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Red Violet(RDVT) - 2024 Q2 - Earnings Call Transcript
RDVTRed Violet(RDVT)2024-08-09 05:40
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Financial Data and Key Metrics Changes - Revenue for Q2 2024 increased by 30% to a record 19.1million,withadjustedgrossprofitreaching19.1 million, with adjusted gross profit reaching 15.6 million and an adjusted gross margin of 82% [7][11] - Adjusted EBITDA rose by 47% to a record 6.8million,resultinginanadjustedEBITDAmarginof366.8 million, resulting in an adjusted EBITDA margin of 36% [7][11] - Adjusted net income increased by 33% to 3.9 million, leading to adjusted earnings of 0.28pershare[7][11]BusinessLineDataandKeyMetricsChanges−Theinvestigativevertical,particularlylawenforcement,showedstrongdouble−digitrevenuegrowth,markingthe10thconsecutivequarterofsequentialrevenuegrowth[12][13]−Thecollectionsverticalalsoexperienceddouble−digitrevenuegrowth,withincreasingtransactionvolumesnoted[13]−Therealestateverticalsawadeclineofapproximately100.28 per share [7][11] Business Line Data and Key Metrics Changes - The investigative vertical, particularly law enforcement, showed strong double-digit revenue growth, marking the 10th consecutive quarter of sequential revenue growth [12][13] - The collections vertical also experienced double-digit revenue growth, with increasing transaction volumes noted [13] - The real estate vertical saw a decline of approximately 10% due to market dynamics [14] Market Data and Key Metrics Changes - The company reported strong growth in the public sector, background screening support, and marketing services, with a significant increase in customer base [10][12] - FOREWARN added 27,237 users in Q2 2024, continuing its streak of 17 consecutive quarters of revenue growth [14] Company Strategy and Development Direction - The company is focused on expanding its market presence, particularly in larger enterprise accounts and public sector engagements [19][20] - Investments in personnel and marketing strategies are aimed at enhancing the company's go-to-market approach [19][21] - The company is committed to maintaining accelerated growth and expanding its cloud-native technology platform [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum throughout 2024 and beyond, citing a favorable economic environment and strong demand for solutions [6][23] - The company is optimistic about its positioning and pipeline, indicating potential for continued growth in underpenetrated markets [23] Other Important Information - Cash and cash equivalents stood at 30.9 million as of June 30, 2024, with a free cash flow of 3.3millionforthequarter[16]−Thecompanyrepurchased15,804sharesatanaveragepriceof3.3 million for the quarter [16] - The company repurchased 15,804 shares at an average price of 18.61 per share during the quarter [16] Q&A Session Summary Question: Insights on targeting larger accounts and public agencies - Management highlighted investments in key personnel and strategies to penetrate larger enterprise and public sector markets, including a significant hire with experience in government relations [19][20] Question: Expectations for the second half of 2024 - Management indicated that momentum is expected to continue, with a strong pipeline and minimal penetration in new areas, suggesting significant growth potential [23] Question: Growth in the investigative unit, particularly law enforcement - Management noted that growth is driven by both new customer acquisition and expansion within existing accounts, with a large market opportunity remaining [25][26]