Key Highlights

  • Third-quarter Revenue increased 20% to USD 27.8 million, while Gross Profit climbed 25% to USD 21.0 million and gross Margin widened to 76% from 73%.
  • Net income grew 29% to USD 5.4 million, or USD 0.35 per diluted share, against USD 0.29 a year earlier, and adjusted EBITDA rose 22% to USD 11.0 million.
  • The adjusted EBITDA margin stood at 40% compared with 39%, and Operating Cash Flow rose 25% to USD 12.7 million.
  • Cash plus U.S. Treasury securities totaled USD 165.7 million with no debt, after an offering that brought in net proceeds of USD 108.7 million.

Revenue Growth Outpaces Costs Across the Income Statement

Red Violet (NASDAQ:RDVT) sells a cloud-based identity intelligence platform used for identity verification, Fraud detection, Due Diligence and customer acquisition. It filed its Quarterly Report on November 4, 2026, covering the period ended September 30, 2026. Revenue was USD 27.8 million against USD 23.1 million. Adjusted gross profit rose 22% to USD 23.7 million, an 85% margin. Cost of revenue came in at USD 4.0 million and sales and Marketing expense at USD 6.2 million, lifting pre-tax income to USD 6.8 million from USD 5.0 million after USD 1.4 million of income tax expense. Operating Income reached USD 5.8 million against USD 4.6 million, and adjusted Net Income grew 23% to USD 7.3 million, or USD 0.47 per diluted share. For nine months, revenue was USD 80.3 million compared with USD 66.9 million, and net income was USD 14.8 million versus USD 10.3 million.

Customer Counts and Cash Generation Behind the Margin

Red Violet added 383 customers to its IDI product, finishing the quarter at 11,252, and gained 19,688 users on FOREWARN, reaching 462,861, while more than 665 REALTOR associations were under contract. Operating cash flow came in at USD 12.7 million, and free cash flow, which the company defines as operating cash flow less Capital Expenditure and capitalized intangible costs, reached USD 8.8 million versus USD 7.3 million. Over nine months, operating cash flow was USD 29.9 million against USD 22.7 million and free cash flow was USD 19.1 million compared with USD 14.5 million. Spending rose elsewhere too: general and administrative expense was USD 9.0 million versus USD 6.8 million, and professional fees went up by USD 1.0 million. Interest income reached USD 1.1 million as cash balances increased.

August Offering Reshapes the Balance Sheet and Share Count

Red Violet (NASDAQ:RDVT) completed an underwritten public offering in August 2026 of 1,916,667 shares, including 250,000 shares from the underwriters' option, with net proceeds of USD 108.7 million after discounts and expenses. Cash and cash equivalents plus Treasury securities totaled USD 165.7 million, with no Debt outstanding. The company also bought back 74,500 shares for USD 3.1 million over nine months. Weighted basic shares increased to 15.3 million from 14.0 million, so the larger count will weigh on per-share growth in later periods. The 10-Q does not say how the proceeds will be used, so this article does not speculate on that.

Where Things Stand

Mainly its high gross margin, combined with revenue growth that outpaced cost growth. Red Violet (NASDAQ:RDVT) converted 20% revenue growth into 29% net income growth and 22% adjusted EBITDA growth, and the August offering left USD 165.7 million of Liquidity with no debt. Dilution and rising general and administrative costs are the points to watch, along with IDI and FOREWARN customer growth.