Veritone Q2 Earnings Call Highlights

Veritone (NASDAQ:VERI) reported second-quarter 2026 revenue of $24.3 million, up 20% sequentially and 5% from a year earlier, as growth in its Veritone Data Refinery, or VDR, and licensing services offset pressure in hiring and public-sector revenue.

Chief Executive Officer Ryan Steelberg said the company continued to execute restructuring and cost-reduction initiatives while launching new artificial intelligence products and expanding its sales pipeline. Veritone has implemented actions representing approximately $11.3 million in annualized savings, including workforce reductions and lower non-payroll expenses, he said.

The company is targeting total annualized cost reductions of $15 million to $20 million by the end of 2026. Steelberg said Veritone intends to continue identifying efficiencies into 2027, with a goal of realizing up to 30% in relative total savings through the first part of that year. The company is targeting break-even profitability in fiscal 2027.

VDR Growth Offsets Delays

Chief Financial Officer Mike Zemetra said second-quarter revenue increased $4 million from the first quarter, driven by VDR and licensing services, which together rose 40% sequentially. Managed services also increased $1 million from the prior-year quarter, led by representation and licensing services.

However, Zemetra said results came in slightly below expectations due largely to delayed public-sector funding. He attributed the decline in public-sector revenue from a year earlier to a delayed Department of Defense contract extension, which he said resulted from temporary budget shifts toward the conflict in Iran.

Veritone remains engaged with the Department of Defense and expects funding for the project could be approved in the second half of 2026 or the first half of 2027, depending on the status of the conflict, Zemetra said.

The company also said some larger hyperscaler VDR transactions remained under review and had not been fully processed during the quarter. Veritone has all major hyperscalers under contract and reported a near-term VDR sales pipeline and bookings opportunity exceeding $65 million, including more than $15 million in active opportunities that could close in the third or fourth quarter.

Steelberg said a single incremental order from a signed hyperscaler or foundation-model developer could represent millions of dollars in quarterly margin. He added that Veritone is progressing with its migration to Oracle, with initial storage payloads expected to begin moving during the current month. Once relevant workloads are migrated, the company expects compute savings of 20% or more.

Public Safety Products and Contracts

During the quarter, Veritone launched Veritone Assess, an agentic AI-powered data-analysis product, and Document Redaction, which is intended to automate the removal of sensitive information from documents. Steelberg said the company has already closed several Document Redaction deals and plans to make the product generally available during the third quarter.

Veritone also secured a multiyear contract with the California Highway Patrol for Veritone Redact, which will be used to automate redaction of sensitive information in digital-evidence datasets. The company added new channel partners, including MCCi and JustFOIA, for redaction offerings, and said it signed a five-year agreement with a Washington state agency.

Internationally, Veritone said it concluded an agreement with the U.K. Department for Work and Pensions and was down-selected for a countrywide U.K. procurement framework. Zemetra said Veritone’s public-sector pipeline remains above $200 million, though some potential opportunities are more likely to affect fiscal 2027 than 2026.

Hiring Business and Commercial Operations

Veritone’s hiring division, rebranded as Broadbean by Veritone, managed more than 7.6 million jobs annually and generated 132 million candidate engagements, Steelberg said. The division introduced its Job Acceleration feature in May, allowing recruiters to put urgent roles into a dedicated campaign with separate budgets.

Broadbean recorded 76 new business wins during the quarter. Veritone also said it signed as a partner in SAP’s PartnerEdge Build program, continued integrations with Oracle HCM, and closed seven new Workday deals. Year to date, the company reported $1.3 million across 33 joint Workday wins.

Still, Zemetra said hiring revenue declined from a year ago, principally due to lower consumption-based revenue from one of the company’s largest hiring platforms and a challenging hiring market. Veritone expects the pressure on smaller customers and hiring demand to continue through the second half of 2026.

Margins, Liquidity and Updated Outlook

GAAP gross profit was $14.2 million, compared with $15.7 million a year earlier, while GAAP gross margin declined to 58.5% from 67.5%. The company said the decline reflected revenue mix, including VDR revenue, which carries lower margins than some software-as-a-service offerings.

Veritone reported an operating loss of $22 million, compared with an operating loss of $18.9 million in the prior-year quarter. The result included $4.5 million of one-time severance and transition costs related to the restructuring. Net loss improved to $22.2 million from $26.5 million a year earlier, aided by lower interest expense after the company retired its senior secured debt in November 2025.

As of June 30, Veritone held $12.7 million in cash and restricted cash and had approximately $45 million of debt outstanding, compared with about $130 million of debt a year earlier. The company raised net proceeds of approximately $9.4 million through its at-the-market equity program during the quarter and had more than $40 million of availability remaining under that program.

Veritone updated its full-year 2026 outlook, projecting revenue of $100 million to $150 million and a non-GAAP net loss of $22 million to $32 million. At the revenue midpoint, the outlook represents 17% year-over-year growth, according to the company. Veritone expects gross margins of 60% to 65% for the year.

Zemetra said the company expects operating profitability as early as the first half of 2027 if it completes the remaining cost actions and generates modest revenue growth. He said annual revenue of roughly $125 million to $130 million, along with the planned reductions, would support break-even results for the full year.

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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