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Veritone, Inc. (VERI) Misses Q2 EPS by 3c, Revenues Miss

August 13, 2018 4:06 PM

Veritone, Inc. (NASDAQ: VERI) reported Q2 EPS of ($0.88), $0.03 worse than the analyst estimate of ($0.85). Revenue for the quarter came in at $4.2 million versus the consensus estimate of $4.92 million.

“I am pleased with the performance of our AI business during the second quarter, including the triple-digit year-over-year growth in net revenues, the new customers, accounts and third-party cognitive engines added to our Operating System for Artificial Intelligence, aiWARE™, and the total hours of video and audio media processed on aiWARE during the quarter,” stated Chad Steelberg, Veritone Chairman and CEO. “The adoption curve for AI-based solutions continues to accelerate, albeit with growth that can come in drips or surges, depending on the maturity of the market segment. Our most mature vertical market, Media & Entertainment, has shown the greatest and most consistent growth, with revenues increasing over 250% on a trailing 12-month basis through the second quarter. In our two newest vertical markets, Legal & Compliance and Government, we have added more technology and channel partners, and have expanded our capabilities to meet the needs of these markets, giving us a strong position as they adopt AI-based solutions. We expect to see the same type of triple-digit growth trajectory in our Legal & Compliance and Government verticals over time as these industries turn to AI, though our revenues from those markets will be lumpy initially. Our SaaS business in total has now experienced net revenues growth of over 200% on a trailing 12-month basis through the second quarter,” continued Steelberg.

“Our SaaS net revenues in the Media & Entertainment vertical have increased by over 100% year-over-year for six consecutive quarters,” said Steelberg. “We are achieving these results by landing marquee customers and then collaborating with them to expand their use of aiWARE. When we entered this market, our internal sales team delivered most of our net revenue growth. Today, we see large opportunities in this market being developed by technology and channel partners, positioning us well for scale, growth and impact ahead. We are evolving our go-to-market strategy in a similar way in our other verticals.”

Steelberg commented on the second quarter revenues in Veritone’s media agency business by saying, “Although we saw a year-over-year decline in net revenues in our media agency business in the second quarter, we increased our active client count by 64% in the quarter compared with the same quarter last year, positioning the company for diversity and strength going forward. At times, challenges in our clients’ businesses independent of Veritone can impact advertising campaign execution, and this is what took place during the second quarter. We expect net revenues in our media agency to increase year-over-year in the third quarter based on the strong bookings we have seen to date. Such dynamics reflect the nature of this business.”

For earnings history and earnings-related data on Veritone, Inc. (VERI) click here.

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