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i3 Verticals Q2 2025 Earnings Report
i3 Verticals, Inc. reported its second quarter 2025 financial results, including an increase in revenue and a shift from net loss to net income from continuing operations, alongside strategic acquisitions and divestitures.
Key Takeaways
i3 Verticals, Inc. reported a strong second quarter for fiscal year 2025, with revenue increasing by 8.8% to $63.1 million and a significant turnaround in net income from continuing operations, moving from a net loss of $2.3 million in the prior year to a net income of $1.1 million. The company also completed the acquisition of a utility billing software company and divested its Healthcare RCM Business.
Second quarter revenue increased by 8.8% year-over-year to $63.1 million.
Net income from continuing operations shifted from a $2.3 million loss to a $1.1 million income.
Adjusted EBITDA from continuing operations grew by 12.7% to $17.1 million, with a margin of 27.2%.
The company acquired a utility billing software company for $9.0 million and divested its Healthcare RCM Business for $96.0 million.
i3 Verticals
i3 Verticals
Forward Guidance
The Company provided revised outlook for RemainCo operations for the fiscal year ending September 30, 2025, excluding the impact of acquisitions, dispositions, and transaction-related costs, and after the divestiture of the Healthcare RCM Business.
Positive Outlook
- The company is now completely focused on bringing the best possible enterprise software to public sector clients.
- The divestiture of the RCM business primes the company for additional M&A opportunities.
- The recent acquisition of a utility billing and accounting platform is expected to be a great fit with existing utilities practices.
- The company anticipates continued growth in its core business segments.
- The strategic shift is expected to enhance long-term, reliable revenue growth.
Challenges Ahead
- The company's practice is to provide annual guidance excluding the impact of acquisitions, dispositions, and transaction-related costs, which may limit comparability.
- Reconciliations of adjusted EBITDA and adjusted diluted earnings per share guidance to GAAP measures are not available without unreasonable efforts.
- Forecasting certain projected amounts for reconciliations is inherently difficult and may not be accurate.
- Changes in the fair value of contingent consideration, income tax expense, and equity-based compensation expense may significantly impact future GAAP financial results.
- The forward-looking statements are subject to various risks and uncertainties, including economic conditions, competition, and regulatory developments.