i3 Verticals, Inc. Q4 FY2024 earnings call

• Greg Daily highlighted fiscal 2024 was transformational, transitioning to a pure-play vertical market software business. • Rick Stanford discussed technology transformation efforts like cloud migration, unified support technologies, and hired Chad Fenner as Chief Product Officer. • Paul Christians mentioned sales alignment and positive sales activity in enterprise utility, JusticeTech, public safety, ERP, and education subverticals.

Following the sale of the Merchant Services business, RemainCo is segmented by vertical. Public sector revenues increased 6% to $49.6 million in Q4 2024 from $46.9 million in Q4 2023, representing 81% of total revenues. Its adjusted EBITDA increased 6% to $20.2 million. Healthcare revenue declined 3% to $11.4 million in Q4 2024 from $11.7 million in Q4 2023, with adjusted EBITDA down 5%.

• Reaffirmed fiscal 2025 guidance: revenues $243 million to $263 million, adjusted EBITDA $63 million to $71.5 million, pro forma adjusted diluted EPS $1.05 to $1.25. • Expect high single-digit organic revenue growth and annual adjusted EBITDA margin improvement of 50 to 100 basis points. • Manitoba project to return to normal cadence, utilities market momentum, and education business lapping state subsidy introduction.

Q: John Davis asked about fourth quarter revenue being light of guide, delayed implementations, and NRR.

A: Geoff Smith said nothing specific pushed out, Clay Whitson mentioned aiming to improve NRR from 100% and organic growth implied at midpoint of 7.5% with new logos.

Q: Mark Palmer asked about utility initiative rollout.

A: Greg Daily said portal side rolling out now, sales activity to begin in distribution side.

Q: James Faucette asked about margin expansion.

A: Geoff Smith said margin expansion target 50 to 100 basis points, driven by revenue growth outpacing corporate overhead.

Q: Alex Markgraff asked about healthcare margins.

A: Geoff Smith said healthcare has lower margin outsourced RCM services, but plans to improve margin over time.

Q: Peter Heckmann asked about seasonality and utility project revenue.

A: Clay Whitson and Geoff Smith discussed software license sales variability and utility project having various revenue types.

Q: Rufus Hone asked about organic growth acceleration and healthcare growth.

A: Clay Whitson said organic growth acceleration from factors like utility customer growth, education normalizing, and Manitoba resumption; healthcare has low single-digit growth due to consolidation.