GET DAILY SIGNALSRed Violet (RDVT) Delivers Record Q3 Revenue with +20% Growth and Expanding Margins
Key Takeaways
- Red Violet reported record revenue of $27.8 million for the third quarter of 2026, up 20% from a year earlier.
- Adjusted earnings per share (EPS) came in at $0.47 on a diluted basis, above the roughly $0.41 consensus estimate.
- Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 22% to $11.0 million, with margin expanding to 40%.
- GAAP net income increased 29% to $5.4 million, or $0.35 per basic and diluted share.
- The company held $165.7 million in cash and U.S. Treasury investments with no debt after a $108.7 million public offering.
- Customer metrics advanced, with 383 net new IDI customers and 19,688 added FOREWARN users during the quarter.
Earnings Context and Why This Quarter Stands Out
Red Violet’s third-quarter results continue a solid streak of execution for the provider of analytics and information solutions. The company runs the IDI and FOREWARN platforms focused on identity intelligence and risk mitigation, and it has now posted dozens of consecutive quarters of double-digit revenue growth. This report is notable because it follows a $108.7 million capital raise, giving investors an early view of how management intends to use the larger balance sheet to invest in the platform, data assets, and possible strategic M&A. With adjusted margins already near peak levels, the quarter provides a useful update on whether profitability can continue to improve while the company funds its next stage of growth.
I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Breaking Down the Reported Results
For the three months ended September 30, 2026, Red Violet posted total revenue of $27.8 million, a 20% increase year over year and slightly above the roughly $27.2 million consensus estimate. Growth was broad-based across all five revenue verticals, led by the Investigative and Collections segments.
Adjusted earnings per share reached $0.47 on a diluted basis, exceeding the approximately $0.41 consensus forecast. On a GAAP basis, net income rose 29% to $5.4 million, or $0.35 per basic and diluted share, up from $0.28 a year earlier. Net income margin improved to 20% from 18%.
Profitability metrics continued to strengthen. Gross profit increased 25% to $21.0 million, while adjusted gross profit rose 22% to $23.7 million, lifting adjusted gross margin to 85% from 84%. Adjusted EBITDA climbed 22% to $11.0 million, with adjusted EBITDA margin expanding to 40% from 39%. Operating cash flow increased 25% to $12.7 million.
Customer growth remained healthy. The company added 383 billable IDI customers, ending the quarter with 11,252, and added 19,688 FOREWARN users to finish at 462,861 users, with more than 665 REALTOR associations under contract.
Market Reaction and Investor Sentiment
Heading into the release, sentiment was broadly positive following Red Violet’s record second-quarter results and its recent equity raise. The company has a history of exceeding consensus EPS estimates, topping forecasts in six of its prior eight quarters, which set a high bar for the third-quarter print. The combination of a modest revenue beat and a stronger-than-expected adjusted EPS reinforced the narrative of steady execution and expanding operating leverage. Key items for investors to watch include the trajectory of the softer Red Violet real estate business, which declined at a high single-digit rate year over year, and how management deploys its enlarged cash position toward disciplined M&A rather than purely organic growth.
Forward Outlook and Key Factors to Monitor
Investors should watch how Red Violet deploys the roughly $109 million in net proceeds from its recent public offering. Management has emphasized a disciplined framework that prioritizes investment in its platform, proprietary data assets, product development, and go-to-market capabilities, while evaluating acquisitions that add unique data, enabling technology, or vertical-market expertise.
Margin trends remain a central theme. The company has indicated that full-year adjusted EBITDA margin is expected to land in the high-30% range, with the first three quarters seasonally strongest and the fourth quarter lower due to year-end incentive accruals. Whether the business can sustain its roughly 40% adjusted EBITDA margin while funding growth will be a key test.
On the demand side, the Collections vertical is benefiting from elevated consumer delinquencies and rising account volumes, while law enforcement adoption continues to expand within Investigative. By contrast, the Red Violet real estate segment remains a headwind tied to housing-market softness and is expected to stay subdued until conditions improve. FOREWARN’s growth into new verticals, including home healthcare, represents an additional catalyst worth monitoring in the quarters ahead.
AI Tools in My Research Process
From what I see, AI-driven platforms have become a practical part of staying on top of names like RDVT. I find Tickeron’s AI Screener especially useful for quickly filtering stocks by fundamentals, technical patterns, and industry trends. It helps surface relevant comparisons without spending hours on manual work, which is valuable when evaluating quarterly results against peers.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
RDVT in -3.39% downward trend, falling for three consecutive days on November 02, 2026
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where RDVT declined for three days, in 212 of 298 cases, the price declined further within the following month. The odds of a continued downward trend are 71%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 44 of 63 cases where RDVT's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 70%.
The Moving Average Convergence Divergence Histogram (MACD) for RDVT turned negative on November 02, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 55 similar instances when the indicator turned negative. In 37 of the 55 cases the stock turned lower in the days that followed. This puts the odds of success at 67%.
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 27, 2026. You may want to consider a long position or call options on RDVT as a result. In 72 of 93 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 77%.
RDVT moved above its 50-day moving average on October 20, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +2.85% 3-day Advance, the price is estimated to grow further. Considering data from situations where RDVT advanced for three days, in 215 of 286 cases, the price rose further within the following month. The odds of a continued upward trend are 75%.
RDVT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In 198 of 232 cases where RDVT Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 85%.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is 20 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock better than average.
The Tickeron Price Growth Rating for this company is 37 (best 1 - 100 worst), indicating steady price growth. RDVT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 54 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 75 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 88 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (11.442) is normal, around the industry mean (-1.902). P/E Ratio (68.603) is within average values for comparable stocks, (15.583). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (2.824). Dividend Yield (0.015) settles around the average of (0.072) among similar stocks. P/S Ratio (11.249) is also within normal values, averaging (70.854).
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General Information
a provider of cloud-based mission-critical information solutions to enterprises in a variety of industries
Industry PackagedSoftware
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