From Yahoo Finance · · 1m 40s
Red Violet's record quarter comes with a catch
A data company doubled its profit, then sold nearly two million new shares and asked holders to wait.
In brief
A data company doubled its profit, then sold nearly two million new shares and asked holders to wait. Red Violet earned a genuinely strong quarter, but the $160M cash pile now has to prove it was worth the dilution. Originally reported by Yahoo Finance.
Growth stopped costing money
Q2 2026 revenue rose 23% to $26.7 million while net income nearly doubled to $5 million. Net margin went from 12% to 19%, which means the growth got cheaper to produce.
Every margin moved up
Gross margin hit 76% from 72%. Adjusted EBITDA jumped 48% to $11.2 million, and operating cash flow rose 42% to a record $10.6 million for the quarter.
Record customer adds
Red Violet signed 447 new IDI customers, a company record, ending at 10,869. FOREWARN added 25,493 real estate agents to reach 443,173 users, with 660 REALTOR Associations under contract.
A $109 million raise
An August offering of 1,916,667 shares brought in about $109 million net. With cash already on hand, the company holds over $160 million and no debt, earmarked for working capital and possible acquisitions.
“the strongest pipeline of strategic initiatives”
Buying back, then selling
Red Violet repurchased 74,500 shares at an average $41.87, then weeks later sold new stock to the public. The release does not say where the new shares were priced.
Dilution at the worst moment
The new shares arrived in the year per-share profit is climbing fastest. Adjusted diluted earnings came in at $0.50 against $0.51 basic, a gap that only widens from here.
Funds hold, shorts pile in
Hedge fund ownership sat flat at 19 holders, neither buying nor leaving. Meanwhile 38.06% of the float is sold short, crowded enough to squeeze hard if sentiment flips.
What it means
Red Violet earned a genuinely strong quarter, but the $160M cash pile now has to prove it was worth the dilution.
