red violet Reports Second Quarter 2026 Financial Results

Record Revenue of $26.7 Million, an Increase of 23%; Record Cash Flow from Operations of $10.6 Million BOCA RATON, Fla., Aug. 10, 2026 (GLOBE NEWSWIRE) -- Red Violet, Inc. (NASDAQ: RDVT), a leading identity intelligence and analytics company, today announced financial results for the quarter ended June 30, 2026. “The demand we are seeing for identity intelligence has never been stronger, and red violet is exceptionally well positioned to capture it. In Q2, we added a record 447 new customers to IDI in a quarter where revenue, profitability, and cash flow all hit new highs,” stated Derek Dubner, red violet’s CEO. “Our success is rooted in our proprietary assets, including an AI-embedded architecture consisting of a unique entity resolution engine which fuels a differentiated identity graph, that continues to prove its value across consequential transactions in the economy. With no debt, more than $160 million in cash following our recently completed offering, and the strongest pipeline of strategic initiatives in the Company’s history, we are positioned to extend our leadership in ways that were not possible even twelve months ago. We remain disciplined in how we deploy capital, yet we have never been more confident in the opportunities ahead.” Second Quarter Financial Results For the three months ended June 30, 2026 as compared to the three months ended June 30, 2025: Total revenue increased 23% to $26.7 million. Gross profit increased 29% to $20.2 million. Gross margin increased to 76% from 72%. Adjusted gross profit increased 25% to $22.9 million. Adjusted gross margin increased to 86% from 84%. Net income increased 85% to $5.0 million, which resulted in earnings of $0.35 and $0.34 per basic and diluted share, respectively. Net income margin increased to 19% from 12%. Adjusted EBITDA increased 48% to $11.2 million. Adjusted EBITDA margin increased to 42% from 35%. Adjusted net income increased 58% to $7.2 million, which resulted in adjusted earnings of $0.51 and $0.50 per basic and diluted share, respectively. Net cash provided by operating activities increased 42% to $10.6 million. Cash and cash equivalents were $50.0 million as of June 30, 2026. Second Quarter and Recent Business Highlights Announced the August 2026 closing of an underwritten public offering of 1,916,667 shares of common stock, including 250,000 shares of common stock sold pursuant to the full exercise of the underwriters’ option, providing net proceeds of approximately $109.0 million, after deducting underwriting discounts and commissions and estimated offering expenses. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes, including potential strategic acquisitions. Added a record 447 customers to IDI™ during the second quarter, ending the quarter with 10,869 customers. Added 25,493 users to FOREWARN® during the second quarter, ending the quarter with 443,173 users. 660 REALTOR® Associations throughout the U.S. are now contracted to use FOREWARN. Purchased 74,500 shares of the Company’s common stock year to date through June 30, 2026, at an average price of $41.87 per share pursuant to the Company’s Stock Repurchase Program. As of June 30, 2026, the Company had $15.5 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 4:30 pm 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 cloud-native, AI-embedded identity intelligence 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, enhance safety, and mitigate fraud and the related financial losses borne by society. For more information, please visit www.redviolet.com. Company Contact: Camilo Ramirez Red Violet, Inc. 561-757-4500 [email protected] Investor Relations Contact: Steven Hooser Three Part Advisors 214-872-2710 [email protected] 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 red violet is exceptionally well positioned to capture the strong demand for identity intelligence; whether our proprietary assets will continue to provide their value across consequential transactions in the economy; whether our cash position and pipeline of strategic initiatives will allow us to extend our leadership in ways that were not possible twelve months ago; whether we will be able to deploy the net proceeds of our recent public offering effectively for working capital and general corporate purposes, including potential strategic acquisitions; and whether we will be able to execute on the 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, 2025, filed on March 4, 2026, as may be supplemented or amended by the Company's other filings with the Securities and Exchange Commission (the “SEC”). 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, 2026 December 31, 2025 ASSETS: Current assets: Cash and cash equivalents $ 49,972 $ 43,557 Accounts receivable, net of allowance for doubtful accounts of $145 and $231 as of June 30, 2026 and December 31, 2025, respectively 12,904 10,697 Prepaid expenses and other current assets 2,359 2,281 Total current assets 65,235 56,535 Property and equipment, net 914 882 Intangible assets, net 41,196 39,264 Goodwill 5,227 5,227 Right-of-use assets 2,311 2,570 Deferred tax assets 4,618 6,585 Other noncurrent assets 847 949 Total assets $ 120,348 $ 112,012 LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable $ 1,489 $ 1,977 Accrued expenses and other current liabilities 2,882 4,469 Current portion of operating lease liabilities 428 396 Deferred revenue 1,195 1,028 Total current liabilities 5,994 7,870 Noncurrent operating lease liabilities 2,219 2,396 Other noncurrent liabilities 523 820 Total liabilities 8,736 11,086 Shareholders' equity: Preferred stock—$0.001 par value, 10,000,000 shares authorized, and 0 shares issued and outstanding, as of June 30, 2026 and December 31, 2025 - - Common stock—$0.001 par value, 200,000,000 shares authorized, 14,114,395 and 14,151,350 shares issued and outstanding, as of June 30, 2026 and December 31, 2025 14 14 Additional paid-in capital 89,966 88,628 Retained earnings 21,632 12,284 Total shareholders' equity 111,612 100,926 Total liabilities and shareholders' equity $ 120,348 $ 112,012 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, 2026 2025 2026 2025 Revenue $ 26,718 $ 21,774 $ 52,548 $ 43,777 Costs and expenses(1): Cost of revenue (exclusive of depreciation and amortization) 3,818 3,501 7,637 7,162 Sales and marketing expenses 5,750 5,622 11,608 11,029 General and administrative expenses 8,268 7,253 16,167 13,427 Depreciation and amortization 2,787 2,647 5,597 5,197 Total costs and expenses 20,623 19,023 41,009 36,815 Income from operations 6,095 2,751 11,539 6,962 Interest income 394 339 738 647 Income before income taxes 6,489 3,090 12,277 7,609 Income tax expense 1,529 404 2,929 1,483 Net income $ 4,960 $ 2,686 $ 9,348 $ 6,126 Earnings per share: Basic $ 0.35 $ 0.19 $ 0.66 $ 0.44 Diluted $ 0.34 $ 0.18 $ 0.65 $ 0.42 Weighted average shares outstanding: Basic 14,175,312 14,018,629 14,184,951 14,008,385 Diluted 14,464,461 14,553,282 14,436,339 14,528,789 (1) Share-based compensation expense in each category: Cost of revenue (exclusive of depreciation and amortization) $ 14 $ - $ 29 $ - Sales and marketing expenses $ 147 $ 193 $ 375 $ 388 General and administrative expenses 2,075 1,634 3,882 3,035 Total $ 2,236 $ 1,827 $ 4,286 $ 3,423 RED VIOLET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (unaudited) Six Months Ended June 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 9,348 $ 6,126 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,597 5,197 Share-based compensation expense 4,286 3,423 Write-off of long-lived assets 1 2 Provision for bad debts 367 274 Noncash lease expenses 259 257 Deferred income tax expense 1,967 1,187 Changes in assets and liabilities: Accounts receivable (2,574 ) (2,024 ) Prepaid expenses and other current assets (78 ) (510 ) Other noncurrent assets 102 (162 ) Accounts payable (488 ) (293 ) Accrued expenses and other current liabilities (1,587 ) (863 ) Deferred revenue 167 94 Operating lease liabilities (145 ) (220 ) Net cash provided by operating activities 17,222 12,488 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (168 ) (252 ) Capitalized costs included in intangible assets (6,803 ) (4,984 ) Net cash used in investing activities (6,971 ) (5,236 ) CASH FLOWS FROM FINANCING ACTIVITIES: Taxes paid related to net share settlement of vesting of restricted stock units (714 ) (727 ) Repurchases of common stock (3,122 ) - Dividend payable - (4,181 ) Net cash used in financing activities (3,836 ) (4,908 ) Net increase in cash and cash equivalents $ 6,415 $ 2,344 Cash and cash equivalents at beginning of period 43,557 36,504 Cash and cash equivalents at end of period $ 49,972 $ 38,848 SUPPLEMENTAL DISCLOSURE INFORMATION: Cash paid for interest $ - $ - Cash paid for income taxes $ 531 $ 681 Share-based compensation capitalized in intangible assets $ 888 $ 752 Retirement of treasury stock $ 3,836 $ 727 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 June 30, Six Months Ended June 30, (Dollars in thousands) 2026 2025 2026 2025 Net income $ 4,960 $ 2,686 $ 9,348 $ 6,126 Interest income (394 ) (339 ) (738 ) (647 ) Income tax expense 1,529 404 2,929 1,483 Depreciation and amortization 2,787 2,647 5,597 5,197 Share-based compensation expense 2,236 1,827 4,286 3,423 Acquisition-related costs 49 370 308 370 Litigation costs 81 4 185 13 Write-off of long-lived assets - 1 1 3 Adjusted EBITDA $ 11,248 $ 7,600 $ 21,916 $ 15,968 Revenue $ 26,718 $ 21,774 $ 52,548 $ 43,777 Net income margin 19 % 12 % 18 % 14 % Adjusted EBITDA margin 42 % 35 % 42 % 36 % 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) 2026 2025 2026 2025 Net income $ 4,960 $ 2,686 $ 9,348 $ 6,126 Share-based compensation expense 2,236 1,827 4,286 3,423 Amortization of share-based compensation capitalized in intangible assets 406 413 820 822 Acquisition-related costs 49 370 308 370 Litigation costs 81 4 185 13 Write-off of long-lived assets - 1 1 3 Tax effect of adjustments(1) (562 ) (759 ) (1,183 ) (1,106 ) Adjusted net income $ 7,170 $ 4,542 $ 13,765 $ 9,651 Earnings per share: Basic $ 0.35 $ 0.19 $ 0.66 $ 0.44 Diluted $ 0.34 $ 0.18 $ 0.65 $ 0.42 Adjusted earnings per share: Basic $ 0.51 $ 0.32 $ 0.97 $ 0.69 Diluted $ 0.50 $ 0.31 $ 0.95 $ 0.66 Weighted average shares outstanding: Basic 14,175,312 14,018,629 14,184,951 14,008,385 Diluted 14,464,461 14,553,282 14,436,339 14,528,789 (1) The tax effect of adjustments is calculated using the expected combined federal and state statutory tax rate, which was approximately 26.00% for the three and six months ended June 30, 2026 and 2025. The resulting tax effect may differ from applying such rate to total adjustments due to the tax treatment of certain items. Beginning with our Annual Report on Form 10-K for the year ended December 31, 2025, we updated the methodology for determining the income tax effects of adjustments in calculating non-GAAP adjusted net income. Prior-period amounts have been revised to conform to the current methodology and presentation. These revisions did not affect our previously reported GAAP financial statements. 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) 2026 2025 2026 2025 Revenue $ 26,718 $ 21,774 $ 52,548 $ 43,777 Cost of revenue (exclusive of depreciation and amortization) (3,818 ) (3,501 ) (7,637 ) (7,162 ) Depreciation and amortization related to cost of revenue (2,716 ) (2,595 ) (5,462 ) (5,095 ) Gross profit 20,184 15,678 39,449 31,520 Depreciation and amortization of certain intangible assets(1) 2,669 2,560 5,378 5,012 Adjusted gross profit $ 22,853 $ 18,238 $ 44,827 $ 36,532 Gross margin 76 % 72 % 75 % 72 % Adjusted gross margin 86 % 84 % 85 % 83 % (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) 2026 2025 2026 2025 Net cash provided by operating activities $ 10,637 $ 7,487 $ 17,222 $ 12,488 Less: Purchase of property and equipment (105 ) (202 ) (168 ) (252 ) Capitalized costs included in intangible assets (3,360 ) (2,515 ) (6,803 ) (4,984 ) Free cash flow $ 7,172 $ 4,770 $ 10,251 $ 7,252 In order to assist readers of our condensed 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) Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Customer metrics IDI - billable customers(1) 8,743 8,926 9,241 9,549 9,853 10,022 10,422 10,869 FOREWARN - users(2) 284,967 303,418 325,336 346,671 372,209 390,018 417,680 443,173 Revenue metrics Contractual revenue %(3) 77 % 77 % 74 % 77 % 75 % 77 % 75 % 77 % Gross revenue retention %(4) 94 % 96 % 96 % 97 % 96 % 95 % 95 % 95 % Other metrics Employees - sales and marketing 93 95 90 92 105 99 104 104 Employees - support 11 11 11 11 11 12 13 13 Employees - infrastructure 29 28 29 29 32 37 36 35 Employees - engineering 58 57 62 63 66 73 77 79 Employees - administration 26 25 24 28 28 29 30 30 (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. Source: Red Violet, Inc.