Red Violet (RDVT) 2024 Southwest IDEAS Conference summary

Business overview and technology

• Aggregates diverse data sources to create comprehensive identity profiles for U.S. adults, serving five main industries including financial services, law enforcement, and real estate.

• Offers unique safety solutions for real estate agents and is expanding into small business and home healthcare for risk mitigation.

• Utilizes cloud infrastructure, AI, and machine learning for dynamic data connections, differentiating from legacy competitors.

• Proprietary data is sourced through performance marketing and combined with regulated and public data.

• Provides access via online portal, API, and batch processing, powering seven of the top ten identity players.

Financial performance and business model

• Reported record Q3 revenue of $19.1 million and $7.2 million in cash flow, with 20% year-over-year growth.

• Maintains fixed cost of revenue due to long-term data contracts, resulting in high contribution margins.

• 80% of revenue is contractual, with SaaS-like characteristics and upsell opportunities based on usage.

• Achieves 80% gross profit margins and is approaching 40% Adjusted EBITDA margin.

• GAAP profitable and generating significant cash.

Strategic initiatives and growth plans

• Focused on expanding in background screening, marketing services, and public sector verticals for 2025.

• Hired industry experts to lead new verticals and developed products with customer input.

• Public sector contracts are large and have long sales cycles, with recent wins and strong law enforcement adoption.

• Beta testing safety solutions for small businesses and home healthcare, using a color-coded risk system.

• Targeting continued 20% annual growth for 2025 and beyond.