Fri, May 9, 9:10 PM (8 days ago)
### Summary of i3 Verticals, Inc. (IIIV) Q1 2025 Financial Performance **Company Overview:** i3 Verticals, Inc. (IIIV) is a software solutions provider focusing on strategic vertical markets, particularly the Public Sector and Healthcare. The company has undergone significant restructuring, including the sale of its Merchant Services Business and Healthcare RCM Business, which are now reflected as discontinued operations. **Financial Highlights (Q1 2025 vs. Q1 2024):** - **Revenue:** Increased by 8.8% to $63.1 million, driven by incremental revenue from acquisitions and growth in recurring and software license revenues. - **Operating Expenses:** Increased by 6.5% to $59.1 million, including higher personnel and software costs, partially offset by lower stock compensation expenses. - **Income from Operations:** Rose by 59.5% to $3.96 million, reflecting improved operational efficiency. - **Net Income:** Decreased by 77.0% to $769,000 due to higher tax provisions and adjustments related to the sale of the Merchant Services Business. - **Cash Flow:** Net cash used in operating activities was $15.6 million, primarily due to significant tax payments related to the Merchant Services Business sale. **Segment Performance:** - **Public Sector:** Revenue increased by 11.3% to $52.4 million, driven by acquisitions and growth in recurring revenues. - **Healthcare:** Revenue decreased by 1.8% to $10.9 million, impacted by a large snowstorm affecting customer volumes. **Key Metrics:** - **Adjusted EBITDA Margin:** Public Sector at 41%, Healthcare at 16%. - **ARR (Annualized Recurring Revenue):** $199.1 million, up 7% year-over-year. **Liquidity and Capital Resources:** - **Cash and Cash Equivalents:** $7.7 million as of March 31, 2025. - **Available Borrowing Capacity:** $438.0 million under the 2023 Senior Secured Credit Facility. - **Debt:** $12.0 million outstanding under the revolving credit facility. **Outlook and Uncertainties:** - **Economic Conditions:** Inflation, interest rates, and geopolitical instability pose risks. - **Strategic Initiatives:** Focus on acquisitions and integrating new technologies to drive growth. - **Regulatory Environment:** Compliance with complex laws and regulations, particularly in the healthcare sector. **Future Operations Impact:** - **Acquisitions:** Continued focus on strategic acquisitions to expand market reach and capabilities. - **Divestitures:** Sale of Healthcare RCM Business completed, impacting future financial statements. - **Share Repurchase Program:** $38.5 million remaining authorization under the program. **Conclusion:** i3 Verticals, Inc. demonstrated resilience and strategic adaptability in Q1 2025, despite challenges from economic conditions and divestitures. The company's focus on recurring revenue and strategic acquisitions positions it for future growth, though it faces uncertainties related to economic and regulatory environments.