Q2 2024 I3 Verticals Inc Earnings Call Transcript
Key Points
- Revenues for Q2 2024 increased by 1% to $94.5 million from $93.9 million in Q2 2023, reflecting organic growth from recurring sources.
- Adjusted EBITDA increased by 4% to $25.8 million for Q2 2024 from $24.7 million for Q2 2023, with improvements in Merchant Services margin and lower corporate expenses.
- Over 80% of i3 Verticals Inc's revenues in Q2 2024 came from recurring sources, demonstrating a strong and stable revenue base.
- The company is exploring the sale of the merchant services business, which could significantly reduce debt and free up resources for growth in strategic verticals like public sector, education, and healthcare.
- i3 Verticals Inc has made significant progress in internal realignment, positioning the company for sustainable growth and improved operational efficiency.
- Nonrecurring sales of software licenses declined by over $2 million, reflecting the ongoing shift to SaaS and impacting immediate revenue.
- Professional services revenues declined by $1.3 million due to delays in project implementations, notably the Manitoba driver's license project.
- Pro forma adjusted diluted earnings per share decreased to $0.34 for Q2 2024 from $0.38 for Q2 2023, driven by higher interest expenses following the repurchase of exchangeable notes.
- The company lowered its full-year guidance, reflecting delays and uncertainties in project timelines and revenue recognition.
- Despite the strategic focus on recurring revenues, the transition has led to short-term revenue declines in nonrecurring high-margin areas, which could impact profitability if not managed effectively.
Good day and welcome to the three verticals Second Quarter 2024 earnings conference call. Today, all participants will be in a listen-only mode. Today's call is being recorded and a replay will be available starting today, May 17 starting today through May 17th. The number for the replay is 877-344-7529, and the code is 6854757. The replay also may be accessed for 30 days at the company's website.
At this time, I would like to turn the conference call over to Mr. Geoff Smith, SVP of Finance. Please go ahead, sir.
Good morning, and welcome to the Second Quarter 2024 Conference Call for i3 Verticals. Joining me on this call are Greg Daily, our Chairman and CEO; Clay Whitson, our CFO; Rick Stanford, our President; and Paul Christians, our COO.
Any non-GAAP financial measure is discussed in today's call. You'll also find a reconciliation to the most directly comparable GAAP financial GAAP financial measure. Reviewing yesterday's earnings release is the company's
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