RV
Red Violet, Inc. (RDVT)·Q1 2025 Earnings Summary
Executive Summary
- RDVT delivered a record Q1: revenue $22.00M (+26% y/y) with record adjusted gross margin 83% and adjusted EBITDA $8.37M (38% margin), aided by $1.2M one-time transactional revenue; GAAP diluted EPS $0.24 and adjusted diluted EPS $0.33 .
- Versus S&P consensus, RDVT posted a material beat: revenue $22.00M vs $20.43M (+7.7%)* and Primary EPS $0.33 vs $0.23 (+$0.10, +43%); note limited coverage (1 estimate for Q1) .
- Customer metrics were strong: +315 IDI billable customers q/q to 9,241; FOREWARN +21,918 users to 325,336; contractual revenue mix dipped to 74% due to the one-time transactional revenue; gross revenue retention reached 96% .
- Catalysts: sustained enterprise traction (customers >$100k TTM rose to ~110), continued law enforcement outperformance, and AI/automation investments to expand risk signals and KYB/account monitoring solutions .
What Went Well and What Went Wrong
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What Went Well
- Record profitability and margins: adjusted EBITDA $8.37M (+47% y/y) with margin +600 bps to 38%; adjusted gross margin +400 bps to 83% on lower cost of revenue .
- Enterprise/customer mix improving: “well in excess of 100, close to 110 customers” spending >$100k TTM, reflecting move up-market; strong IDI adds (+315 q/q) and 20th consecutive quarter of sequential revenue growth at FOREWARN .
- Management strategic focus: “intensifying our efforts around proprietary data generation and aggregation,” continued AI use on core identity graph, and automation to scale productivity . Quote: “Clients are increasingly turning to us not just for innovation, but for cost‑effective, scalable solutions that address mission‑critical needs.”
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What Went Wrong
- Contractual revenue mix fell to 74% (−400 bps y/y) due to $1.2M one-time transactional revenue; implies some normalization risk in future comps .
- Operating expense intensity: Sales & marketing +46% y/y to $5.4M; G&A +7% y/y; highlights continued investment needs to support growth .
- Real Estate (IDI) still soft: low single-digit decline driven by affordability challenges and elevated rates; mix headwind despite broader strength .
Financial Results
Vs. Estimates (S&P Global)
Values marked with * are from S&P Global consensus. Values retrieved from S&P Global.
KPIs and Commercial Metrics
Notes: Q1 included $1.2M one-time transactional revenue tied to two new customers, lifting growth from 19% ex-one-time to 26% reported .
Guidance Changes
Earnings Call Themes & Trends
Management Commentary
- Strategic priorities: “increasing productivity… implementing automation… intensifying our efforts around proprietary data generation and aggregation, which includes our continued use of AI to derive insights from our core identity graph.”
- Business durability: “This counter-cyclical balance in demand ensures that we remain relevant and mission-critical regardless of market conditions.”
- Customer value proposition: “Clients are increasingly turning to us not just for innovation, but for cost‑effective, scalable solutions that address mission‑critical needs.”
- Product roadmap focus areas (Q&A): expanding KYB, account monitoring, and risk signals; leveraging AI/NLP to improve workflow efficiency and intelligence delivery .
Q&A Highlights
- Pipeline and onboarding: Broad-based demand across verticals with continued onboarding across all customer sizes; macro uncertainty had “no impact” on RDVT volumes in Q1, supporting continued conversion through 2025 .
- Enterprise penetration: Customers spending >$100k TTM rose from ~96 at YE’24 to ~110 post-Q1, reflecting successful move up-market .
- Product/tech investments: Continued investment in the identity graph, proprietary data, KYB, account monitoring, and AI-driven risk signals; aim to enhance productivity via automation at scale .
- Vertical dynamics: Collections improving (mid-teens normalized growth), law enforcement remains a structural growth driver; real estate softness persists ex-FOREWARN .
Estimates Context
- Q1 2025 vs S&P Global consensus: Revenue $22.00M vs $20.43M (+7.7%); Primary EPS $0.33 vs $0.23 (+$0.10, +43%); coverage limited (1 estimate), increasing uncertainty in precision *.
- Consensus target price indicated at $67.5*; recommendation text not available from dataset*.
Values marked with * are from S&P Global consensus. Values retrieved from S&P Global.
Key Takeaways for Investors
- Quality beat with record profitability: mix of robust core demand and $1.2M one-time transactional revenue; margin expansion reflects operating leverage and lower cost of revenue .
- Enterprise momentum accelerating: rapid growth in >$100k customers and strong law enforcement traction suggest sustained mix up-shift and higher average revenue per account .
- Contractual mix dip is transitory: lower contractual revenue % driven by one-time transactional revenue; underlying retention remains best‑in‑class at 96% .
- AI/automation roadmap a medium-term margin catalyst: management continues to emphasize proprietary data, AI-driven insights, and automation to scale—supporting sustained 30%+ adjusted EBITDA margin profile through 2025 per prior commentary .
- Near-term trading setup: strong beat/raise-type narrative without formal guidance; watch for normalization of transactional volumes in Q2 and continued enterprise wins as key sentiment drivers .
- KPI momentum: sequential customer/user adds at both IDI and FOREWARN provide solid forward indicators for volume growth .
- Capital returns provide floor: $0.30 special dividend paid in February ($4.2M); buyback capacity remains under program, offering optionality .
Additional Documents Reviewed
- 8‑K (Q1 2025 results press release and full transcript) –.
- Earnings call transcript (Q1 2025) –.
- Q4 2024 8‑K and call (trend analysis) – –.
- Q3 2024 8‑K and call (trend analysis) – –.
- Other press releases in the period: Q1 earnings scheduling (Apr 23) ; investor conference participations (May 13, May 28) .