Veritone, Inc.

Good day and welcome to the Veritone Inc. Third Quarter 2025 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a 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 then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Kate Goldsmith, Investor Relations. Please go ahead.

Thank you, and good afternoon. After the market closed today, Veritone issued a press release announcing results for the third quarter, 2025, ended September 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 Stilberg, and Chief Financial Officer, Mike Simetra, 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, November 6, 2025, and Veritone undertakes no obligation to revise or update them. During this call, the financial measures we will be discussing include non-GAAP measures. Reconciliations 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 www.veritone.com. Now, I would like to turn the call over to our President and Chief Executive Officer, Ryan Steelbrook.

Thank you, Kate, and thank you everyone for joining us today. As the iconic line from one of my favorite childhood shows, The A-Team, goes, I love it when a plan comes together. Simple yet profound, and never more fitting than it is for Baritone today. I look forward to sharing the details of our exceptional quarter and the strategic momentum now propelling Baritone forward. But before we dive in, I want to take a moment to highlight the substantial progress we've made over the past 24 months, progress that has fundamentally strengthened our company and positioned us for sustained growth and success. In early 2023, we set a bold and deliberate course to realign Veritone with its AIWare first mission, fortify our financial position, and ignite durable strategic growth. We've executed with precision and purpose every step of the way, transforming vision into measurable achievement. Today, I'm proud to declare success across these core initiatives. Veritone has not only regained its footing, but stands stronger, more focused, and more strategically positioned than ever before. First, let's start with the balance sheet, where we have completely flipped the script. A few years ago, at their peak, we carried nearly $80 million in high-cost term debt and roughly $200 million in convertible debt. Today, I'm proud to announce that we've completed an agreement to retire the entirety of our term debt and repurchase approximately 50% of our outstanding convertible debt while maintaining material net cash on the balance sheet to fully fund operations through 2026 and achieve our profitability goal in the later half of next year. As a result, our annual debt service burden has now dropped from over $14 million a year to approximately $800,000 a year, a transformative shift that fundamentally strengthens our financial foundation and future trajectory. Our balance sheet, historically an anchor laden with debt, now provides renewed flexibility and stability, enabling us to fully capitalize on this hyper-growth market opportunity. Second, after years of disciplined financial execution and strategic reorganization, efforts that have generated tens of millions of dollars in savings, our operating model today is now tightly aligned with both our scale and our strategic focus on our high-growth AI software products and services. With this foundation in place, our confidence in achieving operating profitability in late 2026 has never been stronger. Third, we have refocused Veritone squarely on our AI roots, our unmatched expertise and unstructured data, and our market-leading intelligent AI applications. Today, Veritone stands on a trajectory of strong, strategic, and profitable growth powered by our proprietary AI operating system, AIWare, which fuels the global data economy by generating trillions of tokens every quarter. As the AI economy accelerates, the data economy is expanding right alongside it, and Veritone's strategic positioning and market timing could not be more perfect. Veritone has emerged as a leading semantic token factory for video and audio, a service we call the Veritone Data Refinery, or VDR, built entirely on our own proprietary AIWare platform. Our tokenization engine not only powers our own AI workflows and customer applications, but now serves as the foundation for a powerful new monetization framework. Our VDR product offering is leading the way as the first of several major monetization initiatives, which we plan to roll out beginning in the first quarter of next year. For more than a decade, Veritan has been tokenizing video and audio, the fastest growing segment of unstructured data, at massive scale. More importantly, we're doing so in a transactional utility driven format that delivers immediate value and measurable ROI for our customers and ultimately for our investors through our expanding suite of innovative AI products, services and applications. Our tokenization and monetization strategy is designed to exist and operate both on-chain in the context of blockchain and independently as it has done profitably and efficiently for more than a decade. The data as a currency era has arrived, and Veritone is uniquely positioned to capitalize, executing from a position of strength, expertise, and leadership in a rapidly expanding multi-billion dollar market. In fact, according to Mordor Intelligence, the global tokenized asset market is projected to reach $13.5 trillion by 2030. It is going to be a very exciting next few years for Veritone and our customers. Now, turning to our strong quarterly results. Veritone delivered revenue of over $29 million. This performance underscores the accelerating demand for our market-leading AIware solutions, data products, and intelligent applications, representing a 32% year-over-year increase in revenue for the overall business. Looking specifically at software products and services, which includes VDR, revenue grew by an impressive 55% during the quarter. Excluding Veritone Hire, our software products and services revenue surged by more than 200%. As global investment in AI infrastructure intensifies, demand for high-quality training data and for our AI applications continues to rise in parallel. This powerful combination is driving sustained high-margin expansion across our software products and services business. And as Mike will outline shortly, our bottom-line performance this quarter was equally strong, delivering more than a 50% year-over-year improvement. Now turning to the partnerships, contract wins, and products that underpinned our strong results. This quarter, our Veritone Data Refinery, VDR business, continued to deliver exceptional performance. VDR transforms raw, unstructured audio, video, images, and text in high-quality, tokenized datasets that power and fine-tune the world's most advanced AI models. We have established ourselves as a premier data and model training partner, and during the quarter, we secured several significant new VDR customers, including contracts with multiple major hyperscalers. further solidifying VDR's position as a critical enabler in the unstructured AI training data ecosystem. VDR's accelerated momentum underscores not only the surging buy-side demand for clean, model-ready training data, but also the expanding monetization potential of premium video and audio assets themselves. Our qualified VDR pipeline and bookings now exceed $40 million, reflecting 100% growth quarter over quarter. Importantly, that figure represents only current bookings and near-term opportunities. Our total VDR pipeline now spans multiple sectors, regions, and time horizons, positioning Veritone for sustained growth as AI developers increasingly move beyond open web data in favor of proprietary multi-modality datasets, precisely the domain VDR was built to serve. Looking forward, we are confident that by the end of 2025, Veritone will hold active contracts or projects with every major hyperscaler in the market. Our VDR solutions are indeed growing quickly and provide great strategic leverage for future growth, but we are equally excited about our AI applications business, again built and deployed on the same AIWare platform. For Veritone and our customers, our AI applications are the delivery vehicles for data-centric high-value use cases, driving efficiency gains and ROI. In the quarter, we achieved significant progress across our commercial enterprise applications business. We signed 27 commercial agreements, including partnerships with ESPN, the NCAA, and Newsmax. And just last week, we announced an expansion of our long-standing relationship with CBS, now encompassing many of CBS Media Ventures' flagship programs, including Entertainment Tonight and Inside Edition, which are now available for licensing through Veritone. These partnerships exemplify how Veritone empowers the world's leading media organizations to unlock and monetize their vast content and data archives. Furthermore, through VDR, we are transforming these assets into clean, searchable, model-ready datasets, creating high-value training material for AI models, and in turn, generating meaningful, recurring revenue streams for both Veritone and our partners. As content libraries expand and data volumes surge, Veritone is uniquely positioned to unlock maximum value for commercial enterprises and IP owners. Our technology enables partners to fully monetize their content archives, transforming dormant assets into active, revenue-generating resources, while simultaneously producing high-quality, model-ready data that fuels the next generation of AI innovation. Turning to the public sector, in Q3, we closed 82 contracts from new and existing customers across federal, state, and local agencies. We also added 30 new agencies during the quarter, including an IDEMS win at a top five law enforcement agency and an annual IDEMS renewal with a Department of War agency deployed in their private cloud. Despite the federal government shutdown, we continue to be actively engaged with our customers and prospects in the Department of War and DHS as we expand the footprint of Veritone Solutions. Our public sector pipeline now approaches $218 million in qualified opportunities, up from $110 million earlier this year, a testament to both our accelerating demand for AI-driven solutions and Veritone's reputation as a trusted technology partner to law enforcement, defense, and fed-civ agencies. We also saw encouraging momentum internationally, including closing a partner-led transaction for a national police agency in the EU and advancing multiple opportunities in the UK for Veritone Redact, Veritone IDEMS, and a new workflow solution on AIWare. Our international pipeline now exceeds $28 million and continues to grow rapidly, reflecting rising product market fit and strong demand among agencies engaged in government initiatives in key global markets, all supported by our secure and GDPR-compliant infrastructure. Our awardable status on the Department of War's P1 marketplace positions Veritone to capitalize on the expanding wave of government AI investment. This designation enables us to engage directly with DoD and civilian agencies, shorten procurement cycles, and deliver mission-critical AI solutions faster, helping government partners tackle their most pressing operational and analytical challenges. Subsequent to the end of the quarter, we introduced a suite of new advanced capabilities within Veritone Redact, our AI-ware powered SaaS application that automates the redaction of sensitive information in audio, video, and text. The latest features include AI-powered voice masking, inverse blur, and multi-language transcription in 64 languages, all designed to enhance privacy, compliance, and efficiency. These advancements are already driving expansion within existing customers and creating new opportunities for agency and enterprise partnerships. Before turning things over to Mike, I want to reflect again on how far we've come and where we're headed. I could not be more excited about Veritone's future and I remain deeply grateful to our investors, partners, and employees who have supported us through this remarkable transformation. I have never been more confident in the future of Veritone, our business, our people, and the market opportunity before us. We are leading the tokenization and monetization of valuable unstructured data and have firmly established ourselves as a key enterprise leader in both the AI and data economies. With a strengthened balance sheet supported by high-quality equity raises completed in the past few months and the material debt reductions announced today, Veritone is entering a new phase of execution, one defined by rapid profitable growth. With our exceptional talent, dynamic AI platform, market-leading applications, and a robust expanding pipeline, Veritone's future has never been brighter. Over to you, Mike.