Revenue Increases 20% to a Record $19.1 Million Producing a Record $7.2 Million of Cash Flow from Operations
BOCA RATON, Fla., Nov. 06, 2024 (GLOBE NEWSWIRE) -- Red Violet, Inc. (NASDAQ: RDVT), a leading analytics and information solutions provider, today announced financial results for the quarter ended September 30, 2024.
"We are thrilled to report a record-breaking quarter for revenue, gross profit, and cash flow, which underscores the strength of our business and the commitment of our team. This exceptional performance enables us to continue investing in strategic initiatives, enhancing our offerings, and driving long-term value for our customers and shareholders alike,” said Derek Dubner, red violet's CEO. "As we look ahead, we remain focused on leveraging these achievements to fuel accelerated growth and innovation across our business.”
Third Quarter Financial Results
For the three months ended September 30, 2024 as compared to the three months ended September 30, 2023:
- Total revenue increased 20% to $19.1 million.
- Gross profit increased 28% to $13.4 million. Gross margin increased to 70% from 66%.
- Adjusted gross profit increased 26% to $15.7 million. Adjusted gross margin increased to 83% from 79%.
- Net income was $1.7 million compared to $12.5 million (inclusive of a one-time deferred income tax benefit of $10.3 million), which resulted in earnings of $0.12 per basic and diluted share. Net income margin decreased to 9% from 79%.
- Adjusted EBITDA increased 25% to $6.7 million. Adjusted EBITDA margin increased to 35% from 34%.
- Adjusted net income increased 23% to $3.2 million, which resulted in adjusted earnings of $0.23 and $0.22 per basic and diluted share, respectively.
- Net cash provided by operating activities increased 25% to $7.2 million.
- Cash and cash equivalents were $35.7 million as of September 30, 2024.
- Added 266 customers to IDI™ during the third quarter, ending the quarter with 8,743 customers.
- Added 21,091 users to FOREWARN® during the third quarter, ending the quarter with 284,967 users. Over 500 REALTOR® Associations throughout the U.S. are now contracted to use FOREWARN.
- Purchased 292,744 shares of the Company's common stock year to date at an average price of $19.81 per share pursuant to the Company's $15.0 million Stock Repurchase Program, as amended, that was initially authorized on May 2, 2022. The Company has $4.6 million remaining under the Stock Repurchase Program.
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
Investor Relations Contact:
Steven Hooser
Three Part Advisors
214-872-2710
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, net, income tax expense (benefit), depreciation and amortization, share-based compensation expense, litigation costs, and write-off of long-lived assets and others. 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, excluding share-based compensation expense, amortization of share-based compensation capitalized in intangible assets, and discrete tax items, and including 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 revenue less cost of revenue (exclusive of depreciation and amortization), 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 our third quarter performance will enable us to continue investing in strategic initiatives, enhancing our offerings, and driving long-term value for our customers and shareholders and whether we are able to leverage our achievements to fuel accelerated growth and innovation across our business. 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, 2023, filed on March 7, 2024, 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, 2024 | December 31, 2023 | |||||||
| ASSETS: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 35,747 | $ | 32,032 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $238 and $159 as of
September 30, 2024 and December 31, 2023, respectively | 8,459 | 7,135 | ||||||
| Prepaid expenses and other current assets | 1,730 | 1,113 | ||||||
| Total current assets | 45,936 | 40,280 | ||||||
| Property and equipment, net | 581 | 592 | ||||||
| Intangible assets, net | 35,731 | 34,403 | ||||||
| Goodwill | 5,227 | 5,227 | ||||||
| Right-of-use assets | 2,045 | 2,457 | ||||||
| Deferred tax assets | 7,463 | 9,514 | ||||||
| Other noncurrent assets | 987 | 517 | ||||||
| Total assets | $ | 97,970 | $ | 92,990 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,787 | $ | 1,631 | ||||
| Accrued expenses and other current liabilities | 795 | 1,989 | ||||||
| Current portion of operating lease liabilities | 469 | 569 | ||||||
| Deferred revenue | 565 | 690 | ||||||
| Total current liabilities | 4,616 | 4,879 | ||||||
| Noncurrent operating lease liabilities | 1,680 | 1,999 | ||||||
| Total liabilities | 6,296 | 6,878 | ||||||
| Shareholders' equity: | ||||||||
| Preferred stock-$0.001 par value, 10,000,000 shares authorized, and 0 shares issued and outstanding, as of September 30, 2024 and December 31, 2023 | - | - | ||||||
| Common stock-$0.001 par value, 200,000,000 shares authorized, 13,735,387 and 13,980,274 shares issued, and 13,735,387 and 13,970,846 shares outstanding, as of September 30, 2024 and December 31, 2023 | 14 | 14 | ||||||
| Treasury stock, at cost, 0 and 9,428 shares as of September 30, 2024 and December 31, 2023 | - | (188) | ||||||
| Additional paid-in capital | 93,393 | 94,159 | ||||||
| Accumulated deficit | (1,733) | (7,873) | ||||||
| Total shareholders' equity | 91,674 | 86,112 | ||||||
| Total liabilities and shareholders' equity | $ | 97,970 | $ | 92,990 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share data)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | $ | 19,057 | $ | 15,837 | $ | 55,624 | $ | 45,143 | ||||||||
| Costs and expenses(1): | ||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization) | 3,314 | 3,313 | 10,525 | 9,732 | ||||||||||||
| Sales and marketing expenses | 4,817 | 3,365 | 12,935 | 10,332 | ||||||||||||
| General and administrative expenses | 5,994 | 5,223 | 17,534 | 15,539 | ||||||||||||
| Depreciation and amortization | 2,434 | 2,171 | 7,081 | 6,141 | ||||||||||||
| Total costs and expenses | 16,559 | 14,072 | 48,075 | 41,744 | ||||||||||||
| Income from operations | 2,498 | 1,765 | 7,549 | 3,399 | ||||||||||||
| Interest income, net | 353 | 346 | 1,032 | 947 | ||||||||||||
| Income before income taxes | 2,851 | 2,111 | 8,581 | 4,346 | ||||||||||||
| Income tax expense (benefit) | 1,132 | (10,384) | 2,441 | (10,253) | ||||||||||||
| Net income | $ | 1,719 | $ | 12,495 | $ | 6,140 | $ | 14,599 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.12 | $ | 0.90 | $ | 0.44 | $ | 1.05 | ||||||||
| Diluted | $ | 0.12 | $ | 0.87 | $ | 0.43 | $ | 1.03 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 13,782,476 | 13,952,426 | 13,852,947 | 13,970,317 | ||||||||||||
| Diluted | 14,311,575 | 14,329,878 | 14,224,285 | 14,207,673 | ||||||||||||
| (1) Share-based compensation expense in each category: | ||||||||||||||||
| Sales and marketing expenses | $ | 148 | $ | 116 | $ | 444 | $ | 348 | ||||||||
| General and administrative expenses | 1,509 | 1,253 | 4,008 | 3,710 | ||||||||||||
| Total | $ | 1,657 | $ | 1,369 | $ | 4,452 | $ | 4,058 | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(unaudited)
| Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 6,140 | $ | 14,599 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 7,081 | 6,141 | ||||||
| Share-based compensation expense | 4,452 |
| ||||||