i3 Verticals, Inc. recently released its 10-Q report, providing a detailed look at the company's financial condition and performance. i3 Verticals, Inc. specializes in providing integrated payment and software solutions, primarily serving the public sector and healthcare markets in the United States. The company operates in two segments, Software and Services, and Merchant Services, offering payment processing services, software platforms, and professional services to its clients.
In the report's "Management's Discussion and Analysis of Financial Condition and Results of Operations," i3 Verticals, Inc. highlighted its liquidity position, stating that as of December 31, 2024, it had $85.6 million in cash and cash equivalents and $450.0 million of available capacity under its 2023 Senior Secured Credit Facility. The company also reported being in compliance with its financial covenants, with a consolidated interest coverage ratio and total leverage ratio of 3.7x and 0.1x, respectively.
Furthermore, the report discussed the sale of i3 Verticals' Merchant Services Business, which was completed on September 20, 2024. The company received an aggregate purchase price of approximately $438 million for the business, and this transaction resulted in the disposal of its entire former Merchant Services segment and a small portion of its former Software and Services segment.
The report also highlighted i3 Verticals' acquisition strategy, noting that its growth strategy includes a disciplined approach to acquiring companies and technology. While the company did not complete any acquisitions during the three months ended December 31, 2024, it completed the acquisition of one business during the same period in 2023, expanding its software offerings.
In terms of revenue and expenses, i3 Verticals generates revenue from software and related services, including the sale of subscriptions, recurring services, ongoing support, licenses, and installation and implementation services specific to software. The company also generates revenue from volume-based payment processing fees and fixed transaction or service fees. On the expense side, i3 Verticals' costs of services include expenses directly related to its software and related services, as well as costs directly attributable to payment processing services. The report also mentioned the reclassification of certain expenses to better align with the company's primary industry following the disposal of its Merchant Services Business.
Following these announcements, the company's shares moved 9.9%, and are now trading at a price of $28.22. For the full picture, make sure to review i3 Verticals's 10-Q report.
