Red Violet 2025 Q2 Earnings Beats Expectations, Net Income Up 1.9%

Red Violet (RDVT) reported its fiscal 2025 Q2 earnings on Aug 06th, 2025. The company exceeded expectations with a 14.3% year-over-year revenue increase and a new nine-year high in net income, while offering confidence about future growth and operational expansion. No official guidance was provided, but management expressed optimism around revenue growth, enterprise expansion, and AI-driven initiatives.

Revenue
Red Violet’s total revenue surged by 14.3% year-over-year to $21.77 million in Q2 2025, up from $19.06 million in the same period last year. The company’s ability to grow revenue despite a challenging comparison, which included $1 million in one-time revenue, highlights the strength of its core operations and customer demand.

Earnings/Net Income
Despite maintaining the same EPS of $0.19 compared to Q2 2024, Red Violet’s net income rose by 1.9% to $2.69 million in Q2 2025 from $2.64 million a year earlier. This marked a nine-year high for fiscal Q2 net income, reflecting the company’s improved profitability and strong cost management. The stable EPS alongside a rising net income signals positive operating leverage and effective strategic execution.

Price Action
The stock price of Red Violet fell 0.32% on the latest trading day and dropped 2.86% for the week, with a more pronounced 13.20% decline month-to-date. This downward momentum reflects short-term investor sentiment and broader market conditions.

Post-Earnings Price Action Review
A strategy of buying Red Violet shares after a quarterly revenue increase and holding for 30 days has historically delivered robust returns. Over the past three years, this approach yielded an overall return of 91.82%, outperforming the benchmark return of 48.58% by a margin of 43.23%. The strategy’s compound annual growth rate (CAGR) was 25.21%, with no maximum drawdown, indicating strong risk-adjusted performance and the effectiveness of the company’s revenue-driven investment strategy.

CEO Commentary
Derek Dubner, CEO and Chairman, highlighted Red Violet’s Q2 2025 performance, noting a 14% year-over-year revenue increase to $21.8 million and an 17% growth in adjusted gross profit to $18.2 million. He credited the team’s efforts in acquiring 308 new IDI customers and 21,335 new FOREWARN users. Dubner emphasized the company’s focus on enterprise expansion, AI investments, and securing a critical data supplier contract through 2031, expressing strong confidence in the growing sales pipeline and long-term value creation.

Guidance
Red Violet did not provide explicit earnings guidance for future periods. However, CEO Derek Dubner and CFO Dan MacLachlan expressed confidence in building on the first half’s performance, driving continued revenue growth, and capitalizing on opportunities in enterprise expansion, AI-driven automation, and data initiatives. The company emphasized its flexibility in capital allocation, including potential share repurchases and investments in AI and data lifecycle enhancements.

Additional News
On Aug 7, 2025, Red Violet announced its Q2 2025 financial results, revealing a 14% year-over-year revenue increase to $21.8 million and an 18% rise in gross profit to $15.7 million. The company also reported a 2% increase in net income to $2.7 million. Key operational achievements included the addition of 308 new IDI customers and 21,335 new FOREWARN users, demonstrating strong customer acquisition. Red Violet also extended a critical data supplier contract through 2031 and recorded a record $7.5 million in operating cash flow. With $38.8 million in cash and equivalents, the company’s balance sheet remains strong, supporting its continued growth initiatives.