Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Veritone Inc (VERI, Financial) secured over 100 new business and renewal software agreements in Q1 2025, including notable contracts with marquee clients such as Freemantle, Odyssey, and Rolls-Royce.
- The company's Veritone Data Refinery (VDR) is gaining traction, with a near-term pipeline of over $10 million, up from $5 million a few weeks prior.
- Veritone's AI solutions are providing significant efficiencies and automated workflows for media companies, as demonstrated by their successful execution at the Masters Golf Tournament.
- The Public Sector pipeline exceeds $110 million, indicating strong demand for AI-based applications and services.
- Veritone Hire has expanded its partnership with Workday, generating numerous opportunities and leads, and is set for further expansion.
Negative Points
- Q1 2025 revenue of $22.5 million was down $1.7 million from Q1 2024, primarily due to declines in Managed Services and Software Products & Services.
- Gross margins were lower than expected, with GAAP gross margin at 61.9% compared to 68.8% in Q1 2024.
- The company experienced delays in some larger Public Sector deals, impacting revenue and gross margins.
- Veritone Hire is facing challenges in the current labor market, with expectations of modest to flat growth in fiscal 2025.
- The company has a significant amount of debt, with consolidated debt at approximately $130 million as of March 31, 2025.
Q & A Highlights
Q: What portion of the Public Sector pipeline consists of new customers versus customer expansions?
A: Ryan Steelberg, President and CEO, explained that the majority is customer expansion. They have already executed revenue-based contracts with some larger pipeline customers and expect to announce expanded contracts with existing agencies under the Department of Defense (DoD) and Department of Justice (DoJ).
Q: Can you provide more details on the visibility and confidence in the second half revenue guidance?
A: Ryan Steelberg stated that the second half revenue growth will be dominated by Veritone Data Refinery (VDR) and Public Sector initiatives. They have great visibility on the size and revenue contribution of deals, with VDR potentially being a breakout win. The timing of contract execution is a variable, but they are confident in meeting or surpassing growth targets for Q3 and Q4.
Q: How does the increase in VDR pipeline from $5 million to $10 million reflect in terms of contracts?
A: Ryan Steelberg noted that the increase is due to multiple contracts with new partners and clients, indicating widespread demand for VDR services.
Q: When will public safety deals start generating revenue, and how does this impact the full-year guidance?
A: Ryan Steelberg mentioned that for high-visibility contracts, they are ready to deploy immediately upon contract signing. The software modules and applications are ready to be delivered, contributing to the confidence in achieving the $104 million to $115 million revenue guidance.
Q: What steps are being taken to address challenges in the Veritone Hire business?
A: Ryan Steelberg outlined a three-pronged approach: expanding the reseller and partner network, increasing media services penetration, and optimizing algorithms for better ROI. They are focusing on larger contract values and expanding their share of customer budgets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
