Veritone, Inc.: Form 10-Q/A for the period ended Sep 30, 2025

The following discussion and analysis of our financial condition and results of operations should be read together with and is qualified in its entirety by reference to the condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q/A. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed under “Risk Factors,” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, and any updates thereto set forth in this Quarterly Report on Form 10-Q/A and our other filings with the Securities and Exchange Commission (“SEC”), including future SEC filings. See “Cautionary Note Regarding Forward-Looking Statements.”

The following information has been adjusted to reflect the Q3 2025 restatement and Q2 2025 revision of our condensed consolidated financial statements as described in the “Explanatory Note” at the beginning of this Amended Report and in Note 2, “Restatement and Revision of Previously Issued Condensed Consolidated Financial Statements,” in the Notes to the Condensed Consolidated Financial Statements of this Amended Report.

Overview

Veritone, Inc., collectively with our subsidiaries, referred to as “Veritone,” “Company,” “we,” “our,” and “us,” is a provider of Artificial Intelligence (“AI”) solutions, powered by our proprietary AI operating system, aiWARE™, to deliver differentiated products and solutions to our Commercial Enterprise and Public Sector customers. Our Software Products & Services consist of revenues generated from Commercial Enterprise and Public Sector customers using our aiWARE platform and Veritone Hire solutions, any related support and maintenance services, and any related professional services associated with the deployment and/or implementation of such solutions. Our Managed Services consist of revenues generated from Commercial Enterprise customers using our content licensing and representation services, including influencer management and related operations.

Through October 17, 2024, we operated a full-service advertising agency through a wholly-owned subsidiary, Veritone One (as defined below), that provided Managed Services to its customers. On October 17, 2024, we sold all of the issued and outstanding equity of Veritone One, LLC (formerly, Veritone One, Inc., referred herein collectively as “Veritone One”) to an affiliate of Insignia Capital Group L.P., pursuant to which, among other things, Purchaser acquired from us all of the issued and outstanding equity of Veritone One (such transaction, the “Divestiture”). The historical financial results of Veritone One are reflected in these condensed consolidated financial statements as discontinued operations and, as such, have been excluded from continuing operations for all periods presented on a retrospective basis, unless otherwise stated.

During the three and nine months ended September 30, 2025, we generated revenue of $26.6 million and $72.3 million, respectively, as compared to $22.0 million and $70.2 million during the three and nine months ended September 30, 2024, respectively. Software Products & Services revenue was $20.4 million and $51.7 million during the three and nine months ended September 30, 2025, respectively, as compared to $14.7 million and $45.5 million during the three and nine months ended September 30, 2024, respectively. Managed Services revenue was $6.2 million and $20.6 million during the three and nine months ended September 30, 2025, respectively, as compared to $7.3 million and $24.7 million during the three and nine months ended September 30, 2024, respectively. During the three months ended September 30, 2025, one customer accounted for 10% or more of our total consolidated revenue. During the three months ended September 30, 2024 and the nine months ended September 30, 2025 and 2024, no customer represented more than 10% of our total consolidated revenue.

Recent Developments

September 2025 Underwritten Public Offering

On September 12, 2025, we issued and sold an aggregate of 10,931,560 shares of common stock at a price of $2.63 per share in an underwritten public offering (the “September 2025 Underwritten Public Offering”). The aggregate net proceeds were approximately $27.0 million, after deducting underwriting discounts and commissions and offering expenses.

October 2025 Registered Direct Offering

On October 17, 2025, we issued and sold an aggregate of 12,864,494 shares of common stock at a price of $5.83 per share to certain institutional and accredited investors in a registered direct offering (the “October 2025 Registered Direct Offering”). The aggregate net proceeds were approximately $70.3 million, after deducting estimated offering expenses.

November 2025 Term Loan Repayment

On November 6, 2025, we provided notice under the Credit Agreement that we intend to repay in full all outstanding amounts under the Term Loan on November 12, 2025 for an aggregate amount of $36.7 million in cash. The repayment amount reflects the outstanding principal amount of loans under the Term Loan of $31.8 million, together with accrued and unpaid interest thereon of $0.5 million, and a prepayment premium equal to 14% of such principal amount. Following such repayment, our obligations under the Term Loan will be terminated.

November 2025 Convertible Note Repurchase

On November 6, 2025, we also entered into separate, privately negotiated transactions with certain holders of our Convertible Notes to repurchase (the “Repurchases”) approximately 50% of the outstanding Convertible Notes or approximately $45.7 million aggregate principal amount of the Convertibles Notes, comprising a combination of (i) approximately $39.0 million in cash and (ii) the issuance of 625,000 shares of our common stock, par value $0.001 per share. The Repurchases are expected to close on or about November 12, 2025, subject to certain closing conditions. Following the closing of the Repurchases, we intend to cancel the repurchased Convertible Notes and, after such cancellation of repurchased Convertible Notes, approximately $45.6 million aggregate principal amount of the Convertible Notes will remain outstanding

Opportunities, Challenges, and Risks

During the three and nine months ended September 30, 2025 and 2024, we derived our revenue primarily through our Commercial Enterprise customers and secondarily through our Public Sector customers. During the three months ended September 30, 2025, one customer accounted for 10% or more of our total consolidated revenue. During the three months ended September 30, 2024 and the nine months ended September 30, 2025 and 2024, no customer represented more than 10% of our total consolidated revenue.

We are a leader in AI-based Software Products & Services. Our proprietary AI operating system, aiWARE, uses machine learning algorithms, or AI models, together with a suite of powerful applications, to reveal valuable insights from vast amounts of structured and unstructured data. Historically, we have derived a large portion of our Software Product & Services revenue from applications we internally developed from our aiWARE platform and actively sold across various customers. Beginning in mid-fiscal year 2022, economic conditions, including those resulting from the pullback in the macroeconomic environment caused by inflation, high interest rates, tariffs and trade tensions, as well as geopolitical factors such as the Russia-Ukraine war and the Israel-Hamas war, negatively impacted parts of our consumption-based operations and financial results. As a result, our Software Products & Services revenue decreased from $84.8 million during the year ended December 31, 2022 to $68.4 million during the year ended December 31, 2023, and decreased further to $61.1 million during the year ended December 31, 2024. While these economic and geopolitical factors have persisted throughout the first half of 2025, including instability caused by tariffs, our Software Products & Services revenue of $20.4 million and $51.7 million for the three and nine months ended September 30, 2025, respectively, improved 39.0% and 13.5%, respectively, as compared to the corresponding prior-year periods.

To align our operating structure with the revenue declines experienced in 2024 and 2023, we enacted significant cost reductions during fiscal years 2023, 2024, and 2025. In January 2023, we announced our plans to reduce costs through the optimization of our operational structure. In February 2024, we announced additional cost reduction and restructuring initiatives, the result of which was a reduction in our global workforce of approximately 13% during fiscal 2024. From January 1, 2023 through December 31, 2024, we reduced our global workforce by approximately 19%. In June 2025, we announced further cost reduction initiatives of up to $10.0 million, approximately 80%, or $8.0 million of which have been achieved as of September 30, 2025. As of September 30, 2025, we have achieved an aggregate of over $50.0 million of net annualized strategic cost reductions since January 1, 2023 as a result of our organizational restructuring and realignment efforts.

As of September 30, 2025, our total Software Products & Services customers declined to 3,021, which was a decrease of 8.2% as compared to September 30, 2024. This change was largely driven by fewer consumption-based customers across Veritone Hire and the continuing impact of sunsetting legacy Career Builder customers. In addition, smaller hiring agency customers experienced a drop in hiring as a result of the challenging macroeconomic environment, which contributed to the decrease in Software Products & Services customers, but did not have a significant impact on our financial results for the three and nine months ended September 30, 2025 or year ended December 31, 2024. To continue our effort to grow our customer base and overall revenue, we continue to invest aggressively in existing customers and acquiring new customers.

We believe our Software Products & Services will extend the capabilities of many third-party software platforms and products that are widely used today. For example, we believe that, when integrated with aiWARE, our Veritone Hire customers will have greater visibility and transparency in their hiring processes. We announced our Intelligent Digital Evidence Management System (“iDEMS”) and Veritone Data Refinery (“VDR”) product launches this year. As a result, we now offer a suite of aiWARE applications to address the growing problem of unstructured digital data management faced by commercial, public safety, and federal government sectors today. A substantial portion of our growth in 2025 to date has come from our iDEMS and VDR solutions. In June 2025, we announced a partnership with the US Air Force Office of Special Investigations (“OSI”), an investigative division within the US Department of Defense (“DOD”), and increased our VDR sales pipeline to more than $10.0 million from our March 2025 estimate of $5.0 million. The partnership with OSI is in the early stages of deploying our iDEMS solutions across the investigative divisions within the DOD. In August 2025, our VDR sales pipeline increased to approximately $20.0 million, and on October 14, 2025, we announced additional new contracts with leading hyperscalers for the deployment of our VDR solution, increasing our VDR bookings and sales pipeline to approximately $40.0 million. Our public sector pipeline has also increased to $218 million, which we believe reflects accelerating demand for our AI-driven solutions and our reputation as a trusted technology partner to government agencies. See “About Our Sales Pipelines” below for more information. As a result, during the third quarter ended September 30, 2025, our Software Products Services revenue, excluding our Veritone Hire platform, grew over 150% when compared to the same period in 2024 led principally by our iDEMS and VDR initiatives. In addition, we announced in the second quarter of 2024 that we achieved Amazon Web Services (“AWS”) Advanced Tier Services status, advancing the deployment of our AI solutions and capabilities across the AWS platform, and we have historically integrated aiWARE across many platforms, including Alteryx, Snowflake and the NVIDIA® CUDA® GPU-based platform, enabling dramatic increases in aiWARE’s processing speed and providing a wide range of new use cases for our technology. We are in the process of developing and marketing more specific use cases for these and future integrations, which we believe will open new markets for our products and accelerate our long-term revenue growth opportunities.

We believe our operating results and performance are, and will continue to be, driven by various factors that affect our industry. Our ability to attract, grow and retain customers for our aiWARE platform is highly sensitive to rapidly changing technology and is dependent on our ability to maintain the attractiveness of our platform, content and services to our customers. Our near term growth opportunities across our Software Products & Services include VDR and the expansion of our iDEMS platform across our Public Sector. Our future revenue and operating growth will rely heavily on our ability to grow and retain our Software Products & Services customer base, continue to develop and deploy quality and innovative AI-driven applications and enterprise-level offerings, provide unique and attractive content and related services to our customers, continue to grow in newer markets such as Public Sector and our VDR opportunity, expand aiWARE into larger and more expansive enterprise engagements and manage our corporate overhead costs. While we believe we will be successful in these endeavors, we cannot guarantee that we will succeed in generating substantial long term operating growth and profitability.

Prior to 2024, we pursued an opportunistic strategy of acquiring companies to help accelerate our organic growth. Our acquisition strategy was threefold: (i) to increase the scale of our business in markets we serve, (ii) to accelerate growth in new markets and product categories, including expanding our existing engineering and sales resources, and (iii) to accelerate the adoption of aiWARE as the universal AI operating system through venture or market-driven opportunities. While we believe there are strategic acquisition targets that can accelerate our entry into and expand our existing market share in key strategic markets, as well as our ability to grow our business, there is no certainty our historical or future acquisitions will achieve these objectives.

In the last few years, we have pursued and may continue to pursue opportunistic sales of certain business operations that are not part of our long-term strategy. For example, we divested our Veritone energy solutions group in the second quarter of 2023 and in October 2024, we divested our wholly-owned subsidiary, Veritone One, for a total purchase price of up to $104.0 million. The decision to divest Veritone One was made to enhance our focus on our core business and growth initiatives, particularly in Software Products & Services. By divesting non-core assets, we aim to streamline operations, reduce complexity, and allocate resources more effectively toward areas that align with our long-term strategic goals. The divestiture of Veritone One has allowed us to concentrate on organic growth, enabling greater innovation, operational efficiency, and the ability to respond more swiftly to market opportunities within our primary business segments. As a result of this transaction, we expect to recognize improved margins and more effective allocation of capital. We believe that a sharper focus on our core assets will drive sustainable growth and value creation for our shareholders moving forward.

For the three and nine months ended September 30, 2025, our total revenues were $26.6 million and $72.3 million, respectively, as compared to $22.0 million and $70.2 million for the three and nine months ended September 30, 2024, respectively, an increase of 21.1% and 3.0%, respectively, over the prior-year period, driven by an increase in Software Products & Services revenue from iDEMs and VDR revenues, partially offset by a decrease in Managed Services revenue primarily due to lower revenue from representation services, in each case, compared to the prior year period. Our gross profit for the three and nine months ended September 30, 2025 was $16.4 million and $45.7 million, respectively, as compared to $14.7 million and $47.4 million for the three and nine months ended September 30, 2024, respectively, an increase of 11.6% and a decrease of (3.6)%, respectively, driven by an increase in revenue compared to the prior year period, however an increase in lower gross margin revenue for the nine months ended September 30, 2025 compared to the prior period led to a decrease in gross profit. For the three and nine months ended September 30, 2025, our non-GAAP gross profit (calculated as described in “Non-GAAP Financial Measures” below) increased to $18.2 million and decreased to $49.7 million, respectively, as compared to $15.7 million and $50.6 million for the three and nine months ended September 30, 2024, respectively, driven by an increase in revenue compared to the prior year period, however an increase in lower gross margin revenue for the nine months ended September 30, 2025 compared to the prior period led to a decrease in non-GAAP gross profit. Gross profit and non-GAAP gross profit are dependent upon our ability to grow our revenue by expanding our customer base and increasing business with existing customers, and to manage our costs by negotiating favorable economic terms with cloud computing providers such as AWS and Microsoft Azure. While we are focused on continuing to improve our gross profit and non-GAAP gross profit, our ability to attract and retain customers to grow our revenue will be highly dependent on our ability to implement and continually improve upon our technology and services and improve our technology infrastructure and operations as we experience increased network capacity constraints due to our growth.

During the three and nine months ended September 30, 2025, we reported a net loss of $29.2 million and $75.6 million, respectively, as compared to $21.7 million and $69.2 million during the three and nine months ended September 30, 2024, respectively. During the three and nine months ended September 30, 2025, we reported a non-GAAP net loss (calculated as described in “Non-GAAP Financial Measures” below) of $8.2 million and $27.7 million, respectively, as compared to $7.1 million and $21.6 million during the three and nine months ended September 30, 2024, respectively. To continue to grow our revenue, we will continue to make targeted investments in people, namely software engineers and sales personnel. However, considering the challenging macro-economic environment since 2023, we have made significant cost reductions to our operating structure to better streamline our business and prioritize investments that drive our growth. These cost reduction initiatives began in the latter half of 2022 and will continue through the end of 2025, and have included reductions in workforce and certain legacy operating costs, as well as the sale of our energy solutions group. As a result of these initiatives, we believe we will be able to accelerate our pathway toward long term profitability.

Impact of Current Global Economic Conditions

Global economic and business activities continue to face uncertainty as a result of macroeconomic and geopolitical factors, the imposition of tariffs, trade tensions, and global trade disputes, lingering economic disruption caused by labor shortages, inflation rates and the responses by central banking authorities to control inflation, monetary supply shifts, recession risks, and disruptions from the Russia-Ukraine conflict, the Israel-Hamas war and conflict in surrounding regions. The extent of the impact of these factors on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected time frame, will depend on future developments, and the impact on our customers, partners and employees, all of which have uncertainty and cannot be predicted. These global economic conditions and any continued or new disruptions caused by these conditions may negatively impact our business in a number of ways. For example, our Veritone Hire solutions are sold to businesses whose financial conditions fluctuate based on general economic and business conditions, particularly the overall demand for labor and the economic health of current and prospective employers.

To the extent that economic uncertainty or attenuated economic conditions cause our customers and potential customers to freeze or reduce their headcount, and reduce their consumption-based spending, demand for our products and services may be negatively affected. These adverse economic conditions could also result in reductions in sales of our applications, longer sales cycles, reductions in contract duration and value, slower adoption of new technologies and increased price competition. In addition, economic recessions have historically resulted in overall reductions in spending on software and technology solutions as well as pressure from customers and potential customers for extended payment terms. If economic, political, or market conditions deteriorate, or if there is uncertainty around these conditions, our customers and potential customers may elect to decrease their software and technology solutions budgets by deferring or reconsidering product purchases, which would limit our ability to grow our business and negatively affect our operating results. Any of these events would likely have an adverse effect on our business, operating results and financial position.

Due to the nature of our business, the effect of these macroeconomic conditions may not be fully reflected in our results of operations until future periods. We have assessed the potential credit deterioration of our customers due to changes in the macroeconomic environment and have determined that no additional allowance for credit losses was necessary due to credit deterioration as of September 30, 2025. The most significant risks to our business and results of operations are discussed in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2024.

About Our Sales Pipelines

Our VDR and public sector sales pipelines represent revenue we expect to receive from contracts related to our VDR solutions and with our public sector customers, respectively, in each case, based on the total fees payable during the full contract term for contracts that we believe have a high probability of closing in the next three to twelve months. We include in our VDR and public sector sales pipelines fees payable during any cancellable portion and an estimate of license fees that may fluctuate over the term and we do not include any variable fees under the contract (e.g., fees for cognitive processing, storage, professional services and other variable services) and any fees payable after contract renewals or extensions that are at the discretion of our customer. Many of our contracts require us to provide services over more than one year and may include professional fees required to enable our technology in certain environments we do not host or have direct control over. In some cases, our customers may have the ability to terminate our agreements on short notice and our VDR and public sector sales pipelines do not consider the potential impact of any early termination. No assurance can be given that we will ultimately realize our full VDR and public sector sales pipelines.

Non-GAAP Financial Measures and Key Performance Indicators

In evaluating our cash flows and financial performance, we use certain non-GAAP financial measures, including non-GAAP net income (loss), non-GAAP net income (loss) from continuing operations, non-GAAP net income (loss) from discontinued operations, non-GAAP gross profit, and non-GAAP gross margin. We also provide certain key performance indicators (“KPIs”), including Total Software Products & Services Customers, Annual Recurring Revenue (SaaS), Annual Recurring Revenue (Consumption), Total New Bookings and Gross Revenue Retention.

Non-GAAP net income (loss) is calculated as our net income (loss) adjusted to exclude net income from discontinued operations, net of income taxes, interest expense, net, income taxes, depreciation and amortization, stock-based compensation, change in fair value of earnout receivable, contingent purchase compensation expense, foreign currency impact and other, acquisition and due diligence costs, (gain) loss on asset disposition, severance and executive transition costs, lender consent fees, and non-GAAP net income from discontinued operations. Non-GAAP net income (loss) from continuing operations is calculated as our net loss from continuing operations adjusted to exclude net income from discontinued operations, net of income taxes, interest expense, net, income taxes, depreciation and amortization, stock-based compensation, change in fair value of earnout receivable, contingent purchase compensation expense, foreign currency impact and other, acquisition and due diligence costs, (gain) loss on asset disposition, severance and executive transition costs, and lender consent fees. Non-GAAP net income (loss) from discontinued operations is calculated as our net income from discontinued operations adjusted to exclude interest expense, net, income taxes, depreciation and amortization, stock-based compensation, acquisition due diligence costs, and severance and executive transition costs.

Non-GAAP gross profit is calculated as gross profit with adjustments to add back depreciation and amortization related to cost of revenue and stock-based compensation expenses. Non-GAAP gross margin is defined as non-GAAP gross profit divided by revenue.

We present non-GAAP net income (loss), non-GAAP net income (loss) from continuing operations, non-GAAP net income (loss) from discontinued operations, non-GAAP gross profit, and non-GAAP gross margin because management believes such information to be important supplemental measures of performance that are commonly used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management also uses this information internally for forecasting, budgeting and measuring annual bonus compensation targets for its executive personnel, including its named executive officers. Our non-GAAP net income (loss) provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as it eliminates the effect of items that are often unrelated to overall operating performance. Our non-GAAP gross profit and non-GAAP gross margin allow investors and our management team to analyze our operating performance by excluding expenses that are not directly related to the cost of providing goods and services.

These non-GAAP financial measures are not calculated and presented in accordance with GAAP and should not be considered as an alternative to net income (loss), operating income (loss), net income (loss) from continuing operations, net income (loss) from discontinued operations, gross profit, gross margin or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. Other companies (including our competitors) may define these non-GAAP financial measures differently. These non-GAAP measures may not be indicative of our historical operating results or predictive of potential future results. Investors should not consider this supplemental non-GAAP financial information in isolation or as a substitute for analysis of our results as reported in accordance with GAAP.

The following table provides a reconciliation of net loss to non-GAAP net loss:

(1) A reconciliation of non-GAAP net income from discontinued operations to GAAP net income from discontinued operations for the three and nine months ended September 30, 2024 is set forth in the table below.

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The following table provides a reconciliation of gross profit to Non-GAAP gross profit and gross margin to Non-GAAP gross margin:

GAAP gross profit of $16.4 million and $45.7 million for the three and nine months ended September 30, 2025, respectively, increased $1.7 million and decreased $1.7 million, respectively, or 11.6% and (3.6)%, respectively, as compared to the three and nine months ended September 30, 2024 primarily due to an increase in revenue for the three months ended September 30, 2025 and an increase lower gross margin revenue for the nine months ended September 30, 2025 compared to the prior year period. GAAP gross margin of 61.4% and 63.2% for the three and nine months ended September 30, 2025, respectively, decreased 524 basis points and 427 basis points, respectively, as compared to the three and nine months ended September 30, 2024 as a result of year-over-year declines in higher gross margin revenue from consumption-based and one-time software revenue.

Non-GAAP gross profit of $18.2 million and $49.7 million for the three and nine months ended September 30, 2025, respectively, increased $2.5 million and decreased $0.9 million, respectively, or 16.1% and (1.8)%, respectively, as compared to the three and nine months ended September 30, 2024 primarily due to an increase in revenue for the three months ended September 30, 2025 and an increase in lower gross margin revenues for the nine months ended September 30, 2025 compared to the prior year period. Non-GAAP gross margin of 68.3% and 68.7% for the three and nine months ended September 30, 2025, respectively, decreased 293 basis points and 336 basis points, respectively, as compared to the three and nine months ended September 30, 2024 as a result of year-over-year declines in higher gross margin revenue from consumption-based and one-time software revenue. Historically, our gross margin and non-GAAP gross margin have been impacted significantly by the mix of our Software Products & Services revenue and our Managed Services revenue in any given period because our Managed Services revenue typically has a lower overall non-GAAP gross margin than our Software Products & Services revenue.

Supplemental Financial Information

We are providing the following unaudited supplemental financial information regarding our Software Products & Services as a lookback of the prior year to explain our recent historical and year-over-year performance.

The supplemental financial information for our Software Products & Services includes: (i) Total Software Products & Services Customers, (ii) Annual Recurring Revenue, (iii) Total New Bookings, and (iv) Gross Revenue Retention, in each case as defined in the footnotes to the table below.

Software Products & Services Supplemental Financial Information

The following table sets forth the results for each of our Software Products & Services supplemental financial information.

(1) “Total Software Products & Services Customers” includes Software Products & Services customers as of the end of each respective quarter set forth above with net revenues in excess of $10 during the last month of the quarter and also excludes any customers categorized by us as trial or pilot status. Management uses Total Software Products & Services Customers and we believe Total Software Products & Services Customers are useful to investors because it more accurately reflects our total customers for our Software Products & Services inclusive of Broadbean.

(2) “Annual Recurring Revenue (SaaS)” represents an annualized calculation of monthly recurring subscription-based SaaS revenue during the last month of the applicable quarter for all Total Software Products & Services customers. Management uses “Annual Recurring Revenue (SaaS)” and we believe Annual Recurring Revenue (SaaS) is useful to investors because Broadbean significantly increases our mix of subscription-based SaaS revenues as compared to consumption-based revenues and the split between the two allows us to delineate between predictable recurring SaaS revenues and more volatile consumption-based revenues, including VDR.

(3) “Annual Recurring Revenue (Consumption)” represents the trailing twelve months of all non-recurring and/or consumption-based revenue for all active Total Software Products & Services customers. Management uses “Annual Recurring Revenue (Consumption)” and we believe Annual Recurring Revenue (Consumption) is useful to investors because Broadbean significantly increases our mix of subscription-based SaaS revenues as compared to consumption-based revenues and the split between the two allows us to delineate between predictable recurring SaaS revenues and more volatile consumption-based revenues, including VDR.

(4) “Total New Bookings” represents the total fees payable during the full contract term for new contracts received in the quarter (including fees payable during any cancellable portion and an estimate of license fees that may fluctuate over the term), excluding any variable fees under the contract (e.g., fees for cognitive processing, storage, professional services and other variable services).

(5) “Gross Revenue Retention” represents a calculation of our dollar-based gross revenue retention rate as of the period end by starting with the revenue from Software Products & Services Customers as of the three months in the prior year quarter to such period, or Prior Year Quarter Revenue. We then deduct from the Prior Year Quarter Revenue any revenue from Software Products & Services Customers who are no longer customers as of the current period end, or Current Period Ending Software Customer Revenue. We then divide the total Current Period Ending Software Customer Revenue by the total Prior Year Quarter Revenue to arrive at our dollar-based gross retention rate, which is the percentage of revenue from all Software Products & Services Customers from our Software Products & Services as of the year prior that is not lost to customer churn.

Results of Operations

The following tables set forth our results of operations for the three and nine months ended September 30, 2025 and 2024, in dollars and as a percentage of our revenue for those periods. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future.

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Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

Revenue

We serve two customer groups: (1) Commercial Enterprise, which consists of customers in the commercial sector, including media and entertainment customers, representation customers and Veritone Hire solutions customers (inclusive of Broadbean customers); and (2) Public Sector, which consists of customers in the public sector industries, including state, local and federal government, legal, and compliance customers.

Software Products & Services consists of revenue generated from our aiWARE platform, including our VDR product, and Veritone Hire talent acquisition solutions, any related support and maintenance services, and any related professional services associated with the deployment and/or implementation of such solutions.

Managed Services consists of revenues generated from content licensing customers, representation services, and, to a lesser extent, from advertising customers and related services.

Commercial Enterprise

Commercial Enterprise Software Products & Services revenue increased $5.3 million, or 40.8%, in the three months ended September 30, 2025 compared to the corresponding prior-year period primarily due to an increase in VDR revenue. Commercial Enterprise Managed Services revenue decreased $1.1 million, or 14.9%, in the three months ended September 30, 2025 compared to the corresponding prior-year period driven by declines in representation services led by VeriAds as a result of the more challenging macro environment, partially offset by a $0.2 million improvement in content licensing.

Commercial Enterprise Software Products & Services revenue increased $4.9 million, or 11.9%, in the nine months ended September 30, 2025 compared to the corresponding prior-year period primarily due to an increase in VDR revenue, partially offset by a decline in consumption based revenue across Veritone Hire. Commercial Enterprise Managed Services revenue decreased $4.0 million, or 16.4%, in the nine months ended September 30, 2025 compared to the corresponding prior-year period driven by a $4.2 million decrease in representation services including our VeriAds services and live event services as a result of the more challenging macro environment.

Public Sector

Public Sector Software Products & Services revenue increased $0.4 million, or 24.2%, in the three months ended September 30, 2025 compared to the corresponding prior-year period primarily due to fluctuations in timing and magnitude of spend by public safety and federal customers.

Public Sector Software Products & Services revenue increased $1.2 million, or 28.7%, in the nine months ended September 30, 2025 compared to the corresponding prior-year period primarily due to fluctuations in timing and magnitude of spend by public safety and federal customers.

Software Products & Services revenue from Public Sector customers in certain markets, particularly our government customers, can be project-based and impacted by the timing of such projects. As such, we expect that our revenue from these markets could fluctuate significantly from period to period.

Cost of Revenue (Exclusive of Depreciation and Amortization)

Cost of revenue, exclusive of depreciation and amortization, increased $2.1 million, or approximately 33.4%, from $6.3 million for the three months ended September 30, 2024 to $8.4 million for the three months ended September 30, 2025. Cost of revenue, exclusive of depreciation and amortization, as a percentage of revenue increased from 28.8% for the three months ended September 30, 2024 to 31.7% for the three months ended September 30, 2025.

The $2.1 million increase was primarily due to a higher mix of lower margin revenue, including VDR. During the three months ended September 30, 2025, Software Products & Services products accounted for 76.7% of revenues compared to 66.8% in the prior year period.

Cost of revenue, exclusive of depreciation and amortization, increased $3.0 million, or approximately 15.4%, from $19.6 million for the nine months ended September 30, 2024 to $22.6 million for the nine months ended September 30, 2025. Cost of revenue, exclusive of depreciation and amortization, as percentage of revenue increased from 27.9% for the nine months ended September 30, 2024 to 31.3% for the nine months ended September 30, 2025.

The $3.0 million increase was primarily due to a higher mix of lower margin revenue, including VDR. During the nine months ended September 30, 2025, Software Products & Services products accounted for 71.5% of revenues compared to 64.9% in the prior year period.

Sales and Marketing

Sales and marketing expenses increased $0.3 million, or approximately 2.6%, from $10.2 million for the three months ended September 30, 2024 to $10.5 million for the three months ended September 30, 2025. Sales and marketing expenses as a percentage of revenue decreased from 46.6% for the three months ended September 30, 2024 to 39.5% for the three months ended September 30, 2025.

The $0.3 million increase was primarily due to increases in personnel-related costs and outside services, partially offset by a decrease in advertising expense.

Sales and marketing expenses increased $0.3 million, or approximately 1.0%, from $31.4 million for the nine months ended September 30, 2024 to $31.7 million for the nine months ended September 30, 2025. Sales and marketing expenses as a percentage of revenue decreased from 44.7% for the nine months ended September 30, 2024 to 43.9% for the nine months ended September 30, 2025.

The $0.3 million increase was primarily due to increases in personnel-related costs and outside services, partially offset by a decrease in advertising expense

Research and Development

Research and development expenses decreased $1.3 million, or approximately 18.8%, from $6.8 million for the three months ended September 30, 2024 to $5.5 million for the three months ended September 30, 2025. Research and development expenses as a percentage of revenue decreased from 30.7% for the three months ended September 30, 2024 to 20.6% for the three months ended September 30, 2025.

The $1.3 million decrease was primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024, capitalized internal-use software costs, and outside consulting services.

Research and development expenses decreased $5.6 million, or approximately 26.5%, from $21.3 million for the nine months ended September 30, 2024 to $15.6 million for the nine months ended September 30, 2025. Research and development expenses as a percentage of revenue decreased from 30.3% for the nine months ended September 30, 2024 to 21.6% for the nine months ended September 30, 2025.

The $5.6 million decrease was primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024, capitalized internal-use software costs, and outside consulting services.

General and Administrative

General and administrative expenses decreased $1.0 million, or approximately 7.3%, from $14.0 million for the three months ended September 30, 2024 to $13.0 million for the three months ended September 30, 2025. General and administrative expenses as a percentage of revenue decreased from 63.7% for the three months ended September 30, 2024 to 48.7% for the three months ended September 30, 2025.

The $1.0 million decrease was primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024 and contingent purchase compensation expense.

General and administrative expenses decreased $4.0 million, or approximately 9.2%, from $43.6 million for the nine months ended September 30, 2024 to $39.6 million for the nine months ended September 30, 2025. General and administrative expenses as a percentage of revenue decreased from 62.2% for the nine months ended September 30, 2024 to 54.8% for the nine months ended September 30, 2025.

The $4.0 million decrease was primarily due to decreases in personnel-related costs resulting from various cost reduction initiatives enacted throughout fiscal year 2024 and contingent purchase compensation expense.

Depreciation and Amortization

Depreciation and amortization expenses increased $0.2 million, or approximately 3.0%, from $7.2 million for the three months ended September 30, 2024 to $7.4 million for the three months ended September 30, 2025. Depreciation and amortization expenses as a percentage of revenue decreased from 32.5% for the three months ended September 30, 2024 to 27.7% for the three months ended September 30, 2025.

The $0.2 million increase was primarily due to ongoing depreciation of newly capitalized internal-use software.

Depreciation and amortization expenses was flat at $21.5 million for both the nine months ended September 30, 2025 and 2024. Depreciation and amortization expenses as a percentage of revenue decreased from 30.6% for the nine months ended September 30, 2024 to 29.7% for the nine months ended September 30, 2025.

Interest Expense, Net

Interest expense, net decreased $0.1 million, or approximately 2.6%, from $3.0 million for the three months ended September 30, 2024 to $2.9 million for the three months ended September 30, 2025.

The $0.1 million decrease was primarily due to a decrease in interest expense as a result of a decrease in the outstanding principal amount under our senior secured term loan under the Credit Agreement (the “Term Loan”) and an increase in interest income.

Interest expense, net increased $0.5 million, or approximately 5.7%, from $8.5 million for the nine months ended September 30, 2024 to $9.0 million for the nine months ended September 30, 2025.

The $0.5 million increase was primarily due to a decrease in interest income, partially offset by a decrease in interest expense as a result of a decrease in the outstanding principal amount under the Term Loan.

Other Expense (Income), Net

The $8.5 million of other expense, net for the three months ended September 30, 2025 primarily consisted of a $$8.0 million loss on revaluation of the Veritone One earnout receivable and a $0.4 million foreign currency impact. The $0.4 million of other income, net for the three months ended September 30, 2024 consisted of a $0.4 million foreign currency impact.

The $7.6 million of other expense, net for the nine months ended September 30, 2025 primarily consisted of a $7.2 million loss on revaluation of the Veritone One earnout receivable. The $0.1 million of other expense, net for the nine months ended September 30, 2024 consisted of a $0.2 million loss on sale of GridBeyond, partially offset by a $0.1 million foreign currency impact.

Net Income From Discontinued Operations

On October 17, 2024, we completed the Divestiture. The Divestiture was strategic, primarily allowing us to focus on our AI solutions, and secondarily improving our financial liquidity with the net proceeds from the Divestiture. During the third quarter of 2024, we determined that Veritone One met the criteria to be classified as discontinued operations. As a result, the historical financial results of Veritone One are reflected in our condensed consolidated financial statements herein as discontinued operations and, as such, have been excluded from continuing operations for all periods presented on a retrospective basis, unless otherwise stated. See Note 4 on Discontinued Operations included elsewhere in this Quarterly Report on Form 10-Q/A for more information.

Net income from discontinued operations was $0.8 million and $2.9 million for the three and nine months ended September 30, 2024, respectively, and primarily consisted of revenue of $8.6 million and $23.0 million, respectively, offset by cost of revenue of $0.3 million and $0.7 million, respectively, other operating expenses of $5.8 million and $14.7 million, respectively, and $1.7 million and $4.7 million, respectively, of net interest expense allocations primarily due to the repayment of our Term Loan as a result of the Divestiture.

Liquidity and Capital Resources

We have historically generated negative cash flows from operations and have primarily financed our operations through the sale of equity securities and debt. As of September 30, 2025, we had cash and cash equivalents of $36.2 million.

During 2025 and through the issuance date of these condensed consolidated financial statements, we raised aggregate net proceeds of approximately $154.9 million through the issuance and sale of our common stock and pre-funded warrants to purchase our common stock in multiple equity offerings.

As of September 30, 2025, we had $35.4 million aggregate principal amount outstanding under our Term Loan. On November 6, 2025, we provided notice under the Credit Agreement that we intend to repay in full all outstanding amounts under the Term Loan (the “Term Loan Repayment”) on November 12, 2025 for an aggregate amount of $36.7 million in cash. The repayment amount reflects the outstanding principal amount of loans under the Term Loan of $31.8 million, together with accrued and unpaid interest thereon of $0.5 million, and a prepayment premium equal to 14% of such principal amount. Following such repayment, our obligations under the Term Loan will be terminated.

As of September 30, 2025, we had $91.3 million aggregate principal amount outstanding under our Convertible Notes. On November 6, 2025, we also entered into separate, privately negotiated transactions with certain holders of our outstanding Convertible Notes to repurchase (the “Repurchases”) approximately 50% of the outstanding Convertible Notes or approximately $45.7 million aggregate principal amount of the Convertibles Notes, comprising a combination of (i) approximately $39.0 million in cash and (ii) the issuance of 625,000 shares of our common stock. The Repurchases are expected to close on or about November 12, 2025, subject to certain closing conditions. Following the closing of the Repurchases, we intend to cancel the repurchased Convertible Notes and, after such cancellation of repurchased Convertible Notes, approximately $45.6 million aggregate principal amount of the Convertible Notes will remain outstanding. Our Convertible Notes mature on November 15, 2026.

Based on our liquidity position as of the issuance date of these condensed consolidated financial statements and our current forecast of operating results and cash flows, absent any other action, we determined that there is substantial doubt about our ability to continue as a going concern over the twelve months following the filing of this Quarterly Report on Form 10-Q/A, principally driven by our debt repayment obligations, historical negative cash flows and recurring losses. As a result, we will require additional liquidity to continue our operations over the next twelve months.

We will continue to explore potential financing structures, in addition those we have already completed, which we believe could improve our current liquidity position and balance sheet. We also continue to evaluate additional strategies to obtain funding for future operations, including, but not limited to, obtaining equity financing and/or further restructuring of operations to grow revenues and decrease operating expenses, which include capturing past cost reductions and potential future cost synergies from our past acquisitions.

We may not be able to access additional equity under acceptable terms, and may not be successful in future financial and operational restructurings, earning any of our deferred purchase consideration, or growing our revenue base, and our ability to execute on our operating plans may be materially adversely impacted. If we become unable to continue as a going concern, we may have to dispose of other or additional assets and might realize significantly less value than the values at which they are carried on our condensed consolidated financial statements. These actions may cause our stockholders to lose all or part of their investment in our common stock. The condensed consolidated financial statements do not include any adjustments that might result from us being unable to continue as a going concern. If we cannot continue as a going concern, adjustments to the carrying values and classification of our assets and liabilities and the reported amounts of income and expenses could be required and could be material.

See Note 5, Debt, Note 11, Stockholders’ Equity, and Note 14, Subsequent Events, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q/A for more information regarding our Term Loan, Convertible Notes, equity offerings, the 2025 Term Loan Repayment, and the 2025 Repurchase Transaction.

Cash Flows

A summary of cash flows from our operating, investing, and financing activities from continuing operations is shown in the table below (in thousands):

Operating Activities

Net cash used in operating activities from continuing operations was $41.2 million for the nine months ended September 30, 2025, a decrease of $7.4 million from $48.5 million for the nine months ended September 30, 2024. The decrease was primarily due to a $6.9 million decrease in net loss from continuing operations including non-cash and reconciling items disclosed within our condensed consolidated statement of cash flows and a $0.5 million favorable change in operating assets and liabilities. The $6.9 million decrease in net loss from continuing operations including non-cash and reconciling items was primarily driven by higher revenue and favorable changes in non-cash and reconciling items including change in fair value of earnout receivable, deferred income taxes, provision for credit losses, and reduction in carrying amount of operating lease right-of-use assets, partially offset by unfavorable changes in non-cash and reconciling items including stock-based compensation, barter income and non-cash interest expense. The $0.5 million of favorable changes in operating assets and liabilities was primarily driven by favorable changes in accounts payable, other assets and deferred revenue, partially offset by unfavorable changes in prepaid expenses and other current assets, accounts receivable, accrued expenses and other current liabilities, and other non-current liabilities.

Investing Activities

Net cash used in investing activities from continuing operations was $3.5 million for the nine months ended September 30, 2025, an increase of $0.4 million from $3.1 million for the nine months ended September 30, 2024. The increase was due to a $1.8 million unfavorable impact of the sale of GridBeyond in 2024, partially offset by a $1.4 million decrease in capital expenditures.

Financing Activities

Net cash provided by financing activities from continuing operations was $64.9 million for the nine months ended September 30, 2025, a favorable change of $70.8 million as compared to net cash used in continuing financing activities of $5.9 million for the nine months ended September 30, 2024. The increase was primarily due to a $70.9 million increase in proceeds from issuance of common stock and pre-funded warrants under our registered direct offerings in January 2025 and June 2025, our underwritten public offering in September 2025, and sales under our at-the-market offering, net of offering costs, and a $1.8 million favorable impact from the settlement of deferred consideration for acquisitions in 2024, partially offset by a $1.9 million increase in repayment of our senior secured term loan.

Contractual Obligations and Known Future Cash Requirements

As of September 30, 2025, our debt obligations are comprised of our Term Loan and our Convertible Notes. As of September 30, 2025, we have $35.4 million principal amount outstanding under our Term Loan that matures in December 2027 and $91.3 million aggregate principal amount outstanding of our Convertible Notes that mature in November 2026. If $30.0 million or more of aggregate principal amount of the Convertible Notes are outstanding on August 14, 2026, we must repay all of the outstanding Term Loans at such time.

As of September 30, 2025, we have no other present agreements or commitments with respect to any material acquisitions of businesses or technologies or any other material capital expenditures.

As of September 30, 2025, we have recorded $2.4 million of gross liability for uncertain tax positions, including interest and penalties. Based upon the information available and possible outcomes, we cannot reasonably estimate the amount and period in which the liability might be paid.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events that affect amounts reported in our condensed consolidated financial statements and related notes, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. Management evaluates its accounting policies, estimates and judgments on an on-going basis. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions.

Our critical accounting estimates reflecting management’s estimates and judgments are described in our Annual Report on Form 10-K for the year ended December 31, 2024. We have reviewed recently issued accounting pronouncements and are evaluating the potential impact, if any, on our condensed consolidated financial statements. Accordingly, there have been no material changes to critical accounting policies and estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of September 30, 2025. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives of ensuring that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to enable timely decisions regarding required disclosures, and is recorded, processed, summarized, and reported within the time periods specified in the rules and forms promulgated by the SEC. Our management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and there is no assurance that our disclosure controls and procedures will operate effectively under all circumstances. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level due to the following material weaknesses in internal control over financial reporting.

Material Weaknesses in Internal Control over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

During the preparation of our Form 10-K for the year ended December 31, 2025, which occurred subsequent to the filing of our Form 10-Q for the quarter ended September 30, 2025, management identified a material weakness in internal control over financial reporting relating to revenue recognition, specifically as it relates to the determination of the appropriate accounting for non-routine revenue transactions. This material weakness resulted in a material misstatement to our consolidated financial statements for the quarter ended September 30, 2025 as disclosed in Note 2, Restatement and Revisions of Previously Issued Financial Statements.

During the preparation of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, management identified a material weakness in internal control over financial reporting relating to a lack of an effective information and communication process that identified and assessed the source of and controls necessary to ensure the reliability of information used in financial reporting and for providing information required for effective activity level controls. This material weakness was not remediated as of September 30, 2025 and could have resulted in a material misstatement to our interim condensed consolidated financial statements that would not be prevented or detected on a timely basis. This material weakness has not been remediated as of September 30, 2025.

During the preparation of our Annual Report on Form 10-K for the fiscal years ended December 31, 2023 and 2022, management identified the following material weaknesses in internal control over financial reporting, which still exist as of September 30, 2025:

• Management identified a material weakness in internal control over financial reporting relating to the consolidation process and review of financial statements specifically pertaining to our design of controls to determine proper accounting for certain foreign exchange transactions and translation between Veritone, Inc. and certain foreign subsidiaries. This material weakness did not result in any identified material misstatements to the financial statements. However, this material weakness could have resulted in a material misstatement to our annual or interim condensed consolidated financial statements that would not be prevented or detected and corrected on a timely basis.
• Management identified a material weakness in internal control over financial reporting relating to information technology general controls (“ITGCs”) in the areas of user access and change-management over certain information technology (“IT”) systems that support our financial reporting processes. Our business process automated and manual controls that are dependent on the affected ITGCs were also deemed ineffective because they could have been adversely impacted. These control deficiencies were a result of user access and change management processes over certain IT systems.

Related to the findings above, management concluded that during the year ended December 31, 2023, we did not maintain appropriately designed entity-level controls impacting the control environment or monitoring controls to prevent or detect material misstatements to the consolidated financial statements. Specifically, these deficiencies were attributed to (i) a lack of a sufficient number of qualified resources to perform control activities and (ii) insufficient risk assessment and monitoring activities as a result of untimely or ineffective identification of internal control risks to properly design, test, implement and assess effective internal controls over financial reporting. This material weakness has not been remediated as of September 30, 2025.

Remediation of Material Weaknesses in Internal Control Over Financial Reporting

In order to remediate the material weaknesses, management is taking remediation actions including:

(i) continued engagement since March 2024 with an outside firm to assist us with our remediation actions;

(ii) development of a more robust plan and risk assessment process around the proper design, testing and assessment of internal controls over financial reporting which has been an ongoing process since April 2024;

(iii) developing a training program addressing ITGCs and policies, including educating control owners concerning the principles and requirements of each control, with a focus on those related to user access and change management over IT systems impacting financial reporting;

(iv) developing and maintaining documentation of underlying ITGCs to promote knowledge transfer upon personnel and function changes;

(v) implementing an IT management review and testing plan to monitor ITGCs with a specific focus on systems supporting our financial reporting processes;

(vi) hiring and train staff on proper accounting for foreign exchange translation, transactions when consolidating foreign subsidiaries and the proper, accurate and timely evaluation of the realizability of long-lived assets, including goodwill and intangible assets. Management has also hired additional staff to oversee the implementation and testing of these remediation actions; and

(vii) implementation of enhanced procedures for the evaluation and review of non-routine revenue transactions. including review of the estimated fair value of noncash consideration, or assessment of standalone selling price of the services promised to the customer, as applicable.

To further remediate the existing material weakness identified herein, the management team, including the Chief Executive Officer and Chief Financial Officer, have reaffirmed and re-emphasized the importance of internal controls, control consciousness and a strong control environment. We are committed to maintaining a strong control environment and believe that these remediation efforts represent continued improvement in our control environment.

We also expect to continue to review, optimize and enhance our financial reporting controls and procedures. While remediating actions have been implemented to mitigate the material weaknesses identified with regard to foreign transaction consolidation and ITGCs, these material weaknesses will not be considered remediated until the applicable remediated and enhanced control processes have operated for a sufficient period of time and management has concluded, through testing, that this enhanced control is operating effectively.

Changes in Internal Control over Financial Reporting

While management continues to make progress on its remediation efforts, there were no changes, other than remediation efforts described above, in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Management recognizes that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Risks affecting our business are discussed in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 10-K”). There have been no material changes to our risk factors as previously disclosed in our 2024 10-K, except as follows:

We have identified material weaknesses in our internal control over financial reporting. If we are unable to develop and maintain effective internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us, materially and adversely affect our business and operating results and expose us to potential litigation.

As a public company, we are required to include in this report an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

During the preparation of our Form 10-K for the year ended December 31, 2025, which occurred subsequent to the filing of our Form 10-Q for the quarter ended September 30, 2025, management identified a material weakness in internal control over financial reporting relating to revenue recognition, specifically as it relates to the determination of the appropriate accounting for non-routine revenue transactions. This material weakness resulted in a material misstatement to our consolidated financial statements for the quarter ended September 30, 2025 as disclosed in Note 2, Restatement and Revisions of Previously Issued Financial Statements.

During the preparation of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, management identified a material weakness in internal control over financial reporting relating to a lack of an effective information and communication process that identified and assessed the source of and controls necessary to ensure the reliability of information used in financial reporting and for providing information required for effective activity level controls. This material weakness was not remediated as of September 30, 2025 and could have resulted in a material misstatement to our unaudited condensed consolidated financial statements that would not be prevented or detected on a timely basis.

During the preparation of our Annual Report on Form 10-K for the fiscal years ended December 31, 2023 and 2022, management identified the following material weaknesses in internal control over financial reporting, which still exist as of September 30, 2025:

• Management identified a material weakness in internal control over financial reporting relating to the consolidation process and review of financial statements specifically pertaining to the Company’s design of controls to determine proper accounting for certain foreign exchange transactions and translation between Veritone, Inc. and certain foreign subsidiaries. This material weakness did not result in any identified material misstatements to the financial statements. However, this material weakness could have resulted in a material misstatement to our annual or interim condensed consolidated financial statements that would not be prevented or detected and corrected on a timely basis.
• Management identified a material weakness in internal control over financial reporting relating to information technology general controls (“ITGCs”) in the areas of user access and change-management over certain information technology (“IT”) systems that support our financial reporting processes. Our business process automated and manual controls that are dependent on the affected ITGCs were also deemed ineffective because they could have been adversely impacted. These control deficiencies were a result of user access and change management processes over certain IT systems.

Related to the findings above, management concluded that during the year ended December 31, 2023, the Company did not maintain appropriately designed entity-level controls impacting the control environment or monitoring controls to prevent or detect material misstatements to the consolidated financial statements. Specifically, these deficiencies were attributed to (i) a lack of a sufficient number of qualified resources to perform control activities and (ii) insufficient risk assessment and monitoring activities as a result of untimely or ineffective identification of internal control risks to properly design, test, implement and assess effective internal controls over financial reporting.

Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Ineffective internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information and our stock price may decline as a result. We could also lose access to sources of capital or liquidity. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on NASDAQ. Though we are taking steps to remediate the existing material weaknesses, we cannot be assured that the measures we have taken to date, or any measures we may take in the future, will be sufficient to remediate the material weakness or avoid potential future material weaknesses.

As a result of the material weaknesses described above and other related matters raised or that may in the future be identified, we also face potential for adverse regulatory consequences, including investigations, penalties or suspensions by the SEC or NASDAQ, litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and material weakness in our internal control over financial reporting and the preparation of our consolidated financial statements. As of the date of this filing, we have no knowledge of any such regulatory consequences, litigation, claim or dispute. However, we can provide no assurance that such regulatory consequences, litigation, claim or dispute will not arise in the future. Any such regulatory consequences, litigation, claim or dispute, whether successful or not, could subject us to additional costs, divert the attention of our management, or impair our reputation. Each of these consequences could have a material adverse effect on our business, results of operations and financial condition.