BOCA RATON, Fla., Aug. 06, 2025 (GLOBE NEWSWIRE) -- Red Violet, Inc. (NASDAQ:RDVT), a leading analytics and information solutions provider, today announced financial results for the quarter ended June 30, 2025.

"We are pleased to report another strong quarter, delivering solid revenue growth and profitability while building on the momentum established early last year," stated Derek Dubner, red violet's CEO. "I am particularly proud of the team's performance against a challenging comparison to last year, which included $1.0 million in one-time transactional revenue. We delivered another quarter of strong customer onboarding and broad-based demand as evidenced by volume expansion across the existing customer base. With a successful first half of 2025 behind us, we are confident in our ability to build on this performance, drive continued revenue growth, and capitalize on the significant opportunities ahead."

Second Quarter Financial Results

For the three months ended June 30, 2025 as compared to the three months ended June 30, 2024:

Total revenue increased 14% to $21.8 million.
Gross profit increased 18% to $15.7 million. Gross margin increased to 72% from 70%.
Adjusted gross profit increased 17% to $18.2 million. Adjusted gross margin increased to 84% from 82%.
Net income increased 2% to $2.7 million, which resulted in earnings of $0.19 and $0.18 per basic and diluted share, respectively. Net income margin decreased to 12% from 14%.
Adjusted EBITDA increased 12% to $7.6 million. Adjusted EBITDA margin decreased to 35% from 36%.
Adjusted net income increased 6% to $4.1 million, which resulted in adjusted earnings of $0.29 and $0.28 per basic and diluted share, respectively.
Net cash provided by operating activities increased 31% to $7.5 million.
Cash and cash equivalents were $38.8 million as of June 30, 2025.

Second Quarter and Recent Business Highlights

Added 308 customers to IDI^™ during the second quarter, ending the quarter with 9,549 customers.
Added 21,335 users to FOREWARN^® during the second quarter, ending the quarter with 346,671 users. Over 575 REALTOR^®Associations throughout the U.S. are now contracted to use FOREWARN.
Continued to win higher-tier customers at an accelerated pace, with total customer spend outpacing prior-year levels across each key revenue cohort, including $10,000 to $25,000, $25,000 to $100,000, and over $100,000, in trailing twelve-month revenue.

Conference Call

In conjunction with this release, red violet will host a conference call and webcast today at 4:30pm ET to discuss its quarterly results and provide a business update. Please click here to pre-register for the conference call and obtain your dial in number and passcode. To access the live audio webcast, visit the Investors section of the red violet website at www.redviolet.com. Please login at least 15 minutes prior to the start of the call to ensure adequate time for any downloads that may be required. Following the completion of the conference call, an archived webcast of the conference call will be available on the Investors section of the red violet website at www.redviolet.com.

About red violet^®

At red violet, we build proprietary technologies and apply analytical capabilities to deliver identity intelligence. Our technology powers critical solutions, which empower organizations to operate with confidence. Our solutions enable the real-time identification and location of people, businesses, assets and their interrelationships. These solutions are used for purposes including identity verification, risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition. Our intelligent platform, CORE™, is purpose-built for the enterprise, yet flexible enough for organizations of all sizes, bringing clarity to massive datasets by transforming data into intelligence. Our solutions are used today to enable frictionless commerce, to ensure safety, and to reduce fraud and the concomitant expense borne by society. For more information, please visit www.redviolet.com.

Company Contact:

Camilo Ramirez

Red Violet, Inc.

561-757-4500

ir@redviolet.com

Investor Relations Contact:

Steven Hooser

Three Part Advisors

214-872-2710

ir@redviolet.com

Use of Non-GAAP Financial Measures

Management evaluates the financial performance of our business on a variety of key indicators, including non-GAAP metrics of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and free cash flow ("FCF"). Adjusted EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on US GAAP, excluding interest income, income tax expense, depreciation and amortization, share-based compensation expense, litigation costs, acquisition-related costs, and write-off of long-lived assets. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. Adjusted net income is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on US GAAP, adjusted to exclude share-based compensation expense and amortization of share-based compensation capitalized in intangible assets, and to include the tax effect of adjustments. We define adjusted earnings per share as adjusted net income divided by the weighted average shares outstanding. We define adjusted gross profit as gross profit plus depreciation and amortization of certain intangible assets, and adjusted gross margin as adjusted gross profit as a percentage of revenue. We define FCF as net cash provided by operating activities reduced by purchase of property and equipment, and capitalized costs included in intangible assets.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as "expects," "plans," "projects," "will," "may," "anticipate," "believes," "should," "intends," "estimates," and other words of similar meaning. Such forward looking statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations, including whether we will be able to build on our successful first half performance, continue to drive revenue growth and capitalize on the significant opportunities ahead. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on our expectations as of the date of this press release and speak only as of the date of this press release and are advised to consider the factors listed above together with the additional factors under the heading "Forward-Looking Statements" and "Risk Factors" in red violet's Form 10-K for the year ended December 31, 2024, filed on February 27, 2025, as may be supplemented or amended by the Company's other SEC filings. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

RED VIOLET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) (unaudited)
	June 30, 2025		December 31, 2024
ASSETS:
Current assets:
Cash and cash equivalents	$	38,848	$	36,504
Accounts receivable, net of allowance for doubtful accounts of $179 and $188 as of June 30, 2025 and December 31, 2024, respectively		9,811		8,061
Prepaid expenses and other current assets		2,137		1,627
Total current assets		50,796		46,192
Property and equipment, net		693		545
Intangible assets, net		37,677		35,997
Goodwill		5,227		5,227
Right-of-use assets		2,822		1,901
Deferred tax assets		6,309		7,496
Other noncurrent assets		1,310		1,173
Total assets	$	104,834	$	98,531
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable	$	1,834	$	2,127
Accrued expenses and other current liabilities		2,518		2,881
Current portion of operating lease liabilities		411		406
Deferred revenue		806		712
Dividend payable		-		4,181
Total current liabilities		5,569		10,307
Noncurrent operating lease liabilities		2,520		1,592
Other noncurrent liabilities		539		-
Total liabilities		8,628		11,899
Shareholders' equity:
Preferred stock—$0.001 par value, 10,000,000 shares authorized, and 0 shares issued and outstanding, as of June 30, 2025 and December 31, 2024		-		-
Common stock—$0.001 par value, 200,000,000 shares authorized, 13,976,841 and 13,936,329 shares issued and outstanding, as of June 30, 2025 and December 31, 2024		14		14
Additional paid-in capital		90,936		87,488
Retained earnings (accumulated deficit)		5,256		(870	)
Total shareholders' equity		96,206		86,632
Total liabilities and shareholders' equity	$	104,834	$	98,531

RED VIOLET, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share data) (unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenue	$	21,774	$	19,056	$	43,777	$	36,567
Costs and expenses⁽¹⁾:
Cost of revenue (exclusive of depreciation and amortization)		3,501		3,455		7,162		7,211
Sales and marketing expenses		5,622		4,406		11,029		8,118
General and administrative expenses		7,253		5,750		13,427		11,540
Depreciation and amortization		2,647		2,377		5,197		4,647
Total costs and expenses		19,023		15,988		36,815		31,516
Income from operations		2,751		3,068		6,962		5,051
Interest income		339		314		647		679
Income before income taxes		3,090		3,382		7,609		5,730
Income tax expense		404		745		1,483		1,309
Net income	$	2,686	$	2,637	$	6,126	$	4,421
Earnings per share:
Basic	$	0.19	$	0.19	$	0.44	$	0.32
Diluted	$	0.18	$	0.19	$	0.42	$	0.31
Weighted average shares outstanding:
Basic		14,018,629		13,780,074		14,008,385		13,888,569
Diluted		14,553,282		14,051,466		14,528,789		14,129,262


(1) Share-based compensation expense in each category:
Sales and marketing expenses	$	193	$	158	$	388	$	296
General and administrative expenses		1,634		1,235		3,035		2,499
Total	$	1,827	$	1,393	$	3,423	$	2,795

RED VIOLET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (unaudited)
	Six Months Ended June 30,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	6,126		$	4,421
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,197			4,647
Share-based compensation expense		3,423			2,795
Write-off of long-lived assets		2			-
Provision for bad debts		274			224
Noncash lease expenses		257			272
Deferred income tax expense		1,187			1,081
Changes in assets and liabilities:
Accounts receivable		(2,024	)		(1,052	)
Prepaid expenses and other current assets		(510	)		(370	)
Other noncurrent assets		(162	)		(616	)
Accounts payable		(293	)		338
Accrued expenses and other current liabilities		(863	)		(1,351	)
Deferred revenue		94			(93	)
Operating lease liabilities		(220	)		(274	)
Net cash provided by operating activities		12,488			10,022
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(252	)		(117	)
Capitalized costs included in intangible assets		(4,984	)		(4,738	)
Net cash used in investing activities		(5,236	)		(4,855	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Taxes paid related to net share settlement of vesting of restricted stock units		(727	)		(403	)
Repurchases of common stock		-			(5,853	)
Dividend payable		(4,181	)		-
Net cash used in financing activities		(4,908	)		(6,256	)
Net increase (decrease) in cash and cash equivalents	$	2,344		$	(1,089	)
Cash and cash equivalents at beginning of period		36,504			32,032
Cash and cash equivalents at end of period	$	38,848		$	30,943
SUPPLEMENTAL DISCLOSURE INFORMATION:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	681		$	439
Share-based compensation capitalized in intangible assets	$	752		$	882
Retirement of treasury stock	$	727		$	6,164
Right-of-use assets obtained in exchange of operating lease liabilities	$	1,153		$	-

Use and Reconciliation of Non-GAAP Financial Measures

Management evaluates the financial performance of our business on a variety of key indicators, including non-GAAP metrics of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF. Adjusted EBITDA is a financial measure equal to net income, the most directly comparable financial measure based on GAAP, excluding interest income, income tax expense, depreciation and amortization, share-based compensation expense, litigation costs, acquisition-related costs, and write-off of long-lived assets. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. Adjusted net income is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on US GAAP, adjusted to exclude share-based compensation expense and amortization of share-based compensation capitalized in intangible assets, and to include the tax effect of adjustments. We define adjusted earnings per share as adjusted net income divided by the weighted average shares outstanding. We define adjusted gross profit as gross profit plus depreciation and amortization of certain intangible assets, and adjusted gross margin as adjusted gross profit as a percentage of revenue. We define FCF as net cash provided by operating activities reduced by purchase of property and equipment, and capitalized costs included in intangible assets.

The following is a reconciliation of net income, the most directly comparable US GAAP financial measure, to adjusted EBITDA:

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2025			2024			2025			2024
Net income	$	2,686		$	2,637		$	6,126		$	4,421
Interest income		(339	)		(314	)		(647	)		(679	)
Income tax expense		404			745			1,483			1,309
Depreciation and amortization		2,647			2,377			5,197			4,647
Share-based compensation expense		1,827			1,393			3,423			2,795
Litigation costs		4			(27	)		13			-
Acquisition-related costs		370			-			370			7
Write-off of long-lived assets		1			-			3			-
Adjusted EBITDA	$	7,600		$	6,811		$	15,968		$	12,500
Revenue	$	21,774		$	19,056		$	43,777		$	36,567

Net income margin		12	%		14	%		14	%		12	%
Adjusted EBITDA margin		35	%		36	%		36	%		34	%

The following is a reconciliation of net income, the most directly comparable US GAAP financial measure, to adjusted net income:

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands, except share data)	2025			2024			2025			2024
Net income	$	2,686		$	2,637		$	6,126		$	4,421
Share-based compensation expense		1,827			1,393			3,423			2,795
Amortization of share-based compensation capitalized in intangible assets		413			286			822			561
Tax effect of adjustments⁽¹⁾		(809	)		(425	)		(1,422	)		(733	)
Adjusted net income	$	4,117		$	3,891		$	8,949		$	7,044
Earnings per share:
Basic	$	0.19		$	0.19		$	0.44		$	0.32
Diluted	$	0.18		$	0.19		$	0.42		$	0.31
Adjusted earnings per share:
Basic	$	0.29		$	0.28		$	0.64		$	0.51
Diluted	$	0.28		$	0.28		$	0.62		$	0.50
Weighted average shares outstanding:
Basic		14,018,629			13,780,074			14,008,385			13,888,569
Diluted		14,553,282			14,051,466			14,528,789			14,129,262

(1) The tax effect of adjustments is calculated using the expected federal and state statutory tax rate. The expected federal and state income tax rate was approximately 26.00% for the three and six months ended June 30, 2025, and 25.75% for the three and six months ended June 30, 2024.

The following is a reconciliation of gross profit, the most directly comparable US GAAP financial measure, to adjusted gross profit:

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2025			2024			2025			2024
Revenue	$	21,774		$	19,056		$	43,777		$	36,567
Cost of revenue (exclusive of depreciation and amortization)		(3,501	)		(3,455	)		(7,162	)		(7,211	)
Depreciation and amortization related to cost of revenue		(2,595	)		(2,322	)		(5,095	)		(4,536	)
Gross profit		15,678			13,279			31,520			24,820
Depreciation and amortization of certain intangible assets⁽¹⁾		2,560			2,322			5,012			4,536
Adjusted gross profit	$	18,238		$	15,601		$	36,532		$	29,356

Gross margin		72	%		70	%		72	%		68	%
Adjusted gross margin		84	%		82	%		83	%		80	%

(1) Depreciation and amortization of certain intangible assets primarily consists of the amortization of capitalized internal-use software development costs, which are included within intangible assets and amortized over their estimated useful lives.

The following is a reconciliation of net cash provided by operating activities, the most directly comparable US GAAP financial measure, to FCF:

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2025			2024			2025			2024
Net cash provided by operating activities	$	7,487		$	5,717		$	12,488		$	10,022
Less:
Purchase of property and equipment		(202	)		(52	)		(252	)		(117	)
Capitalized costs included in intangible assets		(2,515	)		(2,411	)		(4,984	)		(4,738	)
Free cash flow	$	4,770		$	3,254		$	7,252		$	5,167

In order to assist readers of our consolidated financial statements in understanding the operating results that management uses to evaluate the business and for financial planning purposes, we present non-GAAP measures of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF as supplemental measures of our operating performance. We believe they provide useful information to our investors as they eliminate the impact of certain items that we do not consider indicative of our cash operations and ongoing operating performance. In addition, we use them as an integral part of our internal reporting to measure the performance and operating strength of our business.

We believe adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF are relevant and provide useful information frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours and are indicators of the operational strength of our business. We believe adjusted EBITDA eliminates the uneven effect of considerable amounts of non-cash depreciation and amortization, share-based compensation expense and the impact of other non-recurring items, providing useful comparisons versus prior periods or forecasts. Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of revenue. We believe adjusted net income provides additional means of evaluating period-over-period operating performance by eliminating certain non-cash expenses and other items that might otherwise make comparisons of our ongoing business with prior periods more difficult and obscure trends in ongoing operations. Adjusted net income is a non-GAAP financial measure equal to net income, adjusted to exclude share-based compensation expense and amortization of share-based compensation capitalized in intangible assets, and to include the tax effect of adjustments. We define adjusted earnings per share as adjusted net income divided by the weighted average shares outstanding. Our adjusted gross profit is a measure used by management in evaluating the business's current operating performance by excluding the impact of prior historical costs of assets that are expensed systematically and allocated over the estimated useful lives of the assets, which may not be indicative of the current operating activity. We define adjusted gross profit as gross profit plus depreciation and amortization of certain intangible assets. We believe adjusted gross profit provides useful information to our investors by eliminating the impact of certain non-cash depreciation and amortization, and primarily the amortization of software developed for internal use, providing a baseline of our core operating results that allow for analyzing trends in our underlying business consistently over multiple periods. Adjusted gross margin is calculated as adjusted gross profit as a percentage of revenue. We believe FCF is an important liquidity measure of the cash that is available, after capital expenditures, for operational expenses and investment in our business. FCF is a measure used by management to understand and evaluate the business's operating performance and trends over time. FCF is calculated by using net cash provided by operating activities, less purchase of property and equipment, and capitalized costs included in intangible assets.

Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF are not intended to be performance measures that should be regarded as an alternative to, or more meaningful than, financial measures presented in accordance with US GAAP. In addition, FCF is not intended to represent our residual cash flow available for discretionary expenses and is not necessarily a measure of our ability to fund our cash needs. The way we measure adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in our various agreements.

SUPPLEMENTAL METRICS

The following metrics are intended as a supplement to the financial statements found in this release and other information furnished or filed with the SEC. These supplemental metrics are not necessarily derived from any underlying financial statement amounts. We believe these supplemental metrics help investors understand trends within our business and evaluate the performance of such trends quickly and effectively. In the event of discrepancies between amounts in these tables and the Company's historical disclosures or financial statements, readers should rely on the Company's filings with the SEC and financial statements in the Company's most recent earnings release.

We intend to periodically review and refine the definition, methodology and appropriateness of each of these supplemental metrics. As a result, metrics are subject to removal and/or changes, and such changes could be material.

	(Unaudited)
(Dollars in thousands)	Q3'23			Q4'23			Q1'24			Q2'24			Q3'24			Q4'24			Q1'25			Q2'25
Customer metrics
IDI - billable customers⁽¹⁾		7,769			7,875			8,241			8,477			8,743			8,926			9,241			9,549
FOREWARN - users⁽²⁾		168,356			185,380			236,639			263,876			284,967			303,418			325,336			346,671
Revenue metrics
Contractual revenue %⁽³⁾		79	%		82	%		78	%		74	%		77	%		77	%		74	%		77	%
Gross revenue retention %⁽⁴⁾		94	%		92	%		93	%		94	%		94	%		96	%		96	%		97	%
Other metrics
Employees - sales and marketing	65			71			76			86			93			95			90			92
Employees - support	9			9			10			10			11			11			11			11
Employees - infrastructure	27			27			29			27			29			28			29			29
Employees - engineering	47			51			51			56			58			57			62			63
Employees - administration	25			25			25			25			26			25			24			28

(1) We define a billable customer of IDI as a single entity that generated revenue in the last three months of the period. Billable customers are typically corporate organizations. In most cases, corporate organizations will have multiple users and/or departments purchasing our solutions, however, we count the entire organization as a discrete customer.

(2) We define a user of FOREWARN as a unique person that has a subscription to use the FOREWARN service as of the last day of the period. A unique person can only have one user account.

(3) Contractual revenue % represents revenue generated from customers pursuant to pricing contracts containing a monthly fee and any additional overage divided by total revenue. Pricing contracts are generally annual contracts or longer, with auto renewal.

(4) Gross revenue retention is defined as the revenue retained from existing customers, net of reinstated revenue, and excluding expansion revenue. Revenue is measured once a customer has generated revenue for six consecutive months. Revenue is considered lost when all revenue from a customer ceases for three consecutive months; revenue generated by a customer after the three-month loss period is defined as reinstated revenue. Gross revenue retention percentage is calculated on a trailing twelve-month basis. The numerator of which is revenue lost during the period due to attrition, net of reinstated revenue, and the denominator of which is total revenue based on an average of total revenue at the beginning of each month during the period, with the quotient subtracted from one. Our gross revenue retention calculation excludes revenue from idiVERIFIED, which is purely transactional and currently represents less than 3% of total revenue.