i3 Verticals (IIIV) 2025 Conference June 04, 2025 11:25 AM ET Speaker0 So why don't we go ahead and get started. Today we've got I three verticals with us and from the company we've got Clay Whitson who's the Chief Strategy Officer and Jeff Smith, CFO. So they're gonna run through a little bit of slides and open up to Q and A afterwards, but let's let's get it going. Okay. Speaker1 I'll start with a little bit of background. This is our third public company. Greg Daily founded all three companies and took t ...

He also leads the investing group IPO Edge , which offers actionable information on growth stocks through first-look IPO filings, previews on upcoming IPOs, an IPO calendar for tracking what’s on the horizon, a database of U.S. IPOs, and a guide to IPO investing to walk you through the entire IPO lifecycle - from filing to listing to quiet period and lockup expiration dates.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to init ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38532 i3 Verticals, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organizat ...

i3 Verticals (IIIV) Q2 2025 Earnings Call May 09, 2025 08:30 AM ET Company Participants Clay Whitson - Chief Strategy Officer & DirectorGreg Daily - Chairman and Chief Executive OfficerGeoff Smith - CFORick Stanford - PresidentPaul Christians - Chief Revenue OfficerJohn Davis - Managing DirectorPeter Heckmann - MD - Equity ResearchAlex Markgraff - Vice President - Equity Research Operator Good day, everyone, and welcome to the i3 Vertical Second Quarter twenty twenty five Earnings Conference Call. Today's c ...

i3 Verticals (IIIV) Q2 2025 Earnings Call May 09, 2025 08:30 AM ET Company Participants Clay Whitson - Chief Strategy Officer & DirectorGreg Daily - Chairman and Chief Executive OfficerGeoff Smith - CFORick Stanford - PresidentPaul Christians - Chief Revenue OfficerJohn Davis - Managing DirectorPeter Heckmann - MD - Equity ResearchAlex Markgraff - Vice President - Equity Research Operator Good day, everyone, and welcome to the i3 Vertical Second Quarter twenty twenty five Earnings Conference Call. Today's c ...

i3 Verticals (IIIV) Q2 2025 Earnings Call May 09, 2025 08:30 AM ET Speaker0 Good day, everyone, and welcome to the i3 Vertical Second Quarter twenty twenty five Earnings Conference Call. Today's call is being recorded and a replay will be available starting today through May 16. The number for today's for the replay is (877) 344-7529 and the code is 500000899364. The replay may also be accessed for thirty days at the company's website. At this time, for opening remarks, I would like to turn the call over to ...

1 Revenue Composition(1) Q2 FISCAL YEAR 2025 Supplemental Information | ($ in thousands) | | | | | | | | | | Quarter Ended | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | March 31, 2025 | | December 31, 2024 | | September 30, 2024 | | June 30, 2024 | | March 31, 2024 | | December 31, 2023 | | September 30, 2023 | | June 30, 2023 | | March 31, 2023 | | Software and related service revenue | | | | | | | | | | | | | | | ...

i3 VERTICALS REPORTS SECOND QUARTER 2025 FINANCIAL RESULTS Completes Acquisition of Utility Billing Software Company Completes Divestiture of Healthcare RCM Business NASHVILLE, Tenn. (May 8, 2025) – i3 Verticals, Inc. (Nasdaq: IIIV) ("i3 Verticals" or the "Company") today reported its financial results for the fiscal second quarter ended March 31, 2025. Highlights from continuing operations for the three and six months ended March 31, 2025 vs. 2024 1 See footnotes on the following page. -MORE- • Second quar ...

Financial Position - As of December 31, 2024, the company had $85.6 million in cash and cash equivalents and $450.0 million available under its 2023 Senior Secured Credit Facility, maintaining compliance with financial covenants with a consolidated interest coverage ratio of 3.7x and total leverage ratio of 0.1x[248]. - Cash and cash equivalents as of December 31, 2024, were $85.6 million, with available borrowing capacity of $450.0 million under the 2023 Senior Secured Credit Facility[281]. - The company expects cash flow from operations and available borrowing capacity to be sufficient to fund cash needs for at least the next twelve months[282]. - As of December 31, 2024, total material cash requirements amount to $41.975 million, with $31.253 million due within one year[309]. - The 2023 Senior Secured Credit Facility provides for aggregate commitments of $450 million in the form of a senior secured revolving credit facility[292]. - The 2023 Senior Secured Credit Facility consists of a $450 million revolving credit facility, with no borrowings outstanding as of December 31, 2024[323]. - The company is in compliance with financial covenants, maintaining a minimum consolidated interest coverage ratio of 3.0 to 1.0 and a maximum total leverage ratio of 5.0 to 1.0[323]. Revenue and Growth - Annualized recurring revenue (ARR) from continuing operations for the three months ended December 31, 2024, was $193.3 million, an 8% increase from $179.6 million in the same period of 2023[264]. - Revenue increased by $6.6 million, or 12.1%, to $61.7 million for the three months ended December 31, 2024, compared to $55.1 million for the same period in 2023[268]. - Revenue within the Public Sector increased by $5.3 million, or 12.2%, to $48.8 million for the three months ended December 31, 2024[269]. - Revenue within Healthcare increased by $1.6 million, or 13.7%, to $13.2 million for the three months ended December 31, 2024[270]. Profitability - Net income attributable to i3 Verticals, Inc. was $2.1 million for the three months ended December 31, 2024, compared to $1.1 million for the same period in 2023, representing an increase of 87.2%[267]. - The company's net income increased from $1.5 million for the three months ended December 31, 2023, to $3.1 million for the same period in 2024[288]. - Adjusted EBITDA margin for the public sector segment was 39% for the three months ended December 31, 2024, compared to 40% for the same period in 2023[265]. - Adjusted EBITDA margin for the healthcare segment increased to 28% for the three months ended December 31, 2024, from 24% for the same period in 2023[265]. Expenses and Cash Flow - Interest expense decreased by $6.0 million, or 89.8%, to $0.7 million for the three months ended December 31, 2024, from $6.7 million for the same period in 2023[275]. - Other income was $1.8 million for the three months ended December 31, 2024, compared to other expense of $0.1 million for the same period in 2023[276]. - Net cash provided by operating activities decreased by $2.9 million to $11.5 million for the three months ended December 31, 2024, compared to $14.4 million for the same period in 2023[288]. - Net cash used in investing activities decreased by $5.8 million to $1.4 million for the three months ended December 31, 2024, from $7.2 million for the same period in 2023[289]. - Net cash used in financing activities increased by $1.9 million to $10.5 million for the three months ended December 31, 2024, compared to $8.6 million for the same period in 2023[290]. Strategic Initiatives - The company completed the sale of its Merchant Services Business for approximately $438 million on September 20, 2024, which included the equity interests of certain subsidiaries and associated proprietary technology[249]. - The company emphasizes a disciplined approach to acquisitions as a core component of its growth strategy, enhancing its proprietary payment facilitator platform and software solutions[250]. - The company has reclassified certain expenses to align with its new business model following the disposal of the Merchant Services Business, impacting the presentation of costs in its financial statements[255][256]. - The company anticipates using net proceeds from the sale of its Merchant Services Business for general corporate purposes, including share repurchases[284]. Risks and Challenges - Economic uncertainties, including inflation and elevated interest rates, may impact the company's financial results, although the extent of this impact is difficult to predict[247]. - The company faces various risks, including cybersecurity threats, competition, and regulatory challenges, which could affect its ability to achieve its strategic goals[242]. Share Repurchase and Debt - The company has a share repurchase program authorized for up to $50.0 million of Class A common stock, set to expire on August 8, 2025[313]. - During the three months ended December 31, 2024, the company repurchased 496,785 shares of Class A Common Stock at an average price of $22.49[315]. - The company paid $87.4 million to repurchase $90.8 million in aggregate principal amount of its Exchangeable Notes on January 18, 2024[307]. - As of December 31, 2024, $26.2 million of the original aggregate principal amount of $138.0 million of Exchangeable Notes was outstanding[306][308]. - The total amount due under the Tax Receivable Agreement as of December 31, 2024, is $39.2 million, with expected payments ranging from $0 to $9.9 million per year over the next 22 years[317]. Other Information - A 10% change in foreign currency exchange rates would not have had a material impact on the company's consolidated results for the three months ended December 31, 2024[324]. - The company utilizes a Monte Carlo simulation to assess the fair value of contingent consideration related to acquisitions[311].

Financial Data and Key Metrics Changes - Revenue increased by 12% year-over-year to $61.7 million from $55.1 million in Q1 2024, reflecting organic growth of 10% and approximately $1 million from a recent acquisition [14] - Adjusted EBITDA rose by 17% to $16.4 million for Q1 2025 from $14 million for Q1 2024, with adjusted EBITDA as a percentage of revenues increasing to 26.5% from 25.4% [17] - Annual recurring revenues (ARR) increased by 7.6% to $193.3 million for Q1 2025 compared to $179.6 million for Q1 2024 [14] Business Line Data and Key Metrics Changes - SaaS revenue grew by 16%, contributing significantly to the overall revenue growth [7] - Payments revenue increased by 7%, with expectations that SaaS and payments revenues will outpace other forms of revenue for the remainder of the year [15] - Non-recurring sales of software licenses increased to $2.7 million for Q1 2025 from $0.4 million for Q1 2024 [15] Market Data and Key Metrics Changes - Revenues in the public sector vertical increased by 12% to $48.8 million for Q1 2025 from $43.5 million for Q1 2024, representing 79% of total revenues [19] - Healthcare segment revenues increased by 14% to $13.2 million for Q1 2025 from $16.6 million for Q1 2024, driven by recurring software services and non-recurring sales of software licenses [20] Company Strategy and Development Direction - The company continues to focus on integrating payments within its vertical market software base, particularly in key markets such as utilities and permitting [9] - M&A remains a critical part of the company's strategy, with a strong pipeline focused on the public sector vertical [27] - The company is transitioning legacy contracts to a SaaS model and introducing new technology modules to meet current market demands [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fiscal year 2025, highlighting strong revenue growth and the potential for continued ARR growth driven by SaaS [7] - The company anticipates high single-digit organic revenue growth with adjusted EBITDA margin improvement of 50 to 100 basis points per year [23] - Management noted that the competitive landscape for larger utilities is positive, with increasing demand for upgraded software solutions [59] Other Important Information - The company has a strong balance sheet post-sale of the Merchant Services business, with a cash balance of $85.6 million and $450 million of borrowing capacity on its revolving credit [21][22] - The company reaffirmed its guidance for FY 2025, projecting revenues between $243 million and $263 million and adjusted EBITDA between $63 million and $71.5 million [23] Q&A Session Summary Question: Any lumpiness in healthcare growth? - Management expects low single-digit growth for healthcare this year despite recent improvements [48] Question: Update on large utility customer project? - The project is progressing well, with expected revenue growth from approximately $3 million to $5 million this year [54] Question: Competitive landscape for larger utilities? - The landscape is positive, driven by the need to upgrade legacy software, with increasing demand for new technologies [59] Question: Differences between larger and smaller M&A opportunities? - The company continues to focus on deals between $2 million and $5 million in EBITDA, with no significant changes in the competitive environment [72] Question: Outlook on spending trends at the state or city level? - No pullback has been observed, and the company is focused on providing flexible deployment options for government agencies [75] Question: Drivers of high single-digit organic growth? - The growth is driven by a combination of new logos and existing projects, with expectations for inflation to contribute slightly in the future [93]