red violet Reports Third Quarter 2026 Financial Results

Higher margins and operating cash flow accompanied an equity offering that raised $108.7 million net and diluted existing holders.

Rhea-AI Summary

red violet (NASDAQ: RDVT) reported third-quarter revenue of $27.8 million, up 20% from the same period in 2025. For the quarter ended September 30, 2026, net income rose 29% to $5.4 million, or $0.35 per basic and diluted share. Gross margin increased to 76% from 73%, while operating cash flow rose 25% to $12.7 million.

Adjusted EBITDA, a non-GAAP earnings measure, increased 22% to $11.0 million, with margin rising to 40% from 39%. A completed common-stock offering raised $108.7 million net through 1,916,667 shares. Cash and U.S. Treasury investments totaled $165.7 million at September 30, with no debt. IDI added 383 customers and FOREWARN added 19,688 users during the quarter. Nine-month revenue reached $80.299 million versus $66.860 million a year earlier; net income reached $14.793 million versus $10.339 million. Quarterly general and administrative expenses increased to $8.971 million from $6.777 million.

22 points · 0 major

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Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

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0 major · 10 points

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Positive

• Moderate pointThird-quarter revenue increased 20% to $27.8 million year over year.
• Moderate pointThird-quarter net income increased 29% to $5.4 million; net margin rose to 20% from 18%.
• Moderate pointThird-quarter gross profit increased 25% to $21.0 million; gross margin rose to 76% from 73%.
• Moderate pointThird-quarter operating cash flow increased 25% to $12.7 million year over year.
• Moderate pointCompleted common-stock offering provided $108.7 million in net proceeds after underwriting discounts, commissions and offering expenses. 8.5% of market cap
• Moderate pointThird-quarter adjusted EBITDA increased 22% to $11.0 million; adjusted margin rose to 40% from 39%.
• Moderate pointOperating income increased to $5.765 million for the quarter and $17.304 million year-to-date, versus $4.576 million/$11.538 million.

15 minor points

• Minor pointThird-quarter basic EPS rose to $0.35 from $0.30; diluted EPS rose to $0.35 from $0.29.
• Minor pointCash and U.S. Treasury investments totaled $165.7 million at September 30, 2026, with no debt.
• Minor pointThird-quarter adjusted net income increased 23% to $7.3 million, with adjusted basic/diluted EPS of $0.48/$0.47.
• Minor pointThird-quarter adjusted gross profit increased 22% to $23.7 million; adjusted gross margin rose to 85% from 84%.
• Minor pointIDI added 383 customers during the third quarter, ending with 11,252 customers.
• Minor pointFOREWARN added 19,688 users during the third quarter, ending with 462,861 users.
• Minor pointFOREWARN had over 665 REALTOR Associations contracted throughout the United States.
• Minor pointTrailing twelve-month revenue surpassed $100 million for the first time.
• Minor pointNine-month revenue increased to $80.299 million from $66.860 million in 2025.
• Minor pointNine-month net income increased to $14.793 million from $10.339 million; net margin rose to 18% from 15%.
• Minor pointNine-month basic/diluted EPS increased to $1.01/$0.99 from $0.74/$0.71 in 2025.
• Minor pointNine-month adjusted EBITDA increased to $32.917 million from $25.004 million; adjusted margin rose to 41% from 37%.
• Minor pointNine-month operating cash flow increased to $29.893 million from $22.660 million in 2025.
• Minor pointNine-month share repurchases totaled $3.122 million, versus $653,000 in 2025.
• Minor pointThird-quarter interest income increased to $1.069 million from $386,000; nine-month income rose to $1.807 million from $1.033 million.

Negative

• Moderate pointOffering issued 1,916,667 common shares, including 250,000 under the fully exercised underwriters’ option, diluting existing holders.
• Moderate pointThird-quarter general and administrative expenses rose to $8.971 million from $6.777 million; nine-month expenses reached $25.138 million versus $20.204 million.
• Minor pointThird-quarter sales and marketing expenses rose to $6.160 million from $5.402 million; nine-month expenses reached $17.768 million versus $16.431 million.
• Minor pointThird-quarter cost of revenue, excluding depreciation and amortization, rose to $4.018 million from $3.622 million.
• Minor pointNine-month cost of revenue, excluding depreciation and amortization, rose to $11.655 million from $10.784 million.

5 minor points

• Minor pointThird-quarter depreciation and amortization rose to $2.837 million from $2.706 million; nine-month expense reached $8.434 million versus $7.903 million.
• Minor pointThird-quarter share-based compensation expense rose to $2.079 million from $1.706 million; nine-month expense reached $6.365 million versus $5.129 million.
• Minor pointThird-quarter income tax expense rose to $1.389 million from $749,000; nine-month expense reached $4.318 million versus $2.232 million.
• Minor pointNine-month capitalized intangible-asset spending increased to $10.555 million from $7.679 million.
• Minor pointNine-month bad-debt provision increased to $791,000 from $408,000.

News Explained

The completed offering issued 1,916,667 new common shares; shares outstanding rose from 14,151,350 on December 31, 2025 to 16,050,406 on September 30, 2026. Under the supplied definition, the increased share count reduces existing holders’ percentage ownership, absent offsetting changes.

Key Figures

Revenue: $27.8 million, up 20% Gross margin: 76%, compared with 73% Net income: $5.4 million, up 29% +5 more

Revenue

$27.8 million, up 20%

Third quarter 2026 versus third quarter 2025

Gross margin

76%, compared with 73%

Third quarter 2026 versus third quarter 2025

Net income

$5.4 million, up 29%

Third quarter 2026 versus third quarter 2025

Earnings per share

$0.35 per basic and diluted share

Third quarter 2026

Adjusted EBITDA

$11.0 million, up 22%

Third quarter 2026 versus third quarter 2025

Operating cash flow

$12.7 million, up 25%

Third quarter 2026 versus third quarter 2025

Cash, equivalents, and U.S. Treasury securities

$165.7 million; no debt

As of September 30, 2026

Public offering

1,916,667 shares; $108.7 million net proceeds

Underwritten offering closed during the third quarter

Previous Earnings Reports

5 past events · Latest: Aug 10

Same Type 5 events

1. Aug 10

   Q2 earnings

   24h Move

   +8.5%

   Revenue and profitability increased, with gross margin expansion and record operating cash flow.

2. May 06

   Q1 earnings

   24h Move

   +12.6%

   Revenue and net income grew, alongside higher gross profit and operating cash flow.

3. Mar 04

   FY2025 earnings

   24h Move

   +1.7%

   Reported fourth-quarter and full-year revenue growth with higher margins and annual operating cash flow.

4. Nov 05

   Q3 earnings

   24h Move

   +9.0%

   Third-quarter revenue, gross profit, net income, and operating cash flow increased.

5. Aug 06

   Q2 earnings

   24h Move

   -2.4%

   Revenue and gross profit increased, alongside higher operating cash flow.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

adjusted ebitda, non-gaap, underwritten public offering, share-based compensation

4 terms

adjusted ebitda financial

"Adjusted EBITDA increased 22% to $11.0 million."

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

non-gaap financial

"non-GAAP metrics of adjusted EBITDA"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

underwritten public offering financial

"Closed an underwritten public offering of 1,916,667 shares"

An underwritten public offering is when a company sells new shares of its stock to the public with the help of a financial firm, called an underwriter. The underwriter agrees to buy all the shares upfront, reducing the company's risk, and then sells them to investors. This process helps companies raise money quickly and confidently from a wide range of buyers.

share-based compensation financial

"share-based compensation expense"

Share-based compensation is when a company pays employees, executives or directors with its own stock or rights to buy stock instead of, or in addition to, cash. Think of it like receiving store gift cards instead of extra paycheck — it can motivate staff to boost the company’s value, but it also increases the number of shares outstanding and can shrink each existing owner’s slice of profits and voting power. Investors watch it because it affects reported earnings, share count and the alignment between management and shareholders.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Revenue Increases 20% to a Record $27.8 Million Producing a Record $12.7 Million in Cash Flow from Operations

BOCA RATON, Fla., Nov. 04, 2026 (GLOBE NEWSWIRE) -- Red Violet, Inc. (NASDAQ: RDVT), a leading identity intelligence and analytics company, today announced financial results for the quarter ended September 30, 2026.

“red violet delivered another record revenue quarter, surpassing $100 million in trailing twelve-month revenue for the first time, and generating record operating cash flow,” stated Derek Dubner, red violet’s CEO. “The continued expansion of digital interactions, coupled with increasingly sophisticated AI-driven fraud, is fueling demand for identity resolution, fraud prevention, and compliance solutions. Our proprietary platform and longitudinal identity graph deliver accurate identity intelligence that informs critical decisions and supports customers’ daily workflows. We believe these secular tailwinds, combined with our strengthening competitive advantages, position us to capture a growing share of this expanding market.”

Third Quarter Financial Results

For the three months ended September 30, 2026 as compared to the three months ended September 30, 2025:

• Total revenue increased 20% to $27.8 million.
• Gross profit increased 25% to $21.0 million. Gross margin increased to 76% from 73%.
• Adjusted gross profit increased 22% to $23.7 million. Adjusted gross margin increased to 85% from 84%.
• Net income increased 29% to $5.4 million, which resulted in earnings of $0.35 per basic and diluted share. Net income margin increased to 20% from 18%.
• Adjusted EBITDA increased 22% to $11.0 million. Adjusted EBITDA margin increased to 40% from 39%.
• Adjusted net income increased 23% to $7.3 million, which resulted in adjusted earnings of $0.48 and $0.47 per basic and diluted share, respectively.
• Net cash provided by operating activities increased 25% to $12.7 million.
• Cash and cash equivalents, together with investments in U.S. Treasury securities, totaled $165.7 million as of September 30, 2026, with no debt.

Third Quarter and Recent Business Highlights

• Closed an underwritten public offering of 1,916,667 shares of common stock, including 250,000 shares of common stock sold pursuant to the full exercise of the underwriters’ option, providing net proceeds of $108.7 million, after deducting underwriting discounts and commissions and offering expenses.
• Added 383 customers to IDI^™ during the third quarter, ending the quarter with 11,252 customers.
• Added 19,688 users to FOREWARN^® during the third quarter, ending the quarter with 462,861 users. Over 665 REALTOR^® Associations throughout the U.S. are now contracted to use FOREWARN.
  

Conference Call

In conjunction with this release, red violet will host a conference call and webcast today at 4:30 pm ET to discuss its quarterly results and provide a business update. Please click here to pre-register for the conference call and obtain your dial in number and passcode. To access the live audio webcast, visit the Investors section of the red violet website at www.redviolet.com. Please login at least 15 minutes prior to the start of the call to ensure adequate time for any downloads that may be required. Following the completion of the conference call, an archived webcast of the conference call will be available on the Investors section of the red violet website at www.redviolet.com.

About red violet^®

At red violet, we build proprietary technologies and apply analytical capabilities to deliver identity intelligence. Our technology powers critical solutions, which empower organizations to operate with confidence. Our solutions enable the real-time identification and location of people, businesses, assets and their interrelationships. These solutions are used for purposes including identity verification, risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition. Our cloud-native, AI-embedded identity intelligence platform, CORE^™, is purpose-built for the enterprise, yet flexible enough for organizations of all sizes, bringing clarity to massive datasets by transforming data into intelligence. Our solutions are used today to enable frictionless commerce, enhance safety, and mitigate fraud and the related financial losses borne by society. For more information, please visit www.redviolet.com.

Company Contact:
Camilo Ramirez
Red Violet, Inc.
561-757-4500
ir@redviolet.com

Investor Relations Contact:
Steven Hooser
Three Part Advisors
214-872-2710
ir@redviolet.com

Use of Non-GAAP Financial Measures

Management evaluates the financial performance of our business on a variety of key indicators, including non-GAAP metrics of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and free cash flow ("FCF"). Adjusted EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on US GAAP, excluding interest income, income tax expense, depreciation and amortization, share-based compensation expense, acquisition-related costs, litigation costs, and write-off of long-lived assets. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. Adjusted net income is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on US GAAP, adjusted to exclude share-based compensation expense, amortization of share-based compensation capitalized in intangible assets, acquisition-related costs, litigation costs, and write-off of long-lived assets, and to include the tax effect of adjustments. We define adjusted earnings per share as adjusted net income divided by the weighted average shares outstanding. We define adjusted gross profit as gross profit plus depreciation and amortization of certain intangible assets, and adjusted gross margin as adjusted gross profit as a percentage of revenue. We define FCF as net cash provided by operating activities reduced by purchase of property and equipment and capitalized costs included in intangible assets.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as "expects," "plans," "projects," "will," "may," "anticipate," "believes," "should," "intends," "estimates," and other words of similar meaning. Such forward looking statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations, including whether the continued expansion of digital interactions and AI-driven fraud will continue to fuel demand for identity resolution, fraud prevention, and compliance solutions; and whether the Company’s proprietary platform and longitudinal identity graph, combined with its competitive advantages, will enable it to capture a growing share of this expanding market. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on our expectations as of the date of this press release and speak only as of the date of this press release and are advised to consider the factors listed above together with the additional factors under the heading "Forward-Looking Statements" and "Risk Factors" in red violet's Form 10-K for the year ended December 31, 2025, filed on March 4, 2026, as may be supplemented or amended by the Company's other filings with the Securities and Exchange Commission (the “SEC”). We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

RED VIOLET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) (unaudited)
		September 30, 2026				December 31, 2025
ASSETS:
Current assets:
Cash and cash equivalents		$	68,058			$	43,557
Short-term investments			36,286				-
Accounts receivable, net of allowance for doubtful accounts of $239 and $231 as of September 30, 2026 and December 31, 2025, respectively			13,626				10,697
Prepaid expenses and other current assets			3,677				2,281
Total current assets			121,647				56,535
Long-term investments			61,320				-
Property and equipment, net			926				882
Intangible assets, net			43,073				39,264
Goodwill			5,227				5,227
Right-of-use assets			2,179				2,570
Deferred tax assets			2,918				6,585
Other noncurrent assets			658				949
Total assets		$	237,948			$	112,012
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable		$	2,638			$	1,977
Accrued expenses and other current liabilities			2,746				4,469
Current portion of operating lease liabilities			487				396
Deferred revenue			1,634				1,028
Total current liabilities			7,505				7,870
Noncurrent operating lease liabilities			2,080				2,396
Other noncurrent liabilities			796				820
Total liabilities			10,381				11,086
Shareholders' equity:
Preferred stock—$0.001 par value, 10,000,000 shares authorized, and 0 shares issued and outstanding, as of September 30, 2026 and December 31, 2025			-				-
Common stock—$0.001 par value, 200,000,000 shares authorized, 16,050,406 and 14,151,350 shares issued and outstanding, as of September 30, 2026 and December 31, 2025			16				14
Additional paid-in capital			200,826				88,628
Retained earnings			27,077				12,284
Accumulated other comprehensive loss			(352	)			-
Total shareholders' equity			227,567				100,926
Total liabilities and shareholders' equity		$	237,948			$	112,012

RED VIOLET, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share data) (unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Revenue		$	27,751			$	23,083			$	80,299			$	66,860
Costs and expenses(1):
Cost of revenue (exclusive of depreciation and amortization)			4,018				3,622				11,655				10,784
Sales and marketing expenses			6,160				5,402				17,768				16,431
General and administrative expenses			8,971				6,777				25,138				20,204
Depreciation and amortization			2,837				2,706				8,434				7,903
Total costs and expenses			21,986				18,507				62,995				55,322
Income from operations			5,765				4,576				17,304				11,538
Interest income			1,069				386				1,807				1,033
Income before income taxes			6,834				4,962				19,111				12,571
Income tax expense			1,389				749				4,318				2,232
Net income		$	5,445			$	4,213			$	14,793			$	10,339
Earnings per share:
Basic		$	0.35			$	0.30			$	1.01			$	0.74
Diluted		$	0.35			$	0.29			$	0.99			$	0.71
Weighted average shares outstanding:
Basic			15,342,614				14,027,994				14,575,079				14,014,993
Diluted			15,754,154				14,618,657				14,914,635				14,567,167
(1) Share-based compensation expense in each category:
Cost of revenue (exclusive of depreciation and amortization)		$	15			$	-			$	44			$	-
Sales and marketing expenses			233				206				608				594
General and administrative expenses			1,831				1,500				5,713				4,535
Total		$	2,079			$	1,706			$	6,365			$	5,129

RED VIOLET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (unaudited)
		Nine Months Ended September 30,
		2026				2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	14,793			$	10,339
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			8,434				7,903
Share-based compensation expense			6,365				5,129
Write-off of long-lived assets			12				3
Provision for bad debts			791				408
Noncash lease expenses			391				382
Accretion of discount on investments in U.S. Treasury securities, net			(54	)			-
Deferred income tax expense			3,791				2,020
Changes in assets and liabilities:
Accounts receivable			(3,720	)			(2,766	)
Prepaid expenses and other current assets			(486	)			(610	)
Other noncurrent assets			291				58
Accounts payable			661				637
Accrued expenses and other current liabilities			(1,757	)			(701	)
Deferred revenue			606				147
Operating lease liabilities			(225	)			(289	)
Net cash provided by operating activities			29,893				22,660
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments in U.S. Treasury securities			(98,938	)			-
Purchase of property and equipment			(263	)			(439	)
Capitalized costs included in intangible assets			(10,555	)			(7,679	)
Net cash used in investing activities			(109,756	)			(8,118	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net of issuance costs			108,705				-
Taxes paid related to net share settlement of vesting of restricted stock units			(1,219	)			(860	)
Repurchases of common stock			(3,122	)			(653	)
Dividend payable			-				(4,181	)
Net cash provided by (used in) financing activities			104,364				(5,694	)
Net increase in cash and cash equivalents		$	24,501			$	8,848
Cash and cash equivalents at beginning of period			43,557				36,504
Cash and cash equivalents at end of period		$	68,058			$	45,352
SUPPLEMENTAL DISCLOSURE INFORMATION:
Cash paid for interest		$	-			$	-
Cash paid for income taxes		$	570			$	683
Share-based compensation capitalized in intangible assets		$	1,471			$	1,146
Retirement of treasury stock		$	4,341			$	1,513
Right-of-use assets obtained in exchange of operating lease liabilities		$	-			$	1,153

Use and Reconciliation of Non-GAAP Financial Measures

Management evaluates the financial performance of our business on a variety of key indicators, including non-GAAP metrics of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF. Adjusted EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on US GAAP, excluding interest income, income tax expense, depreciation and amortization, share-based compensation expense, acquisition-related costs, litigation costs, and write-off of long-lived assets. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. Adjusted net income is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on US GAAP, adjusted to exclude share-based compensation expense, amortization of share-based compensation capitalized in intangible assets, acquisition-related costs, litigation costs, and write-off of long-lived assets, and to include the tax effect of adjustments. We define adjusted earnings per share as adjusted net income divided by the weighted average shares outstanding. We define adjusted gross profit as gross profit plus depreciation and amortization of certain intangible assets, and adjusted gross margin as adjusted gross profit as a percentage of revenue. We define FCF as net cash provided by operating activities reduced by purchase of property and equipment, and capitalized costs included in intangible assets.

The following is a reconciliation of net income, the most directly comparable US GAAP financial measure, to adjusted EBITDA:

		Three Months Ended September 30,								Nine Months Ended September 30,
(Dollars in thousands)		2026				2025				2026				2025
Net income		$	5,445			$	4,213			$	14,793			$	10,339
Interest income			(1,069	)			(386	)			(1,807	)			(1,033	)
Income tax expense			1,389				749				4,318				2,232
Depreciation and amortization			2,837				2,706				8,434				7,903
Share-based compensation expense			2,079				1,706				6,365				5,129
Acquisition-related costs			225				(12	)			533				358
Litigation costs			84				60				269				73
Write-off of long-lived assets			11				-				12				3
Adjusted EBITDA		$	11,001			$	9,036			$	32,917			$	25,004
Revenue		$	27,751			$	23,083			$	80,299			$	66,860
Net income margin			20	%			18	%			18	%			15	%
Adjusted EBITDA margin			40	%			39	%			41	%			37	%

The following is a reconciliation of net income, the most directly comparable US GAAP financial measure, to adjusted net income:

		Three Months Ended September 30,								Nine Months Ended September 30,
(Dollars in thousands, except share data)		2026				2025				2026				2025
Net income		$	5,445			$	4,213			$	14,793			$	10,339
Share-based compensation expense			2,079				1,706				6,365				5,129
Amortization of share-based compensation capitalized in intangible assets			411				413				1,231				1,235
Acquisition-related costs			225				(12	)			533				358
Litigation costs			84				60				269				73
Write-off of long-lived assets			11				-				12				3
Tax effect of adjustments(1)			(915	)			(423	)			(2,098	)			(1,529	)
Adjusted net income		$	7,340			$	5,957			$	21,105			$	15,608
Earnings per share:
Basic		$	0.35			$	0.30			$	1.01			$	0.74
Diluted		$	0.35			$	0.29			$	0.99			$	0.71
Adjusted earnings per share:
Basic		$	0.48			$	0.42			$	1.45			$	1.11
Diluted		$	0.47			$	0.41			$	1.42			$	1.07
Weighted average shares outstanding:
Basic			15,342,614				14,027,994				14,575,079				14,014,993
Diluted			15,754,154				14,618,657				14,914,635				14,567,167

(1) The tax effect of adjustments is calculated using the expected combined federal and state statutory tax rate, which was approximately 26.00% for the three and nine months ended September 30, 2026 and 2025. The resulting tax effect may differ from applying such rate to total adjustments due to the tax treatment of certain items. Beginning with our Annual Report on Form 10-K for the year ended December 31, 2025, we updated the methodology for determining the income tax effects of adjustments in calculating non-GAAP adjusted net income. Prior-period amounts have been revised to conform to the current methodology and presentation. These revisions did not affect our previously reported GAAP financial statements.


The following is a reconciliation of gross profit, the most directly comparable US GAAP financial measure, to adjusted gross profit:

		Three Months Ended September 30,								Nine Months Ended September 30,
(Dollars in thousands)		2026				2025				2026				2025
Revenue		$	27,751			$	23,083			$	80,299			$	66,860
Cost of revenue (exclusive of depreciation and amortization)			(4,018	)			(3,622	)			(11,655	)			(10,784	)
Depreciation and amortization related to cost of revenue			(2,765	)			(2,651	)			(8,227	)			(7,746	)
Gross profit			20,968				16,810				60,417				48,330
Depreciation and amortization of certain intangible assets(1)			2,702				2,615				8,080				7,627
Adjusted gross profit		$	23,670			$	19,425			$	68,497			$	55,957
Gross margin			76	%			73	%			75	%			72	%
Adjusted gross margin			85	%			84	%			85	%			84	%

(1) Depreciation and amortization of certain intangible assets primarily consists of the amortization of capitalized internal-use software development costs, which are included within intangible assets and amortized over their estimated useful lives.


The following is a reconciliation of net cash provided by operating activities, the most directly comparable US GAAP financial measure, to FCF:

		Three Months Ended September 30,								Nine Months Ended September 30,
(Dollars in thousands)		2026				2025				2026				2025
Net cash provided by operating activities		$	12,671			$	10,172			$	29,893			$	22,660
Less:
Purchase of property and equipment			(95	)			(187	)			(263	)			(439	)
Capitalized costs included in intangible assets			(3,752	)			(2,695	)			(10,555	)			(7,679	)
Free cash flow		$	8,824			$	7,290			$	19,075			$	14,542

In order to assist readers of our condensed consolidated financial statements in understanding the operating results that management uses to evaluate the business and for financial planning purposes, we present non-GAAP measures of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF as supplemental measures of our operating performance and liquidity. We believe they provide useful information to our investors as they eliminate the impact of certain items that we do not consider indicative of our cash operations and ongoing operating performance. In addition, we use them as an integral part of our internal reporting to measure the performance and operating strength of our business.

We believe adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF are relevant and provide useful information frequently used by securities analysts, investors, and other interested parties in their evaluation of the operating performance of companies similar to ours and are indicators of the operational strength of our business. We believe adjusted EBITDA eliminates the uneven effect of considerable amounts of non-cash depreciation and amortization, share-based compensation expense, and the impact of other items not indicative of our ongoing operating performance. Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of revenue. We believe adjusted net income provides additional means of evaluating period-over-period operating performance by eliminating certain non-cash expenses and other items that might otherwise make comparisons of our ongoing business with prior periods more difficult and obscure trends in ongoing operations. Adjusted net income is a non-GAAP financial measure equal to net income, adjusted to exclude share-based compensation expense, amortization of share-based compensation capitalized in intangible assets, and other items not indicative of our ongoing operating performance, and to include the tax effect of adjustments. We define adjusted earnings per share as adjusted net income divided by the weighted average shares outstanding. Our adjusted gross profit is a measure used by management in evaluating the business’s current operating performance by excluding the impact of prior historical costs of certain assets that are expensed systematically and allocated over the estimated useful lives of the assets, which may not be indicative of the current operating activity. We define adjusted gross profit as gross profit plus depreciation and amortization of certain intangible assets. We believe adjusted gross profit provides useful information to our investors by eliminating the impact of certain non-cash depreciation and amortization, and primarily the amortization of software developed for internal use, providing a baseline of our core operating results that allow for analyzing trends in our underlying business consistently over multiple periods. Adjusted gross margin is calculated as adjusted gross profit as a percentage of revenue. We believe FCF is an important liquidity measure of the cash that is available, after capital expenditures, for operational expenses and investment in our business. FCF is a measure used by management to understand and evaluate the business’s operating performance and trends over time. FCF is calculated by using net cash provided by operating activities, less purchase of property and equipment and capitalized costs included in intangible assets.

Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF are not intended to be performance measures that should be regarded as an alternative to, or more meaningful than, financial measures presented in accordance with US GAAP. In addition, FCF is not intended to represent our residual cash flow available for discretionary expenses and is not necessarily a measure of our ability to fund our cash needs. The way we measure adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in our various agreements.

SUPPLEMENTAL METRICS

The following metrics are intended as a supplement to the financial statements found in this release and other information furnished or filed with the SEC. These supplemental metrics are not necessarily derived from any underlying financial statement amounts. We believe these supplemental metrics help investors understand trends within our business and evaluate the performance of such trends quickly and effectively. In the event of discrepancies between amounts in these tables and the Company's historical disclosures or financial statements, readers should rely on the Company's filings with the SEC and financial statements in the Company's most recent earnings release.

We intend to periodically review and refine the definition, methodology and appropriateness of each of these supplemental metrics. As a result, metrics are subject to removal and/or changes, and such changes could be material.

	(Unaudited)
(Dollars in thousands)		Q4'24				Q1'25				Q2'25				Q3'25				Q4'25				Q1'26				Q2'26				Q3'26
Customer metrics
IDI - billable customers(1)			8,926				9,241				9,549				9,853				10,022				10,422				10,869				11,252
FOREWARN - users(2)			303,418				325,336				346,671				372,209				390,018				417,680				443,173				462,861
Revenue metrics
Contractual revenue %(3)			77	%			74	%			77	%			75	%			77	%			75	%			77	%			78	%
Gross revenue retention %(4)			96	%			96	%			97	%			96	%			95	%			95	%			95	%			96	%
Other metrics
Employees - sales and marketing			95				90				92				105				99				104				104				108
Employees - support			11				11				11				11				12				13				13				13
Employees - infrastructure			28				29				29				32				37				36				35				39
Employees - engineering			57				62				63				66				73				77				79				89
Employees - administration			25				24				28				28				29				30				30				29

(1) We define a billable customer of IDI as a single entity that generated revenue in the last three months of the period. Billable customers are typically corporate organizations. In most cases, corporate organizations will have multiple users and/or departments purchasing our solutions; however, we count the entire organization as a discrete customer.

(2) We define a user of FOREWARN as a unique person that has a subscription to use the FOREWARN service as of the last day of the period. A unique person can only have one user account.

(3) Contractual revenue % represents revenue generated from customers pursuant to pricing contracts containing a monthly fee and any additional overage divided by total revenue. Pricing contracts are generally annual contracts or longer, with auto renewal.

(4) Gross revenue retention is defined as the revenue retained from existing customers, net of reinstated revenue, and excluding expansion revenue. Revenue is measured once a customer has generated revenue for six consecutive months. Revenue is considered lost when all revenue from a customer ceases for three consecutive months; revenue generated by a customer after the three-month loss period is defined as reinstated revenue. Gross revenue retention percentage is calculated on a trailing twelve-month basis. The numerator of which is revenue lost during the period due to attrition, net of reinstated revenue, and the denominator of which is total revenue based on an average of total revenue at the beginning of each month during the period, with the quotient subtracted from one. Our gross revenue retention calculation excludes revenue from idiVERIFIED, which is purely transactional and currently represents less than 3% of total revenue.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were red violet’s third-quarter 2026 revenue and earnings?

red violet reported revenue of $27.8 million, up 20% year over year, and net income of $5.4 million, up 29%. Basic and diluted earnings were both $0.35 per share for the quarter ended September 30, 2026.

How much did red violet raise in its common-stock offering?

The completed offering raised $108.7 million in net proceeds after underwriting discounts, commissions and offering expenses. It issued 1,916,667 common shares, including 250,000 shares sold through the full exercise of the underwriters’ option.