i3 Verticals (IIIV) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 revenue from continuing operations grew 12.1% year-over-year to $61.7 million, driven by strong Public Sector and Healthcare performance and recurring and software license revenues.

• Adjusted EBITDA rose 17% to $16.4 million, with margin improving to 26.5%, and SaaS revenue grew 16% year-over-year.

• Net income from continuing operations was $3.3 million, reversing a prior year loss of $4.2 million, and diluted EPS from continuing operations was $0.09, up from $(0.12).

• 78% of revenues were recurring, with ARR reaching $193.3 million, up 7.6% year-over-year.

• Sale of Merchant Services Business completed in September 2024, with results now focused on software and related services.

Financial highlights

• Recurring revenue for Q1 FY2025 was $48.3 million, up from $44.9 million in Q1 FY2024.

• Pro forma adjusted diluted EPS from continuing operations was $0.31, up from $0.12 in the prior year.

• Annualized Recurring Revenue (ARR) reached $193.3 million, up 7.6% year-over-year.

• Adjusted EBITDA margin improved to 26.5% from 25.4% year-over-year.

• Interest expense dropped 89.8% to $0.7 million, reflecting lower average debt balances.

Outlook and guidance

• FY2025 revenue guidance: $243–$263 million; Adjusted EBITDA: $63–$71.5 million.

• Pro forma adjusted diluted EPS guidance: $1.05–$1.25, assuming a 25% tax rate.

• High single-digit organic revenue growth and 50–100 basis points of annual EBITDA margin improvement expected.

• Guidance excludes impacts from acquisitions, dispositions, and transaction-related costs.