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Veritone(VERI) - 2024 Q3 - Earnings Call Transcript
VERIVeritone(VERI)2024-11-12 18:18
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Financial Data and Key Metrics Changes - Q3 2024 revenue was 22million,down22 million, down 6 million from Q3 2023, primarily due to a decline in Software Products & Services [49] - Non-GAAP gross profit for Q3 2024 reached 15.7million,declining24.915.7 million, declining 24.9% from 20.9 million in Q3 2023 [55] - Q3 non-GAAP net loss was 7.1million,animprovementof10.17.1 million, an improvement of 10.1% from 7.9 million in Q3 2023 [56] Business Line Data and Key Metrics Changes - Commercial enterprise revenue declined by 5.8millionyear−over−year,largelyduetoadecreaseinconsumption−basedcustomers[49]−Publicsectorrevenueshowedaslightincrease,withexpectationsforsignificantgrowthinfiscal2025[50]−TotalnewbookingsforQ32024were5.8 million year-over-year, largely due to a decrease in consumption-based customers [49] - Public sector revenue showed a slight increase, with expectations for significant growth in fiscal 2025 [50] - Total new bookings for Q3 2024 were 16.5 million, up 17% sequentially from Q2 2024 and 6% year-over-year [53] Market Data and Key Metrics Changes - The public sector is expected to grow year-over-year by 100% to 150%, driven by iDEMS applications [71] - The sales pipeline for public sector opportunities now exceeds 110million[34]−Thecompanyhasadded13newpublicsectorcustomersinQ32024[34]CompanyStrategyandDevelopmentDirection−ThedivestitureofVeritoneOnemarksastrategicshifttofocusonAIsolutions,streamliningoperationsandenhancingfinancialstability[10][11]−ThecompanyaimstocapitalizeonthegrowingAImarket,particularlyintheapplicationlayer,whichisprojectedtobeasignificantgrowtharea[18][20]−Thestrategyincludesafocusonhighergrowthverticals,specificallyinthepublicsectorandcommercialenterpriseAI[13][30]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinachievingabreakoutyearinfiscal2025,particularlyinthepublicsector[50]−ThecompanyanticipatesareturntogrowthwithamoreefficientoperatingstructureandafocusonAIsolutions[58]−Managementnotedthattheresultsoftherecentpresidentialelectionareexpectedtopositivelyimpactprospectsinthefederalsector[40]OtherImportantInformation−ThedivestitureofVeritoneOnewasvaluedatupto110 million [34] - The company has added 13 new public sector customers in Q3 2024 [34] Company Strategy and Development Direction - The divestiture of Veritone One marks a strategic shift to focus on AI solutions, streamlining operations and enhancing financial stability [10][11] - The company aims to capitalize on the growing AI market, particularly in the application layer, which is projected to be a significant growth area [18][20] - The strategy includes a focus on higher growth verticals, specifically in the public sector and commercial enterprise AI [13][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a breakout year in fiscal 2025, particularly in the public sector [50] - The company anticipates a return to growth with a more efficient operating structure and a focus on AI solutions [58] - Management noted that the results of the recent presidential election are expected to positively impact prospects in the federal sector [40] Other Important Information - The divestiture of Veritone One was valued at up to 104 million, significantly strengthening the company's balance sheet [10][43] - The company has successfully reduced its debt from 201millioninDecember2021toapproximately201 million in December 2021 to approximately 134 million today [64] - The company is exploring additional strategic pathways to further improve its balance sheet and reduce debt [65] Q&A Session Summary Question: Can you talk about the updated 2024 revenue guide? - The change is 100% allocated to timing on Public Sector deals, with potential upside if larger deals close sooner [83] Question: Can you give us a bit more of a bridge on acceleration to 2025? - The large portion of growth on a dollar basis will come from the Public Sector, with expectations for growth across the commercial sector as well [85]