Veritone Inc. pitches its artificial intelligence technology, which is geared for marketing, public safety and other applications, as a game-changing way for customers to save both time and money.
“What used to take days, now takes minutes,” the company said in a recent investor presentation highlighting the Costa Mesa company’s “intelligent monitoring” applications, which range from sorting through thousands of hours of security camera videos in a crime investigation, to tracking marketing brand mentions through just about every conceivable online and broadcast platform for an ad-buyer.
A similar speed-up in sales growth, not to mention stock growth, is taking a bit longer to achieve at Veritone (Nasdaq: VERI), although Chief Executive Chad Steelberg thinks that growth will come.
“Our objective is 100%-plus growth per year at a minimum,” said Steelberg, the company’s co-founder, in an interview with the Business Journal this month.
Steelberg is known as an exuberant salesman, such as telling Barron’s in 2017 that “outside of Google, we have the best data scientists on the planet.”
On sales growth, Veritone is backing up Steelberg’s recent proclamation by reporting first-quarter revenue jumped 177% to $12.1 million, year-over-year.
Sales totaled $27 million last year.
Analysts project a near doubling to about $50.7 million in sales this year, followed by 27% growth in 2020.
Roller Coaster
After its initial public offering in 2017, Veritone was a high flyer with a market cap almost reaching $1 billion. Shares have fallen sharply since then, but in recent months have been back on an upswing: it counted a $155 million market value as of late last week.
There’s been a switch in ownership of late which suggests more stability is in store. About 41% of Veritone’s float is now held by institutions, compared with less than 9% in October 2017.
On Fire
While some of the recent revenue growth can be attributed to acquisitions, investors are keenly watching Veritone’s artificial intelligence system called aiWARE.
Initially, the company touted it as a way to help advertisers know where and when their advertisements are playing in media immediately, as opposed to having to wait weeks, if not months, for the data.
It “processes radio and TV broadcasts in real-time and automatically searches for pre-set ad campaign criteria,” the company says.
This allows broadcasters and advertisers to validate ad campaign effectiveness almost instantaneously, and adjust accordingly, it says.
More recently, Veritone is promoting its AI technology as a way for media companies to quickly license content to generate new—and quick—revenue streams and for corporations to reduce the time spent ensuring employees are meeting compliance regulations.
“What really sets the world on fire with our customers [is] when we walk through and say, ‘but did you think about this application and this application and this application?’” Steelberg said. “And they’re thinking, ‘wow you do all of that?’”
Steelberg, 48, acknowledged the company has a long way to go.
Founded in 2014 with his brother Ryan, the company’s president, Veritone is still far from turning a profit. Its first-quarter loss, even on the revenue jump, widened to $16.3 million and Steelberg said there’s no target date for when it will push into the black.
Police Work
Veritone said in March its aiWARE product received approval for use by federal government agencies.
The company last week released Veritone Illuminate, a new AI product that enables legal and law enforcement investigative teams to quickly and cost-effectively analyze surveillance videos, audio, and text-based evidence during investigations.
Initial trials with an undisclosed Southern California police department suggest the technology can save a law enforcement customer $26,500 per case, while helping get criminals off the street quicker, the company said.
“We are encouraged by the company’s recent product developments, strong acquisitions and overall expanding capability to ingest and process virtually all forms of data,’’ D.A. Davidson & Co. analyst Thomas Diffely wrote the day after the first-quarter results were released.
Four analyst firms rank Veritone as a “strong buy,” according to Nasdaq.
Chad Steelberg said he spends “hours with our investors educating them,” though predicting the future and other popular misconceptions aren’t part of today’s AI.
“We don’t do much Harry Potter here,” he said.
Prior Hits
The Steelberg brothers have had a couple of big hits, such as AdForce Inc., a web advertising company sold to CMGI Inc. for $500 million, and an advertising radio business, dMarc Broadcasting Inc. in Newport Beach, sold in 2006 to Google Inc. for an estimated $400 million. They worked at Google for about a year in its audio and radio units.
As chief executive, Chad handles finance, strategic business development, engineering and product management, while Ryan focuses on “go-to-market, sales, marketing and the real monetization of the technology.’’ According to Veritone’s latest annual report, the Steelberg brothers own about 51% of the company.
The company currently has 332 employees in San Diego, Seattle, New York, and London, in addition to the Costa Mesa headquarters near South Coast Plaza, with another dozen employees possibly scheduled to be added this year. Talent acquisition may be an obstacle to growth, Chad says.
He pointed out that the company has already made some acquisitions, and while nothing is on tap for now, “M&A is a critical part of our strategy.”
Another proclamation for Chad Steelberg: He predicts huge gains for AI. “I think the biggest company on earth, both in terms of profitability and scale and impact, will be an artificial intelligence company in the next 10 years.”
