Gross Margin % is calculated as gross profit divided by its revenue. Red Violet's Gross Profit for the
three
months ended in Mar. 2024 was $13.76 Mil. Red Violet's Revenue for the
three
months ended in Mar. 2024 was $17.51 Mil. Therefore, Red Violet's Gross Margin % for the quarter that ended in Mar. 2024 was 78.55%.
The historical rank and industry rank for Red Violet's Gross Margin % or its related term are showing as below:
RDVT'
s Gross Margin % Range Over the Past 10 Years
Min: 6.09 Med: 63.47 Max: 78.37
Current: 78.37
During the past 8 years, the highestGross Margin % of Red Violet was 78.37%. The lowest was 6.09%. And the median was 63.47%.
RDVT's Gross Margin % is ranked better than 85.86% of 2638
companies
in the Software industry
Industry Median: 41.84
vs RDVT: 78.37
Red Violet had a gross margin of 78.55% for the quarter that ended in Mar. 2024 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Red Violet was 10.30% per year.
Red Violet Gross Margin % Historical Data
The historical data trend for Red Violet's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Red Violet's Gross Margin %
For the Software - Application subindustry, Red Violet's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Red Violet's Gross Margin % Distribution in the Software Industry
For the Software industry and Technology sector, Red Violet's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Red Violet's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Red Violet (NAS:RDVT) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Red Violet had a gross margin of 78.55% for the quarter that ended in Mar. 2024 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Red Violet Gross Margin % Related Terms
Thank you for viewing the detailed overview of Red Violet's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Red Violet Inc is a software and services company. It specializes in big data analysis, providing cloud-based, mission-critical information solutions to enterprises in a variety of industries. Through its CORE data fusion platform, it provides mission-critical information about individuals, businesses, and assets.
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