Core Viewpoint - Growth investors are increasingly focused on stocks with above-average financial growth, which can lead to solid returns, but identifying such stocks is challenging due to their inherent risks and volatility [1] Group 1: Company Overview - Red Violet, Inc. (RDVT) is identified as a promising growth stock, supported by a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Red Violet has a historical EPS growth rate of 174.1%, with projected EPS growth of 41.5% for the current year, significantly outperforming the industry average of 11.3% [5] Group 3: Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 42%, surpassing the industry average of 9.9%, and has an annualized cash flow growth rate of 47.4% over the past 3-5 years compared to the industry average of 8.6% [6][7] Group 4: Earnings Estimate Revisions - The current-year earnings estimates for Red Violet have increased by 11.8% over the past month, indicating a positive trend in earnings estimate revisions [9] Group 5: Investment Positioning - With a Zacks Rank of 2 and a Growth Score of A, Red Violet is well-positioned for outperformance, making it an attractive option for growth investors [10][11]

Core Insights - Red Violet, Inc. (RDVT) is experiencing solid improvement in earnings estimates, which may lead to continued short-term price momentum [1] - The rising trend in estimate revisions reflects growing analyst optimism regarding the company's earnings prospects, which is expected to positively impact its stock price [2] - The Zacks Rank system indicates strong agreement among analysts in revising earnings estimates upward, resulting in improved consensus estimates for the next quarter and full year [3] Current-Quarter Estimate Revisions - The earnings estimate for the current quarter is $0.15 per share, representing a 66.7% increase from the previous year's figure [5] - Over the past 30 days, the Zacks Consensus Estimate for Red Violet has increased by 66.67%, with one estimate moving higher and no negative revisions [5] Current-Year Estimate Revisions - The expected earnings for the full year are $1.16 per share, reflecting a 41.5% increase from the prior year [6] - The revisions trend for the current year shows promise, with one estimate moving higher and no negative revisions [6] Favorable Zacks Rank - The positive estimate revisions have led to a Zacks Rank of 2 (Buy) for Red Violet, indicating strong potential for outperformance [7] - Research indicates that stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500 [7] Bottom Line - Investors have shown interest in Red Violet due to solid estimate revisions, as evidenced by a 9.4% gain in the stock over the past four weeks [8] - The company's earnings growth prospects may further drive the stock price higher, suggesting it could be a worthwhile addition to investment portfolios [8]

Core Viewpoint - Red Violet, Inc. (RDVT) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly influenced by institutional investors [4][6]. - The Zacks Consensus Estimate for Red Violet indicates expected earnings of $1.16 per share for the fiscal year ending December 2025, with no year-over-year change, but a notable increase of 11.8% in estimates over the past three months [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The upgrade of Red Violet to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1 - Red Violet, Inc. will present at the Raymond James TMT and Consumer Conference from December 8-10, 2025, in New York [1] - CEO Derek Dubner and CFO Dan MacLachlan will host investor meetings on December 9, 2025 [1] Group 2 - Red Violet specializes in proprietary technologies and analytical capabilities to deliver identity intelligence [2] - The company's solutions are utilized for identity verification, risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition [2] - The CORE™ platform is designed for enterprises but is adaptable for organizations of all sizes, transforming large datasets into actionable intelligence [2]

Core Insights - Red Violet, Inc. has been named to TIME's list of "America's Growth Leaders of 2026," recognizing its growth performance, financial stability, and stock performance [1][2] - The recognition highlights Red Violet as one of the most dynamic and successful companies in the U.S., celebrating its continuous innovation and strong financial performance [2][3] Company Overview - Red Violet specializes in analytics and information solutions, focusing on identity intelligence through proprietary technologies and analytical capabilities [6] - The company's solutions are designed for identity verification, risk mitigation, fraud detection, regulatory compliance, and customer acquisition, utilizing its intelligent platform, CORE™ [6] Ranking Methodology - The ranking by TIME and Statista evaluated U.S.-based publicly traded companies based on three dimensions: Growth Performance, Financial Stability, and Stock Performance [4] - Growth Performance was assessed through five years of revenue expansion, while Financial Stability was measured using indicators like the Piotroski F-Score and Altman Z-Score [4]

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Core Insights - Red Violet, Inc. (RDVT) reported quarterly earnings of $0.39 per share, exceeding the Zacks Consensus Estimate of $0.32 per share, and showing an increase from $0.22 per share a year ago, resulting in an earnings surprise of +21.88% [1] - The company achieved revenues of $23.08 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.29% and increasing from $19.06 million year-over-year [2] - Red Violet's stock has increased by approximately 44.1% since the beginning of the year, significantly outperforming the S&P 500's gain of 15.1% [3] Earnings Outlook - The future performance of Red Violet's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook, including current consensus earnings expectations for upcoming quarters [4][6] - The current consensus EPS estimate for the next quarter is $0.13 on revenues of $21.41 million, and for the current fiscal year, it is $1.07 on revenues of $87.97 million [7] Industry Context - The Internet - Software and Services industry, to which Red Violet belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 reached a record $23.1 million, up 21% year-over-year [6][12] - Adjusted gross profit was a record $19.4 million, resulting in an adjusted gross margin of 84%, up one percentage point [6][12] - Adjusted EBITDA for the quarter was a record $9 million, an increase of 35% year-over-year, with an adjusted EBITDA margin of 39%, up four percentage points [12] - Adjusted net income increased 75% to a record $5.8 million, resulting in adjusted earnings of $0.39 per diluted share [12][17] - Free cash flow for the quarter was a record $7.3 million, a 51% increase from $4.8 million a year ago [17] Business Line Data and Key Metrics Changes - IDI added over 300 customers, ending the quarter with over 9,800 customers [6][12] - Forewarn added over 25,000 users, with over 590 realtor associations contracted [6][12] - The investigative vertical showed strong performance, driven by demand from law enforcement and investigative customers [12][14] - The emerging markets vertical, including retail, legal, repossession, government, and healthcare, contributed to growth [12][14] - Collections experienced high teens revenue growth, indicating a steady recovery [14] Market Data and Key Metrics Changes - Government sector wins included contracts with state toll authorities and departments of revenue, indicating strong public sector performance [7][22] - Gross revenue retention remained strong at 96%, improving by two percentage points year-over-year [15] Company Strategy and Development Direction - The company continues to invest in platform capabilities, product advancements, and AI integration to enhance competitive advantages [6][8] - The strategic focus is on expanding go-to-market capabilities and enhancing proprietary data assets [8][9] - A $15 million increase to the share repurchase program was announced, reflecting confidence in the company's growth trajectory [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in closing out 2025 as another record year, supported by a strong sales pipeline and disciplined execution [11][18] - The company is excited about the opportunities in the public sector and background screening markets, anticipating significant growth in 2026 [22][25] Other Important Information - Cash and cash equivalents were $45.4 million at the end of Q3 2025, up from $36.5 million at year-end 2024 [17] - The company purchased 15,437 shares at an average price of $42.26 during the quarter [17] Q&A Session Summary Question: Details on traction with larger public and enterprise sector customers - Management highlighted investments in the public sector division and background screening solutions, noting recent wins with state toll authorities and large payroll processors [22][23] Question: Addressable market for large toll authorities and payroll processing - Management indicated that every state has some form of toll authority, presenting substantial market opportunities, and emphasized the enormous background screening industry [24][25] Question: Renewals and ARPU growth for Forewarn - Management confirmed strong renewals and retention rates for Forewarn, with plans to add features that could enhance pricing during renewals [30][32] Question: Customer pipeline for Q4 - Management expressed excitement about the strong customer pipeline but noted potential seasonal slowdowns in Q4 due to fewer business days [34] Question: Expectations for gross margin in Q4 - Management expects gross margins to remain consistent with Q3 levels, around 82%-84% [38] Question: Attractiveness of current share price for buyback - Management affirmed that the current share price is attractive and emphasized the importance of investing in the business for long-term growth [39]

Financial Performance - Total revenue increased 21% to $23.1 million for the three months ended September 30, 2025[84]. - Net income increased 145% to $4.2 million, resulting in earnings of $0.30 per basic share[84]. - Adjusted EBITDA increased 35% to $9.0 million, with an adjusted EBITDA margin of 39%[84]. - Gross profit increased 26% to $16.8 million, with a gross margin of 73%[84]. - Adjusted net income increased 75% to $5.8 million, resulting in adjusted earnings of $0.41 per basic share[84]. - Free cash flow (FCF) for the three months ended September 30, 2025, was $7.3 million, compared to $4.8 million for the same period in 2024, reflecting a 51% increase[92]. - Income before income taxes increased by $4.0 million, or 46%, to $12.6 million for the nine months ended September 30, 2025[125]. - Net income increased by $4.2 million, or 68%, to $10.3 million for the nine months ended September 30, 2025[128]. - Cash flows provided by operating activities were $22.7 million for the nine months ended September 30, 2025, compared to $17.3 million for the same period in 2024[132][134]. Customer Metrics - IDI had 9,853 billable customers as of September 30, 2025, up from 8,743 in the previous year[78]. - FOREWARN added 25,538 users during the third quarter, ending with 372,209 users[89]. - The IDI billable customer base increased to 9,853 customers as of September 30, 2025, up from 8,743 customers a year earlier[101]. - FOREWARN user base increased to 372,209 users as of September 30, 2025, up from 284,967 users a year earlier[101]. - As of September 30, 2025, the IDI billable customer base increased to 9,853 customers, up from 8,743 customers a year earlier, while the FOREWARN user base grew to 372,209 users, up from 284,967 users[115]. Revenue Breakdown - Revenue increased by $4.0 million, or 21%, to $23.1 million for the three months ended September 30, 2025, compared to $19.1 million for the same period in 2024[96]. - Revenue from existing customers increased by $4.1 million, or 24%, while revenue from new customers decreased by $0.1 million, or 6%[99]. - Revenue from new customers increased by $0.9 million, or 17%, and revenue from existing customers increased by $10.4 million, or 21%[118]. Cost and Expenses - Cost of revenue (exclusive of depreciation and amortization) increased by $0.3 million, or 9%, to $3.6 million for the three months ended September 30, 2025[102]. - Cost of revenue (exclusive of depreciation and amortization) increased by $0.3 million, or 2%, to $10.8 million for the nine months ended September 30, 2025[116]. - Cost of revenue as a percentage of revenue decreased to 16% for the nine months ended September 30, 2025, compared to 19% for the same period in 2024[120]. - Sales and marketing expenses increased by $3.5 million, or 27%, to $16.4 million for the nine months ended September 30, 2025[121]. Cash Position - Cash and cash equivalents were $45.4 million as of September 30, 2025[85]. - As of September 30, 2025, total shareholders' equity was $101.7 million and cash and cash equivalents were $45.4 million[138]. - The company expects to fund commitments under data licensing agreements and a cloud service agreement totaling $44.9 million using available cash on hand and cash flows generated from operations over the next twelve months[137]. Stock Repurchase Program - The company increased its Stock Repurchase Program authorization by $15.0 million, totaling $30.0 million[89].

Financial Performance - Total revenue increased 21% to $23.1 million compared to the same quarter last year[6] - Net income rose 145% to $4.2 million, resulting in earnings of $0.30 and $0.29 per basic and diluted share, respectively[6] - Adjusted EBITDA increased 35% to $9.0 million, with an adjusted EBITDA margin of 39%[6] - Cash flow from operations increased 40% to $10.2 million[6] - Gross profit increased 26% to $16.8 million, with a gross margin of 73%[6] - Adjusted net income increased 75% to $5.8 million, resulting in adjusted earnings of $0.41 and $0.39 per basic and diluted share, respectively[6] - Net income for the nine months ended September 30, 2025, increased to $10,339,000, up 68% from $6,140,000 in 2024[17] - Adjusted EBITDA for the nine months ended September 30, 2025, was $25,004,000, representing a 30.5% increase from $19,178,000 in 2024[20] - Revenue for the nine months ended September 30, 2025, reached $66,860,000, a 20.2% increase compared to $55,624,000 in 2024[20] - Free cash flow (FCF) for the nine months ended September 30, 2025, was $14,542,000, up 45.4% from $9,999,000 in 2024[22] - Adjusted gross profit for the nine months ended September 30, 2025, was $55,957,000, an increase of 24% from $45,099,000 in 2024[21] - Adjusted earnings per share for the nine months ended September 30, 2025, was $1.07, compared to $0.76 in 2024, reflecting a 40.8% increase[20] - Cash and cash equivalents at the end of the period increased to $45,352,000 from $35,747,000, marking a 26.5% rise[17] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $22,660,000, up 31.4% from $17,269,000 in 2024[22] - Adjusted EBITDA margin for the nine months ended September 30, 2025, improved to 37% from 34% in 2024[20] - Gross margin for the nine months ended September 30, 2025, was 72%, up from 69% in 2024[21] Customer Growth - The company added 304 customers to its IDI™ platform, ending the quarter with 9,853 customers[6] - FOREWARN® user base grew by 25,538 users, totaling 372,209 users, with over 590 REALTOR® Associations contracted[6] - IDI billable customers increased from 7,875 in Q4'23 to 9,853 in Q3'25, representing a growth of approximately 25.0%[27] - FOREWARN users grew from 0 in Q4'23 to 372,209 in Q3'25, indicating significant user adoption[27] - Gross revenue retention improved from 92% in Q4'23 to 96% in Q4'24, reflecting enhanced customer retention[27] Operational Metrics - Cash and cash equivalents were $45.4 million as of September 30, 2025[6] - The stock repurchase program was increased by $15.0 million, bringing the total authorized to $30.0 million[6] - Contractual revenue percentage decreased from 82% in Q4'23 to 75% in Q3'25, showing a downward trend[27] Employee Growth - Sales and marketing employees increased from 71 in Q4'23 to 105 in Q3'25, indicating expansion in the sales team[27] - Support staff remained stable at 11 employees from Q3'24 to Q3'25, suggesting consistent support capacity[27] - Engineering employees grew from 51 in Q4'23 to 66 in Q3'25, highlighting investment in technical capabilities[27] - Infrastructure employees increased from 27 in Q4'23 to 32 in Q3'25, indicating growth in operational support[27] - Administration staff remained relatively stable, with a slight decrease from 25 in Q4'23 to 24 in Q1'25[27] Future Plans - The company plans to periodically review and refine the definition and methodology of supplemental metrics, which may lead to material changes[26]