red violet Reports Third Quarter 2026 Financial Results

Red Violet posts record revenue, profit, and cash flow, with strong customer growth and no debt.

What the company is saying

Red Violet, Inc. is emphasizing a record quarter, highlighting that trailing twelve-month revenue surpassed $100 million for the first time. The company frames its growth as driven by secular trends in digital interactions and AI-driven fraud, positioning its proprietary identity intelligence platform as a key enabler for customers. CEO Derek Dubner attributes the demand surge to the need for identity resolution, fraud prevention, and compliance solutions, and claims the company is well-placed to capture more market share. The announcement foregrounds double-digit year-over-year growth in revenue, profit, and cash flow, as well as the successful completion of a $108.7 million public offering. Operational expansion is underlined by customer and user growth in IDI and FOREWARN, with over 665 REALTOR Associations now contracted. The tone is confident and data-driven, with only a single forward-looking statement about future market share that is not backed by specific projections.

What the data suggests

The disclosed numbers show broad-based financial and operational improvement. Total revenue for Q3 2026 rose 20% year-over-year to $27.8 million, gross profit increased 25% to $21.0 million, and gross margin expanded to 76% from 73%. Adjusted gross profit reached $23.7 million, up 22%, with adjusted gross margin at 85%. Net income climbed 29% to $5.4 million, yielding $0.35 per share and a net income margin of 20%. Adjusted EBITDA was $11.0 million, up 22%, and net cash from operating activities increased 25% to $12.7 million. The company ended the quarter with $165.7 million in cash and investments and no debt, following a $108.7 million net capital raise. Customer metrics are also strong: 383 new IDI customers (total 11,252) and 19,688 new FOREWARN users (total 462,861), with over 665 REALTOR Associations contracted. The data supports management’s claims of momentum, with all key financial and operational metrics moving in a positive direction and no evidence of missed guidance or negative surprises.

Analysis

The announcement from Red Violet, Inc. is overwhelmingly grounded in realised, measurable results, with nearly all key claims supported by specific financial and operational data for the reported quarter. Revenue, gross profit, net income, margins, cash flow, and customer/user growth are all quantified and show substantial year-over-year improvement. The only forward-looking statement is a general assertion about future market opportunity, which is clearly separated from the factual results and not used to inflate the current performance narrative. The capital raise is disclosed as completed, with proceeds already received and no suggestion that benefits are long-dated or uncertain. There is no evidence of narrative inflation or overstatement; the tone is positive but proportionate to the strong results.

Risk flags

• ●Sustaining high growth rates in revenue and profit may become more challenging as the company scales, particularly if market competition intensifies or if demand for identity intelligence solutions moderates. The current results are strong, but future quarters will need to maintain this trajectory to justify the valuation implied by recent performance.
• ●The company’s recent $108.7 million capital raise adds significant liquidity, but the announcement does not specify deployment plans for these funds. Without clear capital allocation strategies, there is a risk of inefficient use of proceeds or dilution without corresponding value creation.
• ●Customer and user growth in IDI and FOREWARN is robust, but continued expansion depends on maintaining technological edge and adapting to evolving fraud and compliance threats. Any slowdown in product innovation or failure to address new market needs could impact future growth.

Bottom line

Red Violet delivered a quarter of record revenue, profit, and cash flow, with all major financial and operational metrics showing double-digit year-over-year growth. The company’s balance sheet is strong, with $165.7 million in cash and investments and no debt after a $108.7 million equity raise. Customer and user additions in both IDI and FOREWARN reinforce the operational momentum, and the company’s core narrative is grounded in realised results rather than aspirational projections. The main risks are sustaining this pace of growth, deploying new capital effectively, and staying ahead of evolving market needs. Investors should focus on how management allocates its expanded cash reserves and whether growth in both financials and customer metrics continues in coming quarters. The key takeaway is that Red Violet is executing well on both financial and operational fronts, but future value creation will depend on disciplined capital deployment and continued innovation.

Announcement summary

(NASDAQ: RDVT) Red Violet, Inc. reported financial results for the quarter ended September 30, 2026. The company achieved record revenue, surpassing $100 million in trailing twelve-month revenue for the first time. For the three months ended September 30, 2026, total revenue increased 20% to $27.8 million compared to the same period in 2025. Gross profit increased 25% to $21.0 million, and gross margin rose to 76% from 73%. Adjusted gross profit increased 22% to $23.7 million, with adjusted gross margin increasing to 85% from 84%. Net income increased 29% to $5.4 million, resulting in earnings of $0.35 per basic and diluted share. Net income margin increased to 20% from 18%. Adjusted EBITDA increased 22% to $11.0 million, and adjusted EBITDA margin increased to 40% from 39%. Adjusted net income increased 23% to $7.3 million, resulting in adjusted earnings of $0.48 and $0.47 per basic and diluted share, respectively. Net cash provided by operating activities increased 25% to $12.7 million. As of September 30, 2026, cash and cash equivalents together with investments in U.S. Treasury securities totaled $165.7 million, with no debt. The company closed an underwritten public offering of 1,916,667 shares of common stock, including 250,000 shares sold pursuant to the full exercise of the underwriters’ option, providing net proceeds of $108.7 million after deducting underwriting discounts, commissions, and offering expenses. During the third quarter, Red Violet added 383 customers to IDI™, ending the quarter with 11,252 customers. The company also added 19,688 users to FOREWARN®, ending the quarter with 462,861 users. Over 665 REALTOR® Associations throughout the U.S. are now contracted to use FOREWARN. Derek Dubner, CEO of Red Violet, stated that the expansion of digital interactions and AI-driven fraud is fueling demand for the company's identity resolution, fraud prevention, and compliance solutions. The company hosted a conference call and webcast on November 4, 2026, at 4:30 pm ET to discuss quarterly results and provide a business update.

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