RDVT - Earnings call transcript Q2 2021

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Operator

Good day, ladies and gentlemen and welcome to Red Violet’s Second Quarter 2021 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today’s conference, Camilo Ramirez, Director of Finance and Investor Relations. Please go ahead.

Camilo Ramirez

Good afternoon and welcome. us discuss joining XXXX second for results. financial you today our to quarter Thank is our Officer. Derek Executive today me With Dubner, Dan our Officer Chairman MacLachlan, Chief Financial and Chief and

from the following Our will event replay access a session. website. webcast please this would call I of live the will our our Investors that Dan to To you is begin comments the question-and-answer remind today like call call visit followed on Derek webcast, on with and by available website, our and be being A recorded. page www.redviolet.com.

or to Reform I differ to Safe of by the our this information are associated Before would we with XXXX. information call. conference Actual statements certain materially forward-looking listeners by Harbor due risks discussed company provisions stated The begin, during update obligation business. call those from Act undertakes this and like Litigation implied advise of to could under no the that the the uncertainties covered statements management forward-looking on Securities results provided company’s Private

risks recent uncertainties Form and For Securities of filings subsequent Exchange the business, the review the and you on discussion associated company’s with Violet’s with and including Commission, I Annual a Report encourage most Red to XX-Qs. XX-K

call, today. most their are release issued margins adjusted to press EBITDA. and GAAP we financial information these adjusted EBITDA adjusted financial in relating comparable certain measures provided the may During non-GAAP earnings financial profit, Reconciliations present margin, to earlier adjusted the gross gross directly non-GAAP measures of

Violet’s amounts that, earnings from and found maybe Chief can Officer, derived Dubner. press not and also the Red issued statement With be Executive Chairman to I supplemental discussed financial earlier release their addition, metrics metrics certain pleased introduce In are underlying definitions necessarily Derek am that and in today. these any

Derek Dubner

today joining afternoon Good Camilo. those XXXX. results to second our the quarter to us discuss Thanks, of

we revenue quarterly data solutions our With analytic our experienced moving increased capabilities. upon and and who another driven our you our in to last up team continued to to breaking terrific report differentiated and dedicated these across customer to conditions, highest are cloud-native to quarter, business previous bit yet I work pleased will for further record economic members expand platform, assets a our demand us sheet our markets We quarter. results. seize hard delivering particular support seized our achieved opportunities is history Thank by the importance, enabling improving opportunities. for which dedication generation, and their strong and we of the a all across in in upon have and Of organization capabilities in and cash these balance discuss invest as innovative

industries revenue contractual EBITDA from Services of in revenue a to We problems the ending contracted from year. customers. Adjusted associations due XXX the X,XXX made XX% and million. $X.X XX,XXX innovative IDI in U.S. our gross increased profit of examples, second of use in realtor XXX% complex sheet. quarter, million. balance We our technology for quarterly increased the another new revenue XX, on target for $XX.X with record the solutions And XX% quarter FOREWARN million, second I a in June XXXX. quarter. customers same operating like XXXX, to set utility two generated would XX% FOREWARN. of $X.X added Platform to results, X,XXX Now the last the over $X.X increased adjusted margin highlight over revenue quarter gross we solving have Over million ending in the increase and $XX.X markets. strides to XX% various and equivalents various to are the XX% to record to now million our added to users. gears we $X.X to throughout had cite switch the during we at increased Adjusted faced million of $XX.X cash which XX% by quarter increased to as activities to new We users, second cash record period cash compared XX%. generated with million. XXX

insights said often have to data. glean real-time that are struggling We organizations disparate, unstructured increasing structured volumes of actionable from and

this We are problem. solving

due delivered provider leading For time transactions reduce in payment then, and to the and example, we their insights with consumer a business could identities in platform non-traditional coverage, services U.S. data in early extensive and penetration and are solution onboarding like on our have including friction that one this cloud-native customer our market. identity and won of in comprehensive capture. verification this relationships needed to unified and while We highly expanded forged and traditional solution fraud a combination a Since be focused XXXX meaningful provided consumer real assets. ensuring additional

provide data only creating us significantly Another not to disparate consumer but example, and information powerful predictive comprehensive XXXX, property information solutions. identity sought These their their and volumes for have a us in customer households API estate leading to insights. opportunities provider tools property that integrating improve A This markets. high-growth technology with illustrate augment and solutions to proptech flexible since using their that solutions platform-driven to its real company tools consumers, before more even since examples coverage, importantly, grown customers an the customers graph leader to and resolve provides outcomes. leveraged our back our its

of to cash further expansion our which long-term execute our solid the enabling generation is of value proposition. Our strategy bolsters our capabilities, us

us and We continue technologies. enhance technology, our to moat thus the widening between competitive

have In we and space. our outcomes, opportunities of be appoint In to processes relationships analytic Jim General furtherance all has solutions. lead to extensive new identity, apply resulting see to by current in verification view, as to commercial our to an augment we we with objective, companies view with challenges. to also their but prominent We Greenwell and continue enter Throughout things to to welcome prior identity and to Thomson in Identity Reuters. the the team. CEO its knowledge including the significant industry, across understand excited of informed advisor last Manager data-driven a relationships quest were estate with including that in of experience customer-centric sale not engaged Danal Jim as the Jim real in the positions, residential players to Boku efforts. some more C-suite through customer-centric only better a for largest year, identity We of

bring estate into spots, will, intelligence. We of those solutions these light their parties at large. In issues, but if have you identified the on to only own we EVP, in real analytics, at not our product their strategically develop ability as And pleased Officer Chief Equifax. working positions perhaps are convert James including held industry-leading key knowledge board development data address we are of experience Client to to property-centric brings blind serving Property endeavors, data to deep James and with property in and that sector companies, has company. business Frasche the various as Solutions. analytics James and

excited as part are have team. of James the We to

valuable and Citizens companies Trust and company Board American fintech, Express, our a a security, capacities the asset significant pursuit things of Lisa identity. Lisa’s financial Financial. we Board. Lastly, to background new our to in and of will Washington Director be a welcome including appointed services, various in in Board at Trulioo, the Directors. InAuth has all the Stanton identity input Lisa strategic to serving We Bancorp,

business quarter, across demonstrate to continue each we the As strong our is enterprise.

key evolve only We capabilities, analytic assets platform, continue set We differentiated for strategic in towards our view to I but a this quarter, cloud-native this its long-term records all data over not vision and history. and our company. with well is has to metrics financial company positioned it most the discuss Dan financials. now to will turn the been the in healthiest the

Dan MacLachlan

company, hitting financial afternoon. quarter metric. records in for good another the and Derek again, key nearly was you, Thank great It every

solutions. As see demand we with mentioned, improving Derek continue conditions, economic our increasing for to

and Contractual continues let’s business so strong new We quarter returned to revenue into and to the trend norms. are board, pre-COVID second growth with pleased performing Across existing from our the results. dive attrition is customers. revenue well, customer the revenue nicely, its growth

of year, revenue against Platform increased discuss million. up otherwise. revenue XX% $X.X unless $XX.X a record our was or $X.X the million the second over quarterly will quarter XX% and was all clarity, will ever. $XX.X revenue to comparisons million, For revenue increase Services XX% noted a I million. to prior be highest XXXX, today Total

forbearance Our services moratoria revenue continues and to programs. collections be impacted COVID-related by government-imposed

is the first period COVID-normalized this year-over-year we However, have reported. comparable

EBITDA, gross up year. adjusted into XXX% was margin has adjusted prior up been $X.X translated which at XX%, Our the ever points, over highest XX in million a record it nicely percentage

revenue from revenue Our adjusted customers and $XX.X existing Continuing revenue quarter, year. through customers consisting XX% $X.X growth of for million of of compared mentioned, from details P&L, revenue XX% to customers EBITDA margin our was second in of the base as million. the million, prior $X.X $X.X new of the quarter million for existing was from

from customer quarter, first second added users billable base during XXX idiCORE the Our FOREWARN X,XXX grew the customers quarter over quarter. the second customers. at X,XXX sequentially by ending

revenue our contractual and increase highest was quarterly ever. contractual quarter, year the XX% X Our prior a percentage over for point revenue

the X% compared to attrition nicely in XX% has trailing last prior normalized concessions to revenue is Revenue percentage quarters attrition would We the basis. X% and lingering continued trend in to and over our percentage as calculated the we a Our percentage revenue was trend between basis XX-month pandemic-related year. several provided a customer attrition on effects of subside. expect XXXX XX% on

percentage compensation other primarily of million amortization share-based for result was and the million $X.X of for administrative the and million $X.X software. or in benefits increased The $X.X and P&L, million professional XX% margin XX costs. salaries the quarter. amortization salaries of quarter in and $X.X of record quarter data administrative increase of and the an down XX% and non-cash accounting, of expenses primarily acquisition was $X.X IT and our $X.X and million $X.X This The primarily fees. increase General and increased and The expenses sales developed and a employee benefits $X $X.X of ever. metrics in million consisted benefits. profit depreciation increase increase a million XX% primarily million consisted $X.X commissions. result of gross to increase internally the million result million expense the of increased over expense, the $X.X $X.X amortization producing million payroll $X.X $X.X $X.X quarter million $X.X employee million revenue a to quarter. of increase sales and $X.X and the This The to and an salaries a our XXXX million, revenue, benefits Sales adjusted million. and gross cost or of marketing or employees margin marketing increases increased million increased in for from on our of commissions. a second million result adjusted expenses XX%, point X% of to gross Moving was in Adjusted exclusive to highest in for $X.X million Depreciation quarter. in general XX% increase or and was and for the

the fully quarter, the one-time $X.X the our loan million We was Act forgiveness forgiven. CARES of loan. reported CARES gain extinguishment the During of Act of from debt on a

second to income $X.X million net our in year. of result, loss million a for As $X.X a the quarter compared was prior

our share basic XX.X Excluding diluted shares the count million share of for million share reported of XXXX. weighted reported per we $X.X per shares, respectively. on have We loss based $X.X represent million ever. net net the would million, would $X.XX one-time a a and the best $X.XX XX.X still quarter of $X.X average one-time This second million, gain gain, excluding quarter earnings of loss of and

million we $X.X cash were to in activities of were the of internal compared during activities million expenses, our the investing XXXX. can earned compared generated million the activities for versus analysis, track XXXX. on operating use XXXX, XXXX XX, the and use assets balance X liabilities operating basis compared for XX, closing, June for the to we in cash $XX.X on in $X.X for XXXX. used period the $X compared use. were $X.X XXXX, of other a activities we million for EBITDA $X.X to found the current and In were Cash million in quarter million million in internal ending we ended million second software be across generating Internally, cash on the flows. $X Based on There same million result the burning months XX, our another by quarter used million. board. earn June at period. months XXXX, from calculating software was cash quarter $X.X sheet, Current $X.X X capital of cash statement XX, during burn and monthly earn/burn second equivalents for $XX.X the to June December million which had no $XX.X million development operational the from mainly adjusted to and operational compared at for cash Moving cash subtracting great to the $XX financing We developed

all expand key extremely We line will continue strong current for our to organization, our excited the tailwinds onboarding breadth our We business to of we our Throughout harden see sequential the are key see space. now deliver the the professionals. financial industry positioning that, broader across identity the resources and with improvement open about secular Q&A. With in as our teams metrics. our and operator knowledge and continue within

Operator

Pamela Carter [Operator Carter Instructions] [ph] from line Your the first Management. question comes of from

line open. is Your

Unidentified Analyst

Hi, the first, congratulations on impressive. Very quarter.

Derek Dubner

Thank you.

Unidentified Analyst

can at drive what is a it really from What gross look drive X does higher margin XX%, you’re adjusted to your ability continued the been your Today, margin from that, where to speaking today? or so is like impressive. year now? wondering gross but has you I’m – materially margin You

Dan MacLachlan

Pamela, This the Great. thanks. for Thank is question. Dan. you

So The because thing great our the adjusted and each about yes. cost XXX% model the nearly continue gross growth drive where contribution. of to is at can is short from of we’re margin higher fixed, revenue We dollar today incremental materially relatively here. business provides answer

of maturity, margins know, to many information created have gross we we our those – excess XX%. shareholders providers. in generating space, in sold due So which to two companies, of And we companies as know the technology global their two are previously

we a going when approaching now, and year that be XX% we’re us, from number. X talk trending for So about or to

to So being able about we’re this really at business excited leverage the point.

Unidentified Analyst

Wonderful.

Thank helpful. very you. Okay,

Dan MacLachlan

you. Thank

Operator

are conference the now There Dubner. at no further to Mr. like would to turn Derek I back questions time. this

Derek Dubner

positioning of feel posted Thank very half we you great forward. strong year, first and again us our second today. for quarter going joining and a We the about

the in We of the making status are moves in aggressive continue our disruption strategy in quo upon executing order to marketplace.

never of Our technology, assets customers of afternoon. benefits has The the analytics. stronger, we in and optimistic been our are Good health data competitive advantages our realizing very about business and are future. our

Operator

today’s gentlemen, participation, a wonderful and this and day. Thank your have for Ladies conference. concludes you

disconnect. all may You

Red Violet (RDVT) 12 Aug 212021 Q2 Earnings call transcript