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]