Veritone, Inc.

Good day and welcome to the Veritone Inc. Second Quarter 2025 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal your conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star or then one on your telephone keypad. To withdraw your question, please press star or then two. Please note this event is being recorded. I would now like to turn the conference over to Kate Goldsmith. Please go ahead.

Thank you and good afternoon. After the market closed today, Veritone issued a press release announcing results for the second quarter 2025, which ended June 30, 2025. The press release and other supplemental information are available on the Investor Relations section of Veritone's website. Joining us for today's call are Veritone's President and Chief Executive Officer, Ryan Steelberg, and Chief Financial Officer, Mike Symmetra, who will provide prepared remarks and then open the call up for a live question and answer session. Please note that certain information discussed on the call today, including certain answers to your questions, will include forward-looking statements. This includes, without limitation, statements about our business strategy and future financial and operating performance. These forward-looking statements are subject to risks, uncertainties, and assumptions that may cause the actual results to differ materially from those stated. Certain of these risks and assumptions are discussed in Veritone's SEC filings, including its annual report on Form 10-K. These forward-looking statements are based on assumptions as of today, August 7, 2025, and Veritone undertakes no obligation to revise or update them. During this call, the actual and forecasted financial measures we will be discussing include non-GAAP measures. Reconciliation of these measures to the corresponding GAAP measures are included in the press release we issued today. Finally, I would like to remind everyone that the call today is being recorded and will be made available for replay via a link on the Investor Relations section of Veritone's website at .veritone.com. Now I would like to turn the call over to our President and Chief Executive Officer, Brian Steeleberg.

Thank you, Kate, and thank you everyone for joining us this afternoon. I'm excited to speak with you about our recent quarter and our overall progress we've made against our strategic business priorities. I will start with an update on our exciting results and progress against our growth plans, and then Mike will cover our financials in more detail. We are thrilled to report that our revenue of over $24 million for the quarter came in at the high end of our updated guidance in June, and is a testament to the demand for our AIware platform and our market-leading AI applications and solutions. Our results demonstrate strong, organic, -Veritone-hire software revenue growth of over 45 percent in the quarter, and we expect this growth rate to continue through the balance of the year. Veritone is definitively growing again, and this growth is being led by our core AI software solutions spanning both commercial and public sector business lines. Since co-founding Veritone in 2014, I can confidently say that there has never been a more exciting moment for our company than right now. We are translating demand into tangible and sustainable growth, and what makes this even more compelling is that our fastest growth areas, including Veritone Data Refinery, or VDR, and public sector not only delivered strong results, but also represent our largest pipelines and most expansive addressable markets in our history. We are building momentum in all the right areas, and the opportunity ahead of us has never been greater. In the quarter, we secured 104 new software customers and grew our VDR pipeline by over 100 percent from Q1 and over 33 percent just since our late June business update. The near-term VDR pipeline now surpasses $20 million as the demand for high-quality training data across both our commercial and public sector verticals remains very strong. We have also broken through with yet another major DoD agency with the signing of our sole source contract with the U.S. Air Force in June. This deal is already contributing revenue in 2025, and we expect it to ramp significantly in 2026 and beyond. Our public sector pipeline is now up to $189 million, up from $110 million at the end of the first quarter. Overall, it has been a fantastic momentum-building quarter as we transition into the second half of the year. Our recently announced cost-saving initiatives, which are expected to generate $10 million in annualized savings, together with our $10 million equity offering we completed in June, have strengthened our financial position and enhanced our ability to execute our strategy and focus on driving growth. Mike will provide more detail on these efforts and their impact across our core commercial and public sector verticals shortly. Now I want to provide an updated perspective on the AI landscape and our market opportunity. The AI landscape is indeed evolving rapidly. While enterprise-wide generative tools like copilots and chatbots have scaled quickly, function-specific applications remain mostly in pilot mode. This Gen. AI paradox, as McKinsey describes it, underscores a gap between broad adoption and truly transformative use cases. Agentic AI aims to close this gap, shifting from reactive, LLM-centric tools to proactive, goal-driven agents capable of autonomous workflow execution. These agents combine planning, memory, and reasoning capabilities, but also pose new challenges around governance, data fragmentation, and effective monitoring and control. Scaling them effectively requires an infrastructure designed for trust, interoperability, and flexibility across different vendors. This has been and remains Veritone's clear opportunity. Our AIware platform provides a scalable, secure, and model-agnostic foundation for ingesting and operationalizing both structured and unstructured data across disparate enterprise systems securely and at scale. This architecture aligns directly with the emerging Agentic AI mesh, where multiple AI agents interact, collaborate, and continuously learn while maintaining visibility and control. As organizations move towards more adaptive, workflow-driven AI, Veritone offers the infrastructure and purpose-built AIware platform to power that evolution, unlocking operational agility, smarter operations, and new revenue opportunities. AIware also uniquely positions Veritone to capture one of the most compelling opportunities in the evolving AI value chain, training data. As reported just last week by the Wall Street Journal, Big Tech will spend over $400 billion this year on AI CapEx and OpEx in what has become a new tech arms race. As next-generation LLMs and multimodality models become more sophisticated, demand for high quality, domain-specific training datasets has surged. Industry estimates suggest that approximately $3 billion will be spent this year alone by fewer than 50 companies, including the major hyperscalers, on acquiring and preparing training data, and is expected to grow to over $17 billion by 2032. Veritone is uniquely equipped to serve this market through our VDR solution, which transforms massive volumes of unstructured video, audio, and text into centralized, license-ready datasets for internal use or external model training. In the first half of 2025, VDR greatly exceeded our expectations in both adoption and revenue contribution. Data customers across both our commercial and public sector verticals, ranging from major media networks to public institutions, are using VDR to extract new value from both current and legacy data archives, which often are underutilized, some dating back over a decade. On the buy side, VDR is now directly supplying clean, structured training data to some of the world's largest hyperscalers and AI model developers. In many ways, VDR represents the next-generation solution for unstructured training data, building on what data labeling companies like Scale AI, recently acquired by Meta for over $30 billion, and Shutterstock have done for the training data economy. Veritone's differentiation lies in our ability to process complex and diverse media types and modalities like audio and video at tremendous scale. In the second quarter alone, Veritone AIware processed millions of hours of video and audio, or in data science speak, over 5 trillion tokens. Through multimodal tokenization, Veritone efficiently transforms these millions of hours of unstructured video and audio assets into the foundation training blocks of intelligent systems. Our AIware-powered pipeline enables transformer-based sequence modeling and other training methods using discrete audio and video tokens, bringing enterprise-grade media into the era of AI. Whether it's leveraged for third-party model training, fine-tuning enterprise customers' models, or even for training Veritone's proprietary internal models, we are providing a modern-day agentic stack for customers around their audio, video, and text data. As I mentioned earlier, our qualified VDR pipeline now exceeds $20 million, up from $15 million at the end of June and more than doubling since early May. This growth reflects both expansion with existing customers, as well as new agreements with leading hyperscalers and foundational model developers. We expect to formalize partnerships with nearly all of the major hyperscalers by the end of 2025. The growth in our commercial business continues to accelerate, driven by our growing demand for our differentiated AI-powered software and managed services. We enable IP owners to unlock the full value of all of their media libraries by making them searchable, discoverable, and monetizable across a range of channels, including advertising, broadcasting, documentary production, TV and film projects, and internal initiatives. In the second quarter, Veritone Commercial successfully closed 11 software enterprise deals with clients such as InterMilan, LoverCup, United States Soccer Federation, Alpha Media, St. Louis Zoo, ESPN, and the Big Ten Network. These agreements underscore the continued expansion of Veritone's -a-service offerings and highlight the critical role of our AI solutions and AI differentiated managed services in supporting our customers. Turning to the public sector, the major highlight this quarter is our multi-year agreement with the U.S. Air Force to deploy our AIware platform and Intelligent Digital Evidence Management System, or IDEMS. We will provide the Air Force with advanced investigative and information capabilities to enhance and accelerate data analysis for investigative activity across diverse mission areas. This contract represents a material portion of our sales pipeline and represents a strong alignment between our capabilities and the mission-critical needs of our federal partners. We have already begun recognizing revenue from this contract in 2025, with revenue contributions expected to accelerate meaningfully in 2026. This latest sole source award with the Air Force represents our third contract with this agency and greatly expands the scope of our partnership. Our work with the DOD's Defense Logistics Agency also continues to expand. Our task orders with the DOD LA, funded under the JET 2.0 IDIQ, specifically require contractors to be confident in the use of Veritone applications, which has resulted in a number of contracted service providers entering into reseller agreements with Veritone IDEMS for new opportunities. In conjunction with our recently achieved awardable status through the Department of Defense's P1 Solutions Marketplace, we are realizing accelerated opportunities to expand our work with the DOD and other areas of federal, state, and local government and agencies. In the second quarter, we signed 35 new public sector customers, including the Riverside County Sheriff's Department and a top five police agency in the United States. Additionally, we signed 95 renewal contracts in the quarter, further validating the mission-critical nature of our AIware software and strong customer retention. We are confident that Veritone is well positioned to take advantage of the surge in AI spend by our government as use cases and demand for our solutions and AI continue to grow. Our direct public sector pipeline has grown to nearly $200 million. With defense technology spending projected to approach $1 trillion and the administration's prioritization of AI innovation, highlighted by the White House's recent AI action plan, we see significant additional business opportunities in the public sector both this year and beyond. Turning to our higher division, the second quarter delivered solid performance across multiple key areas. The strategies implemented to navigate the challenging hiring market yielded positive outcomes, resulting in -over-year growth for our SaaS and media services, formerly known as Broadbean, and exceeding our Q2 revenue targets. We also surpassed annual sales targets and achieved record growth in media service revenue in our inaugural year as a LinkedIn Gold Partner. With our programmatic business slated to conclude its LinkedIn -for-performance and apply-connect integrations in early Q3, we expect to benefit from these efforts across our entire portfolio. These investments with LinkedIn will enable us to continue delivering substantial value to clients and strengthen our collaboration with LinkedIn, the new global market leader. We signed 58 new software deals in the quarter, including some of our most significant deals to while also building a more robust pipeline that could lead to even more positive results in the second half of the year, particularly in Q4, which traditionally is our strongest quarter for media deals in the higher division. Another major higher initiative, focused on expanding our SaaS revenue through enhanced ATS partnerships and integrations, is also gaining momentum and shows considerable promise for the SaaS revenue growth. At the close of Q1, we executed our most critical partnership agreement to date with Workday. This elevated us to the highest platinum level of partners and created substantial opportunities for co-selling and lead generation with a global leader in the market. In our first active quarter, our lead pipeline with Workday clients exceeds $1 million in contract value, despite the nascent stage of lead and deal flow. We finalized 11 new Workday client deals this quarter. Furthermore, new integrations with major global ATSs, as well as our partnership with the integrations marketplace Combo, will provide Veritone Hire access to over 100 new ATS integrations in Q3 and beyond. We successfully concluded several notable deals this quarter with global corporations such as KPMG, Dower, Faden, CBRE, and Suncorp, among others. Before turning things over to Mike, I want to congratulate our team for their strong performance and perseverance. Veritone is growing again, and we remain very bullish on our future. Our pipeline is the largest it has ever been, led by public sector and VDR, and our AI software revenue growth is accelerating. Now, Mike, over to you. Thank you, Ryan.