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- **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.


i3 Verticals, Inc. (IIIV) Q4 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

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Other Non-Operating Income (Loss)

Net Interest Expense

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Net Income from Continuing Operations

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Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

IIIV

IIIV fundamentals

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