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DATE

Wednesday, May 6, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Derek Dubner
  • Chief Financial Officer — Daniel MacLachlan

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TAKEAWAYS

  • Revenue -- $25.8 million, a record high, representing 17% growth; management cited that normalizing for $1.2 million in one-time transactional revenue in the prior period, underlying growth exceeded 20%.
  • Adjusted Gross Profit -- $22.0 million, up 20%, with a record adjusted gross margin of 85%, a two percentage-point increase.
  • Adjusted EBITDA -- $10.7 million, up 27%, yielding a record margin of 41%, three percentage points higher.
  • Adjusted Net Income -- $6.6 million, up 29%, resulting in record adjusted earnings per diluted share of $0.46.
  • Net Income -- $4.4 million, rising 28% from the prior year.
  • Operating Cash Flow -- $6.6 million, increasing 32% compared to the prior year.
  • Free Cash Flow -- $3.1 million, up 24% from $2.5 million year over year.
  • Billable Customers (IDI Segment) -- 400 customers added sequentially, reaching 10,422, stated as one of the highest quarterly additions in company history.
  • FOREWARN Users -- Exceeded 417,000, up from 325,000, with over 640 realtor associations contracted.
  • Contractual Revenue -- 75% of total, up one percentage point from last year.
  • Gross Revenue Retention -- 95%, a one percentage-point decline compared to the prior year.
  • Cash and Equivalents -- $43.5 million at quarter-end.
  • Current Assets and Liabilities -- $57.3 million in current assets and $5.1 million in current liabilities, the latter down from $7.9 million at year-end.
  • Stock Repurchase -- 73,250 shares repurchased at a $41.90 average price; $15.6 million remains authorized under the program.
  • Vertical Performance -- Financial and corporate risk was the fastest-growing vertical; investigative and collections also posted double-digit and steady gains, respectively.
  • Cost of Revenue -- $3.8 million, up 4%.
  • Sales and Marketing Expense -- $5.9 million, an 8% increase, primarily due to higher personnel costs.
  • General and Administrative Expense -- $7.9 million, up 28%, largely from personnel and acquisition-related activity.
  • Depreciation and Amortization -- $2.8 million, a 10% rise compared to the prior year.
  • AI Integration -- Management highlighted accelerating adoption of AI and agentic tools across engineering, security, and operations, which is materially increasing development velocity and organizational productivity.
  • Long-Term Margin Model -- Management reiterated that, "At maturity, this business model is capable of adjusted gross margins in excess of 90% and adjusted EBITDA margins approaching 65%," but declined to provide a timeline for achievement.

SUMMARY

Red Violet (RDVT +7.87%) surpassed a $100 million annual revenue run rate for the first time, reflecting efficient scaling as platform investments enable margin expansion. The company's data shows broad-based growth across financial, investigative, and emerging verticals, while FOREWARN user adoption is accelerating alongside key industry partnerships. Investments are ongoing in go-to-market personnel, marketing leadership, and AI-driven product innovation, with management emphasizing the compounding effects of AI on both development cycles and customer value creation.

  • Management stated, "crossing the $100 million revenue run rate threshold this quarter is a milestone worth acknowledging, but it is not a finish line," reinforcing focus on sustained, long-term scaling over near-term targets.
  • FOREWARN revenue grew at a strong double-digit rate and added 92,000 new users year over year, further deepening market penetration in the real estate segment.
  • Retention metrics indicate stability, as gross revenue retention remained at 95% despite a one-point dip, and overall contractual revenue increased its proportion of the total revenue base.
  • Operating leverage is evident as adjusted EBITDA margin expanded to a record 41%, supported by disciplined cost management even as the company expands sales and administrative functions.
  • Management characterized AI adoption as a "force multiplier," materially advancing product velocity, customer utility, and internal efficiencies, with ongoing capital allocation toward further AI-driven competitive differentiation.

INDUSTRY GLOSSARY

  • Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, further adjusted for one-time items, used internally to assess operational profitability and cash flow generation.
  • Longitudinal Identity Graph: A proprietary, unified dataset linking identity attributes to unique individuals over time, enabling persistent, accurate resolution across fragmented data sources.
  • FOREWARN: Red Violet's app-based solution for real-time identity verification and risk mitigation, targeting real estate professionals and associations.
  • Agentic Tools: AI-powered automation resources that perform tasks or decision-making functions autonomously, utilized to accelerate engineering and operational processes.

Full Conference Call Transcript

Derek Dubner, our Chairman and Chief Executive Officer, and Daniel MacLachlan, our Chief Financial Officer. Our call today will begin with comments from Derek and Daniel, 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, 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 Red Violet, Inc.'s business. Red Violet, Inc. undertakes no obligation to update the information provided on this call. For a discussion of the risks and uncertainties associated with Red Violet, Inc.'s business, I encourage you to review Red Violet, Inc.'s filings with the Securities and Exchange Commission, including the most recent annual report on Form 10-Ks and 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 measures 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, Inc.'s Chairman and Chief Executive Officer, Derek Dubner.

Derek Dubner: Good afternoon, everyone, and thank you for joining us. Before I walk through the quarter, I want to recognize our team. The results we are reporting today—record revenue, record margins, record EBITDA, and one of the strongest quarters for new customer onboarding in our company's history—are a direct outcome of disciplined execution. This is a team that consistently delivers, and that consistency is what drives the results you are seeing today. Now to the quarter. Revenue for the first quarter was a record $25.8 million, up 17% year over year. It is important to note that the prior year period included $1.2 million of one-time transactional revenue, so the underlying growth this quarter is stronger than the headline suggests.

Adjusted gross profit increased 20% to $22.0 million, resulting in a record adjusted gross margin of 85%. Adjusted EBITDA increased 27% to $10.7 million, with a record margin of 41%. Adjusted net income was $6.6 million, producing record earnings of $0.46 per diluted share. Operating cash flow increased 32% to $6.6 million. This marks yet another quarter of consistent execution with high-teen growth and continued expansion in margins and cash flow. On the customer front, IDI added 400 new billable customers, one of the highest quarterly additions in our history, bringing total customers to 10,422. FOREWARN grew to more than 417,000 users with over 640 realtor associations under contract.

These metrics reflect increasing adoption, deeper integration, and the growing reliance our customers place on our platform in their daily operations. At the same time, we continue to see a significant and expanding opportunity set in front of us, particularly as AI continues to unlock new capabilities across analytics, data aggregation, and customer interaction. Given the strength of our model and the level of cash flow we are generating, we are well positioned to invest proactively into that opportunity. Importantly, our opportunity in AI is not just about access to tools. It is about the foundation that we have built that those tools operate on.

Our longitudinal identity graph, built and refined over time through real-world usage, is what enables us to generate actionable signals, not just data outputs. AI enhances our ability to analyze the foundational graph, identify patterns, and surface risk and insight with greater speed and precision. Similarly, our ability to aggregate and fuse new data is directly tied to our ability to resolve that data to unique individuals within our identity graph. Aggregating data is one thing, but correctly attributing it to the right individual over time is something entirely different.

Whether it is distinguishing between thousands of individuals with the same name, resolving generational differences, or identifying underbanked consumers with limited public data, our platform is architected to unify fragmented data into a persistent, accurate identity—a continuously maintained and correctly attributed view of an individual over time, all powered by our proprietary engine. As we bring in additional data inputs, AI further enhances our ability to validate that data against our graph, then link and extract meaningful insight, reinforcing and extending the advantage we have built over the past. Across customer workflows, AI is also enhancing how our solutions are experienced, improving responsiveness, deepening integration, and increasing the utility of our platform in day-to-day decisioning.

Internally, we are seeing accelerating adoption of AI across the organization, from engineering and security to operations and customer support, driving significant gains in productivity and development velocity. Within our technology organization in particular, development velocity has accelerated materially with teams leveraging AI and agentic tools to code, test, and deploy at rates we have not previously experienced. What historically required multiple resources can now often be accomplished by a single engineer operating with AI augmentation, significantly increasing our pace of product development and innovation. What we are observing is a compounding effect. As adoption deepens across the organization, the pace of improvement is accelerating, driving efficiency gains internally while simultaneously strengthening the value we deliver to customers.

We are just scratching the surface. The net effect is that AI is acting as a force multiplier, increasing the value of our data, accelerating our pace of innovation, strengthening our position within the markets we serve, and further enhancing our AI-embedded layered architecture, which is fundamentally differentiated from the legacy technology stacks of our competition. Switching topics for a moment, I also want to revisit something we said several years ago, and Daniel will go into it in more detail. At that time, we outlined what this business would look like at a $100 million annual revenue run rate—specifically, adjusted gross margins exceeding 80% and adjusted EBITDA margins in the range of 35% to 40%.

We had our skeptics, but that was guided by this team's knowledge and experience building similar businesses over the past three decades. Today, at our current scale, we already are delivering 85% adjusted gross margins and 41% adjusted EBITDA margins. This level of performance reflects the durability of our business and the operating leverage inherent in the model as we grow. We ended the quarter with $43.5 million in cash. We currently have $15.6 million remaining under our stock repurchase program after repurchasing 73,250 shares at an average price of $41.90 per share during the first quarter and through 04/30/2026.

We will continue to allocate capital with discipline, balancing share repurchases with continued investment in our platform, data assets, and go-to-market capabilities. This was a strong start to 2026, and a continuation of the consistent, disciplined execution that defines who we are. With that, I will turn it over to Daniel.

Daniel MacLachlan: Thanks, Derek. Good afternoon, everyone. We are off to an excellent start in 2026, delivering the highest revenue, adjusted gross profit, and adjusted EBITDA in our history—results that reflect the strength of our platform, the expanding reach of our solutions, and the consistency with which we are executing. I want to take a moment to put these results in context, because I think it speaks to something important about this team and this business model. As Derek mentioned, in March 2022, we laid out a framework on our earnings call of what this business looks like at $100 million in annual revenue.

At the time, our run rate was approximately $45 million, our adjusted gross margin was 75%, and our adjusted EBITDA margin was 25%. We told you that at $100 million in annualized revenue, you could expect adjusted gross margin to exceed 80% and adjusted EBITDA margin to be in the range of 35% to 40%. We meant it, and we built toward it. This quarter, we crossed that revenue threshold for the first time—on $25.8 million in quarterly revenue, a $100 million-plus annual run rate—we delivered adjusted gross margin of 85% and adjusted EBITDA margin of 41%.

Disciplined execution against a multiyear road map at the margins we said we would deliver is not something every management team can point to. But we can, and we are just getting started. At maturity, this business model is capable of adjusted gross margins in excess of 90% and adjusted EBITDA margins approaching 65%. The 2026 performance is evidence we are on the right path to get there. But we take a long-term view of this business, and we are not managing to a near-term margin target. We are managing toward the full potential of what we have built.

Over the past decade, we have constructed a differentiated data and analytics platform—one that ingests, normalizes, and delivers intelligence at scale across a broad and growing set of use cases and end markets. The foundation we have built is what makes our AI actionable. AI is accelerating how we develop and deploy new capabilities, compressing development cycles and broadening the solutions we can bring to market. It is enhancing how our customers interact with our products, improving the speed and precision with which identity intelligence is surfaced and acted upon, and it is reshaping how we think about operational efficiency and scale, enabling us to accelerate productivity across the entire business.

We are already seeing these benefits, and we expect their impact to compound. As we continue investing in AI, product development, and go-to-market capabilities, we expect adjusted EBITDA margins in the near term to trend in the mid- to high-30% range. We view that as a reflection of deliberate investment in the long-term growth of the business. The path to 65% adjusted EBITDA margins runs directly through the investments we are making today. Turning now to our first quarter results. For clarity, all the comparisons I will discuss today will be against the first quarter 2025 unless noted otherwise. Total revenue was a record $25.8 million, up 17% over the prior year.

As Derek noted earlier, Q1 2025 included $1.2 million in one-time transactional revenue from two significant customer wins. Normalizing for that, our underlying growth rate this quarter would have been greater than 20%. We generated $22.0 million in adjusted gross profit, the highest to date, delivering a record adjusted gross margin of 85%, up two percentage points. Adjusted EBITDA came in at a record $10.7 million, up 27% over the prior year. Adjusted EBITDA margin expanded three percentage points to 41%, a new high. Adjusted net income increased 29% to $6.6 million, resulting in adjusted earnings of $0.46 per diluted share—both new highs.

Turning to the details of our P&L, as mentioned, revenue for the first quarter was $25.8 million with solid performance across the business. Within IDI, we saw broad-based growth across our verticals, with particular strength in financial and corporate risk, and investigative. We added 400 billable customers sequentially to end the quarter with 10,422 customers. Financial and corporate risk was our fastest-growing vertical, with background screening leading the way with exceptional growth, continuing to benefit from the targeted product development and go-to-market investments we have made over the past year. Financial services delivered strong growth driven by deeper customer integration and volume expansion.

In addition, both corporate risk and insurance contributed meaningful growth, rounding out a solid showing across the vertical. Investigative posted robust double-digit gains across every industry, including law enforcement, private investigators, bail bonds, and process servers. Law enforcement, in particular, continues its impressive trajectory, and we remain focused on deepening our penetration of the public sector. This vertical is expanding as a share of our total revenue, and we see significant runway ahead. Collections delivered steady gains this quarter. The recovery dynamic we have discussed in prior quarters remains intact, and we continue to see volume expansion from our existing customer base as the industry works through elevated delinquency levels.

The vertical is maintaining its steady recovery, and we view it as a meaningful tailwind to our growth outlook. Emerging markets delivered healthy underlying expansion this quarter. The $1.2 million in one-time transactional revenue in Q1 2025 we noted earlier concentrated in this vertical, which creates a tough year-over-year comparison. Normalizing for that, the underlying growth rate was robust and in line with the demand momentum we continue to see across these industries. Retail, government, legal, repossession, and marketing all contributed meaningful growth. We remain encouraged by the breadth of activity throughout emerging markets as a significant long-term growth driver for the business.

Lastly, IDI's real estate vertical, which excludes FOREWARN, delivered modest growth year over year, but is starting to show signs of stabilization following the prolonged pressure that elevated rates and affordability constraints have placed on housing activity. While the macro environment remains a headwind, we are encouraged by the trajectory and believe we are well positioned as conditions gradually improve. As to FOREWARN, the platform continued its impressive performance, delivering strong double-digit revenue expansion this quarter. We exited the quarter with over 417,000 users, up from 325,000 users a year ago. FOREWARN continues to gain traction with real estate professionals, who rely on it as an essential part of their daily workflow.

We now have over 640 realtor associations contracted to use FOREWARN. Overall, contractual revenue accounted for 75% of total revenue in the quarter, up one percentage point from the prior year. Gross revenue retention remained strong at 95%, down one percentage point. Moving back to the P&L, our cost of revenue, exclusive of depreciation and amortization, increased $0.1 million, or 4%, to $3.8 million. Adjusted gross profit increased 20% to a record $22.0 million, resulting in a record adjusted gross margin of 85%, up two percentage points from the prior year. Our sales and marketing expenses increased $0.5 million, or 8%, to $5.9 million for the quarter, driven primarily by higher personnel-related expenses.

General and administrative expenses increased $1.7 million, or 28%, to $7.9 million, driven primarily by higher personnel costs and acquisition-related activity. Depreciation and amortization increased $0.2 million, or 10%, to $2.8 million for the quarter. Net income increased $1.0 million, or 28%, to $4.4 million for the quarter. Adjusted net income increased $1.5 million, or 29%, to $6.6 million, the highest to date, resulting in record adjusted earnings of $0.46 per diluted share. Moving on to the balance sheet, cash and cash equivalents were $43.5 million at 03/31/2026, compared to $43.6 million at 12/31/2025. Current assets totaled $57.3 million, compared to $56.5 million at year-end, while current liabilities were $5.1 million, down from $7.9 million.

We generated $6.6 million in cash from operating activities in the first quarter compared to $5.0 million in the same period last year. Free cash flow for the quarter was $3.1 million, a 24% increase from $2.5 million a year ago. In the first quarter and through 04/30/2026, we purchased 73,250 shares of company stock at an average price of $41.90 per share under our stock repurchase program. As of 04/30/2026, we had $15.6 million remaining under the repurchase program. In closing, crossing the $100 million revenue run rate threshold this quarter is a milestone worth acknowledging, but it is not a finish line.

The same discipline and focus that got us here is what will take us to the next level. We have a clear line of sight to continued margin expansion, a platform that is scaling efficiently, and a team that has constantly and consistently delivered on what it said it would do. We are confident in our ability to build on this momentum, and we look forward to updating you on the progress throughout the year. We will now open the call for questions.

Operator: Thank you. We will now open the call for questions. As a reminder, to ask a question, you will need to press 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star-1-1 again. Please stand by while we compile the Q&A roster. Our first question today is from Eric Martinuzzi with Lake Street Capital Markets. Your line is open.

Eric Martinuzzi: Hey, congrats on the $100 million run rate. That is a very significant milestone that I know you guys have been working a long time to achieve, so great to see that. Question regarding we are always looking for kind of what is next. And given the achievement of those targets that you laid out back in March 2022, you talked a little bit in your prepared remarks, Daniel, about the at-maturity type model having in excess of 90% gross margins and then approaching 65% on the adjusted EBITDA. Obviously, that is the goal. Is there a timeline you are willing to communicate?

Daniel MacLachlan: Thanks, Eric, and I appreciate the question. We are really excited about crossing that revenue threshold. That is a milestone and a good marker for us, but as I said earlier, it is just the beginning; it is not a finish line. When we talk about timelines to get to that maturity, we are not going to put a timeline on that today because we do not issue formal guidance, and pinning a year on a maturity-state outlook would be inconsistent with how we manage the business. What it comes down to is the structure of the business model. We operate a data and analytics platform with a largely fixed cost base.

Once the platform is built and the data is in place, the marginal cost of an incremental transaction is very small. That means as revenue scales, an outsized share of every dollar flows to the bottom line. Our cost structure is built to support a meaningfully larger business than where we are today, and we are continuing to invest in that cost structure to enable future growth. So 65% at maturity is not a forecast and is not a target. It is the model output when you take a high fixed-cost, low marginal-cost platform and you let it scale to its natural operating leverage.

For timelines, it is really about continuing what we are doing—building a good foundational business—and moving as quickly as we can toward those underlying metrics.

Eric Martinuzzi: Okay. And then the other notable achievement here was new customer onboarding. As you went through the different verticals you serve, I did not really pick up on anything that was a substantial change versus your commentary last quarter, and maybe I am incorrect there. But what do you attribute the strength to? Is Q1 typically a time when you do onboard a significant number of new customers? Is there something going on in the macro or with the brand that is allowing you to achieve those numbers?

Derek Dubner: Thanks, Eric. Q1 is generally strong. Industries tend to enter the new year with a little bit of wind in their sails. Maybe they are ready to deploy those budgets and get going. But I think what we would say is we have produced near-record onboarding—or at least at the very highs of our 12-month average—for quite a while now. We have always said that those are a great leading indicator of the revenue generation and success of the business in the out months, and that is bearing true, and that is why we use it as exactly that—a leading indicator. It is a confluence of many things ongoing within the organization.

I think we are doing a very nice job of marketing ourselves, being present at conferences, engaging with our customers, and delivering what they want in products and solutions. We have always said we are very customer-centric, and we will never change. When we think about the next series of developments—whether it be functionality within an application for a certain industry—we are talking to our customers. We are finding out what they want, what they do not see in the competitive environment, and we execute upon that. I am very proud of the organization. That is why I started out with a thank you to the team. It is really brilliant execution over the last 18 months.

We have an extraordinarily strong road map, and because of the AI implementations across the organization, we are seeing acceleration there. It has us very enthusiastic that we are well positioned for the future.

Eric Martinuzzi: Got it. Last question for me. You talked about the growth in the quarter—up 17%—but really would have been even stronger when you back out the $1.2 million from the year-ago quarter. My math has the kind of apples-to-apples growth at around 24%. I know you are not in the business of giving guidance, but seasonal trends in the business historically would have Q2 up from Q1. Is there any reason that trend would be different this year?

Daniel MacLachlan: Thanks, Eric. Historically, the first quarter has always been a really strong quarter for us. We noted Q1 2025 had a little additional in there in one-time transactional revenue, but going back historically, we have always had a good first quarter out of the gate. We try to replicate and grow that in Q2. Last year, if you look, we were probably down sequentially by about $200,000, but of course we were going against that transactional comp. We are not providing any formal guidance. For us, when we think about the business—and going back to 2024 and 2025—we talked about reaccelerating the growth rate. Obviously, we were able to do that.

It is one foot in front of the other and continuing to execute. From a sequential basis, we have a great foundation coming out of the gate at $25.8 million. The expectation is we can leverage that and, over the next couple of quarters, grow from there. For the first quarter, April for the most part is closed, and what we saw in April was an extremely strong month. We are excited about what is happening in the business and looking forward to continuing to perform for the near, medium, and long term.

Eric Martinuzzi: Great. Thanks for taking my questions.

Operator: Our next question comes from Josh Nichols with B. Riley Securities. Your line is open.

Josh Nichols: Yes, thanks for taking my question, and great to see the company taking back some stock this quarter. I wanted to ask two questions. One, about scaling up the go-to-market strategy. Historically you have been a little bit more narrowly focused, but when we think of that broadening out—inside sales, strategic sales, and distribution—what are your plans to grow those channels this year, and how are you investing in that?

Daniel MacLachlan: Yeah, thanks, Josh. I will take that. If you look historically, especially in that go-to-market line—we provide some supplemental metrics around our sales and marketing personnel—we have invested there. We have invested on the marketing front, bringing in a highly skilled leader to build out that team. As Derek talked about earlier, we are at the conferences we need to be at, we are at the trade shows we need to be at, and we are continuing to engage with customers. That starts with a solid marketing foundation and builds out from there. On sales go-to-market, we have built out an extremely efficient and productive inside sales team.

I think of that as the engine of the organization—highly skilled, verticalized subject matter experts across a broad group of industries and verticals. Tactically, over the last several years, we built out more of our strategic side in a number of areas where we have made investments. We have built out the strategic team. So growth is not only in some of those pockets where we have been investing; it is also across the broad and diverse industries and verticals we serve. We call out five main verticals in which we operate and break down revenue, but when you look at the amount of industries that roll up into that by verticals, it is around 25 or 26 different industries.

The great thing about the growth we have seen this quarter—and have seen consistently—is that it is broad-based. It is in a number of areas, and it is not concentrated in one use case or one customer. That gives us a lot of confidence today to talk about how the business has been and how we expect it to perform in the future.

Derek Dubner: Yeah, Josh, I know you are aware, but I will state it unequivocally that we are an early-stage company sitting in front of an enormous market opportunity, and we are very fortunate that we are generating very healthy cash flow. With that opportunity in front of us, the summary of our call today is that we are going to invest. The opportunity is that large. Our goal is not to set necessarily a record EBITDA margin tomorrow. We are building a very healthy foundational business with a view of 10 years out. The answer across the board is we expect to grow our team.

This team is going to be methodical, deliberate, and directly in line with where the opportunity demands it. That includes go-to-market, your question, but also product, data, and definitely AI-driven capabilities. Over time that will create an inflection point. We will get to where revenue scales meaningfully without a commensurate increase in headcount because of what we are doing today and tomorrow. That is the model. We are not one of those companies that has bloated through the pandemic or is using AI as an excuse to eliminate personnel or a missed quarter or anything else. Net-net today, more employees—but a team that is going to operate at a fundamentally much higher level of productivity.

Then that will flatten out, and you will see those margins just drive.

Josh Nichols: Thanks. Then, Derek, you touched on it—always good to hear you talk a little bit about your thoughts on technology and the impact and tailwinds that you think that is going to bring to the business. Clearly, it is a rapidly evolving environment. Agentic capabilities with AI are something that has gotten a lot of focus recently. I am curious how you are thinking about investing in that, enhancing the company's agentic capabilities, and what that could do for the business as that scales up over the next few years.

Derek Dubner: Yeah, sure, Josh. Thank you for the question. We spent some time on this in the fourth quarter in our earnings and full year, but I am happy to revisit it. AI, we do not perceive that as a threat to our business. It is a tailwind for us. I will restate it again: AI alone cannot replicate our data. We have built this longitudinal identity graph. It is billions of unified records, and it is tested and modeled and refined over years of actual usage. That is the foundation that AI needs to run on.

For us, we have this healthy foundation built, and we can layer AI on top of it and better serve our customers in all different ways. In the risk signals we are generating, through an API connection our customers see it when they come into the office in the morning versus the competition’s solutions. Our competition is working on trying to complete migrations to the cloud from other architectures. We are cloud native, AI embedded from day one. We are using AI to compress development cycles and implement more AI across the organization. It is pulsating through the products and what we are doing every day—pair programming, agentic tools.

We are very excited because as customers, especially small and medium size, become more adept at using it and getting agents into their workflow, we are completely usage-based and volume-based. That means they will access our products in much faster fashion—less manual activity—and more demand for the identities that we can clear every single day. It is necessary to come back to us. One person’s data on a given day to open a new bank account is only good for that moment in time. The next day, that person’s identity and profile may have changed.

They might have been arrested the night before, they might now be divorced, they might have financial stress that occurred—a bankruptcy filing, a very large judgment. The next time the commercial or public sector sees that consumer, they need to clear that identity again and make a critical decision about that individual. We have been building for this for the last 11 years. We have built this identity graph to be extraordinarily high confidence. AI can only be directionally correct. We need to be accurate. Law enforcement is making critical decisions every day using our products, as are financial services and all of our industries. We are really well positioned.

We are very excited about the innovation that is going on and the product road map, and very excited about introducing new products and updating you on that.

Daniel MacLachlan: Thanks, Josh.

Operator: Thank you. I am showing no further questions at this time, so I would like to turn it back to Derek Dubner for final remarks.

Derek Dubner: Thank you. As we close, I want to reiterate that our performance this quarter reflects the strength of our strategy, the resilience of our business model, and the continued trust of our clients and partners. We remain focused on disciplined execution, responsible growth, and delivering long-term value to our shareholders. While the macro environment continues to evolve, we are confident in our positioning, our technology, and our team. We appreciate your continued support, and 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.