Red Violet, Inc. Q4 FY2025 earnings call

• Record fourth quarter and strong 2025 finish with 20% revenue growth. - IDI billable customer base grew sequentially, ForWARN added users. - Over 620 realtor associations contracted to use ForWARN. - 2025 saw 20% revenue growth, adjusted EBITDA margin 34%, free cash flow $18.2 million. - 127 customers contributed over $100,000 in revenue in 2025, up from 96 in 2024. - Continued growth in top tier customer onboarding. - Executed against product roadmap, made targeted investments in data science, product development, and go-to-market resources. - AI is a powerful accelerator but doesn't replace the platform's core elements; our platform is cloud-native with AI integrated into core workflows, better positioned to incorporate new advancements. - Revenue model is usage-based with contractual minimums, ~90% volume-driven. - Expanding data within intelligence engine, using AI to aggregate and contextualize data, expand strategic scope and integration in customer workflows. - Added over 30 team members in 2025, focusing on product development and go-to-market expansion.

Fourth quarter: Revenue was $23.4 million, up 20% ; adjusted gross profit was $19.5 million, adjusted gross margin 83% ; adjusted EBITDA was $5.9 million, up 33%, adjusted EBITDA margin 25% ; adjusted net income $3.1 million, up 53%, adjusted earnings per diluted share 21 cents ; free cash flow $3.7 million. IDI billable customer base grew by 169 sequentially to 10,022. ForWARN added 17,809 users, ending at 390,018, with over 620 realtor associations contracted. Full year: Revenue $90.3 million, up 20% ; adjusted gross profit $75.4 million ; adjusted EBITDA $31 million, adjusted EBITDA margin 34% ; free cash flow $18.2 million. 127 customers contributed over $100,000 in revenue in 2025 vs 96 in 2024. IDI's real estate vertical (excluding Forewarn) declined modestly year over year due to housing market conditions. Forewarn revenue growth robust, ended year with over 620 realtor associations under contract and over 390,000 users, contractual revenue 77% of total, gross revenue retention 95%.

• No formal guidance provided. - Expect 2026 to continue healthy top-line expansion. - Likely use of cash is investing in the business, especially in horizontal and vertical expansion enabled by AI.

Q: Josh Nichols of B Reilly Securities asked about enterprise pipeline update and 2026 growth trajectory in law enforcement agency vertical.

A: Dan said enterprise pipeline for higher tier customers is developing well with 127 customers over $100k in revenue in 2025. Derek said end markets excited about are public sector and background screening support, like winning a large payroll processor and progress in law enforcement at state level.

Q: David Polanski of Emerson Investments asked about revenue from payroll processor and toll authority in Q4, growth in high-spending customers, headcount, and AI use.

A: Dan said some revenue from payroll processor in Q4 but contractual minimums start in 2026, toll authority had minimal revenue. Growth in high-spending customers is combination of new customer wins and existing customer spend growth. Headcount: end of year had some shuffling with less productive salespeople, expectation is similar headcount growth in 2026 focusing on product development and go-to-market. Derek said utilizing AI to automate across enterprise, making progress but more to do, investment for growth with expectation of efficiency and productivity in out years.