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Item 8. Financial Statements and Supplementary Data

2025-11-21 compared with 2024-11-25 · 700 added, 625 removed, 1158 unchanged (53% of the section changed)

11 unchanged sentences

To the shareholders and the Board of Directors of i3 Verticals, Inc.

Opinion on the Consolidated Financial Statements

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of i3 Verticals, Inc.

and subsidiaries (the “Company”) as of September 30, 2024 and 2023, the related consolidated statements of operations, changes in equity, and cash flows, for each of the three years in the period ended September 30, 2024, and the related notes to the consolidated financial statements (collectively referred to as the “financial statements”).

and subsidiaries (the "Company") as of September 30, 2025 and 2024, the related consolidated statements of operations, changes in equity, and cash flows, for each of the three years in the period ended September 30, 2025, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition for Software and Related Services Contracts – Refer to Note 3 to the Financial Statements

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – Software and Related Services Contracts – Refer to Note 3 to the Financial Statements

Critical Audit Matter Description

The Company offers software and related services to customers, and arrangements related to such revenue may contain multiple performance obligations such as software as a service, transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to the software offerings.

The Company offers software and related services to customers, and arrangements related to such revenue may contain multiple performance obligations such as software as a service, transaction-based services, ongoing software maintenance and support, software licenses and other professional services related to the software offerings.

The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.

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• Allocation of the transaction price at inception of the arrangement to multiple performance obligations.

We identified revenue recognition for significant software and related services contracts entered into during fiscal year 2024 as a critical audit matter because of these significant judgments applied by management.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate whether revenue was recognized to depict the transfer of promised goods or services to customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

We identified revenue recognition for significant software and related services contracts entered into during the fiscal year 2025 as a critical audit matter because of the significant judgments applied by management.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate whether revenue was recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

How the Critical Audit Matter Was Addressed in the Audit

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◦ Sent confirmations to customers regarding key contract terms that impact revenue recognition.

◦ Evaluated management’s application of their accounting policy and testing revenue recognition for specific performance obligations by comparing management’s conclusions to the underlying contract, master agreement, and any related amendments, if applicable.

◦ Evaluated management’s application of their accounting policy and tested revenue recognition for specific performance obligations by comparing management’s conclusions to the underlying contract, master agreement, and any related amendments, if applicable.

◦ Evaluated management’s conclusions related to whether performance obligations are satisfied at a point in time or over time.

25 unchanged sentences

Operating lease right-of-use assets 4,577 6,331

Other assets (1)

Long-term assets held for sale — 67,409

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Total current liabilities 70,689 164,731

Long-term debt, less current portion and debt issuance costs, net (1)

Long-term tax receivable agreement obligations 32,191 29,347

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Additional paid-in-capital 271,310 279,335

Accumulated earnings (deficit) 100,397 ( 12,944 )

Accumulated earnings 118,270 100,397

Total stockholders' equity 389,583 379,735

2 unchanged sentences

Total liabilities and equity $ 638,411 $ 730,675

_________________________________________

Refer to Note 3 for discussion of the change in the current period presentation.

See Notes to the Consolidated Financial Statements

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Operating expenses

Other costs of services 18,573 15,355 12,834

Other costs of services (excluding depreciation and amortization) (1)

66,587 60,517 54,811

Selling, general and administrative (1)

114,660 100,785 105,982

Depreciation and amortization 27,900 25,553 23,320

2 unchanged sentences

Income (loss) from operations 3,777 4,355 ( 4,411 )

Other expenses

Interest expense, net 29,263 25,128 14,775

Other (income) expense ( 3,395 ) ( 1,224 ) 991

Total other expenses 25,868 23,904 15,766

Loss before income taxes ( 19,014 ) ( 27,473 ) ( 38,907 )

Other (income) expenses

Interest expense 2,299 29,263 25,128

Other income ( 9,406 ) ( 3,395 ) ( 1,224 )

Total other (income) expenses

( 7,107 ) 25,868 23,904

Income (loss) before income taxes 10,884 ( 21,513 ) ( 28,315 )

(Benefit from) provision for income taxes 5,266 ( 5,468 ) ( 3,507 )

Net loss from continuing operations ( 13,346 ) ( 23,685 ) ( 39,059 )

Net income (loss) from continuing operations 5,618 ( 16,045 ) ( 24,808 )

Net income from discontinued operations, net of income taxes 20,885 191,175 22,156

Net income (loss) 26,503 175,130 ( 2,652 )

Net loss from continuing operations attributable to non-controlling interest ( 4,424 ) ( 7,863 ) ( 11,828 )

Net income (loss) from continuing operations attributable to non-controlling interest 1,991 ( 5,191 ) ( 8,192 )

Net income from discontinued operations attributable to non-controlling interest 6,639 66,980 6,351

Net income (loss) attributable to non-controlling interest 8,630 61,789 ( 1,841 )

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

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

3,627 ( 10,854 ) ( 16,616 )

3 unchanged sentences

$ 17,873 $ 113,341 $ ( 811 )

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

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

Basic $ 0.15 $ ( 0.46 ) $ ( 0.72 )

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Basic, for continuing operations

23,911,250 23,419,421 23,137,586

Diluted, for continuing operations

25,070,838 23,419,421 23,137,586

Basic, for discontinued operations 23,911,250 23,419,421 23,137,586

Diluted, for discontinued operations 34,185,684 23,419,421 23,137,586

_________________________________________

Refer to Note 3 for discussion of the change in the current and prior period presentation.

See Notes to the Consolidated Financial Statements

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Balance at September 30, 2022 22,986,448 $ 2 10,118,142 $ 1 $ 241,958 $ ( 23,582 ) $ 89,309 $ 307,688

Adoption of ASU 2020-06 — — — — ( 23,382 ) 11,449 ( 11,933 )

Equity-based compensation — — — — 27,878 — — 27,878

1 unchanged sentence

Redemption of common units in i3 Verticals, LLC 24,748 — ( 24,748 ) — 224 — ( 224 ) —

Sale of Class A common stock, net 722,000 — — — 17,869 — — 17,869

Capitalization of public offering costs — — — — ( 440 ) — — ( 440 )

Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis — — — — 6,407 — — 6,407

Exercise of equity-based awards 127,350 — — — 209 — — 209

Exercise or release of equity-based awards 159,906 — — — ( 1,092 ) — — ( 1,092 )

Allocation of equity to non-controlling interests — — — — ( 4,305 ) — 4,305 —

Issuance of Class A common stock under the 2020 Inducement Plan 82,170 — — — 2,000 — — 2,000

Balance at September 30, 2023 23,253,272 2 10,093,394 1 249,688 ( 12,944 ) 91,549 328,296

Adoption of ASU 2020-06 — — — — ( 23,382 ) 11,449 ( 11,933 )

Equity-based compensation — — — — 26,338 — — 26,338

Net loss — — — — — ( 811 ) ( 1,841 ) ( 2,652 )

Net income — — — — — 113,341 61,789 175,130

Distributions to non-controlling interest holders — — — — — — ( 25,608 ) ( 25,608 )

Redemption of common units in i3 Verticals, LLC 60,718 — ( 60,718 ) — 576 — ( 576 ) —

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Exercise or release of equity-based awards 256,411 — — — ( 683 ) — — ( 683 )

Sale of exchangeable note hedges — — — — 1,483 — — 1,483

Repurchases of warrants — — — — ( 657 ) — — ( 657 )

Allocation of equity to non-controlling interests — — — — ( 8,470 ) — 8,470 —

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Redemption of common units in i3 Verticals, LLC 1,281,739 — ( 1,281,739 ) — 18,301 — ( 18,301 ) —

Recapitalization from contribution to i3 Verticals, LLC — — ( 369,256 ) — ( 5,689 ) — 5,689 —

Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis — — — — 1,778 — — 1,778

Exercise or release of equity-based awards 393,232 — — — ( 3,261 ) — — ( 3,261 )

Sale of exchangeable note hedges — — — — 1,483 — — 1,483

Repurchases of warrants — — — — ( 657 ) — — ( 657 )

Repurchases of Class A common stock ( 1,573,881 ) — — — ( 37,979 ) — — ( 37,979 )

Allocation of equity to non-controlling interests — — — — 481 — ( 481 ) —

Issuance of Class A common stock under the 2020 Inducement Plan 311,634 — — — 7,517 — — 7,517

Balance at September 30, 2025 23,983,125 $ 2 8,381,681 $ 1 $ 271,310 $ 118,270 $ 128,140 $ 517,723

6 unchanged sentences

Net income (loss) $ 26,503 $ 175,130 $ ( 2,652 )

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

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 29,840 37,445 36,461

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Net gain on sale of investments — — ( 295 )

Gain on sale of Merchant Services Business ( 205,576 ) — —

Gain on sale of businesses ( 25,960 ) ( 205,576 ) —

Write down of intangible asset — — 2,660

1 unchanged sentence

Non-cash lease expense 2,515 4,471 4,683

Other non-cash adjustments to net income 1,346 1,546 1,131

(Decrease) Increase in non-cash contingent consideration expense from original estimate ( 690 ) 10,781 23,725

Other non-cash adjustments to net income (loss) 437 1,346 1,546

Increase (Decrease) in non-cash contingent consideration expense from original estimate 1,536 ( 690 ) 10,781

Changes in operating assets:

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Proceeds from sale of Merchant Services Business, net of cash sold — 435,058 —

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

Payments for other investing activities — ( 94 ) ( 1,251 )

9 unchanged sentences

Payments on revolving credit facility ( 58,374 ) ( 659,458 ) ( 281,534 )

Payments to extinguish exchangeable notes ( 26,223 ) — —

Payments for repurchase of exchangeable notes — ( 87,840 ) —

2 unchanged sentences

Payments of debt issuance costs ( 256 ) ( 930 ) ( 694 )

Proceeds from issuance of Class A common stock, net of underwriting discounts and offering costs — — 17,692

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

Net payments for settlement obligations

1 unchanged sentence

Cash paid for contingent consideration ( 817 ) ( 760 ) ( 6,832 )

Payments for required distributions to members for tax obligations ( 1,088 ) — —

Payments for required distributions to members or on behalf of members for tax obligations ( 25,267 ) ( 1,088 ) —

Payments for required distributions to members under the Tax Receivable Agreement ( 10,032 ) — —

Proceeds from stock option exercises 300 25 180

Payments for employee's tax withholdings from net settled stock option exercises ( 708 ) ( 490 ) ( 643 )

Payments for employee's tax withholdings from net settled stock option exercises and RSU releases ( 4,294 ) ( 708 ) ( 490 )

Net cash (used in) provided by financing activities ( 104,414 ) ( 367,362 ) 72,985

Net increase (decrease) in cash, cash equivalents, and restricted cash 77,197 ( 11,365 ) 5,834

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 22,264 ) 77,197 ( 11,365 )

Cash, cash equivalents, and restricted cash at beginning of period 89,597 12,400 23,765

2 unchanged sentences

Cash paid for interest $ 931 $ 29,492 $ 21,476

Cash paid for income taxes $ 7,330 $ 3,236 $ 1,079

_________________________________________

Refer to Note 3 for discussion of the change in the current period presentation.

Cash paid for income taxes, net of refunds $ 34,867 $ 7,330 $ 3,236

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets to that shown in the Consolidated Statements of Cash Flows:

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The Company was formed for the purpose of completing an initial public offering (“IPO”) of its Class A common stock and other related transactions in order to carry on the business of i3 Verticals, LLC and its subsidiaries.

i3 Verticals, LLC was founded in 2012 and delivers seamlessly software solutions integrated with our proprietary payment facilitator platform to customers in strategic vertical markets.

i3 Verticals, LLC was founded in 2012 and delivers software solutions seamlessly integrated with our proprietary payment facilitator platform to customers in strategic public sector markets.

The Company’s headquarters are in located Nashville, Tennessee, with operations throughout the United States.

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As the sole managing member of i3 Verticals, LLC, i3 Verticals, Inc.

consolidates the financial results of i3 Verticals, LLC and reports a non-controlling interest representing the Common Units of i3 Verticals, LLC held by other owners other (the “Continuing Equity Owners”).

consolidates the financial results of i3 Verticals, LLC and reports a non-controlling interest representing the Common Units of i3 Verticals, LLC held by other owners (the “Continuing Equity Owners”).

i3 Verticals, Inc.

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Combining the Class A common stock and Class B common stock, the Continuing Equity Holders hold approximately 26.7 % of the economic interest and voting power in i3 Verticals, Inc.

At-the-Market Program

On August 20, 2021, the Company, together with i3 Verticals, LLC, entered into an at-the-market offering sales agreement (the "Sales Agreement") with Raymond James & Associates, Inc., Morgan Stanley & Co.

LLC and BTIG, LLC (each a “Sales Agent”), under which the Company could issue and sell, from time to time and through the Sales Agents, shares of the Company's Class A common stock having an aggregate offering price of up to $ 125,000 (the “ATM Program”).

During the quarter and year ended September 30, 2024, the Company did no t sell any Class A common stock under the ATM Program.

During the quarter and year ended September 30, 2023, the Company sold 722,000 shares of Class A common stock, raising $ 17,869 in net proceeds under the ATM Program.

The aggregate compensation paid by the Company to the Sales Agents with respect to such sales

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

i3 VERTICALS, Inc.

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

During the three months ended September 30, 2024, the Company terminated the Sales Agreement pursuant to which the ATM Program had been operated.

DISCONTINUED OPERATIONS

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 “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 Purchase Agreement), Payroc Buyer, LLC (“Buyer”), and Payroc WorldAccess, LLC (solely for the purpose of providing a guaranty of the obligations of Buyer as set forth in the Purchase Agreement).

Pursuant to the terms of the Purchase Agreement, the Sellers sold to Buyer the equity interests of certain direct and indirect wholly-owned subsidiaries of Sellers (the “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 Business from i3 Verticals, LLC and certain affiliates to the Acquired Entities pursuant to a contribution agreement which was entered into immediately prior to the Closing (collectively, the "Transactions").

Pursuant to the terms of the Purchase Agreement, Buyer paid to Sellers an aggregate purchase price of approximately $ 438 million (after giving effect to estimated net working capital, indebtedness and cash adjustments), payable in cash at the Closing, subject to post-closing purchase price 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 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.

Aggregate costs incurred related to the 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.

These costs include fees for third-party advisory, consulting, legal and professional services, as well as other items associated with the Transactions.

“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 $ 96,252 , paid in cash at closing, after giving effect to post-closing net working capital, indebtedness and cash adjustments.

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 anticipated to be completed in the first quarter of fiscal 2026.

In addition, the Infinx ELA terminated in accordance with its terms 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 consolidated statements of operations.

Income under the Infinx TSA and Infinx ELA during the year ended September 30, 2025 was $ 5,250 .

Aggregate costs incurred related to the sale of the Healthcare RCM Business during the year ended September 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 consolidated statements of operations.

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

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of the Merchant Services Business:

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

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations of the Healthcare RCM Business as of September 30, 2024:

September 30,

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Prepaid expenses and other current assets 259

Current assets held for sale 17,269

Total current assets 5,484

Property and equipment, net 389

Restricted cash 200

Capitalized software, net 4,609

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Other assets 30

Long-term assets held for sale 219,354

Total assets $ 72,893

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Current portion of operating lease liabilities 1,200

Current liabilities held for sale 12,197

Total current liabilities 4,072

Operating lease liabilities, less current portion 1,427

Other long-term liabilities 1,065

Long-term liabilities held for sale 2,530

Total liabilities $ 5,499

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 years ended September 30, 2024, 2023 and 2022:

i3 VERTICALS, Inc.

1 unchanged sentence

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

The financial results of the Healthcare RCM 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 the Healthcare RCM Business for the years ended September 30, 2025, 2024 and 2023:

Year ended September 30,

2 unchanged sentences

Operating expenses

Other costs of services 67,122 65,197 60,533

Other costs of services (excluding depreciation and amortization) 14,553 24,125 22,387

Selling, general and administrative 7,317 9,949 9,910

2 unchanged sentences

Total operating expenses 25,112 36,605 36,203

Income from operations 24,256 26,278 20,697

Other (income) expenses

Interest expense, net 43 — —

Other (income) expense (including gain on disposal of $ 205,576 in the year ended September 30, 2024)

(Loss) income from operations

( 2,649 ) 2,499 842

Total other (income) expenses ( 205,533 ) 2,660 —

Income become income taxes from discontinued operations 229,789 23,618 20,697

Provision for income taxes 41,313 2,585 4,855

Other income (including gain on disposal of $ 25,960 in the year ended September 30, 2025)

( 25,753 ) — —

Income before income taxes from discontinued operations

23,104 2,499 842

Provision for (benefit from) income taxes

3,782 ( 200 ) ( 281 )

Net income from discontinued operations

Net income from discontinued operations attributable to non-controlling interest 66,213 6,022 5,713

19,322 2,699 1,123

Net income from discontinued operations attributed to non-controlling interest

6,081 767 329

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

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

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

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

Year ended September 30,

2 unchanged sentences

Equity-based compensation $ 3,112 $ 2,783 $ 2,859

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

Non-cash lease expense $ 702 $ 1,235 $ 1,221

Increase (decrease) in non-cash contingent consideration expense from original estimate $ 1,302 $ ( 712 ) $ 788

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

Expenditures for property and equipment $ ( 156 ) $ ( 294 ) $ ( 119 )

Expenditures for capitalized software $ ( 263 ) $ ( 423 ) $ ( 397 )

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

Cash paid for contingent consideration up to original estimates

$ ( 800 ) $ — $ ( 385 )

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

Year ended September 30,

2025 2024 2023

Right-of-use assets obtained in exchange for operating lease obligations $ 266 $ 327 $ ( 625 )

Merchant Services Business Divestiture

Pursuant to the terms of the Purchase Agreement, the Sellers sold to 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 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 "Transactions").

Pursuant to the terms of the Purchase Agreement, Buyer paid to Sellers an aggregate purchase price of approximately $ 439,516 , payable in cash at the Closing, after giving effect to post-closing purchase price 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.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

These costs were primarily incurred during the second and third fiscal quarters of the year ended September 30, 2024 and include fees for third-party advisory, consulting, legal and professional services, as well as other items associated with the Transactions.

The expenses are reflected within selling, general and administrative expenses within the Company's 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 the Merchant Services Business for the years ended September 30, 2025, 2024 and 2023:

Year ended September 30,

2025 2024 2023

Revenue $ — $ 145,907 $ 143,517

Operating expenses

Other costs of services (excluding depreciation and amortization)

— 67,122 65,197

Selling, general and administrative — 45,880 42,005

Depreciation and amortization — 8,649 10,023

Change in fair value of contingent consideration — — 14

Total operating expenses — 121,651 117,239

Income from operations — 24,256 26,278

Other expenses (income)

Interest expense, net — 43 —

Other expense (income) (including gain on disposal of $ 205,576 in the year ended September 30, 2024)

661 ( 205,576 ) 2,660

Total other expenses (income)

661 ( 205,533 ) 2,660

(Loss) income become income taxes from discontinued operations

( 661 ) 229,789 23,618

(Benefit from) provision for income taxes

( 2,224 ) 41,313 2,585

Net (loss) income from discontinued operations

1,563 188,476 21,033

Net (loss) income from discontinued operations attributable to non-controlling interest

558 66,213 6,022

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

$ 1,005 $ 122,263 $ 15,011

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

Year ended September 30,

Depreciation and amortization $ 8,649 $ 10,023

Equity-based compensation $ 8,160 $ 4,155

Provision for doubtful accounts $ 26 $ ( 19 )

Gain on sale of Merchant Services Business

$ ( 205,576 ) $ —

Amortization of capitalized customer acquisition costs $ 873 $ 746

9 unchanged sentences

Proceeds from sale of Merchant Services Business, net of cash sold $ 435,058 $ —

Cash paid for contingent consideration — — ( 4,790 )

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

Year ended September 30,

2024 2023 2022

Residual buyouts financed through principal and interest forgiveness of a loan $ — $ 5,860

4 unchanged sentences

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation within the consolidated statements of cash flows.

Certain prior period amounts have been reclassified to conform to the current period presentation.

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 consolidated statements of operations.

Assets and liabilities subject to the sale of the Merchant Services Business have been reclassified as held for sale for all periods presented in the consolidated balance sheets.

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 consolidated statements of operations.

Assets and liabilities subject to the sale of the Healthcare RCM Business have been reclassified as held for sale for all periods presented in the consolidated balance sheets.

Refer to Note 2 for additional information.

2 unchanged sentences

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

Change in presentation of cash flows associated with "Settlement obligations"

During the second quarter of 2024, the Company elected to change its presentation of cash flows associated with "Settlement obligations" from operating activities to financing actives within the Consolidated Statements of Cash Flows.

Comparative amounts have been reclassified to conform to the current period presentation.

This change has no impact on the Consolidated Balance Sheet, Consolidated Statements of Operations or Consolidated Statement of Changes in Equity.

The following tables present the effects of the change in presentation within the Consolidated Statements of Cash Flows:

For the year ended September 30, 2023

As Previously Reported Adjustment As Adjusted

Cash flows from operating activities:

Settlement obligations ( 2,667 ) 2,667 —

Net cash provided by operating activities 34,503 2,667 37,170

Cash flows from financing activities:

Net payments for settlement obligations — ( 2,667 ) ( 2,667 )

Net cash provided by financing activities 75,652 ( 2,667 ) 72,985

For the year ended September 30, 2022

As Previously Reported Adjustment As Adjusted

Cash flows from operating activities:

Settlement obligations 2,087 ( 2,087 ) —

Net cash provided by operating activities 45,846 ( 2,087 ) 43,759

Cash flows from financing activities:

Net proceeds from settlement obligations — 2,087 2,087

Net cash provided by financing activities 73,033 2,087 75,120

Change in presentation of debt issuance costs related to the 2023 Senior Secured Credit Facility

During the fourth quarter of 2024, the Company elected to change its presentation of debt issuance costs associated with the revolver pursuant to the 2023 Senior Secured Credit Facility to an asset rather than a reduction in the related liability as the previously drawn amounts on the 2023 Senior Secured Credit Facility were repaid upon the closing of the sale of the Merchant Services Business.

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 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 Consolidated Statements of Operations from selling, general and administrative expenses to other costs of services.

The Company reclassified personnel costs related to installation of the Company's software, conversion of client data, training client personnel, customer support activities and various other services provided directly to customers from selling, general and administrative to other costs of services.

The Company also reclassified certain hosting and related software costs for directly supporting the Company's customers from selling, general and administrative to other costs of services.

Comparative amounts have been reclassified to conform to the current period presentation.

This change has no impact on the Consolidated

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Statements of Operations, Consolidated Statement of Changes in Equity or Consolidated Statements of Cash Flows.

The following tables present the effects of the change in presentation within the Consolidated Balance Sheets:

This change has no impact on the Consolidated Balance Sheets, Consolidated Statements of Cash Flows or Consolidated Statement of Changes in Equity.

This change has no impact on the total operating expenses or earnings per share as illustrated below.

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

September 30, 2024

As Previously Reported Adjustment As Adjusted

Other assets 8,803 2,924 11,727

Total assets 881,493 2,924 884,417

Long-term debt, less current portion and debt issuance costs, net 385,081 2,924 388,005

Total liabilities 553,197 2,924 556,121

Total liabilities and equity 881,493 2,924 884,417

As Previously Reported (1)

Adjustment As Adjusted

Operating expenses

Other costs of services $ 16,108 $ 44,409 $ 60,517

Selling, general and administrative $ 145,194 $ ( 44,409 ) $ 100,785

__________________________

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.

September 30, 2023

As Previously Reported (1)

Adjustment As Adjusted

Operating expenses

Other costs of services $ 13,306 $ 41,505 $ 54,811

Selling, general and administrative $ 147,487 $ ( 41,505 ) $ 105,982

__________________________

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.

Principles of Consolidation

These consolidated financial statements include the accounts of the Company and its subsidiary companies.

All significant intercompany accounts and transactions have been eliminated in consolidation .

All intercompany accounts and transactions have been eliminated in consolidation .

Cash and Cash Equivalents

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Cash equivalents are defined as financial instruments readily transferable into cash with an original maturity less than 90 days.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Restricted Cash

Restricted cash represents funds held in escrow related to acquisitions or held-on-deposit with our processing bank pursuant to agreements to cover potential merchant losses.

Restricted cash represents funds held in escrow related to acquisitions or held-on-deposit with the processing bank pursuant to agreements to cover potential merchant losses.

It is presented as long-term assets on the accompanying consolidated balance sheets since the related agreements extend beyond the next twelve months.

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Accounts Receivable and Credit Policies

Accounts receivable include amounts due from the sales of the Company’s technology solutions to its customers.

The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts, if

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

necessary, which reflects management’s best estimate of the amounts that will not be collected.

Accounts receivable include amounts due from the sales of the Company’s technology solutions to its customers, ongoing transition activities with Infinx and Payroc related to the sale of the Healthcare RCM Business and Merchant Services Business, respectively, and other receivables from third parties.

The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts, if necessary, which reflects management’s best estimate of the amounts that will not be collected.

The allowance is estimated based on management’s knowledge of its customers, historical loss experience and existing economic conditions.

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however, actual write-offs may exceed estimated amounts.

In connection with the sale of the Merchant Services Business, $ 200 at September 30, 2023 of the Company's allowance for doubtful were classified as "Current assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

Settlement Assets and Obligations

Settlement assets and obligations result when funds are temporarily held or owed by the Company on behalf of merchants, consumers, schools, and other institutions.

Timing differences, interchange expenses, merchant reserves and exceptional items cause differences between the amount received from the card networks and the amount funded to counterparties.

These balances arising in the settlement process are reflected as settlement assets and obligations on the accompanying consolidated balance sheets.

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 $ 632 as of September 30, 2024 and $ 4,873 as of September 30, 2023.

In connection with the sale of the Healthcare RCM Business, $ 212 at September 30, 2024 of the Company's allowance for doubtful were classified as "Current assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

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 $ 2,516 and $ 2,423 at September 30, 2025 and 2024, respectively, and are included within prepaid expenses and other current assets on the accompanying consolidated balance sheets.

In connection with the sale of the Merchant Services Business, $ 2,100 at September 30, 2023 of the Company's inventories were classified as "Current assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

Property and Equipment

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There were no impairment charges from continuing operations during the years ended September 30, 2025, 2024 and 2023.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Capitalized Software

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Software development costs are amortized using the greater of the straight-line method or the usage method over its estimated useful life, which is generally estimated to be three years .

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Additionally, development costs for software to be used internally is capitalized under similar guidance as discussed above.

Additionally, development costs for software to be used internally or for SaaS products sold to customers is capitalized under similar guidance as discussed above.

Once the software product is in the application development stage, costs are required to be capitalized.

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Acquisition technology intangibles’ net book values are included in capitalized software, net in the accompanying consolidated balance sheets.

Notes Receivable

Notes receivable consist of loans made to unrelated entities.

Notes receivable were $ 195 and $ 199 at September 30, 2024 and 2023, respectively, and are included within prepaid expenses and other current assets and other assets on the accompanying consolidated balance sheets.

Amortization expense related to capitalized software is recorded within depreciation and amortization on the consolidated statements of operations.

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.

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Acquisitions not meeting the accounting criteria to be accounted for as a business combination are accounted for as an asset acquisition.

An asset acquisition is recorded at its purchase price, inclusive of acquisition costs, which is allocated among the acquired assets and assumed liabilities based upon their relative fair values at the date of acquisition.

The operating results of an acquisition are included in the consolidated statements of operations from the date of such acquisition.

Acquisitions completed during the year ended September 30, 2024 contributed $ 884 and $ 61 of revenue and net loss, respectively, to the results in the Company's consolidated statements of operations for the year then ended.

An asset acquisition is recorded at its purchase price, inclusive of acquisition costs,

i3 VERTICALS, Inc.

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

which is allocated among the acquired assets and assumed liabilities based upon their relative fair values at the date of acquisition.

The operating results of an acquisition are included in the consolidated statements of operations from the date of such acquisition.

Acquisitions completed during the year ended September 30, 2025 contributed $ 1,587 and $ 684 of revenue and net income, respectively, to the results in the Company's consolidated statements of operations for the year then ended.

In accordance with ASC 350, Intangibles—Goodwill and Other, the Company tests goodwill for impairment for each reporting unit on an annual basis in the fourth quarter, or when events or circumstances indicate the fair value of a reporting unit is below its carrying value.

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For a discussion of the estimation methodology, the qualitative factors considered when performing a qualitative assessment and the significance of various inputs, please see the subheading below titled “Use of Estimates.”

The Company has determined that it has five reporting units as of the date of the most recent annual goodwill impairment test on July 1, 2024.

Two of these five reporting units were part of the Merchant Service Business, for which a definitive agreement to sell was signed on June 26, 2024.

For the two reporting units within the Merchant Services Business, the Company performed a qualitative assessment.

For the remaining three reporting units, the Company performed a quantitative assessment.

The Company has determined that it has two reporting units as of the date of the most recent annual goodwill impairment test on July 1, 2025.

In the year ended September 30, 2025, based on the qualitative assessment, there were not any indicators that would indicate that it is more likely than not that a reporting unit’s carrying value exceed the fair value.

For each of the years ended September 30, 2025, 2024 and 2023 the Company determined that none of its reporting units were impaired.

Intangible Assets

Intangible assets include acquired customer relationships, referral agreements, trademarks, trade names, website development costs and non-compete agreements.

Intangible assets include acquired customer relationships, trademarks, trade names, website development costs and non-compete agreements.

Customer relationships represent the fair value of customer relationships purchased by the Company.

Referral agreements represent the right to exclusively obtain referrals from a partner for their customers' credit card processing services.

The Company amortizes definite lived identifiable intangible assets using a method that reflects the pattern in which the economic benefits of the intangible asset are expected to be consumed or otherwise utilized.

The estimated useful lives of the Company’s customer-related intangible assets approximate the expected distribution of cash flows, whether straight-line or accelerated, generated from each asset.

The useful lives of contract-based intangible assets are equal to the terms of the agreement.

Management evaluates the remaining useful lives and carrying values of long-lived assets, including definite lived intangible assets, at least annually, or when events and circumstances warrant such a review, to determine whether significant events or changes in circumstances indicate that a change in the useful life or impairment in

The estimated useful lives of the Company’s customer-related intangible assets approximate the expected distribution

i3 VERTICALS, Inc.

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

value may have occurred.

of cash flows, whether straight-line or accelerated, generated from each asset.

The useful lives of contract-based intangible assets are equal to the terms of the agreement.

There were no impairment charges during the years ended September 30, 2025, 2024 and 2023.

Lease Expense

Leases are recorded in accordance with ASC 842, Leases ("ASC 842).

The Company elected the accounting policy practical expedients for all classes of underlying assets to (i) combine associated lease and non-lease components in a lease arrangement as a combined lease component and (ii) exclude recording short-term leases as right-of-use assets on the consolidated balance sheets.

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.

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 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 rate is a fully collateralized rate that considers the Company’s credit rating, market conditions and the term of the lease.

The Company accounts for all components in a lease arrangement as a single combined lease component.

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

Total lease costs include variable lease costs, which are primarily comprised of the consumer price index adjustments and other changes based on rates, such as costs of insurance and property taxes.

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

i3 Verticals, Inc.

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See additional discussion in Note 13.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Valuation of Contingent Consideration

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The Company's revenue from continuing operations for the years ended September 30, 2025, 2024 and 2023 is derived from the following sources:

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

• 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;

• Other — Includes sales of equipment, non-software related professional services and other revenues

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

Revenues from the Company’s software are recognized when the related performance obligations are satisfied.

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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 also generates revenue from maintenance services related to these software licenses, which is recognized over the term of the agreement.The Company also offers access to its software under software-as-a-service (“SaaS”) arrangements, which represent services arrangements, and under which customers do not have the right to take possession of the software.

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.

The Company also offers access to its software under software-as-a-service (“SaaS”) arrangements, which represent services arrangements, and under which customers do not have the right to take possession of the software.

Revenue from SaaS arrangements is recognized over time, over the term of the agreement.

Contracts with professional services, such as training or installation, are evaluated to determine if the customer can benefit from these services independently, whether they can be provided by other available resources, or whether they are separately identifiable from other contract promises.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Discount fees represent a percentage of the dollar amount of each credit or debit transaction processed or a specified per transaction amount, depending on the card type.

1 unchanged sentence

The Company’s core performance obligations are to stand ready to provide continuous access to the Company’s payment authorization services and transaction settlement services in order to be able to process as many transactions as its customers require on a daily basis over the contract term.

These services are stand ready obligations, as the nature of the promise is to stand ready to process an undetermined quantiy of transactions.

These services are stand ready obligations, as the nature of the promise is to stand ready to process an undetermined quantity of transactions.

Under a stand-ready obligation, the Company’s performance obligation is defined by each time increment rather than by the underlying activities satisfied over time based on days elapsed.

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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 years ended September 30, 2025, 2024 and 2023.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

Revenues are also derived from a variety of transaction fees, which are charged for transacting on our proprietary payment facilitator platform and software solutions, and fees for other miscellaneous services.

Revenues derived from such fees are recognized in the time the transactions occur and when there are no further performance obligations.

Revenue from the sale of equipment, is recognized upon transfer of ownership to the customer, after which there are no further performance obligations.

Revenues derived from such fees are recognized in the time the transactions occur and when there are no further performance obligations remaining to be satisfied.

Revenue from the sale of equipment, is recognized upon transfer of ownership to the customer, after which there are no further performance obligations remaining to be satisfied.

Arrangements may contain multiple performance obligations, such as payment authorization services, transaction settlement services, hardware, software products, SaaS, maintenance, and professional installation and training services.

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The Company establishes estimated selling price, based on the judgment of the Company's management, considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle.

In arrangements with multiple performance obligations, the Company applies significant judgement in determining the allocation of the transaction price at inception of the arrangement and uses the standalone selling prices for the majority of the Company's revenue recognition.

In arrangements with multiple performance obligations, the Company applies significant

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

judgement in determining the allocation of the transaction price at inception of the arrangement and uses the standalone selling prices for the majority of the Company's revenue recognition.

Revenues from sales of the Company ’ s hardware and software elements are recognized when each performance obligation has been satisfied which has been determined to be upon the delivery of the product.

Revenues derived from service fees are recognized over time in accordance with our satisfaction of our performance obligations.

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.

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These contracts do not allow for termination for convenience, which reduces the risks related to future revenue recognition.

The transaction price allocated to the remaining performance obligations related to these contracts is not considered useful to the users of the financial statements due to the exclusion of certain revenue based on the aforementioned practical expedients.

The tables below present a disaggregation of the Company's revenue from contracts with customers for continuing operations by product by segment.

However, the transaction price allocated to the remaining performance obligations related to these contracts is not considered useful to the users of the financial statements due to the exclusion of certain revenue based on the aforementioned practical expedients as well as other external circumstances such as customers being subject to annual budget approval for continued funding of contracts.

The tables below present a disaggregation of the Company's revenue from contracts with customers for continuing operations by product.

The Company's products are defined as follows:

• Software and related services — Includes SaaS, transaction-based fees, ongoing software maintenance and support, software licenses, and other professional services related to our software offerings

• Proprietary payments — Includes discount fees and other related fixed transaction or service fees;

• Other — Includes sales of equipment, non-software related professional services and other revenues

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

For the year ended September 30, 2024

Public Sector Healthcare Other Total

Software and related services revenue $ 125,592 $ 43,902 $ ( 436 ) $ 169,058

Proprietary payments revenue 50,089 267 ( 15 ) 50,341

Other revenue 9,160 1,397 ( 33 ) 10,524

Total revenue $ 184,841 $ 45,566 $ ( 484 ) $ 229,923

For the year ended September 30, 2023

Public Sector Healthcare Other Total

Software and related services revenue $ 127,118 $ 42,795 $ ( 45 ) $ 169,868

Proprietary payments revenue 46,551 95 ( 30 ) 46,616

Other revenue 8,545 1,693 — 10,238

Total revenue $ 182,214 $ 44,583 $ ( 75 ) $ 226,722

For the year ended September 30, 2022

Public Sector Healthcare Other Total

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

Year ended September 30,

2025 2024 2023

Software and related services revenue $ 149,044 $ 131,916 $ 134,391

2 unchanged sentences

Total revenue $ 213,158 $ 191,232 $ 189,681

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 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 year ended September 30, 2024

Public Sector Healthcare Other Total

Revenue earned over time $ 170,522 $ 45,288 $ ( 436 ) $ 215,374

Revenue earned at a point in time 14,319 278 ( 48 ) 14,549

Total revenue $ 184,841 $ 45,566 $ ( 484 ) $ 229,923

For the year ended September 30, 2023

Public Sector Healthcare Other Total

Revenue earned over time $ 163,331 $ 44,164 $ ( 46 ) $ 207,449

Revenue earned at a point in time 18,883 419 ( 29 ) 19,273

Total revenue $ 182,214 $ 44,583 $ ( 75 ) $ 226,722

i3 VERTICALS, Inc.

1 unchanged sentence

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

For the year ended September 30, 2022

Public Sector Healthcare Other Total

Year ended September 30,

2025 2024 2023

Revenue earned over time $ 193,532 $ 176,722 $ 170,435

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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.

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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 September 30, 2024, the Company had $ 857 of capitalized contract costs, compared to $ 632 of capitalized contract costs as of September 30, 2023.

The contract costs relate 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 consolidated balance sheets.

In connection with the sale of the Merchant Services Business, $ 4,334 at September 30, 2023 of the Company's capitalized contract costs were classified as "Long-term assets held for sale" in the accompanying consolidated

As of September 30, 2025 and 2024, the Company had $ 1,412 and $ 857 of capitalized contract costs, which relate 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 consolidated balance sheets.

The Company recorded expense from continuing operations related to these costs for the years ended September 30, 2025, 2024 and 2023 of $ 293 , $ 92 and $ 46 respectively.

i3 VERTICALS, Inc.

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

balance sheets and were not included in these amounts.

The Company recorded commissions expense from continuing operations related to these costs for the years ended September 30, 2024, 2023 and 2022 of $ 92 , $ 46 and $ 33 respectively.

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.

Other Cost of Services

Other costs of services from continuing operations include costs directly related to the Company's software and related services, such as hosting expenses.

Additionally, other costs of services include costs directly attributable related to payment processing services such as processing and bank sponsorships.

Other costs of services from continuing operations include costs directly related to the Company's software and related services.

Additionally, other costs of services include costs directly attributable to payment processing services such as processing and bank sponsorship.

Losses resulting from chargebacks against a customer are included in other cost of services.

Residual payments to our distribution partners and the cost of equipment sold is also included in cost of services.

Residual payments to the Company's distribution partners and the cost of equipment sold is also included in cost of services.

Amortization arising from capitalized software development is not included in other cost of services.

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 has been providing software solutions.

Given the change in the Company's business model following the sale of the Merchant Services Business, the Company has 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 consolidated statements of operations from selling, general and administrative expenses to other costs of services.

The Company also reclassified certain hosting and related software costs for directly supporting the Company's customers from selling, general and administrative to other costs of services.

Refer to Note 3 for discussion of the change in the current and prior period presentation.

The Company accounts for all governmental taxes associated with revenue transactions on a net basis.

Selling, General and Administrative

Selling general and administrative expenses from continuing operations include all personnel costs such as salaries, benefits, bonuses, stock based compensation and commissions, as well as marketing and advertising costs, contractor services, legal and other professional services fees, software and technological services, rental expenses and other general expenses.

Selling general and administrative expenses from continuing operations include certain salaries and other employment costs, professional services, internal technology expenses, rent and utilities and other operating costs.

Salaries and other employment costs within selling, general and administrative include individuals associated with shared services, product development and maintenance, sales and other functions.

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.

Refer above for discussion of the change in the current and prior period presentation.

Advertising and promotion costs are expensed as incurred.

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This standard requires compensation expense to be measured based on the estimated fair value of the share-based awards on the date of grant and recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period.

Equity-based compensation from continuing operations was $ 18,178 , $ 23,723 and $ 22,655 for the years ended September 30, 2024, 2023 and 2022, respectively.

Equity-based compensation from continuing operations was $ 15,232 , $ 15,396 and $ 20,864 for the years ended September 30, 2025, 2024 and 2023, respectively, and is included in other cost of services and selling, general and administrative expenses in the Consolidated Statements of Operations.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Use of Estimates

3 unchanged sentences

Actual results could differ from those estimates.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

See Note 19 to the Company's consolidated financial statements for additional information.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

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.

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.

The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company will not be required to adopt ASU 2023-09 until October 1, 2025.

The Company is currently evaluating the impact of the adoption of ASU 2023-09 on the Company’s financial statement disclosures.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

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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.

The Company has adopted ASU 2023-07 effective October 1, 2024.

The adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statements, as the changes only include additional disclosures related to the Company’s reportable segment.

See Note 19 to the Company's consolidated financial statements for additional information regarding segment reporting.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

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

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

The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company will not be required to adopt ASU 2023-09 until October 1, 2025.

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ASU 2024-03 will require companies to disaggregate, within the notes to the financial statements, certain expenses presented on the face of the financial statements to enhance transparency and help investors better understand an entity's performance.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The amendment will specifically require that an entity disclose the amounts related to purchases of inventory, employee compensation, depreciation and intangible asset amortization.

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

In September 2025, the FASB issued ASU No.

2025-06, Intangibles—Goodwill and Other—Internal-Use-Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06").

ASU 2025 removes the prescriptive software development “project stages” and requires capitalization of software costs once (1) management authorizes and commits funding and (2) completion and use are probable.

Entities must evaluate significant development uncertainty related to technological innovations or performance requirements.

The amendments also require Subtopic 360-10 disclosures for all capitalized internal-use software costs and clarify that intangible asset disclosures under Subtopic 350-30 are not required.

The standard is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted.

The Company will not be required to adopt ASU 2025-06 until October 1, 2028.

The Company is currently evaluating the impact of the adoption of ASU 2025-06 on the Company’s financial statement disclosures.

CREDIT RISK AND OTHER CONCENTRATIONS

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The Company believes that the loss of any single customer would not have a material adverse effect on the Company's financial condition or results of operations.

The Company uses a third party payment processor, which facilitates substantially all of our proprietary payments revenues from continuing operations for the years ended September 30, 2024, 2023, and 2022.

The Company uses a third party payment processor, which facilitates the majority of of our proprietary payments revenues from continuing operations for the years ended September 30, 2025, 2024, and 2023.

During the years ended September 30, 2025, 2024 and 2023 the Company acquired the following businesses:

2025 Business Combinations

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.

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

During the years ended September 30, 2024, 2023 and 2022 the Company acquired the following intangible assets and businesses:

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 15.

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 $ 96 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, net $ 796

Property and equipment 200

Capitalized software 380

Customer relationships 4,610

Trade name 100

Goodwill 5,129

Total assets acquired 11,215

Current liabilities 955

Net assets acquired $ 10,260

Other Business Combinations during the year ended September 30, 2025

During the year ended September 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 preliminary fair values of approximately $ 83 to property and equipment, approximately $ 1,700 to customer relationships, $ 141 to deferred revenue, $ 5 to non-compete agreements and the remainder, approximately $ 352 , 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 CONSOLIDATED FINANCIAL STATEMENTS

(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 year ended September 30, 2025 had occurred on October 1, 2024.

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.

Year ended September 30,

Revenue $ 214,595 $ 194,258

Net income (loss) from continuing operations

$ 5,749 $ ( 15,846 )

2024 Business Combinations

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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.

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

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 the acquisition date estimated fair value of contingent cash consideration (the final amount of such contingent cash 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 15.

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

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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 14.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Summary of inLumon

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

Accounts receivable $ 2,936

Prepaid expenses and other current assets 5

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

Accounts receivable, net $ 2,985

Property and equipment 20

Capitalized software 3,000

Acquired customer relationships 11,800

Customer relationships 11,800

Trade name 100

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Net assets acquired $ 27,477

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Other Business Combinations during the year ended September 30, 2024

During the year ended September 30, 2024 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 year ended September 30, 2024 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 acquisition date 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.

Certain of the purchase price allocations assigned for this acquisition is considered preliminary as of September 30, 2024.

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

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Acquisition-related costs for this acquisition amounted to approximately $ 8 and were expensed as incurred.

Pro Forma Results of Operations for 2024 Business Combinations

The following unaudited supplemental pro forma results of operations have been prepared as though each of the acquired businesses in the year ended September 30, 2024 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.

Year ended September 30,

Revenue $ 235,875 $ 232,750

Net loss $ ( 13,382 ) $ ( 24,680 )

2023 Business Combinations

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On October 1, 2022, the Company completed the acquisition of substantially all of the assets of Celtic Cross Holdings, Inc., in Scottsdale, Arizona and Celtic Systems Pvt.

in Vadodara, India (collectively "Celtic") to expand the Company’s software offerings in the Public Sector vertical.

Celtic is within the Public Sector segment.

in Vadodara, India (collectively "Celtic") to expand the Company’s software offerings in the Public Sector.

Total purchase consideration consisted of $ 85,000 in cash consideration, funded by proceeds from the Company's revolving credit facility.

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The acquired capitalized software has a weighted-average amortization period of ten years .

Acquisition-related costs for this acquisition amounted to approximately $ 1,782 and were expensed as incurred.

i3 VERTICALS, Inc.

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

Acquisition-related costs for this acquisition amounted to approximately $ 1,782 and were expensed as incurred.

Summary of Celtic Cross Holdings, Inc.

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

Accounts receivable $ 7,660

Accounts receivable, net $ 7,660

Prepaid expenses and other current assets 103

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The Company completed the acquisition of substantially all of the assets of one other businesses within continuing operations to expand the Company's software offerings.

In connection with this acquisition, the Company allocated approximately $ 159 of the consideration to net working capital, approximately $ 335 to property and equipment, approximately $ 640 to capitalized software, approximately $ 6,920 to customer relationships, approximately $ 100 to trade names, and the remainder, approximately $ 9,365 , to goodwill, of which $ 2,864 is deductible for tax purposes, and approximately $ 2,178 to other long-term liabilities.

Certain of the purchase price allocations assigned for this acquisition is considered preliminary as of September 30, 2023.

The total purchase consideration was $ 15,260 , including $ 12,500 in cash consideration, funded by proceeds from the Company's revolving credit facility, $ 2,000 of the Company's Class A Common Stock, and $ 760 in the acquisition date estimated fair value of contingent consideration (the final amount of such contingent cash payment of up to $ 6,000 is dependent on achievement of specified financial performance targets, as defined in the purchase agreement).

In connection with this acquisition, the Company allocated approximately $ 75 of the consideration to net working capital, approximately $ 335 to property and equipment, approximately $ 640 to capitalized software, approximately $ 6,920 to customer relationships, approximately $ 100 to trade names, and the remainder, approximately $ 9,365 , to goodwill, of which none is deductible for tax purposes, and approximately $ 2,178 to other long-term liabilities.

The acquired capital software and customer relationships intangible assets have an estimated amortization period of seven and fifteen years , respectively.

Acquisition-related costs for this business amounted to approximately $ 199 and were included in selling, general and administrative on our consolidated statement of operations and were expensed as incurred.

2022 Business Combinations

During the year ended September 30, 2022, the Company completed the acquisitions of substantially all of the assets of three businesses to expand the Company’s software offerings in the Public Sector and Healthcare segments.

Total purchase consideration was $ 107,681 , including $ 101,400 in cash consideration, funded by proceeds from the Company's revolving credit facility, and $ 6,281 of contingent consideration.

The goodwill associated with two of the three acquisitions is deductible for tax purposes.

The acquired customer relationships intangible assets have estimated amortization periods of between ten and nineteen years .

The trade names have estimated weighted-average amortization periods of four years .

The weighted-average

i3 VERTICALS, Inc.

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

amortization period for all intangibles acquired is fifteen years .

The acquired capitalized software have amortization periods of seven years .

Acquisition-related costs for these businesses amounted to approximately $ 773 and were included in selling, general and administrative on our consolidated statement of operations and were expensed as incurred.

Certain provisions in the purchase agreements provide for additional consideration of up to $ 23,000 , in the aggregate, to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreements, through no later than September 2024.

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

See additional disclosures in Note 14.

Summary of 2022 Business Combinations

The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2022 were as follows:

Accounts receivable $ 651

Settlement assets 685

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Property and equipment 190

Capitalized software 9,790

Acquired customer relationships 41,090

Trade name 1,550

Goodwill 61,347

Operating lease right-of-use assets 263

Other assets 22

Total assets acquired 115,671

Accrued expenses and other current liabilities 287

Settlement obligations 685

Deferred revenue, current 30

Current portion of operating lease liabilities 82

Operating lease liabilities, less current portion 181

Other long-term liabilities 6,725

Net assets acquired $ 107,681

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

PREPAID EXPENSES AND OTHER CURRENT ASSETS

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

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__________________________

In connection with the sale of the Merchant Services Business, $ 2,937 of the Company's prepaid expenses and other current assets (as of September 30, 2023) were classified as "Current assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

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

PROPERTY AND EQUIPMENT, NET

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Computer equipment and software (2)

Furniture and fixtures 2 to 7 years

Furniture and fixtures 7 years

Terminals 2 to 5 years

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____________________

In connection with the sale of the Merchant Services Business, $ 2,249 of the Company's property and equipment, net (as of September 30, 2023) were classified as "Long-term assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

In connection with the sale of the Healthcare RCM Business, $ 389 of the Company's property and equipment, net (as of September 30, 2024) were classified as "Long-term assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

Includes computer software of $ 352 and $ 330 as of September 30, 2025 and 2024, respectively.

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__________________________

In connection with the sale of the Merchant Services Business, $ 4,520 of the Company's capitalized software, net (as of September 30, 2023) were classified as "Long-term assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

In connection with the sale of the Healthcare RCM Business, $ 4,609 of the Company's capitalized software, net (as of September 30, 2024) were classified as "Long-term assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

The Company capitalized software development costs (including acquisitions) for continuing operations totaling $ 8,311 and $ 13,656 during the years ended September 30, 2025 and 2024, respectively.

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Changes in the carrying amount of goodwill are as follows:

Public Sector Healthcare Other Total

Balance at September 30, 2023 (1)

$ 168,095 $ 46,828 $ — $ 214,923

Goodwill attributable to preliminary purchase price adjustments and acquisition activity during the year ended September 30, 2024 12,695

Balance at September 30, 2024 (1)

221,155 46,828 — 267,983

Goodwill attributable to preliminary purchase price adjustments and acquisition activity during the year ended September 30, 2025 5,481

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__________________________

In connection with the sale of the Merchant Services Business, $ 141,580 and $ 138,716 at September 30, 2023 and 2022, respectively, of the Company's goodwill were classified as "Long-term assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

In connection with the sale of the Merchant Services Business and Healthcare RCM Business, $ 37,690 and $ 179,270 at September 30, 2024 and 2023, respectively, of the Company's goodwill were classified as "Long-term assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

i3 VERTICALS, Inc.

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Intangible assets, net consisted of the following as of September 30, 2025:

Cost Accumulated

Amortization Life and Method

Cost Accumulated Amortization Carrying Value Amortization Life and Method

Finite-lived intangible assets:

Customer relationships $ 179,650 $ ( 44,592 ) $ 135,057 9 to 20 years – straight-line

Non-compete agreements 358 ( 192 ) 166 3 to 8 years – straight-line

Website and brand development costs 6 ( 5 ) 1 3 years – straight-line

Trade names 3,691 ( 3,060 ) 631 2 to 5 years – straight-line

Non-compete agreements and other intangible assets 376 ( 283 ) 93 1 to 8 years – straight-line

Total finite-lived intangible assets 183,717 ( 47,936 ) 135,781

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Finite-lived intangible assets:

Customer relationships $ 187,700 $ ( 27,500 ) $ 160,200 9 to 25 years – accelerated or straight-line

Non-compete agreements 762 ( 905 ) ( 143 ) 3 to 6 years – straight-line

Website development costs 15 ( 13 ) 2 3 to 4 years – straight-line

Customer relationships $ 173,340 $ ( 34,080 ) $ 139,260 9 to 20 years – straight-line

Trade names 3,591 ( 2,286 ) 1,305 2 to 5 years – straight-line

Referral and exclusivity agreements 609 ( 217 ) 392 5 years – straight-line

Non-compete agreements and other intangible assets 359 ( 193 ) 166 3 to 8 years – straight-line

Total finite-lived intangible assets 177,290 ( 36,559 ) 140,731

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__________________________

In connection with the sale of the Merchant Services Business, $ 63,803 of the Company's intangible assets, net (as of September 30, 2023) were classified as "Long-term assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

In connection with the sale of the Healthcare RCM Business, $ 22,068 of the Company's intangible assets, net (as of September 30, 2024) were classified as "Long-term assets held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

Amortization expense for intangible assets for continuing operations amounted to $ 11,379 , $ 10,702 and $ 11,092 during the years ended September 30, 2025, 2024 and 2023, respectively.

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Employee health self-insurance liability 13 649

Accrued Hyland expenses 1,165 2,369

Accrued third-party software expenses 2,674 1,165

Accrued interchange 3,139 1,946

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__________________________

In connection with the sale of the Merchant Services Business, $ 4,160 of the Company's accrued expenses and other current liabilities (as of September 30, 2023) were classified as "Current liabilities held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

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

i3 VERTICALS, Inc.

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

2024 2023 (1)

Accrued contingent consideration — long-term portion $ 3,489 $ 1,636

2 unchanged sentences

Total other long-term liabilities $ 14,844 $ 14,921

__________________________

In connection with the sale of the Merchant Services Business, $ 1,065 of the Company's other long-term liabilities (as of September 30, 2023) were classified as "Long-term liabilities held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

LONG-TERM DEBT, NET

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February 15, 2025 — 26,223

Debt issuance costs, net (1)

Total long-term debt, net of issuance costs $ 26,223 $ 388,005

____________________

Refer to Note 3 for discussion of the change in the current period presentation.

Total long-term debt — 26,223

Less current portion of long-term debt

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

2020 Exchangeable Notes Offering

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The Company received approximately $ 132,762 in net proceeds from the sale of the Exchangeable Notes, as determined by deducting estimated offering expenses paid to third-parties from the aggregate principal amount.

The Exchangeable Notes bear interest at a fixed rate of 1.0 % per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2020.

The Exchangeable Notes will mature on February 15, 2025, unless converted or repurchased at an earlier date.

i3 Verticals, LLC issued the Exchangeable Notes pursuant to an Indenture, dated as of February 18, 2020 (the “Indenture”), among i3 Verticals, LLC, the Company and U.S.

Bank National Association, as trustee.

As of August 15, 2024, the Exchangeable Notes became exchangeable at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

The Exchangeable Notes are exchangeable on the terms set forth in the Indenture into cash, shares of Class A common stock, or a combination thereof, at i3 Verticals, LLC’s election, provided that in September 2022, the Company made the irrevocable election to settle the principal portion of its Exchangeable Notes only in cash.

The exchange rate is initially 24.4666 shares of Class A common stock per $1,000 principal amount of Exchangeable Notes (equivalent to an initial exchange price of approximately $ 40.87 per share of Class A common stock).

The exchange rate is subject to adjustment in certain circumstances.

In addition, following certain corporate events that occur prior to the maturity date or i3 Verticals, LLC’s delivery of a notice of redemption, i3 Verticals, LLC will increase, in certain

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

circumstances, the exchange rate for a holder who elects to exchange its Exchangeable Notes in connection with such a corporate event or notice of redemption, as the case may be.

Prior to the 47th scheduled trading day immediately preceding the maturity date, if the last reported sale price per share of Class A common stock has been at least 130 % of the exchange price for the Exchangeable Notes for at least 20 trading days (whether or not consecutive), i3 Verticals, LLC may redeem all or any portion of the Exchangeable Notes at a cash redemption price equal to 100 % of the principal amount of the Exchangeable Notes to be redeemed plus accrued and unpaid interest on such note to, but not including, the redemption date.

The Exchangeable Notes are general senior unsecured obligations of i3 Verticals, LLC and the guarantee is the Company’s senior unsecured obligation and rank senior in right of payment to all of i3 Verticals, LLC’s and the Company’s future indebtedness that is expressly subordinated in right of payment to the Exchangeable Notes or the guarantee, as applicable.

The Exchangeable Notes and the guarantee rank equally in right of payment with all of i3 Verticals, LLC’s and the Company’s existing and future unsecured indebtedness that is not so expressly subordinated in the right of payment to the Exchangeable Notes or the guarantee, as applicable.

The Exchangeable Notes and the guarantee are effectively subordinated to any of the Companies’ existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness (including obligations under the 2023 Senior Secured Credit Facility, defined below).

The Exchangeable Notes and the guarantee will be structurally subordinated to all indebtedness and other liabilities and obligations (including the debt and trade payables) of the Company’s subsidiaries, other than i3 Verticals, LLC.

i3 Verticals, LLC issued the Exchangeable Notes pursuant to an Indenture, dated as of February 18, 2020, among i3 Verticals, LLC, the Company and U.S.

Bank Trust Company National Association, as trustee (the “Indenture”).

The Exchangeable Notes bore interest at a fixed rate of 1.00 % per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2020.

In accordance with the terms of the Indenture, as of August 15, 2024, the Exchangeable Notes became exchangeable at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

The Exchangeable Notes matured and the remaining principal balance was repaid in full on February 15, 2025, as further described below.

During the fiscal year ended September 30, 2020, we repurchased $ 21,000 in aggregate principal amount of Exchangeable Notes in open market purchases.

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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.

As of September 30, 2024, the aggregate principal amount outstanding of the Exchangeable Notes was $ 26,223 .

In accounting for the issuance of the Exchangeable Notes, transaction costs were recorded as debt issuance costs in the consolidated balance sheet and are amortized to interest expense using the effective interest method over the term of the Exchangeable Notes.

Non-cash interest expense for amortization of debt issuance costs related to the Exchangeable Notes for the years ended September 30, 2024 and 2023 was $ 482 and $ 949 , respectively.

The Company also wrote off a portion of the debt issuance costs in connection with the repurchase

i3 VERTICALS, Inc.

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

transactions in April and September 2020.

Total unamortized debt issuance costs related to the Exchangeable Notes were $ 93 as of September 30, 2024.

The estimated fair value of the Exchangeable Notes was $ 25,685 as of September 30, 2024.

The estimated fair value of the Exchangeable Notes was determined through consideration of quoted market prices for similar instruments.

The fair value is classified as Level 2, as defined in Note 14.

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.

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

Exchangeable Note Hedge Transactions

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The Note Hedge Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Exchangeable Notes, the same number of shares of Class A common stock that initially underlie the Exchangeable Notes in the aggregate and are exercisable upon exchange of the Exchangeable Notes.

The Note Hedge Transactions are intended to reduce potential dilution to the Class A common stock upon any exchange of the Exchangeable Notes.

The Note Hedge Transactions will expire upon the maturity of the Exchangeable Notes, if not earlier exercised.

The Note Hedge Transactions are separate transactions, entered into by i3 Verticals, LLC with the Counterparties, and are not part of the terms of the Exchangeable Notes.

Holders of the Exchangeable Notes will not have any rights with respect to the Note Hedge Transactions.

The Note Hedge Transactions were intended to reduce potential dilution to the Class A common stock upon any exchange of the Exchangeable Notes.

The Note Hedge Transactions expired upon the maturity of the Exchangeable Notes.

The Note Hedge Transactions were separate transactions, entered into by i3 Verticals, LLC with the Counterparties, and were not part of the terms of the Exchangeable Notes.

Holders of the Exchangeable Notes did not have any rights with respect to the Note Hedge Transactions.

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.

4 unchanged sentences

On January 18, 2024, in connection with the Exchangeable Note Repurchases, the Company and i3 Verticals, LLC terminated the corresponding portions of the Note Hedge Transactions ("Note Hedge Unwinds"), and i3 Verticals, LLC received $ 987 for the sale of the Note Hedge Unwinds and recorded a loss on the sale of the Note Hedge Unwinds of $ 245 .

The Note Hedge Transactions expired in February 2025 upon the maturity and payment in full of the Exchangeable Notes.

Warrant Transactions

1 unchanged sentence

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

Holders of the Exchangeable Notes will not have any rights with respect to the Warrants.

The Warrants expired over a 90 trading day period that began on May 15, 2025.

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

Holders of the Exchangeable Notes did not have any rights with respect to the Warrants.

The Company received approximately $ 14,669 from the offering and sale of the Warrants.

The Warrants do not require separate accounting as a derivative as they meet a scope exception for certain contracts involving an entity's own equity.

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

The Warrants do not require separate accounting as a derivative as they meet a scope exception for

i3 VERTICALS, Inc.

1 unchanged sentence

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

certain contracts involving an entity's own equity.

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

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.

3 unchanged sentences

On May 8, 2023, i3 Verticals, LLC (the “Borrower”), entered into that certain Credit Agreement (as amended, the “2023 Senior Secured Credit Facility”) with the guarantors and lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan”).

The 2023 Senior Secured Credit Facility replaces the Prior Senior Secured Credit Facility (as defined below).

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”).

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").

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.

8 unchanged sentences

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

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:

i3 VERTICALS, Inc.

1 unchanged sentence

(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:

Consolidated Total Net Leverage Ratio Commitment Fee Letter of Credit Fee Term Benchmark Loans Base Rate Loans

21 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.

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 CONSOLIDATED FINANCIAL STATEMENTS

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

Debt issuance costs

The Company incurred $ 930 and $ 3,079 in debt issuance costs during the year ended September 30, 2024 and 2023, respectively, and did no t incur any debt issuance costs during the year ended September 30, 2022.

The Company's debt issuance costs related to the 2023 Senior Secured Credit Facility 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 consolidated balance sheets.

The amortization of deferred debt issuance costs is included in interest expense and amounted to approximately $ 1,175 , $ 1,514 and $ 1,046 during the years ended September 30, 2024, 2023 and 2022, respectively.

The Company incurred $ 256 , $ 930 and $ 3,079 in debt issuance costs during the years ended September 30, 2025, 2024 and 2023, respectively.

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 consolidated balance sheets.

The amortization of debt issuance costs is included in interest expense and amounted to approximately $ 961 , $ 1,175 and $ 1,514 during the years ended September 30, 2025, 2024 and 2023, respectively.

In connection with the replacement of our prior Senior Secured Credit Facility (which was replaced by the 2023 Senior Secured Credit Facility), the Company recorded a debt extinguishment charge of $ 203 during the year ended September 30, 2023, for the write-off of deferred financing costs, which was recorded in interest expense in the consolidated statements of operations.

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

STOCKHOLDERS' EQUITY

Share Repurchase Program

On August 8, 2024, the Company announced that our Board of Directors had approved 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 terms of the Prior Share Repurchase Program provided that, immediately prior to repurchases of Class A common stock under the Prior Share Repurchase Program, i3 Verticals, LLC redeemed for cash an equal number of units held by the Company in i3 Verticals, LLC in order to fund such repurchases and maintain a 1 -1 ratio between the number of outstanding shares of Class A common stock and the units held by the Company in i3 Verticals, LLC.

The Prior Share Repurchase Program terminated on August 8, 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 and an aggregate repurchase amount (inclusive of commissions and excise taxes) of $ 37,979 during the year ended September 30, 2025, prior to the termination of such program as noted above.

The shares of Class A Common Stock purchased during this period represent the total number of shares of Class A Common Stock purchased under the Prior Share Repurchase Program since its adoption.

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.

On August 7, 2025, the Company announced that our Board of Directors had approved a new share repurchase program (the "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 related to such repurchases).

This New Share Repurchase Program replaced the Prior Share Repurchase Program which terminated on August 8, 2025, as described above.

The New 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 the New 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.

The terms of the New Share Repurchase Program provide that, immediately prior to repurchases of Class

i3 VERTICALS, Inc.

1 unchanged sentence

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

A common stock under the New Share Repurchase Program, i3 Verticals, LLC will redeem for cash an equal number of units held by the Company in i3 Verticals, LLC in order to fund such repurchases and maintain a 1 -1 ratio between the number of outstanding shares of Class A common stock and the units held by the Company in i3 Verticals, LLC.

The New 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 our discretion.

The Company did not make any repurchases under the New Share Repurchase Program during the year ended September 30, 2025, and the remaining total available authorization as of September 30, 2025, under the New Share Repurchase Program was $ 50,000 .

When the Company repurchases shares of Common Stock, the amount paid to repurchase the shares in excess of the par or stated value is allocated to additional paid-in-capital unless subject to limitation or the balance in additional paid-in-capital is exhausted.

Remaining amounts are recognized as a reduction in retained earnings.

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 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.

There was no material impact to the Company's effective tax rate for the year ended September 30, 2025.

The Company's income tax (benefit) expense for continuing operations during the years ended September 30, 2025, 2024 and 2023 were the following:

3 unchanged sentences

State tax expense 1,191 735 1,156

Federal tax expense (benefit) 626 ( 8,255 ) ( 7,460 )

State tax (benefit) expense ( 9,416 ) 932 6,327

Income tax (benefit) expense $ ( 5,668 ) $ ( 3,788 ) $ 152

Federal tax (benefit) expense ( 492 ) 561 ( 8,129 )

State tax expense (benefit) 1,073 ( 9,147 ) 1,103

Income tax expense (benefit) $ 5,266 $ ( 5,468 ) $ ( 3,507 )

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

A reconciliation of income tax expense (benefit) from continuing operations computed at the U.S.

9 unchanged sentences

Revaluation of debt and other debt transaction differences ( 96 ) ( 0.9 ) % ( 261 ) 1.2 % 536 ( 1.9 ) %

Equity-based compensation 2,405 22.1 % 11 ( 0.1 ) % 4 — %

Change in liability for uncertain tax positions ( 3 ) — % 218 ( 1.0 ) % 155 ( 0.5 ) %

Return to provision adjustments 652 6.0 % ( 239 ) 1.1 % ( 290 ) 1.0 %

Federal tax credits ( 348 ) ( 3.2 ) % ( 773 ) 3.6 % ( 411 ) 1.5 %

Other 4 — % ( 50 ) 0.2 % 107 ( 0.4 ) %

Income tax (benefit) expense $ ( 5,668 ) 29.8 % $ ( 3,788 ) 13.8 % $ 152 ( 0.4 ) %

Income tax expense (benefit) $ 5,266 48.4 % $ ( 5,468 ) 25.4 % $ ( 3,507 ) 12.4 %

i3 VERTICALS, Inc.

4 unchanged sentences

September 30,

2024 2023 (1)

Deferred tax assets:

13 unchanged sentences

Net deferred tax asset $ 40,064 $ 37,043

__________________________

In connection with the sale of the Merchant Services Business, $ 1,035 of the Company's net deferred tax liability (as of September 30, 2023) were classified as "Long-term liabilities held for sale" in the accompanying consolidated balance sheets and were not included in these amounts as the amount related to the Merchant Services Business was a deferred tax liability.

Federal net operating loss carryforwards for continuing operations as of September 30, 2024 and 2023 were $ 188 and $ 42,137 , respectively.

Federal tax credits were $ 0 for continuing operations, resulting in a deferred tax asset of $ 39 as of September 30, 2024 compared to $ 698 of federal tax credits for continuing operations, resulting in a deferred tax asset of $ 9,547 as of September 30, 2023.

The federal net operating loss carryforwards will begin to expire in 2035.

The use of federal net operating losses and credits are limited to the future taxable income of separate legal entities.

As a result, a valuation allowance of $ 40 for continuing operations has been provided for certain federal deferred tax assets, a increase of $ 7 during the year ended September 30, 2024.

State net operating loss carryforwards as of September 30, 2024 for continuing operations totaled $ 5,450 , resulting in a deferred tax asset of $ 328 .

Deferred tax assets associated with federal net operating loss carryforwards were $ 213 as of September 30, 2025, and begin to expire 2035.

Deferred tax assets for federal tax credits were $ 181 as of September 30, 2025, and begin to expire in 2045.

State net operating loss carryforwards as of September 30, 2025 totaled $ 15,217 on a pre-tax-effected basis, resulting in a deferred tax asset of $ 947 .

The state net operating loss carryforwards will begin to expire in 2027.

The use of certain state net operating losses are limited to future taxable earnings of separate legal entities.

As a result, a valuation allowance for continuing operations of $ 17 has been provided for state loss carryforwards and other state tax attributes, a decrease of $ 8,137 during the year ended September 30, 2024.

The Company also considered a valuation allowance on its $ 52,039 outside basis of investment in i3 Verticals, LLC deferred tax asset as of September 30, 2024.

The Company has recorded a valuation allowance of $ 17,574 against the portion of the deferred tax benefit that is capital in nature and against the amount not expected to be realized, resulting in a decrease in valuation allowance of $ 2,472 during the year ended September 30, 2024.

Management believes that it is more likely than not that the results of operations will generate sufficient taxable income to realize the deferred tax assets after giving consideration to the valuation allowance.

The Company maintains a valuation allowance of $ 15,026 against a portion of the gross deferred tax asset, primarily related to the portion of its deductible outside basis difference in its investment in i3 Verticals, LLC, that is capital in nature.

The change in the valuation allowance resulted in an increase of $ 874 , an increase of $ 2,331 , and a decrease of $ 1,753 to income tax expense in the years ended September 30, 2025, 2024 and 2023, respectively.

If the Company determines that the likelihood of realization of existing deferred tax assets changes, a corresponding increase or decrease to valuation allowances will be recognized as an increase or reduction to income tax expense in the period that determination is made.

i3 VERTICALS, Inc.

1 unchanged sentence

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

The components of the Company’s liability for uncertain tax benefits are as follows:

The following table summarizes the activity related to our gross unrecognized tax benefits, excluding accrued interest and penalties, as of September 30, 2025 and 2024, respectively:

Gross unrecognized tax benefits as of September 30, 2022 $ 83

7 unchanged sentences

Gross unrecognized tax benefits as of September 30, 2024 456

As of September 30, 2024 and 2023, the Company had no accrued interest and no accrued penalties in either period related to uncertain tax positions.

It is the Company’s policy to recognize interest and/or penalties related to income tax matters in income tax expense.

Increase in current year tax positions 87

Decrease in prior year tax positions ( 116 )

Settlements and other reductions —

Gross unrecognized tax benefits as of September 30, 2025 $ 427

Estimated interest and penalties related to the underpayment of income taxes are classified as a component of tax expense in the consolidated statements of operations and totaled $ 26 for the year ended September 30, 2025, and $ 0 for the years ended September 30, 2024 and 2023.

As of September 30, 2025, 2024 and 2023, accrued interest and penalties related to income taxes and potential income tax penalties were $ 26 .

As of September 30, 2024 and 2023, we had no accrued interest and penalties related to income taxes and potential income tax penalties.

These totals are reflected in noncurrent Other long-term liabilities in the consolidated balance sheets

The Company is no longer subject to U.S.

federal, state, or local examinations by tax authorities for years before 2021.

As of September 30, 2024 and 2023, there were unrecognized tax benefits of $ 456 and $ 238 that if recognized would affect the annual effective tax rate.

As of September 30, 2025, 2024 and 2023, there were unrecognized tax benefits of $ 427 , $ 456 , and $ 238 , respectively, that if recognized would affect the annual effective tax rate.

Tax Receivable Agreement

5 unchanged sentences

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

When Class B common stock is exchanged for Class A common stock, this triggers an increase in the tax basis of the Company's Common Units in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement.

During the year ended September 30, 2022, the Company acquired an aggregate of 111,000 common units of i3 Verticals, LLC in connection with the redemption of common units, 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 these exchanges, during the year ended September 30, 2022, the Company recognized an increase to its net deferred tax assets in the amount of $ 876 , and corresponding Tax Receivable Agreement liabilities of $ 745 , representing 85 % of the tax benefits due to the Continuing Equity Owners.

The Company also recognized a increase to its net deferred tax assets of $ 1,038 across all exchanges as a result of a tax rate change during the year ended September 30, 2022.

i3 VERTICALS, Inc.

1 unchanged sentence

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

of our investment in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement.

During the year ended September 30, 2023, the Company acquired an aggregate of 24,748 common units of i3 Verticals, LLC in connection with the redemption of common units, 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 these exchanges, during the year ended September 30, 2023, the Company recognized an increase to its net deferred tax assets in the amount of $ 208 , and corresponding Tax Receivable Agreement liabilities of $ 177 , representing 85 % of the tax benefits due to the Continuing Equity Owners.

3 unchanged sentences

The Company also recognized a decrease to its net deferred tax assets of $ 1,187 across all exchanges as a result of a tax rate change during the year ended September 30, 2024.

During the year ended September 30, 2025, the Company acquired an aggregate of 1,281,739 common units of i3 Verticals, LLC in connection with the redemption of common units, 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 these exchanges, during the year ended September 30, 2025, the Company recognized an increase to its net deferred tax assets in the amount of $ 9,398 , and corresponding Tax Receivable Agreement liabilities of $ 6,211 , representing 85 % of the tax benefits due to the Continuing Equity Owners.

The Company also recognized a decrease to its net deferred tax assets of $ 805 across all exchanges as a result of a tax rate change during the year ended September 30, 2025.

The deferred tax asset balance was $ 37,872 as of September 30, 2025.

4 unchanged sentences

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

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

3 unchanged sentences

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 both at September 30, 2024 and 2023 was two years .

The weighted-average remaining lease term for continuing operations at September 30, 2025 and 2024 was four years for both periods.

The Company had no significant short-term leases during the years ended September 30, 2025 and 2024.

4 unchanged sentences

Operating lease costs from continuing operations for the years ended September 30, 2025, 2024 and 2023, were $ 2,072 , $ 2,829 and $ 2,924 , respectively, which are included in selling, general and administrative expenses in the consolidated statements of operations.

Total operating lease costs from continuing operations for the years ended September 30, 2024, 2023 and 2022, include variable lease costs of approximately $ 44 , $ 39 and $ 55 , respectively, which are primarily comprised

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

of costs of maintenance and utilities and changes in rates, and are determined based on the actual costs incurred during the period.

Total variable lease costs within operating lease costs from continuing operations were not significant for the years ended September 30, 2025, 2024 and 2023.

The variable lease costs 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 for the years ended September 30, 2024, 2023 and 2022, was $ 31 , $ 8 and $ 65 , respectively, and are included in selling, general and administrative expenses in the consolidated statements of operations.

Short-term rent expense from continuing operations were not significant for the years ended September 30, 2025, 2024 and 2023.

Short-term rent expense is included in selling, general and administrative expenses in the consolidated statements of operations.

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

7 unchanged sentences

These payments will be made within the next twelve months.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

FAIR VALUE MEASUREMENTS

10 unchanged sentences

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

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

11 unchanged sentences

__________________________

In connection with the sale of the Merchant Services Business, $ 3,197 of the Company's accrued contingent consideration (as of September 30, 2022) were classified as "Current liabilities held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

In connection with the sale of the Healthcare RCM Business, $ 19 and $ 891 of the Company's accrued contingent consideration (as of September 30, 2023) were classified as "Current liabilities held for sale" and "Long-term liabilities held for sale", respectively, in the accompanying consolidated balance sheets and were not included in these amounts.

In connection with the sale of the Healthcare RCM Business, $ 198 of the Company's accrued contingent consideration (as of September 30, 2024) were classified as "Current liabilities held for sale" in the accompanying consolidated balance sheets and were not included in these amounts.

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

3 unchanged sentences

Management reviews the historical and projected performance of each acquisition with contingent consideration and uses an income probability method to revalue the contingent consideration.

The revaluation requires management to make certain assumptions and represent management's best estimate at the valuation date.

The revaluation requires management to make certain assumptions and represent management's best estimate at the

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

valuation date.

The probabilities are determined based on a management review of the expected likelihood of triggering events that would cause a change in the contingent consideration paid.

2 unchanged sentences

Approximately $ 3,489 and $ 1,636 of contingent consideration was recorded in other long-term liabilities as of September 30, 2025 and 2024, respectively.

Disclosure of Fair Values

The Company's financial instruments that are not remeasured at fair value include the Exchangeable Notes (see Note 11).

The Company estimates the fair value of the Exchangeable Notes through consideration of quoted market prices of similar instruments, classified as Level 2 as described above.

The estimated fair value of the Exchangeable Notes was $ 25,685 as of September 30, 2024.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

EQUITY-BASED COMPENSATION

5 unchanged sentences

Equity-based compensation expense $ 15,232 $ 15,396 $ 20,864

In connection with the sale of the Merchant Services Business, $ 8,160 , $ 4,155 and $ 3,575 of the Company's equity-based compensation expense was classified as "net income from discontinued operations" in the accompanying consolidated statements of operations during the years ended September 30, 2024, 2023, and 2022, respectively.

Amounts are included in general and administrative expense on the consolidated statements of operations.

In connection with the sale of the Merchant Services Business and Healthcare RCM Business, $ 3,112 , $ 10,942 and $ 7,014 of the Company's equity-based compensation expense was classified as "net income from discontinued operations" in the accompanying consolidated statements of operations during the years ended September 30, 2025, 2024, and 2023, respectively.

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

Current and deferred income tax benefits for continuing operations of $ 78 , $ 2,668 and $ 3,784 were recognized related to equity-based compensation during the years ended September 30, 2025, 2024, and 2023, respectively.

6 unchanged sentences

As of September 30, 2025, there were 1,914,822 shares of equity awards 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.

The Company has issued stock option awards under the 2018 Plan and the 2020 Inducement Plan.

The fair value of the stock option awards during the years ended September 30, 2024 and 2023 was determined on the

i3 VERTICALS, Inc.

1 unchanged sentence

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

grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:

The Company has issued stock option awards under the 2018 Plan and the 2020 Inducement Plan.

The fair value of the stock option awards during the years ended September 30, 2025 and 2024 was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:

September 30, 2025 September 30, 2024

17 unchanged sentences

Exercised ( 1,137,563 ) 23.02

Forfeited ( 350,147 ) 27.86

Forfeited and cancelled ( 242,145 ) 27.63

Outstanding at September 30, 2025 7,881,236 $ 24.61

3 unchanged sentences

As of September 30, 2025, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $ 10,174 , which is expected to be recognized over a weighted-average period of 2.2 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 year ended September 30, 2025 was $ 11,942 .

In connection with the sale of the Merchant Services Business, the Company fully accelerated the vesting period for 188,482 options (to the extent not previously vested) held by employees of the Merchant Services Business immediately prior to the closing of the Transactions pursuant to the Purchase Agreement.

Restricted Stock Units

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

In connection with the sale of the Merchant Services Business, during the year ended September 30, 2024, the Company fully accelerated the vesting period for 188,482 options (to the extent not previously vested) held by employees of the Merchant Services Business immediately prior to the closing of the divestiture.

In connection with the sale of the Healthcare RCM Business, during the year ended September 30, 2025, 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.

i3 VERTICALS, Inc.

1 unchanged sentence

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

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 as of September 30, 2025 is as follows:

3 unchanged sentences

Vested ( 299,763 ) 23.55

Forfeited ( 66,443 ) 23.77

Forfeited and cancelled ( 66,459 ) 23.30

Outstanding at September 30, 2025 1,160,641 $ 24.89

2 unchanged sentences

The total fair value of RSUs that vested during the year ended September 30, 2025 was $ 7,220 .

In connection with the sale of the Merchant Services Business, the Company fully accelerated the vesting period for 173,230 RSUs (to the extent not previously vested) held by employees of the Merchant Services Business immediately prior to the closing of the Transactions pursuant to the Purchase Agreement.

In connection with the sale of the Merchant Services Business, during the year ended September 30, 2024, the Company fully accelerated the vesting period for 173,230 RSUs (to the extent not previously vested) held by employees of the Merchant Services Business immediately prior to the closing of the divestiture.

In connection with the sale of the Healthcare RCM Business, during the year ended September 30, 2025, 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

2 unchanged sentences

Refer to Note 14 for further discussion and a table of the future minimum payments under these leases.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Contract Commitments

We have contractual obligations primarily for third-party technology services and licenses.

Certain agreements are fixed for the duration of the contracts and may require us to pay minimum fees.

As of September 30, 2025, the remaining aggregate minimum contractual commitment under these arrangements was approximately $ 15,857 , which exclude contract commitments that have been prepaid.

Future minimum payments, including contracts with a remaining term of less than one year, based on these contractual agreements are as follows:

Years ending September 30:

Thereafter 134

Total $ 15,857

With respect to all legal, regulatory and governmental proceedings, and in accordance with ASC 450-20, Contingencies—Loss Contingencies , the Company considers the likelihood of a negative outcome.

2 unchanged sentences

However, the Company in some instances may be unable to estimate an amount of possible loss or range of loss based on the significant uncertainties involved in, or the preliminary nature of, any such material matter, and in these instances the Company will disclose the nature of the contingency and describe why the Company is unable to determine an estimate of possible loss or range of loss.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company is involved in ordinary course legal proceedings, which include all claims, lawsuits, investigations and proceedings, including unasserted claims, which are probable of being asserted, arising in the ordinary course of business.

1 unchanged sentence

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.

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 (as amended on October 10, 2025, 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 damages claimed in the Complaint 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.

PaySchools filed a motion to dismiss the Complaint on October 30, 2025, which remains pending.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

On June 2, 2021, the State of Louisiana, Division of Administration (the “State”) and a putative class of Louisiana sheriffs and law enforcement districts (collectively "Plaintiffs") filed a Petition (as amended on October 4, 2021, the “Petition”), in the 19 th Judicial District Court for the Parish of East Baton Rouge against i3-Software & Services, LLC (“S&S”), a subsidiary of the Company located in Shreveport, Louisiana, the Company, i3 Verticals, LLC, the current leader of the S&S business, the former leader of the S&S business, and 1120 South Pointe Properties, LLC (“South Pointe”), the former owner of the assets of the S&S business (collectively "Defendants") .

On June 2, 2021, the State of Louisiana, Division of Administration (the “State”) and a putative class of Louisiana sheriffs ("Sheriffs") and law enforcement districts ("Districts") (collectively "Plaintiffs") filed a Petition (as amended on October 4, 2021, the “Petition”), in the 19 th Judicial District Court for the Parish of East Baton Rouge against i3-Software & Services, LLC (“S&S”), a subsidiary of the Company located in Shreveport, Louisiana, the Company, i3 Verticals, LLC, the current leader of the S&S business, the former leader of the S&S business, and 1120 South Pointe Properties, LLC (“South Pointe”), the former owner of the assets of the S&S business (collectively "Defendants") .

See State of Louisiana, by and through its Division of Administration, East Baton Rouge Parish Law Enforcement District, by and through the duly elected East Baton Rouge Parish Sheriff, Sid J.

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and Scott Carrington .

The Petition was amended on October 4, 2021 to amend and expand the putative class and subsequently removed to the United States District Court for the Middle District of Louisiana.

The Petition seeks monetary damages for the cost of network remediation of $ 15,000 purportedly spent by the State and $ 7,000 purportedly spent by the Plaintiffs, return of purchase prices, potential additional expenses related to remediation and any obligation to notify parties of an alleged data breach as and if required by applicable law, and reasonable attorneys’ fees.

The Petition was amended on October 4, 2021 to amend and expand the putative class and subsequently removed to federal court.

The Petition seeks monetary damages for the cost of network remediation of $ 15,000 purportedly spent by the State and $ 7,000 purportedly spent by the Sheriffs and Districts, return of purchase prices, potential additional expenses related to remediation and any obligation to notify parties of an alleged data breach as and if required by applicable law, and reasonable attorneys’ fees.

The claimed damages relate to a third-party remote access software product used in connection with services provided by S&S to certain Louisiana law enforcement districts and alleged inadequacies in the Company’s cybersecurity practices.

Plaintiffs moved to remand the action to state court on November 5, 2021, and the motion was referred to a magistrate to make a report and recommendation to the district court judge.

On July 5, 2022, the magistrate recommended that the matter be remanded to state court.

On July 19, 2022, the Company and all other defendants filed objections to the recommendation.

On August 3, 2022, the Plaintiffs filed a response to those objections.

On August 16, 2022, the district court granted the Plaintiffs’ motion to remand, and all Defendants appealed.

Oral argument on this motion in front of the United States Fifth Circuit Court of Appeals took place on April 4, 2023, and on September 1, 2023, the Fifth Circuit panel affirmed the District Court order to remand the case back to state court.

On September 29, 2023, all Defendants-Appellants filed a Petition for Rehearing En Banc, which the Plaintiffs-Appellees opposed on October 12, 2023.

As a result of Defendants’ petition, the Fifth Circuit held its mandate, effectively staying the effective date of its decision, but the Fifth Circuit ultimately denied the petition for rehearing on February 22, 2024, sending the case back to the 19th Judicial District Court for the Parish of East Baton Rouge, where the case remains pending.

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

The Court is allowing plaintiffs to re-plead certain claims and has severed the claims brought by the Division of Administration from the claims brought by the parish Sheriffs and Districts.

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.

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.

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

The Court allowed plaintiffs to re-plead certain claims and has severed the claims brought by the Division of Administration from the claims brought by the parish Sheriffs and Districts.

The State chose not to re-plead their claims, which leaves some of their claims now dismissed with prejudice.

The Sheriffs and Districts re-plead their claims.

Certain Defendants filed renewed pleading-stage motions to dismiss that the Court denied on April 14, 2025.

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 to local government agencies almost exclusively in Louisiana.

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

In connection with the Company's IPO, the Company and i3 Verticals, LLC entered into a Tax Receivable Agreement with the Continuing Equity Owners that provides for the payment by the Company to the Continuing Equity Owners of 85 % of the amount of certain tax benefits, if any, that it actually realizes, or in some circumstances, is deemed to realize in its tax reporting, as a result of (i) future redemptions funded by the Company or exchanges, or deemed exchanges in certain circumstances, of Common Units of i3 Verticals, LLC for

i3 VERTICALS, Inc.

1 unchanged sentence

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

RELATED PARTY TRANSACTIONS

Class A common stock of i3 Verticals, Inc.

or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement.

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As of September 30, 2025, the total amount due under the Tax Receivable Agreement was $ 34,911 .

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.

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

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 i3 Verticals, LLC.

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.

Immediately following the Capital Contribution, the Common Units were recapitalized through a reverse unit split of the Common Units at a ratio of approximately 0.9631 to 1 (the “Reverse Unit Split”) which caused the number of Common Units held by the Company immediately following the Reverse Unit Split to equal to the number of Common Units held by the Company immediately prior to the Contribution, thereby maintaining a one -to-one ratio between the number of Common Units owned by the Company and the number of outstanding shares of Class A Common Stock.

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).

SEGMENT REPORTING

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

The accounting policies of the Company’s one reportable segment are the same as those described in the summary of significant accounting policies in Note 3.

As noted above, on September 20, 2024, the Company completed the transactions contemplated by the 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 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.

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(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 our business segments.

The following is a summary of reportable segment operating performance for continuing operations for the years ended September 30, 2024, 2023 and 2022.

As of and for the Year ended September 30, 2024

Public Sector Healthcare Other Total

Revenue $ 184,841 $ 45,566 $ ( 484 ) $ 229,923

Other costs of services 16,125 2,932 ( 484 ) 18,573

Recurring cash SG&A expenses (1)

95,500 33,622 23,920 153,042

Total adjusted EBITDA $ 73,216 $ 9,012 $ ( 23,920 ) $ 58,308

Adjusted EBITDA Margin (2)

40 % 20 % n/m

Non-recurring or non-cash SG&A expenses

Stock compensation expense $ 18,178

M&A-related expenses 3,161

Other taxes and one-time expenses 2,009

Depreciation and amortization 28,796

Change in fair value of contingent consideration ( 690 )

Income from operations 6,854

Other expenses

Interest expense, net 29,263

Other income ( 3,395 )

Total other expenses 25,868

Loss before income taxes $ ( 19,014 )

Total assets $ 490,328 $ 90,801 $ 149,546 $ 730,675

Goodwill $ 233,850 $ 46,828 $ — $ 280,678

n/m = not meaningful

____________________

Recurring cash SG&A expenses represents recurring operating costs such as people, technology, facilities, sales and marketing.

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

Company no longer presents a Merchant Services segment.

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

Additionally, as noted above, on May 5, 2025, the Company completed the sale of the equity interests of the Healthcare RCM Acquired Entities, which owned and operated the Healthcare RCM Business, including its associated proprietary technology.

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 have been reflected as discontinued operations in our consolidated financial statements, and the Company no longer presents a Healthcare segment.

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

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 determined that it had one operating segment and one reportable segment as of June 30, 2025, and accordingly has updated its segment presentation to reflect this determination.

This change in our segment presentation is consistent with how the chief operating decision maker ("CODM"), the Company's Chief Executive Officer, 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.

The Company has one operating and reportable segment, which derives revenues from a broad range of offerings tailored to its market.

The Company's revenue is primarily derived from enterprise software solutions, which can include SaaS, transaction-based fees, ongoing software maintenance and support, software licenses, and other professional services related to the Company's software offerings.

Additional revenue is derived from enabling payments within the Company's software platforms.

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 Consolidated Statements of Operations.

The CODM uses this key measure to evaluate operating performance and considers budget-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to the segment.

i3 VERTICALS, Inc.

1 unchanged sentence

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

The following is a summary of reportable segment operating performance and significant expenses, reconciled to the Company's consolidated net income (loss) for continuing operations for the years ended September 30, 2025, 2024 and 2023:

As of and for the Year ended September 30,

Public Sector Healthcare Other Total

Revenue $ 182,214 $ 44,583 $ ( 75 ) $ 226,722

Other costs of services 13,326 2,103 ( 74 ) 15,355

Recurring cash SG&A expenses (1)

2025 2024 2023

Total adjusted EBITDA $ 73,491 $ 9,238 $ ( 23,330 ) $ 59,399

Adjusted EBITDA Margin (2)

40 % 21 % n/m

Non-recurring or non-cash SG&A expenses

Stock compensation expense $ 23,723

M&A-related expenses 1,140

Other taxes and one-time expenses 900

Depreciation and amortization 26,438

Change in fair value of contingent consideration 10,767

Loss from operations ( 3,569 )

Other expenses

Interest expense, net 25,128

Other income ( 1,224 )

Total other expenses 23,904

Loss before income taxes $ ( 27,473 )

Total assets $ 482,602 $ 96,918 $ 68,274 $ 647,794

Goodwill $ 221,155 $ 46,828 $ — $ 267,983

n/m = not meaningful

$ 213,158 $ 191,232 $ 189,681

Recurring cash SG&A expenses represents recurring operating costs such as people, technology, facilities, sales and marketing.

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

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

As of and for the Year ended September 30, 2022

Public Sector Healthcare Other Total

Revenue $ 143,951 $ 43,823 $ ( 22 ) $ 187,752

Other costs of services 11,162 1,729 ( 57 ) 12,834

Recurring cash SG&A expenses (1)

Other costs of services (excluding depreciation and amortization) (1)

65,847 59,638 53,294

Total adjusted EBITDA $ 54,509 $ 9,146 $ ( 20,167 ) $ 43,488

Adjusted EBITDA Margin (2)

38 % 21 % n/m

Non-recurring or non-cash SG&A expenses

Stock compensation expense $ 22,655

M&A-related expenses 2,101

Other taxes and one-time expenses 480

Depreciation and amortization 19,330

Change in fair value of contingent consideration 22,063

Income from operations ( 23,141 )

Other expenses

Interest expense, net 14,775

Other expense 991

Total other expenses 15,766

Loss before income taxes $ ( 38,907 )

Total assets $ 373,353 $ 108,950 $ 56,699 $ 539,002

Goodwill $ 168,095 $ 46,828 $ — $ 214,923

n/m = not meaningful

People operating expenses (1)

62,936 56,140 59,203

Recurring cash SG&A expenses represents recurring operating costs such as people, technology, facilities, sales and marketing.

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

Technology operating expenses (1)

8,887 7,340 6,500

Other operating expenses (2)

17,953 17,651 18,892

Other segment expenses (3)

51,917 66,508 76,600

$ 5,618 $ ( 16,045 ) $ ( 24,808 )

____________________

Refer to Note 3 for discussion of the change in the current and prior period presentation.

Other operating expenses includes rent expense, travel and entertainment, office expense, professional services expense, advertising and trade shows expense and immaterial miscellaneous other operating expenses.

Other segment expenses includes stock compensation expense, M&A-related expenses, other taxes and one-time expenses, depreciation and amortization, change in fair value of contingent consideration, interest expense, other (income) expense, and income tax expense.

Revenues from external customers are attributed to geographic areas based on the location of the customer.

For the years ended September 30, 2025, 2024 and 2023, the majority of the Company’s revenues were derived from customers located in the United States, the Company’s country of domicile.

Revenues from foreign countries, primarily Canada, were not considered significant for separate disclosure.

The basis for attributing revenues to geographic areas is the location of the customer receiving the goods or services.

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

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The measure of segment assets is reported on the balance sheet as total consolidated assets.

NON-CONTROLLING INTEREST

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owned 23,983,125 and 23,882,035 of i3 Verticals, LLC's Common Units, representing a 74.1 % and 70.4 % economic ownership interest in i3 Verticals, LLC.

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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:

5 unchanged sentences

Redemption of common units in i3 Verticals, LLC ( 18,301 ) ( 576 ) ( 224 )

Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis 8,470 4,305 11,511

Net transfers to non-controlling interests ( 17,714 ) 4,081 10,593

Change from net income attributable to non-controlling interests and transfers to non-controlling interests $ 44,075 $ 2,240 $ 4,478

Recapitalization from contribution to i3 Verticals, LLC 5,689 — —

Allocation of equity (from) to non-controlling interests

( 481 ) 8,470 4,305

Net transfers (from) to non-controlling interests ( 16,114 ) ( 17,714 ) 4,081

Change from net income attributable (from) to non-controlling interests and transfers to non-controlling interests $ ( 7,484 ) $ 44,075 $ 2,240

See Note 18 for information regarding certain recapitalization actions the Company and i3 Verticals, LLC effected during the year ended September 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.

i3 VERTICALS, Inc.

9 unchanged sentences

2025 2024 2023

Basic and diluted net loss per share:

Basic and diluted net income (loss) per share:

Net income (loss)

$ 5,618 $ ( 16,045 ) $ ( 24,808 )

Net loss attributable to non-controlling interests

Net income (loss) attributable to non-controlling interests

1,991 ( 5,191 ) ( 8,192 )

Net loss attributable to Class A common stockholders

Net income (loss) attributable to Class A common stockholders

$ 3,627 $ ( 10,854 ) $ ( 16,616 )

1 unchanged sentence

23,911,250 23,419,421 23,137,586

Basic and diluted net loss per share (1)(2)(3)

Basic and diluted net income (loss) per share (2)

$ 0.15 $ ( 0.46 ) $ ( 0.72 )

Dilutive net income per share:

Net income attributable to Class A common stockholders - diluted (1)

Weighted average shares of Class A common stock outstanding

Weighted average effect of dilutive securities (1)

Weighted average shares of Class A common stock outstanding - diluted

Diluted net income per share $ 0.14

____________________

For the year ended September 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 earnings per share of Class A common stock:

10,067,399 shares of weighted average Class A common stock, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive,

7,701,564 options to purchase shares of Class A common stock, were excluded because the exercise price of these 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

392,343 shares of Class A common stock, resulting from estimated stock option exercises as calculated by the treasury stock method were excluded because the effect of including them would have been anti-dilutive.

For the year ended September 30, 2023, 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 earnings per share of Class A common stock:

10,109,247 shares of weighted average Class A common stock, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive,

5,580,144 options to purchase shares of Class A common stock, were excluded because the exercise price of these 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

723,898 shares of Class A common stock, resulting from estimated stock option exercises as calculated by the treasury stock method were excluded because the effect of including them would have been anti-dilutive.

For the year ended September 30, 2022, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share.

For the year ended September 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:

9,114,846 shares of weighted average Class A common stock along with the reallocation of net income assuming conversion of these shares (which represents the tax effected net income attributable to non-controlling interest using the effective income tax rates described in Note 13 above and assuming all common units of i3 Verticals, LLC were exchanged for Class A common stock at the beginning of the period), were excluded because the effect would have been anti-dilutive, and

3,421,605 stock options 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 years ended September 30, 2024 and 2023, 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 earnings per share of Class A common stock:

10,170,668 shares of weighted average Class A common stock, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive,

4,580,844 options to purchase shares of Class A common stock, were excluded because the exercise price of these 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

679,858 shares of Class A common stock, resulting from estimated stock option exercises as calculated by the treasury stock method were excluded because the effect of including them would have been anti-dilutive.

10,067,399 and 10,109,247 shares of weighted average Class A common stock for the years ended September 30, 2024 and 2023, respectively, along with the reallocation of net income assuming conversion of these shares (which represents the tax effected net income attributable to non-controlling interest using the effective income tax rates described in Note 13 above and assuming all common units of i3 Verticals, LLC were exchanged for Class A common stock at the beginning of the period), were excluded because the effect would have been anti-dilutive,

7,701,564 and 5,580,144 options to purchase shares of Class A common stock for the years ended September 30, 2024 and 2023, respectively, were excluded because the exercise price of these options exceeded the average market price of the Company's Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

i3 VERTICALS, Inc.

1 unchanged sentence

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

392,343 and 723,898 shares of Class A common stock for the years ended September 30, 2024 and 2023, respectively, resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because the effect of including them would have been anti-dilutive.

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:

8 unchanged sentences

Basic net income per share (3)

Dilutive net loss per share:

$ 0.60 $ 5.30 $ 0.68

Dilutive net income per share:

Net income attributable to Class A common stockholders $ 14,246

Reallocation of net income assuming conversion of common units (1)

50,342 4,549 4,290

Net income attributable to Class A common stockholders - diluted $ 19,312

Weighted average shares of Class A common stock outstanding

Weighted average effect of dilutive securities (2)

Weighted average shares of Class A common stock outstanding - diluted

Diluted net income per share $ 0.56

__________________________

The reallocation of net income assuming conversion of common units represents the tax effected net income attributable to non-controlling interest using the effective income tax rates described in Note 13 above and assuming all common units of i3 Verticals, LLC were exchanged for Class A common stock at the beginning of the period.

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 years ended September 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 the years ended September 30, 2024 and 2023, 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 income per share of Class A common stock for discontinued operations:

7,701,564 and 5,580,144 stock options for the years ended September 30, 2024 and 2023, respectively, were excluded because the exercise price of these stock options exceeded the average market price of the Company's Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

i3 VERTICALS, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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 consolidated operations:

Year ended September 30,

2025 2024 2023

Basic net income (loss) per share:

Net income (loss)

$ 26,503 $ 175,130 $ ( 2,652 )

Net income (loss) attributable to non-controlling interests 8,630 61,789 ( 1,841 )

Net income (loss) attributable to Class A common stockholders $ 17,873 $ 113,341 $ ( 811 )

Weighted average shares of Class A common stock outstanding

23,911,250 23,419,421 23,137,586

Basic net income (loss) per share

$ 0.75 $ 4.84 $ ( 0.04 )

Dilutive net income (loss) per share:

Net income (loss) attributable to Class A common stockholders $ 17,873 $ 113,341 $ ( 811 )

Reallocation of net income (loss) assuming conversion of common units (1)

6,586 46,978 ( 1,391 )

Net income (loss) attributable to Class A common stockholders - diluted $ 24,459 $ 160,319 $ ( 2,202 )

Weighted average shares of Class A common stock outstanding

23,911,250 23,419,421 23,137,586

Weighted average effect of dilutive securities (2)

2 unchanged sentences

34,185,684 33,879,163 33,246,833

Diluted net income per share $ 5.09 $ 0.58 $ 0.44

Diluted net income (loss) per share $ 0.72 $ 4.73 $ ( 0.07 )

__________________________

The common units of i3 Verticals, LLC held by the Continuing Equity Owners are potentially dilutive securities, and the computations of pro forma 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 years ended September 30, 2025, 2024 and 2023 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:

7,701,564 , 5,580,144 and 4,580,844 stock options for years ended September 30, 2024, 2023 and 2022, 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.

Since 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 income per share, if applicable.

The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company's Class A common stock for a given period exceeds the exchange price of $ 40.87 per share for the Exchangeable Notes.

The Warrants sold in connection with the issuance of the Exchangeable Notes are considered to be dilutive when the average price of the Company's Class A common stock during the period exceeds the Warrants' stock price of $ 62.88 per share.

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 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.

Refer to Note 11 for further discussion regarding the Exchangeable Notes.

3,421,605 , 7,701,564 and 5,580,144 stock options for the years ended September 30, 2025, 2024 and 2023, respectively, were excluded because the exercise price of these stock options exceeded the average market price of the Company's Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

723,898 shares for the year ended September 30, 2023 resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because 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 conversion spread would have a dilutive impact on diluted net income per share of common stock when the average market price of the Company's Class A common stock for a given period exceeds the exchange price of $ 40.87 per share for the Exchangeable Notes.

The Exchangeable Notes matured in February 2025 and the Company paid the entire remaining principal balance.

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

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

The Note Hedge Transactions expired in February 2025 upon the maturity and payment in full of the Exchangeable Notes.

Refer to Note 11 for further discussion regarding the Exchangeable Notes.

Shares of the Company's Class B common stock do not participate in the earnings or losses of the Company and are therefore not participating securities.

28 unchanged sentences

1,163 ( 410 ) 1,019 1,855

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

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

1,926 13,292 ( 1,173 ) 201

Net income attributable to i3 Verticals, Inc.

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

$ 3,089 $ 12,882 $ ( 154 ) $ 2,056

Basic earnings (loss) per share from continuing operations attributable to i3 Verticals, Inc $ 0.27 $ ( 0.45 ) $ ( 0.07 ) $ ( 0.12 )

Diluted earnings (loss) per share from continuing operations attributable to i3 Verticals, Inc.

Basic net income (loss) per share from continuing operations attributable to i3 Verticals, Inc

$ 0.05 $ ( 0.02 ) $ 0.04 $ 0.08

Basic earnings per share from discontinued operations attributable to i3 Verticals, Inc $ 4.72 $ 0.13 $ 0.15 $ 0.17

Diluted earnings per share from discontinued operations attributable to i3 Verticals, Inc.

Diluted net income (loss) per share from continuing operations attributable to i3 Verticals, Inc.

$ 0.04 $ ( 0.03 ) $ 0.04 $ 0.08

Basic net income (loss) per share from discontinued operations attributable to i3 Verticals, Inc

$ 0.08 $ 0.55 $ ( 0.05 ) $ 0.01

Diluted net income (loss) per share from discontinued operations attributable to i3 Verticals, Inc.

$ 0.07 $ 0.55 $ ( 0.05 ) $ 0.01

Fiscal Year 2024:

7 unchanged sentences

111,448 4,254 3,860 4,633

Net income attributable to i3 Verticals, Inc.

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

$ 117,910 $ ( 7,545 ) $ 1,878 $ 1,098

Basic earnings (loss) per share from continuing operations attributable to i3 Verticals, Inc.

Basic net income (loss) per share from continuing operations attributable to i3 Verticals, Inc.

$ 0.27 $ ( 0.50 ) $ ( 0.08 ) $ ( 0.15 )

Diluted loss per share from continuing operations attributable to i3 Verticals, Inc.

Diluted net income (loss) per share from continuing operations attributable to i3 Verticals, Inc.

$ 0.19 $ ( 0.50 ) $ ( 0.08 ) $ ( 0.15 )

Basic earnings per share from discontinued operations attributable to i3 Verticals, Inc $ 0.17 $ 0.12 $ 0.18 $ 0.18

Diluted earnings per share from discontinued operations attributable to i3 Verticals, Inc.

Basic net income per share from discontinued operations attributable to i3 Verticals, Inc

$ 4.71 $ 0.18 $ 0.17 $ 0.20

Diluted net income per share from discontinued operations attributable to i3 Verticals, Inc.

$ 4.61 $ 0.18 $ 0.17 $ 0.20

i3 VERTICALS, Inc.

4 unchanged sentences

March 31, 2025;

and December 31, 2023 the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net earnings per share of Class A common stock from continuing operations:

10,032,676 , 10,052,017 , 10,091,604 and 10,093,394 shares of weighted average Class A common stock, along with the reallocation of net income assuming conversion of these shares, for the three months ended September 30, 2024;

June 30, 2024;

March 31, 2024;

and December 31, 2023, respectively, were excluded because the effect would have been anti-dilutive,

and December 31, 2024, 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 from continuing 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,

1,681,255 , 4,362,416 , 4,227,718 and 6,236,721 stock options for the three months ended September 30, 2025;

1 unchanged sentence

March 31, 2025;

and December 31, 2023, 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

479,859 , 234,503 , 387,235 and 467,777 shares of Class A common stock, resulting from estimated stock option exercises as calculated by the treasury stock method for the three months ended September 30, 2024;

June 30, 2024;

March 31, 2024;

and December 31, 2023, respectively, were excluded because the effect of including them would have been anti-dilutive.

For the three months ended September 30, 2023;

June 30, 2023;

and December 31, 2024, respectively, were excluded because the exercise price of these stock options exceeded the average market price of the Company's Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive.

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.

For the three months ended September 30, 2025, March 31, 2025 and December 31, 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 discontinued operations:

9,408,427 and 10,026,180 weighted average shares of Class B common stock for the three months ended March 31, 2025, and December 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,

1,681,255 , 4,227,718 and 6,236,721 stock options for the three months ended September 30, 2025, March 31, 2025, and December 31, 2024, were excluded because the exercise price of these stock options exceeded the average market price of the Company's Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

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 months ended June 30, 2025, net income (loss) from continuing operations attributable to i3 Verticals, Inc.

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 from discontinued operations:

8,637,499 weighted average shares of Class B common stock, along with the reallocation of net income assuming conversion of these shares, were excluded,

4,362,416 stock options were excluded because the exercise price of these stock options exceeded the average market price of the Company's 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 resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded.

For the three months ended September 30, 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 continuing operations:

6,679,386 stock options were excluded because the exercise price of these stock options exceeded the average market price of the Company's 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 months ended June 30, 2024;

March 31, 2024;

and December 31, 2022 the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net earnings per share of Class A common stock from continuing operations:

10,099,678 , 10,108,218 , 10,110,975 and 10,118,142 shares of weighted average Class A common stock, along with the reallocation of net income assuming conversion of these shares, for the three months ended September 30, 2023;

June 30, 2023;

December 31, 2023, 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 from continuing operations:

10,052,017 , 10,091,604 and 10,093,394 weighted average shares of Class B common stock for the three months ended June 30, 2024;

March 31, 2024;

and December 31, 2022, respectively, were excluded because the effect would have been anti-dilutive,

5,672,144 , 5,729,321 , 4,018,042 and 5,652,711 stock options for the three months ended September 30, 2023;

June 30, 2023;

and December 31, 2023, 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 , 7,852,595 and 7,496,394 stock options for the three months ended June 30, 2024;

March 31, 2024;

and December 31, 2022, 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

675,004 , 557,728 , 1,022,267 and 696,427 shares of Class A common stock, resulting from estimated stock option exercises as calculated by the treasury stock method for the three months ended September 30, 2023;

June 30, 2023;

and December 31, 2023, respectively, were excluded because the exercise price of these stock options exceeded the average market price of the Company's 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 , 387,235 and 467,777 shares for the three months ended June 30, 2024;

March 31, 2024;

and December 31, 2022, respectively, were excluded because the effect of including them would have been anti-dilutive.

For the three months ended September 30, 2024;

June 30, 2024;

and December 31, 2023, 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

For the three months ended June 30, 2024;

March 31, 2024;

and December 31, 2023 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 discontinued operations:

10,052,017 and 10,091,604 shares of weighted average Class A common stock, along with the reallocation of net income assuming conversion of these shares, for the three months ended June 30, 2024 and March 31, 2024, respectively, were excluded because the effect would have been anti-dilutive,

6,679,386 , 7,764,984 , 7,852,595 and 7,496,394 stock options for the three months ended September 30, 2024;

June 30, 2024;

and December 31, 2023, net income (loss) from continuing operations attributable to i3 Verticals, Inc.

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 from discontinued operations:

10,052,017 , 10,091,604 , and 10,093,394 weighted average shares of Class B common stock for the three months ended June 30, 2024;

March 31, 2024;

For the three months ended September 30, 2023;

June 30, 2023;

and December 31, 2023, respectively, along with the reallocation of net income assuming conversion of these shares, were excluded,

7,764,984 , 7,852,595 , and 7,496,394 stock options for the three months ended June 30, 2024;

March 31, 2024;

and December 31, 2022 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 discontinued operations:

10,108,218 shares of weighted average Class A common stock, along with the reallocation of net income assuming conversion of these shares, for the three months ended June 30, 2023, were excluded because the effect would have been anti-dilutive,

5,672,144 , 5,729,321 , 4,018,042 and 5,652,711 stock options for the three months ended September 30, 2023;

June 30, 2023;

234,503 , 387,235 , and 467,777 shares for the three months ended June 30, 2024;

March 31, 2024;

and December 31, 2023, respectively, resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

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-K

Item 8. Financial Statements and Supplementary Data