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VI

Veritone, Inc. (VERI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue grew 32.4% year over year to $29.1M, driven by 55.5% growth in Software Products & Services; Managed Services declined 14.1% .
  • The company delivered a revenue beat vs Wall Street consensus ($29.1M actual vs $28.5M estimate*) and better “Primary EPS” than consensus (actual -$0.089 vs -$0.107*), while GAAP loss per share was -$0.41; company-quoted adjusted loss per share from continuing operations was -$0.09 * .
  • Q4 2025 guidance was introduced at $33.4M–$39.4M revenue and non-GAAP net loss of $5.0M–$1.5M; FY 2025 revenue was updated to $109M–$115M and non-GAAP net loss to $31.6M–$26.0M (low-end revenue raised vs prior quarter) .
  • Strategic catalysts: VDR qualified bookings and near‑term pipeline approached ~$40M (up 100% since August), significant enterprise wins, and October/September equity raises; post‑quarter, the company retired its senior secured term debt and repurchased ~50% of converts, cutting annual debt carry to ~$0.8M .

What Went Well and What Went Wrong

  • What Went Well
    • “Growing our core AI software revenue more than 200% [ex‑Hire], solidifying our liquidity through two equity offerings, and remaining on track to reach profitability by latter part of 2026” — CEO Ryan Steelberg .
    • VDR momentum: qualified bookings and near‑term pipeline nearly $40M, with major hyperscaler wins; “we are confident that by the end of 2025, Veritone will hold active contracts or projects with every major hyperscaler” .
    • Public Sector traction: 82 contracts closed in Q3 (30 new agencies), including top‑5 LEA and CBS partnership expansion; ARR up 8.8% YoY to $68.8M .
  • What Went Wrong
    • GAAP net loss increased YoY to -$26.9M, driven primarily by an $8.0M non‑cash earnout fair value change from the Veritone One divestiture .
    • Gross margin mixed: GAAP gross margin fell to 64.3% (from 66.6%); VDR margins ~40% pressured blended margins; management guides Q4 non‑GAAP GM ~60–61% on higher VDR mix .
    • Managed Services revenue declined 14.1% YoY on representation services softness amid a challenging macro; customers fell 8.2% YoY as consumption spend in Hire and legacy sunsetting weighed .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD)$21,993 $24,013 $29,118
GAAP Gross Profit ($USD)$14,655 $15,344 $18,709
GAAP Gross Margin %66.6% 63.9% 64.3%
Non-GAAP Gross Margin %71.2% 68.9% 70.6%
Operating Loss ($USD)$(22,492) $(19,318) $(15,802)
GAAP Loss/Share (Continuing Ops)$(0.59) $(0.54) $(0.41)
Non-GAAP Net Loss (Continuing Ops) ($USD)$(11,097) $(8,713) $(5,796)

Q3 2025 Actual vs Consensus

MetricQ3 2025 ActualQ3 2025 Consensus
Revenue ($USD)$29,118,000 $28,455,120*
Primary EPS ($USD)$(0.0892)*$(0.10667)*

Segment Revenue Breakdown (000s)

SegmentQ3 2024Q2 2025Q3 2025
Software Products & Services – Commercial$13,098 $15,334 $20,865
Software Products & Services – Public Sector$1,596 $2,135 $1,982
Software Products & Services – Total$14,694 $17,469 $22,847
Managed Services – Representation$2,730 $1,529 $1,484
Managed Services – Licensing$4,569 $5,015 $4,787
Managed Services – Total$7,299 $6,544 $6,271
Total Revenue$21,993 $24,013 $29,118

KPIs

KPIQ1 2025Q2 2025Q3 2025
Annual Recurring Revenue (Total, $000s)$58,717 $62,599 $68,832
ARR (SaaS, $000s)$47,494 $50,350 $50,010
ARR (Consumption, $000s)$11,223 $12,249 $18,822
Total SW Products & Services Customers3,156 3,067 3,021
Total New Bookings ($000s)$15,835 $15,766 $21,470
Gross Revenue Retention (%)>90% >90% >90%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)Q4 2025N/A$33.4M–$39.4M New
Non-GAAP Net Loss ($USD)Q4 2025N/A$(5.0)M–$(1.5)M New
Non-GAAP Gross Margin (%)Q4 2025N/A~60%–61% (mix-driven) New
Revenue ($USD)FY 2025$108M–$115M $109M–$115M Raised low-end by $1M
Non-GAAP Net Loss ($USD)FY 2025$(30.0)M–$(25.0)M $(31.6)M–$(26.0)M Range widened; higher low-end

Earnings Call Themes & Trends

TopicPrevious (Q2 2025)Previous (Q1 2025)Current (Q3 2025)Trend
VDR momentumPipeline >$20M; hyperscaler discussions; GM ~40% Pipeline >$10M, rapid growth; early traction Pipeline/Bookings ~$40M; aiming for every hyperscaler by YE25 Accelerating
Public SectorAir Force OSI sole-source; pipeline ~$189M Pipeline >$110M; new SLED wins 82 contracts, 30 new agencies; short-term Fed shutdown delays Strong with near-term delays
Liquidity/debt$9–10M equity raise in June; debt ~$128M $20.3M equity in Jan; debt ~$130M $28.8M Sept + $75.0M Oct raises; plan to retire term debt & 50% converts; completed post‑quarter De‑levering; flexibility improved
Gross marginsNon‑GAAP GM 68.9%; VDR at ~40% GM Non‑GAAP GM 65.1%; VDR ~40% Q3 non‑GAAP GM 70.6%; Q4 guide ~60–61% on VDR mix Mix-dependent; normalizing
Product expansionN/AaiWARE scale; DMH expansions Redact adds voice masking, inverse blur, 64 languages Feature velocity up
InternationalN/ACanada partnership, DoD deployments EU national police, UK opportunities Expanding

Management Commentary

  • “We executed at a high level, growing our core AI software revenue more than 200% [ex‑Hire], solidifying our liquidity position through two equity offerings, and remaining on track to reach profitability by the latter part of 2026.” — Ryan Steelberg, CEO .
  • “Our VDR pipeline and bookings now exceed $40 million… we are confident that by the end of 2025, Veritone will hold active contracts or projects with every major hyperscaler in the market.” — Ryan Steelberg .
  • “Immediately following this debt payoff, our unencumbered consolidated cash is approximately $34 million… remaining debt will be approximately $45 million… freeing up an estimated $13 million of annualized debt carry costs.” — Mike Zemetra, CFO (post‑offer plan; subsequently executed) .

Q&A Highlights

  • Q4 revenue range drivers: timing/velocity of larger VDR deals and some public sector Fed deals; management aims for high end of the range .
  • Go‑to‑market expansion: Veritone sells to both buy‑side (hyperscalers/model developers) and supply‑side (media/IP owners), planning to expand sales force; building brand trust in AI training data .
  • Federal shutdown impact: short-term blip causing weeks-to-months delays; negligible effect on 2026 modeling; diversified commercial/public footprint mitigates .
  • Margin cadence: Q3 non‑GAAP GM benefited from one-time high-margin software; VDR at ~40% GM; Q4 non‑GAAP GM guided to ~60–61% on higher VDR mix .

Estimates Context

MetricQ3 2025Q4 2025Q1 2026
Revenue Consensus Mean ($USD)$28,455,120*$34,341,390*$31,337,810*
Primary EPS Consensus Mean ($USD)$(0.10667)*$(0.05058)*$(0.07505)*
Primary EPS – # of Estimates3*4*3*
Revenue – # of Estimates4*5*4*
Actual Revenue ($USD)$29,118,000 ——
Actual Primary EPS ($USD)$(0.0892)*——

Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

  • The quarter delivered a clean top-line beat vs consensus and substantial non‑GAAP loss improvement, with software strength offsetting managed services softness; VDR and enterprise SaaS are key growth engines * .
  • Margin volatility is mix-driven: VDR growth depresses near-term gross margins (~40% VDR GM), but scale/diversification and one-time software revenues can lift blended margins; plan for ~60–61% non‑GAAP GM in Q4 .
  • Liquidity and de‑leveraging materially improve the equity story: equity raises followed by majority debt reduction reduce annual interest burden to ~$0.8M and remove restrictive covenants, enabling growth investment .
  • Public Sector momentum and international expansion provide multi‑year visibility; short-term federal shutdown delays appear manageable and not thesis-breaking .
  • Watch Q4 closes in VDR/public sector: timing and velocity will drive whether results land at high end of guidance; monitor margin mix and contract durability .
  • Managed Services remains a headwind under macro softness; expect continuation of decline until macro improves; focus on software mix shift .
  • The narrative is increasingly about monetizing unstructured data at scale; VDR positioning with hyperscalers is strategic and could catalyze estimate revisions if pipeline conversion sustains .