On August 8, 2024, i3 Verticals Inc (IIIV, Financial) released its 8-K filing detailing its financial results for the fiscal third quarter ended June 30, 2024. i3 Verticals Inc offers integrated payment and software solutions to small and medium-sized businesses and organizations in strategic vertical markets, including schools, the public sector, not-for-profit organizations, and healthcare. The company generates maximum revenue from its Software and Services segment.
Performance Overview
For the third quarter of 2024, i3 Verticals Inc reported revenue from continuing operations of $56.0 million, a 2% decrease compared to the same period last year. The net loss from continuing operations widened to $13.8 million, up from $10.9 million in the prior year's third quarter. Adjusted EBITDA from continuing operations was $12.9 million, an 11% decrease from the previous year.
Financial Achievements and Challenges
Despite the revenue decline, the company achieved a 4% growth in Annualized Recurring Revenue (ARR), reaching $181.3 million. However, the net loss from continuing operations attributable to i3 Verticals Inc increased to $13.8 million from $10.9 million in the prior year's third quarter. The diluted net loss per share attributable to Class A common stock from continuing operations was $0.49, compared to $0.37 in the previous year.
Income Statement Highlights
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Revenue | $56.0 million | $57.3 million | (2)% |
| Net Loss from Continuing Operations | $13.8 million | $10.9 million | 27% |
| Adjusted EBITDA | $12.9 million | $14.5 million | (11)% |
Balance Sheet and Cash Flow
As of June 30, 2024, i3 Verticals Inc reported total assets of $861.7 million, down from $881.5 million as of September 30, 2023. The company had $9.7 million in cash and cash equivalents, an increase from $3.1 million at the end of the previous fiscal year. Net cash provided by operating activities for the nine months ended June 30, 2024, was $33.3 million, compared to $26.4 million in the same period last year.
Strategic Moves and Outlook
i3 Verticals Inc completed the acquisition of a permitting and licensing business for $18.0 million in cash and 311,634 shares of Class A Common Stock. The company also authorized a $50 million share repurchase program, set to terminate on August 8, 2025, or when the maximum amount is expended.
Greg Daily, Chairman and CEO of i3 Verticals, commented, "Following the closing, we will be a pure vertical market software business focused entirely on the Public Sector, Education, and Healthcare markets. I am confident the remaining business has a very bright future."
Conclusion
i3 Verticals Inc's Q3 2024 earnings report highlights both challenges and strategic initiatives. While the company faced a decline in revenue and an increase in net loss, it continues to focus on growth through acquisitions and share repurchase programs. The company's shift towards a pure vertical market software business could position it for future growth in its strategic verticals.
Explore the complete 8-K earnings release (here) from i3 Verticals Inc for further details.
