i3 Verticals, Inc. reported a slight increase in revenue for the three months ended December 31, 2025, achieving $52.7 million, up from $52.2 million in the same period last year. This growth was primarily driven by a $3.3 million increase in recurring revenues, which was partially offset by a $2.9 million decline in non-recurring revenues. However, the company's net income from continuing operations fell significantly to $1.1 million, a decrease of 61.1% compared to $2.8 million in the prior year, reflecting increased operating expenses and a reduction in income before income taxes.
Operating expenses rose to $51.1 million, an increase of 1.8% from $50.2 million in the previous year. The rise was attributed to a 12.9% increase in other costs of services, which reached $17.6 million, largely due to higher software costs. Selling, general, and administrative expenses also saw a modest increase of 1.9%, totaling $27.0 million. The company reported a change in the fair value of contingent consideration, which resulted in a benefit of $0.4 million for the current quarter, contrasting with a charge of $1.3 million in the prior year.
In terms of strategic developments, i3 Verticals completed the sale of its Healthcare Revenue Cycle Management (RCM) business in May 2025 for $96.3 million, which has been classified as a discontinued operation. The company also divested its Merchant Services business in September 2024 for approximately $439.5 million. These divestitures have allowed i3 Verticals to focus on its core public sector software solutions, which are designed to enhance government operations.
As of December 31, 2025, i3 Verticals had $37.5 million in cash and cash equivalents, with no outstanding borrowings under its $400 million revolving credit facility. The company reported a consolidated interest coverage ratio of 94.9x and a total leverage ratio of 0.0x, indicating strong compliance with its financial covenants. Looking ahead, i3 Verticals plans to continue its growth strategy through acquisitions and investments in technology, while maintaining a focus on its public sector customer base. The company has also initiated a new share repurchase program, authorizing up to $60 million for the repurchase of its Class A common stock.
About i3 Verticals, Inc.
i3 Verticals specializes in building, acquiring, and growing software solutions for the Public Sector and Healthcare markets. Its core offerings include integrated enterprise software and payment facilitation platforms that serve government agencies, healthcare providers, and payers. The company emphasizes long-term partnerships, recurring revenue, and strategic acquisitions to expand its market presence and product capabilities. Its business model centers on scalable, compliant, and deeply integrated solutions that enhance operational efficiency and revenue for its customers.
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