Veritone, Inc. revenue growth decelerated to 16.2% in 2020 vs. 83.6% a year earliner
03/04/2021 • About Veritone, Inc. (
$VERI) • By InTwits
Veritone, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Veritone, Inc. is a fast growth stock: 2020 revenue growth was 16.2%, 5 year revenue CAGR was 32.9% at 2020 ROIC -70.2%
- The company operates at negative EBITDA Margin: -71.5%
- Veritone, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 is 0.0%. Average EBITDA Margin for the same period was -144.4%
- Veritone, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.9%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: $0m in 2020, $0m in 2019, $4m in 2018, $1m in 2017, $0m in 2016
- The company has unprofitable business model: ROIC is -70.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Veritone, Inc.'s Revenue jumped on 16.2%. Revenue growth showed acceleration in 20Q4 - it increased 35.1% YoY. During the last 5 years Revenue growth topped in 2018 at 87.7% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.7 pp from -25.7% to -27.4% in FY2020. EBITDA Margin stuck to a growing trend at 59.3 pp per annum in 2016-2020.
Gross Margin increased on 7.7 pp from 65.2% to 72.9% in 2020. SG&A as a % of Revenue dropped on 25.1 pp from 146% to 121% in 2020. SG&A as a % of Revenue stuck to a declining trend at -45.2 pp per annum in 2016-2020.
Net Income margin surged on 42.1 pp from -125% to -83.0% in 2020. During the last 5 years Net Income margin bottomed in 2017 at -414% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 0.30%. Veritone, Inc. showed decline in CAPEX/Revenue of 4.3 pp from 4.6% in 2017 to 0.30% in 2020. It's average CAPEX/Revenue for the last three years was 4.9%. During 2016-2020 CAPEX as a % of Revenue topped in 2018 at 13.7% and was declining since that time.
Return on investment
The company operates at negative ROIC (-70.2%) and ROE (-70.6%). ROIC jumped on 48.7 pp from -119% to -70.2% in 2020. ROE surged on 44.7 pp from -115% to -70.6% in 2020.
Leverage (Debt)
The company has no debt. Cash surged on 161%.
Management team
Veritone, Inc.'s CEO is Chad Steelberg. Chad Steelberg has 7 years tenure with the company. Veritone, Inc.'s CFO Michael L Zemetra has spent 5 months years with the company.
Financial and operational results
FY ended 12/31/2020
Veritone, Inc. ($VERI) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 8.911 | 14.413 | 27.047 | 49.648 | 57.708 | 16.2% |
| Gross Profit | 7.334 | 13.343 | 20.568 | 32.359 | 42.045 | 29.9% |
| SG&A | 23.214 | 46.135 | 60.463 | 72.629 | 69.957 | -3.7% |
| EBITDA | -23.629 | -46.509 | -58.289 | -58.124 | -41.266 | |
| Net Income | -26.979 | -59.601 | -61.104 | -62.078 | -47.876 | |
Balance Sheet
|
|---|
| Cash | 12.078 | 29.545 | 37.539 | 44.065 | 114.817 | 160.6% |
| Short Term Debt | 13.388 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.037 | 0.664 | 3.718 | 0.293 | 0.175 | -40.3% |
Ratios
|
|---|
| Revenue growth | -36.0% | 61.7% | 87.7% | 83.6% | 16.2% | |
| EBITDA growth | 279.1% | 96.8% | 25.3% | -0.3% | -29.0% | |
|
|---|
| Gross Margin | 82.3% | 92.6% | 76.0% | 65.2% | 72.9% | 7.7% |
| EBITDA Margin | -265.2% | -322.7% | -215.5% | -117.1% | -71.5% | 45.6% |
| SG&A, % of revenue | 260.5% | 320.1% | 223.5% | 146.3% | 121.2% | -25.1% |
| Net Income Margin | -302.8% | -413.5% | -225.9% | -125.0% | -83.0% | 42.1% |
| CAPEX, % of revenue | 0.4% | 4.6% | 13.7% | 0.6% | 0.3% | -0.3% |
|
|---|
| ROIC | | -178.0% | -101.9% | -118.9% | -70.2% | 48.7% |
| ROE | | | -128.5% | -115.3% | -70.6% | 44.7% |
Veritone, Inc. ($VERI) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 12 | 13 | 16 | 17 | | -1.8% | 8.1% | 22.7% | 35.1% |
| EBITDA | -11 | -10 | -9 | -11 | | - | - | - | - |
| Net Income | -13 | -12 | -11 | -12 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 49 | 50 | 54 | 115 | | 23.4% | 24.3% | 10.4% | 160.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | - | - | - | - |
| Long Term Debt | 0 | 0 | 0 | 0 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 68.0% | 67.4% | 71.0% | 75.6% | | -0.1% | 4.6% | 8.2% | 8.6% |
| EBITDA Margin | -94.2% | -75.0% | -59.6% | -63.9% | | 32.7% | 48.4% | 54.3% | 40.7% |
| Net Income Margin | -106.6% | -88.9% | -70.1% | -73.6% | | 27.9% | 47.1% | 40.8% | 45.9% |
Peers in Application Software
Below you can find Veritone, Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 14.8% | 15.1% | 19.4% | 14.5% |
|---|
| Veritone, Inc. ($VERI) | - | 61.7% | 87.7% | 83.6% | 16.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 63.8% | 64.4% | 65.3% | 68.4% | 69.4% |
|---|
| Veritone, Inc. ($VERI) | 82.3% | 92.6% | 76.0% | 65.2% | 72.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -4.7% | -3.3% | -3.3% | 4.5% | 7.7% |
|---|
| Veritone, Inc. ($VERI) | -265.2% | -322.7% | -215.5% | -117.1% | -71.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| Veritone, Inc. ($VERI) | 0.4% | 4.6% | 13.7% | 0.6% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.5% | -10.2% | -9.8% | -4.2% | -1.8% |
|---|
| Veritone, Inc. ($VERI) | - | -178.0% | -101.9% | -118.9% | -70.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (54 companies) | -0.9x | -0.8x | -0.7x | 0.4x | 0.2x |
|---|
