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]

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 expectations [8] - Recurring revenue grew by 8% to $169.6 million compared to $156.4 million in Q1 2025, constituting 80% of total revenue [8] - SaaS revenue led with over 24% growth, marking four consecutive quarters of over 20% growth [4][8] - Adjusted EBITDA declined by $1 million to $13.6 million, with a margin of 25.8% compared to 27.9% in Q1 2025 [9] Business Line Data and Key Metrics Changes - Professional services and software license revenues declined by $3 million, impacting overall revenue growth [8] - Maintenance revenues decreased by 8%, attributed to a shift towards SaaS and new sales [8] Market Data and Key Metrics Changes - Transaction-based revenue grew by 12%, and payments revenue increased by 8% [8] - The company is well-positioned in the transportation market, with a focus on software solutions for public sector needs [5][12] Company Strategy and Development Direction - The company announced a new acquisition in the transportation market, enhancing its geographic reach and product offerings [10][12] - The focus remains on recurring revenue sources, with expectations for double-digit growth in FY 2026 [11] - The company is exploring opportunities in AI to enhance product offerings and improve operational efficiency [19][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth potential, despite a modest revenue increase in Q1 2026 [4] - The company anticipates a rebound in non-recurring professional service revenues in FY 2027 and beyond [11] - There are expectations for continued strong demand in justice tech and transportation markets [17][18] Other Important Information - The company maintains a strong balance sheet with $37 million in cash and no debt, and a $400 million revolving credit facility available for acquisitions [10] - The acquisition was valued at $60 million, with a multiple of approximately 15x EBITDA, reflecting the target's strong growth and margins [10][50] Q&A Session Summary Question: Update on FY 2026 outlook and organic growth - Management confirmed a slight decline in organic growth, primarily due to professional services revenue adjustments [21][22] Question: Recurring revenue growth expectations - Management reiterated expectations for recurring revenue growth of 8%-10% for FY 2026, excluding the impact of acquisitions [23] Question: Capital allocation strategy regarding buybacks and M&A - Management indicated a significant buyback of shares in the last quarter and emphasized an opportunistic approach to buybacks while pursuing M&A [24][25] Question: Details on the new acquisition's market share and revenue model - The acquisition is expected to enhance market presence and is currently not transactional, with potential for future integration into existing services [28][29] Question: Drivers of SaaS revenue growth and sustainability - Management expects organic SaaS growth to remain above 20%, driven by various market segments [35][36] Question: AI adoption and its impact on GovTech - Management discussed the challenges and potential of AI adoption in GovTech, highlighting the need for frameworks and policies [39][40]

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 expectations [7] - Recurring revenue grew by 8% to $169.6 million compared to $156.4 million in Q1 2025, making up 80% of total revenue [8] - Adjusted EBITDA declined by $1 million to $13.6 million for Q1 2026, with a margin of 25.8% compared to 27.9% in Q1 2025 [9][10] - Adjusted diluted earnings per share from continuing operations was $0.26 for Q1 2026 [9] Business Line Data and Key Metrics Changes - SaaS revenue led growth with over 24%, marking four consecutive quarters of over 20% growth [4] - Transaction-based revenue grew by 12%, while payments revenue increased by 8% [8] - Professional services and maintenance revenues declined, with maintenance revenues down by 8% [8] Market Data and Key Metrics Changes - The company operates in the transportation market and has expanded its geographic reach through recent acquisitions [12] - The i3 Verticals Transportation Platform is now live in 30 states and 4 Canadian provinces [17] Company Strategy and Development Direction - The company is focused on recurring revenue sources and has made a strategic acquisition to enhance its position in the transportation market [4][5] - There is an emphasis on leveraging AI to improve product offerings and customer engagement [18] - 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] Management's Comments on Operating Environment and Future Outlook - Management noted that while professional services revenue is expected to decline, they anticipate a rebound in fiscal 2027 and beyond [11] - The company remains well-capitalized and is focused on disciplined capital deployment, including potential stock repurchases [5][10] - Management expressed optimism about the growth prospects of the recent acquisition and its integration into existing operations [12][27] Other Important Information - The company has a strong balance sheet with $37 million in cash and no debt [10] - Guidance for FY 2026 includes revenues of $223 million to $224 million and adjusted EBITDA of $61 million to $66.5 million [10] 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] Question: Recurring revenue growth expectations - Management reiterated expectations for recurring revenue growth of 8%-10% for the year [21] Question: Capital allocation strategy regarding buybacks and M&A - Management indicated that they bought back a significant number of shares and will continue to be opportunistic with buybacks [22][23] 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 could evolve [26][27] Question: Drivers of SaaS revenue growth and sustainability - Management expects organic SaaS growth to remain above 20%, driven by various markets including utilities and public administration [33][34] Question: Thoughts on AI adoption and its impact on GovTech - Management acknowledged that while AI adoption is progressing, regulatory frameworks may slow down its proliferation in GovTech [37][38]