Veritone, Inc.
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 8, 2025
VERI$0.48+1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0000950170-25-069243
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001615165-25-000012
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 124 current paragraphs.
59 unchanged; 39 reworded; 19 added; 8 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Credit Agreement Amendments
Current report
On June 13, 2025, we entered into a Second Amendment to Credit and Guaranty Agreement (the “Second Amendment”). The Second Amendment provides that the minimum Consolidated Liquidity (as defined in the Credit Agreement) covenant is (i) reduced to $5 million for the period of time beginning on June 13, 2025 and extending through June 30, 2025, (ii) increased to $10 million for the period of time beginning on July 1, 2025 and extending through August 31, 2025 and (iii) increased to $15 million beginning on September 1, 2025 and extending through maturity.
Current report
On June 30, 2025, we entered into a Third Amendment to Credit and Guaranty Agreement (the “Third Amendment”). The Third Amendment provides that the minimum Consolidated Liquidity (as defined in the Credit Agreement) covenant (i) shall not be less than $5 million for the period of time beginning on June 13, 2025 and extending through August 31, 2025 and (ii) shall be increased to $15 million beginning on September 1, 2025 and extending through maturity.
Current report
We did not pay a consent fee in connection with the Third Amendment.
Current report
January 2025 Registered Direct Offering
Current report
June 2025 Registered Direct Offering and Private Placement
Current report
On June 30, 2025, we agreed to issue and sell an aggregate of 6,452,293 shares of our common stock at a price of $1.09 per share and pre-funded warrants to purchase up to 1,804,587 shares of our common stock (the “June 2025 Pre-Funded Warrants”), priced at $1.08 per pre-funded warrant, with an exercise price of $0.01 per share, to certain institutional and accredited investors in a registered direct offering (the “June 2025 Registered Direct Offering”). The sale and issuance of shares and warrants were completed on July 1, 2025. The aggregate gross proceeds from the offering were approximately $9.0 million, before deducting estimated offering expenses.
Current report
Additionally, on June 30, 2025, pursuant to the terms of the RDO Purchase Agreement, we and Ryan Steelberg, our President, Chief Executive Officer and Chairman of our Board of Directors, as trustee of The RSS Living Trust dated April 6, 2012 (the “RSS Trust”) entered into a securities purchase agreement (the “Steelberg Purchase Agreement”), pursuant to which the RSS Trust agreed to purchase from us, and we agreed to issue and sell to the RSS Trust, up to 709,220 shares of our common stock for a gross aggregate offering price of $1.0 million, at a price per share equal to the greater of (i) $1.41 (representing the consolidated closing bid price of our common stock on June 27, 2025) and (ii) the consolidated closing bid price of our common stock on the date that is the second full trading day after the date on which our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (“Q2 Form 10-Q”) is filed with the SEC (such transaction, the “Private Placement” and such shares, the “Private Placement Shares”).
Current report
The Private Placement is expected to close on the third full trading day after the filing of our Q2 Form 10-Q with the SEC, subject to satisfaction of certain closing conditions. The Private Placement Shares will not be registered under the Securities Act and are being offered pursuant to the exemption from registration provided in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder. The RSS Trust is an “accredited investor” as such term is defined in Rule 501(a) under the Securities Act.
Current report
One Big Beautiful Bill Act (OBBBA)
Current report
H.R. 1., also known as the One Big Beautiful Bill Act (OBBBA), was enacted on July 4, 2025. The legislation includes several provisions that may impact the timing and magnitude of certain tax deductions. Key provisions include the permanent extension of several business tax benefits originally introduced under the 2017 Tax Cuts and Jobs Act. We are currently evaluating the provisions of the OBBBA to assess their potential impact on our financial position, results of operations and cash flows.
Current report
Sales and marketing remained flat in the six months ended June 30, 2025 compared to the corresponding prior-year period. Sales and marketing as a percentage of revenue increased to 45.6% from 43.9% during the six months ended June 30, 2025.
Current report
Research and development decreased $4.4 million, or 30.1%, in the six months ended June 30, 2025 compared to the corresponding prior-year period primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024, capitalized internal-use software costs, and outside consulting services. Research and development as a percentage of revenue decreased to 21.8% from 30.1% during the six months ended June 30, 2025.
Current report
General and administrative decreased $1.2 million, or 8.7%, in the three months ended June 30, 2025 compared to the corresponding prior-year period primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024 and contingent purchase compensation expense.
Current report
General and administrative decreased $3.0 million, or 10.0%, in the six months ended June 30, 2025 compared to the corresponding prior-year period primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024 and contingent purchase compensation expense.
Current report
Depreciation and amortization expense increased $0.3 million, or 4.3%, in the three months ended June 30, 2025 compared to the corresponding prior-year period primarily due to ongoing depreciation of newly capitalized internal-use software.
Current report
The $3.2 million of other expense, net for the three months ended June 30, 2025 primarily consisted of a $2.9 million loss on revaluation of the Veritone One earnout receivable. The $0.1 million of other expense, net for the three months ended June 30, 2024 consisted of a $0.2 million loss on sale of GridBeyond, partially offset by a $0.1 foreign currency impact.
Current report
The $0.9 million of other income, net for the six months ended June 30, 2025 primarily consisted of a $0.8 million gain on revaluation of the Veritone One earnout receivable. The $0.5 million of other expense, net for the six months ended June 30, 2024 consisted of a $0.2 million loss on sale of GridBeyond and a $0.4 million foreign currency impact.
Current report
On June 30, 2025, we agreed to issue and sell an aggregate of 6,452,293 shares of our common stock at a price of $1.09 per share and pre-funded warrants to purchase up to 1,804,587 shares of our common stock, priced at $1.08 per pre-funded warrant, with an exercise price of $0.01 per share, to certain institutional and accredited investors in a registered direct offering. The sale and issuance of shares and warrants were completed on July 1, 2025. Additionally, in a concurrent private placement transaction, we and Ryan Steelberg, our President, Chief Executive Officer and Chairman of our Board of Directors, as trustee of the RSS Trust, entered into the Steelberg Purchase Agreement, pursuant to which the RSS Trust agreed to purchase from us, and we agreed to issue and sell to the RSS Trust, up to 709,220 shares of common stock for a gross aggregate offering price of $1.0 million, at a price per share equal to the greater of (i) $1.41 (representing the consolidated closing bid price of our common stock on June 27, 2025), and (ii) the consolidated closing bid price of our common stock on the date that is the second full trading day after the date on which our Q2 Form 10-Q is filed. The aggregate gross proceeds were approximately $10.0 million, before deducting estimated offering expenses.
Removed paragraphs (8)
Previous report
Registered Direct Offering
Previous report
Appointment of Francisco Morales to the Board of Directors
Previous report
On March 12, 2025, our Board of Directors (the “Board”) appointed Francisco Morales as a member of the Board, effective as of March 20, 2025, to fill the vacancy created by Chad Steelberg’s resignation as a director on March 12, 2025. Mr. Morales will serve as a Class III director until our 2026 annual meeting of stockholders and until his successor is elected and qualified, or until his earlier death, retirement, resignation or removal. Mr. Chad Steelberg will continue to serve as a strategic advisor to us following his resignation from the Board.
Previous report
Limited Consent to Credit Agreement
Previous report
On March 13, 2025, we entered into a Limited Consent (the “Limited Consent”) to our Credit and Guaranty Agreement, dated December 13, 2023 (the “Credit Agreement”), with the lenders and administrative agent party thereto. Pursuant to the Limited Consent, the lenders consented to the delivery by us of our audited consolidated financial statements for the fiscal year ended December 31, 2024 and a report of our independent certified public accountants relating thereto that do not meet certain requirements of the Credit Agreement requiring, among other things, delivery of audited consolidated financial statements and a report thereon of our independent certified public accountants that are unqualified as to going concern. As consideration for the Limited Consent, we paid an aggregate of $1.0 million in cash to the lenders party to the Limited Consent.
Previous report
First Amendment to Credit Agreement
Previous report
General and administrative decreased $1.8 million, or 11.2%, in the three months ended March 31, 2025 compared to the corresponding prior-year period primarily due to decreased personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024.
Previous report
Other income, net of $4.1 million for the three months ended March 31, 2025 was primarily due to a $3.7 million favorable change in the fair value of the Veritone One earnout receivable and a favorable foreign currency impact. Other expense, net of $0.4 million for the three months ended March 31, 2024 was primarily due to an unfavorable foreign currency impact.
Reworded paragraphs (39)
Previous wording
Veritone, Inc., collectively with our subsidiaries, referred to as “Veritone,” “Company,” “we,” “our,” and “us,” is a provider of Artificial Intelligence (“AI”) solutions, powered by our proprietary AI operating system, aiWARE™, to deliver differentiated products and solutions to our Commercial Enterprise and Public Sector (which we previously referred to as Government & Regulated Industries) customers. Our Software Products & Services consist of revenues generated from Commercial Enterprise and Public Sector customers using our aiWARE platform and Veritone Hire solutions, any related support and maintenance services, and any related professional services associated with the deployment and/or implementation of such solutions. Our Managed Services consist of revenues generated from Commercial Enterprise customers using our content licensing and representation services, including influencer management and related operations.
Current wording
Veritone, Inc., collectively with our subsidiaries, referred to as “Veritone,” “Company,” “we,” “our,” and “us,” is a provider of Artificial Intelligence (“AI”) solutions, powered by our proprietary AI operating system, aiWARE™, to deliver differentiated products and solutions to our Commercial Enterprise and Public Sector customers. Our Software Products & Services consist of revenues generated from Commercial Enterprise and Public Sector customers using our aiWARE platform and Veritone Hire solutions, any related support and maintenance services, and any related professional services associated with the deployment and/or implementation of such solutions. Our Managed Services consist of revenues generated from Commercial Enterprise customers using our content licensing and representation services, including influencer management and related operations.
Previous wording
During the three months ended March 31, 2025, we generated revenue of $22.5 million, as compared to $24.2 million during the three months ended March 31, 2024. Software Products & Services revenue was $14.5 million during the three months ended March 31, 2025, as compared to $15.2 million during the three months ended March 31, 2024, while Managed Services revenue was $8.0 million during the three months ended March 31, 2025, as compared to $8.9 million during the three months ended March 31, 2024. During the three months ended March 31, 2025 and 2024, no customer represented more than 10% of our consolidated revenue.
Current wording
During the three and six months ended June 30, 2025, we generated revenue of $24.0 million and $46.5 million, respectively, as compared to $24.1 million and $48.2 million during the three and six months ended June 30, 2024, respectively. Software Products & Services revenue was $17.5 million and $32.0 million during the three and six months ended June 30, 2025, respectively, as compared to $15.6 million and $30.9 million during the three and six months ended June 30, 2024, respectively. Managed Services revenue was $6.5 million and $14.5 million during the three and six months ended June 30, 2025, respectively, as compared to $8.4 million and $17.4 million during the three and six months ended June 30, 2024, respectively. During the three and six months ended June 30, 2025 and 2024, no customer represented more than 10% of our consolidated revenue.
Previous wording
In connection with obtaining the requisite lenders’ consent to the First Amendment, we issued to the consenting lenders 228,311 shares of our common stock, representing a number of shares having an aggregate value equal to $500,000, based on a price per share of $2.19, which was the closing price per share of our common stock on The Nasdaq Stock Market LLC on April 23, 2025, the trading day immediately prior to the effective date of the First Amendment.
Current wording
In connection with obtaining the requisite lenders’ consent to the First Amendment, we issued to the consenting lenders 228,311 shares of our common stock, representing a number of shares having an aggregate value equal to $500,000, based on a price per share of $2.19, which was the closing price per share of our common stock on The Nasdaq Global Market on April 23, 2025, the trading day immediately prior to the effective date of the First Amendment.
Previous wording
Except as set forth in the Limited Consent and the First Amendment, the terms of the Credit Agreement remain unchanged.
Current wording
Except as set forth in the Limited Consent, the First Amendment, the Second Amendment, and the Third Amendment, the terms of the Credit Agreement remain unchanged.
Previous wording
On January 2, 2025, we sold 4,414,878 shares of our common stock, priced at $2.53 per share, and pre-funded warrants to purchase up to 3,608,838 shares of our common stock (the “Pre-Funded Warrants”), priced at $2.52 per pre-funded warrant, with an exercise price of $0.01 per share, to Esousa Group Holdings, LLC, a New York-based family office, in a registered direct offering (the “Registered Direct Offering”). The gross proceeds from the offering were approximately $20.3 million, before deducting estimated offering expenses.
Current wording
On January 2, 2025, we sold 4,414,878 shares of our common stock, priced at $2.53 per share, and pre-funded warrants to purchase up to 3,608,838 shares of our common stock (the “January 2025 Pre-Funded Warrants”), priced at $2.52 per pre-funded warrant, with an exercise price of $0.01 per share, to Esousa Group Holdings, LLC, a New York-based family office, in a registered direct offering (the “January 2025 Registered Direct Offering”). The gross proceeds from the offering were approximately $20.3 million, before deducting estimated offering expenses.
Previous wording
The Pre-Funded Warrants were offered in lieu of shares of our common stock and provide that the holder may not exercise any portion of the Pre-Funded Warrants to the extent that immediately prior to or after giving effect to such exercise the holder (together with its affiliates) would beneficially own more than 9.99% of our outstanding common stock (the “Maximum Percentage”) after such exercise. Subject to the Maximum Percentage, the Pre-Funded Warrants are immediately exercisable and may be exercised at any time until the fifth anniversary of the original issue date of the Pre-Funded Warrants. If, at the time of exercise, there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance or resale of the Warrant Shares, in lieu of making cash payment otherwise contemplated to be made to us upon exercise of a Pre-Funded Warrant in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the Pre-Funded Warrants.
Current wording
The January 2025 Pre-Funded Warrants were offered in lieu of shares of our common stock and provide that the holder may not exercise any portion of the January 2025 Pre-Funded Warrants to the extent that immediately prior to or after giving effect to such exercise the holder (together with its affiliates) would beneficially own more than 9.99% of our outstanding common stock (the “Maximum Percentage”) after such exercise. Subject to the Maximum Percentage, the January 2025 Pre-Funded Warrants are immediately exercisable and may be exercised at any time until the fifth anniversary of the original issue date of the January 2025 Pre-Funded Warrants. If, at the time of exercise, there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance or resale of the Warrant Shares, in lieu of making cash payment otherwise contemplated to be made to us upon exercise of a January 2025 Pre-Funded Warrant in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the January 2025 Pre-Funded Warrants.
Previous wording
During the three months ended March 31, 2025 and 2024, we derived our revenue primarily through our Commercial Enterprise customers and secondarily through our Public Sector customers.
Current wording
During the three and six months ended June 30, 2025 and 2024, we derived our revenue primarily through our Commercial Enterprise customers and secondarily through our Public Sector customers.
Previous wording
We are a leader in AI-based Software Products & Services. Our proprietary AI operating system, aiWARE, uses machine learning algorithms, or AI models, together with a suite of powerful applications, to reveal valuable insights from vast amounts of structured and unstructured data. Historically, we have derived a large portion of our Software Product & Services revenue from applications we internally developed from our aiWARE platform and actively sold across various customers. Beginning in mid-fiscal year 2022, economic conditions, including those resulting from the pullback in the macroeconomic environment caused by inflation, high interest rates, tariffs and trade tensions, as well as geopolitical factors such as the Russia-Ukraine war and the Israel-Hamas war, negatively impacted parts of our consumption-based operations and financial results. As a result, our Software Products & Services revenue decreased from $84.8 million during the year ended December 31, 2022 to $68.4 million during the year ended December 31, 2023, and decreased further to $61.1 million during the year ended December 31, 2024. These economic and geopolitical factors have continued to impact our financial results, including in the first quarter of 2025, resulting in Software Products & Services revenue of $14.5 million for the three months ended March 31, 2025, a decrease of 4.8% as compared to the prior year period. This decrease in Software Products & Services revenue was also due in part to lower consumption across our Commercial Enterprise customer base, including Amazon and certain one-time software revenue recognized in 2024 that did not recur at the same rate in 2025.
Current wording
We are a leader in AI-based Software Products & Services. Our proprietary AI operating system, aiWARE, uses machine learning algorithms, or AI models, together with a suite of powerful applications, to reveal valuable insights from vast amounts of structured and unstructured data. Historically, we have derived a large portion of our Software Product & Services revenue from applications we internally developed from our aiWARE platform and actively sold across various customers. Beginning in mid-fiscal year 2022, economic conditions, including those resulting from the pullback in the macroeconomic environment caused by inflation, high interest rates, tariffs and trade tensions, as well as geopolitical factors such as the Russia-Ukraine war and the Israel-Hamas war, negatively impacted parts of our consumption-based operations and financial results. As a result, our Software Products & Services revenue decreased from $84.8 million during the year ended December 31, 2022 to $68.4 million during the year ended December 31, 2023, and decreased further to $61.1 million during the year ended December 31, 2024. While these economic and geopolitical factors have persisted throughout the first half of 2025, including recent instability caused by tariffs, our Software Products & Services revenue of $17.5 million and $32.0 million for the three and six months ended June 30, 2025, respectively, improved 11.8% and 3.6%, respectively, as compared to the corresponding prior-year periods.
Previous wording
To align our operating structure with this revenue decline, we enacted significant cost reductions during fiscal years 2023 and 2024. In January 2023, we announced our plans to reduce costs through the optimization of our operational structure. In February 2024, we announced additional cost reduction and restructuring initiatives, the result of which was a reduction in our global workforce of approximately 13% during fiscal 2024. From January 1, 2023 through December 31, 2024, our total reduction in workforce was 19%. As of March 31, 2025, we have achieved $40.0 million of net annualized strategic cost reductions since January 1, 2023 as a result of our organizational restructuring and realignment efforts. We increased our sales and marketing spending in the first quarter of 2025, as compared to the trailing twelve months in order to support our efforts to diversify our customer base and increase sales within our existing customer base, and as a result of our acquisition of (a) 100% of the issued and outstanding share capital of (i) Broadbean Technology Pty Ltd I, (ii) Broadbean Technology Limited, (iii) Broadbean, Inc., and (iv) CareerBuilder France S.A.R.L., and (b) certain assets and liabilities related thereto (the foregoing clauses (i) and (ii) together, “Broadbean”) in June 2023; however, these increased investments were partially offset by our 2024 and 2023 cost-reduction initiatives.
Current wording
To align our operating structure with the revenue declines experienced in 2024 and 2023, we enacted significant cost reductions during fiscal years 2023, 2024, and 2025. In January 2023, we announced our plans to reduce costs through the optimization of our operational structure. In February 2024, we announced additional cost reduction and restructuring initiatives, the result of which was a reduction in our global workforce of approximately 13% during fiscal 2024. From January 1, 2023 through December 31, 2024, our total reduction in workforce was 19%. In June 2025, we announced certain annual cost reduction initiatives of up to $10.0 million, of which actions had been enacted by June 30, 2025 that have result in approximately 80%, or $8.0 million, of 2025 cost reductions. As of June 30, 2025, we have achieved over $50.0 million of net annualized strategic cost reductions since January 1, 2023 as a result of our organizational restructuring and realignment efforts.
Previous wording
As of March 31, 2025, our total Software Products & Services customers declined to 3,156, which was a decrease of 6.7% as compared to March 31, 2024. This change was largely driven by planned migration of legacy CareerBuilder customers off the Broadbean software platform, offset by increases in Public Sector. In addition, smaller hiring agency customers experienced a drop in hiring as a result of the challenging macroeconomic environment, which contributed to the decrease in Software Products & Services customers, but did not have a significant impact on our financial results for the quarter ended March 31, 2025 or year ended December 31, 2024. To continue our effort to grow our customer base and overall revenue, we continue to invest aggressively in existing customers and acquiring new customers.
Current wording
As of June 30, 2025, our total Software Products & Services customers declined to 3,067, which was a decrease of 10.8% as compared to June 30, 2024. This change was largely driven by fewer consumption-based customers across Veritone Hire and the continuing impact of sunsetting legacy Career Builder customers, offset by an increase in public safety customers. In addition, smaller hiring agency customers experienced a drop in hiring as a result of the challenging macroeconomic environment, which contributed to the decrease in Software Products & Services customers, but did not have a significant impact on our financial results for the three and six months ended June 30, 2025 or year ended December 31, 2024. To continue our effort to grow our customer base and overall revenue, we continue to invest aggressively in existing customers and acquiring new customers.
Previous wording
We believe our Software Products & Services will extend the capabilities of many third-party software platforms and products that are widely used today. For example, we believe that, when integrated with aiWARE, our Veritone Hire solutions customers will be given greater visibility and transparency in their hiring processes. Further and with the recently announced Intelligent Digital Evidence Management System (“iDEMs”) and Veritone Data Refinery (“VDR”) launches, we now offer a suite of aiWARE applications to address the growing issue of unstructured digital data management faced by commercial and public safety and federal government sectors today. In 2025, we expect a substantial portion of our growth to come from our iDEMs and VDR solutions. In addition, we recently announced that we achieved Amazon Web Services (“AWS”) Advanced Tier Services status, advancing the deployment of our AI solutions and capabilities across the AWS platform, and we have historically integrated aiWARE across many platforms, including Alteryx, Snowflake and the NVIDIA® CUDA® GPU-based platform, enabling dramatic increases in aiWARE’s processing speed and providing a wide range of new use cases for our technology. We are in the process of developing and marketing more specific use cases for these and future integrations, which we believe will open new markets for our products and accelerate our long-term revenue growth opportunities.
Current wording
We believe our Software Products & Services will extend the capabilities of many third-party software platforms and products that are widely used today. For example, we believe that, when integrated with aiWARE, our Veritone Hire customers will have greater visibility and transparency in their hiring processes. With our recently announced Intelligent Digital Evidence Management System (“iDEMs”) and Veritone Data Refinery (“VDR”) product launches, we now offer a suite of aiWARE applications to address the growing problem of unstructured digital data management faced by commercial, public safety, and federal government sectors today. We expect that a substantial portion of our growth in 2025 will come from our iDEMS and VDR solutions. In June 2025, we announced a partnership with the US Air Force Office of Special Investigations (“OSI”), an investigative division within the US Department of Defense (“DOD”), and increased our VDR sales pipeline to more than $10.0 million from our March 2025 estimate of $5.0 million. The partnership with OSI is in the early stages of deploying our iDEMS solutions across the investigative divisions within the DOD. As a result, during the second quarter ended June 30, 2025, our Software Products Services revenue, excluding our Veritone Hire platform, grew over 40% when compared to the same period in 2024 led principally by our iDEMs and VDR initiatives. In addition, we recently announced that we achieved Amazon Web Services (“AWS”) Advanced Tier Services status, advancing the deployment of our AI solutions and capabilities across the AWS platform, and we have historically integrated aiWARE across many platforms, including Alteryx, Snowflake and the NVIDIA® CUDA® GPU-based platform, enabling dramatic increases in aiWARE’s processing speed and providing a wide range of new use cases for our technology. We are in the process of developing and marketing more specific use cases for these and future integrations, which we believe will open new markets for our products and accelerate our long-term revenue growth opportunities.
Previous wording
Prior to 2024, we pursued an opportunistic strategy of acquiring companies to help accelerate our organic growth. Our acquisition strategy has been threefold: (i) to increase the scale of our business in markets we are in today, (ii) to accelerate growth in new markets and product categories, including expanding our existing engineering and sales resources, and (iii) to accelerate the adoption of aiWARE as the universal AI operating system through venture or market-driven opportunities. While we believe there are strategic acquisition targets that can accelerate our entry into and expand our existing market share in key strategic markets, as well as our ability to grow our business, there is no certainty our historical or future acquisitions will achieve these objectives. Conversely, we have pursued and may continue to pursue opportunistic sales of certain business operations that are not strategic to us long-term, such as the divestitures of our Veritone energy solutions group in the second quarter of 2023 and Veritone One in October 2024.
Current wording
Prior to 2024, we pursued an opportunistic strategy of acquiring companies to help accelerate our organic growth. Our acquisition strategy was threefold: (i) to increase the scale of our business in markets we serve, (ii) to accelerate growth in new markets and product categories, including expanding our existing engineering and sales resources, and (iii) to accelerate the adoption of aiWARE as the universal AI operating system through venture or market-driven opportunities. While we believe there are strategic acquisition targets that can accelerate our entry into and expand our existing market share in key strategic markets, as well as our ability to grow our business, there is no certainty our historical or future acquisitions will achieve these objectives. Conversely, we have pursued and may continue to pursue opportunistic sales of certain business operations that are not strategic to us long-term, such as the divestitures of our Veritone energy solutions group in the second quarter of 2023 and Veritone One in October 2024.
Previous wording
In October 2024, we divested our wholly-owned subsidiary, Veritone One, for a total purchase price of up to $104.0 million. This strategic decision was made to enhance our focus on our core business and growth initiatives, particularly in Software Products & Services. By divesting non-core assets, we aim to streamline operations, reduce complexity, and allocate resources more effectively toward areas that align with our long-term strategic goals. The Divestiture has allowed us to concentrate on organic growth, enabling greater innovation, operational efficiency, and the ability to respond more swiftly to market opportunities within our primary business segments. As a result of this transaction, we expect to see potential positive impacts, e.g., improved margins, increased operational efficiency, more effective allocation of capital and believe that this sharper focus will drive sustainable growth and value creation for our shareholders moving forward.
Current wording
In October 2024, we divested our wholly-owned subsidiary, Veritone One, for a total purchase price of up to $104.0 million. This strategic decision was made to enhance our focus on our core business and growth initiatives, particularly in Software Products & Services. By divesting non-core assets, we aim to streamline operations, reduce complexity, and allocate resources more effectively toward areas that align with our long-term strategic goals. The divestiture of Veritone One has allowed us to concentrate on organic growth, enabling greater innovation, operational efficiency, and the ability to respond more swiftly to market opportunities within our primary business segments. As a result of this transaction, we expect to see potential positive impacts, e.g., improved margins, increased operational efficiency, more effective allocation of capital and believe that this sharper focus will drive sustainable growth and value creation for our shareholders moving forward.
Previous wording
For the three months ended March 31, 2025, our total revenues were $22.5 million, as compared to $24.2 million for the three months ended March 31, 2024, a decrease of 7.0% over the prior-year period, driven by a decrease in Software Products & Services revenue from the planned migration of legacy CareerBuilder customers off the Broadbean software platform and a decrease in Managed Services revenue primarily due to lower revenue from licensing customers and representation services, in each case, compared to the prior year period. Our gross profit for the three months ended March 31, 2025 was $13.7 million as compared to $16.3 million for the three months ended March 31, 2024, a decrease of 16.0%, driven by a decrease in revenue and the increase in depreciation of internally developed software costs compared to the prior year period. For the three months ended March 31, 2025, our non-GAAP gross profit (calculated as described in “Non-GAAP Financial Measures” below) decreased to $14.6 million as compared to $17.2 million for the three months ended March 31, 2024, driven by the decrease in revenue and higher cost of revenue compared to the prior year period. Gross profit and non-GAAP gross profit (calculated as described in “Non-GAAP Financial Measures” below) are dependent upon our ability to grow our revenue by expanding our customer base and increasing business with existing customers, and to manage our costs by negotiating favorable economic terms with cloud computing providers such as AWS and Microsoft Azure. While we are focused on continuing to improve our gross profit and non-GAAP gross profit, our ability to attract and retain customers to grow our revenue will be highly dependent on our ability to implement and continually improve upon our technology and services and improve our technology infrastructure and operations as we experience increased network capacity constraints due to our growth.
Current wording
For the three and six months ended June 30, 2025, our total revenues were $24.0 million and $46.5 million, respectively, as compared to $24.1 million and $48.2 million for the three and six months ended June 30, 2024, respectively, a decrease of 0.2% and 3.6%, respectively, over the prior-year period, driven by a decrease in Managed Services revenue primarily due to lower revenue from representation services, partially offset by an increase in Software Products & Services revenue from iDEMs and VDR revenues, in each case, compared to the prior year period. Our gross profit for the three and six months ended June 30, 2025 was $15.3 million and $29.1 million, respectively, as compared to $16.4 million and $32.7 million for the three and six months ended June 30, 2024, respectively, a decrease of 6.5% and 11.3%, respectively, driven by a decrease in revenue and the increase in depreciation of internally developed software costs compared to the prior year period. For the three and six months ended June 30, 2025, our non-GAAP gross profit (calculated as described in “Non-GAAP Financial Measures” below) decreased to $16.5 million and $31.2 million, respectively, as compared to $17.7 million and $34.9 million for the three and six months ended June 30, 2024, respectively, driven by the decrease in revenue and higher cost of revenue compared to the prior year period. Gross profit and non-GAAP gross profit (calculated as described in “Non-GAAP Financial Measures” below) are dependent upon our ability to grow our revenue by expanding our customer base and increasing business with existing customers, and to manage our costs by negotiating favorable economic terms with cloud computing providers such as AWS and Microsoft Azure. While we are focused on continuing to improve our gross profit and non-GAAP gross profit, our ability to attract and retain customers to grow our revenue will be highly dependent on our ability to implement and continually improve upon our technology and services and improve our technology infrastructure and operations as we experience increased network capacity constraints due to our growth.
Previous wording
During the three months ended March 31, 2025, we reported a net loss of $19.9 million as compared to a net loss of $25.2 million during the three months ended March 31, 2024. During the three months ended March 31, 2025, we reported a non-GAAP net loss of $11.1 million as compared to a non-GAAP net loss of $7.6 million during the three months ended March 31, 2024. To continue to grow our revenue, we will continue to make targeted investments in people, namely software engineers and sales personnel. However, considering the current challenging macro-economic environment throughout 2024 and 2023, we have made and are continuing to make significant cost reductions to our operating structure to better streamline our business and prioritization around our growth and corresponding investments. These cost reduction initiatives began in the latter half of 2022 and have continued through the first quarter of 2025, and include reductions in workforce and certain legacy operating costs, as well as the sale of our energy solutions group. As a result of these initiatives, we believe we will be able to accelerate our pathway toward long term profitability.
Current wording
During the three and six months ended June 30, 2025, we reported a net loss of $26.8 million and $46.7 million, respectively, as compared to $22.2 million and $47.4 million during the three and six months ended June 30, 2024, respectively. During the three and six months ended June 30, 2025, we reported a non-GAAP net loss of $8.7 million and $19.8 million, respectively, as compared to $6.9 million and $14.5 million during the three and six months ended June 30, 2024, respectively. To continue to grow our revenue, we will continue to make targeted investments in people, namely software engineers and sales personnel. However, considering the current challenging macro-economic environment throughout 2024 and 2023, we have made and are continuing to make significant cost reductions to our operating structure to better streamline our business and prioritization around our growth and corresponding investments. These cost reduction initiatives began in the latter half of 2022 and will continue through the end of 2025, and include reductions in workforce and certain legacy operating costs, as well as the sale of our energy solutions group. As a result of these initiatives, we believe we will be able to accelerate our pathway toward long term profitability.
Previous wording
Non-GAAP net income (loss) is calculated as our net income (loss) adjusted to exclude net income from discontinued operations, net of income taxes, interest expense, net, income taxes, depreciation and amortization, stock-based compensation, change in fair value of earnout receivable, contingent purchase compensation expense, foreign currency impact and other, acquisition and due diligence costs, severance and executive transition costs, and non-GAAP net income from discontinued operations. Non-GAAP net income (loss) from continuing operations is calculated as our net loss from continuing operations adjusted to exclude net income from discontinued operations, net of income taxes, interest expense, net, income taxes, depreciation and amortization, stock-based compensation, change in fair value of earnout receivable, contingent purchase compensation expense, foreign currency impact and other, acquisition and due diligence costs, and severance and executive transition costs. Non-GAAP net income (loss) from discontinued operations is calculated as our net income from discontinued operations adjusted to exclude interest expense, net, income taxes, depreciation and amortization, stock-based compensation, acquisition due diligence costs, and severance and executive transition costs.
Current wording
Non-GAAP net income (loss) is calculated as our net income (loss) adjusted to exclude net income from discontinued operations, net of income taxes, interest expense, net, income taxes, depreciation and amortization, stock-based compensation, change in fair value of earnout receivable, contingent purchase compensation expense, foreign currency impact and other, acquisition and due diligence costs, (gain) loss on asset disposition, severance and executive transition costs, other non-recurring items, and non-GAAP net income from discontinued operations. Non-GAAP net income (loss) from continuing operations is calculated as our net loss from continuing operations adjusted to exclude net income from discontinued operations, net of income taxes, interest expense, net, income taxes, depreciation and amortization, stock-based compensation, change in fair value of earnout receivable, contingent purchase compensation expense, foreign currency impact and other, acquisition and due diligence costs, (gain) loss on asset disposition, severance and executive transition costs, and other non-recurring items. Non-GAAP net income (loss) from discontinued operations is calculated as our net income from discontinued operations adjusted to exclude interest expense, net, income taxes, depreciation and amortization, stock-based compensation, acquisition due diligence costs, and severance and executive transition costs.
Previous wording
Non-GAAP gross profit is calculated as gross profit with adjustments to add back depreciation and amortization related to cost of revenue and stock-based compensation. Non-GAAP gross margin is defined as non-GAAP gross profit divided by revenue.
Current wording
Non-GAAP gross profit is calculated as gross profit with adjustments to add back depreciation and amortization related to cost of revenue. Non-GAAP gross margin is defined as non-GAAP gross profit divided by revenue.
Previous wording
Other non-recurring items for the three months ended March 31, 2025 consists of fees paid to the lenders in connection with the Limited Consent to the Credit Agreement as described further in Note 4, Debt, included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
Other non-recurring items for the six months ended June 30, 2025 consists of fees paid to the lenders in connection with the Limited Consent to the Credit Agreement as described further in Note 4, Debt, included elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
A reconciliation of non-GAAP net income from discontinued operations to GAAP net income from discontinued operations for the three months ended March 31, 2024 is set forth in the table below.
Current wording
A reconciliation of non-GAAP net income from discontinued operations to GAAP net income from discontinued operations for the three and six months ended June 30, 2024 is set forth in the table below.
Previous wording
GAAP gross profit of $13.7 million for the three months ended March 31, 2025 declined $2.6 million, or 16.0%, as compared to the three months ended March 31, 2024 primarily due to a decline in revenue, coupled with higher cost of revenue and depreciation and amortization. GAAP gross margin of 61.1% for the three months ended March 31, 2025 declined 650 basis points as compared to the three months ended March 31, 2024 as a result of higher depreciation and amortization, coupled with year-over-year declines in higher gross margin revenue from consumption-based and one-time software revenue.
Current wording
GAAP gross profit of $15.3 million and $29.1 million for the three and six months ended June 30, 2025, respectively, declined $1.1 million and $3.7 million, respectively, or 6.5% and 11.3%, respectively, as compared to the three and six months ended June 30, 2024 primarily due to a decline in revenue, coupled with higher cost of revenue. GAAP gross margin of 63.9% and 62.5% for the three and six months ended June 30, 2025, respectively, declined 430 basis points and 540 basis points, respectively, as compared to the three and six months ended June 30, 2024 as a result of year-over-year declines in higher gross margin revenue from consumption-based and one-time software revenue.
Previous wording
Non-GAAP gross profit of $14.6 million for the three months ended March 31, 2025 declined $2.6 million, or 15.0%, as compared to the three months ended March 31, 2024 primarily due to a decline in revenue, coupled with higher cost of revenue. Non-GAAP gross margin of 65.1% for the three months ended March 31, 2025 declined 610 basis points as compared to the three months ended March 31, 2024 due to year-over-year declines in higher gross margin revenue from consumption-based and one-time software revenue. Historically, our gross margin and non-GAAP gross margin have been impacted significantly by the mix of our Software Products & Services revenue and our Managed Services revenue in any given period because our Managed Services revenue typically has a lower overall non-GAAP gross margin than our Software Products & Services revenue.
Current wording
Non-GAAP gross profit of $16.5 million and $31.2 million for the three and six months ended June 30, 2025, respectively, declined $1.2 million and $3.8 million, respectively, or 6.7% and 10.8%, respectively, as compared to the three and six months ended June 30, 2024 primarily due to a decline in revenue, coupled with higher cost of revenue. Non-GAAP gross margin of 68.9% and 67.1% for the three and six months ended June 30, 2025, respectively, declined 470 basis points and 530 basis points, respectively, as compared to the three and six months ended June 30, 2024 as a result of year-over-year declines in higher gross margin revenue from consumption-based and one-time software revenue. Historically, our gross margin and non-GAAP gross margin have been impacted significantly by the mix of our Software Products & Services revenue and our Managed Services revenue in any given period because our Managed Services revenue typically has a lower overall non-GAAP gross margin than our Software Products & Services revenue.
Previous wording
Comparison of the Three Months Ended March 31, 2025 and 2024
Current wording
Comparison of the Three and Six Months Ended June 30, 2025 and 2024
Previous wording
Commercial Enterprise Software Products & Services revenue decreased $0.6 million, or 4.0%, in the three months ended March 31, 2025 compared to the corresponding prior-year period primarily due to decreases of $1.5 million driven principally by lower consumption-based revenue and, to a lesser extent, foreign exchange rate declines in Europe as compared to the US dollar and and economic and geopolitical factors, partially offset by an approximate $0.9 million increase in VDR revenue. Commercial Enterprise Managed Services revenue decreased $1.0 million, or 10.7%, in the three months ended March 31, 2025 compared to the corresponding prior-year period driven by declines in live event services and VeriAds as a result of the more challening macro environment.
Current wording
Commercial Enterprise Software Products & Services revenue increased $0.3 million, or 1.0%, in the six months ended June 30, 2025 compared to the corresponding prior-year period primarily due to an increase in VDR revenue, offset by a decline in consumption based revenue across Veritone Hire. Commercial Enterprise Managed Services revenue decreased $2.8 million, or 16.3%, in the six months ended June 30, 2025 compared to the corresponding prior-year period driven by declines in live event services and VeriAds as a result of the more challenging macro environment.
Previous wording
Public Sector Software Products & Services revenue decreased $0.2 million, or 12.1%, in the three months ended March 31, 2025 compared to the corresponding prior-year period primarily due to fluctuations in timing and magnitude of spend by public safety and federal customers. In some cases, Software Products & Services revenue from Public Sector customers in certain markets, particularly our government customers, can be project-based and impacted by the timing of such projects. As such, we expect that our revenue from these markets could fluctuate significantly from period to period
Current wording
Public Sector Software Products & Services revenue increased $1.0 million, or 90.3%, in the three months ended June 30, 2025 compared to the corresponding prior-year period primarily due to fluctuations in timing and magnitude of spend by public safety and federal customers. In some cases, Software Products & Services revenue from Public Sector customers in certain markets, particularly our government customers, can be project-based and impacted by the timing of such projects. As such, we expect that our revenue from these markets could fluctuate significantly from period to period.
Previous wording
Cost of revenue increased $0.9 million in the three months ended March 31, 2025 compared to the corresponding prior-year period primarily due to a higher mix of lower margin revenue during the three months ended March 31, 2025, including VDR. During the three months ended March 31, 2025, Software Products & Services products accounted for 64.5% of revenues compared to 63.0% in the prior year period. Cost of revenue as a percentage of revenue increased to 34.9% from 28.8% during the three months ended March 31, 2025.
Current wording
Cost of revenue increased $1.1 million in the three months ended June 30, 2025 compared to the corresponding prior-year period primarily due to a higher mix of lower margin revenue during the three months ended June 30, 2025, including VDR. During the three months ended June 30, 2025, Software Products & Services products accounted for 72.7% of revenues compared to 65.0% in the prior year period. Cost of revenue as a percentage of revenue increased to 31.1% from 26.4% during the three months ended June 30, 2025.
Previous wording
Sales and marketing increased $0.2 million in the three months ended March 31, 2025 compared to the corresponding prior-year period primarily due to increased advertising expense. Sales and marketing as a percentage of revenue increased to 45.0% from 41.2% during the three months ended March 31, 2025.
Current wording
Sales and marketing decreased $0.1 million in the three months ended June 30, 2025 compared to the corresponding prior-year period. Sales and marketing as a percentage of revenue increased to 46.2% from 46.6% during the three months ended June 30, 2025.
Previous wording
Research and development decreased $3.2 million, or 38.2%, in the three months ended March 31, 2025 compared to the corresponding prior-year period primarily due to decreased personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024, partially offset by a decrease in capitalized internal-use software costs and an increase in outside consulting services. Research and development as a percentage of revenue decreased to 23.2% from 34.9% during the three months ended March 31, 2025.
Current wording
Research and development decreased $1.2 million, or 18.9%, in the three months ended June 30, 2025 compared to the corresponding prior-year period primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024, capitalized internal-use software costs, and outside consulting services. Research and development as a percentage of revenue decreased to 20.5% from 25.3% during the three months ended June 30, 2025.
Previous wording
Depreciation and amortization expense decreased $0.5 million, or 6.4%, in the three months ended March 31, 2025 compared to the corresponding prior-year period primarily due to certain long-lived assets being fully depreciated in the latter half of 2024.
Current wording
Depreciation and amortization expense decreased $0.2 million, or 1.3%, in the six months ended June 30, 2025 compared to the corresponding prior-year period primarily due to certain long-lived assets being fully depreciated in the latter half of 2024, partially offset by ongoing depreciation of newly capitalized internal-use software.
Previous wording
Interest expense, net increased $0.2 million, or 6.7%, in the three months ended March 31, 2025 compared to the corresponding prior-year period primarily due to a decrease in interest income, partially offset by a decrease in interest expense as a result of a decrease in the outstanding principal amount under our senior secured term loan under the Credit Agreement (the “Term Loan”).
Current wording
Interest expense, net increased $0.4 million, or 13.2%, in the three months ended June 30, 2025 compared to the corresponding prior-year period primarily due to a decrease in interest income, partially offset by a decrease in interest expense as a result of a decrease in the outstanding principal amount under our senior secured term loan under the Credit Agreement (the “Term Loan”).
Previous wording
Net income from discontinued operations was $1.0 million for the three months ended March 31, 2024 and primarily consisted of (i) revenue of $7.5 million, offset by cost of revenue of $0.1 million, other operating expenses of $4.9 million and $1.5 million of net interest expense allocations primarily due to the repayment of our Term Loan as a result of the Divestiture.
Current wording
Net income from discontinued operations was $1.1 million and $2.1 million for the three and six months ended June 30, 2024, respectively, and primarily consisted of revenue of $6.9 million and $14.4 million, respectively, offset by cost of revenue of $0.2 million and $0.3 million, respectively, other operating expenses of $4.1 million and $8.9 million, respectively, and $1.5 million and $3.0 million, respectively, of net interest expense allocations primarily due to the repayment of our Term Loan as a result of the Divestiture.
Previous wording
We have historically generated negative cash flows from operations and have primarily financed our operations through the sale of equity securities and debt. In January 2025, we issued and sold an aggregate of 4,414,878 shares of common stock at a price of $2.53 per share and pre-funded warrants to purchase up to 3,608,838 shares of common stock at a price of $2.52 per pre-funded warrant, with an exercise price of $0.01, in a registered direct offering. The aggregate gross proceeds were approximately $20.3 million, before deducting estimated offering expenses. Additionally, in accordance with the term of that certain sales agreement we entered into with Needham & Company, LLC and H.C. Wainwright & Co., LLC (the “Sales Agents”), we may offer and sell shares of our common stock having an aggregate offering price of up to $35.0 million from time to time through the Sales Agents (the “ATM Program”). As of March 31, 2025, we have received $4.7 million in gross proceeds for sales of 1,707,791 shares of our common stock under the ATM Program.As of March 31, 2025, we had cash and cash equivalents of $16.1 million. We also may receive additional proceeds in connection with the Divestiture, including any earn-out payments and releases of previously escrowed amounts, all of which proceeds, if received, must be used to repay our Term Loan.
Current wording
We also have the ability to offer and sell shares of our common stock having an aggregate offering price of up to $35.0 million from time to time pursuant to a sales agreement we entered into with Needham & Company, LLC and H.C. Wainwright & Co., LLC (the “Sales Agents”, and the program, the “ATM Program”). As of June 30, 2025, we have received $7.8 million in gross proceeds for sales of 3,716,873 shares of our common stock under the ATM Program. As of June 30, 2025, we had cash and cash equivalents of $13.6 million. We also may receive additional proceeds in connection with the Divestiture, including any earn-out payments and releases of previously escrowed amounts, all of which proceeds, if received, must be used to repay our Term Loan.
Previous wording
As of March 31, 2025, we had $39.2 million aggregate principal amount outstanding under our Term Loan and $91.3 million aggregate principal amount outstanding under our Convertible Notes (as defined in Note 4, Debt). The Term Loan matures on December 13, 2027 and requires prepayment in full if $30.0 million or more of aggregate principal amount of the Convertible Notes are outstanding on August 14, 2026. The Convertible Notes mature on November 15, 2026. See Note 4, Debt, included elsewhere in this Quarterly Report on Form 10-Q for more information regarding the Term Loan and the Convertible Notes
Current wording
As of June 30, 2025, we had $37.3 million aggregate principal amount outstanding under our Term Loan and $91.3 million aggregate principal amount outstanding under our Convertible Notes (as defined in Note 4, Debt). The Term Loan matures on December 13, 2027 and requires prepayment in full if $30.0 million or more of aggregate principal amount of the Convertible Notes are outstanding on August 14, 2026. The Convertible Notes mature on November 15, 2026. See Note 4, Debt, included elsewhere in this Quarterly Report on Form 10-Q for more information regarding the Term Loan and the Convertible Notes
Previous wording
In the near term, and to meet our obligations as they come due, we are evaluating additional strategies to obtain funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, debt and/or further restructuring of operations to grow revenues and decrease operating expenses, which include capturing past cost reductions and potential future cost synergies from our past acquisitions.
Current wording
We are exploring potential financing structures, including discussions with our current debt holders, which we believe could improve our current liquidity position and balance sheet. There can be no assurance that any refinancing will be completed. We also continue to evaluate additional strategies to obtain funding for future operations, including, but not limited to, obtaining equity financing and/or further restructuring of operations to grow revenues and decrease operating expenses, which include capturing past cost reductions and potential future cost synergies from our past acquisitions.
Previous wording
The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business, including having sufficient liquidity in the future to meet, among other things, our covenants under the Credit Agreement (as defined in Note 4, Debt). We may not be able to access additional equity under acceptable terms, and may not be successful in future operational restructurings, earning any of our deferred purchase consideration, meeting the minimum liquidity threshold under our Credit Agreement or growing our revenue base, and our ability to execute on our operating plans may be materially adversely impacted. If we become unable to continue as a going concern, we may have to dispose of other or additional assets and might realize significantly less value than the values at which they are carried on our condensed consolidated financial statements. These actions may cause our stockholders to lose all or part of their investment in our common stock. The condensed consolidated financial statements do not include any adjustments that might result from us being unable to continue as a going concern. If we cannot continue as a going concern, adjustments to the carrying values and classification of our assets and liabilities and the reported amounts of income and expenses could be required and could be material.
Current wording
The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business, including having sufficient liquidity in the future to meet, among other things, our covenants under the Credit Agreement (as defined in Note 4, Debt). We may not be able to access additional equity under acceptable terms, refinance our outstanding debt prior to its scheduled maturity, complete our operational restructurings with our expected cost savings, earn any deferred purchase consideration, meet the minimum liquidity threshold under our Credit Agreement or grow our revenue base. If some of these items do not occur, our ability to execute on our operating plans may be materially adversely impacted. If we become unable to continue as a going concern, we may have to dispose of other or additional assets and might realize significantly less value than the values at which they are carried on our condensed consolidated financial statements. These actions may cause our stockholders to lose all or part of their investment in our common stock. The condensed consolidated financial statements do not include any adjustments that might result from us being unable to continue as a going concern. If we cannot continue as a going concern, adjustments to the carrying values and classification of our assets and liabilities and the reported amounts of income and expenses could be required and could be material.
Previous wording
Net cash used in continuing operating activities was $17.0 million for the three months ended March 31, 2025, an increase of $1.1 million from $15.9 million for the three months ended March 31, 2024. The increase was primarily due to a $4.4 million unfavorable change in operating assets and liabilities, partially offset by a $3.2 million decrease in net loss from continuing operations excluding non-cash and reconciling items disclosed within our condensed consolidated statement of cash flows. The $4.4 million of unfavorable changes in operating assets and liabilities was primarily driven by unfavorable changes in accrued expenses and other current liabilities and accounts receivable, partially offset by favorable changes in accounts payable, deferred revenue, and other non-current liabilities. The $3.2 million decrease in net loss excluding non-cash and reconciling items was primarily driven by lower operating expenses and favorable changes in non-cash and reconciling items including deferred income taxes, partially offset by lower revenue and unfavorable changes in non-cash and reconciling items including change in fair value of earnout receivable and depreciation and amortization.
Current wording
Net cash used in continuing operating activities was $25.3 million for the six months ended June 30, 2025, a decrease of $6.0 million from $31.3 million for the six months ended June 30, 2024. The decrease was primarily due to a $4.0 million decrease in net loss from continuing operations excluding non-cash and reconciling items disclosed within our condensed consolidated statement of cash flows and a $2.1 million favorable change in operating assets and liabilities. The $4.0 million decrease in net loss excluding non-cash and reconciling items was primarily driven by lower operating expenses and favorable changes in non-cash and reconciling items including deferred income taxes, partially offset by lower revenue and unfavorable changes in non-cash and reconciling items including change in fair value of earnout receivable, non-cash interest expense, stock-based compensation, and depreciation and amortization. The $2.1 million of favorable changes in operating assets and liabilities was primarily driven by favorable changes in accounts payable, partially offset by unfavorable changes in accounts receivable, accrued expenses and other current liabilities, and prepaid expenses and other current assets.
Previous wording
Net cash used in continuing investing activities was $1.4 million for the three months ended March 31, 2025, a decrease of $0.4 million from $1.8 million for the three months ended March 31, 2024. The decrease was due to a $0.4 million decrease in capital expenditures.
Current wording
Net cash used in continuing investing activities was $2.3 million for the six months ended June 30, 2025, an increase of $0.9 million from $1.4 million for the six months ended June 30, 2024. The increase was due to a $1.8 million unfavorable impact of the sale of GridBeyond in 2024, partially offset by a $0.9 million decrease in capital expenditures.
Previous wording
Net cash provided by continuing financing activities was $17.9 million for the three months ended March 31, 2025, an increase of $19.6 million as compared to net cash used in continuing financing activities of $1.7 million for the three months ended March 31, 2024. The increase was primarily due to a $19.9 million increase in proceeds from issuance of common stock and pre-funded warrants under our registered direct offering in January 2025, net of issuance costs, and a $1.8 million favorable impact from the settlement of deferred consideration for acquisitions in 2024, partially offset by a $1.9 million increase in repayment of our senior secured term loan.
Current wording
Net cash provided by continuing financing activities was $25.3 million for the six months ended June 30, 2025, an increase of $29.2 million as compared to net cash used in continuing financing activities of $4.0 million for the six months ended June 30, 2024. The increase was primarily due to a $29.4 million increase in proceeds from issuance of common stock and pre-funded warrants under our registered direct offerings in January 2025 and June 2025 and our at-the-market offering, net of offering costs, and a $1.8 million favorable impact from the settlement of deferred consideration for acquisitions in 2024, partially offset by a $1.9 million increase in repayment of our senior secured term loan.
Previous wording
As of March 31, 2025, our debt obligations are comprised of our Term Loan and our 1.75% convertible senior notes due in 2026 (the “Convertible Notes”). As of March 31, 2025, we have $39.2 million principal amount outstanding under our Term Loan that matures in December 2027 and $91.3 million aggregate principal amount outstanding of our Convertible Notes that mature in November 2026.
Current wording
As of June 30, 2025, our debt obligations are comprised of our Term Loan and our 1.75% convertible senior notes due in 2026 (the “Convertible Notes”). As of June 30, 2025, we have $37.3 million principal amount outstanding under our Term Loan that matures in December 2027 and $91.3 million aggregate principal amount outstanding of our Convertible Notes that mature in November 2026. If $30.0 million or more of aggregate principal amount of the Convertible Notes are outstanding on August 14, 2026, we must repay all of the outstanding Term Loans at such time.
Previous wording
As of March 31, 2025, we have recorded $2.3 million of gross liability for uncertain tax positions, including interest and penalties. Based upon the information available and possible outcomes, we cannot reasonably estimate the amount and period in which the liability might be paid.
Current wording
As of June 30, 2025, we have recorded $2.4 million of gross liability for uncertain tax positions, including interest and penalties. Based upon the information available and possible outcomes, we cannot reasonably estimate the amount and period in which the liability might be paid.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
In connection with obtaining the requisite lenders’ consent to the Second Amendment, we issued to the consenting lenders 253,744 shares of our common stock, representing a number of shares having an aggregate value equal to $373,005, based on a price per share of $1.47, which was the closing price per share of our common stock on The Nasdaq Global Market on June 12, 2025, the trading day immediately prior to the effective date of the Second Amendment.
Current report — wording carried from elsewhere
The June 2025 Pre-Funded Warrants provide that the holder may not exercise any portion of the June 2025 Pre-Funded Warrants to the extent that immediately prior to or after giving effect to such exercise the holder (together with its affiliates) would beneficially own more than the Maximum Percentage after such exercise. By written notice to us, the holder may from time to time increase or decrease the Maximum Percentage to any other percentage specified not in excess of 19.99% (the “Maximum Cap”). Subject to the Maximum Percentage or, as applicable, the Maximum Cap, the June 2025 Pre-Funded Warrants are immediately exercisable and may be exercised at any time until the June 2025 Pre-Funded Warrants are exercised in full. If, at the time of exercise, there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance or resale of the shares of common stock issuable from time to time upon exercise of the June 2025 Pre-Funded Warrants, in lieu of making cash payment otherwise contemplated to be made to us upon exercise of a June 2025 Pre-Funded Warrant in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the June 2025 Pre-Funded Warrants.
Current report — wording carried from elsewhere
Commercial Enterprise Software Products & Services revenue increased $0.8 million, or 5.7%, in the three months ended June 30, 2025 compared to the corresponding prior-year period primarily due to an increase in VDR revenue. Commercial Enterprise Managed Services revenue decreased $1.9 million, or 22.3%, in the three months ended June 30, 2025 compared to the corresponding prior-year period driven by declines in live event services and VeriAds as a result of the more challenging macro environment.
Current report — wording carried from elsewhere
Public Sector Software Products & Services revenue increased $0.8 million, or 31.4%, in the six months ended June 30, 2025 compared to the corresponding prior-year period primarily due to fluctuations in timing and magnitude of spend by public safety and federal customers. In some cases, Software Products & Services revenue from Public Sector customers in certain markets, particularly our government customers, can be project-based and impacted by the timing of such projects. As such, we expect that our revenue from these markets could fluctuate significantly from period to period.
Current report — wording carried from elsewhere
Cost of revenue increased $2.0 million in the six months ended June 30, 2025 compared to the corresponding prior-year period primarily due to a higher mix of lower margin revenue during the six months ended June 30, 2025, including VDR. During the six months ended June 30, 2025, Software Products & Services products accounted for 68.7% of revenues compared to 64.0% in the prior year period. Cost of revenue as a percentage of revenue increased to 32.9% from 27.6% during the six months ended June 30, 2025.
Current report — wording carried from elsewhere
Interest expense, net increased $0.6 million, or 10.3%, in the six months ended June 30, 2025 compared to the corresponding prior-year period primarily due to a decrease in interest income, partially offset by a decrease in interest expense as a result of a decrease in the outstanding principal amount under the Term Loan.
Current report — wording carried from elsewhere
We have historically generated negative cash flows from operations and have primarily financed our operations through the sale of equity securities and debt. In January 2025, we issued and sold an aggregate of 4,414,878 shares of common stock at a price of $2.53 per share and pre-funded warrants to purchase up to 3,608,838 shares of common stock at a price of $2.52 per pre-funded warrant, with an exercise price of $0.01, in a registered direct offering. The aggregate gross proceeds were approximately $20.3 million, before deducting estimated offering expenses.