i3 Verticals Q1 Earnings Call Highlights

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i3 Verticals (NASDAQ:IIIV) reported first-quarter fiscal 2026 results that absorption said were accordant with anterior expectations, highlighting continued spot successful recurring and SaaS gross portion non-recurring gross declined. The institution besides discussed a caller transportation-market acquisition that closed astatine the commencement of calendar 2026, arsenic good arsenic its attack to buybacks, merchandise investment, and the gait of AI adoption successful authorities exertion markets.

For the 4th ended December 31, 2025, i3 Verticals posted gross of $52.7 million, up 1% from $52.2 million successful the prior-year period. CFO Geoff Smith said the humble maturation reflected 8% maturation successful recurring revenues, partially offset by a $3 cardinal diminution successful non-recurring nonrecreational services and bundle licence revenues.

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Annual recurring gross (ARR) accrued 8% twelvemonth implicit twelvemonth to $169.6 million from $156.4 million. Smith said 80% of quarterly gross came from recurring sources, driven by:

• SaaS gross maturation of 24%

• Transaction-based gross maturation of 12%

• Payments gross maturation of 8%

Maintenance gross declined 8%, which Smith attributed to the company’s accent connected SaaS and caller sales.

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Adjusted EBITDA was $13.6 million, down from $14.6 million a twelvemonth earlier. Adjusted EBITDA borderline was 25.8%, compared with 27.9% successful the prior-year quarter. Management attributed the diminution to investments successful the company’s justness and inferior markets, higher hosting costs, and $2.6 cardinal little nonrecreational services revenue. Smith noted that nonrecreational services costs tin lag gross fluctuations.

Adjusted diluted net per stock from continuing operations was $0.26 for the quarter.

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Smith said the institution expects adjusted EBITDA borderline to amended implicit the remainder of fiscal 2026, portion reiterating a semipermanent anticipation for borderline enlargement of 50 to 100 ground points per year.

Management highlighted an acquisition that closed connected January 1: a supplier of bundle for operator and centrifugal conveyance security verification. Smith said i3 paid $60 cardinal successful cash, equating to astir 15x EBITDA. He added that the acquired concern is increasing supra 20% with an EBITDA borderline supra 50%.