Red Violet, Inc.

Good day, ladies and gentlemen, and welcome to Resident Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Camilo Ramirez, Senior Vice President, Finance and Investor Relations. Please go ahead.

Good afternoon and welcome. Thank you for joining us today to discuss our second quarter 2024 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. To access the webcast, please visit our investors page on our website, www.redviolet.com. 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 Securities Litigation Reform Act of 1995. Actual results could differ materially from those stated or implied by our forward-looking statements due to risk 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 Red Violet'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 related to adjusted gross profit, adjusted gross margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, and free cash flow. Reconciliations of these non-GAAP financial measures to their most directly comparable U.S. 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 amounts 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, and thanks to those joining us today to discuss our second quarter 2024 results. Coming off of a great first quarter, We are pleased to deliver an even stronger second quarter. The broad-based demand for our solutions that we experienced in the first quarter carried across second quarter, delivering, once again, our highest quarterly revenue and adjusted EBITDA in our company history. We delivered accelerated revenue growth, both year over year and sequentially, while maintaining strong profitability and cash flow, which enables us to continue to invest in our key strategic initiatives. We remain committed to maintaining this accelerated rate of growth and are confident in our ability to carry this momentum throughout the remainder of 2024 and beyond. Our revenue for the quarter was up 30 percent to a record $19.1 million, producing a record adjusted gross profit of $15.6 million, and record margin of 82 percent. Adjusted EBITDA was up 47 percent to a record $6.8 million, producing a record margin of 36 percent. Also records, adjusted net income increased 33 percent to $3.9 million, resulting in adjusted earnings of 28 cents per share. Our revenue growth was healthy across verticals. Law enforcement, which is part of our investigative vertical, continues to be a standout as local, state, and federal agencies grow to appreciate the competitive differentiation in our data accuracy, derived relationships and connections, and unparalleled search capability and functionality. Financial and corporate risk produced another strong quarter. and our collections vertical once again experienced double-digit percentage growth. We continue to execute upon a deep sales pipeline, and we are seeing solid progress within several of our early stage industries, including government, background screening support, and marketing services. Volumes throughout the quarter remained consistently strong as the economic environment is particularly favorable for our durable and balanced business model. A large cohort of the consumer population is doing very well as they have portfolios of equities, real estate, and investments delivering solid income, which is driving new account openings and purchases and increasing reliance on our solutions in the way of identity verification and KYC. A segment of consumers, unfortunately, continues to be negatively impacted by the effects of inflation and the runoff of government subsidies, such that certain industries we serve, such as collections, legal, and repossession, are driving increasing demand for our solutions. We are very excited to deliver such a strong quarter and the strongest first half results in our history. Our strategic initiatives over the past 18 months are driving the acceleration in our business, and we are early in this multi-year plan. Our volumes are not only increasing, but they are increasing consistently across the board and driving healthy dollars to the bottom line. We are investing in the business to continue to widen the moat around our cloud-native technology platform to develop differentiated solutions, and to enhance our marketing efforts, which are increasing brand awareness, all of which continue to power our further penetration of existing and new verticals. We are very excited about the remainder of 2024 and beyond. With that, I turn it over to Dan to discuss the financials.