Veritone Inc (VERI) 2018 Q4 法說會逐字稿

Good afternoon. Welcome to Veritone's Fourth Quarter 2018 Earnings Conference Call. After the market close today, Veritone issued a press release announcing its results for the fourth quarter and full year ended December 31, 2018. The press release is available in the Investor Relations section of Veritone's website.

Joining us for today's call are Veritone's Chairman and CEO, Chad Steelberg; and the company's Chief Financial Officer, Pete Collins. Following their remarks, we will open up the call for questions.

Please note that certain information discussed on the call today will include forward-looking statements about future events and Veritone's business strategy and future financial and operating performance, including its expected net revenues for the first quarter of 2019. These forward-looking statements are subject to risks, uncertainties and assumptions that may cause the actual results to differ materially from those stated or implied by those statements. Certain of these risks and assumptions are discussed in Veritone's filings, including its annual report on Form 10-K. These forward-looking statements are based on assumptions as of today, February 21, 2019, and Veritone undertakes no obligation to revise or update them.

In addition to the company's GAAP financial results, during this call management we will be presenting and discussing the company's earnings before interest expense, depreciation, amortization and stock-based compensation, adjusted to exclude certain acquisition-, integration- and financial-related expenses, or adjusted EBITDAS, which is a non-GAAP financial measure. A reconciliation of the company's adjusted EBITDAS to its net loss is included in the company's press release issued today.

Finally, I would like to remind everyone that this call is being recorded and will be made available for replay via a link in the Investor Relations section of the company's website, at www.veritone.com.

I would now like to turn the call over to Veritone's Chairman and CEO, Chad Steelberg. Sir, please proceed.

Thank you, Operator. Welcome, everyone, and thank you for joining us today. I am very pleased with our strong financial and operating performance in the fourth quarter. Our revenue was a record $10.9 million, an increase of more than 200% compared with the fourth quarter of 2017.

We delivered on the forecasted revenues and product synergies linked to the 3 strategic acquisitions that we closed in the prior quarter. We expanded our customer base and revenues by successfully deploying 3 organically developed aiWARE applications: Redact, IDentify and Attribute. And finally, Veritone One closed the year on a high note, continuing to leverage aiWARE to differentiate its advertising services.

As a whole, Veritone enters 2019 in the strongest strategic and operational position since our inception in 2014.

Taking a broader look for a moment, I'd like to reflect on some of the key objectives we outlined during our IPO in May of 2017. The first objective was to reduce the advertising component of our revenue mix, which was 95% in the first quarter of 2017, to 20% or less by growing our aiWARE apps business through organic growth and strategic acquisitions. 7 quarters later, Veritone's revenue mix in the fourth quarter of 2018 was 55% advertising and 45% aiWARE software and services. We expect this trend to continue for the foreseeable future and expect our aiWARE revenue to cross the 50% threshold in the first half of this year.

The second objective was to reduce our adjusted EBITDAS loss as a percentage of our net revenue, from 207% in the first quarter of 2017 to eventually achieving a positive adjusted EBITDAS run rate. Veritone's adjusted EBITDAS loss rate in the fourth quarter of 2018 was 82%, the lowest rate in our history, compared with 292% in the fourth quarter of 2017. We believe that by continuing to reduce our adjusted EBITDAS loss rate, while simultaneously driving significant top line growth, we will maximize our long-term shareholder value. This is a proven strategy that some of the most valuable SaaS companies have successfully executed and one that we are committed to following.

Our M&A strategy has delivered significant results and helped us evolve our business over the past 12 months. Wazee Digital has added key applications and services that allow us to take part in developing, distributing and monetizing entertainment content. Performance Bridge has been combined with our existing advertising team to establish us as a leader in the podcast advertising industry. And Machine Box brought us the capability to create customized cognitive engines in categories including facial detection and recognition, object detection and logo recognition. The integration of these applications, services and algorithms into aiWARE is a key part of our strategy in 2019 and beyond.

Our land-and-expand strategy delivered organic revenue growth in our aiWARE SaaS business exceeding 200% in 2018. iHeartMedia, Entercom Communications and ESPN are a few of the well known companies that we serve today and where we had significant year-over-year net revenue growth. We landed these customers in 2016 and have expanded our business with them over the past 2 years. At first, this expansion was a result of adding more content to be processed by aiWARE, and then had a second wave of expansion as the number of aiWARE users increased proportionally with the value aiWARE was delivering.

We are now starting to see the third wave of expansion, driven by new aiWARE applications. The Attribute application that we introduced in the fourth quarter provides broadcasters with the capability to collaborate with their customers, the advertisers, to measure ad campaign effectiveness and assist in measuring advertising ROI in real time. The combination of enhanced capabilities via Wazee and Attribute gives us the opportunity to land new customers and expand with our existing customers in Media & Entertainment in 2019.

Our strategy in the Legal & Compliance vertical started out very well in 2018, with net revenues in the first quarter exceeding $600,000. But industry misalignments and our dependency on third-party service providers became a material challenge. We have reevaluated our go-to-market strategy for the Legal & Compliance market and will introduce new applications within the next few months that will provide a cost-effective method for the analysis of large quantities of audio, video and structured data. These applications are being built as aiWARE-native applications and will leverage the broad base of cognitive engine and orchestration that are part of our core offering.

We remain committed to this industry vertical because of 2 factors. Many businesses are expected to increase the effective monitoring of all forms of communication, from emails to phone calls. And the tools that are available today are poorly designed and lack the broad AI capabilities that aiWARE delivers.

Our strategy in the Government vertical in 2018 was focused on developing 2 killer applications for the local law enforcement community. Local police agencies have more video and audio data today than ever before, and their continued ability to protect and serve our communities is dependent on them effectively and efficiently analyzing this data in real time at scale.

We launched 2 applications in the fourth quarter, IDentify and Redact, to directly address critical pain points being experienced by law enforcement today. IDentify allows users to upload and maintain booking known-offender databases in aiWARE and use facial recognition technology to automatically compare images of potential suspects with these databases to rapidly identify them for further investigation. This enables agencies to accelerate the identification of suspects and reduces officers' investigation time. In addition to the local police agency we collaborated with to develop IDentify, it is now deployed in paid pilot projects at 2 large international police departments via a global system integrator.

The second application, Redact, reduces the time and human effort required to redact audio and video files. The increasing volume of video being collected, as well as new regulations that require police agencies to publish much more footage, have caused law enforcement agencies to have to use significantly more manpower to blur out a wide range of protected content before that footage is shared with prosecutors or the public. In our initial paid pilot project with large agencies, Redact is improving the efficiency of this process by more than 75%, which reduces the agency's redaction costs and allows officers to spend more time on higher-value activities.

In addition to continuing to focus and execute on the aforementioned strategies, we've identified 2 new strategic initiatives for 2019. First, we are working to reduce the friction in our sales and marketing efforts by deploying a self-service sign-up solution that will allow customers to experience the power of aiWARE's applications, expediting and automating the traditional enterprise marketing, sales and contracting processes. The net objective is to reduce customer acquisition costs and expand market share.

Second, we are working to reduce the complexity of building and customizing aiWARE applications by developing a set of no-code, low-code tools and applications. This will allow a customer's data analyst or business user to leverage aiWARE instead of it requiring scarce and expensive engineering and data science resources. This strategy is being driven by our customers and system integrator partners, and I'm confident that it will both significantly expand the range of use cases aiWARE can address and embed us even deeper into our customers' operations.

Looking to the future, our vision of an enterprise powered by a ubiquitous aiWARE operating system remains as vibrant and clear as ever. As I've said many times before, nobody wants 2 cups of AI; they want the powerful solutions that artificial intelligence can provide. When Veritone first launched, the concept of an AI operating system was foreign and, frankly, poorly understood. The market is still grappling with that concept. But as we roll out more aiWARE-enabled applications, the proverbial light bulbs are starting to shine brightly from every corner of the enterprise we serve.

As 2019 unfolds, we promise to tirelessly execute on these strategies and provide our investors with a recount of our progress and successes.

With that, I'll ask Pete Collins, our CFO, to review our Q4 and full year financial results. Pete?

Thank you, Chad, and good afternoon, everyone. As Chad mentioned, we achieved our fourth quarter 2018 goals and set the stage for a strong 2019. I will first review our fourth quarter 2018 performance compared with the fourth quarter of 2017. Remember that we acquired Wazee Digital and Performance Bridge in August of 2018. So this was the first full quarter reflecting their impact.

Our net revenues increased 213%, from $3.5 million to $10.9 million, thanks to the $4.8 million contribution from our recent acquisitions, the addition of new customers and growth with existing customers.

Our aiWARE SaaS net revenues were $2.4 million, including approximately $900,000 from Wazee Digital's core and Digital Media hub applications. Excluding the acquisitions, our aiWARE SaaS net revenues increased by $1.0 million, or 211%, to $1.5 million, from $477,000 in the fourth quarter of 2017. This increase reflects the growth we saw both in the number of active clients and the spend from those clients, as well as the performance incentive we earned during the quarter.

aiWARE content licensing and media services had net revenue of $2.5 million. The fourth quarter is generally the seasonally slowest quarter in this business, since a good portion of its annual revenues come from sporting events that occur in the first, second and third quarters.

Within our aiWARE SaaS business, our net revenue growth was anchored by our Media & Entertainment vertical market. We continue to execute well on our land-and-expand strategy with customers that Chad discussed earlier.

Excluding the acquisitions, our aiWARE SaaS monthly recurring revenue, or MRR, under agreements in effect at the end of the fourth quarter increased 32%, to $229,000, from $173,000 in the fourth quarter last year. Remember that MRR excludes some agreements we have with Media customers that are variable revenue, as well as the project-based revenues in our Legal vertical. Because of this, our MRR was up 32%, while our total aiWARE SaaS revenue was up 211%. We see this dynamic continuing over time.

Including the Wazee MRR, which was $313,000 at the end of the fourth quarter, our total aiWARE SaaS MRR at the end of the fourth quarter was $542,000.

Our aiWARE SaaS bookings in the fourth quarter were $1.2 million, including approximately $300,000 for the core and DMH applications that we added when we acquired Wazee. When I exclude the core and DMH bookings so the trend is comparable, our fourth quarter bookings increased approximately 150% over the fourth quarter of 2017 and approximately 300% over the third quarter of 2018. The fourth quarter bookings were in Media & Entertainment and Government verticals.

Our advertising net revenues increased to $6.0 million, including a $1.3 million contribution from Performance Bridge, from $3.0 million in the fourth quarter of last year. While we had an increase in the number of active clients, the majority of the growth is attributable to a significant campaign run by 1 of our customers in the fourth quarter, which we do not expect to recur at the same level in the first quarter of 2019. We had 76 active advertising clients in the fourth quarter of 2018, compared with 57 in the fourth quarter of 2017, an increase of 33%.

Our gross profit increased 128%, to $7.4 million, from $3.3 million in the same period of 2017. This increase in gross profit in the fourth quarter of 2018 compared with the prior year period was due primarily to the higher revenue level from our aiWARE SaaS business and the contribution of our recent acquisitions.

Our gross margin was 68%, versus 93% in the fourth quarter of 2017. The decrease in gross margin reflects the higher proportion of net revenues from our aiWARE SaaS and aiWARE content licensing and media services businesses, which generally carry lower gross margins than our advertising business, and higher amortization expense related to technology acquired in our recent acquisitions.

Our total operating expenses increased to $25.5 million, from $16.0 million in the same period of 2017, driven by the addition of $3.7 million of expenses associated with our acquired companies, as well as to higher stock-based compensation and earn-out incentives associated with 1 of the acquisitions. Depreciation and amortization also increased year-over-year, due to the amortization of intangibles related to the businesses we acquired in the third quarter of 2018.

Our loss from operations was $18.0 million, compared with a loss of $12.8 million in the fourth quarter of 2017.

Our net loss attributable to common stockholders totaled $17.8 million, or $0.92 per share, compared with a net loss of $12.8 million, or $0.83 per share, in the fourth quarter of 2017.

Now turning to our non-GAAP results. Our fourth quarter adjusted EBITDAS loss was $8.9 million, down from a $10.2 million loss in the fourth quarter of 2017. Our adjusted EBITDAS loss in the fourth quarter was 82% of net revenue, compared with 114% in the third quarter of 2018 and 292% in the fourth quarter of 2017. This is the first time that ratio has been better than 100%. We plan to leverage our expected revenue growth and prudent expense management to continue to reduce our adjusted EBITDAS loss as a percentage of net revenues in 2019.

This quarter, we exceeded the forecasted increase of all 4 of the KPIs for our aiWARE operating system. Please note that these KPIs do not include any contributions from our recent acquisitions. We are currently in the process of reviewing all of our current KPIs as we integrate our recent acquisitions to ensure that they are the best metrics with which to assess our operating performance.

The number of cognitive engines on the platform increased to 287, versus our forecast of 275. The amount of media ingested and processed in the quarter exceeded 3.5 million hours, compared with our forecast of 2.9 million hours. The number of customers increased to 97, compared with our forecast of 89. During the quarter we added 180 accounts, growing the total to 814, compared with our forecast of 728.

For our advertising business, we evaluate 3 KPIs. During the fourth quarter this year, we added 14 new clients, the same as in the fourth quarter of 2017. In terms of active clients for the quarter, we had a total of 76, increasing 33%, compared with 57 in the fourth quarter of 2017. Our average media spend per client during the fourth quarter was $616,000, a 33% increase compared with $464,000 in the fourth quarter last year. This increase in spend per client benefited from the significant ad campaign by 1 client in the fourth quarter of 2018 that I mentioned earlier.

Now I will discuss results for the full year ended December 31, 2018. Net revenues increased to $27.0 million, including $7.0 million from our recent acquisitions, up from $14.4 million in 2017.

Advertising revenues for 2018 totaled $17.1 million, including $1.7 million from our recent acquisitions, compared with $12.9 million in the prior year. Excluding the impact of the recent acquisitions, our advertising net revenues increased by 19% year-over-year.

aiWARE SaaS revenues increased to $6.0 million, including $1.3 million from the third quarter acquisitions, compared with $1.5 million in 2017. Excluding the impact of the recent acquisitions, our aiWARE SaaS net revenues increased by 220% year-over-year.

aiWARE content licensing and media services revenues were $3.9 million and are all associated with the Wazee Digital business that we acquired in the third quarter of 2018.

Net loss attributable to common stockholders totaled $61.1 million, or $3.48 per share, compared with a net loss of $64.1 million, or $6.20 per share, in 2017.

Adjusted EBITDAS totaled a loss of $39.0 million, compared with a loss of $30.2 million in 2017.

Our balance sheet remains strong. As of December 31, 2018, we had cash and cash equivalents and marketable securities totaling $50.9 million and no long-term debt. The cash and marketable securities balance includes cash received from clients for future payments of $7.5 million.

Looking to the first quarter of 2019, for the quarter we expect that our net revenues will be between $11.5 million and $11.9 million. The net revenue range is based upon the signed agreements in place today, the expected net revenues from our aiWARE content licensing and media services based on recent and historical trends and the planned spending by our advertising clients. This range of net revenues does not include potential projects, including e-discovery or Media & Entertainment archive processing that have not yet started, as those are difficult to forecast accurately.

And with that, I will turn the call back over to Chad for his additional remarks. Chad?

Thanks, Pete. We were very pleased that our annual revenue increased by 88% in 2018 and that our adjusted EBITDAS loss margin in the fourth quarter was the lowest level in our history. We are excited about furthering these trends in 2019. We are on track to drive scale, revenue growth and bottom line improvements with our land-and-expand, self-service sign-up and app development strategies.

We also look forward to connecting with our investors and analysts. Next week we will be at the JMP Securities Technology Conference in San Francisco. Then in the week of March 18, we will be at the annual Roth conference in Dana Point. As this event is a short distance from our offices, we will be holding our first Investor Day at our headquarters in Costa Mesa, on March 20. Our team will be in touch with more details, or please contact LHA Investor Relations with questions about these events.

Operator, I would like to begin the Q&A session.

(Operator Instructions) Your first question comes from the line of Mike Latimore, from Northland Capital.

Your first quarter guidance, your revenue guidance, is sort of well above what I was looking for. I guess, can you talk a little bit about what you're seeing in the business, what's driving that sequential growth in the first quarter?

This is Chad. Pete, why don't you take that?

So Mike, the business with the bookings that we had, especially in the fourth quarter, as nearly $900,000 on the SaaS aiWARE side, plus the bookings for Wazee Digital at about $300,000 helps us to be at a place now where we're confident with that range of $11.5 million to $11.9 million from a net revenue perspective. So it's the sequential growth that we've seen and kind of building on the success we've had, especially from kind of a land-and-expand perspective, that gives us confidence that we'll land net revenues in Q1 in that range.

So most of the sequential growth probably in the AI and below content revenue line there?

Yes. Well, also the aiWARE content licensing and media services business will have a better quarter in Q1. As we talked about in the prepared remarks, fourth quarter is a seasonally slow quarter for that part of our business. The other thing is that the advertising business, we talked about the strength in the fourth quarter, especially with 1 customer's campaign, and we're not expecting that to recur in the first quarter. So there's a little bit of puts and takes that I would kind of put into the seasonal category, but the thing that's more consistent quarter-to-quarter is that aiWARE SaaS side of the business.

Right. Right. I think you announced at least 1 deal with Digital Media hub and aiWARE combined. I guess, can you talk a little bit about just the pipeline you're seeing on that combined platform?

Well our integrations with both companies have gone very, very well. The aiWARE-enabled Wazee applications are proving to be extremely powerful solutions in the M&E space. We have sold several integrated solutions to date, and we have a pipeline that continues to expand. Nothing but green lights from my perspective as we enter 2019 on the integration of those products into aiWARE.

Great. And just last question, your -- historically you've had some large deals in the pipeline. I think particularly on the Government side. I guess, any visibility into that? And then how would -– if you do have them in the pipeline, how do you think about that relative to maybe guidance? Do you include or exclude them?

What we exclude from the guidance is really those project-based work. Any time we're signing customers that are kind of just pure SaaS application clients, that's really where we're focused on guiding. And many of our VAR relationships are in the Government vertical, and our partners are primarily global system integrators. We've had modest revenues from these relationships so far, but we now have 3 active paid pilot projects in the Government verticals with 1 of these partners, and the pipeline continues to expand.

We believe that these VARs can help us scale and penetrate certain verticals such as Government more quickly, and we're continuing to evaluate how we can structure these relationships to maximize sales as they leverage the business and products that we've delivered.

Your next question comes from the line of Chad Bennett, from Craig-Hallum.

Maybe real -- a couple of quick ones for Pete, I think. So Pete, in light of the revenue shift which has been well advertised to your aiWARE SaaS and content licensing business, which is a good thing longer term, how should we think about gross margins kind of into 2019 or blended for the year? And then from an OpEx standpoint, considering where you were in the December quarter, on a dollar basis is that kind of constant throughout next year? Or any fluctuations there?

Why don't you take that?

So Chad, let me start with the gross margin. So we've said in the past that our advertising business has a very healthy gross margin just by the nature of it. So north of 90%. And then our aiWARE, both on the SaaS and the content licensing, has margins that are in the range of 45% to 65%, depending upon the specific type. So as the revenue mix shifts more to that aiWARE side of the business, it will naturally bring our blended margin to levels that are lower than what we've had in the past.

The other thing that I want to point out for this quarter is that we had a bit of a step-function increase in the cost of revenues and a reduction in our gross margin associated with the amortization of technologies that we acquired as part of the 3 acquisitions we did back in the third quarter. So that amortization charge in the fourth quarter was about 720 basis points of gross margin. So if you do the math, we would have been closer to a 75% margin rate without that amortization from the acquired technology.

So I think to answer your question, though, as our revenues increase more on the aiWARE side, we do expect to see the margins come down just because of the mix shift.

Pete, does that amortization charge at 720, is that a one-time issue? Or is that consistent, going forward, at least for on a straight-line basis over a number of years?

It's the latter. It will be there for a while now.

Okay. Got it. Okay. And then maybe a follow-up for Chad. Chad, the apps that you guys have released in the fourth quarter look really interesting. And I'm just curious as we look into '19, not that you want to kind of let everything out ahead of time, but how should we think about app development and app releases in 2019 and maybe potential areas or use cases? And then also I'd love to get your kind of thought process on what we should expect out of Machine Box in '19 and potential opportunities there.

So to answer, yes, we will continue with our application development in 2019. This will include new applications that further -- and further enhancements in our existing applications. Some of the new applications that we'll be rolling out will be addressing specific issues in specific verticals, such as Legal & Compliance, as we mentioned in the prepared remarks. And others will enhance the ability of our customers to leverage aiWARE for additional use cases across all markets.

I alluded to some of that in terms of our no-code, low-code new sets of applications that we expect to roll out in the first half of this year. And we believe that will dramatically improve the adoption of aiWARE and some of the custom applications that we expect our partners to be building.

Okay. And then on the Machine Box side?

The Machine Box piece, really the strategic nature of that was the fact that it gave us the in-house capabilities to build bespoke and custom models for our industries and our partners. With Conductor, it really requires a set of engines and models to be arbitrated between. And the marketplace really wasn't producing these at scale that could be customized in real time. So we've been very pleased with the Machine Box technology to date. We've seen some additional models that have rolled out, such as Object Box as well as Logo. And we continue to expect great things from them in 2019.

Your next question comes from the line of Dillon Heslin, from Roth Capital Partners.

First one, could you talk a little bit about the progress that you saw in public and safety and sort of how the pipeline started to develop there and what sort of time frame there is for a little bit more revenue contribution? And then on that, how much of that is inbound or outbound versus some of the products that you might be planning to build.

Pete, why don't I take the first one? You can take the second part of that question. So in the Government vertical, specifically, we believe that industry is extremely scalable for us and the opportunity is large. Based on conversations that we have with customers in these verticals, we have developed and are continuing to develop new applications. The pipeline and the tools that we're rolling out really are starting to allow aiWARE to flex its muscle in terms of lowering the cost of application development, targeting the needs for our customers.

I expect that the combination of these specialized applications that utilize the aiWARE stack, as well as the self-service sign-up aspects of our 2019 initiative, is truly going to drive unprecedented scale in the business in 2019.

Pete?

Dillon, you asked -- I think the follow-on question was about, what, the pipeline for Government. Is that what you were looking for?

Yes. Sort of the pipeline and when to expect some revenue contribution or what's sort of the outlook for what could be a realistic revenue contribution from the vertical?

Yes. So Chad talked in his prepared remarks about the 3 paid pilots we've got going on in the first quarter in the Government sector. 2 of them -- well, they're both across the IDentify and the Redact applications. So as far as what we're seeing, at least in the first quarter, is six-figure type revenues coming in for those paid pilot projects. And I think that then beyond that as we progress and deliver those and then move into the next phase, hopefully, for those projects, as well as working with global system integrators to then move on to other opportunities, we'll be able to update you as we progress.

Got it. Thank you. And then just as a follow-up, you mentioned the performance incentives you received. What was that related to? And are you able to quantify what it was?

We've said before that we've got some of our SaaS revenue on the Media & Entertainment space has a variable component to it. And 1 of our customers, we do a year-long kind of arrangement with them. And because we didn't achieve the goal until the fourth quarter we recognized that full amount in the fourth quarter. And that worked out to be right around $400,000 that was recorded in the fourth quarter. So it recognizes the work we've done throughout the year, but from just a pure revenue recognition perspective it gets booked in the fourth quarter.

Your next question comes from the line of Tom Diffely, from D.A. Davidson.

First, a question on some of the programs you're working on. Would you set out kind of a long-term view of IDentify and Redact? I know right now they're project-based. But long term, is that going to be more of a subscription model or a standardized software sale? Or is it going to be project-based, going forward?

Actually, the revenue that we're receiving in the fourth quarter with these paid pilots is not project-based revenue. They are all be subscription-based, classic SaaS-based models. The exciting news with that is really we're moving that product because it's not isolated and restricted to just the Government sector, there are many industries that require an expedited redaction process. And so that's one of the reasons why we're focused on rolling out our first self-service sign-up process, and that initial application that will benefit from that is the redaction app.

Okay. Great. And Pete, now that we've had the acquisitions for a quarter now, what's your view on OpEx over the -- on a go-forward basis from here?

So we had them, the acquisitions, included in the business for the whole fourth quarter, as you said. Our headcount, which makes up a big portion of our operating expenses, finished the year at 316. We're looking to increase that by less than 10% over the course of 2019. So I think, Tom, as far as kind of overhead goes, the run rate we were on in the fourth quarter with a relatively modest increase in headcount anticipated over the course of the year is kind of what we're thinking of.

But we're always balancing revenues with the bottom line, and a big variable in there is those operating expenses in order -- depending upon how the revenue is doing, with the goal on achieving our adjusted EBITDAS amount. If we're fortunate and are able to generate incremental revenues above our plan, then we would be in a position potentially to invest more in building the business for the long term with operating expenses. But it's that balance that we're looking to achieve between revenues and adjusted EBITDAS loss.

Okay. That makes a lot of sense. And then when you look at, I guess, the other side, the cash burn side, is it kind of the steady state again? Or are there still some one-time integration lumps that have to go through?

No, I'd say -- the remarks that we made were that we're going to be looking to reduce the adjusted EBITDAS loss in 2019 in comparison to 2018. So that would not be steady state. And then also the ratio of the EBITDAS loss to the revenues also will be coming down, as well. So I think those are the -- that's kind of the way we're thinking about that metric as we look out into '19.

There are no further questions at this time. I turn the call back over to the presenters.

So let me take (inaudible).

Thank you for joining us on today's call. We want to thank our employees, partners and investors for supporting us as we pursue our mission of building an AI operating system of the future. We look forward to updating you on our progress on our next call. I'll turn the call back over to the operator. Operator?

This concludes today's conference call. You may now disconnect.