company’s legacy advertising agency, marked a strategic divestiture that allowed Veritone to focus more on advanced AI solutions. This move has strengthened the company’s financial foundation, reduced debt, and improved its focus on AI enterprise software.

Expansion and Product Launches

Veritone launched the Veritone Data Refinery and expanded partnerships with major players like CBS News and AWS Marketplace. The Data Refinery is now in full production, contributing to revenue growth and boasting a $5 million sales pipeline.

Public Sector Growth

The company is expecting substantial growth in the public sector, with projections of 100% to 150% year-over-year growth. This is driven by IDEMS applications and significant contracts with the Department of Defense and other federal entities.

Diverse Customer Base

Veritone maintained a diverse customer base, with no single customer representing more than 5% of revenue. The company has expanded its customer base to include CBS News, ESPN, NCAA, FedEx, and various government agencies, maintaining gross revenue retention above the ninetieth percentile.

Cost Reduction and Improved Profitability

Veritone executed over $40 million in annualized cost savings since 2023, including $17 million in 2024. These efforts have positioned the company for improved profitability, with a projected path to profitability as early as fiscal 2026.

Revenue and Margin Decline

The company experienced a 7% year-over-year revenue decline in 2024, with a 10.8% decrease in software products and services. The GAAP gross margin also declined by 280 basis points, highlighting ongoing financial challenges.

Challenges in Consumption-Based Revenue

Veritone faced challenges with consumption-based revenue, as a decline in customers like Amazon affected overall revenue. The ARR from these customers decreased, impacting the company’s financial performance.

Non-GAAP Net Loss

Veritone reported a non-GAAP net loss from continuing operations of $48.8 million, with a decline in non-GAAP gross margin. However, cost reductions helped offset some of these losses.

Debt and Liquidity Concerns

Debt remains a concern for Veritone, with consolidated term debt at $132.6 million. Additionally, cash and restricted cash decreased significantly from $47.5 million at the end of 2023 to $17.3 million at the end of 2024.

Forward-Looking Guidance

Despite a revenue decline in 2024, Veritone is optimistic about fiscal 2025, projecting revenue between $107 and $122 million, representing a potential 24% year-over-year increase. The company anticipates substantial growth in the public sector, driven by IDEMS applications, and expects continued success with its Veritone Data Refinery platform.

In conclusion, Veritone’s earnings call highlighted a mixed sentiment with strategic progress and growth potential in the public sector and AI solutions. While the company faces challenges such as revenue declines and consumption-based revenue issues, its strategic initiatives and cost reductions position it well for future growth. Investors and stakeholders can look forward to a potentially strong performance in 2025, driven by new product launches and public sector expansion.