red violet Announces Third Quarter 2025 Financial Results

Revenue Increases 21% to a Record $23.1 Million Producing a Record $10.2 Million in Cash Flow from Operations Announces $15.0 Million Increase to Share Repurchase Program BOCA RATON, Fla., Nov. 05, 2025 (GLOBE NEWSWIRE) -- Red Violet, Inc. (NASDAQ: RDVT), a leading analytics and information solutions provider, today announced financial results for the quarter ended September 30, 2025. “We are thrilled to report another record-breaking quarter, delivering new highs across all key financial metrics,” stated Derek Dubner, red violet’s CEO. “This achievement reflects exceptional execution across our organization and accelerating adoption of our solutions across a diverse set of industries. Our record performance and strong momentum are not only delivering results today, but also enabling continued investment in product innovation, go-to-market expansion, and enterprise-wide AI initiatives that further extend our market leadership. We are leveraging our technology advantage to drive innovation, efficiency, and significant value creation for our customers and shareholders.” Third Quarter Financial Results For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024: Total revenue increased 21% to $23.1 million.Gross profit increased 26% to $16.8 million. Gross margin increased to 73% from 70%.Adjusted gross profit increased 23% to $19.4 million. Adjusted gross margin increased to 84% from 83%.Net income increased 145% to $4.2 million, which resulted in earnings of $0.30 and $0.29 per basic and diluted share, respectively. Net income margin increased to 18% from 9%.Adjusted EBITDA increased 35% to $9.0 million. Adjusted EBITDA margin increased to 39% from 35%.Adjusted net income increased 75% to $5.8 million, which resulted in adjusted earnings of $0.41 and $0.39 per basic and diluted share, respectively.Net cash provided by operating activities increased 40% to $10.2 million.Cash and cash equivalents were $45.4 million as of September 30, 2025. Third Quarter and Recent Business Highlights Added 304 customers to IDI™ during the third quarter, ending the quarter with 9,853 customers. Added 25,538 users to FOREWARN® during the third quarter, ending the quarter with 372,209 users. Over 590 REALTOR® Associations throughout the U.S. are now contracted to use FOREWARN.Increased the Stock Repurchase Program authorization by $15.0 million, bringing the total authorized to $30.0 million.Purchased 15,437 shares of the Company’s common stock during the third quarter at an average price of $42.26 per share pursuant to the Company’s Stock Repurchase Program. The Company has $18.9 million remaining under the Stock Repurchase Program. 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 RamirezRed Violet, Inc.561-757-4500ir@redviolet.com Investor Relations Contact:Steven Hooser Three Part Advisors214-872-2710ir@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, acquisition-related costs, litigation 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, amortization of share-based compensation capitalized in intangible assets, acquisition-related costs, litigation costs, and write-off of long-lived 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 continue investment in product innovation, go-to-market expansion, and enterprise -wide AI initiatives that further extend our market leadership and continue leveraging our technology advantage to drive innovation, efficiency, and significant value creation for our customers and shareholders. 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) September 30, 2025 December 31, 2024 ASSETS: Current assets: Cash and cash equivalents $45,352 $36,504 Accounts receivable, net of allowance for doubtful accounts of $182 and $188 as ofSeptember 30, 2025 and December 31, 2024, respectively 10,419 8,061 Prepaid expenses and other current assets 2,237 1,627 Total current assets 58,008 46,192 Property and equipment, net 824 545 Intangible assets, net 38,749 35,997 Goodwill 5,227 5,227 Right-of-use assets 2,697 1,901 Deferred tax assets 5,476 7,496 Other noncurrent assets 1,090 1,173 Total assets $112,071 $98,531 LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable $2,764 $2,127 Accrued expenses and other current liabilities 2,884 2,881 Current portion of operating lease liabilities 403 406 Deferred revenue 859 712 Dividend payable - 4,181 Total current liabilities 6,910 10,307 Noncurrent operating lease liabilities 2,459 1,592 Other noncurrent liabilities 969 - Total liabilities 10,338 11,899 Shareholders' equity: Preferred stock—$0.001 par value, 10,000,000 shares authorized, and 0 sharesissued and outstanding, as of September 30, 2025 and December 31, 2024 - - Common stock—$0.001 par value, 200,000,000 shares authorized, 13,967,217 and13,936,329 shares issued and outstanding, as of September 30, 2025 andDecember 31, 2024 14 14 Additional paid-in capital 92,250 87,488 Retained earnings (accumulated deficit) 9,469 (870)Total shareholders' equity 101,733 86,632 Total liabilities and shareholders' equity $112,071 $98,531 RED VIOLET, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Amounts in thousands, except share data)(unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue $23,083 $19,057 $66,860 $55,624 Costs and expenses(1): Cost of revenue (exclusive of depreciation and amortization) 3,622 3,314 10,784 10,525 Sales and marketing expenses 5,402 4,817 16,431 12,935 General and administrative expenses 6,777 5,994 20,204 17,534 Depreciation and amortization 2,706 2,434 7,903 7,081 Total costs and expenses 18,507 16,559 55,322 48,075 Income from operations 4,576 2,498 11,538 7,549 Interest income 386 353 1,033 1,032 Income before income taxes 4,962 2,851 12,571 8,581 Income tax expense 749 1,132 2,232 2,441 Net income $4,213 $1,719 $10,339 $6,140 Earnings per share: Basic $0.30 $0.12 $0.74 $0.44 Diluted $0.29 $0.12 $0.71 $0.43 Weighted average shares outstanding: Basic 14,027,994 13,782,476 14,014,993 13,852,947 Diluted 14,618,657 14,311,575 14,567,167 14,224,285 (1) Share-based compensation expense in each category: Sales and marketing expenses $206 $148 $594 $444 General and administrative expenses 1,500 1,509 4,535 4,008 Total $1,706 $1,657 $5,129 $4,452 RED VIOLET, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands)(unaudited) Nine Months Ended September 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $10,339 $6,140 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7,903 7,081 Share-based compensation expense 5,129 4,452 Write-off of long-lived assets 3 82 Provision for bad debts 408 323 Noncash lease expenses 382 412 Deferred income tax expense 2,020 2,051 Changes in assets and liabilities: Accounts receivable (2,766) (1,647)Prepaid expenses and other current assets (610) (617)Other noncurrent assets 58 (470)Accounts payable 637 1,156 Accrued expenses and other current liabilities (701) (1,150)Deferred revenue 147 (125)Operating lease liabilities (289) (419)Net cash provided by operating activities 22,660 17,269 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (439) (152)Capitalized costs included in intangible assets (7,679) (7,118)Net cash used in investing activities (8,118) (7,270)CASH FLOWS FROM FINANCING ACTIVITIES: Taxes paid related to net share settlement of vesting of restricted stock units (860) (431)Repurchases of common stock (653) (5,853)Dividend payable (4,181) - Net cash used in financing activities (5,694) (6,284)Net increase in cash and cash equivalents $8,848 $3,715 Cash and cash equivalents at beginning of period 36,504 32,032 Cash and cash equivalents at end of period $45,352 $35,747 SUPPLEMENTAL DISCLOSURE INFORMATION: Cash paid for interest $- $- Cash paid for income taxes $683 $524 Share-based compensation capitalized in intangible assets $1,146 $1,210 Retirement of treasury stock $1,513 $6,428 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, acquisition-related costs, litigation 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, amortization of share-based compensation capitalized in intangible assets, acquisition-related costs, litigation costs, and write-off of long-lived 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 September 30, Nine Months Ended September 30, (Dollars in thousands) 2025 2024 2025 2024 Net income $4,213 $1,719 $10,339 $6,140 Interest income (386) (353) (1,033) (1,032)Income tax expense 749 1,132 2,232 2,441 Depreciation and amortization 2,706 2,434 7,903 7,081 Share-based compensation expense 1,706 1,657 5,129 4,452 Acquisition-related costs (12) - 358 7 Litigation costs 60 7 73 7 Write-off of long-lived assets - 82 3 82 Adjusted EBITDA $9,036 $6,678 $25,004 $19,178 Revenue $23,083 $19,057 $66,860 $55,624 Net income margin 18% 9% 15% 11%Adjusted EBITDA margin 39% 35% 37% 34% The following is a reconciliation of net income, the most directly comparable US GAAP financial measure, to adjusted net income: Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands, except share data) 2025 2024 2025 2024 Net income $4,213 $1,719 $10,339 $6,140 Share-based compensation expense 1,706 1,657 5,129 4,452 Amortization of share-based compensationcapitalized in intangible assets 413 394 1,235 1,138 Acquisition-related costs (12) - 358 7 Litigation costs 60 7 73 7 Write-off of long-lived assets - 82 3 82 Tax effect of adjustments(1) (619) (568) (2,141) (1,350)Adjusted net income $5,761 $3,291 $14,996 $10,476 Earnings per share: Basic $0.30 $0.12 $0.74 $0.44 Diluted $0.29 $0.12 $0.71 $0.43 Adjusted earnings per share: Basic $0.41 $0.24 $1.07 $0.76 Diluted $0.39 $0.23 $1.03 $0.74 Weighted average shares outstanding: Basic 14,027,994 13,782,476 14,014,993 13,852,947 Diluted 14,618,657 14,311,575 14,567,167 14,224,285 (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 nine months ended September 30, 2025 and 2024.The following is a reconciliation of gross profit, the most directly comparable US GAAP financial measure, to adjusted gross profit: Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2025 2024 2025 2024 Revenue $23,083 $19,057 $66,860 $55,624 Cost of revenue (exclusive of depreciation andamortization) (3,622) (3,314) (10,784) (10,525)Depreciation and amortization related to cost of revenue (2,651) (2,382) (7,746) (6,918)Gross profit 16,810 13,361 48,330 38,181 Depreciation and amortization of certain intangibleassets(1) 2,615 2,382 7,627 6,918 Adjusted gross profit $19,425 $15,743 $55,957 $45,099 Gross margin 73% 70% 72% 69%Adjusted gross margin 84% 83% 84% 81% (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 September 30, Nine Months Ended September 30, (Dollars in thousands) 2025 2024 2025 2024 Net cash provided by operating activities $10,172 $7,247 $22,660 $17,269 Less: Purchase of property and equipment (187) (35) (439) (152)Capitalized costs included in intangible assets (2,695) (2,380) (7,679) (7,118)Free cash flow $7,290 $4,832 $14,542 $9,999 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 items not indicative of our ongoing operating performance. 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, amortization of share-based compensation capitalized in intangible assets, and other items not indicative of our ongoing operating performance, 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) Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Customer metrics IDI - billable customers(1) 7,875 8,241 8,477 8,743 8,926 9,241 9,549 9,853 FOREWARN - users(2) 185,380 236,639 263,876 284,967 303,418 325,336 346,671 372,209 Revenue metrics Contractual revenue %(3) 82% 78% 74% 77% 77% 74% 77% 75%Gross revenue retention %(4) 92% 93% 94% 94% 96% 96% 97% 96%Other metrics Employees - sales and marketing 71 76 86 93 95 90 92 105 Employees - support 9 10 10 11 11 11 11 11 Employees - infrastructure 27 29 27 29 28 29 29 32 Employees - engineering 51 51 56 58 57 62 63 66 Employees - administration 25 25 25 26 25 24 28 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.

red violet Announces Third Quarter 2025 Financial Results

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