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PRESS RELEASE from provider: Business Wire
This content is a press release from our partner Business Wire. The AP newsroom and editorial departments were not involved in its creation.

Veritone® Reports Financial Results for the Fourth Quarter and Full Year 2018

February 21, 2019

COSTA MESA, Calif.--(BUSINESS WIRE)--Feb 21, 2019--(NASDAQ:), a leading provider of artificial intelligence (AI) technology and solutions, today reported results for the fourth quarter and year ended December 31, 2018.

Chad Steelberg, CEO and Chairman of Veritone, commented: “In 2018, we successfully executed our strategy to expand our product offerings, invest in complementary technologies and further drive customer adoption of aiWARE. For the full year, our Advertising net revenues increased 32%, and our aiWARE SaaS net revenues were up 307%, compared with 2017. These increases reflect both strong organic growth and contributions from our acquisitions in the third quarter, which extended the capabilities of aiWARE and diversified our customer base and product capabilities.

“Our work in 2018 has positioned us well for accelerated revenue growth in 2019. Over the past few months, we added five new applications to our aiWARE platform that deliver solutions based on cognition of audio, video and structured content. Three market focused applications, Attribute, Identify and Redact, were developed by us and two, CORE and Digital Media Hub, came from our acquisition of Wazee Digital. aiWARE’s architecture allows us to build these applications quickly and inexpensively, and they deliver significant benefits for users, ranging from timelier optimization of advertising spend to faster identification of potential criminal suspects to more efficient compliance with information disclosure requirements. We are seeing great interest in these applications from both current and new customers, and we expect them to contribute to significant revenue growth this year. With these new products, our pipeline of other products under development and the momentum in our business, we are excited about our growth prospects in 2019. We will leverage this revenue growth and prudent expense management to materially reduce our Adjusted EBITDAS loss this year,” concluded Steelberg.

Fourth Quarter 2018 Financial Highlights:

Fourth Quarter 2018 Key Performance Indicators (KPIs), Excluding Acquisitions

Veritone aiWARE™ SaaS Business, Year-over-Year Results

Veritone One™ Advertising Business, Year-over-Year Results

Fourth Quarter 2018 Financial Results

Net revenues increased 213% to $10.9 million from $3.5 million in the fourth quarter of 2017. The acquisitions that were completed in August contributed $4.8 million to net revenues in the fourth quarter of 2018. Excluding the impact of these acquisitions, Advertising net revenues totaled $4.7 million, a year-over-year increase of 55%, driven primarily by a significant ad campaign run by one customer during the fourth quarter of 2018. Excluding the impact of the acquisitions, aiWARE SaaS net revenues totaled $1.5 million in the fourth quarter of 2018, a year-over-year increase of 211%, due to the increased number of customers and accounts, increased revenue from existing customers, and a performance incentive that the Company earned during the quarter.

Gross profit increased 128% to $7.4 million from $3.3 million in the fourth quarter of 2017. The increase in gross profit in the fourth quarter of 2018 compared with the prior year period was due primarily to the higher revenue level from the Company’s aiWARE SaaS business and the contributions of the Company’s recent acquisitions. Gross margin was 68%, versus 93% in the fourth quarter of 2017. The decrease in gross margin reflects the higher proportion of net revenues from the Company’s aiWARE SaaS and aiWARE Content Licensing and Media Services businesses, which generally carry lower gross margins than its Advertising business, and to higher amortization expense related to technology acquired in its recent acquisitions.

Total operating expenses were $25.5 million, an increase of $9.4 million, or 58%, compared with the fourth quarter of 2017. The increase was due primarily to the addition of the operating expenses of the businesses acquired in the third quarter of 2018, higher stock-based compensation expense, increased amortization expense related to the intangibles of the businesses acquired in the third quarter of 2018, and higher compensation expense related to earn out incentives associated with one of the acquisitions.

Loss from operations was $18.0 million, an increase of $5.2 million compared with the loss from operations of $12.8 million in the fourth quarter of 2017, due primarily to higher stock-based compensation expense, higher amortization of intangible, and earn out incentives associated with one of the acquisitions.

Net loss attributable to common stockholders totaled $17.8 million, or $(0.92) per share based on 19.2 million weighted average shares outstanding, compared with $12.8 million, or $(0.83) per share based on 15.3 million weighted average shares outstanding, in the fourth quarter of 2017.

Earnings before interest expense, depreciation, amortization and stock-based compensation expenses, adjusted to exclude certain acquisition, integration and financing-related costs (Adjusted EBITDAS ), a non-GAAP financial measure, totaled a loss of $8.9 million, or 82% of net revenues, compared with a loss of $10.2 million, or 292% of net revenues, in the fourth quarter of 2017. The lower Adjusted EBITDAS loss was due primarily to the increase in net revenues, offset in part by the increase in operating expenses. See “About the Presentation of Adjusted EBITDAS” below for an explanation of the items excluded from the calculation of Adjusted EBITDAS and a reconciliation of net loss to Adjusted EBITDAS following the financial statements at the end of this news release.

Cash: As of December 31, 2018, the Company had cash and cash equivalents and marketable securities of $51.1 million, including $7.5 million of cash received from clients for future payments to vendors, and no long-term debt.

Full Year 2018 Financial Results

Net revenues increased 88% to $27.0 million from $14.4 million in 2017, including $7.0 million in 2018 from the Company’s recent acquisitions. Excluding the impact of the recent acquisitions, Advertising net revenues for 2018 totaled $15.4 million, an increase of 19% compared with the prior year, and aiWARE SaaS net revenues totaled $4.7 million, an increase of 220% compared with 2017.

Net loss attributable to common stockholders totaled $61.1 million, or $(3.48) per share based on 17.6 million weighted average shares outstanding, compared with $64.1 million, or $(6.20) per share based on 10.3 million weighted average shares outstanding, in 2017.

Adjusted EBITDAS, a non-GAAP financial measure, totaled a loss of $39.0 million, compared with a loss of $30.2 million in 2017. The increased Adjusted EBITDAS loss was due primarily to the addition of software development, data science, product management, and sales and marketing personnel, which management expects will lead to enhancements to the Company’s aiWARE operating system and increased net revenues in the future.

First Quarter 2019 Revenue Outlook:

For the first quarter ending March 31, 2019, the Company expects its total net revenues to be in the range of $11.5 million to $11.9 million.

Conference Call

Veritone will hold a conference call today February 21, 2019, at 4:30 p.m. Eastern Standard Time (1:30 p.m. Pacific Standard Time) to discuss these results and provide an update on the business. Veritone management will host the presentation, followed by a question and answer session. The call will be open to all interested parties through a live audio web broadcast via the Internet at investors.veritone.com. The call will also be available by dialing 877-791-0151 or 647-689-5650 for International.

Please call the conference telephone number 5-10 minutes prior to the start time and reference the conference ID 9295245. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact LHA at 415-433-3777.

A replay of the audio webcast will be available on the company’s website shortly after the call ends. Additionally, a telephonic replay of the call will be available through Thursday, March 7, 2019 by dialing the following numbers:

Replay number: 800-585-8367 International replay number: 416-621-4642 Replay ID: 9295245

About Veritone

Veritone (Nasdaq: VERI) is a leading provider of artificial intelligence (AI) technology and solutions. The company’s proprietary operating system, aiWARE™, orchestrates an expanding ecosystem of machine learning models to transform audio, video and other data sources into actionable intelligence. aiWARE can be deployed in a number of environments and configurations to meet customers’ needs. Its open architecture enables customers in the media and entertainment, legal and compliance, and government sectors to easily deploy applications that leverage the power of AI to dramatically improve operational efficiency and effectiveness. Veritone is headquartered in Costa Mesa, California with over 300 employees, and has offices in Denver, London, New York, San Diego, and Seattle. To learn more, visit  Veritone.com.

About the Presentation of Adjusted EBITDAS

Adjusted EBITDAS is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income (loss), operating income (loss) or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The items excluded from Adjusted EBITDAS are detailed in the reconciliation included at the end of this news release. Other companies (including the Company’s competitors) may define Adjusted EBITDAS differently. The Company presents Adjusted EBITDAS because management believes it to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in its industry. Management also uses this information internally for forecasting and budgeting. This non-GAAP measure may not be indicative of the historical operating results of Veritone or predictive of potential future results. Investors should not consider Adjusted EBITDAS in isolation or as a substitute for analysis of the Company’s results as reported in accordance with GAAP.

Safe Harbor Statement

This news release contains forward-looking statements, including without limitation statements regarding the Company’s expectation that it is well positioned for accelerated revenue growth in 2019; its expectation that its new applications will contribute to significant revenue growth in the future; the Company’s expectation that it will leverage its expected revenue growth and expense management to materially reduce its Adjusted EBITDAS loss in 2019; and the Company’s expected total net revenues in the first quarter of 2019. In addition, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “plan,” “should,” “could,” “estimate” or “continue” or the plural, negative or other variations thereof or comparable terminology are intended to identify forward-looking statements, and any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements speak only as of the date hereof, and are based on management’s current assumptions, beliefs and information. As such, the Company’s actual results could differ materially and adversely from those expressed in any forward-looking statement as a result of various factors. Important factors that could cause such differences include, among other things, the Company’s ability to successfully integrate its recent acquisitions; the Company’s ability to achieve broad recognition and customer acceptance of its products and services; the Company’s ability to continue to develop and add additional capabilities and features to its aiWARE operating system, including expanding the capabilities of its Conductor technology and extending it to other cognitive classes; the development of the market for cognitive analytics solutions; the ability of third parties to develop and provide additional high quality, relevant cognitive engines and applications; the Company’s ability to successfully identify and integrate such additional third-party cognitive engines and applications onto its aiWARE operating system, and to continue to be able to access and utilize such engines and applications, and the cost thereof; as well as the impact of future economic, competitive and market conditions, particularly those related to its strategic end markets; and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Certain of these judgments and risks are discussed in more detail in the Company’s Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company’s objectives or plans will be achieved. The forward-looking statements contained herein reflect the Company’s beliefs, estimates and predictions as of the date hereof, and the Company undertakes no obligation to revise or update the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events for any reason, except as required by law.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190221005887/en/

CONTACT: Company Contact:

Pete Collins, Chief Financial Officer

Veritone, Inc.

(949) 397-2148

investors@veritone.comInvestor Relations Contact:

Mary Magnani or Kirsten Chapman

LHA

(415) 433-3777

veri@lhai.com

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: TECHNOLOGY SOFTWARE COMMUNICATIONS ADVERTISING

SOURCE: Veritone, Inc.

Copyright Business Wire 2019.

PUB: 02/21/2019 04:05 PM/DISC: 02/21/2019 04:05 PM

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