Veritone has emerged in recent months as a major player in bringing media sales additional ROI opportunities through technology. On Tuesday, the company’s growth came to full light as it released its Q1 2017 financial results.
For the three-month period ending March 31, Veritone saw its net revenue—and profit—jump.
It’s diluted net loss per share also narrowed, marking an all-important step in the right direction for this Orange County, Calif.-based provider of cloud-based artificial intelligence (AI) analytics and cognitive solutions.
Net revenue in Q1 increased to $3.1 million, from $2.1 million. The increase in net revenues was due primarily to an increase in media agency revenues of $864,000, or 43%, as well as an increase of $168,000, or 410%, in SaaS licensing revenues from the Company’s artificial intelligence platform.
Gross profit accelerated to $2.9 million, from $1.8 million. The increase in both gross profit and gross margin was due primarily to the operating leverage provided by Veritone’s higher net revenue level, as well as to lower transcription costs per hour, which were due, in part, to the higher volumes of data being processed.
While Veritone’s net loss attributable to common stock widened to $6.9 million, from $4.75 million, its diluted net loss per share attributable to common shareholders fell to $3.09, from $3.86.
Why? The $3.09 per share is based on 2.2 million shares outstanding, while the Q1 ’16 value of $3.86 per share is based on 1.2 million shares outstanding.
Meanwhile, total operating expenses in Q1 increased 68% to $9.5 million, from $5.7 million in Q1 ’17. The increase in operating expenses was due primarily to higher investments in software development, engineering, sales and marketing as Veritone continues to enhance its AI platform, including developing new products and functionality.
As of March 31 Veritone had cash and cash equivalents of $8.8 million, compared to $12.1 million as of Dec. 31, 2016.
But, that’s not the best gauge of where the company stands with respect to its total assets.
On a pro forma basis, after giving effect to the sale of shares in Veritone’s recent IPO and the net proceeds of approximately $32.6 million received therefrom; the additional investment of $29.3 million by Acacia Research Corporation in connection with the IPO; the funding of $6 million under the company’s bridge loan in April 2017 and May 2017; and the conversion of the company’s preferred stock and $28 million of convertible debt upon the closing of the IPO; Veritone had $76.7 million in cash and cash equivalents, no long-term debt, and 13.9 million shares of common stock outstanding.
Veritone in Q1 signed a license agreement with CBS Radio for the CBS Inc. division’s 117 stations and their advertisers.
“Our operational and financial performance in the first quarter was very strong,” said Veritone CEO Chad Steelberg. “During the quarter, we continued to grow and expand our AI platform business, and our progress was also highlighted by several major wins with significant companies like CBS Radio and by our recent strategic technology partnership with Quantum, which will enable them to redefine the marketplace with an intelligent storage solution.”
Veritone expects to end the year with approximately 425 accounts and approximately 80 active third-party cognitive engines on the platform.