Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| Looking ahead to 2024 and beyond, I am confident in our ability to serve as a critical partner to the public sector by harnessing AI to improve efficiency, cut costs and increase the effectiveness of investigations and the judicial process |
| We therefore see not only a rebound for the media business, but material growth prospects for the year |
| So we're very excited and optimistic about that |
| In Q4, we delivered strong key performance metrics on a pro forma basis |
| Our revenue pipeline and long-term outlook remain strong |
| We expect customer growth and strong net revenue retention to further reduce this revenue concentration in 2024 |
| We are in the midst of an unprecedented wave of demand for artificial intelligence, strengthening Veritone’s value proposition |
| Veritone’s decade-long AI expertise and software and service capabilities in this field gives us a strong competitive advantage in delivering world-class AI applications and solutions |
| We're seeing an explosion of demand for Veritone’s AI applications, aiWARE platform and solution capabilities, with the largest qualified pipeline on record, and we are continuing to accelerate our innovation and development pipeline to adapt and extend our AI capabilities to serve our markets |
| Driving this improvement and the bottom line are legacy cost reductions and, to a lesser extent, the mid-quarter impact of our Q1 2024 restructuring, which we expect to fully begin realizing beginning in Q2 2024 |
| I am happy to report that we continued to make substantial financial progress, ending the year with solid customer metrics and contributions made across our Software Products and Services and Managed Services |
| I firmly believe that our renewed sense of focus, together with our expertise in software, professional services and digital media, will allow us to come out of this transition stronger, more competitive and better positioned to capitalize on the opportunities presented by the dynamic AI market |
| We anticipate these combined actions to result in material improvements to our 2024 non-GAAP net loss as compared to 2023, netting over a 15% reduction in overall operating expense, which Mike will provide further detail on later |
| As we close out financial year 2023, I am proud of the disciplined actions we took to align our resources, talent and investments to not only meet the current demands of our customers and partners, but to secure our growth and lead in delivering advanced, efficient AI solutions in the years to come |
| We expect our managed services, including our advertising to improve over 15% year-over-year, led by advertising and licensing starting in Q2 2024 |
| We have a strong pipeline for iDEMS, while already booking business and expect meaningful revenue contribution in 2024 |
| Our Veritone Hire platform continued to demonstrate our ability to deliver intelligent talent acquisition and down funnel analytics solutions for clients in the marketplace to enable better cost savings, time to hire KPIs and superior advertising performance in Q4 |
| Along with our other market verticals, Public Sector customers continue to be drawn to our proven track record of AI partner-model success, expertise in handling vast data sets and experience leading ethical AI practices |
| Veritone Hire demonstrated resilience, capitalizing on its strong commercial strategy and focus on multi year subscription engagements, leading ATS integrations and dynamic pricing management |
| I am pleased with our financial performance in the fourth quarter, while also achieving significant progress against the strategic initiatives set in motion last year |
| As I stated, as we sit here today, we are pacing above 2022 bookings at this point of time on the advertising side of the business, which is a very material rebound |
| We remain committed to diversifying our customer and revenue base, and the notable increase in ARR associated with our subscription-based customers this year has contributed to greater stability in our revenues and earnings, reducing vulnerability to the actions of a single customer or market segment |
| So again, I think we're probably in the best position we've been in a very long time, where with the absolute lowest concentration risk and fluctuation risk from Amazon contributions that we're pretty bullish for the year |
| 2023 was a pivotal year in the growth of our Public Sector business, and our investments are showing signs of material traction with yearly and quarterly revenue growth of 55% and 29%, respectively |
| We made substantial progress onboarding Broadbean this year, building onto Broadbean’s year-over-year growth, with the successful integration of the sales and marketing organizations in Q3 and accelerated IT systems integration in Q4 |
| Heading further into 2024, we’re well positioned to capitalize on the rebounding ad market and improving outlook in the media and entertainment space overall |
| We expect full year non-GAAP net loss to vastly improve in 2024 and be between $11 million and $15 million, with substantial progress towards profitability beginning in the second half of 2024 |
| Our content licensing business delivered exceptional results and demonstrated significant partner growth across core customers |
| In Q4, our team successfully implemented expanded CBS Evening News content Ingestions, which includes the delivery of all news segments in near real-time across the Veritone marketplace, providing an unmatched user experience for content buyers |
| 2023 was marked by our strategic acquisition of Broadbean in Q2, which further solidified our position in the talent acquisition industry |
| Statement |
|---|
| Q4 managed services advertising gross billings per active client were 647,000, declining 21% from Q4 2022 |
| Total new bookings were $17.5 million down year-over-year largely due to Amazon's reduced spend |
| Revenue was $34.2 million, down 22.1% or $9.7 million from Q4 of 2022, driven by declines of $7.4 million from Software Products and Services and $2.3 million from Managed Services |
| Revenue was $127.6 million, down 14.8% year-over-year from $149.7 million in 2022 |
| Q4 2023 non-GAAP gross profit reached $27.7 million, declined $9.5 million or 25.5% from Q4 of 2022, largely due to the decrease in revenue |
| Full year non-GAAP gross profit reached $99.3 million as compared to $122.3 million in 2022, declining $23 million, or 18.8%, consistent with the decline in revenue over the same period |
| The decline in Managed Services was driven in large part by advertising, which declined $5.8 million year-over-year primarily driven by lower ad net revenue contribution, due in part to the challenging macro environment coupled with customer deferral of budgeted ad spend to future periods |
| Overall non-GAAP gross margins came down to 81% in Q4 2023 as compared to 84.7% in 2022 |
| On a pro forma basis, which assumes ownership of Broadbean since January 1, 2022, fiscal 2023 revenue was $142.6 million versus $182.3 million, a decline of $39.7 million or 21.8% year over year |
| As a result of the mix of revenue in Q4 2023 as compared to Q4 2022, which includes declines in our hiring solutions, which generate non-GAAP gross margins in excess of 90% |
| In addition, Software Products and Services declined due to the loss of over $9 million in certain non-recurring one-time software revenue in 2023 versus 2022 |
| Q4 non-GAAP net loss was $6.8 million as compared to non-GAAP net income of $2.2 million in Q4 2022, driven largely by the decline in non-GAAP gross margin, offset by net improvements in our cost structure throughout fiscal 2023 |
| While our subscription-based ARR grew 4% year-over-year, our overall ARR declined given the trailing 12-month pullback in consumption spending, principally from customers, including the Amazon |
| The pro forma decline in Software Products and Services was driven by the previously discussed declines in certain onetime revenue and from our hiring solutions, the latter of which decreased $29.0 million, or 31.9%, largely from declines in consumption based revenues, including Amazon, offset slightly by a 4.6% increase in Broadbean year-over-year |
| Risk to our Q1 revenue guidance include execution of new enterprise deliverables, namely across our public sector, which can be unpredictable and to a lesser extent, consumption-based revenue across our hire and managed services |
| But when I look at it on a pro forma basis, on a pro forma basis, even at the high end, you're basically predicting a decline in -- a modest decline in revenue for 2024 |
| The decline in Software Products and Services revenue was largely due to a decline of $5.5 million in certain one-time non-recurring revenue in Q4 2022 as compared to Q4 2023, coupled with the net decline of $1.9 million in Veritone Hire, offset by a 30% year-over-year improvement in Public Sector |
| As a reminder, Q1 is our seasonally lowest performing quarter and the majority of our costs are fixed and payroll-driven |
| Q4 2023 non-GAAP net loss was slightly worse versus our original guidance, largely due to the decision to delay certain cost reductions from Q4 2023 to Q1 2024, which I will explain in detail later and slightly lower-than-expected capitalized software costs in Q4 2023 |
| The Software Products and Services decline was largely attributed to lower consumption across our Veritone Hire solution’s customer base, including Amazon, offset by the addition of Broadbean in Q2 2023, which contributed $19.2 million of revenue in 2023 |
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