What changed in this filing

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Item 1. Financial Statements

2025-08-06 compared with 2025-05-07 · 109 added, 65 removed, 275 unchanged (39% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share data)

March 31, 2025

June 30, 2025

December 31, 2024

2 unchanged sentences

Accounts receivable, net of allowance for doubtful accounts of $ 179 and $ 188 as of

March 31, 2025 and December 31, 2024, respectively

June 30, 2025 and December 31, 2024, respectively

Prepaid expenses and other current assets

18 unchanged sentences

Preferred stock—$ 0.001 par value, 10,000,000 shares authorized, and 0 shares

issued and outstanding, as of March 31, 2025 and December 31, 2024

issued and outstanding, as of June 30, 2025 and December 31, 2024

Common stock—$ 0.001 par value, 200,000,000 shares authorized, 13,976,841 and

13,936,329 shares issued and outstanding, as of March 31, 2025 and

13,936,329 shares issued and outstanding, as of June 30, 2025 and

December 31, 2024

7 unchanged sentences

(Amounts in thousands, except share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Costs and expenses:

15 unchanged sentences

Treasury stock

Additional paid-in

Retained earnings

(accumulated deficit)

Balance at March 31, 2024

Vesting of restricted stock units

Increase in treasury stock resulting

from shares withheld to cover

statutory taxes

Common stock repurchased

Retirement of treasury stock

Share-based compensation

Balance at June 30, 2024

Balance at March 31, 2025

Vesting of restricted stock units

Increase in treasury stock resulting

from shares withheld to cover

statutory taxes

Retirement of treasury stock

Share-based compensation

Balance at June 30, 2025

Treasury stock

Retained earnings

paid-in capital

8 unchanged sentences

Share-based compensation

Balance at March 31, 2024

Balance at June 30, 2024

Balance at December 31, 2024

5 unchanged sentences

Share-based compensation

Balance at March 31, 2025

Balance at June 30, 2025

See notes to condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

24 unchanged sentences

Net cash used in financing activities

Net (decrease) increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

5 unchanged sentences

Retirement of treasury stock

Right-of-use assets obtained in exchange of operating lease liabilities

See notes to condensed consolidated financial statements.

29 unchanged sentences

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and is calculated using the treasury stock method for unvested shares.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except share data)

1 unchanged sentence

Earnings per share:

(1) For the three months ended March 31, 2025 and 2024, diluted weighted average shares outstanding are calculated by the inclusion of unvested restricted stock units ("RSUs").

(1) For the three and six months ended June 30, 2025 and 2024, diluted weighted average shares outstanding are calculated by the inclusion of unvested restricted stock units ("RSUs").

Intangible assets, net

Intangible assets other than goodwill consist of the following:

March 31, 2025

June 30, 2025

December 31, 2024

7 unchanged sentences

The gross carrying amount of acquired intangible assets reflects the acquisition cost of certain data assets for which the Company has obtained perpetual usage rights.

Amortization expenses of $ 2,500 and $ 2,214 for the three months ended March 31, 2025 and 2024, respectively, were included in depreciation and amortization expense.

As of March 31, 2025, intangible assets of $ 6,692 , included in the gross carrying amounts of software developed for internal use, have not started amortization, as they are not ready for their intended use.

The Company capitalized costs of intangible assets of $ 3,991 and $ 2,773 during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, estimated amortization expense related to the Company’s intangible assets for the remainder of 2025 through 2030 and thereafter are as follows:

Amortization expenses of $ 2,595 and $ 2,322 for the three months ended June 30, 2025 and 2024, respectively, and $ 5,095 and $ 4,536 for the six months ended June 30, 2025 and 2024, respectively, were included in depreciation and amortization expense.

As of June 30, 2025, intangible assets of $ 3,766 , included in the gross carrying amounts of software developed for internal use, have not yet commenced amortization, as they are not ready for their intended use.

The Company capitalized intangible asset costs of $ 2,784 and $ 2,847 during the three months ended June 30, 2025 and 2024, respectively , and $ 6,775 and $ 5,620 during the six months ended June 30, 2025 and 2024, respectively .

As of June 30, 2025, estimated amortization expense related to the Company’s intangible assets for the remainder of 2025 through 2030 and thereafter are as follows:

(In thousands)

March 31, 2025

June 30, 2025

Remainder of 2025

1 unchanged sentence

Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination.

As of March 31, 2025 and December 31, 2024, the balance of goodwill of $ 5,227 was as a result of the acquisition of Interactive Data, LLC, a wholly-owned subsidiary of red violet, effective on October 2, 2014.

As of June 30, 2025 and December 31, 2024, the balance of goodwill of $ 5,227 was as a result of the acquisition of Interactive Data, LLC, a wholly-owned subsidiary of red violet, effective on October 2, 2014.

In accordance with ASC 350, “Intangibles - Goodwill and Other,” goodwill is tested at least annually for impairment, or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its fair value exceeds the carrying value.

The measurement date of the Company’s annual goodwill impairment test is October 1 .

The Company did no t record a goodwill impairment loss during the three months ended March 31, 2025 and 2024, and there was no accumulated goodwill impairment loss as of March 31, 2025.

The Company did no t record a goodwill impairment loss during the three and six months ended June 30, 2025 and 2024, and there was no accumulated goodwill impairment loss as of June 30, 2025.

Revenue recognition

9 unchanged sentences

In some arrangements, a right to consideration for the Company's performance under the customer contract may occur before invoicing to the customer, resulting in an unbilled accounts receivable.

As of March 31, 2025, the current and noncurrent portion unbilled accounts receivable of $ 1,334 and $ 1,484 , respectively, were included within accounts receivable and other noncurrent assets, respectively, on the condensed consolidated balance sheets .

As of June 30, 2025, the current and noncurrent portion unbilled accounts receivable of $ 1,344 and $ 1,241 , respectively, were included within accounts receivable and other noncurrent assets, respectively, on the condensed consolidated balance sheets .

As of December 31, 2024, the current and noncurrent portion unbilled accounts receivable of $ 937 and $ 1,080 , respectively, were included within accounts receivable and other noncurrent assets, respectively , on the consolidated balance sheets.

The Company's revenue arrangements do not contain significant financing components.

For the three months ended March 31, 2025 and 2024, 74 % and 78 % of total revenue was attributable to customers with pricing contracts, respectively, versus 26 % and 22 % attributable to transactional customers, respectively.

For the three months ended June 30, 2025 and 2024, 77 % and 74 % of total revenue was attributable to customers with pricing contracts, respectively, versus 23 % and 26 % attributable to transactional customers, respectively.

For the six months ended June 30, 2025 and 2024, 76 % of total revenue was attributable to customers with pricing contracts, versus 24 % attributable to transactional customers.

Pricing contracts are generally annual contracts or longer, with auto renewal.

If a customer pays consideration before the Company transfers services to the customer, those amounts are classified as deferred revenue.

As of March 31, 2025 and December 31, 2024, the balance of deferred revenue was $ 754 and $ 712 , respectively, all of which is expected to be realized in the next 12 months.

In relation to the deferred revenue balance as of December 31, 2024, $ 311 was recognized into revenue during the three months ended March 31, 2025.

As of March 31, 2025, $ 22,035 of revenue is expected to be recognized in the future for performance obligations that are unsatisfied or partially unsatisfied , related to pricing contracts that have a term of more than 12 months, of which, $ 8,888 of revenue will be recognized in the remainder of 2025, $ 7,800 in 2026, $ 4,322 in 2027, $ 875 in 2028, $ 145 in 2029, and $ 5 in 2030.

As of June 30, 2025 and December 31, 2024, the balance of deferred revenue was $ 806 and $ 712 , respectively, all of which is expected to be realized in the next 12 months.

In relation to the deferred revenue balance as of December 31, 2024, $ 183 and $ 494 was recognized into revenue during the three and six months ended June 30, 2025, respectively.

As of June 30, 2025, $ 19,931 of revenue is expected to be recognized in the future for performance obligations that are unsatisfied or partially unsatisfied , related to pricing contracts that have a term of more than 12 months, of which, $ 5,902 of revenue will be recognized in the remainder of 2025, $ 8,113 in 2026, $ 4,641 in 2027, $ 1,083 in 2028, $ 187 in 2029, and $ 5 in 2030.

The actual timing of recognition may vary due to factors outside of the Company’s control.

6 unchanged sentences

In each quarter, the Company updates its estimate of the annual effective tax rate, and if its estimated annual tax rate changes, the Company makes a cumulative adjustment in that quarter.

During the third quarter of 2023, the Company released the valuation allowance previously recorded on its deferred tax assets.

The Company concluded that, due to its established historical cumulative positive income before income taxes plus permanent differences for the recent years, projections of future taxable income, and the reversal of taxable temporary differences, the realization of deferred tax assets as of March 31, 2025 was more likely than not.

The Company’s effective income tax rate was 24 % for the three months ended March 31, 2025 and 2024, differing from the U.S.

corporate statutory federal income tax rate of 21 %.

T he differences for the three months ended March 31, 2025 and 2024 were primarily the effect of state income taxes and certain nondeductible permanent differences, partially offset by the utilization of research and development tax credits.

The Company’s effective income tax rate was 13 % and 22 % for the three months ended June 30, 2025 and 2024, respectively, and 19 % and 23 % for the six months ended June 30, 2025 and 2024, respectively, differing from the U.S.

statutory corporate federal income tax rate of 21 %.

For the three and six months ended June 30, 2025, the effective income tax rates were lower than the statutory rate, primarily attributable to the benefit of research and development tax credits, partially offset by state income taxes and nondeductible permanent differences.

In contrast, for the three and six months ended June 30, 2024, the effective income tax rates were higher than the statutory rate, primarily driven by state income taxes and nondeductible permanent differences, partially offset by the benefit of research and development tax credits.

The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date.

3 unchanged sentences

Due to the existence of net operating loss carryforwards since inception, all of the Company’s income tax filings remain open for tax examinations.

The Company does no t have any material unrecognized tax benefits as of March 31, 2025 and December 31, 2024.

The Company does no t have any material unrecognized tax benefits as of June 30, 2025 and December 31, 2024.

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted into law.

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including the full expensing of domestic research and experimentation expenditures.

ASC 740, “ Income Taxes ”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted.

The Company is currently evaluating the impact of the OBBBA on its financial statements and does not expect it to have a material impact on the Company’s effective tax rate.

Shareholders' equity

Common stock and treasury stock

As of March 31, 2025 and December 31, 2024, the number of issued shares of common stock was 13,950,797 and 13,936,329 , respectively.

As of June 30, 2025 and December 31, 2024, the number of issued shares of common stock was 13,976,841 and 13,936,329 , respectively.

The Company held no shares of treasury stock as of either date.

9 unchanged sentences

Subsequently on June 3, 2020 and May 25, 2022, the Company’s stockholders approved amendments to the 2018 Plan to increase the number of shares of common stock authorized for issuance under the 2018 Plan to 4,500,000 shares and 6,500,000 shares, respectively.

On April 17, 2025, the Board of Directors of the Company approved, subject to stockholder approval at the Company's 2025 Annual Meeting, an amendment and restatement to the 2018 Plan to, among other things, further increase the number of shares of common stock authorized for issuance under the 2018 Plan from 6,500,000 shares to 7,500,000 shares.

The primary purpose of the 2018 Plan, as amended, is to attract, retain, reward and motivate certain individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such individuals and the stockholders of the Company.

As of March 31, 2025, there were 1,655,452 shares of common stock available for future issuance under the 2018 Plan, as amended.

To date, all stock incentives issued under the 2018 Plan, as amended, have been in the form of RSUs.

RSUs granted under the 2018 Plan, as amended, vest and settle upon the satisfaction of a time-based condition or with both time- and performance-based conditions.

On June 10, 2025, the Company's stockholders approved an amendment and restatement to the 2018 Plan (the "Amended and Restated Plan") to, among other things, further increase the number of shares of common stock authorized for issuance under the 2018 Plan from 6,500,000 shares to 7,500,000 shares.

The primary purpose of the Amended and Restated Plan is to attract, retain, reward and motivate certain individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such individuals and the stockholders of the Company.

As of June 30, 2025, there were 2,657,597 shares of common stock available for future issuance under the Amended and Restated Plan.

To date, all stock incentives issued under the Amended and Restated Plan have been in the form of RSUs.

RSUs granted under the Amended and Restated Plan vest and settle upon the satisfaction of a time-based condition or with both time- and performance-based conditions.

The time-based condition for these awards is generally satisfied over three or four years with annual vesting.

Details of unvested RSU activity during the three months ended March 31, 2025 were as follows:

Details of unvested RSU activity during the six months ended June 30, 2025 were as follows:

Number of units

4 unchanged sentences

Withheld as treasury stock (2)

Unvested as of March 31, 2025

(1) During the three months ended March 31, 2025, the Company granted an aggregate of 95,650 RSUs to certain employees and directors at grant date fair values ranging from $ 34.18 to $ 38.72 per share, with a vesting period ranging from three to four years .

Unvested as of June 30, 2025 (3)

(1) During the six months ended June 30, 2025, the Company granted an aggregate of 107,050 RSUs to certain employees and directors at grant date fair values ranging from $ 34.18 to $ 49.67 per share, with a vesting period ranging from three to four years .

(2) Withheld as treasury stock represents shares withheld to pay statutory taxes upon the vesting of RSUs.

Refer to Note 7 for details.

As of March 31, 2025, unrecognized share-based compensation expense associated with the granted RSUs amounted to $ 17,364 , which is expected to be recognized over a remaining weighted average period of 2.7 years.

Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

(3) On March 18, 2024, the Company granted 130,000 RSUs, subject to performance-based vesting conditions, to a non-executive employee, at a grant date fair value of $ 18.30 per share.

Such RSU grant will not vest unless and until the Company has achieved certain revenue for a portion of its business prior to December 31, 2030, the final achievement date deadline.

As of June 30, 2025, the Company determined that it is not probable that the performance criteria associated with 70,000 of the 130,000 RSUs will be met.

Accordingly, no share-based compensation expense has been recognized for these RSUs.

The 70,000 RSUs remain unvested and were included in "Unvested as of June 30, 2025" in the table above.

As of June 30, 2025, unrecognized share-based compensation expense associated with the granted RSUs amounted to $ 15,286 , which is expected to be recognized over a remaining weighted average period of 2.5 years.

Share-based compensation was allocated to the following accounts in the condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

4 unchanged sentences

The Company leases its corporate headquarters of 21,020 rentable square feet in accordance with a non-cancellable operating lease agreement as amended and effective in January 2017, and the Company entered into a further amendment on September 20, 2023 to exercise the extension option for an additional 60 months through June 30, 2029, with an option to further extend for an additional 60 months .

The Company also leases an additional office space of 6,003 rentable square feet in accordance with a non-cancellable operating lease agreement entered into in April 2017, which expired in March 2025.

The Company also leases an additional office space of 6,003 rentable square feet for its Seattle office in accordance with a non-cancellable operating lease agreement entered into in April 2017, which expired in March 2025.

The extension options of such agreements were not included in the determination of the lease terms.

On December 20, 2024, the Company entered into a non-cancellable 80-month operating lease agreement for its new Seattle office space of 6,709 rentable square feet (the "New Seattle Lease Agreement"), with the lease term preliminarily set to commence on May 1, 2025.

For the three months ended March 31, 2025 and 2024, a summary of the Company’s lease information is shown below:

Three Months Ended March 31,

For the three and six months ended June 30, 2025 and 2024, a summary of the Company’s lease information is shown below:

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

2 unchanged sentences

Cash paid for operating leases

As of March 31, 2025, the weighted average remaining operating lease term was 4.2 years.

As of March 31, 2025, scheduled future maturities and present value of the operating lease liabilities are as follows:

Right-of-use assets obtained in exchange for new

operating lease liabilities (1)

(1) The New Seattle Lease Agreement resulted in the recognition of $ 1,153 in right-of-use assets obtained in exchange for operating lease liabilities as of May 1, 2025.

The Company applied a 6.0 % discount rate, its estimated incremental borrowing rate for similar secured assets, to determine the present value of the lease payments, as the implicit rate in the lease is not readily determinable.

The discount rate was based on information available as of the Commencement Date.

As of June 30, 2025 and December 31, 2024, the weighted-average remaining term of the Company's operating leases was 5.0 years and 4.3 years, respectively, and the weighted-average discount rate used to measure the operating lease liabilities was 8.36 % and 9.94 %, respectively.

As of June 30, 2025, scheduled future maturities and present value of the operating lease liabilities are as follows:

(In thousands)

March 31, 2025

June 30, 2025

Remainder of 2025

1 unchanged sentence

Total maturities

Lease not yet commenced (1)

Total maturities, excluding lease not yet commenced

Present value included in consolidated balance sheet:

Present value included in condensed consolidated balance sheet:

Current portion of operating lease liabilities

1 unchanged sentence

Total operating lease liabilities

Difference between the maturities, excluding lease not yet commenced, and

related present value of operating lease liabilities

(1) On December 20, 2024, the Company entered into the New Seattle Lease Agreement, with the lease term preliminarily set to commence on May 1, 2025, at which point the Company will recognize a right-of-use asset and a corresponding lease liability on its consolidated balance sheet under ASC 842.

The right-of-use asset and lease liability will be determined based on the pertinent information available as of the commencement date.

As of March 31, 2025, the total undiscounted future lease payments for this lease are included into total maturities as presented in the table above, but its lease liability has not been recognized.

Difference between the maturities and related present value of operating lease liabilities

Segment information

4 unchanged sentences

Information about reported segment revenue, segment net income, and significant segment expenses is shown as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in thousands)

Cost of revenue (exclusive of depreciation and amortization)

Cost of revenue (exclusive of depreciation and

amortization)

Personnel-related expenses

10 unchanged sentences

Consolidated net income

(1) Other segment items included in segment net income includes primarily travel and entertainments, acquisition costs, write-off of long-lived assets, and other selling, general and administrative expenses.

(1) Professional fees for the three and six months ended June 30, 2025, include $ 370 of acquisition-related costs incurred in connection with the due diligence of potential strategic targets.

Comparable acquisition-related costs were $ 0 and $ 7 for the three and six months ended June 30, 2024, respectively.

(2) Other segment items include primarily travel and entertainment, write-off of long-lived assets, and other selling, general and administrative expenses.

Commitments and contingencies

(a) Capital commitment

The Company incurred data costs of $ 2,542 and $ 2,434 for the three months ended March 31, 2025 and 2024, respectively , under certain data licensing agreements.

As of March 31, 2025, material capital commitments under certain data licensing agreements were $ 11,533 , shown as follows:

(In thousands)

March 31, 2025

Remainder of 2025

The Company incurred data costs of $ 2,417 and $ 2,406 for the three months ended June 30, 2025 and 2024, respectively , and $ 4,959 and $ 4,840 for the six months ended June 30, 2025 and 2024, respectively, under certain data licensing agreements.

Effective on May 1, 2025, the Company entered into an amendment with its largest data supplier, extending the term of the agreement through April 30, 2031.

The Company may elect to extend the term for an additional twelve months upon written notice to this supplier at least 30 days prior to April 30, 2031.

This data supplier accounted for 46 % of the Company’s total data acquisition costs for the three months ended June 30, 2025 and 2024, and 45 % and 44 % for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, the remaining minimum purchase commitment of this agreement through the end of the term is $ 24.7 million.

In April 2025, the Company entered into a five-year , non-cancellable cloud services agreement with a third-party provider.

1 unchanged sentence

Costs incurred under this agreement are either (i) expensed as infrastructure fees and included in cost of revenue (exclusive of depreciation and amortization) when used in the delivery of our services to customers, or (ii) capitalized as internal-use software costs within intangible assets when consumed in the development or enhancement of the Company’s internal-use software.

As of June 30, 2025, the total material capital commitments under certain data licensing agreements and the cloud service agreement amounted to $ 43,979 , shown as follows:

(In thousands)

June 30, 2025

Remainder of 2025

2030 and thereafter

(b) Contingencies

21 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements