Red Violet Revenue Growth Cools After Second-Quarter Pace

The Tip Desk · November 11, 2026 · 2 min read

Third-quarter revenue rose 20% to $27.8 million, slower than the 23% increase in the second quarter, as existing customers supplied $26.1 million.

Red Violet, Inc. (RDVT), the identity-intelligence software company, reported third-quarter revenue of $27.8 million, up 20% from a year earlier. That pace was slower than the 23% increase to $26.7 million in the second quarter.

The company said the year-over-year increase was driven by onboarding of new customers and volume expansion across the existing base. Revenue from existing customers rose 21% to $26.1 million. Revenue from new customers, defined as amounts earned in a customer’s first six full calendar months, rose 11% to $1.6 million.

Gross profit increased 25% to $21.0 million, and gross margin rose to 76% from 73% a year earlier. Adjusted gross profit increased 22% to $23.7 million, with adjusted gross margin at 85%. Cost of revenue exclusive of depreciation and amortization rose 11% to $4.0 million and fell to 14% of revenue from 16%. The company attributed the lower percentage to the fixed-cost nature of its primary data licensing. Its largest data supplier accounted for 44% of data acquisition costs.

Net income increased 29% to $5.4 million, or $0.35 a share, and net income margin rose to 20% from 18%. Adjusted EBITDA increased 22% to $11.0 million, with adjusted EBITDA margin at 40%. Adjusted net income increased 23% to $7.3 million, or $0.48 basic and $0.47 diluted a share.

Sales and marketing expenses increased 14% to $6.2 million, including a $0.4 million provision for bad debts versus $0.1 million a year earlier. General and administrative expenses increased 32% to $9.0 million. The company said the increase reflected higher personnel-related expenses and share-based compensation, as well as higher professional fees of $2.2 million, including $0.2 million of acquisition-related due-diligence costs. Interest income increased 177% to $1.1 million.

IDI billable customers ended the quarter at 11,252 after the company added 383 in the third quarter. FOREWARN users ended at 462,861 after 19,688 were added. More than 665 REALTOR Associations were contracted to use FOREWARN. For the three months ended September 30, 2026, 78% of revenue came from customers with pricing contracts and 22% from transactional customers.

Net cash provided by operating activities increased 25% to $12.7 million. Free cash flow was $8.8 million. Cash and cash equivalents together with U.S. Treasury securities totaled $165.7 million as of September 30, 2026, with no debt. The company closed an underwritten public offering of 1,916,667 shares, including 250,000 shares sold on full exercise of the underwriters’ option, providing $108.7 million of net proceeds after discounts, commissions and expenses.