i3 Verticals Q2 2025: Unpacking Contradictions in Revenue Growth, M&A Strategy, and Payments Focus

Revenue growth expectations for the health care segment, M&A strategy and acquisitions outlook, revenue growth expectations in the Payments segment, strategic focus on the Payments segment, and acquisition integration and growth expectations are the key contradictions discussed in i3 Verticals' latest 2025Q2 earnings call.



Revenue Growth and Public Sector Focus:
- i3 Verticals reported RemainCo revenues increased 11.6% to $54.1 million, up 9% organically for Q2 2025 compared to the same period last year.
- Growth was driven by the divestiture of non-core businesses, allowing for a focus on the public sector vertical market.

Divestiture of Healthcare Revenue Cycle Management (RCM) Business:
- The sale of the Healthcare RCM Business for $96 million and an earn-out of $1.5 million was completed, reducing headcount by over 400 employees.
- This divestiture will become discontinued operations in Q3, allowing for more streamlined financial reporting.

Acquisition Strategy and Market Expansion:
- i3 Verticals closed an acquisition in the Utility Billing space for $9 million, expanding its business in multiple states and creating a new footprint.
- The acquisition will enhance i3's offerings in the utilities market and presents opportunities for growth, such as integrating payment processing and cross-selling opportunities.

Artificial Intelligence (AI) Initiatives:
- The company is leveraging AI to solve client pain points and improve efficiencies, with initial releases focusing on an AI service agent in transportation and an automated indexing module in ERP.
- The development of AI applications is driven by client demand for specific solutions and a focus on domain-specific expertise.