Executive Summary

Q1 2025 revenue was $22.5M, down 7% y/y, and below S&P consensus of $25.2M; GAAP EPS from continuing ops was -$0.44 vs S&P consensus of -$0.18 as mix shifted to lower-margin VDR and licensing early-tier pricing, and some Public Sector deals slipped in timing (consensus values marked with “*”; see S&P Global note).
VDR traction accelerated: ~$0.9M Q1 revenue, pipeline >$10M (doubled since March), and management now targets the high end of at least $10M VDR in 2025; initial VDR gross margin ~40%, expected to expand through 2025 .
Public Sector momentum building with iDEMS/Investigate “Awardable” on DoD Tradewinds and federal deployments on both Azure and AWS; Public Sector pipeline >$110M with several large DoD and international opportunities positioned for 2H contribution .
FY25 guidance lowered to $104–$115M revenue (from $107–$122M) and non-GAAP net loss of $30M–$20M (from $27M–$17M), reflecting H1 margin compression from VDR mix and timing shifts into H2; Q2 revenue guided to $23–$25M and non-GAAP net loss of $9M–$8M .

What Went Well and What Went Wrong

What Went Well
- VDR revenue began contributing materially and pipeline doubled in weeks: “VDR is gaining material traction…with a qualified and near-term pipeline of over $10 million, up from $5 million just a few weeks ago.”
- Federal/Public Sector progress: Investigate achieved “Awardable” status on DoD Tradewinds, completing iDEMS availability on the marketplace; deployments validated on secure DoD environments (Azure and AWS) .
- Commercial momentum and bookings: 100+ new/renewal software deals (e.g., Fremantle, Audacy, World Athletics, Cox Media Group) and total new bookings up 22% y/y to $15.8M .
What Went Wrong
- Revenue/EPS miss vs Street: Q1 revenue $22.5M vs $25.2M consensus*, EPS -$0.44 vs -$0.18 consensus*; revenue slightly below internal guidance due to Public Sector deal delays .
- Margin pressure: GAAP gross margin fell to 61.1% (from 67.6% y/y) and non-GAAP to 65.1% (from 71.2%), driven by mix away from higher-margin consumption and early-phase licensing tiers; VDR initial GM ~40% .
- Managed Services softness: revenue declined 10.7% y/y to $8.0M on weaker representation services and licensing .

Financial Results

Consolidated results vs prior periods and consensus

Metric	Q3 2024	Q4 2024	Q1 2025	Q1 2025 Consensus*
Revenue ($M)	$22.0	$22.4	$22.5	$25.2*
GAAP Gross Margin %	68.1%? (non-GAAP 71.2% shown; GAAP not explicitly in Q3 PR)	68.1%	61.1%	—
Non-GAAP Gross Margin %	71.2%	70.2%	65.1%	—
Operating Loss ($M)	$(22.5)	$(19.7)	$(21.6)	—
Net Loss – Continuing Ops ($M)	$(22.5)	$(24.3)	$(19.9)	—
Diluted EPS – Continuing Ops ($)	$(0.59)	$(0.55)	$(0.44)	$(0.18)*

Values with * are from S&P Global (consensus).

Segment revenue detail

Segment ($000s)	Q3 2024	Q4 2024	Q1 2025
Software Products & Services – Commercial Enterprise	$13,098	$14,123	$13,149
Software Products & Services – Public Sector	$1,596	$1,399	$1,334
Total Software Products & Services	$14,694	$15,522	$14,483
Managed Services – Representation	$2,730	$2,788	$2,771
Managed Services – Licensing	$4,569	$4,124	$5,209
Total Managed Services	$7,299	$6,912	$7,980
Total Revenue	$21,993	$22,434	$22,463

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Total Software Products & Services Customers	3,291	3,237	3,156
ARR (SaaS) ($000s)	$48,269	$47,549	$47,494
ARR (Consumption) ($000s)	$15,011	$11,245	$11,223
Total ARR ($000s)	$63,280	$58,794	$58,717
Total New Bookings ($000s)	$16,471	$13,228	$15,835
Gross Revenue Retention	>90%	>90%	>90%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$107–$122M	$104–$115M	Lowered
Non-GAAP Net Loss	FY 2025	$(27)–$(17)M	$(30)–$(20)M	Lowered (wider loss at low end)
Revenue	Q2 2025	N/A	$23–$25M	New quarterly guide
Non-GAAP Net Loss	Q2 2025	N/A	$(9)–$(8)M	New quarterly guide
Non-GAAP Gross Margin (blended)	FY 2025	N/A	65%–70%; up to ~73% at high end of revenue guide (mgmt commentary)	New qualitative/quantitative color

Rationale provided: shift of larger Public Sector and VDR initiatives into H2; early-phase VDR and content licensing mix compress margins in H1, improving later in 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
VDR momentum, revenue mix	VDR launched; 13 enterprise signings; 2025 guide framed with strong pipeline	~$0.9M Q1 revenue; pipeline >$10M (doubled from March); targeting high end of ≥$10M in 2025; initial GM ~40% with expansion expected	Accelerating but near-term margin drag
Public Sector (DoD/Fed/SLED)	19 new customers; Tradewinds status for key apps; pipeline >$100M	Investigate “Awardable” on Tradewinds; pipeline >$110M; ready deployments on AWS/Azure; several large DoD deals expected to start in H2	Building into H2 catalysts
Veritone Hire	Expansion (Workday platinum, Bullhorn integration) and international rollout in Q4	Stability achieved; 3-pronged plan: partner network (Workday co-sell has begun), media services wallet share, algorithmic ROI optimization	Stabilizing; gradual growth setup
Margins	Non-GAAP GM 71.2% (Q3) and 70.2% (Q4) pressured by consumption decline	Non-GAAP GM 65.1% on VDR/lower-margin licensing mix; mgmt expects sequential improvement through Q2–Q4	Near-term pressured, improving 2H
Liquidity/Balance Sheet	Divested Veritone One; term debt paydown; ATM facility set	Cash/restricted cash $16.4M; January $20.3M offering; total debt ~$130M; exploring further balance sheet actions	Incremental de-risking actions

Management Commentary

“VDR is gaining material traction and is now expected to generate significant revenue for the remainder of the year with a qualified and near-term pipeline of over $10 million, up from $5 million just a few weeks ago.”
“We have already ingested, prepared and delivered the equivalent of over 200 billion tokens derived from premium audio and video to multiple hyperscalers and model developers for advanced model training and tuning.”
“Revenue was in line with our preliminary results, but did fall slightly below our guidance primarily driven by delays in some of our larger Public Sector deals offset by outperformance from our VDR business, which resulted in slightly lower gross margins versus expectations.”
“In Q1 2025, VDR gross margins were approximately 40%… expected to improve throughout 2025… content licensing renewals… are expected to improve throughout 2025 as the volume of revenue increases over time.”
“Our Public Sector pipeline now exceeds $110 million… We are also… beginning to work closely with… DLA… deploying iDEMS and aiWARE on the DLA’s private tenants in their own secure environment.”

Q&A Highlights

H2 uplift visibility: Management cited VDR and Public Sector as primary drivers; difference between guide low/high tied to Public Sector timing and VDR growth velocity .
VDR demand breadth: Pipeline increase reflects multiple contracts across new partners and clients (not just one deal) .
Public Sector revenue recognition: For high-visibility contracts, software modules are “ready to be delivered and stood up,” enabling near-immediate revenue once released (AWS, in addition to prior Azure deployments) .
Margin cadence: Q1 margin drag from VDR mix and Public Sector slippage; margins expected to step up in Q2–Q4 .
Veritone Hire strategy: Focus on partner-led co-sell (Workday), expanding media services share of wallet, and ROI-driven algorithm optimization .

Estimates Context

Q1 2025 vs consensus (S&P Global): Revenue $22.46M vs $25.20M*; EPS (cont. ops) -$0.44 vs -$0.18*; EBITDA -$14.69M vs -$9.94M* — a miss on both top line and profitability as mix shifted to VDR and early-stage licensing (consensus values*).
Near-term Street trajectory (as of current S&P estimates):
- Q3 2025: Rev $28.46M*, EPS -$0.107*, EBITDA -$3.46M* (actuals now reflect $29.12M revenue and -$0.089 EPS reported subsequently)
- Q4 2025: Rev $34.34M*, EPS -$0.051*, EBITDA -$1.49M*
- Q1 2026: Rev $31.34M*, EPS -$0.075*, EBITDA -$1.32M*
- Q2 2026: Rev $29.86M*, EPS -$0.049*, EBITDA $1.19M*
  Values with * are from S&P Global (consensus). [GetEstimates]*

Values retrieved from S&P Global.

Q1 2025 Actual vs S&P Consensus

Metric	Q1 2025 Actual	Q1 2025 Consensus*
Revenue ($M)	$22.46	$25.20*
EPS – Continuing Ops ($)	-$0.44	-$0.18*
EBITDA ($M)	-$14.69*	-$9.94*

Values with * are from S&P Global (consensus or, where indicated, actual compiled by S&P).
Values retrieved from S&P Global.

Key Takeaways for Investors

Mix shift creates a timing/margin trade-off: VDR is scaling with lower initial margins (~40%), but management expects margin expansion as the product matures and tiered licensing moves up-volume in 2H .
H2 execution is pivotal: Several large Public Sector contracts (DoD/federal and international) are poised to ramp, with software “ready to deploy” pending contract release; this is the core driver of the FY25 guide and stock narrative into 2H .
Revised FY25 guide lowers the bar but concentrates risk on deal timing; upside optionality remains if VDR velocity exceeds plan and Public Sector timing holds .
Bookings quality improving even as total ARR remains pressured by consumption declines; subscription ARR mix is now 81% of total ARR, supporting durability as consumption stabilizes .
Balance sheet actions continue: $20.3M raise in January and active exploration of additional liquidity/structure improvements against ~$130M total debt underscores a continued de-risking focus .
Near-term trading setup: Stock likely sensitive to incremental VDR deal prints and specific DoD/agency award disclosures; evidence of margin inflection and Public Sector revenue conversion should be key catalysts .

Appendix: Source Documents Read

Q1 2025 8-K (Item 2.02) with Exhibit 99.1 preliminary financials .
Q1 2025 earnings call transcript (full) -.
Q1 2025 results press release (May 8, 2025) -.
Q4 2024 results 8-K/press release (Mar 13, 2025) - -.
Q3 2024 results press release (Nov 12, 2024) -.
Other Q1 2025 relevant press release: DoD Tradewinds “Awardable” for Investigate (Apr 17, 2025) -.

Veritone, Inc. (VERI)·Q1 2025 Earnings Summary