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

Did Red Violet beat or miss consensus estimates last quarter?

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- **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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

RDVT

RDVT fundamentals

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