IIIV: Streamlined Software Focus Unlocks Public Sector Growth Potential

Published on June 16, 2025

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

Other articles you may be interested in

Corpay (CPAY): Powering Global Payments and Expanding Product Offerings

Corpay, a leading global corporate payments company, has been making strategic moves to solidify its position in the rapidly evolving payments landscape. With a diverse suite of solutions catering to vehicle-related expenses, corporate payments, and lodging, Corpay has established itself as a formidable player in the industry.

VERB Technology Company, Inc. (NASDAQ:VERB): Weathering the Storm, Positioning for Growth

VERB Technology Company, Inc. (NASDAQ:VERB) has navigated a tumultuous journey in recent years, marked by both challenges and strategic pivots that have positioned the company for a promising future. As a technology company at the forefront of interactive video-based sales enablement and social commerce platforms, VERB has demonstrated resilience and adaptability in the face of industry disruptions and market volatility.

Arcosa's Infrastructure Transformation Delivers Growth and Margin Expansion ($ACA)

Since its spin-off from Trinity Industries (TICKER:TRN) in 2018, Arcosa, Inc. ($ACA) has embarked on a deliberate and significant strategic transformation. The core vision has been clear: to evolve into a provider of infrastructure-related products and solutions focused on attractive growth markets, while simultaneously reducing the overall complexity and cyclicality inherent in its initial portfolio. This journey has fundamentally reshaped the company, moving from a business where Construction Products represented just one-third of adjusted EBITDA to one where that segment now contributes approximately two-thirds, reflecting a strategic pivot towards more stable, infrastructure-driven demand.

Amesite (NASDAQ:AMST): Revolutionizing Healthcare with AI-Powered NurseMagic

Amesite Inc. (NASDAQ:AMST) is a pioneering technology company that has made significant strides in transforming the healthcare industry through its innovative AI-driven solutions. The company's flagship product, NurseMagic™, is a game-changer, providing intelligent, real-time support for caregivers and revolutionizing the way care is delivered and managed.