Executive Summary / Key Takeaways

• i3 Verticals has strategically transformed into a pure-play vertical market software and services provider, divesting its Merchant Services and Healthcare RCM businesses to focus primarily on the high-potential Public Sector market.
• The company's core strength lies in delivering integrated software solutions seamlessly combined with its proprietary payment platform, a key differentiator enabling unique monetization models and competitive advantages in niche verticals.
• Recent financial performance for continuing operations (excluding Merchant Services) shows solid revenue growth (8.8% in Q2 2025, 10.4% in 6-month period) driven by organic expansion and strategic Public Sector acquisitions, with strong SaaS growth (+23% in Q2 RemainCo).
• A significantly strengthened balance sheet post-divestitures provides substantial cash and borrowing capacity ($64M cash, $400M revolver capacity), enabling accelerated disciplined M&A and potential share repurchases to drive future growth.
• While facing execution risks like project delays (Manitoba) and integration challenges, the company's investment in next-generation technology, including AI applications and platform rewrites, alongside a robust M&A pipeline, positions it for targeted high single-digit organic growth and margin expansion (50-100 bps annually) in fiscal year 2025 and beyond, as guided by management.

The Strategic Pivot: Forging a Pure-Play Identity

Founded in 2012, i3 Verticals, LLC began its journey by integrating software solutions with a proprietary payment facilitator platform, recognizing the power of embedding payments within workflow software. This foundational approach became a core part of the company's DNA, further solidified after i3 Verticals, Inc. was formed in 2018 for its IPO, becoming the managing member of the LLC. A disciplined acquisition strategy has been central to growth, adding numerous platform and tuck-in businesses to expand capabilities and market reach.

Fiscal year 2024 marked a period of profound transformation. Recognizing the strategic imperative to streamline and focus, the company undertook significant divestitures. The sale of the Merchant Services Business in September 2024 for approximately $437 million, followed by the sale of the Healthcare Revenue Cycle Management (RCM) business in May 2025 for $96 million, represent a decisive pivot. These actions have reshaped i3 Verticals into a pure-play provider of integrated software and payment solutions, primarily targeting the Public Sector vertical.

This strategic realignment was driven by the belief that a focused approach would unlock greater potential. Management is now excited to be streamlined and concentrated on the Public Sector, a market characterized by a growing need for efficiency and modernization. The company believes its integrated software offerings are uniquely positioned to help government