Red Violet | 10-Q: FY2026 Q1 Revenue Beats Estimate at USD 25.83 M

Revenue: As of FY2026 Q1, the actual value is USD 25.83 M, beating the estimate of USD 24.63 M.

EPS: As of FY2026 Q1, the actual value is USD 0.3, beating the estimate of USD 0.225.

EBIT: As of FY2026 Q1, the actual value is USD 5.1 M.

Red Violet, Inc. operates as a single operating and reportable segment focusing on identity and information solutions.

Revenue

Total revenue for the three months ended March 31, 2026, increased by 17% to $25.8 million, up from $22.0 million in the same period of 2025. Revenue from existing customers rose by $4.6 million, or 24%, to $23.7 million, while revenue from new customers decreased by $0.8 million, or 28%, to $2.1 million during this period. Customers with pricing contracts accounted for 75% of total revenue in the first quarter of 2026, compared to 74% in 2025, with transactional customers making up the remaining 25% and 26%, respectively.

Net Income

Net income increased by 28% to $4.4 million for the three months ended March 31, 2026, compared to $3.4 million for the same period in 2025. The net income margin improved to 17% from 16% year-over-year. Adjusted net income increased by 29% to $6.6 million for the three months ended March 31, 2026.

Gross Profit and Margin

Gross profit increased by 22% to $19.3 million for the three months ended March 31, 2026, from $15.8 million in the prior year. The gross margin increased to 75% from 72%. Adjusted gross profit increased by 20% to $22.0 million, and the adjusted gross margin expanded to 85% from 83%.

Operating Costs

Cost of revenue (exclusive of depreciation and amortization) increased by $0.1 million, or 4%, to $3.8 million for the three months ended March 31, 2026, from $3.7 million in 2025. Sales and marketing expenses increased by $0.5 million, or 8%, to $5.9 million. General and administrative expenses rose by $1.7 million, or 28%, to $7.9 million. Depreciation and amortization expenses increased by $0.2 million, or 10%, to $2.8 million. Income from operations was $5.4 million for the three months ended March 31, 2026, up from $4.2 million in the prior year.

Adjusted EBITDA

Adjusted EBITDA increased by 27% to $10.7 million for the three months ended March 31, 2026, compared to $8.4 million for the same period in 2025. The Adjusted EBITDA margin improved to 41% from 38% year-over-year.

Cash Flow

Net cash provided by operating activities increased by 32% to $6.6 million for the three months ended March 31, 2026, compared to $5.0 million in 2025. Free cash flow was $3.1 million for the three months ended March 31, 2026, up from $2.5 million in the prior year. Cash and cash equivalents totaled $43.5 million as of March 31, 2026. Net cash used in investing activities was - $3.5 million for the three months ended March 31, 2026, compared to - $2.5 million in the same period of 2025. Net cash used in financing activities was - $3.2 million for the three months ended March 31, 2026, compared to - $4.4 million in the prior year.

Unique Metrics

Red Violet, Inc. added 400 customers to IDI during the first quarter of 2026, reaching a total of 10,422 customers, up from 9,241 a year earlier. FOREWARN added 27,662 users in the first quarter of 2026, bringing its total to 417,680 users, an increase from 325,336 users a year prior. The company repurchased 73,250 shares of common stock year-to-date through April 30, 2026, at an average price of $41.90 per share. As of April 30, 2026, $15.6 million remained authorized under the Stock Repurchase Program. Material capital commitments under data licensing and cloud service agreements amounted to $39.8 million as of March 31, 2026.

Future Outlook and Strategy

Red Violet, Inc. anticipates funding its commitments and ongoing operating and capital requirements over the next twelve months using available cash and cash flows from operations. The company believes its existing resources will be sufficient for at least the next twelve months, based on projected growth in revenue and operating results. The company aims to develop new products, grow its existing business, and expand into additional markets by generating sales from current and new products, while also continuing to build out its sales organization.