VERI

Image source: The Motley Fool. Thursday, Aug. 13, 2026, at 5 p.m. ET President and Chief Executive Officer-Ryan Steelberg Chief Financial Officer-Mike Zemetra Investor Relations-Cate Goldsmith Operator: Good day, and welcome to the Veritone Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Cate Goldsmith, Investor Relations. Please go ahead. Cate Goldsmith: Thank you, and good afternoon. After the market closed today, Veritone issued a press release announcing results for the second quarter ended June 30, 2026. The press release and other supplemental information are available on the Investor Relations section of Veritone's website. Joining us for today's call are Veritone's President and Chief Executive Officer, Ryan Steelberg; and Chief Financial Officer, Mike Zemetra, who will provide prepared remarks and then open the call for a live question-and-answer session. Please note that certain information discussed on the call today, including certain answers to your questions, will include forward-looking statements. This includes, without limitation, statements about our business strategy and future financial and operating performance. These forward-looking statements are subject to risks, uncertainties and assumptions that may cause the actual results to differ materially from those stated. Certain of these risks and assumptions are discussed in Veritone's SEC filings, including its annual report on Form 10-K. These forward-looking statements are based on assumptions as of today, August 13, 2026, and Veritone undertakes no obligation to revise or update them. During this call, the actual and forecasted financial measures we will be discussing include non-GAAP measures. 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 the call today is being recorded and will be made available for replay via a link on the Investor Relations section of Veritone's website at www.veritone.com. Now I would like to turn the call over to our President and Chief Executive Officer, Ryan Steelberg. Ryan Steelberg: Thank you, Cate. Good afternoon, everyone, and thank you for joining us today. During the second quarter, Veritone executed decisively on the strategy and commitments we outlined in May. Our goal was to create measurable and material outcomes, generating material revenue and repeat orders through Veritone Data Refinery, or VDR, expanding customer adoption and restructuring our organization to be more efficient while materially lowering our cost structure. I'm proud to report that we delivered on these fronts, improving our second half visibility and firmly positioning the business for profitable growth. I would summarize our performance like this. As we sit here in Q3 of 2026, while executing these very material organizational changes and cost-cutting initiatives, we were still able to grow revenues year-over-year and materially from last quarter. Furthermore, compared to this time last year, we have greatly deleveraged the business, substantially increased our pipeline and total addressable market and lowered our operating cost structure. Regarding our remaining convertible debt, we have been and remain in active discussions with our debt holders about potential restructuring, and we plan to provide more detail in the upcoming weeks and months. In addition to these corporate and fiscal improvements, our talented product and engineering teams also delivered on the production build and launch of multiple new AI products in the second quarter, including Veritone Assess and Document Redaction, with more exciting new product releases slated for the third quarter. Back to our recent actions. Subsequent to the quarter end, we made substantial progress on the restructuring and cost actions announced earlier this year. These changes, albeit difficult, were necessary. As of today, we have implemented actions that represent approximately $11.3 million in annualized savings, including headcount reductions and lower non-payroll expenses, toward a projected total of $15 million to $20 million by the end of fiscal year 2026. We expect to continue to identify additional opportunities to improve operating efficiency into next year with a continued effort to realize up to 30% in relative total savings through the first part of 2027. Importantly, we have been deliberate in where we reduced spending while preserving targeted investments behind our highest-growth opportunities, including VDR and Public Sector. Our actions have focused on eliminating duplicative corporate costs, streamlining the organization and leveraging our own AI technologies to drive greater productivity and operating efficiency across the business. We believe these actions better align our cost structure with our current revenue base while maintaining the resources and capabilities needed to execute against our key growth priorities. As we mentioned last quarter, we are not waiting for revenue growth to catch up to our cost structure. We are actively improving the operating efficiency of the business, with the goal of achieving breakeven profitability in fiscal year 2027. Today, we are moving rapidly from vision to commercial execution, connecting data owners with AI developers and placing Veritone at the center of the rapidly expanding AI data economy. We are successfully converting VDR opportunities into large commercial deployments, having closed some of our largest individual deals in the second quarter. This traction came from repeat customers, and we are currently sourcing and prepping data for several strategic clients, most of which operate under active master services agreements. We remain very bullish on VDR and our market positioning in the training data market. Hyperscalers remain central to this expansion as both foundational clients and high-velocity partners, positioning VDR as a core growth engine for Veritone. We have built the VDR infrastructure and signed the major players. Now is the time to execute and fulfill. To put the scale opportunity in context, based on the firms already under contract, a single incremental order from one of our signed hyperscalers or foundational model developers can represent millions of dollars of margin in a single quarter. As we discussed last quarter and to continue to support this scale, our migration to Oracle is progressing right on schedule. Initial storage payloads are expected to begin moving in the month, with complete workloads to follow. This transaction is seamlessly enabled by aiWARE's containerized platform-agnostic architecture, which preserves customer flexibility and avoids vendor lock-in. Once relevant payloads are migrated, we expect compute savings of approximately 20% or more. In addition to our infrastructure build-out with Oracle, we are also escalating our co-selling and marketplace opportunities with Oracle. I recently had the opportunity to speak at their national OCI sales team at their annual kickoff and have been invited to speak at the Oracle AI World 2026 Conference in October. Partners like Oracle, Workday, Carahsoft, Getac and others remain a critical part of our future growth strategies, both domestically and internationally. In addition to these major global partners, we maintain strategic partnerships with numerous public sector agencies and leaders in the sports, media and entertainment industries. Through these strategic partnerships, co-selling activity is well underway, currently representing over 450 sourced or jointly pursued opportunities and over $9 million in active pipeline. Partners are critical. Our Commercial Enterprise division delivered another quarter of strong execution, demonstrating scalability and deepening demand for our AI software and data monetization solutions, with 232 agreements executed over the period. One of the clearest examples is within our Content Licensing division, which drove double-digit year-over-year growth in both revenue performance and completed agreements. Simultaneously, our sales team continued to close strategic software deals, expanding the operational footprint of our AI enterprise platform. By securing and renewing key rights cleared partnerships like premier brands like CNN and Sony Pictures Entertainment, Veritone continues to prove its value as an essential software and revenue engine for commercial organizations. Live sports remains the crown jewel of the media ecosystem, and Veritone sits directly at the center of it. Building on our Q1 momentum, Q2 marked another milestone in our long-standing relationship with Augusta National, which began in 2008. During the Masters, our technology delivered live ingestion, automated AI tagging and agentic metadata workflows to transform tournament coverage into instantly searchable, high-value digital assets in near real time. Extending this momentum across the broader sports ecosystem, we have recently announced a multiyear renewal with a Pac-12 conference as their exclusive global content licensing partner, leveraging our Digital Media Hub to manage and monetize both historical archives and current athletic seasons. By unlocking immediate asset accessibility while preserving strict IP control, Veritone empowers premier rights holders to open new revenue streams and elevate fan engagement as action unfolds. As global demand for high-quality AI training data reaches an inflection point, we are actively monetizing the AI data economy through our Veritone Data Refinery as we turn massive unstructured video and audio archive in the high-margin, AI-ready assets. We remain consistently and actively engaged with both hyperscalers and frontier labs as a trusted partner of the necessary data to power the AI economy. This underscores the strength of our data pipeline as AI technology and innovation leaders turn to Veritone to fuel their next-generation models. Looking ahead, we continue to aggressively execute on our strategy to dramatically expand our total addressable market. Leveraging our cloud-native Digital Media Hub, we are taking the enterprise-grade AI architecture we have built for media giants and democratizing it through modular packaging and tier pricing to capture high-margin growth across previously underserved market segments, including mid-market SMBs, marketing agencies and independent creators. We are transforming Veritone from purely an enterprise specialist into a universal software standard for audio and video workflows. Turning to the public sector. Veritone's AI applications and iDEMS suites are revolutionizing productivity and efficiency for mission-critical workflows. This quarter, we launched Veritone Document Redaction and Veritone Assess to our product portfolio. Both applications are built on aiWARE and fit seamlessly into the iDEMS suite of solutions that we currently offer. Document Redaction materially increases our TAM, as all states have requirements for Document Redaction. We have already closed several deals, and we'll be making Document Redaction available to our existing customers and generally available to all customers this quarter. Veritone Assess is an agentic AI-powered data analysis solution designed to help public safety agencies rapidly identify inconsistencies, missing information and critical intelligence gaps, hitting within complex unstructured data sets. Assess significantly expands our AI capabilities across investigations, compliance and case analysis while increasing the speed and accuracy of decision-making. It uses cases, including solving crimes, identifying procurement and financial fraud, developing mission plans and applying policies and procedures to processes involving unstructured data. As we highlighted during our July innovation showcase, we are translating our technology into meaningful real-world impact through our ongoing work with the Cold Case Foundation. Veritone Assess is currently being used on multiple cases, including the JonBenet Ramsey case in Colorado. We believe the public exposure from this work, as well as engagement with the law enforcement agencies where these cases originate, will continue to help accelerate growth across our public safety business. We also secured a multiyear contract with the California Highway Patrol, or CHP, the largest state police agency in the United States, for Veritone Redact to automate the redaction of sensitive information within digital evidence data sets collected by CHP, significantly accelerating public records processing while protecting citizen privacy. This contract validates a highly scalable, repeatable deployment model for use across a variety of state and local agencies. In fact, the CHP is already evaluating our other iDEMS applications, thereby contributing to the growth of our overall public safety pipeline. Our broader public safety sales momentum also remains strong. We secured a 5-year agreement with a state agency in Washington and added several new customers that licensed multiple products under multiyear agreements. We also saw a significant increase in partner activity, including new activations and new accounts. We added MCCi and JustFOIA as new channel partners for our redaction solutions, added several new reseller partners and continued to advance our technical integration and co-selling relationship with Getac. To accelerate adoption across the local agency market, we have established a strategic partnership with Police1 and Lexipol to help agencies identify, pursue and secure grant funding for advanced investigative technologies, reducing a key barrier to procurement. At the federal level, we are demonstrating our leadership in AI infrastructure and government AI initiatives through our partnership and participation in the Genesis Mission Consortium, supporting efforts to accelerate the federal government's AI resources, data sets and high-performance computing capabilities by utilizing aiWARE and our applications. In addition to supporting our current Department of War agencies, the U.S. Defense Logistics Agency and the U.S. Air Force, we are in the process of expanding our enterprise ATO and application footprint for the Department of Justice by adding Veritone Investigate with Assess to the FedRAMP marketplace. We are also in the final stages of contracting for a border security project that we expect to commence shortly. Internationally, we recently concluded an agreement with the U.K. Department for Work and Pensions, highlighting our growing global momentum in the public sector. Also, as it relates to the U.K., we have been down selected as part of an exclusive group of technology firms and vendors for a large countrywide procurement framework, which we remain optimistic as we finalize the contract to secure the award and the appointment here shortly. We also have been actively engaged on iDEMS opportunities with law enforcement agencies in the U.K., Canada and Ireland. Our international activity continues to grow as we focus on these important markets. With the addition of new products, new partners and expanding channel presence, we have significantly increased our addressable market and routes to market. Our applications and iDEMS suites are doing more than improving workflows. They are enabling mission-critical outcomes, improving productivity and efficiency, increasing case closure rates and helping the public sector customers reduce costs. The strong momentum we are seeing across our Public Sector business underscores the critical nature of our offerings, and we look forward to the Public Sector opportunity in the future. Our Hire division, now officially rebranded as Broadbean by Veritone, delivered a focused and highly productive second quarter. Even as we navigate a selective and challenging macro hiring environment, Broadbean remains a bedrock of high-margin recurring revenue for Veritone. This operational stability is powered by the sheer scale of our global network. Broadbean now manages over 7.6 million jobs annually and generates 132 million candidate engagements, cementing its position as a vital foundational asset within our product portfolio. On the product innovation front, I'm thrilled to report the successful launch of our Job Acceleration feature on May 11th. While our programmatic advertising campaigns excel at standard budget pacing, shared tool dynamics can sometimes leave urgent or specialized roles underserved. Job Acceleration solves this directly by allowing recruiters to place high-priority roles into a dedicated high-velocity fast lane without altering their main campaign settings. Market adoption and customer feedback during early rollouts have been exceptional. A key client, SOS Group, highlighted the tool as an absolute game changer, specifically praising its ability to enable their team to respond immediately to sudden spikes in talent demand. By combining dedicated budgets with a friction-free pay-for-performance model, Job Acceleration gives talent acquisition teams instant speed and control a capability we expect will drive meaningful incremental spend across our broader user base. Our enterprise sales momentum also remained strong in Q2, highlighted by 76 new business wins and key multiyear wins across our global footprint. Our media services revenue delivered exceptional performance, surging by 48% compared to Q1 and reflecting robust demand across our global advertising footprint. Concurrently, our team is executing smoothly on the multi-agency U.K. public sector rollouts announced last quarter, including the flagship to U.K. Department for Work and Pensions implementation. Finally, as we have stressed above and previously, the importance of our partnership channels are very critical to the business, and I wanted to provide an update on our Tier 1 HCM ecosystem, where we have reached several critical milestones this quarter. SAP PartnerEdge Build program. On May 5, we officially signed as a partner in the SAP PartnerEdge Build program. This creates a direct channel to integrate Broadbean solutions directly in SAP's core talent management ecosystem, establishing a clear pathway to expand our footprint within the Global 2000 brands that rely on SAP daily. Oracle HCM. We continue to deepen our functional integrations with Oracle HCM, ensuring our global distribution power is seamlessly exposed to their enterprise customer base. We will continue to push into this ever-expanding relationship with Oracle. Workday. Building our momentum as a Workday platinum partner, we closed several new -- 7 new Workday deals in Q2, bringing our year-to-date Workday total to $1.3 million across 33 joint wins, keeping us firmly on track toward our full year ecosystem expansion goals. These operational wins, technology launches and strategic alliances collectively signal a pivotal transition for Broadbean by Veritone. We are no longer just a job distribution tool. We have established ourselves as a deeply embedded AI-driven strategic partner, essential to how the world's largest employers source, engage and manage talent. Looking forward, I'm exceptionally excited about the rapid strides we are making in agentic AI technology and our next-generation product road map for Broadbean. By embedding autonomous capabilities into our core job management architecture and pioneering new enterprise compliance and career sites, we are positioning Broadbean to not only streamline recruitment workflows, but to set the global standard for intelligent compliant talent acquisition in the AI area. In closing, the investments, as well as the difficult yet disciplined operational decisions we have made over the past several quarters, positioned Veritone to accelerate growth while materially improving our path to profitability through the second half of 2026 and into 2027. Our decisive reorganization and cost cutting will more appropriately align our current revenue base and growth areas, creating a clear path to profitability in 2027. Now I'll turn the call over to Mike, who will review our financials and business performance in more detail. Mike? Michael Zemetra: Great. Thank you, Ryan. Overall, revenue was strong in Q2 2026, led by VDR, however, with slightly short of expectations, largely driven by the public sector, where we experienced delayed budgetary shifts in late Q2 2026 from the Department of Defense to move funds over to support the conflict in Iran. As I will explain in more detail later in my prepared remarks, we view this as a temporary shift as the pipeline of projected adoption of our AI platform across the U.S. federal government is forecasted to increase substantially over the next several quarters. And we continue to work directly with the DoD despite the temporary decision to move budget funds to the Iran conflict. On the operating side of the business, we executed $11.3 million of annualized cost reductions to date or roughly 11% of our annualized cost structure as of June 30, 2026, mostly from headcount reductions and reduced third-party professional and consulting fees. By the end of fiscal 2026, we are targeting up to an additional $3.5 million to $8.5 million of cost reductions to reach up to 20% of annualized cost reductions. As I will explain later in my prepared remarks, none of these reductions were revenue are growth impacting, and we are expected to start showing breakeven results on a non-GAAP basis as early as the first half of 2027 and potentially for the full year fiscal 2027 and modest forecasted revenue growth year-over-year. During my prepared remarks, I will discuss our Q2 year-over-year performance and KPIs, balance sheet and liquidity position, including our recent cost reductions, and provide updates on our financial progress in Q2 2026 and fiscal 2026 guidance. Now I would like to discuss our Q2 2026 performance in more detail. Q2 revenue was $24.3 million, up $4 million or 20% sequentially from Q1 2026 and up $1 million or 5% from Q2 2025. The sequential 20% revenue improvement from Q1 2026 was driven by increased VDR and licensing services, which when combined, were up 40% quarter-over-quarter. The improvement over Q2 2025 was driven by our Managed Services, which saw increases in licensing and representation services, while Software Products and Services was relatively flat year-over-year, driven by higher VDR revenue, offset by declines in Veritone Hire in the public sector. Veritone Hire was down year-over-year, principally due to lower consumption-based revenue from one of its largest hiring platforms, driven in part by a continually challenging macro environment across hiring in the quarter, which is expected to continue through the second half of fiscal 2026. The year-over-year decline in Public Sector was largely due to the delayed contract extension with the DoD, which was entirely driven by temporary budgetary shifts and wartime spending due to the ongoing conflict in Iran. To be clear, this is an active project with the DoD that we have been working on expanding for more than a year. We remain highly engaged with the DoD on next steps and anticipate that funding will be approved as early as the second half of 2026 or first half of 2027, depending on the status of the Iran conflict. As I'll explain later in my prepared remarks, we remain very bullish on our current and future pipeline in the public sector, including expanding further within other critical areas of the U.S. federal government and internationally into Western Europe. Our Q2 results were also somewhat tempered by the fact that certain transactions with some of our larger hyperscalers for VDR remain under active review, but not fully processed. I would like to remind everyone that we have all the largest hyperscalers under contract, and we currently have a near-term VDR sales pipeline and bookings of over $65 million. In addition, we have an active sales pipeline of more than $15 million, which could all close in Q3 and/or Q4 2026 and includes several deals in the single to high multimillion dollar range. While the timing of these VDR deals is not fully in our control, we remain optimistic on the near- and long-term revenue growth opportunities for VDR. Turning to the public sector. We are forecasting the public sector to continue to grow throughout fiscal 2026, albeit lower than we had originally expected, with more pronounced growth beginning in fiscal 2027 and expanded rollout of iDEMS across the DoD, including OSI, and other larger international and U.S. federal agencies. Turning to Q2 Managed Services, which increased $1 million year-over-year, principally as a result of increases in both licensing and representation services. As previously discussed, we are seeing improvements in our representation and licensing services over 2025 and expect this trend to continue throughout the remainder of fiscal 2026. Turning to key performance metrics across our Software Products and Services in Q2 2026. ARR of $62 million, up slightly from Q2 2025 of $61.9 million, driven by increased consumption-based revenue from onetime software revenue in VDR, offset by a decline in SaaS-based revenue as we made the decision to sunset one of our legacy SaaS products in Q2 2026, which was margin negative since its inception. Overall, ARR and consumption-based customers increased 71% year-over-year, while recurring subscription-based SaaS customers declined 15%. New bookings of [ $13.9 million ], which were down slightly year-over-year, gross revenue retention continued to be above the 90th percentile, and total Software Product and Service customers of 2,829, down 8% year-over-year, predominantly from our Commercial Enterprise sector, which includes lower consumption-based customers and across Broadbean by Veritone, principally due to macro driven churn from smaller customers as we focus on larger ARR opportunities. As the hiring market continues to be challenged, we expect this trend of smaller ARR customers to continue throughout fiscal 2026. Q2 GAAP gross profit was $14.2 million compared to $15.7 million in Q2 2025. The decline was primarily driven by the decline in revenue, principally from our hiring products and services. Q2 GAAP gross margin of 58.5% as compared to 67.5% in Q2 2025, a decline of 900 basis points, driven largely by the mix of revenue in each period. Excluding noncash depreciation and amortization expense, Q2 2026 non-GAAP gross margin was 63.7% as compared to 72.6% in Q2 2025, a decline of 890 basis points. Note that we continue to forecast 2026 non-GAAP gross margins to be closer to 60% to 65% throughout the year and will vary depending on the timing and the mix of VDR revenue in a given period. Q2 operating loss of $22.1 million increased by $3.1 million or 16% year-over-year, primarily driven by the $0.7 million decline in non-GAAP gross profit, a $4.5 million increase in onetime severance and transition costs associated with our recently announced restructuring and cost reduction efforts, offset by lower noncash depreciation and amortization and a $1.3 million net decrease in year-over-year operating line item expenses driven by lower personnel costs across G&A and sales and marketing, due in part to headcount efficiencies year-over-year, offset slightly by higher R&D costs as we continue to invest in our future growth. Net loss was $22.2 million as compared to $26.5 million in Q2 2025, a $4.3 million or 16% year-over-year improvement. Driving this year-over improvement was a $3.4 million decline in net interest expense year-over-year as a result of the paydown and retirement of 100% of the company's senior secured debt in November 2025. In addition, the company recorded a onetime noncash loss of $2.9 million in Q2 2025 from a change in the fair value of the company's estimated earn-out from the Veritone One sale in October 2024 that did not recur in Q2 2026. Lastly, income taxes were approximately $1.1 million higher in Q2 2026, primarily due to the timing of certain income tax items. Offsetting this was a decline in operating loss of $3.1 million. Excluding the onetime restructuring charge of $4.5 million, Q2 net loss would have been approximately $17.7 million as compared to $26.5 million and $8.8 million or 33% improvement year-over-year. Overall, non-GAAP net loss was $9.95 million as compared to $8.4 million in Q2 2025. The year-over-year variance was mostly driven by lower non-GAAP gross profit, coupled with a $0.3 million decline in capitalized software in Q2 2026 as compared to Q2 2025. Turning to our liquidity and balance sheet. As of June 30, 2026, we held cash and restricted cash of $12.7 million as compared to $27.7 million at December 31, 2025. The $15 million net change in cash reflects net cash outflows from operations of $22.1 million, principally driven by our non-GAAP net loss of $21.9 million, and net cash inflows from investing and financing activities of $6.9 million, primarily driven by net cash outflows of $2 million in capital expenditures and $9.4 million in net proceeds raised from our ATM in Q2 2026. As of June 30, 2026, we settled 5.8 million shares under ATM, raising net proceeds of approximately $9.4 million at an average price of $1.68 per share. Excluding capital raises in the first half of 2026 and 2025, we also improved our net cash outflows by over 27% by $8.8 million year-over-year. Turning to liquidity today. As of June 30, 2026, we held $12.7 million of cash and restricted cash as compared to $13.8 million as of June 30, 2025. Moreover, all the entirety of today's cash is unencumbered and free of any restricted debt covenants, unlike in the prior year, when we had a $15 million minimum cash requirement under our legacy senior secured debt. In addition, we have approximately $45 million of total debt outstanding at June 30, 2026 accruing interest at an annual rate of 1.75% as compared to approximately $130 million at June 30, 2025, a year-over-year improvement of $85 million in debt principal and more than $13 million in reduced annualized debt carry costs. This improved flexibility and stability has strengthened our balance sheet and allows us to focus on reaching our growth potential to meet the hyper growth market opportunities ahead of us. At June 30, 2026, we had 99.1 million shares issued and outstanding and 2.5 million warrants outstanding to certain legacy term net holders. In late June 2026, we began our operating restructuring efforts with a goal to reduce our current operating expenses up to 30%. In the first phase of this restructuring, which continued through this week, we eliminated 62 full-time employees, which is roughly 14% of our workforce. In addition, we reduced other operating expenses. When combined, we have executed approximately $11.3 million or roughly 11% of our annualized operating expense. And we're not done. We have plans to further enact an additional $3.5 million to $8.5 million of annualized operating expense reductions under this restructuring effort to reach out to at least $15 million to $20 million of annualized cost reductions by the end of 2026, or up to 20% of our annualized operating expenses. As I will explain further in my prepared remarks, these efforts will ensure we are on target to achieve breakeven profitability with revenue growth at or near $125 million to $130 million of annualized revenue in fiscal year 2025, or approximately 11% year-over-year growth from the high point of our fiscal 2026 guide. This is absolutely achievable given that substantially all of the investments to achieve this targeted revenue growth have already been made. There will be minimal additional OpEx required to achieve these revenue milestones heading into fiscal 2027. That said, we will continue to be opportunistic, with continued focus to further improve our current liquidity position and balance sheet as well as the previously discussed plan to reduce our consolidated operating expense over the next several months. As of June 30, 2026, we have over $40 million of availability remaining under our current ATM, and we have been in active discussions with our debt holders on potential structuring going forward, which we plan to update you in more detail in the coming months. Lastly, we are working on multiple strategic funds with some of the largest companies in the world to continue to accelerate our growth across our commercial and public sector services. Now turning to full year 2026 guidance. As a reminder, we will only be providing financial guidance for the full fiscal year 2026 given the complexity of forecasting the timing of VDR deals, which tend to be larger in dollar values and entirely consumption based, coupled with the complexity of government decision-making, especially during wartime. That said, and as I explained earlier, we are seeing a large backlog of more than $15 million of active VDR deals that all could close in Q3 2026. And we have given a soft range on Q3 2026 revenue to be between $24 million to an excess of $28 million, which at the high point would be a year-over-year improvement of over 5%. As a backdrop to our annual guide, our Software Products and Services revenue pipeline and long-term outlook continue to be at all-time highs. More specifically, we continue to see strong demand across commercial VDR and the public sector. In 2026, hyperscalers including Google, Amazon, Meta, NVIDIA, which are all current customers, have individually forecasted to spend hundreds of billions of dollars in fiscal 2026 to progress their AI initiatives, including further investments into their large language models. With a global AI training data set market size projected to grow from $4.4 billion in 2026 to $23.2 billion by 2034, we are just in the early phases of AI data modeling. From a model training perspective, we believe that we continue to be well positioned to exploit this potential revenue opportunity at the forefront of future spending with our VDR solution as the more mature models are now investing heavily in rich video data, where we believe Veritone has a clear competitive advantage. As of today, our near-term sales pipeline of VDR remains over $65 million and continues to grow. And to be clear, the average deal size is in the $1 million to millions per VDR order. While we do not control the timing, we are active with these hyperscalers on this potential near-term pipeline of $15 million. To address this in 2026, we are focused on the most efficient and cost-effective ways to increase the supply of data. And we will also be investing in the engineering and product around VDR, including Veritone Marketplace, where our aim is to deepen our competitive moat with exclusive access to thousands of more data providers. As previously discussed, we now have access to content rights holders who control more than 50 million hours of valuable video data, which is vastly significant as compared to the hours we held this time last year. We believe these near-term strategic decisions will enable us to continue to grow VDR revenue in fiscal 2026 and beyond at or above the 23% projected CAGR for spending on large language models through fiscal 2034. In the public sector, the market TAM for digital evidence management solutions today exceeds north of $10 billion, and it continues to grow at double-digit rates. As discussed earlier, we did experience temporary delays with our current DoD project, in large part due to the reallocation of current fiscal budget toward war efforts in Iran. That said, we are actively in contact with the DoD on this project and are highly optimistic this project will reengage at some point in the second half of 2026 or early in fiscal 2027. Despite this delay, deal progress in the public sector has been substantial. Specifically, we have been down selected on a multiyear approximate 10-figure award internationally, where we were selected along with a dozen or so other vendors to deploy our iDEMS solution across a major European country. In addition, we should also be announcing another major win to deploy our iDEMS product across another investigative department of the U.S. government, and we are well underway with a third-party hardware provider to jointly deploy our iDEMS solution and capture a larger share of the state and local law enforcement market. While we cannot quantify the impact of these opportunities given the stage they are in, which will most likely impact fiscal 2027, they could easily double our current public sector pipeline when combined, which today remains north of $200 million. We look forward to providing more details on these opportunities as they mature over the coming months. With the uncertainty around timing of these potential new partnerships and the budgetary shift in the DoD, we will be revising our financial guidance for the public sector, which is now expected to grow at a more modest rate versus what was expected in the previous quarter. That said, once we begin formally rolling out more iDEMS across the broader DoD, including the previously discussed upcoming deals. We expect that growth rate to be much higher starting in the first half of 2027. On the OpEx side, the $11.3 million from restructuring and cost reduction efforts will directly benefit the second half of 2026, with a potential for an additional $3.5 million to $8.5 million by year-end. These cost reductions will impact the entire organization, but more pronounced on sales and marketing and general and administrative. As a result, we are expecting the back of 2026 to show declines in sales and marketing and G&A expenses year-over-year, with forecasted spending across these areas as a percentage of total revenue expected to show improvements year-over-year. We are projecting research and development expenses to be slightly down in the second half as compared to the run rate in Q2 2026. However, we are still continuing to invest in VDR and Public Sector revenue initiatives, including the Veritone Marketplace and planned new software product features and enhancements in 2026 and beyond. With our updated financial guidance, we are projecting operating profitability as early as the first half of fiscal 2027, providing we execute the remainder of our cost reductions by the end of 2026. The key risks to our revenue projections are the consumption-based nature of VDR, coupled with the timing of government-based contracts and decision-making. As a reminder, over the past 12 months, individual deal sizes for VDR have ranged from the high 6 figures to mid-7 figures. While we feel confident in our sales pipeline for VDR, our visibility into the timing is typically 2 to 3 months in advance of delivery, and decision-making on the nature and volume of content may change depending on the customers' need and anticipated impact on those training models. More specifically, we are updating our fiscal 2026 guidance to: revenue to be between $100 million to [ $115 million ], which at the midpoint represents a 17% increase year-over-year from fiscal 2025. As discussed, we are expecting the public sector revenue to modestly grow year-over-year and the remaining growth to come from our Commercial Enterprise sector, predominantly from VDR. Our Broadbean by Veritone Hire products and services are included in this growth, and we expect Broadbean by Veritone Hire to be slightly down year-over-year, given the current macroeconomic hiring environment. Our Managed Services is expected to be up year-over-year by 10% to 15%, principally due to the recent improvements we are seeing on the representation side of our business. We expect gross margins to fluctuate between 60% to 65%, driven by the forecasted mix of revenue in the period, and non-GAAP net loss to be between $22 million and $32 million, which at the midpoint represents a 34% improvement year-over-year as compared to fiscal 2025. The change is reflective of the timing shift in revenue, the previously discussed cost reduction efforts to date, coupled with the compression in gross margins due to the mix of VDR. We believe we are still on track toward profitability but are shifting this to the first half of fiscal 2027. And it's highly dependent on the compounding growth of VDR in the public sector heading into fiscal 2027, coupled with the execution of our remaining cost reductions. Before closing the call, I'd like to remind everyone that's listening that Veritone will be in New York City attending the H.C. Wainwright 28th Annual Global Investment Conference taking place September 14 through the 16 at the Lotte New York Palace Hotel in New York City. That concludes my prepared remarks. Operator, we would like to now open the call for questions. Operator: [Operator Instructions] The first question is from Kevin McVeigh with UBS. Kevin McVeigh: Thanks for the context. If you were to look at the adjustments to the revenue guidance, any -- can you help us dimensionalize, like how much of that was VDR relative to -- and I know VDR spans both business segments in terms of Commercial, Hire and things like that. But just help us understand, was that taking all the VDR out? Or is there still some VDR base in the back half of the year? Ryan Steelberg: I would say it comprises the combination of bulk, not removing VDR entirely by no stretch, but bringing down I'd say the contributions or expected contributions from primarily DoW Fed and the elements of VDR. VDR, obviously, we remain extremely bullish on. Again, some of these deals are -- we felt just with some of the timing that we're seeing in the delays of some of the VDR deals despite the size of magnitude of them, we did feel it was prudent to bring down that guide to, let's say, better coincide with our visibility, however limited that may be, to a more appropriate level. Hence, why we remain extremely disciplined, right, to continue to advance on our cost-cutting and reorganization initiatives. But again, the main drivers for that pullback or reduction in the year end guide is a combination of primarily Department of War Fed and bringing down slightly contributions from VDR in 2026. Kevin McVeigh: Yes. And to be clear, there will be revenue for VDR in the back half of the year? Ryan Steelberg: Yes, Correct. Correct. Kevin McVeigh: So is it -- if you were to think about those 3 buckets, is it -- VDR is 20% of it, and then the other 2 are 80% in terms of the adjustment? Or if you can't get too specific, that's fine. Ryan Steelberg: No, we can't break that out. Kevin McVeigh: Okay. Helpful. And then I guess on the $46 million, Mike, is there any way to think about like timing on that? I don't know if you can give just a little bit tighter on the timing of when we should expect the update? And any thoughts as to how you approach that? Michael Zemetra: Yes. I mean, as we mentioned, we're in active discussions with the debt holders, and hopefully, we'll have some news here over the coming months, if not months. So it's top of mind. We're focused on it. Yes. Kevin McVeigh: And then it seems like you've got nice momentum on the expense side given the revenue reduction relative to the net loss, it looks like the revenue is about $30 million, but only the net loss, $10 million, give or take. Is that the cost actions fully seasoned? Anything else in there we should think about? Just because it really nice progress there. Michael Zemetra: Yes, I think it's a combination of the cost reductions. And there'll be some more coming, coupled with, you recall, VDR from a margin perspective is not as good as some of our SaaS product. So that it's not necessarily a one-to-one correlation, yes, when you're taking that down. Operator: The next question is from Pat McCann with D. Boral Capital. Patrick McCann: I was wondering with the recent public sector wins, if that's driven an uptick in additional interest from other public sector organizations around the country? You mentioned, of course, the importance of CHP and the scale of it. How does -- how has that helped the discussions and the pipeline in the public sector business? Have you noticed a particular uptick as you've won some of these important and notable accounts? Ryan Steelberg: Yes, absolutely. It's a relatively small industry, obviously, and when you're able to land some of these more material agencies, whether they're state local or at the federal level, of course, that has a ripple and referral effect across the organization, across the ecosystem, somewhat akin to any business. And so that -- so despite, I'd say, some short-term delays -- and I want to really stress short -- I'm incredibly bullish on over -- the overreaching public sector business, both domestically here in the United States and internationally. So getting deals done, getting them publicly announced and frankly, and most importantly, getting happy customers who are using your mission-critical software repeat business, it is absolutely a catalyst. So investors should take note of these material agencies and brands that we're signing. We're not happy with sort of the short term, some negative impacts and delays that we've incurred, but it's important for people to listen to the brands and the names that we have been able to disclose. And some of the pending deals. Some of the stuff is public record. When we get the rights and approvals to more clearly promote and explain some of these big wins and award selections, we will do it and we will publicize those appropriately. But I would say one more final point is it's -- there is definitely a crossover between, at times, state and local with the Department of Justice, obviously, as it relates to certain initiatives, with Border Patrol in other areas. So every win is important. Every material agency, whether it's state, local or Fed is important. But it's equally important for Veritone to be able to and appropriately be able to announce and market those effectively. So again, these names are important. You are touching on a very important point, that this is real exciting momentum that. As Mike touched on, we do expect to see very material contributions to bookings and revenues in 2027 from a lot of these awards that have just recently been awarded. Patrick McCann: And then my other question had to do with the guidance of moving toward breakeven in the early stage of 2027. I was wondering if you could kind of handicap your confidence around that based on the dynamic of revenue growth and the cost cutting, obviously, the cost cutting being more squarely within your control? So based on those 2 factors that would come together to drive the move toward breakeven, what is your confidence level? Is enough of that coming from the cost-cutting activities that, that becomes a very, very achievable goal? Just wondering maybe kind of the thoughts that went into that guidance. Ryan Steelberg: Mike, I think you touched on a little bit, speaking to 2027. So why don't you reiterate that buffer range, and for those who are trying to build the models, it's going to take performance on both sides, and some are more in our control than others. But Mike, why don't you kind of reiterate what you talked about for 2027? Michael Zemetra: Yes. So I think we said with some modest growth of $125 million to $130 million and provided that we execute on sort of the remaining $3.5 million to $8.5 million of cost reductions in the back half of the year, that should be plenty sufficient to get us to what I'll call breakeven for the entirety through the year. Now some of that does depend on execution and reengagement, particularly with the Department of War. And we do have some newer deals that hopefully will start bearing revenue as early as the first half. So there are things in there that have a little bit of risk. But from a growth perspective, I think the $125 million, if you take the midpoint of the $125 million to $130 million, it's about 11% growth at the high end of our guide. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Ryan Steelberg for any closing remarks. Ryan Steelberg: Thank you again for joining today. Obviously, we're very excited and bullish on many areas of the business, despite some of the tough decisions we had to make in terms of continuing to reduce cost, and obviously, these are impacting a lot of souls at Veritone. But again, where I think we're doing a very -- the best job we can. This is obviously a great leadership team effort. And I want to be very clear, and I want to acknowledge the entire Veritone team for, frankly, great execution for the first half. We were able to still drive revenue growth. We were still able to drive pipeline expansion and real product innovation. Let's not forget that at the end of the day, these are killer products and services that we're innovating and developing and selling while simultaneously cutting costs and making major material reorganizations. Would we like to be able to have done it faster and early in the year? Sure. But as an international body where we obviously have rules and regulations on reorgs and downsizing, again, strong marks across the board for our team on pulling this off. Second, I would like to say is, despite, again, some of what absolutely are going to be delays, not binary negative outcomes with certain partners and clients in the Department of War, where, obviously, a lot of appropriations are being moved to acute munitions and active war fighting. We remain incredibly bullish about public safety not spanning U.S. state and local U.S. Fed and also international. Our market penetration and growth and relationship build-out with the U.K. and other markets specifically, should -- is very exciting, and that should make investors very excited as well. And then obviously, VDR. VDR -- and again, it's just something I'll say generally is our business in this last quarter, a very material portion of our revenue came from over 2,500 smaller customers. And then you shift over Department of War and VDR, and you see a few customers that have the ability to contribute millions, multimillion dollars of revenue and high-margin revenue in a single quarter. And that's something that we, as an organization, have to adjust to, which we are, right? That's part of the reorganization efforts we're doing. So again, let me reiterate that is, again, in the last quarter, well over 2,000 customers contributed to the super majority of our revenue, and then we have these exciting new lines of businesses that can have -- that at times are hard to forecast, but very -- in a very exciting opportunity, have the ability to generate substantial revenue growth with only a few contracts or orders, as both Mike and I communicated in our prepared remarks. So again, the excitement in the art form here is let's continue to be disciplined and rightsize and structure organization so we have better visibility on, I'd say, "a baseline", but make sure we do not make the mistakes. And that's why we are going to be very methodical on when we're making these reorganizations and these cuts too that we do not impair our ability for these hyper growth areas, including the public sector and VDR. So again, I think, again, we would score ourselves despite some short-term negative news today and reducing the guide. But we hope that we are effectively communicating the real underlying asset value and pipeline expansion that we continue to add to this business. Again, with some of the biggest names in the space, like CHP, the U.K. Department of Work and Pensions, et cetera, Department of War, these are real, they're big, they're contracts. And frankly, we put our opportunity up against any company out there. And then lastly, Mike touched on one. Please check on our investor website. We are attending a slew of different financial and technology conferences through the balance of the year. BMO, UBS, Needham, we mentioned Craig-Hallum, AlphaSelect and others. Look forward to meeting with both current and new prospective investors. And hopefully, people will continue to find excitement in a very -- in a killer business that has created a lot at servicing thousands of customers, and again, is executing against the plans that we laid out, right, despite some short-term hiccups. Thank you for your time today, and have a good evening. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Veritone, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Veritone wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,621!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,314!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 20, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Veritone (VERI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is executing a significant organizational restructuring to align the cost structure with the current revenue base, targeting $15 million to $20 million in annualized savings by year-end 2026. Performance in the quarter was driven by the Veritone Data Refinery (VDR), which is successfully converting unstructured video and audio archives into high-margin training data for hyperscalers and frontier labs. The Public Sector business faced temporary headwinds due to a Department of Defense (DoD) budgetary shift, where funds were reallocated to support the conflict in Iran, delaying a major contract extension. Strategic infrastructure migration to Oracle is on schedule, expected to yield compute savings of approximately 20% or more while avoiding vendor lock-in through a containerized architecture. The Commercial Enterprise division saw strong demand in content licensing, particularly in live sports, leveraging AI for real-time metadata tagging and digital asset monetization. Management is deliberately preserving investments in high-growth areas like VDR and Public Sector while eliminating duplicative corporate costs and leveraging internal AI for productivity. The Hire division (Broadbean) is being repositioned from a job distribution tool to an agentic AI-driven strategic partner, despite a challenging macro hiring environment impacting smaller customers. Management targets achieving non-GAAP breakeven profitability in fiscal year 2027, predicated on achieving $125 million to $130 million in annualized revenue. Revenue guidance for 2026 was revised to $100 million to $115 million to reflect conservative timing assumptions for large VDR deals and government contract delays. The company expects a significant increase in federal government AI adoption over the next several quarters, with a current public sector pipeline exceeding $200 million. Future growth in the VDR segment is expected to track or exceed the 23% projected CAGR for large language model spending through 2034. Management is in active discussions with debt holders regarding the restructuring of the remaining $45 million in convertible debt to further improve the balance sheet. Implemented a 14% workforce reduction (62 full-time employees) as part of the first phase of a broader 30% relative cost-saving initiative through early 2027. Sunsetting of a legacy SaaS product in Q2 2026 impacted recurring revenue but was strategically necessary as the product had been margin-negative since inception. A one-time $4.5 million severance and transition charge was recorded in Q2, impacting GAAP operating loss but serving as a prerequisite for future margin expansion. The consumption-based nature of VDR revenue introduces quarterly volatility, as individual deal sizes can range from high six figures to mid-seven figures with limited timing visibility. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified the reduction was primarily driven by the Department of War budgetary shifts and a more conservative timing outlook for VDR deals. They emphasized that VDR revenue is not being removed from the forecast, but rather adjusted to better coincide with current visibility levels. CFO Mike Zemetra confirmed active discussions with debt holders are ongoing, with updates expected in the coming months. The company highlighted that current cash is unencumbered by legacy restrictive covenants, providing more flexibility than in the prior year. Management expressed high confidence, noting that the required 11% year-over-year growth is achievable because the necessary investments have already been made. Profitability is highly dependent on the execution of the remaining $3.5 million to $8.5 million in cost cuts and the re-engagement of the DoD project. Securing large agencies like the California Highway Patrol acts as a catalyst for referrals across the state, local, and federal ecosystem. Management noted a crossover effect where state-level wins help accelerate discussions with the Department of Justice and Border Patrol.

This article first appeared on GuruFocus. Revenue: Q2 2026 revenue was $24.3 million, up 20% sequentially from Q1 2026 and up 5% year-over-year. Gross Profit: GAAP gross profit was $14.2 million in Q2 2026, down from $15.7 million in Q2 2025. Gross Margin: GAAP gross margin was 58.5%, down 900 basis points year-over-year; non-GAAP gross margin was 63.7%, down 890 basis points. Operating Loss: Q2 operating loss was $22.1 million, up 16% year-over-year, including $4.5 million in one-time severance and transition costs. Net Loss: Net loss was $22.2 million, a 16% year-over-year improvement; excluding restructuring charges, net loss would have been approximately $17.7 million. Non-GAAP Net Loss: Non-GAAP net loss was $9.95 million, compared to $8.4 million in Q2 2025. Annualized Cost Reductions: Executed $11.3 million in annualized cost reductions to date, targeting $15 million to $20 million by end of fiscal 2026. Cash Position: Held $12.7 million in cash and restricted cash as of June 30, 2026, down from $27.7 million at December 31, 2025. Debt: Total debt outstanding was approximately $45 million at June 30, 2026, down from approximately $130 million at June 30, 2025. Annual Recurring Revenue (ARR): ARR was $62 million, up slightly from $61.9 million in Q2 2025. New Bookings: New bookings were $13.9 million, down slightly year-over-year. Fiscal 2026 Guidance: Revenue guidance revised to between $100 million and $115 million; non-GAAP net loss expected between $22 million and $32 million. Warning! GuruFocus has detected 7 Warning Signs with VERI. Is VERI fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue grew 20% sequentially and 5% year-over-year, driven by strong VDR and licensing services. Executed $11.3 million in annualized cost reductions, with plans to reach $15-$20 million by end of 2026. Closed several of the largest individual VDR deals in Q2, with a near-term pipeline of over $65 million. Launched new AI products (Veritone Assess, Document Redaction) and secured key public sector contracts, including California Highway Patrol. Reduced total debt by $85 million year-over-year, lowering annualized debt carry costs by over $13 million. Revenue slightly missed expectations due to delayed public sector budgets from the DoD, impacted by the Iran conflict. Lowered full-year 2026 revenue guidance to $100-$115 million, reflecting reduced VDR and public sector contributions. Non-GAAP gross margin declined 890 basis points year-over-year to 63.7%, due to revenue mix. Cash and restricted cash decreased to $12.7 million from $27.7 million at end of 2025, with net cash outflows from operations of $22.1 million. Customer count declined 8% year-over-year, with continued churn in smaller Broadbean customers due to a challenging hiring market. Q: Can you help us dimensionalize how much of the revenue guidance adjustment was due to VDR versus other factors, and is there still VDR revenue expected in the back half of the year?A: Ryan Steelberg (CEO): The adjustment is a combination of both, not removing VDR entirely. We brought down the expected contributions primarily from the Department of War/Federal sector and elements of VDR due to timing delays. We remain extremely bullish on VDR but felt it prudent to align the guide with our visibility. Mike Zemetra (CFO) clarified that there will still be VDR revenue in the back half of the year. Q: What is your confidence level in achieving breakeven profitability in early 2027, given the dynamics of revenue growth and cost-cutting?A: Mike Zemetra (CFO): With modest revenue growth of $125 million to $130 million (approximately 11% year-over-year growth) and executing the remaining $3.5 million to $8.5 million of cost reductions in the back half of 2026, that should be sufficient to achieve breakeven for the full year. Some of this depends on execution and re-engagement with the Department of War, but the cost-cutting measures are largely within our control. Q: Have the recent public sector wins, like the California Highway Patrol (CHP), driven an uptick in interest from other public sector organizations?A: Ryan Steelberg (CEO): Absolutely. It's a relatively small industry, and landing material agencies at state, local, or federal levels creates a ripple and referral effect across the ecosystem. Getting deals done, publicly announced, and having happy customers using mission-critical software is a catalyst. We expect these recent awards to contribute materially to bookings and revenue in 2027. Q: Regarding the $45 million in convertible debt, can you provide more detail on the timing of a potential restructuring update?A: Mike Zemetra (CFO): We are in active discussions with the debt holders and hope to have news over the coming month or months. It's top of mind and we are focused on it. Q: Given the revenue reduction, the net loss improvement seems strong. Is the cost action fully seasoned, or are there other factors to consider?A: Mike Zemetra (CFO): It's a combination of the cost reductions already implemented and more coming. Additionally, VDR has lower margins than some of our SaaS products, so the revenue reduction doesn't have a one-to-one correlation with net loss improvement. Q: Can you break down the revenue guidance adjustment into specific buckets (VDR vs. other segments)?A: Mike Zemetra (CFO): We can't break that up specifically. Ryan Steelberg (CEO) added that the main drivers for the pullback are primarily the Department of War/Federal sector and bringing down slightly the contributions from VDR in 2026. Q: How does the recent momentum in public sector wins help with discussions and pipeline growth?A: Ryan Steelberg (CEO): Every win is important, and material agencies are crucial. There is a crossover between state, local, and federal initiatives (e.g., with the Department of Justice and Border Patrol). We are incredibly bullish on the public sector business both domestically and internationally, and we expect to see material contributions to bookings and revenue in 2027 from recent awards. Q: What are the key risks to your revenue projections for the rest of 2026 and into 2027?A: Mike Zemetra (CFO): The key risks are the consumption-based nature of VDR revenue and the timing of government-based contracts and decision-making. VDR deal timing is typically only visible two to three months in advance, and government decisions can be delayed, as seen with the DoD budgetary shifts due to the Iran conflict. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Veritone, Inc.? Here are five stocks we like better. Revenue rose to $24.3 million in Q2 2026, up 20% sequentially and 5% year over year, driven by Veritone Data Refinery and licensing services. Growth was partly offset by delayed public-sector funding and weaker hiring-market demand. Veritone has implemented about $11.3 million in annualized savings and is targeting $15 million to $20 million by the end of 2026, with break-even profitability targeted for fiscal 2027. The company ended the quarter with $12.7 million in cash and restricted cash and about $45 million in debt. The company updated its 2026 outlook to $100 million–$150 million in revenue and a non-GAAP net loss of $22 million–$32 million. Its VDR pipeline exceeds $65 million, while the public-sector pipeline remains above $200 million, though some opportunities may shift into 2027. Veritone (NASDAQ:VERI) reported second-quarter 2026 revenue of $24.3 million, up 20% sequentially and 5% from a year earlier, as growth in its Veritone Data Refinery, or VDR, and licensing services offset pressure in hiring and public-sector revenue. Chief Executive Officer Ryan Steelberg said the company continued to execute restructuring and cost-reduction initiatives while launching new artificial intelligence products and expanding its sales pipeline. Veritone has implemented actions representing approximately $11.3 million in annualized savings, including workforce reductions and lower non-payroll expenses, he said. → Lumentum Just Delivered the AI Growth Investors Wanted The company is targeting total annualized cost reductions of $15 million to $20 million by the end of 2026. Steelberg said Veritone intends to continue identifying efficiencies into 2027, with a goal of realizing up to 30% in relative total savings through the first part of that year. The company is targeting break-even profitability in fiscal 2027. Chief Financial Officer Mike Zemetra said second-quarter revenue increased $4 million from the first quarter, driven by VDR and licensing services, which together rose 40% sequentially. Managed services also increased $1 million from the prior-year quarter, led by representation and licensing services. → Joby’s Defense Pivot Accelerates With $500M Resonant Sciences Deal However, Zemetra said results came in slightly below expectations due largely to delayed public-sector funding. He attributed the decline in public-sector revenue from a year earlier to a delayed Department of Defense contract extension, which he said resulted from temporary budget shifts toward the conflict in Iran. Veritone remains engaged with the Department of Defense and expects funding for the project could be approved in the second half of 2026 or the first half of 2027, depending on the status of the conflict, Zemetra said. → Ryman Checks Into a $1.38B Hospitality Upgrade The company also said some larger hyperscaler VDR transactions remained under review and had not been fully processed during the quarter. Veritone has all major hyperscalers under contract and reported a near-term VDR sales pipeline and bookings opportunity exceeding $65 million, including more than $15 million in active opportunities that could close in the third or fourth quarter. Steelberg said a single incremental order from a signed hyperscaler or foundation-model developer could represent millions of dollars in quarterly margin. He added that Veritone is progressing with its migration to Oracle, with initial storage payloads expected to begin moving during the current month. Once relevant workloads are migrated, the company expects compute savings of 20% or more. During the quarter, Veritone launched Veritone Assess, an agentic AI-powered data-analysis product, and Document Redaction, which is intended to automate the removal of sensitive information from documents. Steelberg said the company has already closed several Document Redaction deals and plans to make the product generally available during the third quarter. Veritone also secured a multiyear contract with the California Highway Patrol for Veritone Redact, which will be used to automate redaction of sensitive information in digital-evidence datasets. The company added new channel partners, including MCCi and JustFOIA, for redaction offerings, and said it signed a five-year agreement with a Washington state agency. Internationally, Veritone said it concluded an agreement with the U.K. Department for Work and Pensions and was down-selected for a countrywide U.K. procurement framework. Zemetra said Veritone’s public-sector pipeline remains above $200 million, though some potential opportunities are more likely to affect fiscal 2027 than 2026. Veritone’s hiring division, rebranded as Broadbean by Veritone, managed more than 7.6 million jobs annually and generated 132 million candidate engagements, Steelberg said. The division introduced its Job Acceleration feature in May, allowing recruiters to put urgent roles into a dedicated campaign with separate budgets. Broadbean recorded 76 new business wins during the quarter. Veritone also said it signed as a partner in SAP’s PartnerEdge Build program, continued integrations with Oracle HCM, and closed seven new Workday deals. Year to date, the company reported $1.3 million across 33 joint Workday wins. Still, Zemetra said hiring revenue declined from a year ago, principally due to lower consumption-based revenue from one of the company’s largest hiring platforms and a challenging hiring market. Veritone expects the pressure on smaller customers and hiring demand to continue through the second half of 2026. GAAP gross profit was $14.2 million, compared with $15.7 million a year earlier, while GAAP gross margin declined to 58.5% from 67.5%. The company said the decline reflected revenue mix, including VDR revenue, which carries lower margins than some software-as-a-service offerings. Veritone reported an operating loss of $22 million, compared with an operating loss of $18.9 million in the prior-year quarter. The result included $4.5 million of one-time severance and transition costs related to the restructuring. Net loss improved to $22.2 million from $26.5 million a year earlier, aided by lower interest expense after the company retired its senior secured debt in November 2025. As of June 30, Veritone held $12.7 million in cash and restricted cash and had approximately $45 million of debt outstanding, compared with about $130 million of debt a year earlier. The company raised net proceeds of approximately $9.4 million through its at-the-market equity program during the quarter and had more than $40 million of availability remaining under that program. Veritone updated its full-year 2026 outlook, projecting revenue of $100 million to $150 million and a non-GAAP net loss of $22 million to $32 million. At the revenue midpoint, the outlook represents 17% year-over-year growth, according to the company. Veritone expects gross margins of 60% to 65% for the year. Zemetra said the company expects operating profitability as early as the first half of 2027 if it completes the remaining cost actions and generates modest revenue growth. He said annual revenue of roughly $125 million to $130 million, along with the planned reductions, would support break-even results for the full year. Veritone, Inc (NASDAQ: VERI) is a technology company specializing in artificial intelligence solutions for media, legal, government and enterprise applications. Its flagship offering, aiWARE™, is a cloud-based operating system that orchestrates and automates an ecosystem of machine learning models to transform unstructured data—such as audio, video and text—into actionable intelligence. By providing a modular AI environment, Veritone enables organizations to deploy, manage and scale cognitive engines that address diverse use cases from transcription and translation to sentiment analysis and facial recognition. Through aiWARE and its suite of purpose-built applications, the company delivers turnkey solutions for content licensing, media monitoring, eDiscovery, compliance and public safety. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Veritone Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

– Q2 Total Revenue of $24.3 million, up 20% from Q1 2026 and 5% from Q2 2025 – – Annual Recurring Revenue (ARR) of $62.0 million, up modestly year over year – – Completed first phase of restructuring, delivering $11.3 million in annualized cost reductions, or approximately 11% of annual Operating Expenses as compared to the trailing 12 months ended June 30, 2026 – – Targeting additional cost reductions of $3.5 million to $8.5 million by year-end 2026, representing total annualized Operating Expense reductions of approximately 15% to 20%, with further reductions planned for 2027 – IRVINE, Calif., August 13, 2026--(BUSINESS WIRE)--Veritone, Inc. (NASDAQ: VERI) ("Veritone" or the "Company"), a leader in building enterprise AI solutions, today announced results for the second quarter ended June 30, 2026. "During the second quarter, we executed decisively against our strategic priorities, completing the first phase of our restructuring and cost initiatives while continuing to build strong momentum across our highest-growth opportunities," said Ryan Steelberg, President and Chief Executive Officer of Veritone. "We are converting VDR opportunities into large commercial deployments and expanding our public sector footprint while meaningfully lowering our operating cost structure and continuing to invest in our highest-growth opportunities. With additional cost reduction actions planned through year-end and into 2027, and a strong pipeline ahead, we believe Veritone is strongly positioned to achieve operating profitability as early as the first half of 2027." Second Quarter 2026 Financial Highlights Revenue of $24.3 million, an increase of $1.1 million, or 4.6%, compared to Q2 2025. Annual Recurring Revenue (ARR) of $62.0 million, up slightly from Q2 2025. Software Products and Services revenues of $16.7 million, an increase of $0.1 million, or 0.5%, year over year. Managed Services revenue of $7.5 million, an increase of $1.0 million, or 15.2%, year over year. GAAP gross profit of $14.2 million, a decrease of $1.5 million, or 9.4%, year over year; GAAP gross margin of 58.5% as compared to 67.5% in Q2 2025, largely driven by the higher mix of lower margin revenue. Non-GAAP gross profit of $15.5 million, a decrease of $1.4 million, or 8.2% year over year; non-GAAP gross margin of 63.7% as compared to 72.6% in Q2 2025, largely driven by the higher mix of lower margin revenue. Operating loss of $22.1 million, an increase of $3.1 million, or 16.4%, year over year driven primarily by $4.5 million in restructuring expenses in Q2 2026. Net loss of $22.2 million, an improvement of $4.3 million, or 16.4%, year over year driven principally from lower interest expense. Non-GAAP net loss of $10.0 million, an increase of $1.6 million, or 18.4%, year-over-year principally driven by a decline in year over year Non-GAAP Gross Profit due to the mix of revenue in Q2 2026 as compared to Q2 2025. Year to Date 2026 Financial Highlights Revenue of $44.5 million, a decrease of $1.1 million, or 2.5%, year over year. Software Products and Services revenues of $30.5 million, a decrease of $0.6 million, or 1.9%, year over year. Managed Services revenue of $14.0 million, a decrease of $0.5 million, or 3.7%, year over year. GAAP gross profit of $26.6 million, a decrease of $2.8 million, or 9.4%, year over year; GAAP gross margin of 59.8% as compared to 64.3% for the six months ended June 30, 2025, largely driven by the higher mix of lower margin revenue. Non-GAAP gross profit of $29.2 million, a decrease of $2.3 million, or 7.3% year over year; non-GAAP gross margin of 65.5% as compared to 68.9% for the six months ended June 30, 2025, largely driven by the higher mix of lower margin revenue. Operating loss of $41.6 million, an increase of $0.9 million, or 2.2%, year over year driven primarily by $4.5 million in restructuring expenses in Q2 2026. Net loss of $41.7 million, an improvement of $4.7 million, or 10.1%, year over year driven principally from lower interest expense. Non-GAAP net loss of $21.8 million, an increase of $2.3 million, or 11.8%, year-over-year principally driven by a decline in year over year Non-GAAP Gross Profit due to the mix of revenue for the six months ended June 30, 2026 as compared to 2025. About Our Total New Bookings and Sales Pipeline Our total new bookings 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 (e.g., fees for cognitive processing, storage, professional services and other variable services). Our sales pipeline represents revenue we expect to receive based on the total fees payable during the full contract term for contracts that we believe have a high probability of closing in the next three to twelve months. We include in our sales pipeline fees payable during any cancellable portion and an estimate of license fees that may fluctuate over the term and we do not include any variable fees under the contract (e.g., fees for cognitive processing, storage, professional services and other variable services) and any fees payable after contract renewals or extensions that are at the discretion of our customer. Many of our contracts require us to provide services over more than one year and may include professional fees required to enable our technology in certain environments we do not host or have direct control over. In some cases, our customers may have the ability to terminate our agreements on short notice and our pipeline does not consider the potential impact of any early termination. No assurance can be given that we will ultimately realize our full sales pipeline. Business Highlights Joined the Department of Energy’s Project Genesis Consortium to help advance United States’ sovereign AI and scientific advancement. Secured a multi-year contract with the California Highway Patrol, the largest state police agency in the United States, for Veritone Redact. Down-selected as part of an exclusive group of technology firms and vendors for a large country-wide UK procurement framework. Announced a multi-year Pac-12 agreement as the exclusive global licensing partner leveraging Veritone’s Digital Media Hub (DMH). Executed multi-million dollar VDR orders with existing major hyperscalers in Q2 2026. Broadbean by Veritone secured 76 new business wins and now manages 7.6+ million job listings annually, generating 132 million candidate engagements while achieving several critical milestones with SAP, Oracle and Workday. Closed over 200 commercial enterprise software and licensing contracts including agreements with CNN and Sony Pictures Entertainment. Closed over 100 public sector contracts from new and existing customers across federal, state, and local agencies. Completed first phase of restructuring, delivering $11.3 million in annualized cost reductions, or approximately 11% of annual operating expenses as compared to the trailing 12 months ended June 30, 2026. Targeting additional cost reductions of $3.5 Million to $8.5 million by year-end 2026, representing total annualized operating expense reductions of approximately 15% to 20%, with further reductions planned for 2027. Financial Results for Three Months Ended June 30, 2026 Delivered second quarter revenue of $24.3 million, an increase of $1.1 million from $23.2 million in the second quarter of 2025 driven by increases in Software Products & Services and Managed Services revenues. Software Products & Services revenue of $16.7 million increased slightly year over year, principally due to an increase in revenue generated from our aiWARE solutions, offset by a decline in hire revenue. Commercial Enterprise Managed Services increased $1.0 million, or 15.2% year over year, driven by increases in representation and content licensing services. GAAP gross profit of $14.2 million decreased by $1.5 million from $15.7 million in the second quarter of 2025 driven by the higher mix of lower margin revenue as compared to the prior year period, with GAAP gross margin of 58.5% decreasing 901 bps from 67.5% in the second quarter of 2025. Non-GAAP gross margin was 63.7% as compared to 72.6% in the second quarter of 2025, a decrease of 891 bps. Operating loss of $22.1 million an increase of $3.1 million, or 16.4%, from a loss of $19.0 million in Q2 2025, principally driven by an increase of $4.5 million in restructuring expenses as a result of the restructuring plan initiated by the Company in June 2026, which is principally comprised of severance and transition expenses associated with planned reductions in employees. Net loss of $22.2 million decreased from a net loss of $26.5 million for the second quarter of 2025 principally due to a reduction in interest expense of $3.2 million as the result of the retirement of the Company’s senior secured term loan in November 2025. Non-GAAP net loss of $10.0 million increased by 18.4%, or $1.6 million, from a net loss of $8.4 million for the second quarter of 2025 primarily due to the decrease in Non-GAAP Gross Profit. Total Software Product & Services Customers of 2,829 as of June 30, 2026 decreased compared to June 30, 2025. This decline was principally due to fewer consumption-based customers across our Talent Acquisition solutions. Annual Recurring Revenue of $62.0 million increased slightly over Q2 2025. Financial Results for Six Months Ended June 30, 2026 During the six months ended June 30, 2026 delivered revenue of $44.5 million, down $1.1 million from $45.7 million driven by slight declines in Software Products & Services and Managed Services revenues. Software Products & Services revenue of $30.5 million decreased by $0.6 million, or 1.9%, year over year, principally due to a decline in revenue generated from our Talent Acquisition solutions. Managed Services declined $0.5 million, or 3.7% year over year, principally driven by declines in representation services led by lower influencer-based advertising revenue as a result of the more challenging macro environment, along with a decrease in content licensing. GAAP gross profit of $26.6 million decreased by $2.8 million from $29.4 million in the during the six months ended June 30, 2025 driven by the decrease in revenue compared to the prior year period. GAAP gross margin of 59.8% decreased 454 bps from 64.3% during the six months ended June 30, 2025 as a result of year-over-year increases in lower gross margin revenue from consumption-based revenue. Non-GAAP gross margin was 65.5% as compared to 68.9% during the six months ended June 30, 2025, a decrease of 342 bps driven by year-over-year decrease in depreciation within cost of revenue. Operating loss of $41.6 million increased by $0.9 million, or 2.2%, from a loss of $40.6 million during the six months ended June 30, 2025, was principally driven by expenses incurred as a result of the restructuring initiated by the Company in June 2026. Net loss of $41.7 million decreased from a net loss of $46.4 million during the six months ended June 30, 2025, was principally driven by a reduction in interest expense of $5.6 million as the result of the retirement of the Company’s senior secured term loan in November 2025. Non-GAAP net loss of $21.8 million increased by 11.8%, or $2.3 million, from a net loss of $19.5 million during the six months ended June 30, 2025, was principally driven by a year-over-year decrease in Non-GAAP gross profit as a result of decreases in sales of higher margin products. Business Outlook Full Year 2026 Veritone financial outlook for fiscal year 2026: Revenue is expected to be in the range of $100 million to $115 million, as compared to $92.6 million for fiscal 2025, a 16% implied annual increase at the midpoint. Non-GAAP net loss is expected to be in the range of $22.0 million to $32.0 million, as compared to non-GAAP net loss of $40.8 million for fiscal 2025, a 34% implied annual decrease at the midpoint. Conference Call Veritone will hold a conference call on August 13, 2026, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss its second quarter results, provide an update on the business and conduct a question-and-answer session. To participate, please join the conference call or live audio webcast links or use the following dial-in numbers and ask to be connected to the Veritone earnings conference call. To avoid any delays, please join at least fifteen minutes prior to the start of the call. Conference Call Live Audio Webcast Domestic Call Number: (844) 750-4897 International Call Number: (412) 317-5293 A replay of the conference call can be accessed one hour after the end of the conference call through August 20, 2026. The full webcast replay will be available through August 13, 2027. To access the earnings webcast replay please visit the Veritone Investor Relations website. Domestic Replay Number: (855) 669-9658 International Replay Number: (412) 317-0088 Replay Access Code: 2690799 About the Presentation of Supplemental Non-GAAP Financial Information and Key Performance Indicators 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, including Non-GAAP net income (loss), Non-GAAP gross profit, and Non-GAAP gross margin. The Company also provides key performance indicators (KPI), including Total Software Products & Services Customers, Annual Recurring Revenue (SaaS), Annual Recurring Revenue (Consumption), Total New Bookings and Gross Revenue Retention. Non-GAAP net income (loss) is the Company’s net income (loss), adjusted to exclude interest expense, net, income taxes, depreciation and amortization, stock-based compensation, change in fair value of earnout receivable, contingent purchase compensation expense, foreign currency impact and other, acquisition and due diligence costs, severance and executive transition costs, professional fees and lender consent fees. Non-GAAP gross profit is the Company’s gross profit with adjustments to add back depreciation and amortization related to cost of revenue. Non-GAAP gross margin is defined as non-GAAP gross profit divided by revenue. Reconciliations of each of these non-GAAP financial measures to the most closely comparable GAAP financial measure, including a breakdown of the excluded items noted above are included following the financial statements attached to this news release. These non-GAAP financial measures are not calculated and presented in accordance with GAAP and should not be considered as an alternative to net income (loss), operating income (loss), gross profit, gross margin 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 Company has provided these non-GAAP financial measures and KPI 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, budgeting and measuring annual bonus compensation targets for executive personnel, including the Company’s named executive officers. Non-GAAP net income (loss) provides management and investors consistency and comparability with the Company’s past financial performance and facilitates period-to-period comparisons of operations, as it eliminates the effect of items that are often unrelated to overall operating performance. Non-GAAP gross profit and non-GAAP gross margin allow investors and the Company’s management team to analyze the Company’s operating performance by excluding expenses that are not directly related to the cost of providing goods and services. Other companies (including the Company’s competitors) may define these non-GAAP financial measures differently. The non-GAAP financial measures may not be indicative of the historical operating results of Veritone 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 as reported in accordance with GAAP. About Veritone Veritone (NASDAQ: VERI) is a leader in enterprise artificial intelligence (AI) software and solutions that transform unstructured data into actionable intelligence and dynamic workflows. By empowering organizations in both the commercial and public sectors, Veritone enables users to increase operational efficiency, accelerate decision-making, and drive profitability. The company’s proprietary AI operating system, aiWARE™, orchestrates a diverse ecosystem of machine learning models and intelligent applications to process and tokenize data—including video, audio, and images—powering sophisticated automation and measurable business outcomes. Committed to the development of ethical AI, Veritone blends human expertise with cutting-edge technology to help customers navigate a complex digital landscape while helping to protect intellectual property and enabling sustainable business growth. For more information, visit Veritone.com. Safe Harbor Statement This news release contains forward-looking statements, including without limitation, statements regarding expected total revenue and non-GAAP net loss for the full year 2026, the expected achievement amount and timing of operating expense reductions and operating profitability, the expected growth of Veritone Data Refinery, the expected growth of our public sector offerings, our customer transaction pipelines and the estimated values thereof, and the expected benefits of strategic partnerships. In addition, words such as "may," "will," "expect," "believe," "anticipate," "intend," "plan," "outlook," "should," "could," "estimate," "confident" 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, expectations, beliefs and information. As such, our 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: our ability to continue as a going concern, including our ability to repay our 1.75% convertible senior notes due in November 2026 prior to their scheduled maturity; our ability to expand our aiWARE SaaS business; declines or limited growth in the market for AI-based software applications and concerns over the use of AI that may hinder the adoption of AI technologies; our requirements for additional capital and liquidity to support our operations, our business growth, and repay or refinance our Convertible Notes prior to their scheduled maturity and the availability of such capital on acceptable terms, if at all; our reliance upon a limited number of key customers for a significant portion of our revenue, and the corresponding risk of declines in key customers’ usage of our products and other offerings; our identification of existing material weaknesses in our internal control over financial reporting and plans for remediation; fluctuations in our results over time; the impact of seasonality on our business; our ability to manage our growth, including through acquisitions and expansion into international markets; our ability to enhance our existing products and introduce new products that achieve market acceptance and keep pace with technological developments; our expectations with respect to the future performance of our products, such as the Intelligent Digital Evidence Management System and Veritone Data Refinery, including as drivers of future growth; actions by our competitors, partners and others that may block us from using third party technologies in our aiWARE platform, offering it for free to the public or making it cost prohibitive to continue to incorporate such technologies into our platform; interruptions or performance problems with our technology and infrastructure, or that of third parties with whom we work; the impact of the continuing economic disruption caused by macroeconomic and geopolitical factors, including lingering economic disruption caused by international conflicts, financial instability, inflation and the responses by central banking authorities to control inflation, monetary supply shifts, high interest rates, the imposition of tariffs, trade tensions, and global trade disputes, and the threat of recession in the United States and around the world on our business and our existing and potential customers; and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Certain of these judgments and risks are discussed in more detail in our most recently filed Annual Report on Form 10-K, and our Quarterly Reports on Form 10-Q and other periodic reports filed from time to time 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 us or any other person that our objectives or plans will be achieved. The forward-looking statements contained herein reflect our beliefs, estimates and predictions as of the date hereof, and we undertake 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260813057510/en/ Contacts Company: Mike ZemetraChief Financial OfficerVeritone, [email protected] Investor Relations: Cate GoldsmithProsek [email protected]

This article first appeared on GuruFocus. Q1 Revenue: $20.3 million, down $2.2 million from Q1 2025. Managed Services Revenue: Decreased by $1.5 million or 19.2% year-over-year. ARR (Annual Recurring Revenue): $64.2 million, up 9% from Q1 2025. Public Sector Growth: 69% year-over-year increase. Q1 GAAP Gross Profit: $12.7 million, compared to $13.7 million in Q1 2025. Q1 GAAP Gross Margin: 62.7%, up from 61.1% in Q1 2025. Q1 Non-GAAP Gross Margin: 67.7%, up from 65.1% in Q1 2025. Q1 Operating Loss: $19.4 million, improved by $2.2 million year-over-year. Net Loss: $19.5 million, slightly improved from $19.9 million in Q1 2025. Cash and Restricted Cash: $15.4 million as of March 31, 2026. Total Debt Outstanding: Approximately $45 million as of March 31, 2026. Full-Year 2026 Revenue Guidance: $130 million to $145 million. Q2 2026 Revenue Projection: $25 million to over $30 million. Warning! GuruFocus has detected 7 Warning Signs with VERI. Is VERI fairly valued? Test your thesis with our free DCF calculator. Release Date: May 12, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Veritone Inc (NASDAQ:VERI) announced new strategic partnerships with major companies like Google, NVIDIA, and Oracle, enhancing its market position and infrastructure scalability. The company's Veritone Data Refinery (VDR) pipeline has expanded significantly, with a near-term pipeline of nearly $70 million, supporting its full-year revenue guidance. Veritone Inc (NASDAQ:VERI) is actively lowering its breakeven floor by approximately 30%, improving operating efficiency and paving a clear path to profitability by Q4 2026. The public sector division experienced a 69% year-over-year growth, driven by significant demand across federal and state markets. The company is expanding its addressable market by reimagining its vertical applications to be more accessible to organizations of all sizes, leveraging its AI technologies and expertise. Q1 2026 revenue was down $2.2 million from the previous year, primarily due to a decline in Managed Services. Several large VDR deals were delayed, impacting Q1 results, although they are expected to close in subsequent quarters. The company experienced a decline in software products and services customers, down 8% year-over-year, due to macroeconomic challenges affecting smaller customers. Veritone Inc (NASDAQ:VERI) reported a net loss of $19.5 million for Q1 2026, although slightly improved from the previous year. Cash and restricted cash decreased significantly from $27.7 million at the end of 2025 to $15.4 million by March 31, 2026, reflecting ongoing cash outflows. Q: Can you provide more details on the Expanded Digital Media Hub opportunity, including targeted verticals and launch timing? A: Ryan Steelberg, CEO, explained that the Digital Media Hub, initially designed for large media companies, will soon offer a self-service onboarding solution for smaller businesses and individual creators. This expansion aims to cater to a broader range of enterprises that generate unstructured audio and video data. The launch is expected in the next couple of months, not quarters. Q: What is the timeline for integrating Oracle Cloud Infrastructure (OCI), and how will it be leveraged as a competitive advantage? A: Ryan Steelberg stated that the integration with Oracle is progressing well, with major payloads expected to move to Oracle Cloud by early August. The collaboration will allow Veritone to offer cost savings to customers, enhancing competitiveness. Co-selling efforts with Oracle are already underway, targeting sectors like media, entertainment, sports, and the public sector. Q: Regarding the revenue guidance of $130 million to $145 million for the year, what are the key variables that could lead to hitting the high end of this range? A: Ryan Steelberg highlighted that the Veritone Data Refinery (VDR) will be the primary driver, supported by recent deals with Google and NVIDIA. The public sector, particularly with the Department of Defense and Air Force OSI, will also contribute significantly. These factors are expected to help achieve or exceed the high end of the guidance. Q: In the public sector, how does budget allocation impact the timeline for closing deals, especially with U.S. Federal and state/local customers? A: Ryan Steelberg explained that for state and local law enforcement, readiness and relationship-building are crucial. Veritone's ability to offer modular solutions allows them to fit into existing budgets without needing full-stack purchases. For federal customers, aligning with mission leaders and participating in RFIs and RFPs is essential, with a focus on building personal relationships. Q: How is Veritone positioned to capitalize on the AI training data market, and what are the growth expectations for the public sector? A: Michael Zemetra, CFO, noted that Veritone is well-positioned to exploit the growing AI training data market, with a near-term VDR sales pipeline of over $68 million. The public sector is expected to grow 60% to 70% year-over-year, driven by expanded offerings from existing federal contracts and new international deals. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

– Q1 Total Revenue of $20.3 million, including a 69% increase in Public Sector Revenue year over year – – Annual Recurring Revenue (ARR) of $64.2 million, up 9.4% year over year – – Veritone Data Refinery (VDR) exited Q1 2026 with Qualified Bookings and Near-Term Pipeline in excess of $68.0 million, an over 150% increase from the mid-2025 estimate and up 500% year over year – – Additional leading hyperscalers now under contract for VDR, with the Q1 signings of Google and NVIDIA – – Completed multi-year Strategic Agreement with Oracle to accelerate the deployment of enterprise and generative AI – – Announced targeted 30% Operating Expense reduction initiative, reinforcing forecasted operating profitability as early as Q4 2026 – IRVINE, Calif., May 12, 2026--(BUSINESS WIRE)--Veritone, Inc. (NASDAQ: VERI) ("Veritone" or the "Company"), a leader in enterprise AI and data solutions, today announced results for the first quarter ended March 31, 2026. "During the first quarter, we accelerated the commercialization of Veritone Data Refinery, expanded public sector adoption, and further strengthened the foundation of our AI platform," said Ryan Steelberg, President and Chief Executive Officer of Veritone. "With additional leading hyperscalers now under contract, supporting a large and growing VDR pipeline with future support and scale through the Oracle partnership, we believe Veritone is uniquely positioned to support next-generation AI training and enterprise AI deployment at scale. At the same time, we are taking proactive measures to streamline operations and reduce our cost structure through restructuring and AI initiatives, as early as the end of Q2 2026, which reinforce our forecasted operating profitability as early as Q4 2026." First Quarter 2026 Financial Highlights Revenue of $20.3 million, a decrease of $2.2 million, or 9.8%, compared to Q1 2025. Annual Recurring Revenue (ARR) of $64.2 million, an increase of $5.5 million, or 9.4%, compared to Q1 2025 with notable 50% growth in ARR from consumption-based customers. Software Products and Services revenues of $13.8 million, a decrease of $0.7 million, or 4.6%, year over year. Excluding Veritone Hire revenue, Software Products and Services remained flat. Managed Services revenue of $6.4 million, a decrease of $1.5 million, or 19.2%, year over year. GAAP gross profit of $12.4 million, a decrease of $1.3 million, or 9.4%, year over year; GAAP gross margin of 61.4% as compared to 61.1% in Q1 2025, largely driven by the higher mix of higher margin revenue. Non-GAAP gross profit of $13.7 million, a decrease of $0.9 million, or 6.3% year over year; non-GAAP gross margin of 67.7% as compared to 65.1% in Q1 2025. Operating loss of $19.4 million, a decrease of $2.2 million, or 10.2%, year over year. Net loss of $19.5 million, a decrease of $0.4 million, or 1.8%, year over year. Excluding a one-time gain of $3.7 million from the non-cash fair value assessment of an earnout in Q1 2025, net loss would have improved $4.1 million or over 20% as compared to Q1 2025. Non-GAAP net loss of $11.9 million, an increase of $0.8 million, or 6.8%, year-over-year principally driven by a decline in capitalized internally developed software. About Our Total New Bookings and Sales Pipeline Our total new bookings 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 (e.g., fees for cognitive processing, storage, professional services and other variable services). Our sales pipeline represents revenue we expect to receive based on the total fees payable during the full contract term for contracts that we believe have a high probability of closing in the next three to twelve months. We include in our sales pipeline fees payable during any cancellable portion and an estimate of license fees that may fluctuate over the term and we do not include any variable fees under the contract (e.g., fees for cognitive processing, storage, professional services and other variable services) and any fees payable after contract renewals or extensions that are at the discretion of our customer. Many of our contracts require us to provide services over more than one year and may include professional fees required to enable our technology in certain environments we do not host or have direct control over. In some cases, our customers may have the ability to terminate our agreements on short notice and our pipeline does not consider the potential impact of any early termination. No assurance can be given that we will ultimately realize our full sales pipeline. Business Highlights Announced a multi-year strategic agreement with Oracle to accelerate the deployment of enterprise AI and generative AI, establishing Oracle Cloud Infrastructure (OCI) as a cornerstone of Veritone’s next generation of AI solutions for the Commercial, Public Sector, and Veritone Data Refinery (VDR) markets. Launched Veritone Data Marketplace (VDM), accelerating the industry’s shift from scraped data to ethically sourced, multi-modal datasets and helping advance AI innovation while enabling rightsholders to be compensated for their contributions. Advanced public sector deployments with the Defense Logistics Agency, which is currently live with aiWARE, and through the Air Force’s intent to extend and expand aiWARE contracts and deployments. Announced multi-year content licensing agreement with The Washington Post to enable greater access to content from its extensive archive covering politics, culture, health, science, and interviews with prominent newsmakers. Broadbean by Veritone appointed lead contracting authority for the UK Department for Work and Pensions’ (DPW) Synergy cluster of four government departments to streamline recruitment and enhance talent acquisition efforts. Closed 224 enterprise software and licensing contracts including agreements with CNN, the Smithsonian, Geico, the President Barack Obama Foundation, Titleist, Tubi, Game Show Network, and Bauer Media. Closed 172 contracts from new and existing customers across federal, state, and local agencies, such as a major U.S. university, a top-5 Sheriff’s department, and several major U.S. city police agencies and state highway patrols, underscoring the critical nature of our AI offerings in the Public Sector and the strength of our customer relationships. Financial Results for Three Months Ended March 31, 2026 Delivered first quarter revenue of $20.3 million, down $2.2 million from $22.5 million in the first quarter of 2025 driven by declines in Software Products & Services and Managed Services revenues. Software Products & Services revenue of $13.8 million decreased by $0.7 million, or 4.6%, year over year, principally due to a decline in revenue generated from our Talent Acquisition solutions. Commercial Enterprise Managed Services declined $1.5 million, or 19.2% year over year, principally driven by declines in representation services led by lower in influencer based advertising revenue as a result of the more challenging macro environment, along with a decrease in content licensing. GAAP gross profit of $12.4 million decreased by $1.3 million from $13.7 million in the first quarter of 2025 driven by the decrease in revenue compared to the prior year period. GAAP gross margin of 61.4% increased 30 bps from 61.1% in the first quarter of 2025 as a result of year-over-year increases in higher gross margin revenue from consumption-based and one-time software revenue. Non-GAAP gross margin was 67.7% as compared to 65.1% in the first quarter of 2025, an increase of 254 bps driven by year-over-year increases in higher gross margin revenue from consumption-based and one-time software revenue. Operating loss of $19.4 million improved by $2.2 million, or 10.2%, from a loss of $21.6 million in Q1 2025, principally driven by a decline in operating expenses and offset by lower gross profit. The decline in operating expenses was principally driven by lower general and administrative expenses, which improved year over year as a result of reductions in personnel, professional fees and debt related expenses year over year, offset by slightly higher sales and marketing and research and development expenses. Net loss of $19.5 million decreased from a net loss of $19.9 million for the first quarter of 2025 principally due to the $2.2 million improvement in operating loss and $2.2 million in less interest expense as the result of the retirement of the Company’s senior secured term loan in November 2025, offset by a one-time non-cash benefit of $3.7 million in Q1 2025 associated with a change in the estimated fair value of the earnout from the October 2024 divestiture of Veritone One. Non-GAAP net loss of $11.9 million increased by 6.8%, or $0.8 million, from a net loss of $11.1 million for the first quarter of 2025 primarily due to less capitalized internal software in Q1 2026 as compared to Q1 2025. Total Software Product & Services Customers of 2,897 as of March 31, 2026 decreased compared to March 31, 2025. This decline was principally due to fewer consumption-based customers across our Talent Acquisition solutions. Annual Recurring Revenue of $64.2 million increased year over year, driven by increases in consumption-based spending. Business Outlook Full Year 2026 Veritone reaffirms its financial outlook for fiscal year 2026: Revenue is expected to be in the range of $130 million to $145 million, as compared to $92.6 million for fiscal 2025, a 48% implied annual increase at the midpoint. Non-GAAP net loss is expected to be in the range of $13.5 million to $22.5 million, as compared to non-GAAP net loss of $40.8 million for fiscal 2025, a 56% implied annual decrease at the midpoint. Conference Call Veritone will hold a conference call on May 12, 2026, at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss its first quarter results, provide an update on the business and conduct a question-and-answer session. To participate, please join the conference call or live audio webcast links or use the following dial-in numbers and ask to be connected to the Veritone earnings conference call. To avoid any delays, please join at least fifteen minutes prior to the start of the call. Conference Call Live Audio Webcast Domestic Call Number: (844) 750-4897 International Call Number: (412) 317-5293 A replay of the conference call can be accessed one hour after the end of the conference call through May 19, 2026. The full webcast replay will be available through May 12, 2027. To access the earnings webcast replay please visit the Veritone Investor Relations website. Domestic Replay Number: (855) 669-9658 International Replay Number: (412) 317-0088 Replay Access Code: 7643312 About the Presentation of Supplemental Non-GAAP Financial Information and Key Performance Indicators 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, including Non-GAAP net income (loss) and Non-GAAP gross profit. The Company also provides key performance indicators (KPI), including annual recurring revenue (ARR), total new bookings, sales pipeline and gross revenue retention. Non-GAAP net income (loss) is the Company’s net income (loss), adjusted to exclude interest expense, net, income taxes, depreciation and amortization, stock-based compensation, change in fair value of earnout receivable, contingent purchase compensation expense, foreign currency impact and other, acquisition and due diligence costs, severance and executive transition costs, and lender consent fees. Non-GAAP gross profit is the Company’s gross profit excluding depreciation and amortization related to cost of revenue. Non-GAAP gross margin is defined as non-GAAP gross profit divided by revenue. Reconciliations of each of these non-GAAP financial measures to the most closely comparable GAAP financial measure, including a breakdown of the excluded items noted above are included following the financial statements attached to this news release. These non-GAAP financial measures are not calculated and presented in accordance with GAAP and should not be considered as an alternative to net income (loss), operating income (loss), gross profit, gross margin 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 Company has provided these non-GAAP financial measures and KPI 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, budgeting and measuring annual bonus compensation targets for executive personnel, including the Company’s named executive officers. Non-GAAP net income (loss) provides management and investors consistency and comparability with the Company’s past financial performance and facilitates period-to-period comparisons of operations, as it eliminates the effect of items that are often unrelated to overall operating performance. Non-GAAP gross profit and non-GAAP gross margin allow investors and the Company’s management team to analyze the Company’s operating performance by excluding expenses that are not directly related to the cost of providing goods and services. Other companies (including the Company’s competitors) may define these non-GAAP financial measures differently. The non-GAAP financial measures may not be indicative of the historical operating results of Veritone 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 as reported in accordance with GAAP. About Veritone Veritone (NASDAQ: VERI) is a leader in enterprise artificial intelligence (AI) software and solutions that transform unstructured data into actionable intelligence and dynamic workflows. By empowering organizations in both the commercial and public sectors, Veritone enables users to increase operational efficiency, accelerate decision-making, and drive profitability. The company’s proprietary AI operating system, aiWARE™, orchestrates a diverse ecosystem of machine learning models and intelligent applications to process and tokenize data—including video, audio, and images—powering sophisticated automation and measurable business outcomes. Committed to the development of ethical AI, Veritone blends human expertise with cutting-edge technology to help customers navigate a complex digital landscape while helping to protect intellectual property and enabling sustainable business growth. For more information, visit Veritone.com. Safe Harbor Statement This news release contains forward-looking statements, including without limitation, statements regarding expected total revenue and non-GAAP net loss for the full year 2026, the expected achievement and timing of operating expense reductions and operating profitability, the expected growth of Veritone Data Refinery, value of and demand for our public sector offerings, expectations that the Air Force will extend and expand aiWARE contracts and deployments, the expected adoption and benefits of Veritone Data Marketplace, customer acquisition, expected trends in customer demand and the strength of our customer relationships, customer transaction pipelines and the estimated values thereof, and the expected benefits of strategic partnerships. In addition, words such as "may," "will," "expect," "believe," "anticipate," "intend," "plan," "outlook," "should," "could," "estimate," "confident" 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, expectations, beliefs and information. As such, our 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: our ability to continue as a going concern, including our ability to repay our 1.75% convertible senior notes due in November 2026 prior to their scheduled maturity; our ability to expand our aiWARE SaaS business; declines or limited growth in the market for AI-based software applications and concerns over the use of AI that may hinder the adoption of AI technologies; our requirements for additional capital and liquidity to support our operations, our business growth, and repay or refinance our Convertible Notes prior to their scheduled maturity and the availability of such capital on acceptable terms, if at all; our reliance upon a limited number of key customers for a significant portion of our revenue, and the corresponding risk of declines in key customers’ usage of our products and other offerings; our identification of existing material weaknesses in our internal control over financial reporting and plans for remediation; fluctuations in our results over time; the impact of seasonality on our business; our ability to manage our growth, including through acquisitions and expansion into international markets; our ability to enhance our existing products and introduce new products that achieve market acceptance and keep pace with technological developments; our expectations with respect to the future performance of our products, such as the Intelligent Digital Evidence Management System and Veritone Data Refinery, including as drivers of future growth; actions by our competitors, partners and others that may block us from using third party technologies in our aiWARE platform, offering it for free to the public or making it cost prohibitive to continue to incorporate such technologies into our platform; interruptions or performance problems with our technology and infrastructure, or that of third parties with whom we work; the impact of the continuing economic disruption caused by macroeconomic and geopolitical factors, including lingering economic disruption caused by international conflicts, financial instability, inflation and the responses by central banking authorities to control inflation, monetary supply shifts, high interest rates, the imposition of tariffs, trade tensions, and global trade disputes, and the threat of recession in the United States and around the world on our business and our existing and potential customers; and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Certain of these judgments and risks are discussed in more detail in our most recently filed Annual Report on Form 10-K, and our Quarterly Reports on Form 10-Q and other periodic reports filed from time to time 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 us or any other person that our objectives or plans will be achieved. The forward-looking statements contained herein reflect our beliefs, estimates and predictions as of the date hereof, and we undertake 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. (1) Other items represent other expenses that are not indicative of our ongoing operations, which, for the three months ended March 31, 2025, comprised of fees paid to the lenders in connection with the limited consent to the Company’s Credit Agreement. Veritone, Inc.Supplemental Financial Information (unaudited) We are providing the following unaudited supplemental financial information as a lookback of prior quarters to explain our recent historical performance.   View source version on businesswire.com: https://www.businesswire.com/news/home/20260511717410/en/ Contacts Company: Mike ZemetraChief Financial OfficerVeritone, [email protected] Investor Relations: Cate GoldsmithProsek [email protected]

Interested in Veritone, Inc.? Here are five stocks we like better. Veritone reaffirmed its full-year 2026 revenue outlook of $130 million to $145 million despite lower Q1 revenue of $20.3 million, with management pointing to strong demand for AI-ready data services, public sector software, and new hyperscaler relationships. AI training data services remain the main growth engine: the VDR pipeline has expanded to nearly $70 million, with Google and NVIDIA signing in Q1 and more than $68 million in near-term VDR sales and bookings. The company is pushing toward profitability by cutting costs and lowering its breakeven point by about 30%, with executives saying Veritone could reach operating profitability as early as Q4 2026. Veritone (NASDAQ:VERI) reported lower first-quarter revenue but reaffirmed its full-year 2026 outlook, citing growing demand for its AI training data services, public sector software and recently expanded relationships with major technology companies. On the company’s first-quarter earnings call, President and Chief Executive Officer Ryan Steelberg said Veritone is positioned at the “intersection” of the AI and data economies through its aiWARE platform, Veritone Data Refinery, or VDR, and its market-specific applications. He said demand is rising from enterprises, governments, content owners, hyperscalers and model developers for high-quality, AI-ready data, especially unstructured audio and video. → Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong Momentum Steelberg said Google and NVIDIA signed with Veritone in the first quarter for VDR data services. He said the company’s near-term VDR pipeline has expanded to nearly $70 million, supporting Veritone’s full-year revenue guidance of $130 million to $145 million. Chief Financial Officer Mike Zemetra said first-quarter revenue was $20.3 million, down $2.2 million from the prior-year period. The decline was driven primarily by managed services, which fell $1.5 million, or 19.2%, year over year. → MercadoLibre Boldly Invests in Growth: Discount Deepens Zemetra said software products and services revenue was relatively flat compared with the prior year, including Broadbean by Veritone, which was slightly down amid a difficult hiring environment. He said first-quarter results were affected by the timing of deals with several large hyperscalers, including Google and NVIDIA, which were signed in mid-quarter rather than earlier. GAAP gross profit was $12.7 million, compared with $13.7 million in the year-ago quarter. GAAP gross margin improved to 62.7% from 61.1% a year earlier. Non-GAAP gross margin was 67.7%, up from 65.1% in the prior-year period. Operating loss improved to $19.4 million from $21.6 million a year earlier. Net loss was $19.5 million, compared with $19.9 million in the first quarter of 2025. Non-GAAP net loss was $11.9 million, compared with $11.1 million a year earlier. Zemetra said annual recurring revenue was $64.2 million, up 9% from $58.7 million in the first quarter of 2025. He said consumption-based ARR increased 50% year over year, while recurring subscription-based SaaS revenue was flat. Total software products and services customers fell 8% year over year to 2,897, which Zemetra attributed primarily to churn among smaller Broadbean customers as the company focuses on larger ARR opportunities. → 3 Ways to Target the Resources Powering AI and Data Centers Veritone said it is taking steps to reduce its breakeven point and improve operating efficiency. Steelberg said the company is “proactively lowering our breakeven floor by approximately 30%” and is not waiting for revenue growth to catch up to its cost structure. Zemetra said Veritone is reevaluating its cost structure and believes it can unlock savings of up to 30% in existing operating expense as early as the end of the second quarter of 2026. He said the effort is intended to improve operating margin and help fund growth investments. Both Steelberg and Zemetra said the company remains on track to reach operating profitability as early as the fourth quarter of 2026. As of March 31, Veritone held $15.4 million of cash and restricted cash, down from $27.7 million at the end of 2025. Zemetra said the company had approximately $45 million of debt outstanding at quarter-end, compared with more than $130 million a year earlier. He said the company’s current cash is unencumbered by restricted debt covenants, unlike in the prior year. Steelberg said VDR is benefiting from demand for AI-ready training datasets and noted the launch of the Veritone Data Marketplace. Zemetra said Veritone has access to partners controlling more than 50 million hours of video datasets and is working to improve the speed and availability of content demanded by VDR customers. Zemetra said Veritone currently has more than $68 million in near-term VDR sales pipeline and bookings, and more than $20 million of active sales pipeline that could close in the second quarter. He said second-quarter revenue could range from $25 million to more than $30 million if larger deals close, with the high end representing more than 25% year-over-year growth. In public sector, Veritone reported 69% year-over-year quarterly growth. Steelberg said demand is increasing across federal, state, local and international markets for the company’s investigative and evidence management tools. He highlighted activity with Air Force OSI, the Defense Logistics Agency, Project Genesis at the Department of Energy, the Department of Homeland Security and multiple foreign agencies. Zemetra said some larger federal deals, including the planned rollout of OSI, experienced delays tied in part to resources and prioritization across the Department of Defense. He said those deals are expected to resume planned rollouts in the second quarter and that public sector growth should become more pronounced in 2027 with expected broader iDEMS deployments across the Department of Defense. Executives emphasized Veritone’s strategic agreement with Oracle, which was announced in the first quarter. Zemetra said the partnership is expected to provide more than 20% savings on compute and non-dilutive cash-based incentives from Oracle over time. He said Oracle’s cloud infrastructure will support aiWARE, VDR, the Veritone Data Marketplace and public sector growth. During the question-and-answer session, Steelberg said Veritone is preparing to move initial storage payloads to Oracle as early as August, followed by compute payloads. He also said the companies have already begun co-selling efforts, including across media, entertainment, sports, news and public sector markets. In commercial enterprise, Steelberg highlighted a collaboration with The Washington Post to unlock and monetize its news archive, an extension with U.S. Soccer, and sports-related work involving NCAA March Madness and the Masters Tournament. He said Veritone closed 224 software and license agreements in the first quarter, including renewals and expansions across sports, media, entertainment and brand licensing. Steelberg also said Veritone plans to expand its Digital Media Hub beyond large media companies by introducing more accessible versions for mid-market businesses, city councils, schools, marketing departments and individual creators. In response to an analyst question, he said the company expects to launch the renewed offering “over the next couple of months.” Veritone maintained its full-year 2026 revenue guidance of $130 million to $145 million, with the midpoint representing 49% year-over-year growth, according to Zemetra. The company expects public sector revenue to grow more than 60% year over year, with the remaining growth primarily from commercial enterprise, especially VDR. Zemetra said Broadbean by Veritone is expected to be slightly down year over year because of the hiring environment, while managed services are expected to rise 10% to 15%. Veritone expects gross margins to fluctuate between 60% and 65% and non-GAAP net loss to range from $13.5 million to $22.5 million. Steelberg closed the call by saying Veritone is “poised for strong disciplined growth” through the rest of 2026 and beyond, citing hyperscaler contracts, the Oracle partnership, public sector momentum and cost optimization efforts. Veritone, Inc (NASDAQ: VERI) is a technology company specializing in artificial intelligence solutions for media, legal, government and enterprise applications. Its flagship offering, aiWARE™, is a cloud-based operating system that orchestrates and automates an ecosystem of machine learning models to transform unstructured data—such as audio, video and text—into actionable intelligence. By providing a modular AI environment, Veritone enables organizations to deploy, manage and scale cognitive engines that address diverse use cases from transcription and translation to sentiment analysis and facial recognition. Through aiWARE and its suite of purpose-built applications, the company delivers turnkey solutions for content licensing, media monitoring, eDiscovery, compliance and public safety. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Veritone Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.