Financial Position - As of December 31, 2025, the company had $37.5 million in cash and cash equivalents and $400.0 million available under its 2023 Senior Secured Credit Facility, maintaining compliance with financial covenants[258]. - Cash and cash equivalents as of December 31, 2025, were $37.5 million, with available borrowing capacity of $400.0 million under the 2023 Senior Secured Credit Facility[293]. - The consolidated interest coverage ratio was 94.9x and the total leverage ratio was 0.0x as of December 31, 2025, indicating strong financial health[319]. - The company maintained a consolidated interest coverage ratio of 94.9x and a total leverage ratio of 0.0x as of December 31, 2025, in compliance with financial covenants[295]. - The 2023 Senior Secured Credit Facility provides aggregate commitments of $400.0 million, with the ability to seek additional commitments based on consolidated EBITDA[306]. - The 2023 Senior Secured Credit Facility consists of a $400 million revolving credit facility, with no borrowings outstanding as of December 31, 2025[344]. - The interest rate on the 2023 Senior Secured Credit Facility is based on Term SOFR plus an applicable margin of 2.00% to 3.00%[343]. - 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[344]. - As of December 31, 2025, the company had contractual obligations totaling $26.645 million, with $12.391 million due within one year[324]. Revenue and Income - The company generates revenue from software and related services, including subscriptions, recurring services, and volume-based payment processing fees[268]. - Annualized recurring revenue (ARR) for the three months ended December 31, 2025, was $169.6 million, an increase of 8.4% from $156.4 million in the same period of 2024[278]. - Total revenue for the three months ended December 31, 2025, was $52.7 million, a 0.9% increase from $52.2 million in the same period of 2024, driven by a $3.3 million increase in recurring revenues[282]. - Net income from continuing operations for the three months ended December 31, 2025, was $1.1 million, a decrease of 61.1% from $2.8 million in the same period of 2024[281]. - The company’s net income decreased from $3.1 million for the three months ended December 31, 2024, to $0.9 million for the same period in 2025[302]. Expenses - Operating expenses for the three months ended December 31, 2025, totaled $51.1 million, an increase of 1.8% from $50.2 million in the same period of 2024[281]. - Selling, general and administrative expenses encompass salaries, professional services, and other operational costs[271]. - Selling, general and administrative expenses rose by 1.9% to $27.0 million for the three months ended December 31, 2025, driven by increased personnel costs[284]. - Other costs of services include personnel costs for software installation and customer support, as well as losses from chargebacks[270]. - Other costs of services increased by 12.9% to $17.6 million for the three months ended December 31, 2025, primarily due to a $1.6 million increase in software costs[283]. Cash Flow - Net cash provided by operating activities increased by $2.6 million to $14.1 million for the three months ended December 31, 2025, compared to $11.5 million for the same period in 2024[300]. - Net cash used in financing activities increased by $30.0 million to $40.5 million for the three months ended December 31, 2025, from $10.5 million for the same period in 2024, primarily due to a $26.7 million increase in stock repurchase payments[304]. - Net cash used in investing activities increased by $0.4 million to $1.8 million for the three months ended December 31, 2025, compared to $1.4 million for the same period in 2024[303]. - The company’s net cash provided by operating activities was impacted by a $4.9 million increase in cash from changes in net operating assets and liabilities during the three months ended December 31, 2025[301]. Business Transactions - The company completed the sale of its Healthcare RCM Business for $96.3 million in cash on May 5, 2025, reclassifying the results as discontinued operations[259][260]. - The sale of the Merchant Services Business was finalized on September 20, 2024, for approximately $439.5 million in cash, also reflected as discontinued operations[261][263]. - A recent acquisition effective January 1, 2026, involved a business in the transportation market for $60.0 million in cash, with potential contingent consideration of up to $20.0 million based on financial performance[265]. - The company repurchased $90.8 million in aggregate principal amount of its Exchangeable Notes for $87.4 million on January 18, 2024[321]. - The company announced a new share repurchase program authorizing the repurchase of up to $60.0 million of Class A common stock[329]. - The previous share repurchase program, which authorized up to $50.0 million, has been fully expended[332]. - Under the August 2025 Share Repurchase Program, the company repurchased 1,522,838 shares at an average price of $24.88, totaling $38.3 million[334]. - The August 2024 Share Repurchase Program resulted in the repurchase of 1,573,881 shares at an average price of $23.86, totaling $38.0 million[337]. Economic Environment - The company operates in a challenging economic environment characterized by inflationary pressures and elevated interest rates, impacting financial results[257]. - 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, 2025[345]. Valuation and Fair Value - The company uses a Monte Carlo simulation to assess the fair value of contingent consideration related to acquisitions[326].

Financial Data and Key Metrics Changes - Revenue for Q1 2026 increased by 1% to $52.7 million from $52.2 million in Q1 2025, reflecting an 8% growth in recurring revenues, partially offset by a $3 million decline in non-recurring professional services and software license revenues [8][10] - Annual recurring revenues rose by 8% to $169.6 million for Q1 2026 compared to $156.4 million for Q1 2025, with 80% of revenues coming from recurring sources [8][10] - Adjusted EBITDA declined by $1 million to $13.6 million for Q1 2026 from $14.6 million for Q1 2025, with adjusted EBITDA as a percentage of revenues at 25.8% for Q1 2026 versus 27.9% for Q1 2025 [9][10] Business Line Data and Key Metrics Changes - SaaS revenue led with over 24% growth, marking four consecutive quarters of over 20% growth [4][8] - Transaction-based revenue grew by 12%, while payments revenue increased by 8% [8] - Maintenance revenues declined by 8%, reflecting a shift towards SaaS and new sales [8] Market Data and Key Metrics Changes - The company operates in the transportation market and has expanded its geographic reach through a recent acquisition, enhancing its position in ongoing modernization initiatives [12][13] - The company is currently active in 30 states and four Canadian provinces within the transportation market [13][17] Company Strategy and Development Direction - The company remains focused on recurring revenue sources and disciplined capital deployment, with expectations for continued growth in 2026 [4][6] - The recent acquisition is expected to significantly enhance the company's offerings in the transportation market, particularly in insurance verification [12][13] - The company is also investing in AI-enabled solutions to enhance its product offerings and improve customer engagement [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted that while recurring revenue sources are strong, there are headwinds in professional services revenue, which is expected to decline [20][22] - The long-term expectation for organic revenue growth remains high single-digit, with recurring revenues expected to grow at a double-digit rate for FY 2026 [11][22] - Management expressed optimism about the future, citing strong demand for technology solutions in justice tech and transportation markets [16][17] Other Important Information - The company has a strong balance sheet with $37 million in cash and no debt, and it has a $400 million revolving credit facility available for acquisitions and stock repurchases [10][11] - The company expects adjusted diluted earnings per share to be in the range of $1.08-$1.16 for FY 2026 [11] Q&A Session Summary Question: Update on FY 2026 outlook and organic growth - Management confirmed that organic growth has slightly ticked down, primarily due to professional services revenue [20][21] Question: Recurring revenue growth expectations - Management affirmed that recurring revenue growth is expected to remain in the 8%-10% range for the year [22] Question: Capital allocation strategy regarding buybacks and M&A - Management indicated that they have been opportunistic with buybacks and believe their stock is undervalued [23][24] Question: Details on the new acquisition's market share and revenue model - Management highlighted the acquisition's strong market presence and potential for growth, noting it is not currently transactional but has opportunities for integration with payments [27][28] Question: Drivers of SaaS revenue growth and sustainability - Management expects organic SaaS growth to remain above 20%, driven by various market segments [34][35] Question: Thoughts on AI adoption and its impact on GovTech - Management acknowledged the slow adoption of AI in GovTech due to regulatory concerns but sees potential for growth in AI-enabled solutions [38][39]

i3 Verticals (NasdaqGS:IIIV) Q1 2026 Earnings call February 06, 2026 08:30 AM ET Company ParticipantsCharles Nabhan - Managing Director of Equity Research- Payments/FintechClay Whitson - Chief Strategy OfficerGeoff Smith - Chief Financial OfficerGreg Daily - Chairman and CEORick Stanford - PresidentConference Call ParticipantsAlexander Markgraf - AnalystMadison Schurr - Senior Associate/AnalystPeter Heckman - AnalystOperatorGood day, everyone, and welcome to the i3 Verticals first quarter 2026 earnings conf ...

i3 Verticals (NasdaqGS:IIIV) Q1 2026 Earnings call February 06, 2026 08:30 AM ET Speaker2Good day, everyone, and welcome to the i3 Verticals first quarter 2026 earnings conference call. Today's call is being recorded, and a replay will be available starting today through February 13th. The number for the replay is 855-669-9658, and the code is 6769466. The replay may be accessed for 30 days at the company's website. At this time, for opening remarks, I would like to turn the call over to Clay Whitson, Chief ...

Q1 FISCAL YEAR 2026 Supplemental Information 1 Revenue Composition(1) | ($ in thousands) | | | | | | | | | | Quarter Ended | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | December 31, 2025 | | September 30, 2025 | | June 30, 2025 | | March 31, 2025 | | December 31, 2024 | | September 30, 2024 | | June 30, 2024 | | March 31, 2024 | | December 31, 2023 | | Software and related service revenue | | | | | | | | | | | | | ...

i3 VERTICALS REPORTS FIRST QUARTER 2026 FINANCIAL RESULTS Completes Acquisition of Motor Vehicle Insurance Verification Software Company NASHVILLE, Tenn. (February 5, 2026) – i3 Verticals, Inc. (Nasdaq: IIIV) ("i3 Verticals" or the "Company") today reported its financial results for the fiscal first quarter ended December 31, 2025. 1. As a result of the sale of the Company's merchant services business (the "Merchant Services Business"), which was completed on September 20, 2024, and the sale of the Company' ...

NASHVILLE, Tenn.--(BUSINESS WIRE)---- $IIIV--i3 Verticals, Inc. (Nasdaq: IIIV) ("i3 Verticals†or the "Company†), announced today that it will release its financial results for the first quarter ended December 31, 2025, on Thursday, February 5, 2026, after the Nasdaq market close. The Company will also host a conference call on Friday, February 6, 2026, at 8:30 a.m. ET to discuss financial results and operations. To listen to the call live via telephone, participants should dial (844) 887-9399 approximat. ...

Core Insights - i3 Verticals, Inc. is a technology and integrated payments company serving small and medium-sized businesses across various sectors, including education, healthcare, and public sector [1] - The company faces competition in the payment processing and technology sectors [1] Financial Performance - i3 Verticals has a Return on Invested Capital (ROIC) of 0.26%, indicating minimal efficiency in generating returns from investments [2][6] - The company's Weighted Average Cost of Capital (WACC) is 8.55%, suggesting that it pays a high rate for its capital [2][6] - The ROIC to WACC ratio of 0.03 indicates that i3 Verticals struggles to generate returns that exceed its cost of capital [2] Peer Comparison - International Money Express, Inc. (IMXI) and OneSpan Inc. (OSPN) have a ROIC to WACC ratio of 2.06, demonstrating superior capital utilization compared to i3 Verticals [3][6] - nLIGHT, Inc. (LASR) and Repay Holdings Corporation (RPAY) exhibit negative ROIC to WACC ratios of -1.25 and -1.34, respectively, indicating challenges in covering their cost of capital [4][6] - PC Connection, Inc. (CNXN) has a ROIC to WACC ratio of 1.06, suggesting a moderate level of efficiency in generating returns above its cost of capital [5]

Core Points - The article discusses the importance of enabling Javascript and cookies in browsers to avoid access issues [1] - It highlights that ad-blockers may prevent users from proceeding to the desired content [1] Summary by Categories Technical Requirements - Users are advised to enable Javascript and cookies in their browsers to ensure proper functionality [1] - The presence of ad-blockers can lead to restrictions in accessing content [1]

Market Focus and Strategy - The company serves technologically underserved markets with a focus on large and growing total addressable markets, providing ample opportunity for transaction-based revenues[29] - The company has a cloud-first strategy, with the majority of its collocated assets already migrated to the cloud, enhancing efficiency and security[37] - The company has developed a proprietary payment facilitation platform that centralizes payment solutions, improving scale and margins by lowering expenses[39] - The company is committed to incorporating AI capabilities into its platforms to enhance automation and customer experience[35] - The company has a flexible approach to digital delivery, prioritizing rapid development and continuous improvement to meet evolving customer needs[34] Operations and Workforce - The company has approximately 1,202 employees across 49 states and two countries as of November 20, 2025, with no employees represented by unions[53] - The company’s operations team is structured to meet individual customer needs, with a focus on development, quality control, and support for enterprise software solutions[46] - The company has experienced seasonal fluctuations in revenues, particularly in the education sector, with peak transactional revenue in August, September, October, January, and February[55] Regulatory Compliance - The company operates in a complex regulatory environment, subject to various federal, state, and local laws impacting its electronic payment services[56] - The company is subject to extensive federal and state laws regarding the privacy and security of health information, which may increase operational costs and limit activities[64] - Compliance with the Health Insurance Portability and Accountability Act (HIPAA) is required, establishing privacy and security standards for health information[65] - The company is subject to U.S. federal anti-money laundering laws, including the Bank Secrecy Act, which mandates the development of risk-based anti-money laundering programs[67] - The company must comply with various payment network rules and standards, including the PCI DSS, which govern transaction processing and data security[74] - The company has invested significant resources to ensure compliance with the EMV mandate for chip-enabled cards, which was required by payment networks by October 2015[75] - The company is registered with payment networks like Visa and Mastercard through a sponsor bank, which has substantial discretion over business practices[76] - The company is subject to money transmitter regulations across various U.S. states, which require licensing and compliance with anti-money laundering laws[78] - The company must adhere to unclaimed property laws, requiring remittance of unclaimed property to government authorities after a specified period[79] - The regulatory framework governing the company's business is continuously changing, impacting operational and compliance strategies[80] Financial Position and Capital Structure - As of September 30, 2025, the company had no borrowings outstanding under the 2023 Senior Secured Credit Facility[193] - The company expects cash flow from operations, current cash and cash equivalents, and available borrowing capacity to be sufficient to fund operations and service debt obligations for at least the next twelve months[194] - The 2023 Senior Secured Credit Facility contains restrictive covenants that limit the company's ability to incur additional debt and engage in capital-raising activities[196] - The Continuing Equity Owners hold approximately 27% of the combined voting power of the company's common stock as of November 20, 2025[203] - The company may need to borrow funds to meet tax liabilities or operational needs if i3 Verticals, LLC is restricted from making distributions[202] - The 2025 LLC Tax Distribution resulted in the company holding cash in excess of its tax liabilities and obligations under the Tax Receivable Agreement[208] - The company's Board of Directors will determine the appropriate uses for excess cash following future tax distributions, which may include recapitalization transactions or cash dividends[209] Shareholder and Stockholder Matters - The company is subject to Section 404 of the Sarbanes-Oxley Act, requiring an annual review of internal control over financial reporting[210] - As of September 30, 2025, there are 126,016,875 shares of Class A common stock authorized but unissued, including 8,381,681 shares issuable upon redemption of common units[220] - The company may issue shares of preferred stock in the future, which could adversely affect the market price of Class A common stock[217] - Future issuances of Class A common stock or preferred stock could dilute existing stockholders and significantly impact the market price[222] - The company has provisions that may delay or prevent a change of control, potentially affecting stockholder interests[216] - The existence of anti-takeover provisions may discourage future takeover attempts and affect the market price of Class A common stock[216] - The company has opted out of Section 203 of the Delaware General Corporation Law, but similar provisions may still restrict business combinations with interested stockholders[214] - Sales of Class A common stock in connection with the Registration Rights Agreement could materially affect the market price and impair capital raising efforts[225] - The potential issuance of preferred stock with favorable economic terms could make Class A common stock less attractive to investors[224] - The company may incur costs to improve internal control systems, which could negatively affect financial condition and cash flows[211] - The company cannot predict the size of future issuances of Class A common stock, which may lead to a decline in market price[221]