Red Violet, Inc. (RDVT): Business Model Canvas [Dec-2025 Updated]

You're digging into the nuts and bolts of how Red Violet, Inc. actually makes its money in the identity intelligence game, and honestly, their model is a study in high-margin execution balanced against key dependencies. As of late 2025, they are pulling in about $86.42 million in trailing twelve-month revenue while boasting an impressive 84% adjusted gross margin, largely driven by sticky enterprise contracts and a massive user base of over 346,671 on their real estate risk application. The critical tension point, though, is that up to 48% of their data costs come from just one supplier, which is a risk factor you definitely need to track as they scale. See the full Business Model Canvas below to map out exactly how they manage this high-stakes operational tightrope.

Red Violet, Inc. (RDVT) - Canvas Business Model: Key Partnerships

You're looking at the backbone of Red Violet, Inc.'s operation-the relationships that feed its intelligence engine and distribute its products. These aren't just casual agreements; they are critical dependencies for the CORE platform and the FOREWARN brand.

The most significant cost center in the Key Partnerships block relates directly to the data itself. The Company's reliance on external data sources is substantial, with its largest data supplier being a major credit bureau. For the year ended December 31, 2024, this single largest supplier accounted for 48% of Red Violet, Inc.'s total data costs. This highlights a concentration risk, though the relationship appears stable, as an extension with this key data supplier was secured in Q2 2025 out to April 30, 2031, with terms remaining relatively consistent.

The distribution side, particularly for the FOREWARN solution, is heavily reliant on partnerships with professional organizations. As of the second quarter of 2025, Red Violet, Inc. had over 575 REALTOR associations under contract to offer FOREWARN services to their members. To give you a sense of the scale of these individual partnerships, consider recent examples:

Beyond the core data suppliers and distribution channels, Red Violet, Inc. maintains relationships with other key entities:

• Strategic data partners that supply public-record and proprietary data outside of the primary credit bureau relationship.
• Various government and public records databases that supplement the data assets.
• Technology vendors providing essential cloud infrastructure and AI/ML tools necessary to run the CORE platform.

Finally, the company has established a financial mechanism to facilitate future inorganic growth. Red Violet, Inc. filed for a mixed shelf registration in November 2025, allowing for the potential sale of up to $150,000,000 in various securities. The stated intent for these proceeds includes funding possible acquisitions or business expansion. That's a war chest ready for strategic moves.

Red Violet, Inc. (RDVT) - Canvas Business Model: Key Activities

You're looking at the core engine of Red Violet, Inc. (RDVT), the activities that turn raw data into the intelligence their customers pay for. It's all about the platform, CORE™, and the scale they can manage.

Data aggregation and real-time identity graph maintenance

This is the foundation. Red Violet, Inc. ingests data from massive public-record, proprietary, and publicly-available sources. They use proprietary algorithms and analytic processes to structure and unify this data, resolving unique identities to create an actionable, real-time view. This activity directly supports their CORE™ platform, which is designed to handle ingestion at a massive scale in real-time, irrespective of data structure. The efficiency of this process is reflected in their gross margin, which hit 73% in the third quarter of 2025, up from 70% in the third quarter of 2024. Also, contractual revenue, which relies on this stable data foundation, represented 75% of total revenue in Q3 2025.

Proprietary technology development, including AI/ML for intelligence

The company is committed to developing innovative technology, specifically advancing its business through its AI/ML-driven identity intelligence platform. Management signaled ongoing investments in go-to-market capabilities and AI initiatives in late 2025. This development work is what allows them to achieve high gross margins, as the platform is designed for scalability. The adjusted gross profit for the third quarter of 2025 was $19.4 million, yielding an adjusted gross margin of 84%. This high margin demonstrates the operating leverage gained from their proprietary, scalable technology base.

Enterprise sales and high-touch customer onboarding for IDI

Moving this intelligence to the customer requires a focused sales effort, especially for the IDI (Identity Intelligence) segment. The company added 304 customers to its IDI platform during the third quarter of 2025. This activity is crucial for recurring revenue, as evidenced by the 96% gross revenue retention reported for Q3 2025. The onboarding process for these enterprise and public sector clients is key to realizing the value of the platform. The company's CEO described the enterprise pipeline as the strongest they've seen to date, suggesting sales activity is ramping up significantly.

Here's a look at the customer adoption velocity across the first three quarters of 2025:

Securing and integrating new data sources for competitive advantage

The competitive edge depends on the continuous enrichment of the identity graph. While specific figures on the number of new data sources integrated in 2025 weren't explicitly detailed, the strategy centers on blending public-record, proprietary, and publicly-available data. The ability to ingest data at massive scale in real-time, regardless of form, is a stated requirement for the business to function across multiple channels. This activity is implicitly tied to maintaining the high adjusted gross margin of 84% seen in Q3 2025, suggesting the cost of data acquisition and processing is well-managed relative to the revenue generated.

Pursuing strategic mergers and acquisitions (M&A)

The company's strategic approach includes pursuing M&A, though specific transaction details for 2025 were not provided in the latest reports. The focus in the latter half of 2025 was on internal execution and capitalizing on the existing pipeline, with management expressing confidence in closing out 2025 as another record year. The financial activity that does show up is the commitment to shareholder value through capital returns, as Red Violet, Inc. announced a $15.0 million increase to its Stock Repurchase Program in Q3 2025, bringing the total authorized to $30.0 million.

• Net income for Q3 2025 was $4.2 million, a 145% increase year-over-year.
• Net cash provided by operating activities for Q3 2025 was $10.2 million, a 40% increase year-over-year.
• Cash and cash equivalents stood at $45.4 million as of September 30, 2025.

Finance: draft 13-week cash view by Friday.

Red Violet, Inc. (RDVT) - Canvas Business Model: Key Resources

You're looking at the core assets that power Red Violet, Inc.'s (RDVT) entire operation as of late 2025. These aren't just line items; they are the engines driving their identity intelligence advantage.

CORE™ cloud-native, AI/ML-driven identity intelligence platform

The CORE™ platform is the foundational technology. It's cloud-native, meaning it's built for scale and agility, and it uses Artificial Intelligence and Machine Learning (AI/ML) to do the heavy lifting. This platform assimilates, structures, and unifies billions of disparate records to create comprehensive identity intelligence views in real-time. It's purpose-built for the enterprise but flexible enough for organizations of all sizes, bringing clarity to massive datasets by transforming raw data into actionable intelligence. Its speed, power, extensibility, and scalability are what set it apart in the market.

Massive, differentiated data assets (public, proprietary, and publicly-available)

Data is the lifeblood here, honestly. Red Violet, Inc. leverages a massive data repository that is a key differentiator. This asset isn't just one type of data; it's a fusion of public record data, data they acquire, and data they generate internally. They use proprietary algorithms and analytic processes to unify these assets, revealing connections between data points that others miss. This results in a differentiated information set essential for their risk management solutions.

Here's a quick look at the financial strength supporting continued investment in these resources:

Highly skilled data scientists and software engineering talent

You can't run an AI/ML platform without top-tier people. Red Violet, Inc. is dedicated to hiring and retaining a passionate team focused on data science and technology. These professionals are responsible for designing, developing, and debugging the proprietary code bases used for complex data fusion and entity resolution algorithms sitting at the core of their offerings. They are expected to write scalable, production-facing code, often requiring expertise in areas like parallel programming and working with large data sets for modeling.

The focus on talent supports their strategic initiatives:

• Continued investment in product innovation.
• Expansion of enterprise-wide AI initiatives.
• Driving operational efficiency and margin expansion.

Contractual relationships with key data suppliers

While the internal data assets are huge, external contracts secure necessary inputs. These relationships are critical for maintaining the breadth and depth of the data feeding the CORE™ platform. The strength of their recurring revenue model is tied directly to the stickiness of these relationships and the value delivered.

For instance, their FOREWARN® service shows strong contractual commitment:

• Over 590 REALTOR® Associations throughout the U.S. are contracted to use FOREWARN.
• Contractually driven revenue represented 75% of revenue in Q3 2025.
• Gross revenue retention stood strong at 96%.

Cash and cash equivalents of $45.4 million as of September 30, 2025

A strong balance sheet provides the flexibility to invest in the other key resources-technology and talent-and to return capital to shareholders. The cash position as of the end of the third quarter of 2025 was $45.4 million. This liquidity, combined with a record $10.2 million in net cash provided by operating activities for the quarter, gives Red Violet, Inc. significant capital allocation flexibility. Finance: draft 13-week cash view by Friday.

Red Violet, Inc. (RDVT) - Canvas Business Model: Value Propositions

You're looking at the core reasons why organizations pay Red Violet, Inc. for its data intelligence; these are the specific problems they solve right now.

Red Violet, Inc. delivers the capability for real-time identity verification and location of people, businesses, and assets through its CORE platform. This intelligence is foundational for many client workflows. The platform transforms massive datasets into clarity, which is essential for making decisions in milliseconds.

A major value proposition is fraud detection and prevention, supporting financial and corporate risk management needs across various industries. This focus on actionable intelligence is what powers their solutions to help clients operate with confidence. The company's success in this area is reflected in its financial structure; for the three months ended September 30, 2025, the 84% adjusted gross margin shows the high-margin nature of these operationally critical data services.

For investigative needs, the idiCORE™ solution is a key offering. This is used for due diligence and debt recovery processes. By the third quarter of 2025, Red Violet, Inc. had a total of 9,853 idiCORE customers, adding 304 new customers in that quarter alone. That's a defintely solid base for an enterprise-focused product.

Instant risk mitigation for real estate professionals comes via the FOREWARN® application. This app gives knowledge right before face-to-face engagement. As of the end of the third quarter of 2025, the user base for FOREWARN® reached 372,209 total users, up by 25,538 users during that quarter. Plus, over 590 REALTOR® Associations throughout the U.S. are contracted to use it.

Here's a quick look at the scale of customer adoption across the main platforms as of the third quarter ending September 30, 2025:

The financial underpinning of these value propositions is their high-margin nature. The company's adjusted gross margin for Q3 2025 was 84%, up from 83% in the prior year period. This high margin supports the overall financial health, evidenced by a Q3 2025 total revenue of $23.1 million and net cash provided by operating activities reaching a record $10.2 million in that same quarter.

The core intelligence platform, CORE™, enables these specific outcomes:

• Identity verification and authentication.
• Risk mitigation across workflows.
• Fraud detection and prevention.
• Due diligence support.

Red Violet, Inc. (RDVT) - Canvas Business Model: Customer Relationships

You're looking at how Red Violet, Inc. (RDVT) keeps its customers locked in and growing their spend. It's a mix of high-touch service for big clients and self-service for the masses. This approach is clearly working, given their financial performance reported through the third quarter of 2025.

The relationship strategy varies significantly between the Identity Data Intelligence (IDI) segment, which serves enterprises, and the FOREWARN platform, which targets individual real estate professionals. For the enterprise side, the focus is on deep integration and dedicated support. For FOREWARN, it's about massive, easy adoption through associations.

Here's a look at the customer base metrics that define these relationships as of the second quarter of 2025, showing the scale they achieved:

• Dedicated account management for large enterprise clients
• High-touch sales and support for IDI's 9,549 billable customers
• Automated, app-based self-service for FOREWARN's 346,671 users
• High revenue retention rate (96% as of last quarter)
• Embedded solutions that become critical to customer workflows

The stickiness of the offering is a key relationship indicator. When solutions become embedded, they move from being a tool to being part of the daily operational fabric. This reliance is what drives the strong retention figures. For instance, the company noted that once solutions are incorporated into customer workflows, they become critical to daily operations, and customers continue to increase usage over time. This is evidenced by their strong revenue retention.

To give you a clearer picture of the customer base progression leading into late 2025, here are the latest reported figures from the third quarter of 2025:

The IDI segment focuses on winning higher-tier customers at an accelerated pace. Management highlighted that total customer spend is outpacing prior-year levels across key revenue cohorts, specifically mentioning those spending between $10,000 to $25,000, $25,000 to $100,000, and over $100,000 in trailing twelve-month revenue. This shows the high-touch dedicated account management is successfully driving expansion within existing accounts.

For the FOREWARN side, the relationship is scaled through partnerships. As of the third quarter of 2025, over 590 REALTOR Associations throughout the U.S. are contracted to use the service, often providing it to their members at no additional cost, which drives that massive user count through automated, app-based onboarding. This strategy leverages organizational contracts to create a broad, self-serve user base.

The commitment to high-value customers is also reflected in the financial discipline supporting these relationships. For the three months ended September 30, 2025, Red Violet, Inc. reported a record $10.2 million in cash flow from operations, which is a strong signal that the high-value, embedded nature of their solutions is translating directly into profitable cash generation.

Red Violet, Inc. (RDVT) - Canvas Business Model: Channels

You're looking at how Red Violet, Inc. gets its identity intelligence solutions into the hands of its customers across its two main brands, IDI™ and FOREWARN®. The channel strategy is clearly segmented by product line, targeting enterprise/API integration for IDI and association/mobile for FOREWARN.

The overall financial performance for the period ending September 30, 2025, shows total revenue hitting a record of $23.1 million for the quarter. This revenue is driven through these distinct delivery mechanisms.

Direct Enterprise Sales Force for IDI™ Platform Access

The IDI™ platform, which powers solutions for risk mitigation, fraud detection, and customer acquisition across diverse industries, relies on a direct sales approach for enterprise clients. These are typically organizations looking for large-scale integration of identity intelligence into their workflows. The platform is purpose-built for the enterprise, though flexible for organizations of all sizes. The success of this channel is reflected in the customer count for the IDI segment.

• IDI™ billable customers as of June 30, 2025: 9,549.
• IDI™ added 308 customers during the second quarter of 2025.

API and Batch Data Delivery Methods for Large-Scale Integration

For the enterprise customers accessing the IDI™ platform, the primary delivery mechanism is through technology integration, which means using API (Application Programming Interface) calls for real-time lookups or batch data delivery for bulk processing. This method is essential for clients needing to process high volumes of identity verification or due diligence checks within their own systems. Recent strategic integrations, such as with platforms like TazWorks™, show this channel is actively expanding into specific verticals like background screening.

FOREWARN® Mobile Application for Real Estate Professionals

The FOREWARN® solution is specifically tailored for the real estate industry, focusing on agent safety and proactive risk mitigation. The core channel here is the mobile application, which allows real estate professionals to verify identities and check criminal histories using just a phone number. Adoption in this channel is tracked by the number of unique users.

• FOREWARN® users as of September 30, 2025: 372,209.
• FOREWARN® added 25,538 users during the third quarter of 2025.

Channel Partners, Specifically REALTOR® Associations, for FOREWARN Distribution

A critical distribution channel for FOREWARN® involves direct partnerships with REALTOR® Associations across the U.S. These associations contract with Red Violet, Inc. to offer FOREWARN® as a member benefit, often at no extra cost to the individual agent. This partnership model drives rapid, large-scale user adoption.

Online Portal Access for Transactional Customers

While API/batch is key for enterprise IDI™, and the mobile app is key for FOREWARN®, there is also access provided through an online portal. This likely serves transactional customers or smaller organizations that prefer a web interface over direct system integration for identity verification and risk assessment needs. The CORE™ platform supports organizations of all sizes, suggesting this portal is a flexible entry point.

Red Violet, Inc. (RDVT) - Canvas Business Model: Customer Segments

You're looking at the core user base for Red Violet, Inc. (RDVT) as of late 2025, which is heavily segmented by the application of their identity intelligence across various high-stakes industries. The company's strategy focuses on delivering real-time data through its idiCORE and FOREWARN platforms to these distinct groups, driving the 75% of total revenue derived from predictable Pricing Contracts as of the third quarter of 2025.

The customer base is diverse, but the data points to specific concentrations that align with the required segments. For instance, the FOREWARN platform is explicitly tied to the real estate vertical, while the broader idiCORE solution serves enterprise clients across finance, government, and legal sectors.

Here is a breakdown of the key customer segments and the latest available metrics reflecting their engagement with Red Violet, Inc. (RDVT) as of the third quarter of 2025:

The company is clearly seeing growth across its entire customer base, which is a positive indicator for the recurring revenue stream derived from Pricing Contracts.

You'll want to pay close attention to the high-value customers, as Red Violet, Inc. (RDVT) management specifically noted performance in these tiers. While exact dollar amounts for each tier aren't public, the trend is what matters here.

• Financial services, insurance, and corporate risk management
• Law enforcement, government, and public sector agencies
• Real estate professionals and REALTOR® Associations
• Collections, legal, and investigative firms

The focus on high-tier customers shows the stickiness of the platform for the largest spenders. As of the second quarter of 2025, total customer spend was outpacing prior-year levels across all key revenue cohorts, which included:

• $10,000 to $25,000 in trailing twelve-month revenue
• $25,000 to $100,000 in trailing twelve-month revenue
• Over $100,000 in trailing twelve-month revenue

This growth in the over $100,000 annual spending group is a strong signal of enterprise adoption and expansion within the largest accounts. The total revenue for Q3 2025 hit a record of $23.1 million, up 21% year-over-year, showing broad-based demand across these segments. The company added 304 billable customers sequentially to the IDI platform in Q3 2025, ending the quarter at 9,853 total IDI customers. That's solid traction for the enterprise side of the business.

Red Violet, Inc. (RDVT) - Canvas Business Model: Cost Structure

You're looking at the major drains on Red Violet, Inc. (RDVT)'s top line, and honestly, data sourcing is the biggest factor here. This is where the rubber meets the road for any identity intelligence firm.

Data Acquisition and Licensing Costs

The cost structure is heavily weighted by the need to feed the CORE™ platform. You must account for the concentration risk in data sourcing. For the year ended December 31, 2023, the largest single data supplier accounted for 49% of total data acquisition costs. The outline point regarding the 48% figure is historically accurate for 2022 data acquisition costs, showing a persistent reliance on a few key partners for foundational data sets. This is a critical input cost that directly impacts gross margin.

• Cost of revenue (exclusive of depreciation and amortization) for Q1 2025 was $3.7 million.
• Cost of revenue (exclusive of depreciation and amortization) for Q2 2025 was $3.5 million.
• Total cost of revenue (exclusive of depreciation and amortization) for the six months ended June 30, 2025, totaled $7,162 thousand.

Technology Development and R&D Investment

Red Violet, Inc. (RDVT) must continuously invest to maintain its cloud-native advantage over legacy competitors. This investment in technology development and Research and Development (R&D) is a non-negotiable fixed cost to keep the platform current and innovative. While specific R&D dollar amounts for the full year 2025 aren't immediately available in the latest filings, the commitment is evident in the ongoing platform enhancements and the associated non-cash technology amortization.

Sales and Marketing Expenses

You see the growth engine running hot in the first half of 2025, which drives up the Sales and marketing expenses. These are the costs associated with acquiring the 9,549 IDI customers and 346,671 FOREWARN users by the end of Q2 2025. This spending is essential for scaling the customer base.

For the first half of 2025 (six months ended June 30, 2025), Sales and marketing expenses hit $11,029 thousand. To break that down by quarter:

• Q1 2025 Sales and marketing expenses were $5,407 thousand.
• Q2 2025 Sales and marketing expenses were $5,622 thousand.

Personnel-Related Expenses for G&A and Sales

A significant portion of the increase in operating expenses is tied directly to headcount. You can see this clearly in the commentary around the quarterly results. Personnel costs are the primary driver behind the rise in both selling and administrative overhead.

For the second quarter of 2025, General and administrative expenses were $7,253 thousand, reflecting higher personnel-related costs. This followed Q1 2025 G&A of $6,174 thousand. Similarly, the Q2 2025 Sales and marketing expense increase of 28% over the prior year was driven primarily by higher personnel-related expenses.

Step-Fixed Cost Model and Contribution Margin

This is the key to Red Violet, Inc. (RDVT)'s profitability story. The business model is structured as a step-fixed cost model. What this estimate hides is that once the fixed technology and data infrastructure costs are covered, the marginal cost to service an additional customer or transaction is very low. This structure is what allows the company to achieve a nearly 100% contribution margin on incremental revenue. This operating leverage is why Adjusted EBITDA margin hit 39% in Q3 2025, up from 35% in Q2 2025.

Red Violet, Inc. (RDVT) - Canvas Business Model: Revenue Streams

You're looking at how Red Violet, Inc. (RDVT) actually brings in the money, and it's heavily weighted toward reliable, recurring income. The business model leans hard on securing customers with long-term commitments, which is smart for planning. Honestly, the predictability here is a key feature of their structure.

The core of the revenue engine comes from Pricing Contracts, which represent about 77% of the total revenue, fitting nicely within the expected 74-78% range. These are generally annual or longer-term agreements that come with auto-renewal, giving Red Violet, Inc. (RDVT) a solid, predictable base to build upon. The other component is the Transactional Customer revenue, which is pay-per-use access for customers who don't have a contract; this stream is naturally more variable.

Here's a quick look at how those two streams break down based on recent reporting:

Looking at the top line, the Total Trailing Twelve-Month (TTM) revenue as of late 2025 stands at $86.42 million. That's a solid number for a company of this size. Furthermore, the expectation for the Full-year 2025 revenue is projected to land around $87.62 million. If you compare that to the Q3 2025 revenue of $23.08 million, you can see the momentum they were carrying into the end of the year.

The final piece of the puzzle is growth from the existing base. You'll want to track the Revenue expansion from existing customers, which happens through upselling them to higher-tier contracts. For instance, Q1 2025 revenue was $22 million, which was up 26% year-over-year, suggesting that both new business and expansion within current accounts are working well. If onboarding takes 14+ days, churn risk rises, but the growth figures suggest they are managing that well for now.

• Pricing Contracts: 74-78% of total revenue.
• Transactional Customer revenue: Pay-per-use access.
• TTM revenue (as of Dec 2025): $86.42 million.
• Full-year 2025 revenue expectation: $87.62 million.
• Revenue expansion via upselling higher-tier contracts.

Finance: draft 13-week cash view by Friday.