We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Red Violet's Q3 Earnings Beat Estimates, Revenues Increase Y/Y
Read MoreHide Full Article
Key Takeaways
RDVT's Q3 earnings rose 14.6% to 47 cents per share, while revenues jumped 20.2% to $27.8 million.
RDVT's contractual revenues reached 78% of total sales, while adjusted EBITDA rose 22% to $11 million.
FOREWARN added 19,688 users, while RDVT's operating cash flow surged 25% to a record $12.7 million.
Red Violet (RDVT - Free Report) reported third-quarter 2026 adjusted earnings of 47 cents per share, surpassing the Zacks Consensus Estimate by 14.63%. Earnings increased 14.6% year over year.
Revenues increased 20.2% year over year to a record $27.8 million, beating the consensus mark by 1.5%. Growth was supported by strong demand for identity intelligence solutions across financial services, investigative and collections markets. The company added 383 billable IDI customers, bringing its total to 11,252.
Red Violet, Inc. Price, Consensus and EPS Surprise
Financial and Corporate Risk delivered strong growth, supported by deeper utilization among existing financial services customers. Background screening and insurance gained momentum through increased adoption of enhanced screening offerings and improved pipeline conversion.
Investigative remained the fastest-growing vertical on a percentage basis, with law enforcement, private investigators, bail bonds and process servers recording double-digit growth. RDVT now serves more than 1,000 law enforcement agencies, highlighting further expansion opportunities.
Collections maintained strong momentum as elevated consumer delinquencies and rising collection volumes increased demand for identity intelligence solutions. Emerging Markets also performed well, supported by government, repossession, legal, retail and marketing customers.
Red Violet Expands FOREWARN’s User Base
The Real Estate vertical delivered solid growth, driven by FOREWARN’s double-digit revenue increase. The platform added 19,688 users during the quarter, bringing its total to 462,861. More than 665 REALTOR associations are now under contract.
However, IDI’s real estate business declined at a high-single-digit rate year over year amid challenging housing market conditions. Management expects this softness to persist until market conditions improve.
Red Violet also introduced Community Alerts, enabling FOREWARN subscribers to share warnings about concerning interactions with nearby network members. The feature is included in existing subscriptions at no additional cost.
RDVT’s Contractual Revenue Mix Strengthens
Contractual revenues accounted for 78% of total revenues, increasing 300 basis points (bps) year over year. Red Violet attributed the improvement to growing enterprise customer relationships, new contractual agreements and cross-selling opportunities.
Gross revenue retention remained stable at 96%, indicating continued customer stability. The company also highlighted increasing customer activity across different enterprise spending tiers, including accounts generating more than $100,000 annually.
RDVT reported no meaningful one-time transactional revenue contributions during the quarter. The company emphasized that growth reflected recurring business activity and increasing utilization across its diversified customer base.
Red Violet’s Margins Improve Despite Higher Costs
Adjusted gross profit increased 22% year over year to $23.7 million, while adjusted gross margin expanded 100 bps to 85%.
Sales and marketing expenses increased 14% year over year to $6.2 million, primarily reflecting higher personnel costs and bad debt provisions. General and administrative expenses rose 32% year over year to $9 million, driven by personnel expenses and acquisition-related activities.
Despite higher operating costs, adjusted EBITDA increased 22% year over year to $11 million. Adjusted EBITDA margin expanded 100 bps to 40%, reflecting continued operating leverage.
RDVT’s Cash Flow and Liquidity Remain Strong
Red Violet ended September 2026 with $165.7 million in cash, cash equivalents and U.S. Treasury investments, with no debt. The company completed a public offering that generated approximately $108.7 million in net proceeds.
Operating cash flow increased 25% year over year to a record $12.7 million. Free cash flow rose 21% to $8.8 million from $7.3 million, highlighting strong cash generation alongside business expansion.
RDVT did not repurchase shares during the quarter. Through September 2026, the company repurchased 74,500 shares at an average price of $41.87, leaving $15.5 million available under its authorization.
Red Violet Targets AI and Government Opportunities
Red Violet remains focused on expanding its cloud-native identity intelligence platform through investments in AI, proprietary datasets and product development. AI-driven automation is accelerating feature development, improving data analysis and supporting operational productivity.
Public-sector opportunities continue to expand. The company recently secured a multiyear contract with another Secretary of State and is strengthening relationships with federal agencies. RDVT also identified home healthcare as an emerging opportunity for FOREWARN.
Red Violet plans to increase investments in engineering, sales and marketing while maintaining disciplined capital allocation. Strategic acquisitions involving proprietary data, differentiated technologies and established industry relationships remain under consideration.
The company highlighted continued demand across commercial and government markets, supported by rising digital transactions and increasingly sophisticated AI-driven fraud. Red Violet expects its expanding enterprise relationships, product investments and broader market penetration to support its next phase of growth.
Forgent Power, Telos and NVIDIA are expected to report their quarterly results on Nov. 12, 9 and 17, respectively. Forgent Power shares have dropped 22.6% year to date (YTD). Telos shares have declined 0.8% YTD, while NVIDIA shares have climbed 7.3% YTD.
View the Zacks #1 Rank List
Image: Bigstock
Red Violet's Q3 Earnings Beat Estimates, Revenues Increase Y/Y
Key Takeaways
Red Violet (RDVT - Free Report) reported third-quarter 2026 adjusted earnings of 47 cents per share, surpassing the Zacks Consensus Estimate by 14.63%. Earnings increased 14.6% year over year.
Revenues increased 20.2% year over year to a record $27.8 million, beating the consensus mark by 1.5%. Growth was supported by strong demand for identity intelligence solutions across financial services, investigative and collections markets. The company added 383 billable IDI customers, bringing its total to 11,252.
Red Violet, Inc. Price, Consensus and EPS Surprise
Red Violet, Inc. price-consensus-eps-surprise-chart | Red Violet, Inc. Quote
RDVT Sees Broad-Based Growth Across Verticals
Financial and Corporate Risk delivered strong growth, supported by deeper utilization among existing financial services customers. Background screening and insurance gained momentum through increased adoption of enhanced screening offerings and improved pipeline conversion.
Investigative remained the fastest-growing vertical on a percentage basis, with law enforcement, private investigators, bail bonds and process servers recording double-digit growth. RDVT now serves more than 1,000 law enforcement agencies, highlighting further expansion opportunities.
Collections maintained strong momentum as elevated consumer delinquencies and rising collection volumes increased demand for identity intelligence solutions. Emerging Markets also performed well, supported by government, repossession, legal, retail and marketing customers.
Red Violet Expands FOREWARN’s User Base
The Real Estate vertical delivered solid growth, driven by FOREWARN’s double-digit revenue increase. The platform added 19,688 users during the quarter, bringing its total to 462,861. More than 665 REALTOR associations are now under contract.
However, IDI’s real estate business declined at a high-single-digit rate year over year amid challenging housing market conditions. Management expects this softness to persist until market conditions improve.
Red Violet also introduced Community Alerts, enabling FOREWARN subscribers to share warnings about concerning interactions with nearby network members. The feature is included in existing subscriptions at no additional cost.
RDVT’s Contractual Revenue Mix Strengthens
Contractual revenues accounted for 78% of total revenues, increasing 300 basis points (bps) year over year. Red Violet attributed the improvement to growing enterprise customer relationships, new contractual agreements and cross-selling opportunities.
Gross revenue retention remained stable at 96%, indicating continued customer stability. The company also highlighted increasing customer activity across different enterprise spending tiers, including accounts generating more than $100,000 annually.
RDVT reported no meaningful one-time transactional revenue contributions during the quarter. The company emphasized that growth reflected recurring business activity and increasing utilization across its diversified customer base.
Red Violet’s Margins Improve Despite Higher Costs
Adjusted gross profit increased 22% year over year to $23.7 million, while adjusted gross margin expanded 100 bps to 85%.
Sales and marketing expenses increased 14% year over year to $6.2 million, primarily reflecting higher personnel costs and bad debt provisions. General and administrative expenses rose 32% year over year to $9 million, driven by personnel expenses and acquisition-related activities.
Despite higher operating costs, adjusted EBITDA increased 22% year over year to $11 million. Adjusted EBITDA margin expanded 100 bps to 40%, reflecting continued operating leverage.
RDVT’s Cash Flow and Liquidity Remain Strong
Red Violet ended September 2026 with $165.7 million in cash, cash equivalents and U.S. Treasury investments, with no debt. The company completed a public offering that generated approximately $108.7 million in net proceeds.
Operating cash flow increased 25% year over year to a record $12.7 million. Free cash flow rose 21% to $8.8 million from $7.3 million, highlighting strong cash generation alongside business expansion.
RDVT did not repurchase shares during the quarter. Through September 2026, the company repurchased 74,500 shares at an average price of $41.87, leaving $15.5 million available under its authorization.
Red Violet Targets AI and Government Opportunities
Red Violet remains focused on expanding its cloud-native identity intelligence platform through investments in AI, proprietary datasets and product development. AI-driven automation is accelerating feature development, improving data analysis and supporting operational productivity.
Public-sector opportunities continue to expand. The company recently secured a multiyear contract with another Secretary of State and is strengthening relationships with federal agencies. RDVT also identified home healthcare as an emerging opportunity for FOREWARN.
Red Violet plans to increase investments in engineering, sales and marketing while maintaining disciplined capital allocation. Strategic acquisitions involving proprietary data, differentiated technologies and established industry relationships remain under consideration.
The company highlighted continued demand across commercial and government markets, supported by rising digital transactions and increasingly sophisticated AI-driven fraud. Red Violet expects its expanding enterprise relationships, product investments and broader market penetration to support its next phase of growth.
Zacks Rank & Stocks to Consider
Red Violet currently has a Zacks Rank #3 (Hold).
Forgent Power Solutions (FPS - Free Report) , Telos (TLS - Free Report) and NVIDIA (NVDA - Free Report) are some better-ranked stocks in the broader Zacks Computer and Technology sector. While Forgent Power and Telos sport a Zacks Rank #1 (Strong Buy) each at present, NVIDIA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Forgent Power, Telos and NVIDIA are expected to report their quarterly results on Nov. 12, 9 and 17, respectively. Forgent Power shares have dropped 22.6% year to date (YTD). Telos shares have declined 0.8% YTD, while NVIDIA shares have climbed 7.3% YTD.