What were the key takeaways from i3 Verticals’s earnings call?

What is the market's earnings forecast for i3 Verticals next quarter?

What factors drove the changes in i3 Verticals's revenue and profit?

What is i3 Verticals's gross profit margin?

What is the revenue and EPS growth rate for i3 Verticals year over year?

What does i3 Verticals do and what are its main business segments?

What is i3 Verticals's latest dividend and current dividend yield?

What guidance did i3 Verticals's management provide for the next earnings period?

- **Revenue Growth**: Q4 2025 revenue up 7% YoY to $54.9 million, with 8.4% organic growth for the year. ARR grew 9%, outpacing revenue.
- **Strategic Shift**: Transition to SaaS and recurring revenue, with 75% of Q4 revenue from recurring sources. West Virginia deal highlights bundled solutions with ancillary services.
- **Financial Health**: $67 million cash, no debt. 2026 guidance: $217-232 million revenue, 8-10% recurring growth, and 104% net dollar retention.
- **M&A Focus**: Targeting $2-5 million EBITDA deals, with 2026 expected to see 'meaningful' tuck-in acquisitions.
- **Investment in Justice Tech**: ~$1 million/Q4 investments to accelerate product development, supporting long-term growth.


**【CEO Summary Section】**
- **Revenue Growth and Transformation**: Q4 2025 revenue grew 7% YoY to $54.9 million, with 8.4% organic growth for the year. The company has transitioned to a pure-play public sector software provider, divesting non-core businesses. ARR increased 9% in Q4, outpacing revenue growth.
- **Strategic Investments**: Emphasized investments in Justice and Utility markets, with a focus on recurring revenue. The West Virginia court management deal exemplifies the shift to bundled, SaaS-based solutions with ancillary services.
- **Financial Position**: $67 million in cash with no debt, and $400 million borrowing capacity. Plans to use capital for M&A and buybacks, with $50 million buyback authorization refreshed.

**【CFO Financial Commentary】**
- **Q4 2025 Financials**: Adjusted EBITDA of $14.4 million (26.2% margin), down slightly from prior year due to lower-margin professional services growth. SaaS revenue grew 25%, offsetting an 8% decline in maintenance.
- **2026 Guidance**: Revenue $217-232 million (8-10% recurring growth), with a potential decline in professional services due to project timing. Net dollar retention of 104% reflects modest price increases (1-3% YoY).
- **Long-Term Outlook**: Organic revenue growth expected in the high single digits, driven by recurring revenue and market expansion.

**【M&A and Revenue Strategy】**
- **Acquisition Pipeline**: Focused on $2-5 million EBITDA targets, with 13-year pipeline activity. Expect 2026 to see 'meaningful' tuck-in deals aligning with strategic goals.
- **Revenue Model Shift**: Shifting from one-time license sales to SaaS, with 75% of Q4 revenue from recurring sources. Cross-selling solutions across markets (e.g., Justice Tech, Utilities) drives customer engagement.

**【Q&A Highlights】**
- **2026 Professional Services Decline**: Due to delayed project recognition (e.g., Manitoba), but strong pipeline for 2027+. Justice Tech investments (~$1 million/Q4) will continue, supporting long-term growth.
- **Pricing Strategy**: Conservative price increases (1-3% YoY) to offset inflation, contributing ~1.5% to retention in 2026.
- **Capital Allocation**: Prioritize M&A for market expansion, with buybacks as opportunistic补充.


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