Nasdaq:IIIV
i3 Verticals, Inc.
i3 Verticals delivers specialized data analytics and technology solutions to accelerate digital transformation across critical vertical markets.
Key Metrics
Investment Thesis
Bull Case
The stock offers an attractive entry point given the decline in revenue and net income, which may present a contrarian buying opportunity if market sentiment stabilizes. Strong existing cash reserves of $67.3M provide a buffer to weather near-term volatility while management executes its capital allocation strategy.
Bear Case
Investors should be cautious due to the steep revenue drop over the last three years, which undermines confidence in future growth trajectories. The substantial retained earnings deficit of $118.3M combined with thin operating profits suggests underlying business model challenges that require resolution.
About i3 Verticals, Inc.
i3 Verticals Inc. is a leading provider of data analytics, digital transformation, and technology solutions serving diverse industries including healthcare, finance, and retail. The company leverages its proprietary data models to help clients optimize operations and drive growth through strategic partnerships and acquisitions. With strong cash flow from operations and significant goodwill on its balance sheet, the firm positions itself as a key enabler of enterprise digitalization.
Analysis
Management Discussion
Despite a notable revenue decline from $370.2M in 2023 to $213.2M in 2025, the company reported net income of $26.5M in the latest period. Cash flow from operations remains positive at $5.7M, though significant cash outflows for financing activities reflect substantial share repurchases and other corporate actions.
Industry Overview
The data analytics and digital transformation sector is experiencing rapid evolution as enterprises seek to modernize legacy systems and leverage AI-driven insights. Companies in this space face intense competition from both specialized boutique firms and large technology conglomerates offering integrated suites.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $370.2M | $229.9M | $213.2M |
| Cost of Revenue | $36.9M | $0 | $0 |
| Gross Profit | $333.3M | $229.9M | $213.2M |
| Operating Expenses | $310.6M | $223.1M | $209.4M |
| Operating Income | $22.7M | $6.9M | $3.8M |
| G&A | $219.7M | $176.4M | $114.7M |
| Stock-Based Comp | $27.9M | $26.3M | $18.3M |
| D&A | $36.5M | $28.8M | $27.9M |
| Depreciation | $3.4M | $2.7M | $2.5M |
| Amortization | $20.5M | $12.5M | $11.4M |
| Other OpEx | $90.9M | $46.7M | $94.7M |
| Non-Operating Income | $-26.6M | $-25.9M | $7.1M |
| Pre-Tax Income | $-3.9M | $-19.0M | $10.9M |
| Income Tax | $-1.2M | $-5.7M | $5.3M |
| Continuing Ops | $-2.7M | $-13.3M | $5.6M |
| Discontinued Ops | $0 | $188.5M | $20.9M |
| Net Income | $-2.7M | $175.1M | $26.5M |
| Minority Interest | $-1.8M | $61.8M | $8.6M |
| Net to Common | $-811.0K | $113.3M | $17.9M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $85.5M | $153.4M | $137.6M |
| Cash & Equivalents | $3.1M | $86.5M | $66.7M |
| Accounts Receivable | $65.1M | $56.0M | $58.5M |
| Inventory | $4.1M | $2.4M | $2.5M |
| Prepaid Expenses | $12.4M | $10.2M | $12.1M |
| Other Current Assets | $735.0K | $-1.8M | $-2.1M |
| Long-Term Assets | $795.9M | $577.3M | $500.8M |
| PP&E (Net) | $12.3M | $8.7M | $7.2M |
| Intangibles | $227.0M | $162.8M | $135.8M |
| Goodwill | $409.6M | $280.7M | $248.5M |
| Operating Leases | $13.9M | $9.0M | $4.6M |
| Other LT Assets | $133.2M | $116.2M | $104.8M |
| Total Assets | $881.5M | $730.7M | $638.4M |
| Current Liabilities | $93.5M | $164.7M | $70.7M |
| Accounts Payable | $11.1M | $5.4M | $6.2M |
| Current Debt | — | $26.2M | $0 |
| Current Leases | $4.5M | $3.5M | $1.8M |
| Deferred Revenue | $35.3M | $39.0M | $37.7M |
| Taxes Payable | — | $30.5M | $2.8M |
| Other Current Liab | $4.9M | $-29.9M | $-2.3M |
| Long-Term Liabilities | $459.7M | $50.6M | $50.0M |
| Long-Term Debt | $385.1M | $0 | $0 |
| LT Operating Leases | $10.4M | $6.3M | $3.0M |
| Other LT Liab | $64.2M | $44.3M | $47.0M |
| Total Liabilities | $553.2M | $215.3M | $120.7M |
| Shareholders' Equity | $328.3M | $515.4M | $517.7M |
| Paid-In Capital | $249.7M | $279.3M | $271.3M |
| Retained Earnings | $-12.9M | $100.4M | $118.3M |
| Total L&E | $881.5M | $730.7M | $638.4M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $-2.7M | $175.1M | $26.5M |
| Non-Cash Adjustments | $28.5M | $-175.3M | $-34.4M |
| Working Capital Changes | $8.7M | $48.6M | $13.5M |
| Cash from Operations | $34.5M | $48.4M | $5.7M |
| Capital Expenditures | $4.2M | $3.0M | $1.9M |
| Cash from Investing | $-121.5M | $396.1M | $76.5M |
| Share Buybacks | — | — | $37.6M |
| Cash from Financing | $75.7M | $-367.4M | $-104.4M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-11.4M | $77.2M | $-22.3M |
| Beginning Cash | $23.8M | $12.4M | $89.6M |
| Ending Cash | $12.4M | $89.6M | $67.3M |
Frequently Asked Questions
How does i3 Verticals, Inc. make money?
The company operates primarily through integrated service lines focusing on Data Analytics, Digital Transformation Consulting, and Technology Implementation services. Revenue is driven by high-margin consulting engagements and recurring technology licensing deals that serve enterprise clients seeking operational efficiency.
What are the main risks for IIIV?
Significant revenue contraction in 2024 and 2025 suggests potential headwinds from reduced client spending or competitive pricing pressure. High levels of goodwill ($248.5M) expose the company to impairment risks if acquired assets underperform expectations. Operating profit margins are thin, indicating sensitivity to cost overruns or delays in project delivery.
What is IIIV's competitive advantage?
i3 Verticals possesses deep proprietary data models and industry-specific expertise that create significant switching costs for its enterprise clients. The company's ability to execute strategic acquisitions allows it to rapidly scale capabilities without proportionally increasing operating leverage. Strong cash generation from operations provides flexibility to fund growth initiatives and return capital to shareholders.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.