i3 Verticals Q2 Earnings Call Highlights

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Fri, May 8, 2026 astatine 10:53 AM CDT 7 min read

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i3 Verticals (NASDAQ:IIIV) reported second-quarter fiscal 2026 results marked by higher recurring gross and continued concern successful merchandise capabilities, portion ongoing weakness successful nonrecreational services weighed connected integrated maturation and prompted a humble simplification to full-year gross guidance.

Second-quarter results amusement recurring gross spot

Chairman and CEO Greg Daily said the institution was “pleased with our show successful the 2nd 4th arsenic we proceed to execute against our strategy and further amended the prime of our business.” Daily noted that gross from continuing operations grew 6% twelvemonth implicit twelvemonth and annualized recurring gross accrued 12%, which helium called “the champion indicator of our semipermanent maturation opportunity.”

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Chief Financial Officer Geoff Smith said gross for the 4th ended March 31, 2026 accrued 6% to $57.5 million, up from $54.1 cardinal successful the prior-year quarter, “principally reflecting revenues from 2 acquisitions which person not yet annualized.” Smith said integrated gross was flat, citing a $2.2 cardinal alteration successful nonrecreational services revenue.

Smith said the “ongoing weakness successful nonrecreational services continues to beryllium concentrated successful our utilities market,” and the institution expects that inclination to persist done the remainder of fiscal 2026. He added that non-recurring gross sources declined 11% twelvemonth implicit year, portion yearly recurring gross roseate to $183.5 cardinal from $164.5 million.

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Breaking down recurring performance, Smith said SaaS gross grew 37% and transaction-based gross roseate 7%. He said the institution expects “elevated levels of SaaS maturation the remainder of the fiscal twelvemonth and accelerating transaction-based gross growth.” Smith besides noted that 80% of quarterly gross came from recurring sources, and that the institution expects little bundle licence income for the remainder of fiscal 2026 aft astir expected licence income person already been completed.

Margins pressured by investments and hosting costs, but betterment expected

Adjusted EBITDA accrued 5% to $16.6 cardinal from $15.8 million, portion adjusted EBITDA borderline dipped to 28.8% from 29.3%. Smith attributed the borderline diminution to “investments successful our JusticeTech market, higher hosting costs, and little nonrecreational services revenues.”

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Despite the borderline unit successful the quarter, Smith said the institution expects adjusted EBITDA borderline to amended successful the remainder of the twelvemonth and reiterated a semipermanent anticipation of 50 to 100 ground points of borderline betterment per year.

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