Veritone Inc.’s latest quarterly report produced a mixed bag of results for the wildly traded Costa Mesa company trying to crack into the booming but highly speculative artificial intelligence market.
The good: record quarterly revenue of $4.4 million, up nearly 42% year-over-year and beating Yahoo Finance analyst consensus of $3.9 million. Its aiWARE platform generated licensing revenue of $1.3 million, up 506% and the first time it crossed the million-dollar benchmark. Seventy customers now use its software, which allows companies to track advertisements and media comments in real time, up from 25 year-over-year.
Veritone (Nasdaq: VERI) hopes the technology will create an industry in media ad analysis.
The bad: Its traditional media-buying business accounted for 70.4% of revenue, or $3.1 million. The company reported an operating loss of $13 million, or 81 cents per share, widely missing a forecasted loss of 73 cents, or $11.8 million. Operating expenses increased 79% to $17.1 million, driven by higher headcount to “expand its business and enhance its AI platform.” The company finished the first quarter with 225 employees, 69 of those in research and development. The expense increase also included $2.5 million in stock-based compensation, the same as the fourth quarter.
Veritone entered the second quarter with $54.5 million in cash, down from $69.1 million at the end of the fourth quarter.
Company take: “Q1 was a great quarter for Veritone as we experienced an inflection point in our AI platform business,” Chief Executive Chad Steelberg said in an analyst conference call.
Outsider take: “Its continual failure to meet Wall Street’s targets and generate real revenues is a glaring indicator that the company is little more than a concept,” Silicon Valley finance executive Gary Alexander opined in a blog post on seekingalpha.com.
The company’s shares were trading around $21.54 as of press time, with a market value of $352.3 million, down 7.5% this year.
Tech Fraud?
Rogelio Vasquez, owner of Costa Mesa-based PRB Logics Corp., was charged in a 30-count indictment alleging he acquired old, used and/or discarded integrated circuits from Chinese suppliers, repainted them with counterfeit logos, and resold them under brands Xilinx, Analog Devices and Intel.
The components were altered with date codes, lot codes and countries of origin, according to the indictment, to deceive customers.
Vasquez, 43, also known as James Harrison, was charged with nine counts of wire fraud, 20 counts of trafficking in counterfeit goods, and one count of trafficking in counterfeit military goods.
The wire fraud charges allege Vasquez instructed his Chinese suppliers to remark ICs and instructed a testing laboratory in China to provide two versions of its report, one that accurately showed IC results, and one that didn’t contain inspection or marking tests.
Vasquez denies the charges.
“I’ve been accused of things that are not true,” he told the Business Journal. “I’m very confident we’re going to fight and we’re going to able to present our evidence in court and be able to win this case.”
Each charge of wire fraud and trafficking in counterfeit military goods carries a maximum sentence of 20 years in federal prison. Each count of trafficking of counterfeit goods carries a maximum possible penalty of 10 years in prison.
The investigation is being conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Defense Criminal Investigative Service; and the National Reconnaissance Office, Office of Inspector General.
Road Keeps Giving
Santa Ana-based Iteris Inc. (Nasdaq: ITI) was awarded an additional $2.4 million contract with OC 405 Partners for the integration and maintenance of technology infrastructure in support of the I-405 widening.
The 12-month contract focuses on deployment of temporary intelligent transportation system infrastructure for use during construction. Iteris is in the middle of a $5.5 million contract on the project, responsible for the freeway intelligent transportation systems and express lane infrastructure design, the traffic management plan, and signal design at 42 intersections throughout the corridor. The intelligent transportation system and express lanes include changeable message signs, closed-circuit video cameras, vehicle detection, ramp metering, and communication networks.
The project, with a $1.9 billion budget, is the largest undertaken by the Orange County Transportation Authority in cooperation with Caltrans. It will add four lanes, two general purpose and two toll express. The project stretches from the 73 toll road to the 605 freeway.
OC 405 Partners is a joint venture of OHL USA Inc. in New York and Florida-based Astaldi Construction Corp.
