RDVT - Earnings call transcript Q3 2024

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Operator

Good day, ladies and gentlemen, and welcome to Red Violet's Third Quarter 2024 Earnings Conference Call. Please be advised that today's conference call is being recorded [Operator instructions]. 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 third for results. financial you today our to quarter Thank is our Officer. Derek Executive today me With Dubner, Dan our Officer; Chairman McLachlan, 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 relating 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 issued Executive earlier metrics these Officer, Dubner. and to discussed may financial any am Derek definitions today. Violet's the supplemental underlying pleased from and introduce certain release derived addition, their I Chairman press that, With that Red Chief in in metrics are found earnings be not In statement

Derek Dubner

to today quarter results. joining and to XXXX afternoon, welcome Good discuss Camilo. our those us Thanks, third

Following quarter are third the half strong profit generated year, another deliver quarter. record various a the across metrics. flow gross first We we very in cash revenue, of financial and pleased to record

Our another It strong our onboarding our of of the new exceptional yet and across strength with was underscores increases business existing commitment of quarter team. growth balanced customer our base performance the verticals. transaction volume customer from and

of growth closely XX% Revenue impressive cash resulting achieving $X.XX sequentially earnings Within quarter, record the reflecting verticals, our on growth basis investigative emerging driven XX% of to the percentage margin XXX to producing Given a led the record $X.X followed $XX.X a accelerated producing a $X.X million customers business, and free margin the by quarter generating income XX%. was $XX.X double-digit in for $X.X quarter we a XX% in growth record net the added flow remains IDI, strong in out verticals. from remain across Adjusted for of a to gross to strong in up quarter. risk adjusted each record was demand XXXX and our adjusted increased of We share. an adjusted cash per robust, million and for well our our flows, record continued demand million, in positioned drive third corporate to generated in million, up the and Revenue markets investment customer quarter. very Adjusted we profit million close by the financial record XX%. by XXXX. and EBITDA vertical second quarter, EBITDA diluted

appreciation transaction and supporting low verticals. Our Favorable of consumers collections as demonstrate many continues vertical recovery. driving across are signs and encouraging factors such of our to a volumes durable unemployment asset

support lends collections of depletion ongoing income related face verticals. interest in high consumers government challenges rates the inflation, turn, and and our lower to subsidies, other from While which

Given continue unforeseen the the FOREWARN XXXX. quarter. through its Over environment our tool circumstances, barring expect we the FOREWARN use added proactive anticipated business rate this to for position economic favorable during throughout landscape year continues current benefiting associations and contracted and face-to-face interest remainder reductions, the of the FOREWARN. engagement. users leading as XX,XXX XXX now safety are to solidify the to REALTOR

the Our enhance second members enabled XX continuing team map we in still marketing produced business throughout members approximately execute our in business, again strategically quarter, adding with to added our continued the have go-to-market upon second cash Notwithstanding team record due sequentially sheet business achievements capabilities. the and operational year-to-date strategies. product the from on and cash quarter invest of to $X the flow, in us of the to free million the year, road various to investment leverage our our After another balance emphasis sales in we quarter. third model, the XX adding

close Given and in the XXXX XXXX. that out will continued a throughout business, continued momentum we momentum record are optimistic we drive we the are seeing

Now Dan I to to financials. the it turn discuss will over

Daniel MacLachlan

profit revenue, Thank had records and cash We afternoon. Derek, for new you, free flow. great gross and hitting quarter, good another

each onboarding We with has the the cash milestones flow, million, and in XX% profitability customer XXXX date, quarter within $X.X the adjusted in board. while record driving growth Revenue To to in existing margin great our been increased across including strong continue see million the to a base. strong hitting strategy. increased business, a year in producing invest go-to-market record XX% a EBITDA and $XX.X all from and new customer to revenue quarter. third volume of continuing

our now to Turning third quarter results.

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

the Moving our of details P&L. through

As the this IDI, when the I Within is that mentioned, $X sequentially the strong transactional see for second growth There quarter onetime onetime third of across exclude last continue million was you was verticals. $XX.X transactional revenue an increase third we quarter. revenue the win to quarter. no would million material in we revenue from discussed note quarter. customer that

to revenue revenue including growth markets retail, we repossession, vertical, industries, investigative had strong which led enforcement, quarter its consecutive to by health see across Within and legal, double-digit government. our vertical Our growth. sequential emerging continues law of care outperform, XXth continue

financial growth industries also our the corporate We key experienced with insurance risk and strong within double-digit growth. the to contributors both being financial revenue vertical and

real had the Our of third IDI's collections signs industry. in quarter does recovery FOREWARN, third see vertical, vertical collections XX% not of consecutive double-digit the its to approximately include was in growth which continue revenue we estate quarter. as down

we relates is quarter of of experienced it FOREWARN's growth. This to XXth another As growth. revenue strong FOREWARN, quarter sequential consecutive revenue

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

retention XX%. revenue remained Our at gross unchanged percentage

back Moving the P&L. to

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

to Our income $X.X or XX% million before million. increased $X.X taxes

million, which decreased $XX.X of $X.X income $X.X produced of earnings Adjusted tax quarter million. year or earnings diluted Our share. million adjusted onetime diluted $X.XX million net per which the a $X.X or income million, net benefit included quarter $XX.X income increased for share. third to produced prior XX% XX% per Note, quarter of for $X.XX deferred to the

of and million compared compared million We liabilities $X.X XX, third compared at on million million were flow cash $XX.X record million XXXX. price assets in Current purchase have purchased the stock the activities equivalents in September $X.X generating $XX.XX We operating $XX.X repurchase in the compared free sheet. to to cash the compared were $XX generated program. in generated million stock from at third were cash company share. XX, XXXX, in same generating third balance XXXX. of quarter in and Moving an December any did of not Cash under $X.X $X.X to $X.X million. to the at XXX,XXX XXXX. $XX.X the to to million same quarter a total in average shares current a we period a shares for period record quarter $X.X per our We million Year-to-date, million

million this to profitability flow. record XX% quarters strong we've with XX% cash year $X.X of each have stock consecutive growth, our remaining program. We X repurchase In had under and approximately closing, revenue, revenue strong

quarter expect XXXX. We in and the to throughout fourth continue momentum this

the come. the of Q&A. operator is this now well growth open extremely With feel Violet for the our years are to Red that, performing for We positioned to way is team trajectory continue proud will and line

Operator

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

Josh Nichols

see results. digging And record XQ just into the also, to numbers. was Great the I

And sales momentum you subs XQ. been continue much from XXXX? those some starting So was you're start additional customers added you through seeing today newer confidence to a II added Are what and you some actually nice you've I is more investing results hires? the marketing. increase where giving than in know about talking in see material that to what's that so in

Derek Dubner

the It's Derek. Appreciate question. Josh. Absolutely. Thanks,

of we're the investing XX areas penetrating around so, strategic early or pretty capabilities been As strong cash sales we've such were and to in flow, the the in out very these us months relaying we've each over generating and certain that initiatives given that that clear been enable build marketing on that verticals. calls the last

very which respective say, individuals their in areas, we is putting add months, future into these customer last sales, very the we've So seeing at for matter just with a or course. the fruits a least customer pleased indicator been members, I giving really -- And monthly of for on been as up subject team basis, gosh, that we're about would highs onboarding. qualified investment. the visibility about us record highly strong in of at us, onboarding we've XX

about So feel putting confident very we the together. we're teams

continue that these from dividends paying adding been the productivity continuation a been teams. to And seeing strength been to sort we've the evaluate investments of by we've of it's and we've just We -- year productivity increase all made.

about that, excited because So XXXX. we're of very

Josh Nichols

the of kind what's terms some increasing how in That's commentary but the think great. and briefly kind the strategy And growth expand that then on driving think about of you touched customers on of touched in I'm new should briefly curious, But earlier of I we the adds, split with overall? land on between and existing volumes this also you customer call. the

Daniel MacLachlan

is Yes, Josh, thanks, this for and the Dan. Thanks question.

we've only volume, onboard them as even small what done would organization, that time. of yes, an increase customers and job medium with kind initial at also a not So consider but enterprise-sized volume good over I to

expand where enterprise, up case that this and revenue opportunity What potentially as base ahead as and tier we've cases. opportunity customer excites you is the just really are you really combination government look know, because larger have growth. for with in been growth only learn the increasing revenue to you new moving additional that, and of quarter, we there expand opportunity within So about tremendous customer volume that to good it's to one customers. both really out organization us And is not the customer there's working but at a larger on use existing there, going use

of enterprise, So quarter, look in have also enterprise that we great more this to move customer but into growth existing at new existing opportunity even base an when we we forward, expand. larger as onboarding and grow customers, up and both moving

this we continue the as journey. forward excited to So detail there. move we're really I on appreciate

Josh Nichols

for someone a let question I'll last then take me, And stab. else

where in that growth growth Looking penetration or opportunities at now are you been curious where in the is terms sustainable drive could and in continue persistent FOREWARN, terms of pretty remain left I'm penetrate of that's how it's agencies you really much MLS that think throughout and been you realty this impressive year. other today will based are the on to market? that just you

Daniel MacLachlan

you. This that Sure. is and Thank I'll Dan again, take question.

approximately there's the we today, associations just associations. yes, XXX So U.S., announced around today over X,XXX within

within tool get brand, also it taking user-to-user go for of industries have that now taking and due diligence But So lot at concept protective that a a still we're safety industry. additional FOREWARN out and cases. engagement what use the of of expanding really that real is estate into for looking number

to but really real into as looking industry, the plenty and within what, total, that now associations time, industries. and get I XXX to So resources take in today, new investing about associations estate go said, brand X,XXX spending

Derek Dubner

Josh. situation, Derek a FOREWARN Obviously, safety provide to we is gratitude and them estate that the protecting fact their us part difficult realtor it's many dangerous many, in leading the And is real also, This about Yes. express situation. tool. love to facing professionals exciting the that professionals, their feedback a proactive prior

across has introducing about industries. it other So and small to applicability very it think we're business ventures, we -- there's many excited

Operator

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

Derek Dubner

Thank you.

quarter We performance of continuation year-to-date. another strong a the are pleased to record and deliver

progress about year the are we very remainder strategic of our the XXXX. and Given initiatives, against optimistic the

Operator

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

You now disconnect. may

Red Violet (RDVT) 6 Nov 242024 Q3 Earnings call transcript