Veritone reports Q3 results

Veritone, Inc. (NASDAQ: VERI), a provider of cloud-based artificial intelligence (AI) analytics and cognitive solutions, has reported results for the third quarter and nine months ended September 30, 2017, the company said.

Net revenues in the third quarter of 2017 increased 60% to USD 3.7 million from USD 2.3 million in the same period in 2016. The increase in net revenues was due to an increase in media agency revenues of USD 1.1 million, or 48%, and to an increase of USD 0.3 million, or 340%, in SaaS licensing revenues from the company´s AI platform.

Gross profit in the third quarter of 2017 increased 83% to USD 3.4 million (92.1% of net revenues) from USD 1.9 million (80.7% of net revenues) in the same period in 2016. The increase in gross margin was due primarily to the operating leverage provided by the company´s higher net revenues level.

Total operating expenses in the third quarter of 2017 increased 192% to USD 22.9 million from USD 7.8 million in the same period last year. The year-over-year increase in operating expenses was due primarily to an USD 11.6 million increase in stock-based compensation expenses, and to higher investments in software development, data science, and sales and marketing as the company continued to enhance its AI platform, including developing new products and functionality.

The year-over-year increase in stock-based compensation was due primarily to USD 8.9 million of expense recorded in the third quarter relating to the vesting of performance-based stock options previously issued to the company´s CEO and President.

Loss from operations in the third quarter of 2017 was USD 19.5 million, an increase of USD 13.5 million compared with a loss from operations of USD 6.0 million in the third quarter of 2016, due primarily to the USD 11.6 million increase in stock-based compensation expenses discussed above.

Net revenues in the first nine months of 2017 increased 70% to USD 10.9 million from USD 6.4 million in the same period in 2016. The increase in net revenues was due to an increase in media agency revenues of USD 3.7 million, or 60%, and to an increase of USD 0.8 million, or 368%, in SaaS licensing revenues from the company´s AI platform.

Gross profit in the first nine months of 2017 increased 89% to USD 10.1 million (92.5% of net revenues) from USD 5.3 million (83.3% of net revenues) in the same period in 2016. The increase in gross margin was due primarily to the operating leverage provided by the company´s higher net revenues level.

Total operating expenses in the first nine months of 2017 increased 102% to USD 44.0 million from USD 21.8 million in the same period last year. The year-over-year increase in operating expenses was due primarily to a USD 12.0 million increase in stock-based compensation expenses, and to higher investments in software development, data science, and sales and marketing as the company continued to enhance its AI platform, including developing new products and functionality. The year-over-year increase in stock-based compensation was due primarily to USD 9.3 million of expense recorded in the first nine months relating to performance-based stock options previously issued to the company´s CEO and President.

Loss from operations in the first nine months of 2017 was USD 33.9 million, an increase of USD 17.5 million compared with a loss from operations of USD 16.4 million in the first nine months of 2016, due primarily to the USD 12.0 million increase in stock-based compensation expense described above.

Veritone (VERI) is an artificial intelligence company that has developed a unique platform, aiWARE, which unlocks the power of AI-based cognitive computing to transform and analyze unstructured public and private audio and video data for clients in a variety of markets, including media, politics, legal and government. The open platform integrates an ecosystem of best-of-breed cognitive engines and powerful applications, which can be orchestrated together to reveal valuable, multivariate insights. aiWARE delivers unprecedented insights by unlocking data from linear files such as radio and TV broadcasts, surveillance footage and public and private content globally. To learn more about Veritone, visit Veritone.com.