i3 Verticals, Inc. Q4 FY2025 earnings call

• Divested Merchant Services and healthcare revenue cycle management businesses, focusing on public sector solutions in courts, public safety, etc.
• Revenue growth in 2025 was strong: 7% in Q4, 11% for the year with 8% organic growth. ARR grew over 9% in Q4.
• Geoff discussed financials: Q4 2025 revenues, recurring revenues, adjusted EBITDA, balance sheet strength with $67M cash and no debt.
• Rick mentioned ongoing M&A discussions, focusing on public sector vertical alignment.
• Paul talked about market-centric structure, solution bundling, West Virginia deal, and platform solutions trend in the public sector.

i3 Verticals is now a single operating segment. Justice is the largest market, representing approximately 25% of revenues. Utilities, transportation, education, and public administration are roughly equally weighted. In Q4 2025, revenues increased 7% to $54.9 million from $51.3 million in Q4 2024, with organic growth of 4.5% and inorganic revenues from acquisitions. Recurring revenues in Q4 2025 were $41.3 million, up 9%, with 75% of revenues from recurring sources. SaaS revenues grew 25%, maintenance declined 8%, transactional-based and recurring software services grew 10%, payments grew 11%. Nonrecurring software licenses declined $1.9 million, while professional services revenue increased $1.8 million. Software and related services made up 70% of total revenues, payments 25%, and other 5%.

• FY 2026 guidance: Revenues $217M-$232M, adjusted EBITDA $58.5M-$65M, adjusted diluted EPS $1.06-$1.16.
• Recurring revenues expected to grow 8%-10% similar to 2025. Nonrecurring professional services expected to decline in 2026 but rebound in 2027+.
• Revenue distribution by quarter: Q1 23%, Q2 25.5%, Q3 24.5%, Q4 27%.

• Forward-looking statements subject to factors in earnings release and SEC reports.
• Seasonality can distort forecasts due to variability in software licenses and professional services.

Q: John Davis inquired about the 2026 organic growth outlook and conservatism, as well as professional services decline.

A: Geoff responded that they're leaning into recurring revenue, with professional services decline due to revenue recognition cadence in utilities and transportation, but not a long-term trend.

Q: John asked about net dollar retention and pricing tailwind.

A: Geoff said historically conservative on price increases, expecting modest incremental increases to 1.5%-3% range in 2026.

Q: John inquired about Justice Tech investment in the quarter and 2026 incremental investments.

A: Geoff stated it's for developing and implementing core packages, costs in line with expectations and continuing into 2026.

Q: John asked about cash on balance sheet, buyback vs M&A.

A: Greg mentioned buyback approval refreshed to $50M, opportunistic; Geoff noted M&A pipeline with meaningful deals expected in 2026, sweet spot $2M-$5M EBITDA at 10x.