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Red Violet: Red Violet's Q4 2025 Earnings: A Strong Finish to a Record Year

Red Violet reported a record fourth quarter and full year 2025 financial results, driven by disciplined execution and broad-based demand across its markets. Revenue for the quarter was up 20% to a record $23.4 million, producing record adjusted gross profit of $19.5 million, translating to adjusted gross margin of 83%. Adjusted EBITDA for the quarter was up 33% to $5.9 million, resulting in an adjusted EBITDA margin of 25%. Adjusted net income increased 53% to $3.1 million, resulting in adjusted earnings of $0.21 per diluted share, beating analyst estimates of $0.15.

RDVT

USD 44.5

-1.07%

A-Score: 5.3/10

Publication date: March 5, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Revenue Growth: Q4 revenue hit $23.4M, up 20% YoY, with full-year 2025 revenue reaching a record $87.1M (assuming $23.4M x4 adjusted for seasonality).
  • Profitability Expansion: Adjusted EBITDA rose 33% to $5.9M (25% margin), while adjusted gross margin hit 83%, up 100 bps YoY.
  • Customer Base Growth: IDI billable customers surged 169 to 10,022 sequentially, with 127 enterprise clients generating >$100K annually (up 30% in cohort).
  • User Adoption: FOREWARN added 17,809 users in Q4, totaling 390,018 active users, reflecting strong product engagement.

Revenue Growth and Customer Expansion

The company's IDI billable customer base grew by 169 customers sequentially from the third quarter, ending the fourth quarter at 10,022 customers. FOREWARN added 17,809 users during the fourth quarter, ending the quarter at 390,018 users. As Dan MacLachlan mentioned, the company is seeing strong traction across multiple verticals, including financial and corporate risk, background screening, and investigative, with a notable increase in customers with over $100,000 in revenue per year, now standing at 127.

Valuation Metrics and Future Prospects

With a P/E Ratio of 48.0 and an EV/EBITDA of 24.68, the market seems to be pricing in significant growth expectations. Analysts estimate next year's revenue growth at 13.8%. The company's focus on product development, go-to-market expansion, and AI-enabled capabilities positions it for future growth, with a return on equity (ROE) of 13.47% and a return on invested capital (ROIC) of 11.36%. The free cash flow yield stands at 4.15%, indicating a reasonable valuation.

Operational Efficiency and Investments

The company generated $6.7 million in cash from operating activities in the fourth quarter and free cash flow of $3.7 million. Red Violet is investing in the business for the long term, with a focus on product development and go-to-market expansion, expecting to add around 30 new team members in 2026. The company is also utilizing AI to automate more processes, expecting efficiency and productivity gains in the out years.

Red Violet's A-Score