Veritone, Inc. (VERI) Earnings Call Transcript & Summary

Good morning, and welcome to Veritone's Analyst Update and Tech Demo presentation. I'm Brian Alger, SVP of Investor Relations and Capital Markets. This morning, May 13, we'll be making a number of statements and presentations that will be forward-looking in nature. And as such, please review the slide and refer back to our SEC documents, including our recently filed 10-K for any additional disclosure information you're looking for. Now let's get started. As you can see from the agenda, and like prior events, we packed a ton of information into a short period of time. Over the next 90 minutes, you're going to get a high-level overview of AI in general from Chad, a state of the union from Ryan, and then each of our BU leads will present customer testimonials, demonstrations and their own unique perspective on the frontline operations of the company. Then Mike is going to bring us home with a financial overview and an update on our long-term outlook. Finally, I will moderate a live Q&A covering all of the presented material at the very end. So keep your questions or enter them into the moderator section. All right. Now I'm going to hand it over to a short quick overview video, and then Chad will take it from there. Thanks. [Presentation]

Good morning. I'm excited to kick things off today. As the video we just watched illustrates, we have a ton of amazing innovation and market development to share with you. Before we jump into the product updates and hearing from our amazing customers and partners, I wanted to set the stage and put things in a bit of context. As most of you are aware, Veritone started about 8 years ago with the goal of driving and enabling the broad-based adoption of artificial intelligence through the development of an operating system that we call aiWARE. AI and cognitive computing is essentially the fourth generation of computer technology or digital transformation. As this slide shows, each progressive generation has built on top of, but did not replace the operating systems that came before, just as Windows was built on top of the prior DoS and kernels of prior generation, aiWARE stands on top of computational systems in order to unlock the cognitive capabilities of neural networking and machine learning models. Today, aiWARE is in its third generation. The exact same code is deployed in the cloud, on-premise, on personal computers and even embedded devices. Today, you will hear from our team and some of our customers, showing both the adoption and utilization is diverse. This diversity of adoption across deployments and industries is what leads me to proudly say that AI is alive. Throughout this morning's presentation, you will see and hear examples of how AI is impacting and improving daily lives in multiple industries and in multiple ways. Early on, when Ryan and I were first racking our heads around the implications of AI, we realized that this technology disruption was going to be more powerful than any other innovation over the history of mankind. Let me explain. Since the beginning of time, there are just 2 primary variables that have determined the pace of innovation and the overall well-being of humans. Just 2. The first is the number of people on the planet. And the second is the ease at which it is possible for those humans to communicate and share ideas. This is true going back to fire, the wheel, the printing press, et cetera, et cetera. Fast forward to the 1990s and the impact of the Internet and mobile communications is something that all can relate to. However, the same 2 variables have simultaneously enabled and constrained human innovation and improvement. AI represents a massive accelerant to that innovation, a third variable. As you will hear from Ryan and our team, AI enables us to create and utilize multiple proxies of ourselves to extend our personal capacity beyond our individual and 24-hour daily potential. Through AI, those that have access will be able to utilize essentially an infinite number of proxies or as we like to call them, avatars, to operate at the speed of light 24/7. We are still in the early days, and we are driving improvements in models and data access and curation still needs to occur. But make no mistake, AI will be the single biggest disruptive innovation humankind has ever known. AI is alive and is getting stronger every day, and Veritone is driving this rapid revolution. Over the next hour or so, you will see how and why we believe Veritone, through aiWARE and our partners, are enabling the realization of AI's potential. Now it is my pleasure to hand the call over to Ryan, who will kick off the more detailed operational portion of today's presentation.

Thank you, Chad. AI truly is alive, and it's been an incredible year so far for Veritone, coming on the heels of an incredible and productive 2021. And I just wanted to highlight and express how thankful I am to my talented team. And frankly, to the media and industry as a whole, who have really been celebrating and acknowledging the successes of Veritone and what we're doing in the space. And here is just an example, a relatively short list of examples of all of the recent awards that we have been -- bestowed upon us, most recently, the NAB Product of the Year Award for the third consecutive year, which is really the bellwether show for all media and entertainment technology. But more importantly, we've been recognized by a multitude of workplace awards from Comparably and others. And including our significant improved Glassdoor rating, which, as everybody knows, is incredibly important, right? Culture is critical, nurturing our staff and providing great opportunities for career development is critical. And we're thankful that we're seeing great results internally and being acknowledged externally. So now back to the exciting part. Today, we're going to be walking you through some amazing new innovations that Veritone has brought to market. The first area that I'm going to be introducing before I turn over to our commercial group, is really what we're doing, what Veritone's products and go-to-market strategy is for the metaverse. It's a hot topic regardless of how all things are going to shake out ultimately. We all are firm believers, it's going to be a big market. It's going to impact nearly every facet of Web 2, Web 1 company -- based companies. But as we look at the metaverse and Web3, Veritone is going to be right and thick of it, and we're excited to walk you through our solutions as it relates to the metaverse, which we collectively call the Veriverse. So with that, I want to introduce and have you watch a short video introduction. And then let's talk a little bit more about the Veriverse. [Presentation]

It's exciting, right? I literally get chills and goosebumps every time I watch that. And it's not just exciting about some ethereal future opportunity. But what I'm so excited about it is that the Veriverse truly is the enterprise AI solution for the metaverse. And we're in such a unique situation and we have such a unique opportunity to truly be the leaders in this capacity, servicing our customers. And it all starts again with aiWARE. The fact that we are already, for so many of our enterprise customers, including the market-leading media and entertainment customers were already ingesting all of their assets. We're indexing them to a level that's never been seen before using our AI. And this data, this audio and video data that we historically were acting upon with AI is now the training data itself. So the hundreds of thousands of hours a week that we ingest and process and index for the leading media and entertainment customers around the world, that is no longer just the work project, it is actually the input function of the training data to allow us to do so many amazing things as it relates to the metaverse. The ability to create synthetic voices, the ability to create synthetic hyperrealistic avatars, building out NFT platform and frameworks and marketplaces. These are all of the amazing opportunities and innovations that we've been able to very quickly and efficiently build and deploy on aiWARE and make it immediately actionable and available to our customers. Before I turn it over to Sean, I just wanted to let you know, our -- the constituent groups that we're focusing on as it relates to the Veriverse are digital influencers and influencer community, and also IP owners and content owners, right? Those are 2 of our -- the initial focuses -- areas of focus that we're bringing forth the Veriverse strategy to market. We do absolutely expect to expand that focus to support, I'll say, non-media entertainment groups and non-influencer-based groups in the future. But we're excited. We got a lot to show you and walk you through. And with that, I'm going to turn you over to Sean King, who heads up our commercial arm of Veritone. Sean?

Good morning, good afternoon, everyone. I'm Sean King, Senior Vice President of Commercial Services. I'm really excited to be here today to talk to you all about the metaverse and more specifically, our Veriverse solution that we're bringing to commercial groups. The metaverse is a decentralized space with different unconnected immersive worlds. And within these worlds, brands, companies, content creators alike can create these digitally-immersive experiences where they can really create a community, where they can share content, they can share opportunities, they can share experiences. And it's alive here today, and we're already here. Now the grand notion of the full, decentralized, fully connected metaverse is not here. There are these unconnected immersive worlds that can create great experiences for companies that are ready to take advantage of it. And as you can see on the screen here right now, it's currently projected to be an $800 billion enterprise year by 2024, and we've even seen studies that are showing an expectations that are going to be even larger than that. Why would someone choose Veritone to help them conquer this metaverse landscape? We're very uniquely positioned to help take our customers and clients alike into these digitally immersive worlds. The metaverse will be powered by AI and Veritone is in a unique position with aiWARE. We have over 300 of the world's leading AI models that help solve content and customer engagement challenges that take place in both real that will transition to these digital worlds. Not only that, we're the only synthetic media provider that can deliver custom voice and avatars backed with the same fundamentals that people expect in real world, which is the appropriate licensing approvals and authentic proof of ownership. In addition to that, Veritone works with 3 of the top 5 entertainment companies in the world and 6 of the largest media companies that control 90% of what we read, what we watch and what we listen to. That, powered by our core tenet and ethics that we're always going to strive to make sure the application of AI is done seriously and the same standards that we expect in the real world will carry over to the digital -- these digitally immersive worlds. In the metaverse today, companies, brands, content owners, creators, all can create and host digital or virtual events, they can produce and engage with media, you can create and buy and market products and services. You can create a digital twin. You can create a synthetic voice, you can build a brand, you can build a following, but more importantly, you can also build a community. And these are things that can take place today but you need the right technical and technology partner that can help you navigate the way through and equip you with the right tools and technology to help take advantage of this opportunity. After talking about all the things that one can do in the metaverse, one of the things you need to think about from the beginning is making sure that there's a consistent experience between both in real life and these digitally immersive worlds. So when we think about it today, what we're seeing on our television commercials, what we're hearing on the radio, what we're experiencing in storefronts in a mobile application on a website, these same fundamentals, we need to make sure are consistent when we're going into these environments, whether that be your voice, your visual representation or avatar of yourself, the types of products or commerce that are going to take place in these, these same experiences need to continue in those. And again, why you need the right technical partner and technology to be able to support you. When thinking about those experiences, and the things that we do in real life and how that transitions over into these digital environments, as I was mentioning before, we're talking about this ability to activate the metaverse ecosystem. And we're thinking about activation. You're thinking about that as a new channel, a new way in which you can create engagement. So you're thinking about what you need to consider going into these environments. You're thinking about sound, you're thinking about the visual representation. You're thinking about the experience, the commerce. And doing all these things together, also making sure that my assets are being protected. The things that I'm bringing into these digitally immersive ones, how can I make sure that it's being protected and being withheld, the same things that I expect in the real world? And am I getting the right attribution, the same things that I'm doing, is this experience working? Is it building a community? Is it expanding my brand? Is it selling my product? These are all things that we expect in real world, and we need to make sure that everyone is considering and making sure that they're getting these same things in these digital immersive environments. Now up to this point in the presentation, I've been talking about what a brand, a content creator, a content owner can do in these experience -- in these digital immersive worlds. And what I haven't talked a lot about and what I want to talk about now is what are the audience is expecting. The audience here are expecting a humanized digital experience. They're expecting personality, they're expecting interactivity, they're expecting a new experience, sneak peeks, exclusive engagements, new types of experiences and events that can take place. They're not any different than what they're expecting in the real world, but there -- we need to think about this humanized digital experience for the audience's perspective. In creating these humanized digital experiences that I was talking about, those key to the metaverse is going to be synthetic media. Synthetic media is going to be able to create that humanized experience. Veritone is uniquely positioned with 2 of our pillars of the Veriverse: voice and avatars. Voice, allowing an individual, a brand and a company to create their vocal identity in the metaverse. They're brand ambassador that's there, that is a humanistic sounding voice, clone or original voice that can be that person for them in the metaverse. And creating the avatar, which is an artificial intelligence-powered realistic 3D human digital representation of a person or a persona. So I asked the question, what is your persona? Because that is -- the personas are fundamental to your overall metaverse strategy. And with that, I'd like to hand it over to my coworker, Ashley Bailey, who's going to take you through a lot of our solutions and in more detail about the Veriverse. Ashley?

Thanks, Sean. Hi, everyone. It's a pleasure to be here with you. My name is Ashley Bailey, and I lead product marketing for our synthetic and metaverse solutions at Veritone. Veriverse launched April 19 as a portfolio of metaverse-ready solutions and provides content creators and content IP owners the tools they need to manage and protect their assets and identity, monetize their content and maintain brand continuity across traditional and immersive worlds. Veriverse consists of 5 main solutions: Voice, Avatar, Verify, NFT, and Metaverse Migration Services. Voice is our 3 time award-winning ethical synthetic voice solution that we launched in May of last year, which is now part of the Veriverse portfolio. Avatar is an ultra realistic 3D avatar solution and is already award-winning, having won the National Association of Broadcasters' Product of the Year Award during the recent 2022 show in April. Verify gives clients the ability to safeguard assets and protect against misappropriation as well as ensure continuity for assets under management. With Veritone NFT, clients can now easily mint, sell and trade NFTs to verified users on a secure marketplace. Our team of experts will help clients manage all aspects of their NFT strategy from price, drop, creative, promotion, minting and operations. And lastly, our Metaverse Migration Services is a professional service offering, where we guide content creators and content IP owners through readiness, mapping, and ultimately help them activate and be successful in the metaverse. Veriverse use cases fall into 2 general buckets, companies and individuals. Content IP owners can license their content for use in a metaverse platform. This is already happening today. Media companies and celebrities alike can create synthetic media, including voice and avatar for use across persistent worlds. Brands now have the ability to not only create a sonic identity, but also maintain brand continuity across all these different channels. Veritone clients now also have the ability to identify mintable moments and catch phrases as well as ensure the authenticity of their NFTs. These are just some of the Veriverse use cases. We've already hit on some of these benefits, but here's a look at some more, including scaling content production, streamlining asset management, diversifying and creating new revenue channels and protecting rightful identity and assets. Veritone is expert when it comes to content, providing structure to unstructured data, managing content, accessing content, monetizing content and protecting content. These are all areas we have vast experience in and carries over to the Veriverse solutions as well. Veriverse helps content creators and content owners create, manage, mint, monetize and protect their content as well as activate or migrate their content to the metaverse. Here are some of the partners and customers that are in the Veriverse ecosystem, as well as governing memberships that we actively participate in, including the Open Voice Network and IAB. We will now hear from some of our valued customers and partners.

I'm the CEO of Silver Trak Digital. We work in the localization of deliverables, mastering, QC and post production in Australia, New Zealand and Southeast Asia. We do a lot of work in audio encryption, and we faced a number of challenges around staffing, voice and recording GOs. So when the idea of Veritone Voice was shown to us, we were super excited. The ability to create an AI-based voice with Veritone solved a lot of our problems. So we're happy to jump on board and give it a try in order to create as much efficiency as possible. So that's where we all started. But we have also premium clients, all those premium streamers we work with. And for us, they really had to understand -- we had to understand that the content we were delivering them was as good as a real voice. And so that was always our concern because obviously, working with AI in the past and over the number of years, it's been developing. So we were hesitant initially. Once we sort of heard some demos and some recordings and actually live creation of that content using Veritone voice, we were pretty blown away, to be honest. And almost straightaway realized that it could be a product we could actually take into our workflows and create content from which we have done.

My first multimedia book, I was fortunate enough to have Walter Cronkite write the foreword. The book was called -- is called We Interrupt This Broadcast. And Walter wrote the foreword to the book. And I always regretted that I didn't ask him to record it especially now, if you read it, it's as if he wrote it yesterday and the way he talks about the how critical free and unintimidated press is to the central nervous system of a democracy. So fast forward to about 6 months ago, and I happened to see a webinar that Veritone presented where they were talking about Veritone Voice and all of a sudden the lightbulb went on. And I thought maybe this might be the opportunity that I've been looking for. So I reached out to Chip at the -- Chip Cronkite, Walter's son, and told him about what I'd seen. And then I immediately reached out to Sean and said, Sean, may I introduce you to the Cronkite estate. And so I am thrilled that we're in the process of bringing Walter's voice to Walter's words to the American people, and the timing couldn't be better.

My name is Danny Tomsett. I am the CEO and Founder of a great company called UneeQ Digital Humans. So AI is going to be fundamental to the metaverse, primarily because the metaverse, unlike the physical world is not constrained by time or location. And so you're going to need services that are always on and AI will give the scalability and the intelligence needed to support so many different use cases and experiences in an always-on world. So Veritone is so well positioned when you think about their ability to help content creators and content owners take existing assets where they've been able to find value in what we know as our physical world and digital channels today, but if you think about Veriverse and where the metaverse is going to open up all these new opportunities, they really can guide these creators and content owners in a way where they can monetize not just from a value from their side, but for their users, their fans, their customers in a meaningful way with utility and ongoing value.

I'm Ben Foakes, CEO and Founder of BASE. We are a huge Veritone partner and advocate in the U.K. European market. We actually partnered around 4 years ago, deploying Digital Media Hub and aiWARE into our cloud for the sports sector. So we work together with clients like Formula E, Extreme E and a range of various companies that use us for content distribution. So this is very high data rate, very high speed delivery of sports shows with embedded AI for things like facial recognition, sponsor recognition and all sorts of things to help monetize the content. So it's a really great partnership. The benefits of working with Veritone is that BASE and Veritone have very similar cultures and kind of ways of doing business. We're both entirely cloud native. We're both big advocates for AI, big advocates for pure cloud native application development. And so really, the benefits are that we are 2 companies that have the same approach, and it works really well. Looking to the future together, BASE is growing very, very quickly. We are around the 75% annual growth rate right now. And the ideas that we've got with Veritone around embedding and using the aiWARE stack in the back end of more of our tools. So making AI more readily available across the applications that we sell into the media market. But I think what's going to drive the investment and drive the new orders that we get is going to be the enterprise market. So yes, we're big in sport. We're big in online video, we're big in broadcast and movies, but now we're moving into brands, and that's really, really exciting.

What's good, everybody, man, it's your boy ToNYD2WiLD checking in. Once again, you guys may know me, maybe not as a sneaker head, a fashion connoisseur, a guy that just loves kicks, sneakers clothing, and all of the above. But today, we're going to talk about the future of the creator economy with Veritone, one thing being Veritone Voice, Veritone Avatars and of course, NFT. We're designing my own NFT right now as we speak. And these NFTs are going to allow me to expand my community and connect with my viewers across the world and Table Rock and Veritone are going to support me all the way through to give me the necessary tools, the necessary knowledge to come into this new world and this new future of this meta world, this metaverse, this Web3 into this creator economy. We aren't just waiting on that future though. We are creating that future. So let's get started.

Thank you to all who participated and shared their Veritone story with us. Veritone, which extends you this offering, uphold the promise for good across the board, but particularly when it comes to dealing with IP, synthetic media, content security, we take the power of AI very seriously and hold ourselves and others to very high standards. This is a core pillar and one we continue to hold close in each of these offerings. And now I'll hand it over to Charlize Benz to talk a bit more about Veritone Avatar. Thank you.

Thanks, Ashley, Sean and Ryan, it's wonderful to see you again, and nice to meet you all. My fictitious name is Charlize Benz, and I'm an example of a stock avatar leveraging both Veritone Voice and Veritone Avatar, part of the Veriverse portfolio of solutions. I could assist in a buyer journey, become a brand ambassador or be the face and voice for corporate training materials in traditional or metaverse channels. The possibilities are endless. It's a pleasure to be brought to life for this important Veritone Analyst Update and Tech Demo. For more information, visit veriverse.com. I will now hand it over to Conor Doyle, Senior Vice President, Managing Director of Veritone One, who has a special announcement about a new product, Navigate. [Presentation]

Hi. I'm Conor Doyle, SVP of Veritone One, and I'm excited to share with you an overview of our newest app, Navigate. Audio and video influencer marketing are fast-growing ROI-generating media. With 80% of marketers having found it to be helpful in growing their business, it's no wonder that searches for influencer marketing have grown by 1,500% in the past 4 years. However, because of a variety of challenges from discovery to verification, 3/4 of brands are working with fewer than 50 influencers, leaving millions of dollars of revenue on the table. This is precisely why we created the Navigate app, to help advertisers discover and partner with the best fit and best performing influencers across audio and video. Navigate. Our new Veritone One app built on aiWARE. This industry-defining custom build app automates the audio and video influencer buying cycle while providing an unmatched level of insight and scale. Navigate aggregates billions of data points across 30,000 shows, leveraging AI to unlock the world's largest repository of audio and influencer metadata. The app fuels Veritone One's decision-making by surfacing granular-level campaign insights in near real time across all Veritone One clients, allowing for increased ROI through better planning, execution, evaluation and media optimization. Some of Navigate's amazing AI-enabled features include cross-client media and performance trends, planning filters to fuel and streamline influencer discovery, ad and content analytics for unmatched influencer optimization and automated integration detection and messaging adherence. Coming soon, the app will feature AI-enabled performance benchmarking for predictive analytics, role-based permissions as well as inventory alerts for cross-client bidding. Through Navigate, Veritone One is currently executing on over 80,000 ad integrations each month, and with built in machine learning through aiWARE, we're getting smarter with each integration and show ingested. Next up, we're going to show you the app in action and hear from Lauren McConnell, Head of Influencer Marketing at HelloFresh.

Here's a quick look at our Navigate media planning app powered by AI. Let's search for some crime podcasts. Results are sorted by relevancy. On the left side, we can sort by a number of parameters, including demographic information, and we can filter by a number of metrics as well. Let's dive deeper into the Crime After Crime podcast. We have our demographic information as well as information about the host and a sample read. Jumping over to the feed gives us a list of recent shows, and if we were to launch this into our Discovery app, we would see our automated mention verification, which allows us to listen to each mention individually. Jumping over to the content analytics. You can see how we use the cognitive AI engines to analyze brand safety risk, the advertisers that were mentioned as well as an IAB taxonomy. All of this is powered by AI and allows us to be more efficient in our media planning process.

My name is Lauren McConnell and I am the Head of Influencer Marketing at HelloFresh Group. We work with Veritone One for all of our blogging needs. Veritone One has really allowed us to push forward and scale and do so efficiently. Being that we sit on the growth team, everything is about driving efficiency. And through the use of Navigate and AI technology, we are able to not only work with influencers, but do so really efficiently and know that -- save the team time as well, knowing that drops have happened when they are meant to and that we are able to push forward and really continue to scale our business and our brand and do so in an efficient and cost-effective manner.

Thanks, Lauren. Next, we're going to hear from Terry at PandoLogic. [Presentation]

I'm Terry Baker, President and CEO of PandoLogic. AI is alive, and it's needed, both in the places you think it would be and even those that you wouldn't. In fact, according to Aptitude Research, around 60% of companies are investing or looking to invest in AI solutions to end this chaos of modern hiring. And it's really no wonder. AI is playing a crucial role across all areas of talent acquisition and its potential only stands to grow as AI comes alive and new in different ways. For PandoLogic, AI is allowing us to reimagine the hiring process and to create a revolutionary, fully automated, end-to-end hiring process. In this new world, not only are we able to increase our addressable market. But more importantly, all the pieces of what today is considered the tech stack puzzle fall into place in a brand-new and streamlined workflow. AI-enabled programmatic job advertising is designed to target and reach candidates where they are most active online. And when we pair that with conversational AI, which engages with and evaluates applications through face-to-face interactions, then the combination of these 2 AI technologies amplifies and elevates the recruiting powers of our customers, cultivating a stronger, more connected workforce. And that promise of a stronger, more connected workforce is helping us to sell cross-functionally and develop deeper customer engagements with Veritone's customers. For example, Smile Brands, a long-time Veritone customer, is now bringing our flagship product, pandoIQ, into their tech stack and hiring process. From the onset, their interest in our AI capacity and their desire to streamline their job advertising recruitment and to maximize ROI was a perfect fit for our solution. This deal shows really clearly that Veritone's expansion into human capital management not only differentiates us from a competitive set, but it also enables us to deliver a fresh approach to automation in AI inside of HR tech. That innovative mindset is bringing natural synergies between Veritone and PandoLogic right to the forefront. Together, we've built a multichannel advertising opportunity that delivers increased impressions, reaching potential candidates outside of direct advertising channels. Thus, we're able to grow our distribution network of over 1,000 of today's top job sites to include additional channels like podcasts, radio, digital video, YouTube, search, social and broadcast television. The outcome of this diversified opportunity has increased candidate reach and qualified applicant flow at a really efficient cost, allowing us to fulfill dynamic labor orders in new ways. We're also achieving impressive results over the last quarter through our partnership operation, doubling sourced revenue quarter-over-quarter. We completed 30 applicant tracking system integrations, enabling programmatic as a feature and an automated workflow within those third-party systems. Our message around sourcing efficiency and delivering incredible results via automated decisioning and limited overhead requirements are truly resonating in an industry that is valuing efficiency above all else. In delivering true based AI programmatic advertising through strategic relationships with other HR technology and service providers, we've secured an additional $833,000 in Q1 alone. And an ongoing revenue stream of an additional $25,000 per month just through these reseller partnerships. One of our partners, SmartRecruiters, is a modern enterprise grade talent acquisition suite that empowers businesses to hire talent on demand and under budget. SmartRecruiters was looking to partner with an innovative programmatic solution to accelerate the sales and adoption of their SmartJobs product. I'd like to introduce you to the General Manager and VP of SmartRecruiters, Jim Milton, to explain how PandoLogic was able to check the boxes that the competition simply couldn't. Jim?

Hi, everyone. I'm Jim Milton, General Manager and Vice President of Advertising Products at SmartRecruiters. Excited to share a little bit about my experience working with PandoLogic. But first, a little bit about SmartRecruiters as a best-in-breed global talent acquisition suite. SmartRecruiter aims to bring our customers cutting-edge capabilities beyond the traditional ATS. So we're always needing to be on the hunt for technologies that help us deliver on our brand promise, which is not just to track applicants, but to truly empower higher success for our customers. And our CEO, Jerome Ternynck, really starting 3 years ago, became intrigued by the potential value of baking programmatic advertising into our offering, really for our mid-market enterprise and large enterprise segments. We were so intrigued that the company spent about 3 years vetting various programmatic vendors in the space until we landed on PandoLogic. It was a pretty easy decision in the end. It took a while to get there, but Pando ended up checking all the boxes for us and for our customers. Some of the key aspects of what Pando brings to the table, differentiated AI that makes better decisions on where to place job ads, real seamless integration with our ATS in a unique way. And then just stepping back, the shared overall vision for innovation going forward, which is really important for us. And delivering on the goods, right? When we implemented PandoLogic with our customers, our customers are successful -- consistently successful without having to man the wheel and do anything on their own, true set it and forget it. And this is something, frankly, other vendors haven't been able to deliver on over the past several years. So if we really zero in on what's happening right now between SmartRecruiters and Pando, simply speaking, the AI-powered white label application has helped us go to market with a brand-new business that we call SmartJobs. And for SmartJobs, we've been able to triple our revenue goals this past Q4, so much so that this is now our fastest-growing offering. So we couldn't be more thrilled to work with Pando. It's critical that we continue at SmartRecruiters to deliver on our promise to customers by maintaining a leadership status in the TA space, and that's going to, in part, recontinuing our investment in innovation and continuing to work together with Pando in this innovative kind of partnership structure where we'll grow hopefully together.

Thanks, Jim. Next up, we'll hear from Veritone's Government, Legal and Compliance business. [Presentation]

Hi, my name is Jon Gacek, and I manage the GLC team here at Veritone. And it's my pleasure to speak with you today about the progress that we've made over the last 6 months or the last time we met. I'm going to put up a slide that I've shown at the last 2 investor conferences. And the point of this slide is to really tell you that our strategy hasn't changed, but I am going to talk to you about some of the progress. So as I've said before, everything that we do in GLC starts around aiWARE. aiWARE is the core technology that we build off of, whether it's applications for a government agency or a legal firm or a police department. And so as you think about what we do, aiWARE is in the center of that. We think about GLC in 4 groupings, but they're all really interrelated. The first is legal. So in legal, we're doing legal support for litigation support services generally using AI, and we're cognitively enabling a process that historically has been done by humans. In the SLED space, we're supporting state and local governments, police agencies, special agencies, DAs, public defenders. Again, cognitively enabling processes to make them more efficient. In this space, we have very specific applications that you can see up to the right, specifically Illuminate, Redact, our connection to Relativity and Contact. Again, cognitively enabling solutions built around aiWARE. At the bottom, I think about the Fed space in 2 groupings. One is FedCiv. FedCiv is really again focused on supporting investigations, cognitively enabling processes. You're going to hear me say that a lot, but at very, very large scale. As I'm sure you're aware, the government does everything big. These are very, very large projects, large opportunities, and they take time to get implemented, and I'll talk more about that in a second. And then on the DoD/Intel space, again, a different division. And here, we're primarily selling the capabilities of aiWARE. And what's really evolved since our last investor conference is we've added some new customers that have been publicly announced, some that haven't. But the core of what we're doing is really about taking aiWARE into the military space, and making it a platform to cognitively enable how we go about the things that are done in the military battlefield. So this slide hasn't changed, lots of progress, and we're very excited about the things that are going on. One of the updates I wanted to provide and one of the things we're very excited about is in February of this year, we announced our selection amongst other companies as part of the $249 million BPA with the JAIC. JAIC is the Joint AI Center for the DoD. Their mission is to use AI and accelerate its use across the DoD. This is one of several projects we have going on with the JAIC. And we're very, very excited about our position and what we're doing there. Generally speaking, what we're doing is we're taking aiWARE and making it deployable and usable for mission-centric DoD applications, different kinds of signals, different kinds of use cases, but all of it to provide new workflows, new technology to support our war fighters. And this is very exciting. We're really pleased to be part of this. This is one of the contracts we're able to publicly disclose. Because it's DoD, you can expect that we won't disclose everything, but we have a lot going on with the JAIC and we're excited about the opportunity there. Moving on to federal government but focused on Civ. I just want to summarize again where we stand. We have received what we -- what's called an enterprise-wide ATO with the DOJ that allows any component inside of the DOJ to use Veritone services. That was announced back in the fall. We are actively working with a number of agencies inside of the DOJ across a multitude of products or a multitude of solutions, but the products generally are our connection to Relativity, our Redact application and our Illumina application. We're using our automated studio product to connect to some of these use cases. And this is work that's going to continue and accelerate and ongoing, and it's supported by the overall ATO. In addition at the DOJ, just as a reminder, we are also partnered with 4 of the 5 MEGA 5 partners, which is a program that was announced also in the fall and includes Deloitte, Ernst & Young, CACI, PAE and Leidos. And 4 of those 5 have partnered with Veritone. And why that's important is because we're in FedRAMP and because we already have a BPA, it makes it very easy for any of those 4 firms to utilize Veritone services. So think of that as a second route to market into the Civ space. And then finally, we did a press release around EPA also in the fall. And our strategy and what we're continuing to do here is expand our footprint with having authorities to operate inside of FedRAMP for other agencies. So we've announced EPA. We've announced DOJ, and we are also working with other agencies. And what will happen over time, is you will be -- either in a press release or there will be a public announcement through GovWin or one of those, where we have a new contract with a new Civ agency. They don't always do them, but they're pretty good about getting those out there. A lot of POCs going on, a lot of activity. Again, this is all building off of our initial FedRAMP authorization from the DOJ. Very excited about the breadth of the agencies that we're working with. And again, as we can announce those things, we expect to do so. So another key element of our strategy is partnerships. And if you participated a year ago, you remember that Deloitte was one of our presenters on our behalf, Pat McCulloch from their legal services team talked about how they're partnered with Veritone. In the last year, our relationship with Deloitte has expanded significantly. We are jointly working and proposing on projects inside the DoD. We are jointly working and proposing on projects inside -- on the Civ side of the government. And we are very engaged with them across Deloitte in their AI go-to-market and product team called CortexAI. And I'm pleased to introduce Dilip Krishna who manages the Cortex's AI team to talk a little bit about what CortexAI does and how he sees Veritone fitting in and being a part of their overall solution. So let me turn it over to Dilip.

My name is Dilip Krishna. I'm a Managing Director of Deloitte, and I run the CortexAI platform as the Chief Product Officer, and CortexAI is used by our client teams to build and deliver advanced solutions, advanced AI solutions to a number of our clients globally. When we think about CortexAI, our whole processes is we take a whole bunch of data, provide easy access to our client teams, our resources across the large organization that we are. And then generate great insights based on that information. Started working with aiWARE over the past, I want to say, a year or a little bit more than that. What was really impressive and effective for us was, on the one hand, the ability for our teams to get rapid access to aiWARE, to get very smart very quickly on aiWARE and do initial proof of concept with things like natural language processing. All that happened extremely rapidly for us, and that impressed us a whole lot. Now what we've been doing is we've been looking at how to solve problems across the board. Solving problems, like I mentioned earlier on things like looking at unstructured data, pictures, images and so forth in the marketing space and being able to combine that with some of the structured information and structured solutions that we already have. So as we begin to do that, aiWARE is a really helpful complement to the technologies that we already have in place, the ability to create models, the ability to use models that are already out there and build on top of them, those are all the capabilities that allow us to accelerate our journey into the marketplace, which is what we are looking to do with CortexAI first of all. We see AI as a tremendous fuel into the future for things that we haven't really imagined, not only in terms of products, but also in terms of how organizations and people work going forward. One of the key goals that we have in CortexAI is increasingly to leverage the power of our partners, not only the technology, but really all the people and the brainpower that come behind that technology and that's where we see the integration and the partnership with Veritone as being very fruitful for us. We see a firm generating great technology being backed by a great set of people who provide a lot of support to us, a lot of information and help and those sorts of things, training. And all of that is going to be critical for us to help clients get to this new future of AI.

Thanks, Dilip. I really appreciate you taking the time and sharing your perspective on Veritone, aiWARE and how we fit into the Cortex AI strategy. For the audience, if you recall, a year ago, Pat McCulloch from the legal services team of Deloitte presented on our behalf and talked about how we're working with his team. It's now been a year and we are actively engaged with Dilip and his team on CortexAI. We are active with their team on DoD side. We've got multiple POCs and projects that we proposed on or are working on together. We're also working with their Civ government team on some interesting things. So the point there is that partnership continues to expand and will be critical to our growth strategy going forward. Deloitte is a 350,000 person organization global, worldwide and enabling them on aiWARE and building a practice and bringing their accounts to utilize our technology is what that strategy is all about. So a very key partner, one that we are very far along with both contractually and practically and we're working on things together. So there'll be more and more about that partnership going on. I want to put up a slide that I showed both in the last 2 investor conferences. This slide hasn't changed either. These are 5 key tenets of what I think is going on with GLC and our opportunity at Veritone, we are making people and processes more efficient and accurate. My summary of that is we're cognitively enabling things. And aiWARE is in the center of all that. The partnerships are key to our growth, Deloitte is one of those. We have others and some of them are more public than others. And again, I know that investors like to see that stuff. Believe me, as soon as we can announce things, we will. aIWARE is the key to all of this, and our deployment flexibility makes us different. Public cloud, private cloud, on-prem, GovCloud, FedRAMP, IL-6 security, all of these things make us different. And it's a very important part of what we're doing. I keep saying this, I have a bullet on here. The strategy is right and aiWARE is the future for this. It's going to be built around aiWARE. And we continue to evolve it, make it better and mentioned bringing in different signals. It is a great platform, and we're continuing to develop and improve on that. And I know this is always hard, but it's still early. It's 6 months later than the last time we spoke, and we've made a ton of progress since then. But in the grand scheme of where AI is, it's still very, very early and Veritone and aiWARE is right in the middle of it as it relates to GLC customers and opportunities. Thank you very much for the time. I hope it was helpful. Next what I'd like to do is pass it along to our energy team and let them give you an update of what we've done around our energy solutions. Thanks very much. [Presentation]

Hello, everybody. My name is Sean McEvoy, and I head up the Energy business here at Veritone. And for the next 10 minutes or so, I'm going to give you some of the latest updates and highlights in terms of what we have been doing. So let me touch base on a couple of the highlights for you. I would say the biggest news first is that we formally launched our DERMS solution in February of this year. And for those of you that don't know, DERMS stands for distributed energy resource management system. And this current version of our DERMS solution is focused on the optimization, forecasting and control of grid-connected assets such as solar, wind, battery, storage and hydro. And this is the same DERMS solution that is in operation at Tampa Electric as well as it is also being leveraged by Marubeni and Competitive Power Ventures who are both participating in the wholesale energy markets. On the event side, so yesterday, Veritone co-presented this DERMS solution with our customer Tampa Electric at an IEEE event. At that event, we discussed like the benefits of this AI-powered DERMS solution and the value that it brings to Tampa Electric. Hopefully, you all got a chance to see that. If not, I'm sure you can go back and check it out. And later this month, we are going to be at 2 events. One of them is the Clean Power event in San Antonio. And the next one, which is one of the biggest ones of the year is DISTRIBUTECH, which is later in May, and that is going to be in Dallas. So if you are there, please don't hesitate to drop by our booth where I can download a product to you and answer any of the questions that you may have. So what value does our DERMS solution provide to our customers today? Well, from their perspective, our AI-powered solution enhances grid reliability and resiliency, which is of utmost important to our customers. And we can achieve this by generating highly accurate forecasts and dynamically orchestrating renewable and storage assets to react dynamically to changes in the grid in near-real time. For example, our DERMS solution deployed at Tampa Electric today is operating autonomously, which is a first for many of the utilities in the U.S. Our system like is orchestrating solar and battery to deliver improved energy quality, while at the same time, it is also helping to reduce grid stress through peak-demand shaving at the end of the day. And our other set of customers, which are like independent power producers. And with this set of customers, our grid-edge decisioning reduces operational costs by protecting and prolonging the life of the physical assets, typically by about 2x. And at the same time, we're also providing these types of customers, the independent power producers, the necessarily needed critical decision support to maximize returns from energy arbitrage. So in summary, both regulated and nonregulated power producers will derive value at both the grid level and also at the wholesale market level. So what differentiates the Veritone DERMS solution from other solutions like in the market? Well, for one, and this is probably the biggest difference is that we have the only AI-powered DERMS system on the market today. Like our DERMS solution can consume large amounts of both sensory and market data to deliver like untapped operational insights and decision support at scale with proven high levels of accuracy in near real time. The system can also run autonomously or in supervisory mode, which is important to a lot of our power producers. We also have flexible deployment options. So it doesn't matter if you are a utility and you want your like DERMS solution deployed completely on-prem because you're worried about security issues or if you're an independent power producer or a micro-grid developer and you lean more towards like cloud, but sometimes you want the ability to put some of the modules on-premise, we have complete hybrid solutions as well. So you can go fully on-premise, fully in the cloud or a hybrid of both. So bottom line here is that we provide the deployment flexibility required by all of our customers. So how does our DERMS solution work? Like most AI-powered systems, our AI engine consumes lots of data. At the grid level, we ingest sensory data such as voltage, temperature, weather, current data. For the wholesale market side and those participating in those markets, we ingest pricing data, demand data, generation data and network congestion data. We also incorporate customer business goals into our models as well as industry rules such as regulatory FERC constraints, NERC security constraints, asset warranty constraints and market participation rules. So once we have all of the sensory data, market data and constraints built into our model, we can then apply our forecasting and optimization algorithms, which produce optimal signals for our controllers who act on the physical assets, and we also produce key data insights for our energy arbitrage. So in summary, we enable our customers to meet a wide range of business goals such as decarbonization, cost reduction, reliability and resiliency. Now I will turn the remainder of the energy update over to Tatjana Legans, who is our Head of Product Marketing. Thank you.

Hello, everyone. My name is Tatjana Legans, and I'm the Product Marketing Lead for our Energy business unit. Sean has introduced you to Veritone iDERMS, and I'm excited to now show you our iDERMS solution in action and the value it creates for our customers. Here is an example of what our customers see when using Veritone iDERMS, think of a utility or an independent power producers and how, with our solution, they now have the ability to immediately determine the health and state of their renewable power plant. If you look at all of these boxes, you can see how much power they're generating and storing and how different assets are operating. And all of this is in real time, which is really critical because it is helping assure that reliability is upheld while the plant is operating in the most efficient manner. And this is top of mind for every utility plant -- renewable plant operator. This is my favorite screen because it illustrates how all of the assets, solar and batteries, are operating as a unit, making decisions in real time and finding the most optimal path to reach our customers' end goals. I think this is really impressive. I mean you can literally see in real time how solar energy is being generated and how batteries are charging or discharging and all of that leads to getting the power dispatch to the main grid. So how does this translate to real tangible value? Well, I hope you had a chance to tune in yesterday and hear from Tampa Electric and their experience with Veritone iDERMS. They have deployed our solution at their Big Bend power plant. And since, they have seen their maintenance and operating costs go down significantly. They were also able to extend the life of their inverters 2 times, which is significant, especially when you look at these savings at scale, it really adds up. They really add up. In addition, the predictable nature and our industry-leading accuracy of Veritone iDERMS gives them the ability to confidently reduce fossil fuel-based spinning reserves. TECO and other U.S. utilities are required to run spinning reserves in order to compensate for potential power shortages or frequency drops that DRs may cause. So reducing spinning reserve coverage can lead to significant savings in fuel costs, but more importantly, to some utilities, getting them closer to their aggressive Net Zero energy goals. And lastly, Tampa Electric's Big Bend power plant is now fully dispatchable and it is being used for end-of-day peak demand mitigation using green power, again, getting them closer to their aggressive green energy goals. On this screen, you can see how Veritone iDERMS serves customers that participate in the wholesale energy markets. So customers like Marubeni, CPV and others can now visualize, analyze and even back test market trends to support their market position in real time. Again, why does this matter? Well, thanks to these advanced AI capabilities of our solutions, our customers can now confidently buy energy low and sell high and also participate in value stacking to pursue maximum profits. We will now hear from another client of ours, Empower Energies and how they are harnessing the power of AI to serve their customers better.

Hi. My name is Bob Duva. I'm Vice President of Engineering for Empower Energies. The challenge that we faced is how do we differentiate ourselves as a renewable energy provider and integrator. And Veritone has provided that level of support thus far. We can seamlessly integrate with them both on the initial vision of what can be for a particular client as well as work with them going forward in the realization of a brand-new project. What we've noticed is that technology advances at a near impossible pace to keep up with. And so we need to be as forward leaning as possible. And they have provided the differentiation that we need for our clients in order to incorporate as many emerging technologies as possible as well as provide the highest returns on investment that they can get.

And now we'll explore some exciting aiWARE powered solutions recently built by our professional services team. [Presentation]

Hello, everyone. My name is Greg Loose. I run our professional services group at Veritone, and I'm here to talk about some enterprise AI solutions we've done for our customers. The first use case I'd like to talk about is a translated video closed captioned use case. So being able to take original English transcript and translate that into many languages. This allows our customers to be able to go into other markets around the world much more quickly and efficiently and allow compliance with local laws and also just consumer experiences to be able to follow along with closed captioning. Our solution took a video file, we transcribed that, and then we were able to orchestrate workflow to be able to then translate that into 5 different languages that then were able to be embedded in the video file itself. So this allowed our customer to very quickly, efficiently get this content produced and on the video files in the time specified formats that were required. The next use case I'd like to talk about is object tracking in video. So this is the ability to be able to take an object in a frame of a video. This could be a person, it could be an object like a tree, a building, a car, and to be able to track that with statistical precision, not just within that video as it goes from scene to scene, but also across video. So we're finding a lot of applications for this, both in our media and entertainment customers, sports customers as well as government customers to be able to identify an object, be able to identify that as a person as myself, as Greg, and to be able to see where in other videos and within the same video that person appears or that car, that briefcase. So that's turning out to be useful in applications that we support as well as customers integrating it into their own applications and workflows. The next 2 use cases were built and delivered using our very diverse set of product capabilities that you heard about from other speakers. A major market radio station wanted to take their very popular morning drive time host and turn his morning broadcast in English into Spanish. We transcribed the English broadcast. We translated it into Spanish and then we used Veriverse to create a synthetically created version of that host's voice in Spanish. This allowed this station and this host to expand his brands into new markets. This station has plans to apply the same technology to other hosts as well as other languages in the future. Our next Veriverse use case is translating podcasts in synthetic voices. Podcasters can transcribe and translate their podcasts then autogenerate new ones in foreign languages spoken in the host's synthetic voice. This allows podcasters to scale their businesses and enter new markets much more quickly. Veritone delivered this solution in conjunction with our partner, SLINGR. Now I'd like to introduce you to Grace Schroeder, who is CEO and President of SLINGR.

My name is Grace Schroeder. I'm the CEO of SLINGR. Working with Veritone has been fantastic. Finally, we have a partner that can bring artificial intelligence to our client base today, and that sets the stage for their accelerated growth in the future. Companies can finally activate an artificial intelligence strategy that can make immediate improvements and set the stage for long-term accelerated growth.

Thanks for letting me talk to you about enterprise AI solutions. Now I'd like to introduce Mike Zemetra, who will give you a financials update.

Thanks, Greg, and good morning to all. Today, I will be highlighting our recent financial performance, updated customer LTV, the implied value of our customer base across our software services, and finally, updating our longer-term financial model. Since 2014, we've demonstrated strong revenue growth, which is forecasted at 68% CAGR, assuming the midpoint of our 2022 revenue guidance of $185 million, including 100% actual revenue growth from 2020 to 2021. Driving this growth is our software products and services and to a lesser extent, our managed services. Last week, we announced another record first quarter with pro forma revenue growth of 45% year-over-year including 78% growth from our software products and services. Driving this was pro forma software customer growth of 45% and customer gross retention over 90% and net retention over 120%. We improved our pro forma gross margins to 80% in Q1 and continue to invest in our growth with the addition of over 150 people through today, an increase of 25% since January 1 of 2022. On a trailing 5-quarter basis, the revenue growth in our platform has been extraordinary. Given this growth and our improvements in gross margin, we ended 2021 with reported profitability on a non-GAAP basis. We've always stressed responsible growth and are forecasted to be profitable once again in fiscal 2022. With our accelerated software products and services growth, Q1 2022 software products and services represented 53% of our consolidated revenue as compared to just 26% in Q1 2021. Our managed services grew 19% year-over-year, largely driven by our licensing services, which grew over 60% year-over-year. As a reminder, our licensing platform allows third parties to discover and license the largest global digital content libraries, including CBS, the PGA and the NCAA. And we have seasonality in our business, driven largely by our intelligent hiring services with Q1 typically being our lowest reported revenue quarter, accelerating each quarter to Q4. Our software customer lifetime value continues to be strong and growing with average annual revenue over $200,000, trailing 12-month gross margins of approximately 84% and best-in-class gross and net customer retention rates. Our LTV is now $1.7 million per software customer. Based upon ending software customers of 559 at March 31, 2022, the LTV of this customer base is now approaching $1 billion in total value. Today, there's an enormous disconnect with the market value of our stock, driven in part by today's macro headwinds and misunderstandings of the recent momentum and fundamentals of our business. First, our platform is equally important to our customers in good as it is in challenging times. In good times, our platform helps our customers generate new revenue streams and product offerings. In more challenging times, our platform helps our customers to drive cost efficiencies and scale around processes and improve workflows. If you look at the trailing 5 quarters on a pro forma basis, the LTV value of our software customer base alone has improved by over 50% from Q1 2021. The total $1 billion in value is now more than 3x our market cap today. What's even more striking, this only represents a little over half of our consolidated revenue services. Equally important, we are now progressing in enterprise offerings where the long-term expectations are going to drive higher customer growth, net retention and average annual revenue opportunities, demonstrating even more powerful growth across our growing software customer base. We continue to execute towards long-term growth targets using an implied growth rate of 44%, which is conservative given our 68% projected CAGR since 2014. Our 5-year revenue goal exceeds $900 million with projected 2026 non-GAAP net income accelerating to over $225 million or a 59% CAGR as projected operating margins improved from 12.5% pro forma in fiscal 2021 to 25% in 2026 with more scale and growth. To achieve these 2026 targets, we will drive organic and M&A growth. In summary, we are growing fast and responsibly and executing at the highest levels. Our software customer metrics are solid, with pro forma Q1 growth of 45%, including new bookings up 292% and gross and net retention rates well above the industry standards. With an outlook of continued profitability, unencumbered cash over $169 million and our 5-year convertible with fixed interest at 1.75%, we are in the greatest financial position to continue our growth trajectory and more important, take advantage of future and more cost-effective M&A opportunities to expand our platform and product offerings even further. That concludes our presentation. We now open the line up for Q&A.

All right. Well, thanks everyone, that's a jampacked session. We're going to kickoff the Q&A portion. We only have roughly about 12, 13 minutes left in the 90-minute slot that we were hoping for. [Operator Instructions] I'm going to kick a question off from Darren Aftahi to start things out. What percent of customers are deploying on-prem versus cloud solutions across an entire product set? I think that probably should go to Mike.

Yes, sure. Today, the majority of our customers are deploying cloud solutions but as we venture into more of the enterprise offerings, this is really on our government and regulated industry segment, that pivot, depending on the customer's need for example, if it's in energy or utility, they need real time monitoring and forecasting as a necessity to monitor the batteries. They may opt in for an on-prem solution. And similar with the government, depending on the level of secrecy and/or with FedRAMP ramp requirements, we may have to do on-prem solutions. But today, the majority are cloud-based.

Right. And I think this is going to be a question for Sean King relating to the metaverse and Veriverse. Sean, is there a metaverse world that Veritone recommends over the others?

At the moment right now, no, there are dozens of metaverse platforms that are out there right now, and there's new ones that are kind of continually being launched. But there's certainly obviously the ones that have the most engagement happening right now. So it really is going to depend on the individual or the entity's goals, their business model, what they're looking to do, what their overall strategy is going to look like. And that's why we really have those metaverse migration solutions that we talked about during that session there because it's going to be a little bit of a bespoke recipe for each customer that's going to look to kind of conquer this new emerging channel.

Great. And now sticking on the Veriverse theme here, Sean. A question from Nick over at Craig-Hallum. Any more detail you can provide on the Veriverse partners? He believes that UneeQ and Respeecher were a couple of the partners working with Veritone. Any others on the go-to-market and products, et cetera?

At the moment right now, we're constantly looking at evaluating which is going to provide the most extensibility and compatibility with the different players that are in the space right now. So this is something that's going to be an always-on biz dev function within the group. That we're always focused on making sure that we have the best-in-class that is going to make sure that it's going to meet the needs, not just at what we do today, but very forward-looking in what we can look at as we go into the next quarters and years.

Great. And I think this is probably for Mike because it's a revenue question. But Mike, question coming in for Mike [Machada]. Can you provide expected revenue from iDERMS or any of the other energy solutions for fiscal year 2022?

Yes. I mean we don't disclose that level of detail. The iDERMS and the energy product set are still in their nascent stages. So I wouldn't expect there to be material significant as a percentage of our overall revenue.

Okay. And this probably is better for Sean McEvoy. What hurdles are preventing more utilities from adopting our DERMS solution currently?

Yes. Thanks for that question. So the biggest hurdle, I would say, for adoption is just utilities willing to kind of open up and adopt like an AI solution versus like legacy solutions. We've had great success with Tampa Electric in terms of their adoption and being able to let this solution run autonomously. But again, it's a new type of technology that needs to be able to fit on-prem. We are fully on-prem focused. So we've removed that barrier from the utilities. Now it's just more about piloting with utilities and doing proof of concepts with them just so they can get like fully understanding of the key capabilities and how the software runs.

And this is a question coming from a retail investor, Sean King. I think pretty obvious answer, but I think it's a good distinction for us to draw the line. Can you discuss the impact of the removal of cookies on our advertising solutions? Maybe you can explain a little bit of what we do in more detail.

Sure. I mean, look, I mean, whenever we're taking away that data point, there's definitely an impact. But we've always been focused on kind of the in-content advertising solutions. So we're really looking at contextually what's taking place in and around the ads, and using that as a primary benchmark. And then again, obviously, aiWARE, since most if not all of our placements are natively embedded in the programs themselves, we're not really relying on third-party solutions to make sure that this validation occurs. Using aiWARE to ingest the audio and video streams and being able to validate that those are taking place, it acts as almost our own third-party validation tool and verification tool.

Right. And a question, I think probably for -- probably for Mike here. This is coming from Koji at Bank of America. Can you help us understand what a software customer actually is? You have 500-plus with high average revenues. Are those found only within customers that deploy aiWARE? Or are these customers spread across all of your product lines? Mike?

Yes. So those customers are spread across all of our software products and services, which is a combination of PandoLogic, aiWARE. So it's a combination of both.

Great. And I think this goes back to Sean King, a lot of Veriverse questions here, Sean. Dillon over at ROTH Capital is asking what other opportunities exist to monetize the Veriverse beyond voice and avatars as something like NFTs that may not have staying power. Can Navigate influencer market also be used in the Veriverse?

Absolutely. I mean our primary constituents that we're really looking at and focusing our efforts on are really around the creator economy and content owners. As you go into these kind of these digital immersive worlds, there's kind of those same fundamentals that take place in real life that need to also occur in these digital worlds. And that's the protecting of one's self representation, their voice, their identity, but being able to create these immersive experiences where you can engage with content, you can monetize content, you can buy products or services. All things that we're doing in the real world that are going to be able to take into these digital worlds from those. And I won't necessarily turn a blind eye to the NFT that that's not going to be a thing because what NFTs can do is provide a level of utility, which can bring access to it. A lot of the NFTs that you're seeing out there today are really kind of in the collectible realms. But when you're getting that piece of -- that's coming with some utility or some opportunity to engage in real life things, get things -- provides a great way for people to build community. And in that community, again, you can start to do the normal things that you do in real world and share your stories, share products, share services, buy and sell goods. So it's going to act and become its own kind of new distribution channel, but it's going to be a little bit more of a dimension that it's going to be like a standard television or radio or podcast stream because there's going to be this kind of ongoing 2-way communication that's taking place.

Thanks. And a follow-up question from Koji of Bank of America. This is for Jon Gacek. Can you walk us through how the JAIC contract works from the big award to the bookings and how we're going to recognize revenue at Veritone? Jon, obviously, you can probably expand on that a little bit.

Yes. So Koji is talking about the BPA that I mentioned. What will happen in the BPA is task orders will come out and the various companies will bid on those. And depending on what we sell or what we're providing will determine the rev rec. It could be consulting, which is over time, it could be an instance of aiWARE and depend on deployment that could be upfront or over time. As I mentioned in the presentation, the DoD intel is really about aiWARE and the capabilities that it has. So how it gets deployed, Koji, will dictate rev rec. And then the JAIC has a lot of other funded mechanisms besides BPAs or OTAs, other opportunities for movement and funding of programs. But the rev rec piece and what we're selling will be similar to the BPA, it will be just about use case.

Thanks, Jon. I'm going to send this to Mike, I guess, a pretty straightforward answer. But Chad Peterson is asking the question, can you provide more information on the large East Coast utility provider mentioned in the 10-K? Or is that Tampa Electric?

Yes, it's Tampa Electric.

Koji has got another question, which is actually, I think, a really good one here on the Veriverse, Sean King. For the Veriverse, can you talk about the types of verticals and end markets that are coming to Veritone with the most demand for metaverse products. And from Veritone's view, what verticals and end markets will mean the biggest monetization opportunities for Veritone in the future?

That's a great question. I mean, again, coming -- going back to what I was saying earlier, our primary constituents that we're focused on right now are content creators and content owners, and that really just comes from our pedigree and heritage, really being experts in content licensing and IP protection and copyright protection as well as monetization solutions around content creators, albeit podcasters, YouTube content creators and such. Theirs is a new place where they get to create and -- create those -- can build those communities around. So those are where the primary amounts of activities that we're seeing in there. But also, it's going to be the same thing, radio stations, television groups, studios and such, all these ones that are creating opportunities for people to engage are definitely going to be those areas of focus and where we're seeing the most amount of demand coming back. And then in addition to that, a lot of it are going to be brands. You've seen a lot of brands, primarily they've been the brands like Nike and Gucci that have already done like these kind of metaverse-related events there. But again, it's a new place where it's an opportunity to create a new channel that you're able to actually sell in real life goods and services. So we're seeing a lot more activity from the brand side of it bit pick up as well.

Great. And we got -- it looks time for one last question here and it's a bit of a softball for you, Mike Zemetra. A question from Chad Peterson again. Who is Veritone's greatest competitor?

Our biggest competitor are humans. The -- for artificial intelligence, it sort of crosses a lot of ranges in terms of -- but the most applicability today is around just cognition. And I think as more and more folks adopted, that human sort of competition, we'll be able to overcome. But today, it's humans.

Great. And with that, I think we better wrap things up. We tried to promise 90 minutes. We're, I think, at 91 here. Thank you to everyone, all of our presenters, all of our partners, all of our customers who gave testimonials. Of course, thank you all on the investment side and whatnot. Hopefully, you got a lot from today. And if we didn't get to your questions, please resubmit them to me via e-mail at [email protected], and we'll do our very best to get you the answers you need. Thank you, everyone.

Thank you.