I3 Verticals Inc Q4 2024 Earnings Call: A Deep Dive

i3 Verticals Inc, a leading provider of integrated payment and software solutions, recently held its Q4 2024 earnings call. The call provided valuable insights into the company's financial performance, strategic initiatives, and future outlook. This article will delve into the key takeaways from the earnings call and analyze their implications for investors.

i3 Verticals reported a 3.9% increase in revenue from continuing operations to $60.9 million in Q4 2024, compared to the prior year's fourth quarter. This growth was driven by the company's focus on core verticals and strategic initiatives. The company also reported a net income from continuing operations of $7.0 million, a significant improvement from the net loss of $1.2 million in the prior year's fourth quarter.



The sale of i3 Verticals' merchant services business in Q4 2024 had a notable impact on its financial performance. The historical results of this business were reflected in discontinued operations, while continuing operations reflected the company's remaining operations after the sale. Despite this change, i3 Verticals reported strong financial results, indicating the strategic value of the divestment.

i3 Verticals' adjusted EBITDA from continuing operations decreased by 1.8% year-over-year to $58.3 million in Q4 2024. This decline can be attributed to the removal of the higher-margin merchant services business from the company's core operations. However, the adjusted EBITDA margin from continuing operations remained relatively stable at 25.4%.



i3 Verticals' annualized recurring revenue (ARR) grew by 7.5% year-over-year to $188.2 million in Q4 2024. This growth can be attributed to the company's strategic focus on recurring revenue sources, such as software-as-a-service arrangements and transaction-based software revenue. The divestment of the merchant services business allowed i3 Verticals to concentrate on its high-growth, high-margin segments, driving ARR growth.

The company's management reaffirmed its 2025 outlook, indicating that the sale of the merchant services business did not alter its long-term growth prospects. This reaffirmation underscores i3 Verticals' commitment to its strategic initiatives and focus on core verticals.

In conclusion, i3 Verticals' Q4 2024 earnings call provided valuable insights into the company's financial performance and strategic initiatives. Despite the sale of the merchant services business, i3 Verticals reported strong financial results and reaffirmed its 2025 outlook. The company's focus on core verticals and recurring revenue sources drove its ARR growth, positioning it well for future success. Investors should monitor i3 Verticals' progress as it continues to execute on its strategic initiatives and capitalize on emerging opportunities in the integrated payment and software solutions market.