- Q1 Revenue of $34.4 Million Increased 88% for GAAP and 45% for Pro Forma Year over Year -

- Q1 Software Revenue of $18.2 Million Grew 288% for GAAP and 78% for Pro Forma Year over Year -

- Q1 SaaS Customers Increased to 559, Up 45% on a Pro Forma Basis Year over Year -

- Q1 New Bookings of $9.6 Million, Up 292% Year over Year -

- Held $237.6 Million Cash and Cash Equivalents at March 31, 2022 ⁽¹⁾-

Veritone, Inc. (NASDAQ: VERI), creator of aiWARE, a hyper-expansive enterprise AI platform, today reported results for the first quarter ended March 31, 2022.

“For the first quarter of 2022, Veritone delivered growth with GAAP revenue up 88%, Pro Forma revenue up 45%, new bookings up 292%, non-volume hiring customers up 100%, and software customers up 45% versus first quarter of 2021,” said Chad Steelberg, Chairman and CEO of Veritone. “More importantly, looking ahead, we continue to see strong demand for aiWARE and remain very bullish on our projected growth. In every economy, artificial intelligence helps companies innovate, differentiate and expand their products and offerings as well as provides them with tools to better optimize, automate and reduce costs and inefficiencies.”

Ryan Steelberg, President of Veritone, added, “AI is alive and growing stronger every day. Our record bookings, strong retention, and new market offerings validate our strategy and investments. In fact, our platform has never been more important to our customers than right now. Notably, our efficient recruitment and hiring is even more critical across all industries and becomes a strategic advantage for those that embrace Veritone’s AI solutions sooner. AI is a singularly disruptive innovation that we believe is still in its early stages of adoption and impact, and Veritone is committed to leading that innovation.”

Financial Highlights: First Quarter 2022 Compared to First Quarter 2021

• Revenue increased 88% on a GAAP basis and 45% on a Pro Forma basis to $34.4 million.
• Software Products & Services Revenue increased 288% on a GAAP basis and 78% on a Pro Forma basis to $18.2 million.
• Gross profit increased 104% on a GAAP basis and 48% on a Pro Forma basis to $27.5 million.
• GAAP net loss was $28.7 million, as compared to $30.6 million.
• Non-GAAP net loss was $5.2 million, as compared to $3.9 million.
• Cash and cash equivalents⁽¹⁾ were $237.6 million at March 31, 2022, as compared to $127.5 million at March 31, 2021.
  
  Pro Forma basis assumes Veritone owned PandoLogic since the beginning of 2021.

Recent Business Highlights

• Launched Veriverse™, a portfolio of integrated AI solutions for content IP owners and individuals leveraging the metaverse, NFTs and blockchain.
• Selected by Marubeni for price, demand, and generation forecasts via Veritone iDERMS™ solution at its pilot site in southern California.
• Partnered with EMPA GmbH to transform video search and discovery with AI during ADAC TotalEnergies 24h Nurburgring Race.
• Partnered with OOONA to create synthetic audio descriptions for Silver Trak Digital, a major APAC localization and media services company.
• Won various awards:
  • Veritone Avatar™: 2022 NAB Show Product of the Year Award
  • Veritone Voice™: Best Artificial Intelligence at the 14th Annual Media Excellence Awards, the Best Podcasting Advertising Software from Quill, and a silver from Los Angeles American Advertising Awards for Innovative Use of the Interactive/Technology
  • Veritone iDERMS: CIO Review Magazine 20 Most Promising Energy Tech Solution Providers 2022
  • Veritone’s workplace excellence: three Comparably Awards for Q1 2022: Best Company Outlook, Best Places to Work in Los Angeles and Best Marketing Teams

Business Outlook

Second Quarter 2022

• Revenue is expected to be in the range of $38.0 million to $39.0 million, as compared to $19.2 million in the second quarter of 2021.
• Non-GAAP net loss is expected to be in the range of $3.5 million to $2.5 million, as compared to $3.9 million in the second quarter of 2021.

Full Year 2022

• Revenue is expected to be in the range of $180.0 million to $190.0 million, as compared to $115.3 million in 2021.
• Non-GAAP net income is expected to be in the range of $10.0 million to $17.0 million, as compared to $6.8 million in 2021.

Financial Results for Three Months Ended March 31, 2022

Achieved record first quarter revenue of $34.4 million, up 88% from $18.3 million in the first quarter of 2021. Software Products & Services revenue reached $18.2 million, 288% greater than the first quarter of 2021, driven by PandoLogic. Managed Services revenue grew to $16.2 million, up 19% compared to the first quarter of 2021, driven by 61% growth in content licensing services. Gross profit increased to $27.5 million, up $14.0 million, or 104%, compared to the first quarter of 2021, driven by the PandoLogic contribution and organic revenue growth. Gross margin improved to 80%, compared to 74% in the first quarter of 2021.

GAAP net loss was $28.4 million, compared to $30.6 million in the first quarter of 2021. Non-GAAP net loss was $5.2 million, compared to $3.9 million in the first quarter of 2021. This was largely driven by higher investments in people and infrastructure costs to grow and scale, coupled with certain one-time non-recurring customer credits incurred in the first quarter 2022 as a result of a site upgrade from one of the third-party hiring platforms, offset by increased gross margins year over year.

As of March 31, 2022, the Company had cash and cash equivalents of $237.6 million, including approximately $69.5 million of cash received from Managed Services clients for future payments to vendors.

Conference Call

Veritone will hold a conference call using its synthetic voice technology, Veritone Voice, to deliver management’s prepared remarks on Tuesday, May 3, 2022, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss its first quarter 2022, provide an update on the business, and conduct a question and answer session. To listen, please join the webcast or dial-in. To avoid a wait, if dialing in, please pre-register or call in 20 minutes in advance.

* Callers who pre-register will be emailed, upon registering and again on the day of the call, a conference pass code and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.

A replay of the audio webcast will be available on the Company’s website approximately one hour after the call ends. A telephonic replay of the call will be available through May 17, 2022:

About the Presentation of Supplemental Non-GAAP and Pro Forma Financial Information

In this news release, the Company has supplemented its financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures, including “Non-GAAP net income (loss)” and “Non-GAAP net income (loss) per share.” Non-GAAP net income (loss) and Non-GAAP net income (loss) per share is the Company’s net income (loss) and net income (loss) per share, respectively, adjusted to exclude interest expense, provision for income taxes, depreciation expense, amortization expense, stock-based compensation expense, changes in fair value of warrant liability, changes in fair value of contingent consideration, a reserve for state sales taxes, charges related to a facility sublease, gain on sale of asset, warrant expense, acquisition and diligence costs, and severance and executive search costs. The items excluded from these non-GAAP financial measures, as well as a breakdown of GAAP net income (loss), non-GAAP net income (loss) and these excluded items between the Company’s Core Operations and Corporate, are detailed in the reconciliations included following the financial statements attached to this news release. In addition, following the financial statements attached to this news release, the Company has provided additional supplemental non-GAAP measures of gross profit, operating expenses, loss from operations, other income (expense), net, and loss before income taxes, excluding the items excluded from non-GAAP net loss as noted above, and reconciling such non-GAAP measures to the most directly comparable GAAP measures.

The Company has provided these non-GAAP financial measures because management believes such information to be important supplemental measures of performance that are commonly used by securities analysts, investors and other interested parties in the evaluation of companies in its industry. Management also uses this information internally for forecasting and budgeting.

These non-GAAP financial measures should not be considered as an alternative to net income (loss), operating income (loss) or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. Other companies (including the Company’s competitors) may define these non-GAAP financial measures differently.

These 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.

In addition, the Company defines the following capitalized terms in this news release as follows:

Core Operations consists of the Company’s aiWARE operating platform of software, SaaS and related services; content licensing and advertising agency services; and their supporting operations, including direct costs of sales as well as operating expenses for sales, marketing and product development and certain general and administrative costs dedicated to these operations.

Corporate principally consists of general and administrative functions such as executive, finance, legal, people operations, fixed overhead expenses (including facilities and information technology expenses), other income (expenses) and taxes, and other expenses that support the entire Company, including public company driven costs.

Software Products & Services consists of revenues generated from commercial enterprise and government and regulated industries customers using our aiWARE platform and PandoLogic’s talent acquisition software product solutions, any related support and maintenance services, and any related professional services associated with the deployment and/or implementation of such solutions.

Managed Services consist of revenues generated from commercial enterprise customers using our content licensing services and advertising agency and related services.

Pro Forma includes historical Software Products & Services revenue from the past five fiscal quarters of each of Veritone, Inc. and PandoLogic Ltd. (unaudited) and presents such revenue on a combined pro forma basis treating PandoLogic Ltd. as owned by Veritone, Inc. since January 1, 2021.

About Veritone

Veritone (NASDAQ: VERI) is a leader in enterprise artificial intelligence (AI) software and solutions. Serving organizations in both commercial and regulated sectors, Veritone’s software, services, and industry applications accelerate and maximize digital migration, empowering the largest and most recognizable brands in the world to run more efficiently, accelerate decision making and increase profitability. Veritone’s hyper-expansive Enterprise AI platform, aiWARE™, orchestrates an ever-growing ecosystem of machine learning models to transform audio, video and other data sources into actionable intelligence. Through professional and managed services, as well as its robust partner ecosystem, Veritone develops and builds AI solutions that solve the problems of today and tomorrow. To learn more, visit Veritone.com.

Safe Harbor Statement

This news release contains forward-looking statements, including without limitation statements regarding the Company’s expectations regarding its rapidly growing pipeline of business, the Company’s expected total revenue and Non-GAAP net income(loss) for Q2 2022 and for full year 2022. In addition, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “plan,” “should,” “could,” “estimate” or “continue” or the plural, negative or other variations thereof or comparable terminology are intended to identify forward-looking statements, and any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements speak only as of the date hereof, and are based on management’s current assumptions, beliefs and information. As such, the Company’s actual results could differ materially and adversely from those expressed in any forward-looking statement as a result of various factors. Important factors that could cause such differences include, among other things, the impact of the economic disruption caused by the COVID-19 pandemic and the Russian invasion of Ukraine on the business of the Company and that of its existing and potential customers; the Company’s ability to achieve broad recognition and customer acceptance of its products and services; the Company’s ability to continue to develop and add additional capabilities and features to its aiWARE operating system; the development of the market for cognitive analytics solutions; the ability of third parties to develop and provide additional high quality, relevant machine learning models and applications; the Company’s ability to successfully identify and integrate such additional third-party models and applications onto its aiWARE operating system, and to continue to be able to access and utilize such models 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.

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