Red Violet, Inc.

What they do

Red Violet builds proprietary cloud-native, AI-embedded identity intelligence technology, primarily marketed through two brands: IDI and FOREWARN. IDI offers its flagship product idiCORE, an investigative solution for industries such as financial services, insurance, healthcare, law enforcement, and collections. FOREWARN is an app-based solution tailored for the real estate industry, providing instant risk assessment before face-to-face engagements. The company generates substantially all revenue from licensing its solutions.

Revenue drivers

• IDI — IDI is the analytics and information solutions provider with idiCORE as its flagship product, serving a diverse set of industries. It had 10,869 billable customers as of June 30, 2026, up from 10,022 at year-end 2025.
• FOREWARN — FOREWARN is an app-based solution for the real estate industry, providing real-time risk intelligence. It had 443,173 users as of June 30, 2026, with 660 REALTOR Associations contracted to use the service.
• CORE Platform — CORE is the company's cloud-native, AI-enabled identity intelligence platform that powers all solutions, embedding AI/ML capabilities to deliver real-time analytics and actionable insights.

Recent performance

For Q2 2026, revenue increased 23% year-over-year to a record $26.7 million. Gross profit grew 29% to $20.2 million, with gross margin improving to 76%. Net income rose 85% to $5.0 million, and adjusted EBITDA increased 48% to $11.2 million. Operating cash flow for the quarter was $10.6 million, up 42%.

Strategy

Management plans to use proceeds from an August 2026 public offering of $109.0 million for working capital and potential strategic acquisitions. The company continues to invest in its AI-embedded architecture, including its entity resolution engine and identity graph, to capture demand in identity intelligence. It is also executing a stock repurchase program, having bought back 74,500 shares at an average price of $41.87 in 2026 through June 30.

Risks

• Product errors or security vulnerabilities — Undetected errors or security vulnerabilities in products could lead to revenue loss, customer attrition, or costly litigation.
• Rapid technological change — Failure to keep pace with rapid technological changes in the data and analytics sector could render products obsolete and erode market share.
• Dependence on data and workflows — The company's solutions rely on extensive proprietary and public-record data; disruptions or quality issues could impair service delivery.
• Customer concentration and retention — Billable customers are typically corporate organizations; retention and expansion are key, and any significant loss could harm financial results.

Outlook

Management expressed confidence in the strong demand for identity intelligence and the company's positioning to capitalize on it. With no debt and over $160 million in cash following the offering, the company has a strong balance sheet to fund strategic initiatives and potential acquisitions. The pipeline of strategic initiatives is described as the strongest in company history, but management remains disciplined in capital deployment.