PR Newswire
Veritone’s alleged misapplication of ASC 606 revenue recognition standards overstated Q3 2025 revenue by approximately $2.2 million, forcing a restatement that wiped out shareholder value.
NEW YORK, June 3, 2026 /PRNewswire/ — Levi & Korsinsky, LLP notifies investors in Veritone, Inc. (NASDAQ: VERI) that a class action lawsuit has been filed on behalf of shareholders who purchased securities between October 14, 2025 and April 14, 2026. Find out if you qualify to recover losses. You may also contact Joseph E. Levi, Esq. at [email protected] or (212) 363-7500.
The AI computing solutions provider originally reported Q3 2025 revenue of $29.1 million, representing 32.4% year-over-year growth. After corrective disclosures revealed errors in how Veritone recognized revenue under ASC 606, the Company announced its Q3 2025 financial statements “should no longer be relied upon.” Shares declined across three separate corrective events.
The Alleged ASC 606 Revenue Recognition Failures
At the center of this securities action is Veritone’s treatment of non-monetary transactions and on-premise software sales under ASC 606, Revenue from Contracts with Customers. The lawsuit contends that the Company recorded revenue from transactions where it acted as an agent rather than a principal, inflating both top-line revenue and reported assets.
The most significant alleged error involved an on-premise software license exchanged for intangible rights with a negotiated price of $13.0 million. The estimated standalone selling price of the software ranged from just $0.4 million to $11.3 million, a gap the complaint alleges should have raised immediate red flags for any functioning internal control system.
How Misapplied Revenue Standards Allegedly Distorted Reported Financials
- Revenue for Q3 2025 was overstated by approximately $2.2 million, or 8% of reported quarterly revenue, due to an error in valuing consideration received for an on-premise software sale
- Accounts receivable were overstated by approximately $0.9 million, or 3% of previously reported balances
- Accumulated other comprehensive income was overstated by $1.5 million, representing a 246% overstatement of the previously reported figure
- Revenue and costs were misclassified in transactions where the Company acted as an agent under ASC 606, not as a principal
- Additional errors resulted in overstatement of royalties expense and understatement of goodwill and intangible assets
The Known Material Weakness Factor
The complaint highlights that Veritone had previously disclosed a material weakness in internal control over financial reporting. The Company’s Q3 2025 Form 10-Q acknowledged this weakness related to “a lack of an effective information and communication process” but claimed it “did not result in any identified material misstatements to the financial statements.” The lawsuit contends this assurance was misleading given the errors that later forced a restatement.
“This case presents important questions about revenue recognition disclosure obligations in the AI technology sector. When a company applies complex accounting standards like ASC 606 to non-monetary transactions, investors are entitled to accurate reporting of how those standards were applied and what impact they had on financial results.” — Joseph E. Levi, Esq.
Submit your information to join this case or call (212) 363-7500.
ABOUT LEVI & KORSINSKY, LLP — Over the past 20 years, Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders. The firm has extensive expertise in complex securities litigation and a team of over 70 employees. For seven consecutive years, Levi & Korsinsky has ranked in ISS Securities Class Action Services’ Top 50 Report. Applications to serve as lead plaintiff must be filed by July 20, 2026.
Frequently Asked Questions About the VERI Lawsuit
Q: What is the VERI class action lawsuit about? A: A securities class action has been filed against Veritone, Inc. (NASDAQ: VERI) alleging materially false and misleading statements between October 14, 2025 and April 14, 2026. Shares fell approximately 29.5% after the first corrective disclosure, with additional declines following subsequent revelations, causing significant losses for shareholders.
Q: Who is eligible to join the VERI investor lawsuit? A: Investors who purchased VERI stock or securities between October 14, 2025 and April 14, 2026 and suffered financial losses may be eligible. Eligibility is based on purchase date and documented losses, not on whether you still hold the shares.
Q: What specific misstatements does the VERI lawsuit allege? A: The complaint alleges Veritone made materially false or misleading statements regarding its revenue recognition under ASC 606, internal controls over financial reporting, and the accuracy of its reported financial results. When the true state was revealed through a series of corrective disclosures, the stock price declined sharply.
Q: What do VERI investors need to do right now? A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at [email protected] or (212) 363-7500. No immediate action is required to remain eligible as a class member.
Q: What if I already sold my VERI shares — can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold them. Investors who bought during the class period and sold at a loss may still participate.
Q: What does it cost me to participate? A: Nothing. Securities class actions are handled on a pure contingency basis. No upfront fees, no retainer, no out-of-pocket costs.
Q: What if I missed the lead plaintiff deadline? A: The deadline applies only to investors seeking lead plaintiff appointment. Class members who miss it can still participate in any settlement or recovery.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
[email protected]
Tel: (212) 363-7500
Fax: (212) 363-7171
View original content to download multimedia:https://www.prnewswire.com/news-releases/veri-deadline-levi–korsinsky-reminds-veritone-inc-investors-of-upcoming-securities-class-action-deadline-302789450.html
SOURCE Levi & Korsinsky, LLP
