The following is a summary of the Red Violet, Inc. (RDVT) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Red Violet reported a 20% increase in Q3 revenue reaching a record $19.1 million.

• Adjusted gross profit increased to a record $15.7 million with a gross margin of 83%.

• Adjusted EBITDA grew 25% to $6.7 million, leading to an adjusted EBITDA margin of 35%.

• Adjusted net income rose by 23% resulting in $3.1 million, with adjusted earnings of $0.22 per diluted share.

• A record $4.8 million in free cash flow was generated during the quarter.

Business Progress:

• Red Violet added 266 new customers sequentially in Q3, demonstrating strong demand across its verticals.

• The company has engaged in significant hiring, adding 13 new team members in sales and marketing to support growth.

• Forewarn, their proactive safety tool, has shown significant user growth, with 21,091 additions in the quarter

• Record performance in investigative, financial, and corporate risk verticals with continuous onboarding of new customers and expanding transactions with existing ones.

• Plans to continue aggressive investment in business and marketing strategies throughout 2025.

Opportunities:

• The low unemployment and anticipated interest rate reductions are expected to positively impact transaction volumes, supporting revenue growth in various consumer-related verticals.

• Continued investment in sales and marketing capabilities is poised to drive stronger market penetration and customer acquisition, especially in emerging markets and financial and corporate risk areas.

Risks:

• Lower-income consumers experiencing pressures from inflation, high interest rates, and reduced government subsidies could potentially impact the collections vertical.

• Over-reliance on specific favorable economic factors may pose a risk if those conditions reverse unexpectedly.

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