Red Violet, Inc. Segments Disclosure
12. Segment information
The Company currently has one single operating and reporting segment, identity and information solutions, as defined by ASC 280, “Segment Reporting.” The Company adopted ASU 2023-07 as of December 31, 2024. The Company builds proprietary technologies and applies analytical capabilities to deliver identity intelligence. The solutions enable the real-time identification and location of people, businesses, assets, and their interrelationships, and are used for purposes including identity verification, risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition. The Company’s cloud-native, AI-enabled identity intelligence platform, CORE, is purpose-built for the enterprise, yet flexible enough for organizations of all sizes, bringing clarity to massive datasets by transforming data into intelligence. The Company generates substantially all of its revenue from licensing its solutions. Customers access the Company’s solutions through a hosted environment using an online interface, batch processing, API, and custom integrations. Revenue is generally recognized on (a) a transactional basis determined by the customers’ usage, (b) a monthly fee, or (c) a combination of both. The Company derives revenue all in the United States and manages the business activities on a consolidated basis. The technology used in the customer arrangements is based on a single software platform that is deployed to and implemented by customers in a similar manner.
The Company’s chief operating decision maker (the “CODM”) is a group consisting of its Chief Executive Officer, President, and Chief Financial Officer.
The accounting policies of the identity and information solutions segment are the same as those described in the Summary of Significant Accounting Policies in Note 2. The CODM assesses performance for the identity and information solutions segment and decides how to allocate resources based on net income that also is reported on the statements of operations as consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets.
The CODM uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the entity, to pursue acquisitions, or to pay dividends. Net income is used to monitor budget versus actual results. The monitoring of budgeted versus actual results is also used in assessing performance of the segment.
In addition to net income as the measure of segment profit, the CODM evaluates the financial performance of its business on a variety of key indicators, including non-GAAP metrics of adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on US GAAP, excluding interest income, income tax expense, depreciation and amortization, share-based compensation expense, litigation costs, and write-off of long-lived assets.
Information about reported segment revenue, segment net income, and significant segment expenses is shown as follows:
|
|
Year Ended December 31, |
|
|||||
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Revenue |
|
$ |
90,252 |
|
|
$ |
75,189 |
|
Less: |
|
|
|
|
|
|
||
Cost of revenue (exclusive of depreciation and |
|
|
14,675 |
|
|
|
13,997 |
|
Personnel-related expenses |
|
|
33,955 |
|
|
|
28,488 |
|
Advertising, marketing and agency expenses |
|
|
1,188 |
|
|
|
867 |
|
Provision for bad debts |
|
|
760 |
|
|
|
342 |
|
Share-based compensation expense |
|
|
6,500 |
|
|
|
5,948 |
|
Occupancy expenses |
|
|
1,143 |
|
|
|
1,243 |
|
Professional fees(1) |
|
|
5,256 |
|
|
|
4,178 |
|
Other segment items(2) |
|
|
2,965 |
|
|
|
2,644 |
|
Depreciation and amortization |
|
|
10,672 |
|
|
|
9,562 |
|
Interest income |
|
|
(1,420 |
) |
|
|
(1,400 |
) |
Income tax expense |
|
|
1,404 |
|
|
|
2,317 |
|
Segment net income |
|
$ |
13,154 |
|
|
$ |
7,003 |
|
Consolidated net income |
|
$ |
13,154 |
|
|
$ |
7,003 |
|
(1) Professional fees for the year ended December 31, 2025, include $358 of acquisition-related costs incurred in connection with the due diligence of potential strategic targets. Comparable acquisition-related costs were $7 for the year ended December 31, 2024.
(2) Other segment items include primarily travel and entertainments, write-off of long-lived assets, and other selling, general and administrative expenses.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 4, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.