Download PDF

1. Company Snapshot

1.a. Company Description

i3 Verticals, Inc.provides integrated payment and software solutions to small- and medium-sized businesses and organizations in education, non-profit, public sector, and healthcare markets in the United States.It operates in two segments, Merchant Services, and Proprietary Software and Payments.


The company offers payment processing services that enables clients to accept electronic payments, facilitating the exchange of funds and transaction data between clients, financial institutions, and payment networks.The company also licenses software; and provides ongoing support, and other point of sale-related solutions.It offers its solutions to clients through direct sales force; distribution partners, including independent software vendors, value-added resellers, and independent sales organizations; and referral partners, such as financial institutions, trade associations, chambers of commerce, and card issuers.


The company was founded in 2012 and is headquartered in Nashville, Tennessee.

Show Full description

1.b. Last Insights on IIIV

Recent positive drivers behind i3 Verticals, Inc.'s performance include: * Strong Q4 2024 earnings, with the company reporting a beat on both revenue and earnings per share. * The successful go-live of its self-service ePortal for the City of Phoenix Water Services Department, enabling customers to access an intuitive self-service experience. * A new contract with Saskatchewan Province to provide motor carrier services, further establishing the company's Public Sector presence in Canada. * The company's ePortal solution has been recognized for its ability to empower customers with self-service capabilities, highlighting its competitive advantage in the market. These developments demonstrate the company's ability to deliver strong financial results and expand its presence in key markets, driving growth and increasing its competitiveness.

1.c. Company Highlights

2. i3 Verticals Delivers Solid Earnings, Guided for Continued Growth

The company's financial performance was solid, with actual EPS coming in at $0.27, beating estimates of $0.26. Revenue distribution is expected to be approximately 23% in Q1, 25.5% in Q2, 24.5% in Q3, and 27% in Q4. The long-term expectation for organic revenue growth remains at high single digits, with analysts estimating next year's revenue growth at 6.6%. As Clay M. Whitson noted, the cadence driven by revenue recognition on certain projects in utilities and transportation markets will be particularly true in Q1, which is expected to be a softer quarter.

Publication Date: Nov -20

📋 Highlights
  • Revenue Distribution by Quarter: Expected to be 23% in Q1, 25.5% in Q2, 24.5% in Q3, and 27% in Q4.
  • Organic Growth Outlook: Maintained at high single digits despite 2026 revenue challenges, with recovery expected in 2027+
  • Buyback Approval Refreshed: $50 million authorization, with $0-2 "meaningful" M&A deals planned in 2026
  • Pricing Strategy: Targeting 3-5% consistent price increases and 2026 professional services decline due to project timing
  • Strategic Partnership Expansion: West Virginia Supreme Court collaboration to deploy i3 Court One, enhancing transparency and efficiency

Revenue and Margin Expectations

The company's revenue is expected to be driven by its structured organization into five primary markets: justice tech, transportation, public administration, education, and utilities. Intra-market cross-selling has naturally progressed into solution bundling, with leadership identifying synergistic opportunities across markets to accelerate revenue and deepen customer engagements. The company is also leaning into recurring revenue and expects professional services to be down in 2026 due to the timing and cadence of certain projects.

Growth Opportunities and M&A

Rick Stanford mentioned various opportunities for potential acquisition targets, with ongoing discussions and a disciplined approach to pricing. The company's acquisition philosophy is steady, focusing on opportunities that align with strategic goals and operational compatibility. The company has refreshed its buyback approval to $50 million, aiming to be opportunistic and not chase low returns. It expects to see M&A activity, including a couple of meaningful deals in 2026, but nothing transformative.

Valuation and Outlook

Using the current valuation metrics, the stock trades at a P/E Ratio of 32.96, P/B Ratio of 1.51, and P/S Ratio of 2.49. The EV/EBITDA ratio stands at 12.82, indicating a reasonable valuation. With a long-term expectation for organic revenue growth remaining at high single digits, the current valuation appears to be justified. The ROE stands at 4.66%, and the ROIC is 0.34%, indicating a relatively stable return profile. With a Net Debt / EBITDA ratio of -0.69, the company's balance sheet appears healthy.

3. NewsRoom

Card image cap

Why i3 Verticals Stock Dropped Today

Nov -18

Source: fool.com

Card image cap

i3 Verticals, Inc. (IIIV) Q4 2025 Earnings Call Transcript

Nov -18

Source: seekingalpha.com

Card image cap

10,242 Shares in i3 Verticals, Inc. $IIIV Purchased by Sequoia Financial Advisors LLC

Oct -23

Source: defenseworld.net

Card image cap

i3 Verticals and West Virginia Supreme Court Expand Partnership

Oct -20

Source: businesswire.com

Card image cap

i3 Verticals, Inc. (IIIV) Q3 2025 Earnings Call Transcript

Aug -08

Source: seekingalpha.com

Card image cap

i3 Verticals Reports Third Quarter 2025 Financial Results

Aug -07

Source: businesswire.com

Card image cap

i3 Verticals to Participate in June 2025 Investor Conferences

May -28

Source: businesswire.com

Card image cap

i3 Verticals Focuses On Public Sector, But Catalysts Are Unclear

May -14

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.26%)

6. Segments

Software and Services

Expected Growth: 7%

i3 Verticals' Software and Services segment growth is driven by increasing adoption of payment processing solutions, expansion into new markets, and strategic acquisitions. The company's proprietary software and integrated payment solutions are in high demand, particularly in the healthcare and public sector verticals. Additionally, the shift towards digital payments and the need for secure, compliant payment processing solutions are contributing to the segment's growth.

Merchant Services

Expected Growth: 5%

i3 Verticals' Merchant Services growth is driven by increasing adoption of omnichannel payment solutions, rising demand for integrated payment processing, and expansion into new industries such as healthcare and non-profit. Additionally, strategic acquisitions and partnerships, as well as investments in technology and security, contribute to the segment's growth.

Other

Expected Growth: 4%

i3 Verticals' 4% growth is driven by increasing adoption of its payment processing solutions, expansion into new markets, and strategic acquisitions. The company's focus on software-enabled payments and integrated payment facilitation also contributes to its growth. Additionally, the rising demand for omnichannel payment solutions and the need for businesses to optimize their payment processing operations further support i3 Verticals' growth.

7. Detailed Products

Payment Processing

i3 Verticals provides payment processing solutions for businesses, enabling them to accept and process payments securely and efficiently.

Integrated Payments

i3 Verticals offers integrated payment solutions that combine payment processing with software applications, providing a seamless payment experience.

Point of Sale (POS) Solutions

i3 Verticals provides POS solutions for businesses, enabling them to manage transactions, inventory, and customer data efficiently.

Merchant Services

i3 Verticals offers merchant services, including credit card processing, debit card processing, and gift card programs.

Software Development

i3 Verticals develops custom software solutions for businesses, integrating payment processing and other features to meet specific needs.

8. i3 Verticals, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for i3 Verticals, Inc. is medium due to the presence of alternative payment processing solutions, but the company's diversified product offerings and strong relationships with clients mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for i3 Verticals, Inc. due to the company's strong market position and the lack of significant buyer concentration in the industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for i3 Verticals, Inc. due to the presence of multiple suppliers in the market, but the company's scale and negotiating power mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low for i3 Verticals, Inc. due to the high barriers to entry in the payment processing industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high for i3 Verticals, Inc. due to the presence of several established competitors in the payment processing industry, leading to a highly competitive market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 62.82%
Debt Cost 9.13%
Equity Weight 37.18%
Equity Cost 11.73%
WACC 10.10%
Leverage 168.97%

11. Quality Control: i3 Verticals, Inc. passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
i3 Verticals

A-Score: 5.1/10

Value: 3.6

Growth: 4.8

Quality: 7.8

Yield: 0.0

Momentum: 8.5

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
NetScout Systems

A-Score: 5.0/10

Value: 5.5

Growth: 1.7

Quality: 7.5

Yield: 0.0

Momentum: 8.0

Volatility: 7.0

1-Year Total Return ->

View Full Report
Stock-Card
Yext

A-Score: 4.3/10

Value: 2.4

Growth: 6.9

Quality: 5.9

Yield: 0.0

Momentum: 7.5

Volatility: 3.3

1-Year Total Return ->

View Full Report
Stock-Card
Zuora

A-Score: 4.2/10

Value: 5.2

Growth: 4.3

Quality: 3.9

Yield: 0.0

Momentum: 6.5

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
Appian

A-Score: 4.2/10

Value: 4.9

Growth: 6.4

Quality: 5.4

Yield: 0.0

Momentum: 4.0

Volatility: 4.3

1-Year Total Return ->

View Full Report
Stock-Card
AuthID

A-Score: 2.8/10

Value: 6.6

Growth: 4.7

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.21$

Current Price

23.21$

Potential

-0.00%

Expected Cash-Flows