What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 514 added, 394 removed, 866 unchanged (51% of the section changed)

3 unchanged sentences

(In thousands, except share amounts)

March 31, September 30,

June 30, September 30,

Current assets

3 unchanged sentences

Prepaid expenses and other current assets 12,770 9,973

Current assets held for sale — 5,484

Total current assets 117,777 153,393

7 unchanged sentences

Other assets 6,858 6,666

Long-term assets held for sale — 67,409

Total assets $ 623,274 $ 730,675

7 unchanged sentences

Current portion of operating lease liabilities 2,023 2,305

Current liabilities held for sale — 4,072

Total current liabilities 58,211 164,731

Long-term debt, less current portion 12,000 —

Long-term tax receivable agreement obligations 35,117 29,347

1 unchanged sentence

Other long-term liabilities 15,458 14,921

Long-term liabilities held for sale — 1,427

Total liabilities 112,153 215,316

2 unchanged sentences

Preferred stock, par value $ 0.0001 per share, 10,000,000 shares authorized;

0 shares issued and outstanding as of March 31, 2025 and September 30, 2024

0 shares issued and outstanding as of June 30, 2025 and September 30, 2024

Class A common stock, par value $ 0.0001 per share, 150,000,000 shares authorized;

24,386,990 and 23,882,035 shares issued and outstanding as of March 31, 2025 and September 30, 2024, respectively

23,780,915 and 23,882,035 shares issued and outstanding as of June 30, 2025 and September 30, 2024, respectively

Class B common stock, par value $ 0.0001 per share, 40,000,000 shares authorized;

8,832,061 and 10,032,676 shares issued and outstanding as of March 31, 2025 and September 30, 2024, respectively

8,463,204 and 10,032,676 shares issued and outstanding as of June 30, 2025 and September 30, 2024, respectively

Additional paid-in capital 268,111 279,335

8 unchanged sentences

(In thousands, except share and per share amounts)

Three months ended March 31, Six months ended March 31,

Three months ended June 30, Nine months ended June 30,

2025 2024 2025 2024

8 unchanged sentences

Total operating expenses 56,714 47,493 155,956 138,964

Income from operations 3,964 2,486 6,663 3,971

(Loss) income from operations ( 4,813 ) ( 1,310 ) 2,301 945

Other (income) expenses

2 unchanged sentences

Total other (income) expenses ( 3,795 ) 7,906 ( 5,088 ) 20,157

Income (loss) before income taxes 4,149 ( 2,971 ) 7,994 ( 8,280 )

Provision for (benefit from) income taxes 3,054 ( 669 ) 3,577 ( 1,763 )

Net income (loss) from continuing operations 1,095 ( 2,302 ) 4,417 ( 6,517 )

Net (loss) income from discontinued operations, net of income taxes ( 326 ) 5,650 ( 540 ) 11,401

Net income 769 3,348 3,877 4,884

Net income (loss) from continuing operations attributable to non-controlling interest 1,022 ( 593 ) 2,150 ( 1,923 )

Net (loss) income from discontinued operations attributable to non-controlling interest ( 99 ) 2,063 ( 175 ) 3,831

Net income attributable to non-controlling interest 923 1,470 1,975 1,908

Net income (loss) from continuing operations attributable to i3 Verticals, Inc.

(Loss) income before income taxes ( 1,018 ) ( 9,216 ) 7,389 ( 19,212 )

(Benefit from) provision for income taxes ( 22 ) 5,191 3,272 3,153

Net (loss) income from continuing operations ( 996 ) ( 14,407 ) 4,117 ( 22,365 )

Net income from discontinued operations, net of income taxes 19,421 6,109 18,185 18,951

Net income (loss) 18,425 ( 8,298 ) 22,302 ( 3,414 )

Net (loss) income from continuing operations attributable to non-controlling interest ( 586 ) ( 2,608 ) 1,653 ( 4,654 )

Net income from discontinued operations attributable to non-controlling interest 6,129 1,855 5,865 5,809

Net income (loss) attributable to non-controlling interest 5,543 ( 753 ) 7,518 1,155

Net (loss) income from continuing operations attributable to i3 Verticals, Inc.

( 410 ) ( 11,799 ) 2,464 ( 17,711 )

Net (loss) income from discontinued operations attributable to i3 Verticals, Inc.

Net income from discontinued operations attributable to i3 Verticals, Inc.

13,292 4,254 12,320 13,142

Net (loss) income attributable to i3 Verticals, Inc.

Net income (loss) attributable to i3 Verticals, Inc.

$ 12,882 $ ( 7,545 ) $ 14,784 $ ( 4,569 )

Net income (loss) per share attributable to Class A common stockholders from continuing operations:

Net (loss) income per share attributable to Class A common stockholders from continuing operations:

Basic $ ( 0.02 ) $ ( 0.50 ) $ 0.10 $ ( 0.76 )

Diluted $ ( 0.03 ) $ ( 0.50 ) $ 0.10 $ ( 0.76 )

Net (loss) income per share attributable to Class A common stockholders from discontinued operations:

Net income per share attributable to Class A common stockholders from discontinued operations:

Basic $ 0.55 $ 0.18 $ 0.52 $ 0.56

11 unchanged sentences

(In thousands, except share amounts)

Class A Common Stock Class B Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Non-Controlling Interest Total Equity

Class A Common Stock Class B Common Stock Additional Paid-In Capital Retained Earnings

Non-Controlling Interest Total Equity

Shares Amount Shares Amount

19 unchanged sentences

Balance at March 31, 2025 24,386,990 2 8,832,061 1 282,872 102,299 128,485 513,659

Equity-based compensation — — — — 7,396 — — 7,396

Net income — — — — — 12,882 5,543 18,425

Distributions to non-controlling interest holders — — — — — — ( 630 ) ( 630 )

Redemption of common units in i3 Verticals, LLC 368,857 — ( 368,857 ) — 5,340 — ( 5,340 ) —

Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis — — — — 281 — — 281

Exercise of equity-based awards 88,794 — — — ( 1,644 ) — — ( 1,644 )

Repurchases of Class A common stock ( 1,063,726 ) — — — ( 26,366 ) — — ( 26,366 )

Allocation of equity to non-controlling interests — — — — 232 — ( 232 ) —

Balance at June 30, 2025 23,780,915 $ 2 8,463,204 $ 1 $ 268,111 $ 115,181 $ 127,826 $ 511,121

See Notes to the Interim Condensed Consolidated Financial Statements

19 unchanged sentences

Balance at March 31, 2024 23,416,518 2 10,052,676 1 259,242 ( 9,968 ) 96,823 346,100

Equity-based compensation — — — — 5,102 — — 5,102

Net loss — — — — — ( 7,545 ) ( 753 ) ( 8,298 )

Distributions to non-controlling interest holders — — — — — — ( 839 ) ( 839 )

Redemption of common units in i3 Verticals, LLC 20,000 — ( 20,000 ) — 192 — ( 192 ) —

Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis — — — — 4,300 — — 4,300

Exercise of equity-based awards 6,180 — — — ( 450 ) — — ( 450 )

Allocation of equity to non-controlling interests — — — — ( 1,210 ) — 1,210 —

Balance at June 30, 2024 23,442,698 $ 2 10,032,676 $ 1 $ 267,176 $ ( 17,513 ) $ 96,249 $ 345,915

See Notes to the Interim Condensed Consolidated Financial Statements

2 unchanged sentences

(In thousands)

Six months ended March 31,

Nine months ended June 30,

Cash flows from operating activities:

Net income $ 3,877 $ 4,884

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ 22,302 $ ( 3,414 )

Adjustments to reconcile net income (loss) from operating activities:

Depreciation and amortization 22,788 29,865

4 unchanged sentences

Gain on repurchases of warrants — ( 105 )

Provision for (benefit from) deferred income taxes 1,859 ( 1,238 )

Adjustments to loss (gain) on sale of Merchant Services Business 657 —

Provision for deferred income taxes 3,644 4,078

Adjustments to gain on sale of Merchant Services Business 661 —

Gain on sale of Healthcare RCM Business ( 25,960 ) —

Non-cash lease expense 1,933 3,534

20 unchanged sentences

Acquisitions of businesses, net of cash and restricted cash acquired ( 11,000 ) ( 1,100 )

Proceeds from sale of Healthcare RCM Business, net of cash sold 96,102 —

Payments for other investing activities — ( 39 )

Proceeds from other investing activities — 8

Net cash used in investing activities ( 3,675 ) ( 12,369 )

Net cash provided by (used in) investing activities 78,774 ( 16,755 )

See Notes to the Interim Condensed Consolidated Financial Statements

2 unchanged sentences

(In thousands)

Six months ended March 31,

Nine months ended June 30,

Cash flows from financing activities:

5 unchanged sentences

Payments for repurchases of warrants — ( 552 )

Payments of debt issuance costs ( 249 ) ( 906 )

Payments for repurchases of Class A common stock ( 37,604 ) —

4 unchanged sentences

Proceeds from stock option exercises 150 25

Payments for employee's tax withholdings from net settled stock option exercises and RSU releases — ( 204 )

Payments for employees' tax withholdings from net settled stock option exercises and RSU releases ( 4,140 ) ( 679 )

Net cash used in financing activities ( 104,283 ) ( 15,215 )

Net decrease in cash, cash equivalents and restricted cash ( 79,331 ) ( 5,107 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 33,785 ) 1,296

Cash, cash equivalents and restricted cash at beginning of period 89,597 12,400

41 unchanged sentences

DISCONTINUED OPERATIONS

Healthcare RCM Business Divestiture

During the three months ended June 30, 2025, i3 Verticals, LLC and i3 Healthcare Solutions, LLC, a wholly-owned subsidiary of i3 Verticals, LLC (“Healthcare RCM Seller,” and collectively with i3 Verticals, LLC, the “Healthcare RCM Seller Parties”), completed the sale of the equity interests of certain wholly-owned subsidiaries of the Healthcare RCM Seller (the “Healthcare RCM Acquired Entities”) which owned and operated the Company's healthcare revenue cycle management business, including its associated proprietary technology (the “Healthcare RCM Business”), to Infinx, Inc.

(“Healthcare RCM Buyer”), a Texas corporation, pursuant to the terms of that certain Securities Purchase Agreement dated as of May 5, 2025, by and among Healthcare RCM Buyer and the Healthcare RCM Seller Parties (the “Healthcare RCM Purchase Agreement;” the transactions contemplated by the Healthcare RCM Purchase Agreement, the “Healthcare RCM Transactions”).

In addition, immediately prior to the sale of the equity interests of the Healthcare RCM Acquired Entities pursuant to the Healthcare RCM Purchase Agreement, i3 Verticals, LLC and certain of its subsidiaries contributed and/or assigned certain assets and certain liabilities related to the Healthcare RCM Business to the Healthcare RCM Acquired Entities.

The purchase price payable by Healthcare RCM Buyer to Healthcare RCM Seller for the equity interests of the Healthcare RCM Acquired Entities was $ 96,443 , paid in cash at closing.

The final purchase price is subject to post-closing net working capital and other purchase price adjustments as provided in the Healthcare RCM Purchase Agreement.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

At the closing of the transactions contemplated by the Healthcare RCM Purchase Agreement, the Company entered into a transition services agreement with Infinx ("Infinx TSA"), pursuant to which, among other things, the Company or affiliates thereof are providing certain information technology and operational transition services to Infinx for a period of time after the closing, and an employee leasing agreement with Infinx ("Infinx ELA"), pursuant to which the Company leased employees of the Healthcare RCM Business to Infinx for a limited period of time following the closing in accordance with the terms thereof.

The obligations under the Infinx TSA are planned to be complete in the first quarter of fiscal 2026.

The Infinx ELA completed on July 31, 2025.

Revenue earned under the Infinx TSA and Infinx ELA are reported in other income and expenses incurred for which the Company is reimbursed through the Infinx TSA and Infinx ELA are reported in selling, general and administrative expenses within the Company's condensed consolidated statements of operations.

Income under the Infinx TSA and Infinx ELA during the three and nine months ended June 30, 2025 was $ 3,919 .

Aggregate costs incurred related to the sale of the Healthcare RCM Business during the nine months ended June 30, 2025 that were not considered incremental direct costs to transact the sale, were approximately $ 1,332 and were expensed as incurred.

These costs were primarily incurred during the third fiscal quarter of the fiscal year ended September 30, 2025 and include fees for third-party advisory, consulting, legal and professional services, as well as other items associated with the sale of the Healthcare RCM Business.

The expenses are reflected within selling, general and administrative expenses within the Company's condensed consolidated statements of operations.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The financial results of the Healthcare RCM Business are included in income from discontinued operations, net of income taxes on the Company’s condensed consolidated statements of operations.

The following table presents the assets and liabilities of the Healthcare RCM Business as of September, 30, 2024:

September 30,

Current assets

Cash and cash equivalents $ 16

Accounts receivable, net 5,209

Prepaid expenses and other current assets 259

Total current assets 5,484

Property and equipment, net 389

Capitalized software, net 4,609

Goodwill 37,690

Intangible assets, net 22,068

Operating lease right-of-use assets 2,623

Other assets 30

Total assets $ 72,893

Liabilities and equity

Current liabilities

Accounts payable $ 484

Accrued expenses and other current liabilities 1,720

Deferred revenue 668

Current portion of operating lease liabilities 1,200

Total current liabilities 4,072

Operating lease liabilities, less current portion 1,427

Total liabilities $ 5,499

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The following table presents financial results of Healthcare RCM Business for the three and nine months ended June 30, 2025 and 2024:

Three months ended June 30, Nine months ended June 30,

2025 2024 2025 2024

Revenue $ 3,601 $ 9,993 $ 22,463 $ 29,426

Operating expenses

Other costs of services (excluding depreciation and amortization) 3,023 6,109 14,553 17,834

Selling, general and administrative 2,491 2,450 7,317 7,530

Depreciation and amortization 275 812 1,940 2,422

Change in fair value of contingent consideration 10 ( 19 ) 1,302 ( 716 )

Total operating expenses 5,799 9,352 25,112 27,070

(Loss) income from operations

( 2,198 ) 641 ( 2,649 ) 2,356

Other income ( 25,960 ) — ( 25,998 ) —

Income before income taxes from discontinued operations

23,762 641 23,349 2,356

Provision for income taxes

4,337 80 4,620 355

Net income from discontinued operations

19,425 561 18,729 2,001

Net income from discontinued operations attributed to non-controlling interest

6,130 192 6,041 710

Net income from discontinued operations attributable to i3 Verticals, Inc.

$ 13,295 $ 369 $ 12,688 $ 1,291

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The Company has elected to not separately disclose discontinued operations on its condensed consolidated statement of cash flows.

The following table presents cash flows from discontinued operations for major captions on the condensed consolidated financial statements:

Nine months ended June 30,

Depreciation and amortization $ 1,940 $ 2,422

Equity-based compensation $ 3,112 $ 2,134

Gain on sale of Healthcare RCM Business $ ( 25,960 ) $ —

Non-cash lease expense $ 702 $ 917

Increase (decrease) in non-cash contingent consideration expense from original estimate $ 1,302 $ ( 716 )

Contingent consideration paid in excess of original estimates $ ( 700 ) $ —

Expenditures for property and equipment $ ( 156 ) $ ( 176 )

Expenditures for capitalized software $ ( 263 ) $ ( 321 )

Proceeds from sale of Healthcare RCM Business, net of cash sold

Cash paid for contingent consideration $ ( 800 ) $ —

The following table presents significant non-cash investing and financing activities for major captions on the consolidated financial statements:

Nine months ended June 30, 2025

Right-of-use assets obtained in exchange for operating lease obligations $ 266

Merchant Services Business Divestiture

During the year ended September 30, 2024, the Company made the strategic decision to discontinue a significant segment of its operations constituting its Merchant Services Business (as defined below).

In this regard, on September 20, 2024, i3 Verticals, LLC, and i3 Holdings Sub, Inc., a wholly-owned subsidiary of i3 Verticals, LLC (“Corporation Seller,” and collectively with i3 Verticals, LLC, the “Sellers”) completed the transactions (such closing, the “Closing”) contemplated by that certain Securities Purchase Agreement dated as of June 26, 2024 (the “Merchant Services Purchase Agreement”), by and among i3 Verticals, LLC, Corporation Seller, the Company (solely for the purpose of providing a guaranty of the obligations of Sellers as set forth in the Merchant Services Purchase Agreement), Payroc Buyer, LLC (“Merchant Services Buyer”), and Payroc WorldAccess, LLC (solely for the purpose of providing a guaranty of the obligations of Merchant Services Buyer as set forth in the Merchant Services Purchase Agreement).

Pursuant to the terms of the Merchant Services Purchase Agreement, the Sellers sold to Merchant Services Buyer the equity interests of certain direct and indirect wholly-owned subsidiaries of Sellers (the “Merchant Services Acquired Entities”) primarily comprising the Company’s merchant services business, including its associated proprietary technology (the “Merchant Services Business”), after giving effect to the contribution of certain assets and the assignment of certain liabilities associated with the Merchant Services Business from i3 Verticals, LLC and certain affiliates to the Merchant Services Acquired Entities pursuant to a contribution agreement which was entered into immediately prior to the Closing (collectively, the "Merchant Services Transactions").

Pursuant to the terms of the Merchant Services Purchase Agreement, Merchant Services Buyer paid to Sellers an aggregate purchase price of approximately $ 437,343 (after giving effect to post-closing net working capital, indebtedness and cash adjustments), payable in cash at the Closing, subject to post-closing purchase price adjustments.

In this regard, on September 20, 2024, i3 Verticals, LLC, and i3 Holdings Sub, Inc., a wholly-owned subsidiary of i3 Verticals, LLC (“Corporation Seller,” and collectively with i3 Verticals, LLC, the “Merchant Services Sellers”) completed the transactions (such closing, the “Closing”) contemplated by that certain Securities Purchase Agreement dated as of June 26, 2024 (the “Merchant Services Purchase Agreement”), by and among i3 Verticals, LLC, Corporation Seller, the Company (solely for the purpose of providing a guaranty of the obligations of Merchant Services Sellers as set forth in the Merchant Services Purchase Agreement), Payroc Buyer, LLC (“Merchant Services Buyer”), and Payroc WorldAccess, LLC (solely for the purpose of providing a guaranty of the obligations of Merchant Services Buyer as set forth in the Merchant Services Purchase Agreement).

Pursuant to the terms of the Merchant Services Purchase Agreement, the Merchant Services Sellers sold to Merchant Services Buyer the equity interests of certain direct and indirect wholly-owned subsidiaries of the Merchant Services Sellers (the “Merchant Services Acquired Entities”) primarily comprising the Company’s merchant services business, including its associated proprietary technology (the “Merchant Services Business”), after giving effect to the contribution of certain assets and the assignment of certain liabilities associated with the Merchant Services Business from i3 Verticals, LLC and certain affiliates to the Merchant Services Acquired Entities pursuant to a contribution agreement which was entered into immediately prior to the Closing (collectively, the "Merchant Services Transactions").

Pursuant to the terms of the Merchant Services Purchase Agreement, Merchant Services Buyer paid to the Merchant Services Sellers an aggregate purchase price of approximately $ 439,516 paid in cash at closing, after giving effect to post-closing net working capital, indebtedness and cash adjustments.

The Merchant Services Business comprised the Company's entire former Merchant Services segment and a small portion of the Company's former Software and Services segment.

In connection with the closing of the Merchant Services Transactions, the Company entered into a Transition Services Agreement, pursuant to which, among other things, the Company or affiliates thereof will provide certain information technology and operational transition services to Payroc for a period of time after the closing, and a Processing Services Agreement with Payroc, pursuant to which the parties provide certain payment processing services to customers of each party following the closing in accordance with the terms thereof.

In connection with the closing of the Merchant Services Transactions, the Company entered into a transition services agreement with Payroc ("Payroc TSA"), pursuant to which, among other things, the Company or affiliates thereof provides certain information technology and operational transition services to Payroc for a period of time

i3 VERTICALS, Inc.

1 unchanged sentence

(in thousands, except unit, share and per share amounts)

after the closing, and a processing services agreement with Payroc ("Payroc PSA"), pursuant to which the parties provide certain payment processing services to customers of each party following the closing in accordance with the terms thereof.

The obligations under the Payroc TSA are planned to be substantially complete is in the fourth quarter of fiscal 2025.

The obligations under the Payroc PSA are planned to be complete is in the first quarter of fiscal 2029.

Revenue earned under the Payroc TSA and Payroc PSA are reported in other income, and expenses incurred for which the Company is reimbursed through the Payroc TSA and Payroc PSA are reported in selling, general and administrative expenses within the Company's condensed consolidated statements of operations.

Income under the Payroc TSA and Payroc PSA during the three and nine months ended June 30, 2025 was $ 318 and $ 1,274 , respectively.

Aggregate costs incurred related to the Merchant Services Transactions during the year ended September 30, 2024 that were not considered incremental direct costs to transact the sale, were approximately $ 2,626 and were expensed as incurred.

1 unchanged sentence

The expenses are reflected within selling, general and administrative expenses within the Company's condensed consolidated statements of operations.

The financial results of the Merchant Services Business are presented as income from discontinued operations, net of income taxes on the Company’s consolidated statements of operations.

The following table presents financial results of Merchant Services Business for the three and six months ended March 31, 2025 and 2024:

Three months ended March 31, Six months ended March 31,

The financial results of the Merchant Services Business are included in income from discontinued operations, net of income taxes on the Company’s consolidated statements of operations.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The following table presents financial results of Merchant Services Business for the three and nine months ended June 30, 2025 and 2024:

Three months ended June 30, Nine months ended June 30,

2025 2024 2025 2024

1 unchanged sentence

Operating expenses

Other costs of services — 16,477 — 32,786

Other costs of services (excluding depreciation and amortization) — 18,116 — 50,902

Selling, general and administrative — 10,305 — 31,484

7 unchanged sentences

(Loss) income before income taxes from discontinued operations ( 4 ) 6,874 ( 661 ) 20,802

(Benefit from) provision for income taxes ( 78 ) 1,249 ( 117 ) 2,526

Provision for (benefit from) income taxes

— 1,326 ( 117 ) 3,852

Net (loss) income from discontinued operations ( 4 ) 5,548 ( 544 ) 16,950

6 unchanged sentences

The Company has elected to not separately disclose discontinued operations on its condensed consolidated statement of cash flows.

The Company had no significant cash flow activity pertaining to discontinued operations in the three and six months ended March 31, 2025.

The following table presents cash flows from discontinued operations for major captions on the condensed consolidated financial statements:

Six months ended March 31,

Nine months ended June 30,

Depreciation and amortization $ — $ 8,649

Equity-based compensation $ — $ 2,576

Amortization of capitalized customer acquisition costs $ — $ 430

Adjustments to loss (gain) on sale of Merchant Services Business

Adjustments to gain on sale of Merchant Services Business

Non-cash lease expense $ — $ 803

3 unchanged sentences

The following table presents significant non-cash investing and financing activities for major captions on the consolidated financial statements:

Six months ended March 31, 2024

Consideration accrued for December 2023 residual buyout $ 252

Nine months ended June 30, 2024

Right-of-use assets obtained in exchange for operating lease obligations $ 1,739

3 unchanged sentences

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for fair presentation of the unaudited condensed consolidated financial statements of the Company and its subsidiaries as of March 31, 2025 and for the three and six months ended March 31, 2025 and 2024.

The results of operations for the three and six months ended March 31, 2025 and 2024 are not necessarily indicative of the operating results for the full year.

In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for fair presentation of the unaudited condensed consolidated financial statements of the Company and its subsidiaries as of June 30, 2025 and for the three and nine months ended June 30, 2025 and 2024.

The results of operations for the three and nine months ended June 30, 2025 and 2024 are not necessarily indicative of the operating results for the full year.

As permitted by the rules and regulations of the SEC, certain information and disclosures otherwise included in the notes to the consolidated financial statements have been condensed or omitted from the summary of significant accounting policies.

17 unchanged sentences

With the exception of merchant reserves, settlement assets or settlement obligations are generally collected and paid within one to four days .

Settlement assets and settlement obligations were $ 67 as of March 31, 2025 and $ 632 as of September 30, 2024, respectively.

Settlement assets and settlement obligations were $ 18 as of June 30, 2025 and $ 632 as of September 30, 2024, respectively.

Reclassifications

2 unchanged sentences

Discontinued operations

The results of operations for the Company's Merchant Services Business have been reclassified as discontinued operations for all periods presented in the condensed consolidated statements of operations.

The results of operations for the Company's Merchant Services Business and Healthcare RCM Business have been reclassified as discontinued operations for all periods presented in the condensed consolidated statements of operations.

Refer to Note 2 for additional information.

Change in presentation of certain costs to other costs of services

Following the disposal of the Company's Merchant Services Business in the fourth quarter of fiscal year 2024, the Company’s core business is providing software solutions for key verticals.

Given the change in the Company's business model following the sale of our Merchant Services Business, the Company has reclassified certain expenses to better align with the primary industry in which it now operates.

Following the disposal of the Company's Merchant Services Business in the fourth quarter of fiscal year 2024, the Company’s core business has been providing software solutions.

Given the change in the Company's business model following the sale of our Merchant Services Business, the Company reclassified certain expenses to better align with the primary industry in which it operates.

During the first quarter of fiscal year 2025, the Company revised its presentation of certain expenses in the Condensed Consolidated Statements of Operations from selling, general and administrative expenses to other costs of services.

8 unchanged sentences

The following tables present the effects of the change in presentation within the Condensed Consolidated Statements of Operations:

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

As Previously Reported (1)

4 unchanged sentences

__________________________

This column is presented after giving effect to discontinued operations of the Merchant Services Business as discussed in Note 2.

For the Six Months Ended March 31, 2024

This column is presented after giving effect to discontinued operations of the Merchant Services Business and the Healthcare RCM Business as discussed in Note 2.

For the Nine Months Ended June 30, 2024

As Previously Reported (1)

4 unchanged sentences

__________________________

This column is presented after giving effect to discontinued operations of the Merchant Services Business as discussed in Note 2.

This column is presented after giving effect to discontinued operations of the Merchant Services Business and the Healthcare RCM Business as discussed in Note 2.

Inventories consist of point-of-sale equipment to be sold to customers and are stated at the lower of cost, determined on a weighted average or specific basis, or net realizable value.

Inventories were $ 2,220 and $ 2,423 at March 31, 2025 and September 30, 2024, respectively, and are included within prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets.

Inventories were $ 2,380 and $ 2,423 at June 30, 2025 and September 30, 2024, respectively, and are included within prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets.

Business acquisitions have been recorded using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), and, accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair value as of the date of acquisition.

28 unchanged sentences

(in thousands, except unit, share and per share amounts)

The Company's revenue from continuing operations for the three and six ended March 31, 2025 and 2024 is derived from the following sources:

The Company's revenue from continuing operations for the three and nine months ended June 30, 2025 and 2024 is derived from the following sources:

• Software and related services — Includes software as a service ("SaaS"), transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to our software offerings;

• Proprietary payments — Includes volume-based payment processing fees (“discount fees”) and other related fixed transaction or service fees;and

• Proprietary payments — Includes volume-based payment processing fees (“discount fees”) and other related fixed transaction or service fees;

• Other — Includes sales of equipment, non-software related professional services, bundled performance obligations for software sales and equipment leasing and other revenues.

2 unchanged sentences

The key distinction is whether the license represents a right to use (functional) or a right to access (symbolic) intellectual property.

The Company generates sales of one-time software licenses, which is functional intellectual property.

Revenue from functional intellectual property is recognized at a point in time, when control of the software license transfers to the customer.

The Company generates sales of one-time software licenses, which is functional intellectual property, and right to access license sales, which are symbolic intellectual property.

Revenue from functional intellectual property is recognized at a point in time, when control of the software license transfers to the customer, while revenue from symbolic intellectual property is recognized over-time, as control transfers to the customer.

The Company also generates revenue from maintenance services related to these software licenses, which is recognized over the term of the agreement.

18 unchanged sentences

(1) the Company has no discretion over which card issuing bank will be used to process a transaction and is unable to direct the activity of the merchant to another card issuing bank, and (2) interchange and card network rates are pre-established by the card issuers or card networks, and the Company has no latitude in determining these fees.

Therefore, revenue allocated to the payment authorization performance obligation is presented net of interchange and card network fees paid to the card issuing bank and card network, respectively, for the six months ended March 31, 2025 and 2024.

With regards to the Company's discount fees, generally, where the Company has control over merchant pricing, merchant portability, credit risk and ultimate responsibility for the merchant relationship, revenues are reported at the time of sale equal to the full amount of the discount charged to the merchant, less interchange and network fees.

10 unchanged sentences

Revenue from bundled performance obligations for software sales and equipment leasing is recognized over time as a single performance obligation.

Lease income is recognized in accordance with ASC 842, and the leased equipment is classified as fixed assets and depreciated over its useful life.The Company’s professional services, including training, installation, and repair services are recognized as revenue as these services are performed.

Lease income is recognized in accordance with ASC 842, and the leased equipment is classified as fixed assets and depreciated over its useful life.

The Company’s professional services, including training, installation, and repair services are recognized as revenue as these services are performed.

ASC 606 provides various optional practical expedients.

12 unchanged sentences

• Other — Includes sales of equipment, non-software related professional services, bundled performance obligations for software sales and equipment leasing and other revenues.

For the Three Months Ended March 31, 2025

Public Sector Healthcare Other Total

Software and related services revenue $ 35,956 $ 10,469 $ ( 202 ) $ 46,223

Proprietary payments revenue 14,058 84 ( 1 ) 14,141

Other revenue 2,391 304 — 2,695

Total revenue $ 52,405 $ 10,857 $ ( 203 ) $ 63,059

For the Three Months Ended March 31, 2024

Public Sector Healthcare Other Total

Software and related services revenue $ 31,385 $ 10,656 $ ( 144 ) $ 41,897

Proprietary payments revenue 13,511 67 ( 6 ) 13,572

Other revenue 2,201 330 ( 32 ) 2,499

Total revenue $ 47,097 $ 11,053 $ ( 182 ) $ 57,968

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

For the Six Months Ended March 31, 2025

Public Sector Healthcare Other Total

Software and related services revenue $ 69,159 $ 23,207 $ ( 468 ) $ 91,898

Proprietary payments revenue 27,493 159 — 27,652

Other revenue 4,538 662 — 5,200

Total revenue $ 101,190 $ 24,028 $ ( 468 ) $ 124,750

For the Six Months Ended March 31, 2024

Public Sector Healthcare Other Total

Three months ended June 30, Nine months ended June 30,

2025 2024 2025 2024

Software and related services revenue $ 36,245 $ 31,963 $ 110,528 $ 95,428

2 unchanged sentences

Total revenue $ 51,901 $ 46,183 $ 158,257 $ 139,909

The tables below present a disaggregation of the Company's revenue from contracts with customers from continuing operations by timing of transfer of goods or services by segment.

The tables below present a disaggregation of the Company's revenue from contracts with customers from continuing operations by timing of transfer of goods or services.

The Company's revenue included in each category are defined as follows:

• Revenue earned over time — Includes SaaS, professional services, ongoing support, discount fees or other stand-ready obligations;

• Revenue earned over time — Includes SaaS, sales of software licenses sold as symbolic intellectual property, professional services, ongoing support, discount fees or other stand-ready obligations;

• Revenue earned at a point in time — Includes software licenses sold as functional intellectual property, equipment, or point in time service fees that are not stand-ready obligations.

For the Three Months Ended March 31, 2025

Public Sector Healthcare Other Total

Revenue earned over time $ 45,992 $ 10,648 $ ( 202 ) $ 56,438

Revenue earned at a point in time 6,413 209 ( 1 ) 6,621

Total revenue $ 52,405 $ 10,857 $ ( 203 ) $ 63,059

For the Three Months Ended March 31, 2024

Public Sector Healthcare Other Total

Revenue earned over time $ 42,961 $ 11,035 $ ( 144 ) $ 53,852

Revenue earned at a point in time 4,136 18 ( 38 ) 4,116

Total revenue $ 47,097 $ 11,053 $ ( 182 ) $ 57,968

For the Six Months Ended March 31, 2025

Public Sector Healthcare Other Total

Revenue earned over time $ 91,657 $ 22,116 $ ( 468 ) $ 113,305

Revenue earned at a point in time 9,533 1,912 — 11,445

Total revenue $ 101,190 $ 24,028 $ ( 468 ) $ 124,750

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

For the Six Months Ended March 31, 2024

Public Sector Healthcare Other Total

Three months ended June 30, Nine months ended June 30,

2025 2024 2025 2024

Revenue earned over time $ 47,543 $ 42,958 $ 142,457 $ 130,371

4 unchanged sentences

Therefore, the Company may have contract assets other than trade accounts receivable for performance obligations that are partially completed, which would typically represent consulting services provided before a milestone is completed in a contract.

Additionally, contract assets also include software licenses sold as a right to use license but paid for under a subscription model.

Additionally, contract assets also include software licenses sold as a right to use license but paid for under a non-cancellable subscription model.

Under this structure, the license revenue is recognized upfront while a portion of the revenue is unbilled.

Unbilled amounts associated with these professional services and software licenses sold under the subscription model are presented as accounts receivable as the Company has an unconditional right to payment for services performed.

As of March 31, 2025 and September 30, 2024, the Company’s contract assets from contracts with customers was $ 9,754 and $ 8,680 , respectively.

As of June 30, 2025 and September 30, 2024, the Company’s contract assets from contracts with customers was $ 9,417 and $ 8,680 , respectively.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

Contract Liabilities

6 unchanged sentences

Substantially all of the Company's deferred revenue is anticipated to be recognized within the next year.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The following tables present the changes in deferred revenue as of and for the six months ended March 31, 2025 and 2024, respectively:

The following tables present the changes in deferred revenue as of and for the nine months ended June 30, 2025 and 2024, respectively:

Balance at September 30, 2024

5 unchanged sentences

Balance at March 31, 2025 37,260

Deferral of revenue 8,844

Recognition of unearned revenue ( 15,527 )

Balance at June 30, 2025

Balance at September 30, 2023

5 unchanged sentences

Balance at March 31, 2024 34,809

Deferral of revenue 8,975

Recognition of unearned revenue ( 14,154 )

Balance at June 30, 2024

Costs to Obtain and Fulfill a Contract

The Company capitalizes incremental costs to obtain new contracts and contract renewals and amortizes these costs on a straight-line basis as an expense over the benefit period, which is generally the expected customer life, unless a commensurate payment is not expected at renewal.

As of March 31, 2025 and September 30, 2024, the Company had $ 871 and $ 857 , respectively, of capitalized contract costs, which relates to commissions paid to employees and agents as well as other incentives given to customers to obtain new sales, included within “Other assets" on the condensed consolidated balance sheets.

The Company recorded expense from continuing operations related to these costs of $ 181 and $ 212 for the three and six months ended March 31, 2025 and $ 22 and $ 40 for the three and six months ended March 31, 2024.

The Company expenses sales commissions as incurred for the Company's sales commission plans that are paid on recurring monthly revenues, portfolios of existing customers, or have a substantive stay requirement prior to payment.

As of June 30, 2025 and September 30, 2024, the Company had $ 1,140 and $ 857 , respectively, of capitalized contract costs, which relates to commissions paid to employees as well as other incentives given to customers to obtain new sales, included within “Other assets" on the condensed consolidated balance sheets.

The Company recorded expense from continuing operations related to these costs of $ 30 and $ 241 for the three and nine months ended June 30, 2025 and $ 24 and $ 64 for the three and nine months ended June 30, 2024.

i3 VERTICALS, Inc.

1 unchanged sentence

(in thousands, except unit, share and per share amounts)

Other Cost of Services

5 unchanged sentences

Other costs of services are recognized at the time the related revenue is recognized.

Following the disposal of the Company's Merchant Services Business in the fourth quarter of fiscal year 2024, the Company’s core business is providing software solutions for key verticals.

Following the disposal of the Company's Merchant Services Business in the fourth quarter of fiscal year 2024, the Company’s core business has been providing software solutions.

8 unchanged sentences

Actual results could differ from those estimates.

Segment Information

The Company has identified its Chief Executive Officer as the Company's Chief Operating Decision Maker ("CODM").

The Company’s CODM reviews discrete financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance which is based on consolidated information about our revenues, income from operations, and other key financial data.

All significant operating decisions are made by analyzing the Company as a single operating segment and as a result, the Company has determined that it operates as a single reportable segment as of June 30, 2025.

See Note 16 to our condensed consolidated financial statements for additional information.

Recent Accounting Pronouncements

2 unchanged sentences

2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 will provide improvements to the income tax disclosures primarily related to the income taxes paid and rate reconciliation, and how legislation changes may affect future capital allocation and cash flow forecasts.

ASU 2023-09 will provide improvements to the income tax disclosures primarily

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

related to the income taxes paid and rate reconciliation, and how legislation changes may affect future capital allocation and cash flow forecasts.

The amendment will improve the consistency in which companies provide tax information, and will further increase the transparency of related tax risks and operational opportunities.

5 unchanged sentences

ASU 2023-07 improves interim disclosure requirements for segment reporting, including clarifications regarding the measure of profit and loss used to assess segment performance and the allocation of resources.

Further, it enhances the disclosures for reporting segment expenses and will require the Company to report significant expenses regularly provided by the chief operating decision

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

Further, it enhances the disclosures for reporting segment expenses and will require the Company to report significant expenses regularly provided by the CODM.

The amendment will require companies to disclose a more granular level of information with regards to segment reporting to further enhance the transparency of what specified amounts are included within each segment.

The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

This new ASU will be effective for us beginning with our Form 10-K for fiscal year 2025.

The Company is currently evaluating the impact of the adoption of ASU 2023-07 on the Company’s financial statement disclosures.

7 unchanged sentences

The Company is currently evaluating the impact of the adoption of ASU 2024-03 on the Company’s financial statement disclosures.

During the three months ended March 31, 2025, the Company did not acquire any businesses.

During the year ended September 30, 2024, the Company acquired the following businesses:

During the nine months ended June 30, 2025 and 2024, the Company acquired the following businesses:

Business Combinations during nine months ended June 30, 2025

Purchase of Utility Billing Software Company

On April 1, 2025, the Company completed the acquisition of substantially all of the assets of a business (the "Utility Billing Software Company") to expand the Company’s public sector utility billing software offerings.

Total purchase consideration was $ 10,260 , including $ 9,000 in cash funded by proceeds from the Company's revolving credit facility, and $ 1,260 in the acquisition date estimated fair value of contingent cash consideration (the final amount of such contingent cash payment of up to $ 5,000 is dependent upon achievement of specified financial performance targets, as defined in the purchase agreement).

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The additional cash consideration of up to $ 5,000 , in the aggregate, is to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreement, for performance periods extending through September 2027.

The Company determines the acquisition date fair values of the liabilities for the contingent consideration using a Monte Carlo simulation as well as a discounted cash flow analysis.

In each subsequent reporting period, the Company will reassess its current estimates of performance relative to the targets and adjust the contingent liabilities to their fair values through earnings.

See additional disclosures in Note 12.

The goodwill associated with the business acquisition is deductible for tax purposes.

The acquired customer relationships intangible asset has an estimated amortization period of fifteen years .

The acquired trade name has an amortization period of two years .

The acquired capitalized software has an amortization period of seven years .

Acquisition-related costs for this acquisition amounted to approximately $ 70 and were included in selling, general and administrative on our consolidated statement of operations and were expensed as incurred.

Summary of the Utility Billing Software Company

The preliminary fair values assigned to certain assets and liabilities assumed, as of the acquisition date, were as follows:

Accounts receivable $ 912

Property and equipment 200

Capitalized software 380

Customer relationships 4,610

Trade name 100

Goodwill 4,996

Total assets acquired 11,198

Deferred revenue, current 938

Net assets acquired $ 10,260

Other Business Combinations nine months ended June 30, 2025

During the nine months ended June 30, 2025, the Company purchased certain assets of a business to expand the Company’s customer footprint.

Total purchase consideration was $ 2,000 in cash funded from cash on hand.

In connection with this purchase, the Company allocated approximately $ 83 to property and equipment, approximately $ 1,700 to customer relationships, $ 5 to non-compete agreements and the remainder, approximately $ 211 , to goodwill, all of which is deductible for tax purposes.

The acquired customer relationships intangible asset has an estimated amortization period of fifteen years .

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

Pro Forma Results of Operations for 2025 Business Combinations

The following unaudited supplemental pro forma results of operations have been prepared as though each of the acquired businesses in the nine months ended June 30, 2025 had occurred on October 1, 2023.

Pro forma adjustments were made to reflect the impact of depreciation and amortization, changes to executive compensation and the revised debt load, all in accordance with ASC 805.

This supplemental pro forma information does not purport to be indicative of the results of operations that would have been attained had the acquisitions been made on these dates, or of results of operations that may occur in the future.

Nine Months Ended June 30,

Revenue $ 1,437 $ 2,206

Net income (loss)

$ 131 $ ( 12 )

Business Combinations during the year ended September 30, 2024

Purchase of Eduloka, Ltd.

On August 1, 2024, the Company completed the acquisition of substantially all of the assets of Eduloka Ltd.

("inLumon") to expand the Company's permitting and licensing software offerings in the Public Sector segment.

Total purchase consideration was $ 27,477 , including $ 18,000 in cash funded by proceeds from the Company's revolving credit facility, the issuance of 311,634 shares of the Company's Class A common stock (valued at $ 7,517 ) and $ 1,960 in contingent consideration.

("inLumon") to expand the Company's permitting and licensing software offerings.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

payment of up to $ 22,000 is dependent upon achievement of specified financial performance targets, as defined in the purchase agreement).

The additional consideration of up to $ 22,000 , in the aggregate, is to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreement, through no later than July 2027.

The Company determined the acquisition date fair value of the liability for the contingent consideration using a Monte Carlo simulation as well as a discounted cash flow analysis.

See additional disclosures in Note 12.

The goodwill associated with the inLumon acquisition is deductible for tax purposes.

3 unchanged sentences

Acquisition-related costs for this acquisition amounted to approximately $ 294 and were included in selling, general and administrative on our consolidated statement of operations and were expensed as incurred.

Certain provisions in the purchase agreement provides for additional consideration of up to $ 22,000 , in the aggregate, to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreement, through no later than July 2027.

The Company determined the acquisition date fair value of the liability for the contingent consideration using a Monte Carlo simulation as well as a discounted cash flow analysis.

See additional disclosures in Note 12.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

Summary of inLumon

10 unchanged sentences

Net assets acquired $ 27,477

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

Other Business Combinations during the year ended September 30, 2024

During the three months ended December 31, 2023, the Company completed the acquisition of substantially all of the assets of a business to expand the Company’s software offerings within the Public Sector segment.

Total purchase consideration was $ 1,270 , including $ 1,100 in cash consideration, funded by proceeds from the Company's revolving credit facility, and $ 170 of contingent consideration.

During the three months ended December 31, 2023, the Company completed the acquisition of substantially all of the assets of a business to expand the Company’s software offerings.

Total purchase consideration was $ 1,270 , including $ 1,100 in cash consideration, funded by proceeds from the Company's revolving credit facility, and $ 170 in the estimated fair value of contingent cash consideration, the final amount of such contingent cash payment of up to $ 750 is dependent upon achievement of specified financial performance targets, as defined in the purchase agreement).

The additional consideration of up to $ 750 , in the aggregate, is to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreement, through no later than May 2026.

In connection with this acquisition, the Company allocated approximately $ 5 to property and equipment, approximately $ 40 to capitalized software, approximately $ 220 to customer relationships and the remainder, approximately $ 1,005 , to goodwill, all of which is deductible for tax purposes.

3 unchanged sentences

PREPAID EXPENSES AND OTHER CURRENT ASSETS

A summary of the Company's prepaid expenses and other current assets as of March 31, 2025 and September 30, 2024 is as follows:

March 31, September 30,

A summary of the Company's prepaid expenses and other current assets as of June 30, 2025 and September 30, 2024 is as follows:

June 30, September 30,

Inventory $ 2,380 $ 2,423

5 unchanged sentences

$ 12,770 $ 9,973

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

__________________________

In connection with the sale of the Healthcare RCM Business, $ 259 of the Company's prepaid expenses and other current assets was classified as "Current assets held for sale" as of September 30, 2024 in the accompanying condensed consolidated balance sheets and was not included in these amounts.

GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill are as follows:

Public Sector Healthcare Other Total

Balance at September 30, 2024 (1)

$ 233,850 $ 46,828 $ — $ 280,678

Goodwill attributable to preliminary purchase price adjustments during the six months ended March 31, 2025 — — — —

Balance at March 31, 2025

Goodwill attributable to preliminary purchase price adjustments during the nine months ended June 30, 2025

Balance at June 30, 2025

__________________________

Intangible assets consisted of the following as of March 31, 2025:

In connection with the sale of the Healthcare RCM Business, $ 37,688 of the Company's goodwill was classified as "Long-term assets held for sale" as of September 30, 2024 in the accompanying condensed consolidated balance sheets and was not included in this amount.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

Intangible assets consisted of the following as of June 30, 2025:

Cost Accumulated

1 unchanged sentence

Finite-lived intangible assets:

Customer relationships $ 199,720 $ ( 44,789 ) $ 154,931 9 to 25 years – accelerated or straight-line

Customer relationships $ 179,650 $ ( 41,904 ) $ 137,746 9 to 20 years – straight-line

Trade names 3,691 ( 2,860 ) 831 2 to 5 years – straight-line

5 unchanged sentences

$ 183,733 $ ( 45,025 ) $ 138,708

Amortization expense from continuing operations for intangible assets amounted to $ 3,242 and $ 6,485 for the three and six months ended March 31, 2025, and $ 3,113 and $ 6,259 for the three and six months ended March 31, 2024.

Based on net carrying amounts at March 31, 2025, the Company's estimate of future amortization expense for continuing operations for intangible assets are presented in the table below for fiscal years ending September 30:

2025 (six months remaining) $ 6,477

Amortization expense from continuing operations for intangible assets amounted to $ 2,882 and $ 8,467 for the three and nine months ended June 30, 2025, and $ 2,621 and $ 7,969 for the three and nine months ended June 30, 2024.

Based on net carrying amounts at June 30, 2025, the Company's estimate of future amortization expense for continuing operations for intangible assets are presented in the table below for fiscal years ending September 30:

2025 (three months remaining) $ 2,912

Thereafter 92,099

3 unchanged sentences

ACCRUED EXPENSES AND OTHER LIABILITIES

A summary of the Company's accrued expenses and other current liabilities as of March 31, 2025 and September 30, 2024 is as follows is as follows:

March 31, September 30,

A summary of the Company's accrued expenses and other current liabilities as of June 30, 2025 and September 30, 2024 is as follows:

June 30, September 30,

2025 2024 (1)

Accrued wages, bonuses, commissions and vacation $ 9,380 $ 4,673

10 unchanged sentences

Other accrued liabilities related to the Sale of the Merchant Services Business — 7,887

Other accrued liabilities related to the Sale of the Healthcare RCM Business

Accrued liabilities owed to sellers 296 334

1 unchanged sentence

Accrued expenses and other current liabilities $ 21,915 $ 88,252

A summary of the Company's long-term liabilities as of March 31, 2025 and September 30, 2024 is as follows:

March 31, September 30,

__________________________

In connection with the sale of the Healthcare RCM Business, $ 1,720 of the Company's accrued expenses and other current liabilities was classified as "Current liabilities held for sale" as of September 30, 2024 in the accompanying condensed consolidated balance sheets and was not included in these amounts.

A summary of the Company's long-term liabilities as of June 30, 2025 and September 30, 2024 is as follows:

June 30, September 30,

Accrued contingent consideration — long-term portion $ 3,778 $ 1,636

2 unchanged sentences

Total other long-term liabilities $ 15,458 $ 14,921

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

LONG-TERM DEBT, NET

A summary of long-term debt, net as of March 31, 2025 and September 30, 2024 is as follows:

March 31, September 30,

A summary of long-term debt, net as of June 30, 2025 and September 30, 2024 is as follows:

June 30, September 30,

Maturity 2025 2024

5 unchanged sentences

Long-term debt, net of current portion $ — $ —

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

2020 Exchangeable Notes Offering

12 unchanged sentences

These repurchases resulted in a decrease in the Company's total leverage ratio, and following the completion of the repurchases of these Exchangeable Notes, approximately $ 26,223 in aggregate principal amount of the Exchangeable Notes remained outstanding, with terms unchanged.

The Company recorded a gain on retirement of debt of $ 2,397 due to the estimated acquisition price exceeding the net carrying amount of the repurchased portion of the Exchangeable Notes, adjusted for unamortized debt issuance costs and costs and third-party fees related to the transaction.

The Company recorded a gain on retirement of debt of $ 2,397 due to the estimated acquisition price exceeding the net carrying

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

amount of the repurchased portion of the Exchangeable Notes, adjusted for unamortized debt issuance costs and costs and third-party fees related to the transaction.

Upon maturity of the Exchangeable Notes in February 2025, we paid $ 26,223 for the remaining principal balance and $ 131 in accrued interest.

7 unchanged sentences

i3 Verticals, LLC used approximately $ 28,676 of the net proceeds from the offering of the Exchangeable Notes (net of the premiums received for the warrant transactions described below) to pay the cost of the Note Hedge Transactions.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The Note Hedge Transactions did not require separate accounting as a derivative as they meet a scope exception for certain contracts involving an entity's own equity.

7 unchanged sentences

The Company offered and sold the Warrants in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

The Warrants will expire over a period beginning on May 15, 2025.

The Warrants expire over a ninety trading day period that began on May 15, 2025.

The Warrants are separate transactions, entered into by the Company with the Counterparties, and are not part of the terms of the Exchangeable Notes.

3 unchanged sentences

The premiums paid for the Warrants have been included as a net increase to additional paid-in capital within stockholders' equity.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

In December 2023, the Company paid $ 119 to the Counterparties to terminate the portion of the Warrants corresponding to the Exchangeable Notes that were repurchased in fiscal year 2020.

4 unchanged sentences

The 2023 Senior Secured Credit Facility replaced the prior senior secured credit facility of the Company which was entered into on May 9, 2019 (the "Prior Senior Secured Credit Facility").

The 2023 Senior Secured Credit Facility provides for aggregate commitments of $ 450,000 in the form of a senior secured revolving credit facility (the “Revolver”).

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

among other things, after giving pro forma effect to the incurrence of such additional borrowings and any related transactions, the Borrower’s consolidated interest coverage ratio (as defined in the 2023 Senior Secured Credit Facility) would not be less than 3.0 to 1.0 and the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Senior Secured Credit Facility) would not exceed 5.0 to 1.0.

As of March 31, 2025, the Borrower's consolidated interest coverage ratio was 92.5 x and total leverage ratio was 0.1 x.

Following an amendment to the Credit Facility entered into on May 5, 2025, as described below, the 2023 Senior Secured Credit Facility provides for aggregate commitments of $ 400,000 in the form of a senior secured revolving credit facility (the “Revolver”).

The 2023 Senior Secured Credit Facility provides that the Borrower has the right to seek additional commitments to provide additional term loan facilities or additional revolving credit commitments in an aggregate principal amount up to, as of any date of determination, the sum of (i) the greater of $ 100,000 and 100 % of the Borrower’s consolidated EBITDA (as defined in the 2023 Senior Secured Credit Facility) for the most recently completed four quarter period, plus (ii) the amount of certain prepayments of certain indebtedness, so long as, among other things, after giving pro forma effect to the incurrence of such additional borrowings and any related transactions, the Borrower’s consolidated interest coverage ratio (as defined in the 2023 Senior Secured Credit Facility) would not be less than 3.0 to 1.0 and the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Senior Secured Credit Facility) would not exceed 5.0 to 1.0.

As of June 30, 2025, the Borrower's consolidated interest coverage ratio was 87.1 x and total leverage ratio was 0.0 x.

The provision of any such additional amounts under the additional term loan facilities or additional revolving credit commitments are subject to certain additional conditions and the receipt of certain additional commitments by existing or additional lenders.

2 unchanged sentences

Borrowings under the Revolver will be made, at the Borrower’s option, at the Adjusted Term SOFR rate or the base rate, plus, in each case, an applicable margin.

The Adjusted Term SOFR rate will be the rate of interest per annum equal to the Term SOFR rate (based upon an interest period of one, three or six months), plus 0.10 %, plus an applicable margin of 2.00 % to 3.00 % ( 2.00 % at March 31, 2025).

The Adjusted Term SOFR rate shall not be less than 0 % in any event.

The base rate is a fluctuating rate of interest per annum equal to the highest of (a) the greater of the federal funds rate or the overnight bank funding rate, plus ½ of 1%, (b) Wall Street Journal prime rate and (c) the Adjusted Term SOFR rate for an interest period of one month, plus 1 %, plus an applicable margin of 1.00 % to 2.00 % ( 1.00 % at March 31, 2025).

The base rate shall not be less than 1 % in any event.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The applicable margin is based upon the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Senior Secured Credit Facility), as reflected in the schedule below:

6 unchanged sentences

0.15 % 2.00 % 2.00 % 1.00 %

In addition to paying interest on outstanding principal under the Revolver, the Borrower will be required to pay a commitment fee equal to the product of between 0.15 % and 0.30 % (the applicable percentage depending on the Borrower’s consolidated total net leverage ratio as reflected in the schedule above, 0.15 % at March 31, 2025) times the actual daily amount by which $ 450,000 exceeds the total amount outstanding under the Revolver and available to be drawn under all outstanding letters of credit.

In addition to paying interest on outstanding principal under the Revolver, the Borrower will be required to pay a commitment fee equal to the product of between 0.15 % and 0.30 % (the applicable percentage depending on the Borrower’s consolidated total net leverage ratio as reflected in the schedule above, 0.15 % at June 30, 2025) times the actual daily amount by which $ 400,000 exceeds the total amount outstanding under the Revolver and available to be drawn under all outstanding letters of credit.

The Borrower will be permitted to voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans under the 2023 Senior Secured Credit Facility, whether such amounts are issued under the Revolver or under the additional term loan facilities or additional revolving credit facilities, at any time without premium or penalty.

In addition, if the total amount borrowed under the Revolver exceeds $ 400,000 at any time, the 2023 Senior Secured Credit Facility requires the Borrower to prepay such excess outstanding amounts.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

All obligations under the 2023 Senior Secured Credit Facility are unconditionally guaranteed by the Company, and each of the Company’s existing and future direct and indirect material, wholly owned domestic subsidiaries, subject to certain exceptions.

11 unchanged sentences

The 2023 Senior Secured Credit Facility contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, certain events of bankruptcy and insolvency, material judgments, certain events with respect to employee benefit plans, invalidity of loan documents and certain changes in control.

See Note 20 for information regarding the Second Amendment to the 2023 Senior Secured Credit Facility which was entered into subsequent to March 31, 2025.

On May 5, 2025, i3 LLC entered into that certain Second Amendment to Credit Agreement (the “Amendment”), which amended the 2023 Senior Secured Credit Facility, with the guarantors and the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.

The Amendment provided for certain amendments to the 2023 Senior Secured Credit Facility, including amendments that permitted and accommodated the execution of the Healthcare RCM Purchase Agreement and the consummation of the Healthcare RCM Transactions.

The Amendment also permanently reduced the aggregate lender commitments under the Company’s revolving line of credit from $ 450,000 to $ 400,000 .

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

Debt issuance costs

The Company did not incur any debt issuance costs during the three and six months ended March 31, 2025 and 2024.

The Company incurred $ 249 in debt issuance costs during both the three and nine months ended June 30, 2025 and $ 906 in debt issuance costs during both the three and nine months ended June 30, 2024.

The Company's debt issuance costs are being amortized over the related term of the debt using the straight-line method, which is not materially different than the effective interest rate method, and are presented within other assets in the condensed consolidated balance sheets.

The amortization of deferred debt issuance costs is included in interest expense and amounted to approximately $ 250 and $ 530 during the three and six months ended March 31, 2025 and $ 262 and $ 676 during the three and six months ended March 31, 2024 .

The amortization of deferred debt issuance costs is included in interest expense and amounted to approximately $ 216 and $ 746 during the three and nine months ended June 30, 2025 and $ 221 and $ 897 during the three and nine months ended June 30, 2024.

In connection with the Second Amendment to the Credit Agreement, the Company recorded $ 295 during the three and nine months ended June 30, 2025 for the write-off of debt issuance costs, which was recorded in interest expense in the condensed consolidated statements of operations.

STOCKHOLDERS' EQUITY

Share Repurchase Program

On August 8, 2024, the Company entered into a share repurchase program for the Company's Class A common stock, under which the Company is authorized to repurchase up to $ 50,000 of outstanding shares of our Class A common stock (exclusive of fees, commissions or other expenses related to such repurchases) (the "Share Repurchase Program").

The Share Repurchase Program will terminate on the earlier of August 8, 2025, or when the maximum dollar amount under the Share Repurchase Program has been expended.

Pursuant to the Share Repurchase Program, the Company is authorized to make repurchases of our Class A Common Stock in the open market, through privately negotiated transactions, or otherwise, including under Rule 10b5-1 plans.

During the six months ended March 31, 2025 the Company repurchased 510,155 shares of Class A Common Stock under the Share Repurchase Program at an average price of $ 22.51 per share for a total cost inclusive of excise taxes of $ 11,613 .

On August 8, 2024, the Company entered into a share repurchase program for the Company's Class A common stock, under which the Company was authorized to repurchase up to $ 50,000 of outstanding shares of our Class A common stock (exclusive of fees, commissions or other expenses related to such repurchases) (the "Prior Share Repurchase Program").

Pursuant to the Prior Share Repurchase Program, the Company was authorized to make repurchases of our Class A Common Stock in the open market, through privately negotiated transactions, or otherwise, including under Rule 10b5-1 plans.

The Prior Share Repurchase Program terminated on August 8, 2025, and has been replaced by a new share repurchase program adopted by the Company as described below under Note 20.

During the nine months ended June 30, 2025 the Company repurchased 1,573,881 shares of Class A Common Stock under the Prior Share Repurchase Program at an average price of $ 23.86 per share for a total cost inclusive of commissions and excise taxes of $ 37,979 .

The repurchased shares were cancelled and retired, resulting in a permanent reduction in both the number of shares outstanding and the Company's total stockholders' equity.

1 unchanged sentence

Remaining amounts are recognized as a reduction in retained earnings.

As of March 31, 2025 the remaining total available authorization under the Share Repurchase Program was $ 38,519 .

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

As of June 30, 2025 the remaining total available authorization under the Prior Share Repurchase Program was $ 12,445 .

i3 Verticals, Inc.

3 unchanged sentences

In addition, certain subsidiaries of i3 Verticals, LLC are corporations that are subject to state and federal income taxes.

On July 4, 2025, the U.S.

enacted the tax legislation known as the One Big Beautiful Bill Act which includes, among other provisions, changes to federal income tax provisions including the allowance of immediate

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

expensing of qualifying research and development expenses and permanent extensions of certain provision within the Tax Cuts and Jobs Act.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others taking effect in later years.

The Company is evaluating the future impact of these changes on its condensed consolidated financial statements.

The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period.

1 unchanged sentence

Each quarter, the Company updates its estimate of the annual effective tax rate, and if the Company’s estimated tax rate changes, it makes a cumulative adjustment in that period.

The Company’s provision for income taxes for continuing operations was a provision of $ 3,054 and $ 3,577 for the three and six months ended March 31, 2025 and a benefit of $ 669 and $ 1,763 during the three and six months ended March 31, 2024.

The Company’s provision for income taxes for continuing operations was a benefit of $ 22 and a provision of $ 3,272 for the three and nine months ended June 30, 2025 and a provision of $ 5,191 and a provision of $ 3,153 during the three and nine months ended June 30, 2024.

Tax Receivable Agreement

3 unchanged sentences

If a Continuing Equity Owner transfers Common Units but does not assign to the transferee of such units its rights under the Tax Receivable Agreement, such Continuing Equity Owner generally will continue to be entitled to receive payments under the Tax Receivable Agreement arising in respect of a subsequent exchange of such Common Units.

In general, the Continuing Equity Owners’ rights under the Tax Receivable Agreement may not be assigned, sold, pledged or otherwise alienated to any person, other than certain permitted transferees, without (a) the Company's prior written consent, which should not be unreasonably withheld, conditioned or delayed, and (b) such persons becoming a party to the Tax Receivable Agreement and agreeing to succeed to the applicable Continuing Equity Owner’s interest therein.

In general, the Continuing Equity Owners’ rights under the Tax Receivable Agreement may not be assigned, sold, pledged or otherwise alienated to any person, other than certain permitted transferees, without (a) the Company's prior written consent, which may not be unreasonably withheld, conditioned or delayed, and (b) such persons becoming a party to the Tax Receivable Agreement and agreeing to succeed to the applicable Continuing Equity Owner’s interest therein.

The Company expects to benefit from the remaining 15 % of the tax benefits, if any, that the Company may realize.

During the six months ended March 31, 2025, the Company acquired an aggregate of 831,359 Common Units in i3 Verticals, LLC in connection with the redemption of Common Units from the Continuing Equity Owners, which resulted in an increase in the tax basis of our investment in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement.

As a result of the exchange, during the six months ended March 31, 2025, the Company recognized an increase to its net deferred tax assets in the amount of $ 5,035 , and corresponding Tax Receivable Agreement liabilities of $ 4,280 , representing 85 % of the tax benefits due to Continuing Equity Owners.

The Company made payments of $ 9,954 during the six months ended March 31, 2025 under the Tax Receivable Agreement.

The deferred tax asset and corresponding Tax Receivable Agreement liability balances were $ 38,119 and $ 33,526 , respectively, as of March 31, 2025.

Payments to the Continuing Equity Owners related to exchanges through March 31, 2025 will range from $ 0 to $ 3,413 per year and are expected to be paid over the next 26 years.

The amounts recorded as of March 31,

During the nine months ended June 30, 2025, the Company acquired an aggregate of 1,200,216 Common Units in i3 Verticals, LLC in connection with the redemption of Common Units from the Continuing Equity Owners, which resulted in an increase in the tax basis of our investment in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement.

As a result of the exchange, during the nine months ended June 30, 2025, the Company recognized an increase to its net deferred tax assets in the amount of $ 6,907 , and corresponding Tax Receivable Agreement liabilities of $ 5,871 , representing 85 % of the tax benefits due to Continuing Equity Owners.

The Company made payments of $ 9,954 during the nine months ended June 30, 2025 under the Tax Receivable Agreement.

The deferred tax asset and corresponding Tax Receivable Agreement liability balances were $ 39,178 and $ 35,117 , respectively, as of June 30, 2025.

Payments to the Continuing Equity Owners related to exchanges through June 30, 2025 will range from $ 0 to $ 3,501 per year and are expected to be paid over the next 26 years.

The amounts recorded as of June 30, 2025, approximate the current estimate of expected tax savings and are subject to change after the filing of the Company’s U.S.

federal and state income tax returns.

Future payments under the Tax Receivable Agreement with respect to subsequent exchanges would be in addition to these amounts.

i3 VERTICALS, Inc.

1 unchanged sentence

(in thousands, except unit, share and per share amounts)

2025, approximate the current estimate of expected tax savings and are subject to change after the filing of the Company’s U.S.

federal and state income tax returns.

Future payments under the Tax Receivable Agreement with respect to subsequent exchanges would be in addition to these amounts.

The Company’s leases consist primarily of real estate leases throughout the markets in which the Company operates.

At contract inception, the Company determines whether an arrangement is or contains a lease, and for each identified lease, evaluates the classification as operating or financing.

The Company had no finance leases as of March 31, 2025.

The Company had no finance leases as of June 30, 2025.

Leased assets and obligations are recognized at the lease commencement date based on the present value of fixed lease payments to be made over the term of the lease.

Renewal and termination options are factored into determination of the lease term only if the option is reasonably certain to be exercised.

The weighted-average remaining lease term at March 31, 2025 and 2024 were both 2 years.

The Company had no significant short-term leases during the three and six months ended March 31, 2025 and 2024.

The weighted-average remaining lease term at June 30, 2025 and 2024 were both 2 years.

The Company had no significant short-term leases during the three and nine months ended June 30, 2025 and 2024.

The Company’s leases do not provide a readily determinable implicit interest rate and the Company uses its incremental borrowing rate to measure the lease liability and corresponding right-of-use asset.

The incremental borrowing rates were determined based on a portfolio approach considering the Company’s current secured borrowing rate adjusted for market conditions and the length of the lease term.

The weighted-average discount rate used in the measurement of our lease liabilities was 7.3 % and 7.6 % as of March 31, 2025 and 2024, respectively.

The weighted-average discount rate used in the measurement of our lease liabilities was 7.4 % and 7.9 % as of June 30, 2025 and 2024, respectively.

Operating lease cost is recognized on a straight-line basis over the lease term.

Operating lease costs from continuing operations were $ 399 and $ 1,371 for the three and six months ended March 31, 2025 and $ 1,026 and $ 2,062 for the three and six months ended March 31, 2024, which are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

Total operating lease costs from continuing operations include variable lease costs of approximately $ 278 and $ 304 for the three and six months ended March 31, 2025, and $ 37 and $ 47 for the three and six months ended March 31, 2024, which are primarily comprised of costs of maintenance and utilities and changes in rates, and are determined based on the actual costs incurred during the period.

Operating lease costs from continuing operations were $ 640 and $ 1,447 for the three and nine months ended June 30, 2025 and $ 686 and $ 2,095 for the three and nine months ended June 30, 2024, which are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

Total operating lease costs from continuing operations include variable lease costs of approximately $ 56 and $ 360 for the three and nine months ended June 30, 2025, and $ 140 and $ 187 for the three and nine months ended June 30, 2024, which are primarily comprised of costs of maintenance and utilities and changes in rates, and are determined based on the actual costs incurred during the period.

Variable payments are expensed in the period incurred and not included in the measurement of lease assets and liabilities.

Short-term rent expense from continuing operations was $ 26 and $ 50 for the three and six months ended March 31, 2025, and $ 9 and $ 15 for the three and six months ended March 31, 2024, and are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

As of March 31, 2025, maturities of lease liabilities for continuing operations are as follows:

Short-term rent expense from continuing operations was $ 61 and $ 111 for the three and nine months ended June 30, 2025, and $ 11 and $ 26 for the three and nine months ended June 30, 2024, and are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

As of June 30, 2025, maturities of lease liabilities for continuing operations are as follows:

Fiscal Years ending September 30:

2025 (six months remaining) $ 1,993

2025 (three months remaining) $ 671

Thereafter 621

5 unchanged sentences

These payments will be made within the next twelve months.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

FAIR VALUE MEASUREMENTS

8 unchanged sentences

Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets.

The carrying value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, settlement assets and obligations, accounts receivable, other assets, accounts payable, and accrued expenses, approximated their fair values as of March 31, 2025 and 2024, because of the relatively short maturity dates on these instruments.

The carrying amount of debt approximates fair value as of March 31, 2025 and 2024, because interest rates on these instruments approximate market interest rates.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The carrying value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, settlement assets and obligations, accounts receivable, other assets, accounts payable, and accrued expenses, approximated their fair values as of June 30, 2025 and 2024, because of the relatively short maturity dates on these instruments.

The carrying amount of debt approximates fair value as of June 30, 2025 and 2024, because interest rates on these instruments approximate market interest rates.

The Company has no Level 1 or Level 2 financial instruments measured at fair value on a recurring basis.

5 unchanged sentences

Contingent consideration paid ( 60 )

Balance at March 31, 2025 $ 4,050

Balance at June 30, 2025 $ 3,794

__________________________

In connection with the sale of the Healthcare RCM Business, $ 198 of the Company's accrued contingent consideration was classified as "Current assets held for sale" as of September 30, 2024 in the accompanying condensed consolidated balance sheets and was not included in this amount.

Accrued Contingent Consideration

3 unchanged sentences

Contingent consideration paid ( 7,326 )

Balance at March 31, 2024 $ 3,969

Balance at June 30, 2024 (2)

__________________________

In connection with the sale of the Healthcare RCM Business, $ 19 and $ 891 of the Company's accrued contingent consideration was classified as "Current assets held for sale" and "Long-term assets held for sale", respectively, as of September 30, 2023 in the accompanying condensed consolidated balance sheets and was not included in this amount.

In connection with the sale of the Healthcare RCM Business, $ 194 of the Company's accrued contingent consideration was classified as "Current assets held for sale" and June 30, 2024 in the accompanying condensed consolidated balance sheets and was not included in this amount.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The fair value of contingent consideration obligations includes inputs not observable in the market and thus represents a Level 3 measurement.

6 unchanged sentences

The Company develops the projected future financial results based on an analysis of historical results, market conditions, and the expected impact of anticipated changes in the Company's overall business and/or product strategies.

Approximately $ 1,506 and $ 716 of contingent consideration was recorded in accrued expenses and other current liabilities as of March 31, 2025 and September 30, 2024, respectively.

Approximately $ 2,544 and $ 1,636 of contingent consideration was recorded in other long-term liabilities as of March 31, 2025 and September 30, 2024, respectively.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

Approximately $ 16 and $ 518 of contingent consideration was recorded in accrued expenses and other current liabilities as of June 30, 2025 and September 30, 2024, respectively.

Approximately $ 3,778 and $ 1,636 of contingent consideration was recorded in other long-term liabilities as of June 30, 2025 and September 30, 2024, respectively.

EQUITY-BASED COMPENSATION

A summary of equity-based compensation expense for continuing operations recognized during the three and six months ended March 31, 2025 and 2024 is as follows:

Three Months Ended March 31, Six Months Ended March 31,

A summary of equity-based compensation expense for continuing operations recognized during the three and nine months ended June 30, 2025 and 2024 is as follows:

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

2 unchanged sentences

Equity-based compensation expense $ 4,879 $ 3,770 $ 12,030 $ 12,677

In connection with the sale of the Merchant Services Business, $ 755 and $ 1,905 of the Company's equity-based compensation expense was classified within "net income from discontinued operations" in the accompanying condensed consolidated statements of operations during three and six months ended March 31, 2024.

During the three and nine months ended June 30, 2025, $ 2,517 and $ 3,112 , respectively, was classified as within "net income from discontinued operations" in connection with the sale of the Healthcare RCM Business.

In connection with the sale of the Merchant Services Business and the Healthcare RCM Business, $ 1,332 and $ 4,710 of the Company's equity-based compensation expense was classified within "net income from discontinued operations" in the accompanying condensed consolidated statements of operations during three and nine months ended June 30, 2024.

Amounts are included in other costs of services and in selling, general and administrative expense on the condensed consolidated statements of operations.

Current and deferred income tax expense for continuing operations of $ 1,378 and $ 767 was recognized during the three and six months ended March 31, 2025, respectively, and current and deferred income tax benefit of $ 816 and $ 1,713 during the three and six months ended March 31, 2024, respectively.

Current and deferred income tax benefits for continuing operations of $ 504 and expense $ 84 were recognized during the three and nine months ended June 30, 2025, respectively, and current and deferred income tax benefits of $ 596 and $ 2,066 during the three and nine months ended June 30, 2024, respectively.

Stock Options

1 unchanged sentence

The number of shares of Class A common stock available for issuance under the 2018 Plan includes an annual increase on the first day of each calendar year equal to 4.0 % of the outstanding shares of all classes of the Company's common stock as of the last day of the immediately preceding calendar year, unless the Company’s board of directors determines prior to the last trading day of December of the immediately preceding calendar year that the increase shall be less than 4.0 %.

As of March 31, 2025, equity awards with respect to 2,233,833 shares of the Company's Class A common stock were available for grant under the 2018 Plan.

In September 2020, the Company adopted the 2020 Acquisition Equity Incentive Plan (the “2020 Inducement Plan”) under which the Company may grant up to 1,500,000 stock options and other equity-based awards to individuals that were not previously employees of the Company or its subsidiaries in connection with acquisitions, as a material inducement to the individual's entry into employment with the Company or its subsidiaries within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

In May 2021, the Company amended the 2020 Inducement Plan to increase the number of shares of the Company's Class A common stock available for issuance from 1,500,000 to 3,000,000 shares.

As of March 31, 2025, equity awards with respect to 1,567,739 shares of the Company's Class A common stock were available for grant under the 2020 Inducement Plan.

Share-based compensation expense includes the estimated effects of forfeitures, which will be adjusted over the requisite service period to the extent actual forfeitures differ or are expected to differ from such estimates.

As of June 30, 2025, equity awards with respect to 2,256,952 shares of the Company's Class A common stock were available for grant under the 2018 Plan.

i3 VERTICALS, Inc.

1 unchanged sentence

(in thousands, except unit, share and per share amounts)

A summary of stock option activity for the six months ended March 31, 2025 is as follows:

In May 2021, the Company amended the 2020 Inducement Plan to increase the number of shares of the Company's Class A common stock available for issuance from 1,500,000 to 3,000,000 shares.

As of June 30, 2025, equity awards with respect to 1,710,793 shares of the Company's Class A common stock were available for grant under the 2020 Inducement Plan.

A summary of stock option activity for the nine months ended June 30, 2025 is as follows:

Stock Options Weighted Average Exercise Price

3 unchanged sentences

Forfeited ( 172,365 ) 28.06

Outstanding at March 31, 2025 8,691,636 $ 24.58

Exercisable at March 31, 2025 7,370,339 $ 25.11

The weighted-average grant date fair value of stock options granted during the six months ended March 31, 2025 was $ 13.07 .

As of March 31, 2025, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $ 12,072 , which is expected to be recognized over a weighted-average period of 2.5 years.

Outstanding at June 30, 2025 8,512,121 $ 24.55

Exercisable at June 30, 2025 7,175,718 $ 25.07

The weighted-average grant date fair value of stock options granted during the nine months ended June 30, 2025 was $ 13.12 .

As of June 30, 2025, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $ 11,154 , which is expected to be recognized over a weighted-average period of 2.4 years.

The Company's policy is to account for forfeitures of stock-based compensation awards as they occur.

The total fair value of stock options that vested during the three and six months ended March 31, 2025 was $ 6,822 and $ 10,031 , respectively.

The total fair value of stock options that vested during the three and nine months ended June 30, 2025 was $ 688 and $ 10,719 , respectively.

In connection with the sale of the Healthcare RCM Business, the Company fully accelerated the vesting period for 40,853 options (to the extent not previously vested) held by employees of the Healthcare RCM Business immediately prior to the closing of the divestiture.

Restricted Stock Units

The Company has issued Class A common stock in the form of restricted stock units ("RSUs") under the 2018 Plan.

A summary of activity related to restricted stock units for the six months ended March 31, 2025 is as follows:

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

A summary of activity related to restricted stock units for the nine months ended June 30, 2025 is as follows:

Restricted Stock Units Weighted Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 46,397 ) 23.08

Outstanding at March 31, 2025 1,255,698 $ 24.45

As of March 31, 2025, total unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures, was $ 21,428 , which is expected to be recognized over a weighted average period of 3.0 years.

The total fair value of RSUs that vested during the three and six months ended March 31, 2025 was $ 3,658 and $ 4,066 , respectively .

Outstanding at June 30, 2025 1,163,209 $ 24.61

As of June 30, 2025, total unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures, was $ 18,812 , which is expected to be recognized over a weighted average period of 2.9 years.

The total fair value of RSUs that vested during the three and nine months ended June 30, 2025 was $ 3,037 and $ 7,103 , respectively.

In connection with the sale of the Healthcare RCM Business, the Company fully accelerated the vesting period for 96,613 RSUs (to the extent not previously vested) held by employees of the Healthcare RCM Business immediately prior to the closing of the divestiture.

COMMITMENTS AND CONTINGENCIES

The Company utilizes office space and equipment under operating leases.

Rent expense from continuing operations under these leases amounted to $ 425 and $ 1,421 during the three and six months ended March 31,

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

2025, and $ 1,035 and $ 2,077 during the three and six months ended March 31, 2024.

Rent expense from continuing operations under these leases amounted to $ 700 and $ 1,557 during the three and nine months ended June 30, 2025, and $ 697 and $ 2,121 during the three and nine months ended June 30, 2024.

Refer to Note 11 for further discussion and a table of the future minimum payments under these leases.

6 unchanged sentences

After taking into consideration the evaluation of such legal matters by the Company's legal counsel, the Company's management believes at this time such matters will not have a material impact on the Company's consolidated balance sheet, results of operations or cash flows.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

PaySchools Litigation

On May 16, 2025, Suzanne Hess, individually and on behalf of a putative class of citizens of the State of New York, filed a Class Action Complaint and Demand for Jury Trial (the “Complaint”), in the Supreme Court of the State of New York, Nassau County, against i3 Verticals, LLC and CP-DBS, LLC d/b/a “PaySchools”, a subsidiary of i3 Verticals, LLC.

The claimed damages relate to services offered by PaySchools that enable parents, guardians and caregivers to fund lunches for students in certain New York school districts, and allegedly unlawful practices by PaySchools related to the fees charged for these school lunch services.

The plaintiff seeks unspecified monetary damages, restitution, disgorgement, and attorneys’ fees and costs, as well as injunctive relief prohibiting PaySchools from charging transaction-based fees.

On June 20, 2025, the matter was removed to the United States District Court for the Eastern District of New York, where the case remains pending.

The Company is unable to predict the outcome of this litigation.

While the Company does not believe that this matter will have a material adverse effect on its business or financial condition, the Company cannot give assurance that this matter will not have a material effect on its results of operations or cash flows for any particular reporting period.

S&S Litigation

12 unchanged sentences

On February 22, 2024, the case was remanded to the 19th Judicial District Court for the Parish of East Baton Rouge, where the case remains pending.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

All Defendants filed pleading-stage motions to dismiss, some of which were granted.

4 unchanged sentences

The case is now in the discovery phase of litigation.

The assets of the S&S business were acquired from South Pointe by the Company in 2018 for $ 17,000 , including upfront cash consideration and contingent consideration, and provides software and payments services within the Company’s Public Sector vertical to local government agencies almost exclusively in Louisiana.

The assets of the S&S business were acquired from South Pointe by the Company in 2018 for $ 17,000 , including upfront cash consideration and contingent consideration, and provides software and payments services to local government agencies almost exclusively in Louisiana.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The Company is unable to predict the outcome of this litigation.

While we do not believe that this matter will have a material adverse effect on our business or financial condition, we cannot give assurance that this matter will not have a material effect on our results of operations or cash flows for the period in which it is resolved.

RELATED PARTY TRANSACTIONS

2 unchanged sentences

See Note 10 for further information.

As of March 31, 2025, the total amount due under the Tax Receivable Agreement was $ 33,526 .

As of June 30, 2025, the total amount due under the Tax Receivable Agreement was $ 35,117 .

On January 23, 2025, the Company and i3 Verticals, LLC effected certain recapitalization actions in order to reduce excess cash held at the Company as a result of its “Up-C” structure following a tax distribution received by the Company and the Continuing Equity Owners earlier in January 2025 (the “LLC Tax Distribution”) related to the taxable income associated with the gain on the sale of the Merchant Services Business completed in September 2024 that was anticipated to be recognized for 2024 federal income tax purposes by members of the Company.

As a result of differences in the amount of net taxable income allocable to the Company and to the Continuing Equity Owners and the higher assumed tax rate of the Continuing Equity Owners than the tax rate of the Company, this LLC Tax Distribution resulted in the Company holding cash in excess of the Company’s tax liabilities, its obligation to make payments under its tax receivables agreement, and any other expected liabilities of the Company.

As a result of differences in the amount of net taxable income allocable to the Company and to the Continuing Equity Owners and the higher assumed tax rate of the Continuing Equity Owners than the tax rate of the Company, this LLC Tax Distribution resulted in the Company holding cash in excess of the Company’s tax liabilities, its obligation to make payments under its the Tax Receivable Agreement, and any other expected liabilities of the Company.

Accordingly, in order to make such cash held by the Company accessible in connection with our operations, on January 23, 2025, the Company contributed approximately $ 21,396 in cash (the “Capital Contribution”) held by the Company to i3 LLC in exchange for 896,763 newly-issued common units of i3 Verticals, LLC (“Common Units”) at a price per Common Unit of $ 23.86 , such price being equal to the to the 50 -day volume-weighted average price of the Company’s Class A common stock for the period ended January 22, 2025.

1 unchanged sentence

Upon the effectiveness of the Reverse Unit Split, 369,256 outstanding shares of Class B common stock of the Company were retired without consideration, thereby maintaining a one -to-one ratio between the number of Common Units owned by the Continuing Equity Owners after giving to the Reverse Unit Split and the number of outstanding shares of Class B Common Stock.

After giving effect to these recapitalization actions, as of January 23, 2025, the Company held approximately 70.83 % of the outstanding Common Units (an increase of approximately 0.78 % compared to the Company’s ownership of approximately 70.05 % of the outstanding Common Units immediately prior to giving effect to these recapitalization actions) and the Continuing Equity Owners hold approximately 29.17 % of the outstanding Common Units (a decrease of approximately 0.78 % compared to the Continuing Equity Owners’ ownership of approximately 29.95 % of the outstanding Common Units immediately prior to giving effect to these recapitalization actions).

i3 VERTICALS, Inc.

1 unchanged sentence

(in thousands, except unit, share and per share amounts)

The Company determines its operating segments based on ASC 280, Segment Reporting , in alignment with how the chief operating decision making group monitors and manages the performance of the business as well as the level at which financial information is reviewed.

The Company’s operating segments are strategic business units that offer different products and services.

The Company determines its operating segments based on ASC 280, Segment Reporting , in alignment with how the CODM monitors and manages the performance of the business as well as the level at which financial information is reviewed.

As noted above, on September 20, 2024, the Company completed the transactions contemplated by the Merchant Services Purchase Agreement dated June 26, 2024, and sold the equity interests of the Merchant Services Acquired Entities comprising the Merchant Services Business.

The Merchant Services Business comprised the Company's entire former Merchant Services segment and a small portion of the Company's former Software and Services segment.

As a result of the sale of the Merchant Services Business, the historical results of the Merchant Services Business have been reflected as discontinued operations in our consolidated financial statements, and the Company no longer presents a Merchant Services segment.

See Note 2 to our condensed consolidated financial statements for additional information.

After giving effect to these developments, the Company's core business for continuing operations is delivering seamlessly software solutions integrated with our proprietary payment facilitator platform to customers in strategic vertical markets.

The Company has since updated its segmentation, and the core business consists of two new operating segments and reportable segments, Public Sector and Healthcare.

The Public Sector has products and solutions that create an efficient flow of information throughout a variety of public sector entities.

We serve customers at both the state and local level and our geographic reach covers most of the United States and some of Canada.

Our solutions help our customers provide more responsive and efficient services to their citizens and stakeholders.

The Healthcare segment is dedicated to delivering integrated solutions across the healthcare ecosystem, catering to providers and payers, with a strong emphasis on enhancing process efficiency and ensuring compliance.

The Other category includes corporate overhead expenses, technology resources shared across segments and inter-segment eliminations.

The Company has since updated its intercompany transactions and allocations to adhere to the updated segment structure, which includes Public Sector intercompany, Healthcare intercompany, and intercompany locations within its business.

As described above, these transactions include, but are not limited to, resources shared across segments and also exist to eliminate revenue and cost between components that should not be included on a consolidated basis.

Although our intercompany structure and allocations have changed due to our updated segments, this reporting is consistent with our accounting policies from prior periods.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The Company primarily uses adjusted EBITDA margin to measure operating performance and for purposes of making decisions about allocating resources to the Company's business segments.

The following is a summary of reportable segment operating performance for continuing operations for the three and six months ended March 31, 2025 and 2024.

For the Three Months Ended March 31,

For the Six Months Ended March 31,

2025 2024 2025 2024

Public Sector adjusted EBITDA margin (1)

41 % 41 % 40 % 40 %

Healthcare adjusted EBITDA margin (1)

16 % 16 % 23 % 20 %

Public Sector revenue $ 52,405 $ 47,097 $ 101,190 $ 90,595

Healthcare revenue 10,857 11,053 24,028 22,633

Other revenue ( 203 ) ( 182 ) ( 468 ) ( 206 )

Total revenue $ 63,059 $ 57,968 $ 124,750 $ 113,022

Public sector adjusted EBITDA 21,576 19,233 40,819 36,592

Healthcare adjusted EBITDA 1,722 1,775 5,470 4,569

Corporate, eliminations and other ( 6,156 ) ( 5,794 ) ( 12,775 ) ( 11,959 )

Stock compensation expense ( 3,932 ) ( 5,022 ) ( 7,746 ) ( 10,380 )

M&A-related expenses ( 570 ) ( 714 ) ( 1,116 ) ( 958 )

Other taxes and one-time expenses ( 455 ) ( 89 ) ( 707 ) ( 173 )

Depreciation and amortization ( 7,840 ) ( 7,193 ) ( 15,524 ) ( 14,247 )

Change in fair value of contingent consideration ( 381 ) 290 ( 1,758 ) 527

Income from operations 3,964 2,486 6,663 3,971

Other (income) expense

Interest expense 446 7,714 1,126 14,401

Other income ( 631 ) ( 2,257 ) ( 2,457 ) ( 2,150 )

Total other (income) expense ( 185 ) 5,457 ( 1,331 ) 12,251

Income (loss) before income taxes $ 4,149 $ ( 2,971 ) $ 7,994 $ ( 8,280 )

n/m = not meaningful

____________________

Adjusted EBITDA Margin represents adjusted EBITDA as a percentage of revenue.

The chief operating decision maker primarily uses adjusted EBITDA margin to measure operating performance and for purposes of making decisions about allocating resources to the Company's business segments.

Additionally, as noted above, on May 5, 2025, the Company completed the sale of the equity interests of the subsidiaries of the Company which owned and operated the Company's Healthcare RCM Business.

The Healthcare RCM business comprised a majority of the Company's former Healthcare segment.

As a result of the sale of the Healthcare RCM business, the historical results of the Healthcare RCM Business have been reflected as discontinued operations in the Company's consolidated financial statements.

See Note 2 to our condensed consolidated financial statements for additional information.

Prior to giving effect to the disposition of the Healthcare RCM Business, the Company had two operating segments and reportable segments, a Public Sector segment and a Healthcare segment, as reflected in the Company’s condensed consolidated financial statements for the three and six months ended March 31, 2025.

After giving effect to the disposition of the Healthcare RCM Business, the Company's core business for continuing operations is providing mission-critical enterprise software solutions to its public sector customers.

Taking into account the impact of the disposition of the Healthcare RCM Business, the Company has updated its segment presentation, and has determined that it has one operating segment and reportable segment as of June 30, 2025.

This change in our segment presentation is consistent with how the CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance (which is based on consolidated information) as further noted below.

The Company's business has products and solutions that create an efficient flow of information.

The Company's public sector software solutions help its customers provide more responsive and efficient services to their citizens and stakeholders.

As the Company has a single operating segment and single reportable segment and is managed on a consolidated basis, the measure of segment profit or loss that the CODM uses to allocate resources and assess performance is consolidated net income as reported in the condensed consolidated statements of operations.

The CODM uses this measure to evaluate operating performance and for the purpose of making decisions about allocating resources.

i3 VERTICALS, Inc.

1 unchanged sentence

(in thousands, except unit, share and per share amounts)

March 31, March 31,

Public Sector total assets $ 479,354 $ 467,465

Healthcare total assets 90,823 92,848

Other total assets 76,182 65,526

Total assets $ 646,359 $ 625,839

Public Sector goodwill $ 233,850 $ 222,364

Healthcare goodwill 46,828 46,828

Total goodwill $ 280,678 $ 269,192

The Company has not disclosed expenditures on long-lived assets at a segment level as such expenditures are not reviewed by or provided to the chief operating decision maker at a segment level.

NON-CONTROLLING INTEREST

4 unchanged sentences

As such, future redemptions or direct exchanges of Common Units of i3 Verticals, LLC by the Continuing Equity Owners will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in capital when i3 Verticals, LLC has positive or negative net assets, respectively.

As of March 31, 2025 and 2024, respectively, i3 Verticals, Inc.

As of June 30, 2025 and 2024, respectively, i3 Verticals, Inc.

owned 23,780,915 and 23,442,698 of i3 Verticals, LLC's Common Units, representing a 73.8 % and 70.0 % economic ownership interest in i3 Verticals, LLC.

i3 VERTICALS, Inc.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except unit, share and per share amounts)

The following table summarizes the impact on equity due to changes in the Company's ownership interest in i3 Verticals, LLC:

Six Months Ended March 31,

Nine Months Ended June 30,

Net income attributable to non-controlling interest

6 unchanged sentences

Net transfers (from) to non-controlling interests ( 15,316 ) 3,545

Change from net income attributable to non-controlling interests and net transfers to non-controlling interests $ ( 7,139 ) $ 5,274

See Note 15 for information regarding certain recapitalization actions the Company and i3 Verticals, LLC effected during the three months ended March 31, 2025 in order to reduce excess cash held at the Company as a result of its “Up-C” structure, which adjusted the Company’s and the Continuing Equity Holders’ respective ownership interests in i3 Verticals, LLC.

Change from net income attributable to non-controlling interests and net transfers (from) to non-controlling interests $ ( 7,798 ) $ 4,700

See Note 15 for information regarding certain recapitalization actions the Company and i3 Verticals, LLC effected during the nine months ended June 30, 2025 in order to reduce excess cash held at the Company as a result of its “Up-C” structure, which adjusted the Company’s and the Continuing Equity Holders’ respective ownership interests in i3 Verticals, LLC.

EARNINGS PER SHARE

6 unchanged sentences

(in thousands, except unit, share and per share amounts)

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock from continuing operations for the three and six months ended March 31, 2025 and 2024:

Three Months Ended March 31, Six Months Ended March 31,

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

Basic net income (loss) per share:

Net income (loss) $ 1,095 $ ( 2,302 ) $ 4,417 $ ( 6,517 )

Net income (loss) attributable to non-controlling interest

Basic net (loss) income per share:

Net (loss) income

$ ( 996 ) $ ( 14,407 ) $ 4,117 $ ( 22,365 )

Net income (loss) attributable to Class A common stockholders $ 73 $ ( 1,709 ) $ 2,267 $ ( 4,594 )

Net (loss) income attributable to non-controlling interest

( 586 ) ( 2,608 ) 1,653 ( 4,654 )

Net (loss) income attributable to Class A common stockholders

$ ( 410 ) $ ( 11,799 ) $ 2,464 $ ( 17,711 )

Weighted average shares of Class A common stock outstanding

24,345,826 23,420,811 23,909,714 23,339,598

Basic net income (loss) per share (1)

Basic net (loss) income per share (1)

$ ( 0.02 ) $ ( 0.50 ) $ 0.10 $ ( 0.76 )

Diluted net income per share:

Net income attributable to Class A common stockholders $ 73 $ 2,267

Reallocation of net income assuming conversion of common units (2)

Net income attributable to Class A common stockholders - diluted $ 73 $ 2,267

Diluted net (loss) income per share:

Net (loss) income attributable to Class A common stockholders

$ ( 410 ) $ 2,464

Reallocation of net loss assuming conversion of common units (2)

Net (loss) income attributable to Class A common stockholders – diluted

$ ( 856 ) $ 2,464

Weighted average shares of Class A common stock outstanding

4 unchanged sentences

32,983,325 24,823,635

Diluted net income per share $ 0.00 $ 0.09

Diluted net (loss) income per share

$ ( 0.03 ) $ 0.10

For the three and six months ended March 31, 2024, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share.

__________________________

For the three and nine months ended June 30, 2024, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share.

The following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net loss per share of Class A common stock for continuing operations:

10,091,604 and 10,092,504 weighted average shares of Class B common stock for the three and six months ended March 31, 2024, respectively, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive,

7,852,595 and 8,246,542 stock options for the three and six months ended March 31, 2024, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

387,235 and 427,506 shares for the three and six months ended March 31, 2024, respectively, resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because of the effect of including them would have been anti-dilutive.

10,052,017 and 10,079,057 weighted average shares of Class B common stock for the three and nine months ended June 30, 2024, respectively, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive,

7,764,984 and 7,981,615 stock options for the three and nine months ended June 30, 2024, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

234,503 and 363,171 shares for the three and nine months ended June 30, 2024, respectively, resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because of the effect of including them would have been anti-dilutive.

i3 VERTICALS, Inc.

3 unchanged sentences

The common units of i3 Verticals, LLC held by the Continuing Equity Owners are potentially dilutive securities, and the computations of diluted net income per share assume that all common units of i3 Verticals, LLC were exchanged for shares of Class A common stock at the beginning of the period.

For the three and six months ended March 31, 2025, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net income per share of Class A common stock for continuing operations:

9,408,427 and 9,720,698 weighted average shares of Class B common stock for the three and six months ended March 31, 2025, respectively, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive, and

4,227,718 and 4,660,034 stock options for the three and six months ended March 31, 2025, respective, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive.

For the three and nine months ended June 30, 2025, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net (loss) income per share of Class A common stock for continuing operations:

9,359,632 weighted average shares of Class B common stock for the nine months ended June 30, 2025, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive,

4,362,416 and 4,436,416 stock options for the three and nine months ended June 30, 2025, respective, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

952,796 shares for the three months ended June 30, 2025 resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because of the effect of including them would have been anti-dilutive.

i3 VERTICALS, Inc.

1 unchanged sentence

(in thousands, except unit, share and per share amounts)

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock from discontinued operations for the three and six months ended March 31, 2024:

Three Months Ended March 31, Six Months Ended March 31,

Basic net (loss) income per share:

Net (loss) income $ ( 326 ) $ 5,650 $ ( 540 ) $ 11,401

Net (loss) income attributable to non-controlling interest ( 99 ) 2,063 ( 175 ) 3,831

Net (loss) income attributable to Class A common stockholders $ ( 227 ) $ 3,587 $ ( 365 ) $ 7,570

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

Basic net income per share:

$ 19,421 $ 6,109 $ 18,185 $ 18,951

Net income attributable to non-controlling interest

6,129 1,855 5,865 5,809

Net income attributable to Class A common stockholders

$ 13,292 $ 4,254 $ 12,320 $ 13,142

Weighted average shares of Class A common stock outstanding

24,345,826 23,420,811 23,909,714 23,339,598

Basic net (loss) income per share (1)

Basic net income per share (1)

$ 0.55 $ 0.18 $ 0.52 $ 0.56

4 unchanged sentences

Weighted average shares of Class A common stock outstanding

23,331,239 23,299,214

Weighted average effect of dilutive securities (3)

387,235 10,520,010

Weighted average shares of Class A common stock outstanding – diluted

23,718,474 33,819,224

Diluted net income per share $ 0.49

__________________________

For the three and six months ended March 31, 2025, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share.

For the three months ended June 30, 2025 and for three and nine months ended June 30, 2024, net income (loss) from continuing operations attributable to i3 Verticals, Inc.

was in a loss position, so diluted net income per share of Class A common stock for discontinued operations is computed in the same manner as basic net income per share of Class A common stock for discontinued operations.

The following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net loss per share of Class A common stock for discontinued operations:

4,227,718 and 4,660,034 stock options for the three and six months ended March 31, 2025, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive.

299,505 and 389,584 shares for the three and six months ended March 31, 2025, respectively, resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because of the effect of including them would have been anti-dilutive.

8,637,499, 10,052,017 and 10,079,057 weighted average shares of Class B common stock for the three months ended June 30, 2025 and the three and nine months ended June 30, 2024, respectively,along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive,

4,362,416 , 7,764,984 and 7,981,615 stock options for the three months ended June 30, 2025 and the three and nine months ended June 30, 2024, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

952,796, 234,503 and 363,171 shares for the three months ended June 30, 2025 and the three and nine months ended June 30, 2024, respectively, resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because of the effect of including them would have been anti-dilutive.

i3 VERTICALS, Inc.

3 unchanged sentences

For the three and six months ended March 31, 2024, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net loss per share of Class A common stock for discontinued operations:

10,091,604 weighted average shares of Class B common stock for the three months ended March 31, 2024, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive, and

For the nine months ended June 30, 2025, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net income per share of Class A common stock for discontinued operations:

4,436,416 stock options for the nine months ended June 30, 2025, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive.

i3 VERTICALS, Inc.

1 unchanged sentence

(in thousands, except unit, share and per share amounts)

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock from the consolidated operations for three and six months ended March 31, 2024:

Three Months Ended March 31, Six Months Ended March 31,

Basic net income per share:

Net income $ 769 $ 3,348 $ 3,877 $ 4,884

Net income attributable to non-controlling interest

Three Months Ended June 30, Nine Months Ended June 30,

Basic net income (loss) per share:

Net income (loss)

$ 18,425 $ ( 8,298 ) $ 22,302 $ ( 3,414 )

Net income (loss) attributable to non-controlling interest

5,543 ( 753 ) 7,518 1,155

Net (loss) income attributable to Class A common stockholders

2 unchanged sentences

24,345,826 23,420,811 23,909,714 23,339,598

Basic net (loss) income per share (1)

Basic net income (loss) per share (1)

$ 0.53 $ ( 0.32 ) $ 0.62 $ ( 0.20 )

Diluted net income per share:

Net (loss) income attributable to Class A common stockholders

Net income attributable to Class A common stockholders

$ 12,882 $ 14,784

Reallocation of net income assuming conversion of common units (2)

Net (loss) income attributable to Class A common stockholders - diluted

Net income attributable to Class A common stockholders – diluted

$ 17,096 $ 20,500

7 unchanged sentences

__________________________

For the three months ended March 31, 2025, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share.

The following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net loss per share of Class A common stock for discontinued operations:

9,408,427 weighted average shares of Class B common stock for the three months ended March 31, 2025, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive.

4,227,718 stock options for the three months ended March 31, 2025, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive.

299,505 shares for the three months ended March 31, 2025, resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because of the effect of including them would have been anti-dilutive.

For the three and nine months ended June 30, 2024, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share.

The following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net loss per share of Class A common stock for consolidated operations:

10,052,017 and 10,079,057 weighted average shares of Class B common stock for the three and nine months ended June 30, 2024, respectively,along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive,

i3 VERTICALS, Inc.

3 unchanged sentences

For the three months ended March 31, 2024 and the six months ended March 31, 2025 and 2024, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net income per share of Class A common stock from consolidated operations:

10,091,604 , 9,720,698 and 10,092,504 weighted average shares of Class B common stock for the three months ended March 31, 2024 and the six months ended March 31, 2025 and 2024, respectively, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive, and

7,852,595 , 4,660,034 and 8,246,542 stock options for the three months ended March 31, 2024 and the six months ended March 31, 2025 and 2024, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive.

For the three and nine months ended June 30, 2025, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net income per share of Class A common stock for consolidated operations:

4,362,416 and 4,436,416 stock options for the three and nine months ended June 30, 2025, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive.

In September 2022 the Company made the irrevocable election to settle the principal portion of its Exchangeable Notes only in cash, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net loss per share, if applicable.

3 unchanged sentences

The effect of the additional shares that may be issued upon exercise of the Warrants will be included in the weighted average shares of Class A common stock outstanding—diluted using the treasury stock method.

The Warrants expire in May 2025.

The Warrants expire over a ninety trading day period that began on May 15, 2025.

The Note Hedge Transactions purchased in connection with the issuance of the Exchangeable Notes are considered to be anti-dilutive and therefore do not impact our calculation of diluted net income per share.

4 unchanged sentences

SIGNIFICANT NON-CASH TRANSACTIONS

The Company engaged in the following significant non-cash investing and financing activities related to continuing operations during the six months ended March 31, 2025 and 2024:

Six months ended March 31,

The Company engaged in the following significant non-cash investing and financing activities related to continuing operations during the nine months ended June 30, 2025 and 2024:

Nine months ended June 30,

Acquisition date fair value of contingent consideration in connection with business combinations $ 1,260 $ 170

1 unchanged sentence

SUBSEQUENT EVENTS

Recent Acquisitions

On April 1, 2025, the Company completed the acquisition of a business to expand the Company’s Public Sector utility billing software offerings within the Public Sector segment.

Purchase consideration for the business

New Share Repurchase Program

On August 7, 2025, the Company announced that its Board of Directors had approved a new share repurchase program for the Company’s Class A common stock, under which the Company may repurchase up to $ 50,000 of outstanding shares of Class A common stock (exclusive of fees, commissions or other expenses

i3 VERTICALS, Inc.

1 unchanged sentence

(in thousands, except unit, share and per share amounts)

included $ 9,000 in cash funded by proceeds from the Company's revolving credit facility and cash on hand as well as an amount of contingent consideration which is still being valued.

Certain provisions in the purchase agreement provide for additional consideration of up to $ 5,000 , in the aggregate, to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreement, through no later than September 2027.

The Company is in process of determining the acquisition date fair values of the liabilities for the contingent consideration based on discounted cash flow analyses.

The effect of the acquisition will be included in the consolidated statements of operations beginning April 1, 2025.

The Company is still evaluating the allocations of the preliminary purchase consideration and pro forma results of operations.

Recent Divestitures

On May 5, 2025, i3 Verticals, LLC and i3 Healthcare Solutions, LLC, a wholly-owned subsidiary of i3 Verticals, LLC (“Seller,” and collectively with i3 Verticals, LLC, the “Seller Parties”), completed the sale of the equity interests of certain wholly-owned subsidiaries of the Seller (the “Healthcare RCM Acquired Entities”) which owned and operated the Company's healthcare revenue cycle management business, including its associated proprietary technology (the “Healthcare RCM Business”), to Infinx, Inc.

(“Healthcare RCM Buyer”), a Texas corporation, pursuant to the terms of that certain Securities Purchase Agreement dated as of May 5, 2025, by and among Healthcare RCM Buyer and the Seller Parties (the “Healthcare RCM Purchase Agreement;” the transactions contemplated by the Healthcare RCM Purchase Agreement, the “Healthcare RCM Transactions”).

The purchase price payable by Healthcare RCM Buyer to Seller for the equity interests of the Healthcare RCM Acquired Entities was $ 96.0 million, paid in cash at closing, subject to post-closing net working capital and other purchase price adjustments as provided in the Healthcare RCM Purchase Agreement.

As of March 31, 2025, the Company's Healthcare RCM Business was not classified as held for sale according to GAAP due to the lack of identification of a final buyer, preliminary stage of buyer's diligence and lack of Board approval for the sale.

Accordingly, the current period and historical results of the Healthcare RCM Business are presented within results from continuing operations in this Quarterly Report on Form 10-Q.

In connection with the sale of the Healthcare RCM Business, the Company fully accelerated the vesting period for the options and RSUs (to the extent not previously vested) held by employees of the Healthcare RCM Business immediately prior to the closing of the Healthcare RCM Transactions pursuant to the Healthcare RCM Purchase Agreement.

Amendment to Credit Agreement

On May 5, 2025, i3 LLC entered into that certain Second Amendment to Credit Agreement (the “Amendment”), which amends that certain Credit Agreement dated as of May 8, 2023, as amended (the “Existing Credit Agreement”), with the guarantors and the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.

The Amendment provides for certain amendments to the Existing Credit Agreement, including amendments that permitted and accommodated the execution of the Healthcare RCM Purchase Agreement and the consummation of the Healthcare RCM Transactions.

The Amendment also permanently reduced the aggregate lender commitments under the Company’s revolving line of credit from $ 450,000 to $ 400,000 .

related to such repurchases).

This new share purchase program will replace the Prior Share Repurchase Program which terminated on August 8, 2025, as described above in Note 9.

This share repurchase program will terminate on the earlier of September 30, 2026, or when the maximum dollar amount under the authorization has been expended.

Pursuant to this authorization, repurchases may be made from time to time in the open market, through privately negotiated transactions, or otherwise, including under Rule 10b5-1 plans.

In addition, any repurchases under this share repurchase program will be subject to prevailing market conditions, liquidity and cash flow considerations, applicable securities laws requirements (including under Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934, as applicable), compliance with contractual restrictions under the 2023 Senior Secured Credit Facility and other factors.

This share repurchase program does not require the Company to acquire any particular amount of shares of Class A common stock, and may be extended, modified, suspended or discontinued at any time at the Company’s discretion.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements