# 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.
- Title: Red Violet's record quarter comes with a catch · Yahoo Finance
- Summary: 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…
- Keywords: earnings, data, small caps, dilution, short interest, business, finance, Red, Violet's, record, quarter, comes
- Source: Yahoo Finance — https://finance.yahoo.com/markets/stocks/articles/red-violet-rdvt-turns-record-133658483.html
- Published: 2026-09-13T13:36:58+00:00
- Read time: 1 min
- Topics: earnings, data, small caps, dilution, short interest, business, 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.
## Key takeaway

Red Violet earned a genuinely strong quarter, but the $160M cash pile now has to prove it was worth the dilution.