Veritone, Inc.
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
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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, 2026 · Filed Aug 13, 2026
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 2026-03-31; filed 2026-05-14.
0001628280-26-035074
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001628280-26-056828
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 97 previous paragraphs and 112 current paragraphs.
55 unchanged; 33 reworded; 20 added; 8 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 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 (20)
Current report
For the three and six months ended June 30, 2026, our total revenues were $24.3 million and $44.5 million, respectively, as compared to $23.2 million and $45.7 million for the three and six months ended June 30, 2025, respectively, an increase of 4.6% and decrease of 2.5%, respectively, over the prior-year period, driven by an increase in margins for aiWARE for the three months ended June 30, 2026 and a decrease in our Veritone hire revenue offset by an increase in our aiWARE SAAS revenue compared to the prior year period for the six months ended June 30, 2026. Our gross profit for the three and six months ended June 30, 2026 was $14.2 million and $26.6 million, respectively, as compared to $15.7 million and $29.4 million for the three and six months ended June 30, 2025, respectively, a decrease of 9.4% and 9.4%, respectively, primarily driven by a decrease in margins within Veritone hire and VeriAds products compared to the prior year period. For the three and six months ended June 30, 2026, our non-GAAP gross profit (calculated as described in “Non-GAAP Financial Measures” below) decreased to $15.5 million and $29.2 million, respectively, as compared to $16.8 million and $31.5 million for the three and six months ended June 30, 2025, respectively, driven by a decrease margins within our VeriAds and Veritone hire products compared to the prior year period.
Current report
During the three and six months ended June 30, 2026, we reported a net loss of $22.2 million and $41.7 million, respectively, as compared to $26.5 million and $46.4 million during the three and six months ended June 30, 2025, respectively. During the three and six months ended June 30, 2026, we reported a non-GAAP net loss (calculated as described in “Non-GAAP Financial Measures” below) of $10.0 million and $21.8 million, respectively, as compared to $8.4 million and $19.5 million during the three and six months ended June 30, 2025, respectively, primarily due to the decrease in non-GAAP gross profit (calculated as described in “Non-GAAP Financial Measures” below), including as a result of decreases in sales of higher margin products.
Current report
We serve two customer groups: (1) Commercial Enterprise, which consists of customers in the commercial sector, including media and entertainment customers, representation customers and Veritone Hire solutions customers (inclusive of Broadbean customers); and (2) Public Sector, which consists of customers in the public sector industries, including state, local and federal government, legal, and compliance customers.
Current report
Software Products & Services revenue increased $0.1 million, or 0.5%, in the three months ended June 30, 2026 compared to the corresponding prior-year period primarily due to an increase in revenue generated from our aiWARE solutions, offset by a decrease in Veritone hire solutions.
Current report
Managed Services revenue increased $1.0 million, or 15.2%, in the three months ended June 30, 2026 compared to the corresponding prior-year period driven by an increase of $0.6 million in representation services led by VeriAds in addition to a $0.4 million improvement in content licensing.
Current report
Cost of revenue, exclusive of depreciation and amortization, increased $2.5 million, or approximately 38.7%, from $6.4 million for the three months ended June 30, 2025 to $8.8 million for the three months ended June 30, 2026. Cost of revenue, exclusive of depreciation and amortization, as a percentage of revenue increased from 27.4% for the three months ended June 30, 2025 to 36.3% for the three months ended June 30, 2026.
Current report
Cost of revenue, exclusive of depreciation and amortization, increased $1.2 million, or approximately 8.3%, from $14.2 million for the six months ended June 30, 2025 to $15.4 million for the six months ended June 30, 2026. Cost of revenue, exclusive of depreciation and amortization, as percentage of revenue increased from 31.1% for the six months ended June 30, 2025 to 34.5% for the six months ended June 30, 2026.
Current report
The $1.2 million increase was primarily due to a higher mix of lower margin revenue, including VeriAds. During the six months ended June 30, 2026, Software Products & Services products accounted for 68.6% of revenues compared to 68.2% in the prior year period.
Current report
Sales and marketing expenses decreased $0.3 million, or approximately 1.2%, from $21.2 million for the six months ended June 30, 2025 to $21.0 million for the six months ended June 30, 2026. Sales and marketing expenses as a percentage of revenue increased from 46.4% for the six months ended June 30, 2025 to 47.1% for the six months ended June 30, 2026.
Current report
Research and development expenses increased $1.5 million, or approximately 14.7%, from $10.1 million for the six months ended June 30, 2025 to $11.6 million for the six months ended June 30, 2026. Research and development expenses as a percentage of revenue increased from 22.2% for the six months ended June 30, 2025 to 26.1% for the six months ended June 30, 2026.
Current report
The $1.5 million increase was primarily due to increases in platform costs, additional personnel-related costs, and an increase in outside consulting services.
Current report
General and administrative expenses decreased $4.6 million, or approximately 17.2%, from $26.7 million for the six months ended June 30, 2025 to $22.1 million for the six months ended June 30, 2026. General and administrative expenses as a percentage of revenue decreased from 58.4% for the six months ended June 30, 2025 to 49.6% for the six months ended June 30, 2026.
Current report
Restructuring Expenses
Current report
Restructuring expenses were $4.52 million for the three and six months ended June 30, 2026 as a result of the restructuring plan initiated in June 2026 which is principally comprised of severance and transition expenses associated with planned reductions in employees.
Current report
Depreciation and amortization expenses decreased $2.6 million or approximately 18.2% to $11.5 million from $14.1 million for the six months ended June 30, 2026 and 2025. Depreciation and amortization expenses as a percentage of revenue decreased from 30.9% for the six months ended June 30, 2025 to 25.9% for the six months ended June 30, 2026. The decrease was primarily due to an increase in assets becoming fully depreciated compared to the prior year.
Current report
Interest expense, net decreased $3.2 million, or approximately 92.1%, from $3.4 million for the three months ended June 30, 2025 to $0.3 million for the three months ended June 30, 2026.
Current report
The $3.2 million decrease was primarily due to a decrease in interest expense resulting from the repayment in full of our senior secured term loan in November 2025 and the partial repayment of our Convertible Notes in November 2025.
Current report
Interest expense, net decreased $5.6 million, or approximately 92.6%, from $6.1 million for the six months ended June 30, 2025 to $0.5 million for the six months ended June 30, 2026.
Current report
The $0.6 million of other expense, net for the six months ended June 30, 2026 primarily consisted of foreign currency impact. 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.
Current report
Liquidity and Capital Resources
Removed paragraphs (8)
Previous report
For the three months ended March 31, 2026, our total revenues were $20.3 million as compared to $22.5 million for the three months ended March 31, 2025, a decrease of 9.8% over the prior-year period, driven by a decrease in Software Products & Services along with a decrease in Managed Services revenue due to lower revenue from representation services and licensing, in each case, compared to the prior year period. Our gross profit for the three months ended March 31, 2026 was $12.4 million as compared to $13.7 million for the three months ended March 31, 2025, a decrease of 9.4%, driven by a decrease in revenue compared to the prior year period. For the three months ended March 31, 2026, our non-GAAP gross profit (calculated as described in “Non-GAAP Financial Measures” below) decreased to $13.7 million as compared to $14.6 million for the three months ended March 31, 2025, driven by a decrease 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 report
During the three months ended March 31, 2026, we reported a net loss of $19.5 million as compared to $19.9 million during the three months ended March 31, 2025. During the three months ended March 31, 2026, we reported a non-GAAP net loss (calculated as described in “Non-GAAP Financial Measures” below) of $11.9 million as compared to $11.1 million during the three months ended March 31, 2025, 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 2022, 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 into 2026, and 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 report
Our Managed Services revenue typically has a lower overall non-GAAP gross margin than our Software Products & Services revenue.
Previous report
Cost of revenue, exclusive of depreciation and amortization, decreased $1.3 million, or approximately 16.4%, from $7.8 million for the three months ended March 31, 2025 to $6.6 million for the three months ended March 31, 2026.
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.
Previous report
Benefit From Income Taxes
Previous report
Benefit from income taxes of $0.6 million for the three months ended March 31, 2026 represented a change of $0.3 million compared to a benefit from income taxes of $0.3 million for the three months ended March 31, 2025. The change was largely driven by changes in the profitability of foreign entities during the three months ended March 31, 2025 compared to the three months ended March 31, 2026.
Previous report
Liquidity, Capital Resources and Going Concern
Reworded paragraphs (33)
Previous wording
During the three months ended March 31, 2026 and 2025, we generated revenue of $20.3 million and $22.5 million, respectively. Software Products & Services revenue was $13.8 million and $14.5 million during the three months ended March 31, 2026 and 2025, respectively. Managed Services revenue was $6.4 million and $8.0 million during the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, no customer represented more than 10% of our consolidated revenue.
Current wording
During the three and six months ended June 30, 2026, we generated revenue of $24.3 million and $44.5 million, respectively, as compared to $23.2 million and $45.7 million during the three and six months ended June 30, 2025, respectively. Software Products & Services revenue was $16.7 million and $30.5 million during the three and six months ended June 30, 2026, respectively, as compared to $16.6 million and $31.1 million during the three and six months ended June 30, 2025, respectively. Managed Services revenue was $7.5 million and $14.0 million during the three and six months ended June 30, 2026, respectively, as compared to $6.5 million and $14.5 million during the three and six months ended June 30, 2025, respectively. During the three months ended June 30, 2026 and 2025, one customer and no customer represented more than 10% of our consolidated revenue, respectively. During the six months ended June 30, 2026 and June 30, 2025 no customer represented more than 10% of our 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, macroeconomic and geopolitical factors, including lingering economic disruption caused by international conflicts, financial instability, inflation and the responses by central banking authorities to control inflation, monetary supply shifts, high interest rates, the imposition of tariffs, trade tensions, and global trade disputes, and the threat of recession in the United States and around the world on our business and our existing and potential customers, negatively impacted parts of our consumption-based operations and financial results. For example, business operations at our Israel office location where we perform development work on our Talent Acquisition solutions, have been, and may continue to be, impacted by the conflicts in the Middle East. In addition, our Talent Acquisition 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. While these economic and geopolitical factors persisted throughout 2025 and into the first quarter of 2026, including instability caused by tariffs and higher energy costs, our Software Products & Services revenue of $65.8 million for the year ended December 31, 2025 increased 7.8% as compared to 2024.
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, macroeconomic and geopolitical factors, including lingering economic disruption caused by international conflicts, financial instability, inflation and the responses by central banking authorities to control inflation, monetary supply shifts, high interest rates, the imposition of tariffs, trade tensions, and global trade disputes, and the threat of recession in the United States and around the world on our business and our existing and potential customers, negatively impacted parts of our consumption-based operations and financial results. For example, business operations at our Israel office location where we perform development work on our Talent Acquisition solutions, have been, and may continue to be, impacted by the conflicts in the Middle East. In addition, our Talent Acquisition 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. While these economic and geopolitical factors persisted throughout 2025 and into the first half of 2026, our Software Products & Services revenue of $16.7 million and $30.5 million for the three and six months ended June 30, 2026, respectively, remained relatively flat as compared to the corresponding prior-year periods.
Previous wording
Beginning in 2023, we enacted significant cost reductions. From January 2023 to June 2025, we announced plans to reduce costs through the optimization of our operational structure, the cumulative result of which was a reduction in our global workforce of approximately 30% over this period. As of March 31, 2026, 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. In May 2026, we announced plans to further reduce our operating cost structure by up to 30%, in part to reinvest in areas required for growth and to realize synergies from operations, including from the adoption of AI-based agents and tools across the organization. We expect to begin executing this cost reduction plan by no later than the end of the third quarter of 2026. Until such cost reduction actions are initiated, we plan to keep our operating expenses relatively flat as compared to fiscal year 2025, which will be driven in part by planned cost reductions across our operating structure, offset by planned increases in our research and development operating expenses, largely to support efforts around near-and long-term revenue growth in VDR and the Public Sector.
Current wording
As of June 30, 2026, we have achieved an aggregate of over $60.0 million of net annualized strategic cost reductions since January 1, 2023 as a result of our organizational restructuring and realignment efforts. In May 2026, we announced plans to further reduce our operating cost structure, in part to reinvest in areas required for growth and to realize synergies from operations, including from the adoption of AI-based agents and tools across the organization. We began executing this cost reduction plan in June 2026 and as of August 2026 we enacted approximately $11.3 million of annualized cost savings, which included a reduction of approximately 14% of our workforce. In conjunction with the recent cost reduction plan, we incurred $4.5 million of employee severance and other costs as of June 30, 2026. Our planned cost reductions will be partially offset by planned increases in our research and development operating expenses, largely to support efforts around near-and long-term revenue growth in VDR and the Public Sector.
Previous wording
As of March 31, 2026, our total Software Products & Services customers declined to 2,897, which was a decrease of 8.2% as compared to March 31, 2025. This change was largely driven by declining consumption-based customers across our Talent Acquisition solutions, the vast majority of which are smaller revenue-based customers. In addition, smaller hiring agency customers experienced a drop in hiring as a result of the challenging macroeconomic environment. Collectively, these contributed to the decrease in Software Products & Services customers, but did not have a significant impact on our financial results for the quarters ended March 31, 2026 and 2025. In the first half of 2026 and until we see an improved macroeconomic environment, we expect to experience a similar decline in smaller hiring agency customers across our Talent Acquisition solutions. 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, 2026, our total Software Products & Services customers declined to 2,829, which was a decrease of 7.7% as compared to June 30, 2025. This change was largely driven by declining consumption-based customers across our Talent Acquisition solutions, the vast majority of which are smaller revenue-based customers. In addition, smaller hiring agency customers experienced a drop in hiring as a result of the challenging macroeconomic environment. Collectively, these contributed to the change 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, 2026 or year ended December 31, 2025. 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 Talent Acquisition customers will have greater visibility and transparency in their hiring processes. Further, with iDEMS and VDR products, 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 came 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”). The partnership with OSI is in the early stages of deploying our iDEMS solutions across the investigative divisions within the DOD. Through March 2026, our VDR sales pipeline increased to over $50.0 million, as compared to approximately $20.0 million in August 2025 and $40.0 million in October 2025. As of the first quarter of 2026, we are now under contract with the majority of leading hyperscalers for the deployment of our VDR solution. Our Public Sector pipeline is over $200 million as of March 31, 2026, 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 year ended December 31, 2025, our Software Products Services revenue, excluding our Talent Acquisition solutions, grew over 45% when compared to the same period in 2024 led principally by our iDEMS and VDR initiatives.
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 Talent Acquisition customers will have greater visibility and transparency in their hiring processes. Further, with iDEMS and VDR products, 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 came 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”). The partnership with OSI is in the early stages of deploying our iDEMS solutions across the investigative divisions within the DOD. Through June 2026, our VDR sales pipeline increased to over $65.0 million, as compared to approximately $20.0 million in August 2025 and $40.0 million in October 2025. As of the first quarter of 2026, we are now under contract with the majority of leading hyperscalers for the deployment of our VDR solution. Our Public Sector pipeline is over $220 million as of June 30, 2026, which we believe reflects accelerating demand for our AI-driven solutions and our reputation as a trusted technology partner to government agencies. While we recently experienced a shift in the deployment plan of our iDEMS solution across a portion of the DOD, we viewed this shift as temporary as the DOD was reallocating budgetary spending to the crisis in Iran, and as a result did not impair our Public Sector pipeline. See “About Our Sales Pipelines” below for more information. As a result, during the year ended December 31, 2025, our Software Products Services revenue, excluding our Talent Acquisition solutions, grew over 45% when compared to the same period in 2024 led principally by our iDEMS and VDR initiatives.
Previous wording
In evaluating our cash flows and financial performance, we use certain non-GAAP financial measures, including non-GAAP net income (loss), non-GAAP gross profit, and non-GAAP gross margin. We also provide certain key performance indicators (“KPIs”), including Total Software Products & Services Customers, Annual Recurring Revenue (SaaS), Annual Recurring Revenue (Consumption), Annual Recurring Revenue (Total), Total New Bookings and Gross Revenue Retention.
Current wording
In evaluating our cash flows and financial performance, we use certain non-GAAP financial measures, including non-GAAP net income (loss), non-GAAP gross profit, and non-GAAP gross margin. We also provide certain key performance indicators (“KPIs”), including Total Software Products & Services Customers, Annual Recurring Revenue (SaaS), Annual Recurring Revenue (Consumption), Total New Bookings and Gross Revenue Retention.
Previous wording
Non-GAAP net income (loss) is calculated as our net income (loss), adjusted to exclude 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 lender consent fees.
Current wording
Non-GAAP net income (loss) is calculated as our net income (loss), adjusted to exclude 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, professional fees and lender consent fees.
Previous wording
(1) Other items represent other expenses that are not indicative of our ongoing operations, which, for the three months ended March 31, 2025, comprised of fees paid to the lenders in connection with the limited consent to the Company’s Credit Agreement.
Current wording
(1)Other items represent other expenses that are not indicative of our ongoing operations, which, for the three and six months ended June 30, 2026 primarily comprised of professional fees and for the six months ended June 30, 2025 comprised of fees paid to the lenders in connection with the limited consent to the Company’s Credit Agreement.
Previous wording
GAAP gross profit of $12.4 million for the three months ended March 31, 2026 decreased $1.3 million or 9.4% as compared to the three months ended March 31, 2025 primarily due to a decrease in revenue. GAAP gross margin of 61.4% for the three months ended March 31, 2026, increased 30 basis points as compared to the three months ended March 31, 2025 as a result of year-over-year increases in higher gross margin revenue from consumption-based and one-time software revenue.
Current wording
GAAP gross profit of $14.2 million and $26.6 million for the three and six months ended June 30, 2026, respectively, decreased $1.5 million and $2.8 million, respectively, or 9.4% and 9.4%, respectively, as compared to the three and six months ended June 30, 2025 primarily due to an increase in cost of revenue. GAAP gross margin of 58.5% and 59.8% for the three and six months ended June 30, 2026, respectively, decreased 901 basis points and 454 basis points, respectively, as compared to the three and six months ended June 30, 2025 as a result of year-over-year declines in higher gross margin revenue from consumption-based revenue.
Previous wording
Non-GAAP gross profit of $13.7 million for the three months ended March 31, 2026 decreased $0.9 million or 6.3% as compared to the three months ended March 31, 2025 primarily due to a decrease in revenue. Non-GAAP gross margin of 67.7% for the three months ended March 31, 2026, increased 254 basis points as compared to the three months ended March 31, 2025 as a result of year-over-year increases in higher gross margin revenue from consumption-based and one-time software revenue.
Current wording
Non-GAAP gross profit of $15.5 million and $29.2 million for the three and six months ended June 30, 2026, respectively, decreased $1.4 million and $2.3 million, respectively, or 8.2% and 7.3%, respectively, as compared to the three and six months ended June 30, 2025 primarily due to an increase in cost of revenue. Non-GAAP gross margin of 63.7% and 65.5% for the three and six months ended June 30, 2026, respectively, decreased 891 basis points and 342 basis points, respectively, as compared to the three and six months ended June 30, 2025 as a result of year-over-year declines in higher gross margin revenue from consumption-based revenue.
Previous wording
(5)“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
(6)“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 March 31, 2026 and 2025, 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 six months ended June 30, 2026 and 2025, 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 Months Ended March 31, 2026 and 2025
Current wording
Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Previous wording
Managed Services consists of revenues generated from content licensing customers, representation services, and, to a lesser extent, from advertising customers and related services.
Current wording
Managed Services consists of revenues generated from content licensing customers, representation services, and, to a lesser extent, advertising customers and related services.
Previous wording
Software Products & Services revenue decreased $0.7 million, or 4.6%, in the three months ended March 31, 2026 compared to the corresponding prior-year period primarily due to a decline in revenue generated from our Talent Acquisition solutions. Commercial Enterprise Managed Services revenue decreased $1.5 million, or 19.2%, in the three months ended March 31, 2026 compared to the corresponding prior-year period driven by declines in representation services led by lower influencer based advertising revenue as a result of the more challenging macro environment, along with a $0.7 million decrease in content licensing.
Current wording
Managed Services revenue decreased $0.5 million, or 3.7%, in the six months ended June 30, 2026 compared to the corresponding prior-year period driven by a $0.2 million decrease in representation services driven by lower influencer based advertising revenue as a result of the more challenging macro environment, along with a $0.3 million decrease in content licensing.
Previous wording
The $1.3 million decrease was primarily due to a decrease in revenue. During the three months ended March 31, 2026, Software Products & Services products accounted for 68.2% of revenues compared to 64.5% in the prior year period.
Current wording
The $2.5 million increase was primarily due to a higher mix of lower margin revenue, including VDR. During the three months ended June 30, 2026, Software Products & Services products accounted for 68.9% of revenues compared to 71.8% in the prior year period.
Previous wording
Sales and marketing expenses increased $0.5 million, or approximately 5.4%, from $10.1 million for the three months ended March 31, 2025 to $10.7 million for the three months ended March 31, 2026. Sales and marketing expenses as a percentage of revenue increased from 45.0% for the three months ended March 31, 2025 to 52.6% for the three months ended March 31, 2026.
Current wording
Sales and marketing expenses decreased $0.8 million, or approximately 7.2%, from $11.1 million for the three months ended June 30, 2025 to $10.3 million for the three months ended June 30, 2026. Sales and marketing expenses as a percentage of revenue decreased from 47.8% for the three months ended June 30, 2025 to 42.4% for the three months ended June 30, 2026.
Previous wording
The $0.5 million increase was primarily due to increases in personnel-related costs and outside services, partially offset by a decrease in advertising expense.
Current wording
The $0.8 million decrease was primarily due to decreases in personnel-related costs and a decrease in advertising expense.
Previous wording
Research and development expenses increased $0.5 million, or approximately 10.5%, from $5.2 million for the three months ended March 31, 2025 to $5.8 million for the three months ended March 31, 2026. Research and development expenses as a percentage of revenue increased from 23.2% for the three months ended March 31, 2025 to 28.4% for the three months ended March 31, 2026.
Current wording
Research and development expenses increased $0.9 million, or approximately 19.0%, from $4.9 million for the three months ended June 30, 2025 to $5.9 million for the three months ended June 30, 2026. Research and development expenses as a percentage of revenue increased from 21.3% for the three months ended June 30, 2025 to 24.2% for the three months ended June 30, 2026.
Previous wording
The $0.5 million increase was primarily due to decreases in capitalized internal-use software costs, and an increase in outside consulting services.
Current wording
The $0.9 million increase was primarily due to increases in platform costs, additional personnel-related costs and an increase in outside consulting services.
Previous wording
General and administrative expenses decreased $3.1 million, or approximately 21.8%, from $14.0 million for the three months ended March 31, 2025 to $10.9 million for the three months ended March 31, 2026. General and administrative expenses as a percentage of revenue decreased from 62.3% for the three months ended March 31, 2025 to 54.0% for the three months ended March 31, 2026.
Current wording
General and administrative expenses decreased $1.5 million, or approximately 12.0%, from $12.7 million for the three months ended June 30, 2025 to $11.1 million for the three months ended June 30, 2026. General and administrative expenses as a percentage of revenue decreased from 54.6% for the three months ended June 30, 2025 to 45.9% for the three months ended June 30, 2026.
Previous wording
The $3.1 million decrease was primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted, reduction in debt related expenses and lower third party professional services.
Current wording
The $4.6 million decrease was primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted, reduction in debt related expenses and lower third party professional services.
Previous wording
Depreciation and amortization expenses decreased $1.2 million, or approximately 16.8%, from $6.9 million for the three months ended March 31, 2025 to $5.8 million for the three months ended March 31, 2026. Depreciation and amortization expenses as a percentage of revenue decreased from 30.9% for the three months ended March 31, 2025 to 28.5% for the three months ended March 31, 2026.
Current wording
Depreciation and amortization expenses decreased $1.4 million, or approximately 19.6%, from $7.2 million for the three months ended June 30, 2025 to $5.8 million for the three months ended June 30, 2026. Depreciation and amortization expenses as a percentage of revenue decreased from 30.9% for the three months ended June 30, 2025 to 23.8% for the three months ended June 30, 2026.
Previous wording
The $1.2 million decrease was primarily due to an increase in assets becoming fully depreciated compared to the prior year.
Current wording
The $1.4 million decrease was primarily due to an increase in assets becoming fully depreciated compared to the prior year.
Previous wording
Interest expense, net decreased $2.5 million, or approximately 93.2%, from $2.6 million for the three months ended March 31, 2025 to $0.2 million for the three months ended March 31, 2026, primarily due to the repayment in full of our senior secured term loan in November 2025.
Current wording
The $5.6 million decrease was primarily due to a decrease in interest expense was primarily due to the repayment in full of our senior secured term loan in November 2025 along with the partial repayment of our Convertible Notes in November 2025.
Previous wording
The $0.5 million of other expense, net for the three months ended March 31, 2026 primarily consisted of the effect of foreign currency exchange.
Current wording
The $0.1 million of other expense, net for the three months ended June 30, 2026 primarily consisted of foreign currency impact. 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.
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.
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 June 30, 2026, we had cash and cash equivalents of $12.4 million.
Previous wording
As of March 31, 2026, we had cash and cash equivalents of $15.1 million, working capital deficit of $45.8 million and accounts receivable, net of $26.7 million, and the amount outstanding under our debt obligations was $45.4 million, net of unamortized discount cost, all of which related to the Convertible Notes. Additionally, for the three months ended March 31, 2026, net loss was $19.5 million and net cash used in operating activities was $11.5 million. Our ability to continue as a going concern is dependent on our ability to generate significant cash flows, obtain sufficient proceeds from any future offerings of securities, and/or obtain alternative financing prior to the maturity of the Convertible Notes in November 2026. We expect operating losses to continue in the foreseeable future as we continue to invest in growing our business. To alleviate these conditions, management is actively engaged in discussions to obtain alternative financing prior to the maturity of the Convertible Notes in November 2026. However, there can be no assurance that we will be able to obtain alternative financing as it is ultimately outside of our control.
Current wording
As of June 30, 2026, we had cash and cash equivalents of $12.4 million, working capital deficit of $53.1 million and accounts receivable, net of $28.0 million, and the amount outstanding under our debt obligations was $45.5 million, net of unamortized discount cost, all of which related to the Convertible Notes. Additionally, for the six months ended June 30, 2026, net loss was $41.7 million and net cash used in operating activities was $22.1 million. Our ability to continue as a going concern is dependent on our ability to generate significant cash flows, obtain sufficient proceeds from any future offerings of securities, and/or obtain alternative financing prior to the maturity of the Convertible Notes in November 2026. We expect operating losses to continue in the foreseeable future as we continue to invest in growing our business. To alleviate these conditions, management is actively engaged in discussions to obtain alternative financing prior to the maturity of the Convertible Notes in November 2026. However, there can be no assurance that we will be able to obtain alternative financing as it is ultimately outside of our control. In addition, we have the ability to offer and sell shares of our common stock having an aggregate offering price of up to $50.0 million in an “at-the-market” equity offering program (the “2026 ATM Program”) pursuant to the sales agreement dated May 21, 2026, by and between us, UBS Securities LLC, Needham & Company, LLC and Craig-Hallum Capital Group LLC (the “May 2026 Sales Agreement”), under the 2026 ATM Program, which may provide additional liquidity. Our ability to sell shares under the 2026 ATM Program is subject to market conditions and there can be no assurance as to the amount of proceeds, if any, we may raise thereunder.
Previous wording
Net cash used in operating activities was $11.5 million for the three months ended March 31, 2026, a decrease of $5.6 million from $17.0 million for the three months ended March 31, 2025. The decrease was primarily due to a $0.9 million decrease in net loss excluding changes in operating assets and liabilities disclosed within our condensed consolidated statement of cash flows and a $4.6 million favorable change in operating assets and liabilities. The $0.9 million decrease in net loss excluding changes in operating assets and liabilities was primarily driven by a decrease in our net loss and favorable changes in non-cash and reconciling items including change in fair value of earnout receivable and deferred income taxes partially offset by unfavorable changes in non-cash and reconciling items including stock-based compensation, provision for credit losses, barter income, non-cash interest expense and reduction in carrying amount of operating lease right-of-use assets. The $4.6 million of favorable changes in operating assets and liabilities was primarily driven by favorable changes in accounts receivable and prepaid expenses and other current assets partially offset by unfavorable changes in other assets, accounts payable, deferred revenue and accrued expenses and other current liabilities.
Current wording
Cash used in operating activities for the six months ended June 30, 2026 was $22.1 million, a decrease of $3.2 million from the six months ended June 30, 2025 of $25.3 million. The decrease was primarily due to a $4.7 million decrease in the change in net loss, a decrease of $7.1 million in changes in non-cash items and a $5.6 million favorable change in operating assets and liabilities. The changes in non-cash and reconciling items including change in fair value of earnout receivable and deferred income taxes, partially offset by unfavorable changes in non-cash and reconciling items including stock-based compensation, provision for credit losses, reduction in carrying amount of operating lease right-of-use assets, barter income and non-cash interest expense. The $5.6 million of favorable changes in operating assets and liabilities was primarily driven by favorable changes in prepaid expenses and other current assets, accrued expenses and other current liabilities, partially offset by unfavorable changes in accounts receivable accounts payable and deferred revenue, other assets, and other non-current liabilities.
Previous wording
Net cash used in investing activities was $0.5 million for the three months ended March 31, 2026, a decrease of $0.8 million from $1.4 million for the three months ended March 31, 2025. The decrease was due to a $0.8 million decrease in capital expenditures.
Current wording
Net cash used in investing activities was $2.0 million for the six months ended June 30, 2026, a decrease of $0.3 million from $2.3 million for the six months ended June 30, 2025. The decrease was due to a $0.3 million decrease in capital expenditures.
Previous wording
Net cash used in financing activities was $0.5 million for the three months ended March 31, 2026, an unfavorable change of $18.3 million as compared to net cash provided by financing activities of $17.9 million for the three months ended March 31, 2025. The decrease was primarily due to a $19.9 million decrease in proceeds from issuance of common stock and pre-funded warrants under our registered direct offerings in January 2025 and sales under our at-the-market offering, net of offering costs along with a decrease of $0.4 million paid for taxes attributed to settlement of equity awards, partially offset by a $1.9 million increase in repayment of our senior secured term loan.
Current wording
Net cash provided by financing activities was $8.9 million for the six months ended June 30, 2026, an unfavorable change of $16.4 million as compared to net cash provided by financing activities of $25.3 million for the six months ended June 30, 2025. The decrease was primarily due to a $20.1 million decrease in proceeds from issuance of common stock and pre-funded warrants under our registered direct offerings in January 2025 and June 2025 and sales under our at-the-market offering, net of offering costs partially offset by a $3.9 million decrease in repayment of our senior secured term loan.
Previous wording
As of March 31, 2026, our debt obligations are solely comprised of $45.6 aggregate principal amount outstanding of our Convertible Notes that mature in November 2026. For a further discussion on our Convertible Notes, see Note 3, Debt, to our financial statements included in this Quarterly Report on Form 10-Q.
Current wording
As of June 30, 2026, our debt obligations are solely comprised of $45.6 million aggregate principal amount outstanding of our Convertible Notes that mature in November 2026. For a further discussion on our Convertible Notes, see Note 5, Debt, to our financial statements included in this Quarterly Report on Form 10-Q.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Beginning in 2023, we enacted significant cost reductions. From January 2023 to June 2025, we announced plans to reduce costs through the optimization of our operational structure, the cumulative result of which was a reduction in our global workforce of approximately 30% over this period.
Current report — wording carried from elsewhere
Software Products & Services revenue decreased $0.6 million, or 1.9%, in the six months ended June 30, 2026 compared to the corresponding prior-year period primarily due to a decline in revenue generated from our Talent Acquisition solutions.
Current report — wording carried from elsewhere
The $0.3 million decrease was primarily due to a decrease in advertising expense.
Current report — wording carried from elsewhere
The $1.5 million decrease was primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted, including decreased stock compensation cost.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
(4)“Annual Recurring Revenue” represents the sum of “Annual Recurring Revenue (SaaS)” and “Annual Recurring Revenue (Consumption).” Management uses “Annual Recurring Revenue” and we believe Annual Recurring Revenue is useful to investors because it provides our revenue from Total Software Products & Services Customers, which as noted above, excludes customers with insignificant revenue and customers on trial or pilot status.