i3 Verticals (IIIV) grows Q2 revenue 6% and raises 2026 EPS floor
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
i3 Verticals reported modest growth for the quarter ended March 31, 2026. Revenue from continuing operations was $57.5 million, up 6% from a year earlier, while net income from continuing operations was $2.2 million, slightly below last year’s $2.3 million. Adjusted EBITDA from continuing operations reached $16.6 million, up 5%, with an adjusted EBITDA margin of 28.8%. Diluted EPS from continuing operations for Class A stockholders was $0.07, compared with $0.04 a year ago, and adjusted diluted EPS rose to $0.32 from $0.29. Annualized recurring revenue increased to $183.5 million, up 11.6%, highlighting the company’s focus on subscription and transaction-based public sector software. For fiscal 2026, i3 Verticals revised its outlook to revenue of $221–$229 million, adjusted EBITDA of $61–$65 million, and adjusted diluted EPS of $1.09–$1.15.
Positive
- None.
Negative
- None.
Insights
Steady Q2 growth, stronger cash flow, slightly narrowed 2026 outlook.
i3 Verticals delivered Q2 revenue from continuing operations of $57.5 million, up 6%, with adjusted EBITDA of $16.6 million and a margin of 28.8%. Annualized recurring revenue rose to $183.5 million, reflecting an 11.6% increase and underscoring the shift toward recurring public-sector software and services.
GAAP net income from continuing operations was $2.2 million, roughly flat year over year, while adjusted diluted EPS improved to $0.32 from $0.29. Six‑month operating cash flow strengthened to $24.2 million versus a use of cash in the prior-year period, giving the company more flexibility to fund product investment and manage debt.
For fiscal year ending September 30, 2026, the company now guides revenue to $221–$229 million and adjusted EBITDA to $61–$65 million, a modest tightening from the prior ranges. Adjusted diluted EPS guidance of $1.09–$1.15 is essentially in line with the earlier outlook, suggesting stable expectations for profitability as management emphasizes recurring revenue growth and efficiency initiatives.
8-K Event Classification
3 items: 2.02, 7.01, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
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): May 7, 2026
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(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 class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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 May 7, 2026, i3 Verticals, Inc. (the “Company”) issued a press release announcing the results of its operations for the three and six months ended March 31, 2026. 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 March 31, 2026. 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 | |||||||
99.1 | Press release issued by i3 Verticals, Inc. on May 7, 2026 | |||||||
99.2 | Supplemental Presentation | |||||||
| 104 | Cover Page Interactive Data 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: May 7, 2026
i3 VERTICALS, INC. | ||||||||
By: | /s/ Geoff Smith | |||||||
Name: | Geoff Smith | |||||||
Title: | Chief Financial Officer | |||||||
| (Principal Financial Officer and Principal Accounting Officer) | ||||||||
i3 VERTICALS REPORTS SECOND QUARTER 2026 FINANCIAL RESULTS
NASHVILLE, Tenn. (May 7, 2026) – i3 Verticals, Inc. (Nasdaq: IIIV) (“i3 Verticals” or the “Company”) today reported its financial results for the fiscal second quarter ended March 31, 2026.
Highlights from continuing operations1 for the three and six months ended March 31, 2026 vs. 2025
•Second quarter revenue from continuing operations1 was $57.5 million, an increase of 6.2% over the prior year's second quarter. Revenue from continuing operations1 for the six months ended March 31, 2026, was $110.2 million, an increase of 3.6% over the prior year's first six months.
•Second quarter net income from continuing operations1 was $2.2 million, compared to net income from continuing operations1 of $2.3 million for the prior year's second quarter. Net income from continuing operations1 for the six months ended March 31, 2026, was $3.3 million, compared to net income from continuing operations1 of $5.1 million in the prior year's first six months.
•Second quarter net income from continuing operations attributable to i3 Verticals, Inc.1 was $1.5 million, compared to net income from continuing operations attributable to i3 Verticals, Inc.1 of $1.0 million in the prior year's second quarter. Net income from continuing operations attributable to i3 Verticals, Inc.1 for the six months ended March 31, 2026, was $2.0 million, compared to net income from continuing operations attributable to i3 Verticals, Inc.1 of $2.9 million in the prior year's first six months.
•Second quarter adjusted EBITDA from continuing operations1,2 was $16.6 million, an increase of 4.7% over the prior year's second quarter. Adjusted EBITDA from continuing operations1,2 for the six months ended March 31, 2026, was $30.2 million as compared to $30.4 million in the prior year's first six months.
•Second quarter adjusted EBITDA from continuing operations1,2 as a percentage of revenue was 28.8%, compared to 29.3% in the prior year's second quarter. Adjusted EBITDA from continuing operations1,2 as a percentage of revenue for the six months ended March 31, 2026, was 27.4%, compared to 28.6% in the prior year's first six months.
•Diluted net income per share attributable to Class A common stockholders from continuing operations1,3 was $0.07, compared to diluted net income per share attributable to Class A common stockholders from continuing operations1,3 of $0.04 in the prior year's second quarter. Diluted net income per share attributable to Class A common stockholders from continuing operations1,3 was $0.09 in the six months ended March 31, 2026, compared to diluted net income per share attributable to Class A common stockholders from continuing operations1,3 of $0.12 in the prior year's first six months.
•Second quarter adjusted diluted earnings per share from continuing operations1,2,3, which gives effect to the Company's 25% estimated long-term effective tax rate4, was $0.32 compared to $0.29 for the prior year's second quarter. Non-GAAP adjusted diluted earnings per share from continuing operations1,2,3 for the six months ended March 31, 2026, was $0.57 compared to $0.56 for the prior year's first six months.
•Annualized Recurring Revenue ("ARR") from continuing operations1,5 for the three months ended March 31, 2026 and 2025 was $183.5 million and $164.5 million, respectively, representing a period-to-period growth rate of 11.6%.
Greg Daily, Chairman and CEO of i3 Verticals, commented, "We are pleased with our second quarter results, which reflect continued progress in the execution of our strategy. Revenue from continuing operations grew 6% year over year, driven by strong performance across our recurring revenue streams, and annualized recurring revenue increased nearly 12% compared to the prior year.
"Across the public sector, we continue to invest thoughtfully in products with attractive long‑term growth opportunities. At the same time, ongoing process improvements and efficiency initiatives position us well for margin expansion as we move through the remainder of the fiscal year.
"With a strong balance sheet and a growing base of high‑quality recurring revenue, we are excited about the opportunities ahead and confident in our ability to create long‑term value."
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IIIV Reports Second Quarter 2026 Financial Results
Page 2
May 7, 2026
See footnotes on the following page.
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's Healthcare revenue cycle management business ("Healthcare RCM Business"), which was completed on May 5, 2025, the historical results of the Merchant Services Business and the Healthcare RCM 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 classifications. Prior period results have been recast to reflect this presentation.
2.Represents a non-GAAP financial measure. For additional information regarding non-GAAP financial measures (including reconciliation information), see the attached schedules to this release.
3.Diluted net income (loss) per share attributable to Class A common stockholders from continuing operations and adjusted diluted earnings per share from continuing operations both exclude discontinued operations of the Merchant Services Business and the Healthcare RCM Business but include the consolidated cash interest expense.
4.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 six months ended March 31, 2026 and 2025, based on the estimated long-term effective tax rate, considering blended federal and state tax rates.
5.Annualized Recurring Revenue (ARR) is the annualized revenue derived from recurring sources where the Company has an ongoing contract with its customers. The Company believes revenue from recurring sources is a strategic priority. ARR is comprised of 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. The sum of these revenue categories is multiplied by four to calculate ARR. ARR excludes revenue that is not recurring or is one-time in nature. The Company's management believes this metric provides useful information to investors by providing visibility regarding the ongoing revenue potential of the Company's business model and providing a clearer picture of its sustainable revenue base. Further, the Company's management uses ARR as a metric because it helps to assess the health and trajectory of the Company's business. The Company's management believes that focusing on ARR can orient the Company's sales and operations management towards long-term, reliable revenue growth. This focus on recurring revenue is particularly relevant for businesses operating under a subscription model, where customer retention and contract renewals play a significant role in long-term financial performance. 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 the Company's customers.
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IIIV Reports Second Quarter Fiscal Year 2026 Financial Results
Page 3
May 7, 2026
2026 Outlook
The Company's practice is to provide annual guidance, excluding the impact of future acquisitions and transaction-related costs.
The Company is providing the following revised outlook for the fiscal year ending September 30, 2026:
| (in thousands, except share and per share amounts) | Previous Outlook Range | Revised Outlook Range | |||||||||||||||||||||
Fiscal year ending September 30, 2026 | |||||||||||||||||||||||
| Revenue | $ | 223,000 | - | $ | 234,000 | $ | 221,000 | - | $ | 229,000 | |||||||||||||
Adjusted EBITDA (non-GAAP) | $ | 61,000 | - | $ | 66,500 | $ | 61,000 | - | $ | 65,000 | |||||||||||||
Adjusted diluted earnings per share(1)(non-GAAP) | $ | 1.08 | - | $ | 1.16 | $ | 1.09 | - | $ | 1.15 | |||||||||||||
_______________________
1.Assumes an effective tax rate of 25.0% (non-GAAP), based on the estimated long-term effective tax rate, considering blended federal and state tax rates.
With respect to the “2026 Outlook” above, reconciliations of adjusted EBITDA from continuing operations and 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, May 8, 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 approximately 10 minutes prior to the start of the call. A telephonic replay will be available from 11:30 a.m. ET on May 8, 2026, through May 14, 2026, by dialing (855) 669-9658 and entering Confirmation Code 6088860.
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.
Additional information about non-GAAP financial measures, 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 provides mission-critical enterprise software solutions to public sector entities. These comprehensive cloud-native solutions address a broad range of government functions, including courts and public safety, public administration, utilities, transportation and schools. The Company’s mission is to enable state and local governments and related agencies to perform their functions and serve their constituents as effectively and efficiently as possible. With thousands of software installations across all 50 states and Canada, i3 Verticals is a leader in the public sector vertical. More information about the Company can be found at www.i3verticals.com.
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IIIV Reports Second Quarter Fiscal Year 2026 Financial Results
Page 4
May 7, 2026
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 2026 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, elevated interest rates, tariff and trade-related developments, ongoing military conflicts in the Middle East and Ukraine, the evolving legal, ethical, regulatory and operational landscape related to artificial intelligence technologies, competition in our industry and our ability to compete effectively, 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 Healthcare RCM 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 may further update in Part II, Item 1A - Risk Factors in Quarterly Reports on Form 10-Q we will file hereafter, and the risks and uncertainties identified in other filings filed with the Securities and Exchange Commission from time to time.
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 Second Quarter Fiscal Year 2026 Financial Results
Page 5
May 7, 2026
i3 Verticals, Inc. Consolidated Statements of Operations
(Unaudited)
($ in thousands, except share and per share amounts)
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Revenue | $ | 57,518 | $ | 54,135 | 6% | $ | 110,189 | $ | 106,356 | 4% | |||||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||||||||||||
Costs of services (excluding depreciation and amortization) | 17,138 | 16,580 | 3% | 34,720 | 32,156 | 8% | |||||||||||||||||||||||||||||
| Selling, general and administrative | 29,058 | 26,282 | 11% | 56,047 | 52,761 | 6% | |||||||||||||||||||||||||||||
| Depreciation and amortization | 7,703 | 6,998 | 10% | 14,568 | 13,859 | 5% | |||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | (124) | (786) | (84)% | (498) | 466 | n/m | |||||||||||||||||||||||||||||
| Total operating expenses | 53,775 | 49,074 | 10% | 104,837 | 99,242 | 6% | |||||||||||||||||||||||||||||
| Income from operations | 3,743 | 5,061 | (26)% | 5,352 | 7,114 | (25)% | |||||||||||||||||||||||||||||
| Other expenses (income) | |||||||||||||||||||||||||||||||||||
| Interest expense | 1,141 | 446 | 156% | 1,522 | 1,126 | 35% | |||||||||||||||||||||||||||||
| Other income | (70) | (593) | (88)% | (631) | (2,419) | (74)% | |||||||||||||||||||||||||||||
| Total other expenses (income) | 1,071 | (147) | n/m | 891 | (1,293) | n/m | |||||||||||||||||||||||||||||
Income before income taxes | 2,672 | 5,208 | (49)% | 4,461 | 8,407 | (47)% | |||||||||||||||||||||||||||||
| Provision for income taxes | 478 | 2,885 | (83)% | 1,182 | 3,294 | (64)% | |||||||||||||||||||||||||||||
Net income from continuing operations | 2,194 | 2,323 | 3,279 | 5,113 | |||||||||||||||||||||||||||||||
| Net loss from discontinued operations, net of income taxes | — | (1,554) | (138) | (1,236) | |||||||||||||||||||||||||||||||
| Net income | 2,194 | 769 | 185% | 3,141 | 3,877 | (19)% | |||||||||||||||||||||||||||||
Net income from continuing operations attributable to non-controlling interest | 730 | 1,304 | 1,239 | 2,239 | |||||||||||||||||||||||||||||||
| Net loss from discontinued operations attributable to non-controlling interest | — | (381) | (46) | (264) | |||||||||||||||||||||||||||||||
| Net income attributable to non-controlling interest | 730 | 923 | (21)% | 1,193 | 1,975 | (40)% | |||||||||||||||||||||||||||||
Net income from continuing operations attributable to i3 Verticals, Inc. | 1,464 | 1,019 | 2,040 | 2,874 | |||||||||||||||||||||||||||||||
| Net loss from discontinued operations attributable to i3 Verticals, Inc. | — | (1,173) | (92) | (972) | |||||||||||||||||||||||||||||||
| Net income (loss) attributable to i3 Verticals, Inc. | $ | 1,464 | $ | (154) | n/m | $ | 1,948 | $ | 1,902 | 2% | |||||||||||||||||||||||||
Net income per share attributable to Class A common stockholders from continuing operations: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 0.07 | $ | 0.04 | $ | 0.09 | $ | 0.12 | |||||||||||||||||||||||||||
| Diluted | $ | 0.07 | $ | 0.04 | $ | 0.09 | $ | 0.12 | |||||||||||||||||||||||||||
| Net loss per share attributable to Class A common stockholders from discontinued operations: | |||||||||||||||||||||||||||||||||||
| Basic | — | $ | (0.05) | $ | 0.00 | $ | (0.04) | ||||||||||||||||||||||||||||
| Diluted | — | $ | (0.05) | $ | 0.00 | $ | (0.04) | ||||||||||||||||||||||||||||
Weighted average shares of Class A common stock outstanding: | |||||||||||||||||||||||||||||||||||
Basic, for continuing operations | 21,798,840 | 23,834,233 | 22,747,267 | 23,691,648 | |||||||||||||||||||||||||||||||
Diluted, for continuing operations | 30,582,587 | 24,133,738 | 23,656,640 | 24,081,232 | |||||||||||||||||||||||||||||||
| Basic, for discontinued operations | — | 23,834,233 | 22,747,267 | 23,691,648 | |||||||||||||||||||||||||||||||
| Diluted, for discontinued operations | — | 23,834,233 | 31,128,948 | 23,691,648 | |||||||||||||||||||||||||||||||
n/m = not meaningful
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IIIV Reports Second Quarter Fiscal Year 2026 Financial Results
Page 6
May 7, 2026
i3 Verticals, Inc. Consolidated Balance Sheets
(Unaudited)
($ in thousands, except share and per share amounts)
| March 31, | September 30, | ||||||||||
| 2026 | 2025 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 7,142 | $ | 66,672 | |||||||
| Accounts receivable, net | 55,284 | 58,467 | |||||||||
| Settlement assets | 220 | 411 | |||||||||
| Prepaid expenses and other current assets | 15,564 | 12,075 | |||||||||
| Total current assets | 78,210 | 137,625 | |||||||||
| Property and equipment, net | 6,023 | 7,181 | |||||||||
| Restricted cash | 2,755 | 250 | |||||||||
| Capitalized software, net | 52,267 | 48,314 | |||||||||
| Goodwill | 282,284 | 248,469 | |||||||||
| Intangible assets, net | 156,805 | 135,797 | |||||||||
| Deferred tax asset | 47,842 | 49,058 | |||||||||
| Operating lease right-of-use assets | 4,485 | 4,577 | |||||||||
| Other assets | 5,749 | 7,140 | |||||||||
| Total assets | $ | 636,420 | $ | 638,411 | |||||||
| Liabilities and equity | |||||||||||
| Liabilities | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 3,630 | $ | 6,248 | |||||||
| Accrued expenses and other current liabilities | 20,025 | 24,525 | |||||||||
| Settlement obligations | 220 | 411 | |||||||||
| Deferred revenue | 32,909 | 37,678 | |||||||||
| Current portion of operating lease liabilities | 1,786 | 1,827 | |||||||||
| Total current liabilities | 58,570 | 70,689 | |||||||||
| Long-term debt, less current portion | 81,000 | — | |||||||||
| Long-term tax receivable agreement obligations | 32,379 | 32,191 | |||||||||
| Operating lease liabilities, less current portion | 2,826 | 2,964 | |||||||||
| Other long-term liabilities | 23,409 | 14,844 | |||||||||
| Total liabilities | 198,184 | 120,688 | |||||||||
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 March 31, 2026 and September 30, 2025 | — | — | |||||||||
Class A common stock, par value $0.0001 per share, 150,000,000 shares authorized; 20,541,392 and 23,983,125 shares issued and outstanding as of March 31, 2026 and September 30, 2025, respectively | 2 | 2 | |||||||||
Class B common stock, par value $0.0001 per share, 40,000,000 shares authorized; 8,381,681 and 8,381,681 shares issued and outstanding as of March 31, 2026 and September 30, 2025, respectively | 1 | 1 | |||||||||
| Additional paid-in capital | 197,160 | 271,310 | |||||||||
| Accumulated earnings | 120,218 | 118,270 | |||||||||
| Total stockholders' equity | 317,381 | 389,583 | |||||||||
| Non-controlling interest | 120,855 | 128,140 | |||||||||
| Total equity | 438,236 | 517,723 | |||||||||
| Total liabilities and equity | $ | 636,420 | $ | 638,411 | |||||||
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IIIV Reports Second Quarter Fiscal Year 2026 Financial Results
Page 7
May 7, 2026
i3 Verticals, Inc. Consolidated Cash Flow Data
(Unaudited)
($ in thousands)
| Six Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Net cash provided by (used in) operating activities | $ | 24,150 | $ | (15,627) | |||||||
| Net cash used in investing activities | $ | (64,658) | $ | (3,675) | |||||||
| Net cash used in financing activities | $ | (16,708) | $ | (60,029) | |||||||
Reconciliation of GAAP to Non-GAAP Financial Measures
The Company discloses the following non-GAAP financial measures in this earnings release:
•Adjusted Income Before Taxes from Continuing Operations. Adjusted income before taxes from continuing operations equals net income (loss) from continuing operations attributable to i3 Verticals Inc., adjusted to add back net income (loss) from continuing operations attributable to non-controlling interest and to exclude certain items on a pre-tax basis which the Company believes may not fully reflect our underlying operating performance. The Company believes that this non-GAAP measure provides useful information to investors in understanding and evaluating the Company’s results of continuing operations and ongoing operational performance on a pre-tax basis.
•Adjusted Net Income from Continuing Operations and Adjusted Diluted Earnings per Share from Continuing Operations. Adjusted net income from continuing operations equals adjusted income before taxes from continuing operations as described above, adjusted to give effect to an effective tax rate of 25%, which reflects our estimated long-term effective tax rate, considering blended federal and state tax rates. Adjusted diluted earnings per share from continuing operations equals adjusted net income from continuing operations divided by our adjusted weighted average shares of adjusted diluted Class A common stock outstanding. The Company believes that these non-GAAP measures provide useful information to investors in understanding and evaluating the Company’s results of continuing operations and ongoing operational performance on a post-tax basis after giving effect to this assumed tax rate. Adjusted Diluted Earnings per Share from Continuing Operations has also been utilized as a metric in connection with performance-based equity awards previously granted by the Company to executives.
•Adjusted EBITDA from Continuing Operations and Adjusted EBITDA Margin from Continuing Operations. Adjusted EBITDA from continuing operations equals net income (loss) from continuing operations attributable to i3 Verticals Inc., before interest, income taxes, depreciation and amortization, adjusted to add back net income (loss) from continuing operations attributable to non-controlling interest, and to exclude certain items which the Company believes do not fully reflect our underlying operating performance. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue. The Company believes that these non-GAAP measures provide useful information to investors in understanding and evaluating the Company’s results of continuing operations and ongoing operational performance. In addition, Adjusted EBITDA and Adjusted EBITDA margin have been metrics utilized in connection with the Company’s short-term annual cash incentive program for executive management.
The Company believes that the disclosure of these non-GAAP financial measures provides investors with useful information in connection with assessing the Company's financial results as described above. In addition, these non-GAAP financial measures are utilized by management to assess the Company's financial results, evaluate the Company's business, manage budgets, allocate resources, and make operational decisions. The Company believes that disclosure of these non-GAAP financial measures provides investors with additional information to help them better understand our financial results just as management utilizes these non-GAAP financial measures as described above. 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.
See below for reconciliations of the non-GAAP financial measures presented in this release.
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IIIV Reports Second Quarter Fiscal Year 2026 Financial Results
Page 8
May 7, 2026
i3 Verticals, Inc. Reconciliation of GAAP Net Income (Loss) from Continuing Operations to
Non-GAAP Adjusted Net Income from Continuing Operations and
Non-GAAP Adjusted EBITDA from Continuing Operations
(Unaudited)
($ in thousands)
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Net income from continuing operations attributable to i3 Verticals, Inc. | $ | 1,464 | $ | 1,019 | $ | 2,040 | $ | 2,874 | |||||||||||||||
Net income from continuing operations attributable to non-controlling interest | 730 | 1,304 | 1,239 | 2,239 | |||||||||||||||||||
Net income from continuing operations | $ | 2,194 | $ | 2,323 | $ | 3,279 | $ | 5,113 | |||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||
| Provision for income taxes | 478 | 2,885 | 1,182 | 3,294 | |||||||||||||||||||
Non-cash change in fair value of contingent consideration(1) | (124) | (786) | (498) | 466 | |||||||||||||||||||
Equity-based compensation from continuing operations(2) | 4,619 | 3,545 | 9,797 | 7,151 | |||||||||||||||||||
M&A-related activity(3) | 126 | 107 | 147 | 159 | |||||||||||||||||||
Acquisition intangible amortization(4) | 4,970 | 4,227 | 9,366 | 8,453 | |||||||||||||||||||
Non-cash interest expense(5) | 215 | 250 | 431 | 530 | |||||||||||||||||||
Other taxes(6) | 463 | 455 | 614 | 707 | |||||||||||||||||||
Loss (gain) on disposal of property and equipment(7) | — | — | 71 | (585) | |||||||||||||||||||
Non-GAAP adjusted income before taxes from continuing operations(8) | $ | 12,941 | $ | 13,006 | $ | 24,389 | $ | 25,288 | |||||||||||||||
Estimated taxes at 25%(9) | (3,235) | (3,252) | (6,097) | (6,323) | |||||||||||||||||||
Adjusted net income from continuing operations(8) | $ | 9,706 | $ | 9,754 | $ | 18,292 | $ | 18,965 | |||||||||||||||
Cash interest expense (income), net(10) | 915 | 64 | 613 | (282) | |||||||||||||||||||
Estimated taxes at 25%(9) | 3,235 | 3,252 | 6,097 | 6,323 | |||||||||||||||||||
Depreciation and internally developed software amortization(11) | 2,733 | 2,771 | 5,202 | 5,406 | |||||||||||||||||||
Adjusted EBITDA from continuing operations(8) | $ | 16,589 | $ | 15,841 | $ | 30,204 | $ | 30,412 | |||||||||||||||
________________
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 ("M&A-related expenses"), 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 ("M&A-related income"), 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. M&A-related income was $60 and $225 for the three and six months ended March 31, 2026, respectively, and $461 and $956 for the three and six months ended March 31, 2025, respectively. M&A-related expenses were $186 and $372 for the three and six months ended March 31, 2026, respectively and $570 and $1,116 for the three and six months ended March 31, 2025, respectively.
4.Acquisition intangible amortization reflects amortization of intangible assets and software acquired through acquisitions of business or other purchases of intangible assets.
5.Non-cash interest expense reflects amortization of debt issuance costs and any write-offs of debt issuance costs.
6.Other taxes consist of franchise taxes, commercial activity taxes, reserves for ongoing tax audit matters, the employer portion of payroll taxes related to stock option exercises and other non-income-based taxes. Taxes related to salaries are not included.
7.Loss (gain) on disposal of property and equipment is related to the sale of buildings and automobiles purchased through acquisitions.
8.Represents a non-GAAP financial measure.
9.Corporate income tax expense is based on non-GAAP adjusted income before taxes from continuing operations and is calculated using a tax rate of 25.0% for both the six months ended March 31, 2026 and 2025, based on the estimated long-term effective tax rate, considering blended federal and state tax rates.
10.Cash interest expense (income), net, represents all interest expense net of interest income recorded on the Company's statement of operations other than non-cash interest expense, which represents amortization of debt issuance costs and any write-offs of debt issuance costs.
11.Depreciation and internally developed software amortization reflects depreciation on the Company's property, plant and equipment, net, and amortization expense on its internally developed capitalized software.
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IIIV Reports Second Quarter Fiscal Year 2026 Financial Results
Page 9
May 7, 2026
i3 Verticals, Inc. GAAP Diluted EPS from Continuing Operations and
Non-GAAP Adjusted Diluted EPS from Continuing Operations
(Unaudited)
($ in thousands, except share and per share amounts)
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Diluted net income per share attributable to Class A common stockholders from continuing operations(1) | $ | 0.07 | $ | 0.04 | $ | 0.09 | $ | 0.12 | |||||||||||||||
Adjusted diluted earnings per share from continuing operations(2)(3) | $ | 0.32 | $ | 0.29 | $ | 0.57 | $ | 0.56 | |||||||||||||||
Adjusted net income from continuing operations(2)(4) | $ | 9,706 | $ | 9,754 | $ | 18,292 | $ | 18,965 | |||||||||||||||
Adjusted weighted average shares of adjusted diluted Class A common stock outstanding(2)(5) | 30,582,587 | 33,542,165 | 32,038,321 | 33,801,930 | |||||||||||||||||||
________________
1.Diluted net income per share attributable to Class A common stockholders from continuing operations and adjusted diluted earnings per share from continuing operations both exclude the discontinued operations of the Merchant Services Business and the Healthcare RCM Business but include the consolidated cash interest expense.
2.Represents a non-GAAP financial measure.
3.Adjusted diluted earnings per share from continuing operations, a non-GAAP financial measure, is calculated using adjusted net income from continuing operations and the adjusted weighted average shares of adjusted diluted Class A common stock outstanding. Further, 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.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.
5.Adjusted weighted average shares of adjusted diluted Class A common stock outstanding include 8,381,681 and 9,408,427 weighted average outstanding shares of Class B common stock (which can be converted into Class A common stock upon the exchange of the Class B common stock and the associated Common Units in i3 Verticals, LLC) and 402,066 and 299,505 shares resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method for the three months ended March 31, 2026 and 2025, respectively. Adjusted weighted average shares of adjusted diluted Class A common stock outstanding include 8,381,681 and 9,720,698 weighted average outstanding shares of Class B common stock (which can be converted into Class A common stock upon the exchange of the Class B common stock and the associated Common Units in i3 Verticals, LLC) and 909,373 and 389,584 shares resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method for the six months ended March 31, 2026 and 2025, respectively.
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1 Supplemental Information Q2 FISCAL YEAR 2026
2 ($ in thousands) Quarter Ended March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Recurring revenue SaaS(2) $ 12,658 $ 10,959 $ 10,375 $ 9,299 $ 9,209 $ 8,812 $ 8,331 $ 7,517 $ 7,500 Transaction-based(3) 22,359 20,399 19,971 19,325 20,933 18,867 18,024 17,471 19,281 Maintenance(4) 7,832 7,971 7,956 8,648 8,115 8,622 8,610 8,255 7,936 Other recurring services(5) 3,021 3,077 3,013 2,929 2,856 2,804 2,876 2,655 2,938 Total recurring revenue(6) $ 45,870 $ 42,406 $ 41,315 $ 40,201 $ 41,113 $ 39,105 $ 37,841 $ 35,898 $ 37,655 Year-over-year growth 12 % 8 % 9 % 12 % 9 % Non-recurring revenue Professional services(7) 6,946 6,959 11,537 9,458 9,136 9,583 9,729 8,472 8,795 Software licenses & other 4,702 3,306 2,049 2,242 3,886 3,533 3,753 1,813 2,054 Total non-recurring revenue $ 11,648 $ 10,265 $ 13,586 $ 11,700 $ 13,022 $ 13,116 $ 13,482 $ 10,285 $ 10,849 Year-over-year growth (11) % (22) % 1 % 14 % 20 % Total revenue $ 57,518 $ 52,671 $ 54,901 $ 51,901 $ 54,135 $ 52,221 $ 51,323 $ 46,183 $ 48,504 Annualized Recurring Revenue “ARR”(8) $ 183,480 $ 169,624 $ 165,260 $ 160,804 $ 164,452 $ 156,420 $ 151,364 $ 143,592 $ 150,620 Year-over-year growth 12 % 8 % 9 % 12 % 9 % Revenue Composition(1) See footnotes on the next slide.
3 1.) As a result of the sale of our merchant services business (the "Merchant Services Business"), which was completed on September 20, 2024, and the sale of our Healthcare revenue cycle management business (the "Healthcare RCM Business"), which was completed on May 5, 2025, the historical results of the Merchant Services Business and the Healthcare RCM Business have been reflected in discontinued operations in the consolidated statement of operations included in this supplemental information, and continuing operations reflect our remaining operations after giving effect to such classifications. Prior period results have been recast to reflect this presentation. 2.) SaaS revenue is earned when we provide, as a service to our customers over time, the right to access our software. 3.) Transaction-based revenue is earned when we provide services through our software and charge a fee on a volume or per-transaction basis. For example, we process credit card or ACH payment transactions, we provide electronic filing services for courts and charge fees per filing, and we stand- ready to process and bill utility customers and charge the utility a fee per bill 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.) Other recurring services are earned when we provide long-term, usually evergreen, contracted services to our customers. For example, we provide recurring long-term contracts such as software support plans, hardware maintenance plans, rental plans and field service plans. 6.) 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. 7.) 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. 8.) Annualized Recurring Revenue (ARR) is the annualized revenue derived from recurring sources where the Company has an ongoing contract with our customers. We believe revenue from recurring sources is a strategic priority. ARR is comprised of 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. The sum of these revenue categories is multiplied by four to calculate ARR. ARR excludes revenue that is not recurring or is one-time in nature. We believe this metric provides useful information to investors by providing visibility regarding the ongoing revenue potential of our business model and providing a clearer picture of our sustainable revenue base. Further, management uses ARR as a metric because it helps to assess the health and trajectory of our business. Our management believes that focusing on ARR can orient our sales and operations management towards long-term, reliable revenue growth. This focus on recurring revenue is particularly relevant for businesses operating under a subscription model, where customer retention and contract renewals play a significant role in long-term financial performance. 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 our customers. Revenue Composition
4 Q2 Fiscal 2026 GAAP Measures; Use of Non-GAAP Financial Measures The following is our income (loss) from operations for the current and prior year quarters calculated in accordance with GAAP and presented for continuing operations only. This presentation includes the disclosure of certain non-GAAP financial measures presented by the Company, including the following: • Adjusted Income Before Taxes from Continuing Operations. Adjusted income before taxes from continuing operations equals net income (loss) from continuing operations attributable to i3 Verticals Inc., adjusted to add back net income (loss) from continuing operations attributable to non-controlling interest and to exclude certain items on a pre-tax basis which the Company believes may not fully reflect our underlying operating performance. The Company believes that this non-GAAP measure provides useful information to investors in understanding and evaluating the Company’s results of continuing operations and ongoing operational performance on a pre-tax basis. • Adjusted Net Income from Continuing Operations and Adjusted Diluted Earnings Per Share from Continuing Operations. Adjusted net income from continuing operations equals adjusted income before taxes from continuing operations as described above, adjusted to give effect to an effective tax rate of 25%, which reflects our estimated long-term effective tax rate, considering blended federal and state tax rates. Adjusted diluted earnings per share from continuing operations equals adjusted net income from continuing operations divided by our adjusted weighted average shares of adjusted diluted Class A common stock outstanding. The Company believes that these non-GAAP measures provide useful information to investors in understanding and evaluating the Company’s results of continuing operations and ongoing operational performance on a post-tax basis after giving effect to this assumed tax rate. Adjusted Diluted Earnings per Share from Continuing Operations has also been utilized as a metric in connection with performance-based equity awards previously granted by the Company to executives. • Adjusted EBITDA from Continuing Operations and Adjusted EBITDA Margin from Continuing Operations. Adjusted EBITDA from continuing operations equals net income (loss) from continuing operations attributable to i3 Verticals Inc., before interest, income taxes, depreciation and amortization, adjusted to add back net income (loss) from continuing operations attributable to non-controlling interest, and to exclude certain items which the Company believes do not fully reflect our underlying operating performance. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue. The Company believes that these non-GAAP measures provide useful information to investors in understanding and evaluating the Company’s results of continuing operations and ongoing operational performance. In addition, Adjusted EBITDA and Adjusted EBITDA margin have been metrics utilized in connection with the Company’s short-term annual cash incentive program for executive management. The Company believes that the disclosure of these non-GAAP financial measures provides investors with useful information in connection with assessing the Company's financial results as described above. In addition, these non-GAAP financial measures are utilized by management to assess the Company's financial results, evaluate the Company's business, manage budgets, allocate resources, and make operational decisions. The Company believes that disclosure of these non-GAAP financial measures provides investors with additional information to help them better understand our financial results just as management utilizes these non-GAAP financial measures as described above. 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. This presentation includes reconciliations of the non-GAAP financial measures disclosed herein as described above. ($ in thousands) Three Months Ended March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 Income (loss) from operations $ 3,743 $ 1,609 $ 1,476 $ (4,813) $ 5,061 $ 2,053
5 Quarterly Performance from Continuing Operations 1. Recurring cash costs of services represents recurring operating costs directly related to our revenue generating activities except the stock compensation portion of personnel costs included within costs of services. 2. 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. 3. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue. Adjusted EBITDA and Adjusted EBITDA margin 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, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 Revenue from continuing operations $ 57,518 $ 52,671 $ 54,901 $ 51,901 $ 54,135 $ 52,221 Recurring cash costs of services(1) 16,866 17,345 17,483 16,547 16,403 15,414 Recurring cash SG&A expenses(2) 18,702 16,875 18,811 18,117 17,399 17,261 Corporate expenses 5,361 4,836 4,208 4,513 4,492 4,975 Adjusted EBITDA from continuing operations(3) $ 16,589 $ 13,615 $ 14,399 $ 12,724 $ 15,841 $ 14,571 Adjusted EBITDA margin from continuing operations(3) 29 % 26 % 26 % 25 % 29 % 28 % Period over period growth rates Y/Y Revenue from continuing operations 6% Recurring cash costs of services(1) 3% Recurring cash SG&A expenses(2) 7% Corporate expenses 19% Adjusted EBITDA from continuing operations(3) 5%
6 Reconciliation of Non-GAAP Financial Measures(1) The reconciliation of our net income (loss) from continuing operations attributable to i3 Verticals, Inc. to non-GAAP adjusted income before taxes from continuing operations, non-GAAP adjusted net income from continuing operations and non-GAAP adjusted EBITDA from continuing operations for the current and prior year quarters are as follows: See footnotes on the next slide. ($ in thousands) Three Months Ended March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 Net income (loss) from continuing operations attributable to i3 Verticals, Inc. $ 1,464 $ 576 $ 1,163 $ (410) $ 1,019 $ 1,855 Net income (loss) from continuing operations attributable to non-controlling interests 730 509 338 (586) 1,304 935 Net income (loss) from continuing operations 2,194 1,085 1,501 (996) 2,323 2,790 Non-GAAP Adjustments: Provision for (benefit from) income taxes 478 704 1,994 (22) 2,885 409 Non-cash change in fair value of contingent consideration(2) (124) (374) (206) (26) (786) 1,252 Equity-based compensation(3) 4,619 5,178 3,202 4,879 3,545 3,606 M&A-related activity(4) 126 21 (145) 1,137 107 52 Acquisition intangible amortization(5) 4,970 4,396 4,473 4,444 4,227 4,226 Non-cash interest(6) 215 216 215 511 250 280 Other taxes(7) 463 151 1,573 322 455 252 Other income related to the adjustment of liabilities under tax receivable agreement(8) — — (471) — — — Loss (gain) on disposal of property and equipment(9) — 71 — — — (585) Non-GAAP adjusted income before taxes from continuing operations(10) 12,941 11,448 12,136 10,249 13,006 12,282 Estimated taxes at 25%(11) (3,235) (2,862) (3,033) (2,562) (3,252) (3,071) Adjusted net income from continuing operations(10) $ 9,706 $ 8,586 $ 9,103 $ 7,687 $ 9,754 $ 9,211 Plus: Cash interest expense (income), net(12) 915 (302) (316) (70) 64 (346) Estimated taxes at 25%(11) 3,235 2,862 3,033 2,562 3,252 3,071 Depreciation and internally developed software amortization(13) 2,733 2,469 2,579 2,545 2,771 2,635 Adjusted EBITDA from continuing operations(10) $ 16,589 $ 13,615 $ 14,399 $ 12,724 $ 15,841 $ 14,571
7 1.) As a result of the sale of our merchant services business (the "Merchant Services Business"), which was completed on September 20, 2024, and the sale of our Healthcare revenue cycle management business (the "Healthcare RCM Business"), which was completed on May 5, 2025, the historical results of the Merchant Services Business and the Healthcare RCM Business have been reflected in discontinued operations in the consolidated statement of operations included in this supplemental information, and continuing operations reflect our remaining operations after giving effect to such classifications. Prior period results have been recast to reflect this presentation. 2.) 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. 3.) 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. 4.) 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 ("M&A- related expenses"), 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 ("M&A-related income"), 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. M&A-related income was $60, $166, $1,448, $4,237, $461, and $495 for the three months ending March 31, 2026; December 31, 2025; September 30, 2025; June 30, 2025; and March 31, 2025; and December 31, 2024, respectively. M&A-related expenses were $186, $187, $1,303, $5,373, $570, and $546 for the three months ending March 31, 2026; December 31, 2025; September 30, 2025; June 30, 2025; and March 31, 2025; and December 31, 2024, respectively. 5.) Acquisition intangible amortization reflects amortization of intangible assets and software acquired through acquisitions of business or other purchases of intangible assets. 6.) Non-cash interest expense reflects amortization of debt issuance costs and any write-offs of debt issuance costs. 7.) 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. 8.) 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. 9.) Loss (gain) on disposal of property and equipment is related to the sale of buildings and automobiles purchased through acquisitions. 10.) Represents a non-GAAP financial measure. 11.) 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 all periods presented, based on the estimated long-term effective tax rate, considering blended federal and state tax rates. 12.) Cash interest expense (income), 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. 13.) 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. Reconciliation of Non-GAAP Financial Measures
8 See footnotes on the next slide. Non-GAAP Adjusted Diluted EPS from Continuing Operations(1) The reconciliation of our GAAP diluted EPS from continuing operations and non-GAAP Adjusted diluted EPS from continuing operations for the current and prior year quarters are as follows: ($ in thousands, except share and per share amounts) Three Months Ended March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 Diluted net income (loss) per share attributable to Class A common stockholders from continuing operations(1) $ 0.07 $ 0.02 $ 0.04 $ (0.03) $ 0.04 $ 0.08 Adjusted diluted earnings per share from continuing operations(2)(3) $ 0.32 $ 0.26 $ 0.27 $ 0.23 $ 0.29 $ 0.27 Adjusted net income from continuing operations(2)(4) $ 9,706 $ 8,586 $ 9,103 $ 7,687 $ 9,754 $ 9,211 Adjusted weighted average shares of adjusted diluted Class A common stock outstanding(2)(5) 30,582,587 33,473,435 34,215,380 33,936,121 33,542,165 34,057,196
9 1.) Diluted net income (loss) per share attributable to Class A common stockholders from continuing operations and adjusted diluted earnings per share from continuing operations both exclude the discontinued operations of the Merchant Services Business and the Healthcare RCM Business but include the consolidated cash interest expense. 2.) Represents a non-GAAP financial measure. 3.) Adjusted diluted earnings per share from continuing operations, a non-GAAP financial measure, is calculated using adjusted net income from continuing operations and the adjusted weighted average shares of adjusted diluted Class A common stock outstanding. Further, 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.) 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. 5.) Adjusted weighted average shares of adjusted diluted Class A common stock outstanding include the following outstanding shares of Class A common stock issuable upon the exchange of Common Units in i3 Verticals, LLC and the following shares resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method for each of the period presented: • For the three months ended March 31, 2026, adjusted weighted average shares of adjusted diluted Class A common stock outstanding include 8,381,681 weighted average outstanding shares of Class B common stock (which can be converted into Class A common stock upon the exchange of the Class B common stock and the associated Common Units in i3 Verticals, LLC) and 402,066 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, 2025, adjusted weighted average shares of adjusted diluted Class A common stock outstanding include 8,381,681 weighted average outstanding shares of Class B common stock (which can be converted into Class A common stock upon the exchange of the Class B common stock and the associated Common Units in i3 Verticals, LLC) and 1,416,679 shares resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method. • For the three months ended September 30, 2025, adjusted weighted average shares of adjusted diluted Class A common stock outstanding include 8,388,470 weighted average outstanding shares of Class B common stock (which can be converted into Class A common stock upon the exchange of the Class B common stock and the associated Common Units in i3 Verticals, LLC) and 1,911,108 shares resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method. • For the three months ended June 30, 2025, adjusted weighted average shares of adjusted diluted Class A common stock outstanding include 8,637,499 weighted average outstanding shares of Class B common stock (which can be converted into Class A common stock upon the exchange of the Class B common stock and the associated Common Units in i3 Verticals, LLC) and 952,796 shares resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method. • For the three months ended March 31, 2025, adjusted weighted average shares of adjusted diluted Class A common stock outstanding include 9,408,427 weighted average outstanding shares of Class B common stock (which can be converted into Class A common stock upon the exchange of the Class B common stock and the associated Common Units in i3 Verticals, LLC) and 299,505 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, adjusted weighted average shares of adjusted diluted Class A common stock outstanding include 10,026,180 weighted average outstanding shares of Class B common stock (which can be converted into Class A common stock upon the exchange of the Class B common stock and the associated Common Units in i3 Verticals, LLC) and 479,664 shares resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method. Reconciliation of Non-GAAP Financial Measures