Veritone, Inc.

Previous 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.

Current wording

During the three and nine months ended September 30, 2025, we generated revenue of $29.1 million and $75.6 million, respectively, as compared to $22.0 million and $70.2 million during the three and nine months ended September 30, 2024, respectively. Software Products & Services revenue was $22.8 million and $54.8 million during the three and nine months ended September 30, 2025, respectively, as compared to $14.7 million and $45.5 million during the three and nine months ended September 30, 2024, respectively. Managed Services revenue was $6.3 million and $20.8 million during the three and nine months ended September 30, 2025, respectively, as compared to $7.3 million and $24.7 million during the three and nine months ended September 30, 2024, respectively. During the three months ended September 30, 2025, two customers each accounted for 10% or more of our consolidated revenue, and collectively accounted for 27% of our consolidated revenue. During the three months ended September 30, 2024 and the nine months ended September 30, 2025 and 2024, no customer represented more than 10% of our consolidated revenue.

Previous 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.

Current wording

During the three and nine months ended September 30, 2025 and 2024, we derived our revenue primarily through our Commercial Enterprise customers and secondarily through our Public Sector customers. During the three months ended September 30, 2025, two customers each accounted for 10% or more of our total consolidated revenue, and collectively accounted for 27% of our total consolidated revenue. During the three months ended September 30, 2024 and the nine months ended September 30, 2025 and 2024, no customer represented more than 10% of our total consolidated revenue.

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. 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.

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 instability caused by tariffs, our Software Products & Services revenue of $22.8 million and $54.8 million for the three and nine months ended September 30, 2025, respectively, improved 55.5% and 20.3%, respectively, as compared to the corresponding prior-year periods.

Previous 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.

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, we reduced our global workforce by approximately 19%. In June 2025, we announced further cost reduction initiatives of up to $10.0 million, approximately 80%, or $8.0 million of which have been achieved as of September 30, 2025. As of September 30, 2025, we have achieved an aggregate of 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 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.

Current wording

As of September 30, 2025, our total Software Products & Services customers declined to 3,021, which was a decrease of 8.2% as compared to September 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. 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 nine months ended September 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 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.

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. We announced our Intelligent Digital Evidence Management System (“iDEMS”) and Veritone Data Refinery (“VDR”) product launches this year. As a result, 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. A substantial portion of our growth in 2025 to date has 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. In August 2025, our VDR sales pipeline increased to approximately $20.0 million, and on October 14, 2025, we announced additional new contracts with leading hyperscalers for the deployment of our VDR solution, increasing our VDR bookings and sales pipeline to approximately $40.0 million. Our public sector pipeline has also increased to $218 million, which we believe reflects accelerating demand for our AI-driven solutions and our reputation as a trusted technology partner to government agencies. See “About Our Sales Pipelines” below for more information. As a result, during the third quarter ended September 30, 2025, our Software Products Services revenue, excluding our Veritone Hire platform, grew over 200% when compared to the same period in 2024 led principally by our iDEMS and VDR initiatives. In addition, we announced in the second quarter of 2024 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 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.

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.

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 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.

Current wording

In the last few years, we have pursued and may continue to pursue opportunistic sales of certain business operations that are not part of our long-term strategy. For example, we divested our Veritone energy solutions group in the second quarter of 2023 and in October 2024, we divested our wholly-owned subsidiary, Veritone One, for a total purchase price of up to $104.0 million. The decision to divest Veritone One 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 recognize improved margins and more effective allocation of capital. We believe that a sharper focus on our core assets will drive sustainable growth and value creation for our shareholders moving forward.

Previous 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.

Current wording

For the three and nine months ended September 30, 2025, our total revenues were $29.1 million and $75.6 million, respectively, as compared to $22.0 million and $70.2 million for the three and nine months ended September 30, 2024, respectively, an increase of 32.4% and 7.7%, respectively, over the prior-year period, driven by an increase in Software Products & Services revenue from iDEMs and VDR revenues, partially offset by a decrease in Managed Services revenue primarily due to lower revenue from representation services, in each case, compared to the prior year period. Our gross profit for the three and nine months ended September 30, 2025 was $18.7 million and $47.8 million, respectively, as compared to $14.7 million and $47.4 million for the three and nine months ended September 30, 2024, respectively, an increase of 27.7% and 0.8%, respectively, driven by an increase in revenue compared to the prior year period. For the three and nine months ended September 30, 2025, our non-GAAP gross profit (calculated as described in “Non-GAAP Financial Measures” below) increased to $20.6 million and $51.7 million, respectively, as compared to $15.7 million and $50.6 million for the three and nine months ended September 30, 2024, respectively, driven by an increase in revenue compared to the prior year period. Gross profit and non-GAAP gross profit 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 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.

Current wording

During the three and nine months ended September 30, 2025, we reported a net loss of $26.9 million and $73.6 million, respectively, as compared to $21.7 million and $69.2 million during the three and nine months ended September 30, 2024, respectively. During the three and nine months ended September 30, 2025, we reported a non-GAAP net loss (calculated as described in “Non-GAAP Financial Measures” below) of $5.8 million and $25.6 million, respectively, as compared to $7.1 million and $21.6 million during the three and nine months ended September 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 challenging macro-economic environment since 2023, we have made significant cost reductions to our operating structure to better streamline our business and prioritize investments that drive our growth. These cost reduction initiatives began in the latter half of 2022 and will continue through the end of 2025, and have included 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

Global economic and business activities continue to face uncertainty as a result of macroeconomic and geopolitical factors, the imposition of tariffs, trade tensions, and global trade disputes, lingering economic disruption caused by labor shortages, inflation rates and the responses by central banking authorities to control inflation, monetary supply shifts, recession risks, and disruptions from the Russia-Ukraine conflict, the Israel-Hamas war and conflict in surrounding regions. In particular, business operations at our Herzliya, Israel office location where we do development work on our Veritone Hire solutions products have been, and may continue to be, impacted by the war in Israel. A small portion of our Israel-based employees, and a number of their family members, have been conscripted into military service. The extent of the impact of these factors on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected time frame, will depend on future developments, and the impact on our customers, partners and employees, all of which have uncertainty and cannot be predicted. These global economic conditions and any continued or new disruptions caused by these conditions may negatively impact our business in a number of ways. For example, our Veritone Hire solutions are sold to businesses whose financial conditions fluctuate based on general economic and business conditions, particularly the overall demand for labor and the economic health of current and prospective employers.

Current wording

Global economic and business activities continue to face uncertainty as a result of macroeconomic and geopolitical factors, the imposition of tariffs, trade tensions, and global trade disputes, lingering economic disruption caused by labor shortages, inflation rates and the responses by central banking authorities to control inflation, monetary supply shifts, recession risks, and disruptions from the Russia-Ukraine conflict, the Israel-Hamas war and conflict in surrounding regions. The extent of the impact of these factors on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected time frame, will depend on future developments, and the impact on our customers, partners and employees, all of which have uncertainty and cannot be predicted. These global economic conditions and any continued or new disruptions caused by these conditions may negatively impact our business in a number of ways. For example, our Veritone Hire solutions are sold to businesses whose financial conditions fluctuate based on general economic and business conditions, particularly the overall demand for labor and the economic health of current and prospective employers.

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, (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.

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, lender consent fees, 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 lender consent fees. 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. 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 and stock-based compensation expenses. Non-GAAP gross margin is defined as non-GAAP gross profit divided by revenue.

Previous 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.

Current wording

(1)A reconciliation of non-GAAP net income from discontinued operations to GAAP net income from discontinued operations for the three and nine months ended September 30, 2024 is set forth in the table below.

Previous 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.

Current wording

GAAP gross profit of $18.7 million and $47.8 million for the three and nine months ended September 30, 2025, respectively, increased $4.1 million and $0.4 million, respectively, or 27.7% and 0.8%, respectively, as compared to the three and nine months ended September 30, 2024 primarily due to an increase in revenue. GAAP gross margin of 64.3% and 63.2% for the three and nine months ended September 30, 2025, respectively, decreased 238 basis points and 432 basis points, respectively, as compared to the three and nine months ended September 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 $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.

Current wording

Non-GAAP gross profit of $20.6 million and $51.7 million for the three and nine months ended September 30, 2025, respectively, increased $4.9 million and $1.1 million, respectively, or 31.2% and 2.2%, respectively, as compared to the three and nine months ended September 30, 2024 primarily due to an increase in revenue. Non-GAAP gross margin of 70.6% and 68.4% for the three and nine months ended September 30, 2025, respectively, decreased 66 basis points and 365 basis points, respectively, as compared to the three and nine months ended September 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

“Total Software Products & Services Customers” includes Software Products & Services customers as of the end of each respective quarter set forth above with net revenues in excess of $10 during the last month of the quarter and also excludes any customers categorized by us as trial or pilot status. Management uses Total Software Products & Services Customers and we believe Total Software Products & Services Customers are useful to investors because it more accurately reflects our total customers for our Software Products & Services inclusive of Broadbean.

Current wording

(1)“Total Software Products & Services Customers” includes Software Products & Services customers as of the end of each respective quarter set forth above with net revenues in excess of $10 during the last month of the quarter and also excludes any customers categorized by us as trial or pilot status. Management uses Total Software Products & Services Customers and we believe Total Software Products & Services Customers are useful to investors because it more accurately reflects our total customers for our Software Products & Services inclusive of Broadbean.

Previous wording

“Annual Recurring Revenue (SaaS)” represents an annualized calculation of monthly recurring subscription-based SaaS revenue during the last month of the applicable quarter for all Total Software Products & Services customers. Management uses “Annual Recurring Revenue (SaaS)” and we believe Annual Recurring Revenue (SaaS) is useful to investors because Broadbean significantly increases our mix of subscription-based SaaS revenues as compared to consumption-based revenues and the split between the two allows us to delineate between predictable recurring SaaS revenues and more volatile consumption-based revenues.

Current wording

(2)“Annual Recurring Revenue (SaaS)” represents an annualized calculation of monthly recurring subscription-based SaaS revenue during the last month of the applicable quarter for all Total Software Products & Services customers. Management uses “Annual Recurring Revenue (SaaS)” and we believe Annual Recurring Revenue (SaaS) is useful to investors because Broadbean significantly increases our mix of subscription-based SaaS revenues as compared to consumption-based revenues and the split between the two allows us to delineate between predictable recurring SaaS revenues and more volatile consumption-based revenues, including VDR.

Previous wording

“Annual Recurring Revenue (Consumption)” represents the trailing twelve months of all non-recurring and/or consumption-based revenue for all active Total Software Products & Services customers. Management uses “Annual Recurring Revenue (Consumption)” and we believe Annual Recurring Revenue (Consumption) is useful to investors because Broadbean significantly increases our mix of subscription-based SaaS revenues as compared to consumption-based revenues and the split between the two allows us to delineate between predictable recurring SaaS revenues and more volatile consumption-based revenues.

Current wording

(3)“Annual Recurring Revenue (Consumption)” represents the trailing twelve months of all non-recurring and/or consumption-based revenue for all active Total Software Products & Services customers. Management uses “Annual Recurring Revenue (Consumption)” and we believe Annual Recurring Revenue (Consumption) is useful to investors because Broadbean significantly increases our mix of subscription-based SaaS revenues as compared to consumption-based revenues and the split between the two allows us to delineate between predictable recurring SaaS revenues and more volatile consumption-based revenues, including VDR.

Previous wording

“Total New Bookings” represents the total fees payable during the full contract term for new contracts received in the quarter (including fees payable during any cancellable portion and an estimate of license fees that may fluctuate over the term), excluding any variable fees under the contract (e.g., fees for cognitive processing, storage, professional services and other variable services).

Current wording

(4)“Total New Bookings” represents the total fees payable during the full contract term for new contracts received in the quarter (including fees payable during any cancellable portion and an estimate of license fees that may fluctuate over the term), excluding any variable fees under the contract (e.g., fees for cognitive processing, storage, professional services and other variable services).

Previous wording

“Gross Revenue Retention” represents a calculation of our dollar-based gross revenue retention rate as of the period end by starting with the revenue from Software Products & Services Customers as of the three months in the prior year quarter to such period, or Prior Year Quarter Revenue. We then deduct from the Prior Year Quarter Revenue any revenue from Software Products & Services Customers who are no longer customers as of the current period end, or Current Period Ending Software Customer Revenue. We then divide the total Current Period Ending Software Customer Revenue by the total Prior Year Quarter Revenue to arrive at our dollar-based gross retention rate, which is the percentage of revenue from all Software Products & Services Customers from our Software Products & Services as of the year prior that is not lost to customer churn.

Current wording

(5)“Gross Revenue Retention” represents a calculation of our dollar-based gross revenue retention rate as of the period end by starting with the revenue from Software Products & Services Customers as of the three months in the prior year quarter to such period, or Prior Year Quarter Revenue. We then deduct from the Prior Year Quarter Revenue any revenue from Software Products & Services Customers who are no longer customers as of the current period end, or Current Period Ending Software Customer Revenue. We then divide the total Current Period Ending Software Customer Revenue by the total Prior Year Quarter Revenue to arrive at our dollar-based gross retention rate, which is the percentage of revenue from all Software Products & Services Customers from our Software Products & Services as of the year prior that is not lost to customer churn.

Previous wording

The following tables set forth our results of operations for the three months ended June 30, 2025 and 2024, in dollars and as a percentage of our revenue for those periods. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future.

Current wording

The following tables set forth our results of operations for the three and nine months ended September 30, 2025 and 2024, in dollars and as a percentage of our revenue for those periods. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

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 wording

Commercial Enterprise Software Products & Services revenue increased $7.8 million, or 59.3%, in the three months ended September 30, 2025 compared to the corresponding prior-year period primarily due to an increase in VDR revenue. Commercial Enterprise Managed Services revenue decreased $1.0 million, or 14.1%, in the three months ended September 30, 2025 compared to the corresponding prior-year period driven by declines in representation services led by VeriAds as a result of the more challenging macro environment, partially offset by a $0.2 million improvement in content licensing.

Previous 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.

Current wording

Commercial Enterprise Software Products & Services revenue increased $8.0 million, or 19.5%, in the nine months ended September 30, 2025 compared to the corresponding prior-year period primarily due to an increase in VDR revenue, partially offset by a decline in consumption based revenue across Veritone Hire. Commercial Enterprise Managed Services revenue decreased $3.9 million, or 15.7%, in the nine months ended September 30, 2025 compared to the corresponding prior-year period driven by a $4.0 million decrease in representation services including our VeriAds services and live event services as a result of the more challenging macro environment.

Previous 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.

Current wording

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 $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.

Current wording

The $2.2 million increase was primarily due to a higher mix of lower margin revenue, including VDR. During the three months ended September 30, 2025, Software Products & Services products accounted for 78.5% of revenues compared to 66.8% in the prior year period.

Previous 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.

Current wording

The $1.3 million decrease was 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.

Previous wording

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 wording

The $1.0 million decrease was primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024 and contingent purchase compensation expense.

Previous wording

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 wording

The $4.0 million decrease was primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024 and contingent purchase compensation expense.

Previous wording

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 wording

The $0.2 million increase was primarily due to ongoing depreciation of newly capitalized internal-use software.

Previous 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”).

Current wording

The $0.1 million decrease was primarily due to 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”) and an increase in interest income.

Previous wording

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 wording

The $0.5 million increase was 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.

Previous wording

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 wording

The $8.5 million of other expense, net for the three months ended September 30, 2025 primarily consisted of a $$8.0 million loss on revaluation of the Veritone One earnout receivable and a $0.4 million foreign currency impact. The $0.4 million of other income, net for the three months ended September 30, 2024 consisted of a $0.4 million foreign currency impact.

Previous wording

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 wording

The $7.6 million of other expense, net for the nine months ended September 30, 2025 primarily consisted of a $7.2 million loss on revaluation of the Veritone One earnout receivable. The $0.1 million of other expense, net for the nine months ended September 30, 2024 consisted of a $0.2 million loss on sale of GridBeyond, partially offset by a $0.1 million foreign currency impact.

Previous 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.

Current wording

Net income from discontinued operations was $0.8 million and $2.9 million for the three and nine months ended September 30, 2024, respectively, and primarily consisted of revenue of $8.6 million and $23.0 million, respectively, offset by cost of revenue of $0.3 million and $0.7 million, respectively, other operating expenses of $5.8 million and $14.7 million, respectively, and $1.7 million and $4.7 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.

Current wording

We have historically generated negative cash flows from operations and have primarily financed our operations through the sale of equity securities and debt. As of September 30, 2025, we had cash and cash equivalents of $36.2 million.

Previous wording

Based on our liquidity position as of June 30, 2025 and our current forecast of operating results and cash flows, absent any other action, management determined that there is substantial doubt about our ability to continue as a going concern over the twelve months following the filing of this Quarterly Report on Form 10-Q, principally driven by our current debt service obligations, historical negative cash flows and recurring losses. As a result, we will require additional liquidity to continue our operations over the next twelve months.

Current wording

Based on our liquidity position as of the issuance date of these condensed consolidated financial statements and our current forecast of operating results and cash flows, absent any other action, we determined that there is substantial doubt about our ability to continue as a going concern over the twelve months following the filing of this Quarterly Report on Form 10-Q, principally driven by our debt repayment obligations, historical negative cash flows and recurring losses. As a result, we will require additional liquidity to continue our operations over the next twelve months.

Previous 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.

Current wording

We will continue to explore potential financing structures, in addition those we have already completed, which we believe could improve our current liquidity position and balance sheet. 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, 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.

Current wording

We may not be able to access additional equity under acceptable terms, and may not be successful in future financial and operational restructurings, earning any of our deferred purchase consideration, 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.