RDVT - Earnings call transcript Q1 2024

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Operator

Good day, ladies and gentlemen, and welcome to Red Violet's First Quarter 2024 Earnings Conference Call.

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.

Camilo Ramirez

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

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

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

earlier cash are non-GAAP issued press During net GAAP financial adjusted income, gross certain call, Reconciliations margin, the the comparable their today. provided U.S. we to these adjusted may share in earnings most of measures EBITDA margin, to adjusted free financial adjusted adjusted and relating information flow. present measures non-GAAP release profit, directly per EBITDA, adjusted financial gross earnings

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

Derek Dubner

to quarterly our today company by great strong quarter quarter. results. joining throughout EBITDA and posted you our adjusted XXXX broad-based to afternoon, and thank Good discuss Camilo. XXXX across highest our is revenue for experienced the driven us volumes demand we verticals and Thanks, a as history, in off first start

months over executed the initiatives off. last XX strategic are paying Our

investing the fruit. expansion of and been these our our suite are bearing in go-to-market have and We product technology, investments our clearly capabilities,

Our team markets solutions investigations. increasing target are by verification, that tools identity executed capitalizing superbly, for on the our innovative our prevention indispensable fraud realization and

for just quarter record this out And a for positions fact, we which the produced performance revenue in Red Our month us XXXX. closed Violet. of April, well month

year. was million, adjusted Adjusted quarter increased a points. for share. $X.X prior the in over of the diluted a the Now Total record $XX.X the revenue quarter. prior in turning a year. over up million, to XX% resulting XX% EBITDA record record We net for income EBITDA Adjusted margin numbers. XX% up Adjusted $XX.X XX% gross adjusted million produced was XX%, profit, first the $X.X per resulting in quarter a quarter, margin percentage of million was in for a $X.XX earnings to X increase

are quarter, FOREWARN FOREWARN. sequentially users. the quarter XXX,XXX have the first segments history, percentage fourth customer increase strong a and at by progress X XXX We use the financial double-digit law at we growth. the contracted that in added users We is our XXXX, focused Our vertical, customers the saw experienced and Over were to increase saw risk quarter, as IDI contributors. solid legal, during enforcement from diverse increasing XX,XXX billable strong and we continue very on ending first in. now ending our contribution make quarter substantial been from X,XXX over identity base sequential XXX largest corporate progress associations grew customers. very the the largest our in which with also since quarterly volumes to quarterly from collections power continued quarters, with we Consistent last that platforms verification few realtor

We these in as early where and same still background increase those stage, as significant in $X.X penetrating first both marketing million in from screening including operating markets from to a ahead cash We are we further in well see continue XXXX. services, the very opportunities generated activities XXX% the government. quarter, period

various leaning healthy continued and adding and enhancements we've we these been bolster in generation, our our Given opportunities, go-to-market our into indicated, to strategically as personnel technology, previously investing product market capabilities. cash developments

common $X.X repurchase repurchase XX, $XX currently has under stock demand robust had company's $XX.XX sum stock addition a under In to XXX,XXX at just share stock quarter, April balanced to per average we program. million purchased of through driven up, an pursuant of across business, the shares program. XXXX investing The Red the by its year-to-date company's our company in terrific remaining verticals. and Violet To million price

are the currently front we of the turn optimistic we're Dan momentum I discuss us, year. financials. opportunities that, in the and Given remainder experiencing over to of to very With about the the it continuing

Daniel MacLachlan

and you, afternoon. good Derek, Thank

pleased EPS million and million quarter, flow. increasing year, free EBITDA translating great across by of revenue reaccelerated are customer of led first record and to report volume record $X.X XX%. strong cash in strong the into achieved and We healthy growth the a $XX.X start the We to base. nicely to Revenue adjusted

discussed opportunity and on execute to The these to last and we growth we in to continues XXXX. with revenue As in in endeavors endeavors accelerate that to increasing pipeline lean our well pipeline team continue wins. our quarter, real opportunity current converting see

quarter first our to now results. Turning

was comparisons the in XX%, Total percentage the will for We net million, XX% in $X.X a quarter, up over margin year. otherwise. $X.X a gross was X EBITDA diluted For up million, a of the X the Adjusted $X.XX XX% for increase first record noted a share. increased profit, quarter to adjusted adjusted million will up XX% prior a revenue unless the $XX.X percentage XXXX, record margin resulting clarity, quarter against year. quarter, of EBITDA $XX.X resulting prior be in produced in points. was over million Adjusted discuss today Adjusted earnings first of all I per XX% point. income record

details the P&L. through of Moving our

mentioned, X for time saw Within first As first broke was revenue collections verticals, years, in we the for IDI, growth the quarter. strong into revenue $XX.X million across double-digit growth. percentage

Our perform investigative again vertical our to by enforcement well, led continues segment. law

our XXXX vertical. growth The represents of first investigative quarter revenue ninth of sequential quarter the consecutive for

from first in nonrecurring Our onetime quarter growth first our strong corporate $X.X Legal emerging Within contribution markets quarter we comp in of year also revenue. as risk, million financial experienced the vertical the tough batch segment. included with had last XXXX a from and nice

a percentage revenue, was a double points. vertical, risk which onetime corporate include and was digits few estate IDI's this Excluding real financial FOREWARN not on up percentage down basis. does

Our IDI from quarter ended of sequentially at XXXX. quarter billable X,XXX first third grew We quarter, XXX base the fourth largest our customers. by the since customer the sequential IDI increase customers quarter

of FOREWARN. remained associations representing to the As users the XXth the strong association United increase onboarding States. are state we quarterly during initial growth. of led of in in FOREWARN XXX the the history, XX,XXX Florida it relates FOREWARN, revenue Realtors, quarter, quarter by revenue added our the to now consecutive realtor first with largest XXXX, use the largest first contracted Over realtor sequential growth quarter

prior Our year. points contractual the quarter, for revenue up was XX% X from percentage

year. percentage revenue retention XX% in XX% prior compared to gross was Our

XX% XX% our the future. trend We retention to gross expect revenue and for foreseeable between percentage

to back Moving the P&L.

employee and salaries decreased decrease by million to percentage was bad $X.X partially from XX% of and costs Our million of million $X.X XX% of million million result XX% $X.X $X.X in in to million, million. $X.X result X% the accounting, the benefits. was acquisition depreciation increase This million in in increased the marketing $X.X increase the professional new million sales quarter. for million million of increase increase a $X.X in of amortization software. assets. million in million benefits or million This data million a was an $X.X of Adjusted point the the consisted share-based due $X.X of internally and the $XX.X developed marketing compensation professional the expenses first and of primarily for general XXXX. for debt, profit salaries and gross to or over quarter primarily quarter. of quarter $X.X was primarily expense and and noncash and primarily producing primarily X of the of General for amortization million The offset commissions. This or salaries $X.X result expenses to for revenue and an employee increased million $X.X $X.X and margin other XX%, adjusted The fees. fees. of increased of primarily a sales increase Depreciation consisted increase data quarter amortization cost the exclusive benefits, provision an to IT gross million expense and $X.X $X.X decrease or increased quarter. in expenses $X.X increase to for and This a addition administrative in $X.X XX% administrative Sales

to based income of diluted shares basic quarter share reported net earnings average and Our million. $X.X XXX% per XX the $X.X million or quarter million for adjusted income earnings resulted increased and million, $X.X net share diluted. of Adjusted XX.X the diluted. $X.XX million XX% and $X.XX $X.XX count increased basic the for We which of to weighted basic share quarter on per shares $X.X million in or for a

March purchase balance XX, shares XX, the Greater current compared of liabilities settled December Federation Of million included to compared $XX.X X, compared cash equivalents the million. current million that $X.X to sheet. and and million Current at XXXX, due on from were on XXX,XXX the to $X.X to $XX were $XX.X $X.X company of XXXX. XXXX. at in million were assets million Miami Moving $XX.X $X.X Jewish million stock million for April Cash liabilities note, the

$X.X period the quarter a $X.X compared first mainly Miami of million in $X.X the of XXXX. financing negative generated same federation for items. was flow the compared from Cash operating same the the million was period million $X.X was activities in the use. We developed beneficial in a in million of activities $X.X the million to greater from any in used for activities cash result in flow software $X.X for million $X.X activities Cash in for period free first repurchase, mainly in investing million the company. We in activities X for the the Cash XXXX. generated cash of operating holder for XXXX. cash Jewish used in used no the quarter, investing first result internal used quarter $X.X longer to securities same free generating quarter, Following was the of cash million first

of at of an stock share. program our repurchase company First, and shares XX,XXX for of average the stock settlement per purchase under million price $X.X $XX.XX

tax share net to the X,XXX of of quarter. stock Second, shares treasury were settlement of in end $X.X for prior acquired million the withheld stock shares retired and we These employee company restricted from units. the

During cash financing million. the $X.X XXXX, activities same in period used was of

in relates it have continue acquire stock our start. program, other and we remaining monitor Revenue will $X.X repurchase accordance cash accelerating. to is for investment program. our XXXX as strategically prevailing In we program. applicable, to our to repurchase we closing, market additional or the shares with under balances use approximately great that Currently, is million repurchase off stock conditions have opportunities of As our and a

We are investing and market product for expansion.

pipeline strong, and we and a convert win. continue growing Our remains opportunity flow profitability to cash to

Q&A. XXXX that, our will now an year exciting Red for Violet. With for the We open be operator expect line to

Operator

Instructions]. [Operator

Nichols question comes first B. from Riley. of Josh Our line the of

Josh Nichols

Great for essentially also particularly adds. quarters, to see customer IDI and colorant record

growth? your I of to of if and strength customers such be revenue into you curious dive if $XXX,XXX you've the bit get going IDI, little these this as specifically been also a little any potentially you sub you're marketing And where talking a going more acceleration are could that was for more after bit? This in seeing quarter, expand plus budget kind annual about these to accounts more details,

Derek Dubner

Great Derek. was within throughout broad-based. It's saw It IDI talk to strong very Josh. Thanks, to quarter. a activity the Yes. you. We

have and for law to we've As legal and And volume mentioned, months we XX had new made seeing a onboarding enforcement. customers substantial last XX progress there focus there. we the good on

strong set activities, in from and graph access identity that Aside have of through know, the diverse as performing serving solutions graph we to identity cases identity you various volumes robust become work. the that that, we identity consumer organizations in and where we channels a the an part all accuracy that, of industries. their that integral have seen of platform verification the from uniqueness their out serving due graph and also AIML built powered and way can of the many We've platforms of that use types mentioned our in

would with strength, quarter. the more and very about we is verticals expert we So that some can matter What the the seeing our hear saw the to what wanting very sentiment subject serve strong consistent some have be the throughout that there to some we sales genuinely we seems nice do how within for sentiment end sales user, I it real was pretty we good of with are. outbound add we're in differentiated solutions,

And so we going marketing of our the marketing and a innos,in invested that's tailwind. in very believe positive. as very be early a did products as we also And days, solutions. to little our that's some bit of We've

comment and can done over upon months. And of the for last that will? marketing customer. awareness XX Dan if improved has Dan, size us. market so we've our perhaps definitely well you been And building capabilities out

Daniel MacLachlan

this I mean side, quarter again. on the to we logos at really Sure. within of the opportunity Dan. a good adds to Yes. Great look across potential in Yes. those Josh, industries, you lot the customers. across when the is talk first IDI board,

As in yearly XX that the XXX,XXX XXX,XXX look a quarter, we we over customers basis compared who to customers a at trailing are are XX-month approximately what now have we on generating If at that fourth cohorts. QX within it relates reported of or over end additional to basis.

quality there the the the between for XX,XXX logos lot future as year. the the additions quarter, growth. board, to with XX,XXX potential customers But nice of across as seeing So across a in well we cohort look first XXX-plus industries when at of adds a

Josh Nichols

the Thanks. for but so touch a press to trajectory forward you've positive over generators to of talked of much, just XX some some as revenue for also going had days curious is It's the last I'm your new the you're given part about I expectation number about what on the you've It's minute. subs adding that great hear that wins larger as releases potential to wanted that adding wins. just the for not to FOREWARN platform, many so? well. or announced

Daniel MacLachlan

and within the on is last talk FOREWARN, great uptake again. saw Yes, a you associations when about we the an across sure. tremendous We several expansion the board, we've Yes, with acceleration, seen year continue trend last Dan years, last This will, X,XXX market. over of that of really if would amount kind expect we U.S. associations approximately level, year. into the look that wins When 'XX. we the the overall at We see to throughout had there's to to throughout 'XX about X,XXX associations

we reported, have XXX today. As associations over just we

So They plenty go-get. I perspective, X.X Of would close of National so there's from house think so forth. Association to realtor to under we more million XXX,XXX realtors selling are that, Realtors. and the XXX,XXX say of approximately year When realtors. were it a active than about a and on X probably

we're today of plenty number get. where still think the I so And at have of go users with

to that associations onboarding into that of continue 'XX. carry and expect would acceleration see we to XXXX, the So in

Josh Nichols

it I'll sounds that for piece to this years been It challenges, collections for that's business I are back the the the you of all markets year? growth. the is double-digit kind collections few but growing likely Do facing have toward last me, business one guess, really the well. some to continue Last think here. doing now then like of end pretty been have pass question like

Daniel MacLachlan

significant see talked starting it anecdotally good the throughout our good at turn very in year, conservatively, growth revenue. when through quarter all first as come as look vertical. So looking that actually that that But we as We've year to I this volume numbers, last seeing several seen about into upside. we're we're we've the strong as And think saw look from signs. collections, good And at customers, conservative hearing quarters, we metrics great any the business. We're over well. April

leaving to start But significant would really is And expectation reversion pretty down we'll good now the or collections flat nice be that to The indication growth. expectation X years. being to when see few compared solid in healthy the be last continued see so the us next we're should probably industry. for everything seeing real going that we're that a over gives 'XX quarters

Derek Dubner

Derek. Josh, Yes, it's

autos that what to least subsidies longer, know perhaps a the certain a back, challenged. peaked, worn section we or be not consumer, rates saw that, have off at and you or of is changes. as Just going as adding higher that to but where forbearance until have the were the consumer many going bought like see first, And and level. many having high now It at hit for least bills, autos probably we're looks Government their they're is gone. pay to therefore, peaked

And have since probably highest so XXXX credit autos, After consumers moved they've so. delinquencies up. have or definitely been card the challenged at been They're there.

good a as challenged consumer given the as be number process up be that those at takes fact It a bit and seems inflation indications that continue and least through consumer ends And where to of consumers. goes appears to so sticky know, deceleration process a of slowed. it And being will that the a least has collection effort. a it at the a or we now, little as of right little

continue working relatively some to for may as a Now the always long the robust is to pay low be who's and given is unemployment continue consumer that and bills consumer, that as American time. still vendor, been able and some

last collections, showing few but the it's So out durability quarters. certainly jury's bit a little over on

Josh Nichols

start a the see guys. appreciate Thanks, first update. Glad such to everything quarter. I the off for to good

Operator

closing remarks. this Derek I like now showing back I no to questions for further turn to time. would am Dubner at it

Derek Dubner

a our reported translating over better financial of the continue we've investments made execute our quarter, all better another revenue you in and past XX The to awareness, for of the to product Thank highest upon our results. increasing today use go-to-market joining company months as our We business. capabilities and enhancing history plan. record solutions, suite reacceleration quarter volumes our we are report first market strategic our to and our us

cash XXXX Given remainder and healthy Good our value. we about beyond. highly our fixed continue model well and We're to shareholder afternoon. business generation, cost of leverageable in the excited enhancing are investing and positioned

Operator

Thank does participation in This you program. today's conference. your conclude for the

disconnect. You now may

Red Violet (RDVT) 8 May 242024 Q1 Earnings call transcript