8-K
Veritone, Inc. (VERI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 10, 2020
Veritone, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-38093 | 47-1161641 |
|---|---|---|
| (State or Other Jurisdiction<br><br><br>of Incorporation) | (Commission File Number) | (IRS Employer<br><br><br>Identification No.) |
| 575 Anton Boulevard, Suite 100<br><br><br>Costa Mesa, California | 92626 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (888) 507-1737
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading<br><br><br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.001 per share | VERI | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
| transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act. | ☐ |
|---|
Item 2.02. Results of Operations and Financial Condition.
On August 10, 2020, Veritone, Inc. (the “Company”) announced its financial results for the second quarter and six months ended June 30, 2020, as well as its outlook for certain financial measures for the third quarter of 2020. The press release issued by the Company in connection with the announcement is attached to this report as Exhibit 99.1.
This information shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as may be set forth by specific reference in such a filing.
Use of Non-GAAP Financial Measures
In the press release attached to this report as Exhibit 99.1, the Company has supplemented its financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP) with non-GAAP financial measures. These non-GAAP financial measures and the reasons for their inclusion, as well as the limitations on the usefulness of such information to an investor, are described below.
The Company has provided non-GAAP measures of “Non-GAAP net loss” and “Non-GAAP net loss per share,” which represent the Company’s net loss and net loss per share, adjusted to exclude interest expense, provision for income taxes, depreciation, amortization and stock-based compensation expenses, as well as certain acquisition, integration and financing-related costs, for the three and six months ended June 30, 2020 and 2019. The Company has also provided guidance regarding its expected Non-GAAP net loss for the third quarter of 2020.
Tables detailing the items excluded from these non-GAAP financial measures and reconciling such non-GAAP results and guidance with the Company’s GAAP results and guidance are included following the financial statements that are a part of the press release. These non-GAAP measures 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. Other companies (including the Company’s competitors) may define Non-GAAP net loss or Non-GAAP net loss per share differently.
In addition, the Company has provided supplemental non-GAAP measures of gross profit, 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 that are applicable to such measures, and reconciling such non-GAAP measures to the applicable GAAP measures.
The Company has provided these non-GAAP measures in addition to its GAAP results because management believes that they are 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. This non-GAAP financial information may not be indicative of the historical operating results of the Company 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 reported in accordance with GAAP.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated August 10, 2020 (furnished pursuant to Item 2.02 and not deemed filed). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 10, 2020 | Veritone, Inc. | |
|---|---|---|
| By: | /s/ Jeffrey B. Coyne | |
| Jeffrey B. Coyne | ||
| Executive Vice President, General Counsel | ||
| and Secretary |
veri-ex991_6.htm
EXHIBIT 99.1
Veritone Reports Financial Results for the Second Quarter of 2020
- Record Quarterly Revenues of $13.3 Million -
COSTA MESA, CA – August 10, 2020 – 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, 2020.
“Veritone’s employees performed with grace and determination, helping our customers build out their digital capabilities to improve efficiency and transform their operations,” said Chad Steelberg, Chairman and CEO of Veritone. “As a result, we posted second quarter net revenues of $13.3 million, up 8.1% year-over-year, and we are forecasting an even better performance in the third quarter. These record results demonstrate the power of our aiWARE operating system and world-class AI applications, and the value of our differentiated and diverse portfolio.”
Ryan Steelberg, President of Veritone added, “We are immensely proud of our team’s performance during this truly unprecedented business environment - they have responded very well, staying focused and agile and are continuing to generate strong results. Our Advertising and Content Licensing businesses outperformed our expectations in the second quarter despite the challenging economic conditions, and we expect to see sequential revenue growth again in the third quarter.”
Second Quarter 2020 Financial Highlights
| ● | Net revenues were $13.3 million, an increase of 11.5% compared with $11.9 million in Q1 of 2020 and an increase of 8.1% compared with $12.3 million in Q2 of 2019. |
|---|---|
| ● | Advertising net revenues were $7.0 million, an increase of 17.3% compared with $6.0 million in Q1 of 2020 and an increase of 20.5% compared with $5.8 million in Q2 of 2019. |
| --- | --- |
| ● | aiWARE Content Licensing and Media Services net revenues were $3.2 million, an increase of 15.5% compared with $2.8 million in Q1 of 2020, but a decrease of 13.9% compared with $3.8 million in Q2 of 2019. |
| --- | --- |
| ● | Net loss was $11.8 million, improving $0.9 million compared with Q1 of 2020 and $4.9 million compared with Q2 of 2019. |
| --- | --- |
| ● | Non-GAAP net loss was $5.7 million, improving $0.9 million compared with Q1 of 2020 and $3.5 million compared with Q2 of 2019. |
| --- | --- |
Recent Business Highlights
| ● | Recorded new bookings from Government, Legal and Compliance customers in Q2 of 2020 that exceeded the total net revenues recognized from such markets in all of 2019. |
|---|---|
| ● | Generated initial revenues from a SaaS customer in the renewable energy market. |
| --- | --- |
| ● | Delivered strong revenue growth from its VeriAds Networks; the Company has now contracted with over 250 U.S. radio stations for its Spot Network, and over 3,000 unique influencers have been active on its Influencer Bridge platform in 2020. |
| --- | --- |
| ● | Added to the Russell 2000® Index. |
| --- | --- |
Second Quarter 2020 Financial Results
Net revenues were $13.3 million, compared with $12.3 million in the second quarter of 2019. Net revenues in the second quarter of 2020 were comprised of $7.0 million from Advertising, $3.0 million from aiWARE SaaS solutions, and $3.2 million from aiWARE content licensing and media services. The Company saw significant rebounds in its Advertising and Content Licensing businesses from the first quarter levels, though its Content Licensing business
continues to be constrained by the cancellation of major sporting events and slower activity in film and television production. The Company’s SaaS business delivered 12.1% year-over-year growth, but was 3.4% lower sequentially due to a software license in the first quarter that did not recur.
Gross margins were 67.4%, compared with 62.8% in the second quarter of 2019, due primarily to lower computing costs resulting from the Company’s platform enhancements.
Operating expenses decreased 16.1% to $20.5 million, compared with $24.4 million in the second quarter of 2019, due to the savings associated with the Company’s cost reduction initiatives.
Loss from operations improved $5.2 million to $11.6 million, compared with $16.7 million in the second quarter of 2019.
Net loss improved $4.9 million to $11.8 million, or $0.43 per share, compared with $16.7 million, or $0.80 per share, in the second quarter of 2019. The lower net loss was due primarily to the savings associated with the Company’s cost reduction initiatives.
Non-GAAP net loss improved $3.5 million to $5.7 million, or $0.21 per share, compared with $9.2 million, or $0.44 per share, in the second quarter of 2019. The lower non-GAAP net loss was due primarily to the savings associated with the Company’s cost reduction initiatives.
Cash: As of June 30, 2020, the Company had cash and cash equivalents of $50.1 million, including $24.2 million of cash received from Advertising clients for future payments to vendors, and no long-term debt.
First Half 2020 Financial Results
Net revenues were $25.2 million, up 3.2% compared with $24.4 million in the first half of 2019. Net revenues in the first half of 2020 were comprised of $13.0 million from Advertising, $6.1 million from aiWARE SaaS solutions, and $6.0 million from aiWARE content licensing and media services.
Gross margins were 67.7%, compared with 65.4% in the first half of 2019.
Operating expenses decreased 15.9% to $41.4 million, compared with $49.2 million in the first half of 2019.
Loss from operations improved $8.9 million to $24.4 million, compared with $33.2 million in the first half of 2019.
Net loss improved $8.5 million to $24.5 million, or $0.91 per share, compared with $33.0 million, or $1.64 per share, in the first half of 2019.
Non-GAAP net loss improved $6.1 million to $12.4 million, or $0.46 per share, compared with $18.5 million, or $0.92 per share, in the first half of 2019.
Business Outlook For the third quarter of 2020, Veritone expects sequential revenue growth in its Advertising business and from SaaS customers in the Government, Legal and Compliance markets. The Company expects its total net revenues for the third quarter of 2020 to be in the range of $14.2 million to $14.6 million, assuming that major sporting events occur in line with current schedules and that the Company’s Advertising clients do not experience further supply chain disruptions. Based on this expected revenue level and its continuing cost discipline, the Company expects to reduce its non-GAAP net loss sequentially again in the third quarter, to be in the range of $5.7 million to $5.3 million.
Conference Call
Veritone will hold a conference call on Monday, August 10, 2020 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss its results for the second quarter of 2020, provide an update on the business, and conduct a question and answer session. To listen, please join the webcast or dial-in. To avoid a wait, if dialing in, please pre-register or call in 20 minutes in advance.
Preregister*: http://dpregister.com/10146081
Live audio webcast: investors.veritone.com
Domestic call number:1-866-270-1533
International call number:1-412-317-0797
Call ID:10146081
* Callers who pre-register will be emailed upon registering a conference pass code and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time. 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 approximately one hour after the call ends. Additionally, a telephonic replay of the call will be available through August 24, 2020:
Replay number: 1-877-344-7529
International replay number: 1-412-317-0088
Replay ID: 10146081
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,” and “Non-GAAP net loss per share.” Non-GAAP net loss is the company’s net loss, adjusted to exclude interest expense, provision for income taxes, depreciation expense, amortization expense, stock-based compensation expense, and certain acquisition, integration and financing-related costs. Non-GAAP net loss 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 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 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 (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 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.
About Veritone
Veritone (NASDAQ: VERI) is a leading provider of artificial intelligence (AI) technology and solutions. The company’s proprietary operating system, aiWARE™, powers a diverse set of AI applications and intelligent process automation solutions that are transforming both commercial and government organizations. aiWARE orchestrates an expanding ecosystem of machine learning models to transform audio, video, and other data sources into actionable intelligence. The company’s AI developer tools enable its customers and partners to easily develop and deploy custom applications that leverage the power of AI to dramatically improve operational efficiency and unlock untapped opportunities. Veritone is headquartered in Costa Mesa, California, and has offices in Denver, London, New York, and San Diego. To learn more, visit Veritone.com.
Safe Harbor Statement This news release contains forward-looking statements, including without limitation statements regarding the Company’s expectation of sequential revenue growth in the third quarter of 2020, particularly in its Advertising business and from SaaS customers in the Government, Legal and Compliance markets; and the Company’s expected total net revenues and Non-GAAP net loss in the third quarter of 2020. In addition, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “plan,” “should,” “could,” “estimate” or “continue” or the plural, negative or other variations thereof or comparable terminology are intended to identify forward-looking statements, and any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements speak only as of the date hereof, and are based on management’s current assumptions, beliefs and information. As such, the Company’s actual results could differ materially and adversely from those expressed in any forward-looking statement as a result of various factors. Important factors that could cause such differences include, among other things, the impact of the economic disruption caused by COVID-19 pandemic on the business of the Company and that of its existing and potential customers; 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; 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.
Company Contact:
Brian Alger, CFA
SVP, Corporate Development & Investor Relations Veritone, Inc.
(949) 386-4318
investors@veritone.com
Investor Relations Contact:
Kirsten Chapman
LHA Investor Relations
(415) 433-3777
veritone@lhai.com
| VERITONE, INC. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||||||
| (in thousands) | ||||||||||||
| As of | ||||||||||||
| June 30, | December 31, | |||||||||||
| 2020 | 2019 | |||||||||||
| ASSETS | ||||||||||||
| Cash and cash equivalents | $ | 50,081 | $ | 44,065 | ||||||||
| Accounts receivable, net | 24,535 | 21,352 | ||||||||||
| Expenditures billable to clients | 3,177 | 10,286 | ||||||||||
| Prepaid expenses and other current assets | 5,279 | 5,409 | ||||||||||
| Total current assets | 83,072 | 81,112 | ||||||||||
| Property, equipment and improvements, net | 2,732 | 3,214 | ||||||||||
| Intangible assets, net | 13,432 | 16,126 | ||||||||||
| Goodwill | 6,904 | 6,904 | ||||||||||
| Long-term restricted cash | 855 | 855 | ||||||||||
| Other assets | 292 | 315 | ||||||||||
| Total assets | $ | 107,287 | $ | 108,526 | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Accounts payable | $ | 20,498 | $ | 17,014 | ||||||||
| Accrued media payments | 31,797 | 26,664 | ||||||||||
| Client advances | 4,461 | 9,080 | ||||||||||
| Accrued compensation | 2,334 | 2,486 | ||||||||||
| Other accrued liabilities | 6,830 | 4,492 | ||||||||||
| Total current liabilities | 65,920 | 59,736 | ||||||||||
| Other liabilities | 1,287 | 1,379 | ||||||||||
| Total liabilities | 67,207 | 61,115 | ||||||||||
| Stockholders' equity | ||||||||||||
| Common Stock | 28 | 26 | ||||||||||
| Additional paid-in capital | 296,967 | 279,828 | ||||||||||
| Accumulated deficit | (256,966 | ) | (232,489 | ) | ||||||||
| Accumulated other comprehensive income | 51 | 46 | ||||||||||
| Total stockholders' equity | 40,080 | 47,411 | ||||||||||
| Total liabilities and stockholders' equity | $ | 107,287 | $ | 108,526 | ||||||||
| VERITONE, INC. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||||
| AND COMPREHENSIVE LOSS | ||||||||||||
| (in thousands, except per share and share data) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net revenues | $ | 13,268 | $ | 12,270 | $ | 25,172 | $ | 24,395 | ||||
| Cost of revenues | 4,325 | 4,562 | 8,136 | 8,434 | ||||||||
| Gross profit | 8,943 | 7,708 | 17,036 | 15,961 | ||||||||
| 67 | % | 63 | % | 68 | % | 65 | % | |||||
| Operating expenses: | ||||||||||||
| Sales and marketing | 5,460 | 6,448 | 10,920 | 12,581 | ||||||||
| Research and development | 3,696 | 6,351 | 7,598 | 13,289 | ||||||||
| General and administrative | 11,343 | 11,645 | 22,886 | 23,335 | ||||||||
| Total operating expenses | 20,499 | 24,444 | 41,404 | 49,205 | ||||||||
| Loss from operations | (11,556 | ) | (16,736 | ) | (24,368 | ) | (33,244 | ) | ||||
| Other income (expense), net | (235 | ) | 51 | (104 | ) | 262 | ||||||
| Loss before provision for income taxes | (11,791 | ) | (16,685 | ) | (24,472 | ) | (32,982 | ) | ||||
| Provision for income taxes | 2 | 6 | 5 | 15 | ||||||||
| Net loss | $ | (11,793 | ) | $ | (16,691 | ) | $ | (24,477 | ) | $ | (32,997 | ) |
| Net loss per share: | ||||||||||||
| Basic and diluted | $ | (0.43 | ) | $ | (0.80 | ) | $ | (0.91 | ) | $ | (1.64 | ) |
| Weighted average shares outstanding: | ||||||||||||
| Basic and diluted | 27,117,432 | 20,759,396 | 26,945,297 | 20,138,756 | ||||||||
| Comprehensive loss: | ||||||||||||
| Net loss | $ | (11,793 | ) | $ | (16,691 | ) | $ | (24,477 | ) | $ | (32,997 | ) |
| Unrealized gain on marketable securities, net of income taxes | - | 13 | - | 48 | ||||||||
| Foreign currency translation gain, net of income taxes | 1 | 45 | 5 | 24 | ||||||||
| Total comprehensive loss | $ | (11,792 | ) | $ | (16,633 | ) | $ | (24,472 | ) | $ | (32,925 | ) |
| VERITONE, INC. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||||||
| (in thousands) | ||||||||||||
| Six Months Ended | ||||||||||||
| June 30, | ||||||||||||
| 2020 | 2019 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ | (24,477 | ) | $ | (32,997 | ) | ||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Depreciation and amortization | 3,206 | 2,719 | ||||||||||
| Issuance of warrants | 102 | - | ||||||||||
| Change in fair value of warrant liability | 200 | 50 | ||||||||||
| Provision for doubtful accounts | 213 | 44 | ||||||||||
| Stock-based compensation expense | 8,587 | 11,285 | ||||||||||
| Other | — | (19 | ) | |||||||||
| Changes in assets and liabilities: | ||||||||||||
| Accounts receivable | (3,453 | ) | 2,278 | |||||||||
| Expenditures billable to clients | 7,109 | (2,111 | ) | |||||||||
| Prepaid expenses and other current assets | (363 | ) | 413 | |||||||||
| Accounts payable | 3,484 | (10,255 | ) | |||||||||
| Accrued media payments | 5,133 | 13,367 | ||||||||||
| Client advances | (4,619 | ) | (3,727 | ) | ||||||||
| Other accrued liabilities | 2,193 | 2,364 | ||||||||||
| Other liabilities | (92 | ) | (17 | ) | ||||||||
| Net cash used in operating activities | (2,777 | ) | (16,606 | ) | ||||||||
| Cash flows from investing activities: | ||||||||||||
| Proceeds from sales of marketable securities | — | 8,616 | ||||||||||
| Proceeds from the sale of equipment | 56 | — | ||||||||||
| Capital expenditures | (30 | ) | (208 | ) | ||||||||
| Intangible assets acquired | — | (477 | ) | |||||||||
| Acquisition of businesses, net of cash acquired | — | (883 | ) | |||||||||
| Net cash provided by investing activities | 26 | 7,048 | ||||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from common stock offerings, net | 6,527 | 11,778 | ||||||||||
| Proceeds from loan | 6,491 | — | ||||||||||
| Repayment of loan | (6,491 | ) | — | |||||||||
| Proceeds from the exercise of warrants | 2,100 | — | ||||||||||
| Proceeds from issuances of stock under employee stock plans, net | 140 | 414 | ||||||||||
| Net cash provided by financing activities | 8,767 | 12,192 | ||||||||||
| Net increase in cash, cash equivalents and restricted cash | 6,016 | 2,634 | ||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 44,920 | 38,776 | ||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 50,936 | $ | 41,410 | ||||||||
| VERITONE, INC. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| NET REVENUES DETAIL (UNAUDITED) | ||||||||||||
| (in thousands) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Advertising | $ | 7,038 | $ | 5,842 | $ | 13,039 | $ | 11,556 | ||||
| aiWARE SaaS Solutions | 3,002 | 2,677 | 6,110 | 5,431 | ||||||||
| aiWARE Content Licensing and Media Services | 3,228 | 3,751 | 6,023 | 7,408 | ||||||||
| Net revenues | $ | 13,268 | $ | 12,270 | $ | 25,172 | $ | 24,395 | ||||
| VERITONE, INC. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| RECONCILIATION OF NON-GAAP NET LOSS TO GAAP NET LOSS (UNAUDITED) | ||||||||||||
| (in thousands) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net loss | $ | (11,793 | ) | $ | (16,691 | ) | $ | (24,477 | ) | $ | (32,997 | ) |
| Provision for income taxes | 2 | 6 | 5 | 15 | ||||||||
| Depreciation and amortization | 1,602 | 1,586 | 3,206 | 2,719 | ||||||||
| Stock-based compensation expense | 4,131 | 5,255 | 8,587 | 10,058 | ||||||||
| Change in fair value of warrant liability | 202 | 37 | 200 | 50 | ||||||||
| Issuance of warrants | 102 | — | 102 | — | ||||||||
| Gain on sale of asset | — | — | (56 | ) | — | |||||||
| Interest expense | 9 | — | 9 | — | ||||||||
| Machine Box contingent payments | — | 530 | — | 1,447 | ||||||||
| Machine Box earn-out fair value adjustment | — | 70 | — | 70 | ||||||||
| Performance Bridge earn-out fair value adjustment | — | — | — | 139 | ||||||||
| Non-GAAP Net Loss | $ | (5,745 | ) | $ | (9,207 | ) | $ | (12,424 | ) | $ | (18,499 | ) |
| VERITONE, INC. | ||||||||||||
| --- | --- | |||||||||||
| RECONCILIATION OF EXPECTED NON-GAAP NET LOSS RANGE | ||||||||||||
| TO EXPECTED GAAP NET LOSS RANGE (UNAUDITED) | ||||||||||||
| (in millions) | ||||||||||||
| Three Months Ending September 30, 2020 | ||||||||||||
| Net loss | (12.3) to (11.9) | |||||||||||
| Provision for income taxes | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Stock-based compensation expense | ||||||||||||
| Non-GAAP net loss | (5.7) to (5.3) |
All values are in US Dollars.
| VERITONE, INC. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL INFORMATION (UNAUDITED) | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| GAAP gross profit | $ | 8,943 | $ | 7,708 | $ | 17,036 | $ | 15,961 | ||||
| Depreciation and amortization | 562 | 535 | 1,123 | 905 | ||||||||
| Non-GAAP gross profit | 9,505 | 8,243 | 18,159 | 16,866 | ||||||||
| GAAP sales and marketing expenses | 5,460 | 6,448 | 10,920 | 12,581 | ||||||||
| Depreciation and amortization | (528 | ) | (529 | ) | (1,059 | ) | (742 | ) | ||||
| Stock-based compensation expense | (198 | ) | (271 | ) | (376 | ) | (514 | ) | ||||
| Non-GAAP sales and marketing expenses | 4,734 | 5,648 | 9,485 | 11,325 | ||||||||
| GAAP research and development expenses | 3,696 | 6,351 | 7,598 | 13,289 | ||||||||
| Depreciation and amortization | (256 | ) | (275 | ) | (512 | ) | (502 | ) | ||||
| Stock-based compensation expense | (184 | ) | (376 | ) | (421 | ) | (757 | ) | ||||
| Machine Box contingent payments | — | (600 | ) | — | (1,517 | ) | ||||||
| Non-GAAP research and development expenses | 3,256 | 5,100 | 6,665 | 10,513 | ||||||||
| GAAP general and administrative expenses | 11,343 | 11,645 | 22,886 | 23,335 | ||||||||
| Depreciation and amortization | (256 | ) | (247 | ) | (512 | ) | (570 | ) | ||||
| Stock-based compensation expense | (3,749 | ) | (4,608 | ) | (7,790 | ) | (8,787 | ) | ||||
| Issuance of warrants | (102 | ) | — | (102 | ) | — | ||||||
| Performance Bridge earn-out fair value adjustment | — | — | — | (139 | ) | |||||||
| Non-GAAP general and administrative expenses | 7,236 | 6,790 | 14,482 | 13,839 | ||||||||
| GAAP loss from operations | (11,556 | ) | (16,736 | ) | (24,368 | ) | (33,244 | ) | ||||
| Total non-GAAP adjustments (1) | 5,835 | 7,441 | 11,895 | 14,433 | ||||||||
| Non-GAAP loss from operations | (5,721 | ) | (9,295 | ) | (12,473 | ) | (18,811 | ) | ||||
| GAAP other income (expense), net | (235 | ) | 51 | (104 | ) | 262 | ||||||
| Change in fair value of warrant liability | 202 | 37 | 200 | 50 | ||||||||
| Interest expense | 9 | — | 9 | — | ||||||||
| Gain on sale of asset | — | — | (56 | ) | — | |||||||
| Non-GAAP other income (expense), net | (24 | ) | 88 | 49 | 312 | |||||||
| GAAP loss before income taxes | (11,791 | ) | (16,685 | ) | (24,472 | ) | (32,982 | ) | ||||
| Total non-GAAP adjustments (1) | 6,046 | 7,478 | 12,048 | 14,483 | ||||||||
| Non-GAAP loss before income taxes | (5,745 | ) | (9,207 | ) | (12,424 | ) | (18,499 | ) | ||||
| Income tax provision | 2 | 6 | 5 | 15 | ||||||||
| GAAP net loss | (11,793 | ) | (16,691 | ) | (24,477 | ) | (32,997 | ) | ||||
| Total non-GAAP adjustments (1) | 6,048 | 7,484 | 12,053 | 14,498 | ||||||||
| Non-GAAP net loss | $ | (5,745 | ) | $ | (9,207 | ) | $ | (12,424 | ) | $ | (18,499 | ) |
| Shares used in computing non-GAAP basic and diluted net loss per share | 27,117 | 20,759 | 26,945 | 20,139 | ||||||||
| Non-GAAP basic and diluted net loss per share | $ | (0.21 | ) | $ | (0.44 | ) | $ | (0.46 | ) | $ | (0.92 | ) |
^(^^1^^)^ Adjustments are comprised of the adjustments to GAAP gross profit, sales and marketing expenses, research and development expenses and general and administrative expenses and other income (expense), net (where applicable) listed above.
| VERITONE, INC. | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| KEY PERFORMANCE INDICATORS (KPI's) (UNAUDITED) | |||||||||||||
| Quarter Ended | |||||||||||||
| Mar 31, | Jun 30, | Sept 30, | Dec 31, | Mar 31, | Jun 30, | ||||||||
| 2019 | 2019 | 2019 | 2019 | 2020 | 2020 | ||||||||
| Advertising | |||||||||||||
| Average gross billings per active client (in 000's)^(1)^ | $ | 469 | $ | 488 | $ | 490 | $ | 511 | $ | 533 | $ | 614 | |
| Net revenues during quarter (in 000's) | $ | 5,714 | $ | 5,842 | $ | 6,197 | $ | 6,517 | $ | 5,881 | $ | 6,140 | |
| Quarter Ended | |||||||||||||
| Mar 31, | Jun 30, | Sept 30, | Dec 31, | Mar 31, | Jun 30, | ||||||||
| 2019 | 2019 | 2019 | 2019 | 2020 | 2020 | ||||||||
| aiWARE SaaS Solutions | |||||||||||||
| Total accounts on platform at quarter end | 911 | 941 | 980 | 1,069 | 1,587 | 1,753 | |||||||
| New bookings received during quarter (in 000's)^(2)^ | $ | 1,316 | $ | 1,351 | $ | 1,384 | $ | 2,522 | $ | 1,397 | $ | 2,319 | |
| Total contract value of new bookings received during quarter (in 000’s)^(3)^ | $ | 2,092 | $ | 1,351 | $ | 1,724 | $ | 12,872 | $ | 2,312 | $ | 2,502 | |
| Net revenues during quarter (in 000's) | $ | 2,754 | $ | 2,677 | $ | 2,350 | $ | 2,872 | $ | 3,002 | $ | 3,002 | |
| ^(1)^ | For each quarter, reflects the average gross quarterly billings per client over the twelve month period through the end of such quarter for clients that are active during such quarter. | ||||||||||||
| --- | --- | ||||||||||||
| ^(2)^ | Represents the contractually committed fees payable during the first 12 months of the contract term, or the non-cancellable portion of the contract term (if shorter), for new contracts received in the quarter, excluding any variable fees under the contract (i.e., fees for cognitive processing, storage, professional services and other variable services). | ||||||||||||
| --- | --- | ||||||||||||
| ^(3)^ | 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 (i.e., fees for cognitive processing, storage, professional services and other variable services). | ||||||||||||
| --- | --- |
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