Red Violet, Inc. (NASDAQ: RDVT), a leading analytics and
information solutions provider, today announced financial results
for the quarter ended September 30, 2023.
“We are pleased to report record revenue and profitability for
the third quarter. Our strong performance, given the uncertain
economic environment, reflects the underlying strength of the
business and the ongoing value proposition we provide for our
customers,” stated Derek Dubner, red violet’s CEO. “I am extremely
proud of our team’s performance as these results follow a tough
comparison from the prior year period that included approximately
$1.8 million in one-time transactional revenue. Despite broader
macroeconomic challenges, we continue to see strong demand from new
and existing customers driven by the differentiation of our
technology platform and innovative solutions.”
Third Quarter Financial Results
For the three months ended September 30, 2023, as compared to
the three months ended September 30, 2022:
- Total revenue increased 5% to $15.8
million.
- Gross profit increased 1% to $10.4
million. Gross margin decreased to 66% from 69%.
- Adjusted gross profit increased 5% to
$12.5 million. Adjusted gross margin decreased to 79% from
80%.
- Net income increased 453% to $12.5
million, which resulted in earnings of $0.90 and $0.87 per basic
and diluted share, respectively. Net income margin increased to 79%
from 15%.
- Adjusted EBITDA increased 3% to $5.4
million. Adjusted EBITDA margin decreased to 34% from 35%.
- Net cash provided by operating
activities increased 84% to $5.8 million.
- Cash and cash equivalents were $34.2
million as of September 30, 2023.
Third Quarter and Recent Business
Highlights
- Added 272 customers to IDI™ during the
third quarter, ending the quarter with 7,769 customers.
- Added 21,819 users to FOREWARN® during
the third quarter, ending the quarter with 168,356 users. Over 330
REALTOR® Associations throughout the U.S. are now contracted to use
FOREWARN.
- Announced agreement with Florida
Realtors®, the largest state REALTOR Association in the United
States, to purchase FOREWARN services for its 238,000 members
beginning January 2024.
- As a result of our cumulative taxable
income for the recent years, projections of future taxable income,
and the reversal of taxable temporary differences, the Company
released its valuation allowance recorded against its deferred tax
assets under ASC 740, resulting in a one-time $10.4 million tax
benefit realized in the third quarter.
- Purchased 97,181 shares of the
Company’s common stock year to date through November 3, 2023, at an
average price of $18.29 per share pursuant to the Company’s $5.0
million Stock Repurchase Program that was authorized on May 2,
2022. The Company has $2.3 million remaining under the Stock
Repurchase Program.
Conference Call
In conjunction with this release, red violet will host a
conference call and webcast today at 4:30pm ET to discuss its
quarterly results and provide a business update. Please click here
to pre-register for the conference call and obtain your dial in
number and passcode. To access the live audio webcast, visit the
Investors section of the red violet website at www.redviolet.com.
Please login at least 15 minutes prior to the start of the call to
ensure adequate time for any downloads that may be required.
Following the completion of the conference call, an archived
webcast of the conference call will be available on the Investors
section of the red violet website at www.redviolet.com.
About red violet®
At red violet, we build proprietary technologies and apply
analytical capabilities to deliver identity intelligence. Our
technology powers critical solutions, which empower organizations
to operate with confidence. Our solutions enable the real-time
identification and location of people, businesses, assets and their
interrelationships. These solutions are used for purposes including
risk mitigation, due diligence, fraud detection and prevention,
regulatory compliance, and customer acquisition. Our intelligent
platform, CORE™, is purpose-built for the enterprise, yet flexible
enough for organizations of all sizes, bringing clarity to massive
datasets by transforming data into intelligence. Our solutions are
used today to enable frictionless commerce, to ensure safety, and
to reduce fraud and the concomitant expense borne by society. For
more information, please visit www.redviolet.com.
Company Contact:Camilo RamirezRed Violet,
Inc.561-757-4500ir@redviolet.com
Investor Relations Contacts:Steven
Hooser/Phillip KupperThree Part
Advisors214-872-2710ir@redviolet.com
Use of Non-GAAP Financial Measures
Management evaluates the financial performance of our business
on a variety of key indicators, including non-GAAP metrics of
adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit,
adjusted gross margin and free cash flow ("FCF"). Adjusted EBITDA
is a financial measure equal to net income, the most directly
comparable financial measure based on US GAAP, excluding interest
income, net, income tax (benefit) expense, depreciation and
amortization, share-based compensation expense, litigation costs,
and write-off of long-lived assets and others. We define adjusted
EBITDA margin as adjusted EBITDA as a percentage of revenue. We
define adjusted gross profit as revenue less cost of revenue
(exclusive of depreciation and amortization), and adjusted gross
margin as adjusted gross profit as a percentage of revenue. We
define FCF as net cash provided by operating activities reduced by
purchase of property and equipment and capitalized costs included
in intangible assets.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements," as
that term is defined under the Private Securities Litigation Reform
Act of 1995 (PSLRA), which statements may be identified by words
such as "expects," "plans," "projects," "will," "may,"
"anticipate," "believes," "should," "intends," "estimates," and
other words of similar meaning. Such forward looking statements are
subject to risks and uncertainties that are often difficult to
predict, are beyond our control and which may cause results to
differ materially from expectations, including whether we will
continue to see strong demand from new and existing customers
driven by differentiation of our technology platform and innovative
solutions. Readers are cautioned not to place undue reliance on
these forward-looking statements, which are based on our
expectations as of the date of this press release and speak only as
of the date of this press release and are advised to consider the
factors listed above together with the additional factors under the
heading "Forward-Looking Statements" and "Risk Factors" in red
violet's Form 10-K for the year ended December 31, 2022 filed on
March 8, 2023, as may be supplemented or amended by the Company's
other SEC filings. We undertake no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise, except as required by
law.
RED VIOLET,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Amounts in thousands, except share
data)(unaudited)
|
|
September 30, 2023 |
|
|
December 31, 2022 |
|
ASSETS: |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
34,210 |
|
|
$ |
31,810 |
|
Accounts receivable, net of
allowance for doubtful accounts of $109 and $60 as of September 30,
2023 and December 31, 2022, respectively |
|
|
6,805 |
|
|
|
5,535 |
|
Prepaid expenses and other
current assets |
|
|
1,178 |
|
|
|
771 |
|
Total current assets |
|
|
42,193 |
|
|
|
38,116 |
|
Property and equipment, net |
|
|
627 |
|
|
|
709 |
|
Intangible assets, net |
|
|
33,992 |
|
|
|
31,647 |
|
Goodwill |
|
|
5,227 |
|
|
|
5,227 |
|
Right-of-use assets |
|
|
2,589 |
|
|
|
1,114 |
|
Deferred tax assets |
|
|
10,021 |
|
|
|
- |
|
Other noncurrent assets |
|
|
627 |
|
|
|
601 |
|
Total
assets |
|
$ |
95,276 |
|
|
$ |
77,414 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,989 |
|
|
$ |
2,229 |
|
Accrued expenses and other
current liabilities |
|
|
372 |
|
|
|
1,845 |
|
Current portion of operating
lease liabilities |
|
|
548 |
|
|
|
692 |
|
Deferred revenue |
|
|
527 |
|
|
|
670 |
|
Total current liabilities |
|
|
3,436 |
|
|
|
5,436 |
|
Noncurrent operating lease
liabilities |
|
|
2,149 |
|
|
|
598 |
|
Deferred tax liabilities |
|
|
- |
|
|
|
287 |
|
Total
liabilities |
|
|
5,585 |
|
|
|
6,321 |
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Preferred stock—$0.001 par value,
10,000,000 shares authorized, and 0 shares issued and outstanding,
as of September 30, 2023 and December 31, 2022 |
|
|
- |
|
|
|
- |
|
Common stock—$0.001 par value,
200,000,000 shares authorized, 13,920,370 and 13,956,404 shares
issued, and 13,912,390 and 13,956,404 shares outstanding, as of
September 30, 2023 and December 31, 2022 |
|
|
14 |
|
|
|
14 |
|
Treasury stock, at cost, 7,980
and 0 shares as of September 30, 2023 and December 31, 2022 |
|
|
(168 |
) |
|
|
- |
|
Additional paid-in capital |
|
|
96,648 |
|
|
|
92,481 |
|
Accumulated deficit |
|
|
(6,803 |
) |
|
|
(21,402 |
) |
Total shareholders'
equity |
|
|
89,691 |
|
|
|
71,093 |
|
Total liabilities and
shareholders' equity |
|
$ |
95,276 |
|
|
$ |
77,414 |
|
|
|
|
|
|
|
|
|
|
RED VIOLET,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Amounts in thousands, except share
data)(unaudited)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
$ |
15,837 |
|
|
$ |
15,026 |
|
|
$ |
45,143 |
|
|
$ |
40,249 |
|
Costs and
expenses(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of
depreciation and amortization) |
|
|
3,313 |
|
|
|
3,067 |
|
|
|
9,732 |
|
|
|
9,157 |
|
Sales and marketing expenses |
|
|
3,365 |
|
|
|
2,623 |
|
|
|
10,332 |
|
|
|
7,836 |
|
General and administrative
expenses |
|
|
5,223 |
|
|
|
5,465 |
|
|
|
15,539 |
|
|
|
16,118 |
|
Depreciation and
amortization |
|
|
2,171 |
|
|
|
1,713 |
|
|
|
6,141 |
|
|
|
4,860 |
|
Total costs and
expenses |
|
|
14,072 |
|
|
|
12,868 |
|
|
|
41,744 |
|
|
|
37,971 |
|
Income from
operations |
|
|
1,765 |
|
|
|
2,158 |
|
|
|
3,399 |
|
|
|
2,278 |
|
Interest income, net |
|
|
346 |
|
|
|
125 |
|
|
|
947 |
|
|
|
126 |
|
Income before income
taxes |
|
|
2,111 |
|
|
|
2,283 |
|
|
|
4,346 |
|
|
|
2,404 |
|
Income tax (benefit) expense |
|
|
(10,384 |
) |
|
|
25 |
|
|
|
(10,253 |
) |
|
|
244 |
|
Net income |
|
$ |
12,495 |
|
|
$ |
2,258 |
|
|
$ |
14,599 |
|
|
$ |
2,160 |
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.90 |
|
|
$ |
0.16 |
|
|
$ |
1.05 |
|
|
$ |
0.16 |
|
Diluted |
|
$ |
0.87 |
|
|
$ |
0.16 |
|
|
$ |
1.03 |
|
|
$ |
0.16 |
|
Weighted average number
of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
13,952,426 |
|
|
|
13,748,587 |
|
|
|
13,970,317 |
|
|
|
13,690,309 |
|
Diluted |
|
|
14,329,878 |
|
|
|
13,764,262 |
|
|
|
14,207,673 |
|
|
|
13,872,596 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Share-based compensation
expense in each category: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses |
|
$ |
116 |
|
|
$ |
92 |
|
|
$ |
348 |
|
|
$ |
247 |
|
General and administrative
expenses |
|
|
1,253 |
|
|
|
1,181 |
|
|
|
3,710 |
|
|
|
3,819 |
|
Total |
|
$ |
1,369 |
|
|
$ |
1,273 |
|
|
$ |
4,058 |
|
|
$ |
4,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RED VIOLET,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Amounts in
thousands)(unaudited)
|
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
14,599 |
|
|
$ |
2,160 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
6,141 |
|
|
|
4,860 |
|
Share-based compensation
expense |
|
|
4,058 |
|
|
|
4,066 |
|
Write-off of long-lived
assets |
|
|
4 |
|
|
|
6 |
|
Provision for bad debts |
|
|
913 |
|
|
|
96 |
|
Noncash lease expenses |
|
|
444 |
|
|
|
406 |
|
Deferred income tax (benefit)
expense |
|
|
(10,308 |
) |
|
|
207 |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(2,183 |
) |
|
|
(2,833 |
) |
Prepaid expenses and other
current assets |
|
|
(407 |
) |
|
|
(250 |
) |
Other noncurrent assets |
|
|
(26 |
) |
|
|
- |
|
Accounts payable |
|
|
(240 |
) |
|
|
(9 |
) |
Accrued expenses and other
current liabilities |
|
|
(1,473 |
) |
|
|
149 |
|
Deferred revenue |
|
|
(143 |
) |
|
|
(302 |
) |
Operating lease liabilities |
|
|
(512 |
) |
|
|
(456 |
) |
Net cash provided by operating
activities |
|
|
10,867 |
|
|
|
8,100 |
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of property and
equipment |
|
|
(98 |
) |
|
|
(271 |
) |
Capitalized costs included in
intangible assets |
|
|
(6,921 |
) |
|
|
(6,139 |
) |
Net cash used in investing
activities |
|
|
(7,019 |
) |
|
|
(6,410 |
) |
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Taxes paid related to net share
settlement of vesting of restricted stock units |
|
|
(197 |
) |
|
|
(4,310 |
) |
Repurchases of common stock |
|
|
(1,251 |
) |
|
|
(365 |
) |
Net cash used in financing
activities |
|
|
(1,448 |
) |
|
|
(4,675 |
) |
Net increase (decrease)
in cash and cash equivalents |
|
$ |
2,400 |
|
|
$ |
(2,985 |
) |
Cash and cash equivalents at
beginning of period |
|
|
31,810 |
|
|
|
34,258 |
|
Cash and cash equivalents
at end of period |
|
$ |
34,210 |
|
|
$ |
31,273 |
|
SUPPLEMENTAL DISCLOSURE
INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
- |
|
|
$ |
- |
|
Cash paid for income taxes |
|
$ |
55 |
|
|
$ |
37 |
|
Share-based compensation
capitalized in intangible assets |
|
$ |
1,389 |
|
|
$ |
1,193 |
|
Retirement of treasury stock |
|
$ |
1,280 |
|
|
$ |
4,675 |
|
Right-of -use assets obtained in
exchange of operating lease liabilities |
|
$ |
1,919 |
|
|
$ |
- |
|
Operating lease liabilities
arising from obtaining right-of-use assets |
|
$ |
1,919 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Use and Reconciliation of Non-GAAP Financial
Measures
Management evaluates the financial performance of our business
on a variety of key indicators, including non-GAAP metrics of
adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit,
adjusted gross margin and FCF. Adjusted EBITDA is a financial
measure equal to net income, the most directly comparable financial
measure based on GAAP, excluding interest income, net, income tax
(benefit) expense, depreciation and amortization, share-based
compensation expense, litigation costs, and write-off of long-lived
assets and others, as noted in the tables below. We define adjusted
EBITDA margin as adjusted EBITDA as a percentage of revenue. We
define adjusted gross profit as revenue less cost of revenue
(exclusive of depreciation and amortization), and adjusted gross
margin as adjusted gross profit as a percentage of revenue. We
define FCF as net cash provided by operating activities reduced by
purchase of property and equipment and capitalized costs included
in intangible assets.
The following is a reconciliation of net income, the most
directly comparable US GAAP financial measure, to adjusted
EBITDA:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
(Dollars in
thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net income |
|
$ |
12,495 |
|
|
$ |
2,258 |
|
|
$ |
14,599 |
|
|
$ |
2,160 |
|
Interest income, net |
|
|
(346 |
) |
|
|
(125 |
) |
|
|
(947 |
) |
|
|
(126 |
) |
Income tax (benefit) expense |
|
|
(10,384 |
) |
|
|
25 |
|
|
|
(10,253 |
) |
|
|
244 |
|
Depreciation and
amortization |
|
|
2,171 |
|
|
|
1,713 |
|
|
|
6,141 |
|
|
|
4,860 |
|
Share-based compensation
expense |
|
|
1,369 |
|
|
|
1,273 |
|
|
|
4,058 |
|
|
|
4,066 |
|
Litigation costs |
|
|
1 |
|
|
|
37 |
|
|
|
49 |
|
|
|
128 |
|
Write-off of long-lived assets
and others |
|
|
56 |
|
|
|
4 |
|
|
|
58 |
|
|
|
7 |
|
Adjusted
EBITDA |
|
$ |
5,362 |
|
|
$ |
5,185 |
|
|
$ |
13,705 |
|
|
$ |
11,339 |
|
Revenue |
|
$ |
15,837 |
|
|
$ |
15,026 |
|
|
$ |
45,143 |
|
|
$ |
40,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
margin |
|
|
79 |
% |
|
|
15 |
% |
|
|
32 |
% |
|
|
5 |
% |
Adjusted EBITDA
margin |
|
|
34 |
% |
|
|
35 |
% |
|
|
30 |
% |
|
|
28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is a reconciliation of gross profit, the most
directly comparable US GAAP financial measure, to adjusted gross
profit:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
(Dollars in
thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
$ |
15,837 |
|
|
$ |
15,026 |
|
|
$ |
45,143 |
|
|
$ |
40,249 |
|
Cost of revenue (exclusive of
depreciation and amortization) |
|
|
(3,313 |
) |
|
|
(3,067 |
) |
|
|
(9,732 |
) |
|
|
(9,157 |
) |
Depreciation and amortization
of intangible assets |
|
|
(2,112 |
) |
|
|
(1,659 |
) |
|
|
(5,965 |
) |
|
|
(4,682 |
) |
Gross
profit |
|
|
10,412 |
|
|
|
10,300 |
|
|
|
29,446 |
|
|
|
26,410 |
|
Depreciation and amortization
of intangible assets |
|
|
2,112 |
|
|
|
1,659 |
|
|
|
5,965 |
|
|
|
4,682 |
|
Adjusted gross
profit |
|
$ |
12,524 |
|
|
$ |
11,959 |
|
|
$ |
35,411 |
|
|
$ |
31,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin |
|
|
66 |
% |
|
|
69 |
% |
|
|
65 |
% |
|
|
66 |
% |
Adjusted gross
margin |
|
|
79 |
% |
|
|
80 |
% |
|
|
78 |
% |
|
|
77 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is a reconciliation of net cash provided by
operating activities, the most directly comparable US GAAP
financial measure, to FCF:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
(Dollars in
thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net cash provided by operating activities |
|
$ |
5,789 |
|
|
$ |
3,145 |
|
|
$ |
10,867 |
|
|
$ |
8,100 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and
equipment |
|
|
(47 |
) |
|
|
(50 |
) |
|
|
(98 |
) |
|
|
(271 |
) |
Capitalized costs included in
intangible assets |
|
|
(2,412 |
) |
|
|
(2,246 |
) |
|
|
(6,921 |
) |
|
|
(6,139 |
) |
Free cash
flow |
|
$ |
3,330 |
|
|
$ |
849 |
|
|
$ |
3,848 |
|
|
$ |
1,690 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In order to assist readers of our condensed consolidated
financial statements in understanding the operating results that
management uses to evaluate the business and for financial planning
purposes, we present non-GAAP measures of adjusted EBITDA, adjusted
EBITDA margin, adjusted gross profit, adjusted gross margin and FCF
as supplemental measures of our operating performance. We believe
they provide useful information to our investors as they eliminate
the impact of certain items that we do not consider indicative of
our cash operations and ongoing operating performance. In addition,
we use them as an integral part of our internal reporting to
measure the performance and operating strength of our business.
We believe adjusted EBITDA, adjusted EBITDA margin, adjusted
gross profit, adjusted gross margin and FCF are relevant and
provide useful information frequently used by securities analysts,
investors and other interested parties in their evaluation of the
operating performance of companies similar to ours and are
indicators of the operational strength of our business. We believe
adjusted EBITDA eliminates the uneven effect of considerable
amounts of non-cash depreciation and amortization, share-based
compensation expense and the impact of other non-recurring items,
providing useful comparisons versus prior periods or forecasts.
Adjusted EBITDA margin is calculated as adjusted EBITDA as a
percentage of revenue. Our adjusted gross profit is a measure used
by management in evaluating the business’ current operating
performance by excluding the impact of prior historical costs of
assets that are expensed systematically and allocated over the
estimated useful lives of the assets, which may not be indicative
of the current operating activity. Our adjusted gross profit is
calculated by using revenue, less cost of revenue (exclusive of
depreciation and amortization). We believe adjusted gross profit
provides useful information to our investors by eliminating the
impact of non-cash depreciation and amortization, and specifically
the amortization of software developed for internal use, providing
a baseline of our core operating results that allow for analyzing
trends in our underlying business consistently over multiple
periods. Adjusted gross margin is calculated as adjusted gross
profit as a percentage of revenue. We believe FCF is an important
liquidity measure of the cash that is available, after capital
expenditures, for operational expenses and investment in our
business. FCF is a measure used by management to understand and
evaluate the business’s operating performance and trends over time.
FCF is calculated by using net cash provided by operating
activities, less purchase of property and equipment and capitalized
costs included in intangible assets.
Adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit,
adjusted gross margin and FCF are not intended to be performance
measures that should be regarded as an alternative to, or more
meaningful than, financial measures presented in accordance with US
GAAP. In addition, FCF is not intended to represent our residual
cash flow available for discretionary expenses and is not
necessarily a measure of our ability to fund our cash needs. The
way we measure adjusted EBITDA, adjusted EBITDA margin, adjusted
gross profit, adjusted gross margin and FCF may not be comparable
to similarly titled measures presented by other companies, and may
not be identical to corresponding measures used in our various
agreements.SUPPLEMENTAL METRICS
The following metrics are intended as a supplement to the
financial statements found in this release and other information
furnished or filed with the SEC. These supplemental metrics are not
necessarily derived from any underlying financial statement
amounts. We believe these supplemental metrics help investors
understand trends within our business and evaluate the performance
of such trends quickly and effectively. In the event of
discrepancies between amounts in these tables and the Company's
historical disclosures or financial statements, readers should rely
on the Company's filings with the SEC and financial statements in
the Company's most recent earnings release.
We intend to periodically review and refine the definition,
methodology and appropriateness of each of these supplemental
metrics. As a result, metrics are subject to removal and/or
changes, and such changes could be material.
|
|
(Unaudited) |
|
(Dollars in
thousands) |
|
Q4'21 |
|
|
Q1'22 |
|
|
Q2'22 |
|
|
Q3'22 |
|
|
Q4'22 |
|
|
Q1'23 |
|
|
Q2'23 |
|
|
Q3'23 |
|
Customer metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IDI - billable customers(1) |
|
|
6,548 |
|
|
|
6,592 |
|
|
|
6,817 |
|
|
|
6,873 |
|
|
|
7,021 |
|
|
|
7,256 |
|
|
|
7,497 |
|
|
|
7,769 |
|
FOREWARN - users(2) |
|
|
82,419 |
|
|
|
91,490 |
|
|
|
101,261 |
|
|
|
110,051 |
|
|
|
116,960 |
|
|
|
131,348 |
|
|
|
146,537 |
|
|
|
168,356 |
|
Revenue
metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual revenue %(3) |
|
|
79 |
% |
|
|
77 |
% |
|
|
80 |
% |
|
|
68 |
% |
|
|
77 |
% |
|
|
75 |
% |
|
|
79 |
% |
|
|
79 |
% |
Gross revenue retention %(4) |
|
|
96 |
% |
|
|
97 |
% |
|
|
95 |
% |
|
|
94 |
% |
|
|
95 |
% |
|
|
94 |
% |
|
|
94 |
% |
|
|
94 |
% |
Revenue from new customers(5) |
|
$ |
920 |
|
|
$ |
1,014 |
|
|
$ |
805 |
|
|
$ |
2,016 |
|
|
$ |
1,216 |
|
|
$ |
1,869 |
|
|
$ |
1,147 |
|
|
$ |
1,363 |
|
Base revenue from existing customers(6) |
|
$ |
9,114 |
|
|
$ |
9,721 |
|
|
$ |
10,164 |
|
|
$ |
10,839 |
|
|
$ |
10,574 |
|
|
$ |
11,121 |
|
|
$ |
11,707 |
|
|
$ |
12,399 |
|
Growth revenue from existing customers(7) |
|
$ |
1,224 |
|
|
$ |
1,994 |
|
|
$ |
1,525 |
|
|
$ |
2,171 |
|
|
$ |
1,279 |
|
|
$ |
1,636 |
|
|
$ |
1,826 |
|
|
$ |
2,075 |
|
Other
metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees - sales and marketing |
|
54 |
|
|
59 |
|
|
57 |
|
|
64 |
|
|
68 |
|
|
61 |
|
|
63 |
|
|
65 |
|
Employees - support |
|
10 |
|
|
10 |
|
|
9 |
|
|
10 |
|
|
10 |
|
|
10 |
|
|
9 |
|
|
9 |
|
Employees - infrastructure |
|
18 |
|
|
23 |
|
|
25 |
|
|
25 |
|
|
28 |
|
|
27 |
|
|
26 |
|
|
27 |
|
Employees - engineering |
|
37 |
|
|
50 |
|
|
52 |
|
|
52 |
|
|
54 |
|
|
47 |
|
|
47 |
|
|
47 |
|
Employees - administration |
|
22 |
|
|
26 |
|
|
27 |
|
|
26 |
|
|
27 |
|
|
25 |
|
|
25 |
|
|
25 |
|
(1) We define a billable customer of IDI as a single entity that
generated revenue in the last three months of the period. Billable
customers are typically corporate organizations. In most cases,
corporate organizations will have multiple users and/or departments
purchasing our solutions, however, we count the entire organization
as a discrete customer.
(2) We define a user of FOREWARN as a unique person that has a
subscription to use the FOREWARN service as of the last day of the
period. A unique person can only have one user account.
(3) Contractual revenue % represents revenue generated from
customers pursuant to pricing contracts containing a monthly fee
and any additional overage divided by total revenue. Pricing
contracts are generally annual contracts or longer, with auto
renewal.
(4) Gross revenue retention is defined as the revenue retained
from existing customers, net of reinstated revenue, and excluding
expansion revenue. Revenue is measured once a customer has
generated revenue for six consecutive months. Revenue is considered
lost when all revenue from a customer ceases for three consecutive
months; revenue generated by a customer after the three-month loss
period is defined as reinstated revenue. Gross revenue retention
percentage is calculated on a trailing twelve-month basis. The
numerator of which is revenue lost during the period due to
attrition, net of reinstated revenue, and the denominator of which
is total revenue based on an average of total revenue at the
beginning of each month during the period, with the quotient
subtracted from one. Prior to Q1’22, FOREWARN revenue was excluded
from our gross revenue retention calculation. Beginning Q4’22, our
gross revenue retention calculation excludes revenue from
idiVERIFIED, which is purely transactional and currently represents
less than 3% of total revenue.
(5) Revenue from new customers represents the total monthly
revenue generated from new customers in a given period. A customer
is defined as a new customer during the first six months of revenue
generation.
(6) Base revenue from existing customers represents the total
monthly revenue generated from existing customers in a given period
that does not exceed the customers' trailing six-month average
revenue. A customer is defined as an existing customer six months
after their initial month of revenue.
(7) Growth revenue from existing customers represents the total
monthly revenue generated from existing customers in a given period
in excess of the customers' trailing six-month average revenue.
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