Red Violet(RDVT)2023-05-13 22:43Financial Data and Key Metrics Changes - Total revenue for Q1 2023 was 11.4 million, resulting in an adjusted gross margin of 78%, up 3 percentage points year-over-year [13][24] - Adjusted EBITDA for the quarter was 0.6 million or 569% to 0.05 per share [48] Business Line Data and Key Metrics Changes - The IDI billable customer base grew by 235 customers sequentially, ending Q1 2023 at 7,256 customers [6][31] - FOREWARN added over 14,300 users during Q1, ending the quarter with 131,348 users, with over 255 realtor associations contracted [6][14] - Services revenue represented approximately 2% of total revenue for Q1 2023, down from 2.5% in 2022, indicating a continued decrease in this segment [15] Market Data and Key Metrics Changes - The company experienced broad-based demand across various sectors, particularly in financial services and investigative spaces, while collections remained stagnant [19][30] - Gross revenue retention was reported at 94%, down from 97% in the prior year [14] Company Strategy and Development Direction - The company continues to invest in its business to penetrate target markets and advance its product roadmap, with a focus on optimizing productivity and efficiency [5][27] - New product launches, including idiCREM and coreIDENTITY, are aimed at enhancing the identity verification solutions for the background screening industry [7][26] - The company is optimistic about future growth, particularly with larger enterprise prospects and ongoing marketing initiatives [41][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to weather economic uncertainties while maintaining a long-term growth perspective [27][41] - There is cautiousness observed among larger enterprises regarding spending, but smaller to medium-sized enterprises are not showing similar hesitance [54] Other Important Information - The company reduced its total headcount from 187 to 170 employees, which is expected to yield cost savings not reflected in Q1 results [28][59] - Cash and cash equivalents were 31.8 million at the end of 2022 [34] Q&A Session Summary Question: What industries are seeing strength and where are the new customers coming from? - The company noted good uptake across financial services, investigative spaces, and public sector, with a consistent addition of new customers [19][50] Question: What is the size of the new IDI customers relative to the historic customer base? - The company is seeing more medium and larger enterprises entering the customer base, which presents opportunities for volume increases over time [51] Question: Is there any cautiousness from financial service customers? - Management indicated some hesitation from larger enterprises regarding spending, but smaller to medium-sized enterprises are not showing similar caution [54]