Good day ladies and gentlemen, and welcome to Red Violet's Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. I would now like to the hand the -- I would 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 2023 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 be 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 and adjusted EBITDA margin and free cash flow. Reconciliations of these non-GAAP financial measures to their most directly comparable US 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.

Thanks, Camilo. Good afternoon. Good afternoon to all and thanks for joining us today to discuss our results for the second quarter of 2023. We are pleased to report a very strong quarter, further highlighting our ability to drive both top line growth and profitability. We are experiencing continued strength in new customer onboarding, pipeline expansion from higher-tier prospects and robust customer conversion at all levels. We again generated solid revenue growth which combined with our dedication to operational efficiency, translated into healthy margins throughout the P&L and solid net income, showcasing the company's resilience and adaptability in a dynamic market environment. Given our results and the present pulse on the business, including closing out a very strong July, we are well positioned for the back half of the year. Now, turning to the numbers. For the quarter, total revenue was $14.7 million, a 17% increase over prior year. We produced $11.4 million in adjusted gross profit, resulting in adjusted gross margin of 78% in the second quarter, up one percentage point. Adjusted EBITDA for the quarter was $4.6 million, up 58% over prior year. Adjusted EBITDA margin was 32% for the quarter, up nine percentage points. We generated $1.3 million in free cash flow for the quarter, compared to generating $0.3 million in the prior year. Our IDI billable customer base grew by 241 customers sequentially from the first quarter, ending the second quarter at 7,497 customers. FOREWARN added 15,189 users during the second quarter, ending the quarter at 146,537 users. Over 285 REALTOR Associations are now contracted to use FOREWARN. Demand continues to be strong for identity and fraud solutions across the enterprise. We experienced healthy proportional customer demand across all means of IDI access, API batch and online. Last quarter, we saw our new customer applications at…

Thank you, Derek, and good afternoon. We are extremely pleased with our second quarter results. We saw solid year-over-year revenue growth which flowed nicely down the P&L, translating into highly profitable growth dollars. As Derek pointed out earlier, our $1.9 million increase in adjusted gross profit produced a $1.7 million increase in adjusted EBITDA. This 90% contribution is indicative of our profitability leverage and underscores our disciplined approach to driving productivity and efficiency. We continue to see strength in the expansion of our opportunity pipeline including higher tier prospects, and are converting those opportunities to win. With that, let's jump into our second quarter results. For clarity, all the comparisons I will discuss today will be against the second quarter of 2022 unless noted otherwise. Total revenue was $14.7 million, a 17% increase over prior year. We produced $11.4 million in adjusted gross profit resulting in adjusted gross margin of 78% in the second quarter up 1 percentage point. Adjusted EBITDA for the quarter was $4.6 million, up 58% over prior year. Adjusted EBITDA margin was 32%, up 9 percentage points. We generated $1.3 million in free cash flow for the quarter compared to generating $0.3 million in prior year. On the IDI side, we continue to see strong volume and double-digit revenue growth across several verticals, including financial and corporate risk, investigative and emerging markets. As has been the case for several quarters, both collections and real estate remain relatively flat over prior year. We do believe some tailwinds will form in collections in the near term and expect to see volumes and corresponding revenue increase in the not-too-distant future. As for real estate, volumes remained steady, but with interest rates still hovering around 7%, residential housing inventory remaining low and commercial struggling with post pandemic related issues and…

Thank you, and thank you again, for joining us today. To conclude, we are pleased to report a strong quarter of top line growth and profitability. Given our robust customer onboarding, our progress against our growing larger enterprise pipeline, the secular tailwinds in identity verification and fraud solutions, and a healthy balance sheet, we are well positioned for the back half of the year and 2024.

This concludes today's conference call. Thank you for participating. You may now disconnect.