Red Violet (RDVT) 10-Q 11 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 08, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Trading Symbol	RDVT
Entity Registrant Name	RED VIOLET, INC.
Entity Central Index Key	0001720116
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		11,598,015
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	001-38407
Entity Tax Identification Number	82-2408531
Entity Address, Address Line One	2650 North Military Trail
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33431
City Area Code	(561)
Local Phone Number	757-4000
Entity Information, Former Legal or Registered Name	None
Document Transition Report	false
Document Quarterly Report	true
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Title of 12(b) Security	Common Stock, $0.001 par value per share
Security Exchange Name	NASDAQ

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 11,454	$ 11,776
Accounts receivable, net of allowance for doubtful accounts of $19 and $40 as of March 31, 2020 and December 31, 2019, respectively	3,039	3,543
Prepaid expenses and other current assets	1,116	722
Total current assets	15,609	16,041
Property and equipment, net	616	660
Intangible assets, net	25,310	24,034
Goodwill	5,227	5,227
Right-of-use assets	2,509	2,620
Other noncurrent assets	226	289
Total assets	49,497	48,871
Current liabilities:
Accounts payable	2,229	2,138
Accrued expenses and other current liabilities	816	1,571
Current portion of operating lease liabilities	506	491
Deferred revenue	207	128
Total current liabilities	3,758	4,328
Noncurrent operating lease liabilities	2,327	2,459
Total liabilities	6,085	6,787
Shareholders' equity:
Preferred stock—$0.001 par value, 10,000,000 shares authorized, and 0 shares issued and outstanding, as of March 31, 2020 and December 31, 2019
Common stock—$0.001 par value, 200,000,000 shares authorized, 11,693,162 and 11,657,912 shares issued, 11,590,015 and 11,554,765 shares outstanding, as of March 31, 2020 and December 31, 2019	12	12
Treasury stock, at cost, 103,147 shares as of March 31, 2020 and December 31, 2019	(1,255)	(1,255)
Additional paid-in capital	61,996	59,187
Accumulated deficit	(17,341)	(15,860)
Total shareholders' equity	43,412	42,084
Total liabilities and shareholders' equity	$ 49,497	$ 48,871

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Statement Of Financial Position [Abstract]
Allowance for doubtful accounts	$ 19	$ 40
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	11,693,162	11,657,912
Common stock, shares outstanding	11,590,015	11,554,765
Treasury Stock, Shares	103,147	103,147

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue	$ 9,300	$ 5,734
Costs and expenses:
Sales and marketing expenses	2,176	1,500
General and administrative expenses	4,434	2,365
Depreciation and amortization	910	618
Total costs and expenses	10,812	7,152
Loss from operations	(1,512)	(1,418)
Interest income, net	31	40
Loss before income taxes	(1,481)	(1,378)
Net loss	$ (1,481)	$ (1,378)
Loss per share:
Basic and diluted	$ (0.13)	$ (0.13)
Weighted average number of shares outstanding:
Basic and diluted	11,583,214	10,267,680
Service [Member]
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization)	$ 3,292	$ 2,669

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid- in Capital	Accumulated Deficit
Beginning balance at Dec. 31, 2018	$ 36,278	$ 10		$ 41,052	$ (4,784)
Beginning balances, shares at Dec. 31, 2018		10,266,613
Vesting of restricted stock units, Shares		20,000
Share-based compensation	424			424
Net loss	(1,378)				(1,378)
Ending balance at Mar. 31, 2019	35,324	$ 10		41,476	(6,162)
Ending balances, shares at Mar. 31, 2019		10,286,613
Beginning balance at Dec. 31, 2019	42,084	$ 12	$ (1,255)	59,187	(15,860)
Beginning balances, shares at Dec. 31, 2019		11,657,912	(103,147)
Vesting of restricted stock units, Shares		35,250
Share-based compensation	2,809			2,809
Net loss	(1,481)				(1,481)
Ending balance at Mar. 31, 2020	$ 43,412	$ 12	$ (1,255)	$ 61,996	$ (17,341)
Ending balances, shares at Mar. 31, 2020		11,693,162	(103,147)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,481)	$ (1,378)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	910	618
Share-based compensation expense	2,221	274
Write-off of long-lived assets	17	30
Provision for bad debts	190	154
Noncash lease expenses	111	103
Changes in assets and liabilities:
Accounts receivable	314	(677)
Prepaid expenses and other current assets	(394)	(359)
Other noncurrent assets	63	85
Accounts payable	91	(97)
Accrued expenses and other current liabilities	(755)	143
Deferred revenue	79	23
Operating lease liabilities	(117)	(105)
Net cash provided by (used in) operating activities	1,249	(1,186)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(33)	(15)
Capitalized costs included in intangible assets	(1,538)	(1,430)
Net cash used in investing activities	(1,571)	(1,445)
Net decrease in cash and cash equivalents	(322)	(2,631)
Cash and cash equivalents at beginning of period	11,776	9,950
Cash and cash equivalents at end of period	11,454	7,319
SUPPLEMENTAL DISCLOSURE INFORMATION
Share-based compensation capitalized in intangible assets	$ 588	150
Right-of-use assets obtained in exchange of operating lease liabilities		3,042
Operating lease liabilities arising from obtaining right-of-use assets		$ 3,387

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	1. Summary of significant accounting policies (a) Basis of preparation The accompanying unaudited condensed consolidated financial statements of Red Violet, Inc. (“red violet” or the “Company”), a Delaware corporation, The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for any future interim periods or for the full year ending December 31, 2020. The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”). The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date included in the 2019 Form 10-K, but does not include all disclosures required by GAAP. The Company has only one operating segment, as defined by Accounting Standards Codification (“ASC”) 280, “ Segment Reporting Principles of consolidation The condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant transactions among the Company and its subsidiaries have been eliminated upon consolidation . (b) Recently issued accounting standards As an emerging growth company, the Company has left open the opportunity to take advantage of the extended transition In June 2016, FASB issued ASU No. 2016-13 (“ASU 2016-13”), “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In August 2018, FASB issued ASU No. 2018-15 (“ASU 2018-15”), “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,”

Loss Per Share

Loss Per Share	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Loss Per Share	2. Loss per share Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the periods. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and is calculated using the treasury stock method for unvested shares. Common equivalent shares are excluded from the calculation in the loss periods as their effects would be anti-dilutive. Three Months Ended March 31, (In thousands, except share data) 2020 2019 Numerator: Net loss $ (1,481 ) $ (1,378 ) Denominator: Weighted average shares outstanding - Basic and diluted (1) 11,583,214 10,267,680 Loss per share: Basic and diluted: $ (0.13 ) $ (0.13 ) (1) A total of 2,185,577 and 2,267,500 unvested restricted stock units (“RSUs”) have been excluded from the diluted loss per share for the three months ended March 31, 2020 and 2019, respectively, as the impact is anti-dilutive.

Intangible Assets, Net

Intangible Assets, Net	3 Months Ended
	Mar. 31, 2020
Intangible Assets Net Excluding Goodwill [Abstract]
Intangible Assets, Net	3. Intangible assets, net Intangible assets other than goodwill consist of the following: March 31, 2020 December 31, 2019 (In thousands) Amortization Period Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Software developed for internal use 5-10 years $ 31,816 $ (6,506 ) $ 25,310 $ 29,690 $ (5,656 ) $ 24,034 The gross amount associated with software developed for internal use represents capitalized costs of internally-developed software, including eligible salaries and staff benefits, share-based compensation, travel expenses incurred by relevant employees, and other relevant costs. Amortization expenses of $850 and $554 for the three months ended March 31, 2020 and 2019, respectively, were included in depreciation and amortization expense. As of March 31, 2020, intangible assets of $4,136, included in the gross amounts of software developed for internal use, have not started amortization, as they are not ready for their intended use. The Company capitalized costs of software developed for internal use of $2,126 and $1,580 during the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, estimated amortization expense related to the Company’s intangible assets for the remainder of 2020 through 2025 and thereafter are as follows: (In thousands) Year March 31, 2020 Remainder of 2020 $ 2,832 2021 4,324 2022 4,321 2023 4,245 2024 3,629 2025 and thereafter 5,959 Total $ 25,310

Goodwill

Goodwill	3 Months Ended
	Mar. 31, 2020
Goodwill Disclosure [Abstract]
Goodwill	4. Goodwill Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. As of March 31, 2020 and December 31, 2019, the balance of goodwill of $5,227 was as a result of the acquisition of Interactive Data, LLC, a wholly-owned subsidiary of red violet, effective on October 2, 2014. In accordance with ASC 350, “Intangibles - Goodwill and Other,” As of March 31, 2020 and December 31, 2019, no goodwill impairment charges were recorded.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2020
Revenue From Contract With Customer [Abstract]
Revenue Recognition	5. Revenue recognition On January 1, 2018, the Company adopted ASC 606, “Revenue from Contracts with Customers,” Available within Topic 606, the Company has applied the portfolio approach practical expedient in accounting for customer revenue as one collective group, rather than individual contracts. Based on the Company’s historical knowledge of the contracts contained in this portfolio and the similar nature and characteristics of the customers, the Company has concluded the financial statement effects are not materially different than if accounting for revenue on a contract by contract basis. Revenue is recognized over a period of time since the performance obligation is delivered in a series. The Company’s customers simultaneously receive and consume the benefits provided by the Company’s performance as and when provided. Furthermore, the Company has elected the “right to invoice” practical expedient, available within Topic 606, as its measure of progress, since it has a right to payment from a customer in an amount that corresponds directly with the value of its performance completed-to-date. The Company's revenue arrangements do not contain significant financing components. For the three months ended March 31, 2020 and 2019, 69% and 67% of total revenue was attributable to customers with pricing contracts, respectively, versus 31% and 33% attributable to transactional customers, respectively. Pricing contracts are generally annual contracts or longer, with auto renewal. If a customer pays consideration before the Company transfers services to the customer, those amounts are classified as deferred revenue. As of March 31, 2020 and December 31, 2019, the balance of deferred revenue was $207 and $128, respectively, all of which is expected to be realized in the next 12 months. In relation to the deferred revenue balance as of December 31, 2019, $91 was recognized into revenue during the three months ended March 31, 2020. As of March 31, 2020, $3,868 of revenue is expected to be recognized in the future for outstanding performance obligations, primarily related to pricing contracts that have a term of more than 12 months. $1,967 of revenue will be recognized in the remainder of 2020, $1,820 in 2021, $65 in 2022, and $16 in 2023 and thereafter. The actual timing of recognition may vary due to factors outside of the Company’s control. The Company excludes variable consideration related entirely to wholly unsatisfied performance obligations and contracts and recognizes such variable consideration based upon the right to invoice the customer. Sales commissions are incurred and recorded on an ongoing basis over the term of the customer relationship. These costs are recorded in sales and marketing expenses. In addition, the Company elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Income Taxes	6. Income taxes The Company is subject to federal and state income taxes in the United States. The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate, and if its estimated annual tax rate changes, the Company makes a cumulative adjustment in that quarter. The Company’s effective income tax rate differed from the statutory federal income tax rate of 21 . The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the Company’s financial statements. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. All of the Company’s income tax filings since 2016 remain open for tax examinations. The Company does not have any unrecognized tax benefits as of March 31, 2020 and December 31, 2019.

Common Stock and Treasury Stock

Common Stock and Treasury Stock	3 Months Ended
	Mar. 31, 2020
Equity [Abstract]
Common Stock and Treasury Stock	7. Common stock and treasury stock Common stock As of March 31, 2020 and December 31, 2019, the number of issued shares of common stock was 11,693,162 and 11,657,912, respectively, which included shares of treasury stock of 103,147 and 103,147, respectively. The change in the number of issued shares of common stock was due to an aggregate of 35,250 shares of common stock issued as a result of the vesting of RSUs. Treasury stock As of March 31, 2020 and December 31, 2019, the Company held 103,147 shares of treasury stock, with a cost of $1,255, as a result of the shares withheld to pay withholding taxes upon the vesting of RSUs.

Share-based Compensation

Share-based Compensation	3 Months Ended
	Mar. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Share-based Compensation	8. Share-based compensation On March 22, 2018, the board of directors of the Company and Fluent, Inc., in its capacity as sole stockholder of the Company at that time, approved the Red Violet, Inc. 2018 Stock Incentive Plan (the “2018 Plan”). A total of 3,000,000 shares of common stock were authorized to be issued under the 2018 Plan. The primary purpose of the 2018 Plan is to attract, retain, reward and motivate certain individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such individuals and the stockholders of the Company. As of March 31, 2020, there were 44,624 shares of common stock available for future issuance under the 2018 Plan. On April 17, 2020, the board of directors of the Company approved, subject to stockholder approval, an amendment to the 2018 Plan to increase the number of shares of common stock authorized for issuance under the 2018 Plan from 3,000,000 shares to 4,500,000 shares . Details of unvested RSU activity during the three months ended March 31, 2020 were as follows: Number of units Weighted average grant-date fair value Unvested as of December 31, 2019 2,237,827 $ 8.88 Vested and delivered (35,250 ) $ 7.25 Vested not delivered (12,000 ) $ 6.10 Forfeited (5,000 ) $ 7.25 Unvested as of March 31, 2020 2,185,577 $ 8.92 On September 5, 2018 and January 16, 2019, the Company granted an aggregate of 1,487,500 RSUs and 90,000 RSUs, respectively, subject to both time- and performance-based requirements, to certain of its employees and directors, at a grant date fair value of $7.69 per share and $7.25 per share, respectively, with a three-year As a result of meeting the 2018 Performance Criteria as of June 30, 2019, the Company recognized a total of $971 of share-based compensation expense relating to RSUs with the 2018 Performance Criteria for the three months ended March 31, 2020. No share-based compensation expense of such RSUs was recognized during the three months ended March 31, 2019 because the Company determined at that period end that it was not probable that the 2018 Performance Criteria would be met. On August 28, 2019 and October 28, 2019, the Company granted an aggregate of 681,000 RSUs, subject to both time- and performance-based requirements, to certain employees, at a grant date fair value of $11.42 per share and $16.42 per share, respectively, with time vesting periods of either three or four years. Such RSU grants shall not vest unless and until the Company has, for any fiscal quarter in which the RSUs are outstanding, (i) gross revenue determined in accordance with the Company’s reviewed or audited financial statements in excess of (a) $10.0 million for such fiscal quarter and positive adjusted EBITDA of at least $1.5 million, as determined based on amounts derived from the Company’s reviewed or audited financial statements for such fiscal quarter for 256,000 RSUs, and (b) $12.5 million for such fiscal quarter and positive adjusted EBITDA of at least $2.0 million, as determined based on amounts derived from the Company’s reviewed or audited financial statements for such fiscal quarter for 425,000 RSUs, and (ii) the recipient continues to provide services to the Company either as an employee, director or consultant on the last day of the quarter that the performance criteria is met (collectively, the “2019 Performance Criteria”). Provided the respective 2019 Performance Criteria are met, the RSUs will vest in accordance with the time-based requirements contained in the award agreement over three or four years. In the event of a change of control, all RSUs which have not vested on the date of such change of control shall immediately vest even if the 2019 Performance Criteria have not been met. As of March 31, 2020, unrecognized share-based compensation expense associated with the granted RSUs amounted to $12,654, which is expected to be recognized over a remaining weighted average period of 2.0 years. Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, (In thousands) 2020 2019 Sales and marketing expenses $ 154 $ 87 General and administrative expenses 2,067 187 Share-based compensation expense 2,221 274 Capitalized in intangible assets 588 150 Total $ 2,809 $ 424

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2020
Related Party Transactions [Abstract]
Related Party Transactions	9. Related party transactions Services Agreement On August 7, 2018, the Company entered into an executive chairman services agreement with Mr. Michael Brauser, the then Executive Chairman of the Company, pursuant to which Mr. Brauser will be providing recommendations on organizational and capital structure, future financing needs and future acquisitions or strategic transactions (“Services Agreement”), for a term of one year, automatically renewing for additional one-year

Leases

Leases	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Leases	10. Leases On January 1, 2019, the Company adopted Leases (Topic 842) using the modified retrospective method applied to all leases existing at the date of initial application. The Company elected the practical expedients to not reassess whether any existing contracts are or contain leases, not reassess the lease classification for any existing leases, and not reassess initial direct costs for any existing leases, upon the adoption of Leases (Topic 842). The Company leases its corporate headquarters of 21,020 rentable square feet in accordance with a non-cancelable 89-month operating lease agreement as amended and effective in January 2017. The Company also leases an additional office space of 6,003 rentable square feet in accordance with a non-cancellable 90-month operating lease agreement entered into in April 2017, with an option to extend for additional 60 months. The extension option is not included in the determination of the lease term as it is not reasonably certain to be exercised. For the three months ended March 31, 2020 and 2019, a summary of the Company’s lease information is shown below: Three Months Ended March 31, (In thousands) 2020 2019 Lease cost: Operating lease costs $ 168 $ 168 Other information: Cash paid for operating leases $ 174 $ 170 Right-of-use assets obtained in exchange for operating lease liabilities $ - $ 3,042 Weighted average discount rate for operating leases (1) - 8.0 % (1) The Company used 8.0%, its estimated incremental borrowing rate for similar secured assets, as the discount rate for the leases to determine the present value of the lease payments because the implicit rate in each lease is not readily determinable. The discount rate was calculated on the basis of information available as of January 1, 2019, the application date. As of March 31, 2020, the weighted average remaining operating lease term was 4.6 years. As of March 31, 2020, scheduled future maturities and present value of the operating lease liabilities are as follows: (In thousands) Year March 31, 2020 Remainder of 2020 $ 530 2021 724 2022 743 2023 765 2024 542 2025 and thereafter 77 Total maturities $ 3,381 Present value included in consolidated balance sheet: Current portion of operating lease liabilities $ 506 Noncurrent operating lease liabilities 2,327 Total operating lease liabilities $ 2,833 Difference between the maturities and the present value of operating lease liabilities $ 548

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2020
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	11. Commitments and contingencies (a) Capital commitment The Company incurred data costs of $2,132 and $1,688 for the three months ended March 31, 2020 and 2019, respectively, under certain data licensing agreements. As of March 31, 2020, material capital commitments under certain data licensing agreements were $12,766, shown as follows: (In thousands) Year March 31, 2020 Remainder of 2020 $ 5,499 2021 5,615 2022 1,652 Total $ 12,766 (b) Contingencies The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our financial statements to not be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated . The Company may be involved in litigation from time to time in the ordinary course of business. The Company does not believe that the ultimate resolution of any such matters will have a material adverse effect on its business, financial condition, results of operations or cash flows. However, the results of such matters cannot be predicted with certainty and the Company cannot assure you that the ultimate resolution of any legal or administrative proceeding or dispute will not have a material adverse effect on its business, financial condition, results of operations and cash flows. (c ) Covid -19 update In December 2019, a novel strain of coronavirus, now known as Covid-19 (“Covid-19”), was reported in Wuhan, China and has since extensively impacted the global health and economic environment. In March 2020, the World Health Organization characterized Covid-19 as a pandemic. The Company has taken numerous steps, and will continue to take further actions, in its approach to minimizing the impact of the Covid-19 pandemic. As a result of the Covid-19 pandemic, to ensure the health and well-being of our employees, the Company instructed employees at its offices to work from home on a temporary basis. The Company has implemented cost containment strategies across all areas of the organization, including continued curtailment of Company travel and partnering with suppliers, landlords and vendors for price concessions and payment deferrals during this interim period. In the second half of March, as preventative and protective actions were taken by governments, including the implementation of stay-at-home orders, we experienced reduced transactional volume that we believe was a result of customers adjusting to the effects of these stay-at-home orders. Beginning April 1, 2020, the Company elected, under Section 2302 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), to defer payment of the employer portion of Social Security payroll tax. Under the CARES Act, employers can forgo timely payment of the employer portion of Social Security taxes that would otherwise be due from March 27, 2020 through December 31, 2020, without penalty or interest charges. Employers must pay 50% of the deferred amount by December 31, 2021, and the remainder by December 31, 2022. The Company will continue to assess the CARES Act and other applicable government-related legislation aimed at assisting businesses during the Covid-19 pandemic. Given the dynamic nature of this health emergency, the full impact of the Covid-19 pandemic on the Company’s ongoing business, results of operations and overall financial performance cannot be reasonably estimated at this time.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2020
Subsequent Events [Abstract]
Subsequent Events	12. Subsequent events On May 5, 2020, the Company received funding under a promissory note dated May 5, 2020 (the “Promissory Note”) evidencing an unsecured non-recourse loan in the principal amount of $2,152 under the CARES Act (the “Loan”). The Loan to the Company is being made through Legacy Bank of Florida (the “Lender”). The Loan has a two-year term and matures on May 5, 2022. The interest rate on the Loan is 1.00% per annum. Payments shall be deferred for the first six months of the term of the Loan. The U.S. Small Business Administration has the right to extend the deferment period. The Promissory Note contains customary events of default relating to, among other things, payment defaults, and breach of representations and warranties, or other provisions of the Promissory Note. The Loan may be forgiven partially or fully if the Loan proceeds are used for covered payroll costs, rent and utility costs incurred during the eight-week period that commenced on the date of funding, and at least 75% of the Loan proceeds are used for covered payroll costs. Any forgiveness of the Loan will be subject to approval by the U.S. Small Business Administration and the Lender. The Company will be required to apply for such forgiveness. Although the Company intends to use the proceeds of the Loan for such covered purposes, it can provide no assurance that the Company will obtain forgiveness of the Loan in whole or in part.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
Basis of Preparation	(a) Basis of preparation The accompanying unaudited condensed consolidated financial statements of Red Violet, Inc. (“red violet” or the “Company”), a Delaware corporation, The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for any future interim periods or for the full year ending December 31, 2020. The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”). The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date included in the 2019 Form 10-K, but does not include all disclosures required by GAAP. The Company has only one operating segment, as defined by Accounting Standards Codification (“ASC”) 280, “ Segment Reporting Principles of consolidation The condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant transactions among the Company and its subsidiaries have been eliminated upon consolidation .
Recently Issued Accounting Standards	(b) Recently issued accounting standards As an emerging growth company, the Company has left open the opportunity to take advantage of the extended transition In June 2016, FASB issued ASU No. 2016-13 (“ASU 2016-13”), “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In August 2018, FASB issued ASU No. 2018-15 (“ASU 2018-15”), “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,”

Loss Per Share (Tables)

Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Schedule of Basic and Diluted Loss Per Share	Three Months Ended March 31, (In thousands, except share data) 2020 2019 Numerator: Net loss $ (1,481 ) $ (1,378 ) Denominator: Weighted average shares outstanding - Basic and diluted (1) 11,583,214 10,267,680 Loss per share: Basic and diluted: $ (0.13 ) $ (0.13 )

Intangible Assets, Net (Tables)

Intangible Assets, Net (Tables)	3 Months Ended
	Mar. 31, 2020
Intangible Assets Net Excluding Goodwill [Abstract]
Intangible Assets Other than Goodwill	Intangible assets other than goodwill consist of the following: March 31, 2020 December 31, 2019 (In thousands) Amortization Period Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Software developed for internal use 5-10 years $ 31,816 $ (6,506 ) $ 25,310 $ 29,690 $ (5,656 ) $ 24,034
Schedule of Estimated Amortization Expense	As of March 31, 2020, estimated amortization expense related to the Company’s intangible assets for the remainder of 2020 through 2025 and thereafter are as follows: (In thousands) Year March 31, 2020 Remainder of 2020 $ 2,832 2021 4,324 2022 4,321 2023 4,245 2024 3,629 2025 and thereafter 5,959 Total $ 25,310

Share-based Compensation (Table

Share-based Compensation (Tables)	3 Months Ended
	Mar. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Schedule of Unvested Restricted Stock Units	Details of unvested RSU activity during the three months ended March 31, 2020 were as follows: Number of units Weighted average grant-date fair value Unvested as of December 31, 2019 2,237,827 $ 8.88 Vested and delivered (35,250 ) $ 7.25 Vested not delivered (12,000 ) $ 6.10 Forfeited (5,000 ) $ 7.25 Unvested as of March 31, 2020 2,185,577 $ 8.92
Summary of Allocated Share-based Compensation	Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, (In thousands) 2020 2019 Sales and marketing expenses $ 154 $ 87 General and administrative expenses 2,067 187 Share-based compensation expense 2,221 274 Capitalized in intangible assets 588 150 Total $ 2,809 $ 424

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Summary of Company's Lease Information	For the three months ended March 31, 2020 and 2019, a summary of the Company’s lease information is shown below: Three Months Ended March 31, (In thousands) 2020 2019 Lease cost: Operating lease costs $ 168 $ 168 Other information: Cash paid for operating leases $ 174 $ 170 Right-of-use assets obtained in exchange for operating lease liabilities $ - $ 3,042 Weighted average discount rate for operating leases (1) - 8.0 % (1) The Company used 8.0%, its estimated incremental borrowing rate for similar secured assets, as the discount rate for the leases to determine the present value of the lease payments because the implicit rate in each lease is not readily determinable. The discount rate was calculated on the basis of information available as of January 1, 2019, the application date.
Scheduled Future Maturities and Present Value of Operating Lease Liabilities	As of March 31, 2020, scheduled future maturities and present value of the operating lease liabilities are as follows: (In thousands) Year March 31, 2020 Remainder of 2020 $ 530 2021 724 2022 743 2023 765 2024 542 2025 and thereafter 77 Total maturities $ 3,381 Present value included in consolidated balance sheet: Current portion of operating lease liabilities $ 506 Noncurrent operating lease liabilities 2,327 Total operating lease liabilities $ 2,833 Difference between the maturities and the present value of operating lease liabilities $ 548

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2020
Commitments And Contingencies Disclosure [Abstract]
Future Minimum Capital Payments under Certain Data Licensing Agreements	The Company incurred data costs of $2,132 and $1,688 for the three months ended March 31, 2020 and 2019, respectively, under certain data licensing agreements. As of March 31, 2020, material capital commitments under certain data licensing agreements were $12,766, shown as follows: (In thousands) Year March 31, 2020 Remainder of 2020 $ 5,499 2021 5,615 2022 1,652 Total $ 12,766

Summary of Significant Accoun_3

Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2020Segment
Accounting Policies [Abstract]
Operating segments	1

Loss Per Share - Schedule of Ba

Loss Per Share - Schedule of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Net loss	$ (1,481)	$ (1,378)
Weighted average shares outstanding - Basic and diluted	11,583,214	10,267,680
Loss per share:
Basic and diluted:	$ (0.13)	$ (0.13)

Loss Per Share - Additional Inf

Loss Per Share - Additional Information (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Restricted Stock Units (RSUs)
Earnings Per Share [Line Items]
Shares excluded from the diluted loss per share calculation	2,185,577	2,267,500

Intangible Assets, Net - Intang

Intangible Assets, Net - Intangible Assets Other than Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Finite Lived Intangible Assets [Line Items]
Intangible Assets, Net	$ 25,310	$ 24,034
Software Developed for Internal Use
Finite Lived Intangible Assets [Line Items]
Intangible Assets, Gross Amount	31,816	29,690
Intangible Assets, Accumulated Amortization	(6,506)	(5,656)
Intangible Assets, Net	$ 25,310	$ 24,034
Software Developed for Internal Use | Minimum
Finite Lived Intangible Assets [Line Items]
Amortization Period	5 years
Software Developed for Internal Use | Maximum
Finite Lived Intangible Assets [Line Items]
Amortization Period	10 years

Intangible Assets, Net - Additi

Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Finite Lived Intangible Assets [Line Items]
Amortization expenses	$ 850	$ 554
Internally-developed Software
Finite Lived Intangible Assets [Line Items]
Intangible assets that have not started amortization	4,136
Capitalized costs of internally-developed software	$ 2,126	$ 1,580

Intangible Assets, Net - Schedu

Intangible Assets, Net - Schedule of Estimated Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Intangible Assets Net Excluding Goodwill [Abstract]
Remainder of 2020	$ 2,832
2021	4,324
2022	4,321
2023	4,245
2024	3,629
2025 and thereafter	5,959
Intangible Assets, Net	$ 25,310	$ 24,034

Goodwill - Additional Informati

Goodwill - Additional Information (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Goodwill Disclosure [Abstract]
Goodwill	$ 5,227,000	$ 5,227,000
Date of annual goodwill impairment test	October 1
Goodwill impairment charges	$ 0	$ 0

Revenue Recognition - Additiona

Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Revenue Recognition [Line Items]
Deferred revenue	$ 207		$ 128
Deferred revenue realization period	12 months
Revenue recognized, previously reported as deferred	$ 91
Estimated revenue expected to be recognized in the future	$ 3,868
Period over which subscription contract terms exceed	12 months
Customers With Pricing Contracts
Revenue Recognition [Line Items]
Percentage of Revenue	69.00%	67.00%
Transactional Customers
Revenue Recognition [Line Items]
Percentage of Revenue	31.00%	33.00%

Revenue Recognition - Additio_2

Revenue Recognition - Additional Information (Details 1) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)
Revenue Recognition [Line Items]
Estimated revenue expected to be recognized in the future	$ 3,868
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-04-01
Revenue Recognition [Line Items]
Estimated revenue expected to be recognized in the future	$ 1,967
Revenue, remaining performance obligation, expected timing of satisfaction, period	9 months
Revenue For Future Outstanding Performance Obligations	$ 3,868
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01
Revenue Recognition [Line Items]
Estimated revenue expected to be recognized in the future	$ 1,820
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01
Revenue Recognition [Line Items]
Estimated revenue expected to be recognized in the future	$ 65
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01
Revenue Recognition [Line Items]
Estimated revenue expected to be recognized in the future	$ 16
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Statutory federal income tax rate	21.00%	21.00%
Effective income tax rate, percentage	0.00%	0.00%
Percentage of tax benefits likelihood of being realized upon settlement of tax authority	greater than 50%
Unrecognized tax benefits	$ 0		$ 0

Common Stock and Treasury Sto_2

Common Stock and Treasury Stock - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Common stock, shares issued	11,693,162	11,657,912
Treasury Stock, issued	103,147	103,147
Treasury Stock, Value	$ 1,255	$ 1,255
Treasury Stock, Shares	103,147	103,147
Common Stock
Vesting of restricted stock units, Shares	35,250

Share-based Compensation - Addi

Share-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	Aug. 28, 2019	Jan. 16, 2019	Sep. 05, 2018	Oct. 28, 2019	Mar. 31, 2020	Mar. 31, 2019	Apr. 17, 2020	Mar. 22, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Amortization of share based compensation expense					$ 2,221	$ 274
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized share-based compensation costs in respect of granted RSUs					$ 12,654
Unrecognized share-based compensation remaining weighted average period					2 years
2018 Stock Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of common stock authorized							4,500,000	3,000,000
Common stock available for future issuance					44,624
2018 Stock Incentive Plan | Performance Based Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Amortization of share based compensation expense					$ 971
2018 Stock Incentive Plan | Performance Based Restricted Stock Units | Employees and Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted		90,000	1,487,500
Grant date fair value per share		$ 7.25	$ 7.69
Vesting period		3 years	3 years
Gross revenue threshold limit for vesting of grants			$ 7,000
2018 Stock Incentive Plan | Performance Based Restricted Stock Units | Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted	681,000			681,000
Grant date fair value per share	$ 11.42			$ 16.42
Amortization of share based compensation expense					$ 1,389
2018 Stock Incentive Plan | Performance Based Restricted Stock Units | Employees | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted	256,000			256,000
Vesting period	3 years			3 years
Gross revenue threshold limit for vesting of grants	$ 10,000			$ 10,000
Positive adjusted EBITDA threshold limit for vesting of grants	$ 1,500			$ 1,500
2018 Stock Incentive Plan | Performance Based Restricted Stock Units | Employees | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units granted	425,000			425,000
Vesting period	4 years			4 years
Gross revenue threshold limit for vesting of grants	$ 12,500			$ 12,500
Positive adjusted EBITDA threshold limit for vesting of grants	$ 2,000			$ 2,000

Share-based Compensation - Sche

Share-based Compensation - Schedule of Unvested RSU Activity (Detail) - Restricted Stock Units (RSUs)	3 Months Ended
	Mar. 31, 2020$ / sharesshares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unvested, Number of units Beginning balance | shares	2,237,827
Vested and delivered, Number of units | shares	(35,250)
Vested not delivered, Number of units | shares	(12,000)
Forfeited, Number of units | shares	(5,000)
Unvested, Number of units Ending balance | shares	2,185,577
Unvested, Weighted average grant-date fair value, Beginning balance | $ / shares	$ 8.88
Vested and delivered, Weighted average grant-date fair value | $ / shares	7.25
Vested not delivered, Weighted average grant-date fair value | $ / shares	6.10
Forfeited, Weighted average grant-date fair value | $ / shares	7.25
Unvested, Weighted average grant-date fair value, Ending balance | $ / shares	$ 8.92

Share-based Compensation - Summ

Share-based Compensation - Summary of Allocated Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share-based compensation recognized
Share-based compensation expense	$ 2,221	$ 274
Capitalized in intangible assets	588	150
Total	2,809	424
Sales and Marketing Expenses
Share-based compensation recognized
Share-based compensation expense	154	87
General and Administrative Expenses
Share-based compensation recognized
Share-based compensation expense	$ 2,067	$ 187

Related Party Transactions - Ad

Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands	Aug. 07, 2018	Mar. 31, 2020	Mar. 31, 2019
Related Party Transaction [Line Items]
Share-based compensation expense		$ 2,221	$ 274
Services Agreement | Michael Brauser-Former Executive Chairman
Related Party Transaction [Line Items]
Term of agreement, related party	1 year
Renewal term of agreement, related party	1 year
Consulting service fee monthly payment	$ 30
Consulting service fee recognized amount		90	90
Services Agreement | Michael Brauser-Former Executive Chairman | Restricted Stock Units (RSUs)
Related Party Transaction [Line Items]
Share-based compensation expense		$ 339	$ 0

Leases - Additional Information

Leases - Additional Information (Details) - ft²	3 Months Ended
	Mar. 31, 2020	Apr. 30, 2017	Jan. 31, 2017
Leases [Abstract]
Operating leases rentable square feet		6,003	21,020
Operating lease agreement		90 months	89 months
Operating lease, existence of option to extend	true
Operating lease, extended term		60 months
Weighted average remaining operating lease	4 years 7 months 6 days

Leases - Summary of Company's L

Leases - Summary of Company's Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019		Dec. 31, 2018
Lease cost:
Operating lease costs	$ 168	$ 168
Other information:
Cash paid for operating leases	$ 174	170
Right-of-use assets obtained in exchange for operating lease liabilities		$ 3,042
Weighted average discount rate for operating leases		8.00%	[1]	8.00%
[1]	The Company used 8.0%, its estimated incremental borrowing rate for similar secured assets, as the discount rate for the leases to determine the present value of the lease payments because the implicit rate in each lease is not readily determinable. The discount rate was calculated on the basis of information available as of January 1, 2019, the application date.

Leases - Summary of Company's_2

Leases - Summary of Company's Lease Information (Paranthetical) (Details)	Mar. 31, 2019		Dec. 31, 2018
Leases [Abstract]
Weighted average discount rate for operating leases	8.00%	[1]	8.00%
[1]	The Company used 8.0%, its estimated incremental borrowing rate for similar secured assets, as the discount rate for the leases to determine the present value of the lease payments because the implicit rate in each lease is not readily determinable. The discount rate was calculated on the basis of information available as of January 1, 2019, the application date.

Leases - Scheduled Future Matur

Leases - Scheduled Future Maturities and Present Value of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Remainder of 2020	$ 530
2021	724
2022	743
2023	765
2024	542
2025 and thereafter	77
Total maturities	3,381
Present value included in consolidated balance sheet:
Current portion of operating lease liabilities	506	$ 491
Noncurrent operating lease liabilities	2,327	$ 2,459
Total operating lease liabilities	2,833
Difference between the maturities and the present value of operating lease liabilities	$ 548

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Commitments And Contingencies Disclosure [Abstract]
Data cost incurred	$ 2,132	$ 1,688
Total capital commitment under certain data licensing agreements	$ 12,766

Commitments and Contingencies_2

Commitments and Contingencies - Future Minimum Capital Payments under Certain Data Licensing Agreements (Details) $ in Thousands	Mar. 31, 2020USD ($)
Commitments And Contingencies Disclosure [Abstract]
Remainder of 2020	$ 5,499
2021	5,615
2022	1,652
Total	$ 12,766

Subsequent Events - Additional

Subsequent Events - Additional Information (Details) - Promissory Notes - Cares Act - Legacy Bank Of Florida - Subsequent Event $ in Thousands	May 05, 2020USD ($)
Subsequent Event [Line Items]
Unsecured non-recourse loan in the principal amount	$ 2,152
Loan maturity date	May 5, 2022
Loan Interest rate	1.00%
Minimum
Subsequent Event [Line Items]
Percentage of loan proceeds used for covered payroll costs	75.00%