Good afternoon. My name is Susan, and I’ll be your conference operator for today. At this time, I would like to welcome everyone to the Veritone First Quarter 2020 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Brian Alger, Senior Vice President of Corporate Development and Investor Relations, you may begin your conference.

Good afternoon, and welcome to Veritone's first quarter 2020 conference call. I'm Brian Alger, Senior Vice President of Corporate Development and Investor Relations. After the market closed today, Veritone issued a press release announcing the results for the first quarter ended March 31, 2020. The press release is available on the Investors section of our website. Joining me for today's call are Veritone's Chairman and CEO; Chad Steelberg, President; Ryan Steelberg and CFO; Pete Collins. Following their remarks, we'll open up the call for questions. Please note that certain information discussed on the call today will include forward-looking statements about future events and Veritone's business strategy and future financial and operating performance, including its expected net revenues and non-GAAP net loss for the second quarter of 2020. These forward-looking statements are subject to risks, uncertainties, and assumptions that may cause the actual results to differ materially from those stated or implied by those statements. Certain of these risks and assumptions are discussed in Veritone's SEC filings, including its Annual Report on Form 10-K and its quarterly report on Form 10-Q filed today. These forward-looking statements are based on assumptions as of today, May 11, 2020, and Veritone undertakes no obligation to revise or update them. During this call, the actual and forecasted non-GAAP financial measures we will be discussing, including gross margins, operating expenses, and net loss, will be presented on a non-GAAP basis. Reconciliations of these measures to the corresponding GAAP measures are included in the press release we issued today. Finally, I would like to remind everyone that this call is being recorded and will be made available for replay via a link available on our Investor section of the Company's website at www.veritone.com. Now, I'd like to turn the call over to our Chairman and CEO, Chad Steelberg. Chad?

Thank you, Brian. Welcome everyone and thank you for joining us today. I hope you and your families are staying safe and healthy in light of these extraordinary circumstances. When I last spoke with you in early March, no one could have imagined how much and how quickly the world would change. Our prayers are with everyone who has been hit by this pandemic, especially those who have lost loved ones. The pandemic had an immediate impact on our content licensing and advertising businesses in March with approximately $1.5 million in expected revenue loss or delays in the last few weeks of the quarter. Despite the significant revenue pressure, I’m pleased with our Q1 results which demonstrate the resiliency of our team and the value of our differentiated and diverse portfolio. Veritone’s Q1 revenue was $11.9 million. On the cost side, we were in a strong position given the focus we've had since Q4 on the bottom line. As the pandemic continued to spread, we were able to quickly accelerate and expand our program and further reduce our operating expenses without a reduction in headcount, enabling us to reduce our non-GAAP net loss to $6.7 million. I cannot stress enough how immensely proud I am of the Herculean effort of our talented employees, working from home to maintain operations in this environment while driving customer engagement and product development levels to all-time highs. We’ve seen a decade’s worth of digital transformation in the last two months, as businesses increasingly move to the cloud and AI recognizing the necessity for change in the changing world. As a result, they expect to see strong engagement on our powerful and unique platforms. We continue to innovate and explore new verticals such as energy and safety, and we are building out existing relationships while adding new customers. Upgrades to our aiWARE operating system continued to gain high praise from our customers. Security and privacy remain a priority for every organization, and we have been working closely with customers to ensure that as they become digital-first businesses using AI, they have the necessary checks and balances in place. More specifically, Veritone launched the groundbreaking AI benchmarking tool to help our customers compare the performance and efficiencies of various AI models on aiWARE and, equally important, to measure and mitigate bias within the machine. In addition to helping customers and the communities they serve, Veritone is hyper-focused on efforts to help reopen the global economy. We are hardly immune from the global economic downturn, but we believe this current environment also creates new opportunities for us, as digital and AI are critical to finding a path to recovery. In that spirit, we are doubling down on our government business, working with top private and public sector organizations to develop AI-based solutions aimed at bringing back much-needed trust and confidence to the places where we work, live, shop, and play. There's still plenty to do, but we hope to be in a position to share additional details in the coming weeks. Looking past our first response phase, we see profound structural changes in the global economy, particularly for the quick and agile a relatively fast recovery and bright future. At our core, we are driven by the belief that AI is mankind's greatest innovation and is the key to building a more just, transparent, and productive society. Veritone is committed to making AI technology available to transform the activities of organizations of all sizes and industries. Now, I would like to hand the call over to Ryan, our President and co-Founder, to discuss our operations progress in greater detail. Ryan?

Thank you, Chad, and good afternoon everyone. Let me start by saying that in the face of pressures resulting from the pandemic and economic restrictions, our entire team has been laser-focused on not just mitigating the impact on our business, but emerging even stronger than before. I'd like to spend a few minutes discussing our first quarter revenues and outlook in each of our businesses. In our advertising business, while we saw the cancellation and delay of several advertising campaigns in March, our differentiated cognitive processing and analytics capabilities, the diversity of our services media markets, and the fact that many of our clients are direct to consumer focused have helped to mitigate the disruption from the pandemic to some extent. In terms of performance highlights for the quarter in this business, while its revenues declined, our net customer count has continued to be relatively stable, and its revenues grew 5% year over year, as most of their peers have according to clients. We are introducing a new KPI, average gross billings per active client, as it is a primary indicator of our current and future performance in our advertising business. Our average gross billings per active client for Q1 2020 increased 23.7% year over year to $579,000, reflecting the increasing traction we are having with accounts like Express VPN and a large pharmaceutical company that is adding new drugs to its campaigns serviced through Veritone. Our performance marketing and podcasts, broadcast, and digital influencers enabled by aiWARE cognitive analytics continue to perform very well. Billings in these segments continue to represent more than 60% of our total gross billings, and our revenue growth here continues to outperform the competition. I also want to call out the strength we are seeing in our new ad networks business, VeriAds. We have seen a strong pickup in our VeriAds offerings this quarter as stations and advertisers look to transact, increasing loads of unsold inventory. Looking ahead, we expect our advertising revenues to rebound somewhat in Q2 due to new client campaigns and growth in VeriAds, and we are optimistic that they will increase further later this year once the global economy starts to open back up. In our content licensing business, we are seeing similar near-term revenue pressures from COVID, while we are taking decisive action to mitigate these temporary impacts. We remain confident that our strategy of leveraging the power of aiWARE to monetize both live and historical video and audio content is a game-changer for the media and entertainment industry. Starting in mid-March, virtually every major sporting event worldwide has been canceled or postponed. In particular, two of our licensing groups, the most material revenue drivers, the NCAA Basketball tournament and the Masters Golf tournament, have been canceled and postponed respectively. In addition, film and television production was largely shut down in March and April, which also impacted our Q1 and Q2 revenue. However, our team has done an excellent job of finding new opportunities to license the top-tier content we represent and leveraging aiWARE capabilities to add value to that content. In terms of performance highlights, we are seeing a material increase in demand for COVID-19 related content provided by licensing partners such as CBS News, Bloomberg, and CNN. With aiWARE's indexing and search capabilities, we are able to identify and provide this content quickly and efficiently. Within our existing base of content, we are finding new distribution models emerge, such as with the Golf Channel's presence on NBCUniversal's new streaming service, Peacock. We have also added notable new licensing clients like CBS' Game On! and additionally our licensing business has expanded into indexing and representing user-generated content, and we are already starting to license this new content. While we expect the impact on our content licensing revenues to continue in Q2, we're seeing them start to stabilize somewhat as some of our new business initiatives start to produce revenue, and we are optimistic that they will start to rebound later this year when sporting events start to take place and film and TV production returns to normal levels. Shifting to our SaaS businesses, we continue to transform the activity of organizations of all sizes through the power of aiWARE. Despite the challenging economic climate, our SaaS business continues to deliver strong performance. Total SaaS revenues in Q1 were a record $3.1 million, up 8% sequentially and 13% year over year. Our bookings and TCB have shown strong improvement over the last four quarters. Our land and expand strategy is continuing to drive growth in our media and entertainment business while our government legal and compliance business is seeing momentum coming from landing new customers. In both of these businesses, the vast majority of our deployments are in the cloud, enabling customers to use our solutions remotely, and the adoption and usage of our SaaS operations continue to grow despite the changes in our customer's operations. Within M&E, we continue to see virtually zero customer churn, and a number of our existing customers have renewed into broader and longer-term contracts. I'm pleased to say that, as of this month, iHeart Radio is now using aiWARE on all of its 903 U.S. stations, all of its Premiere Radio Networks and we have begun processing their national podcasts. Moreover, nearly all of Hubbard, Bonneville, and Entercom stations are also using aiWARE. In addition to our broadcast partners, we have signed aiWARE deals with Sony Pictures, Fremantle, and several other large media companies and professional sports teams. Looking forward, we intend to extend the cognitive capabilities of aiWARE across all of our customers. GLC posted a good quarter, strengthened by a six-figure subcontract under a program sponsored by AFWERX, the U.S. Air Force's innovation arm. We are very excited about this opportunity to supply aiWARE for the U.S. military. Importantly, GLC's business activity has shifted from demos and trials to signing new license agreements. Year-to-date, we have signed new contracts with 29 public safety and justice agencies in seven different states. That's more than we signed in all of 2019. Also, last Friday, the U.S. Department of Justice awarded Veritone a two-year sole source IDIQ contract covering various cognitive solutions. We consider this award a significant milestone in our strategy to expand our business with the Federal Government. Furthermore, our engagement with partners such as Apis, Microsoft, PRI, Deloitte, and others continues to drive expansion and leverage throughout our organization. Looking at GLC's new business pipeline for Q2 and the remainder of the year, we are increasingly confident that GLC will rapidly grow to exceed our M&E SaaS business. Pete Collins will now review our financial results for the first quarter of 2020 and provide details around our financial guidance. Pete?

Thank you, Ryan, and good afternoon everyone. Each of you should have accessed the results we released earlier this afternoon, and Ryan has already provided significant color on the first-quarter revenues of our business units. The COVID-19 pandemic had an immediate impact on our monetization businesses starting in March, which resulted in our total revenues declining by 4.3% sequentially and 1.8% year over year. As I reviewed our financial results, a couple of items warranted further discussion. First, we were able to achieve significant improvements in our gross margin for Q1. Our overall non-GAAP gross margin improved 110 basis points sequentially and more than 150 basis points year over year. This is due primarily to our revenue mix in Q1 as content licensing is our lowest gross margin business, but it's also reflective of enhancements we have made to our underlying aiWARE software, which are not only reducing our computing costs but also improving performance and stability. We've also made great progress in reducing our operating expenses. Starting back in Q4 of 2019, we began aggressively cutting costs and presenting efficiencies in a number of areas. As we talked about, conditions began to deteriorate in March, we implemented additional actions to reduce our costs. As a result, we were able to bring our non-GAAP operating expenses down by nearly $2 million versus the fourth quarter of last year. On an annualized basis, we are now operating with a $13 million lower cost base than we had in the third quarter of 2019, before we shifted our focus on driving towards cash flow breakeven. As a result of these actions, despite the revenue disruption caused by the pandemic, our gross margin improvement together with tight expense controls helped us to reduce our Q1 non-GAAP net loss to $6.7 million, the lowest level since we have been a public company. Over the past three quarters since shifting our focus towards reaching cash flow breakeven, our quarterly non-GAAP net losses have dropped from $9.6 million to $8.1 million and now to $6.7 million in Q1. While the team has been very diligent in improving efficiencies and reducing costs where possible, I would like to point out that our largest expense continues to be our employees' compensation. With the bonus or payroll benefit consideration and our current headcount, we have an annual cash cost of $30 million. The $6.5 million in loans that we've received under the Paycheck Protection Program have been deposited into separate accounts and all withdrawals are directly linked to payroll and occupancy-related costs as is required under the program rules. As we noted in our April 16 press release, these loans together with our cost-cutting initiatives are helping us to avoid actions that would impact our employees such as salary reductions, layoffs, or furloughs. Based on our current outlook, we do not anticipate needing additional capital in the near term. We will continue to take actions that will reduce our cloud compute and cognitive engine costs and control our operating expenses as we pursue revenue growth. The combination of revenue growth, compute cost reductions, and operating expense control will reduce our cash burn and minimize the amount of cash we will need to raise until we reach cash flow breakeven from operations. Turning to our guidance regarding the second quarter of 2020, we continue to see cancellations and delays of sporting events and slowness in film and television production impacting our content licensing business unit. We also see some delays in expected new avenues from our SaaS businesses resulting from the economic shutdown. We expect these impacts to be offset by a rebound in our advertising business, due primarily to additional spending by existing clients and growth in VeriAds. As a result, we now expect our total net revenues for the second quarter of 2020 to be in the range of $11.8 million to $12.2 million. As we have discussed, we have made significant progress on the cost front, and as a result of efficiency gains and tight operational controls, we believe we should once again be in a position to reduce our cash burn sequentially. We expect our second quarter non-GAAP net loss to be in the range of $6.5 million to $6.1 million. Now, I'll hand the call back over to Chad to summarize. Chad?

Thank you, Pete. As you persevere through this crisis, it is clear that we will be facing a world very different than before. While we recognize the severe human and economic impact this pandemic has created, we also see new opportunities ahead. We're committed to ensuring that Veritone will play a critical role in the rebuilding of our global economy. aiWARE, our proprietary operating system for artificial intelligence, is the backbone of our strategy and key to enterprise AI transformation. Our customers' trust in artificial intelligence and deep learning, and a new sound fellowship between man and machine is being forged as a result of our efforts. I'll conclude by reiterating our confidence that Veritone will emerge stronger through this crisis. Our business today is differentiated in the marketplace. We have a unique and diverse portfolio of products and solutions, and we have very strong relationships and engagement with our customers. We're truly a partner to our customers helping them through this period, which brings me to our team and our culture, which is our source of strength and differentiation. During this pandemic, as fear and uncertainty spread like wildfire, I watched the Veritone team become a family as they cared for and encouraged one another with sincerity and empathy. I am honored and blessed to be counted among them. I'm grateful for our shareholders, customers, and partners for your continued support in our business. We look forward to connecting directly with our investors and analysts at the Oppenheimer virtual conference tomorrow, May 12. To arrange meetings at this event, we encourage institutional investors to reach out to their respective brokers or to contact Brian Alger. At this time, we'd like to begin the Q&A session. Operator.

And thank you very much. Our first question comes from the line of Pat Walravens with JMP Securities. Your line is open.

Great, thank you and congratulations you guys on controlling your expenses in an extremely volatile period. Chad, can I start with one of the big questions I know people have, which is: You've announced in April that you’ve got the $6.5 million from the Paycheck Protection Program, and there have just been so many different headlines about that. Can you update us on what the status is?

First, I'll start with the very first part has always been and continued to be the safety and well-being of our employees, their families, and our communities. Meeting our obligations to our customers and partners is paramount to our future success. As we noted in our prepared remarks, the COVID-19 pandemic had an immediate negative impact on our business starting in March, and there was a tremendous amount of uncertainty. I'd say both the duration and intensity that both the pandemic and the economic downturn would have in our ability to access capital and obviously continue to finance the business going forward to profitability. When the CARES Act was passed, we applied for PPP loans based on the rules and interpretations at that time. These loans have truly allowed us to avoid the salary reductions and layoffs and help us through this period of economic uncertainty. We do not have any updates today on this sort of question, Pat. Our board continues to evaluate the situation. As you know, the government continues to make modifications to the rules governing the CARES Act and the PPP loans themselves, but we will update you in the future. But again, our primary goal is to protect our business and our employees going forward.

And then two more questions, I’ll just put them out there. So, you had a big aiWARE SaaS bookings quarter into Q4, and I'm wondering, did that turn into revenue the way you thought it would? Or were there some things about the environment that might have impacted that? And then, Pete, maybe this is a little unfair because I know you didn't guide for the year, but any ideas on how we should think about the quarters after Q2? I mean, should they go down sequentially? Should it be flat? Anything you can share with us would be really helpful.

So, why don't I have Ryan address the bookings and how that translates into revenue in 2020?

So, in the fourth quarter, we renewed and expanded some very material, large contracts, including a material expansion with iHeart Media. That expansion is on track, and it's actually sending us up to deploy our next generation attribute application software across their station groups. So, I wouldn't say that there's been a material delay. The bookings are where we're very confident with in terms of total contract value, and we will start to see more accelerated expansion specifically as it relates to attribute through the end of Q2 and Q3.

This is Pete. Let me address that. In response to your question about the full-year outlook, we need to concentrate on operating expenses, as that's something we can control most effectively. For the remainder of the year, we expect our operating expenses to remain quite similar to Q1 and in line with our guidance for Q2. Therefore, we do not anticipate significant changes in operating expenses for the rest of the year.

And our next question comes from Darren Aftahi from ROTH Capital Partners. Your line is now open.

Can I follow up, Pete, on your commentary around OpEx reductions? Just so I understand it clearly, I think you've referenced $13 million in annualized savings, correct me if I'm wrong? Does that compare to the $8 million in annualized savings you guys took I think at the end of maybe the third quarter in 2019? And so should we think about the run rate of OpEx as benefiting from that by $13 million on an annualized basis starting in Q2?

I think the comment was really back anchored on the third quarter of last year, Darren, in saying that we pulled out roughly over $3 million a quarter since that point in time. So, the $13 million is really an annual improvement over that Q3 2019 run rate.

Okay, and that's starting in the quarter, is that correct?

Yes, it's ongoing from the first and second quarter, yes.

And then, two more, if I may. On your ads business, can you kind of differentiate between the core business and maybe VeriAds? I know in the commentary in the release, you said there was some weakness around content licensing and AI SaaS. A little bit surprised though you said you expect a rebound in the ads business. So maybe Ryan, if you could just talk about your core business versus VeriAds and then kind of compare and contrast?

Sure, the core agency business was rather resilient although it was softer than we had hoped for Q1. It was resilient primarily because of the type and portfolio of different types of customers that we represent. Specifically, we have a heavy distribution of dollars for direct-to-consumer type of accounts, such as Express VPN and GoTo, LogMeIn, which actually maintained, and in some instances, increased their spend. We were never really historically heavy with consumer packaged goods or retail. I think that bodes very well for us throughout the quarter. We did bring on some very recent, larger pharmaceutical buys, which started to kick in at the end of Q1 and are continuing through Q2. I would chalk it up mostly to great discipline and execution by the team, but going into the year, we had a pretty diversified portfolio and sort of dominant position as it relates to client distribution for direct-to-consumer.

Great, and then just last one for me. I noticed two parts of this: On the aiWARE accounts that were up, I think, pretty materially both year-on-year and sequentially. So, there's your talk of that. And then Chad, I think you mentioned energy as a vertical, which may have been the first time you've talked about that for aiWARE. So, I'm just kind of curious if you could elaborate a little bit more into that? Thanks.

So, Ryan, you take the first, and I’ll take the second.

Sure. GLC, we've obviously been laying in the groundwork and laying the infrastructure for a long time, and I think we're just starting to really see the benefits of that. We specifically referenced a couple of market opportunities with an extension to our ATO with the DOJ, and we are really starting to roll out and train their 94 U.S. attorney's offices, and we're pretty excited about that. Obviously, with AFWERX, which was a relatively material side deal for us to deploy aiWARE for the Air Force's use within the U.S. Military has been a long time coming, but we're starting to see a lot of those deals come in and actually close. We are very optimistic about the pipeline for GLC, both from I'll say more legal-centric initiatives with the DOJ and also with DOD and other related opportunities within the government.

The aiWARE was always developed as an operating system independent of any vertical and industry-specific. Over the past year, we have been working heavily with our aiWARE team and our labs organization to explore new markets and new applications both in safety, security, and even the energy market. As these markets continue to evolve and really, the needs of those markets continue to progress to the standpoint where they can actually take advantage of artificial intelligence in terms of their transformation to be in the technology sectors. I've been really pleased with some of the opportunities that we see in front of us, both in terms of the energy markets as well as just general safety. Stay tuned. I think we've got some big things underway that we've worked on for over a year with regards to our core data science and aiWARE team that could have a dramatic impact in new markets for us.

Our next question comes from the line of Chad Bennett of Craig-Hallum. Your line is now open.

Pete, I don’t know if I missed it in the prepared remarks or in the press release. Did you talk about an MRR for aiWARE in the quarter?

We did not. We've refined our KPIs, and with the mix of business that we've got, we just found that that wasn't a significant factor for us. So, it's not presented in the KPI table any longer.

I was wondering if there was any revenue in the $3.1 million for the quarter that might be considered one-time in nature.

Yes, the one project, one piece of revenue that Ryan was referring to from AFWERX would be the one item that would be one-timer in the revenue for the quarter.

Okay, got it. And then, just directionally it sounds like, I think it was Ryan talking about the segments, and you think aiWARE will sequentially grow again in the June quarter, as far as you can tell today?

We haven't given a breakdown of the color on the segments. We had comments that Ryan shared emphasize the improvement that we're seeing in advertising. The challenges we're facing especially in content licensing. Overall, they are kind of on a sequential basis, one heading up, one heading down for the factors that Ryan talks about that overall producing relatively flat revenues compared to Q1 looking at Q2.

Right. Okay. And maybe last one for me. The aiWARE bookings in the quarter were $1.4 million. Is there any kind of split you can provide with respect to GLC and M&E in that bookings dollar amount?

Yes, the bookings are still skewed more towards M&E, but what we talked about was the significant ramp up in the number of GLC accounts that we signed. From our perspective, this is following the playbook that we've seen in the past where we get in, typically with five-figure type contracts with customers. Once they get more familiar with aiWARE and applications that we've built specifically for GLC, we expect to be able to expand that revenue on an account-by-account basis, as well as adding new accounts. We're really excited about the growth we've got in accounts and the adoption and really the reaction to the applications as well as just the overall improvements we've made in the operating system. We look to continue to build that momentum in Q2 and throughout the year.

And sorry, one last one from me, Pete. I think you've indicated on the call you're comfortable with the capital position right now. Does that imply that you guys won't utilize the APM going forward at least in the near term?

Yes, we have indicated that with the proceeds from the PPP loan, we do not expect to need additional capital in the near term.

Our next question comes from the line of Tom Diffely of DA Davidson. Your line is open.

I want to dig a little bit on the revenue impact you had in the quarter. You talked about cancellations and push-outs late in a quarter. Do you have any sort of visibility into what percentage of the impact with cancellations versus push-outs?

Hi Frank. We'll have Ryan address that question for you.

I think we represented that based on our estimates was around $1.5 million of an impact in the quarter, and it started pretty immediately. Although we do believe some of these are singular events and not systemic. Specifically, if you look at March Madness and the Masters versus those that historically have generated several hundred thousand dollars of revenue for us. The Masters is at least, as everybody knows, rescheduled for this year, so we do expect to recoup, if not an immaterial amount, a majority of those lost revenues for the Masters. The NCAA basketball tournament obviously is not being rescheduled, and so we look at that as just a lost opportunity there. But again, what I think is important is for the other businesses, they all look relatively resilient, and our pipelines look strong and healthy as we sit here today. With the exception of the licensing business, which is still going to be somewhat predicated upon production opening back up, and potentially these professional sports leagues going back to work in, and a lot of other there's lots of discussions about opening up the NBA and other sports. As we sit here today, nothing has been definitively rescheduled with the exception of the PGA Tour.

And then have you seen any impacts on saving engagements or perhaps the timing of deals in the GLC vertical as a result of the pandemic?

There has definitely been some softness and a delay, and I wouldn't say it's necessarily directly correlated to the appetite and demand for the products and services specifically redact and identified. Part of it is just the police agencies themselves who are also impacted by COVID-19 and the stay-at-home orders have put that deal flow and timing into a little bit of a bump. That being said, we are pretty excited that the City Council for Anaheim Police Department did approve the renewal of our license for identify, and that was a unanimous vote with pretty good-sized city operations. So, we do have seen softness, but we don't believe it's going to be overly impactful over the course of the year.

Okay. And then one last one if I may, do you have any updates on the performance of the recently introduced podcast tools that you put in the market a few quarters ago?

The podcast tools, I think you're referring to the tech analytics solutions. The primary beneficiary of those new technologies is actually our monetization group. We've started to roll out and have started to leverage the targeting capabilities provided by tech analytics against our advertising clients, which we're really excited about. To be clear, that's in lieu of just trying to target the entire shelf. We now can look into these shows and target very specific topics across different contexts and categories. That's going to be the really big push initially. In addition to ART19 and a few other groups, we're starting to license that technology externally, but I'd say the primary beneficiary of that technology is actually Veritone One in our monetization group.

And our first question comes from Yolanda Dee, a private investor. Please go ahead. Your line is now open.

Thank you. I'm very sorry you had to cancel the shareholder conference meeting. Are you planning on trying to reschedule it this year or next year? What's your thoughts on that?

Yes, we put a lot of effort into preparing for the investor meeting. It was timed to coincide with the ROTH Conference when many people would be in town, and it made sense from a logistics perspective to host it at our offices due to the proximity. Once things return to normal, we will reevaluate the possibility of rescheduling. We were excited to host it and provide updates to investors and look forward to doing something later in the year.

Your next question comes from the line of Chad Latimore of Northland Capital. Your line is now open.

Hi guys, Mike here. You talked about GLC exceeding media entertainment. What was the timeline again for there? Or what are you thinking here?

I think the timelines are longer term. We see more opportunities long-term in GLC, but today the mix is something like 80-20 M&E versus GLC. GLC will grow faster than M&E just because of the total addressable market out there.

Content licensing, what's kind of the rough gross margin on that?

The gross margins are in the low 40s, and the tipping is, the overhead is relatively low as well. It's a good operating margin business for us, but it is now our lowest gross margin business.

Then just last on podcasting, it sounds like that is going well overall. Is that meeting expectations? Is it ahead of expectations? Is it a little bit slower because of COVID stuff? Just tell more color about that, it would be great.

Yes, I think the podcast business remains very strong. The demand has been there, and the performance related to our clients' benefit. During this time, time spent consuming podcasts continues to increase at a disproportionate rate, especially with people working from home. Overall, engagement is higher, the performance of the advertising is still maintaining, and the demand for investment within podcasts remains high.

There are no further questions in the queue. I'll turn the call back to Mr. Chad Steelberg for closing remarks.

Thank you, operator, and thank you all for joining us on today's call. As I said, I am very proud of the way our entire team has responded to this very challenging situation. I want to personally thank each of them for their tireless efforts in the past two months, and for their unwavering focus on continuing to pursue our vision of building the world's leading AI solutions company. We have huge opportunities in our businesses, and our teams are better positioned to capture them than they ever have been before. We look forward to reporting to you on our progress. Goodbye.

And this concludes today's conference. You may now disconnect.