Red Violet | 8-K: FY2026 Q2 Revenue Beats Estimate at USD 26.72 M

Revenue: As of FY2026 Q2, the actual value is USD 26.72 M, beating the estimate of USD 25.62 M.

EPS: As of FY2026 Q2, the actual value is USD 0.34, beating the estimate of USD 0.21.

EBIT: As of FY2026 Q2, the actual value is USD 6.095 M.

Operational Metrics (Q2 2026 vs. Q2 2025)

Profitability

• Gross profit increased 29% to $20.2 million in Q2 2026 from $15.678 million in Q2 2025.
• Gross margin increased to 76% in Q2 2026 from 72% in Q2 2025.
• Adjusted gross profit increased 25% to $22.9 million in Q2 2026 from $18.238 million in Q2 2025.
• Adjusted gross margin increased to a record 86% in Q2 2026 from 84% in Q2 2025.
• Net income increased 85% to $5.0 million in Q2 2026 from $2.686 million in Q2 2025.
• Net income margin increased to 19% in Q2 2026 from 12% in Q2 2025.
• Adjusted EBITDA increased 48% to a record $11.2 million in Q2 2026 from $7.600 million in Q2 2025.
• Adjusted EBITDA margin increased to a record 42% in Q2 2026 from 35% in Q2 2025.
• Adjusted net income increased 58% to a record $7.2 million in Q2 2026 from $4.542 million in Q2 2025.
• Income from operations was $6,095 thousand in Q2 2026, compared to $2,751 thousand in Q2 2025.

Operating Costs

• Cost of revenue (exclusive of depreciation and amortization) was $3,818 thousand in Q2 2026, up from $3,501 thousand in Q2 2025, an increase of $0.3 million or 9%.
• Sales and marketing expenses were $5,750 thousand in Q2 2026, compared to $5,622 thousand in Q2 2025, an increase of $0.1 million or 2%.
• General and administrative expenses were $8,268 thousand in Q2 2026, up from $7,253 thousand in Q2 2025, an increase of $1.0 million or 14%.
• Depreciation and amortization was $2,787 thousand in Q2 2026, compared to $2,647 thousand in Q2 2025, an increase of $0.1 million or 5%.
• Total costs and expenses were $20,623 thousand in Q2 2026, up from $19,023 thousand in Q2 2025.

Cash Flow

• Net cash provided by operating activities was $17,222 thousand for the six months ended June 30, 2026, compared to $12,488 thousand in the same period of 2025.
• Cash generated from operating activities was a record $10.6 million in Q2 2026, up 42% year-over-year from $7.5 million in the same period last year.
• Net cash used in investing activities was -$6,971 thousand for the six months ended June 30, 2026, compared to -$5,236 thousand in the same period of 2025.
• Net cash used in financing activities was -$3,836 thousand for the six months ended June 30, 2026, compared to -$4,908 thousand in the same period of 2025.
• Free cash flow was $7,172 thousand in Q2 2026, representing a 50% increase from $4,770 thousand in Q2 2025.
• Free cash flow for the six months ended June 30, 2026, was $10,251 thousand, compared to $7,252 thousand in the same period of 2025.

Balance Sheet (as of June 30, 2026)

• Cash and cash equivalents were $49,972 thousand, up from $43,557 thousand as of December 31, 2025.
• Cash and cash equivalents stood at $50.0 million, up from $43.6 million at December 31, 2025.
• Red Violet, Inc. has no debt.
• Current assets totaled $65.2 million, compared to $56.5 million at year-end 2025.
• Current liabilities were $6.0 million, down from $7.9 million at year-end 2025.

Operational Metrics

• Red Violet, Inc. added a record 447 new customers to IDI™ during Q2 2026, bringing the total to 10,869 customers.
• The company added 25,493 users to FOREWARN® during Q2 2026, reaching a total of 443,173 users.
• 660 REALTOR® Associations across the U.S. are now contracted to use FOREWARN®, maintaining a 100% renewal rate among association customers.
• Red Violet, Inc. repurchased 74,500 shares of its common stock year to date through June 30, 2026, at an average price of $41.87 per share.
• As of June 30, 2026, $15.5 million remained under the Stock Repurchase Program.
• Contractual revenue percentage was 77% in Q2 2026, consistent with Q2 2025.
• Gross revenue retention percentage was 95% in Q2 2026, a decrease of 2-percentage points from 97% in Q2 2025.

Segment Revenue

• Four of Red Violet, Inc.’s five revenue verticals achieved all-time high quarterly revenue levels in Q2 2026.
• Financial and Corporate Risk delivered strong, well-diversified growth, with Background Screening as a standout, Financial Services growing solidly, and Insurance posting healthy gains.
• Investigative was the fastest-growing vertical on a percentage basis, with Law Enforcement, Private Investigators, Bail Bonds, and Process Servers all showing strong double-digit growth.
• Collections experienced growth surpassing 20%, driven by underlying, recurring demand.
• Emerging Markets showed strong growth, led by Retail, Repossession, and Legal, with additional contributions from Marketing and Education.
• IDI’s Real Estate vertical (excluding FOREWARN) saw a modest decline, while FOREWARN achieved strong double-digit revenue growth.

Outlook / Guidance

Red Violet, Inc. expects its full-year adjusted EBITDA margin to be in the high-thirties and plans to continue investing in product development, AI engineers, infrastructure, and go-to-market capabilities for incremental margins over time. The company completed a public offering, raising approximately $109.0 million in net proceeds, which it intends to use for working capital, general corporate purposes, and potential strategic acquisitions. Red Violet, Inc. expressed confidence in extending its leadership due to its strong cash position and strategic initiatives, focusing on organic growth, data and platform expansion, and strategic acquisitions that align with specific criteria.