Veritone (VERI) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $20.3M, down 9.8% year-over-year, with declines in both Software Products & Services and Managed Services, but a 69% increase in Public Sector revenue.

• Signed major contracts with Google, NVIDIA, and The Washington Post for VDR data services, and announced a multi-year strategic agreement with Oracle to scale AI offerings.

• VDR bookings and pipeline exceeded $68M, up 500% year-over-year, with total sales pipelines for VDR and Public Sector solutions surpassing $250M.

• Announced a targeted 30% operating expense reduction initiative, aiming for operating profitability by Q4 2026.

• Cost reduction initiatives since 2023 have achieved over $50M in annualized savings, with further reductions planned in 2026.

Financial highlights

• Software Products & Services revenue was $13.8M, down 4.6% year-over-year; Managed Services revenue was $6.4M, down 19.2%.

• Q1 GAAP gross profit was $12.4M (61.4% margin), with non-GAAP gross margin at 67.7%, both improved year-over-year.

• Operating loss improved to $19.4M, a 10.2% reduction year-over-year; net loss was $19.5M, slightly better than prior year.

• Cash and cash equivalents at March 31, 2026, were $15.1M, with net cash used in operating activities of $11.5M for the quarter.

• Total debt reduced to $45M–$45.6M, all related to Convertible Notes maturing November 2026.

Outlook and guidance

• Full-year 2026 revenue guidance maintained at $130M–$145M, a 48–49% year-over-year increase at midpoint.

• Q2 2026 revenue expected between $25M–$30M, potentially over 25% year-over-year growth.

• Non-GAAP net loss for 2026 forecasted at $13.5M–$22.5M, a 56% improvement at midpoint.

• Operating profitability targeted as early as Q4 2026, supported by cost reduction initiatives and sequential quarterly revenue growth.

• Public sector revenue projected to grow over 60% year-over-year; managed services expected up 10–15%.