Red Violet, Inc. (RDVT) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. Red Violet, Inc. is a Delaware corporation providing identity intelligence solutions through its proprietary CORE platform, marketed primarily under the brands IDI and FOREWARN. The company operates as a single reporting segment and is classified as a non-accelerated filer and smaller reporting company.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $25.83 million | $22.00 million |
| Gross Profit | $19.27 million | $15.84 million |
| Gross Margin | 75% | 72% |
| Net Income | $4.39 million | $3.44 million |
| Diluted EPS | $0.30 | $0.24 |
| Operating Cash Flow | $6.59 million | $5.00 million |
| Free Cash Flow | $3.08 million | $2.48 million |
| Cash & Equivalents (End of Period) | $43.45 million | $34.60 million |
| Total Debt | $0 | $0 |
Note: The company has no long-term debt. Operating lease liabilities total $2.72 million.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 17% year-over-year, driven by a 24% increase in revenue from existing customers, partially offset by a 28% decrease in revenue from new customers.
- Profitability: Net income rose 28% to $4.39 million. Adjusted EBITDA increased 27% to $10.67 million, with margins expanding from 38% to 41%.
- Expense Trends: General and administrative expenses increased 28% due to higher personnel costs and share-based compensation. Cost of revenue as a percentage of revenue decreased to 15% from 17% due to the fixed-cost nature of data licensing.
- Customer Base: IDI billable customers grew to 10,422 (up 1,181 from prior year), and FOREWARN users reached 417,680 (up 92,344 from prior year).
Guidance, Outlook, and Risks
- Capital Allocation: The company repurchased 63,500 shares of common stock for approximately $2.7 million during the quarter. As of April 30, 2026, $15.6 million remained under the $30.0 million stock repurchase program.
- Commitments: Material capital commitments for data licensing and cloud services total $39.8 million, with $7.58 million due in the remainder of 2026.
- Legal Contingencies: The company is a defendant in a class action lawsuit filed by Atlas Data Privacy Corporation regarding compliance with New Jersey's "Daniel's Law." The company is vigorously defending the action and expects insurance coverage for defense costs and potential liability.
- Outlook: Management believes existing cash resources and operating cash flows are sufficient to fund operations for at least the next 12 months. No specific forward-looking financial guidance was provided in this filing.
Investor Verification Checklist
- Revenue Mix: Verify the sustainability of the 24% growth from existing customers versus the 28% decline from new customers.
- Capital Expenditures: Review the $3.44 million in capitalized costs included in intangible assets and the impact on future amortization expenses.
- Legal Exposure: Monitor the status of the Atlas Data Privacy Corporation litigation and potential impacts on insurance coverage or operational restrictions.
- Share Repurchases: Track the remaining $15.6 million authorization and the average price paid ($42.54 in Q1) relative to current market prices.
- Data Supplier Concentration: Note that the largest data supplier accounted for 46% of total data acquisition costs in Q1 2026.