Red Violet(RDVT) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter revenue increased 20% to a record $23.4 million, while full year revenue also increased 20% to $90.3 million[1][4] - Gross profit for the fourth quarter increased 23% to $16.8 million, with a gross margin of 72%, up from 70%[4] - Net income for the fourth quarter surged 226% to $2.8 million, resulting in earnings of $0.20 per share, with a net income margin of 12%, up from 4%[4] - Adjusted EBITDA for the fourth quarter increased 33% to $5.9 million, with an adjusted EBITDA margin of 25%, up from 23%[4] - Adjusted net income for the full year increased 44% to $18.7 million, resulting in adjusted earnings of $1.33 per share[4] - Net income for the year ended December 31, 2025, was $13,154 million, a 88% increase from $7,003 million in 2024[15] - Adjusted EBITDA for the year ended December 31, 2025, was $30,952 million, up 31% from $23,646 million in 2024[17] - Revenue for the year ended December 31, 2025, reached $90,252 million, representing a 20% increase from $75,189 million in 2024[17] - Adjusted net income for the year ended December 31, 2025, was $18,669 million, a 44% increase from $12,995 million in 2024[17] - Adjusted gross profit for the year ended December 31, 2025, was $75,420 million, up from $61,192 million in 2024, indicating a 23% growth[18] - Adjusted gross margin for the year ended December 31, 2025, was 84%, compared to 81% in 2024[18] - The adjusted EBITDA margin for the year ended December 31, 2025, was 34%, compared to 31% in 2024[17] Customer Growth - The company added 169 customers to its IDI™ platform during the fourth quarter, ending the year with a total of 10,022 customers[4] - FOREWARN® user base grew by 17,809 users in the fourth quarter, reaching a total of 390,018 users, with over 620 REALTOR® Associations contracted[4] - IDI billable customers increased from 8,241 in Q1'24 to 10,022 in Q4'25, representing a growth of 21.7%[26] - FOREWARN users saw a significant increase from 8 in Q4'24 to 390,018 in Q4'25, indicating a substantial expansion in user base[26] Cash Flow and Financial Position - Cash from operating activities increased 22% to $29.3 million for the full year[4] - Cash and cash equivalents as of December 31, 2025, were $43.6 million, compared to $36.5 million as of December 31, 2024[11] - The company reported a net cash provided by operating activities of $29,349 million for the year ended December 31, 2025, an increase from $23,960 million in 2024[19] - The company’s cash and cash equivalents at the end of the period were $43,557 million, up from $36,504 million at the beginning of the period[15] - Free cash flow (FCF) for the year ended December 31, 2025, was $18,193 million, compared to $14,393 million in 2024, reflecting a 26% increase[19] Employee Growth and Investment - Sales and marketing employees increased from 95 in Q4'24 to 99 in Q4'25, indicating a focus on expanding sales efforts[26] - Engineering employees grew from 57 in Q4'24 to 73 in Q4'25, highlighting investment in product development and technology[26] Revenue Retention and Metrics - Contractual revenue percentage remained stable at 77% in Q4'24 and Q4'25, reflecting consistent revenue generation from pricing contracts[26] - Gross revenue retention improved from 96% in Q4'24 to 95% in Q4'25, demonstrating strong customer retention capabilities[26] - Total revenue from existing customers is calculated on a trailing twelve-month basis, with a focus on minimizing attrition and maximizing reinstated revenue[27] - The company plans to periodically review and refine supplemental metrics, which may lead to material changes in reporting[25] - The definition of a billable customer includes corporate organizations generating revenue within the last three months, emphasizing the focus on corporate clients[26] - The company excludes revenue from idiVERIFIED in gross revenue retention calculations, as it represents less than 3% of total revenue[27]