Announces Latest Public Sector
Acquisition
Raises 2021 Outlook
i3 Verticals, Inc. (Nasdaq: IIIV) (“i3 Verticals” or the
“Company”) today reported its financial results for the fiscal
second quarter ended March 31, 2021.
Highlights for the fiscal second quarter and six months ended
March 31, 2021 vs. 2020
- Second quarter revenue was $47.9 million, an increase of 22%
over the prior year's second quarter. Revenue for the six months
ended March 31, 2021, was $91.2 million, an increase of 14% over
the prior year's first six months.
- Second quarter adjusted net revenue1, which excludes
acquisition revenue adjustments, was $49.4 million, a decrease of
26% over the prior year's second quarter. Adjusted net revenue1 for
the six months ended March 31, 2021, was $94.3 million, an increase
of 17% over the prior year's first six months.
- Second quarter net loss was $0.1 million, compared to net
income of $1.9 million in the prior year's second quarter. Net loss
for the six months ended March 31, 2021, was $4.2 million, compared
to net income of $3.9 million in the prior year's first six
months.
- Second quarter adjusted EBITDA1 was $12.4 million, an increase
of 25% over the prior year's second quarter. Adjusted EBITDA1 for
the six months ended March 31, 2021, was $23.3 million, an increase
of 7% over the prior year's first six months.
- Second quarter adjusted EBITDA1 as a percentage of adjusted net
revenue1 was 25.2%, compared to 25.3% in the prior year's second
quarter. For the six months ended March 31, 2021, adjusted EBITDA1
as a percentage of adjusted net revenue1 was 24.7%, compared to
27.0% for the prior year's first six months.
- Second quarter diluted net income per share available to Class
A common stock was $0.00, compared to diluted net income per share
available to Class A common stock of $0.05 in the prior year's
second quarter. For the six months ended March 31, 2021, diluted
net loss per share available to Class A common stock was $0.12,
compared to diluted net income per share available to Class A
common stock of $0.04 for the prior year's first six months.
- For the three and six months ended March 31, 2021, pro forma
adjusted diluted earnings per share1, which gives pro forma effect
to the Company's going forward effective tax rate, was $0.23 and
$0.45, respectively, compared to $0.20 and $0.44 for the three and
six months ended March 31, 2020, respectively.
- Integrated payments2 were 59% and 57% of payment volume for the
three and six months ended March 31, 2021, respectively.
- As of March 31, 2021, our consolidated interest coverage ratio
was 6.19x, total leverage ratio was 3.80x and consolidated senior
leverage ratio was 1.57x. These ratios are defined in our Senior
Secured Credit Facility.
- Subsequent to March 31, 2021, the Company completed the
acquisition of three businesses. Two of these businesses were
previously announced in our press release dated April 5, 2021, and
further strengthen the Company's focus in its Healthcare vertical.
The third business expands the Company's software capabilities in
the utilities market within the Public Sector vertical. The
aggregate up-front cash purchase price for the three businesses was
$37.4 million. These transactions also include contingent
consideration, for which the fair value as of the respective
acquisition dates is still being valued. The aggregate maximum
contingent consideration payable for these acquisitions is up to
$40.0 million, subject to the satisfaction of certain growth
metrics over established time periods.
- For the third acquisition, which closed on May 4, 2021, in
accordance with Nasdaq Listing Rule 5635(c)(4), the Company has
granted equity awards under its 2020 Acquisition Equity Incentive
Plan to the new employees who agreed to join the Company at
closing. The Company granted options to purchase a total of 300,000
shares of the Company’s Class A common stock to 46 employees as a
material inducement to enter into employment with the Company.
These stock options will vest ratably over three years, subject to
the employees’ continued service to the Company through each
applicable vesting date. The stock options have an exercise price
equal to $32.41, the closing price per share of the Company’s Class
A common stock as reported by Nasdaq on the date of closing.
- Represents a non-GAAP financial measure. For additional
information (including reconciliation information), see the
attached schedules to this release.
- Integrated payments represents payment transactions that are
generated in situations where payment technology is embedded within
the Company's own proprietary software, a client’s software or
critical business process.
Greg Daily, Chairman and CEO of i3 Verticals, commented, “We are
thrilled with our second quarter results as we posted new records
in adjusted net revenue, adjusted EBITDA, software revenue, payment
volume and integration mix. Software-related revenue is now 36% of
our total adjusted net revenue, and our Public Sector vertical is
leading the way.
“We anticipate that government technology spending will increase
as the effects of the pandemic subside and state and local
governments receive federal funds allocated under the American
Rescue Plan Act. Our product lineup and integrations are perfectly
suited to help our government clients continue to modernize. We
will continue to invest in our Public Sector software and are
enthusiastic about the opportunities ahead.
“We recently completed an acquisition of a software company that
provides products and solutions in the utilities sector. This
company focuses on large, Tier 1 customers. Its software and
professional services will augment and expand our existing platform
in this space. We are excited about our increased ability to
deliver excellent products to this market going forward.
“We previously announced in April the closing of our latest two
acquisitions in the Healthcare vertical. We have now built a strong
foundation to address this market. We are optimistic about our
opportunities to further build our product suite and grow our
Healthcare vertical.
We exited the second quarter with positive momentum, and we
believe we are well positioned to deliver strong financial results
during the remainder of the year.”
Revised 2021 Outlook
The Company's practice is to provide annual guidance, excluding
future acquisitions and transaction-related costs. The Company is
providing the following revised outlook for the fiscal year ending
September 30, 2021:
(in thousands, except share and per share
amounts)
Outlook Range
Fiscal year ending September 30,
2021
Adjusted net revenue(1) (non-GAAP)
$
204,000
-
$
220,000
Adjusted EBITDA(1) (non-GAAP)
$
52,000
-
$
58,000
Depreciation and internally developed
software amortization
$
4,250
-
$
4,500
Cash interest expense, net
$
4,750
-
$
5,250
Pro forma weighted average shares of
adjusted diluted Class A common stock outstanding
33,000,000
-
34,000,000
Pro forma adjusted diluted earnings per
share(1)(2) (non-GAAP)
$
0.98
-
$
1.08
_______________________
- Under GAAP, companies must adjust, as necessary, beginning
balances of acquired deferred revenue to fair value as part of
acquisition accounting as defined by GAAP. For the 2021 outlook,
the Company has removed the effect of these adjustments to
acquisition date fair value from acquisitions that have closed as
of the earnings release date.
- Assumes an effective pro forma tax rate of 25.0%
(non-GAAP).
With respect to the “Revised 2021 Outlook” above, reconciliation
of adjusted net revenue, adjusted EBITDA and pro forma adjusted
diluted earnings per share guidance to the closest corresponding
GAAP measure on a forward-looking basis is not available without
unreasonable efforts. This inability results from the inherent
difficulty in forecasting generally and quantifying certain
projected amounts that are necessary for such reconciliations. In
particular, sufficient information is not available to calculate
certain adjustments required for such reconciliations, including
changes in the fair value of contingent consideration, income tax
expense of i3 Verticals, Inc. and equity-based compensation
expense. The Company expects these adjustments may have a
potentially significant impact on future GAAP financial
results.
Conference Call
The Company will host a conference call on Tuesday, May 11,
2021, at 8:30 a.m. ET, to discuss financial results and operations.
To listen to the call live via telephone, participants should dial
(877) 270-2148 approximately 10 minutes prior to the start of the
call. A telephonic replay will be available from 11:30 a.m. ET on
May 11, 2021, through May 18, 2021, by dialing (877) 344-7529 and
entering Confirmation Code 10155829.
To listen to the call live via webcast, participants should
visit the “Investors” section of the Company’s website,
www.i3verticals.com, and go to the “Events & Presentations”
page approximately 10 minutes prior to the start of the call. The
online replay will be available on this page of the Company’s
website beginning shortly after the conclusion of the call and will
remain available for 30 days.
Non-GAAP Measures
This press release contains information prepared in conformity
with GAAP as well as non-GAAP information. It is management’s
intent to provide non-GAAP financial information to enhance
understanding of the Company's consolidated financial information
as prepared in accordance with GAAP. This non-GAAP information
should be considered by the reader in addition to, but not instead
of, the financial statements prepared in accordance with GAAP. Each
non-GAAP financial measure and the most directly comparable GAAP
financial measure are presented so as not to imply that more
emphasis should be placed on the non-GAAP measure. The non-GAAP
financial information presented may be determined or calculated
differently by other companies.
Additional information about non-GAAP financial measures,
including, but not limited to, adjusted net revenue, pro forma
adjusted net income, adjusted EBITDA and pro forma adjusted diluted
EPS, and a reconciliation of those measures to the most directly
comparable GAAP measures is included on pages 10 through 13 in the
financial schedules of this release.
About i3 Verticals
Helping drive the convergence of software and payments, i3
Verticals delivers seamlessly integrated payment and software
solutions to small- and medium-sized businesses and other
organizations in strategic vertical markets, such as education,
non-profit, the public sector, property management, and healthcare
and to the business-to-business payments market. With a broad suite
of payment and software solutions that address the specific needs
of its clients in each strategic vertical market, i3 Verticals
processed approximately $15.0 billion in total payment volume for
the 12 months ended March 31, 2021.
Forward-Looking Statements
This release contains forward-looking statements that are
subject to risks and uncertainties. All statements other than
statements of historical fact or relating to present facts or
current conditions included in this release are forward-looking
statements, including any statements regarding the Company's fiscal
2021 financial outlook and statements of a general economic or
industry specific nature. Forward-looking statements give the
Company's current expectations and projections relating to its
financial condition, results of operations, guidance, plans,
objectives, future performance and business. You can identify
forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may
include words such as “anticipate,” “estimate,” “expect,”
“project,” “plan,” “intend,” “believe,” “may,” “will,” “should,”
“could have,” “exceed,” “significantly,” “likely” and other words
and terms of similar meaning in connection with any discussion of
the timing or nature of future operating or financial performance
or other events.
The forward-looking statements contained in this release are
based on assumptions that we have made in light of the Company's
industry experience and its perceptions of historical trends,
current conditions, expected future developments and other factors
we believe are appropriate under the circumstances. As you review
and consider information presented herein, you should understand
that these statements are not guarantees of future performance or
results. They depend upon future events and are subject to risks,
uncertainties (many of which are beyond the Company's control) and
assumptions. Although we believe that these forward-looking
statements are based on reasonable assumptions, you should be aware
that many factors could affect the Company's actual future
performance or results and cause them to differ materially from
those anticipated in the forward-looking statements. Certain of
these factors and other risks are discussed in the Company's
filings with the U.S. Securities and Exchange Commission (the
“SEC”) and include, but are not limited to: (i) the anticipated
impact to the timing and recovery of the Company’s business
operations, payment volume and volume attrition due to the global
pandemic of a novel strain of the coronavirus (COVID-19), including
the anticipated impact of further school closures on our Education
vertical; (ii) the Company’s indebtedness and the ability to
maintain compliance with the financial covenants in the Company’s
senior secured credit facility in light of the impacts of the
COVID-19 pandemic; (iii) the ability to meet the Company’s
liquidity needs in light of the impacts of the COVID-19 pandemic;
(iv) the ability to raise additional funds on terms acceptable to
us, if at all, whether debt, equity or a combination thereof; (v)
the triggering of impairment testing of the Company’s fair-valued
assets, including goodwill and intangible assets, in the event of a
decline in the price of the Company’s Class A common stock; (vi)
the ability to generate revenues sufficient to maintain
profitability and positive cash flow; (vii) competition in the
Company's industry and the ability to compete effectively; (viii)
the dependence on non-exclusive distribution partners to market the
Company's products and services; (ix) the ability to keep pace with
rapid developments and changes in the Company's industry and
provide new products and services; (x) liability and reputation
damage from unauthorized disclosure, destruction or modification of
data or disruption of the Company's services; (xi) technical,
operational and regulatory risks related to the Company's
information technology systems and third-party providers’ systems;
(xii) reliance on third parties for significant services; (xiii)
exposure to economic conditions and political risks affecting
consumer and commercial spending, including the use of credit
cards; (xiv) the ability to increase the Company's existing
vertical markets, expand into new vertical markets and execute the
Company's growth strategy; (xv) the ability to successfully
identify acquisition targets and thereafter to complete and
effectively integrate those acquisitions into the Company's
services; (xvi) potential degradation of the quality of the
Company's products, services and support; (xvii) the ability to
retain clients, many of which are small- and medium-sized
businesses, which can be difficult and costly to retain; (xviii)
the Company's ability to successfully manage its intellectual
property; (xiv) the ability to attract, recruit, retain and develop
key personnel and qualified employees; (xx) risks related to laws,
regulations and industry standards; (xxi) operating and financial
restrictions imposed by the Company's senior secured credit
facility; and (xxii) the risk factors included in the Company's
Annual Report on Form 10-K for the year ended September 30, 2020.
Should one or more of these risks or uncertainties materialize, or
should any of these assumptions prove incorrect, the Company's
actual results may vary in material respects from those projected
in these forward-looking statements.
Any forward-looking statement made by us in this release speaks
only as of the date of this release. Factors or events that could
cause the Company's actual results to differ may emerge from time
to time, and it is not possible for us to predict all of them. The
Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
i3 Verticals, Inc.
Consolidated Statements of Operations
(Unaudited)
($ in thousands, except share and
per share amounts)
Three months ended March
31,
Six months ended March
31,
2021
2020
% Change
2021
2020
% Change
Revenue
$
47,863
$
39,178
22
%
$
91,176
$
80,289
14
%
Operating expenses
Other costs of services
11,314
11,955
(5
)%
24,980
24,873
—
%
Selling, general and administrative
30,511
20,786
47
%
55,473
40,073
38
%
Depreciation and amortization
5,851
4,538
29
%
10,943
9,193
19
%
Change in fair value of contingent
consideration
322
(142
)
n/m
2,226
12
n/m
Total operating expenses
47,998
37,137
29
%
93,622
74,151
26
%
(Loss) income from operations
(135
)
2,041
n/m
(2,446
)
6,138
n/m
Other expenses
Interest expense, net
2,358
2,184
8
%
4,387
4,198
5
%
Other income
(2,353
)
—
n/m
(2,353
)
—
n/m
Total other expenses
5
2,184
(100
)%
2,034
4,198
(52
)%
(Loss) income before income taxes
(140
)
(143
)
(2
)%
(4,480
)
1,940
(331
)%
Benefit from income taxes
(87
)
(2,062
)
(96
)%
(306
)
(1,913
)
n/m
Net (loss) income
(53
)
1,919
n/m
(4,174
)
3,853
(208
)%
Net (loss) income attributable to
non-controlling interest
(493
)
1,182
n/m
(2,042
)
3,265
(163
)%
Net income (loss) attributable to i3
Verticals, Inc.
$
440
$
737
(40
)%
$
(2,132
)
$
588
n/m
Net income (loss) per share available to
Class A common stock:
Basic
$
0.02
$
0.05
$
(0.11
)
$
0.04
Diluted
$
0.00
$
0.05
$
(0.12
)
$
0.04
Weighted average shares of Class A common
stock outstanding:
Basic
20,940,725
14,456,970
20,024,936
14,344,768
Diluted
33,404,983
16,106,757
31,237,675
15,778,077
n/m = not meaningful
i3 Verticals, Inc. Financial
Highlights
(Unaudited)
($ in thousands, except per share
amounts)
Three months ended March
31,
Six months ended March
31,
2021
2020
% Change
2021
2020
% Change
Adjusted net revenue (non-GAAP)
$
49,406
$
39,311
26%
$
94,314
$
80,935
17%
Adjusted EBITDA (non-GAAP)
12,435
9,965
25%
23,313
21,824
7%
Pro forma adjusted diluted earnings per
share (non-GAAP)
$
0.23
$
0.20
15%
$
0.45
$
0.44
2%
i3 Verticals, Inc.
Supplemental Volume Information
(Unaudited)
($ in thousands)
Three months ended March
31,
Six months ended March
31,
2021
2020
2021
2020
Payment volume(1)
$
4,263,205
$
3,577,735
$
8,063,732
$
7,416,853
__________________________
- Payment volume is the net dollar value of both 1) Visa,
Mastercard and other payment network transactions processed by the
Company's clients and settled to clients by us and 2) ACH
transactions processed by the Company's clients and settled to
clients by the Company.
i3 Verticals, Inc. Segment
Summary
(Unaudited)
($ in thousands)
For the Three Months Ended
March 31, 2021
Merchant Services
Proprietary Software and
Payments
Other
Total
Revenue
$
25,992
$
22,549
$
(678
)
$
47,863
Operating expenses
Other costs of services
11,782
210
(678
)
11,314
Selling general and administrative
6,765
15,198
8,548
30,511
Depreciation and amortization
2,712
2,952
187
5,851
Change in fair value of contingent
consideration
163
159
—
322
Income (loss) from operations
$
4,570
$
4,030
$
(8,735
)
$
(135
)
Payment volume
$
3,816,170
$
447,035
$
—
$
4,263,205
For the Six Months Ended March
31, 2021
Merchant Services
Proprietary Software and
Payments
Other
Total
Revenue
$
50,962
$
41,325
$
(1,111
)
$
91,176
Operating expenses
Other costs of services
22,623
3,467
(1,110
)
24,980
Selling general and administrative
13,209
26,093
16,171
55,473
Depreciation and amortization
5,478
5,101
364
10,943
Change in fair value of contingent
consideration
320
1,906
—
2,226
Income (loss) from operations
$
9,332
$
4,758
$
(16,536
)
$
(2,446
)
Payment volume
$
7,398,784
$
664,948
$
—
$
8,063,732
For the Three Months Ended
March 31, 2020(1)
Merchant Services
Proprietary Software and
Payments
Other
Total
Revenue
$
25,729
$
13,980
$
(531
)
$
39,178
Operating expenses
Other costs of services
11,356
1,129
(530
)
11,955
Selling general and administrative
7,048
7,138
6,600
20,786
Depreciation and amortization
2,995
1,364
179
4,538
Change in fair value of contingent
consideration
(649
)
507
—
(142
)
Income (loss) from operations
$
4,979
$
3,842
$
(6,780
)
$
2,041
Payment volume
$
3,393,710
$
184,025
$
—
$
3,577,735
________
- Effective July 1, 2020, the Company reassigned a component from
the Proprietary Software and Payments segment to the Merchant
Services segment to better align the Company's business within its
segments. The prior period comparatives have been retroactively
adjusted to reflect the Company's current segment
presentation.
For the Six Months Ended March
31, 2020(1)
Merchant Services
Proprietary Software and
Payments
Other
Total
Revenue
$
53,968
$
27,262
$
(941
)
$
80,289
Operating expenses
Other costs of services
23,530
2,283
(940
)
24,873
Selling general and administrative
13,911
14,533
11,629
40,073
Depreciation and amortization
6,067
2,778
348
9,193
Change in fair value of contingent
consideration
(2,946
)
2,958
—
12
Income (loss) from operations
$
13,406
$
4,710
$
(11,978
)
$
6,138
Payment volume
$
7,028,766
$
388,087
$
—
$
7,416,853
________
- Effective July 1, 2020, the Company reassigned a component from
the Proprietary Software and Payments segment to the Merchant
Services segment to better align the Company's business within its
segments. The prior period comparatives have been retroactively
adjusted to reflect the Company's current segment
presentation.
i3 Verticals, Inc.
Consolidated Balance Sheets
($ in thousands, except share and
per share amounts)
March 31,
September 30,
2021
2020
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
2,352
$
15,568
Accounts receivable, net
24,599
17,538
Settlement assets
6,056
—
Prepaid expenses and other current
assets
9,983
4,869
Total current assets
42,990
37,975
Property and equipment, net
5,929
5,339
Restricted cash
10,090
5,033
Capitalized software, net
39,163
16,989
Goodwill
263,365
187,005
Intangible assets, net
165,145
109,233
Deferred tax asset
51,277
36,755
Operating lease right-of-use assets
14,821
—
Other assets
10,039
5,197
Total assets
$
602,819
$
403,526
Liabilities and equity
Liabilities
Current liabilities
Accounts payable
$
4,871
$
3,845
Accrued expenses and other current
liabilities
42,357
24,064
Settlement obligations
6,056
—
Deferred revenue
22,426
10,986
Current portion of operating lease
liabilities
3,056
—
Total current liabilities
78,766
38,895
Long-term debt, less current portion and
debt issuance costs, net
178,442
90,758
Long-term tax receivable agreement
obligations
39,626
27,565
Operating lease liabilities, less current
portion
12,382
—
Other long-term liabilities
12,138
6,140
Total liabilities
321,354
163,358
Commitments and contingencies (see Note
10)
Stockholders' equity
Preferred stock, par value $0.0001 per
share, 10000,000 shares authorized; 0 shares issued and outstanding
as of March 31, 2021 and September 30, 2020
—
—
Class A common stock, par value $0.0001
per share, 150,000,000 shares authorized; 1,919,300 and 18,864,143
shares issued and outstanding as of March 31, 2021 and September
30, 2020, respectively
2
2
Class B common stock, par value $0.0001
per share, 40,000,000 shares authorized 10,229,142 and 11,900,621
shares issued and outstanding as of March 31, 2021 and September
30, 2020, respectively
1
1
Additional paid-in capital
203,803
157,598
Accumulated (deficit) earnings
(4,155
)
(2,023
)
Total stockholders' equity
199,651
155,578
Non-controlling interest
81,814
84,590
Total equity
281,465
240,168
Total liabilities and equity
$
602,819
$
403,526
i3 Verticals, Inc.
Consolidated Cash Flow Data
(Unaudited)
($ in thousands)
Six months ended March
31,
2021
2020
Net cash provided by operating
activities
$
23,875
$
8,847
Net cash used in investing activities
$
(115,934
)
$
(3,881
)
Net cash provided by (used in) financing
activities
$
83,900
$
(4,994
)
Reconciliation of GAAP to Non-GAAP Financial Measures
The Company believes that non-GAAP financial measures are
important to enable investors to understand and evaluate its
ongoing operating results. Accordingly, i3 Verticals includes
non-GAAP financial measures when reporting its financial results to
stockholders and potential investors in order to provide them with
an additional tool to evaluate the Company’s ongoing business
operations. i3 Verticals believes that the non-GAAP financial
measures are representative of comparative financial performance
that reflects the economic substance of i3 Verticals’ current and
ongoing business operations.
Although non-GAAP financial measures are often used to measure
the Company's operating results and assess its financial
performance, they are not necessarily comparable to similarly
titled measures of other companies due to potential inconsistencies
in the method of calculation. i3 Verticals believes that its
provision of non-GAAP financial measures provides investors with
important key financial performance indicators that are utilized by
management to assess the Company's operating results, evaluate the
business and make operational decisions on a prospective,
going-forward basis. Hence, management provides disclosure of
non-GAAP financial measures to give stockholders and potential
investors an opportunity to see i3 Verticals as viewed by
management, to assess i3 Verticals with some of the same tools that
management utilizes internally and to be able to compare such
information with prior periods. i3 Verticals believes that
inclusion of non-GAAP financial measures provides investors with
additional information to help them better understand its financial
statements just as management utilizes these non-GAAP financial
measures to better understand the business, manage budgets and
allocate resources.
i3 Verticals, Inc.
Reconciliation of GAAP Net Income to Non-GAAP Pro Forma Adjusted
Net Income and Non-GAAP Adjusted EBITDA
(Unaudited)
($ in thousands)
Three months ended March
31,
Six months ended March
31,
2021
2020
2021
2020
Net income (loss) attributable to i3
Verticals, Inc.
$
440
$
737
$
(2,132
)
$
588
Net (loss) income attributable to
non-controlling interest
(493
)
1,182
(2,042
)
3,265
Non-GAAP adjustments:
Benefit from income taxes
(87
)
(2,062
)
(306
)
(1,913
)
Financing-related expenses(1)
63
221
116
221
Non-cash change in fair value of
contingent consideration(2)
322
(142
)
2,226
12
Equity-based compensation(3)
4,142
2,510
7,583
4,634
Acquisition revenue adjustments(4)
1,543
133
3,138
646
Acquisition-related expenses(5)
520
583
1,530
845
Acquisition intangible amortization(6)
4,827
3,600
8,944
7,321
Non-cash interest expense(7)
1,352
879
2,684
979
Other taxes(8)
129
81
223
135
Gain on investment(9)
(2,353
)
—
(2,353
)
—
Non-GAAP pro forma adjusted income
before taxes
10,405
7,722
19,611
16,733
Pro forma taxes at effective tax
rate(10)
(2,601
)
(1,930
)
(4,903
)
(4,183
)
Pro forma adjusted net
income(11)
$
7,804
$
5,792
$
14,708
$
12,550
Cash interest expense, net(12)
1,006
1,305
1,703
3,219
Pro forma taxes at effective tax
rate(10)
2,601
1,930
4,903
4,183
Depreciation, non-acquired intangible
asset amortization and internally developed software
amortization(13)
1,024
938
1,999
1,872
Adjusted EBITDA
$
12,435
$
9,965
$
23,313
$
21,824
________
- Financing-related expenses includes expenses directly related
to certain transactions as part of financing transactions.
- Non-cash change in fair value of contingent consideration
reflects the changes in management’s estimates of future cash
consideration to be paid in connection with prior acquisitions from
the amount estimated as of the later of the most recent balance
sheet date forming the beginning of the income statement period or
the original estimates made at the closing of the applicable
acquisition.
- Equity-based compensation expense consisted of $4,142 related
to stock options issued under the Company's 2018 Equity Incentive
Plan and 2020 Acquisition Equity Incentive Plan and $2,510 related
to stock options issued under the Company's 2018 Equity Incentive
Plan during the three months ended March 31, 2021 and 2020,
respectively. Equity-based compensation expense consisted of $7,583
related to stock options issued under the Company's 2018 Equity
Incentive Plan and 2020 Acquisition Equity Incentive Plan and
$4,634 related to stock options issued under the Company's 2018
Equity Incentive Plan during the six months ended March 31, 2021
and 2020, respectively.
- Under GAAP, companies must adjust, as necessary, beginning
balances of acquired deferred revenue to fair value as part of
acquisition accounting as defined by GAAP. Acquisition revenue
adjustments remove the effect of these adjustments to acquisition
date fair value from acquisitions that have closed as of the date
of this earnings release.
- Acquisition-related expenses are the professional service and
related costs directly related to the Company's acquisitions and
are not part of its core performance.
- Acquisition intangible amortization reflects amortization of
intangible assets and software acquired through business
combinations, acquired customer portfolios, acquired referral
agreements and related asset acquisitions.
- Non-cash interest expense reflects amortization of debt
discount and debt issuance costs and any write-offs of debt
issuance costs.
- Other taxes consist of franchise taxes, commercial activity
taxes, employer payroll taxes related to stock exercises and other
non-income based taxes. Taxes related to salaries are not
included.
- In March 2021, the Company became aware of an observable price
change in an investment due to a planned third party acquisition of
the entity underlying the investment. This resulted in an increase
of $2,353 to the fair value of the investment at March 31, 2021,
which the Company recognized in other income.
- Pro forma corporate income tax expense is based on Non-GAAP
adjusted income before taxes and is calculated using a tax rate of
25.0% for both 2021 and 2020, based on blended federal and state
tax rates.
- Pro forma adjusted net income assumes that all net income
during that period was available to the holders of the Company's
Class A common stock.
- Cash interest expense, net represents all interest expense net
of interest income recorded on the Company's statement of
operations other than non-cash interest expense, which represents
amortization of debt discount and debt issuance costs and any
write-offs of debt issuance costs.
- Depreciation, non-acquired intangible asset amortization and
internally developed software amortization reflects depreciation on
the Company's property, plant and equipment, net, and amortization
expense on its internally developed capitalized software.
i3 Verticals, Inc. GAAP
Diluted EPS and Non-GAAP Pro Forma Adjusted Diluted EPS
(Unaudited)
($ in thousands, except share and
per share amounts)
Three months ended March
31,
Six months ended March
31,
2021
2020
2021
2020
Diluted net income (loss) available to
Class A common stock per share
$
0.00
$
0.05
$
(0.12
)
$
0.04
Pro forma adjusted diluted earnings per
share (non-GAAP)(1)
$
0.23
$
0.20
$
0.45
$
0.44
Pro forma adjusted net income(2)
$
7,804
$
5,792
$
14,708
$
12,550
Pro forma weighted average shares of
adjusted diluted Class A common stock outstanding(3)
33,404,983
28,876,325
32,698,865
28,624,095
__________
- Pro forma adjusted diluted earnings per share is calculated
using pro forma adjusted net income and the pro forma weighted
average shares of adjusted diluted Class A common stock
outstanding.
- Pro forma adjusted net income assumes that all net income
during the period is available to the holders of the Company's
Class A common stock. Further, pro forma adjusted diluted earnings
per share assumes that all Common Units in i3 Verticals, LLC and
the associated non-voting Class B common stock were exchanged for
Class A common stock at the beginning of the period on a
one-for-one basis.
- Pro forma weighted average shares of adjusted diluted Class A
common stock outstanding include 10,747,158 and 12,769,568
outstanding shares of Class A common stock issuable upon the
exchange of Common Units in i3 Verticals, LLC and 1,717,100 and
1,649,787 shares of unvested Class A common stock and options for
the three months ended March 31, 2021 and 2020, respectively. Pro
forma weighted average shares of adjusted diluted Class A common
stock outstanding include 11,212,739 and 12,846,018 outstanding
shares of Class A common stock issuable upon the exchange of Common
Units in i3 Verticals, LLC and 1,461,190 and 1,433,309 shares of
unvested Class A common stock and options for the six months ended
March 31, 2021 and 2020, respectively.
i3 Verticals, Inc.
Reconciliation of GAAP Revenue to Non-GAAP Adjusted Net
Revenue
(Unaudited)
($ in thousands)
Three months ended March
31,
Six months ended March
31,
2021
2020
2021
2020
Revenue
$
47,863
$
39,178
$
91,176
$
80,289
Acquisition revenue adjustments(1)
1,543
133
3,138
646
Adjusted Net Revenue
$
49,406
$
39,311
$
94,314
$
80,935
__________
- Under GAAP, companies must adjust, as necessary, beginning
balances of acquired deferred revenue to fair value as part of
acquisition accounting as defined by GAAP. Acquisition revenue
adjustments remove the effect of these adjustments to acquisition
date fair value from acquisitions that have closed as of the date
of this earnings release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210510005923/en/
Clay Whitson Chief Financial Officer (888) 251-0987
investorrelations@i3verticals.com
i3 Verticals (NASDAQ:IIIV)
Historical Stock Chart
From Mar 2024 to Apr 2024
i3 Verticals (NASDAQ:IIIV)
Historical Stock Chart
From Apr 2023 to Apr 2024
