Veritone’s Net Loss Grows, Despite Record Revenue

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It’s been stated many times that record revenue growth is meaningless if it doesn’t translate to net income of significance.


In the case of Veritone Inc., no net income was seen in Q1.

In fact, its net loss widened despite the strong surge in revenue.

That fact wasn’t noted by Chairman/CEO Chad Steelberg on Wednesday afternoon, following Costa Mesa, Calif.-based Veritone’s Q1 earnings release.

“During the first quarter we delivered strong top-line growth across the board, resulting in record net revenue of $12.1 million, above the high end of our guidance range,” Steelberg said.

The net revenue of $12.1 million climbed from $4.39 million in Q1 2018.

Advertising net revenues were up 83% from Q1 2018 to $5.71 million, and aiWARE SaaS revenues grew by 117%, to $2.75 million.

Steelberg noted that new products “are driving new market penetration and an acceleration in customer engagements.” He added that Veritone is benefiting from a diversification of revenue both within its product offerings and across new channels and geographies.

“As we continue to enhance and improve our aiWARE operating system with new features, capabilities and components, we are able to more rapidly develop and deliver applications to meet specific use cases,” Steelberg said. “With growing momentum in all of our businesses, the amazing customer response to our new applications and our pipeline of exciting products under development, we are very excited about our growth prospects for 2019,” Steelberg said.

Those positive words did little to cloud the fact that Veritone’s  net loss widened to $16.3 million (-84 cents per share) in Q1, from $13.05 million (-81 cents).

The EPS results bested Benzinga’s forecast by a penny, while it forecast net revenue of $11.6 million — bested by $500,000.

That said, expenses surged in Q1, with sales and marketing, research and development and general and administrative costs all increasing. The result: total operating expenses in the quarter of $24.8 million, rising from $17.05 million.

On a non-GAAP basis, Veritone’s net loss was lower than in Q1 2018, moving to $9.29 million (-48 cents) from $10.22 million (-64 cents).

Still, with adjusted EBITDA still in the loss column, investors may be wondering if VERI will ever get back to where it was one year ago.

Veritone Inc. stock on May 7, 2018 sat at $22.18 and by June 11 was up to $23.06.

Then came a cascade for a stock that had been highly volatile since its May 2017 IPO, highlighted by a rapid rise to above $45 a share in September 2017 and subsequent slide to just below $14 a share by March 2018.

Today, investors would be pleased if Verione was anywhere close to $14. In after-hours trading ahead of Thursday’s Opening Bell on Nasdaq, VERI was trading at $6.21.

Year-to-date, that’s not so terrible. But, VERI has a 1-year target estimate of $13.90, and has not surpassed $7.12 so far in 2019.

For the second quarter, Veritone expects its total net revenue to be in the range of $12.1
million to $12.5 million.