RDVT - Earnings call transcript Q2 2024

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Operator

Good day, ladies and gentlemen, and welcome to Red Violet's Second Quarter 2024 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 call, Camilo Ramirez, Senior Vice President, 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

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

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

Derek Dubner

ability to an delivering to today demand solutions first first quarter quarter, quarterly results. joining EBITDA across quarter. to accelerated year-over-year and momentum in growth invest pleased We our to sequentially, broad-based throughout second XXXX that a history. afternoon, stronger thanks Good XXXX flow, enables and profitability discuss initiatives. this Camilo. growth, again the us Coming maintaining experienced delivered deliver revenue our our maintaining to off in both and rate even those accelerated carried second and company strong our our us quarter in carry we and beyond. are highest strategic this once of in revenue the Thanks, remain great are adjusted to we our which remainder committed for The of to of second We continue key while quarter, cash confident and

of producing record XX% million, $X.XX earnings a was XX% revenue to in adjusted Our adjusted was and per million, $XX.X XX% of of profit to up the a $X.X $XX.X adjusted net of to record quarter record Also records, margin producing Adjusted XX%. a million EBITDA up share. million, $X.X record a margin income gross increased resulting record for XX%.

collections and revenue Our percentage produced another relationships grow in agencies our and vertical, double-digit and of quarter, growth. appreciate which Law experienced once across risk data functionality. strong to competitive growth continues capability accuracy, to part enforcement, unparalleled vertical the a state Financial corporate derived our and federal connections, as healthy verticals. differentiation and is was local, standout again search our and be investigative

by purchases services. openings equities, segment reliance investments of well, pipeline, for on quarter continues environment are driving model. A background runoff to sales execute consumer account to consumers, of of is progress the unfortunately, large way real remained our the and Volumes effects portfolios support are is business government continue we several cohort our upon certain of we repossession, inflation A increasing new doing solutions verification and seeing deep of estate within economic screening legal driving solutions. demand as solid which consistently solid is delivering government, that be of very marketing negatively early-stage income, identity collections, KYC. of subsidies, as particularly such industries, impacted population durable the a and they our balanced and We including and the and in our increasing and favorable for strong and and the industries have such the serve, as throughout

history. strongest We are our results very first excited to deliver in strong the quarter half and such a

Our our are are early plan. acceleration strategic in multiyear this we months the past initiatives driving in the XX over business, and

the volumes are to across board Our dollars and line. increasing, consistently the increasing they driving healthy but bottom are not only

are existing enhance of continue in to further the continue our verticals. to moat cloud native which power our all We which differentiated investing marketing and penetration to our to business and to platform, solutions awareness, around are increasing technology brand of the develop new widen efforts,

very excited and remainder I about to over the Dan turn financials. beyond. With are We that, of discuss the to XXXX it

Daniel MacLachlan

you, good afternoon. Derek, Thank and

was great Red quarter for a second quarter The Violet.

a volume margin Customer a growth second $X.X EBITDA in quarter. We the million continue $XX.X increased strong. adjusted in resulting remain the side customer of FOREWARN to million, EBITDA, Revenue side the the on producing record XX% IDI experience XX% growth in on base. throughout record increasing and record to adjusted transaction user

continue we As marketing background and see discussed including quarters increasing sector, support within on, a for public few have several focused services. screening markets opportunity new now, to we

to and of we have result quarter. in new team sales increasing opportunity, second a the that with investments, go-to-market in leaned marketing our members XX As adding our

experience strong key conversion in areas. and these growth pipeline to continue We

results. quarter second our to now Turning

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

Moving through the details of our P&L.

from As of was $X result $XX.X quarter. transactional mentioned, existing revenue $XX.X large revenue revenue the in total as opportunity for Included the was in onetime customer. second million of a million win an a million

have XX% sequentially quarter, from in ending customer the billable first across transactional XXX healthy onetime this revenue, we verticals. strong grew by at revenue the quarter customers. customers saw IDI's increased Excluding growth still would IDI, second quarter. Within X,XXX a the base

led the revenue Our investigative sequential basis all consecutive law vertical by this for percentage was with verticals growth revenue strong our Led of vertical. quarter enforcement, XXth investigative on double-digit a growth.

corporate We financial vertical. also saw within growth strong and risk our double-digit revenue

including quarter our vertical growth across industries, in government. double-digit the repossession, last breaking broke the X quarter. strong saw years revenue second emerging and Our collections in revenue double-digit vertical, After again quarter, markets double-digit into retail, into for legal first growth growth

of we remaining increasing we throughout housing remainder continued decrease prices. collections for base, volume end have FOREWARN, vertical, rates the which cautiously something dynamics seen XX% not home real of seeing levels is of the growth the optimistic XXXX, to While limited high our approximately since collections which and transaction are of customer down XXXX, inventory, vertical's market include does quarter. pre-COVID. IDI's attributable for elevated not was mortgage estate This was the about

Associations representing FOREWARN, XXXX with to second XXth the relates the of of revenue now during are quarter. use it quarter users growth remains As to XX,XXX second we growth. sequential FOREWARN. quarter XXX stellar, contracted added REALTOR the FOREWARN's Over revenue consecutive

Our onetime result the transactional for the This revenue contractual million revenue in down was from X year. percentage I discussed XX% prior was decrease $X quarter, the of points earlier.

retention at remained revenue XX%. percentage gross Our unchanged

back Moving the P&L. to

Adjusted or XX% year. Sales cost revenue $X.X administrative gross amortization prior Our a from million, gross point increased and increased X to of million $XX.X or adjusted $X.X million to marketing the depreciation profit expenses producing $X.X $X.X of for XX% percentage an and of million X% XX%, increase to primarily margin increased due Depreciation million. the salaries increase exclusive XX% or quarter. increased for to XX% million amortization an benefits million to $X.X sales added from to quarter. or $X.X and in headcount and for increased million to the quarter. increase team. General and $X.X expenses million This our and the marketing was additional $X.X

million, quarter $X.X or share. which Adjusted or to for earnings increased million $X.X share. produced XX% earnings the million XX% the $X net which per $X.X income $X.XX adjusted of per diluted produced to quarter for increased million, net Our diluted of $X.XX income

$X.X million million to $X.X and million compared million the liabilities same the Moving cash June activities million, free generated compared in to operating from generating compared at period in $XX.X million. We same to $X.X the Current million generating for Cash $X.X assets current were $X.X and in to $X.X to equivalents to XXXX, were XX, quarter XXXX. the We in XXXX. December period million in the million XXXX. $XX.X second second cash sheet. million $XX.X $XX compared flow quarter at on XX, were generated compared balance cash in

average purchased quarter, $XX.XX price Year-to-date XX,XXX under at XXX,XXX $XX.XX at total a the price average During of our through XX, of share. share. we per of per of June shares purchased company we shares repurchase program stock an an stock

closing, XXXX great. the The is We remaining of have repurchase million been team stock $X.X program. In executing. under our first has half

had X have quarters accelerated and both sequentially, consecutive flow. strong revenue Derek year-over-year profitability earlier, of As we cash while and mentioned growth, maintaining

line this back half our operator the open and excited beyond. With for in will We to continue now Q&A. are that, the XXXX trajectory of

Operator

with line [Operator Nichols the of Instructions] B. first question Our from comes Riley. Josh

Josh Nichols

you what been with been the success of growth $XXX,XXX-plus on little I agencies I governments that up accounts making platform. Clearly, that traction Pretty it earnings market. and some tends you QX a some bit been phenomenal a wondering been move bit. market has targeting know having lot these you've could with accelerated I larger to behind to the if targeting you've elaborate a as and little seasonally. also company doing public larger think, see of just slower, company's other moving the up record was given customers you've with be

Derek Dubner

It's Dubner. Josh. to Thanks, talk Sure. again. Great you Derek to

our in cash into our XX you able last lines -- continue to not or our long-term to includes in if of sector and we've larger business talking way plan mentioned, as along it last the during but been probably is you the strategic enterprise, to months, the as know And will. As you plan, generation, only along initiatives about quarters, several great private we're for this the sector. that strategic invest these public which execution due

or key government go-to-market us to screening in are exciting companies, at sector. he building are invested the sector. made of Jonathan hire public along in and strategies a with clearance, who public out and have very of history has McDonald, has as He I in support sector personnel several mentioned, services, including refining our of some way the the business way the has worked in leading public government background long We sort areas that the in and of marketing in sector We a key there. TransUnion building the relationships government

very Jonathan public footprint had we welcome the So creating excited McDonald. We sector. started our in were to already

the And lead and that like to this so plan. have in was Jonathan around he'd him team out an to extraordinary build the for executing us add team

be probably enforcement have last We significant very been on interface, have and had that and against investing but including the enforcement, advancing period law made from short suite an made law you very around and few in penetrating app of they to in only team Jonathan his sector. We road. in platform a time in a is as already not differentiated phenomenal significant hires have the solutions, online public progress the of them which made know to multiple differentiated our attracting out find quarters, inroads and

about expand if to road continue very continue and these product which further our capabilities invest mentioned, invest bodies, and those you very will. XX we we're is added the and market in will to invest We We penetration and in those in continue markets. areas, to deep, areas excited as to into Dan in map, platform's go the

Josh Nichols

color Thank for on so that. providing you some much

the 'XX? what first you're seeing half, so start Just half phenomenal have given of to any comments far, the expectations you for about back the

Derek Dubner

What right our nothing is changed. I see about now. the say continuing. We're excited has We would very positioning there momentum

there. the pipeline that keep we And accelerating to mentioning, we into that that 'XX, continue is of we the newer talking year for us. to some where, upon executing carry believe penetration are those will throughout we momentum and pipeline minuscule have and areas keep only we slightly We slightly, as about, especially

records is the us, accomplished for So what little picture yet excited from we're areas. year-to-date, in still those extraordinarily contribution we've about which and there's big

Josh Nichols

Any enforcement. more the right, at because from seems the And it mentioned side you leading about? big customers? growth. for with to customers? size the specifically the in law could looking expanding previously, is that's It IDI investigative continued the new unit, market that overall terms Is the that context then you potential? just you base of existing growth charge, And of this talk relative today business Are opportunity how

Daniel MacLachlan

Thanks specific Josh. the Yes, sales law is Thanks, Dan. look that or again enforcement. ago, back months I mean, And this area about for Yes. look, when we XX question. within resources put and we so verticalize

with and over and can to of overall the seen, agencies. And that throughout we've had And added there. that type agencies utilized perspective, in at We more we've our brand. now Once across we and you long local, when and was capabilities be. at for federal deliver data have time, XX resources marketing to product XX,XXX out market. customer to and and There's that from competition way a highly information we whether as within enforcement the slightly continue tools law built law of the the a new well you differentiation, accuracy in board. We're that account augment a get within growth about country we're in tremendous you We the market. making to efficiently lot and enhanced where the love probably with able the other penetrated we've enforcement added scratched as an into progress. But our go just have customers department, sticky. for recurring. stays look quarters, are when only a the unseat felt They're discussed needed presented especially get are the we functionality. XX,XXX resources to law We've months, adoption sales more or great really They're as that's it search state, there industries look data only be differentiation surface. And and attack much to with really our the those you you the the competition, very we that we've few enforcement specific

Operator

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

Derek Dubner

you. Thank

year half record the our quarter in best We to are another pleased deliver and first of the history.

and continues to invest growth. Our in our translating healthy us are cash initiatives into accelerated generation to strategic enable

are and positioned the for We well the of remainder year beyond. Good afternoon.

Operator

in This Thank you. today's concludes this conference. participation

Red Violet (RDVT) 7 Aug 242024 Q2 Earnings call transcript