Good day, and welcome to the Veritone Incorporated Second Quarter 2023 Financial Results Call. All participants will be in listen-only. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Stefan Norbom of Investor Relations. Please go ahead.

Thank you and good afternoon. After the market closed today Veritone issued a press release announcing results for the second quarter ended June 30, 2023. The press release and other supplemental information are available on the Investors section of Veritone's website. Joining us for today's call are Veritone's CEO and President, Ryan Steelberg; and CFO, Mike Zemetra who will provide prepared remarks and then open up the call for a live question-and-answer session. Please note that, certain information discussed on the call today, including certain answers to your questions will include forward-looking statements. This includes without limitation statements about our business strategy and future financial and operating performance. These forward-looking statements are subject to risks, uncertainties and assumptions that may cause the actual results to differ materially from those stated. Certain of these risks and assumptions are discussed in Veritone's SEC filings, including its annual report on Form 10-K. These forward-looking statements are based on assumptions as of today August 8 2023 and Veritone undertakes no obligation to revise or update them. During this call, the actual and forecasted financial measures we will be discussing including non-GAAP measures. Reconciliations of these measures to the corresponding GAAP measures are included in the press release we issued today, also when we reference pro forma measures such measures are presented on a combined pro forma basis treating Broadbean as owned by Veritone during fiscal year 2022. Finally, I would like to remind everyone that not only has this call been produced with Veritone generative AI, but it is also being recorded and will be made available for replay via link in the Investors section of Veritone's website at www.veritone.com. Now, I would like to turn the call over to our CEO and President, Ryan Steelberg.

Thank you, Stefan. Good afternoon. [Foreign Language] As Stefan noted, this call is being powered by our AI-driven and multi-award-winning offering Veritone Voice. I'm pleased to share our second quarter earnings results which demonstrate Veritone's progress against the strategic pillars we presented earlier this year despite a challenging macroeconomic backdrop. Before turning to results, I want to discuss the attractive opportunity that Veritone is uniquely positioned to capitalize on through disrupting target vertical markets. Over the last year artificial intelligence has transitioned from a niche area of R&D to a catalyst for transformation expected to boost global productivity in GDP by over 14% in 2030, representing a contribution of approximately $16 trillion according to PwC. The global technology landscape has experienced immense innovation over the past decades. And consequently, we have seen a rapid increase in data creation foundational to consumers and businesses. With unstructured data comprising the overwhelming majority of data created globally there is a clear demand for solutions that extract value and actionable insights from this sea of unmanaged data as well as act upon it, while structured data can show you what's happening. The programmatic use of unstructured data allows you to realize the full potential of this asset. Data is the lifeblood of predictive end-to-end automation and commercialized artificial intelligence. Through Veritone's enterprise AI software and solutions we are enabling companies to integrate and orchestrate their disparate data sources and workflows to drive operational efficiencies and productivity gains. A consequence of enterprises centralizing vast amounts of structured and unstructured data is the opportunity to infuse existing applications or build new applications with AI-based generative models. Veritone's purpose-built applications powered by aiWARE have been enabling disruptive efficiency and productivity in the market verticals we believe are most attractive. Talent acquisition media and entertainment sports and government…

Thank you, Ryan. I am pleased to report Veritone made great progress in the second quarter headlined by the acquisition of Broadbean, the divestiture of our Energy Group, the closing of a $30 million revolving AR facility to improve our liquidity position and balance sheet and increased annualized cost savings to over $17 million while closing the quarter with solid customer and operating metrics. I would like to highlight a few items before I begin. With the June 2023 acquisition of Broadbean, we have updated our key customer metrics on a pro forma basis which assumes we own Broadbean since the beginning of fiscal year 2022 in addition to ending customers and gross retention, we are introducing ARR or annualized recurring revenue as a new key performance indicator. During my prepared remarks, I will discuss our second quarter financial and operating performance. The acquisition of Broadbean and its financial implications progress on 2023 cost savings initiatives, Q2 cash flow and liquidity sources, including our $30 million credit facility and our Q3 and fiscal 2023 outlook starting with Q2 2023 performance. Revenue was $28.0 million down 18% or $6.3 million year-over-year driven primarily by software products and services and managed services which decreased 23% and 13% respectively. The year-over-year decline in software products and services was attributed to certain onetime software revenue in Q2 2022 of $5.7 million which did not recur in Q2 2023 coupled with the previously announced decision by Amazon to reduce consumption of our HR products and services mid-May the impact of which was between $4 million to $5 million. Offsetting this was government and regulated industries, which collectively grew 84% to $1.6 million in Q2 2023. Included in our Q2 GAAP results was approximately $1.7 million of revenue from the Broadbean acquisition completed in mid-June 2023.…

Thank you. As I look back on my first two quarters as CEO, I'm filled with both excitement and a bright outlook for our future. Artificial intelligence is in a state of rapid advancement and transformation and Veritone stands ready to lead our 3000-plus customers and new customers through this AI transformation to realize material productivity and efficiency gains. By enabling our clients through aiWARE to fully engage with and leverage our array of cognitive and generative AI models, applications and solutions, we not only demystify the future possibilities but also help realize the revolutionary impact of AI today and into the future. With the disciplined financial stewardship and a strategically planned approach, Veritone is well on its way to becoming a long-term dominant player in the enterprise AI field. While there is still more work to do in 2023, my vision as CEO is clear, and I've never been more confident that we're on the right path to achieving profitable growth and long-term shareholder value. Stay tuned for future calls, where we will be thrilled to share our progress with you. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.