Red Violet, Inc.

Good day, ladies and gentlemen, and welcome to Red Violet's second quarter 2025 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, 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 2025 financial results. With me today is Derek Dubner, our Chairman, 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 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 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 the 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.

Good afternoon, everyone, and thank you for joining us today to discuss our second quarter financial results. This quarter reflects continued execution across our strategic roadmap, supported by sustained customer utilization and revenue expansion. We achieved solid year-over-year growth, strong margins, and healthy cash flow, reinforcing the durability of our business model and the operational importance of our platform to our clients. Now let's briefly run through the numbers. Revenue for the quarter was up 14% to $21.8 million. Worthy of mention, excluding the $1 million of one-time transactional revenue we had in the prior year quarter, our second quarter revenue would have grown 21%. We generated $18.2 million in adjusted gross profit, resulting in a record adjusted gross margin of 84%. Adjusted EBITDA for the quarter was $7.6 million, with a margin of 35 percent. Adjusted net income came in at $4.1 million, resulting in adjusted earnings of 28 cents per diluted share. During the quarter, we generated $4.8 million in free cash flow. We added over 300 customers to IDI during the quarter. ending the second quarter at over 9,500 customers. Within ForWarn, we added over 21,000 users and ended the quarter with over 575 realtor associations now contracted to use ForWarn. Revenue growth continues to be broad-based, driven by key areas of focus in law enforcement, legal, government, financial services, and collections. We continue to make solid progress against our large enterprise sales pipeline, testing and winning top tier customers. Importantly, revenue growth continues to be fueled not only by solid new customer onboarding, but also by notable expansion within our existing customer base. This expansion is a key indicator of the embedded value of our platform. Once our solutions are incorporated into customer workflows, they become critical to daily operations. We continue to see customers increase their usage over time as they realize the full utility, efficiency, and scalability of our offerings, as evidenced by our strong revenue retention. Internally, we continue to focus on increasing productivity across the enterprise, including the identification and implementation of automation across key business functions, with a focus on increasing throughput and reducing manual dependencies as we scale. These efforts are already contributing to higher productivity across our employee base, and more streamlined service delivery, which in turn support margin expansion. We've also been actively optimizing internal workflows through machine learning applications that help prioritize decision paths, reduce latency, and increase operational visibility. In parallel, we advanced our efforts around proprietary data aggregation and ownership, This remains a core focus area for us. We've enhanced the depth and breadth of our identity graph, both through organic expansion and the integration of new data streams. These efforts are increasingly powered by AI-driven ingestion, normalization, and entity resolution. allowing us to accelerate the velocity at which data becomes actionable within our platform. Our AI initiatives are strategically aligned with our broader objectives of insight generation, delivery, and scalability. We continue to leverage machine learning to strengthen fraud detection, improve data quality, and increase the intelligence embedded throughout our solutions. These applications are not only enhancing product value but also improving efficiency at the infrastructure level. Capital investment in AI remains a key part of our long-term growth strategy. Financially, our strengthening margin profile continues to support healthy cash flow generation. This, in turn, enables continued investment in AI, product development, data initiatives, and go-to-market, all without compromising financial discipline. We remain well capitalized and operationally agile, with the flexibility to pursue both organic and strategic growth opportunities. In summary, we are executing against our priorities with discipline, and consistency. We are operating from a position of strength with a resilient model, differentiated data assets, and a clear roadmap for continued innovation. We remain confident in our ability to drive long-term value creation. Thank you to our employees for their continued focus and performance, and to our customers and our shareholders for their trust and support. I'll turn it over to Dan to discuss the financials.