i3 Verticals, Inc. 10-Q

Item 1. Financial Statements 3 i3 Verticals, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands, except share amounts) June 30, September 30, 2026 2025 Assets Current assets Cash and cash equivalents $ 2,647 $ 66,672 Accounts receivable, net 48,519 58,467 Settlement assets 36 411 Prepaid expenses and other current assets 12,270 12,075 Total current assets 63,472 137,625 Property and equipment, net 6,627 7,181 Restricted cash 2,760 250 Capitalized software, net 50,983 48,314 Goodwill 282,284 248,469 Intangible assets, net 153,599 135,797 Deferred tax asset 46,595 49,058 Operating lease right-of-use assets 4,495 4,577 Other assets 16,169 7,140 Total assets $ 626,984 $ 638,411 Liabilities and equity Liabilities Current liabilities Accounts payable $ 4,384 $ 6,248 Accrued expenses and other current liabilities 21,026 24,525 Settlement obligations 36 411 Deferred revenue 25,285 37,678 Current portion of operating lease liabilities 1,907 1,827 Total current liabilities 52,638 70,689 Long-term debt, less current portion 114,276 — Long-term tax receivable agreement obligations 32,192 32,191 Operating lease liabilities, less current portion 2,689 2,964 Other long-term liabilities 24,859 14,844 Total liabilities 226,654 120,688 Commitments and contingencies (see Note 11) Stockholders' equity Preferred stock, par value $ 0.0001 per share, 10,000,000 shares authorized; 0 shares issued and outstanding as of both June 30, 2026 and September 30, 2025 — — Class A common stock, par value $ 0.0001 per share, 150,000,000 shares authorized; 18,241,855 and 23,983,125 shares issued and outstanding as of June 30, 2026 and September 30, 2025, respectively 2 2 Class B common stock, par value $0.0001 per share, 40,000,000 shares authorized; 8,381,681 shares issued and outstanding as of both June 30, 2026 and September 30, 2025 1 1 Additional paid-in capital 156,844 271,310 Accumulated earnings 123,700 118,270 Total stockholders' equity 280,547 389,583 Non-controlling interest 119,783 128,140 Total equity 400,330 517,723 Total liabilities and equity $ 626,984 $ 638,411 See Notes to the Interim Condensed Consolidated Financial Statements 4 i3 Verticals, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except share and per share amounts) Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Revenue $ 53,067 $ 51,901 $ 163,256 $ 158,257 Operating expenses Costs of services (excluding depreciation and amortization) 16,314 16,733 51,034 48,889 Selling, general and administrative 28,858 33,018 84,905 85,779 Depreciation and amortization 7,349 6,989 21,917 20,848 Change in fair value of contingent consideration 1,438 ( 26 ) 940 440 Total operating expenses 53,959 56,714 158,796 155,956 (Loss) income from operations ( 892 ) ( 4,813 ) 4,460 2,301 Other expenses (income) Interest expense 1,820 806 3,342 1,932 Other income ( 9,903 ) ( 4,601 ) ( 10,534 ) ( 7,020 ) Total other income ( 8,083 ) ( 3,795 ) ( 7,192 ) ( 5,088 ) Income (loss) before income taxes 7,191 ( 1,018 ) 11,652 7,389 Provision for (benefit from) income taxes 1,313 ( 22 ) 2,495 3,272 Net income (loss) from continuing operations 5,878 ( 996 ) 9,157 4,117 Net (loss) income from discontinued operations, net of income taxes ( 217 ) 19,421 ( 355 ) 18,185 Net income 5,661 18,425 8,802 22,302 Net income (loss) from continuing operations attributable to non-controlling interest 2,258 ( 586 ) 3,497 1,653 Net (loss) income from discontinued operations attributable to non-controlling interest ( 79 ) 6,129 ( 125 ) 5,865 Net income attributable to non-controlling interest 2,179 5,543 3,372 7,518 Net income (loss) from continuing operations attributable to i3 Verticals, Inc. 3,620 ( 410 ) 5,660 2,464 Net (loss) income from discontinued operations attributable to i3 Verticals, Inc. ( 138 ) 13,292 ( 230 ) 12,320 Net income attributable to i3 Verticals, Inc. $ 3,482 $ 12,882 $ 5,430 $ 14,784 Net income (loss) per share attributable to Class A common stockholders from continuing operations: Basic $ 0.19 $ ( 0.02 ) $ 0.26 $ 0.10 Diluted $ 0.19 $ ( 0.03 ) $ 0.25 $ 0.10 Net (loss) income per share attributable to Class A common stockholders from discontinued operations: Basic $ ( 0.01 ) $ 0.55 $ ( 0.01 ) $ 0.52 Diluted $ ( 0.01 ) $ 0.55 $ ( 0.01 ) $ 0.49 Weighted average shares of Class A common stock outstanding: Basic, for continuing operations 19,419,792 24,345,826 21,638,108 23,909,714 Diluted, for continuing operations 19,543,611 32,983,325 22,285,629 24,823,635 Basic, for discontinued operations 19,419,792 24,345,826 21,638,108 23,909,714 Diluted, for discontinued operations 27,801,473 24,345,826 30,019,789 34,183,267 See Notes to the Interim Condensed Consolidated Financial Statements 5 i3 Verticals, Inc. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) (In thousands, except share amounts) Class A Common Stock Class B Common Stock Additional Paid-In Capital Retained Earnings Non-Controlling Interest Total Equity Shares Amount Shares Amount Balance at September 30, 2025 23,983,125 $ 2 8,381,681 $ 1 $ 271,310 $ 118,270 $ 128,140 $ 517,723 Equity-based compensation — — — — 5,178 — — 5,178 Net income — — — — — 484 463 947 Distributions to non-controlling interest holders — — — — — — 93 93 Exercise or release of equity-based awards 149,250 — — — ( 2,283 ) — — ( 2,283 ) Repurchases of Class A common stock ( 1,522,838 ) — — — ( 38,317 ) — — ( 38,317 ) Allocation of equity to non-controlling interests — — — — 3,861 — ( 3,861 ) — Balance at December 31, 2025 22,609,537 2 8,381,681 1 239,749 118,754 124,835 483,341 Equity-based compensation — — — — 4,619 — — 4,619 Net income — — — — — 1,464 730 2,194 Distributions to non-controlling interest holders — — — — — — 29 29 Exercise or release of equity-based awards 152,591 — — — ( 968 ) — — ( 968 ) Repurchases of Class A common stock ( 2,220,736 ) — — — ( 50,979 ) — — ( 50,979 ) Allocation of equity to non-controlling interests — — — — 4,739 — ( 4,739 ) — Balance at March 31, 2026 20,541,392 2 8,381,681 1 197,160 120,218 120,855 438,236 Equity-based compensation — — — — 5,136 — — 5,136 Net income — — — — — 3,482 2,179 5,661 Exercise of equity-based awards 13,021 — — — ( 115 ) — — ( 115 ) Repurchases of Class A common stock ( 2,312,558 ) — — — ( 48,588 ) — — ( 48,588 ) Allocation of equity to non-controlling interests — — — — 3,251 — ( 3,251 ) — Balance at June 30, 2026 18,241,855 $ 2 8,381,681 $ 1 $ 156,844 $ 123,700 $ 119,783 $ 400,330 See Notes to the Interim Condensed Consolidated Financial Statements 6 i3 Verticals, Inc. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) (CONTINUED) (In thousands, except share amounts) Class A Common Stock Class B Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Non-Controlling Interest Total Equity Shares Amount Shares Amount Balance at September 30, 2024 23,882,035 $ 2 10,032,676 $ 1 $ 279,335 $ 100,397 $ 135,624 $ 515,359 Equity-based compensation — — — — 3,814 — — 3,814 Net income — — — — — 2,056 1,052 3,108 Redemption of common units in i3 Verticals, LLC 17,577 — ( 17,577 ) — 237 — ( 237 ) — Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis — — — — 14 — — 14 Exercise or release of equity-based awards 34,423 — — — 29 — — 29 Repurchases of Class A common stock ( 496,785 ) — — — ( 11,190 ) — — ( 11,190 ) Allocation of equity to non-controlling interests — — — — 293 — ( 293 ) — Balance at December 31, 2024 23,437,250 2 10,015,099 1 272,532 102,453 136,146 511,134 Equity-based compensation — — — — 3,932 — — 3,932 Net (loss) income — — — — — ( 154 ) 923 769 Adjustments to accrued distributions to non-controlling interest holders — — — — — — 283 283 Redemption of common units in i3 Verticals, LLC 813,782 — ( 813,782 ) — 11,493 — ( 11,493 ) — 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 — — — — 143 — — 143 Exercise or release of equity-based awards 149,328 — — — ( 2,179 ) — — ( 2,179 ) Repurchases of Class A common stock ( 13,370 ) — — — ( 423 ) — — ( 423 ) Allocation of equity to non-controlling interests — — — — 3,063 — ( 3,063 ) — Balance at March 31, 2025 24,386,990 2 8,832,061 1 282,872 102,299 128,485 513,659 Equity-based compensation — — — — 7,396 — — 7,396 Net income — — — — — 12,882 5,543 18,425 Distributions to non-controlling interest holders — — — — — — ( 630 ) ( 630 ) Redemption of common units in i3 Verticals, LLC 368,857 — ( 368,857 ) — 5,340 — ( 5,340 ) — Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis — — — — 281 — — 281 Exercise of equity-based awards 88,794 — — — ( 1,644 ) — — ( 1,644 ) Repurchases of Class A common stock ( 1,063,726 ) — — — ( 26,366 ) — — ( 26,366 ) Allocation of equity to non-controlling interests — — — — 232 — ( 232 ) — Balance at June 30, 2025 23,780,915 $ 2 8,463,204 $ 1 $ 268,111 $ 115,181 $ 127,826 $ 511,121 See Notes to the Interim Condensed Consolidated Financial Statements 7 i3 Verticals, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Nine months ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 8,802 $ 22,302 Adjustments to reconcile net income from operating activities: Depreciation and amortization 21,917 22,788 Equity-based compensation 14,933 15,142 Amortization of debt issuance costs 647 746 Provision for deferred income taxes 1,708 3,644 Gain on sale of businesses — ( 25,299 ) Gain on investment ( 9,868 ) — Non-cash lease expense 1,576 1,933 Changes in non-cash contingent consideration expense from original estimate 940 1,743 Other non-cash adjustments to net income 2,858 36 Changes in operating assets and liabilities ( 5,099 ) ( 51,311 ) Net cash provided by (used in) operating activities 38,414 ( 8,276 ) Cash flows from investing activities: Expenditures for property and equipment ( 2,032 ) ( 1,516 ) Proceeds from sale of property and equipment 448 1,501 Expenditures for capitalized software ( 6,536 ) ( 6,301 ) Purchases of merchant portfolios and residual buyouts — ( 12 ) Acquisitions of businesses, net of cash acquired ( 60,000 ) ( 11,000 ) Proceeds from sale of Healthcare RCM Business, net of cash sold — 96,102 Net cash (used in) provided by investing activities ( 68,120 ) 78,774 Cash flows from financing activities: Proceeds from revolving credit facility 227,833 58,024 Payments on revolving credit facility ( 113,557 ) ( 58,024 ) Payments to extinguish exchangeable notes — ( 26,223 ) Payments of debt issuance costs — ( 249 ) Payments for repurchases of Class A common stock, including related excise taxes ( 136,895 ) ( 37,604 ) Net payments for settlement obligations ( 375 ) ( 614 ) Cash paid for contingent consideration — ( 800 ) Payments for required distributions to members or on behalf of members for tax obligations ( 2,219 ) ( 24,849 ) Payments for required distributions to members under the Tax Receivable Agreement ( 2,524 ) ( 9,954 ) Proceeds from stock option exercises 129 150 Payments for employees' tax withholdings from net settled stock option exercises and RSU releases ( 4,576 ) ( 4,140 ) Net cash used in financing activities ( 32,184 ) ( 104,283 ) Net decrease in cash, cash equivalents and restricted cash ( 61,890 ) ( 33,785 ) Cash, cash equivalents and restricted cash at beginning of period 67,333 89,597 Cash, cash equivalents and restricted cash at end of period $ 5,443 $ 55,812 Supplemental disclosure of cash flow information: Cash paid for interest $ 2,486 $ 763 Cash paid for income taxes, net of refunds $ 3,209 $ 35,112 See Notes to the Interim Condensed Consolidated Financial Statements 8 i3 Verticals, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED) (In thousands) The following tables provide reconciliations of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to that shown in the condensed consolidated statements of cash flows: September 30, 2025 2024 Beginning balance Cash and cash equivalents $ 66,672 $ 86,541 Settlement assets 411 632 Restricted cash 250 2,424 Total cash, cash equivalents, and restricted cash $ 67,333 $ 89,597 June 30, 2026 2025 Ending balance Cash and cash equivalents $ 2,647 $ 55,544 Settlement assets 36 18 Restricted cash 2,760 250 Total cash, cash equivalents, and restricted cash $ 5,443 $ 55,812 The Company engaged in the following significant non-cash investing and financing activities during the nine months ended June 30, 2026 and 2025 which are reported on a consolidated basis. See Note 2 for significant non-cash investing and financing activities from discontinued operations for major captions on the condensed consolidated financial statements. Nine months ended June 30, 2026 2025 Acquisition date fair value of contingent consideration in connection with business combinations $ 7,600 $ 1,260 Right-of-use assets obtained in exchange for operating lease obligations $ 1,494 $ 288 Excise taxes accrued on share repurchases $ 1,364 $ 375 Conversion of note receivable to equity investment $ 293 $ — See Notes to the Interim Condensed Consolidated Financial Statements 9 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) 1. ORGANIZATION AND OPERATIONS i3 Verticals, Inc. (the “Company”) was formed as a Delaware corporation on January 17, 2018. 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 software solutions seamlessly integrated with our proprietary payment facilitator platform to customers in strategic vertical markets. The Company’s headquarters are located in Nashville, Tennessee, with operations throughout the United States. Unless the context otherwise requires, references to “we,” “us,” “our,” “i3 Verticals” and the “Company” refer to i3 Verticals, Inc. and its subsidiaries, including i3 Verticals, LLC. In connection with the IPO, the Company completed certain reorganization transactions, which, among other things, resulted in i3 Verticals, Inc. being the sole managing member of i3 Verticals, LLC (the “Reorganization Transactions”). Following the completion of the IPO and Reorganization Transactions, the Company is a holding company and the principal asset that it owns are the common units of i3 Verticals, LLC. i3 Verticals, Inc. operates and controls all of i3 Verticals, LLC's operations and, through i3 Verticals, LLC and its subsidiaries, conducts i3 Verticals, LLC's business. i3 Verticals, Inc. has a majority economic interest in i3 Verticals, LLC. 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 owners other than i3 Verticals, Inc. (the “Continuing Equity Owners”). 2. DISCONTINUED OPERATIONS Healthcare RCM Business Divestiture During the three months ended June 30, 2025, i3 Verticals, LLC and i3 Healthcare Solutions, LLC, a wholly-owned subsidiary of i3 Verticals, LLC (“Healthcare RCM Seller,” and collectively with i3 Verticals, LLC, the “Healthcare RCM Seller Parties”), completed the sale of the equity interests of certain wholly-owned subsidiaries of the Healthcare RCM Seller (the “Healthcare RCM Acquired Entities”) which owned and operated the Company's healthcare revenue cycle management business, including its associated proprietary technology (the “Healthcare RCM Business”), to Infinx, Inc. (“Healthcare RCM Buyer” or "Infinx"), 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. The Healthcare RCM Business comprised the majority of the Company's former Healthcare segment. 10 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) At the closing of the transactions contemplated by the Healthcare RCM Purchase Agreement, the Company entered into a transition services agreement with Infinx ("Infinx TSA"), pursuant to which, among other things, the Company or affiliates thereof provided 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 were substantially completed in the first quarter of fiscal 2026. The Infinx ELA completed on July 31, 2025. Revenue earned under the Infinx TSA and Infinx ELA are reported in other income and expenses incurred for which the Company is reimbursed through the Infinx TSA and Infinx ELA are reported in selling, general and administrative expenses within the Company's condensed consolidated statements of operations. Income under the Infinx TSA was not significant during the three and nine months ended June 30, 2026, and was $ 3,919 during both the three and nine months ended June 30, 2025. 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 condensed consolidated statements of operations. 11 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) The financial results of the Healthcare RCM Business are included in income from discontinued operations, net of income taxes on the Company’s condensed consolidated statements of operations. The following table presents financial results of Healthcare RCM Business for the three and nine months ended June 30, 2026 and 2025: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Revenue $ — $ 3,601 $ — $ 22,463 Operating expenses Costs of services (excluding depreciation and amortization) — 3,023 — 14,553 Selling, general and administrative — 2,491 — 7,317 Depreciation and amortization — 275 — 1,940 Change in fair value of contingent consideration — 10 — 1,302 Total operating expenses — 5,799 — 25,112 Loss from operations — ( 2,198 ) — ( 2,649 ) Other expenses (income) 250 ( 25,960 ) 419 ( 25,998 ) (Loss) income before income taxes from discontinued operations ( 250 ) 23,762 ( 419 ) 23,349 (Benefit from) provision for income taxes ( 33 ) 4,337 ( 64 ) 4,620 Net (loss) income from discontinued operations ( 217 ) 19,425 ( 355 ) 18,729 Net (loss) income from discontinued operations attributed to non-controlling interest ( 79 ) 6,130 ( 125 ) 6,041 Net (loss) income from discontinued operations attributable to i3 Verticals, Inc. $ ( 138 ) $ 13,295 $ ( 230 ) $ 12,688 12 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) The Company has elected to not separately disclose discontinued operations on its condensed consolidated statement of cash flows. The following table presents cash flows from discontinued operations for major captions on the condensed consolidated financial statements: Nine Months Ended June 30, 2025 Depreciation and amortization $ 1,940 Equity-based compensation $ 3,112 Gain on sale of Healthcare RCM Business $ ( 25,960 ) Non-cash lease expense $ 702 Increase in non-cash contingent consideration expense from original estimate $ 1,302 Contingent consideration paid in excess of original estimates $ ( 700 ) Expenditures for property and equipment $ ( 156 ) Expenditures for capitalized software $ ( 263 ) Proceeds from sale of Healthcare RCM Business, net of cash sold $ 96,102 Cash paid for contingent consideration $ ( 800 ) The following table presents significant non-cash investing and financing activities for major captions on the consolidated financial statements: Nine Months Ended June 30, 2025 Right-of-use assets obtained in exchange for operating lease obligations $ 266 Merchant Services Business Divestiture During the year ended September 30, 2024, the Company made the strategic decision to discontinue a significant segment of its operations constituting its Merchant Services Business (as defined below). In this regard, on September 20, 2024, i3 Verticals, LLC, and i3 Holdings Sub, Inc., a wholly-owned subsidiary of i3 Verticals, LLC (“Corporation Seller,” and collectively with i3 Verticals, LLC, the “Merchant Services Sellers”) completed the transactions (such closing, the “Closing”) contemplated by that certain Securities Purchase Agreement dated as of June 26, 2024 (the “Merchant Services Purchase Agreement”), by and among i3 Verticals, LLC, Corporation Seller, the Company (solely for the purpose of providing a guaranty of the obligations of Merchant Services Sellers as set forth in the Merchant Services Purchase Agreement), Payroc Buyer, LLC (“Merchant Services Buyer” or "Payroc"), and Payroc WorldAccess, LLC (solely for the purpose of providing a guaranty of the obligations of Merchant Services Buyer as set forth in the Merchant Services Purchase Agreement). Pursuant to the terms of the Merchant Services Purchase Agreement, the Merchant Services Sellers sold to Merchant Services Buyer the equity interests of certain direct and indirect wholly-owned subsidiaries of the Merchant Services Sellers (the “Merchant Services Acquired Entities”) primarily comprising the Company’s merchant services business, including its associated proprietary technology (the “Merchant Services Business”), after giving effect to the contribution of certain assets and the assignment of certain liabilities associated with the Merchant Services Business from i3 Verticals, LLC and certain affiliates to the Merchant Services Acquired Entities pursuant to a contribution agreement which was entered into immediately prior to the Closing (collectively, the "Merchant Services Transactions"). Pursuant to the terms of the Merchant Services Purchase Agreement, Merchant Services Buyer paid to the Merchant Services Sellers an aggregate purchase price of approximately $ 439,516 paid in cash at closing, after giving effect to post-closing net working capital, indebtedness and cash adjustments. The Merchant Services Business comprised the Company's entire former Merchant Services segment and a small portion of the Company's former Software and Services segment. In connection with the closing of the Merchant Services Transactions, the Company entered into a transition services agreement with Payroc ("Payroc TSA"), pursuant to which, among other things, the Company or affiliates thereof provides certain information technology and operational transition services to Payroc for a period of time 13 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) after the closing, and a processing services agreement with Payroc ("Payroc PSA"), pursuant to which the parties provide certain payment processing services to customers of each party following the closing in accordance with the terms thereof. The obligations under the Payroc TSA were substantially complete as of December 31, 2025. The obligations under the Payroc PSA are planned to be complete in the first quarter of fiscal 2029. Revenue earned under the Payroc TSA and Payroc PSA are reported in other income, and expenses incurred for which the Company is reimbursed through the Payroc TSA and Payroc PSA are reported in selling, general and administrative expenses within the Company's condensed consolidated statements of operations. Income under the Payroc TSA and Payroc PSA was not significant during the three and nine months ended June 30, 2026, and was $ 318 and $ 1,274 during the three and nine months ended June 30, 2025, respectively. The financial results of the Merchant Services Business are included in income from discontinued operations, net of income taxes on the Company’s consolidated statements of operations. The following table presents financial results of Merchant Services Business for the three and nine months ended June 30, 2025: Three Months Ended June 30, 2025 Nine Months Ended June 30, 2025 Revenue $ — $ — Operating expenses Costs of services (excluding depreciation and amortization) — — Selling, general and administrative — — Depreciation and amortization — — Total operating expenses — — Income from operations — — Other expenses 4 661 Loss before income taxes from discontinued operations ( 4 ) ( 661 ) Benefit from income taxes — ( 117 ) Net loss from discontinued operations ( 4 ) ( 544 ) Net loss from discontinued operations attributed to non-controlling interest ( 1 ) ( 176 ) Net loss from discontinued operations attributable to i3 Verticals, Inc. $ ( 3 ) $ ( 368 ) The Company has elected to not separately disclose discontinued operations on its condensed consolidated statement of cash flows. The following table presents cash flows from discontinued operations for major captions on the condensed consolidated financial statements: Nine Months Ended June 30, 2025 Adjustments to gain on sale of Merchant Services Business 661 14 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no changes to our significant accounting policies described in the Annual Report on Form 10-K for the year ended September 30, 2025, filed with the SEC on November 21, 2025, that have had a material impact on our condensed consolidated financial statements and related notes. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the reporting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for fair presentation of the unaudited condensed consolidated financial statements of the Company and its subsidiaries as of June 30, 2026 and for the three and nine months ended June 30, 2026 and 2025. The results of operations for the three and nine months ended June 30, 2026 and 2025 are not necessarily indicative of the operating results for the full year. As permitted by the rules and regulations of the SEC, certain information and disclosures otherwise included in the notes to the consolidated financial statements have been condensed or omitted from the summary of significant accounting policies. The Company believes the disclosures are adequate to make the information presented not misleading. It is recommended that these interim condensed consolidated financial statements be read in conjunction with the Company's consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025 filed with the SEC on November 21, 2025. Principles of Consolidation These interim condensed consolidated financial statements include the accounts of the Company and its subsidiary companies. All intercompany accounts and transactions have been eliminated in consolidation. Restricted Cash 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 condensed consolidated balance sheets since the initial terms of the related agreements extend beyond the next twelve months. The Company includes restricted cash along with the cash and cash equivalents balance for presentation in the consolidated statements of cash flows. Reclassifications Discontinued operations The results of operations for the Company's Merchant Services Business and Healthcare RCM Business have been reclassified as discontinued operations for all periods presented in the condensed consolidated statements of operations. Refer to Note 2 for additional information. Change in presentation of cash flows During the third quarter of 2026, the Company adopted the condensed presentation of cash flows permitted for interim period financial statements. The Company changed its presentation of cash flows associated with operating activities within the Condensed Consolidated Statements of Cash Flows. This change has no impact on net cash provided by (used in) operating activities, investing activities or financing activities. Comparative amounts have been reclassified to conform to the current period presentation. This change has no impact on the Condensed Consolidated Balance Sheet, Condensed Consolidated Statements of Operations or Condensed Consolidated Statement of Changes in Equity. 15 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) The following tables present the effects of the change in presentation within the Condensed Consolidated Statements of Cash Flows: Nine months ended June 30, 2025 As Previously Reported Adjustment As Adjusted Cash flows from operating activities: Adjustments to gain on sale of Merchant Services Business $ 661 $ ( 661 ) $ — Gain on sale of Healthcare RCM Business $ ( 25,960 ) $ 25,960 $ — Gain on sale of businesses $ — $ ( 25,299 ) $ ( 25,299 ) Changes in operating assets: Accounts receivable $ 1,955 $ ( 1,955 ) $ — Prepaid expenses and other current assets $ ( 922 ) $ 922 $ — Other assets $ ( 1,023 ) $ 1,023 $ — Changes in operating liabilities: Accounts payable $ ( 677 ) $ 677 $ — Accrued expenses and other current liabilities $ ( 37,450 ) $ 37,450 $ — Acquisition escrow obligations $ ( 2,174 ) $ 2,174 $ — Deferred revenue $ ( 7,597 ) $ 7,597 $ — Operating lease liabilities $ ( 2,561 ) $ 2,561 $ — Other long-term liabilities $ ( 102 ) $ 102 $ — Contingent consideration paid in excess of original estimates $ ( 760 ) $ 760 $ — Changes in operating assets and liabilities $ — $ ( 51,311 ) $ ( 51,311 ) Inventories 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 $ 2,798 and $ 2,516 at June 30, 2026 and September 30, 2025, respectively, and are included within prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets. Acquisitions The operating results of an acquisition are included in the consolidated statements of operations from the date of such acquisition. Acquisitions completed during the nine months ended June 30, 2026 contributed $ 4,600 and $ 63 of revenue and net income, respectively, to the results in the Company's condensed consolidated statements of operations for the nine months ended June 30, 2026. Revenue Recognition and Deferred Revenue The Company recognizes revenue as each performance obligation is satisfied in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). 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. Revenues are allocated to each performance obligation based on the standalone selling price of each good or service. 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, 16 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) customer segment pricing strategies and the product life cycle. In arrangements with multiple performance obligations, the Company applies significant judgment 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. Revenue is recognized net of any taxes collected from clients, which are subsequently remitted to governmental authorities. Software and other related revenue Software and other related revenue includes software-as-a-service (“SaaS”), transaction-based fees, ongoing software maintenance and support, software licenses, other professional services related to the Company's software offerings, sales of equipment, non-software related maintenance plans or professional services, bundled performance obligations for software sales and equipment leasing and other revenues. Revenues from the Company’s software are recognized when the related performance obligations are satisfied. In accordance with ASC 606, sales of software licenses considered to be intellectual property are categorized as functional or symbolic. 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 are considered functional intellectual property, and right to access license sales, which are considered 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 time, over the term of the agreement. The Company also offers access to its software under 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. If professional services are determined to be distinct, the revenue allocable to the service obligations are recognized over time as we perform the services. Professional services fees are typically billed on a time and material or a milestone basis as defined within contract terms. Revenue for milestone basis contracts is recognized either at milestone completion or by measuring progress-to-completion, generally using labor hours, depending on the language in the contracts. Revenues are also derived from a variety of transaction fees, which are charged for transacting within our software solutions and fees for other miscellaneous services. Revenues derived from such fees are recognized at the time of the transactions and are recognized over time when they represent stand ready obligations. Revenue from the sale of equipment is recognized at a point in time, upon transfer of control to the customer, after which there are no further performance obligations remaining to be satisfied. Revenue from hardware maintenance agreements is recognized over time, over the term of the agreement. 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. Proprietary payments revenue Proprietary payments revenue includes discount fees and other related fixed transaction or service fees. 17 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (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. The Company frequently enters into agreements with customers under which the customer engages the Company to provide both payment authorization services and transaction settlement services for all of the cardholder transactions of the customer, regardless of which issuing bank and card network to which the transaction relates. 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 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. Because the service of standing ready is substantially the same each day and has the same pattern of transfer to the customer, the Company has determined that its stand ready performance obligation comprises a series of distinct days of service. Discount fees are recognized over time based on the volume or transaction count at the time the merchants’ transactions are processed. The Company follows the requirements of ASC 606-10-55 Revenue from Contracts with Customers—Principal versus Agent Considerations, which states that the determination of whether a company should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement. The determination of gross versus net recognition of revenue requires judgment that depends on whether the Company controls the good or service before it is transferred to the merchant or whether the Company is acting as an agent of a third party. The assessment is provided separately for each performance obligation identified. Under its agreements, the Company incurs interchange and network charges from the third-party card issuers and card networks, respectively, related to the provision of payment authorization services. The Company has determined that it is acting as an agent with respect to these payment authorization services, based on the following factors: (1) the Company has no discretion over which card issuing bank will be used to process a transaction and is unable to direct the activity of the merchant to another card issuing bank, and (2) interchange and card network rates are pre-established by the card issuers or card networks, and the Company has no latitude in determining these fees. Therefore, revenue allocated to the payment authorization performance obligation is presented net of interchange and card network fees paid to the card issuing bank and card network, respectively, for the three and nine months ended June 30, 2026 and 2025. Disaggregation of revenue The following table presents revenue from contracts with customers for continuing operations disaggregated by categories that reflect how economic factors affect the nature, amount, timing, and uncertainty of revenues and cash flows: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Software and other related revenue $ 39,778 $ 38,801 $ 120,969 $ 117,663 Proprietary payments revenue 13,289 13,100 42,287 40,594 Total revenue $ 53,067 $ 51,901 $ 163,256 $ 158,257 18 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) Contract Assets The Company bills for certain software and related services sales and fixed fee professional services upon pre-determined milestones in the contracts. 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 non-cancellable subscription model. Under this structure, the license revenue is recognized upfront while a portion of the revenue is unbilled. Unbilled amounts associated with these professional services and software licenses sold under the subscription model are presented as accounts receivable as the Company has an unconditional right to payment for services performed. As of June 30, 2026 and September 30, 2025, the Company’s contract assets from contracts with customers was $ 9,567 and $ 9,211 , respectively. Contract Liabilities Deferred revenue represents amounts billed to customers by the Company for services contracts. Payment is typically collected at the start of the contract term. The initial prepaid contract agreement balance is deferred. The balance is then recognized as the services are provided over the contract term. Deferred revenue that is expected to be recognized as revenue within one year is recorded as short-term deferred revenue and the remaining portion is recorded as other long-term liabilities in the condensed consolidated balance sheets. The terms for most of the Company's contracts with a deferred revenue component are one year. Substantially all of the Company's deferred revenue is anticipated to be recognized within the next year. 19 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) The following tables present the changes in deferred revenue as of and for the nine months ended June 30, 2026 and 2025, respectively: Balance at September 30, 2025 $ 38,486 Deferral of revenue 15,133 Recognition of unearned revenue ( 15,999 ) Balance at December 31, 2025 37,620 Deferral of revenue 12,921 Recognition of unearned revenue ( 14,408 ) Balance at March 31, 2026 36,133 Deferral of revenue 7,530 Recognition of unearned revenue ( 15,101 ) Balance at June 30, 2026 $ 28,562 Balance at September 30, 2024 $ 39,156 Deferral of revenue 16,881 Recognition of unearned revenue ( 13,645 ) Balance at December 31, 2024 42,392 Deferral of revenue 9,841 Recognition of unearned revenue ( 14,973 ) Balance at March 31, 2025 37,260 Deferral of revenue 8,844 Recognition of unearned revenue ( 15,527 ) Balance at June 30, 2025 $ 30,577 Use of Estimates The preparation of condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, the value of purchase consideration paid and identifiable assets acquired and assumed in acquisitions, goodwill and intangible asset impairment review, determination of performance obligations for revenue recognition, loss reserves, assumptions used in the calculation of equity-based compensation and in the calculation of income taxes, and certain tax assets and liabilities as well as the related valuation allowances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Segment Information The Company has identified its Chief Executive Officer as the Company's Chief Operating Decision Maker ("CODM"). The Company’s CODM reviews discrete financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance which is based on consolidated information about our revenues, income from operations, and other key financial data. All significant operating decisions are made by analyzing the Company as a single operating segment and as a result, the Company determined that it operates 20 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) as a single reportable segment. See Note 13 to our condensed consolidated financial statements for additional information. Recent 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 present the effects of adoption of ASU 2023-09 until the Form 10-K filed for the annual period ending September 30, 2026. The Company is currently evaluating the impact of the adoption of ASU 2023-09 on the Company’s financial statement disclosures. In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03"). 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. The amendment will specifically require that an entity disclose the amounts related to purchases of inventory, employee compensation, depreciation and intangible asset amortization. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company will not be required to adopt ASU 2024-03 until the annual period ending September 30, 2028. 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 the annual period ending September 30, 2029. The Company is currently evaluating the impact of the adoption of ASU 2025-06 on the Company’s financial statement disclosures. In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements ("ASU 2025-11"). ASU 2025-11 provides clarity on current interim reporting requirements. The amendments improve the navigability of required interim disclosures and enhance consistency for all entities by clarifying the form and content of interim financial statements in accordance with GAAP. Additionally, the standard introduces a disclosure principle requiring entities to report all events since the end of the last annual reporting period that have a material impact on the Company. The standard is effective for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company will not be required to adopt ASU 2025-11 until the annual period ending September 30, 2029. The Company is currently evaluating the impact of the adoption of ASU 2025-11 on the Company’s financial statement disclosures. 21 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) 4. ACQUISITIONS During the nine months ended June 30, 2026 and the year ended September 30, 2025, the Company acquired the following businesses: Business Combinations during the nine months ended June 30, 2026 Purchase of Transportation Market Business On January 1, 2026, the Company completed the acquisition of a business that operates in the transportation market at the state level. The acquired business provides driver and motor vehicle insurance verification solutions. Total purchase consideration was $ 60,000 in cash payable at closing funded by proceeds from the Company's revolving credit facility and cash on hand, plus an additional amount of cash contingent consideration payable following the closing in an amount of up to $ 20,000 , dependent upon the achievement of specified financial performance targets, as defined in the purchase agreement, for performance periods extending through May 2028. The acquisition date estimated fair value of such cash contingent consideration is $ 7,600 . 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 9. The goodwill associated with the business acquisition is deductible for tax purposes. The acquired customer relationships intangible asset has an estimated amortization period of eighteen years . The acquired trade name has an amortization period of one year . The acquired capitalized software has an amortization period of seven years . Acquisition-related costs for this acquisition amounted to approximately $ 249 and were included in selling, general and administrative on the consolidated statement of operations and were expensed as incurred. Summary of the Transportation Market Business The preliminary fair values assigned to certain assets and liabilities assumed, as of the acquisition date, were as follows: Accounts receivable, net $ 1,252 Prepaid expenses and other current assets 85 Property and equipment, net 75 Capitalized software, net 6,600 Customer relationships 26,900 Trade name 210 Goodwill 33,815 Total assets acquired 68,937 Accrued expenses and other current liabilities 1,301 Deferred revenue 36 Net assets acquired $ 67,600 22 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) Pro Forma Results of Operations for 2026 Business Combinations The following supplemental pro forma results of operations have been prepared as though each of the businesses acquired in the nine months ended June 30, 2026 had been acquired 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. Nine Months Ended June 30, 2026 2025 Revenue $ 165,343 $ 163,605 Net income from continuing operations $ 9,577 $ 4,003 Business Combinations during the year ended September 30, 2025 Purchase of Utility Billing Software Company On April 1, 2025, the Company completed the acquisition of substantially all of the assets of a business (the "Utility Billing Software Company") to expand the Company’s public sector utility billing software offerings. Total purchase consideration was $ 10,260 , including $ 9,000 in cash funded by proceeds from the Company's revolving credit facility, and $ 1,260 in the acquisition date estimated fair value of contingent cash consideration (the final amount of such contingent cash payment of up to $ 5,000 is dependent upon achievement of specified financial performance targets, as defined in the purchase agreement). 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 9. 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. 23 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) Summary of the Utility Billing Software Company The fair values assigned to certain assets and liabilities assumed, as of the acquisition date, were as follows: Accounts receivable $ 792 Property and equipment 200 Capitalized software 380 Customer relationships 4,610 Trade name 100 Goodwill 5,129 Total assets acquired 11,211 Deferred revenue, current 951 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 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 . 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 businesses acquired in the year ended September 30, 2025 had been acquired 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. Nine Months Ended June 30, 2025 Revenue $ 159,694 Net income from continuing operations $ 4,248 24 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) 5. GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill are as follows: Total Balance at September 30, 2025 $ 248,469 Goodwill attributable to the preliminary purchase price of the acquisition completed during the nine months ended June 30, 2026 33,815 Balance at June 30, 2026 $ 282,284 Intangible assets consisted of the following as of June 30, 2026: Cost Accumulated Amortization Carrying Value Amortization Life and Method Finite-lived intangible assets: Customer relationships $ 206,550 $ ( 53,403 ) $ 153,147 9 to 20 years – straight-line Trade names 1,511 ( 1,144 ) 367 1 to 5 years – straight-line Non-compete agreements and other intangible assets 175 ( 106 ) 69 1 to 8 years – straight-line Total finite-lived intangible assets 208,236 ( 54,653 ) 153,583 Indefinite-lived intangible assets: Trademarks 16 — 16 Total identifiable intangible assets $ 208,252 $ ( 54,653 ) $ 153,599 Amortization expense from continuing operations for intangible assets amounted to $ 3,207 and $ 9,308 for the three and nine months ended June 30, 2026, respectively, and $ 2,882 and $ 8,467 for the three and nine months ended June 30, 2025, respectively. Based on net carrying amounts at June 30, 2026, the Company's estimate of future amortization expense for continuing operations for intangible assets are presented in the table below for fiscal years ending September 30: 2026 (three months remaining) $ 3,192 2027 12,501 2028 12,260 2029 12,233 2030 12,188 Thereafter 101,209 $ 153,583 6. LONG-TERM DEBT A summary of long-term debt as of June 30, 2026 and September 30, 2025 is as follows: June 30, September 30, Maturity 2026 2025 Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility May 8, 2028 $ 114,276 $ — 25 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) 2023 Senior Secured Credit Facility 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 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. As of June 30, 2026, the Borrower's consolidated interest coverage ratio was 13.5 x and total leverage ratio was 1.9 x. The provision of any such additional amounts under the additional term loan facilities or additional revolving credit commitments are subject to certain additional conditions and the receipt of certain additional commitments by existing or additional lenders. The lenders under the 2023 Senior Secured Credit Facility are not under any obligation to provide any such additional term loan facilities or revolving credit commitments. The proceeds of the Revolver, together with proceeds from any additional amounts under the additional term loan facilities or additional revolving credit commitments, may only be used by the Borrower to (i) finance working capital, capital expenditures and other lawful corporate purposes, (ii) finance permitted acquisitions (as defined in the 2023 Senior Secured Credit Facility) and (iii) to refinance certain existing indebtedness. Borrowings under the Revolver will be made, at the Borrower’s option, at the Adjusted Term SOFR rate or the base rate, plus, in each case, an applicable margin. The Adjusted Term SOFR rate will be the rate of interest per annum equal to the Term SOFR rate (based upon an interest period of one, three or six months), plus 0.10 %, plus an applicable margin of 2.00 % to 3.00 % ( 2.00 % at June 30, 2026). The Adjusted Term SOFR rate shall not be less than 0 % in any event. The base rate is a fluctuating rate of interest per annum equal to the highest of (a) the greater of the federal funds rate or the overnight bank funding rate, plus ½ of 1%, (b) Wall Street Journal prime rate and (c) the Adjusted Term SOFR rate for an interest period of one month, plus 1 %, plus an applicable margin of 1.00 % to 2.00 % ( 1.00 % at June 30, 2026). The base rate shall not be less than 1 % in any event. 26 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) The applicable margin is based upon the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Senior Secured Credit Facility), as reflected in the schedule below: Consolidated Total Net Leverage Ratio Commitment Fee Letter of Credit Fee Term Benchmark Loans Base Rate Loans > 3.0 to 1.0 0.30 % 3.00 % 3.00 % 2.00 % > 2.5 to 1.0 but < 3.00 to 1.0 0.25 % 2.50 % 2.50 % 1.50 % > 2.0 to 1.0 but < 2.50 to 1.0 0.20 % 2.25 % 2.25 % 1.25 % < 2.0 to 1.0 0.15 % 2.00 % 2.00 % 1.00 % In addition to paying interest on outstanding principal under the Revolver, the Borrower will be required to pay a commitment fee equal to the product of between 0.15 % and 0.30 % (the applicable percentage depending on the Borrower’s consolidated total net leverage ratio as reflected in the schedule above, 0.15 % at June 30, 2026) times the actual daily amount by which $ 400,000 exceeds the total amount outstanding under the Revolver and available to be drawn under all outstanding letters of credit. The Borrower will be permitted to voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans under the 2023 Senior Secured Credit Facility, whether such amounts are issued under the Revolver or under the additional term loan facilities or additional revolving credit facilities, at any time without premium or penalty. In addition, if the total amount borrowed under the Revolver exceeds $ 400,000 at any time, the 2023 Senior Secured Credit Facility requires the Borrower to prepay such excess outstanding amounts. All obligations under the 2023 Senior Secured Credit Facility are unconditionally guaranteed by the Company, and each of the Company’s existing and future direct and indirect material, wholly owned domestic subsidiaries, subject to certain exceptions. The obligations are secured by first-priority security interests in substantially all tangible and intangible assets of the Borrower, the Company and each subsidiary guarantor, in each case whether owned on the date of the initial borrowings or thereafter acquired. The 2023 Senior Secured Credit Facility places certain restrictions on the ability of the Borrower, the Company and their subsidiaries to, among other things, incur debt and liens; merge, consolidate or liquidate; dispose of assets; enter into hedging arrangements; make certain restricted payments; undertake transactions with affiliates; enter into sale-leaseback transactions; make certain investments; prepay or modify the terms of certain indebtedness; and modify the terms of certain organizational agreements. 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 Verticals, 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 . 27 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) Debt issuance costs The Company did not incur any debt issuance costs during the three and nine months ended June 30, 2026, and incurred $ 249 in debt issuance costs during the three and nine months ended June 30, 2025. The Company's debt issuance costs are being amortized over the related term of the debt using the straight-line method, which is not materially different than the effective interest rate method, and are presented within other assets in the condensed consolidated balance sheets. The amortization of deferred debt issuance costs is included in interest expense and amounted to approximately $ 216 and $ 647 during the three and nine months ended June 30, 2026, respectively, and $ 216 and $ 746 during the three and nine months ended June 30, 2025, respectively. In connection with the Second Amendment to the Credit Agreement, the Company recorded $ 295 during the three and nine months ended June 30, 2025 for the write-off of debt issuance costs, which was recorded in interest expense in the condensed consolidated statements of operations. 7. STOCKHOLDERS' EQUITY Share Repurchase Programs On August 7, 2025, the Company announced that our Board of Directors had approved a share repurchase program (the "August 2025 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 Class A common stock (exclusive of fees, commissions or other expenses related to such repurchases). This August 2025 Share Repurchase Program replaced a prior share repurchase program entered into by the Company on August 8, 2024 (the “August 2024 Share Repurchase Program”), under which the Company was authorized to repurchase up to $ 50,000 of outstanding shares of the Company’s Class A common stock (exclusive of fees, commissions or other expenses related to such repurchases), which the August 2024 Share Repurchase Program terminated on August 8, 2025. During the nine months ended June 30, 2025, the Company repurchased 1,573,881 shares of Class A Common Stock under the August 2024 Share Repurchase Program at an average price of $ 23.86 per share for a total cost of $ 37,979 . The repurchased shares were cancelled and retired, resulting in a reduction in both the number of shares outstanding and the Company's total stockholders' equity. The terms of the August 2025 Share Repurchase Program provided that such program would terminate on the earlier of September 30, 2026, or when the maximum dollar amount under the authorization was expended. Pursuant to the August 2025 Share Repurchase Program, the Company was authorized to make repurchases of its Class A Common Stock in the open market, through privately negotiated transactions, or otherwise, including under Rule 10b5-1 plans. The maximum dollar amount under the August 2025 Share Repurchase Program was expended during the three months ended March 31, 2026, and the August 2025 Share Repurchase Program is no longer in effect. On February 5, 2026, the Company entered into a new share repurchase program (the "February 2026 Share Repurchase Program") for the Company's Class A common stock, under which the Company was authorized to repurchase up to $ 60,000 of outstanding shares of Class A common stock (exclusive of fees, commissions or other expenses related to such repurchases). The February 2026 Share Repurchase Program replaced the August 2025 Share Repurchase Program. The terms of the February 2026 Share Repurchase Program provided that such program would terminate on the earlier of February 4, 2027, or when the maximum dollar amount under the authorization was expended. Pursuant to the February 2026 Share Repurchase Program, the Company was authorized to make repurchases of its Class A Common Stock in the open market, through privately negotiated transactions, or otherwise, including under Rule 10b5-1 plans. 28 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) The maximum dollar amount under the February 2026 Share Repurchase Program was expended during the three months ended June 30, 2026, and the February 2026 Share Repurchase Program is no longer in effect. On May 12, 2026, the Company entered into a new share repurchase program (the "May 2026 Share Repurchase Program") for the Company's Class A common stock, under which the Company is authorized to repurchase up to $ 100,000 of outstanding shares of our Class A common stock (exclusive of fees, commissions or other expenses related to such repurchases). The May 2026 Share Repurchase Program replaced the February 2026 Share Repurchase Program. The terms of the May 2026 Share Repurchase Program provide that such program will terminate on the earlier of May 11, 2027, or when the maximum dollar amount under the authorization has been expended. Pursuant to the May 2026 Share Repurchase Program, the Company is authorized to make repurchases of its Class A Common Stock in the open market, through privately negotiated transactions, or otherwise, including under Rule 10b5-1 plans. In addition, repurchases under the May 2026 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 May 2026 Share Repurchase Program does not require the Company to acquire any particular amount of shares of Class A common stock, and may be extended, modified, suspended or discontinued at any time at the Company’s discretion. During the three months ended June 30, 2026, on an aggregate basis, the Company repurchased 2,312,558 shares of Class A Common Stock at an average price of $ 20.78 per share for a total cost inclusive of commissions and excise taxes of $ 48,588 . These repurchases consisted of 1,320,500 shares repurchased under the May 2026 Share Repurchase Program at an average price of $ 19.96 per share for a total cost inclusive of commissions and excise taxes of $ 26,642 , and 992,058 shares repurchased under the February 2026 Share Repurchase Program at an average price of $ 21.87 per share for a total cost inclusive of commissions and excise taxes of $ 21,946 . The repurchased shares were cancelled and retired, resulting in a reduction in both the number of shares outstanding and the Company's total stockholders' equity. During the nine months ended June 30, 2026, on an aggregate basis, the Company repurchased 6,056,132 shares of Class A Common Stock at an average price of $ 22.51 per share for a total cost inclusive of commissions and excise taxes of $ 137,884 . These repurchases consisted of 1,320,500 shares repurchased under the May 2026 Share Repurchase Program at an average price of $ 19.96 per share for a total cost inclusive of commissions and excise taxes of $ 26,642 , 2,695,740 shares repurchased under the February 2026 Share Repurchase Program at an average price of $ 22.26 per share for a total cost inclusive of commissions and excise taxes of $ 60,681 , and 2,039,892 shares repurchased under the August 2025 Share Repurchase Program at an average price of $ 24.51 per share for a total cost inclusive of commissions and excise taxes of $ 50,561 . The repurchased shares were cancelled and retired, resulting in a reduction in both the number of shares outstanding and the Company's total stockholders' equity. 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. 8. INCOME TAXES i3 Verticals, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from i3 Verticals, LLC based on i3 Verticals, Inc.’s economic interest in i3 Verticals, LLC. i3 Verticals, LLC's members, including the Company, are liable for federal, state and local income taxes based on their share 29 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) of i3 Verticals, LLC's pass-through taxable income. i3 Verticals, LLC is not a taxable entity for federal income tax purposes but is subject to and reports entity level tax in both Tennessee and Texas. 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 provisions within the Tax Cuts and Jobs Act. The legislation has multiple effective dates, with certain provisions effective in 2025 and others taking effect in later years. The Company is evaluating the future impact of these changes on its condensed consolidated financial statements. The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. When the estimate of the annual effective tax rate is unreliable, the Company records its income tax expense or benefit based upon a period to date effective tax rate. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the Company’s estimated tax rate changes, it makes a cumulative adjustment in that period. The Company’s provision for income taxes for continuing operations was a provision of $ 1,313 and $ 2,495 for the three and nine months ended June 30, 2026, respectively, and a benefit of $ 22 and a provision of $ 3,272 for the three and nine months ended June 30, 2025, respectively. Tax Receivable Agreement On June 25, 2018, the Company entered into a Tax Receivable Agreement with i3 Verticals, LLC and each of the Continuing Equity Owners (the “Tax Receivable Agreement”) 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 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. These tax benefit payments are not conditioned upon one or more of the Continuing Equity Owners maintaining a continued ownership interest in i3 Verticals, LLC. If a Continuing Equity Owner transfers Common Units but does not assign to the transferee of such units its rights under the Tax Receivable Agreement, such Continuing Equity Owner generally will continue to be entitled to receive payments under the Tax Receivable Agreement arising in respect of a subsequent exchange of such Common Units. In general, the Continuing Equity Owners’ rights under the Tax Receivable Agreement may not be assigned, sold, pledged or otherwise alienated to any person, other than certain permitted transferees, without (a) the Company's prior written consent, which may not be unreasonably withheld, conditioned or delayed, and (b) such persons becoming a party to the Tax Receivable Agreement and agreeing to succeed to the applicable Continuing Equity Owner’s interest therein. The Company expects to benefit from the remaining 15 % of the tax benefits, if any, that the Company may realize. During the nine months ended June 30, 2026, the Company did not acquire any common units of i3 Verticals, LLC in connection with the redemption of common units. The deferred tax asset balance was $ 35,416 as of June 30, 2026. The Company also has a corresponding Tax Receivable Agreement liability of $ 32,379 , of which $ 187 was recorded in accrued expenses and other current liabilities and $ 32,192 was recorded in long-term tax receivable agreement obligations as of June 30, 2026. Payments to the Continuing Equity Owners related to exchanges through June 30, 2026 will range from $ 0 to $ 5,364 per year and are expected to be paid over the next 22 years. The amounts recorded as of June 30, 2026, approximate the current estimate of expected tax savings and are subject to change after the filing of the Company’s U.S. federal and state income tax returns. Future payments under the Tax Receivable Agreement with respect to subsequent exchanges would be in addition to these amounts. 30 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) 9. FAIR VALUE MEASUREMENTS The Company applies the provisions of ASC 820, Fair Value Measurement , which defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or the price paid to transfer a liability as of the measurement date. A three-tier, fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The three levels are: Level 1 — Quoted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets. The carrying value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, settlement assets and obligations, accounts receivable, other assets, accounts payable, and accrued expenses, approximated their fair values as of June 30, 2026 and 2025, because of the relatively short maturity dates on these instruments. The carrying amount of debt approximates fair value as of June 30, 2026 and 2025, because interest rates on these instruments approximate market interest rates. The Company has no Level 1 or Level 2 financial instruments measured at fair value on a recurring basis. The following tables present the changes in the Company's Level 3 financial instruments that are measured at fair value on a recurring basis. Accrued Contingent Consideration Balance at September 30, 2025 $ 3,571 Contingent consideration accrued at time of business combination 7,600 Change in fair value of contingent consideration included in operating expenses 940 Contingent consideration paid — Balance at June 30, 2026 $ 12,111 Accrued Contingent Consideration Balance at September 30, 2024 (1) $ 2,154 Contingent consideration accrued at time of business combination 1,260 Change in fair value of contingent consideration included in operating expenses 440 Contingent consideration paid ( 60 ) Balance at June 30, 2025 $ 3,794 __________________________ 1. 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 condensed consolidated balance sheets and were not included in this amount. 31 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) The fair value of contingent consideration obligations includes inputs not observable in the market and thus represents a Level 3 measurement. The amount to be paid under these obligations is contingent upon the achievement of certain growth metrics related to the financial performance of the entities subsequent to acquisition. The fair value of material contingent consideration included in an acquisition is calculated using a Monte Carlo simulation as well as a discounted cash flows analysis. The contingent consideration is revalued each period until it is settled. 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 represents management's best estimate at the 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. The Company develops the projected future financial results based on an analysis of historical results, market conditions, and the expected impact of anticipated changes in the Company's overall business and/or product strategies. Approximately $ 980 and $ 82 of contingent consideration was recorded in accrued expenses and other current liabilities as of June 30, 2026 and September 30, 2025, respectively. Approximately $ 11,131 and $ 3,489 of contingent consideration was recorded in other long-term liabilities as of June 30, 2026 and September 30, 2025, respectively. During the three months ended June 30, 2026, the Company had a nonrecurring adjustment to the carrying value of an equity investment to its fair value as the result of a third party investment in the entity underlying our investment. This resulted in an increase of $ 9,868 to the fair value of the investment, which the Company recognized in other income. This investment was revalued using the quoted price for equity in the same entity in a market that is not typically active, and thus represents a Level 2 measurement. The Company reviews information quarterly to verify if there is new information warranting changes in the fair value of the investment. Approximately $ 10,820 and $ 659 of investments was recorded in other assets as of June 30, 2026 and September 30, 2025, respectively. 10. EQUITY-BASED COMPENSATION A summary of equity-based compensation expense for continuing operations recognized during the three and nine months ended June 30, 2026 and 2025 is as follows: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Stock options $ 2,414 $ 1,610 $ 5,615 $ 5,435 Restricted stock units 2,722 3,269 9,318 6,595 Equity-based compensation expense $ 5,136 $ 4,879 $ 14,933 $ 12,030 In connection with the sale of the Healthcare RCM Business, $ 2,517 and $ 3,112 of the Company's equity-based compensation expense was classified within "net income from discontinued operations" in the accompanying condensed consolidated statements of operations during three and nine months ended June 30, 2025, respectively. Amounts are included in other costs of services and in selling, general and administrative expense on the condensed consolidated statements of operations. Stock Options 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. 32 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) A summary of stock option activity for the nine months ended June 30, 2026 is as follows: Stock Options Weighted Average Exercise Price Outstanding at September 30, 2025 7,881,236 $ 24.61 Granted 1,245,000 23.61 Exercised ( 195,032 ) 23.18 Forfeited and cancelled ( 140,638 ) 26.59 Outstanding at June 30, 2026 8,790,566 $ 24.47 Exercisable at June 30, 2026 6,765,894 $ 24.94 The weighted-average grant date fair value of stock options granted during the nine months ended June 30, 2026 was $ 12.41 . As of June 30, 2026, there were 8,790,566 stock options outstanding, of which 6,765,894 were exercisable. As of June 30, 2026, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $ 18,042 , which is expected to be recognized over a weighted-average period of 3.4 years. The total fair value of stock options that vested during the three and nine months ended June 30, 2026 was $ 187 and $ 5,024 , respectively. Restricted Stock Units The Company has issued Class A common stock in the form of restricted stock units ("RSUs") under the 2018 Plan. A summary of activity related to restricted stock units for the nine months ended June 30, 2026 is as follows: Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at September 30, 2025 1,160,641 $ 24.89 Granted 405,826 24.01 Vested ( 409,714 ) 24.77 Forfeited and cancelled ( 79,175 ) 24.49 Outstanding at June 30, 2026 1,077,578 $ 24.63 The weighted-average grant date fair value of RSUs granted during three and nine months ended June 30, 2026 was $ 24.01 . As of June 30, 2026, total unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures, was $ 18,210 , which is expected to be recognized over a weighted average period of 2.5 years. The total fair value of RSUs that vested during the three and nine months ended June 30, 2026 was $ 455 and $ 10,148 , respectively. 33 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) 11. COMMITMENTS AND CONTINGENCIES Leases The Company utilizes office space and equipment under operating leases. Rent expense from continuing operations under these leases amounted to $ 658 and $ 2,049 during the three and nine months ended June 30, 2026, respectively, and $ 700 and $ 1,557 during the three and nine months ended June 30, 2025, respectively. 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 June 30, 2026, the remaining aggregate minimum contractual commitment under these arrangements was approximately $ 19,583 , 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: Fiscal Years ending September 30: 2026 (three months remaining) $ 1,992 2027 11,020 2028 4,770 2029 1,189 2030 612 Thereafter — Total $ 19,583 Litigation 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. If the Company determines the likelihood of a negative outcome with respect to any such matter is probable and the amount of the loss can be reasonably estimated, the Company records an accrual for the estimated amount of loss for the expected outcome of the matter. If the likelihood of a negative outcome with respect to material matters is reasonably possible and the Company is able to determine an estimate of the amount of possible loss or a range of loss, whether in excess of a related accrued liability or where there is no accrued liability, the Company discloses the estimate of the amount of possible loss or range of loss. 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. 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. The Company has considered all such ordinary course legal proceedings in formulating its disclosures and assessments. After taking into consideration the evaluation of such legal matters by the Company's legal counsel, while the Company does not believe at this time that these matters will have a material effect on its business or financial condition, the Company cannot give assurance that these matters will not have a material effect on its consolidated balance sheets, results of operations or cash flows for any particular reporting period. PaySchools Litigation On May 16, 2025, Suzanne Hess, individually and on behalf of a putative class of citizens of the State of New York, filed a Class Action Complaint and Demand for Jury Trial (the “Complaint”), in the Supreme Court of the State of New York, Nassau County, against i3 Verticals, LLC and CP-DBS, LLC d/b/a “PaySchools”, a subsidiary 34 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) of i3 Verticals, LLC. The claimed damages relate to services offered by PaySchools that enable parents, guardians and caregivers to fund lunches for students in certain New York school districts, and allegedly unlawful practices by PaySchools related to the fees charged for these school lunch services. The plaintiff seeks unspecified monetary damages, restitution, disgorgement, and attorneys’ fees and costs, as well as injunctive relief prohibiting PaySchools from charging transaction-based fees. On June 20, 2025, the matter was removed to the United States District Court for the Eastern District of New York, where a motion to dismiss the Complaint was filed by PaySchools on January 14, 2026. On August 4, 2026, the court granted the motion, and dismissed all of the claims in the Complaint, while at the same time granting the plaintiffs leave to amend the Complaint for a period of time. The Company is unable to predict the outcome of this litigation. While the Company does not believe that this matter will have a material effect on its business or financial condition, the Company cannot give assurance that this matter will not have a material effect on its consolidated balance sheets, 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 ("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") . The lawsuit is styled as: 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. Gautreaux, III, et. al., individually and as class representatives vs. i3-Software & Services, LLC; 1120 South Pointe Properties, LLC, formerly known as Software and Services of Louisiana, L.L.C.; i3 Verticals, Inc.; i3 Verticals, LLC; Gregory R. Teeters; and Scott Carrington . 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. 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-pleaded their claims in a Second Amended Petition, which is under seal (the “Sealed Petition”). The damages sought by the plaintiffs in the Sealed Petition materially exceeded the specifically enumerated damages of $ 22,000 sought in the Petition as noted above. 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. Class certification fact and expert discovery, including third-party subpoenas and motion practice, is also underway, and the Court originally scheduled a March 31, 2026 hearing principally on the issue of class certification. That hearing was rescheduled for June 8, 2026, and has been rescheduled again for September 28, 2026. 35 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) 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 the Company does not believe that this matter will have a material effect on its business or financial condition, the Company cannot give assurance that this matter will not have a material effect on its consolidated balance sheets, results of operations or cash flows for any particular reporting period. 12. 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 Class A common stock of the Company or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement. See Note 8 for further information. As of June 30, 2026, the total amount due under the Tax Receivable Agreement was $ 32,379 . On January 23, 2025, the Company and i3 Verticals, LLC effected certain recapitalization actions in order to reduce excess cash held at the Company as a result of its “Up-C” structure following a tax distribution received by the Company and the Continuing Equity Owners earlier in January 2025 (the “LLC Tax Distribution”) related to the taxable income associated with the gain on the sale of the Merchant Services Business completed in September 2024 that was anticipated to be recognized for 2024 federal income tax purposes by members of the Company. As a result of differences in the amount of net taxable income allocable to the Company and to the Continuing Equity Owners and the higher assumed tax rate of the Continuing Equity Owners than the tax rate of the Company, this LLC Tax Distribution resulted in the Company holding cash in excess of the Company’s tax liabilities, its obligation to make payments under 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 Verticals, 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 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 held approximately 29.17 % of the outstanding Common Units (a decrease of approximately 0.78 % compared to the Continuing Equity Owners’ ownership of 36 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) approximately 29.95 % of the outstanding Common Units immediately prior to giving effect to these recapitalization actions). 13. SEGMENTS REPORTING The Company determines its operating segments based on ASC 280, Segment Reporting , in alignment with how the CODM monitors and manages the performance of the business as well as the level at which financial information is reviewed. 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. The Company's core business for continuing operations is providing mission-critical enterprise software solutions to its public sector customers. The Company determined that it had one operating segment and one reportable segment. This 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'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 condensed 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. 37 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (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 for continuing operations for the three and nine months ended June 30, 2026 and 2025: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Revenue $ 53,067 $ 51,901 $ 163,256 $ 158,257 Less: Costs of services (excluding depreciation and amortization) 16,062 16,546 50,273 48,363 People operating expenses 16,223 15,957 47,557 47,126 Technology operating expenses 2,052 2,051 6,372 6,810 Other operating expenses (1) 5,418 4,623 15,538 12,822 Other segment expenses (2) 7,434 13,720 34,359 39,019 Net income (loss) from continuing operations $ 5,878 $ ( 996 ) $ 9,157 $ 4,117 ____________________ 1. 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. 2. 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. The measure of segment assets is reported on the balance sheet as total consolidated assets. 14. NON-CONTROLLING INTEREST i3 Verticals, Inc. is the sole managing member of i3 Verticals, LLC, and as a result, consolidates the financial results of i3 Verticals, LLC and reports a non-controlling interest representing the Common Units of i3 Verticals, LLC held by the Continuing Equity Owners. Changes in i3 Verticals, Inc.’s ownership interest in i3 Verticals, LLC while i3 Verticals, Inc. retains its controlling interest in i3 Verticals, LLC will be accounted for as equity transactions. As such, future redemptions or direct exchanges of Common Units of i3 Verticals, LLC by the Continuing Equity Owners will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in capital when i3 Verticals, LLC has positive or negative net assets, respectively. As of June 30, 2026 and 2025, respectively, i3 Verticals, Inc. owned 18,241,855 and 23,780,915 of i3 Verticals, LLC's Common Units, representing a 68.5 % and 73.8 % economic ownership interest in i3 Verticals, LLC. 38 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) The following table summarizes the impact on equity due to changes in the Company's ownership interest in i3 Verticals, LLC: Nine Months Ended June 30, 2026 2025 Net income attributable to non-controlling interest $ 3,372 $ 7,518 Transfers from non-controlling interests: Distributions to non-controlling interest holders 122 ( 347 ) Redemption of common units in i3 Verticals, LLC — ( 17,070 ) Recapitalization from contribution to i3 Verticals, LLC — 5,689 Allocation of equity from non-controlling interests ( 11,851 ) ( 3,588 ) Net transfers from non-controlling interests ( 11,729 ) ( 15,316 ) Change from net income attributable to non-controlling interests and net transfers from non-controlling interests $ ( 8,357 ) $ ( 7,798 ) See Note 12 for information regarding certain recapitalization actions the Company and i3 Verticals, LLC effected during the nine months ended June 30, 2025 in order to reduce excess cash held at the Company as a result of its “Up-C” structure, which adjusted the Company’s and the Continuing Equity Owners’ respective ownership interests in i3 Verticals, LLC. 15. EARNINGS PER SHARE Basic earnings per share of Class A common stock is computed by dividing net income available to i3 Verticals, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to i3 Verticals, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. 39 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock from continuing operations for the three and nine months ended June 30, 2026 and 2025: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Basic net income (loss) per share: Numerator Net income (loss) $ 5,878 $ ( 996 ) $ 9,157 $ 4,117 Less: Net income (loss) attributable to non-controlling interest 2,258 ( 586 ) 3,497 1,653 Net income (loss) attributable to Class A common stockholders $ 3,620 $ ( 410 ) $ 5,660 $ 2,464 Denominator Weighted average shares of Class A common stock outstanding 19,419,792 24,345,826 21,638,108 23,909,714 Basic net income (loss) per share $ 0.19 $ ( 0.02 ) $ 0.26 $ 0.10 Diluted net income (loss) per share: Numerator Net income (loss) attributable to Class A common stockholders $ 3,620 $ ( 410 ) $ 5,660 $ 2,464 Reallocation of net loss assuming conversion of common units (1)(2) — ( 446 ) — — Net income (loss) attributable to Class A common stockholders – diluted $ 3,620 $ ( 856 ) $ 5,660 $ 2,464 Denominator Weighted average shares of Class A common stock outstanding 19,419,792 24,345,826 21,638,108 23,909,714 Weighted average effect of dilutive securities (2) 123,819 8,637,499 647,521 913,921 Weighted average shares of Class A common stock outstanding – diluted 19,543,611 32,983,325 22,285,629 24,823,635 Diluted net income (loss) per share $ 0.19 $ ( 0.03 ) $ 0.25 $ 0.10 __________________________ 1. 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 8 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. 2. For the three and nine months ended June 30, 2026 and 2025, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net income per share of Class A common stock for continuing operations: a. 8,381,681 , 8,381,681 and 9,359,632 weighted average shares of Class B common stock for the three months ended June 30, 2026 and the nine months ended June 30, 2026 and 2025, respectively, along with the reallocation of associated 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 8 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, b. 6,911,778 , 4,362,416 , 4,601,639 and 4,436,416 stock options for the three months ended June 30, 2026 and 2025 and for the nine months ended June 30, 2026 and 2025, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and 40 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) c. 952,796 shares of Class A common stock 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 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 for the three and nine months ended June 30, 2026 and 2025: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 (1) 2026 2025 Basic net (loss) income per share: Numerator Net (loss) income $ ( 217 ) $ 19,421 $ ( 355 ) $ 18,185 Less: Net (loss) income attributable to non-controlling interest ( 79 ) 6,129 ( 125 ) 5,865 Net (loss) income attributable to Class A common stockholders $ ( 138 ) $ 13,292 $ ( 230 ) $ 12,320 Denominator Weighted average shares of Class A common stock outstanding 19,419,792 24,345,826 21,638,108 23,909,714 Basic net (loss) income per share (1) $ ( 0.01 ) $ 0.55 $ ( 0.01 ) $ 0.52 Diluted net (loss) income per share: Numerator Net (loss) income attributable to Class A common stockholders $ ( 138 ) $ ( 230 ) $ 12,320 Reallocation of net (loss) income assuming conversion of common units (2)(3) ( 60 ) ( 95 ) 4,459 Net (loss) income attributable to Class A common stockholders – diluted $ ( 198 ) $ ( 325 ) $ 16,779 Denominator Weighted average shares of Class A common stock outstanding 19,419,792 21,638,108 23,909,714 Weighted average effect of dilutive securities (3) 8,381,681 8,381,681 10,273,553 Weighted average shares of Class A common stock outstanding – diluted 27,801,473 30,019,789 34,183,267 Diluted net (loss) income per share $ ( 0.01 ) $ ( 0.01 ) $ 0.49 __________________________ 1. For the three months ended June 30, 2025, net income (loss) from continuing operations attributable to i3 Verticals, Inc. was in a loss position, so diluted net income per share of Class A common stock for discontinued operations is computed in the same manner as basic net income per share of Class A common stock for discontinued operations. The following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net loss per share of Class A common stock for discontinued operations: a. 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 because the effect would have been anti-dilutive, b. 4,362,416 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, and c. 952,796 shares 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. 41 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) 2. 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 8 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. 3. For the three months ended June 30, 2026 and the nine months ended June 30, 2026 and 2025, 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 from discontinued operations: a. 6,911,778 , 4,601,639 and 4,436,416 options to purchase shares of Class A common stock for the three months ended June 30, 2026 and the nine months ended June 30, 2026 and 2025, 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 b. 123,819 and 647,521 shares of Class A common stock for the three and nine months ended June 30, 2026, 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 consolidated operations for three and nine months ended June 30, 2026 and 2025: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Basic net income per share: Numerator Net income $ 5,661 $ 18,425 $ 8,802 $ 22,302 Less: Net income attributable to non-controlling interest 2,179 5,543 3,372 7,518 Net income attributable to Class A common stockholders $ 3,482 $ 12,882 $ 5,430 $ 14,784 Denominator Weighted average shares of Class A common stock outstanding 19,419,792 24,345,826 21,638,108 23,909,714 Basic net income per share $ 0.18 $ 0.53 $ 0.25 $ 0.62 Diluted net income per share: Numerator Net income attributable to Class A common stockholders $ 3,482 $ 12,882 $ 5,430 $ 14,784 Reallocation of net income assuming conversion of common units (1)(2) — 4,214 — 5,716 Net income attributable to Class A common stockholders – diluted $ 3,482 $ 17,096 $ 5,430 $ 20,500 Denominator Weighted average shares of Class A common stock outstanding 19,419,792 24,345,826 21,638,108 23,909,714 Weighted average effect of dilutive securities (3) 123,819 9,590,295 647,521 10,273,553 Weighted average shares of Class A common stock outstanding – diluted 19,543,611 33,936,121 22,285,629 34,183,267 Diluted net income per share $ 0.18 $ 0.50 $ 0.24 $ 0.60 __________________________ 42 i3 VERTICALS, Inc. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (in thousands, except unit, share and per share amounts) 1. 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 8 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. 2. For the three and nine months ended June 30, 2026 and 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 from consolidated operations: a. 8,381,681 weighted average shares of Class B common stock for both the three and nine months ended June 30, 2026, along with the reallocation of associated 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 8 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 b. 6,911,778 , 4,362,416 , 4,601,639 and 4,436,416 stock options for the three months ended June 30, 2026 and 2025 and the nine months ended June 30, 2026 and 2025, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive. 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. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. 16. SUBSEQUENT EVENTS Recent Share Repurchases Since June 30, 2026 and as of August 6, 2026, the Company repurchased 301,847 shares of Class A Common Stock under the May 2026 Share Repurchase Program at an average price of $ 20.38 per share for a total cost inclusive of commissions and excise taxes of $ 6,220 . The repurchased shares were cancelled and retired, resulting in a reduction in both the number of shares outstanding and the Company's total stockholders' equity. 43