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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission file number: 001-38532
i3 Verticals, Inc.
(Exact name of registrant as specified in its charter)

Delaware | 82-4052852
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
40 Burton Hills Blvd., Suite 415 |
Nashville, TN | 37215
(Address of principal executive offices) | (Zip Code)
(615) 465-4487
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Class A Common Stock, $0.0001 Par Value | IIIV | Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☐ |  |  | Accelerated filer | ☒
Non-accelerated filer | ☐ |  |  | Smaller reporting company | ☐
Emerging growth company | ☐ |  |  |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of May 7, 2026, there were 19,549,833 outstanding shares of Class A common stock, $0.0001 par value per share, and 8,381,681 outstanding shares of Class B common stock, $0.0001 par value per share.

TABLE OF CONTENTS

| Page
PART I. FINANCIAL INFORMATION | 3
Item 1. Financial Statements (Unaudited) | 3
Condensed Consolidated Balance Sheets | 4
Condensed Consolidated Statements of Operations | 5
Condensed Consolidated Statement of Changes in Equity | 6
Condensed Consolidated Statements of Cash Flows | 8
Notes to the Unaudited Condensed Consolidated Financial Statements | 10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 51
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 69
Item 4. Controls and Procedures | 70
PART II. OTHER INFORMATION | 70
Item 1. Legal Proceedings | 70
Item 1A. Risk Factors | 70
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 71
Item 3. Defaults Upon Senior Securities | 71
Item 4. Mine Safety Disclosures | 71
Item 5. Other Information | 71
Item 6. Exhibits | 72
SIGNATURES | 73

2

PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
3

i3 Verticals, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share amounts)

| March 31, |  | September 30,
| 2026 |  | 2025
Assets |  |  |
Current assets |  |  |
Cash and cash equivalents | $ | 7,142 |  |  | $ | 66,672 |
Accounts receivable, net | 55,284 |  |  | 58,467 |
Settlement assets | 220 |  |  | 411 |
Prepaid expenses and other current assets | 15,564 |  |  | 12,075 |
Total current assets | 78,210 |  |  | 137,625 |
Property and equipment, net | 6,023 |  |  | 7,181 |
Restricted cash | 2,755 |  |  | 250 |
Capitalized software, net | 52,267 |  |  | 48,314 |
Goodwill | 282,284 |  |  | 248,469 |
Intangible assets, net | 156,805 |  |  | 135,797 |
Deferred tax asset | 47,842 |  |  | 49,058 |
Operating lease right-of-use assets | 4,485 |  |  | 4,577 |
Other assets | 5,749 |  |  | 7,140 |
Total assets | $ | 636,420 |  |  | $ | 638,411 |
Liabilities and equity |  |  |
Liabilities |  |  |
Current liabilities |  |  |
Accounts payable | $ | 3,630 |  |  | $ | 6,248 |
Accrued expenses and other current liabilities | 20,025 |  |  | 24,525 |
Settlement obligations | 220 |  |  | 411 |
Deferred revenue | 32,909 |  |  | 37,678 |
Current portion of operating lease liabilities | 1,786 |  |  | 1,827 |
Total current liabilities | 58,570 |  |  | 70,689 |
Long-term debt, less current portion | 81,000 |  |  | — |
Long-term tax receivable agreement obligations | 32,379 |  |  | 32,191 |
Operating lease liabilities, less current portion | 2,826 |  |  | 2,964 |
Other long-term liabilities | 23,409 |  |  | 14,844 |
Total liabilities | 198,184 |  |  | 120,688 |
Commitments and contingencies (see Note 14) |  |  |
Stockholders' equity |  |  |
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2026 and September 30, 2025 | — |  |  | — |
Class A common stock, par value $0.0001 per share, 150,000,000 shares authorized; 20,541,392 and 23,983,125 shares issued and outstanding as of March 31, 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 and 8,381,681 shares issued and outstanding as of March 31, 2026 and September 30, 2025, respectively | 1 |  |  | 1 |
Additional paid-in capital | 197,160 |  |  | 271,310 |
Accumulated earnings | 120,218 |  |  | 118,270 |
Total stockholders' equity | 317,381 |  |  | 389,583 |
Non-controlling interest | 120,855 |  |  | 128,140 |
Total equity | 438,236 |  |  | 517,723 |
Total liabilities and equity | $ | 636,420 |  |  | $ | 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 March 31, |  | Six Months Ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Revenue | $ | 57,518 |  |  | $ | 54,135 |  |  | $ | 110,189 |  |  | $ | 106,356 |
Operating expenses |  |  |  |  |  |  |
Costs of services (excluding depreciation and amortization) | 17,138 |  |  | 16,580 |  |  | 34,720 |  |  | 32,156 |
Selling, general and administrative | 29,058 |  |  | 26,282 |  |  | 56,047 |  |  | 52,761 |
Depreciation and amortization | 7,703 |  |  | 6,998 |  |  | 14,568 |  |  | 13,859 |
Change in fair value of contingent consideration | (124) |  |  | (786) |  |  | (498) |  |  | 466 |
Total operating expenses | 53,775 |  |  | 49,074 |  |  | 104,837 |  |  | 99,242 |
Income from operations | 3,743 |  |  | 5,061 |  |  | 5,352 |  |  | 7,114 |
Other expenses (income) |  |  |  |  |  |  |
Interest expense | 1,141 |  |  | 446 |  |  | 1,522 |  |  | 1,126 |
Other income | (70) |  |  | (593) |  |  | (631) |  |  | (2,419) |
Total other expenses (income) | 1,071 |  |  | (147) |  |  | 891 |  |  | (1,293) |
Income before income taxes | 2,672 |  |  | 5,208 |  |  | 4,461 |  |  | 8,407 |
Provision for income taxes | 478 |  |  | 2,885 |  |  | 1,182 |  |  | 3,294 |
Net income from continuing operations | 2,194 |  |  | 2,323 |  |  | 3,279 |  |  | 5,113 |
Net loss from discontinued operations, net of income taxes | — |  |  | (1,554) |  |  | (138) |  |  | (1,236) |
Net income | 2,194 |  |  | 769 |  |  | 3,141 |  |  | 3,877 |
Net income from continuing operations attributable to non-controlling interest | 730 |  |  | 1,304 |  |  | 1,239 |  |  | 2,239 |
Net loss from discontinued operations attributable to non-controlling interest | — |  |  | (381) |  |  | (46) |  |  | (264) |
Net income attributable to non-controlling interest | 730 |  |  | 923 |  |  | 1,193 |  |  | 1,975 |
Net income from continuing operations attributable to i3 Verticals, Inc. | 1,464 |  |  | 1,019 |  |  | 2,040 |  |  | 2,874 |
Net loss from discontinued operations attributable to i3 Verticals, Inc. | — |  |  | (1,173) |  |  | (92) |  |  | (972) |
Net income (loss) attributable to i3 Verticals, Inc. | $ | 1,464 |  |  | $ | (154) |  |  | $ | 1,948 |  |  | $ | 1,902 |
Net income per share attributable to Class A common stockholders from continuing operations: |  |  |  |  |  |  |
Basic | $ | 0.07 |  |  | $ | 0.04 |  |  | $ | 0.09 |  |  | $ | 0.12 |
Diluted | $ | 0.07 |  |  | $ | 0.04 |  |  | $ | 0.09 |  |  | $ | 0.12 |
Net loss per share attributable to Class A common stockholders from discontinued operations: |  |  |  |  |  |  |
Basic | — |  |  | $ | (0.05) |  |  | $ | 0.00 |  |  | $ | (0.04) |
Diluted | — |  |  | $ | (0.05) |  |  | $ | 0.00 |  |  | $ | (0.04) |
Weighted average shares of Class A common stock outstanding: |  |  |  |  |  |  |
Basic, for continuing operations | 21,798,840 |  |  | 23,834,233 |  |  | 22,747,267 |  |  | 23,691,648 |
Diluted, for continuing operations | 30,582,587 |  |  | 24,133,738 |  |  | 23,656,640 |  |  | 24,081,232 |
Basic, for discontinued operations | — |  |  | 23,834,233 |  |  | 22,747,267 |  |  | 23,691,648 |
Diluted, for discontinued operations | — |  |  | 23,834,233 |  |  | 31,128,948 |  |  | 23,691,648 |

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 |

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 |

See Notes to the Interim Condensed Consolidated Financial Statements
7

i3 Verticals, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)

| Six months ended March 31,
| 2026 |  | 2025
Cash flows from operating activities: |  |  |
Net income | $ | 3,141 |  |  | $ | 3,877 |
Adjustments to reconcile net income from operating activities: |  |  |
Depreciation and amortization | 14,568 |  |  | 15,524 |
Equity-based compensation | 9,797 |  |  | 7,746 |
Amortization of debt issuance costs | 431 |  |  | 530 |
Provision for deferred income taxes | 725 |  |  | 1,859 |
Adjustments to gain on sale of Merchant Services Business | — |  |  | 657 |
Non-cash lease expense | 1,065 |  |  | 1,162 |
Changes in non-cash contingent consideration expense from original estimate | (498) |  |  | 1,758 |
Other non-cash adjustments to net income | 1,821 |  |  | (366) |
Changes in operating assets: |  |  |
Accounts receivable | 2,802 |  |  | 25 |
Prepaid expenses and other current assets | (3,411) |  |  | (3,145) |
Other assets | 841 |  |  | (454) |
Changes in operating liabilities: |  |  |
Accounts payable | (2,618) |  |  | (1,020) |
Accrued expenses and other current liabilities | (2,905) |  |  | (40,839) |
Acquisition escrow obligations | 2,505 |  |  | 26 |
Deferred revenue | (2,385) |  |  | (1,030) |
Operating lease liabilities | (1,145) |  |  | (1,776) |
Other long-term liabilities | (584) |  |  | (101) |
Contingent consideration paid in excess of original estimates | — |  |  | (60) |
Net cash provided by (used in) operating activities | 24,150 |  |  | (15,627) |
Cash flows from investing activities: |  |  |
Expenditures for property and equipment | (722) |  |  | (972) |
Proceeds from sale of property and equipment | 448 |  |  | 1,501 |
Expenditures for capitalized software | (4,384) |  |  | (4,204) |
Acquisitions of businesses, net of cash acquired | (60,000) |  |  | — |
Net cash used in investing activities | (64,658) |  |  | (3,675) |
Cash flows from financing activities: |  |  |
Proceeds from revolving credit facility | 140,071 |  |  | 36,052 |
Payments on revolving credit facility | (59,071) |  |  | (24,052) |
Payments to extinguish exchangeable notes | — |  |  | (26,223) |
Payments for repurchases of Class A common stock, including related excise taxes | (88,788) |  |  | (11,498) |
Net payments for settlement obligations | (191) |  |  | (565) |
Payments for required distributions to members or on behalf of members for tax obligations | (1,762) |  |  | (23,939) |
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 | (4,572) |  |  | — |
Net cash used in financing activities | (16,708) |  |  | (60,029) |
Net decrease in cash, cash equivalents and restricted cash | (57,216) |  |  | (79,331) |
Cash, cash equivalents and restricted cash at beginning of period | 67,333 |  |  | 89,597 |
Cash, cash equivalents and restricted cash at end of period | $ | 10,117 |  |  | $ | 10,266 |
Supplemental disclosure of cash flow information: |  |  |
Cash paid for interest | $ | 892 |  |  | $ | 440 |
Cash paid for income taxes, net of refunds | $ | 3,009 |  |  | $ | 34,157 |

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 |
| March 31,
| 2026 |  | 2025
Ending balance |  |  |
Cash and cash equivalents | $ | 7,142 |  |  | $ | 7,749 |
Settlement assets | 220 |  |  | 67 |
Restricted cash | 2,755 |  |  | 2,450 |
Total cash, cash equivalents, and restricted cash | $ | 10,117 |  |  | $ | 10,266 |

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 are providing 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 during the three and six months ended March 31, 2026 was $26 and $160, respectively.
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 six months ended March 31, 2026 and 2025:

| Three Months Ended March 31, |  | Six Months Ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Revenue | $ | — |  |  | $ | 9,126 |  |  | $ | — |  |  | $ | 18,862 |
Operating expenses |  |  |  |  |  |  |
Costs of services (excluding depreciation and amortization) | — |  |  | 5,809 |  |  | — |  |  | 11,530 |
Selling, general and administrative | — |  |  | 2,405 |  |  | — |  |  | 4,826 |
Depreciation and amortization | — |  |  | 842 |  |  | — |  |  | 1,665 |
Change in fair value of contingent consideration | — |  |  | 1,167 |  |  | — |  |  | 1,292 |
Total operating expenses | — |  |  | 10,223 |  |  | — |  |  | 19,313 |
Loss from operations | — |  |  | (1,097) |  |  | — |  |  | (451) |
Other (income) expenses | — |  |  | (38) |  |  | 169 |  |  | (38) |
Loss before income taxes from discontinued operations | — |  |  | (1,059) |  |  | (169) |  |  | (413) |
Provision for (benefit from) income taxes | — |  |  | 169 |  |  | (31) |  |  | 283 |
Net loss from discontinued operations | — |  |  | (1,228) |  |  | (138) |  |  | (696) |
Net loss from discontinued operations attributed to non-controlling interest | — |  |  | (282) |  |  | (46) |  |  | (89) |
Net loss from discontinued operations attributable to i3 Verticals, Inc. | $ | — |  |  | $ | (946) |  |  | $ | (92) |  |  | $ | (607) |

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:

| Six Months Ended March 31, 2025
Depreciation and amortization | $ | 1,665 |
Equity-based compensation | $ | 595 |
Non-cash lease expense | $ | 523 |
Increase in non-cash contingent consideration expense from original estimate | $ | 1,292 |
Expenditures for capitalized software | $ | (218) |

The following table presents significant non-cash investing and financing activities for major captions on the consolidated financial statements:

| Six Months Ended March 31, 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 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
13

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
administrative expenses within the Company's condensed consolidated statements of operations. Income under the Payroc TSA and Payroc PSA was $34 and $65 during the three and six months ended March 31, 2026 respectively, and was $461 and $956 during the three and six months ended March 31, 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 six months ended March 31, 2025:

| Three Months Ended March 31, 2025 |  | Six Months Ended March 31, 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 | 404 |  |  | 657 |
Loss before income taxes from discontinued operations | (404) |  |  | (657) |
Benefit from income taxes | (78) |  |  | (117) |
Net loss from discontinued operations | (326) |  |  | (540) |
Net loss from discontinued operations attributed to non-controlling interest | (99) |  |  | (175) |
Net loss from discontinued operations attributable to i3 Verticals, Inc. | $ | (227) |  |  | $ | (365) |

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 March 31, 2026 and for the three and six months ended March 31, 2026 and 2025. The results of operations for the three and six months ended March 31, 2026 and 2025 are not necessarily indicative of the operating results for the full year.
14

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
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. Following the adoption of Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230), the Company includes restricted cash along with the cash and cash equivalents balance for presentation in the consolidated statements of cash flows.
Settlement Assets and Obligations
Settlement assets and obligations result when funds are temporarily held or owed by the Company on behalf of merchants, consumers, schools, and other institutions. Timing differences, interchange expenses, merchant reserves and exceptional items cause differences between the amount received from the card networks and the amount funded to counterparties. These balances arising in the settlement process are reflected as settlement assets and obligations on the accompanying consolidated balance sheets. Settlement assets or settlement obligations are generally collected and paid within two weeks. Settlement assets and settlement obligations were $220 as of March 31, 2026 and $411 as of September 30, 2025, respectively.
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.
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 $2,617 and $2,516 at March 31, 2026 and September 30, 2025, respectively, and are included within prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets.
Acquisitions
Business acquisitions have been recorded using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), and, accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair value as of the date of acquisition. Where relevant, the fair value of contingent consideration included in an acquisition is calculated using a Monte Carlo simulation as well as a discounted cash flows analysis. The fair value of customer relationships and non-compete assets acquired is identified using the Income Approach. The fair values of trade names and internally-developed software acquired are identified using the Relief from Royalty Method. After the purchase price has been allocated, goodwill is recorded to the extent the total consideration paid for the acquisition, including the acquisition date fair value of
15

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
contingent consideration, if any, exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. Acquisition costs for business combinations are expensed when incurred and recorded in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.
Acquisitions not meeting the accounting criteria to be accounted for as a business combination are accounted for as an asset acquisition. An asset acquisition is recorded at its purchase price, inclusive of acquisition costs, which is allocated among the acquired assets and assumed liabilities based upon their relative fair values at the date of acquisition.
The operating results of an acquisition are included in the consolidated statements of operations from the date of such acquisition. Acquisitions completed during the six months ended March 31, 2026 contributed $2,242 and $304 of revenue and net income, respectively, to the results in the Company's condensed consolidated statements of operations for the six months ended March 31, 2026.
Lease Expense
Leases are recorded in accordance with ASC 842, Leases ("ASC 842"). The Company elected the accounting policy practical expedients for all classes of underlying assets to (i) combine associated lease and non-lease components in a lease arrangement as a combined lease component and (ii) exclude recording short-term leases as right-of-use assets on the condensed consolidated balance sheets.
At contract inception the Company determines whether an arrangement is, or contains a lease, and for each identified lease, evaluates the classification as operating or financing. Leased assets and obligations are recognized at the lease commencement date based on the present value of fixed lease payments to be made over the term of the lease. Renewal and termination options are factored into determination of the lease term only if the option is reasonably certain to be exercised. The Company’s leases do not provide a readily determinable implicit interest rate and the Company uses its incremental borrowing rate to measure the lease liability and corresponding right-of-use asset. The incremental borrowing rate is a fully collateralized rate that considers the Company’s credit rating, market conditions and the term of the lease. The Company accounts for all components in a lease arrangement as a single combined lease component.
Operating lease cost is recognized on a straight-line basis over the lease term. Total lease costs include variable lease costs, which are primarily comprised of the consumer price index adjustments and other changes based on rates, such as costs of insurance and property taxes. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and obligations.
Revenue Recognition and Deferred Revenue
Revenue is recognized as each performance obligation is satisfied, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience. The Company utilized the portfolio approach practical expedient within ASC 606-10-10-4 Revenue from Contracts with Customers—Objectives and the significant financing component practical expedient within ASC 606-10-32-18 Revenue from Contracts with Customers—The Existence of a Significant Financing Component in the Contract in performing the analysis.
16

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
The Company's revenue from continuing operations for the three and six months ended March 31, 2026 and 2025 is derived from the following sources:
•Software and related services — Includes software as a service ("SaaS"), transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to the Company's software offerings;
•Proprietary payments — Includes volume-based payment processing fees (“discount fees”) and other related fixed transaction or service fees; and
•Other — Includes sales of equipment, non-software related 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. Sales of software licenses are categorized into one of two categories of intellectual property in accordance with ASC 606, 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 is functional intellectual property, and right to access license sales, which are 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 the term of the agreement. The Company also offers access to its software under software-as-a-service (“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.
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 each day based on the volume or transaction count at the time the merchants’ transactions are processed.
17

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
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 pass-through 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 six months ended March 31, 2026 and 2025.
With regards to the Company's discount fees, generally, where the Company has control over merchant pricing, merchant portability, credit risk and ultimate responsibility for the merchant relationship, revenues are reported at the time of sale equal to the full amount of the discount charged to the merchant, less interchange and network fees.
Revenues are also derived from a variety of transaction fees, which are charged for transacting on our proprietary payment facilitator platform and software solutions, and fees for other miscellaneous services. Revenues derived from such fees are recognized in the time the transactions occur and when there are no further performance obligations remaining to be satisfied. Revenue from the sale of equipment, is recognized upon transfer of ownership to the customer, after which there are no further performance obligations remaining to be satisfied.
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 selling price for a deliverable is based on standalone selling price, if available, the adjusted market assessment approach, estimated cost plus margin approach, or residual approach. 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, 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.
Revenues from sales of the Company’s hardware and software elements are recognized when each performance obligation has been satisfied which has been determined to be upon the delivery of the product. Revenues derived from service fees are recognized over time in accordance with our satisfaction of our performance obligations. 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. The Company’s professional services, including training, installation, and repair services are recognized as revenue as these services are performed.
18

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
The tables below present a disaggregation of the Company's revenue from contracts with customers for continuing operations by product. The Company's products are defined as follows:
•Software and related services — Includes SaaS, transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to the Company's software offerings;
•Proprietary payments — Includes discount fees and other related fixed transaction or service fees; and
•Other — Includes sales of equipment, non-software related professional services, bundled performance obligations for software sales and equipment leasing and other revenues.

| Three Months Ended March 31, |  | Six Months Ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Software and related services revenue | $ | 40,677 |  |  | $ | 37,679 |  |  | $ | 76,359 |  |  | $ | 74,283 |
Proprietary payments revenue | 14,523 |  |  | 14,058 |  |  | 28,998 |  |  | 27,493 |
Other revenue | 2,318 |  |  | 2,398 |  |  | 4,832 |  |  | 4,580 |
Total revenue | $ | 57,518 |  |  | $ | 54,135 |  |  | $ | 110,189 |  |  | $ | 106,356 |

The tables below present a disaggregation of the Company's revenue from contracts with customers from continuing operations by timing of transfer of goods or services. The Company's revenue included in each category are defined as follows:
•Revenue earned over time — Includes SaaS, sales of software sold as symbolic intellectual property, professional services, ongoing support, discount fees or other stand-ready obligations; and
•Revenue earned at a point in time — Includes software licenses sold as functional intellectual property, equipment, or point in time service fees that are not stand-ready obligations.

| Three Months Ended March 31, |  | Six Months Ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Revenue earned over time | $ | 49,649 |  |  | $ | 47,514 |  |  | $ | 97,297 |  |  | $ | 94,914 |
Revenue earned at a point in time | 7,869 |  |  | 6,621 |  |  | 12,892 |  |  | 11,442 |
Total revenue | $ | 57,518 |  |  | $ | 54,135 |  |  | $ | 110,189 |  |  | $ | 106,356 |

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 March 31, 2026 and September 30, 2025, the Company’s contract assets from contracts with customers was $10,564 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
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i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
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.
The following tables present the changes in deferred revenue as of and for the six months ended March 31, 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 |

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 |

Costs to Obtain and Fulfill a Contract
The Company capitalizes incremental costs to obtain new contracts and contract renewals and amortizes these costs on a straight-line basis as an expense over the benefit period, which is generally the expected customer life, unless a commensurate payment is not expected at renewal. As of March 31, 2026 and September 30, 2025, the Company had $1,727 and $1,412, respectively, of capitalized contract costs, which relate to commissions paid to employees as well as other incentives given to customers to obtain new sales, included within “Other assets" on the condensed consolidated balance sheets. The Company recorded expense from continuing operations related to these costs of $63 and $121 for the three and six months ended March 31, 2026, respectively, and $180 and $212 for the three and six months ended March 31, 2025, respectively.
The Company expenses sales commissions as incurred for the Company's sales commission plans that are paid on recurring monthly revenues, portfolios of existing customers, or have a substantive stay requirement prior to payment.
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i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
Costs of Services
Costs of services include costs directly related to the Company's software and related services, including personnel costs related to installation of the Company's software, conversion of client data, training client personnel, customer support activities and various other services provided directly to customers and hosting and related software costs for directly supporting the Company's customers. Additionally, costs of services include costs directly attributable to payment processing services such as processing and bank sponsorship. Losses resulting from chargebacks against a customer are included in costs of services. Residual payments to the Company's distribution partners and the cost of equipment sold is also included in cost of services. Amortization arising from capitalized software development is not included in costs of services. Costs of services are recognized at the time the related revenue is recognized.
The Company accounts for all governmental taxes associated with revenue transactions on a net basis.
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 as a single reportable segment as of June 30, 2025. See Note 16 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.
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i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
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.
4. ACQUISITIONS
During the six months ended March 31, 2026 and the year ended September 30, 2025, the Company acquired the following businesses:
Business Combinations during the six months ended March 31, 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 12.
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i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
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 $142 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 |

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 acquired businesses in the six months ended March 31, 2026 had occurred 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.

| Six Months Ended March 31,
| 2026 |  | 2025
Revenue | $ | 112,276 |  |  | $ | 109,908 |
Net income from continuing operations | $ | 3,699 |  |  | $ | 4,810 |

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).
23

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
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 12.
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.
Summary of the Utility Billing Software Company
The preliminary 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 preliminary 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.
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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 2025 Business Combinations
The following unaudited supplemental pro forma results of operations have been prepared as though each of the acquired businesses in the year ended September 30, 2025 had occurred 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.

| Six Months Ended March 31,
| 2025
Revenue | $ | 107,793 |
Net income from continuing operations | $ | 5,244 |

5. PREPAID EXPENSES AND OTHER CURRENT ASSETS
A summary of the Company's prepaid expenses and other current assets as of March 31, 2026 and September 30, 2025 is as follows:

| March 31, |  | September 30,
| 2026 |  | 2025
Inventory | $ | 2,617 |  |  | $ | 2,516 |
Prepaid licenses | 9,020 |  |  | 5,874 |
Prepaid insurance | 1,017 |  |  | 222 |
Notes receivable — current portion | 195 |  |  | 195 |
Other current assets | 2,715 |  |  | 3,268 |
Prepaid expenses and other current assets | $ | 15,564 |  |  | $ | 12,075 |

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i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
6. 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 six months ended March 31, 2026 | 33,815 |
Balance at March 31, 2026 | $ | 282,284 |

Intangible assets consisted of the following as of March 31, 2026:

| Cost |  | Accumulated Amortization |  | Carrying Value |  | Amortization Life and Method
Finite-lived intangible assets: |  |  |  |  |  |  |
Customer relationships | $ | 206,550 |  |  | $ | (50,342) |  |  | $ | 156,208 |  |  | 9 to 20 years – straight-line
Trade names | 2,101 |  |  | (1,597) |  |  | 504 |  |  | 1 to 5 years – straight-line
Non-compete agreements and other intangible assets | 175 |  |  | (98) |  |  | 77 |  |  | 1 to 8 years – straight-line
Total finite-lived intangible assets | 208,826 |  |  | (52,037) |  |  | 156,789 |  |  |
Indefinite-lived intangible assets: |  |  |  |  |  |  |
Trademarks | 16 |  |  | — |  |  | 16 |  |  |
Total identifiable intangible assets | $ | 208,842 |  |  | $ | (52,037) |  |  | $ | 156,805 |  |  |

Amortization expense from continuing operations for intangible assets amounted to $3,243 and $6,101 for the three and six months ended March 31, 2026, respectively, and $2,792 and $5,585 for the three and six months ended March 31, 2025, respectively.
Based on net carrying amounts at March 31, 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 (six months remaining) | $ | 6,399 |
2027 | 12,501 |
2028 | 12,260 |
2029 | 12,233 |
2030 | 12,188 |
Thereafter | 101,208 |
| $ | 156,789 |

26

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
7. ACCRUED EXPENSES AND OTHER LIABILITIES
A summary of the Company's accrued expenses and other current liabilities as of March 31, 2026 and September 30, 2025 is as follows:

| March 31, |  | September 30,
| 2026 |  | 2025
Accrued wages, bonuses, commissions and vacation | $ | 5,061 |  |  | $ | 6,587 |
Accrued interest | 354 |  |  | 155 |
Accrued contingent consideration — current portion | 1,023 |  |  | 82 |
Escrow liabilities — current portion | 1,255 |  |  | — |
Accrued tax distributions | 268 |  |  | 2,147 |
Accrued income tax expense | 150 |  |  | 2,760 |
Tax receivable agreement liability — current portion | — |  |  | 2,720 |
Customer deposits | 991 |  |  | 461 |
Employee health self-insurance liability | — |  |  | 13 |
Accrued third-party software expenses | 3,742 |  |  | 2,674 |
Accrued interchange | 3,951 |  |  | 3,139 |
Accrued excise taxes | 883 |  |  | 376 |
Other accrued expenses | 2,347 |  |  | 3,411 |
Accrued expenses and other current liabilities | $ | 20,025 |  |  | $ | 24,525 |

A summary of the Company's long-term liabilities as of March 31, 2026 and September 30, 2025 is as follows:

| March 31, |  | September 30,
| 2026 |  | 2025
Escrow liabilities — long-term | $ | 1,250 |  |  | $ | — |
Accrued contingent consideration — long-term portion | 9,650 |  |  | 3,489 |
Deferred tax liability — long-term | 8,504 |  |  | 8,994 |
Deferred revenue — long-term | 3,224 |  |  | 808 |
Other long-term liabilities | 781 |  |  | 1,553 |
Total other long-term liabilities | $ | 23,409 |  |  | $ | 14,844 |

8. LONG-TERM DEBT
A summary of long-term debt as of March 31, 2026 and September 30, 2025 is as follows:

|  |  | March 31, |  | September 30,
| Maturity |  | 2026 |  | 2025
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility | May 8, 2028 |  | $ | 81,000 |  |  | $ | — |

2020 Exchangeable Notes Offering
On February 18, 2020, i3 Verticals, LLC issued $138,000 aggregate principal amount of 1.0% Exchangeable Senior Notes due 2025 (the “Exchangeable Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The Company
27

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
received approximately $132,762 in net proceeds from the sale of the Exchangeable Notes, as determined by deducting estimated offering expenses paid to third-parties from the aggregate principal amount.
i3 Verticals, LLC issued the Exchangeable Notes pursuant to an Indenture, dated as of February 18, 2020, among i3 Verticals, LLC, the Company and U.S. Bank Trust Company National Association, as trustee (the “Indenture”).
The Exchangeable Notes bore interest at a fixed rate of 1.00% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2020. In accordance with the terms of the Indenture, as of August 15, 2024, the Exchangeable Notes became exchangeable at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Exchangeable Notes matured and the remaining principal balance was repaid in full on February 15, 2025, as further described below.
During the fiscal year ended September 30, 2020, we repurchased $21,000 in aggregate principal amount of Exchangeable Notes in open market purchases. In addition, on December 21, 2023, i3 Verticals, LLC entered into agreements to repurchase an additional portion of its Exchangeable Notes pursuant to privately negotiated transactions with a limited number of holders of the Exchangeable Notes (the "Exchangeable Note Repurchases"). The repurchase payments were determined by the Company’s average stock price over the 15 trading-day measurement period ended January 16, 2024. The closing of the Exchangeable Note Repurchases occurred on January 18, 2024, and the Company paid $87,391 to repurchase $90,777 in aggregate principal amount of its Exchangeable Notes and to repay approximately $386 in accrued interest on the repurchased portion of the Exchangeable Notes. The Company wrote off $926 of debt issuance costs in connection with the repurchase transactions. These repurchases resulted in a decrease in the Company's total leverage ratio, and following the completion of the repurchases of these Exchangeable Notes, approximately $26,223 in aggregate principal amount of the Exchangeable Notes remained outstanding, with terms unchanged. The Company recorded a gain on retirement of debt of $2,397 due to the estimated acquisition price exceeding the net carrying amount of the repurchased portion of the Exchangeable Notes, adjusted for unamortized debt issuance costs and costs and third-party fees related to the transaction.
Upon maturity of the Exchangeable Notes in February 2025, we paid $26,223 for the remaining principal balance and $131 in accrued interest.
Exchangeable Note Hedge Transactions
On February 12, 2020, concurrently with the pricing of the Exchangeable Notes, and on February 13, 2020, concurrently with the exercise by the initial purchasers of their right to purchase additional Exchangeable Notes, i3 Verticals, LLC entered into exchangeable note hedge transactions with respect to Class A common stock (the “Note Hedge Transactions”) with certain financial institutions (collectively, the “Counterparties”). The Note Hedge Transactions covered, subject to anti-dilution adjustments substantially similar to those applicable to the Exchangeable Notes, the same number of shares of Class A common stock that initially underlaid the Exchangeable Notes in the aggregate and were exercisable upon exchange of the Exchangeable Notes. The Note Hedge Transactions were intended to reduce potential dilution to the Class A common stock upon any exchange of the Exchangeable Notes. The Note Hedge Transactions expired upon the maturity of the Exchangeable Notes. The Note Hedge Transactions were separate transactions, entered into by i3 Verticals, LLC with the Counterparties, and were not part of the terms of the Exchangeable Notes. Holders of the Exchangeable Notes did not have any rights with respect to the Note Hedge Transactions. i3 Verticals, LLC used approximately $28,676 of the net proceeds from the offering of the Exchangeable Notes (net of the premiums received for the warrant transactions described below) to pay the cost of the Note Hedge Transactions.
The Note Hedge Transactions did not require separate accounting as a derivative as they meet a scope exception for certain contracts involving an entity's own equity. The premiums paid for the Note Hedge Transactions have been included as a net reduction to additional paid-in capital within stockholders' equity.
28

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
In December 2023, i3 Verticals, LLC received $250 from the Counterparties to terminate the portion of the Note Hedge Transactions corresponding to the Exchangeable Notes that were repurchased in fiscal year 2020. Also in December 2023, i3 Verticals, LLC entered into agreements with the Counterparties to terminate the portion of the Note Hedge Transactions corresponding to the Exchangeable Note Repurchases. On January 18, 2024, in connection with the Exchangeable Note Repurchases, the Company and i3 Verticals, LLC terminated the corresponding portions of the Note Hedge Transactions ("Note Hedge Unwinds"), and i3 Verticals, LLC received $987 for the sale of the Note Hedge Unwinds and recorded a loss on the sale of the Note Hedge Unwinds of $245.
The Note Hedge Transactions expired in February 2025 upon the maturity and payment in full of the Exchangeable Notes.
Warrant Transactions
On February 12, 2020, concurrently with the pricing of the Exchangeable Notes, and on February 13, 2020, concurrently with the exercise by the initial purchasers of their right to purchase additional Exchangeable Notes, the Company entered into warrant transactions to sell to the Counterparties warrants (the “Warrants”) to acquire, subject to customary adjustments, up to initially 3,376,391 shares of Class A common stock in the aggregate at an initial exercise price of $62.88 per share. The Company offered and sold the Warrants in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Warrants expired over a ninety trading day period that began on May 15, 2025.
The Warrants are separate transactions, entered into by the Company with the Counterparties, and are not part of the terms of the Exchangeable Notes. Holders of the Exchangeable Notes did not have any rights with respect to the Warrants. The Company received approximately $14,669 from the offering and sale of the Warrants. The Warrants do not require separate accounting as a derivative as they meet a scope exception for certain contracts involving an entity's own equity. The premiums paid for the Warrants have been included as a net increase to additional paid-in capital within stockholders' equity.
In December 2023, the Company paid $119 to the Counterparties to terminate the portion of the Warrants corresponding to the Exchangeable Notes that were repurchased in fiscal year 2020. Also in December 2023, i3 Verticals, LLC entered into agreements with the Counterparties to terminate the portion of the Warrants corresponding to the Exchangeable Note Repurchases. On January 18, 2024, in connection with the Exchangeable Note Repurchases, the Company and i3 Verticals, LLC terminated the corresponding portions of the Warrants ("Warrant Unwinds"), and the Company paid $433 for the repurchase of the Warrant Unwinds and recorded a gain on the repurchase of the Warrant Unwinds of $105.
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
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i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
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 March 31, 2026, the Borrower's consolidated interest coverage ratio was 16.2x and total leverage ratio was 1.2x.
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 March 31, 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 March 31, 2026). The base rate shall not be less than 1% in any event.
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 March 31, 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.
30

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share 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.
Debt issuance costs
The Company did not incur any debt issuance costs during the three and six months ended March 31, 2026 and 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 $215 and $431 during the three and six months ended March 31, 2026, respectively, and $250 and $530 during the three and six months ended March 31, 2025, respectively.
9. 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.
31

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
During the six months ended March 31, 2025 the Company repurchased 510,155 shares of Class A Common Stock under the August 2024 Share Repurchase Program at an average price of $22.51 per share for a total cost of $11,613. 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 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 "New Share Repurchase Program") for the Company's Class A common stock, under which the Company is authorized to repurchase up to $60,000 of outstanding shares of our Class A common stock (exclusive of fees, commissions or other expenses related to such repurchases). This New Share Repurchase Program replaced the August 2025 Share Repurchase Program.
This New Share Repurchase Program will terminate on the earlier of February 4, 2027, or when the maximum dollar amount under the authorization has been expended. Pursuant to this New Share Repurchase Program, the Company is authorized to make repurchases of our Class A Common Stock in the open market, through privately negotiated transactions, or otherwise, including under Rule 10b5-1 plans. In addition, repurchases under this New 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. This New 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 March 31, 2026 the Company repurchased 2,220,736 shares of Class A Common Stock at an average price of $22.70 per share for a total cost inclusive of commissions and excise taxes of $50,979. These repurchases consisted of 1,703,682 shares repurchased under the New Share Repurchase Program at an average price of $22.48 per share for a total cost inclusive of commissions and excise taxes of $38,735, and 517,054 shares repurchased under the August 2025 Share Repurchase Program at an average price of $23.42 per share for a total cost inclusive of commissions and excise taxes of $12,244.
During the six months ended March 31, 2026 the Company repurchased 3,743,574 shares of Class A Common Stock at an average price of $23.59 per share for a total cost inclusive of commissions and excise taxes of $89,296. These repurchases consisted of 1,703,682 shares repurchased under the New Share Repurchase Program at an average price of $22.48 per share for a total cost inclusive of commissions and excise taxes of $38,735, 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. Since March 31, 2026, the maximum dollar amount under the New Share Repurchase Program has been expended, and the New Share Repurchase Program is no longer in effect. For additional information regarding the Company’s new share purchase program, see Note 20.
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.
32

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
10. 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 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 $478 and $1,182 for the three and six months ended March 31, 2026, respectively, and a provision of $2,885 and $3,294 three and six months ended March 31, 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 six months ended March 31, 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 $36,222 as of March 31, 2026. The Company also has a corresponding Tax Receivable Agreement liability of $32,379, which was recorded in long-term tax receivable agreement obligations as of March 31, 2026.
33

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
Payments to the Continuing Equity Owners related to exchanges through March 31, 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 March 31, 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.
11. LEASES
The Company’s leases consist primarily of real estate leases throughout the markets in which the Company operates. At contract inception, the Company determines whether an arrangement is or contains a lease, and for each identified lease, evaluates the classification as operating or financing. The Company had no finance leases as of March 31, 2026. Leased assets and obligations are recognized at the lease commencement date based on the present value of fixed lease payments to be made over the term of the lease. Renewal and termination options are factored into determination of the lease term only if the option is reasonably certain to be exercised. The weighted-average remaining lease term was 4 years at both March 31, 2026 and 2025. The Company had no significant short-term leases during the three and six months ended March 31, 2026 and 2025.
The Company’s leases do not provide a readily determinable implicit interest rate and the Company uses its incremental borrowing rate to measure the lease liability and corresponding right-of-use asset. The incremental borrowing rates were determined based on a portfolio approach considering the Company’s current secured borrowing rate adjusted for market conditions and the length of the lease term. The weighted-average discount rate used in the measurement of our lease liabilities was 6.3% and 7.1% as of March 31, 2026 and 2025, respectively.
Operating lease cost is recognized on a straight-line basis over the lease term. Operating lease costs for continuing operations were $617 and $1,236 for the three and six months ended March 31, 2026, respectively, and $119 and $807 for the three and six months ended March 31, 2025, respectively, which are included in selling, general and administrative expenses in the condensed consolidated statements of operations.
Total variable lease costs within operating lease costs from continuing operations were not significant for the three and six months ended March 31, 2026 and 2025. The variable lease costs are primarily comprised of costs of maintenance and utilities and changes in rates, and are determined based on the actual costs incurred during the period. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and liabilities.
Short-term rent expense from continuing operations were not significant for the three and six months ended March 31, 2026 and 2025. Short-term rent expense is included in selling, general and administrative expenses in the condensed consolidated statements of operations.
34

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
As of March 31, 2026, maturities of lease liabilities for continuing operations are as follows:

Fiscal Years ending September 30: |
2026 (six months remaining) | $ | 1,156 |
2027 | 1,903 |
2028 | 1,002 |
2029 | 724 |
2030 | 645 |
Thereafter | 154 |
Total future minimum lease payments (undiscounted)(1) | 5,584 |
Less: present value discount | (972) |
Present value of lease liability | $ | 4,612 |

__________________________
1. Total future minimum lease payments excludes payments of $58 for leases designated as short-term leases, which are excluded from the Company's right-of-use assets. These payments will be made within the next twelve months.
12. 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 March 31, 2026 and 2025, because of the relatively short maturity dates on these instruments. The carrying amount of debt approximates fair value as of March 31, 2026 and 2025, because interest rates on these instruments approximate market interest rates.
35

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
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 | (498) |
Contingent consideration paid | — |
Balance at March 31, 2026 | $ | 10,673 |

| Accrued Contingent Consideration
Balance at September 30, 2024(1) | $ | 2,154 |
Contingent consideration accrued at time of business combination | — |
Change in fair value of contingent consideration included in operating expenses | 466 |
Contingent consideration paid | (60) |
Balance at March 31, 2025(2) | $ | 2,560 |

__________________________
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 these amounts.
2. In connection with the sale of the Healthcare RCM Business, $1,490 of the Company's accrued contingent consideration was classified as "Current assets held for sale" as of March 31, 2025 in the accompanying condensed consolidated balance sheets and was not included in this amount.
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 $1,023 and $82 of contingent consideration was recorded in accrued expenses and other current liabilities as of March 31, 2026 and September 30, 2025, respectively. Approximately $9,650 and $3,489 of contingent consideration was recorded in other long-term liabilities as of March 31, 2026 and September 30, 2025, respectively.
36

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
13. EQUITY-BASED COMPENSATION
A summary of equity-based compensation expense for continuing operations recognized during the three and six months ended March 31, 2026 and 2025 is as follows:

| Three Months Ended March 31, |  | Six Months Ended March 31, |  |
| 2026 |  | 2025 |  | 2026 |  | 2025 |  |
Stock options | $ | 1,855 |  |  | $ | 1,502 |  |  | $ | 3,201 |  |  | $ | 3,825 |  |  |
Restricted stock units | 2,764 |  |  | 2,043 |  |  | 6,596 |  |  | 3,326 |  |  |
Equity-based compensation expense | $ | 4,619 |  |  | $ | 3,545 |  |  | $ | 9,797 |  |  | $ | 7,151 |  |  |

In connection with the sale of the Healthcare RCM Business, $387 and $595 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 six months ended March 31, 2025, respectively.
Amounts are included in costs of services and in selling, general and administrative expense on the condensed consolidated statements of operations. Current and deferred income tax benefits for continuing operations of $472 and $1,202 were recognized during the three and six months ended March 31, 2026, respectively, and current and deferred income tax expense of $1,165 and $588 during the three and six months ended March 31, 2025, respectively.
Stock Options
In May 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”) under which the Company may grant up to 3,500,000 stock options and other equity-based awards to employees, directors and officers. The number of shares of Class A common stock available for issuance under the 2018 Plan includes an annual increase on the first day of each calendar year equal to 4.0% of the outstanding shares of all classes of the Company's common stock as of the last day of the immediately preceding calendar year, unless the Company’s board of directors determines prior to the last trading day of December of the immediately preceding calendar year that the increase shall be less than 4.0%. As of March 31, 2026, equity awards with respect to 2,303,073 shares of the Company's Class A common stock were available for grant under the 2018 Plan.
In September 2020, the Company adopted the 2020 Acquisition Equity Incentive Plan (the “2020 Inducement Plan”) under which the Company may grant up to 1,500,000 stock options and other equity-based awards to individuals that were not previously employees of the Company or its subsidiaries in connection with acquisitions, as a material inducement to the individual's entry into employment with the Company or its subsidiaries within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. In May 2021, the Company amended the 2020 Inducement Plan to increase the number of shares of the Company's Class A common stock available for issuance from 1,500,000 to 3,000,000 shares. As of March 31, 2026, equity awards with respect to 2,021,344 shares of the Company's Class A common stock were available for grant under the 2020 Inducement Plan.
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.
37

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 six months ended March 31, 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 | (181,032) |  |  | 23.42 |
Forfeited and cancelled | (94,632) |  |  | 26.60 |
Outstanding at March 31, 2026 | 8,850,572 |  |  | $ | 24.48 |
Exercisable at March 31, 2026 | 6,800,178 |  |  | $ | 24.95 |

The weighted-average grant date fair value of stock options granted during the six months ended March 31, 2026 was $12.41.
As of March 31, 2026, there were 8,850,572 stock options outstanding, of which 6,800,178 were exercisable. As of March 31, 2026, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $19,895, which is expected to be recognized over a weighted-average period of 3.5 years.
The total fair value of stock options that vested during the three and six months ended March 31, 2026 was $4,163 and $4,837, 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 six months ended March 31, 2026 is as follows:

| Restricted Stock Units |  | Weighted Average Grant Date Fair Value
Outstanding at September 30, 2025 | 1,160,641 |  |  | $ | 24.89 |
Granted | 401,826 |  |  | 24.06 |
Vested | (391,916) |  |  | 24.73 |
Forfeited and cancelled | (34,547) |  |  | 23.64 |
Outstanding at March 31, 2026 | 1,136,004 |  |  | $ | 24.69 |

The weighted-average grant date fair value of RSUs granted during three and six months ended March 31, 2026 was $24.06.
As of March 31, 2026, total unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures, was $21,096, which is expected to be recognized over a weighted average period of 2.6 years.
The total fair value of RSUs that vested during the three and six months ended March 31, 2026 was $5,449 and $9,693, respectively.
38

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
14. COMMITMENTS AND CONTINGENCIES
Leases
The Company utilizes office space and equipment under operating leases. Rent expense from continuing operations under these leases amounted to $689 and $1,391 during the three and six months ended March 31, 2026 and 2025, respectively, and $145 and $857 during the three and six months ended March 31, 2025, respectively. Refer to Note 11 for further discussion and a table of the future minimum payments under these leases.
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 March 31, 2026, the remaining aggregate minimum contractual commitment under these arrangements was approximately $18,268, 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 (six months remaining) | $ | 3,395 |
2027 | 10,205 |
2028 | 3,342 |
2029 | 794 |
2030 | 532 |
Thereafter | — |
Total | $ | 18,268 |

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.
39

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
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 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, filed by PaySchools, remains pending.
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"). See 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-plead their claims. 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 has been continued until June 8, 2026.
40

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.
15. 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 i3 Verticals, Inc. or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement. See Note 10 for further information. As of March 31, 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 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
41

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).
16. 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.
42

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 six months ended March 31, 2026 and 2025:

| Three Months Ended March 31, |  | Six Months Ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Revenue | $ | 57,518 |  |  | $ | 54,135 |  |  | $ | 110,189 |  |  | $ | 106,356 |
Less: |  |  |  |  |  |  |
Costs of services (excluding depreciation and amortization) | 16,866 |  |  | 16,403 |  |  | 34,211 |  |  | 31,817 |
People operating expenses | 16,062 |  |  | 15,895 |  |  | 31,334 |  |  | 31,169 |
Technology operating expenses | 2,205 |  |  | 2,211 |  |  | 4,320 |  |  | 4,759 |
Other operating expenses(1) | 5,796 |  |  | 3,785 |  |  | 10,120 |  |  | 8,199 |
Other segment expenses(2) | 14,395 |  |  | 13,518 |  |  | 26,925 |  |  | 25,299 |
Net income from continuing operations | $ | 2,194 |  |  | $ | 2,323 |  |  | $ | 3,279 |  |  | $ | 5,113 |

____________________
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.
Revenues from external customers are attributed to geographic areas based on the location of the customer. For the six months ended March 31, 2026 and 2025, the majority of the Company’s revenues were derived from customers located in the United States, the Company’s country of domicile. Revenues from foreign countries, primarily Canada, were not considered significant for separate disclosure. The basis for attributing revenues to geographic areas is the location of the customer receiving the goods or services.
The Company has not disclosed expenditures on long-lived assets as such expenditures are not reviewed by or provided to the chief operating decision maker.
The measure of segment assets is reported on the balance sheet as total consolidated assets.
17. 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 March 31, 2026 and 2025, respectively, i3 Verticals, Inc. owned 20,541,392 and 24,386,990 of i3 Verticals, LLC's Common Units, representing a 71.0% and 73.4% economic ownership interest in i3 Verticals, LLC.
43

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:

| Six Months Ended March 31,
| 2026 |  | 2025
Net income attributable to non-controlling interest | $ | 1,193 |  |  | $ | 1,975 |
Transfers from non-controlling interests: |  |  |
Distributions to non-controlling interest holders | 122 |  |  | 283 |
Redemption of common units in i3 Verticals, LLC | — |  |  | (11,730) |
Recapitalization from contribution to i3 Verticals, LLC | — |  |  | 5,689 |
Allocation of equity from non-controlling interests | (8,600) |  |  | (3,356) |
Net transfers from non-controlling interests | (8,478) |  |  | (9,114) |
Change from net income attributable to non-controlling interests and net transfers from non-controlling interests | $ | (7,285) |  |  | $ | (7,139) |

See Note 15 for information regarding certain recapitalization actions the Company and i3 Verticals, LLC effected during the six months ended March 31, 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.
18. 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.
44

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 six months ended March 31, 2026 and 2025:

| Three Months Ended March 31, |  | Six Months Ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Basic net income per share: |  |  |  |  |  |  |
Numerator |  |  |  |  |  |  |
Net income | $ | 2,194 |  |  | $ | 2,323 |  |  | $ | 3,279 |  |  | $ | 5,113 |
Less: Net income attributable to non-controlling interest | 730 |  |  | 1,304 |  |  | 1,239 |  |  | 2,239 |
Net income attributable to Class A common stockholders | $ | 1,464 |  |  | $ | 1,019 |  |  | $ | 2,040 |  |  | $ | 2,874 |
Denominator |  |  |  |  |  |  |
Weighted average shares of Class A common stock outstanding | 21,798,840 |  |  | 23,834,233 |  |  | 22,747,267 |  |  | 23,691,648 |
Basic net income per share | $ | 0.07 |  |  | $ | 0.04 |  |  | $ | 0.09 |  |  | $ | 0.12 |
Diluted net income per share: |  |  |  |  |  |  |
Numerator |  |  |  |  |  |  |
Net income attributable to Class A common stockholders | $ | 1,464 |  |  | $ | 1,019 |  |  | $ | 2,040 |  |  | $ | 2,874 |
Reallocation of net income assuming conversion of common units(1)(2) | 557 |  |  | — |  |  | — |  |  | — |
Net income attributable to Class A common stockholders – diluted | $ | 2,021 |  |  | $ | 1,019 |  |  | $ | 2,040 |  |  | $ | 2,874 |
Denominator |  |  |  |  |  |  |
Weighted average shares of Class A common stock outstanding | 21,798,840 |  |  | 23,834,233 |  |  | 22,747,267 |  |  | 23,691,648 |
Weighted average effect of dilutive securities(2) | 8,783,747 |  |  | 299,505 |  |  | 909,373 |  |  | 389,584 |
Weighted average shares of Class A common stock outstanding – diluted | 30,582,587 |  |  | 24,133,738 |  |  | 23,656,640 |  |  | 24,081,232 |
Diluted net income per share | $ | 0.07 |  |  | $ | 0.04 |  |  | $ | 0.09 |  |  | $ | 0.12 |

__________________________
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 10 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 six months ended March 31, 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. 9,408,427, 8,381,681 and 9,720,698 weighted average shares of Class B common stock for the three months ended March 31, 2025 and the six months ended March 31, 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 10 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. 4,812,850, 4,227,718, 3,381,943 and 4,660,034 stock options for the three months ended March 31, 2026 and 2025 and for the six months ended March 31, 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.
45

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 discontinued operations for the three and six months ended March 31, 2026 and 2025:

| Three Months Ended March 31, |  | Six Months Ended March 31,
| 2026(1) |  | 2025 |  | 2026 |  | 2025
Basic net loss per share: |  |  |  |  |  |  |
Numerator |  |  |  |  |  |  |
Net loss |  |  | $ | (1,554) |  |  | $ | (138) |  |  | $ | (1,236) |
Less: Net loss attributable to non-controlling interest |  |  | (381) |  |  | (46) |  |  | (264) |
Net loss attributable to Class A common stockholders |  |  | $ | (1,173) |  |  | $ | (92) |  |  | $ | (972) |
Denominator |  |  |  |  |  |  |
Weighted average shares of Class A common stock outstanding |  |  | 23,834,233 |  |  | 22,747,267 |  |  | 23,691,648 |
Basic net loss per share |  |  | $ | (0.05) |  |  | $ | 0.00 |  |  | $ | (0.04) |
Diluted net loss per share: |  |  |  |  |  |  |
Numerator |  |  |  |  |  |  |
Net loss attributable to Class A common stockholders |  |  | $ | (1,173) |  |  | $ | (92) |  |  | $ | (972) |
Reallocation of net loss assuming conversion of common units(2)(3) |  |  | — |  |  | (35) |  |  | — |
Net loss attributable to Class A common stockholders – diluted |  |  | $ | (1,173) |  |  | $ | (127) |  |  | $ | (972) |
Denominator |  |  |  |  |  |  |
Weighted average shares of Class A common stock outstanding |  |  | 23,834,233 |  |  | 22,747,267 |  |  | 23,691,648 |
Weighted average effect of dilutive securities(3) |  |  | — |  |  | 8,381,681 |  |  | — |
Weighted average shares of Class A common stock outstanding – diluted |  |  | 23,834,233 |  |  | 31,128,948 |  |  | 23,691,648 |
Diluted net loss per share |  |  | $ | (0.05) |  |  | $ | 0.00 |  |  | $ | (0.04) |

__________________________
1. There was no net income from discontinued operations during the three months ended March 31, 2026.
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 10 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 March 31, 2025 and the six months ended March 31, 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. 9,408,427 and 9,720,698 weighted average shares of Class B common stock for the three and six months ended March 31, 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 10 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. 4,227,718, 3,381,943 and 4,660,034 options to purchase shares of Class A common stock for the three months ended March 31, 2025 and the six months ended March 31, 2026 and 2025, respectively, were excluded because the exercise price of these options
46

i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
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
c. 299,505, 909,373 and 389,584 shares of Class A common stock for the three months ended March 31, 2025 and the six months ended March 31, 2026 and 2025, 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.
47

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 consolidated operations for three and six months ended March 31, 2026 and 2025:

| Three Months Ended March 31, |  | Six Months Ended March 31,
| 2026 |  | 2025 |  | 2026 |  | 2025
Basic net income (loss) per share: |  |  |  |  |  |  |
Numerator |  |  |  |  |  |  |
Net income | $ | 2,194 |  |  | $ | 769 |  |  | $ | 3,141 |  |  | $ | 3,877 |
Less: Net income attributable to non-controlling interest | 730 |  |  | 923 |  |  | 1,193 |  |  | 1,975 |
Net income (loss) attributable to Class A common stockholders | $ | 1,464 |  |  | $ | (154) |  |  | $ | 1,948 |  |  | $ | 1,902 |
Denominator |  |  |  |  |  |  |
Weighted average shares of Class A common stock outstanding | 21,798,840 |  |  | 23,834,233 |  |  | 22,747,267 |  |  | 23,691,648 |
Basic net income (loss) per share(1) | $ | 0.07 |  |  | $ | (0.01) |  |  | $ | 0.09 |  |  | $ | 0.08 |
Diluted net income per share: |  |  |  |  |  |  |
Numerator |  |  |  |  |  |  |
Net income attributable to Class A common stockholders | $ | 1,464 |  |  |  |  | $ | 1,948 |  |  | $ | 1,902 |
Reallocation of net income assuming conversion of common units(2)(3) | 557 |  |  |  |  | — |  |  | — |
Net income attributable to Class A common stockholders – diluted | $ | 2,021 |  |  |  |  | $ | 1,948 |  |  | $ | 1,902 |
Denominator |  |  |  |  |  |  |
Weighted average shares of Class A common stock outstanding | 21,798,840 |  |  |  |  | 22,747,267 |  |  | 23,691,648 |
Weighted average effect of dilutive securities(3) | 8,783,747 |  |  |  |  | 909,373 |  |  | 389,584 |
Weighted average shares of Class A common stock outstanding – diluted | 30,582,587 |  |  |  |  | 23,656,640 |  |  | 24,081,232 |
Diluted net income per share | $ | 0.07 |  |  |  |  | $ | 0.08 |  |  | $ | 0.08 |

__________________________
1. For the three months ended March 31, 2025, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share. 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 from consolidated operations:
a. 9,408,427 weighted average shares of Class B common stock for the three months ended March 31, 2025, 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 10 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. 4,227,718 stock options for the three months ended March 31, 2025 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. 299,505 shares of Class A common stock for the three months ended March 31, 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.
48

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 10 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 March 31, 2026 and the six months ended March 31, 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 and 9,720,698 weighted average shares of Class B common stock for the six months ended March 31, 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 10 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. 4,812,850, 3,381,943 and 4,660,034 stock options for the three months ended March 31, 2026 and the six months ended March 31, 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.
In September 2022 the Company made the irrevocable election to settle the principal portion of its Exchangeable Notes only in cash, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net loss per share, if applicable. The conversion spread had a dilutive impact on diluted net loss per share of common stock when the average market price of the Company's Class A common stock for a given period exceeded the exchange price of $40.87 per share for the Exchangeable Notes. The Exchangeable Notes matured in February 2025 and the Company paid the entire remaining principal balance.
The Warrants sold in connection with the issuance of the Exchangeable Notes are considered to be dilutive when the average price of the Company's Class A common stock during the period exceeds the Warrants' stock price of $62.88 per share. The effect of the additional shares that may be issued upon exercise of the Warrants will be included in the weighted average shares of Class A common stock outstanding—diluted using the treasury stock method. The Warrants expired over a ninety trading day period that began on May 15, 2025. The Note Hedge Transactions purchased in connection with the issuance of the Exchangeable Notes are considered to be anti-dilutive and therefore do not impact our calculation of diluted net income per share. The Note Hedge Transactions expired in February 2025 upon the maturity and payment in full of the Exchangeable Notes. Refer to Note 8 for further discussion regarding the Exchangeable Notes.
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.
19. SIGNIFICANT NON-CASH TRANSACTIONS
The Company engaged in the following significant non-cash investing and financing activities during the six months ended March 31, 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.

| Six months ended March 31,
| 2026 |  | 2025
Acquisition date fair value of contingent consideration in connection with business combinations | $ | 7,600 |  |  | $ | — |
Right-of-use assets obtained in exchange for operating lease obligations | $ | 974 |  |  | $ | 451 |
Excise taxes accrued on share repurchases | $ | 883 |  |  | $ | 115 |

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i3 VERTICALS, Inc.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(in thousands, except unit, share and per share amounts)
20. SUBSEQUENT EVENTS
Recent Share Repurchases
Since March 31, 2026 and as of May 7, 2026, the Company repurchased 992,058 shares of Class A Common Stock under the New 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. The maximum dollar amount under the New Share Repurchase Program has been expended, and the New Share Repurchase Program is no longer in effect.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the year ended September 30, 2025 (“Form 10-K”), filed with the SEC on November 21, 2025. The terms “i3 Verticals,” “we,” “us” and “our” and similar references refer to i3 Verticals, Inc. and, where appropriate, its subsidiaries.
Note Regarding Forward-looking Statements
This Quarterly Report on Form 10-Q includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of the federal securities laws. All statements other than statements of historical facts contained in this report may be forward-looking statements. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “pro forma,” “continues,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” “would” or “should” or, in each case, their negative or other variations or comparable terminology.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These factors include, but are not limited to, the following:
•our ability to protect our systems and data from continually evolving cybersecurity risks or other technological risks, including the impact of any cybersecurity incidents or security breaches;
•liability and reputation damage from unauthorized disclosure, destruction or modification of data or disruption of our services;
•technical, operational and regulatory risks related to our information technology systems and third-party providers’ systems;
•our ability to execute on our strategy and achieve our goals following the completion of the sale of our Merchant Services Business and our Healthcare RCM Business;
•our ability to successfully manage our intellectual property;
•the impact of any potential of impairment charges associated with our fair-valued assets, including goodwill and intangible assets, in the event of a decline in the price of our Class A common stock or otherwise;
•our ability to generate revenues sufficient to maintain profitability and positive cash flow;
•competition in our industry and our ability to compete effectively;
•consolidation in the banking and financial services industry;
•risk of shortages, price increases, changes, delays or discontinuations of hardware due to supply chain disruptions with respect to our limited number of suppliers;
•risks related to economic and geopolitical conditions, including the impact of inflation and fluctuations in interest rates (including current elevated interest rate levels) and tariff and trade-related developments;
•our ability to keep pace with rapid developments and changes in our industry and provide new products and services;
•reliance on third parties for significant services;
•exposure to economic conditions and political risks affecting consumer, commercial and government spending, including as a result of budgetary and political pressures to reduce government spending, as well as any decline in the use of credit cards;
•changes in the budgets or regulatory environments of our public sector customers, primarily local and state governments, that could negatively impact spending;
•our ability to increase our existing market share, grow within the current public sector markets in which we operate and execute our growth strategy;
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•our ability to successfully identify acquisition targets, complete those acquisitions and effectively integrate those acquisitions into our services;
•potential degradation of the quality of our products, services and support;
•our ability to retain customers;
•our ability to attract, recruit, retain and develop key personnel and qualified employees;
•risk of chargeback liabilities if our customers refuse or cannot reimburse chargebacks resolved in favor of their customers;
•risks related to laws, regulations and industry standards, including our ability to comply with complex laws and regulations applicable to the industries in which we operate or to adjust our operations in response to changing laws and regulations, such as the evolving legal, ethical, regulatory and operational landscape related to artificial intelligence technologies;
•the impact of decisions of the U.S. Supreme Court regarding the actions of federal agencies;
•the impact of claims, litigation and government investigations;
•risks related to our international operations;
•our indebtedness and our ability to maintain compliance with the financial covenants in our 2023 Senior Secured Credit Facility (as defined below);
•our ability to meet our liquidity needs;
•our ability to raise additional funds on terms acceptable to us, if at all, whether through debt, equity or a combination thereof;
•operating and financial restrictions imposed by our 2023 Senior Secured Credit Facility; and
•the "Risk Factors" included in our Form 10-K and included in Part II, Item 1A of this Quarterly Report on Form 10-Q, if any.
Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. The matters summarized in “Risk Factors” in our Form 10-K, and in subsequent filings could cause our actual results to differ significantly from those contained in our forward-looking statements. In addition, even if our results of operations, financial condition and liquidity, and industry developments are consistent with the forward-looking statements contained in this filing, those results or developments may not be indicative of results or developments in subsequent periods.
In light of these risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this filing speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments, except as required by applicable law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.
Executive Overview
The Company provides mission-critical enterprise software solutions to its public sector customers. These comprehensive cloud-native solutions address a broad range of government functions, including courts, transportation, utilities, revenue and schools. The Company’s mission is to enable state and local governments and related agencies to serve their constituents in an effective and efficient manner. With thousands of software installations across all 50 states and Canada, i3 Verticals is a leader in the public sector vertical.
The Company has one operating and reportable segment. See Note 16 to our condensed consolidated financial statements for additional information.
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Economic Trends
Inflationary pressures, elevated interest rate levels, monetary policy, the current geopolitical situation (including military conflicts in the Middle East and Ukraine), tariff and trade-related developments, and budgetary and political pressures to reduce government spending are causing broad economic uncertainty and could potentially cause new, or exacerbate existing, economic challenges that may impact us. The future magnitude, duration and effects of these macroeconomic and geopolitical conditions are difficult to predict, and as such we are unable to predict the extent of the potential effect of these conditions on our financial results.
Liquidity
At March 31, 2026, we had $7.1 million of cash and cash equivalents and $319.0 million of available capacity under our 2023 Senior Secured Credit Facility subject to our financial covenants. As of March 31, 2026, we were in compliance with these covenants with a consolidated interest coverage ratio and total leverage ratio 16.2x, and 1.2x, respectively. For additional information about our 2023 Senior Secured Credit Facility, see the section entitled “Liquidity and Capital Resources” below.
Divestitures
Sale of Healthcare RCM Business
On May 5, 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”), 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 $96.3 million, paid in cash at closing, after giving effect to post-closing net working capital, indebtedness and cash adjustments.
As a result of the sale of the Healthcare RCM Business, the results of operations for the Healthcare RCM Business have been reclassified as discontinued operations in our condensed consolidated statements of operations for all periods presented. Refer to Note 2 for additional information.
Sale of Merchant Services Business
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 the Merchant Services Sellers as set forth in the Merchant Services Purchase Agreement), Payroc Buyer, LLC (“Merchant Services Buyer”), 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. 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 $439.5 million paid in cash at closing, after giving effect to post-closing net working capital, indebtedness and cash adjustments.
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As a result of the sale of the Merchant Services Business, the results of operations for the Merchant Services Business have been reflected as discontinued operations in our condensed consolidated statements of operations for all periods presented. Refer to Note 2 for additional information.
Acquisitions
A core component of our growth strategy includes a disciplined approach to acquisitions of companies and technology, evidenced by numerous platform acquisitions and tuck-in acquisitions since our inception in 2012. Our acquisitions have increased the number of businesses and organizations to whom we provide solutions and augmented our existing proprietary payment facilitator platform and software solutions and capabilities.
Acquisitions during the six months ended March 31, 2026
During the six months ended March 31, 2026, we 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 $60.0 million in cash payable at closing funded by proceeds from our 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 $20.0 million, 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 $7.6 million.
Acquisitions during the six months ended March 31, 2025
During the six months ended March 31, 2025, we did not complete any acquisitions.
Our Revenue and Expenses
Revenues
We generate revenue from software and related services revenue, including the sale of subscriptions, recurring services, ongoing support, licenses, and installation and implementation services specific to software. We also generate revenue from volume-based payment processing fees (“discount fees”) that we provide to our customers directly through our software. Volume-based fees represent a percentage of the dollar amount of each credit or debit transaction processed. Revenues are also derived from a variety of fixed transaction or service fees, including authorization fees, convenience fees, statement fees, annual fees and fees for other miscellaneous services, such as handling chargebacks.
Interchange and network fees. Interchange and network fees consist primarily of pass-through fees that make up a portion of discount fee revenue. These include assessment fees payable to card associations, which are a percentage of the processing volume we generate from Visa and Mastercard. These fees are presented net of revenue.
Expenses
Costs of services. Costs of services include costs directly related to our software and related services, including personnel costs related to installation of our software, conversion of client data, training client personnel, customer support activities and various other services provided directly to customers and hosting and related software costs for directly supporting our customers. Additionally, costs of services include costs directly attributable related to payment processing services such as processing and bank sponsorship. Losses resulting from chargebacks against a customer are included in costs of services. Residual payments to our distribution partners and the cost of equipment sold is also included in cost of services. Amortization arising from capitalized software development is not included in costs of services. Costs of services are recognized at the time the related revenue is recognized.
Selling, general and administrative. Selling, general and administrative expenses include certain salaries and other employment costs, professional services, internal technology expenses, rent and utilities and other operating costs. Salaries and other employment costs within selling, general and administrative include individuals associated with shared services, product development and maintenance, sales and other functions.
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Depreciation and amortization. Depreciation expense consists of depreciation on our investments in property, equipment and computer hardware and software. Depreciation expense is recognized on a straight-line basis over the estimated useful life of the asset. Amortization expense for acquired intangible assets and internally developed software is recognized straight-line, which we consider materially consistent with a proportional cash flow method. Amortization expense for internally developed software is recognized over the estimated useful life of the asset. The useful lives of contract-based intangible assets are equal to the terms of the agreement.
Interest expense. Our interest expense consists of interest on our outstanding indebtedness under our 2023 Senior Secured Credit Facility, and prior to their maturity, the Exchangeable Notes, and amortization of or write offs of debt issuance costs.
How We Assess Our Business
As a result of the sale of the Merchant Services Business in 2024 and the Healthcare RCM Business in 2025, the results of operations for the Merchant Services Business and the Healthcare RCM Business have been reflected as discontinued operations in our condensed consolidated statements of operations for all periods presented.
After giving effect to these developments, as further described above, the Company has one operating segment and reportable segment.
The Company provides mission-critical enterprise software and services solutions to its public sector customers. These comprehensive solutions cover a broad range of applications, including cloud native enterprise software, all of which enable state and local governments and related agencies to serve their constituents in an efficient and seamless manner.
Key Performance Indicators
We evaluate our performance through various metrics, including the following key performance indicators:
•Annualized recurring revenue ("ARR");
•Adjusted EBITDA margin
ARR is the annualized revenue derived from recurring sources where we have an ongoing contract with our customers. We believe revenue from recurring sources is a strategic priority. ARR is comprised of software-as-a-service (“SaaS”) arrangements, transaction-based software-revenue, software maintenance, recurring software-based services, payments revenue and other recurring revenue sources within the quarter. The sum of these revenue categories is multiplied by four to calculate ARR. ARR excludes revenue that is not recurring or is one-time in nature.
We believe this metric provides useful information to investors by providing visibility regarding the ongoing revenue potential of our business model and providing a clearer picture of our sustainable revenue base. Further, our management uses ARR as a metric because it helps us to assess the health and trajectory of our business. We believe that focusing on ARR can orient our sales and operations management towards long-term, reliable revenue growth. This focus on recurring revenue is particularly relevant for businesses operating under a subscription model, where customer retention and contract renewals play a significant role in long-term financial performance.
ARR does not have a standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. It should be reviewed independently of revenue, and it is not a forecast. Additionally, ARR does not take into account seasonality. The active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers. ARR from continuing operations for the three months ended March 31, 2026 and 2025 was $183.5 million and $164.5 million, respectively, representing a period-to-period growth rate of 11.6%.
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Adjusted EBITDA margin is used by the Company to measure operating performance and for purposes of making decisions. Adjusted EBITDA margin for any particular period is adjusted EBITDA as a percentage of revenue for such period. Adjusted EBITDA is calculated as earnings adjusted to exclude interest, tax, depreciation, amortization, stock-compensation expense, non-cash changes in the fair value of contingent consideration, M&A-related expenses, and certain other adjustments that management believes are not reflective of our underlying operations. Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures.
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Results of Operations
As a result of the sale of the Merchant Services Business and the Healthcare RCM Business, the historical results of these two disposed businesses have been reflected as discontinued operations in our condensed consolidated financial statements. Prior period results of operations and balance sheet information have been recast to reflect this presentation, and the discussion below relates to our continuing operations after giving effect to the reclassification for the Merchant Services Business and the Healthcare RCM Business as discontinued operations.
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
The following table presents our historical results of operations for the periods indicated:

|  | Three Months Ended March 31, |  | Change
(in thousands) |  | 2026 |  | 2025 |  | Amount |  | %
Revenue |  | $ | 57,518 |  |  | $ | 54,135 |  |  | $ | 3,383 |  |  | 6.2 | %
Operating expenses |  |  |  |  |  |  |  |
Costs of services (excluding depreciation and amortization) |  | 17,138 |  |  | 16,580 |  |  | 558 |  |  | 3.4 | %
Selling, general and administrative |  | 29,058 |  |  | 26,282 |  |  | 2,776 |  |  | 10.6 | %
Depreciation and amortization |  | 7,703 |  |  | 6,998 |  |  | 705 |  |  | 10.1 | %
Change in fair value of contingent consideration |  | (124) |  |  | (786) |  |  | 662 |  |  | (84.2) | %
Total operating expenses |  | 53,775 |  |  | 49,074 |  |  | 4,701 |  |  | 9.6 | %
Income from operations |  | 3,743 |  |  | 5,061 |  |  | (1,318) |  |  | (26.0) | %
Other expenses (income) |  |  |  |  |  |  |  |
Interest expense |  | 1,141 |  |  | 446 |  |  | 695 |  |  | 155.8 | %
Other income |  | (70) |  |  | (593) |  |  | 523 |  |  | (88.2) | %
Total other expenses (income) |  | 1,071 |  |  | (147) |  |  | 1,218 |  |  | n/m
Income before income taxes |  | 2,672 |  |  | 5,208 |  |  | (2,536) |  |  | (48.7) | %
Provision for income taxes |  | 478 |  |  | 2,885 |  |  | (2,407) |  |  | (83.4) | %
Net income from continuing operations |  | 2,194 |  |  | 2,323 |  |  | (129) |  |  | (5.6) | %
Net loss from discontinued operations, net of income taxes |  | — |  |  | (1,554) |  |  | 1,554 |  |  | n/m
Net income |  | 2,194 |  |  | 769 |  |  | 1,425 |  |  | 185.3 | %
Net income from continuing operations attributable to non-controlling interest |  | 730 |  |  | 1,304 |  |  | (574) |  |  | (44.0) | %
Net loss from discontinued operations attributable to non-controlling interest |  | — |  |  | (381) |  |  | 381 |  |  | n/m
Net income attributable to non-controlling interest |  | 730 |  |  | 923 |  |  | (193) |  |  | (20.9) | %
Net income from continuing operations attributable to i3 Verticals, Inc. |  | 1,464 |  |  | 1,019 |  |  | 445 |  |  | 43.7 | %
Net loss from discontinued operations attributable to i3 Verticals, Inc. |  | — |  |  | (1,173) |  |  | 1,173 |  |  | n/m
Net income (loss) attributable to i3 Verticals, Inc. |  | $ | 1,464 |  |  | $ | (154) |  |  | $ | 1,618 |  |  | n/m

n/m = not meaningful
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Revenue
Revenue increased $3.4 million, or 6.2%, to $57.5 million for the three months ended March 31, 2026 from $54.1 million for the three months ended March 31, 2025. The increase was driven by an increase of $4.8 million in recurring revenues, partially offset by a decrease of $1.4 million in non-recurring revenues.
Costs of Services
Costs of services increased $0.6 million, or 3.4%, to $17.1 million for the three months ended March 31, 2026 from $16.6 million for the three months ended March 31, 2025. The increase was primarily driven by an increase in software costs of $1.4 million, partially offset by a decrease in people costs of $0.8 million for the three months ended March 31, 2026 from the three months ended March 31, 2025.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $2.8 million, or 10.6%, to $29.1 million for the three months ended March 31, 2026 from $26.3 million for the three months ended March 31, 2025. The increase was driven by an increase in people costs (including stock compensation expense) of $1.1 million as well as increases in other expenses, including the provision for doubtful accounts, rent expense, professional fees and marketing expense for the three months ended March 31, 2026 from the three months ended March 31, 2025.
Depreciation and Amortization
Depreciation and amortization increased $0.7 million, or 10.1%, to $7.7 million for the three months ended March 31, 2026 from $7.0 million for the three months ended March 31, 2025. Amortization expense increased $0.6 million for the three months ended March 31, 2026 from three months ended March 31, 2025, primarily due to an increase in capitalized software project releases, driving an increase in amortization expense, and amortization expense recorded for intangible assets and capitalized software acquired from current year and prior year acquisitions. Depreciation expense increased $0.1 million for the three months ended March 31, 2026 from three months ended March 31, 2025.
Change in Fair Value of Contingent Consideration
Change in fair value of contingent consideration to be paid in connection with acquisitions was a benefit of $0.1 million for the three months ended March 31, 2026 related to adjustments to the expected present value of consideration to be paid for earnouts. The change in fair value of contingent consideration for the three months ended March 31, 2025 was a benefit of $0.8 million.
Interest Expense
Interest expense increased $0.7 million, or 155.8%, to $1.1 million for the three months ended March 31, 2026 from $0.4 million for the three months ended March 31, 2025. The increase reflects a higher average outstanding debt balance for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.
Other Income
Other income was $0.1 million during the three months ended March 31, 2026 compared to $0.6 million during the three months ended March 31, 2025. Other income during the three months ended March 31, 2026 reflects income from the transition services agreement and processing services agreement related to the sale of the Merchant Services Business, income from the transition services agreement entered into at the closing of the sale of the Healthcare RCM Business and interest income generated from cash held at financial institutions. Other income during the three months ended March 31, 2025 reflects income from the transition services agreement and processing services agreement related to the sale of the Merchant Services Business of $0.5 million and income generated from cash held at financial institutions of $0.1 million.
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Provision for Income Taxes
The provision for income taxes decreased to a provision for $0.5 million for the three months ended March 31, 2026 from a provision for $2.9 million for three months ended March 31, 2025. Our effective tax rate was 18% for the three months ended March 31, 2026. Our effective tax rate differs from the federal statutory rate of 21% primarily due to the tax structure of the Company, valuation allowance activity, stock compensation and state tax expense. The income of majority-owned i3 Verticals, LLC is not taxed at the entity-level. i3 Verticals, Inc. is subject to federal, state and local income taxes with respect to its allocable share of any taxable income of i3 Verticals, LLC and is taxed at the prevailing corporate tax rates.
Net Loss from Discontinued Operations, Net of Income Taxes
We had no net income from discontinued operations, net of income tax, for the three months ended March 31, 2026. For the three months ended March 31, 2025, we had a net loss from discontinued operations, net of income tax, of $1.6 million. See Note 2 to our condensed consolidated financial statements for additional information and detail on the financial results of discontinued operations.
The net loss from discontinued operations, net of income tax, for the three months ended March 31, 2025 reflects adjustments to the gain on the sale of the Merchant Services Business and a complete quarter of business activity for the Healthcare RCM Business, including revenue of $9.1 million, operating expenses of $10.2 million and a provision for income taxes of $0.1 million.
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Six Months Ended March 31, 2026 Compared to Six Months Ended March 31, 2025
The following table presents our historical results of operations for the periods indicated:

|  | Six Months Ended March 31, |  | Change
(in thousands) |  | 2026 |  | 2025 |  | Amount |  | %
Revenue |  | $ | 110,189 |  |  | $ | 106,356 |  |  | $ | 3,833 |  |  | 3.6 | %
Operating expenses |  |  |  |  |  |  |  |
Costs of services (excluding depreciation and amortization) |  | 34,720 |  |  | 32,156 |  |  | 2,564 |  |  | 8.0 | %
Selling, general and administrative |  | 56,047 |  |  | 52,761 |  |  | 3,286 |  |  | 6.2 | %
Depreciation and amortization |  | 14,568 |  |  | 13,859 |  |  | 709 |  |  | 5.1 | %
Change in fair value of contingent consideration |  | (498) |  |  | 466 |  |  | (964) |  |  | n/m
Total operating expenses |  | 104,837 |  |  | 99,242 |  |  | 5,595 |  |  | 5.6 | %
Income from operations |  | 5,352 |  |  | 7,114 |  |  | (1,762) |  |  | (24.8) | %
Other expenses (income) |  |  |  |  |  |  |  |
Interest expense |  | 1,522 |  |  | 1,126 |  |  | 396 |  |  | 35.2 | %
Other income |  | (631) |  |  | (2,419) |  |  | 1,788 |  |  | (73.9) | %
Total other expenses (income) |  | 891 |  |  | (1,293) |  |  | 2,184 |  |  | n/m
Income before income taxes |  | 4,461 |  |  | 8,407 |  |  | (3,946) |  |  | (46.9) | %
Provision for income taxes |  | 1,182 |  |  | 3,294 |  |  | (2,112) |  |  | (64.1) | %
Net income from continuing operations |  | 3,279 |  |  | 5,113 |  |  | (1,834) |  |  | (35.9) | %
Net loss from discontinued operations, net of income taxes |  | (138) |  |  | (1,236) |  |  | 1,098 |  |  | n/m
Net income |  | 3,141 |  |  | 3,877 |  |  | (736) |  |  | (19.0) | %
Net income from continuing operations attributable to non-controlling interest |  | 1,239 |  |  | 2,239 |  |  | (1,000) |  |  | (44.7) | %
Net loss from discontinued operations attributable to non-controlling interest |  | (46) |  |  | (264) |  |  | 218 |  |  | n/m
Net income attributable to non-controlling interest |  | 1,193 |  |  | 1,975 |  |  | (782) |  |  | (39.6) | %
Net income from continuing operations attributable to i3 Verticals, Inc. |  | 2,040 |  |  | 2,874 |  |  | (834) |  |  | (29.0) | %
Net loss from discontinued operations attributable to i3 Verticals, Inc. |  | (92) |  |  | (972) |  |  | 880 |  |  | n/m
Net income attributable to i3 Verticals, Inc. |  | $ | 1,948 |  |  | $ | 1,902 |  |  | $ | 46 |  |  | 2.4 | %

n/m = not meaningful
Revenue
Revenue increased $3.8 million, or 3.6%, to $110.2 million for the six months ended March 31, 2026 from $106.4 million for the six months ended March 31, 2025. The increase was driven by an increase of $8.1 million in recurring revenues, partially offset by a decrease of $4.2 million in non-recurring revenues.
Costs of Services
Costs of services increased $2.6 million, or 8.0%, to $34.7 million for the six months ended March 31, 2026 from $32.2 million for the six months ended March 31, 2025. The increase was primarily driven by an increase in software costs of $3.0 million, other costs of $0.5 million and payments costs of $0.3 million, partially offset by a decrease in people costs of $1.3 million for the six months ended March 31, 2026 from the six months ended March 31, 2025.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $3.3 million, or 6.2%, to $56.0 million for the six months ended March 31, 2026 from $52.8 million for the six months ended March 31, 2025. The increase was driven by an increase in people costs (including stock compensation expense) of $2.6 million as well as increases in other expenses, including the provision for doubtful accounts, rent expense, professional fees and marketing expense for the six months ended March 31, 2026 from the six months ended March 31, 2025.
Depreciation and Amortization
Depreciation and amortization increased $0.7 million, or 5.1%, to $14.6 million for the six months ended March 31, 2026 from $13.9 million for the six months ended March 31, 2025. Amortization expense increased $0.6 million for the six months ended March 31, 2026 from six months ended March 31, 2025, primarily due to an increase in capitalized software project releases, driving an increase in amortization expense, and amortization expense recorded for intangible assets and capitalized software acquired from current year and prior year acquisitions. Depreciation expense increased $0.1 million for the six months ended March 31, 2026 from six months ended March 31, 2025.
Change in Fair Value of Contingent Consideration
Change in fair value of contingent consideration to be paid in connection with acquisitions was a benefit of $0.5 million for the six months ended March 31, 2026 related to adjustments to the expected present value of consideration to be paid for earnouts. The change in fair value of contingent consideration for the six months ended March 31, 2025 was a charge of $0.5 million.
Interest Expense
Interest expense increased $0.4 million, or 35.2%, to $1.5 million for the six months ended March 31, 2026 from $1.1 million for the six months ended March 31, 2025. The increase reflects a higher average outstanding debt balance for the six months ended March 31, 2026, as compared to the six months ended March 31, 2025.
Other Income
Other income was $0.6 million during the six months ended March 31, 2026 compared to $2.4 million during the six months ended March 31, 2025. Other income during the six months ended March 31, 2026 reflects interest income generated from cash held at financial institutions of $0.5 million, income from the transition services agreement entered into at the closing of the sale of the Healthcare RCM Business of $0.2 million and income from the transition services agreement and processing services agreement related to the sale of the Merchant Services Business of $0.1 million, partially offset by a loss on disposal of property and equipment of $0.1 million related to the sale of a building purchased through a previous acquisition. Other income during the six months ended March 31, 2025 reflects income from the transition services agreement and processing services agreement related to the sale of the Merchant Services Business of $1.0 million, income generated from cash held at financial institutions of $0.9 million, and a gain on disposal of property and equipment of $0.6 million related to the sale of a building purchased through previous acquisitions.
Provision for Income Taxes
The provision for income taxes decreased to a provision for $1.2 million for the six months ended March 31, 2026 from a provision of $3.3 million for six months ended March 31, 2025. Our effective tax rate was 26% for the six months ended March 31, 2026. Our effective tax rate differs from the federal statutory rate of 21% primarily due to the tax structure of the Company, valuation allowance activity, stock compensation and state tax expense. The income of majority-owned i3 Verticals, LLC is not taxed at the entity-level. i3 Verticals, Inc. is subject to federal, state and local income taxes with respect to its allocable share of any taxable income of i3 Verticals, LLC and is taxed at the prevailing corporate tax rates.
Net Loss from Discontinued Operations, Net of Income Taxes
We had $0.1 million in net loss from discontinued operations, net of income tax, for the six months ended March 31, 2026 compared to $1.2 million in net loss from discontinued operations, net of income tax, for the six months ended March 31, 2025. See Note 2 to our condensed consolidated financial statements for additional information and detail on the financial results of discontinued operations.
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The net loss from discontinued operations, net of income tax, for the six months ended March 31, 2026 reflects adjustments to the gain on the sale of the Healthcare RCM Business. The net loss from discontinued operations, net of income tax, for the six months ended March 31, 2025 reflects adjustments to the gain on the sale of the Merchant Services Business, net of income tax, of $0.5 million and a complete six months of business activity for the Healthcare RCM Business, including revenue of $18.9 million, operating expenses of $19.3 million and a provision for income taxes of $0.3 million.
Seasonality
We have experienced in the past, and may continue to experience, seasonal fluctuations in our revenues as a result of consumer and business spending patterns. The number of business days in a month or quarter also may affect seasonal fluctuations. Certain revenues fluctuate with the fiscal calendars of our customers. Transactional revenue for our education customers is strongest in August, September, October, January and February, at the start of each semester, and generally weakens throughout the semester, with little revenue in the summer months of June and July. Operating expenses show less seasonal fluctuation, with the result that net income is subject to the same seasonal factors as our revenues.
Liquidity and Capital Resources
We have historically financed our operations and working capital through net cash from operating activities. As of March 31, 2026, we had $7.1 million of cash and cash equivalents and available borrowing capacity of $319.0 million under our 2023 Senior Secured Credit Facility, subject to the financial covenants. We usually minimize cash balances by making payments on our revolving line of credit to minimize borrowings and interest expense. As of March 31, 2026, we had borrowings outstanding of $81.0 million under the 2023 Senior Secured Credit Facility. For additional information about our 2023 Senior Secured Credit Facility, see the section entitled "2023 Senior Secured Credit Facility" below.
Our primary cash needs are to fund working capital requirements, make capital expenditures and otherwise invest in our technology infrastructure, fund acquisitions and related contingent consideration, make scheduled principal and interest payments on our outstanding indebtedness, pay tax distributions to members of i3 Verticals, LLC as discussed below, and make repurchases of shares of Class A common stock under our share repurchase program as discussed below. We consistently have positive cash flow provided by operations and expect that our cash flow from operations, current cash and cash equivalents and available borrowing capacity under the 2023 Senior Secured Credit Facility will be sufficient to fund our cash needs as described above for at least the next twelve months and foreseeable future. Our growth strategy includes acquisitions. We expect to fund acquisitions through a combination of cash on hand, net cash from operating activities, borrowings under our 2023 Senior Secured Credit Facility and through the issuance of equity and debt securities. As a holding company, we depend on distributions or loans from i3 Verticals, LLC to access funds earned by our operations. The covenants contained in the 2023 Senior Secured Credit Facility may restrict i3 Verticals, LLC’s ability to provide funds to i3 Verticals, Inc.
Our 2023 Senior Secured Credit Facility, as amended, requires us to maintain a consolidated interest coverage ratio not less than 3.0 to 1.0 and total leverage ratio not exceeding 5.0 to 1.0. As of March 31, 2026, we were in compliance with these covenants with a consolidated interest coverage ratio and total leverage ratio of 16.2x and 1.2x, respectively. Although we believe our liquidity position remains strong, there can be no assurance that we will be able to raise additional funds, in the form of debt or equity, or to amend our 2023 Senior Secured Credit Facility on terms acceptable to us, if at all, even if we determined such actions were necessary in the future.
In January 2025, i3 Verticals, LLC, a pass-through entity in which the Company holds a majority ownership interest, made a tax distribution (the “LLC Tax Distribution”) to the Company and the other members of i3 Verticals, LLC (the “Continuing Equity Owners”) 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 i3 Verticals, LLC. 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
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Company holding cash in excess of the Company’s tax liabilities, its obligation to make payments under its tax receivables agreement, and any other expected liabilities of the Company. Thereafter, on January 23, 2025, the Company and i3 Verticals, LLC effected certain recapitalization actions in order to reduce excess cash held at the Company following this LLC Tax Distribution. For additional information regarding the ownership interest of the Company in i3 Verticals, LLC and the capitalization of i3 Verticals, LLC, see Note 1 to the accompanying unaudited condensed consolidated financial statements contained in this report. For additional information regarding these recapitalization transactions, see Note 15 to the accompanying unaudited condensed consolidated financial statements contained in this report.
Cash Flows
The discussion of our cash flows that follows does not include the impact of any adjustments to remove the Merchant Services Business and the Healthcare RCM Business as discontinued operations and is stated on a total company consolidated basis. The following table presents a summary of cash flows from operating, investing and financing activities for the following comparative periods.
Six Months Ended March 31, 2026 and 2025

| Six months ended March 31,
| 2026 |  | 2025
| (in thousands)
Net cash provided by (used in) operating activities | $ | 24,150 |  |  | $ | (15,627) |
Net cash used in investing activities | $ | (64,658) |  |  | $ | (3,675) |
Net cash used in financing activities | $ | (16,708) |  |  | $ | (60,029) |

Cash Flow from Operating Activities
Net cash provided by operating activities increased $39.8 million to $24.2 million net cash provided by operating activities for the six months ended March 31, 2026 from net cash used in operating activities of $15.6 million for the six months ended March 31, 2025.
The increase in net cash provided by operating activities was driven by increases in cash provided by changes in net operating assets and liabilities of $41.5 million during the six months ended March 31, 2026 from the six months ended March 31, 2025, which are impacted by the timing of collections and payments. Income taxes and other liabilities related to the sale of the Merchant Services Business in September 2024 were accrued in fiscal year 2024, but paid during the six months ended March 31, 2025, driving most of the increases in net operating assets and liabilities during the six months ended March 31, 2026 from the six months ended March 31, 2025
Partially offsetting the increases driven by changes in net operating assets and liabilities, our net income decreased from $3.9 million for the six months ended March 31, 2025 to $3.1 million for the six months ended March 31, 2026.
Cash Flow from Investing Activities
Net cash used in investing activities increased $61.0 million to $64.7 million for the six months ended March 31, 2026 from $3.7 million for the six months ended March 31, 2025. The largest driver of the increase in cash used in investing activities was the $60.0 million in cash paid for acquisitions (net of cash acquired) during the six months ended March 31, 2026, whereas we had no cash paid for acquisitions (net of cash acquired) during the six months ended March 31, 2025. Additionally, proceeds from the sale of property and equipment decreased $1.1 million during the six months ended March 31, 2026 from the six months ended March 31, 2025.
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Cash Flow from Financing Activities
Net cash used in financing activities decreased $43.3 million to $16.7 million for the six months ended March 31, 2026 from $60.0 million for the six months ended March 31, 2025. The decrease in net cash used in financing activities was driven by an increase in net borrowings on the revolving credit facility of $69.0 million, a decrease of $22.2 million in payments for required distributions on behalf of members for tax obligations and a decrease of $7.4 million in required distributions to members under the Tax Receivable Agreement. The decrease was also related to the $26.2 million in payments for repurchases of Exchangeable Notes during the six months ended March 31, 2025. Partially offsetting these decreases in net cash used in financing activities for the six months ended March 31, 2026 from the six months ended March 31, 2025 was an increase of $77.3 million in payments for repurchases of Class A common stock and an increase of $4.6 million in payments for employees' tax withholdings from net settled stock option exercises and RSU releases.
2023 Senior Secured Revolving Credit Facility
On May 8, 2023, i3 Verticals, LLC (the “Borrower”), entered into that certain Credit Agreement (as amended by the first amendment dated June 26, 2024, and the second amendment dated May 5, 2025, 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"). As amended by the Second Amendment described below, the 2023 Senior Secured Credit Facility provides for aggregate commitments of $400.0 million in the form of a senior secured revolving credit facility (the “Revolver”). In addition, on February 11, 2025, the Borrower entered into a letter agreement with the administrative agent and the lenders under the 2023 Senior Secured Credit Facility providing the Borrower with a one-time consent to an earlier reduction in the pricing of the revolving loans than what is otherwise permitted by the terms of the 2023 Senior Secured Credit Facility. Such reduction became effective as of September 27, 2024, which is the date that the Borrower paid down the outstanding balance of the revolving loans with proceeds of the sale of the Merchant Services Business and achieved a consolidated total net leverage ratio of less than 2.0 to 1.0, instead of November 26, 2024, which is the date that the Borrower delivered its compliance certificate for the fiscal quarter ending September 30, 2024. Further, on May 5, 2025, the Borrower entered into a second amendment (the “Second Amendment”) to the 2023 Senior Secured Credit Facility to permit the Healthcare RCM Transactions. The Second Amendment also permanently reduced the aggregate lender commitments under the Revolver from $450.0 million to $400.0 million.
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 $100.0 million 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 March 31, 2026, the Borrower's consolidated interest coverage ratio was 16.2x and total leverage ratio was 1.2x.
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.
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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 March 31, 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 March 31, 2026). The base rate shall not be less than 1% in any event.
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 < 3.0 to 1.0 | 0.25 | % | 2.50 | % | 2.50 | % | 1.50 | %
> 2.0 to 1.0 but < 2.5 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 March 31, 2026) times the actual daily amount by which $400.0 million (as of the effectiveness of the Second Amendment) 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 $400.0 million (as of the effectiveness of the Second Amendment) 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.
As of March 31, 2026, we were in compliance with these covenants, with a consolidated interest coverage ratio and total leverage ratio of 16.2x and 1.2x, respectively.
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Exchangeable Notes
On February 18, 2020, i3 Verticals, LLC issued $138.0 million aggregate principal amount of its 1.0% Exchangeable Notes due February 15, 2025. Prior to their maturity, the Exchangeable Notes bore interest at a fixed rate of 1.0% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2020. The Exchangeable Notes were exchangeable into cash, shares of the Company's Class A common stock, or a combination thereof, at i3 Verticals, LLC's election, provided that in September 2022, the Company made the irrevocable election to settle the principal portion of its Exchangeable Notes only in cash. As of August 15, 2024, the Exchangeable Notes became exchangeable by the holders thereof at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The net proceeds from the sale of the Exchangeable Notes were approximately $132.8 million, after deducting discounts and commissions to the certain initial purchasers and other estimated fees and expenses. i3 Verticals, LLC used a portion of the net proceeds of the Exchangeable Notes offering to pay down outstanding borrowings under the Prior Senior Secured Credit Facility in connection with the effectiveness of the operative provisions of the amendment to the Prior Senior Secured Credit Facility and to pay the cost of the Note Hedge Transactions.
On December 21, 2023, i3 Verticals, LLC entered into agreements to repurchase a portion of its Exchangeable Notes pursuant to privately negotiated transactions with a limited number of holders of the Exchangeable Notes (the "Exchangeable Note Repurchases"). The Exchangeable Note Repurchases were completed on January 18, 2024, and the Company paid $87.4 million to repurchase $90.8 million in aggregate principal amount of its Exchangeable Notes and to repay approximately $0.4 million in accrued interest on the repurchased portion of the Exchangeable Notes. The Exchangeable Notes matured and were repaid in full on February 15, 2025, and we paid $26.4 million in satisfaction of the outstanding principal and accrued interest in connection therewith.
For additional information, see Note 8 to our condensed consolidated financial statements.
Material Cash Requirements
The following table summarizes our material cash requirements as of March 31, 2026, including those related to leases and borrowings:

|  | Payments Due by Period
Contractual Obligations |  | Total |  | Less than 1 year |  | 1 to 3 years |  | 3 to 5 years |  | More than 5 years
(in thousands) |  |  |  |  |  |  |  |  |  |
Contract minimum fees(1) |  | $ | 18,268 |  |  | $ | 11,841 |  |  | $ | 5,896 |  |  | $ | 531 |  |  | $ | — |
Facility leases(2) |  | 5,584 |  |  | 2,252 |  |  | 2,173 |  |  | 1,159 |  |  | — |
2023 Senior Secured Credit Facility and related interest(3) |  | 91,940 |  |  | 5,152 |  |  | 86,788 |  |  | — |  |  | — |
Contingent consideration(4) |  | 10,673 |  |  | 1,023 |  |  | 9,650 |  |  | — |  |  | — |
Total |  | $ | 126,465 |  |  | $ | 20,268 |  |  | $ | 104,507 |  |  | $ | 1,690 |  |  | $ | — |

__________________________
1. 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.
2. In addition to the facility leases presented, we have $58 thousand in short-term leases. These payments will be made within the next twelve months.
3. We estimated interest payments through the maturity of our 2023 Senior Secured Credit Facility by applying the interest rate of 5.77% in effect on the outstanding balance as of March 31, 2026, plus unused fee rate of 0.15% in effect as of March 31, 2026.
4. In connection with certain of our acquisitions, we may be obligated to pay the seller of the acquired entity certain amounts of contingent consideration as set forth in the relevant purchasing documents, whereby additional consideration may be due upon the achievement of certain specified financial performance targets. i3 Verticals, Inc. accounts for the fair values of such contingent payments in accordance with the Level 3 financial instrument fair value hierarchy at the close of each subsequent reporting period. The acquisition-date fair value of contingent consideration is valued using a Monte Carlo simulation. i3 Verticals, Inc. subsequently reassesses such fair value based on probability estimates with respect to the acquired entity’s likelihood of achieving the respective financial performance targets.
Potential payments under the Tax Receivable Agreement are not reflected in this table. See “—Tax Receivable Agreement” below.
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Share Repurchase Programs
New Share Repurchase Program
On February 5, 2026, the Company announced that our Board of Directors had approved a share repurchase program for the Company's Class A common stock (the “New Share Repurchase Program”), under which the Company is authorized to repurchase up to $60.0 million of outstanding shares of our Class A common stock (exclusive of fees, commissions or other expenses related to such repurchases). This New Share Repurchase Program replaced a prior share repurchase program entered into by the Company on August 8, 2025 (the “August 2025 Share Repurchase Program”) as further described below, which August 2025 Share Repurchase Program is no longer in effect following the Company expending the maximum dollar amount under such program.
Pursuant to this New Share Repurchase Program, the Company was authorized to make repurchases of our Class A Common Stock in the open market, through privately negotiated transactions, or otherwise, including under Rule 10b5-1 plans. The terms of this New Share Repurchase Program provided that, immediately prior to repurchases of Class A common stock under this New Share Repurchase Program, i3 Verticals, LLC would redeem for cash an equal number of units held by the Company in i3 Verticals, LLC in order to fund such repurchases and maintain a 1-1 ratio between the number of outstanding shares of Class A common stock and the units held by the Company in i3 Verticals, LLC.
In addition, repurchases under this New Share Repurchase Program were 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. This New Share Repurchase Program did not require the Company to acquire any particular amount of shares of Class A common stock, and was permitted to be extended, modified, suspended or discontinued at any time at the Company’s discretion.
The Company repurchased 1,703,682 shares of Class A Common Stock under the New Share Repurchase Program at an average price of $22.48 and an aggregate repurchase amount inclusive of commissions and excise taxes of $38.7 million, during the six months ended March 31, 2026. 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. Since March 31, 2026, the maximum dollar amount under the New Share Repurchase Program has been expended, and the New Share Repurchase Program is no longer in effect.
August 2025 Share Repurchase Program
On August 7, 2025, the Company entered into the August 2025 Share Repurchase Program, under which the Company was authorized to repurchase up to $50.0 million of outstanding shares of our Class A common stock (exclusive of fees, commissions or other expenses related to such repurchases). The 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”) as further described below, which August 2024 Share Repurchase Program expired on August 8, 2025. Under the terms of August 2025 Share Repurchase Program, 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 our Class A Common Stock in the open market, through privately negotiated transactions, or otherwise, including under Rule 10b5-1 plans. The terms of the August 2025 Share Repurchase Program provided that, immediately prior to repurchases of Class A common stock under the August 2025 Share Repurchase Program, i3 Verticals, LLC would redeem for cash an equal number of units held by the Company in i3 Verticals, LLC in order to fund such repurchases and maintain a 1-1 ratio between the number of outstanding shares of Class A common stock and the units held by the Company in i3 Verticals, LLC.
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The Company repurchased 2,039,892 shares of Class A Common Stock under the August 2025 Share Repurchase Program at an average price of $24.51 and an aggregate repurchase amount inclusive of commissions and excise taxes of $50.6 million, during the six months ended March 31, 2026. 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 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.
August 2024 Share Repurchase Program
On August 8, 2024, the Company announced that our Board of Directors had approved the August 2024 Share Repurchase Program, under which the Company was authorized to repurchase up to $50.0 million of outstanding shares of our Class A common stock (exclusive of fees, commissions or other expenses related to such repurchases). Under the terms of the August 2024 Share Repurchase Program, such program would terminate on the earlier of August 8, 2025, or when the maximum dollar amount under the authorization was expended.
Pursuant to the August 2024 Share Repurchase Program, the Company was authorized to make repurchases of our Class A Common Stock in the open market, through privately negotiated transactions, or otherwise, including under Rule 10b5-1 plans. The terms of the August 2024 Share Repurchase Program provided that, immediately prior to repurchases of Class A common stock under the August 2024 Share Repurchase Program, i3 Verticals, LLC redeemed for cash an equal number of units held by the Company in i3 Verticals, LLC in order to fund such repurchases and maintain a 1-1 ratio between the number of outstanding shares of Class A common stock and the units held by the Company in i3 Verticals, LLC. The August 2024 Share Repurchase Program terminated on August 8, 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 and an aggregate repurchase amount (inclusive of commissions and excise taxes) of $38.0 million during the year ended September 30, 2025, prior to the termination of such program as noted above. 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.
Tax Receivable Agreement
We are a party to a Tax Receivable Agreement with i3 Verticals, LLC and each of the Continuing Equity Owners, as described in Note 10 of our condensed consolidated financial statements. As a result of the Tax Receivable Agreement, we have been required to establish a liability in our condensed consolidated financial statements. That liability, which will increase upon the redemptions or exchanges of Common Units for our Class A common stock, generally represents 85% of the estimated future tax benefits, if any, relating to the increase in tax basis associated with the Common Units we received as a result of the reorganization transactions entered into in connection with our IPO and other redemptions or exchanges by holders of Common Units. If this election is made, the accelerated payment will be based on the present value of 100% of the estimated future tax benefits and, as a result, the associated liability reported on our condensed consolidated financial statements may be increased. We expect that the payments required under the Tax Receivable Agreement will be substantial. The actual increase in tax basis, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of redemptions or exchanges by the holders of Common Units, the price of our Class A common stock at the time of the redemption or exchange, whether such redemptions or exchanges are taxable, the amount and timing of the taxable income we generate in the future and the tax rate then applicable as well as the portion of our payments under the Tax Receivable Agreement constituting imputed interest. We intend to fund the payment of the amounts due under the Tax Receivable Agreement out of the cash savings that we actually realize in respect of the attributes to which the Tax Receivable Agreement relates.
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As of March 31, 2026, the total amount due under the Tax Receivable Agreement was $32.4 million, and payments to the Continuing Equity Owners related to exchanges through March 31, 2026 will range from $0 to $5.4 million per year and are expected to be paid over the next 22 years. The amounts recorded as of March 31, 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.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, goodwill and intangible assets, contingent consideration, and equity-based compensation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
Critical accounting policies are those that we consider the most critical to understanding our financial condition and results of operations.
As of March 31, 2026, there have been no significant changes to our critical accounting estimates disclosed in the Form 10-K for the fiscal year ended September 30, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
As of March 31, 2026, the 2023 Senior Secured Credit Facility, as amended, consisted of a $400 million revolving credit facility, together with an option to increase the revolving credit facility and/or obtain incremental term loans in an additional principal amount of up to, as of any date of determination, the greater of $100 million and 100% of consolidated EBITDA (as defined in the 2023 Senior Secured Credit Facility) for the most recently completed four quarter period (subject to the receipt of additional commitments for any such incremental loan amounts).
As of March 31, 2026, the 2023 Senior Secured Credit Facility accrued interest at Term SOFR (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 March 31, 2026), or the base rate (defined as 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 March 31, 2026), in each case depending upon the consolidated total leverage ratio, as defined in the agreement. Interest is payable at the end of the selected interest period, but no less frequently than quarterly. Additionally, the 2023 Senior Secured Credit Facility requires us to pay unused commitment fees of 0.15% to 0.30% (0.15% as of March 31, 2026) on any undrawn amounts under the revolving credit facility and letter of credit fees of up to 3.00% on the maximum amount available to be drawn under each letter of credit issued under the agreement. The 2023 Senior Secured Credit Facility requires maintenance of certain financial ratios on a quarterly basis as follows: (i) a minimum consolidated interest coverage ratio of 3.0 to 1.0 (ii) a maximum total leverage ratio of 5.0 to 1.0.
As of March 31, 2026, we were in compliance with these covenants, and there was $319.0 million available for borrowing under the revolving credit facility, subject to the financial covenants.
As of March 31, 2026, we had borrowings outstanding of $81.0 million under the 2023 Senior Secured Credit Facility. A 1.0% increase or decrease in the interest rate applicable to such borrowing (which was the Term SOFR rate) would have had a $0.8 million impact on the results of the business.
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Foreign Currency Exchange Rate Risk
As a result of our international operations, we are also exposed to foreign currency exchange rate risks. Because our international operations are not yet material to our consolidated results of operations, a 10% change in foreign currency exchange rates would not have had a material impact on our consolidated results of operations, financial position, or cash flows for the three months ended March 31, 2026.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer, with the participation of other members of management, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on such evaluations, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective (at the reasonable assurance level) to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act has been recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to ensure that the information required to be included in this report was accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended March 31, 2026 that materially affected, or which are reasonably likely to materially affect, our internal control over financial reporting.
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
The information required with respect to this item can be found in Note 14 to the accompanying unaudited condensed consolidated financial statements contained in this report and is incorporated by reference into this Part II, Item 1.
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed under the heading “Risk Factors” in our Form 10-K for the fiscal year ended September 30, 2025 filed with the SEC on November 21, 2025.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
The following table provides information with respect to purchases of shares of the Company’s Class A Common Stock made during the three months ended March 31, 2026 by the Company:

ISSUER PURCHASES OF EQUITY SECURITIES
Period | (a) Total Number of Shares (or Units) Purchased |  | Average Price Paid per Share (or Unit) |  | (a) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |  | (a) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
1/1/2026 - 1/31/2026 | 372,370 |  |  | $ | 24.08 |  |  | 372,370 |  |  | $ | 3,140 |
2/1/2026 - 2/28/2026 | 984,002 |  |  | $ | 21.86 |  |  | 984,002 |  |  | $ | 41,631 |
3/1/2026 - 3/31/2026 | 864,364 |  |  | $ | 23.06 |  |  | 864,364 |  |  | $ | 21,699 |
Total | 2,220,736 |  |  | $ | 22.70 |  |  | 2,220,736 |  |  | $ | 21,699 |

__________________________
a. On August 7, 2025, the Company announced that its Board of Directors had approved a share repurchase program (the "August 2025 Share Repurchase Program") providing for the repurchase of up to $50.0 million of outstanding shares of Class A common stock with an expiration date of September 30, 2026. The maximum dollar amount under the August 2025 Share Repurchase Program was expended during the three months ended March 31, 2026, and such program is no longer in effect. On February 5, 2026, the Company announced that our Board of Directors had approved a new share repurchase program providing for the repurchase of up to $60.0 million of outstanding shares of Class A common stock with an expiration date of February 4, 2027, which program replaced the August 2025 Share Repurchase Program. Since March 31, 2026, the maximum dollar amount under the New Share Repurchase Program was expended, and such program is no longer in effect. The shares of Class A common stock repurchased during the three months ended March 31, 2026, as reflected in the table above, were repurchased under both of these share repurchase programs.
During the three months ended March 31, 2026, the Company purchased 2,220,736 of its outstanding shares of Class A common stock under the August 2025 Share Repurchase Program adopted on August 7, 2025 and the New Share Repurchase Program adopted on February 5, 2026, at an average price of $22.70 per share for a total cost inclusive of commissions and excise taxes of $51.0 million. 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.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None. Without limiting the generality of the foregoing, during the three months ended March 31, 2026, no director or officer of the Company adopted or terminated any “Rule 10b5-1 trading arrangement,” or any “non-Rule 10b-5 trading arrangement,” as such terms are defined in Item 408(a) of Regulation S-K.
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Item 6. Exhibit Index

Exhibit Number |  | Exhibit Description
2.1 |  | Securities Purchase Agreement, dated as of June 26, 2024, by and among i3 Verticals, LLC, i3 Holdings Sub, Inc., Payroc Buyer, LLC, Payroc WorldAccess, LLC, solely for purposes of certain terms set forth therein, and i3 Verticals, Inc., solely for purposes of certain terms set forth therein (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 26, 2024) (File No. 001-38532).
2.2 |  | Securities Purchase Agreement, dated as of May 5, 2025, by and among i3 Verticals, LLC, i3 Healthcare Solutions, LLC and Infinx, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the SEC on May 6, 2025) (File No. 001-38532).
3.1 |  | Amended and Restated Certificate of Incorporation of i3 Verticals, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 25, 2018) (File No. 001-38532).
3.2 |  | Amended and Restated Bylaws of i3 Verticals, Inc., as amended and restated on November 16, 2022 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 16, 2022) (File No. 001-38532).
31.1* |  | Certification of Chief Executive Officer pursuant to Rules 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended.
31.2* |  | Certification of Chief Financial Officer pursuant to Rules 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended.
32.1** |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2** |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS* |  | XBRL Instance Document.
101.SCH* |  | XBRL Taxonomy Extension Schema Document.
101.CAL* |  | XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF* |  | XBRL Taxonomy Definition Linkbase Document.
101.LAB* |  | XBRL Taxonomy Label Linkbase Document.
101.PRE* |  | XBRL Taxonomy Extension Presentation Linkbase Document.
104 |  | The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline XBRL and contained in Exhibit 101.

____________________
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  |  | i3 Verticals, Inc.
|  |  | By: | /s/ Geoff Smith
|  |  |  | Geoff Smith
|  |  |  | Chief Financial Officer
|  |  |  | (Principal Financial Officer and Principal Accounting Officer)
Date: | May 8, 2026 |  |  |

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