Good day, ladies and gentlemen, and welcome to Red Violet's First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Camilo Ramirez, Director of Finance and Investor Relations.
Please go ahead.
Good afternoon, and welcome. Thank you for joining us today to discuss our Q1 2021 financial results. With me today is Derek Dufner, our Chairman and Chief Executive Officer and Dan McLaughlin, 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 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 ks and the subsequent 10 Qs.
During the call, we may present certain non GAAP financial information relating to adjusted gross profit, Adjusted gross margin and adjusted EBITDA. 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 Statements 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 Gubner.
Thanks, Camilo, Good afternoon to those joining us today to discuss the results of our Q1 2021. Red Violet delivered a strong start to the year. We kicked off the year with our highest quarterly revenue in our history, driven by strong demand across our product suite. I am very proud of the Red Violet team as they capitalized upon increased momentum in our markets due to the improving economy and the leverage of our differentiated assets, which translated into strong demand for our solutions. Turning now to our performance in the quarter.
We generated record revenue of $10,200,000 A 10% increase over the Q1 of last year. Adjusted gross profit increased 24% to $7,500,000 and adjusted gross margin increased to 73% from 65% in the same period of 2020. Adjusted EBITDA increased 66% to $2,900,000 also a record in a given quarter in our history. Most importantly, Platform revenue increased to $9,800,000 21 percent over the same period last year. In the Q1 of this year, we set another new record for contractual revenue at 80%.
As a reminder, we break out revenue into platform revenue and services revenue. Platform revenue is exactly that, all revenue driven by our technology platform, Core. This revenue is very high margin, driven by our fixed cost business model. Services revenue is made up of revenues from our collections suite ancillary product, IDI Verified, a lower margin verification product. As IDI Verified was most significantly impacted by pandemic related collections moratoria and is still slowly recovering, The rest of the business is growing healthily and generating these record financial metrics without any real contribution from our services revenue.
For example, we handily topped 1st quarter revenues of last year without the additional $800,000 in services revenue included in the Q1 of last year. As the collections industry continues its recovery, it will be additive to the overall growth momentum we are experiencing across the business. Turning to IDI Core, we added over 170 new customers during the Q1, Ending the quarter with 5,902 customers as we continue to enhance the breadth And depth of data, increased functionality and introduced new features, all of which is driving greater efficiency and effectiveness in customer workflows. This growth occurred Notwithstanding the termination of 162 customers in the Q1 as a carryover of our 4th quarter implementation of a heightened compliance and credentialing program that we detailed on our earnings call last quarter. Revenue associated with these terminated customers is immaterial, representing approximately $7,000 a month.
ForWarn added over 10,400 users during the Q1. ForWarn has now surpassed 58,800 users and over 140 Realtor associations have now contracted for Forewarn, securing this unique verification and risk prevention tool for their real estate professionals. With a 100 percent association renewal rate, ForWarn has truly become the gold standard in Realtor safety. While IDI Core and ForWarn are our 2 prominent brands in the market, it's important to remember That our technology platform is our product suite as the platform powers those 2 brands And all bespoke applications. With a customer centric approach from first contact, We strive to understand our customers' needs.
Whether that fits squarely within IDI Core or forewarn is irrelevant As our platform is designed to be flexible enough to customize solutions for particular needs with little modification. Many of our largest customers are strategic integrations with our platform, where their solutions in market are dependent upon our platform and its speed, flexibility, throughput and the accurate information that it generates. Today, from a revenue perspective, The IDI Core brand represents 93% of our total revenue and ForWarn represents the remaining 7%. Presently, the primary markets we serve consist of real estate, financial services, collections and investigative, which includes industries such as law enforcement and private investigative firms. These markets are benefiting from a general improvement in the economy, including a robust housing market, increasing commerce and new customer and employee onboarding.
We also serve a number of other industries in what we refer to as emerging markets. We know from prior experience that emerging markets represent strong opportunities for growth, But historically, just due to the early stages of our evolution as a company, we have focused our sales efforts outside of this area. Today, with the business as strong as it has ever been, we see increased opportunity to drive our solutions suite Into these emerging markets, while continuing our strong growth in our primary markets. By way of example, we We are planning our strategic entry into online gaming, government and insurance, bringing current and new solutions in identity, Fraud and Marketing. Building upon our identity intelligence capabilities, we believe we are in early innings of becoming the go to solution for all things identity within these strong and growing markets.
To provide a bit more insight in today's primary markets, our solutions are used in the following ways. Within real estate, IDI Core is used for property owner diligence, for propensity modeling and identity verification for buyer seller transactions. FOREWARN is used for instant identity verification and risk assessment and mitigation. In Financial Services, use cases include identity verification, fraud prevention and due diligence in support of payments, frictionless commerce and customer onboarding as well as KYC or know your customer and AML Anti Money Laundering. In collections, use cases include debtor and asset verification, Location and legislative compliance.
As you can see, our solutions power essential risk and compliance workflows across key disparate industries and these applications apply to just about any transaction. In support of our expansion, both within primary and emerging markets, we've recently hired several industry veterans with deep knowledge in identity, data and analytics to fill key new business development positions. We will continue to address key positions in strategic sales to move into larger enterprises within various verticals. Our strong balance sheet and cash generation are driving expansion of our competitive advantages, Including our cloud native architecture, extensible platform, differentiated data assets and customer centric solutions. We will continue to invest in our teams to drive these competitive advantages into our markets.
Given the improving economy, secular tailwinds and the applicability of our technology, Differentiated data assets and innovative solutions, we are very excited about the future. I will now turn it over to Dan to discuss the
financials. Thank you, Derek, and good afternoon. We had a great Q1. With strong profitable growth from platform revenue, we hit records in nearly every key financial metric. We are seeing nice customer adoption across our brands, which is Translating nicely into new customer revenue.
As well, we are seeing strong growth revenue from existing customers. Across the board, I am extremely pleased with how the business is performing. So let's dive into the Q1 results. For clarity, All the comparisons I will discuss today will be against the Q1 of 2020 unless noted otherwise.
Total revenue was $10,200,000
a 10% increase over prior year and our highest quarterly revenue ever. Platform revenue increased 21 percent to a record $9,800,000 As Derek discussed, Our services revenue continues to be impacted by COVID related government imposed collection moratorium and forbearance programs and as a result was down 66 percent to $400,000 Our adjusted gross margin was the highest it has ever been at 73%, up 8 percentage points. These profitable dollars slowed nicely down the P and L, generating a record 2 $900,000 in adjusted EBITDA, up 66% over prior year. Continuing through the details of our P and L. As mentioned, revenue was $10,200,000 for the Q1 consisting of revenue from new customers of 1,000,000 Base revenue from existing customers of $7,300,000 and growth revenue from existing customers of 1,900,000 Our IDI core billable customer base grew sequentially by 176 customers compared to the Q4 of 2020, Ending the Q1 at 5,902 customers.
Forewarn added over 10,400 users during the Q1, our highest sequential increase ever. As Derek pointed out earlier, we discussed on our last earnings call that at End of the Q3 2020, we implemented enhanced credentialing and compliance standards, which impacted mostly smaller customers in our investigative vertical during the Q1 and that we expected to see some residual impact in the Q1 of 2021. That residual impact The first quarter resulted in the termination of 162 customers. These 162 customers represented in total A loss of only $7,000 in monthly revenue. Netting out this compliance initiative, our sequential customer adds The IDI core billable customer base in the Q1 would have been over 300 customers and consistent with prior quarters and in line with trending expectations.
Our contractual revenue was 80% for the quarter, an 11 percentage point increase over prior year And our highest quarterly contractual revenue ever. Our revenue attrition percentage was 7% compared to 8% in prior year. This metric trended nicely in the Q1 despite some lingering effects as it is calculated on a trailing 12 month basis from the pandemic related customer concessions and temporary transactional customer pauses from the 2nd Q3 of 2020. We would expect our revenue attrition percentage to trend between 5% 10% for the remainder of the year. Moving on from our revenue metrics and down the P and L, our cost of revenue, exclusive of depreciation and amortization, decreased $500,000 or 16% to $2,800,000 This $500,000 decrease was a result of a decrease in third party servicer costs associated with our services revenue, partially offset by an increase in data acquisition costs.
Adjusted gross profit increased 24% to a record $7,500,000 producing an adjusted gross margin of 73%, an 8 percentage point increase over 4th quarter 2020 and our highest adjusted gross margin ever. Sales and marketing expenses remained flat at $2,200,000 for the quarter. The $2,200,000 of sales and marketing expense for the quarter consisted primarily of $1,200,000 in employee salary and benefits and $600,000 in sales commissions. General and administrative expenses increased $200,000 or 3 percent to $4,600,000 for the quarter. This increase was primarily the result of a $300,000 increase in payroll and benefits, slightly offset by a decrease in share based compensation expense.
The $4,500,000 in general and administrative For the quarter consisted primarily of $1,900,000 of non cash share based compensation expense, dollars 1,500,000 of employee salaries And amortization increased $400,000 or 38 percent to $1,300,000 for the
quarter. This increase
was primarily the result of The amortization of internally developed software. Net loss narrowed $900,000 or 61 percent to $600,000 for the quarter, our best quarter ever. We reported a loss of $0.05 per share for the quarter Based on a weighted average share count of 12,200,000 shares. Moving on to the balance sheet. Cash and cash equivalents were $12,900,000 at March 31, 2021 compared to $13,000,000 at December 31, 2020.
Current assets were $17,500,000 compared to $16,700,000 and current liabilities were $4,700,000 compared to $5,000,000 We generated $1,200,000 in cash Operating activities for the quarter ended March 31, 2021, and for the same period in 2020. Internally, we track our operational cash burn versus burn on a monthly basis by calculating adjusted EBITDA and subtracting the cash we use for the development of internal use software and other capital expenses, which can be found on our statement of cash flow. Based on this operational earn burn analysis, we earned $1,600,000 in cash during the Q1 2021 compared to earning $200,000 for the Q1 2020. Cash used in investing activities was 1,300,000 The quarter ended March 31, 2021, mainly the result of $1,200,000 used for software developed for internal use. There were no financing activities during the period.
In closing, I'm very happy with the performance in the Q1. Across the board, our financial metrics are extremely strong. Our teams are delivering in their respective areas. Our technology platform continues to win business from the competition at a higher customer tier. We are seeing strong leverage in the business And very healthy profitability metrics as we continue to scale.
We are excited with the momentum we are seeing. With that, our operator will now open the line for Q and A.
There are no questions at this time. Presenters, you may end the call.
Thank you very much. We're very proud of posting a record quarter across many metrics. We're seeing increased momentum in the business And we're generating cash, which we are investing to execute upon our long term strategy. We believe we are very well positioned for
This concludes today's conference call. Thank you for participating. You may now all disconnect.