[Executive Summary](index=1&type=section&id=Executive%20Summary) Red Violet achieved strong Q2 2025 financial results, marked by significant revenue growth, improved profitability, and robust customer acquisition across its key platforms [Q2 2025 Financial and Operational Highlights](index=1&type=section&id=Q2%202025%20Financial%20and%20Operational%20Highlights) Red Violet achieved strong Q2 2025 financial results, marked by significant revenue growth, improved profitability, and robust customer acquisition across its key platforms Financial Highlights (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :--------- | | Total Revenue | $21,774 | $19,056 | +14% | | Gross Profit | $15,678 | $13,279 | +18% | | Gross Margin | 72% | 70% | +2 pp | | Adjusted Gross Profit | $18,238 | $15,601 | +17% | | Adjusted Gross Margin | 84% | 82% | +2 pp | | Net Income | $2,686 | $2,637 | +2% | | Net Income Margin | 12% | 14% | -2 pp | | Basic EPS | $0.19 | $0.19 | 0% | | Diluted EPS | $0.18 | $0.19 | -5% | | Adjusted EBITDA | $7,600 | $6,811 | +12% | | Adjusted EBITDA Margin | 35% | 36% | -1 pp | | Adjusted Net Income | $4,117 | $3,891 | +6% | | Adjusted Basic EPS | $0.29 | $0.28 | +4% | | Adjusted Diluted EPS | $0.28 | $0.28 | 0% | | Net Cash from Operations | $7,487 | $5,717 | +31% | | Cash & Cash Equivalents (as of June 30) | $38,848 | $30,943 | +25.5% | - Added **308 customers** to IDI™ during Q2 2025, ending the quarter with **9,549 customers**[5](index=5&type=chunk) - Added **21,335 users** to FOREWARN® during Q2 2025, ending the quarter with **346,671 users**[5](index=5&type=chunk) - Continued to win higher-tier customers at an accelerated pace, with total customer spend outpacing prior-year levels across key revenue cohorts ($10,000 to $25,000, $25,000 to $100,000, and over $100,000 in trailing twelve-month revenue)[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Derek Dubner highlighted solid revenue growth and profitability, noting strong customer onboarding and broad-based demand despite a challenging prior-year comparison - Reported another strong quarter, delivering solid revenue growth and profitability[2](index=2&type=chunk) - Achieved strong customer onboarding and broad-based demand, evidenced by volume expansion across the existing customer base[2](index=2&type=chunk) - Confident in the ability to build on this performance, drive continued revenue growth, and capitalize on significant opportunities ahead, despite a challenging comparison to last year which included **$1.0 million** in one-time transactional revenue[2](index=2&type=chunk) [About Red Violet](index=1&type=section&id=About%20red%20violet) Red Violet is a leading analytics and information solutions provider, leveraging proprietary technologies to deliver identity intelligence for verification, risk mitigation, and fraud detection [Company Overview](index=1&type=section&id=Company%20Overview) Red Violet provides identity intelligence through proprietary technologies, enabling real-time identification and location for verification, risk mitigation, and compliance - Red Violet is a leading analytics and information solutions provider[4](index=4&type=chunk) - Builds proprietary technologies and applies analytical capabilities to deliver identity intelligence[4](index=4&type=chunk) - Solutions enable real-time identification and location of people, businesses, assets, and their interrelationships for purposes including identity verification, risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition[4](index=4&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section provides Red Violet's condensed consolidated financial statements, detailing the company's balance sheet, income statement, and cash flow performance [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, Red Violet's total assets increased to **$104,834 thousand**, driven by cash, receivables, and intangibles, while liabilities decreased, boosting shareholders' equity Balance Sheet (in thousands) | Balance Sheet Item | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Change | | :-------------------------------- | :--------------------------- | :-------------------------- | :----- | | Cash and cash equivalents | $38,848 | $36,504 | +$2,344 | | Accounts receivable, net | $9,811 | $8,061 | +$1,750 | | Total current assets | $50,796 | $46,192 | +$4,604 | | Intangible assets, net | $37,677 | $35,997 | +$1,680 | | Total assets | $104,834 | $98,531 | +$6,303 | | Total current liabilities | $5,569 | $10,307 | -$4,738 | | Total liabilities | $8,628 | $11,899 | -$3,271 | | Total shareholders' equity | $96,206 | $86,632 | +$9,574 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q2 2025 revenue increased 14% to **$21,774 thousand**, with net income up 2% to **$2,686 thousand**, though operating income declined due to higher expenses Income Statement (in thousands) | Income Statement Item | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :--------- | | Revenue | $21,774 | $19,056 | +14% | | Cost of revenue | $3,501 | $3,455 | +1% | | Sales and marketing expenses | $5,622 | $4,406 | +28% | | General and administrative expenses | $7,253 | $5,750 | +26% | | Income from operations | $2,751 | $3,068 | -10% | | Net income | $2,686 | $2,637 | +2% | | Basic EPS | $0.19 | $0.19 | 0% | | Diluted EPS | $0.18 | $0.19 | -5% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, operating cash flow rose 24.6% to **$12,488 thousand**, with investing and financing activities using cash, resulting in an overall increase in cash and cash equivalents Cash Flow Statement (in thousands) | Cash Flow Item | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :----- | | Net cash provided by operating activities | $12,488 | $10,022 | +$2,466 | | Net cash used in investing activities | $(5,236) | $(4,855) | -$381 | | Net cash used in financing activities | $(4,908) | $(6,256) | +$1,348 | | Net increase (decrease) in cash and cash equivalents | $2,344 | $(1,089) | +$3,433 | | Cash and cash equivalents at end of period | $38,848 | $30,943 | +$7,905 | [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section defines Red Violet's non-GAAP financial measures, including Adjusted EBITDA and Free Cash Flow, and provides their reconciliations to GAAP metrics [Definitions of Non-GAAP Measures](index=3&type=section&id=Definitions%20of%20Non-GAAP%20Measures) Red Violet uses non-GAAP measures like Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow to offer additional insights into operating performance by excluding non-cash or non-recurring items - **Adjusted EBITDA:** Net income excluding interest income, income tax expense, depreciation and amortization, share-based compensation expense, litigation costs, acquisition-related costs, and write-off of long-lived assets[6](index=6&type=chunk) - **Adjusted Net Income:** Net income adjusted to exclude share-based compensation expense and amortization of share-based compensation capitalized in intangible assets, and to include the tax effect of adjustments[6](index=6&type=chunk) - **Free Cash Flow (FCF):** Net cash provided by operating activities reduced by purchase of property and equipment, and capitalized costs included in intangible assets[17](index=17&type=chunk) [Reconciliation of Adjusted EBITDA](index=7&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Q2 2025 Adjusted EBITDA increased 12% to **$7,600 thousand**, reflecting improved operational performance, though the margin slightly decreased to **35%** Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :---------------- | :--------------------- | :--------------------- | :--------- | | Net income | $2,686 | $2,637 | +2% | | Adjusted EBITDA | $7,600 | $6,811 | +12% | | Revenue | $21,774 | $19,056 | +14% | | Net income margin | 12% | 14% | -2 pp | | Adjusted EBITDA margin | 35% | 36% | -1 pp | [Reconciliation of Adjusted Net Income](index=7&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Income) Q2 2025 Adjusted Net Income increased 6% to **$4,117 thousand**, indicating stronger underlying profitability, with Adjusted diluted EPS stable at **$0.28** Adjusted Net Income Reconciliation (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :--------------------- | :--------------------- | :--------------------- | :--------- | | Net income | $2,686 | $2,637 | +2% | | Adjusted net income | $4,117 | $3,891 | +6% | | Basic EPS | $0.19 | $0.19 | 0% | | Diluted EPS | $0.18 | $0.19 | -5% | | Adjusted Basic EPS | $0.29 | $0.28 | +4% | | Adjusted Diluted EPS | $0.28 | $0.28 | 0% | [Reconciliation of Adjusted Gross Profit](index=8&type=section&id=Reconciliation%20of%20Adjusted%20Gross%20Profit) Q2 2025 Adjusted Gross Profit rose 17% to **$18,238 thousand**, with Adjusted Gross Margin improving to **84%**, reflecting enhanced revenue generation efficiency Adjusted Gross Profit Reconciliation (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :--------------------- | :--------------------- | :--------------------- | :--------- | | Gross profit | $15,678 | $13,279 | +18% | | Adjusted gross profit | $18,238 | $15,601 | +17% | | Gross margin | 72% | 70% | +2 pp | | Adjusted gross margin | 84% | 82% | +2 pp | [Reconciliation of Free Cash Flow (FCF)](index=8&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow%20%28FCF%29) Q2 2025 Free Cash Flow (FCF) significantly increased by 46.6% to **$4,770 thousand**, demonstrating strong cash generation after capital expenditures Free Cash Flow Reconciliation (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :--------- | | Net cash provided by operating activities | $7,487 | $5,717 | +31% | | Free cash flow | $4,770 | $3,254 | +46.6% | [Purpose and Limitations of Non-GAAP Measures](index=8&type=section&id=Purpose%20and%20Limitations%20of%20Non-GAAP%20Financial%20Measures) Non-GAAP measures are used by management for performance evaluation and investor information, excluding non-cash or non-recurring items, but are not GAAP alternatives and may not be comparable - Non-GAAP measures provide useful information by eliminating the impact of certain items not indicative of cash operations and ongoing operating performance[20](index=20&type=chunk) - Used by management as an integral part of internal reporting to measure business performance and operating strength[21](index=21&type=chunk) - Not intended to be performance measures that should be regarded as an alternative to, or more meaningful than, financial measures presented in accordance with US GAAP, and may not be comparable to similarly titled measures presented by other companies[22](index=22&type=chunk) [Supplemental Metrics](index=10&type=section&id=SUPPLEMENTAL%20METRICS) This section presents Red Violet's key supplemental metrics, including customer growth, revenue retention, and employee headcount, reflecting operational performance and strategic investments [Customer Metrics](index=10&type=section&id=Customer%20metrics) Red Violet expanded its customer base in Q2 2025, showing significant growth in both IDI™ billable customers and FOREWARN® users Customer Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | IDI - billable customers | 9,549 | 9,241 | 8,477 | | FOREWARN - users | 346,671 | 325,336 | 263,876 | [Revenue Metrics](index=10&type=section&id=Revenue%20metrics) Q2 2025 contractual revenue remained strong at **77%**, with gross revenue retention improving to **97%**, indicating high customer loyalty and recurring revenue Revenue Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------- | :------ | :------ | :------ | | Contractual revenue % | 77% | 74% | 74% | | Gross revenue retention % | 97% | 96% | 94% | [Employee Metrics](index=10&type=section&id=Other%20metrics) As of Q2 2025, Red Violet's employee count increased across most departments, particularly in sales, marketing, and engineering, reflecting growth investments Employee Headcount | Department | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | Sales and marketing | 92 | 90 | 86 | | Support | 11 | 11 | 10 | | Infrastructure | 29 | 29 | 27 | | Engineering | 63 | 62 | 56 | | Administration | 28 | 24 | 25 | [Forward-Looking Statements](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section contains forward-looking statements, subject to risks and uncertainties that may cause actual results to differ materially from expectations [Disclaimer on Forward-Looking Statements](index=3&type=section&id=Disclaimer%20on%20Forward-Looking%20Statements) Forward-looking statements are subject to risks and uncertainties, and readers are cautioned against undue reliance and advised to review SEC filings for risk factors - Statements are subject to risks and uncertainties that may cause results to differ materially from expectations[7](index=7&type=chunk) - Readers are cautioned not to place undue reliance on these forward-looking statements[7](index=7&type=chunk) - Company undertakes no obligation to publicly update or revise any forward-looking statement, except as required by law[7](index=7&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) This section provides Red Violet's contact information and details regarding the quarterly conference call and webcast [Contact Information](index=3&type=section&id=Company%20Contact) Provides contact details for Red Violet's company and investor relations departments - **Company Contact:** Camilo Ramirez, Red Violet, Inc., 561-757-4500, ir@redviolet.com[6](index=6&type=chunk) - **Investor Relations Contact:** Steven Hooser, Three Part Advisors, 214-872-2710, ir@redviolet.com[6](index=6&type=chunk) [Conference Call Details](index=1&type=section&id=Conference%20Call) Red Violet hosted a conference call and webcast on August 6, 2025, to discuss quarterly results and provide a business update - Conference call and webcast held on August 6, 2025, at 4:30 PM ET[3](index=3&type=chunk) - Purpose: Discuss quarterly results and provide a business update[3](index=3&type=chunk) - Pre-registration and live audio webcast access details available on www.redviolet.com[3](index=3&type=chunk)

Financial Data and Key Metrics Changes - Revenue for the quarter increased by 14% to $21.8 million, with a 21% growth when excluding a one-time transactional revenue of $1 million from the prior year [7][17] - Adjusted gross profit reached $18.2 million, resulting in a record adjusted gross margin of 84%, up two percentage points [8][18] - Adjusted EBITDA was $7.6 million, with a margin of 35%, down one percentage point from the previous year [8][18] - Adjusted net income increased by 6% to $4.1 million, resulting in adjusted earnings of $0.28 per diluted share [8][22] - Free cash flow for the quarter was $4.8 million, a 47% increase from $3.3 million a year ago [23] Business Line Data and Key Metrics Changes - IDI's billable customer base increased by 308 customers sequentially, ending the quarter with 9,549 customers [18] - The Investigative vertical led in percentage growth, driven by the addition of over 200 law enforcement agencies [19] - The emerging markets vertical led in revenue growth dollars, with strong contributions from legal, government, and retail industries [19] - Collections posted high teens revenue growth, the highest since 2020, indicating a recovery in that vertical [19] - ForWarn added over 21,000 users, now having over 575 realtor associations contracted [20] Market Data and Key Metrics Changes - Contractual revenue accounted for 77% of total revenue, up three percentage points from the prior year [21] - Gross revenue retention improved to 97%, an increase of three percentage points [21] Company Strategy and Development Direction - The company is focusing on increasing productivity through automation and machine learning applications to enhance operational efficiency [11][12] - Capital investment in AI is a key part of the long-term growth strategy, aimed at improving fraud detection and data quality [13] - The company is well-capitalized and agile, with the flexibility to pursue both organic and strategic growth opportunities [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive long-term value creation, citing a resilient business model and a clear roadmap for innovation [14] - The company is encouraged by the growth pipeline, particularly in larger enterprise accounts, and is optimistic about future opportunities in the public sector [30][34] Other Important Information - The company entered into an amendment with its largest data supplier, extending the agreement through April 30, 2031, with minimal cost escalation [21][43] - Sales and marketing expenses increased by 28% to $5.6 million, driven by higher personnel-related expenses [22] Q&A Session Summary Question: What are the expectations for securing larger accounts? - Management noted significant progress in penetrating larger enterprise accounts, with a growing pipeline and encouraging results from testing [28][30] Question: Are there opportunities related to government budget increases? - Management confirmed that recent government budget changes present significant opportunities, particularly in the public sector [34][36] Question: Is there a timeline for expanding ForWarn into other verticals? - Management is actively testing and marketing ForWarn in various key areas outside real estate, with expectations for updates in 2026 [39][40] Question: Can you elaborate on the amendment with the data supplier? - The amendment extends the term with the data supplier under similar terms, ensuring long-term partnership with minimal price escalation [43][44] Question: What is the outlook for customer retention? - Management expects retention rates to remain around 95% to 96%, supported by strong product functionality and customer need [48][49] Question: How will the company utilize its cash flow? - The company is evaluating various capital allocation strategies, including investments in AI, potential acquisitions, and share repurchase programs [52][54]

PART I - FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's analysis of financial condition and results of operations [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Red Violet, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and notes, for Q2 and H1 2025 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20consolidated%20balance%20sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $38,848 | $36,504 | | Total current assets | $50,796 | $46,192 | | Total assets | $104,834 | $98,531 | | **Liabilities & Equity** | | | | Total current liabilities | $5,569 | $10,307 | | Total liabilities | $8,628 | $11,899 | | Total shareholders' equity | $96,206 | $86,632 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20consolidated%20statements%20of%20operations) This section outlines the company's financial performance, including revenue, income from operations, net income, and diluted EPS for Q2 and H1 2025 and 2024 Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $21,774 | $19,056 | $43,777 | $36,567 | | Income from operations | $2,751 | $3,068 | $6,962 | $5,051 | | Net income | $2,686 | $2,637 | $6,126 | $4,421 | | Diluted EPS | $0.18 | $0.19 | $0.42 | $0.31 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20consolidated%20statements%20of%20cash%20flows) This section details the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $12,488 | $10,022 | | Net cash used in investing activities | ($5,236) | ($4,855) | | Net cash used in financing activities | ($4,908) | ($6,256) | | **Net increase (decrease) in cash** | **$2,344** | **($1,089)** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20condensed%20consolidated%20financial%20statements) This section provides detailed explanations of significant accounting policies, revenue recognition, income taxes, and other material financial disclosures - For Q2 2025, **77% of total revenue** was from customers with pricing contracts, compared to 74% in Q2 2024. The remaining revenue was from transactional customers[37](index=37&type=chunk) - As of June 30, 2025, the company expects to recognize **$19.9 million in future revenue** from unsatisfied performance obligations related to long-term pricing contracts[39](index=39&type=chunk) - The effective income tax rate was **13% for Q2 2025** and **19% for H1 2025**, compared to 22% and 23% for the same periods in 2024, respectively. The decrease in 2025 is primarily due to the benefit of R&D tax credits[42](index=42&type=chunk)[43](index=43&type=chunk) - A special cash dividend of **$0.30 per share**, totaling approximately **$4.2 million**, was paid on February 14, 2025[48](index=48&type=chunk) - As of June 30, 2025, the company has material capital commitments of **$44.0 million** under data licensing and cloud service agreements[65](index=65&type=chunk)[131](index=131&type=chunk) - The company is a defendant in a lawsuit filed by Atlas Data Privacy Corporation concerning compliance with New Jersey's "Daniel's Law." The company is vigorously defending itself and anticipates its insurer will cover defense costs and potential liability, subject to policy limits[67](index=67&type=chunk)[68](index=68&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes the company's financial condition and results of operations for Q2 and H1 2025, covering performance drivers, liquidity, and non-GAAP reconciliations [Overview](index=18&type=section&id=Overview) This section provides an overview of the company's business model, identity intelligence solutions, and key operational metrics including customer and user growth - The company delivers identity intelligence solutions through its AI/ML-driven platform, CORE™, marketed primarily under two brands: IDI™ for various industries and FOREWARN® for the real estate industry[72](index=72&type=chunk)[74](index=74&type=chunk) Customer and User Growth (Year-over-Year) | Brand | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | IDI | Billable Customers | 9,549 | 8,477 | | FOREWARN | Users | 346,671 | 263,876 | [Results of Operations](index=24&type=section&id=Results%20of%20Operations) This section details the company's financial performance, including revenue, expenses, and net income, for Q2 and H1 2025 compared to the prior year Q2 2025 vs Q2 2024 Performance (in millions) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $21.8 | $19.1 | +14% | | Cost of Revenue | $3.5 | $3.5 | 0% | | Sales & Marketing Exp. | $5.6 | $4.4 | +28% | | General & Admin Exp. | $7.3 | $5.8 | +26% | | Net Income | $2.7 | $2.6 | +2% | - The **14% revenue growth in Q2 2025** was driven by an **18% increase in revenue from existing customers**, which offset a 19% decrease from new customers. Q2 2024 revenue included **$1.0 million in one-time transactional revenue** not present in Q2 2025[91](index=91&type=chunk)[92](index=92&type=chunk)[94](index=94&type=chunk) H1 2025 vs H1 2024 Performance (in millions) | Metric | H1 2025 (in millions) | H1 2024 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $43.8 | $36.6 | +20% | | Cost of Revenue | $7.2 | $7.2 | 0% | | Sales & Marketing Exp. | $11.0 | $8.1 | +36% | | General & Admin Exp. | $13.4 | $11.5 | +16% | | Net Income | $6.1 | $4.4 | +39% | - The **20% revenue growth in H1 2025** was driven by a **28% increase from new customers** and a **19% increase from existing customers**[107](index=107&type=chunk)[111](index=111&type=chunk) [Use and Reconciliation of Non-GAAP Financial Measures](index=22&type=section&id=Use%20and%20Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section explains the use of non-GAAP financial measures like Adjusted EBITDA and provides their reconciliation to GAAP equivalents - Management uses non-GAAP metrics such as **adjusted EBITDA**, **adjusted net income**, and **free cash flow** to evaluate financial performance, believing they provide useful information by eliminating the impact of certain non-cash or non-recurring items[82](index=82&type=chunk)[88](index=88&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net income | $2,686 | $2,637 | $6,126 | $4,421 | | Adjustments | $4,914 | $4,174 | $9,842 | $8,079 | | **Adjusted EBITDA** | **$7,600** | **$6,811** | **$15,968** | **$12,500** | | Adjusted EBITDA margin | 35% | 36% | 36% | 34% | [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position, operating cash flows, and capital commitments, outlining its ability to fund future operations - As of June 30, 2025, the company had **$38.8 million in cash and cash equivalents** and **$96.2 million in total shareholders' equity**[132](index=132&type=chunk) - Net cash provided by operating activities was **$12.5 million for the first six months of 2025**, an increase from $10.0 million in the same period of 2024[127](index=127&type=chunk)[129](index=129&type=chunk) - Management believes that existing cash and projected cash flows from operations will be sufficient to fund operations and capital expenditures for at least the next twelve months[133](index=133&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Red Violet, Inc. is not required to provide the information for this item - The company is exempt from this disclosure requirement due to its status as a smaller reporting company[138](index=138&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[140](index=140&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[141](index=141&type=chunk) PART II - OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, and other corporate disclosures [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 11 of the financial statements for details on legal proceedings, specifically a lawsuit regarding New Jersey's "Daniel's Law" - Information regarding legal proceedings is detailed in Note 11 of the financial statements[143](index=143&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors were reported since the last Annual Report on Form 10-K[144](index=144&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock was repurchased in Q2 2025 under the Stock Repurchase Program, with $4.6 million remaining for future repurchases - No common stock was repurchased in Q2 2025 under the authorized Stock Repurchase Program[146](index=146&type=chunk) - The approximate dollar value of shares that may yet be purchased under the program is **$4.6 million**[146](index=146&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) James P. Reilly was appointed Principal Operating Officer effective August 1, 2025, and no officers or directors had Rule 10b5-1 trading plans - Effective August 1, 2025, James P. Reilly was appointed as the company's Principal Operating Officer[150](index=150&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL data files - The report includes exhibits such as the Amended and Restated 2018 Stock Incentive Plan, CEO/CFO certifications, and XBRL data[153](index=153&type=chunk)

Core Insights - Red Violet, Inc. reported a 14% increase in revenue to $21.8 million for the quarter ended June 30, 2025, alongside a record cash flow from operations of $7.5 million [1][6]. Financial Performance - Total revenue increased by 14% to $21.8 million compared to $19.1 million in the same quarter last year [6]. - Gross profit rose by 18% to $15.7 million, with gross margin improving to 72% from 70% [6]. - Adjusted gross profit increased by 17% to $18.2 million, and adjusted gross margin improved to 84% from 82% [6]. - Net income grew by 2% to $2.7 million, resulting in earnings of $0.19 per basic share and $0.18 per diluted share [6]. - Adjusted EBITDA increased by 12% to $7.6 million, with adjusted EBITDA margin slightly decreasing to 35% from 36% [6]. - Net cash provided by operating activities surged by 31% to $7.5 million [6]. Customer Metrics - The company added 308 customers to its IDI platform during the second quarter, bringing the total to 9,549 customers [6]. - FOREWARN saw an addition of 21,335 users, ending the quarter with 346,671 users, with over 575 REALTOR Associations contracted to use the service [6]. Market Position and Strategy - The CEO expressed confidence in the company's ability to continue driving revenue growth and capitalize on significant opportunities ahead, highlighting strong customer onboarding and demand [2][6]. - The company has been successful in attracting higher-tier customers, with total customer spend increasing across key revenue cohorts [6].

Financial Performance - Red Violet achieved $82 million in Q2'25 TTM revenue[17] - The company's Q2'25 TTM Adjusted EBITDA reached $27 million[17] - Red Violet's Q2'25 Adjusted EBITDA margin was 33%[20] - The company's Q2'25 gross revenue retention was 97%[17] - Red Violet's Q2'25 adjusted gross margin was 84%[47] Customer Base - Red Violet has over 9,500 customers as of Q2'25[17] - FOREWARN has over 346,500 users as of Q2'25[52] Market Opportunity - Red Violet operates in a large and growing market with a Total Addressable Market (TAM) exceeding $10 billion[17] Revenue Growth - Red Violet experienced 22% revenue growth in Q2'25 TTM[17] - The company's Q2'25 contractual revenue accounted for 77% of total revenue[50]

Core Insights - Red Violet, Inc. will report its financial results for the second quarter ended June 30, 2025, after the close of U.S. financial markets on August 6, 2025 [1] - The earnings call is scheduled for August 6, 2025, at 4:30 PM ET, where the company will discuss its quarterly results and provide a business update [1] Participant Registration & Webcast Information - Participants must register to receive unique dial-in credentials for the earnings call, and a general dial-in number will not be provided [2] - The earnings call will be simultaneously webcast on the Investors section of the Red Violet website [2][3] - An archived webcast of the earnings call will be available on the Investors section of the Red Violet website after the call [3] Company Overview - Red Violet specializes in analytics and information solutions, focusing on identity intelligence through proprietary technologies and analytical capabilities [4] - The company's solutions are utilized for identity verification, risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition [4] - Red Violet's intelligent platform, CORE™, is designed for enterprises and is adaptable for organizations of all sizes, transforming massive datasets into actionable intelligence [4]

Core Insights - FOREWARN services will be made available to approximately 10,000 members of the MIBOR REALTOR Association to enhance agent safety [1][3] - The service provides real-time information solutions, including identity verification and criminal history checks, accessible via a mobile app [2][5] - MIBOR members can access FOREWARN services at no additional cost, promoting proactive safety measures [2][3] Company Overview - FOREWARN, LLC is a leading provider of real-time information solutions for real estate agents, focusing on safety and risk mitigation [1][5] - MIBOR REALTOR Association represents central Indiana's REALTORS, serving around 10,000 professionals across 14 counties [7][8] - MIBOR aims to strengthen communities and promote professionalism through technology resources [8]

Company Overview - Red Violet, Inc. (RDVT) shares increased by 6.3% to close at $50.96, driven by notable trading volume and strong customer demand across various sectors [1] - The company is experiencing increased adoption from medium and large enterprise customers, alongside investments in proprietary data generation, automation, and AI-driven risk solutions [1] Earnings Expectations - Red Violet is expected to report quarterly earnings of $0.28 per share, unchanged from the previous year, with revenues projected at $24.5 million, reflecting a 28.5% increase year-over-year [2] - The consensus EPS estimate for Red Violet has remained stable over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [3] Industry Context - Red Violet operates within the Zacks Internet - Software and Services industry, where Globant (GLOB) is another player, having closed 0.4% lower at $91.13 and showing a -6.4% return over the past month [3] - Globant's consensus EPS estimate has decreased by 0.5% to $1.52, representing a 0.7% increase compared to the previous year, and it currently holds a Zacks Rank of 4 (Sell) [4]

Summary of Red Violet (RDVT) FY Conference Call - June 11, 2025 Company Overview - **Company Name**: Red Violet - **Industry**: Identity verification - **Location**: Boca Raton, Florida - **Key Personnel**: Camilo Ramirez (Senior Vice President of Finance and Investor Relations) Core Business and Competitive Landscape - Red Violet is a leader in the identity verification space, applicable to nearly every transaction in the US [2][4] - The management team has extensive experience, having previously founded and sold companies in the identity space, including Accurant and TLO [4][5] - The company aggregates various databases to create comprehensive profiles on individuals, which are sold to clients under long-term contracts [6][4] - Red Violet serves five verticals across 26 industries, including collections, real estate, financial and corporate risk, law enforcement, and emerging markets [6][14] Key Use Cases - **Collections**: Provides data to debt collectors to ensure compliance and avoid fines [6][7] - **Real Estate**: Offers safety solutions for realtors to verify potential clients [8][10] - **Financial and Corporate Risk**: Assists large banks with KYC and background screening [13] - **Law Enforcement**: Supplies tools for investigations, including mobile applications for real-time data access [39][40] Competitive Advantages - Red Violet's technology leverages cloud infrastructure, allowing for scalability and efficiency compared to legacy systems [6][24] - The company claims to power seven of the top ten identity players, indicating strong market presence [21] - High gross profit margins around 80% and adjusted EBITDA margins around 40% [35] Market Dynamics - The company is observing a bifurcation in consumer spending, with lower-income consumers facing challenges while higher-income consumers continue to spend [24][26] - The resumption of student loan collections is expected to impact the collections market positively [26] - Red Violet is actively acquiring new clients in the collections space, anticipating growth as collections commence [27] Financial Insights - Approximately 40% of data costs are tied to one vendor, with contract renewals expected to maintain flat pricing [33][34] - The company has repurchased about 1.5 million shares at an average price of $19, indicating a commitment to returning capital to shareholders [52][54] - Future capital allocation will focus on acquiring unique data assets and improving operational efficiency [55][56] Challenges and Opportunities - The company faces competition from larger players like Equifax and LexisNexis but differentiates itself through data quality and technology [50][66] - AI presents both a challenge and an opportunity, with potential for enhanced data acquisition and processing capabilities [45][47] - The company is exploring automation to improve operational efficiency as it scales [56] Conclusion - Red Violet is well-positioned in the identity verification market with a strong management team, innovative technology, and a diverse client base across multiple industries. The company is focused on growth through strategic acquisitions, operational efficiency, and capitalizing on market trends.

Red Violet Inc. (NASDAQ: RDVT ) operates in the data and data analytics industry. The company doesn't report a separate segment. However, for my analysis, I based it on two key revenue streams that the company reports: Pricing Contracts andI am an experienced Risk Management Business Analyst at a Systemic Greek Bank, with a strong background in finance and risk analysis. I hold an MSc in Applied Risk Management from the University of Athens and have completed the ACA Certificate Level. My expertise lies in ...