Red Violet(US:RDVT)2021-11-10 01:49Financial Data and Key Metrics Changes - The company reported record revenue of $11.7 million, a 26% increase compared to the same quarter last year [10][24] - Adjusted gross profit increased by 35% to $8.9 million, with adjusted gross margin rising to 76% from 71% [10][26] - Adjusted EBITDA reached a record $3.6 million, up 73% year-over-year, with an adjusted EBITDA margin of 31% compared to 23% in the prior year [10][26] - The company achieved its first quarter of GAAP profitability without a one-time gain, generating $1.3 million in net income, translating to earnings of $0.09 per diluted share [10][28] Business Line Data and Key Metrics Changes - Platform revenue increased by 26% to $11.3 million, while services revenue rose by 24% to $0.4 million [10][24] - The idiCORE billable customer base grew by 173 customers sequentially, ending the quarter with 6,314 customers [26] - FOREWARN added approximately 6,800 users, ending the quarter with 74,377 users [26] Market Data and Key Metrics Changes - Contractual revenue for the quarter was 80%, a 12 percentage point increase over the prior year [27] - Revenue attrition percentage improved to 5% from 10% in the prior year, with expectations to trend between 5% and 10% in the foreseeable future [27] Company Strategy and Development Direction - The company is executing a multi-year strategic roadmap, focusing on expanding its cloud-native platform and data-driven solutions [9][12] - Recent hires include executives to lead expansion in the public sector and financial services, indicating a focus on these growth verticals [14][15] - The company aims to leverage its technology and data assets to enhance consumer access to services while addressing fraud [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong demand for solutions and a solid cash generation to invest in business expansion [17][20] - The company anticipates continued growth in 2022 and beyond, driven by digital transformation and the need for fraud capture [44][45] Other Important Information - The company generated $3.5 million in cash from operating activities in Q3 2021, with cash and cash equivalents totaling $13.4 million as of September 30, 2021 [11][29] - Cash used in investing activities was primarily for software development, totaling $3.8 million for the nine months ended September 30, 2021 [30] Q&A Session Summary Question: Insights on fintech and public sector sales pipeline - Management acknowledged the early stages of expansion into fintech and public sector, emphasizing the potential for growth and the importance of identity verification in these sectors [33][34][36] Question: Concerns about data provider contract and cost structure - Management confirmed flexible terms with their largest data provider, having renewed the contract for another five years without significant changes to costs [40][41][42]