Veritone Q1 Earnings Call Highlights

Key Points

• Veritone reaffirmed its full-year 2026 revenue outlook of $130 million to $145 million despite lower Q1 revenue of $20.3 million, with management pointing to strong demand for AI-ready data services, public sector software, and new hyperscaler relationships.
• AI training data services remain the main growth engine: the VDR pipeline has expanded to nearly $70 million, with Google and NVIDIA signing in Q1 and more than $68 million in near-term VDR sales and bookings.
• The company is pushing toward profitability by cutting costs and lowering its breakeven point by about 30%, with executives saying Veritone could reach operating profitability as early as Q4 2026.

Veritone NASDAQ: VERI reported lower first-quarter revenue but reaffirmed its full-year 2026 outlook, citing growing demand for its AI training data services, public sector software and recently expanded relationships with major technology companies.

On the company’s first-quarter earnings call, President and Chief Executive Officer Ryan Steelberg said Veritone is positioned at the “intersection” of the AI and data economies through its aiWARE platform, Veritone Data Refinery, or VDR, and its market-specific applications. He said demand is rising from enterprises, governments, content owners, hyperscalers and model developers for high-quality, AI-ready data, especially unstructured audio and video.

Steelberg said Google and NVIDIA signed with Veritone in the first quarter for VDR data services. He said the company’s near-term VDR pipeline has expanded to nearly $70 million, supporting Veritone’s full-year revenue guidance of $130 million to $145 million.

First-quarter revenue declines, but margins improve

Chief Financial Officer Mike Zemetra said first-quarter revenue was $20.3 million, down $2.2 million from the prior-year period. The decline was driven primarily by managed services, which fell $1.5 million, or 19.2%, year over year.

Zemetra said software products and services revenue was relatively flat compared with the prior year, including Broadbean by Veritone, which was slightly down amid a difficult hiring environment. He said first-quarter results were affected by the timing of deals with several large hyperscalers, including Google and NVIDIA, which were signed in mid-quarter rather than earlier.

• GAAP gross profit was $12.7 million, compared with $13.7 million in the year-ago quarter.
• GAAP gross margin improved to 62.7% from 61.1% a year earlier.
• Non-GAAP gross margin was 67.7%, up from 65.1% in the prior-year period.
• Operating loss improved to $19.4 million from $21.6 million a year earlier.
• Net loss was $19.5 million, compared with $19.9 million in the first quarter of 2025.
• Non-GAAP net loss was $11.9 million, compared with $11.1 million a year earlier.

Zemetra said annual recurring revenue was $64.2 million, up 9% from $58.7 million in the first quarter of 2025. He said consumption-based ARR increased 50% year over year, while recurring subscription-based SaaS revenue was flat. Total software products and services customers fell 8% year over year to 2,897, which Zemetra attributed primarily to churn among smaller Broadbean customers as the company focuses on larger ARR opportunities.

Company outlines path to profitability

Veritone said it is taking steps to reduce its breakeven point and improve operating efficiency. Steelberg said the company is “proactively lowering our breakeven floor by approximately 30%” and is not waiting for revenue growth to catch up to its cost structure.

Zemetra said Veritone is reevaluating its cost structure and believes it can unlock savings of up to 30% in existing operating expense as early as the end of the second quarter of 2026. He said the effort is intended to improve operating margin and help fund growth investments. Both Steelberg and Zemetra said the company remains on track to reach operating profitability as early as the fourth quarter of 2026.

As of March 31, Veritone held $15.4 million of cash and restricted cash, down from $27.7 million at the end of 2025. Zemetra said the company had approximately $45 million of debt outstanding at quarter-end, compared with more than $130 million a year earlier. He said the company’s current cash is unencumbered by restricted debt covenants, unlike in the prior year.

VDR and public sector remain key growth drivers

Steelberg said VDR is benefiting from demand for AI-ready training datasets and noted the launch of the Veritone Data Marketplace. Zemetra said Veritone has access to partners controlling more than 50 million hours of video datasets and is working to improve the speed and availability of content demanded by VDR customers.

Zemetra said Veritone currently has more than $68 million in near-term VDR sales pipeline and bookings, and more than $20 million of active sales pipeline that could close in the second quarter. He said second-quarter revenue could range from $25 million to more than $30 million if larger deals close, with the high end representing more than 25% year-over-year growth.

In public sector, Veritone reported 69% year-over-year quarterly growth. Steelberg said demand is increasing across federal, state, local and international markets for the company’s investigative and evidence management tools. He highlighted activity with Air Force OSI, the Defense Logistics Agency, Project Genesis at the Department of Energy, the Department of Homeland Security and multiple foreign agencies.

Zemetra said some larger federal deals, including the planned rollout of OSI, experienced delays tied in part to resources and prioritization across the Department of Defense. He said those deals are expected to resume planned rollouts in the second quarter and that public sector growth should become more pronounced in 2027 with expected broader iDEMS deployments across the Department of Defense.

Oracle partnership and commercial expansion in focus

Executives emphasized Veritone’s strategic agreement with Oracle, which was announced in the first quarter. Zemetra said the partnership is expected to provide more than 20% savings on compute and non-dilutive cash-based incentives from Oracle over time. He said Oracle’s cloud infrastructure will support aiWARE, VDR, the Veritone Data Marketplace and public sector growth.

During the question-and-answer session, Steelberg said Veritone is preparing to move initial storage payloads to Oracle as early as August, followed by compute payloads. He also said the companies have already begun co-selling efforts, including across media, entertainment, sports, news and public sector markets.

In commercial enterprise, Steelberg highlighted a collaboration with The Washington Post to unlock and monetize its news archive, an extension with U.S. Soccer, and sports-related work involving NCAA March Madness and the Masters Tournament. He said Veritone closed 224 software and license agreements in the first quarter, including renewals and expansions across sports, media, entertainment and brand licensing.

Steelberg also said Veritone plans to expand its Digital Media Hub beyond large media companies by introducing more accessible versions for mid-market businesses, city councils, schools, marketing departments and individual creators. In response to an analyst question, he said the company expects to launch the renewed offering “over the next couple of months.”

Full-year outlook reaffirmed

Veritone maintained its full-year 2026 revenue guidance of $130 million to $145 million, with the midpoint representing 49% year-over-year growth, according to Zemetra. The company expects public sector revenue to grow more than 60% year over year, with the remaining growth primarily from commercial enterprise, especially VDR.

Zemetra said Broadbean by Veritone is expected to be slightly down year over year because of the hiring environment, while managed services are expected to rise 10% to 15%. Veritone expects gross margins to fluctuate between 60% and 65% and non-GAAP net loss to range from $13.5 million to $22.5 million.

Steelberg closed the call by saying Veritone is “poised for strong disciplined growth” through the rest of 2026 and beyond, citing hyperscaler contracts, the Oracle partnership, public sector momentum and cost optimization efforts.

About Veritone NASDAQ: VERI

Veritone, Inc NASDAQ: VERI is a technology company specializing in artificial intelligence solutions for media, legal, government and enterprise applications. Its flagship offering, aiWARE™, is a cloud-based operating system that orchestrates and automates an ecosystem of machine learning models to transform unstructured data—such as audio, video and text—into actionable intelligence. By providing a modular AI environment, Veritone enables organizations to deploy, manage and scale cognitive engines that address diverse use cases from transcription and translation to sentiment analysis and facial recognition.

Through aiWARE and its suite of purpose-built applications, the company delivers turnkey solutions for content licensing, media monitoring, eDiscovery, compliance and public safety.

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