i3 Verticals, Inc. Q1 FY2026 earnings call

• Greg Daily noted revenue was up 1% YoY, recurring revenue up over 8%, and SaaS up 24% for 4 quarters, with a new acquisition announced.
• Geoff Smith discussed revenue details, recurring revenue growth, adjusted EBITDA, balance sheet strength, and provided FY 2026 guidance including revenues, adjusted EBITDA, and EPS ranges.
• Rick Stanford detailed the acquisition in the transportation market, its features, and market positioning in the transportation sector.
• Focus on refining market offerings in JusticeTech and transportation, with activity in CourtOne, AI initiatives, and partnerships like with West Virginia and Arizona.

Revenues for the first quarter of fiscal 2026 were $52.7 million, up 1% from Q1 2025. Recurring revenue increased 8%, with SaaS revenue growing over 24%. Annual recurring revenues reached $169.6 million for Q1 2026. 80% of revenues came from recurring sources. Adjusted EBITDA was $13.6 million, down from $14.6 million in Q1 2025. The company acquired a software provider for driver and motor vehicle insurance verification for $60 million in cash, which is growing durably at over 20% with an EBITDA margin above 50%.

For FY 2026, revenues are expected to be $223 million to $234 million, adjusted EBITDA $61 million to $66.5 million, and adjusted diluted EPS $1.08 to $1.16. Recurring revenue is expected to grow 8%-10% organic, with professional services revenue declining. Revenue distribution by quarters: Q1 23%, Q2 25%, Q3 25%, Q4 27%.

Forward-looking statements are subject to factors in the company's earnings release and SEC reports. Integration of acquisitions and market conditions may impact performance.

Q: Madison Suhr asked about organic growth headwinds and capital allocation.

A: Clay Whitson stated professional services revenue is lower than expected, and Geoff Smith mentioned buybacks are opportunistic.

Q: Peter Heckmann inquired about acquisition details.

A: Rick Stanford discussed the acquisition in the transportation market, its features, and growth prospects.

Q: Charles Nabhan asked about SaaS growth drivers.

A: Geoff Smith mentioned acquisition contribution and organic drivers of SaaS growth above 20%.

Q: Charles Nabhan asked about AI sustainability.

A: Rick Stanford and Clay Whitson discussed AI adoption challenges and internal AI development.

Q: Alexander Markgraff asked about acquisition multiple and product investments.

A: Clay Whitson discussed the higher multiple due to the acquisition's growth and margins, and investment continuation as per plan.