On November 19, 2024, i3 Verticals Inc (IIIV, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full fiscal year ending September 30, 2024. i3 Verticals Inc, a provider of integrated payment and software solutions to small and medium-sized businesses, operates primarily in the Software and Services segment, focusing on strategic vertical markets such as schools, healthcare, and the public sector.
Performance Highlights and Challenges
For the fourth quarter, i3 Verticals Inc reported revenue from continuing operations of $60.9 million, which is slightly below the analyst estimate of $61.25 million. This represents a 3.9% increase over the prior year's fourth quarter. However, the full-year revenue of $229.9 million fell short of the annual estimate of $255.41 million, marking a modest 1.4% increase from the previous year.
Despite the revenue shortfall, the company reported a significant improvement in net income from continuing operations, achieving $7.0 million in the fourth quarter compared to a net loss of $1.2 million in the same period last year. For the full year, the net loss from continuing operations was reduced to $13.3 million from $23.7 million in the previous year.
Financial Achievements and Industry Relevance
i3 Verticals Inc's financial achievements are noteworthy, particularly in the context of its strategic transition. The company reported a fourth-quarter adjusted EBITDA from continuing operations of $16.2 million, a 3.5% increase over the prior year. However, the full-year adjusted EBITDA saw a slight decline of 1.8% to $58.3 million. The adjusted EBITDA margin for the quarter was 26.7%, slightly down from 26.8% in the previous year, reflecting the company's focus on maintaining profitability amidst its strategic realignment.
Income Statement and Key Metrics
The income statement reveals a diluted net income per share attributable to Class A common stock from continuing operations of $0.23 for the fourth quarter, which is below the analyst estimate of $1.47. However, the full-year diluted net loss per share was $0.34, an improvement from the previous year's loss of $0.67. The company's Annualized Recurring Revenue (ARR) grew by 7.5% to $188.2 million, underscoring the importance of recurring revenue streams in the software industry.
Greg Daily, Chairman and Chief Executive Officer of i3 Verticals, commented, "We are pleased to report our earnings for the fourth quarter of fiscal 2024. Our results for the year reflect a culmination of what has been a significant transition for our business. We are now a streamlined and scaled vertical market software provider."
Analysis and Outlook
i3 Verticals Inc's performance reflects its strategic focus on becoming a leading vertical market software provider. The company's ability to improve its net income and maintain a stable adjusted EBITDA margin amidst revenue challenges highlights its operational resilience. The growth in ARR is a positive indicator of the company's potential for future revenue stability and growth.
Looking ahead, i3 Verticals Inc reaffirms its 2025 outlook, anticipating revenue growth and margin expansion. The company's strategic focus on recurring revenue and its recent organizational changes, including the appointment of a new Chief Product Officer, position it well for future growth opportunities in its targeted vertical markets.
Explore the complete 8-K earnings release (here) from i3 Verticals Inc for further details.
