i3 Verticals (IIIV) Q3 2026 earnings summary

Executive summary

• Third quarter revenue from continuing operations was $53.1 million, up 2.2% year-over-year, with annualized recurring revenue (ARR) growing 8.3% to $174.1 million.

• Net income from continuing operations for the quarter was $5.9 million, up from a loss of $1.0 million in the prior year; adjusted EBITDA was $13.3 million, a 4.6% increase year-over-year.

• Results were below expectations due to weakness in non-recurring revenue streams, especially professional services and utilities, and implementation delays.

• Major divestitures of Merchant Services and Healthcare RCM businesses were completed, with historical results now reflected as discontinued operations.

• Significant share repurchases reduced outstanding shares by over 20% since October 2024.

Financial highlights

• Q3 2026 revenue increased 2.2% year-over-year to $53.1 million, with recurring revenue up 8% to $43.5 million and non-recurring revenue down 18% to $9.5 million.

• Adjusted EBITDA margin for the quarter was 25.1%, up from 24.5% a year ago; adjusted diluted EPS was $0.25, up from $0.07 in the prior year.

• Net income attributable to the company for the quarter was $3.5 million, compared to $12.9 million in the prior year, which included a large gain from discontinued operations.

• For the nine months ended June 30, 2026, revenue was $163.3 million, up 3.2% year-over-year, with net income from continuing operations of $9.2 million.

• $9.9 million unrealized gain on a minority equity investment recognized in the quarter.

Outlook and guidance

• Fiscal 2026 revenue guidance lowered to $216–$221 million, adjusted EBITDA to $57–$60 million, and adjusted diluted EPS to $1.08–$1.12.

• Guidance reduction driven by lower professional services and transaction revenues, and implementation delays.

• FY 2027 revenue growth now expected in the mid-single digits, below prior high single-digit guidance; margin expansion of 100–200 basis points anticipated.

• Guidance excludes impact of future acquisitions and transaction-related costs.

• Management expects continued focus on recurring revenue growth and disciplined acquisitions to drive long-term performance.