i3 Verticals (IIIV) Q2 2026 Earnings Transcript

Chairman and Chief Executive Officer — Gregory Daily Chief Financial Officer — Geoffrey Smith Vice President, Investor Relations — Clay Whitson Clay Whitson: Good morning, and welcome to the Second Fiscal Quarter 2026 Conference Call for i3 Verticals. Joining me on this call are Greg Daily, our Chairman and CEO; Rick Stanford, our President; Jeff Smith, our CFO; and Paul Christians, our Chief Revenue Officer. To the extent any non-GAAP financial measure is discussed in today s call, you will also find a reconciliation to the most directly comparable GAAP financial measure by reviewing yesterday s earnings release. It is the company s intent to provide non-GAAP financial information to enhance understanding of its consolidated GAAP financial information. This non-GAAP financial information should be considered by each individual in addition to, but not instead of, the GAAP financial statements. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding the company s expected financial and operating performance. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. You are hereby cautioned that these forward-looking statements may be affected by important factors, among others, set forth in the company s earnings release and in reports that are filed or furnished to the SEC. Consequently, actual operations and results may differ materially from those discussed in the forward-looking statements. Finally, the information shared on this call is valid as of today s date, and the company undertakes no obligation to update it, except as may be required under applicable law. I ll now turn the call over to the company s Chairman and CEO, Greg Daily. Gregory Daily: Thanks, Clay, and good morning to everyone on the call. We are pleased with our performance in the second quarter as we continue to execute against our strategy and further improve the quality of our business. Revenue from continuing operations grew 6% year-over-year and annualized recurring revenue increased 12%, which we continue to believe is the best indicator of our long-term growth opportunity. Across each of our public sector markets, we are investing thoughtfully in products and capabilities where we see opportunities. For example, we continue to find compelling opportunities to invest in Justice Tech market to help courts modernize and capitalize on their own revenue opportunities. However, we are seeing opportunities for cost control and margin expansion amongst many of our highly durable products. Importantly, the process improvements and the efficiency initiatives we ve been driving through the organization are beginning to show up in our operating model. While we continue to invest for growth, we believe these efforts position us well for margin improvement as we move through the remainder of fiscal year 26. We remain well positioned from a balance sheet perspective, which gives us the flexibility to pursue all manner of capital allocation opportunities. Overall, we re encouraged by the momentum we re seeing across the business and remain confident in our ability to create long-term value for our shareholders. With that, I ll turn it over to Jeff to walk through the financial results in more detail. Geoffrey Smith: Thanks, Greg. The following pertains to the second quarter of fiscal year 2026, which is the quarter ended March 31, 2026. Please refer to the slide presentation titled Supplemental Information on our website for reference with this discussion. You will see we have retooled our presentation of revenue. We believe this clarifies our recurring revenue and simplifies the categories investors track while maintaining visibility in the important trends in the business. Revenues for the second quarter of fiscal 2026 increased 6% to $57.5 million from $54.1 million for Q2 2025, principally reflecting revenues from two acquisitions, which have not yet annualized. Organic revenue was flat in the quarter, hampered by a $2.2 million decrease in professional services. The ongoing weakness in professional services continues to be concentrated in our utilities market, and we expect this to continue through the remainder of the fiscal year. Overall, nonrecurring revenue sources decreased 11% compared to the prior year. Annual recurring revenues increased 12% to $183.5 million for Q2 2026 compared to $164.5 million for Q2 2025. SaaS revenues grew 37% and transaction-based revenue grew 7%. We expect elevated levels of SaaS growth for the remainder of the fiscal year and accelerating transaction-based revenue growth. Overall, 80% of our revenues in the quarter came from recurring sources. Most of our expected software license sales for fiscal 2026 have been, and we expect lower levels for the remainder of the year. Adjusted EBITDA

i3 Verticals (IIIV) Q2 2026 Earnings Transcript

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i3 Verticals (IIIV) Q2 2026 Earnings Transcript

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