• Revenue (Q4 2024): $19.6 million, up 30% year-over-year.
• Adjusted Gross Profit (Q4 2024): $16.1 million, with an adjusted gross margin of 82%.
• Adjusted EBITDA (Q4 2024): $4.5 million, up 68% year-over-year, with a margin of 23%.
• Adjusted Net Income (Q4 2024): $1.3 million, up 390% year-over-year, resulting in $0.09 per diluted share.
• Cash and Cash Equivalents (Dec 31, 2024): $36.5 million.
• IDI Billable Customer Base (Q4 2024): Increased by 183 customers to 8,926.
• FOREWARN Users (Q4 2024): Increased by over 18,000 to 303,418 users.
• Revenue (Full Year 2024): $75.2 million, up 25% year-over-year.
• Adjusted Gross Profit (Full Year 2024): $61.2 million.
• Adjusted EBITDA (Full Year 2024): $23.6 million, with a margin of 31%.
• Free Cash Flow (Full Year 2024): $14.4 million, up from $5.9 million in 2023.
• Special Cash Dividend: $0.30 per share, totaling $4.2 million, paid on February 14, 2025.

• Warning! GuruFocus has detected 3 Warning Sign with SEER.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Red Violet Inc (NASDAQ:RDVT) achieved record revenue growth of 30% in the fourth quarter, reaching $19.6 million.
• The company reported a significant increase in adjusted EBITDA, up 68% to $4.5 million, with a margin improvement of 5 percentage points.
• Adjusted net income saw a substantial rise of 390% to $1.3 million, translating to adjusted earnings of $0.09 per diluted share.
• The IDI billable customer base grew by 183 customers sequentially, ending the fourth quarter with 8,926 customers.
• Red Violet Inc (NASDAQ:RDVT) generated $14.4 million in free cash flow for the year, a 143% increase compared to 2023.

Negative Points

• Contractual revenue decreased by 5 percentage points to 77% for the quarter.
• Sales and marketing expenses increased by 40% to $4.9 million, primarily due to higher personnel-related costs.
• General and administrative expenses rose by 21% to $8.3 million, also driven by increased personnel-related expenses.
• The collections vertical, although showing growth, had been soft for several years due to COVID-19 and regulatory impacts.
• Despite strong growth, the company did not purchase any shares under its stock repurchase program in the fourth quarter.

Q & A Highlights

Q: Great to see the record revenue despite typical seasonal headwinds. How do you plan to maintain this elevated level of top-line growth in 2025? A: Derek Dubner, CEO: We are pleased with our recent acceleration, which is a result of strategic investments and brand awareness. Our sales pipeline is strong, and we expect to continue this momentum with new products and functionalities that will transform our operations into even greater growth.

Q: How do you view the opportunities for growth in 2025 between expanding within the existing customer base versus acquiring new customers? A: Daniel MacLachlan, CFO: We see significant opportunities to expand within our current relationships, especially as we move upmarket. While acquiring new customers remains important, we believe there is a larger opportunity to extract more revenue from our existing base, which gives us confidence in sustaining our growth momentum.

Q: Are the recent investments in sales and marketing yielding a healthy ROI, and will you continue to expand these investments in 2025? A: Daniel MacLachlan, CFO: Yes, we are seeing ROI from our strategic hires, and we plan to continue investing in sales, marketing, product development, and infrastructure in 2025. We expect a consistent ramp in ROI as new hires build their pipelines and convert them into sales.

Q: Can you provide more details about the new products you are working on and their potential impact? A: Derek Dubner, CEO: We are expanding functionalities, such as geospatial search and account monitoring, and enhancing AI capabilities to extract knowledge from data. These initiatives will open new ways for customers to interact with our solutions, providing actionable intelligence and driving growth.

Q: Regarding margins, is the target of 40% EBITDA margin at $100 million in revenue still valid, and what should we expect for 2025? A: Daniel MacLachlan, CFO: Yes, the 40% EBITDA margin target remains our goal. For 2025, we plan to maintain consistent EBITDA margins with 2024, around 30%, as we continue to invest in strategic areas to drive future revenue growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.