GICS Sector : Technology
Red Violet, Inc., a software and services company, specializes in proprietary technologies and applying analytical capabilities to deliver identity intelligence in the United States.It offers idiCORE, an investigative solution used to address various organizational challenges, which include due diligence, risk mitigation, identity authentication, and regulatory compliance; and FOREWARN, an app-based solution that provides instant knowledge before face-to-face engagement with a consumer, as well as helps professionals to identify and mitigate risk.The company serves financial services, insurance, healthcare, retail, and telecommunication companies; law enforcement and government agencies; and collections, corporate security, and investigative firms, as well as solutions used for purposes, such as risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition.
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.
Publication Date: Mar -08
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.
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.
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 (RDVT) Upgraded to Strong Buy: What Does It Mean for the Stock?
Mar -17
Red Violet: Strong Progress Continues
Mar -12
Red Violet (NASDAQ:RDVT) Shares Up 9% on Strong Earnings
Mar -06
Red Violet, Inc. (RDVT) Q4 2025 Earnings Call Transcript
Mar -05
red violet Announces Fourth Quarter and Full Year 2025 Financial Results
Mar -04
Hillsdale Investment Management Inc. Lowers Holdings in Red Violet, Inc. $RDVT
Feb -23
FOREWARN to Provide Identity Verification Services to West Penn Multi-List, Inc. to Promote Agent Safety
Feb -13
Red Violet: Still A Compelling Story Going Into 2026
Dec -24
The growth of Red Violet's AI-driven Identity Intelligence Platform is driven by increasing demand for identity verification and fraud prevention, coupled with the adoption of machine learning and artificial intelligence in various industries.
A platform that provides real-time access to public records, allowing users to make informed decisions
An AI-powered platform that provides advanced analytics and visualization tools to help users identify patterns and connections
A data analytics platform that provides access to a vast repository of public records and data
A verification platform that provides real-time identity verification and authentication
Red Violet, Inc. operates in a niche market, providing data analytics and information solutions. While there are some substitutes available, they are not as comprehensive as Red Violet's offerings, reducing the threat of substitutes.
Red Violet, Inc. has a diverse customer base, and no single customer accounts for a significant portion of its revenue, reducing the bargaining power of customers.
Red Violet, Inc. has a diversified supply chain, and its suppliers do not have significant bargaining power, reducing the threat of supplier negotiations.
The data analytics and information solutions market is highly competitive, and new entrants can easily enter the market, posing a significant threat to Red Violet, Inc.'s market share.
The data analytics and information solutions market is highly competitive, with many established players, leading to a high intensity of rivalry among competitors, including Red Violet, Inc.
| Value | |
|---|---|
| Debt Weight | 2.90% |
| Debt Cost | 3.95% |
| Equity Weight | 97.10% |
| Equity Cost | 9.69% |
| WACC | 9.53% |
| Leverage | 2.98% |
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