Red Violet (RDVT) 2026 年第三季法說會：營收創新高且 EBITDA 利潤率達 40%

重點摘要

• Red Violet (NASDAQ: RDVT) 公布 2026 年第三季營收達創紀錄的 2,780 萬美元，年增 20%。過去 12 個月累計營收首次突破 1 億美元。
• 調整後 EBITDA 成長 22% 至 1,100 萬美元，利潤率擴增 1 個百分點至 40%。管理層稱此成果為另一個符合「60 法則」（Rule of 60）的季度。
• 營運現金流達到創紀錄的 1,270 萬美元，成長 25%；自由現金流則成長 21%，達到創紀錄的 880 萬美元。
• 合約營收占總營收比重從去年同期的 75% 上升至 78%。總營收留存率維持在 96%，管理層表示並無顯著的單次交易性營收貢獻。
• IDI 新增 383 家計費客戶，總數達 11,252 家。FOREWARN 新增 19,688 名用戶，季末用戶數達 462,861 名，且簽約的房仲協會超過 665 家。
• 在完成募集約 1.09 億美元淨收益的公開發行後，Red Violet 季末持有 1.657 億美元的現金、約當現金及美國公債，且無任何負債。

關鍵財務數據

業務與營運表現

Red Violet 旗下五大營收垂直領域均呈現全面性成長。「金融與企業風險」領域受益於金融服務使用程度深化、進階背景審查產品採用率提高，以及保險業務轉換率改善。

「調查」領域在成長百分比上表現最快。執法機關、私家偵探、保釋擔保以及法律文書送達人均繳出強勁的兩位數成長。全美共有超過 17,000 家執法機關，Red Violet 目前服務的執法機關已超過 1,000 家。

「催收」領域再次繳出強勁成長的季度，主因消費者違約率攀升促使更多帳戶進入催收階段，客戶對 Red Violet 工具的使用量也顯著增加。「新興市場」亦在政府、資產查扣、法律、零售及行銷等領域實現全面成長。

「房地產」領域整體呈現穩健成長，主因 FOREWARN 的兩位數營收擴增抵消了 IDI 房地產業務的疲軟。在房市艱困的大環境下，IDI 房地產業務營收出現高個位數下滑。管理層預期此疲軟態勢將持續至市況好轉。

FOREWARN 推出了「社區警報」（Community Alerts）功能，讓用戶可標記有疑慮的互動並通知更廣泛的在地網絡。該功能包含在現有訂閱中，無需額外付費。管理層亦將居家照護視為 FOREWARN 的潛在拓展機會。

Red Violet 於 10 月簽署了另一份多年期州務卿合約。該公司持續導入執法機關並拓展聯邦政府合作關係，但管理層指出聯邦業務的銷售開發需要較長時間。

風險與關注領域

• IDI 的房地產業務仍面臨房市環境的壓力，且上一季觀察到的初步改善並未延續。
• 聯邦政府的業務機會涉及冗長的關係建立與教育推廣週期。
• 業務銷售、工程技術、基礎設施與產品開發方面的徵才可能會導致單季利潤率出現波動，但管理層預期隨著時間推移，商業模式的營運槓桿將支撐增量利潤率。
• Red Violet 持續評估併購機會，但對策略契合度、綜效及估值維持高標準門檻。管理層表示，若交易無法達到這些標準，寧可放棄收購。

分析師問答重點

大型企業客戶：管理層表示，從年營收貢獻 10,000 至 25,000 美元到超過 100,000 美元的各客戶群體均展現強勁需求。公司觀察到潛在商機管道擴大，且客戶正陸續邁向更高的支出層級。

合約營收：營收佔比提升至 78%，反映出新增的中大型企業客戶簽約，以及在現有組織內的交叉銷售成果。管理層表示，經常性營收基礎使 2026 年第四季和 2027 年的營運能見度更高。

身分編排需求：Red Violet 為數個身分編排平台提供核心支援。管理層表示，這些客戶交易量的成長正在帶動對其身分數據與風險信號的需求。

AI 投資：該公司正在資料整合、風險分析、產品開發與內部自動化方面擴展 AI 與深度學習能力。管理層表示，在調整後 EBITDA 利潤率達到 40% 的同時，AI 已顯著加速新功能與應用的開發。

資本配置與併購：約 1.09 億美元的現金增資擴大了 Red Violet 投資於自身平台、專有數據、市場推廣與併購的能力。潛在標的包括獨特的數據資產、技術，以及 Red Violet 仍處於初期發展階段的垂直領域成熟企業。

完整法說會逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Good day, ladies and gentlemen, and welcome to Red Violet's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded.

I would now like to introduce your host for today's conference, Camilo Ramirez, Senior Vice President of Finance and Investor Relations. Please go ahead.

Camilo Ramirez

Good afternoon, and welcome. Thank you for joining us today to discuss our third quarter 2026 financial results. With me today is Derek Dubner, our Chairman and Chief Executive Officer; and Dan MacLachlan, our Chief Financial Officer. Our call today will begin with comments from Derek and Dan, followed by a question-and-answer session. I would like to remind you that this call is being webcast live and recorded. A replay of the event will be available following the call on our website. To access the webcast, please visit our Investors page on our website, www.redviolet.com.

Before we begin, I would like to advise listeners that certain information discussed by management during this conference call are forward-looking statements covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company's business. The company undertakes no obligation to update the information provided on this call. For a discussion of risks and uncertainties associated with Red Violet's business, I encourage you to review the company's filings with the Securities and Exchange Commission including the most recent annual report on Form 10-K and the subsequent 10-Qs.

During the call, we may present certain non-GAAP financial information relating to adjusted gross profit, adjusted gross margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share and free cash flow. Reconciliations of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measure are provided in the earnings press release issued earlier today. In addition, certain supplemental metrics that are not necessarily derived from any underlying financial statement amounts may be discussed, and these metrics and their definitions can also be found in the earnings press release issued earlier today.

With that, I am pleased to introduce Red Violet's Chairman and Chief Executive Officer, Derek Dubner.

Derek Dubner

Thanks, Camilo. Good afternoon, everyone, and thank you for joining us. We are pleased to report another record quarter for Red Violet with revenue and operating cash flow reaching new highs and trailing 12-month revenue surpassing $100 million for the first time. These results continue a sustained period of strong growth, healthy margins and customer additions at levels near the highest in our history. The expansion of digital interactions and increasingly sophisticated AI-driven fraud are reinforcing the need for trusted identity intelligence, and our differentiated capabilities are translating that need into growing customer adoption. Thank you to our team for the execution that continues to make this possible.

Over the last several quarters, we have spent considerable time discussing who we are, how we built this business, what differentiates our platform, the defensibility of our competitive position and the opportunities that lie ahead. If you are new to our story, I would encourage you to review the transcripts from our last several quarterly earnings calls. Our recent highly successful capital raise gave us additional opportunities to explore those topics with new and existing investors who participated in the offering. We have since had many follow-up meetings with investors, along with introductions to others getting to know Red Violet. Given those extensive discussions, my remarks today will be more concise and focus on the record quarter we just delivered.

Let's briefly run through the numbers. Third quarter revenue increased 20% to a record $27.8 million. Adjusted gross margin was 85%. Adjusted EBITDA increased 22% to $11 million with a margin of 40%. Adjusted net income increased 23% to $7.3 million, which resulted in adjusted earnings of $0.47 per diluted share. We generated a record $12.7 million in operating cash flow, up 25%, that's another Rule of 60 quarter, combining 20% revenue growth with a 40% adjusted EBITDA margin, a strong combination of growth and profitability.

On the customer front, IDI added 383 billable customers during the quarter, bringing our total to 11,252. We continue to onboard customers at a pace at or near our highs and well above what we were seeing a year ago. FOREWARN added 19,688 users, ending the quarter with 462,861 users. Its growing network reinforces its position as the leading proactive safety solution for face-to-face engagement. Growth remained broad-based across the industries we serve with continued strength in financial services, corporate risk, background screening, law enforcement, legal and collections. These markets have different demand drivers, but they share a growing need to resolve identities accurately and make informed decisions quickly. We are seeing that need translate into new customer relationships and continued increasing utilization across our existing base.

Put simply, the business is firing on all cylinders. September was our highest revenue month in our history and October was just as good. Contractual revenue represented 78% of total revenue in the quarter. Importantly, there were no meaningful onetime transactional revenue contributions, with results instead reflecting regular course business activity across a diverse customer base. We believe that breadth is an important indication of the underlying momentum in the business. Within our public sector business, we continue to win and onboard law enforcement agencies, building on the progress we have discussed over the past several quarters. We are also advancing at the state level, supporting identity resolution and fraud prevention activities, including a recent multiyear contract we signed in October with another Secretary of State. These wins demonstrate the relevance of our capabilities across a widening range of government use cases.

At the federal level, we continue to make inroads, educating agencies about IDI, the capabilities of our platform and how our intelligence can support their missions. Developing these relationships takes time, but we are encouraged by our progress and remain focused on building this opportunity for the long term. Across these markets, our competitive advantages continue to strengthen. The depth and accuracy of our longitudinal identity graph, supported by our cloud-native AI embedded platform provide intelligence that informs critical decisions and supports daily workflows. We continue to extend the use of AI throughout the business, enhancing how we aggregate and analyze data, how customers engage with our products and solutions and how we develop new capabilities.

Internally, AI-powered automation is streamlining processes and increasing productivity across the organization. These efforts build on our proprietary foundation, accelerating innovation and strengthening the value we deliver to customers. We believe this continued advancement positions us to capture a growing share of an expanding market. Our capital allocation strategy remains unchanged. Our first priority is investment in the business, including our platform, proprietary data assets, product development and go-to-market capabilities. We continue to identify and evaluate strategic M&A opportunities that can strengthen our capabilities and accelerate our growth.

We ended the quarter with over $165 million in cash and U.S. treasury investments and no debt, giving us substantial capacity to pursue these priorities with discipline. We are very pleased with how the business is performing, and we remain focused on the large opportunity ahead. We have a strong foundation, meaningful secular tailwinds and the resources to invest in our next phase of growth. Thank you to our team, our customers, our partners and our shareholders for your continued support.

With that, I'll turn it over to Dan.

Daniel MacLachlan

Thanks, Derek, and good afternoon, everyone. This was another strong quarter with record revenue and record cash flows with broad-based growth across nearly every part of the business. We also completed a public offering that generated approximately $109 million in net proceeds, significantly expanding our financial capacity to invest in our platform, our data assets, our go-to-market and other strategic opportunities. We've built this company with a disciplined approach to capital allocation, and that same discipline will continue to guide how we deploy our balance sheet.

With that as context, let me take you through the quarter. For clarity, all the comparisons I will discuss today will be against the third quarter of 2025, unless noted otherwise. Total revenue was a record $27.8 million, up 20% over the prior year. We generated record adjusted gross profit of $23.7 million, resulting in an adjusted gross margin of 85%, up 1 percentage point. Adjusted EBITDA increased 22% to $11 million, producing an adjusted EBITDA margin of 40%, also up 1 percentage point. Adjusted net income increased 23% to a record $7.3 million, resulting in adjusted earnings of $0.47 per diluted share.

Turning to the details of our P&L. As mentioned, revenue for the third quarter was $27.8 million, with each of our 5 revenue verticals contributing solid growth. We added 383 billable customers to IDI during the quarter, ending with 11,252 customers. Financial and Corporate Risk posted another strong quarter with growth spread across its core industries. Financial services, the largest industry in the vertical, grew steadily on deeper usage across the existing customer base. Both background screening and insurance delivered accelerated growth with continued adoption of our enhanced background screening offerings and stronger conversion of our insurance pipeline.

Investigative was again our fastest-growing vertical on a percentage basis, with all 4 industries, law enforcement, private investigators, bail bonds and process servers posting strong double-digit growth. Law enforcement stood out in particular with continued strong adoption. We now serve more than 1,000 agencies compared to more than 17,000 agencies nationwide, leaving us with significant runway for further penetration. Collections also continued to build on the momentum we have seen over the past several quarters. Coming out of the pandemic, this vertical was stagnant for an extended period due to government subsidies and collections moratorium.

Over the past few years, we started to see early signs of a recovery. Those signs developed into a clear trend, and we have now delivered several consecutive quarters of strong growth with this quarter among the strongest. Consumer delinquencies remain elevated, more accounts are entering collections and our customers are relying on our solutions at higher volumes to locate and recover them. Against that backdrop, we believe collections remains well positioned to continue contributing to our growth. Emerging markets grew strongly again this quarter with gains across a broad set of industries. Government, repossession, legal, retail and marketing, all contributed to the growth. We remain early in our penetration of many of these markets and continue to see significant opportunity across the vertical.

Turning to real estate. The vertical delivered solid growth during the quarter, driven by continued strength in FOREWARN, partially offset by softness in IDI's real estate business. IDI's real estate business remained soft against a difficult housing backdrop, declining at a high single-digit rate year-over-year. The tentative signs of improvement we noted last quarter did not carry through, and we expect the softness to persist until market conditions improve. FOREWARN had another strong quarter with double-digit revenue growth. We added 19,688 users during the quarter, bringing the total to 462,861 users, and we now have more than 665 realtor associations under contract.

The scale we have achieved with FOREWARN is an important competitive advantage. We recently introduced Community Alerts, which allows an agent to flag a concerning interaction and quickly alert the broader FOREWARN network. The breadth of our network creates a level of reach that is difficult to replicate, increasing the value of the protection we provide to every user. Overall, contractual revenue accounted for 78% of total revenue in the quarter, up 3 percentage points from the prior year. Gross revenue retention remained strong at 96%, consistent with the prior year.

Moving back to the P&L. Cost of revenue, exclusive of depreciation and amortization increased $0.4 million or 11% to $4 million. Adjusted gross profit increased 22% to $23.7 million, resulting in an adjusted gross margin of 85%, up 1 percentage point. Our sales and marketing expenses increased $0.8 million or 14% to $6.2 million for the quarter, driven primarily by increased personnel-related expenses and higher provision for bad debt. Our general and administrative expenses increased $2.2 million or 32% to $9 million for the quarter, driven primarily by higher personnel-related expenses and acquisition-related activity. Depreciation and amortization increased $0.1 million or 5% to $2.8 million for the quarter. Net income increased $1.2 million or 29% to $5.4 million for the quarter. Adjusted net income increased $1.4 million or 23% to $7.3 million, resulting in adjusted earnings of $0.47 per diluted share.

Turning to the balance sheet. Cash and cash equivalents were $68.1 million at September 30, 2026, compared to $43.6 million at December 31, 2025. Cash and cash equivalents, together with our investments in U.S. treasury securities totaled $165.7 million as of September 30, 2026. Current assets totaled $121.6 million compared to $56.5 million at year-end, while current liabilities were $7.5 million, down from $7.9 million. We generated $12.7 million in cash from operating activities in the third quarter compared to $10.2 million in the same period last year. Free cash flow for the quarter was a record $8.8 million, a 21% increase from $7.3 million a year ago. We did not repurchase any shares during the third quarter. Year-to-date through September 30, 2026, we repurchased 74,500 shares at an average price of $41.87 per share under our stock repurchase program. As of September 30, 2026, we had $15.5 million remaining under the program.

In closing, we entered the final quarter of the year growing across nearly every market we serve with a platform our customers continue to rely on more deeply. What stands out is the consistency of the contribution across the business rather than from any single driver. That diversification is by the design and gives us confidence in the durability of our growth as we close out the year and head into 2027.

With that, our operator will now open the line for Q&A.

Operator

[Operator Instructions] Our first question comes from the line of Alex Sklar from Raymond James.

分析師問答

Alexander Sklar

Maybe first one for me, can you just update us on what you're seeing as it relates to the your upmarket push? You flagged another statewide contract on the public sector side, I think, closed right after the quarter. But what are you seeing in the new logo deal sizes broadly versus maybe a year ago? And how sales cycles progressing for these larger prospects?

Daniel MacLachlan

Thanks, Alex. This is Dan, and I'm happy to address your question. Yes, I mean, we're really excited what we're seeing in the business, not only in the pipeline, but what we're seeing in conversion. As Derek mentioned, obviously, a nice public sector win with the Secretary of State. As you're aware, annually, we do release kind of a metric around larger enterprise wins and customers that generate in excess of $100,000 a year. But we track that quarterly, and we look at the cohorts of customers from the $10,000 to $25,000 from the $25,000 to $100,000 and $100,000 and above. And what we're seeing in the business is incredible strength across the board in all those cohorts, both in that movement up tier in the larger tier customers, but as well as those $10,000 to $25,000 to $75,000 a year customers. And so that's what really excites us is that the business continues to grow in scale, both in pipeline and conversion, and the movement up tier has been very successful to date.

Alexander Sklar

Okay. And Dan, maybe another one for you. Just a very nice uptick in the contractual revenue mix this quarter, you flagged it. So if you look at that base, it's growing 25% above the group. Can you just talk about the drivers behind that? Is this converting some of your existing transactional base to contractual? Or is it tied to kind of the new logo growth and increasing mix of people coming on with guaranteed pricing?

Daniel MacLachlan

Yes. Thanks, Alex. Yes. Look, I mean, it's really a combination of both. Most of the customers we're bringing on today, think of those as more medium and larger enterprise, which you'll normally see in some kind of contract. Now the great thing about those businesses, as you can imagine, not only do you have the opportunity to win the volume in a particular use case, you have the ability to cross-sell across the organization. And that really is what moves the needle when we talk about contractual revenue.

But we're still seeing really good uptick in onboarding from the small and medium-sized business customers as well. But you're absolutely right, that 78% number for the quarter shows that it's solid business. As Derek discussed, there were no material onetime transactional revenue that came in the quarter. So that's very sound foundational structural revenue. And that gives us obviously a lot of clarity into what Q4 and 2027 is prepared to be because of that strong revenue base.

Derek Dubner

Yes, Alex, just it's basically a continuation of what we've been seeing for now multiple quarters. And it's just -- the execution is there. Very proud of the team, very proud of what we're building, how quickly we're building it. And our path to market is so much faster than it was. It's accelerating. So just very pleased, just more of the same, very consistent performance for multiple quarters now.

Operator

Our next question comes from the line of Joshua Reilly from Needham.

Joshua Reilly

Maybe just starting off on the identity orchestration platform customers that you serve. I've been doing some work in the space, and it seems like they're starting to see a pretty meaningful inflection in terms of their volume and adoption of different use cases across commercial and government markets. How is that customer set contributing to growth for you guys relative to the rest of the business?

Derek Dubner

Yes. Thanks, Josh. Appreciate the question. You're absolutely right. And given that we are powering a number of those, when I say powering integrated into key aspects of their solutions to many out there in the industry. As their volumes increase, that's wonderful. It's more demand on them. We all know the secular tailwinds I've talked about, and that's, I'm sure, consistent for them with digital transactions increasing exponentially and sophistication in AI fraud. So there's a terrific demand for what they do, and that translates to better volumes for us. And so we're always trying to enhance what they need, increase and optimize the relationship.

And we've talked a lot about that the last few quarters in adding incremental data sets into our engine to solve for more identity use cases and be a part of that wallet share and part of that relationship with their end user. And we're building out a number of capabilities with a very deep product road map using a lot of intelligence, as we say, and AI, of course, and analyzing risk signals so that we can inform not only them, but all of our direct connect large and medium enterprise and of course, small customers, smaller size, small business. So we absolutely see it, and it's growing.

Joshua Reilly

Awesome. Great. And then if you look at the current demand environment, do you think it makes sense to ramp up sales hiring? And how do you think about the near-term trade-off in EBITDA margins relative to making these hiring decisions and ramping productivity of hires? And maybe could you comment specifically on how you're thinking about accelerating the hiring for the FOREWARN opportunity in the home health care piece?

Daniel MacLachlan

Yes. Thanks, Josh, and this is Dan. Yes, correct. Look, we're seeing demand across the business. Obviously, we're opening new markets, new use cases, home health care with FOREWARN is a great example of that. And we're going to continue to invest in our go-to-market, our infrastructure, our product development. You'll see that in the supplemental metrics that we released, right, additional incremental headcount on sales and marketing, additional incremental headcount on engineering and infrastructure. We've talked about that for a number of quarters. And we just see tremendous opportunity. We're in the early innings. We're going to continue to invest there.

Now one of the great things about this business is even with that investment, and you've seen it over the last several quarters by adding additional headcount, we've still been able to incrementally grow our margin nicely. We think about this business in the long term. Obviously, we're public. We're mindful quarter-to-quarter, but we don't drive the business for the quarter-to-quarter cadence. And so it will ebb and flow a little bit. But ultimately, because of the operational leverage of the business, even with that investment, we're able to continue to drive nice incremental margins.

Operator

Our next question comes from the line of Matthew Mouse from B. Riley Securities.

Josh Nichols

It's Josh Nichols from Riley. Yes, I mean, Rule of 60 has a real nice ring to it. I know you did some engineering hiring during the quarter. You've talked about previously AI ramp-up and investment, but EBITDA margin still hitting 40% level. One, is there much more investment that you guys are looking to do on that? If you could talk about some of the opportunity and how you're going to be leveraging that and how to think about balancing the internal investments in some of those growth initiatives versus the profitability, which has been so strong.

Derek Dubner

Yes. Thanks, Josh. It's Derek. As we've talked about, the opportunity is very large. And we've been investing in the engineering team, product development team for some time now. And we have increased our investment over a number of quarters in the AI team, the deep learning team to enhance sort of AI throughout the enterprise, as we've talked about. We've talked about a number of use cases for AI. I guess I'll run through them real quickly, aggregating and analyzing data. We see massive volumes of data, as you know, and we analyze those risk signals, which inform our solutions and inform our customers.

We are also accelerating the path and have accelerated the path to new features, new functionality that a year ago, 2 years ago would have taken so much longer to serve a number of industries that we're excited about, think of law enforcement and background screening and others. And so building out new applications there are very exciting. And of course, using AI assist the development and bringing in these team members that are utilizing for a very significant advantage. And I don't mind, of course, we've had a large team, a decent-sized team already who have been utilizing AI for years now in doing what we do. So it's very exciting.

As you can see from the financials, despite our investment, you're still seeing these extraordinarily healthy margins, and that's the model. And so it's really -- I'll simplify it, it's really turning dials. Where is the opportunity? Where do we want to point and aim and shoot? And what does that do? And when we analyze that and we see it and we say, no, there's an opportunity there straight line to a revenue in some short, medium or long term. And if it's something that didn't come to fruition or wouldn't come to fruition, it's very easy for us to dial it back and point resources to another direction.

So excited about also, of course, with AI, the increase in productivity of all of the employees. We are developing these features and these products at 10x what we normally did. And it's extraordinary when we have these meetings and we talk about where they are in the pipe and where they are with development and the path to commercialization. So it's extremely exciting. We are building out new applications. We just talk a tiny bit about that because it's very exciting and that we have not made an announcement yet. But new applications, new ways of interacting with our solutions that we think are going to change the way all customers of this industry evaluate, analyze, investigate and perform their decision-making. So we're excited about those opportunities, and we'll continue to invest because we can and because we're disciplined about it. And really, we take that very seriously over here.

Operator

Our next question comes from the line of Eric Martinuzzi from Lake Street Capital Markets.

Eric Martinuzzi

Yes. Congrats on the successful quarter. I wanted to talk about the impact of the equity raise. You talked about a net $109 million with regard to your M&A pipeline. Just curious to know if that has opened up the aperture. Do we have an increased appetite now for unique data sets or unique technologies? Just a layer deeper on the M&A pipeline would be appreciated.

Derek Dubner

Sure. Thanks, Eric. Appreciate it. As we've talked about, we've always looked at opportunities for perhaps tuck-ins, if you will, in the way of, as I said, more data assets in this proprietary engine that we've built in the way of looking at certain technologies of companies out there that for us would be a buyer build analysis or it's perhaps so unique that is something we would want to jump on immediately. And for a number of years, we've been very much behind the scenes, powering a number of solutions out there. And as we mature, we're becoming more of a well-known front-facing brand or brands, and that's why you're seeing the success that we've been able to put up for a number of quarters. So if there was an opportunity to acquire a company that perhaps had a well-established presence in a vertical where we were early with a great brand and there was extraordinary synergy. And by the way, synergy would have to work for all 3 of those, then we would move on it.

We have a funnel of opportunities that we look at. Up until, I don't know, I would say, last year, we've knocked on the door on a few, and it either didn't meet our expectations in the way of synergistic or valuation. And as we know, there has been not much in the way of small M&A over the last few years, especially coming out of '22, '23 and '24 because the public markets obviously corrected valuation pretty quickly. But in the private markets, founder-led businesses perhaps figured they will endure and make it out the other side. But we're seeing more and more opportunities where it's difficult for them to get capital, and they realize that there's a great home here with a lot of synergy. So we're doing work, and we have a very high bar, and we don't mind walking away from deals. And when we see the one we want, we will transact.

Eric Martinuzzi

Okay. And then on the FOREWARN community alerts, is this just kind of an added free benefit on top of the current subscription? Or is there a monetization element to the additional functionality?

Derek Dubner

Right now, it is a free benefit inside the FOREWARN subscription, and we're very excited to do that because FOREWARN stands alone as a network, a network of a data-driven safety solution with over 460,000 users, primarily only in real estate today, but it's growing, and it's going to be in a number of verticals in the future. And with that many in the network, there's safety in numbers. So when an individual subscriber has a concerning interaction with somebody, -- they can alert their local community around that phone number. And immediately, there's a proactive effect of protecting the members around them.

And so we're excited to bring that to the current base because we started this product, this FOREWARN brand as essential safety for all. And that's been the mission. We've been dedicated to primarily only safety and not adding marketing functions or other different functions that sort of cloud the mission, if you will, of a real estate subscriber or another industry now using it for unlimited searches, not having to pick and choose because there's a price associated with the search, which could be construed as perhaps discriminating or whatever violation of law, they can look up everybody to ensure their safety to prevent fraud and it's a powerful benefit. We're hearing great reactions from the base, and we're excited to bring it to them at no cost.

Operator

This concludes the question-and-answer session. I would now like to turn it back to Derek Dubner for closing remarks.

Derek Dubner

Thank you for joining us today. Another record quarter and more than $100 million in trailing 12-month revenue reflect the consistency of our execution and the growing importance of our identity intelligence across the markets we serve. We are pairing strong growth with substantial profitability and cash generation while continuing to invest in innovation and extend our competitive advantages. With powerful secular tailwinds and the resources to pursue the significant opportunity ahead, we remain confident in our next phase of growth. Thank you again to our team for their continued dedication and to our customers and shareholders for your trust and support. We look forward to updating you on our progress next quarter.

Operator

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.