Red Violet, Inc.

Good day, ladies and gentlemen, and welcome to Red Violet's third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference call is being recorded. I would now like to introduce your host for today's conference, 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 third quarter 2024 financial results. With me today is Bear 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 St. Harvard 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 Pilot's business, I encourage you to review the company's filing 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, adjusted EBITDA margin, adjusted net income, adjust the 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 be found in the earnings press release issued earlier today. With that, I am pleased to introduce RedViolet's Chairman and Chief Executive Officer, Derek Dubner. Thanks, Camila. Good afternoon, and welcome to those joining us today to discuss our third quarter 2024 results. Following a very strong first half of the year, we are pleased to deliver another record quarter across various financial metrics. We generated record revenue, gross profit, and cash flow in the third quarter. Our performance underscores the strength of our business and the commitment of our exceptional team. It was yet another quarter of strong new customer onboarding and growth from our existing customer base with balanced transaction volume increases across verticals. Given our continued investment in the business, Driven by strong customer demand generating record cash flows, we remain very well positioned to close out a record 2024 and to drive accelerated growth in 2025. Revenue for the quarter was up 20% to a record $19.1 million, producing a record adjusted gross profit of $15.7 million and record margin of 83%. Adjusted EBITDA for the quarter was up 25% to $6.7 million, producing an adjusted EBITDA margin of 35%. Adjusted net income increased 23% to $3.1 million for the quarter, resulting in adjusted earnings of 22 cents per diluted share. We generated a record $4.8 million in in free cash flow in the quarter. Within IDI, we added 266 customers sequentially from the second quarter, reflecting strong demand across our verticals. Revenue growth remains robust, led by our investigative vertical on a percentage basis and closely followed by emerging markets and our financial and corporate risk verticals. each achieving impressive double-digit growth in the third quarter. Our collections vertical continues to demonstrate encouraging signs of a durable recovery. Favorable factors such as asset appreciation and low unemployment are supporting consumers and driving transaction volumes across many of our verticals. While lower-income consumers face ongoing challenges from inflation, high interest rates, and the depletion of government subsidies, which in turn lends support to our collections and other related verticals. Given the current economic landscape and anticipated interest rate reductions, barring unforeseen circumstances, we expect this favorable environment to continue benefiting our business through the remainder of the year and throughout 2025. ForeWarn continues to solidify its position as the leading proactive safety tool for face-to-face engagement. ForeWarn added 21,091 users during the quarter. Over 500 realtor associations are now contracted to use ForeWarn. Our achievements year-to-date have enabled us to strategically invest in our business throughout the year. continuing to execute upon our product roadmap and enhance our go-to-market strategies. After adding 13 team members in the second quarter, we again added another 13 team members in the third quarter with emphasis on various sales and marketing capabilities. Notwithstanding the continued investment in the business, due to the operational leverage of our business model, we still produced record-free cash flow, adding approximately $5 million of cash to the balance sheet sequentially from the second quarter. Given the continued momentum we are seeing in the business, we are optimistic that we will close out a record 2024 and drive continued momentum throughout 2025. Now, I will turn it over to Dan to discuss the financials.