0001728688FALSE00017286882025-02-062025-02-06


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549  
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 6, 2025
 
 
i3 Logo - no verticals word.jpg
i3 Verticals, Inc.
(Exact name of registrant as specified in its charter)  
 

 
Delaware
001-38532
82-4052852
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
40 Burton Hills Blvd., Suite 415
Nashville, TN
37215
(Address of principal executive offices)
(Zip Code)
(615) 465-4487
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.0001 Par ValueIIIVNasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company.  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐



As provided in General Instruction B.2 of Form 8-K, the information contained in Item 2.02 and 7.01 of this Current Report on Form 8-K (including Exhibits 99.1 and 99.2 hereto) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 2.02.    Results of Operations and Financial Condition.
On February 6, 2025, i3 Verticals, Inc. (the “Company”) issued a press release announcing the results of its operations for the three months ended December 31, 2024. A copy of the press release is furnished as Exhibit 99.1 hereto and is hereby incorporated by reference into this Item 2.02.
Item 7.01.    Regulation FD Disclosure.

The Company has also prepared a supplemental presentation (the “Supplemental Presentation”) providing certain supplemental financial information for the three months ended December 31, 2024. A copy of the Supplemental Presentation is furnished as Exhibit 99.2 hereto and is hereby incorporated by reference into this Item 7.01. A copy of the Supplemental Presentation is also available on the Investors section of the Company’s website, www.i3verticals.com.
Item 9.01.     Financial Statements and Exhibits.

(d) Exhibits:
Exhibit No.Description
104Cover Page Interactive Date File (embedded within the Inline XBRL document).




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 6, 2025

i3 VERTICALS, INC.
By:
/s/ Geoff Smith
Name:
Geoff Smith
Title:
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)


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i3 VERTICALS REPORTS FIRST QUARTER 2025 FINANCIAL RESULTS
Reiterates Guidance
NASHVILLE, Tenn. (February 6, 2025) – i3 Verticals, Inc. (Nasdaq: IIIV) (“i3 Verticals” or the “Company”) today reported its financial results for the fiscal first quarter ended December 31, 2024.
Highlights from continuing operations1 for the three months ended December 31, 2024 vs. 2023
•Revenue from continuing operations was $61.7 million, an increase of 12.1% over the prior year's first quarter.
•Net income from continuing operations was $3.3 million, compared to net loss from continuing operations of $4.2 million in the prior year's first quarter.
•Net income from continuing operations attributable to i3 Verticals, Inc. was $2.2 million, compared to net loss from continuing operations attributable to i3 Verticals, Inc. of $2.9 million in the prior year's first quarter.
•Adjusted EBITDA from continuing operations2 was $16.4 million, an increase of 17.0% over the prior year's first quarter.
•Adjusted EBITDA from continuing operations2 as a percentage of revenue was 26.5%, compared to 25.4% in the prior year's first quarter.
•Diluted net income per share attributable to Class A common stock from continuing operations3 was $0.09, compared to diluted net loss per share attributable to Class A common stock from continuing operations of $0.12 in the prior year's first quarter.
•Pro forma adjusted diluted earnings per share from continuing operations2,3, which gives pro forma effect to the Company's tax rate, was $0.31 compared to $0.12 for the prior year's first quarter.
•Annualized Recurring Revenue ("ARR") from continuing operations4 for the three months ended December 31, 2024 and 2023 was $193.3 million and $179.6 million, respectively, representing a period-to-period growth rate of 7.6%.
•As of December 31, 2024, consolidated interest coverage ratio was 3.7x and total leverage ratio was 0.1x. These ratios are defined in the Company's 2023 Credit Agreement.

1.As a result of the sale of the Company’s merchant services business, which was completed on September 20, 2024, the historical results of i3 Verticals' merchant services business have been reflected in discontinued operations in the consolidated statement of operations included in this earnings release, and continuing operations reflect the Company's remaining operations after giving effect to such classification. Prior period results have been recast to reflect this presentation.
2.Represents a non-GAAP financial measure. For additional information (including reconciliation information), see the attached schedules to this release.
3.Diluted net income per share attributable to Class A common stock from continuing operations and pro forma adjusted diluted earnings per share from continuing operations both exclude discontinued operations but include the consolidated cash interest expense.
4.Annualized Recurring Revenue (ARR) is the annualized revenue derived from software-as-a-service (“SaaS”) arrangements, transaction-based software-revenue, software maintenance, recurring software-based services, payments revenue and other recurring revenue sources within the quarter. This excludes contracts that are not recurring or are one-time in nature. The Company focuses on ARR because it helps i3 Verticals to assess the health and trajectory of the business. ARR does not have a standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. It should be reviewed independently of revenue, and it is not a forecast. Additionally, ARR does not take into account seasonality. The active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by i3 Verticals' customers.
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IIIV Reports First Quarter Fiscal Year 2025 Financial Results
Page 2
February 6, 2025
Greg Daily, Chairman and CEO of i3 Verticals, commented, “We are pleased to have started fiscal 2025 on a strong note and are happy to share our results with investors. This year, we expect to see significant improvements in our SaaS growth, which began this quarter with a 16% increase over the prior year. We anticipate this positive momentum will continue throughout the year.
“Even after divesting our merchant services business, we retained robust payment capabilities, and our ability to integrate these services with our proprietary vertical market software remains a key competitive advantage. We still have multiple large addressable markets where we can integrate payments within our existing software footprint. Payments revenue grew 7% this quarter, and we expect that revenue line to reaccelerate, alongside SaaS, to drive continued recurring revenues.
“2025 is shaping up to be a great year for our company. Our balance sheet is strong, our revenue growth is trending upward, and our margins are headed in the right direction. We are excited about the opportunities ahead.”
2025 Outlook
The Company's practice is to provide annual guidance, excluding the impact of acquisitions, dispositions and transaction-related costs.
The Company is reaffirming its outlook for continuing operations for the fiscal year ended September 30, 2025:
(in thousands, except share and per share amounts)
Fiscal year ending September 30, 2025
Revenue$243,000 -$263,000 
Adjusted EBITDA (non-GAAP)
$63,000 -$71,500 
Depreciation and internally developed software amortization$12,000 -$14,000 
Cash interest expense, net$1,000 -$2,000 
Pro forma adjusted diluted earnings per share(1)(non-GAAP)
$1.05 -$1.25 
_______________________
1.Assumes an effective pro forma tax rate of 25.0% (non-GAAP).

With respect to the “2025 Outlook” above, reconciliations of adjusted EBITDA from continuing operations and pro forma adjusted diluted earnings per share from continuing operations guidance to the closest corresponding GAAP measure on a forward-looking basis are not available without unreasonable efforts. This inability results from the inherent difficulty in forecasting generally and quantifying certain projected amounts that are necessary for such reconciliations. In particular, sufficient information is not available to calculate certain adjustments required for such reconciliations, including changes in the fair value of contingent consideration, income tax expense of i3 Verticals, Inc. and equity-based compensation expense. The Company expects these adjustments may have a potentially significant impact on future GAAP financial results.
Conference Call
The Company will host a conference call on Friday, February 7, 2025, 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 approximately 10 minutes prior to the start of the call. A telephonic replay will be available from 11:30 a.m. ET on February 7, 2025, through February 14, 2025, by dialing (877) 344-7529 and entering Confirmation Code 5368210.
To listen to the call live via webcast, participants should visit the “Investors” section of the Company’s website, www.i3verticals.com, and go to the “Events” page approximately 10 minutes prior to the start of the call. The online replay will be available on this page of the Company’s website beginning shortly after the conclusion of the call and will remain available for 30 days.
Non-GAAP Measures
This press release contains information prepared in conformity with GAAP as well as non-GAAP information. It is management’s intent to provide non-GAAP financial information to enhance understanding of the Company's consolidated financial information as prepared in accordance with GAAP. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure and the most directly comparable GAAP financial measure are presented for historical periods so as not to imply that more emphasis should be placed on the non-GAAP measure. The non-GAAP financial information presented may be determined or calculated differently by other companies.
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IIIV Reports First Quarter Fiscal Year 2025 Financial Results
Page 3
February 6, 2025
Additional information about non-GAAP financial measures, including, but not limited to, pro forma adjusted net income from continuing operations, adjusted EBITDA from continuing operations and pro forma adjusted diluted EPS from continuing operations, and a reconciliation of those measures to the most directly comparable GAAP measures is included in the financial schedules of this release.
About i3 Verticals
The Company delivers seamless integrated software to customers in strategic vertical markets. Building on its sophisticated and diverse platform of software and services solutions, the Company creates and acquires software products to serve the specific needs of public and private organizations in its strategic verticals, including its Public Sector and Healthcare verticals.
Forward-Looking Statements
This release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this release are forward-looking statements, including any statements regarding the Company's fiscal 2025 and fiscal 2025 financial outlook for continuing operations and statements of a general economic or industry specific nature. Forward-looking statements give the Company's current expectations and projections relating to its financial condition, results of operations, guidance, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “could have,” “exceed,” “significantly,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.
The forward-looking statements contained in this release are based on assumptions that we have made in light of the Company's industry experience and its perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you review and consider information presented herein, you should understand that these statements are not guarantees of future performance or results. They depend upon future events and are subject to risks, uncertainties (many of which are beyond the Company's control) and assumptions. Factors that could cause actual results to differ from those expressed or implied by our forward-looking statements include, among other things: ongoing and future economic and geopolitical conditions, including the impact of inflation and elevated interest rates, competition in our industry and our ability to compete effectively, and regulatory developments; the successful integration of acquired businesses; our ability to execute on our strategy and achieve our goals following the completion of the sale of our merchant services business; and future decisions made by us and our competitors. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item 1A - Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we have updated and may further update in Part II, Item 1A - Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file hereafter.
Any forward-looking statement made by us in this release speaks only as of the date of this release and we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Contact:
Clay Whitson
Chief Strategy Officer
(888) 251-0987
investorrelations@i3verticals.com
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IIIV Reports First Quarter Fiscal Year 2025 Financial Results
Page 4
February 6, 2025
i3 Verticals, Inc. Consolidated Statements of Operations
(Unaudited)
($ in thousands, except share and per share amounts)
Three Months Ended December 31,
20242023% Change
Revenue$61,691 $55,054 12%
Operating expenses
Other costs of services (excluding depreciation and amortization)(1)
21,031 19,577 7%
Selling, general and administrative(1)
28,900 27,175 6%
Depreciation and amortization7,684 7,054 9%
Change in fair value of contingent consideration1,377 (237)n/m
Total operating expenses58,992 53,569 10%
Income from operations2,699 1,485 82%
Other (income) expenses
Interest expense680 6,687 (90)%
Other (income) expense(1,826)107 n/m
Total other (income) expenses(1,146)6,794 n/m
Income (loss) before income taxes3,845 (5,309)n/m
Provision for (benefit from) income taxes523 (1,094)n/m
Net income (loss) from continuing operations3,322 (4,215)
Net (loss) income from discontinued operations, net of income taxes(214)5,751 
Net income3,108 1,536 102%
Net income (loss) from continuing operations attributable to non-controlling interest1,128 (1,330)
Net (loss) income from discontinued operations attributable to non-controlling interest(76)1,768 
Net income attributable to non-controlling interest1,052 438 140%
Net income (loss) from continuing operations attributable to i3 Verticals, Inc.2,194 (2,885)
Net (loss) income from discontinued operations attributable to i3 Verticals, Inc.(138)3,983 
Net income attributable to i3 Verticals, Inc.$2,056 $1,098 87%
Net income (loss) per share attributable to Class A common stockholders from continuing operations:
Basic$0.09 $(0.12)
Diluted$0.09 $(0.12)
Net (loss) income per share attributable to Class A common stockholders from discontinued operations:
Basic$(0.01)$0.17 
Diluted$(0.01)$0.16 
Weighted average shares of Class A common stock outstanding:
Basic, for continuing operations23,551,352 23,267,290 
Diluted, for continuing operations34,057,196 23,267,290 
Basic, for discontinued operations23,551,352 23,267,290 
Diluted, for discontinued operations23,551,352 33,828,461 
___________________________________________________________
1.Following the disposal of the Company's Merchant Services Business in the fourth quarter of fiscal year 2024, the Company’s core business is providing software solutions for key verticals. Given the change in the Company's business model, the Company has reclassified certain expenses to better align with the primary industry in which it now operates. During the first quarter of fiscal year 2025, the Company revised its presentation of certain expenses in the Condensed Consolidated Statements of Operations from selling, general and administrative expenses to other costs of services. The Company reclassified personnel costs related to installation of the Company's software, conversion of client data, training client personnel, customer support activities and various other services provided directly to customers from selling, general and administrative to other costs of services. The Company also reclassified certain hosting and related software costs for directly supporting the Company's customers from selling, general and administrative to other costs of services. Prior period results have been reclassified to conform to the current presentation.
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IIIV Reports First Quarter Fiscal Year 2025 Financial Results
Page 5
February 6, 2025
i3 Verticals, Inc. Segment Summary from Continuing Operations
(Unaudited)
($ in thousands)

For the Three Months Ended December 31, 2024
Public SectorHealthcareOtherTotal
Revenue$48,785 $13,171 $(265)$61,691 
Adjusted EBITDA(1)
$19,243 $3,748 $(6,619)$16,372 
Adjusted EBITDA Margin(1)
39 %28 %n/m27 %
Income (loss) from operations$11,791 $2,634 $(11,726)$2,699 

For the Three Months Ended December 31, 2023
Public SectorHealthcareOtherTotal
Revenue$43,498 $11,580 $(24)$55,054 
Adjusted EBITDA(1)
$17,359 $2,794 $(6,165)$13,988 
Adjusted EBITDA Margin(1)
40 %24 %n/m25 %
Income (loss) from operations$11,532 $2,160 $(12,207)$1,485 
________________________
1.Adjusted EBITDA and Adjusted EBITDA margin as presented at a segment level are measures reported to the Company's management for purposes of making decisions about allocating resources and assessing the performance of our business segments, and these measures are presented in the Company's financial statement footnotes in accordance with ASC 280. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue. Adjusted EBITDA and Adjusted EBITDA margin, as presented on a consolidated basis, are non-GAAP financial measures. For additional information regarding these non-GAAP financial measures, including reconciliations of consolidated Adjusted EBITDA to the most comparable GAAP measure, see below under "Reconciliation of GAAP to Non-GAAP Financial Measures."
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IIIV Reports First Quarter Fiscal Year 2025 Financial Results
Page 6
February 6, 2025
i3 Verticals, Inc. Consolidated Balance Sheets
(Unaudited)
($ in thousands, except share and per share amounts)
December 31,September 30,
20242024
Assets
Current assets
Cash and cash equivalents$85,552 $86,541 
Accounts receivable, net51,342 55,988 
Settlement assets1,205 632 
Prepaid expenses and other current assets15,006 10,232 
Total current assets153,105 153,393 
Property and equipment, net7,583 8,677 
Restricted cash2,450 2,424 
Capitalized software, net57,249 58,592 
Goodwill280,678 280,678 
Intangible assets, net159,574 162,816 
Deferred tax asset48,481 48,445 
Operating lease right-of-use assets7,942 8,954 
Other assets9,167 6,696 
Total assets$726,229 $730,675 
Liabilities and equity
Liabilities
Current liabilities
Accounts payable$7,402 $5,370 
Current portion of long-term debt26,223 26,223 
Accrued expenses and other current liabilities82,997 89,972 
Settlement obligations1,205 632 
Deferred revenue42,259 39,029 
Current portion of operating lease liabilities3,345 3,505 
Total current liabilities163,431 164,731 
Long-term tax receivable agreement obligations29,326 29,347 
Operating lease liabilities, less current portion5,423 6,317 
Other long-term liabilities16,915 14,921 
Total liabilities215,095 215,316 
Commitments and contingencies
Stockholders' equity
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2024 and September 30, 2024
— — 
Class A common stock, par value $0.0001 per share, 150,000,000 shares authorized; 23,437,250 and 23,882,035 shares issued and outstanding as of December 31, 2024 and September 30, 2024, respectively
2 2 
Class B common stock, par value $0.0001 per share, 40,000,000 shares authorized; 10,015,099 and 10,032,676 shares issued and outstanding as of December 31, 2024 and September 30, 2024, respectively
1 1 
Additional paid-in capital272,532 279,335 
Accumulated earnings102,453 100,397 
Total stockholders' equity374,988 379,735 
Non-controlling interest136,146 135,624 
Total equity511,134 515,359 
Total liabilities and equity$726,229 $730,675 
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IIIV Reports First Quarter Fiscal Year 2025 Financial Results
Page 7
February 6, 2025
i3 Verticals, Inc. Consolidated Cash Flow Data
(Unaudited)
($ in thousands)
Three Months Ended December 31,
20242023
Net cash provided by operating activities$11,495 $14,405 
Net cash used in investing activities$(1,418)$(7,171)
Net cash used in financing activities$(10,467)$(8,550)

Reconciliation of GAAP to Non-GAAP Financial Measures
The Company discloses adjusted EBITDA from continuing operations, pro forma adjusted net income from continuing operations and pro forma adjusted diluted EPS from continuing operations because the Company believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating the Company's ongoing operating results. Accordingly, the Company discloses these non-GAAP financial measures when reporting its financial results to stockholders and potential investors in order to provide them with an additional tool to evaluate the Company’s ongoing business operations. The Company believes that these non-GAAP financial measures are representative of comparative financial performance that reflects the economic substance of the Company's current and ongoing business operations.
Although these non-GAAP financial measures assist in measuring the Company's financial results and assessing its financial performance, they are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation. The Company believes that the disclosure of these non-GAAP financial measures provides investors with important key financial performance indicators that are utilized by management to assess the Company's financial results, evaluate the Company's business and make operational decisions on a prospective, going-forward basis. Hence, management provides disclosure of these non-GAAP financial measures to give stockholders and potential investors an opportunity to see the Company as viewed by management, to assess the Company with some of the same tools that management utilizes internally and to be able to compare such information with prior periods. The Company believes that disclosure of these non-GAAP financial measures provides investors with additional information to help them better understand its financial statements just as management utilizes these non-GAAP financial measures to better understand the business, manage budgets and allocate resources.













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IIIV Reports First Quarter Fiscal Year 2025 Financial Results
Page 8
February 6, 2025


i3 Verticals, Inc. Reconciliation of GAAP Net Income (Loss) from Continuing Operations to Non-GAAP Pro Forma Adjusted Net Income from Continuing Operations and
Non-GAAP Adjusted EBITDA from Continuing Operations
(Unaudited)
($ in thousands)
Three Months Ended December 31,
20242023
Net income (loss) from continuing operations attributable to i3 Verticals, Inc.$2,194 $(2,885)
Net income (loss) from continuing operations attributable to non-controlling interest1,128 (1,330)
Net income (loss) from continuing operations3,322 (4,215)
Non-GAAP adjustments:
Provision for (benefit from) income taxes523 (1,094)
Non-cash change in fair value of contingent consideration(1)
1,377 (237)
Equity-based compensation from continuing operations(2)
3,814 5,358 
M&A-related activity(3)
51 244 
Acquisition intangible amortization(4)
4,913 4,856 
Non-cash interest expense(5)
280 414 
Other taxes(6)
252 84 
(Gain) loss on disposal of property and equipment(7)
(585)107 
Non-GAAP pro forma adjusted income before taxes from continuing operations(12)
$13,947 $5,517 
Pro forma taxes at effective tax rate(8)
(3,487)(1,379)
Pro forma adjusted net income from continuing operations(9)
$10,460 $4,138 
Cash interest (income) expense, net(10)
(346)6,273 
Pro forma taxes at effective tax rate(8)
3,487 1,379 
Depreciation and internally developed software amortization(11)
2,771 2,198 
Adjusted EBITDA from continuing operations(12)
$16,372 $13,988 
________________
1.Non-cash change in fair value of contingent consideration reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the later of the most recent balance sheet date forming the beginning of the income statement period or the original estimates made at the closing of the applicable acquisition.
2.Equity-based compensation expense related to stock options and restricted stock units issued under the Company's 2018 Equity Incentive Plan and 2020 Acquisition Equity Incentive Plan.
3.M&A-related activity is the net impact of professional service and related costs directly related to any merger, acquisition and disposition activity of the Company, which are recorded in selling, general and administrative in the condensed consolidated statements of operations, and revenue earned through post-sale non-recurring activities with divestitures, which are recorded in other income in the condensed consolidated statements of operations. i3 Verticals believes these activities are not reflective of the underlying operational performance of the Company.
4.Acquisition intangible amortization reflects amortization of intangible assets and software acquired through business combinations, acquired customer portfolios, acquired referral agreements and related asset acquisitions.
5.Non-cash interest expense reflects amortization of debt issuance costs and any write-offs of debt issuance costs.
6.Other taxes consist of franchise taxes, commercial activity taxes, reserves for ongoing tax audit matters, the employer portion of payroll taxes related to stock option exercises and other non-income-based taxes. Taxes related to salaries are not included.
7.(Gain) loss on disposal of property and equipment is related to the sale of buildings and automobiles purchased through acquisitions.
8.Pro forma corporate income tax expense is based on non-GAAP adjusted income before taxes from continuing operations and is calculated using a tax rate of 25.0% for both the three months ended December 31, 2024 and 2023, based on blended federal and state tax rates.
9.Pro forma adjusted net income from continuing operations represents a non-GAAP financial measure and assumes that all net income during the period is available to the holders of the Company's Class A common stock.
10.Cash interest (income) expense, net, represents all interest expense net of interest income recorded on the Company's statement of operations other than non-cash interest expense, which represents amortization of debt issuance costs and any write-offs of debt issuance costs.
11.Depreciation and internally developed software amortization reflects depreciation on the Company's property, plant and equipment, net, and amortization expense on its internally developed capitalized software.
12.Represents a non-GAAP financial measure.
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IIIV Reports First Quarter Fiscal Year 2025 Financial Results
Page 9
February 6, 2025
i3 Verticals, Inc. GAAP Diluted EPS from Continuing Operations and
Non-GAAP Pro Forma Adjusted Diluted EPS from Continuing Operations
(Unaudited)
($ in thousands, except share and per share amounts)
Three Months Ended December 31,
20242023
Diluted net income (loss) attributable to Class A common stock per share from continuing operations(1)
$0.09 $(0.12)
Pro forma adjusted diluted earnings per share from continuing operations(1)(2)(3)
$0.31 $0.12 
Pro forma adjusted net income from continuing operations(3)
$10,460 $4,138 
Pro forma weighted average shares of adjusted diluted Class A common stock outstanding(4)
34,057,196 33,828,461 
________________
1.Diluted net income per share attributable to Class A common stock from continuing operations and pro forma adjusted diluted earnings per share from continuing operations both exclude discontinued operations but include the consolidated cash interest expense.
2.Pro forma adjusted diluted earnings per share from continuing operations, a non-GAAP financial measure, is calculated using pro forma adjusted net income from continuing operations and the pro forma weighted average shares of adjusted diluted Class A common stock outstanding.
3.Pro forma adjusted net income from continuing operations, a non-GAAP financial measure, assumes that all net income from continuing operations during the period is available to the holders of the Company's Class A common stock. Further, pro forma adjusted diluted earnings per share from continuing operations assumes that all Common Units in i3 Verticals, LLC and the associated non-voting Class B common stock were exchanged for Class A common stock at the beginning of the period on a one-for-one basis.
4.Pro forma weighted average shares of adjusted diluted Class A common stock outstanding include 10,026,180 and 10,093,394 outstanding shares of Class A common stock issuable upon the exchange of Common Units in i3 Verticals, LLC and 479,664 and 467,777 shares resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method for the three months ended December 31, 2024 and 2023, respectively.
-END-
1 Supplemental Information Q1 FISCAL YEAR 2025

 
2 ($ in thousands) Quarter Ended December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Software and related service revenue SaaS(2) $ 10,182 $ 9,677 $ 8,834 $ 8,809 $ 8,742 $ 8,977 $ 8,523 $ 8,244 $ 7,713 Transaction-based(3) 3,836 4,121 3,928 3,538 3,651 3,706 3,291 3,174 3,150 Maintenance(4) 8,796 8,783 8,433 8,125 8,207 7,970 8,336 8,039 7,310 Recurring software services(5) 10,343 10,497 10,913 11,263 10,205 10,303 11,127 10,567 9,449 Professional services(6) 9,841 10,062 8,906 9,199 8,881 10,777 10,039 10,634 9,369 Software licenses 2,677 2,498 405 963 417 2,714 2,380 3,193 884 Total $ 45,675 $ 45,638 $ 41,419 $ 41,897 $ 40,103 $ 44,447 $ 43,696 $ 43,851 $ 37,875 Year-over-year growth 14 % 3 % (5) % (4) % 6 % Payments revenue $ 13,511 $ 12,225 $ 11,867 $ 13,572 $ 12,677 $ 11,296 $ 10,895 $ 12,903 $ 11,522 Year-over-year growth 7 % 8 % 9 % 5 % 10 % Other revenue Recurring(7) $ 1,646 $ 1,738 $ 1,343 $ 1,405 $ 1,423 $ 1,526 $ 1,445 $ 1,363 $ 1,512 Other 859 1,263 1,408 1,094 851 1,315 1,224 1,050 803 Total $ 2,505 $ 3,001 $ 2,751 $ 2,499 $ 2,274 $ 2,841 $ 2,669 $ 2,413 $ 2,315 Year-over-year growth 10 % 6 % 3 % 4 % (2) % Total revenue $ 61,691 $ 60,864 $ 56,037 $ 57,968 $ 55,054 $ 58,584 $ 57,260 $ 59,167 $ 51,712 Recurring revenue(8) $ 48,314 $ 47,040 $ 45,318 $ 46,712 $ 44,905 $ 43,778 $ 43,617 $ 44,290 $ 40,656 Annualized Recurring Revenue “ARR”(9) Software and related service revenue $ 132,629 $ 132,313 $ 128,432 $ 126,940 $ 123,220 $ 123,824 $ 125,108 $ 120,096 $ 110,488 Payments revenue 54,045 48,898 47,468 54,288 50,708 45,184 43,580 51,612 46,088 Other revenue 6,583 6,951 5,372 5,620 5,692 6,104 5,780 5,452 6,048 Total ARR $ 193,256 $ 188,162 $ 181,272 $ 186,848 $ 179,620 $ 175,112 $ 174,468 $ 177,160 $ 162,624 Year-over-year growth 8 % 7 % 4 % 5 % 10 % Revenue Composition - Continuing Operations(1) See footnotes continued on the next slide.

 
3 1.) As a result of the sale of our merchant services business (the “Merchant Services Business”) pursuant to the terms of the securities purchase agreement dated as of June 26, 2024 (the “Purchase Agreement”), entered into by us with Payroc, the historical results of our Merchant Services Business have been reflected in discontinued operations in the results of operations included in this supplemental information, and continuing operations reflect our remaining operations after giving effect to such classification. Prior period results have been recast to reflect this presentation. The sale was completed on September 20, 2024. 2.) SaaS revenue is earned when we provide, as a service to our customers over time, the right to access our software, generally hosted in a cloud environment. 3.) Transaction-based software revenue is earned when we provide services through our software and charge a per-transaction fee. For example, when we provide electronic filing services for courts and charge fees per filing, or when we stand-ready to process and bill utility customers and charge the utility a fee per bill electronically presented. 4.) Software maintenance revenue is earned when, following the implementation of our software systems, we provide ongoing software support services to assist our customers in operating the systems and to periodically update the software. 5.) Recurring software services are earned when we provide long-term, usually evergreen, contracted services to our customers through our software. The services provided, such as healthcare revenue cycle management, or automated collections management, are integrated into one of our software solutions. 6.) Professional services are earned when we provide customized services to our customers who utilize our software products. Many of our customers contract with us for installation, configuration, training, and data conversion projects, which do not necessarily recur, and as such are excluded from our calculation of ARR. 7.) Recurring other revenue primarily consists of recurring long-term contracts that are not specific to software, such as hardware maintenance plans or field service plans. 8.) Recurring revenue consists of software-as-a-service (“SaaS”) arrangements, transaction-based software-revenue, software maintenance revenue, recurring software-based services, payments revenue and other recurring revenue sources. This excludes contracts that are not recurring or are one-time in nature. 9.) Annualized Recurring Revenue (“ARR”) is the quarterly recurring revenue multiplied by 4. The Company focuses on ARR because it helps to assess the health and trajectory of the business. ARR does not have a standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. It should be reviewed independently of revenue and it is not a forecast. It does not contemplate seasonality. The active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by the Company’s customers. Revenue Composition - Continuing Operations

 
4 Q1 Fiscal 2025 GAAP Measures ($ in thousands) Three Months Ended December 31, 2024 Three Months Ended December 31, 2023 Public Sector Healthcare Other Total Public Sector Healthcare Other Total Income (loss) from operations $ 11,791 $ 2,634 $ (11,726) $ 2,699 $ 11,532 $ 2,160 $ (12,207) $ 1,485 The following is our income (loss) from operations for the three months ended December 31, 2024 and 2023 calculated in accordance with GAAP and presented for continuing operations only. The presentation also includes references to non-GAAP financial measures presented by the Company. The Company discloses these non-GAAP financial measures because the Company believes that the non-GAAP financial measures presented by the Company provide useful information to investors in understanding and evaluating the Company's ongoing operating results. Accordingly, the Company discloses these non-GAAP financial measures when reporting its financial results to stockholders and potential investors in order to provide them with an additional tool to evaluate the Company’s ongoing business operations. The Company believes that these non- GAAP financial measures are representative of comparative financial performance that reflects the economic substance of the Company’s current and ongoing business operations. Although these non-GAAP financial measures assist in measuring the Company's financial results and assessing its financial performance, they are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation. The Company believes that the disclosure of these non-GAAP financial measures provides investors with important key financial performance indicators that are utilized by management to assess the Company's financial results, evaluate the Company’s business and make operational decisions on a prospective, going-forward basis. Hence, management provides disclosure of these non-GAAP financial measures to give stockholders and potential investors an opportunity to see the Company as viewed by management, to assess the Company with some of the same tools that management utilizes internally and to be able to compare such information with prior periods. The Company believes that disclosure of these non-GAAP financial measures provides investors with additional information to help them better understand its financial statements just as management utilizes these non-GAAP financial measures to better understand the business, manage budgets and allocate resources. ($ in thousands) Three Months Ended September 30, 2024 Three Months Ended June 30, 2024 Three Months Ended March 31, 2024 Public Sector Healthcare Other Total Public Sector Healthcare Other Total Public Sector Healthcare Other Total Income (loss) from operations $ 14,268 $ 1,172 $ (11,886) $ 3,554 $ 10,593 $ 1,328 $ (12,590) $ (669) $ 13,318 $ 1,160 $ (11,992) $ 2,486

 
5 Q1 2025 Segment Performance(1) 1.) i3 Verticals has two segments, "Public Sector" and “Healthcare.” i3 Verticals also has an “Other” category, which includes corporate overhead, technology resources shared across segments and inter-segment eliminations. 2.) Following the disposal of our Merchant Services Business in the fourth quarter of fiscal year 2024, our core business is providing software solutions for key verticals. Given the change in our business model, we have reclassified certain expenses to better align with the primary industry in which we now operate. During the first quarter of fiscal year 2025, we revised our presentation of certain expenses in the Condensed Consolidated Statements of Operations from selling, general and administrative expenses to other costs of services. We reclassified personnel costs related to installation of our software, conversion of client data, training client personnel, customer support activities and various other services provided directly to customers from selling, general and administrative to other costs of services. We also reclassified certain hosting and related software costs for directly supporting our customers from selling, general and administrative to other costs of services. Prior period results have been reclassified to conform to the current presentation. These tables are presented for our continuing operations. 3.) Recurring cash other costs of services represents recurring operating costs directly related to our revenue generating activities except the stock compensation portion of personnel costs included within other costs of services. 4.) Recurring cash SG&A expenses represents recurring operating costs such as certain people costs (for individuals not within other cost of services), technology, facilities, sales and marketing. 5.) Adjusted EBITDA from continuing operations and Adjusted EBITDA margin from continuing operations as presented at a segment level are measures reported to our management for purposes of making decisions about allocating resources and assessing the performance of our business segments, and these measures are presented in our financial statement footnotes in accordance with ASC 280. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue. Adjusted EBITDA and Adjusted EBITDA margin, as presented on a consolidated basis, are non-GAAP financial measures. For additional information regarding these non-GAAP financial measures, including reconciliations of Adjusted EBITDA to the most comparable GAAP measure. Refer to the following slides for the reconciliations of non-GAAP financial measures. ($ in thousands) Three Months Ended December 31, 2024 Three Months Ended December 31, 2023 Public Sector Healthcare Other Total Public Sector Healthcare Other Total Revenue from continuing operations $ 48,785 $ 13,171 $ (265) $ 61,691 $ 43,498 $ 11,580 $ (24) $ 55,054 Recurring cash other costs of services(2)(3) 14,715 6,174 142 21,031 12,963 5,820 794 19,577 Recurring cash SG&A expenses(2)(4) 14,827 3,249 6,212 24,288 13,176 2,966 5,347 21,489 Adjusted EBITDA from continuing operations(5) $ 19,243 $ 3,748 $ (6,619) $ 16,372 $ 17,359 $ 2,794 $ (6,165) $ 13,988 Adjusted EBITDA margin from continuing operations(5) 39 % 28 % n/m 27 % 40 % 24 % n/m 25 % Period over period growth rates Revenue from continuing operations 12% 14% 12% Recurring cash other costs of services(2)(3) 14% 6% 7% Recurring cash SG&A expenses(2)(4) 13% 10% 13% Adjusted EBITDA from continuing operations(5) 11% 34% 17%

 
6 Q2-Q4 2024 Quarterly Segment Performance(1) 1.) i3 Verticals has two segments, "Public Sector" and “Healthcare.” i3 Verticals also has an “Other” category, which includes corporate overhead, technology resources shared across segments and inter-segment eliminations. 2.) Following the disposal of our Merchant Services Business in the fourth quarter of fiscal year 2024, our core business is providing software solutions for key verticals. Given the change in our business model, we have reclassified certain expenses to better align with the primary industry in which we now operate. During the first quarter of fiscal year 2025, we revised our presentation of certain expenses in the Condensed Consolidated Statements of Operations from selling, general and administrative expenses to other costs of services. We reclassified personnel costs related to installation of our software, conversion of client data, training client personnel, customer support activities and various other services provided directly to customers from selling, general and administrative to other costs of services. We also reclassified certain hosting and related software costs for directly supporting our customers from selling, general and administrative to other costs of services. Prior period results have been reclassified to conform to the current presentation. These tables are presented for our continuing operations. 3.) Recurring cash other costs of services represents recurring operating costs directly related to our revenue generating activities except the stock compensation portion of personnel costs included within other costs of services. 4.) Recurring cash SG&A expenses represents recurring operating costs such as certain people costs (for individuals not within other cost of services), technology, facilities, sales and marketing. 5.) Adjusted EBITDA from continuing operations and Adjusted EBITDA margin from continuing operations as presented at a segment level are measures reported to our management for purposes of making decisions about allocating resources and assessing the performance of our business segments, and these measures are presented in our financial statement footnotes in accordance with ASC 280. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue. Adjusted EBITDA and Adjusted EBITDA margin, as presented on a consolidated basis, are non-GAAP financial measures. For additional information regarding these non-GAAP financial measures, including reconciliations of Adjusted EBITDA to the most comparable GAAP measure. Refer to the following slides for the reconciliations of non-GAAP financial measures. ($ in thousands) Three Months Ended March 31, 2024 Public Sector Healthcare Other Total Revenue from continuing operations $ 47,097 $ 11,053 $ (182) $ 57,968 Recurring cash other costs of services(2)(3) 14,093 6,206 690 20,989 Recurring cash SG&A expenses(2)(4) 13,771 3,072 4,922 21,765 Adjusted EBITDA from continuing operations(5) $ 19,233 $ 1,775 $ (5,794) $ 15,214 Adjusted EBITDA margin from continuing operations(5) 41 % 16 % n/m 26 % ($ in thousands) Three Months Ended June 30, 2024 Public Sector Healthcare Other Total Revenue from continuing operations $ 44,643 $ 11,533 $ (139) $ 56,037 Recurring cash other costs of services(2)(3) 14,332 6,199 614 21,145 Recurring cash SG&A expenses(2)(4) 13,888 3,053 5,076 22,017 Adjusted EBITDA from continuing operations(5) $ 16,423 $ 2,281 $ (5,829) $ 12,875 Adjusted EBITDA margin from continuing operations(5) 37 % 20 % n/m 23 % ($ in thousands) Three Months Ended September 30, 2024 Public Sector Healthcare Other Total Revenue from continuing operations $ 49,603 $ 11,400 $ (139) $ 60,864 Recurring cash other costs of services(2)(3) 15,114 6,366 631 22,111 Recurring cash SG&A expenses(2)(4) 14,290 2,875 5,355 22,520 Adjusted EBITDA from continuing operations(5) $ 20,199 $ 2,159 $ (6,125) $ 16,233 Adjusted EBITDA margin from continuing operations(5) 41 % 19 % n/m 27 %

 
7 Reconciliation of Non-GAAP Financial Measures The reconciliation of our quarterly income (loss) from continuing operations attributable to i3 Verticals, Inc. to non-GAAP adjusted income (loss) before taxes from continuing operations, non-GAAP pro forma adjusted net income from continuing operations and non-GAAP adjusted EBITDA from continuing operations is as follows: See GAAP Diluted EPS from Continuing Operations and Non-GAAP Pro Forma Adjusted Diluted EPS from Continuing operations continued on the next slide. ($ in thousands) Three Months Ended December 31, 2024 Three Months Ended December 31, 2023 Public Sector Healthcare Other Total Public Sector Healthcare Other Total Net income (loss) from continuing operations attributable to i3 Verticals, Inc. $ 12,376 $ 2,634 $ (12,816) $ 2,194 $ 11,408 $ 2,160 $ (16,453) $ (2,885) Net income (loss) from continuing operations attributable to non-controlling interests — — 1,128 1,128 — — (1,330) (1,330) Net income (loss) from continuing operations 12,376 2,634 (11,688) 3,322 11,408 2,160 (17,783) (4,215) Non-GAAP Adjustments: Provision for (benefit from) income taxes — — 523 523 — — (1,094) (1,094) Non-cash change in fair value of contingent consideration(1) 1,252 125 — 1,377 82 (319) — (237) Equity-based compensation(2) — — 3,814 3,814 — — 5,358 5,358 M&A-related activity(3) — — 51 51 — — 244 244 Acquisition intangible amortization(4) 4,104 809 — 4,913 4,041 815 — 4,856 Non-cash interest(5) — — 280 280 — — 414 414 Other taxes(6) 13 — 239 252 28 3 53 84 (Gain) loss on disposal of property and equipment(7) (585) — — (585) 118 — (11) 107 Non-GAAP adjusted income (loss) before taxes from continuing operations 17,160 3,568 (6,781) 13,947 15,677 2,659 (12,819) 5,517 Pro forma taxes at effective tax rate(8) (4,290) (892) 1,695 (3,487) (3,919) (665) 3,205 (1,379) Pro forma adjusted net income (loss) from continuing operations(9) $ 12,870 $ 2,676 $ (5,086) $ 10,460 $ 11,758 $ 1,994 $ (9,614) $ 4,138 Plus: Cash interest (income) expense, net(10) — — (346) (346) 6 — 6,267 6,273 Pro forma taxes at effective tax rate(8) 4,290 892 (1,695) 3,487 3,919 665 (3,205) 1,379 Depreciation and internally developed software amortization(11) 2,083 180 508 2,771 1,676 135 387 2,198 Adjusted EBITDA from continuing operations(12) $ 19,243 $ 3,748 $ (6,619) $ 16,372 $ 17,359 $ 2,794 $ (6,165) $ 13,988

 
8 See footnotes on the next slide. ($ in thousands, except share and per share amounts) Three Months Ended December 31, 2024 Three Months Ended December 31, 2023 Diluted net income (loss) attributable to Class A common stock per share from continuing operations $ 0.09 $ (0.12) Pro forma adjusted diluted earnings per share from continuing operations(9)(13)(14) $ 0.31 $ 0.12 Pro forma adjusted net income from continuing operations(9) $ 10,460 $ 4,138 Pro forma weighted average shares of adjusted diluted Class A common stock outstanding(15) 34,057,196 33,828,461 Reconciliation of Non-GAAP Financial Measures The reconciliation of our quarterly GAAP diluted EPS from continuing operations and non-GAAP pro forma adjusted diluted EPS from continuing operations is as follows:

 
9 1.) Non-cash change in fair value of contingent consideration reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the later of the most recent balance sheet date forming the beginning of the income statement period or the original estimates made at the closing of the applicable acquisition. 2.) Equity-based compensation expense related to stock options and restricted stock units issued under the Company's 2018 Equity Incentive Plan and 2020 Acquisition Equity Incentive Plan. 3.) M&A-related activity is the net impact of professional service and related costs directly related to any merger, acquisition and disposition activity of the Company, which are recorded in selling, general and administrative in the condensed consolidated statements of operations, and revenue earned through post-sale non-recurring activities with divestitures, which are recorded in other income in the condensed consolidated statements of operations. i3 Verticals believes these activities are not reflective of the underlying operational performance of the Company. 4.) Acquisition intangible amortization reflects amortization of intangible assets and software acquired through business combinations, acquired customer portfolios, acquired referral agreements and related asset acquisitions. 5.) Non-cash interest expense reflects amortization of debt issuance costs and any write-offs of debt issuance costs. 6.) Other taxes consist of franchise taxes, commercial activity taxes, reserves for ongoing tax audit matters, the employer portion of payroll taxes related to stock option exercises and other non-income-based taxes. Taxes related to salaries are not included. 7.) (Gain) loss on disposal of property and equipment is related to the sale of buildings and automobiles purchased through acquisitions. 8.) Pro forma corporate income tax expense is based on non-GAAP adjusted income before taxes from continuing operations and is calculated using a tax rate of 25.0% for both the three months ended December 31, 2024 and 2023, based on blended federal and state tax rates. 9.) Pro forma adjusted net income from continuing operations represents a non-GAAP financial measure and assumes that all net income during the period is available to the holders of the Company's Class A common stock. Further, pro forma adjusted diluted earnings per share from continuing operations assumes that all Common Units in i3 Verticals, LLC and the associated non-voting Class B common stock were exchanged for Class A common stock at the beginning of the period on a one-for-one basis. 10.) Cash interest (income) expense, net, represents all interest expense net of interest income recorded on the Company's statement of operations other than non-cash interest expense, which represents amortization of debt issuance costs and any write-offs of debt issuance costs. 11.) Depreciation and internally developed software amortization reflects depreciation on the Company's property, plant and equipment, net, and amortization expense on its internally developed capitalized software. 12.) Represents a non-GAAP financial measure. 13.) Pro forma adjusted diluted earnings per share from continuing operations, a non-GAAP financial measure, is calculated using pro forma adjusted net income from continuing operations and the pro forma weighted average shares of adjusted diluted Class A common stock outstanding. 14.) Diluted net income per share attributable to Class A common stock from continuing operations and pro forma adjusted diluted earnings per share from continuing operations both exclude discontinued operations but include the consolidated cash interest expense. 15.) Pro forma weighted average shares of adjusted diluted Class A common stock outstanding include 10,026,180 and 10,093,394 outstanding shares of Class A common stock issuable upon the exchange of Common Units in i3 Verticals, LLC and 479,664 and 467,777 shares resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method for the three months ended December 31, 2024 and 2023, respectively. Reconciliation of Non-GAAP Financial Measures

 
10 Reconciliation of Non-GAAP Financial Measures The reconciliation of our quarterly income (loss) from continuing operations attributable to i3 Verticals, Inc. to non-GAAP adjusted income (loss) before taxes from continuing operations, non-GAAP pro forma adjusted net income from continuing operations and non-GAAP adjusted EBITDA from continuing operations is as follows: ($ in thousands) Three Months Ended September 30, 2024 Three Months Ended June 30, 2024 Three Months Ended March 31, 2024 Public Sector Healthcare Other Total Public Sector Healthcare Other Total Public Sector Healthcare Other Total Net income (loss) from continuing operations attributable to i3 Verticals, Inc. $ 14,268 $ 1,172 $ (9,111) $ 6,329 $ 10,593 $ 1,328 $ (22,577) $ (10,656) $ 13,318 $ 1,160 $ (16,187) $ (1,709) Net income (loss) from continuing operations attributable to non-controlling interests — — 689 689 — — (3,190) (3,190) — — (593) (593) Net income (loss) from continuing operations 14,268 1,172 (8,422) 7,018 10,593 1,328 (25,767) (13,846) 13,318 1,160 (16,780) (2,302) Non-GAAP Adjustments: (Benefit from) provision for income taxes — — (9,175) (9,175) — — 5,271 5,271 — — (669) (669) Non-cash change in fair value of contingent consideration(1) (149) 4 — (145) 1 (19) — (18) 88 (378) — (290) Equity-based compensation(2) — — 3,367 3,367 — — 4,432 4,432 — — 5,022 5,022 M&A-related activity(3) — — 272 272 — — 1,931 1,931 — — 714 714 Acquisition intangible amortization(4) 4,044 809 — 4,853 3,979 809 — 4,788 4,015 815 — 4,830 Non-cash interest(5) — — 278 278 — — 221 221 — — 262 262 Other taxes(6) 4 — 1,601 1,605 (4) 1 233 230 (1) 28 62 89 Other income related to the adjustment of liabilities under tax receivable agreement(7) — — (1,245) (1,245) — — — — — — — Net gain on exchangeable note repurchases and related transactions(8) — — — — — — — — — — (2,257) (2,257) Non-GAAP adjusted income (loss) before taxes from continuing operations 18,167 1,985 (13,324) 6,828 14,569 2,119 (13,679) 3,009 17,420 1,625 (13,646) 5,399 Pro forma taxes at effective tax rate(9) (4,542) (496) 3,331 (1,707) (3,642) (530) 3,420 (752) (4,355) (406) 3,410 (1,351) Pro forma adjusted net income (loss) from continuing operations(10) $ 13,625 $ 1,489 $ (9,993) $ 5,121 $ 10,927 $ 1,589 $ (10,259) $ 2,257 $ 13,065 $ 1,219 $ (10,236) $ 4,048 Plus: Cash interest (income) expense, net(11) — — 6,678 6,678 — — 7,685 7,685 — — 7,452 7,452 Pro forma taxes at effective tax rate(9) 4,542 496 (3,331) 1,707 3,642 530 (3,420) 752 4,355 406 (3,410) 1,351 Depreciation and internally developed software amortization(12) 2,032 174 521 2,727 1,854 162 165 2,181 1,813 150 400 2,363 Adjusted EBITDA from continuing operations(13) $ 20,199 $ 2,159 $ (6,125) $ 16,233 $ 16,423 $ 2,281 $ (5,829) $ 12,875 $ 19,233 $ 1,775 $ (5,794) $ 15,214 See footnotes on the next slide.

 
11 1.) Non-cash change in fair value of contingent consideration reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the later of the most recent balance sheet date forming the beginning of the income statement period or the original estimates made at the closing of the applicable acquisition. 2.) Equity-based compensation expense related to stock options and restricted stock units issued under the Company's 2018 Equity Incentive Plan and 2020 Acquisition Equity Incentive Plan. 3.) M&A-related activity is the net impact of professional service and related costs directly related to any merger, acquisition and disposition activity of the Company, which are recorded in selling, general and administrative in the condensed consolidated statements of operations, and revenue earned through post-sale non-recurring activities with divestitures, which are recorded in other income in the condensed consolidated statements of operations. i3 Verticals believes these activities are not reflective of the underlying operational performance of the Company. 4.) Acquisition intangible amortization reflects amortization of intangible assets and software acquired through business combinations, acquired customer portfolios, acquired referral agreements and related asset acquisitions. 5.) Non-cash interest expense reflects amortization of debt issuance costs and any write-offs of debt issuance costs. 6.) Other taxes consist of franchise taxes, commercial activity taxes, reserves for ongoing tax audit matters, the employer portion of payroll taxes related to stock option exercises and other non-income-based taxes. Taxes related to salaries are not included. 7.) Under our Tax Receivable Agreement we have a liability equal to 85% of certain deferred tax assets resulting from an increase in the tax basis of our investment in i3 Verticals, LLC. Other expenses related to adjustments of liabilities under our Tax Receivable Agreement relate to the remeasurement of the underlying deferred tax asset for changes in estimated income tax rates. 8.) Net gain on exchangeable note repurchases and related transactions reflects the gain on repurchases of exchangeable notes and warrant unwinds, net of the loss on sale of bond hedge unwinds, which occurred during the three months ended March 31, 2024. 9.) Pro forma corporate income tax expense is based on non-GAAP adjusted income before taxes from continuing operations and is calculated using a tax rate of 25.0% for both the three months ended December 31, 2024 and 2023, based on blended federal and state tax rates. 10.) Pro forma adjusted net income from continuing operations represents a non-GAAP financial measure and assumes that all net income during the period is available to the holders of the Company's Class A common stock. Further, pro forma adjusted diluted earnings per share from continuing operations assumes that all Common Units in i3 Verticals, LLC and the associated non-voting Class B common stock were exchanged for Class A common stock at the beginning of the period on a one-for-one basis. 11.) Cash interest (income) expense, net, represents all interest expense net of interest income recorded on the Company's statement of operations other than non-cash interest expense, which represents amortization of debt issuance costs and any write-offs of debt issuance costs. 12.) Depreciation and internally developed software amortization reflects depreciation on the Company's property, plant and equipment, net, and amortization expense on its internally developed capitalized software. 13.) Represents a non-GAAP financial measure. Reconciliation of Non-GAAP Financial Measures

 
v3.25.0.1
Cover
Feb. 06, 2025
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 06, 2025
Entity Registrant Name i3 Verticals, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-38532
Entity Tax Identification Number 82-4052852
Entity Address, Address Line One 40 Burton Hills Blvd., Suite 415
Entity Address, City or Town Nashville
Entity Address, State or Province TN
Entity Address, Postal Zip Code 37215
City Area Code 615
Local Phone Number 465-4487
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock, $0.0001 Par Value
Trading Symbol IIIV
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001728688
Amendment Flag false
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