Eight days after the company known for its generative AI capabilities for radio and TV welcomed the former Chief of Police of Anaheim, Calif., Jorge Cisneros, as an advisor, Veritone released its third quarter 2023 results.
The company fell short of analysts’ estimates on revenue and greatly missed on its earnings per share, sending stock prices tumbling on Wednesday.
Revenue in Q3 came in at $35.13 million, down from $37.2 million. Analysts polled by Yahoo! Finance predicted earnings of $35.86 million. The four analysts also said earnings per share would come in at -$0.18. Instead, Veritone’s net loss widened to $20.91 million (-$0.57) from $4.89 million (-$0.13).
That triggered a sell-off on the Nasdaq exchange of “VERI,” which finished Wednesday’s trading down 24.54% to $2.06 per share. This compares to $9.03 on the final day of January 2023.
For Q4, the portrait for Veritone is equally glum:
- Revenue is expected to be in the range of $33.0 million to $34.5 million, as compared to $43.9 million in the fourth quarter of 2022.
- Non-GAAP net loss is expected to be in the range of $5.5 million to $6.5 million, compared to non-GAAP net loss of $2.2 million in the fourth quarter of 2022.
With cash and cash equivalents of $72.1 million on hand at the end of Q3, Veritone is taking out a loan. It entered into a commitment letter with certain funds managed by Highbridge Capital Management LLC and with certain other lenders on Tuesday (11/7) to provide a senior secured term loan facility in an aggregate principal amount of $77.5 million.
Veritone expects to use the proceeds of the Term Loan to repurchase an aggregate $50.0 million principal amount of its existing 1.75% convertible senior notes due 2026 held by the lenders at a purchase price of $37.5 million plus accrued and unpaid interest and for general corporate purposes.
The Term Loan has a four-year term, accrue interest at a rate of Term SOFR plus 8.50%, with a 3.00% floor for Term SOFR, payable quarterly, and will require quarterly amortization payments of 2.5% of the principal amount, commencing in June 2024.
Veritone has agreed to issue warrants to the lenders to purchase up to 3,008,540 shares of common stock, with 20% of the warrants to be issued for entry into the commitment letter and the remaining 80% conditioned on the closing of the Term Loan.
“We expect the Term Loan to close in the fourth quarter and replace our Senior Secured ABL Facility,” the company said.