What guidance did Red Violet's management provide for the next earnings period?

What is Red Violet's gross profit margin?

Did Red Violet beat or miss consensus estimates last quarter?

What factors drove the changes in Red Violet's revenue and profit?

What does Red Violet do and what are its main business segments?

What is the market's earnings forecast for Red Violet next quarter?

What is the revenue and EPS growth rate for Red Violet year over year?

What were the key takeaways from Red Violet's earnings call?

- **Record Growth**: Q3 2025 revenue ($23.1M, +21% YoY), EBITDA ($9M, 39% margin), and free cash flow ($7.3M, +51% YoY) set new highs.
- **Customer Expansion**: 304 IDI customers added (total 9,853), 25,000 FOREWARN users (590 associations). Collections and public sector wins drove 75% contractual revenue.
- **Strategic Investments**: $15M share buyback expansion reflects confidence; AI initiatives target 60% Rule of 40. 2026 pipeline highlights public sector and payroll processor opportunities.
- **Margin Strength**: Gross margin 84%, retention 96%, with pricing power in FOREWARN renewals and new features.

**【CEO Summary Section】**
- **Record Financial Performance**: Q3 2025 revenue reached $23.1 million (+21% YoY), with adjusted gross margin of 84% and adjusted EBITDA of $9 million (39% margin). Free cash flow hit $7.3 million, up 51% YoY.
- **Customer Growth**: Added 304 IDI customers (total 9,853) and 25,000 FOREWARN users (590 realtor associations). Collections and public sector wins drove momentum.
- **AI and Innovation**: Invested in AI-driven workflows, data enrichment, and risk detection, targeting a Rule of 40 score of 60%.
- **Share Buyback**: Expanded repurchase program by $15 million, with $18.9 million remaining. Q3 purchases: 15,437 shares at $42.26 avg price.

**【CFO Financial Commentary】**
- **Revenue Breakdown**: 75% contractual revenue (vs. 77% YoY), 96% gross retention. IDI growth balanced across verticals; FOREWARN up double digits.
- **Cost Efficiency**: COGS rose 9% to $3.6 million, S&M +12% to $5.4 million, G&A +13% to $6.8 million. Operating cash flow $10.2 million (+42% YoY).
- **Balance Sheet**: Cash $45.4 million (vs. $36.5M at year-end). 2026 outlook: Strong pipeline in public sector, payroll processing, and background screening.

**【Q&A Key Highlights】**
- **Public Sector Wins**: Secured large state toll authority and multiyear payroll processor contract. 49+ states and major payroll processors remain addressable.
- **FOREWARN Pricing**: Renewals show ARPU potential; new features under development for 2026. 400,000+ users interact frequently.
- **Seasonality**: Q4 expects 20% transactional revenue decline due to holidays, but 2026 pipeline is "extremely strong."
- **Buyback Sentiment**: Management views current $54.53 price as attractive, prioritizing business investment alongside buybacks.

Red Violet, Inc. (RDVT) Q3 2025 Earnings Call Transcript

- **Record Growth**: 21% adjusted revenue growth (excl. one-time) and 84% gross margin highlight strong execution.
- **Customer Expansion**: 9,500 IDI customers and 575 REALTOR Associations reflect platform adoption.
- **AI & Data Leadership**: Extended data partnerships and AI investments drive differentiation.
- **Enterprise Momentum**: Large account pipeline progressing, with 7-figure opportunities in testing.
- **Cash Flexibility**: $38.8M cash and 47% YoY free cash flow growth enable strategic investments.

**【CEO Summary Section】**
- **Revenue Growth**: Q2 revenue of $21.8 million (+14% YoY), excluding $1 million one-time transactional revenue, growth would have been 21%. Adjusted gross margin hit a record 84%.
- **Customer Expansion**: Added 300+ IDI customers (total 9,500) and 21,000+ FOREWARN users, with 575 REALTOR Associations contracted.
- **AI Investment**: Continued focus on AI-driven data ingestion, fraud detection, and operational efficiency, with capital allocated for long-term growth.
- **Pipeline Momentum**: Enterprise sales pipeline progressing, with large accounts testing solutions and expanding usage over time.

**【CFO Financial Commentary】**
- **Profitability**: Adjusted EBITDA of $7.6 million (35% margin), up 12% YoY. Adjusted net income $4.1 million ($0.28 EPS), +6% YoY.
- **Cash Flow**: Generated $4.8 million free cash flow (+47% YoY) and ended Q2 with $38.8 million cash.
- **Cost Management**: Sales & marketing (+28%) and G&A (+26%) driven by personnel costs, offset by operational efficiency gains.
- **Data Strategy**: Extended key data supplier agreement to 2031 with minimal cost escalation, securing long-term data access.

**【Q&A Key Highlights】**
- **Large Enterprise Progress**: Pipeline growth in public sector and private enterprises, with 7-figure opportunities in testing phases. Collections vertical recovery driving growth.
- **Government Opportunities**: Passage of 'big beautiful bill' creating openings in federal contracts, aligning with company's public sector go-to-market strategy.
- **FOREWARN Expansion**: Testing beta in non-real estate verticals, targeting 2026 for meaningful revenue contributions.
- **Retention Strength**: Gross retention at 97% (vs. 94% prior), driven by collections vertical recovery and product stickiness.
- **Capital Allocation**: Focus on AI, M&A (small bolt-ons), and disciplined share buybacks, with $11M repurchased at $19-20 price range.


Red Violet, Inc. (RDVT) Q2 2025 Earnings Call Transcript

- **Record Growth**: Q1 2025 revenue surged 26% YoY to $22 million, with adjusted EBITDA margin hitting 38%.
- **Customer Expansion**: IDI customers +315 QoQ to 9,241 and FOREWARN users +21,918 QoQ, reflecting broad market adoption.
- **Resilient Model**: Countercyclical demand from both growth (financial services) and stress (collections, legal) segments drove stability.
- **Cash Strength**: $34.6 million in cash, with $2.5 million free cash flow, supporting long-term investments in AI and automation.

**【CEO Summary Section】**
- **Revenue Growth**: Q1 2025 revenue reached $22 million, up 26% YoY, driven by strong demand across all verticals.
- **Profitability Metrics**: Adjusted gross margin hit 83% (up 4ppt YoY), adjusted EBITDA margin rose to 38% (up 6ppt YoY), and adjusted EPS increased 53% to $0.33.
- **Customer Expansion**: IDI billable customers grew by 315 to 9,241, while FOREWARN added 21,918 users, totaling 325,336.
- **Resilience Highlight**: Business model proved countercyclical, with demand from both growth-focused (e.g., financial services) and stress-focused (e.g., legal, collections) segments.

**【CFO Financial Commentary】**
- **Revenue Breakdown**: $1.2 million in one-time transactional revenue boosted growth; core growth (excluding one-time) was 19% YoY.
- **Vertical Performance**: Emerging markets (+double-digit), financial/corporate risk (+double-digit), and collections (mid-single digit) all contributed to growth.
- **Cost Efficiency**: Gross revenue retention improved to 96%, and operating expenses grew 19% YoY, outpaced by revenue growth.
- **Cash Flow**: Generated $5 million in operating cash flow and $2.5 million in free cash flow, with $34.6 million in cash reserves.

**【Q&A Key Takeaways】**
- **Customer Growth Drivers**: Consistent onboarding across all verticals, with no macroeconomic impact observed.
- **Large Customer Momentum**: Number of customers spending >$100k/yr increased to ~110 (from ~96 in Q4 2024).
- **Long-Term Investments**: Focus on AI-driven identity graph enhancements, KYB account monitoring, and automation to scale operations efficiently.

Red Violet, Inc. (RDVT) Q1 2025 Earnings Call Transcript

- **Record Q4 Growth**: 30% YoY revenue to $19.6M, defying seasonal decline, with 25% annual growth.
- **Profitability Surge**: 82% gross margin, 23% EBITDA margin, and $14.4M free cash flow (143% YoY).
- **Strategic Momentum**: AI, cloud expansion, and 96 high-tier customers fuel 2025+ growth.
- **Cash Return**: $4.2M special dividend and $4.6M remaining under buyback program.

**【CEO Summary Section】**
- Q4 2024 revenue grew 30% YoY to $19.6 million, with 25% annual growth to $75.2 million, defying seasonal trends.
- Adjusted gross margin reached 82%, up 4 percentage points YoY, driven by higher-tier customer onboarding (96 customers >$100k in 2024 vs 72 in 2023).
- 2024 free cash flow surged 143% to $14.4 million, with $36.5 million cash on hand.
- Strategic focus on AI, cloud-native platform expansion, and data asset monetization to sustain growth.

**【CFO Financial Commentary】**
- Q4 2024 adjusted EBITDA rose 68% YoY to $4.5 million (23% margin), vs $2.3 million (12% margin) in 2023.
- Annual adjusted EBITDA margin expanded to 31% (2023: 27%), with 81% gross margin.
- Generated $6.7 million in Q4 operating cash flow, up 59% YoY, and $14.4 million annual free cash flow.
- 77% contractual revenue retention, up 4 percentage points YoY, reflecting sticky customer base.

**【Q&A Key Takeaways】**
- 2025 growth will balance new customer acquisition with existing base expansion, targeting 20%+ revenue growth.
- AI-driven solutions (e.g., NLP for data analysis) and cloud scalability will drive 40% EBITDA margin at $100 million revenue.
- Collections vertical recovery and government market expansion are key 2025 opportunities.
- Sales & marketing investments (40% YoY growth) are yielding ROI, with pipeline strength for 2025.

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