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Red Violet combines public records and other licensed data on its CORE cloud platform so organizations can verify identities, investigate relationships and detect fraud. Its IDI brand offers idiCORE to customers such as financial institutions, insurers, law enforcement agencies and investigative firms. Its FOREWARN app helps real estate professionals check information about consumers before meeting them face to face.
Customers pay to access these services online or through connections to their own systems. Almost all revenue comes from licensing, with fees based on usage, a monthly charge, or both. Customers with pricing contracts provide most of the revenue; these contracts generally run for a year or longer and renew automatically. Revenue is spread across customers rather than dominated by a single buyer.
The business depends heavily on continued access to outside data, including credit-bureau and government records. One supplier accounts for a large share of data acquisition costs, and replacing its data on comparable terms would take substantial time and resources. Privacy and information-use laws restrict how Red Violet can access, collect, combine and use personal data, limiting both its data supply and what its services can provide.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Red Violet’s results depend on growing identity-intelligence usage, keeping access to licensed data and competing with major information providers such as RELX’s LexisNexis.
TransUnion competes with Red Violet for lenders, insurers, telecom operators and government agencies that pay to verify identities, reduce fraud and understand customers. Watch TransUnion’s identity-verification and fraud offerings for these customers: its extensive proprietary data makes it a rival Red Violet must contend with.
Thomson Reuters competes with Red Violet to sell investigative information and data analysis to legal, corporate and government customers. Its information and software subscriptions are often embedded in customers’ daily work, so customer retention helps show how firmly this rival holds accounts Red Violet also serves through idiCORE.
TransUnion earningsTRU
TransUnion’s report will show whether lenders, insurers, telecom operators and government agencies are sustaining demand for identity checks and fraud prevention—the same buyers Red Violet competes to serve.
Read TransUnion’s identity-verification and fraud results alongside retention among those customers. Steady demand and retention would show that these buyers continue to spend on identity checks and fraud prevention, sharpening competition for Red Violet; weakness would suggest less pressure, but would not establish that Red Violet’s own customers are spending more.
Red Violet, Inc. earningsThis company
Red Violet earns licensing revenue as customers use its identity tools, and this report will show whether existing customers expand their use without data and cloud costs rising just as fast.
Compare growth in revenue from existing customers with growth in cost of revenue excluding depreciation and amortization. Existing-customer revenue rising faster than that cost would show that added use is producing revenue on top of Red Violet’s largely fixed-fee data licensing structure; if customer growth slows or the cost catches up, expansion is yielding less or data, cloud and related personnel costs are weighing more heavily.
