Good day, ladies and gentlemen, and welcome to Red Violet's Second Quarter 2022 Earnings Conference Call. At this time all aprticipants’ are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Camilo Ramirez, Vice President, Finance and Investor Relations. Please go ahead.

Good afternoon, and welcome. Thank you for joining us today to discuss our second quarter 2022 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 subsequent 10-Qs. During the call, we may present certain non-GAAP financial information related to adjusted gross profit, adjusted gross margin, adjusted EBITDA and adjusted EBITDA margin. Reconciliations of these non-GAAP financial measures to their most directly comparable 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's Chairman and Chief Executive Officer, Derek Dubner.

Thank you, Camilo. Good afternoon, and thank you for joining us today to discuss the results of our second quarter 2022. We delivered a solid second quarter, driven by strong demand for our identity and fraud solutions across our diverse verticals. While the economic volatility in the quarter presented some headwinds in our real estate marketing vertical, we feel confident about our positioning as a whole as the secular tailwinds for our business remains strong. We are executing upon a deep product road map, and our sales pipeline is robust and converting. Most importantly, as we state regularly that we think about our business always with a long-term view and not just quarter-by-quarter, the business is as healthy as it has ever been. With the leading cloud-native technology platform in our space, innovative solutions, a diverse customer base and strong operational leverage producing solid adjusted EBITDA and cash flow. With that, let us turn to the quarter. For the quarter, total revenue was $12.5 million, a 15% increase over prior year. Platform revenue increased 15% to $12.2 million. Services revenue was up 6% to $0.3 million. We produced a record $9.6 million in adjusted gross profit, resulting in a record margin of 77% for the second quarter, up 2 percentage points from the same period a year ago. Adjusted EBITDA for the quarter was $2.9 million, down 6% from prior year. Adjusted EBITDA margin for the quarter was 23%, compared to 29% in prior year. We generated $2.5 million in cash flow from operations in the second quarter, compared to generating $2.3 million for the same period 2021. Cash and cash equivalents were $32.3 million at June 30, 2022. We are especially pleased with our strong adjusted EBITDA and cash flow generation, given this was our first full quarter of…

Thank you, Derek, and good afternoon. We are pleased with our overall performance in the second quarter. Notwithstanding the broader economic challenges the economy is currently facing, we continue to see strong revenue growth in all our key verticals with the exception of collections and a portion of real estate, both of which I will expand upon shortly. Importantly, along with nice growth, the business continues to produce increasing profitability, solid adjusted EBITDA and healthy cash flow. As you know, this management team has always stressed the importance of building this business brick-by-brick, creating a foundation for healthy growth, balance sheet strength and operational leverage, as we continue our path of becoming a multibillion dollar market cap company. As a result of this discipline, we are stronger and better positioned today to execute on our multiyear growth plan than ever in our history. The overall market for our solutions continue to show robust fundamentals and increasing opportunity for growth. In addition, we have several key product releases slated for the second half of 2022 and throughout 2023, which, with a couple of initial customer wins in these areas, will negate the temporary growth headwinds we are seeing in collections and a portion of our real estate vertical. As it relates to collections, we have provided commentary in the past regarding the government imposed forbearance programs and collections moratoria resulting from the COVID pandemic. Because of this, our collections business has remained relatively flat over the last 18 months. For the second quarter 2022, collections revenue was up approximately 1% over the same period 2021. Historically, we see increased demand for first and third-party collection solutions during times of slowing economic activity and consumer deterioration. However, today our collections customers are facing two issues: The first issue is the continued government…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] At this time, I'd like to turn the call over to Derek Dubner for closing remarks. : :

Thank you to those who joined us today. We delivered a strong second quarter, once again demonstrating the demand for our solutions and the resilience and powerful operational leverage of our business model. While economic volatility impacted a portion of revenue in the second quarter, the majority of our business, which is fraud and identity, continued to expand, and we are well positioned for the remainder of the year and beyond. Good day.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.