i3 Verticals Reports 12.1% Revenue Growth and Net Income Turnaround for December 2024

i3 Verticals, Inc. reported a revenue increase of 12.1% for the three months ended December 31, 2024, reaching $61.7 million compared to $55.1 million in the same period of the previous year. The company also achieved a net income of $3.1 million, a significant turnaround from a net loss of $4.2 million in the prior year. This improvement in profitability was driven by a combination of higher recurring revenues and software license sales, alongside a notable reduction in interest expenses, which fell by 89.8% to $0.7 million.

The company's operating expenses rose by 10.1% to $59.0 million, primarily due to increases in selling, general, and administrative expenses, which totaled $28.9 million, and other costs of services, which reached $21.0 million. The increase in operating expenses was partially offset by a decrease in stock compensation expenses. The change in fair value of contingent consideration also contributed to the operating expenses, reflecting adjustments related to acquisitions.

Strategically, i3 Verticals completed the sale of its Merchant Services Business on September 20, 2024, for approximately $438 million. This divestiture allowed the company to focus on its core operations in the Public Sector and Healthcare segments. The company did not make any acquisitions during the latest quarter but had previously acquired Eduloka, Ltd. to enhance its software offerings in the Public Sector. The company’s total assets as of December 31, 2024, were reported at $726.2 million, with goodwill remaining stable at $280.7 million.

Operationally, i3 Verticals reported an annualized recurring revenue (ARR) of $193.3 million, reflecting an 8% growth year-over-year. The company’s customer base and engagement metrics remained strong, with significant contributions from both the Public Sector and Healthcare segments. The Public Sector segment generated $48.8 million in revenue, while the Healthcare segment contributed $13.2 million, marking increases of 12.2% and 13.7%, respectively.

Looking ahead, i3 Verticals expressed confidence in its liquidity position, with $85.6 million in cash and cash equivalents and $450 million available under its 2023 Senior Secured Credit Facility. The company anticipates that its cash flow from operations, combined with its current cash reserves, will be sufficient to meet its operational needs and support future growth initiatives, including potential acquisitions. The company remains focused on leveraging its software solutions to drive growth in its strategic verticals while managing its financial obligations effectively.