I3 Verticals (IIIV) Announces Second Quarter 2025 Financial Earnings Results

i3 Verticals, Inc. (IIIV) today announced its financial results for the most recent quarter, revealing earnings per share of $0.32, which exceeded analysts’ expectations by $0.03. However, the company reported revenue of $63.1 million, falling short of the estimated $72.8 million by approximately $9.8 million. Despite the revenue miss, the earnings beat reflects the company’s ability to manage costs effectively in a challenging market environment.

Key Highlights:

• Second quarter revenue increased by 8.8% to $63.1 million compared to the prior year.
• Net income from continuing operations for the second quarter was $1.1 million, a significant improvement from a net loss of $2.3 million in the previous year.
• Adjusted EBITDA for the second quarter rose by 12.7% to $17.1 million, representing 27.2% of revenue.
• Annualized Recurring Revenue (ARR) grew by 6.5% year-over-year to $199.1 million.
• The Company completed the acquisition of a utility billing software company for $9.0 million and announced the divestiture of its Healthcare Revenue Cycle Management business for $96.0 million.
• The Company revised its fiscal 2025 outlook, projecting revenue between $207 million and $217 million, down from a previous range of $243 million to $263 million.

Summary: i3 Verticals, Inc. reported robust financial results for the second quarter of fiscal 2025, with revenue reaching $63.1 million, reflecting an 8.8% increase year-over-year. The company achieved a net income of $1.1 million from continuing operations, marking a significant turnaround from the previous year’s loss. Adjusted EBITDA rose to $17.1 million, indicating a 12.7% increase and a margin of 27.2%. The company’s focus on recurring revenue is evident, with Annualized Recurring Revenue (ARR) growing to $199.1 million. CEO Greg Daily emphasized the strategic direction, stating, “We believe that transforming government services with best-in-class enterprise software is a critical part of that effort.”

Looking ahead, i3 Verticals has adjusted its fiscal 2025 revenue outlook to between $207 million and $217 million, a decrease from its previous guidance. This revision follows the divestiture of its Healthcare Revenue Cycle Management business, which the company believes will allow for a more focused approach on its core public sector operations. The acquisition of a utility billing software company is expected to enhance its offerings in the utilities sector. Daily expressed optimism about future growth opportunities, stating, “We can’t wait to get to work.”

i3 Verticals, Inc. (IIIV) has experienced notable price fluctuations recently, with a 5.77% increase over the past week and a robust 14.28% rise in the last month, suggesting a renewed investor interest. However, the stock has faced challenges over the longer term, evidenced by a 5.85% decline over the past three months, despite a commendable 19.25% increase year-over-year. The company’s fundamentals present a mixed picture; while it boasts a low price-to-earnings ratio of 6.38, indicating potential undervaluation, its two-year compound annual growth rates (CAGR) for earnings and revenue are concerningly negative at -23.84% and -9.02%, respectively. On a positive note, i3 Verticals has managed to maintain a solid net profit margin of 46.40% and a free cash flow CAGR of 6.30%, reflecting operational efficiency. The return on invested capital stands at a modest 4.13%, suggesting room for improvement in capital allocation. As investors weigh these metrics, the recent price movements may signal a potential turnaround or merely a temporary rally in a challenging environment.

i3 Verticals, Inc. provides integrated payment and software solutions to small- and medium-sized businesses and organizations in education, non-profit, public sector, and healthcare markets in the United States. It operates in two segments, Merchant Services, and Proprietary Software and Payments. The company offers payment processing services that enables clients to accept electronic payments, facilitating the exchange of funds and transaction data between clients, financial institutions, and payment networks. The company also licenses software; and provides ongoing support, and other point of sale-related solutions. It offers its solutions to clients through direct sales force; distribution partners, including independent software vendors, value-added resellers, and independent sales organizations; and referral partners, such as financial institutions, trade associations, chambers of commerce, and card issuers. The company was founded in 2012 and is headquartered in Nashville, Tennessee.