i3 Verticals Reports Third Quarter 2026 Financial Results
$IIIV--i3 Verticals, Inc. (Nasdaq: IIIV) (“i3 Verticals” or the “Company”) today reported its financial results for the fiscal third quarter ended June 30, 2026. Highlights from continuing ope...
NASHVILLE, Tenn.: $IIIV--i3 Verticals, Inc. (Nasdaq: IIIV) (“i3 Verticals” or the “Company”) today reported its financial results for the fiscal third quarter ended June 30, 2026.
Highlights from continuing operations1 for the three and nine months ended June 30, 2026 vs. 2025
- Third quarter revenue from continuing operations1 was $53.1 million, an increase of 2.2% over the prior year's third quarter. Revenue from continuing operations1 for the nine months ended June 30, 2026, was $163.3 million, an increase of 3.2% over the prior year's first nine months.
- Third quarter net income from continuing operations1 was $5.9 million, compared to net loss from continuing operations1 of $1.0 million for the prior year's third quarter. Net income from continuing operations1 for the nine months ended June 30, 2026, was $9.2 million, compared to net income from continuing operations1 of $4.1 million in the prior year's first nine months.
- Third quarter net income from continuing operations attributable to i3 Verticals, Inc.1 was $3.6 million, compared to net loss from continuing operations attributable to i3 Verticals, Inc.1 of $0.4 million in the prior year's third quarter. Net income from continuing operations attributable to i3 Verticals, Inc.1 for the nine months ended June 30, 2026, was $5.7 million, compared to net income from continuing operations attributable to i3 Verticals, Inc.1 of $2.5 million in the prior year's first nine months.
- Third quarter adjusted EBITDA from continuing operations1,2 was $13.3 million, an increase of 4.6% over the prior year's third quarter. Adjusted EBITDA from continuing operations1,2 for the nine months ended June 30, 2026, was $43.5 million, an increase of 0.9% over the prior year's first nine months.
- Third quarter adjusted EBITDA from continuing operations1,2 as a percentage of revenue was 25.1%, compared to 24.5% in the prior year's third quarter. Adjusted EBITDA from continuing operations1,2 as a percentage of revenue for the nine months ended June 30, 2026, was 26.7%, compared to 27.3% in the prior year's first nine months.
- Diluted net income per share attributable to Class A common stockholders from continuing operations1,3 was $0.19, compared to diluted net loss per share attributable to Class A common stockholders from continuing operations1,3 of $0.03 in the prior year's third quarter. Diluted net income per share attributable to Class A common stockholders from continuing operations1,3 was $0.25 in the nine months ended June 30, 2026, compared to diluted net income per share attributable to Class A common stockholders from continuing operations1,3 of $0.10 in the prior year's first nine months.
- Third 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 $0.25 compared to $0.23 for the prior year's third quarter. Non-GAAP adjusted diluted earnings per share from continuing operations1,2,3 for the nine months ended June 30, 2026, was $0.82 compared to $0.78 for the prior year's first nine months.
- Annualized Recurring Revenue ("ARR") from continuing operations1,5 for the three months ended June 30, 2026 and 2025 was $174.1 million and $160.8 million, respectively, representing a period-to-period growth rate of 8.3%.
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 (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 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 nine months ended June 30, 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. |
Greg Daily, Chairman and CEO of i3 Verticals, commented, "Our third quarter results came in below our expectations, reflecting ongoing weakness in certain non-recurring revenue streams and implementation delays. While we are disappointed with this outcome, we remain focused on attractive future growth opportunities.
“Annualized recurring revenue grew 8% year over year. We are pleased to announce the go-live of four material statewide services in our Transportation market, which we believe will help re-accelerate recurring revenue growth going forward.
"We have now repurchased more than 20% of our outstanding shares under share repurchase programs since October 2024, reflecting our long-term confidence in the direction of our business."
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 | $ | 221,000 | - | $ | 229,000 |
| $ | 216,000 | - | $ | 221,000 |
Adjusted EBITDA (non-GAAP) | $ | 61,000 | - | $ | 65,000 |
| $ | 57,000 | - | $ | 60,000 |
Adjusted diluted earnings per share(1) (non-GAAP) | $ | 1.09 | - | $ | 1.15 |
| $ | 1.08 | - | $ | 1.12 |
| |||||||||||
_______________________ | |||||||||||
| | |||||||||||
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, August 7, 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 August 7, 2026, through August 14, 2026, by dialing (855) 669-9658 and entering Confirmation Code 9466422.
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.
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.
i3 Verticals, Inc. Consolidated Statements of Operations | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
($ in thousands, except share and per share amounts) | |||||||||||||||||||||
| |||||||||||||||||||||
| Three Months Ended June 30, |
| Nine Months Ended June 30, | ||||||||||||||||||
|
| 2026 |
|
|
| 2025 |
|
| % Change |
|
| 2026 |
|
|
| 2025 |
|
| % Change | ||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Revenue | $ | 53,067 |
|
| $ | 51,901 |
|
| 2 | % |
| $ | 163,256 |
|
| $ | 158,257 |
|
| 3 | % |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Costs of services (excluding depreciation and amortization) |
| 16,314 |
|
|
| 16,733 |
|
| (3 | )% |
|
| 51,034 |
|
|
| 48,889 |
|
| 4 | % |
Selling, general and administrative |
| 28,858 |
|
|
| 33,018 |
|
| (13 | )% |
|
| 84,905 |
|
|
| 85,779 |
|
| (1 | )% |
Depreciation and amortization |
| 7,349 |
|
|
| 6,989 |
|
| 5 | % |
|
| 21,917 |
|
|
| 20,848 |
|
| 5 | % |
Change in fair value of contingent consideration |
| 1,438 |
|
|
| (26 | ) |
| n/m |
|
| 940 |
|
|
| 440 |
|
| 114 | % | |
Total operating expenses |
| 53,959 |
|
|
| 56,714 |
|
| (5 | )% |
|
| 158,796 |
|
|
| 155,956 |
|
| 2 | % |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
(Loss) income from operations |
| (892 | ) |
|
| (4,813 | ) |
| (81 | )% |
|
| 4,460 |
|
|
| 2,301 |
|
| 94 | % |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other expenses (income) |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest expense |
| 1,820 |
|
|
| 806 |
|
| 126 | % |
|
| 3,342 |
|
|
| 1,932 |
|
| 73 | % |
Other income |
| (9,903 | ) |
|
| (4,601 | ) |
| 115 | % |
|
| (10,534 | ) |
|
| (7,020 | ) |
| 50 | % |
Total other income |
| (8,083 | ) |
|
| (3,795 | ) |
| 113 | % |
|
| (7,192 | ) |
|
| (5,088 | ) |
| 41 | % |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Income (loss) before income taxes |
If you liked this article and want to stay up to date with news from
InnovationOpenLab.com subscribe to ours
Free newsletter.
Related news
Last NewsRSA at Cybertech Europe 2024Alaa Abdul Nabi, Vice President, Sales International at RSA presents the innovations the vendor brings to Cybertech as part of a passwordless vision for… Italian Security Awards 2024: G11 Media honours the best of Italian cybersecurityG11 Media's SecurityOpenLab magazine rewards excellence in cybersecurity: the best vendors based on user votes How Austria is making its AI ecosystem growAlways keeping an European perspective, Austria has developed a thriving AI ecosystem that now can attract talents and companies from other countries Sparkle and Telsy test Quantum Key Distribution in practiceSuccessfully completing a Proof of Concept implementation in Athens, the two Italian companies prove that QKD can be easily implemented also in pre-existing… Most readCircle Reports Second Quarter 2026 ResultsCircle Internet Group, Inc. (NYSE: CRCL) today announced results for the second quarter of fiscal year 2026. Financial Highlights (Q2’26 vs. Q2’25) USDC… Kioxia Showcases Game Changing Flash Storage Innovations for the AI Era…This week at FMS: the Future of Memory and Storage, KIOXIA America, Inc. will demonstrate how its flash memory and SSD technologies, including the KIOXIA… Atkore Inc. to be Acquired by Prysmian for $95.00 per Share in CashAtkore Inc. (“Atkore” or the “Company”) (NYSE: ATKR), a leading manufacturer of electrical infrastructure products, announced today that it has entered… H2O AI Super Agent™ Ranks #2 Worldwide on FutureX Overall LeaderboardH2O.ai, the sovereign enterprise AI platform for predictive, generative and agentic AI, with built-in observability and governance, today announced that… G11 Media Networks
InnovationOpenLab is a channel of BitCity, a newspaper registered at the court of Como , 
| ||||||||||||||||||||