Veritone, Inc. Q1 FY2026 earnings call

• Strategic Positioning in AI/Data Economy: Veritone is positioned at the intersection of AI and data convergence, helping organizations convert unstructured audio/video data into AI-ready, monetizable assets while supplying differentiated training data to large hyperscalers and AI model developers. In Q1 2026, both Google and NVIDIA signed contracts for VDR data services.
• Key Strategic Partnerships: A multi-year strategic agreement was signed with Oracle to host AIWare, VDR, and Veritone applications on Oracle Cloud Infrastructure (OCI), delivering over 20% initial compute cost savings, non-dilutive cash incentives, improved scalability, and enhanced enterprise and public sector AI capabilities. The company also announced a new collaboration with The Washington Post to unlock and monetize its historical news archive via Veritone's AI data platform, and a strategic deployment with the UK Department for Work and Pensions for Broadbean recruitment technology.
• Cost Efficiency & Profitability Roadmap: Management is proactively reducing operating costs to lower the company's breakeven floor by approximately 30% by the end of Q2 2026. This initiative, combined with operating leverage from the mature AIWare platform, means the company's target of operating profitability as early as Q4 2026 does not depend on aggressive revenue growth assumptions, and is achievable even with moderate revenue growth.
• Commercial Enterprise Expansion: Veritone launched the Veritone Data Marketplace to expand access to curated, AI-ready training datasets. The company processed thousands of hours of live sports content for high-profile events including NCAA March Madness and the Masters Tournament, and extended a partnership with U.S. Soccer for AI-powered content monetization. Management is developing tiered, self-service versions of its core Digital Media Hub platform for small and mid-sized organizations, individual creators, and mid-market clients, greatly expanding the total addressable market while maintaining high core margins.
• Broadbean Product & Partnership Milestones: The segment achieved key milestones with all three major global human capital platform partners: Workday, Oracle, and SAP. An alpha version of a new Workday job management integration was released, with beta testing in Q2 2026 and general availability expected in Q3 2026. The SAP partnership agreement was finalized and signed in early Q2 2026, and Oracle integration updates were launched to improve client interface and campaign tracking. An agentic AI framework for Broadbean is targeted for alpha release in Q4 2026.
• Public Sector Growth & Differentiation: The company's IDEM evidence management suite delivers material improvements to public safety case closure rates, with open platform architecture that supports any security posture including air-gapped, network-isolated environments to meet strict data sovereignty requirements. The quarter saw deepened integration with the U.S. Air Force Office of Special Investigations and a live deployment of a private AIWare/IDEM instance for the Defense Logistics Agency, with a record high public sector sales pipeline.

Total Q1 2026 revenue was $20.3 million, a $2.2 million decrease year-over-year (YoY).

• Commercial Enterprise: Revenue was relatively flat YoY. The segment includes the high-growth Veritone Data Refinery (VDR), which had $68 million in near-term pipeline as of Q1 end, up over 500% YoY. The segment closed 224 new software and license agreements in Q1, with total company ARR of $64.2 million, up 9% YoY, 73% of which came from subscription vs consumption-based customers (down from 81% YoY as consumption-based ARR grew 50% YoY).
• Broadbean by Veritone (formerly Hiring division): Revenue was slightly down YoY, meeting internal Q1 revenue plans and remaining cash flow positive. The segment added 42 new global SaaS clients, and expanded its government and enterprise footprint, with 24 new joint clients with partner Workday in Q1. Total company software customers across all segments were 2,897, down 8% YoY, driven by macro churn of smaller Broadbean customers as the company focuses on larger opportunities.
• Public Sector: Revenue grew 69% YoY, driven by rollout of large deals closed in H1 2025. Some federal deal rollouts experienced minor delays in Q1, but are expected to resume in Q2 2026. The segment holds a record high sales pipeline.
• Managed Services: Revenue decreased $1.5 million (19.2%) YoY, driven by declines in representation services and timing of content licensing revenue pushed to Q2 2026.

Overall GAAP gross profit was $12.7 million (62.7% margin, up 166 bps YoY), non-GAAP gross margin was 67.7% (up 260 bps YoY). GAAP operating loss was $19.4 million, an improvement of $2.2 million (10%) YoY, and net loss was $19.5 million, a slight improvement from $19.9 million YoY.

• Full year 2026 revenue guidance is maintained at $130 million to $145 million, representing a 49% YoY increase at the midpoint.
• Q2 2026 revenue is guided to a range of $25 million to over $30 million, representing over 25% YoY growth at the high end of the range, with VDR expected to deliver its strongest quarter to date.
• Public sector full year 2026 revenue growth is projected to be 60% to 70% YoY, with much faster growth expected starting in H1 2027 as IDEM rollouts accelerate across the U.S. Department of Defense.
• Broadbean by Veritone full year 2026 revenue is expected to be slightly down YoY, reflecting ongoing macro headwinds in the global hiring market.
• Managed services full year 2026 revenue is expected to increase 10% to 15% YoY, driven by improving performance in representation services.
• Full year 2026 non-GAAP gross margins are projected to be between 60% and 65%, fluctuating based on the timing and mix of VDR revenue.
• Non-GAAP net loss for full year 2026 is projected to be between $13.5 million and $22.5 million, representing a 56% YoY improvement at the midpoint. The company remains on track to achieve operating profitability as early as Q4 2026.
• Operating expenses are expected to be flat YoY for sales, general and administrative in 2026, with expense reductions driving declines starting in H2 2026, while R&D spending will be slightly higher YoY to support VDR and public sector product development.

• The consumption-based business model of VDR means revenue visibility is limited to 2-3 months in advance, and customer demand for specific content and order volumes can shift based on changing AI model training needs.
• Government contracting is subject to decision-making delays, resource re-prioritization, and longer procurement timelines that can push revenue recognition into future periods, as seen with minor Q1 2026 delays for certain U.S. DoD deals.
• Persistent macroeconomic headwinds in the global hiring market are expected to continue driving churn of smaller Broadbean customers through full year 2026.

Q: What verticals will the expanded Digital Media Hub target, and when will it launch? / A: Originally built for large enterprise media clients, the updated Digital Media Hub will preserve its core enterprise capabilities while adding near self-service onboarding for a much broader market. This includes small and mid-sized businesses, individual content creators, corporate marketing teams, schools, and local government entities, all of which generate growing volumes of unstructured audio and video data that require more intelligent storage and processing than generic cloud storage solutions. The re-vamped offering will launch within the next couple of months.

Q: What are the timelines and benefits of the Oracle Cloud integration? / A: Veritone has already completed foundational work to containerize AIWare, making it fully platform-agnostic, and technical integration with OCI is on track or ahead of schedule. The company will begin moving initial storage and then compute payloads to OCI by early August, and co-selling activities with Oracle have already started, including joint go-to-market planning for media, public sector, and entertainment verticals. Once fully deployed, lower compute costs will be passed to customers, creating a more competitive offering versus rivals.

Q: What factors will drive Veritone to hit or exceed the high end of full year 2026 revenue guidance? / A: Results at the high end of guidance will be overwhelmingly driven by VDR revenue: Google and NVIDIA deals that were delayed from Q4 2025 to Q1 2026 are now active, and the $68 million near-term VDR pipeline continues to grow. Public sector will also contribute: Q1 delays for the Defense Logistics Agency and Air Force OSI deployments have been resolved, both are now live, and accelerated expansion of these contracts through the remainder of 2026 will add incremental revenue to hit the upper guidance range.

Q: How does budget availability and customer awareness impact public sector deal closing timelines? / A: For state and local customers, Veritone maintains ongoing relationships to be ready when contract renewal cycles arise, and its modular platform allows low-cost entry points for incremental departmental purchases (such as redaction or investigative tools) outside of full annual budget cycles, making it easier to land new accounts and scale over time. For federal customers, the process is more involved, requiring both formal procurement bidding and direct relationship-building with mission leaders, but the company is already seeing results from this approach with recent wins across the DoD.