Red Violet, Inc.

Good day, ladies and gentlemen, and welcome to the Red Violets Third Quarter 2021 Earnings Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require operator assistance, please press star zero on your phone. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Camila Ramirez. Director of Finance and Investor Relations. Please go ahead.

Good afternoon and welcome. Thank you for joining us today to discuss our third quarter 2021 financial results. With me today is Derek Dubner, our Chairman and Chief Executive Officer, and Dan McLaughlin, our Chief Financial Officer. Our call today will begin with comments from Derek and Dan, followed by a question and answer session. I would like to remind you that this call is being webcast live and recorded. A replay of the event will be available following the call on our website. Before we begin, I would like to advise listeners that certain information discussed by management during this conference call are forward-looking statements covered under the Safe Harbor provisions of the Private Security Selegation Reform Act of 1995. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company's business. The company undertakes no obligation to update the information provided on this call. For a discussion of risk and uncertainties associated with RedViolet's business, I encourage you to review the company's filings with the Securities and Exchange Commission, including the most recent annual report on Form 10-K and subsequent 10-Qs. During the call, we may present certain non-GAAP financial information relating to adjusted gross profit, adjusted gross margin, adjusted EBITDA margin, and adjusted EBITDA. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measure are provided in the earnings press release issued earlier today. In addition, certain supplemental metrics that are not necessarily derived from any underlying financial statement amount may be discussed, and these metrics and their definitions can also be found in the earnings press release issued earlier today. With that, I am pleased to introduce Red Violet's Chairman and Chief Executive Officer, Derek Dubner.

Thanks, Camilo. Good afternoon to those joining us today to discuss the results of our third quarter 2021. RedViolet delivered a very strong quarter, hitting records in revenue, gross profit, and adjusted EBITDA. We also achieved our first quarter ever of GAAP profitability without a one-time gain. We experienced strong demand for our solutions across the board. Our team performed extremely well, driving and meeting customer demand with the differentiated assets of our cloud-native platform and unified data-driven solutions. I'm especially pleased with our execution against our multi-year strategic roadmap. As a result of our strong performance, we continue to leverage our cash generation to invest in the expansion of the business. We generated record revenue of $11.7 million, a 26% increase over the third quarter of last year. Platform revenue increased 26% to $11.3 million. Services revenue increased 24% to $.4 million. Adjusted gross profit increased 35% to $8.9 million. and adjusted gross margin increased to 76 percent from 71 percent compared to the same period of 2020. Adjusted EBITDA increased 73 percent to a record $3.6 million. We achieved our first quarter ever of GAAP profitability without a one-time gain, generating $1.3 million in net income which translated into earnings of $0.09 per diluted share. We generated $3.5 million in cash from operating activities in the third quarter, and as of September 30, 2021, we had $13.4 million in cash and cash equivalents on our balance sheet. We added over 170 new IDI customers during the third quarter, ending the the quarter with 6,314 customers. ForeWarn added over 6,700 users, ending the quarter with 74,377 users. Over 165 realtor associations throughout the U.S. are now contracted to use ForeWarn. As demonstrated by recent moves we have made, we are executing against our multi-year strategic plan, positioning the business for the future. As we continue to penetrate existing and new markets, we are adding to our teams and our capabilities, leveraging our innovative platform, differentiated data assets, and customer-centric solutions to develop new applications for new segments of our business. As we highlighted on our last earnings call, several very talented individuals joined the team to lead our efforts in property solutions and identity. Within property solutions, there are a number of opportunities that we have identified where we can solve for various challenges in the marketplace using our analytic capabilities in delivering derived insights from our data to the commercial and residential real estate sector. Within the broader identity space, transactions continue to move online in an accelerated fashion due to the pandemic. And we see enormous opportunity to leverage our technology and identity graph to deliver insights to the public and private sectors throughout the entire consumer journey. from onboarding to login to transaction, all with the goal of frictionless commerce and fraud capture. Consistent with our company mission, we want to drive increased consumer access to services, including the unbanked and underbanked, while capturing fraud and reducing the associated expense that is ultimately passed on to society as a whole. Executing against our plan, I would like to highlight a few recent moves we have made. During the quarter, we welcomed Justin Cleveland to head our expansion within the public sector. Justin is an accomplished executive with a demonstrable track record building and leading teams and rapidly scaling public sector businesses across federal, state, and local verticals. The public sector is a significant opportunity given the convergence of various government programs and the ongoing digital transformation. We have all of the assets needed to package them up and to deliver targeted solutions to the public sector, which we believe will be a strong growth vertical for us. Recently, we welcomed Ajou Jeanne to the Red Violet team to lead our financial services solutions. A former LexisNexis and Fiserv product executive brings a wealth of knowledge and experience from the view of the financial services industry. We're excited to have him aboard as we enhance our current offerings and develop new solutions for enterprise financial services. Lastly, during the quarter, we announced the creation of our Innovations in Identity Advisory Board. consisting of industry luminaries and accomplished executives from diverse industries to provide strategic guidance in support of the company's mission. As you can see from our progression throughout the year, as the economy strengthens, so does demand for our solutions. We are utilizing our solid cash generation to position the company for 2022 and beyond. We are and will always be innovating at a rapid pace. And while I am extremely excited about our performance year to date and the roadmap ahead, I'm even more excited because we are still in the early innings of our evolution. I'll now turn it over to Dan to discuss the financials.