Veritone Inc.’s fourth-quarter results were as volatile as the company’s roller coaster ride on Wall Street in its first year as a public company.
The Costa Mesa business that’s shooting to crack into the artificial intelligence segment posted $3.5 million in revenue, up 40% year-over-year but missing analyst estimates of $4.4 million. It recorded an operating loss of $12.8 million, or 83 cents, compared to a loss of $7.4 million, wildly missing Wall Street targets of a loss of 60 cents, or about $9.6 million.
Its media-buying business accounted for $3 million, or 85.7%, of revenue.
Veritone’s aiWARE artificial intelligence platform finished the quarter with 57 customers, up from 18 a year earlier.
“We are in the first inning of the AI revolution,” Chief Executive Chad Steelberg said in a Feb. 26 conference call with analysts following the poor earnings report. “This AI journey will take time, not only for the technology to mature, but also for the marketplace to adopt these potentially disruptive yet powerful AI solutions.”
Investors wasted little time in sinking the stock, sending shares down more than 15% in after-hours trading while the conference call was in session.
Veritone was trading at $13.26 as of press time, with a market cap of about $213 million, miles from its intraday day high of $74.92 on Sept. 27.
For the year, revenue increased 62% to $14.4 million. Operating losses hit $46.8 million compared to a $23.8 million loss in 2016.
The earnings report closely followed a big price target cut by Newport Beach-based Roth Capital analyst Darren Aftahi, who slashed his stock target from $62 to $32, still more than double the current price.
Ephesoft Gets CFO
Ike Kavas has made his second executive hire at Ephesoft Inc. since taking the top post in December of the company he co-founded eight years ago.
Industry veteran Naren Goel, who’s spent nearly 20 years in various financial roles, was tapped as chief financial officer, a newly created position. He most recently served as vice president of finance at San Mateo-based business software maker SignalFx and had previous stints at Coho Data in Santa Clara and Palo Alto-based VMWare Inc.
Kavas, who took charge in December, named Russ Hubbard chief revenue officer the following month in his first executive hire.
The company’s cloud-based content capture and analytics software is used in more than 35 countries by some 550 customers in the financial services, federal government, insurance, mortgage and healthcare sectors. It helps businesses classify, sort and extract data through digital document capture.
Sales doubled in 2016 to about $15 million, a year after the company was named to the Inc. 500 list of fastest-growing private companies in the U.S.
Kavas told the Business Journal in December that he projected revenue to grow another 70% last year to an estimated $25 million.
The Business Journal reported in July that Ephesoft raised $15 million in a Series A round from sole investor Mercato Partners, which is headquartered outside Salt Lake City.
The company planned to use the funding for product development on its two main offerings and to boost sales and marketing.
Kavas’ ascension to chief executive is a bit contrarian, since most founders of technology companies take the top post at onset, before giving way to a corporate executive or someone recommended after a venture capital investment.
He spent two stints at Irvine-based Kofax before co-founding Ephesoft, which has grown to 120 employees in about 15 offices in the U.S., two in Europe, and a development team in India. It doubled global employment in the past two years.
Kofax was sold in July to Chicago-based private equity firm Thoma Bravo, its third sale in as many years, the latest projected at about $1.2 billion.
Down-Under Buy
Irvine-based analytics software maker Alteryx Inc. acquired its distribution partner in Australia in its third buy since raising about $114 million a year ago in an initial public offering.
Financial terms of the deal for Alteryx ANZ were undisclosed.
The buy builds on the company’s expansion in the Australian and New Zealand markets, where it has more than 100 customers, including Commonwealth Bank, Australia Post and Telstra, Australia’s largest telecom.
Since 2015 Alteryx ANZ has been the software maker’s exclusive master distributor in Australia and New Zealand, where more than 40% of businesses have invested in big data and analytics, according to market tracker IDC.
Alteryx’ customers pay a subscription fee for its analytics software to integrate data, monetize content, forecast sales, map retail expansion plans, and compare sales and product placement, among other features.
The company posted $131.6 million in revenue last year, up 53% over 2016. It reported an operating loss of $7.2 million compared to a loss of $19.7 million in 2016.
