Cover
Cover - shares | 6 Months Ended | |
Mar. 31, 2023 | May 09, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38532 | |
Entity Registrant Name | i3 Verticals, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-4052852 | |
Entity Address, Address Line One | 40 Burton Hills Blvd., Suite 415 | |
Entity Address, City or Town | Nashville | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37215 | |
City Area Code | 615 | |
Local Phone Number | 465-4487 | |
Title of 12(b) Security | Class A Common Stock, $0.0001 Par Value | |
Trading Symbol | IIIV | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001728688 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 23,174,199 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,108,218 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Current assets | ||
Cash and cash equivalents | $ 3,977 | $ 3,490 |
Accounts receivable, net | 56,946 | 53,334 |
Settlement assets | 7,185 | 7,540 |
Prepaid expenses and other current assets | 21,736 | 19,445 |
Total current assets | 89,844 | 83,809 |
Property and equipment, net | 12,206 | 5,670 |
Restricted cash | 11,171 | 12,735 |
Capitalized software, net | 65,114 | 52,341 |
Goodwill | 409,042 | 353,639 |
Intangible assets, net | 229,612 | 195,919 |
Deferred tax asset | 44,783 | 43,458 |
Operating lease right-of-use assets | 15,460 | 17,678 |
Other assets | 5,794 | 5,063 |
Total assets | 883,026 | 770,312 |
Current liabilities | ||
Accounts payable | 7,916 | 9,342 |
Accrued expenses and other current liabilities | 55,407 | 57,833 |
Settlement obligations | 7,185 | 7,540 |
Deferred revenue | 33,542 | 31,975 |
Current portion of operating lease liabilities | 4,630 | 4,568 |
Total current liabilities | 108,680 | 111,258 |
Long-term debt, less current portion and debt issuance costs, net | 385,467 | 287,020 |
Long-term tax receivable agreement obligations | 40,894 | 40,812 |
Operating lease liabilities, less current portion | 11,757 | 13,994 |
Other long-term liabilities | 24,417 | 9,540 |
Total liabilities | 571,215 | 462,624 |
Commitments and contingencies (see Note 12) | ||
Stockholders' equity | ||
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2023 and September 30, 2022 | 0 | 0 |
Additional paid-in capital | 234,442 | 241,958 |
Accumulated deficit | (12,337) | (23,582) |
Total stockholders' equity | 222,108 | 218,379 |
Non-controlling interest | 89,703 | 89,309 |
Total equity | 311,811 | 307,688 |
Total liabilities and equity | 883,026 | 770,312 |
Class A Common Stock | ||
Stockholders' equity | ||
Common stock | 2 | 2 |
Class B Common Stock | ||
Stockholders' equity | ||
Common stock | $ 1 | $ 1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Sep. 30, 2022 |
Preferred Stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred Stock issued (in shares) | 0 | 0 |
Preferred Stock outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common Stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common Stock authorized (in shares) | 150,000,000 | 150,000,000 |
Common Stock issued (in shares) | 23,167,730 | 22,986,448 |
Common Stock, outstanding (in shares) | 23,167,730 | 22,986,448 |
Class B Common Stock | ||
Common Stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common Stock authorized (in shares) | 40,000,000 | 40,000,000 |
Common Stock issued (in shares) | 10,108,218 | 10,118,142 |
Common Stock, outstanding (in shares) | 10,108,218 | 10,118,142 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 93,872 | $ 78,120 | $ 179,901 | $ 152,059 |
Operating expenses | ||||
Other costs of services | 19,930 | 16,631 | 38,999 | 33,141 |
Selling, general and administrative | 57,204 | 48,716 | 108,207 | 95,103 |
Depreciation and amortization | 9,015 | 7,447 | 17,691 | 14,317 |
Change in fair value of contingent consideration | 2,279 | 11,503 | 3,722 | 16,430 |
Total operating expenses | 88,428 | 84,297 | 168,619 | 158,991 |
Income (loss) from operations | 5,444 | (6,177) | 11,282 | (6,932) |
Interest expense, net | 6,199 | 3,377 | 11,689 | 6,531 |
Other income | 0 | 0 | (203) | 0 |
Total other expenses | 6,199 | 3,377 | 11,486 | 6,531 |
Loss before income taxes | (755) | (9,554) | (204) | (13,463) |
(Benefit from) provision for income taxes | (563) | 884 | (181) | 656 |
Net loss | (192) | (10,438) | (23) | (14,119) |
Net (loss) income attributable to non-controlling interest | (228) | (3,065) | 181 | (4,218) |
Net income (loss) attributable to i3 Verticals, Inc. | $ 36 | $ (7,373) | $ (204) | $ (9,901) |
Net income (loss) per share attributable to Class A common stockholders: | ||||
Basic (in USD per share) | $ 0 | $ (0.33) | $ (0.01) | $ (0.45) |
Diluted (in USD per share) | $ 0 | $ (0.33) | $ (0.01) | $ (0.45) |
Weighted average shares of Class A common stock outstanding: | ||||
Basic (in shares) | 23,135,898 | 22,076,297 | 23,066,499 | 22,059,365 |
Diluted (in shares) | 34,269,140 | 22,076,297 | 23,066,499 | 22,059,365 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Class A Common Stock | Class B Common Stock | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid-In Capital | Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Deficit) | Retained Earnings (Deficit) Cumulative Effect, Period of Adoption, Adjustment | Non-Controlling Interest |
Common stock, shares, outstanding, beginning at Sep. 30, 2021 | 22,026,098 | 10,229,142 | |||||||||
Stockholders' equity, beginning at Sep. 30, 2021 | $ 289,591 | $ 2 | $ 1 | $ 211,237 | $ (6,480) | $ 84,831 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Equity-based compensation | 6,624 | 6,624 | |||||||||
Net (loss) income | (2,528) | ||||||||||
Net (loss) income | (1,153) | ||||||||||
Net (loss) income | (3,681) | ||||||||||
Redemption of common units in i3 Verticals, LLC (in shares) | 15,000 | (15,000) | |||||||||
Redemption of common units in i3 Verticals, LLC | 0 | 123 | (123) | ||||||||
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | 345 | 345 | |||||||||
Exercise or release of equity-based awards (in shares) | 23,219 | ||||||||||
Exercise or release of equity-based awards | 174 | 174 | |||||||||
Allocation of equity to non-controlling interests | 0 | (1,899) | 1,899 | ||||||||
Common stock, shares, outstanding, ending at Dec. 31, 2021 | 22,064,317 | 10,214,142 | |||||||||
Stockholders' equity, ending at Dec. 31, 2021 | 293,053 | $ 2 | $ 1 | 216,604 | (9,008) | 85,454 | |||||
Common stock, shares, outstanding, beginning at Sep. 30, 2021 | 22,026,098 | 10,229,142 | |||||||||
Stockholders' equity, beginning at Sep. 30, 2021 | 289,591 | $ 2 | $ 1 | 211,237 | (6,480) | 84,831 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net (loss) income | (9,901) | $ (9,901) | |||||||||
Net (loss) income | 4,218 | 4,218 | |||||||||
Net (loss) income | (14,119) | $ (14,119) | |||||||||
Common stock, shares, outstanding, ending at Mar. 31, 2022 | 22,133,682 | 10,174,142 | |||||||||
Stockholders' equity, ending at Mar. 31, 2022 | 287,495 | $ 2 | $ 1 | 220,201 | (16,381) | 83,672 | |||||
Common stock, shares, outstanding, beginning at Sep. 30, 2021 | 22,026,098 | 10,229,142 | |||||||||
Stockholders' equity, beginning at Sep. 30, 2021 | 289,591 | $ 2 | $ 1 | 211,237 | (6,480) | 84,831 | |||||
Common stock, shares, outstanding, ending at Sep. 30, 2022 | 22,986,448 | 10,118,142 | 22,986,448 | 10,118,142 | |||||||
Stockholders' equity, ending at Sep. 30, 2022 | $ 307,688 | $ (11,933) | $ 2 | $ 1 | 241,958 | $ (23,382) | (23,582) | $ 11,449 | 89,309 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 | ||||||||||
Common stock, shares, outstanding, beginning at Dec. 31, 2021 | 22,064,317 | 10,214,142 | |||||||||
Stockholders' equity, beginning at Dec. 31, 2021 | $ 293,053 | $ 2 | $ 1 | 216,604 | (9,008) | 85,454 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Equity-based compensation | 6,257 | 6,257 | |||||||||
Net (loss) income | (7,373) | $ (7,373) | (7,373) | ||||||||
Net (loss) income | 3,065 | 3,065 | (3,065) | ||||||||
Net (loss) income | (10,438) | $ (10,438) | |||||||||
Redemption of common units in i3 Verticals, LLC (in shares) | 40,000 | (40,000) | |||||||||
Redemption of common units in i3 Verticals, LLC | 0 | 335 | (335) | ||||||||
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | (1,288) | (1,288) | |||||||||
Exercise or release of equity-based awards (in shares) | 29,365 | ||||||||||
Exercise or release of equity-based awards | (89) | (89) | |||||||||
Allocation of equity to non-controlling interests | 0 | (1,618) | 1,618 | ||||||||
Common stock, shares, outstanding, ending at Mar. 31, 2022 | 22,133,682 | 10,174,142 | |||||||||
Stockholders' equity, ending at Mar. 31, 2022 | 287,495 | $ 2 | $ 1 | 220,201 | (16,381) | 83,672 | |||||
Common stock, shares, outstanding, beginning at Sep. 30, 2022 | 22,986,448 | 10,118,142 | 22,986,448 | 10,118,142 | |||||||
Stockholders' equity, beginning at Sep. 30, 2022 | 307,688 | (11,933) | $ 2 | $ 1 | 241,958 | (23,382) | (23,582) | 11,449 | 89,309 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Equity-based compensation | 6,846 | 6,846 | |||||||||
Net (loss) income | (240) | ||||||||||
Net (loss) income | 409 | ||||||||||
Net (loss) income | 169 | ||||||||||
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | 685 | 685 | |||||||||
Exercise or release of equity-based awards (in shares) | 24,745 | ||||||||||
Exercise or release of equity-based awards | 3 | 3 | |||||||||
Allocation of equity to non-controlling interests | 0 | 1,906 | (1,906) | ||||||||
Common stock, shares, outstanding, ending at Dec. 31, 2022 | 23,011,193 | 10,118,142 | |||||||||
Stockholders' equity, ending at Dec. 31, 2022 | 303,458 | $ 2 | $ 1 | 228,016 | (12,373) | 87,812 | |||||
Common stock, shares, outstanding, beginning at Sep. 30, 2022 | 22,986,448 | 10,118,142 | 22,986,448 | 10,118,142 | |||||||
Stockholders' equity, beginning at Sep. 30, 2022 | 307,688 | $ (11,933) | $ 2 | $ 1 | 241,958 | $ (23,382) | (23,582) | $ 11,449 | 89,309 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net (loss) income | (204) | $ (204) | |||||||||
Net (loss) income | (181) | (181) | |||||||||
Net (loss) income | $ (23) | $ (23) | |||||||||
Redemption of common units in i3 Verticals, LLC (in shares) | 9,924 | ||||||||||
Exercise or release of equity-based awards (in shares) | 202,737 | ||||||||||
Common stock, shares, outstanding, ending at Mar. 31, 2023 | 23,167,730 | 10,108,218 | 23,167,730 | 10,108,218 | |||||||
Stockholders' equity, ending at Mar. 31, 2023 | $ 311,811 | $ 2 | $ 1 | 234,442 | (12,337) | 89,703 | |||||
Common stock, shares, outstanding, beginning at Dec. 31, 2022 | 23,011,193 | 10,118,142 | |||||||||
Stockholders' equity, beginning at Dec. 31, 2022 | 303,458 | $ 2 | $ 1 | 228,016 | (12,373) | 87,812 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Equity-based compensation | 6,802 | 6,802 | |||||||||
Net (loss) income | 36 | $ 36 | 36 | ||||||||
Net (loss) income | 228 | 228 | (228) | ||||||||
Net (loss) income | (192) | $ (192) | |||||||||
Redemption of common units in i3 Verticals, LLC (in shares) | (9,924) | ||||||||||
Redemption of common units in i3 Verticals, LLC | 0 | 86 | (86) | ||||||||
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis | 349 | 349 | |||||||||
Exercise or release of equity-based awards (in shares) | 64,443 | ||||||||||
Exercise or release of equity-based awards | (606) | $ 0 | (606) | ||||||||
Allocation of equity to non-controlling interests | 0 | (2,205) | 2,205 | ||||||||
Issuance of Class A common stock under the 2020 Inducement Plan ( in shares) | 82,170 | ||||||||||
Issuance of Class A common stock under the 2020 Inducement Plan | 2,000 | 2,000 | |||||||||
Common stock, shares, outstanding, ending at Mar. 31, 2023 | 23,167,730 | 10,108,218 | 23,167,730 | 10,108,218 | |||||||
Stockholders' equity, ending at Mar. 31, 2023 | $ 311,811 | $ 2 | $ 1 | $ 234,442 | $ (12,337) | $ 89,703 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (23) | $ (14,119) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 17,691 | 14,317 |
Equity-based compensation | 13,648 | 12,881 |
Amortization of debt discount and issuance costs | 729 | 2,853 |
(Benefit from) provision for income taxes | (208) | 656 |
Non-cash lease expense | 2,289 | 2,446 |
Increase in non-cash contingent consideration expense from original estimate | 3,722 | 16,430 |
Other non-cash adjustments to net income | 909 | 493 |
Changes in operating assets: | ||
Accounts receivable | 6,497 | (2,844) |
Prepaid expenses and other current assets | (1,860) | (4,118) |
Other assets | (710) | (1,087) |
Changes in operating liabilities: | ||
Accounts payable | (1,484) | 1,489 |
Accrued expenses and other current liabilities | (5,009) | 1,830 |
Acquisition escrow obligations | (1,564) | 4,184 |
Settlement obligations | (355) | 1,819 |
Deferred revenue | (2,628) | 316 |
Operating lease liabilities | (2,234) | (2,349) |
Other long-term liabilities | 0 | (1) |
Contingent consideration paid in excess of original estimates | (3,881) | (3,983) |
Net cash provided by operating activities | 25,529 | 31,213 |
Cash flows from investing activities: | ||
Expenditures for property and equipment | (2,322) | (967) |
Expenditures for capitalized software | (5,381) | (4,305) |
Purchases of merchant portfolios and residual buyouts | (387) | 0 |
Acquisitions of businesses, net of cash and restricted cash acquired | (101,997) | (94,315) |
Payments for other investing activities | (1,227) | (11) |
Proceeds from investments | 184 | 0 |
Net cash used in investing activities | (111,130) | (99,598) |
Cash flows from financing activities: | ||
Proceeds from revolving credit facility | 265,811 | 179,835 |
Payments on revolving credit facility | (179,939) | (95,908) |
Payments of debt issuance costs | (87) | 0 |
Cash paid for contingent consideration | (1,175) | (6,217) |
Proceeds from stock option exercises | 104 | 217 |
Payments for employee's tax withholdings from net settled stock option exercises and RSU releases | (545) | (160) |
Net cash provided by financing activities | 84,169 | 77,767 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (1,432) | 9,382 |
Cash, cash equivalents and restricted cash at beginning of period | 23,765 | 17,931 |
Cash, cash equivalents and restricted cash at end of period | 22,333 | 27,313 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 10,266 | 3,471 |
Cash paid for income taxes | $ 1,419 | $ 588 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 |
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 3,977 | $ 3,490 | $ 6,340 | $ 3,641 |
Settlement assets | 7,185 | 7,540 | 7,272 | 4,768 |
Restricted cash | 11,171 | 12,735 | 13,701 | 9,522 |
Total cash, cash equivalents, and restricted cash | $ 22,333 | $ 23,765 | $ 27,313 | $ 17,931 |
ORGANIZATION AND OPERATIONS
ORGANIZATION AND OPERATIONS | 6 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND OPERATIONS | ORGANIZATION AND OPERATIONS i3 Verticals, Inc. (the “Company”) was formed as a Delaware corporation on January 17, 2018. The Company was formed for the purpose of completing an initial public offering (“IPO”) of its Class A common stock and other related transactions in order to carry on the business of i3 Verticals, LLC and its subsidiaries. i3 Verticals, LLC was founded in 2012 and delivers seamlessly integrated software and payment solutions to customers in strategic vertical markets. The Company’s headquarters are located in Nashville, Tennessee, with operations throughout the United States. Unless the context otherwise requires, references to “we,” “us,” “our,” “i3 Verticals” and the “Company” refer to i3 Verticals, Inc. and its subsidiaries, including i3 Verticals, LLC. In connection with the IPO, the Company completed certain reorganization transactions, which, among other things, resulted in i3 Verticals, Inc. being the sole managing member of i3 Verticals, LLC (the “Reorganization Transactions”). Following the completion of the IPO and Reorganization Transactions, the Company is a holding company and the principal asset that it owns are the common units of i3 Verticals, LLC. i3 Verticals, Inc. operates and controls all of i3 Verticals, LLC's operations and, through i3 Verticals, LLC and its subsidiaries, conducts i3 Verticals, LLC's business. i3 Verticals, Inc. has a majority economic interest in i3 Verticals, LLC. As the sole managing member of i3 Verticals, LLC, i3 Verticals, Inc. consolidates the financial results of i3 Verticals, LLC and reports a non-controlling interest representing the Common Units of i3 Verticals, LLC held by owners other than i3 Verticals, Inc. (the “Continuing Equity Owners”). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the reporting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for fair presentation of the unaudited condensed consolidated financial statements of the Company and its subsidiaries as of March 31, 2023 and for the three and six months ended March 31, 2023 and 2022. The results of operations for the three and six months ended March 31, 2023 and 2022 are not necessarily indicative of the operating results for the full year. As permitted by the rules and regulations of the SEC, certain information and disclosures otherwise included in the notes to the consolidated financial statements have been condensed or omitted from the summary of significant accounting policies. The Company believes the disclosures are adequate to make the information presented not misleading. It is recommended that these interim condensed consolidated financial statements be read in conjunction with the Company's consolidated financial statements and related footnotes for the years ended September 30, 2022 and 2021, included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022 filed with the SEC on November 18, 2022. Principles of Consolidation These interim condensed consolidated financial statements include the accounts of the Company and its subsidiary companies. All significant intercompany accounts and transactions have been eliminated in consolidation. Restricted Cash Restricted cash represents funds held in escrow related to acquisitions or held-on-deposit with processing banks pursuant to agreements to cover potential merchant losses. It is presented as long-term assets on the accompanying condensed consolidated balance sheets since the related agreements extend beyond the next twelve months. Following the adoption of Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230), the Company includes restricted cash along with the cash and cash equivalents balance for presentation in the consolidated statements of cash flows. Settlement Assets and Obligations Settlement assets and obligations result when funds are temporarily held or owed by the Company on behalf of merchants, consumers, schools, and other institutions. Timing differences, interchange expenses, merchant reserves and exceptional items cause differences between the amount received from the card networks and the amount funded to counterparties. These balances arising in the settlement process are reflected as settlement assets and obligations on the accompanying consolidated balance sheets. With the exception of merchant reserves, settlement assets or settlement obligations are generally collected and paid within one Inventories Inventories consist of point-of-sale equipment to be sold to customers and are stated at the lower of cost, determined on a weighted average or specific basis, or net realizable value. Inventories were $4,732 and $4,121 at March 31, 2023 and September 30, 2022, respectively, and are included within prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets. Acquisitions Business acquisitions have been recorded using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), and, accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair value as of the date of acquisition. Where relevant, the fair value of contingent consideration included in an acquisition is calculated using a Monte Carlo simulation. The fair value of merchant relationships and non-compete assets acquired is identified using the Income Approach. The fair values of trade names and internally-developed software acquired are identified using the Relief from Royalty Method. After the purchase price has been allocated, goodwill is recorded to the extent the total consideration paid for the acquisition, including the acquisition date fair value of contingent consideration, if any, exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. Acquisition costs for business combinations are expensed when incurred and recorded in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. Acquisitions not meeting the accounting criteria to be accounted for as a business combination are accounted for as an asset acquisition. An asset acquisition is recorded at its purchase price, inclusive of acquisition costs, which is allocated among the acquired assets and assumed liabilities based upon their relative fair values at the date of acquisition. The operating results of an acquisition are included in the Company’s condensed consolidated statements of operations from the date of such acquisition. Acquisitions completed during the six months ended March 31, 2023 contributed $9,071 and $2,638 of revenue and net income, respectively, to the Company's condensed consolidated statements of operations for the six months then ended. Leases The Company adopted ASU 2016-02, Leases, on October 1, 2020, using the optional modified retrospective method under which the prior period financial statements were not restated for the new guidance. The Company elected the accounting policy practical expedients for all classes of underlying assets to (i) combine associated lease and non-lease components in a lease arrangement as a combined lease component and (ii) exclude recording short-term leases as right-of-use assets on the condensed consolidated balance sheets. At contract inception the Company determines whether an arrangement is, or contains a lease, and for each identified lease, evaluates the classification as operating or financing. Leased assets and obligations are recognized at the lease commencement date based on the present value of fixed lease payments to be made over the term of the lease. Renewal and termination options are factored into determination of the lease term only if the option is reasonably certain to be exercised. The Company’s leases do not provide a readily determinable implicit interest rate and the Company uses its incremental borrowing rate to measure the lease liability and corresponding right-of-use asset. The incremental borrowing rate is a fully collateralized rate that considers the Company’s credit rating, market conditions and the term of the lease. The Company accounts for all components in a lease arrangement as a single combined lease component. Operating lease cost is recognized on a straight-line basis over the lease term. Total lease costs include variable lease costs, which are primarily comprised of the consumer price index adjustments and other changes based on rates, such as costs of insurance and property taxes. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and obligations. Revenue Recognition and Deferred Revenue Revenue is recognized as each performance obligation is satisfied, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience. The Company utilized the portfolio approach practical expedient within ASC 606-10-10-4 Revenue from Contracts with Customers—Objectives and the significant financing component practical expedient within ASC 606-10-32-18 Revenue from Contracts with Customers—The Existence of a Significant Financing Component in the Contract in performing the analysis. The Company adopted ASC 606 on October 1, 2019, using the modified retrospective method and applying the standard to all contracts not completed on the date of adoption. The Company's revenue for the six months ended March 31, 2023 and 2022 is derived from the following sources: • Software and related services — Includes sales of software as a service, transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to our software offerings • Payments — Includes volume-based payment processing fees (“discount fees”), gateway fees and other related fixed transaction or service fees • Other — Includes sales of equipment, non-software related professional services and other revenues Revenues from sales of the Company’s software are recognized when the related performance obligations are satisfied. Sales of software licenses are categorized into one of two categories of intellectual property in accordance with ASC 606, functional or symbolic. The key distinction is whether the license represents a right to use (functional) or a right to access (symbolic) intellectual property. The Company generates sales of one-time software licenses, which is functional intellectual property. Revenue from functional intellectual property is recognized at a point in time, when delivered to the customer. The Company also offers access to its software under software-as-a-service (“SaaS”) arrangements, which represent services arrangements. Revenue from SaaS arrangements is recognized over time, over the term of the agreement. Discount fees represent a percentage of the dollar amount of each credit or debit transaction processed or a specified per transaction amount, depending on the card type. The Company frequently enters into agreements with customers under which the customer engages the Company to provide both payment authorization services and transaction settlement services for all of the cardholder transactions of the customer, regardless of which issuing bank and card network to which the transaction relates. The Company’s core performance obligations are to stand ready to provide continuous access to the Company’s payment authorization services and transaction settlement services in order to be able to process as many transactions as its customers require on a daily basis over the contract term. These services are stand ready obligations, as the timing and quantity of transactions to be processed is not determinable. Under a stand-ready obligation, the Company’s performance obligation is defined by each time increment rather than by the underlying activities satisfied over time based on days elapsed. Because the service of standing ready is substantially the same each day and has the same pattern of transfer to the customer, the Company has determined that its stand-ready performance obligation comprises a series of distinct days of service. Discount fees are recognized each day based on the volume or transaction count at the time the merchants’ transactions are processed. The Company follows the requirements of ASC 606-10-55 Revenue from Contracts with Customers—Principal versus Agent Considerations , which states that the determination of whether a company should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement. The determination of gross versus net recognition of revenue requires judgment that depends on whether the Company controls the good or service before it is transferred to the merchant or whether the Company is acting as an agent of a third party. The assessment is provided separately for each performance obligation identified. Under its agreements, the Company incurs interchange and network pass-through charges from the third-party card issuers and card networks, respectively, related to the provision of payment authorization services. The Company has determined that it is acting as an agent with respect to these payment authorization services, based on the following factors: (1) the Company has no discretion over which card issuing bank will be used to process a transaction and is unable to direct the activity of the merchant to another card issuing bank, and (2) interchange and card network rates are pre-established by the card issuers or card networks, and the Company has no latitude in determining these fees. Therefore, revenue allocated to the payment authorization performance obligation is presented net of interchange and card network fees paid to the card issuing banks and card networks, respectively. With regards to the Company's discount fees, generally, where the Company has control over merchant pricing, merchant portability, credit risk and ultimate responsibility for the merchant relationship, revenues are reported at the time of sale equal to the full amount of the discount charged to the merchant, less interchange and network fees. Revenues generated from merchant portfolios where the Company does not have control over merchant pricing, liability for merchant losses or credit risk or rights of portability are reported net of interchange and network fees as well as third-party processing costs directly attributable to processing and bank sponsorship costs. Revenues are also derived from a variety of transaction fees, which are charged for accessing our payment and software solutions, and fees for other miscellaneous services. Revenues derived from such fees are recognized in the period the transactions occur and when there are no further performance obligations. Revenue from the sale of equipment, is recognized upon transfer of ownership to the customer, after which there are no further performance obligations. Arrangements may contain multiple performance obligations, such as payment authorization services, transaction settlement services, hardware, software products, maintenance, and professional installation and training services. Revenues are allocated to each performance obligation based on the standalone selling price of each good or service. The selling price for a deliverable is based on standalone selling price, if available, the adjusted market assessment approach, estimated cost plus margin approach, or residual approach. The Company establishes estimated selling price, based on the judgment of the Company's management, considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle. In arrangements with multiple performance obligations, the Company determines allocation of the transaction price at inception of the arrangement and uses the standalone selling prices for the majority of the Company's revenue recognition. Revenues from sales of the Company ’ s combined hardware and software element are recognized when each performance obligation has been satisfied which has been determined to be upon the delivery of the product. Revenues derived from service fees are recognized at the time the services are performed and there are no further performance obligations. The Company’s professional services, including training, installation, and repair services are recognized as revenue as these services are performed. The tables below present a disaggregation of the Company's revenue from contracts with customers by product by segment. Refer to Note 14 for discussion of the Company's segments. The Company's products are defined as follows: • Software and related services — Includes sales of SaaS, transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to our software offerings. • Payments — Includes discount fees, gateway fees and other related fixed transaction or service fees. • Other — Includes sales of equipment, non-software related professional services and other revenues. For the Three Months Ended March 31, 2023 Merchant Services Software and Services Other Total Software and related services revenue $ 3,217 $ 44,099 $ (9) $ 47,307 Payments revenue 27,634 14,285 (10) 41,909 Other revenue 2,243 2,413 — 4,656 Total revenue $ 33,094 $ 60,797 $ (19) $ 93,872 For the Three Months Ended March 31, 2022 Merchant Services Software and Services Other Total Software and related services revenue $ 3,008 $ 35,972 $ (8) $ 38,972 Payments revenue 23,926 10,616 (14) 34,528 Other revenue 2,246 2,374 — 4,620 Total revenue $ 29,180 $ 48,962 $ (22) $ 78,120 For the Six Months Ended March 31, 2023 Merchant Services Software and Services Other Total Software and related services revenue $ 6,196 $ 82,244 $ (19) $ 88,421 Payments revenue 55,243 27,038 (18) 82,263 Other revenue 4,489 4,728 — 9,217 Total revenue $ 65,928 $ 114,010 $ (37) $ 179,901 For the Six Months Ended March 31, 2022 Merchant Services Software and Services Other Total Software and related services revenue $ 5,970 $ 69,356 $ (16) $ 75,310 Payments revenue 48,230 19,782 (18) 67,994 Other revenue 4,157 4,598 — 8,755 Total revenue $ 58,357 $ 93,736 $ (34) $ 152,059 The tables below present a disaggregation of the Company's revenue from contracts with customers by timing of transfer of goods or services by segment. For the three and six months ended March 31, 2022, $9,333 and $19,546, respectively, was included in revenue earned at a point in time related to professional services or other stand ready contract revenue for fixed service fee arrangements. These types of revenue are included in revenue earned over time for the three and six months ended March 31, 2023. The Company's revenue included in each category are defined as follows: • Revenue earned over time — Includes discount fees, gateway fees, sales of SaaS, ongoing support or other stand-ready obligations and professional services. • Revenue earned at a point in time — Includes point in time service fees that are not stand-ready obligations, software licenses sold as functional intellectual property and other equipment. For the Three Months Ended March 31, 2023 Merchant Services Software and Services Other Total Revenue earned over time $ 27,984 $ 54,568 $ (9) $ 82,543 Revenue earned at a point in time 5,110 6,229 (10) 11,329 Total revenue $ 33,094 $ 60,797 $ (19) $ 93,872 For the Three Months Ended March 31, 2022 Merchant Services Software and Services Other Total Revenue earned over time $ 22,599 $ 34,151 $ (9) $ 56,741 Revenue earned at a point in time 6,581 14,811 (13) 21,379 Total revenue $ 29,180 $ 48,962 $ (22) $ 78,120 For the Six Months Ended March 31, 2023 Merchant Services Software and Services Other Total Revenue earned over time $ 55,581 $ 105,009 $ (19) $ 160,571 Revenue earned at a point in time 10,347 9,001 (18) 19,330 Total revenue $ 65,928 $ 114,010 $ (37) $ 179,901 For the Six Months Ended March 31, 2022 Merchant Services Software and Services Other Total Revenue earned over time $ 45,333 $ 65,439 $ (17) $ 110,755 Revenue earned at a point in time 13,024 28,297 (17) 41,304 Total revenue $ 58,357 $ 93,736 $ (34) $ 152,059 Contract Assets The Company bills for certain software and related services sales and fixed fee professional services upon pre-determined milestones in the contracts. Therefore, the Company may have contract assets other than trade accounts receivable for performance obligations that are partially completed, which would typically represent consulting services provided before a milestone is completed in a contract. Unbilled amounts associated with these services are presented as accounts receivable as the Company has an unconditional right to payment for services performed. As of March 31, 2023 and September 30, 2022, the Company’s contract assets from contracts with customers was $12,116 and $9,716, respectively. Contract Liabilities Deferred revenue represents amounts billed to customers by the Company for services contracts. Payment is typically collected at the start of the contract term. The initial prepaid contract agreement balance is deferred. The balance is then recognized as the services are provided over the contract term. Deferred revenue that is expected to be recognized as revenue within one year is recorded as short-term deferred revenue and the remaining portion is recorded as other long-term liabilities in the condensed consolidated balance sheets. The terms for most of the Company's contracts with a deferred revenue component are one year. Substantially all of the Company's deferred revenue is anticipated to be recognized within the next year. The following tables present the changes in deferred revenue as of and for the six months ended March 31, 2023 and 2022, respectively: Balance at September 30, 2022 $ 32,089 Deferral of revenue 19,334 Recognition of unearned revenue (13,925) Balance at December 31, 2022 37,498 Deferral of revenue 10,475 Recognition of unearned revenue (14,286) Balance at March 31, 2023 $ 33,687 Balance at September 30, 2021 $ 30,024 Deferral of revenue 21,032 Recognition of unearned revenue (15,735) Balance at December 31, 2021 35,321 Deferral of revenue 11,047 Recognition of unearned revenue (16,034) Balance at March 31, 2022 $ 30,334 Costs to Obtain and Fulfill a Contract The Company capitalizes incremental costs to obtain new contracts and contract renewals and amortizes these costs on a straight-line basis as an expense over the benefit period, which is generally the contract term, unless a commensurate payment is not expected at renewal. As of March 31, 2023 and September 30, 2022 the Company had $4,518 and $4,185, respectively, of capitalized contract costs, which relates to commissions paid to employees and agents as well as other incentives given to customers to obtain new sales, included within “Other assets" on the condensed consolidated balance sheets. The Company recorded expense related to these costs of $193 and $376 for the three and six months ended March 31, 2023, respectively and $178 and $345 for the three and six months ended March 31, 2022, respectively. The Company expenses sales commissions as incurred for the Company's sales commission plans that are paid on recurring monthly revenues, portfolios of existing customers, or have a substantive stay requirement prior to payment. Other Cost of Services Other costs of services include third-party processing costs directly attributable to processing and bank sponsorship costs, which may not be based on a percentage of volume. These costs also include related costs such as residual payments to sales groups, which are based on a percentage of the net revenues generated from merchant referrals. In certain merchant processing bank relationships the Company is liable for chargebacks against a merchant equal to the volume of the transaction. Losses resulting from chargebacks against a merchant are included in other cost of services on the accompanying condensed consolidated statement of operations. The Company evaluates its risk for such transactions and estimates its potential loss from chargebacks based primarily on historical experience and other relevant factors. The reserve for merchant losses is included within accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheets. The cost of equipment sold is also included in other cost of services. Other costs of services are recognized at the time the associated revenue is earned. The Company accounts for all governmental taxes associated with revenue transactions on a net basis. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, the value of purchase consideration paid and identifiable assets acquired and assumed in acquisitions, goodwill and intangible asset impairment review, determination of performance obligations for revenue recognition, loss reserves, assumptions used in the calculation of equity-based compensation and in the calculation of income taxes, and certain tax assets and liabilities as well as the related valuation allowances. Actual results could differ from those estimates. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. The amendments in ASU 2020-06 are effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted this ASU on October 1, 2022. The adoption of ASU 2020-06 resulted in an increase in long-term debt, less current portion and debt issuance costs, net of $11,933, a decrease in additional paid-in-capital of $23,382 and a decrease in accumulated deficit of $11,449. The adoption of ASU 2020-06 had no impact on net income. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS During the six months ended March 31, 2023 and 2022, the Company acquired the following intangible assets and businesses: Residual Buyouts From time to time, the Company acquires future commission streams (or "residuals") from sales agents in exchange for an upfront cash payment. This results in an increase in overall gross processing volume to the Company. The residual buyouts are treated as asset acquisitions, resulting in recording a residual buyout intangible asset at cost on the date of acquisition. These assets are amortized using a method of amortization that reflects the pattern in which the economic benefits of the intangible asset are expected to be utilized over their estimated useful lives. During the six months ended March 31, 2023, the Company purchased $387 in residuals using a combination of cash on hand and borrowings on the Company's revolving credit facility. The acquired residual buyout intangible asset has an estimated amortization period of eight years. The Company did not acquire any residuals during the six months ended March 31, 2022. Referral Agreements From time to time, the Company enters into referral agreements with agent banks or other organizations (“referral partner”). Under these agreements, the referral partner refers its customers to the Company for credit card processing services. Total consideration paid for these agreements in the six months ended March 31, 2023 was $420, all of which was settled with cash on hand. Because the Company pays an up-front fee to compensate the referral partner, the amount is treated as an asset acquisition in which the Company has acquired an intangible stream of referrals. This asset is amortized over a straight-line period of five years. Purchase of Celtic Cross Holdings, Inc. and Celtic Systems Pvt. Ltd. During the six months ended March 31, 2023, the Company completed the acquisition of Celtic Cross Holdings, Inc., in Scottsdale, Arizona and Celtic Systems Pvt. Ltd. in Vadodara, India (collectively "Celtic") to expand the Company’s software offerings in the Public Sector vertical. Celtic is within the Software and Services segment. Total purchase consideration consisted of $85,000 in cash consideration, funded by proceeds from the Company's revolving credit facility. Certain of the purchase price allocations assigned for this acquisition is considered preliminary as of March 31, 2023. The goodwill associated with the Celtic acquisition is deductible for tax purposes. The acquired customer relationships intangible assets has an estimated amortization period of eighteen years. The trade name and non-compete agreements associated with the acquisition have amortization periods of five years and three years, respectively. The weighted-average amortization period for all intangibles acquired is eighteen years. The acquired capitalized software has a weighted-average amortization period of ten years. Acquisition-related costs for this acquisition amounted to approximately $1,739 and were expensed as incurred. Summary of Celtic Cross Holdings, Inc. and Celtic Systems Pvt. Ltd. The fair values assigned to certain assets and liabilities assumed, as of the acquisition date, were as follows: Accounts receivable $ 7,604 Prepaid expenses and other current assets 110 Property and equipment 5,437 Capitalized software 12,600 Customer relationships 33,800 Non-compete agreements 200 Trade name 600 Goodwill 42,595 Total assets acquired 102,946 Accounts payable 9 Accrued expenses and other current liabilities 3,182 Deferred revenue, current 2,742 Other long-term liabilities 12,013 Net assets acquired $ 85,000 Other Business Combinations during the six months ended March 31, 2023 The Company completed the acquisition of two other businesses to expand the Company's software offerings. The total purchase consideration was $19,757, including $16,997 in cash consideration, funded by proceeds from the Company's revolving credit facility, $2,000 of the Company's Class A Common Stock, and $760 contingent consideration. In connection with this acquisition, the Company allocated approximately $180 of the consideration to net working capital, approximately $374 to property and equipment, approximately $670 to capitalized software, approximately $8,400 to customer relationships, approximately $100 to trade names, and the remainder, approximately $12,808, to goodwill, of which $2,864 is deductible for tax purposes, and approximately $2,778 to other long-term liabilities. Certain of the purchase price allocations assigned for this acquisition is considered preliminary as of March 31, 2023. The acquired capital software and customer relationships intangible asset have estimated amortization periods of seven ten Pro Forma Results of Operations for Business Combinations during the six months ended March 31, 2023 The following unaudited supplemental pro forma results of operations have been prepared as though each of the acquired businesses in the six months ended March 31, 2023 had occurred on October 1, 2021. Pro forma adjustments were made to reflect the impact of depreciation and amortization, changes to executive compensation and the increased debt, all in accordance with ASC 805. This supplemental pro forma information does not purport to be indicative of the results of operations that would have been attained had the acquisitions been made on these dates, or of results of operations that may occur in the future. Six months ended March 31, 2023 2022 Revenue $ 181,275 $ 163,987 Net loss $ (67) $ (12,630) Business Combinations during the year ended September 30, 2022 During the year ended September 30, 2022, the Company completed the acquisitions of three businesses to expand the Company’s software offerings in the Public Sector and Healthcare vertical markets. Certain of the purchase price allocations assigned for these acquisitions are considered preliminary as of March 31, 2023. Total purchase consideration was $107,681, including $101,400 in cash consideration, funded by proceeds from the Company's revolving credit facility, and $6,281 of contingent consideration. The goodwill associated with two of the three acquisitions is deductible for tax purposes. The acquired customer relationships intangible assets have estimated amortization periods of between ten Acquisition-related costs for these businesses amounted to approximately $773 and were expensed as incurred. Certain provisions in the purchase agreements provide for additional consideration of up to $23,000, in the aggregate, to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreements, through no later than September 2024. The Company determined the acquisition date fair values of the liabilities for the contingent consideration based on probability forecasts and discounted cash flow analyses. In each subsequent reporting period, the Company will reassess its current estimates of performance relative to the targets and adjust the contingent liabilities to their fair values through earnings See additional disclosures in Note 10. Summary of Business Combinations during the year ended September 30, 2022 The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2022 were as follows: Accounts receivable $ 651 Settlement assets 685 Prepaid expenses and other current assets 83 Property and equipment 190 Capitalized software 9,790 Acquired merchant relationships 41,090 Trade name 1,550 Goodwill 61,347 Operating lease right-of-use assets 263 Other assets 22 Total assets acquired 115,671 Accrued expenses and other current liabilities 287 Settlement obligations 685 Deferred revenue, current 30 Current portion of operating lease liabilities 82 Operating lease liabilities, less current portion 181 Other long-term liabilities 6,725 Net assets acquired $ 107,681 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS A summary of the Company's prepaid expenses and other current assets as of March 31, 2023 and September 30, 2022 is as follows: March 31, September 30, 2023 2022 Inventory $ 4,732 $ 4,121 Prepaid licenses 6,282 5,743 Prepaid insurance 980 736 Notes receivable — current portion 5,117 4,930 Other current assets 4,625 3,915 Prepaid expenses and other current assets $ 21,736 $ 19,445 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill are as follows: Merchant Services Software and Services Other Total Balance at September 30, 2022 $ 119,086 $ 234,553 $ — $ 353,639 Goodwill attributable to preliminary purchase price adjustments and acquisitions during the six months ended March 31, 2023 2,864 52,539 — 55,403 Balance at March 31, 2023 $ 121,950 $ 287,092 $ — $ 409,042 Intangible assets consisted of the following as of March 31, 2023: Cost Accumulated Amortization Carrying Value Amortization Life and Method Finite-lived intangible assets: Merchant relationships $ 310,501 $ (89,422) $ 221,079 9 to 25 years – accelerated or straight-line Non-compete agreements 1,390 (928) 462 3 to 6 years – straight-line Website and brand development costs 267 (194) 73 3 to 4 years – straight-line Trade names 8,471 (4,935) 3,536 3 to 7 years – straight-line Residual buyouts 6,557 (2,538) 4,019 8 years – straight-line Referral and exclusivity agreements 1,220 (821) 399 5 years – straight-line Total finite-lived intangible assets 328,406 (98,838) 229,568 Indefinite-lived intangible assets: Trademarks 44 — 44 Total identifiable intangible assets $ 328,450 $ (98,838) $ 229,612 Amortization expense for intangible assets amounted to $10,216 and $8,774 during the six months ended March 31, 2023 and 2022 respectively. Based on net carrying amounts at March 31, 2023, the Company's estimate of future amortization expense for intangible assets are presented in the table below for fiscal years ending September 30: 2023 (six months remaining) $ 10,160 2024 19,548 2025 19,257 2026 18,785 2027 18,165 Thereafter 143,653 $ 229,568 |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 6 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | ACCRUED EXPENSES AND OTHER LIABILITIES A summary of the Company's accrued expenses and other current liabilities as of March 31, 2023 and September 30, 2022 is as follows is as follows: March 31, September 30, 2023 2022 Accrued wages, bonuses, commissions and vacation $ 7,182 $ 8,117 Accrued interest 1,336 642 Accrued contingent consideration — current portion 20,756 21,385 Escrow liabilities 10,721 12,285 Tax receivable agreement liability — current portion 21 20 Customer deposits 1,272 1,575 Employee health self-insurance liability 1,068 732 Accrued interchange 2,184 2,096 Other current liabilities 10,867 10,981 Accrued expenses and other current liabilities $ 55,407 $ 57,833 A summary of the Company's long-term liabilities as of March 31, 2023 and September 30, 2022 is as follows: March 31, September 30, 2023 2022 Accrued contingent consideration — long-term portion $ 1,503 $ 1,448 Deferred tax liability — long-term 22,687 7,896 Other long-term liabilities 227 196 Total other long-term liabilities $ 24,417 $ 9,540 |
LONG-TERM DEBT, NET
LONG-TERM DEBT, NET | 6 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT, NET | LONG-TERM DEBT, NET A summary of long-term debt, net as of March 31, 2023 and September 30, 2022 is as follows: March 31, September 30, Maturity 2023 2022 Revolving lines of credit to banks under the Senior Secured Credit Facility May 9, 2024 $ 271,067 $ 185,017 1% Exchangeable Senior Notes due 2025 February 15, 2025 117,000 104,557 Debt issuance costs, net (2,600) (2,554) Total long-term debt, net of issuance costs $ 385,467 $ 287,020 2020 Exchangeable Notes Offering On February 18, 2020, i3 Verticals, LLC issued $138,000 aggregate principal amount of 1.0% Exchangeable Senior Notes due 2025 (the “Exchangeable Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The Company received approximately $132,762 in net proceeds from the sale of the Exchangeable Notes, as determined by deducting estimated offering expenses paid to third-parties from the aggregate principal amount. On October 1, 2022, the Company adopted ASU 2020-06 using the modified retrospective method, which resulted in the Exchangeable Notes being presented as a single liability instrument with no separate accounting for embedded conversion features. Refer to Note 2 for further discussion. The Exchangeable Notes bear interest at a fixed rate of 1.00% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2020. The Exchangeable Notes will mature on February 15, 2025, unless converted or repurchased at an earlier date. i3 Verticals, LLC issued the Exchangeable Notes pursuant to an Indenture, dated as of February 18, 2020, among i3 Verticals, LLC, the Company and U.S. Bank National Association, as trustee. As of March 31, 2023, the aggregate principal amount outstanding of the Exchangeable Notes was $117,000. For a discussion of the terms of the Exchangeable Notes, refer to the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022. Non-cash interest expense, including amortization of debt issuance costs, related to the Exchangeable Notes for the three and six months ended March 31, 2023 was $233 and $460, respectively $164 and $323 for the three and six months ended March 31, 2022, respectively. Total unamortized debt issuance costs related to the Exchangeable Notes were $1,989 as of March 31, 2023. The estimated fair value of the Exchangeable Notes was $108,564 as of March 31, 2023. The estimated fair value of the Exchangeable Notes was determined through consideration of quoted market prices for similar instruments. The fair value is classified as Level 2, as defined in Note 10. Exchangeable Note Hedge Transactions On February 12, 2020, concurrently with the pricing of the Exchangeable Notes, and on February 13, 2020, concurrently with the exercise by the initial purchasers of their right to purchase additional Exchangeable Notes, i3 Verticals, LLC entered into exchangeable note hedge transactions with respect to Class A common stock (the “Note Hedge Transactions”) with certain financial institutions (collectively, the “Counterparties”). The Note Hedge Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Exchangeable Notes, the same number of shares of Class A common stock that initially underlie the Exchangeable Notes in the aggregate and are exercisable upon exchange of the Exchangeable Notes. The Note Hedge Transactions are intended to reduce potential dilution to the Class A common stock upon any exchange of the Exchangeable Notes. The Note Hedge Transactions will expire upon the maturity of the Exchangeable Notes, if not earlier exercised. The Note Hedge Transactions are separate transactions, entered into by i3 Verticals, LLC with the Counterparties, and are not part of the terms of the Exchangeable Notes. Holders of the Exchangeable Notes will not have any rights with respect to the Note Hedge Transactions. i3 Verticals, LLC used approximately $28,676 of the net proceeds from the offering of the Exchangeable Notes (net of the premiums received for the warrant transactions described below) to pay the cost of the Note Hedge Transactions. The Note Hedge Transactions do not require separate accounting as a derivative as they meet a scope exception for certain contracts involving an entity's own equity. The premiums paid for the Note Hedge Transactions have been included as a net reduction to additional paid-in capital within stockholders' equity. Warrant Transactions On February 12, 2020, concurrently with the pricing of the Exchangeable Notes, and on February 13, 2020, concurrently with the exercise by the initial purchasers of their right to purchase additional Exchangeable Notes, the Company entered into warrant transactions to sell to the Counterparties warrants (the “Warrants”) to acquire, subject to customary adjustments, up to initially 3,376,391 shares of Class A common stock in the aggregate at an initial exercise price of $62.88 per share. The Company offered and sold the Warrants in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Warrants will expire over a period beginning on May 15, 2025. The Warrants are separate transactions, entered into by the Company with the Counterparties, and are not part of the terms of the Exchangeable Notes. Holders of the Exchangeable Notes will not have any rights with respect to the Warrants. The Company received approximately $14,669 from the offering and sale of the Warrants. The Warrants do not require separate accounting as a derivative as they meet a scope exception for certain contracts involving an entity's own equity. The premiums paid for the Warrants have been included as a net increase to additional paid-in capital within stockholders' equity. Senior Secured Credit Facility On May 9, 2019, the Company replaced its then existing credit facility with a new credit agreement (the "Senior Secured Credit Facility"). Effective October 3, 2022, the Senior Secured Credit Facility, as amended, consisted of a $375,000 revolving credit facility, together with an option to increase the revolving credit facility and/or obtain incremental term loans in an additional principal amount of up to $50,000 in the aggregate (subject to the receipt of additional commitments for any such incremental loan amounts). The Senior Secured Credit Facility accrues interest at Term SOFR (based upon an interest period of one, three or six months), plus an adjustment of 0.10%, plus an applicable margin of 2.25% to 3.25% (3.25% as of March 31, 2023), or the base rate (defined as the highest of (x) the Bank of America prime rate, (y) the federal funds rate plus 0.50% and (z) Term SOFR, plus an adjustment of 0.10%, plus 1.00%), plus an applicable margin of 0.25% to 1.25% (1.25% as of March 31, 2023), in each case depending upon the consolidated total leverage ratio, as defined in the agreement. Interest was payable at the end of the selected interest period, but no less frequently than quarterly. Additionally, the Senior Secured Credit Facility required the Company to pay unused commitment fees of 0.15% to 0.30% (0.30% as of March 31, 2023) on any undrawn amounts under the revolving credit facility and letter of credit fees of up to 3.25% on the maximum amount available to be drawn under each letter of credit issued under the agreement. The Senior Credit Facility requires maintenance of certain financial ratios on a quarterly basis as follows: (i) a minimum consolidated interest coverage ratio of 3.00 to 1.00 (ii) a maximum total leverage ratio of 5.00 to 1.00, provided, that for each of the four fiscal quarters immediately following a qualified acquisition (each a “Leverage Increase Period”), the required ratio set forth above may be increased by up to 0.25, subject to certain limitations and (iii) a maximum consolidated senior secured leverage ratio of 3.25 to 1.00, provided, that for each Leverage Increase Period, the consolidated senior leverage ratio may be increased by up to 0.25, subject to certain limitations. The maturity date of the Senior Secured Credit Facility is May 9, 2024. As of March 31, 2023, the Company was in compliance with these covenants, and there was $103,933 available for borrowing under the revolving credit facility, subject to the financial covenants. The Senior Secured Credit Facility was secured by substantially all assets of the Company. The lenders under the Senior Secured Credit Facility held senior rights to collateral and principal repayment over all other creditors. The provisions of the Senior Secured Credit Facility placed certain restrictions and limitations upon the Company. These include, among others, restrictions on liens, investments, indebtedness, fundamental changes and dispositions; maintenance of certain financial ratios; and certain non-financial covenants pertaining to the activities of the Company during the period covered. The Company was in compliance with such covenants as of March 31, 2023. In addition, the Senior Secured Credit Facility restricts the Company's ability to make dividends or other distributions to the holders of the Company's equity. The Company is permitted to (i) make cash distributions to the holders of the Company's equity in order to pay taxes incurred by owners of equity in i3 Verticals, LLC, by reason of such ownership, (ii) move intercompany cash between subsidiaries that are joined to the Senior Secured Credit Facility, (iii) repurchase equity from employees, directors, officers or consultants in an aggregate amount not to exceed $3,000 per year, (iv) make certain payments in connection with the Tax Receivable Agreement (discussed in Note 8 below), and (v) make other dividends or distributions in an aggregate amount not to exceed 5% of the net cash proceeds received from any additional common equity issuance. The Company is also permitted to make non-cash dividends in the form of additional equity issuances. Each subsidiary may make ratable distributions to persons that own equity interests in such subsidiary. All other forms of dividends or distributions are prohibited under the Senior Secured Credit Facility. On May 8, 2023, the Company replaced the Senior Secured Credit Facility with a new credit agreement. See Note 18—Subsequent Events for more information. Debt issuance costs The Company incurred $265 in debt issuance costs during the three and six months ended March 31, 2023 and did not incur any debt issuance costs during the three and six months ended March 31, 2022. The Company's debt issuance costs are being amortized over the related term of the debt using the straight-line method, which is not materially different than the effective interest rate method, and are presented net against long-term debt in the condensed consolidated balance sheets. The amortization of deferred debt issuance costs is included in interest expense and amounted to approximately $368 and $729 during the three and six months ended March 31, 2023, respectively and $259 and $513 during the three and six months ended March 31, 2022, respectively. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES i3 Verticals, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from i3 Verticals, LLC based on i3 Verticals, Inc.’s economic interest in i3 Verticals, LLC. i3 Verticals, LLC's members, including the Company, are liable for federal, state and local income taxes based on their share of i3 Verticals, LLC's pass-through taxable income. i3 Verticals, LLC is not a taxable entity for federal income tax purposes but is subject to and reports entity level tax in both Tennessee and Texas. In addition, certain subsidiaries of i3 Verticals, LLC are corporations that are subject to state and federal income taxes. The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. When the estimate of the annual effective tax rate is unreliable, the Company records its income tax expense or benefit based up on a period to date effective tax rate. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the Company’s estimated tax rate changes, it makes a cumulative adjustment in that period. The Company’s provision for income taxes was a benefit of $563 and $181 for the three and six months ended March 31, 2023, and a provision of $884 and $656 during the three and six months ended March 31, 2022. Tax Receivable Agreement On June 25, 2018, the Company entered into a Tax Receivable Agreement with i3 Verticals, LLC and each of the Continuing Equity Owners (the “Tax Receivable Agreement”) that provides for the payment by the Company to the Continuing Equity Owners of 85% of the amount of certain tax benefits, if any, that it actually realizes, or in some circumstances, is deemed to realize in its tax reporting, as a result of (i) future redemptions funded by the Company or exchanges, or deemed exchanges in certain circumstances, of Common Units of i3 Verticals, LLC for Class A common stock of i3 Verticals, Inc. or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement. These tax benefit payments are not conditioned upon one or more of the Continuing Equity Owners maintaining a continued ownership interest in i3 Verticals, LLC. If a Continuing Equity Owner transfers Common Units but does not assign to the transferee of such units its rights under the Tax Receivable Agreement, such Continuing Equity Owner generally will continue to be entitled to receive payments under the Tax Receivable Agreement arising in respect of a subsequent exchange of such Common Units. In general, the Continuing Equity Owners’ rights under the Tax Receivable Agreement may not be assigned, sold, pledged or otherwise alienated to any person, other than certain permitted transferees, without (a) the Company's prior written consent, which should not be unreasonably withheld, conditioned or delayed, and (b) such persons becoming a party to the Tax Receivable Agreement and agreeing to succeed to the applicable Continuing Equity Owner’s interest therein. The Company expects to benefit from the remaining 15% of the tax benefits, if any, that the Company may realize. During the six months ended March 31, 2023, the Company acquired an aggregate of 9,924 Common Units in i3 Verticals, LLC in connection with the redemption of Common Units from the Continuing Equity Owners, which resulted in an increase in the tax basis of our investment in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement. As a result of the exchange, during the six months ended March 31, 2023 the Company recognized an increase to its net deferred tax assets in the amount of $98, and corresponding Tax Receivable Agreement liabilities of $83, representing 85% of the tax benefits due to Continuing Equity Owners. The deferred tax asset and corresponding Tax Receivable Agreement liability balances were $39,808 and $40,915, respectively, as of March 31, 2023. Payments to the Continuing Equity Owners related to exchanges through March 31, 2023 will range from $0 to $3,321 per year and are expected to be paid over the next 24 years. The amounts recorded as of March 31, 2023, approximate the current estimate of expected tax savings and are subject to change after the filing of the Company’s U.S. federal and state income tax returns. Future payments under the Tax Receivable Agreement with respect to subsequent exchanges would be in addition to these amounts. |
LEASES
LEASES | 6 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Company’s leases consist primarily of real estate leases throughout the markets in which the Company operates. At contract inception, the Company determines whether an arrangement is or contains a lease, and for each identified lease, evaluates the classification as operating or financing. The Company had no finance leases as of March 31, 2023. Leased assets and obligations are recognized at the lease commencement date based on the present value of fixed lease payments to be made over the term of the lease. Renewal and termination options are factored into determination of the lease term only if the option is reasonably certain to be exercised. The weighted-average remaining lease term at March 31, 2023 and 2022 was four The Company’s leases do not provide a readily determinable implicit interest rate and the Company uses its incremental borrowing rate to measure the lease liability and corresponding right-of-use asset. The incremental borrowing rates were determined based on a portfolio approach considering the Company’s current secured borrowing rate adjusted for market conditions and the length of the lease term. The weighted-average discount rate used in the measurement of our lease liabilities was 7.3% and 7.1% as of March 31, 2023 and 2022, respectively. Operating lease cost is recognized on a straight-line basis over the lease term. Operating lease costs were $1,405 and $2,909 for the three and six months ended March 31, 2023, respectively and $1,455 and $2,946 for the three and six months ended March 31, 2022, respectively, which are included in selling, general and administrative expenses in the condensed consolidated statements of operations. Total operating lease costs for the three and six months ended March 31, 2023 include variable lease costs of approximately $9 and $20, respectively and $6 and $44 for the three and six months ended March 31, 2022, respectively, which are primarily comprised of costs of maintenance and utilities and changes in rates, and are determined based on the actual costs incurred during the period. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and liabilities. Short-term rent expense for the three and six months ended March 31, 2023 were $75 and $110, respectively and were $46 and $93 for the three and six months ended March 31, 2022, respectively, and are included in selling, general and administrative expenses in the condensed consolidated statements of operations. As of March 31, 2023, maturities of lease liabilities are as follows: Years ending September 30: 2023 (six months remaining) $ 2,662 2024 4,743 2025 4,125 2026 3,202 2027 1,597 Thereafter 2,017 Total future minimum lease payments (undiscounted) (1) 18,346 Less: present value discount (1,959) Present value of lease liability $ 16,387 __________________________ |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company applies the provisions of ASC 820, Fair Value Measurement , which defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or the price paid to transfer a liability as of the measurement date. A three-tier, fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The three levels are: Level 1 — Quoted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets. The carrying value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, settlement assets and obligations, accounts receivable, other assets, accounts payable, and accrued expenses, approximated their fair values as of March 31, 2023 and 2022, because of the relatively short maturity dates on these instruments. The carrying amount of debt approximates fair value as of March 31, 2023 and 2022, because interest rates on these instruments approximate market interest rates. The Company has no Level 1 or Level 2 financial instruments measured at fair value on a recurring basis. The following tables present the changes in the Company's Level 3 financial instruments that are measured at fair value on a recurring basis. Accrued Contingent Consideration Balance at September 30, 2022 $ 22,833 Contingent consideration accrued at time of business combination 760 Change in fair value of contingent consideration included in Operating expenses 3,722 Contingent consideration paid (5,056) Balance at March 31, 2023 $ 22,259 Accrued Contingent Consideration Balance at September 30, 2021 $ 36,229 Contingent consideration accrued at time of business combination 5,481 Change in fair value of contingent consideration included in Operating expenses 16,430 Contingent consideration paid (10,200) Balance at March 31, 2022 $ 47,940 The fair value of contingent consideration obligations includes inputs not observable in the market and thus represents a Level 3 measurement. The amount to be paid under these obligations is contingent upon the achievement of certain growth metrics related to the financial performance of the entities subsequent to acquisition. The fair value of material contingent consideration included in an acquisition is calculated using a Monte Carlo simulation. The contingent consideration is revalued each period until it is settled. Management reviews the historical and projected performance of each acquisition with contingent consideration and uses an income probability method to revalue the contingent consideration. The revaluation requires management to make certain assumptions and represent management's best estimate at the valuation date. The probabilities are determined based on a management review of the expected likelihood of triggering events that would cause a change in the contingent consideration paid. The Company develops the projected future financial results based on an analysis of historical results, market conditions, and the expected impact of anticipated changes in the Company's overall business and/or product strategies. Approximately $20,756 and $21,385 of contingent consideration was recorded in accrued expenses and other current liabilities as of March 31, 2023 and September 30, 2022, respectively. Approximately $1,503 and $1,448 of contingent consideration was recorded in other long-term liabilities as of March 31, 2023 and September 30, 2022, respectively. Disclosure of Fair Values |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 6 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION A summary of equity-based compensation expense recognized during the three and six months ended March 31, 2023 and 2022 is as follows: Three Months Ended March 31, Six Months Ended March 31, 2023 2022 2023 2022 Stock options $ 5,992 $ 6,042 $ 12,280 $ 12,666 Restricted stock units 810 215 1,368 215 Equity-based compensation expense $ 6,802 $ 6,257 $ 13,648 $ 12,881 Amounts are included in general and administrative expense on the condensed consolidated statements of operations. Income tax benefits of $61 and $108 were recognized during the three and six months ended March 31, 2023, respectively, and $68 and $95 during the three and six months ended March 31, 2022, respectively. In May 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”) under which the Company may grant up to 3,500,000 stock options and other equity-based awards to employees, directors and officers. The number of shares of Class A common stock available for issuance under the 2018 Plan includes an annual increase on the first day of each calendar year equal to 4.0% of the outstanding shares of all classes of the Company's common stock as of the last day of the immediately preceding calendar year, unless the Company’s board of directors determines prior to the last trading day of December of the immediately preceding calendar year that the increase shall be less than 4.0%. As of March 31, 2023, equity awards with respect to 849,900 shares of the Company's Class A common stock were available for grant under the 2018 Plan. In September 2020, the Company adopted the 2020 Acquisition Equity Incentive Plan (the “2020 Inducement Plan”) under which the Company may grant up to 1,500,000 stock options and other equity-based awards to individuals that were not previously employees of the Company or its subsidiaries in connection with acquisitions, as a material inducement to the individual's entry into employment with the Company or its subsidiaries within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. In May 2021, the Company amended the 2020 Inducement Plan to increase the number of shares of the Company's Class A common stock available for issuance from 1,500,000 to 3,000,000 shares. As of March 31, 2023, equity awards with respect to 1,074,736 shares of the Company's Class A common stock were available for grant under the 2020 Inducement Plan. Share-based compensation expense includes the estimated effects of forfeitures, which will be adjusted over the requisite service period to the extent actual forfeitures differ or are expected to differ from such estimates. Stock Options The Company has issued stock option awards under the 2018 Plan and the 2020 Inducement Plan. The fair value of the stock option awards during the six months ended March 31, 2023 and during the year ended September 30, 2022 was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions: March 31, 2023 September 30, 2022 Expected volatility (1) 55.0 % 55.7 % Expected dividend yield (2) — % — % Expected term (3) 6 years 6 years Risk-free interest rate (4) 3.9 % 1.6 % _________________ 1. Expected volatility is based on the Company's own share price. 2. The Company has assumed a dividend yield of zero as management has no plans to declare dividends in the foreseeable future. 3. Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method as details of employee exercise behavior are limited due to limited historical data. 4. The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term. A summary of stock option activity for the six months ended March 31, 2023 is as follows: Stock Options Weighted Average Exercise Price Outstanding at September 30, 2022 8,222,322 $ 25.07 Granted 1,154,550 24.37 Exercised (202,737) 19.43 Forfeited (246,474) 26.85 Outstanding at March 31, 2023 8,927,661 $ 25.06 Exercisable at March 31, 2023 5,543,356 $ 24.26 The weighted-average grant date fair value of stock options granted during the six months ended March 31, 2023 was $13.88. As of March 31, 2023, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $33,829, which is expected to be recognized over a weighted-average period of 2.2 years. The Company's policy is to account for forfeitures of stock-based compensation awards as they occur. The total fair value of stock options that vested during the three and six months ended March 31, 2023 was $11,150 and $18,172, respectively. Restricted Stock Units The Company has issued Class A common stock in the form of restricted stock units ("RSUs") under the 2018 Plan. A summary of activity related to restricted stock units for the six months ended March 31, 2023 is as follows: Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at September 30, 2022 486,652 $ 24.93 Granted 524,132 25.32 Vested (58,234) 26.52 Forfeited (51,058) 24.20 Outstanding at March 31, 2023 901,492 $ 24.94 As of March 31, 2023, total unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures, was $14,218, which is expected to be recognized over a weighted average period of 3.56 years. $1,544 RSUs vested during the six months ended March 31, 2023. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases The Company utilizes office space and equipment under operating leases. Rent expense under these leases amounted to $1,480 and $3,019 during the three and six months ended March 31, 2023, respectively, and $1,501 and $3,039 during the three and six months ended March 31, 2022, respectively. Refer to Note 9 for further discussion and a table of the future minimum payments under these leases. Minimum Processing Commitments The Company has non-exclusive agreements with several processors to provide the Company services related to transaction processing and transmittal, transaction authorization and data capture, and access to various reporting tools. Certain of these agreements require the Company to submit a minimum monthly number of transactions for processing. If the Company submits a number of transactions that is lower than the minimum, it is required to pay to the processor the fees the processor would have received if the Company had submitted the required minimum number of transactions. As of March 31, 2023, such minimum fee commitments were as follows: Years ending September 30: 2023 (six months remaining) $ 2,237 2024 1,238 2025 — 2026 — 2027 — Thereafter — Total $ 3,475 Third Party Sales Organization Buyout Agreement The Company has conditionally committed to a future buyout of a third party's business at the earlier of (a) the 60th day following the date upon which the founder of the third party sales organization dies or becomes disabled or (b) the 60th day following July 1, 2023. The buyout amount is dependent on certain financial metrics but is capped at $29,000, which would be net of repayment of secured loans. The buyout also contains certain provisions to provide additional consideration of up to $9,000, in the aggregate, to be paid based on the achievement of specified financial performance targets, following the buyout. As the eventual financial metrics are not known, the amount of the buyout transaction as well as the additional consideration are not able to be estimated at this time. Litigation With respect to all legal, regulatory and governmental proceedings, and in accordance with ASC 450-20, Contingencies—Loss Contingencies , the Company considers the likelihood of a negative outcome. If the Company determines the likelihood of a negative outcome with respect to any such matter is probable and the amount of the loss can be reasonably estimated, the Company records an accrual for the estimated amount of loss for the expected outcome of the matter. If the likelihood of a negative outcome with respect to material matters is reasonably possible and the Company is able to determine an estimate of the amount of possible loss or a range of loss, whether in excess of a related accrued liability or where there is no accrued liability, the Company discloses the estimate of the amount of possible loss or range of loss. However, the Company in some instances may be unable to estimate an amount of possible loss or range of loss based on the significant uncertainties involved in, or the preliminary nature of, the matter, and in these instances the Company will disclose the nature of the contingency and describe why the Company is unable to determine an estimate of possible loss or range of loss. The Company is involved in ordinary course legal proceedings, which include all claims, lawsuits, investigations and proceedings, including unasserted claims, which are probable of being asserted, arising in the ordinary course of business. The Company has considered all such ordinary course legal proceedings in formulating its disclosures and assessments. After taking into consideration the evaluation of such legal matters by the Company's legal counsel, the Company's management believes at this time such matters will not have a material impact on the Company's consolidated balance sheet, results of operations or cash flows. S&S Litigation On June 2, 2021, the State of Louisiana, Division of Administration (the “State”) and a putative class of Louisiana law enforcement districts (collectively "Plaintiffs") filed a Petition (as amended on October 4, 2021, the “Petition”), in the 19 th Judicial District Court for the Parish of East Baton Rouge against i3-Software & Services, LLC (“S&S”), a subsidiary of the Company located in Shreveport, Louisiana, the Company, i3 Verticals, LLC, the current leader of the S&S business, the former leader of the S&S business, and 1120 South Pointe Properties, LLC (“South Pointe”), the former owner of the assets of the S&S business (collectively "Defendants") . See State of Louisiana, by and through its Division of Administration, East Baton Rouge Parish Law Enforcement District, by and through the duly elected East Baton Rouge Parish Sheriff, Sid J. Gautreaux, III, et. al., individually and as class representatives vs. i3-Software & Services, LLC; 1120 South Pointe Properties, LLC, formerly known as Software and Services of Louisiana, L.L.C.; i3 Verticals, Inc.; i3 Verticals, LLC; Gregory R. Teeters; and Scott Carrington . The Petition was amended on October 4, 2021 to add a putative class of Louisiana sheriffs (the “Sheriffs”) and subsequently removed to the United States District Court for the Middle District of Louisiana. The Petition seeks monetary damages for the cost of network remediation of $15,000 purportedly spent by the State and $7,000 purportedly spent by the Sheriffs, return of purchase prices, potential additional expenses related to remediation and any obligation to notify parties of an alleged data breach as and if required by applicable law, and reasonable attorneys’ fees. The claimed damages relate to a third-party remote access software product used in connection with services provided by S&S to certain Louisiana Parish law enforcement districts and alleged inadequacies in the Company’s cybersecurity practices. Plaintiffs moved to remand the action to state court on November 5, 2021, and the motion was referred to a magistrate to make a report and recommendation to the district court judge. On July 5, 2022, the magistrate recommended that the matter be remanded to state court. On July 19, 2022, the Company and all other defendants filed objections to the recommendation. On August 3, 2022, the Plaintiffs filed a response to those objections. On August 16, 2022, the district court granted the Plaintiffs’ motion to remand, and all Defendants appealed. The case is fully briefed with the United States Fifth Circuit Court of Appeals, and oral argument took place on April 4, 2023. The assets of the S&S business were acquired from South Pointe by the Company in 2018 for $17,000, including upfront cash consideration and contingent consideration, and S&S provides software and payments services within the Company’s Public Sector vertical to local government agencies almost exclusively in Louisiana. The Company is unable to predict the outcome of this litigation. While we do not believe that this matter will have a material adverse effect on our business or financial condition, we cannot give assurance that this matter will not have a material effect on our results of operations for the period in which it is resolved. Other The Company's subsidiary CP-PS, LLC has certain indemnification obligations in favor of FDS Holdings, Inc. related to the acquisition of certain assets of Merchant Processing Solutions, LLC in February 2014. The Company has incurred expenses related to these indemnification obligations in prior periods and may have additional expenses in the future. However, after taking into consideration the evaluation of such matters by the Company’s legal counsel, the Company’s management believes at this time that the anticipated outcome of any existing or potential indemnification liabilities related to this matter will not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSIn connection with the Company’s IPO, the Company and i3 Verticals, LLC entered into a Tax Receivable Agreement with the Continuing Equity Owners that provides for the payment by the Company to the Continuing Equity Owners of 85% of the amount of certain tax benefits, if any, that it actually realizes, or in some circumstances, is deemed to realize in its tax reporting, as a result of (i) future redemptions funded by the Company or exchanges, or deemed exchanges in certain circumstances, of Common Units of i3 Verticals, LLC for Class A common stock of i3 Verticals, Inc. or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement. See Note 8 for further information. As of March 31, 2023, the total amount due under the Tax Receivable Agreement was $40,915. |
SEGMENTS
SEGMENTS | 6 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS The Company determines its operating segments based on ASC 280, Segment Reporting , in alignment with how the chief operating decision-making group monitors and manages the performance of the business as well as the level at which financial information is reviewed. The Company’s operating segments are strategic business units that offer different products and services. The Company's core business is delivering seamlessly integrated payment and software solutions customers in strategic vertical markets. This is accomplished through the Merchant Services and Software and Services segments. The Merchant Services segment provides comprehensive payment solutions to businesses and organizations. The Merchant Services segment includes third-party integrated payment solutions as well as traditional merchant processing services across the Company's strategic vertical markets. The Software and Services segment delivers vertical market software solutions to customers across all of the Company's strategic vertical markets. These solutions often include embedded payments or other recurring services. The Other category includes corporate overhead expenses when presenting reportable segment information. The Company primarily uses processing margin to measure operating performance. Processing margin is equal to revenue less other cost of services plus residuals expense, which are a component of other cost of services. The following is a summary of reportable segment operating performance for the three and six months ended March 31, 2023 and 2022. As of and for the Three Months Ended March 31, 2023 Merchant Services Software and Services Other Total Revenue $ 33,094 $ 60,797 $ (19) $ 93,872 Other costs of services (15,719) (4,229) 18 (19,930) Residuals 10,039 799 (9) 10,829 Processing margin $ 27,414 $ 57,367 $ (10) $ 84,771 Residuals (10,829) Selling, general and administrative (57,204) Depreciation and amortization (9,015) Change in fair value of contingent consideration (2,279) Income from operations $ 5,444 Total assets $ 205,898 $ 620,126 $ 57,002 $ 883,026 Goodwill $ 121,950 $ 287,092 $ — $ 409,042 As of and for the Six Months Ended March 31, 2023 Merchant Services Software and Services Other Total Revenue $ 65,928 $ 114,010 $ (37) $ 179,901 Other costs of services (31,286) (7,752) 39 (38,999) Residuals 19,848 1,322 (20) 21,150 Processing margin $ 54,490 $ 107,580 $ (18) $ 162,052 Residuals (21,150) Selling, general and administrative (108,207) Depreciation and amortization (17,691) Change in fair value of contingent consideration (3,722) Income from operations $ 11,282 Total assets $ 205,898 $ 620,126 $ 57,002 $ 883,026 Goodwill $ 121,950 $ 287,092 $ — $ 409,042 As of and for the Three Months Ended March 31, 2022 Merchant Services Software and Services Other Total Revenue $ 29,180 $ 48,962 $ (22) $ 78,120 Other costs of services (13,528) (3,124) 21 (16,631) Residuals 8,054 448 (13) 8,489 Processing Margin $ 23,706 $ 46,286 $ (14) $ 69,978 Residuals (8,489) Selling, general and administrative (48,716) Depreciation and amortization (7,447) Change in fair value of contingent consideration (11,503) Loss from operations $ (6,177) Total assets $ 205,922 $ 506,409 $ 60,325 $ 772,656 Goodwill $ 119,086 $ 230,368 $ — $ 349,454 As of and for the Six Months Ended March 31, 2022 Merchant Services Software and Services Other Total Revenue $ 58,357 $ 93,736 $ (34) $ 152,059 Other costs of services (26,970) (6,204) 33 (33,141) Residuals 16,235 791 (17) 17,009 Processing margin $ 47,622 $ 88,323 $ (18) $ 135,927 Residuals (17,009) Selling, general and administrative (95,103) Depreciation and amortization (14,317) Change in fair value of contingent consideration (16,430) Loss from operations $ (6,932) Total assets $ 205,922 $ 506,409 $ 60,325 $ 772,656 Goodwill $ 119,086 $ 230,368 $ — $ 349,454 The Company has not disclosed expenditures on long-lived assets as such expenditures are not reviewed by or provided to the chief operating decision maker. |
NON-CONTROLLING INTEREST
NON-CONTROLLING INTEREST | 6 Months Ended |
Mar. 31, 2023 | |
Noncontrolling Interest [Abstract] | |
NON-CONTROLLING INTEREST | NON-CONTROLLING INTEREST i3 Verticals, Inc. is the sole managing member of i3 Verticals, LLC, and as a result, consolidates the financial results of i3 Verticals, LLC and reports a non-controlling interest representing the Common Units of i3 Verticals, LLC held by the Continuing Equity Owners. Changes in i3 Verticals, Inc.’s ownership interest in i3 Verticals, LLC while i3 Verticals, Inc. retains its controlling interest in i3 Verticals, LLC will be accounted for as equity transactions. As such, future redemptions or direct exchanges of Common Units of i3 Verticals, LLC by the Continuing Equity Owners will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in capital when i3 Verticals, LLC has positive or negative net assets, respectively. As of March 31, 2023 and 2022, respectively, i3 Verticals, Inc. owned 23,167,730 and 22,133,682 of i3 Verticals, LLC's Common Units, representing a 69.6% and 68.5% economic ownership interest in i3 Verticals, LLC. The following table summarizes the impact on equity due to changes in the Company's ownership interest in i3 Verticals, LLC: Six Months Ended March 31, 2023 2022 Net income (loss) attributable to non-controlling interest $ 181 $ (4,218) Transfers to non-controlling interests: Redemption of common units in i3 Verticals, LLC (86) (458) Allocation of equity to non-controlling interests 299 3,517 Net transfers to non-controlling interests 213 3,059 Change from net income (loss) attributable to non-controlling interests and transfers to non-controlling interests $ 394 $ (1,159) |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHAREBasic earnings per share of Class A common stock is computed by dividing net income available to i3 Verticals, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to i3 Verticals, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the three and six months ended March 31, 2023 and 2022: Three Months Ended March 31, Six Months Ended March 31, 2023 2022 2023 2022 Basic net income (loss) per share: Numerator Net loss $ (192) $ (10,438) $ (23) $ (14,119) Less: Net (loss) income attributable to non-controlling interest (228) (3,065) 181 (4,218) Net income (loss) attributable to Class A common stockholders $ 36 $ (7,373) $ (204) $ (9,901) Denominator Weighted average shares of Class A common stock outstanding 23,135,898 22,076,297 23,066,499 22,059,365 Basic net income (loss) per share (1) $ 0.00 $ (0.33) $ (0.01) $ (0.45) Diluted net loss per share: Numerator Net income attributable to Class A common stockholders $ 36 Reallocation of net loss assuming conversion of common units (171) Net loss attributable to Class A common stockholders - diluted (135) Denominator Weighted average shares of Class A common stock outstanding 23,135,898 Weighted average effect of dilutive securities (2) 11,133,242 Weighted average shares of Class A common stock outstanding - diluted 34,269,140 Diluted net loss per share $ 0.00 __________________________ 1. For the six months ended March 31, 2023 and the three and six months ended March 31, 2022, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share. The following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net loss per share of Class A common stock: a. 10,114,598 weighted average shares of Class B common stock for the six months ended March 31, 2023, and 10,210,142 and 10,216,615 for the three and six months ended March 31, 2022, respectively, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive. b. 5,165,478 stock options for the six months ended March 31, 2023 and 4,667,581 and 5,388,813 for the three and six months ended March 31, 2022, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and c. 633,453 shares for the six months ended March 31, 2023, and 522,355 and 613,913 for the three and six months ended March 31, 2022, respectively, resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because of the effect of including them would have been anti-dilutive. 2. For the three months ended March 31, 2023, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net loss per share of Class A common stock: a. 4,018,042 stock options for the three months ended March 31, 2023, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive. On September 22, 2022, the Company provided the trustee notice of the Company’s irrevocable election to settle the principal portion of its Exchangeable Notes only in cash and the conversion spread in cash or shares. Accordingly, upon conversion, the Company will pay the principal in cash, and it will pay or deliver, as the case may be, the conversion premium in cash, shares of Class A Common Stock or a combination of cash and shares of Class A Common Stock, at its election. The Company applies the if-converted method and only includes the number of incremental shares that would be issued upon conversion for calculating any potential dilutive effect of the conversion spread on diluted net income per share. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company's Class A common stock for a given period exceeds the exchange price of $40.87 per share for the Exchangeable Notes. The Warrants sold in connection with the issuance of the Exchangeable Notes are considered to be dilutive when the average price of the Company's Class A common stock during the period exceeds the Warrants' stock price of $62.88 per share. The effect of the additional shares that may be issued upon exercise of the Warrants will be included in the weighted average shares of Class A common stock outstanding—diluted using the treasury stock method. The Note Hedge Transactions purchased in connection with the issuance of the Exchangeable Notes are considered to be anti-dilutive and therefore do not impact our calculation of diluted net income per share. Refer to Note 7 for further discussion regarding the Exchangeable Notes. |
SIGNIFICANT NON-CASH TRANSACTIO
SIGNIFICANT NON-CASH TRANSACTIONS | 6 Months Ended |
Mar. 31, 2023 | |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |
SIGNIFICANT NON-CASH TRANSACTIONS | SIGNIFICANT NON-CASH TRANSACTIONS The Company engaged in the following significant non-cash investing and financing activities during the six months ended March 31, 2023 and 2022: Six months ended March 31, 2023 2022 Acquisition date fair value of contingent consideration in connection with business combinations $ 760 $ 5,481 Debt issuance costs financed with proceeds from the Senior Secured Credit Facility $ 178 $ — Right-of-use assets obtained in exchange for operating lease obligations $ 1,098 $ 7,584 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS 2023 Senior Secured Revolving Credit Facility On May 8, 2023, i3 Verticals, LLC (the “Borrower”), entered into that certain Credit Agreement (the “2023 Credit Agreement”) with the guarantors and lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan”). The 2023 Credit Agreement replaces the Senior Secured Credit Facility. The 2023 Credit Agreement provides for aggregate commitments of $450 million in the form of a senior secured revolving credit facility (the “Revolver”). The 2023 Credit Agreement provides that the Borrower has the right to seek additional commitments to provide additional term loan facilities or additional revolving credit commitments in an aggregate principal amount up to, as of any date of determination, the sum of (i) the greater of $100 million and 100% of the Borrower’s consolidated EBITDA (as defined in the 2023 Credit Agreement) for the most recently completed four quarter period, plus (ii) the amount of certain prepayments of certain indebtedness, so long as, among other things, after giving pro forma effect to the incurrence of such additional borrowings and any related transactions, the Borrower’s consolidated interest coverage ratio (as defined in the 2023 Credit Agreement) would not be less than 3.0 to 1.0 and the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Credit Agreement) would not exceed 5.0 to 1.0. The provision of any such additional amounts under the additional term loan facilities or additional revolving credit commitments are subject to certain additional conditions and the receipt of certain additional commitments by existing or additional lenders. The lenders under the 2023 Credit Agreement are not under any obligation to provide any such additional term loan facilities or revolving credit commitments. The proceeds of the Revolver, together with proceeds from any additional amounts under the additional term loan facilities or additional revolving credit commitments, may only be used by the Borrower to (i) finance working capital, capital expenditures and other lawful corporate purposes, (ii) finance permitted acquisitions (as defined in the 2023 Credit Agreement) and (iii) to refinance certain existing indebtedness. Borrowings under the Revolver will be made, at the Borrower’s option, at the base rate or the Adjusted Term SOFR rate, plus, in each case, an applicable margin. The base rate is a fluctuating rate of interest per annum equal to the highest of (a) the greater of the federal funds rate or the overnight bank funding rate, plus ½ of 1%, (b) Wall Street Journal prime rate and (c) the Adjusted Term SOFR rate for an interest period of one month, plus 1%; provided, that the base rate shall not be less than 1% in any event. The Adjusted Term SOFR rate will be the rate of interest per annum equal to the Term SOFR rate (based upon an interest period of one, three or six months), plus 0.10%; provided, that the Adjusted Term SOFR rate shall not be less than 0% in any event. The applicable margin is based upon the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Credit Agreement), as reflected in the schedule below: Consolidated Total Net Leverage Ratio Commitment Fee Letter of Credit Fee Term Benchmark Loans Base Rate Loans > 3.0 to 1.0 0.30 % 3.00 % 3.00 % 2.00 % > 2.5 to 1.0 but < 3.00 to 1.0 0.25 % 2.50 % 2.50 % 1.50 % > 2.0 to 1.0 but < 2.50 to 1.0 0.20 % 2.25 % 2.25 % 1.25 % < 2.0 to 1.0 0.15 % 2.00 % 2.00 % 1.00 % In addition to paying interest on outstanding principal under the Revolver, the Borrower will be required to pay a commitment fee equal to the product of between 0.15% and 0.30% (the applicable percentage depending on the Borrower’s consolidated total net leverage ratio as reflected in the schedule above) times the actual daily amount by which $450 million exceeds the total amount outstanding under the Revolver and available to be drawn under all outstanding letters of credit. The Borrower will be permitted to voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans under the 2023 Credit Agreement, whether such amounts are issued under the Revolver or under the additional term loan facilities or additional revolving credit facilities, at any time without premium or penalty. In addition, if the total amount borrowed under the Revolver exceeds $450 million at any time, the 2023 Credit Agreement requires the Borrower to prepay such excess outstanding amounts. All obligations under the 2023 Credit Agreement are unconditionally guaranteed by the Company, and each of the Company’s existing and future direct and indirect material, wholly owned domestic subsidiaries, subject to certain exceptions. The obligations are secured by first-priority security interests in substantially all tangible and intangible assets of the Borrower, the Company and each subsidiary guarantor, in each case whether owned on the date of the initial borrowings or thereafter acquired. The 2023 Credit Agreement places certain restrictions on the ability of the Borrower, the Company and their subsidiaries to, among other things, incur debt and liens; merge, consolidate or liquidate; dispose of assets; enter into hedging arrangements; make certain restricted payments; undertake transactions with affiliates; enter into sale-leaseback transactions; make certain investments; prepay or modify the terms of certain indebtedness; and modify the terms of certain organizational agreements. The 2023 Credit Agreement contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, certain events of bankruptcy and insolvency, material judgments, certain ERISA events, invalidity of loan documents and certain changes in control. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the reporting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for fair presentation of the unaudited condensed consolidated financial statements of the Company and its subsidiaries as of March 31, 2023 and for the three and six months ended March 31, 2023 and 2022. The results of operations for the three and six months ended March 31, 2023 and 2022 are not necessarily indicative of the operating results for the full year. As permitted by the rules and regulations of the SEC, certain information and disclosures otherwise included in the notes to the consolidated financial statements have been condensed or omitted from the summary of significant accounting policies. The Company believes the disclosures are adequate to make the information presented not misleading. It is recommended that these interim condensed consolidated financial statements be read in conjunction with the Company's consolidated financial statements and related footnotes for the years ended September 30, 2022 and 2021, included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022 filed with the SEC on November 18, 2022. |
Principles of Consolidation | Principles of Consolidation These interim condensed consolidated financial statements include the accounts of the Company and its subsidiary companies. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Restricted Cash | Restricted Cash Restricted cash represents funds held in escrow related to acquisitions or held-on-deposit with processing banks pursuant to agreements to cover potential merchant losses. It is presented as long-term assets on the accompanying condensed consolidated balance sheets since the related agreements extend beyond the next twelve months. Following the adoption of Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows: Restricted Cash |
Settlement Assets and Obligations | Settlement Assets and ObligationsSettlement assets and obligations result when funds are temporarily held or owed by the Company on behalf of merchants, consumers, schools, and other institutions. Timing differences, interchange expenses, merchant reserves and exceptional items cause differences between the amount received from the card networks and the amount funded to counterparties. These balances arising in the settlement process are reflected as settlement assets and obligations on the accompanying consolidated balance sheets. With the exception of merchant reserves, settlement assets or settlement obligations are generally collected and paid within one |
Inventories | Inventories Inventories consist of point-of-sale equipment to be sold to customers and are stated at the lower of cost, determined on a weighted average or specific basis, or net realizable value. |
Acquisitions | Acquisitions Business acquisitions have been recorded using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), and, accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair value as of the date of acquisition. Where relevant, the fair value of contingent consideration included in an acquisition is calculated using a Monte Carlo simulation. The fair value of merchant relationships and non-compete assets acquired is identified using the Income Approach. The fair values of trade names and internally-developed software acquired are identified using the Relief from Royalty Method. After the purchase price has been allocated, goodwill is recorded to the extent the total consideration paid for the acquisition, including the acquisition date fair value of contingent consideration, if any, exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. Acquisition costs for business combinations are expensed when incurred and recorded in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. Acquisitions not meeting the accounting criteria to be accounted for as a business combination are accounted for as an asset acquisition. An asset acquisition is recorded at its purchase price, inclusive of acquisition costs, which is allocated among the acquired assets and assumed liabilities based upon their relative fair values at the date of acquisition. |
Leases | Leases The Company adopted ASU 2016-02, Leases, on October 1, 2020, using the optional modified retrospective method under which the prior period financial statements were not restated for the new guidance. The Company elected the accounting policy practical expedients for all classes of underlying assets to (i) combine associated lease and non-lease components in a lease arrangement as a combined lease component and (ii) exclude recording short-term leases as right-of-use assets on the condensed consolidated balance sheets. At contract inception the Company determines whether an arrangement is, or contains a lease, and for each identified lease, evaluates the classification as operating or financing. Leased assets and obligations are recognized at the lease commencement date based on the present value of fixed lease payments to be made over the term of the lease. Renewal and termination options are factored into determination of the lease term only if the option is reasonably certain to be exercised. The Company’s leases do not provide a readily determinable implicit interest rate and the Company uses its incremental borrowing rate to measure the lease liability and corresponding right-of-use asset. The incremental borrowing rate is a fully collateralized rate that considers the Company’s credit rating, market conditions and the term of the lease. The Company accounts for all components in a lease arrangement as a single combined lease component. Operating lease cost is recognized on a straight-line basis over the lease term. Total lease costs include variable lease costs, which are primarily comprised of the consumer price index adjustments and other changes based on rates, such as costs of insurance and property taxes. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and obligations. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue Revenue is recognized as each performance obligation is satisfied, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience. The Company utilized the portfolio approach practical expedient within ASC 606-10-10-4 Revenue from Contracts with Customers—Objectives and the significant financing component practical expedient within ASC 606-10-32-18 Revenue from Contracts with Customers—The Existence of a Significant Financing Component in the Contract in performing the analysis. The Company adopted ASC 606 on October 1, 2019, using the modified retrospective method and applying the standard to all contracts not completed on the date of adoption. The Company's revenue for the six months ended March 31, 2023 and 2022 is derived from the following sources: • Software and related services — Includes sales of software as a service, transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to our software offerings • Payments — Includes volume-based payment processing fees (“discount fees”), gateway fees and other related fixed transaction or service fees • Other — Includes sales of equipment, non-software related professional services and other revenues Revenues from sales of the Company’s software are recognized when the related performance obligations are satisfied. Sales of software licenses are categorized into one of two categories of intellectual property in accordance with ASC 606, functional or symbolic. The key distinction is whether the license represents a right to use (functional) or a right to access (symbolic) intellectual property. The Company generates sales of one-time software licenses, which is functional intellectual property. Revenue from functional intellectual property is recognized at a point in time, when delivered to the customer. The Company also offers access to its software under software-as-a-service (“SaaS”) arrangements, which represent services arrangements. Revenue from SaaS arrangements is recognized over time, over the term of the agreement. Discount fees represent a percentage of the dollar amount of each credit or debit transaction processed or a specified per transaction amount, depending on the card type. The Company frequently enters into agreements with customers under which the customer engages the Company to provide both payment authorization services and transaction settlement services for all of the cardholder transactions of the customer, regardless of which issuing bank and card network to which the transaction relates. The Company’s core performance obligations are to stand ready to provide continuous access to the Company’s payment authorization services and transaction settlement services in order to be able to process as many transactions as its customers require on a daily basis over the contract term. These services are stand ready obligations, as the timing and quantity of transactions to be processed is not determinable. Under a stand-ready obligation, the Company’s performance obligation is defined by each time increment rather than by the underlying activities satisfied over time based on days elapsed. Because the service of standing ready is substantially the same each day and has the same pattern of transfer to the customer, the Company has determined that its stand-ready performance obligation comprises a series of distinct days of service. Discount fees are recognized each day based on the volume or transaction count at the time the merchants’ transactions are processed. The Company follows the requirements of ASC 606-10-55 Revenue from Contracts with Customers—Principal versus Agent Considerations , which states that the determination of whether a company should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement. The determination of gross versus net recognition of revenue requires judgment that depends on whether the Company controls the good or service before it is transferred to the merchant or whether the Company is acting as an agent of a third party. The assessment is provided separately for each performance obligation identified. Under its agreements, the Company incurs interchange and network pass-through charges from the third-party card issuers and card networks, respectively, related to the provision of payment authorization services. The Company has determined that it is acting as an agent with respect to these payment authorization services, based on the following factors: (1) the Company has no discretion over which card issuing bank will be used to process a transaction and is unable to direct the activity of the merchant to another card issuing bank, and (2) interchange and card network rates are pre-established by the card issuers or card networks, and the Company has no latitude in determining these fees. Therefore, revenue allocated to the payment authorization performance obligation is presented net of interchange and card network fees paid to the card issuing banks and card networks, respectively. With regards to the Company's discount fees, generally, where the Company has control over merchant pricing, merchant portability, credit risk and ultimate responsibility for the merchant relationship, revenues are reported at the time of sale equal to the full amount of the discount charged to the merchant, less interchange and network fees. Revenues generated from merchant portfolios where the Company does not have control over merchant pricing, liability for merchant losses or credit risk or rights of portability are reported net of interchange and network fees as well as third-party processing costs directly attributable to processing and bank sponsorship costs. Revenues are also derived from a variety of transaction fees, which are charged for accessing our payment and software solutions, and fees for other miscellaneous services. Revenues derived from such fees are recognized in the period the transactions occur and when there are no further performance obligations. Revenue from the sale of equipment, is recognized upon transfer of ownership to the customer, after which there are no further performance obligations. Arrangements may contain multiple performance obligations, such as payment authorization services, transaction settlement services, hardware, software products, maintenance, and professional installation and training services. Revenues are allocated to each performance obligation based on the standalone selling price of each good or service. The selling price for a deliverable is based on standalone selling price, if available, the adjusted market assessment approach, estimated cost plus margin approach, or residual approach. The Company establishes estimated selling price, based on the judgment of the Company's management, considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle. In arrangements with multiple performance obligations, the Company determines allocation of the transaction price at inception of the arrangement and uses the standalone selling prices for the majority of the Company's revenue recognition. Revenues from sales of the Company ’ s combined hardware and software element are recognized when each performance obligation has been satisfied which has been determined to be upon the delivery of the product. Revenues derived from service fees are recognized at the time the services are performed and there are no further performance obligations. The Company’s professional services, including training, installation, and repair services are recognized as revenue as these services are performed. The tables below present a disaggregation of the Company's revenue from contracts with customers by product by segment. Refer to Note 14 for discussion of the Company's segments. The Company's products are defined as follows: • Software and related services — Includes sales of SaaS, transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to our software offerings. • Payments — Includes discount fees, gateway fees and other related fixed transaction or service fees. • Other — Includes sales of equipment, non-software related professional services and other revenues. For the Three Months Ended March 31, 2023 Merchant Services Software and Services Other Total Software and related services revenue $ 3,217 $ 44,099 $ (9) $ 47,307 Payments revenue 27,634 14,285 (10) 41,909 Other revenue 2,243 2,413 — 4,656 Total revenue $ 33,094 $ 60,797 $ (19) $ 93,872 For the Three Months Ended March 31, 2022 Merchant Services Software and Services Other Total Software and related services revenue $ 3,008 $ 35,972 $ (8) $ 38,972 Payments revenue 23,926 10,616 (14) 34,528 Other revenue 2,246 2,374 — 4,620 Total revenue $ 29,180 $ 48,962 $ (22) $ 78,120 For the Six Months Ended March 31, 2023 Merchant Services Software and Services Other Total Software and related services revenue $ 6,196 $ 82,244 $ (19) $ 88,421 Payments revenue 55,243 27,038 (18) 82,263 Other revenue 4,489 4,728 — 9,217 Total revenue $ 65,928 $ 114,010 $ (37) $ 179,901 For the Six Months Ended March 31, 2022 Merchant Services Software and Services Other Total Software and related services revenue $ 5,970 $ 69,356 $ (16) $ 75,310 Payments revenue 48,230 19,782 (18) 67,994 Other revenue 4,157 4,598 — 8,755 Total revenue $ 58,357 $ 93,736 $ (34) $ 152,059 The tables below present a disaggregation of the Company's revenue from contracts with customers by timing of transfer of goods or services by segment. For the three and six months ended March 31, 2022, $9,333 and $19,546, respectively, was included in revenue earned at a point in time related to professional services or other stand ready contract revenue for fixed service fee arrangements. These types of revenue are included in revenue earned over time for the three and six months ended March 31, 2023. The Company's revenue included in each category are defined as follows: • Revenue earned over time — Includes discount fees, gateway fees, sales of SaaS, ongoing support or other stand-ready obligations and professional services. • Revenue earned at a point in time — Includes point in time service fees that are not stand-ready obligations, software licenses sold as functional intellectual property and other equipment. For the Three Months Ended March 31, 2023 Merchant Services Software and Services Other Total Revenue earned over time $ 27,984 $ 54,568 $ (9) $ 82,543 Revenue earned at a point in time 5,110 6,229 (10) 11,329 Total revenue $ 33,094 $ 60,797 $ (19) $ 93,872 For the Three Months Ended March 31, 2022 Merchant Services Software and Services Other Total Revenue earned over time $ 22,599 $ 34,151 $ (9) $ 56,741 Revenue earned at a point in time 6,581 14,811 (13) 21,379 Total revenue $ 29,180 $ 48,962 $ (22) $ 78,120 For the Six Months Ended March 31, 2023 Merchant Services Software and Services Other Total Revenue earned over time $ 55,581 $ 105,009 $ (19) $ 160,571 Revenue earned at a point in time 10,347 9,001 (18) 19,330 Total revenue $ 65,928 $ 114,010 $ (37) $ 179,901 For the Six Months Ended March 31, 2022 Merchant Services Software and Services Other Total Revenue earned over time $ 45,333 $ 65,439 $ (17) $ 110,755 Revenue earned at a point in time 13,024 28,297 (17) 41,304 Total revenue $ 58,357 $ 93,736 $ (34) $ 152,059 Contract Assets The Company bills for certain software and related services sales and fixed fee professional services upon pre-determined milestones in the contracts. Therefore, the Company may have contract assets other than trade accounts receivable for performance obligations that are partially completed, which would typically represent consulting services provided before a milestone is completed in a contract. Unbilled amounts associated with these services are presented as accounts receivable as the Company has an unconditional right to payment for services performed. As of March 31, 2023 and September 30, 2022, the Company’s contract assets from contracts with customers was $12,116 and $9,716, respectively. Contract Liabilities Deferred revenue represents amounts billed to customers by the Company for services contracts. Payment is typically collected at the start of the contract term. The initial prepaid contract agreement balance is deferred. The balance is then recognized as the services are provided over the contract term. Deferred revenue that is expected to be recognized as revenue within one year is recorded as short-term deferred revenue and the remaining portion is recorded as other long-term liabilities in the condensed consolidated balance sheets. The terms for most of the Company's contracts with a deferred revenue component are one year. Substantially all of the Company's deferred revenue is anticipated to be recognized within the next year. The following tables present the changes in deferred revenue as of and for the six months ended March 31, 2023 and 2022, respectively: Balance at September 30, 2022 $ 32,089 Deferral of revenue 19,334 Recognition of unearned revenue (13,925) Balance at December 31, 2022 37,498 Deferral of revenue 10,475 Recognition of unearned revenue (14,286) Balance at March 31, 2023 $ 33,687 Balance at September 30, 2021 $ 30,024 Deferral of revenue 21,032 Recognition of unearned revenue (15,735) Balance at December 31, 2021 35,321 Deferral of revenue 11,047 Recognition of unearned revenue (16,034) Balance at March 31, 2022 $ 30,334 Costs to Obtain and Fulfill a Contract The Company capitalizes incremental costs to obtain new contracts and contract renewals and amortizes these costs on a straight-line basis as an expense over the benefit period, which is generally the contract term, unless a commensurate payment is not expected at renewal. As of March 31, 2023 and September 30, 2022 the Company had $4,518 and $4,185, respectively, of capitalized contract costs, which relates to commissions paid to employees and agents as well as other incentives given to customers to obtain new sales, included within “Other assets" on the condensed consolidated balance sheets. The Company recorded expense related to these costs of $193 and $376 for the three and six months ended March 31, 2023, respectively and $178 and $345 for the three and six months ended March 31, 2022, respectively. The Company expenses sales commissions as incurred for the Company's sales commission plans that are paid on recurring monthly revenues, portfolios of existing customers, or have a substantive stay requirement prior to payment. Other Cost of Services Other costs of services include third-party processing costs directly attributable to processing and bank sponsorship costs, which may not be based on a percentage of volume. These costs also include related costs such as residual payments to sales groups, which are based on a percentage of the net revenues generated from merchant referrals. In certain merchant processing bank relationships the Company is liable for chargebacks against a merchant equal to the volume of the transaction. Losses resulting from chargebacks against a merchant are included in other cost of services on the accompanying condensed consolidated statement of operations. The Company evaluates its risk for such transactions and estimates its potential loss from chargebacks based primarily on historical experience and other relevant factors. The reserve for merchant losses is included within accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheets. The cost of equipment sold is also included in other cost of services. Other costs of services are recognized at the time the associated revenue is earned. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, the value of purchase consideration paid and identifiable assets acquired and assumed in acquisitions, goodwill and intangible asset impairment review, determination of performance obligations for revenue recognition, loss reserves, assumptions used in the calculation of equity-based compensation and in the calculation of income taxes, and certain tax assets and liabilities as well as the related valuation allowances. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. The amendments in ASU 2020-06 are effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted this ASU on October 1, 2022. The adoption of ASU 2020-06 resulted in an increase in long-term debt, less current portion and debt issuance costs, net of $11,933, a decrease in additional paid-in-capital of $23,382 and a decrease in accumulated deficit of $11,449. The adoption of ASU 2020-06 had no impact on net income. |
Fair Value Measurement | The Company applies the provisions of ASC 820, Fair Value Measurement , which defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or the price paid to transfer a liability as of the measurement date. A three-tier, fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The three levels are: Level 1 — Quoted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenue | The tables below present a disaggregation of the Company's revenue from contracts with customers by product by segment. Refer to Note 14 for discussion of the Company's segments. The Company's products are defined as follows: • Software and related services — Includes sales of SaaS, transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to our software offerings. • Payments — Includes discount fees, gateway fees and other related fixed transaction or service fees. • Other — Includes sales of equipment, non-software related professional services and other revenues. For the Three Months Ended March 31, 2023 Merchant Services Software and Services Other Total Software and related services revenue $ 3,217 $ 44,099 $ (9) $ 47,307 Payments revenue 27,634 14,285 (10) 41,909 Other revenue 2,243 2,413 — 4,656 Total revenue $ 33,094 $ 60,797 $ (19) $ 93,872 For the Three Months Ended March 31, 2022 Merchant Services Software and Services Other Total Software and related services revenue $ 3,008 $ 35,972 $ (8) $ 38,972 Payments revenue 23,926 10,616 (14) 34,528 Other revenue 2,246 2,374 — 4,620 Total revenue $ 29,180 $ 48,962 $ (22) $ 78,120 For the Six Months Ended March 31, 2023 Merchant Services Software and Services Other Total Software and related services revenue $ 6,196 $ 82,244 $ (19) $ 88,421 Payments revenue 55,243 27,038 (18) 82,263 Other revenue 4,489 4,728 — 9,217 Total revenue $ 65,928 $ 114,010 $ (37) $ 179,901 For the Six Months Ended March 31, 2022 Merchant Services Software and Services Other Total Software and related services revenue $ 5,970 $ 69,356 $ (16) $ 75,310 Payments revenue 48,230 19,782 (18) 67,994 Other revenue 4,157 4,598 — 8,755 Total revenue $ 58,357 $ 93,736 $ (34) $ 152,059 The tables below present a disaggregation of the Company's revenue from contracts with customers by timing of transfer of goods or services by segment. For the three and six months ended March 31, 2022, $9,333 and $19,546, respectively, was included in revenue earned at a point in time related to professional services or other stand ready contract revenue for fixed service fee arrangements. These types of revenue are included in revenue earned over time for the three and six months ended March 31, 2023. The Company's revenue included in each category are defined as follows: • Revenue earned over time — Includes discount fees, gateway fees, sales of SaaS, ongoing support or other stand-ready obligations and professional services. • Revenue earned at a point in time — Includes point in time service fees that are not stand-ready obligations, software licenses sold as functional intellectual property and other equipment. For the Three Months Ended March 31, 2023 Merchant Services Software and Services Other Total Revenue earned over time $ 27,984 $ 54,568 $ (9) $ 82,543 Revenue earned at a point in time 5,110 6,229 (10) 11,329 Total revenue $ 33,094 $ 60,797 $ (19) $ 93,872 For the Three Months Ended March 31, 2022 Merchant Services Software and Services Other Total Revenue earned over time $ 22,599 $ 34,151 $ (9) $ 56,741 Revenue earned at a point in time 6,581 14,811 (13) 21,379 Total revenue $ 29,180 $ 48,962 $ (22) $ 78,120 For the Six Months Ended March 31, 2023 Merchant Services Software and Services Other Total Revenue earned over time $ 55,581 $ 105,009 $ (19) $ 160,571 Revenue earned at a point in time 10,347 9,001 (18) 19,330 Total revenue $ 65,928 $ 114,010 $ (37) $ 179,901 For the Six Months Ended March 31, 2022 Merchant Services Software and Services Other Total Revenue earned over time $ 45,333 $ 65,439 $ (17) $ 110,755 Revenue earned at a point in time 13,024 28,297 (17) 41,304 Total revenue $ 58,357 $ 93,736 $ (34) $ 152,059 |
Schedule of Contract with Customer, Asset and Liability | The following tables present the changes in deferred revenue as of and for the six months ended March 31, 2023 and 2022, respectively: Balance at September 30, 2022 $ 32,089 Deferral of revenue 19,334 Recognition of unearned revenue (13,925) Balance at December 31, 2022 37,498 Deferral of revenue 10,475 Recognition of unearned revenue (14,286) Balance at March 31, 2023 $ 33,687 Balance at September 30, 2021 $ 30,024 Deferral of revenue 21,032 Recognition of unearned revenue (15,735) Balance at December 31, 2021 35,321 Deferral of revenue 11,047 Recognition of unearned revenue (16,034) Balance at March 31, 2022 $ 30,334 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Purchase Consideration of the Acquired Assets and Assumed Liabilities | The fair values assigned to certain assets and liabilities assumed, as of the acquisition date, were as follows: Accounts receivable $ 7,604 Prepaid expenses and other current assets 110 Property and equipment 5,437 Capitalized software 12,600 Customer relationships 33,800 Non-compete agreements 200 Trade name 600 Goodwill 42,595 Total assets acquired 102,946 Accounts payable 9 Accrued expenses and other current liabilities 3,182 Deferred revenue, current 2,742 Other long-term liabilities 12,013 Net assets acquired $ 85,000 The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2022 were as follows: Accounts receivable $ 651 Settlement assets 685 Prepaid expenses and other current assets 83 Property and equipment 190 Capitalized software 9,790 Acquired merchant relationships 41,090 Trade name 1,550 Goodwill 61,347 Operating lease right-of-use assets 263 Other assets 22 Total assets acquired 115,671 Accrued expenses and other current liabilities 287 Settlement obligations 685 Deferred revenue, current 30 Current portion of operating lease liabilities 82 Operating lease liabilities, less current portion 181 Other long-term liabilities 6,725 Net assets acquired $ 107,681 |
Schedule of Pro Forma Information | This supplemental pro forma information does not purport to be indicative of the results of operations that would have been attained had the acquisitions been made on these dates, or of results of operations that may occur in the future. Six months ended March 31, 2023 2022 Revenue $ 181,275 $ 163,987 Net loss $ (67) $ (12,630) |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | A summary of the Company's prepaid expenses and other current assets as of March 31, 2023 and September 30, 2022 is as follows: March 31, September 30, 2023 2022 Inventory $ 4,732 $ 4,121 Prepaid licenses 6,282 5,743 Prepaid insurance 980 736 Notes receivable — current portion 5,117 4,930 Other current assets 4,625 3,915 Prepaid expenses and other current assets $ 21,736 $ 19,445 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill are as follows: Merchant Services Software and Services Other Total Balance at September 30, 2022 $ 119,086 $ 234,553 $ — $ 353,639 Goodwill attributable to preliminary purchase price adjustments and acquisitions during the six months ended March 31, 2023 2,864 52,539 — 55,403 Balance at March 31, 2023 $ 121,950 $ 287,092 $ — $ 409,042 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following as of March 31, 2023: Cost Accumulated Amortization Carrying Value Amortization Life and Method Finite-lived intangible assets: Merchant relationships $ 310,501 $ (89,422) $ 221,079 9 to 25 years – accelerated or straight-line Non-compete agreements 1,390 (928) 462 3 to 6 years – straight-line Website and brand development costs 267 (194) 73 3 to 4 years – straight-line Trade names 8,471 (4,935) 3,536 3 to 7 years – straight-line Residual buyouts 6,557 (2,538) 4,019 8 years – straight-line Referral and exclusivity agreements 1,220 (821) 399 5 years – straight-line Total finite-lived intangible assets 328,406 (98,838) 229,568 Indefinite-lived intangible assets: Trademarks 44 — 44 Total identifiable intangible assets $ 328,450 $ (98,838) $ 229,612 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consisted of the following as of March 31, 2023: Cost Accumulated Amortization Carrying Value Amortization Life and Method Finite-lived intangible assets: Merchant relationships $ 310,501 $ (89,422) $ 221,079 9 to 25 years – accelerated or straight-line Non-compete agreements 1,390 (928) 462 3 to 6 years – straight-line Website and brand development costs 267 (194) 73 3 to 4 years – straight-line Trade names 8,471 (4,935) 3,536 3 to 7 years – straight-line Residual buyouts 6,557 (2,538) 4,019 8 years – straight-line Referral and exclusivity agreements 1,220 (821) 399 5 years – straight-line Total finite-lived intangible assets 328,406 (98,838) 229,568 Indefinite-lived intangible assets: Trademarks 44 — 44 Total identifiable intangible assets $ 328,450 $ (98,838) $ 229,612 |
Schedule of Future Amortization Expense of Finite-lived Intangible Assets | Based on net carrying amounts at March 31, 2023, the Company's estimate of future amortization expense for intangible assets are presented in the table below for fiscal years ending September 30: 2023 (six months remaining) $ 10,160 2024 19,548 2025 19,257 2026 18,785 2027 18,165 Thereafter 143,653 $ 229,568 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | A summary of the Company's accrued expenses and other current liabilities as of March 31, 2023 and September 30, 2022 is as follows is as follows: March 31, September 30, 2023 2022 Accrued wages, bonuses, commissions and vacation $ 7,182 $ 8,117 Accrued interest 1,336 642 Accrued contingent consideration — current portion 20,756 21,385 Escrow liabilities 10,721 12,285 Tax receivable agreement liability — current portion 21 20 Customer deposits 1,272 1,575 Employee health self-insurance liability 1,068 732 Accrued interchange 2,184 2,096 Other current liabilities 10,867 10,981 Accrued expenses and other current liabilities $ 55,407 $ 57,833 |
Schedule of Long-term Liabilities | A summary of the Company's long-term liabilities as of March 31, 2023 and September 30, 2022 is as follows: March 31, September 30, 2023 2022 Accrued contingent consideration — long-term portion $ 1,503 $ 1,448 Deferred tax liability — long-term 22,687 7,896 Other long-term liabilities 227 196 Total other long-term liabilities $ 24,417 $ 9,540 |
LONG-TERM DEBT, NET (Tables)
LONG-TERM DEBT, NET (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | A summary of long-term debt, net as of March 31, 2023 and September 30, 2022 is as follows: March 31, September 30, Maturity 2023 2022 Revolving lines of credit to banks under the Senior Secured Credit Facility May 9, 2024 $ 271,067 $ 185,017 1% Exchangeable Senior Notes due 2025 February 15, 2025 117,000 104,557 Debt issuance costs, net (2,600) (2,554) Total long-term debt, net of issuance costs $ 385,467 $ 287,020 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Maturities of Lease Liabilities | As of March 31, 2023, maturities of lease liabilities are as follows: Years ending September 30: 2023 (six months remaining) $ 2,662 2024 4,743 2025 4,125 2026 3,202 2027 1,597 Thereafter 2,017 Total future minimum lease payments (undiscounted) (1) 18,346 Less: present value discount (1,959) Present value of lease liability $ 16,387 __________________________ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Changes in Level 3 Financial Instruments Measured on a Recurring Basis | The following tables present the changes in the Company's Level 3 financial instruments that are measured at fair value on a recurring basis. Accrued Contingent Consideration Balance at September 30, 2022 $ 22,833 Contingent consideration accrued at time of business combination 760 Change in fair value of contingent consideration included in Operating expenses 3,722 Contingent consideration paid (5,056) Balance at March 31, 2023 $ 22,259 Accrued Contingent Consideration Balance at September 30, 2021 $ 36,229 Contingent consideration accrued at time of business combination 5,481 Change in fair value of contingent consideration included in Operating expenses 16,430 Contingent consideration paid (10,200) Balance at March 31, 2022 $ 47,940 |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Equity-Based Compensation Expense | A summary of equity-based compensation expense recognized during the three and six months ended March 31, 2023 and 2022 is as follows: Three Months Ended March 31, Six Months Ended March 31, 2023 2022 2023 2022 Stock options $ 5,992 $ 6,042 $ 12,280 $ 12,666 Restricted stock units 810 215 1,368 215 Equity-based compensation expense $ 6,802 $ 6,257 $ 13,648 $ 12,881 |
Schedule of Fair Value of Stock Option Awards | The fair value of the stock option awards during the six months ended March 31, 2023 and during the year ended September 30, 2022 was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions: March 31, 2023 September 30, 2022 Expected volatility (1) 55.0 % 55.7 % Expected dividend yield (2) — % — % Expected term (3) 6 years 6 years Risk-free interest rate (4) 3.9 % 1.6 % _________________ 1. Expected volatility is based on the Company's own share price. 2. The Company has assumed a dividend yield of zero as management has no plans to declare dividends in the foreseeable future. 3. Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method as details of employee exercise behavior are limited due to limited historical data. 4. The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term. |
Schedule of Stock Option Activity | A summary of stock option activity for the six months ended March 31, 2023 is as follows: Stock Options Weighted Average Exercise Price Outstanding at September 30, 2022 8,222,322 $ 25.07 Granted 1,154,550 24.37 Exercised (202,737) 19.43 Forfeited (246,474) 26.85 Outstanding at March 31, 2023 8,927,661 $ 25.06 Exercisable at March 31, 2023 5,543,356 $ 24.26 |
Schedule of Share-based Payment Arrangement, Restricted Stock Unit, Activity | A summary of activity related to restricted stock units for the six months ended March 31, 2023 is as follows: Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at September 30, 2022 486,652 $ 24.93 Granted 524,132 25.32 Vested (58,234) 26.52 Forfeited (51,058) 24.20 Outstanding at March 31, 2023 901,492 $ 24.94 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Fee Commitments | As of March 31, 2023, such minimum fee commitments were as follows: Years ending September 30: 2023 (six months remaining) $ 2,237 2024 1,238 2025 — 2026 — 2027 — Thereafter — Total $ 3,475 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Performance | The following is a summary of reportable segment operating performance for the three and six months ended March 31, 2023 and 2022. As of and for the Three Months Ended March 31, 2023 Merchant Services Software and Services Other Total Revenue $ 33,094 $ 60,797 $ (19) $ 93,872 Other costs of services (15,719) (4,229) 18 (19,930) Residuals 10,039 799 (9) 10,829 Processing margin $ 27,414 $ 57,367 $ (10) $ 84,771 Residuals (10,829) Selling, general and administrative (57,204) Depreciation and amortization (9,015) Change in fair value of contingent consideration (2,279) Income from operations $ 5,444 Total assets $ 205,898 $ 620,126 $ 57,002 $ 883,026 Goodwill $ 121,950 $ 287,092 $ — $ 409,042 As of and for the Six Months Ended March 31, 2023 Merchant Services Software and Services Other Total Revenue $ 65,928 $ 114,010 $ (37) $ 179,901 Other costs of services (31,286) (7,752) 39 (38,999) Residuals 19,848 1,322 (20) 21,150 Processing margin $ 54,490 $ 107,580 $ (18) $ 162,052 Residuals (21,150) Selling, general and administrative (108,207) Depreciation and amortization (17,691) Change in fair value of contingent consideration (3,722) Income from operations $ 11,282 Total assets $ 205,898 $ 620,126 $ 57,002 $ 883,026 Goodwill $ 121,950 $ 287,092 $ — $ 409,042 As of and for the Three Months Ended March 31, 2022 Merchant Services Software and Services Other Total Revenue $ 29,180 $ 48,962 $ (22) $ 78,120 Other costs of services (13,528) (3,124) 21 (16,631) Residuals 8,054 448 (13) 8,489 Processing Margin $ 23,706 $ 46,286 $ (14) $ 69,978 Residuals (8,489) Selling, general and administrative (48,716) Depreciation and amortization (7,447) Change in fair value of contingent consideration (11,503) Loss from operations $ (6,177) Total assets $ 205,922 $ 506,409 $ 60,325 $ 772,656 Goodwill $ 119,086 $ 230,368 $ — $ 349,454 As of and for the Six Months Ended March 31, 2022 Merchant Services Software and Services Other Total Revenue $ 58,357 $ 93,736 $ (34) $ 152,059 Other costs of services (26,970) (6,204) 33 (33,141) Residuals 16,235 791 (17) 17,009 Processing margin $ 47,622 $ 88,323 $ (18) $ 135,927 Residuals (17,009) Selling, general and administrative (95,103) Depreciation and amortization (14,317) Change in fair value of contingent consideration (16,430) Loss from operations $ (6,932) Total assets $ 205,922 $ 506,409 $ 60,325 $ 772,656 Goodwill $ 119,086 $ 230,368 $ — $ 349,454 |
NON-CONTROLLING INTEREST (Table
NON-CONTROLLING INTEREST (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Noncontrolling Interest [Abstract] | |
Schedule of Ownership Interest | The following table summarizes the impact on equity due to changes in the Company's ownership interest in i3 Verticals, LLC: Six Months Ended March 31, 2023 2022 Net income (loss) attributable to non-controlling interest $ 181 $ (4,218) Transfers to non-controlling interests: Redemption of common units in i3 Verticals, LLC (86) (458) Allocation of equity to non-controlling interests 299 3,517 Net transfers to non-controlling interests 213 3,059 Change from net income (loss) attributable to non-controlling interests and transfers to non-controlling interests $ 394 $ (1,159) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliations of the Numerators and Denominators Used to Compute Basic and Diluted Earnings Per Share | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the three and six months ended March 31, 2023 and 2022: Three Months Ended March 31, Six Months Ended March 31, 2023 2022 2023 2022 Basic net income (loss) per share: Numerator Net loss $ (192) $ (10,438) $ (23) $ (14,119) Less: Net (loss) income attributable to non-controlling interest (228) (3,065) 181 (4,218) Net income (loss) attributable to Class A common stockholders $ 36 $ (7,373) $ (204) $ (9,901) Denominator Weighted average shares of Class A common stock outstanding 23,135,898 22,076,297 23,066,499 22,059,365 Basic net income (loss) per share (1) $ 0.00 $ (0.33) $ (0.01) $ (0.45) Diluted net loss per share: Numerator Net income attributable to Class A common stockholders $ 36 Reallocation of net loss assuming conversion of common units (171) Net loss attributable to Class A common stockholders - diluted (135) Denominator Weighted average shares of Class A common stock outstanding 23,135,898 Weighted average effect of dilutive securities (2) 11,133,242 Weighted average shares of Class A common stock outstanding - diluted 34,269,140 Diluted net loss per share $ 0.00 __________________________ 1. For the six months ended March 31, 2023 and the three and six months ended March 31, 2022, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share. The following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net loss per share of Class A common stock: a. 10,114,598 weighted average shares of Class B common stock for the six months ended March 31, 2023, and 10,210,142 and 10,216,615 for the three and six months ended March 31, 2022, respectively, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive. b. 5,165,478 stock options for the six months ended March 31, 2023 and 4,667,581 and 5,388,813 for the three and six months ended March 31, 2022, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and c. 633,453 shares for the six months ended March 31, 2023, and 522,355 and 613,913 for the three and six months ended March 31, 2022, respectively, resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because of the effect of including them would have been anti-dilutive. 2. For the three months ended March 31, 2023, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted net loss per share of Class A common stock: a. 4,018,042 stock options for the three months ended March 31, 2023, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive. |
SIGNIFICANT NON-CASH TRANSACT_2
SIGNIFICANT NON-CASH TRANSACTIONS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |
Schedule of Significant Noncash Transactions | The Company engaged in the following significant non-cash investing and financing activities during the six months ended March 31, 2023 and 2022: Six months ended March 31, 2023 2022 Acquisition date fair value of contingent consideration in connection with business combinations $ 760 $ 5,481 Debt issuance costs financed with proceeds from the Senior Secured Credit Facility $ 178 $ — Right-of-use assets obtained in exchange for operating lease obligations $ 1,098 $ 7,584 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Summary of Consolidated Total Net Leverage Ratio | The applicable margin is based upon the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Credit Agreement), as reflected in the schedule below: Consolidated Total Net Leverage Ratio Commitment Fee Letter of Credit Fee Term Benchmark Loans Base Rate Loans > 3.0 to 1.0 0.30 % 3.00 % 3.00 % 2.00 % > 2.5 to 1.0 but < 3.00 to 1.0 0.25 % 2.50 % 2.50 % 1.50 % > 2.0 to 1.0 but < 2.50 to 1.0 0.20 % 2.25 % 2.25 % 1.25 % < 2.0 to 1.0 0.15 % 2.00 % 2.00 % 1.00 % |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Oct. 01, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Settlement assets | $ 7,185 | $ 7,272 | $ 7,185 | $ 7,272 | $ 7,540 | $ 4,768 | |
Settlement obligations | 7,185 | 7,185 | 7,540 | ||||
Inventories | 4,732 | 4,732 | 4,121 | ||||
Revenue from acquisitions | 9,071 | ||||||
Net income from acquisitions | 2,638 | ||||||
Revenue | 93,872 | 78,120 | 179,901 | 152,059 | |||
Contract assets from contracts with customer | 12,116 | 12,116 | 9,716 | ||||
Capitalized contract costs | 4,518 | 4,518 | 4,185 | ||||
Commissions related to capitalized contract costs | 193 | 178 | 376 | 345 | |||
Long-term debt, less current portion and debt issuance costs, net | 385,467 | 385,467 | 287,020 | ||||
Additional paid-in capital | 234,442 | 234,442 | 241,958 | ||||
Accumulated deficit | (12,337) | (12,337) | $ (23,582) | ||||
Revenue earned at a point in time | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Revenue | $ 11,329 | 21,379 | $ 19,330 | 41,304 | |||
Fixed-Price Contract | Revenue earned at a point in time | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Revenue | $ 9,333 | $ 19,546 | |||||
Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Long-term debt, less current portion and debt issuance costs, net | $ 11,933 | ||||||
Additional paid-in capital | (23,382) | ||||||
Accumulated deficit | $ 11,449 | ||||||
Maximum | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Maturity period of settlement assets and obligations (in years) | 4 days | ||||||
Minimum | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Maturity period of settlement assets and obligations (in years) | 1 day |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Concentration Risk [Line Items] | ||||
Total revenue | $ 93,872 | $ 78,120 | $ 179,901 | $ 152,059 |
Revenue earned over time | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 82,543 | 56,741 | 160,571 | 110,755 |
Revenue earned at a point in time | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 11,329 | 21,379 | 19,330 | 41,304 |
Fixed-Price Contract | Revenue earned at a point in time | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 9,333 | 19,546 | ||
Merchant Services | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 33,094 | 29,180 | 65,928 | 58,357 |
Merchant Services | Revenue earned over time | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 27,984 | 22,599 | 55,581 | 45,333 |
Merchant Services | Revenue earned at a point in time | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 5,110 | 6,581 | 10,347 | 13,024 |
Software and Services | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 60,797 | 48,962 | 114,010 | 93,736 |
Software and Services | Revenue earned over time | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 54,568 | 34,151 | 105,009 | 65,439 |
Software and Services | Revenue earned at a point in time | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 6,229 | 14,811 | 9,001 | 28,297 |
Other | ||||
Concentration Risk [Line Items] | ||||
Total revenue | (19) | (22) | (37) | (34) |
Other | Revenue earned over time | ||||
Concentration Risk [Line Items] | ||||
Total revenue | (9) | (9) | (19) | (17) |
Other | Revenue earned at a point in time | ||||
Concentration Risk [Line Items] | ||||
Total revenue | (10) | (13) | (18) | (17) |
Software and related services revenue | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 47,307 | 38,972 | 88,421 | 75,310 |
Software and related services revenue | Merchant Services | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 3,217 | 3,008 | 6,196 | 5,970 |
Software and related services revenue | Software and Services | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 44,099 | 35,972 | 82,244 | 69,356 |
Software and related services revenue | Other | ||||
Concentration Risk [Line Items] | ||||
Total revenue | (9) | (8) | (19) | (16) |
Payments revenue | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 41,909 | 34,528 | 82,263 | 67,994 |
Payments revenue | Merchant Services | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 27,634 | 23,926 | 55,243 | 48,230 |
Payments revenue | Software and Services | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 14,285 | 10,616 | 27,038 | 19,782 |
Payments revenue | Other | ||||
Concentration Risk [Line Items] | ||||
Total revenue | (10) | (14) | (18) | (18) |
Other revenue | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 4,656 | 4,620 | 9,217 | 8,755 |
Other revenue | Merchant Services | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 2,243 | 2,246 | 4,489 | 4,157 |
Other revenue | Software and Services | ||||
Concentration Risk [Line Items] | ||||
Total revenue | 2,413 | 2,374 | 4,728 | 4,598 |
Other revenue | Other | ||||
Concentration Risk [Line Items] | ||||
Total revenue | $ 0 | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Contract with customer, Liability [Roll Forward] | ||||
Deferred revenue, beginning | $ 37,498 | $ 32,089 | $ 35,321 | $ 30,024 |
Deferral of revenue | 10,475 | 19,334 | 11,047 | 21,032 |
Recognition of unearned revenue | (14,286) | (13,925) | (16,034) | (15,735) |
Deferred revenue, ending | $ 33,687 | $ 37,498 | $ 30,334 | $ 35,321 |
ACQUISITIONS - Additional Infor
ACQUISITIONS - Additional Information (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2023 USD ($) business | Mar. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) business | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 409,042 | $ 349,454 | $ 353,639 |
Residual buyouts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | 387 | $ 0 | |
Estimated amortization period | 8 years | ||
Referral agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $ 420 | ||
Estimated amortization period | 5 years | ||
Celtic | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 18 years | ||
Payment to acquire business | $ 85,000 | ||
Acquisition-related costs | 1,739 | ||
Property and equipment | 5,437 | ||
Goodwill | 42,595 | ||
Other long-term liabilities | $ 12,013 | ||
Celtic | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 18 years | ||
Intangible assets | $ 33,800 | ||
Celtic | Trade name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 5 years | ||
Intangible assets | $ 600 | ||
Celtic | Non-compete agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 3 years | ||
Intangible assets | $ 200 | ||
Celtic | Capitalized software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 10 years | ||
Intangible assets | $ 12,600 | ||
Other Business Combinations | |||
Finite-Lived Intangible Assets [Line Items] | |||
Payment to acquire business | $ 16,997 | ||
Number of businesses acquired | business | 2 | ||
Total purchase consideration | $ 19,757 | ||
Contingent consideration | 760 | ||
Net working capital | 180 | ||
Property and equipment | 374 | ||
Goodwill | 12,808 | ||
Business acquisition, goodwill, expected tax deductible amount | 2,864 | ||
Other long-term liabilities | 2,778 | ||
Other Business Combinations | Class A Common Stock | |||
Finite-Lived Intangible Assets [Line Items] | |||
Common units issued to seller | 2,000 | ||
Other Business Combinations | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 8,400 | ||
Other Business Combinations | Trade name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 100 | ||
Other Business Combinations | Capitalized software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 670 | ||
Other Business Combinations | Minimum | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 10 years | ||
Other Business Combinations | Minimum | Capitalized software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 7 years | ||
Other Business Combinations | Maximum | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 15 years | ||
Other Business Combinations | Maximum | Capitalized software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 8 years | ||
2022 Business Combinations | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 15 years | ||
Payment to acquire business | $ 101,400 | ||
Acquisition-related costs | $ 773 | ||
Number of businesses acquired | business | 3 | ||
Total purchase consideration | $ 107,681 | ||
Contingent consideration | 6,281 | ||
Property and equipment | 190 | ||
Goodwill | 61,347 | ||
Other long-term liabilities | 6,725 | ||
Potential additional consideration | 23,000 | ||
2022 Business Combinations | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 41,090 | ||
2022 Business Combinations | Trade name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 4 years | ||
Intangible assets | $ 1,550 | ||
2022 Business Combinations | Capitalized software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 7 years | ||
Intangible assets | $ 9,790 | ||
2022 Business Combinations | Minimum | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 10 years | ||
2022 Business Combinations | Maximum | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated amortization period | 19 years |
ACQUISITIONS - Preliminary Purc
ACQUISITIONS - Preliminary Purchase Consideration of the Acquired Assets and Assumed Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 409,042 | $ 353,639 | $ 349,454 |
Celtic | |||
Business Acquisition [Line Items] | |||
Accounts receivable | 7,604 | ||
Prepaid expenses and other current assets | 110 | ||
Property and equipment | 5,437 | ||
Goodwill | 42,595 | ||
Total assets acquired | 102,946 | ||
Accounts payable | 9 | ||
Accrued expenses and other current liabilities | 3,182 | ||
Deferred revenue, current | 2,742 | ||
Other long-term liabilities | 12,013 | ||
Net assets acquired | 85,000 | ||
Celtic | Capitalized software | |||
Business Acquisition [Line Items] | |||
Intangible assets | 12,600 | ||
Celtic | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | 33,800 | ||
Celtic | Non-compete agreements | |||
Business Acquisition [Line Items] | |||
Intangible assets | 200 | ||
Celtic | Trade name | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 600 | ||
2022 Business Combinations | |||
Business Acquisition [Line Items] | |||
Accounts receivable | 651 | ||
Settlement assets | 685 | ||
Prepaid expenses and other current assets | 83 | ||
Property and equipment | 190 | ||
Goodwill | 61,347 | ||
Operating lease right-of-use assets | 263 | ||
Other assets | 22 | ||
Total assets acquired | 115,671 | ||
Accrued expenses and other current liabilities | 287 | ||
Settlement obligations | 685 | ||
Deferred revenue, current | 30 | ||
Current portion of operating lease liabilities | 82 | ||
Operating lease liabilities, less current portion | 181 | ||
Other long-term liabilities | 6,725 | ||
Net assets acquired | 107,681 | ||
2022 Business Combinations | Capitalized software | |||
Business Acquisition [Line Items] | |||
Intangible assets | 9,790 | ||
2022 Business Combinations | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | 41,090 | ||
2022 Business Combinations | Trade name | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 1,550 |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue | $ 181,275 | $ 163,987 |
Net loss | $ (67) | $ (12,630) |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Inventory | $ 4,732 | $ 4,121 |
Prepaid licenses | 6,282 | 5,743 |
Prepaid insurance | 980 | 736 |
Notes receivable — current portion | 5,117 | 4,930 |
Other current assets | 4,625 | 3,915 |
Prepaid expenses and other current assets | $ 21,736 | $ 19,445 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Changes in Goodwill (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning | $ 353,639 |
Goodwill attributable to preliminary purchase price adjustments and acquisitions during the six months ended March 31, 2023 | 55,403 |
Goodwill, ending | 409,042 |
Merchant Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning | 119,086 |
Goodwill attributable to preliminary purchase price adjustments and acquisitions during the six months ended March 31, 2023 | 2,864 |
Goodwill, ending | 121,950 |
Software and Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning | 234,553 |
Goodwill attributable to preliminary purchase price adjustments and acquisitions during the six months ended March 31, 2023 | 52,539 |
Goodwill, ending | 287,092 |
Other | |
Goodwill [Roll Forward] | |
Goodwill, beginning | 0 |
Goodwill attributable to preliminary purchase price adjustments and acquisitions during the six months ended March 31, 2023 | 0 |
Goodwill, ending | $ 0 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, cost | $ 328,406 | ||
Finite-lived intangible assets, accumulated amortization | (98,838) | ||
Finite-lived intangible assets, carrying value | 229,568 | ||
Total identifiable intangible assets, cost | 328,450 | ||
Total identifiable intangible assets, carrying value | 229,612 | $ 195,919 | |
Amortization expense of intangible assets | 10,216 | $ 8,774 | |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | 44 | ||
Merchant relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, cost | 310,501 | ||
Finite-lived intangible assets, accumulated amortization | (89,422) | ||
Finite-lived intangible assets, carrying value | $ 221,079 | ||
Merchant relationships | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization life | 9 years | ||
Merchant relationships | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization life | 25 years | ||
Non-compete agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, cost | $ 1,390 | ||
Finite-lived intangible assets, accumulated amortization | (928) | ||
Finite-lived intangible assets, carrying value | $ 462 | ||
Non-compete agreements | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization life | 3 years | ||
Non-compete agreements | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization life | 6 years | ||
Website and brand development costs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, cost | $ 267 | ||
Finite-lived intangible assets, accumulated amortization | (194) | ||
Finite-lived intangible assets, carrying value | $ 73 | ||
Website and brand development costs | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization life | 3 years | ||
Website and brand development costs | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization life | 4 years | ||
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, cost | $ 8,471 | ||
Finite-lived intangible assets, accumulated amortization | (4,935) | ||
Finite-lived intangible assets, carrying value | $ 3,536 | ||
Trade names | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization life | 3 years | ||
Trade names | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization life | 7 years | ||
Residual buyouts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, cost | $ 6,557 | ||
Finite-lived intangible assets, accumulated amortization | (2,538) | ||
Finite-lived intangible assets, carrying value | $ 4,019 | ||
Amortization life | 8 years | ||
Referral and exclusivity agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, cost | $ 1,220 | ||
Finite-lived intangible assets, accumulated amortization | (821) | ||
Finite-lived intangible assets, carrying value | $ 399 | ||
Amortization life | 5 years |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (six months remaining) | $ 10,160 |
2024 | 19,548 |
2025 | 19,257 |
2026 | 18,785 |
2027 | 18,165 |
Thereafter | 143,653 |
Finite-lived intangible assets, carrying value | $ 229,568 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Accrued expenses and other current liabilities: | ||
Accrued wages, bonuses, commissions and vacation | $ 7,182 | $ 8,117 |
Accrued interest | 1,336 | 642 |
Accrued contingent consideration — current portion | 20,756 | 21,385 |
Escrow liabilities | 10,721 | 12,285 |
Tax receivable agreement liability — current portion | 21 | 20 |
Customer deposits | 1,272 | 1,575 |
Employee health self-insurance liability | 1,068 | 732 |
Accrued interchange | 2,184 | 2,096 |
Other current liabilities | 10,867 | 10,981 |
Accrued expenses and other current liabilities | 55,407 | 57,833 |
Long-term Liabilities | ||
Accrued contingent consideration — long-term portion | 1,503 | 1,448 |
Deferred tax liability — long-term | 22,687 | 7,896 |
Other long-term liabilities | 227 | 196 |
Total other long-term liabilities | $ 24,417 | $ 9,540 |
LONG-TERM DEBT, NET (Details)
LONG-TERM DEBT, NET (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 | Feb. 18, 2020 |
Debt Instrument [Line Items] | |||
Debt issuance costs, net | $ (2,600) | $ (2,554) | |
Total long-term debt, net of issuance costs | 385,467 | 287,020 | |
Line of Credit | Revolving lines of credit to banks under the Senior Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | 271,067 | 185,017 | |
Exchangeable Notes | 1% Exchangeable Senior Notes due 2025 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 117,000 | $ 104,557 | |
Debt issuance costs, net | $ (1,989) | ||
Stated interest rate (percent) | 1% | 1% |
LONG-TERM DEBT, NET - Additiona
LONG-TERM DEBT, NET - Additional Information (Details) | 3 Months Ended | 6 Months Ended | |||||||
Mar. 31, 2023 USD ($) | Oct. 03, 2022 USD ($) | Feb. 18, 2020 USD ($) | Feb. 13, 2020 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Amortization of deferred debt issuance costs | $ 368,000 | $ 259,000 | $ 729,000 | $ 513,000 | |||||
Debt issuance costs, net | $ 2,600,000 | 2,600,000 | 2,600,000 | $ 2,554,000 | |||||
Exchangeable notes, fair value | 108,564,000 | 108,564,000 | 108,564,000 | ||||||
Payments for note hedge transactions | $ 28,676,000 | ||||||||
Debt issuance costs incurred | 265,000 | 0 | 265,000 | 0 | |||||
Class A Common Stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Warrants outstanding (shares) | shares | 3,376,391 | ||||||||
Warrants sold in connection with the issuance of the exchangeable notes (in USD per share) | $ / shares | $ 62.88 | ||||||||
Proceeds from issuance of warrants | $ 14,669,000 | ||||||||
1% Exchangeable Senior Notes due 2025 | Exchangeable Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Original principal amount | $ 117,000,000 | $ 138,000,000 | $ 117,000,000 | $ 117,000,000 | |||||
Stated interest rate (percent) | 1% | 1% | 1% | 1% | |||||
Proceeds from convertible debt | $ 132,762,000 | ||||||||
Amortization of deferred debt issuance costs | $ 233,000 | $ 164,000 | $ 460,000 | $ 323,000 | |||||
Debt issuance costs, net | $ 1,989,000 | 1,989,000 | 1,989,000 | ||||||
1% Exchangeable Senior Notes due 2025 | Exchangeable Notes | Class A Common Stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Exchangeable notes, exchange rate, shares per $1000 | 0.0244666 | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Revolving line of credit borrowing capacity | $ 375,000,000 | ||||||||
Optional addition to borrowing capacity | $ 50,000,000 | ||||||||
Unused commitment fee (percent) | 0.30% | ||||||||
Debt covenant, minimum consolidated interest coverage ratio | 3 | ||||||||
Debt covenant, maximum total leverage ratio | 5 | ||||||||
Debt covenant, increase to maximum consolidated senior secured leverage ratio during leverage increase period | 0.25 | ||||||||
Debt covenant, maximum consolidated senior secured leverage ratio | 3.25 | ||||||||
Remaining borrowing capacity | $ 103,933,000 | $ 103,933,000 | $ 103,933,000 | ||||||
Debt covenant, equity repurchase limit from employees, directors, officers or consultants | $ 3,000,000 | ||||||||
Debt covenant, dividend or distribution limit as percent of net cash proceeds from additional common equity issuance (percent) | 5% | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Unused commitment fee (percent) | 0.15% | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Unused commitment fee (percent) | 0.30% | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | Maximum | Letter of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Unused commitment fee (percent) | 3.25% | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | One, Two, Three or Six-month SOFR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 3.25% | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | One, Two, Three or Six-month SOFR | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 2.25% | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | One, Two, Three or Six-month SOFR | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 3.25% | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | Federal Funds Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 0.50% | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | 30-day SOFR | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 0.10% | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | SOFR plus 1% | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 1.25% | 1% | |||||||
2020 Senior Secured Credit Facility | Line of Credit | SOFR plus 1% | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 0.25% | ||||||||
2020 Senior Secured Credit Facility | Line of Credit | SOFR plus 1% | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 1.25% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Jun. 25, 2018 | |
Class of Stock [Line Items] | ||||||
(Benefit from) Provision for income taxes | $ (563) | $ 884 | $ (181) | $ 656 | ||
Tax benefits retained (percent) | 15% | |||||
Percent of tax benefits payable to continuing equity owners | 85% | |||||
Period of payment to continuing equity owners | 24 years | |||||
Minimum | ||||||
Class of Stock [Line Items] | ||||||
Expected payments for repurchase of redeemable noncontrolling interest | 0 | $ 0 | ||||
Maximum | ||||||
Class of Stock [Line Items] | ||||||
Expected payments for repurchase of redeemable noncontrolling interest | 3,321 | 3,321 | ||||
Class B Common Stock | Continuing Equity Owner | ||||||
Class of Stock [Line Items] | ||||||
Increase in net deferred tax assets | 98 | |||||
Increase tax receivable agreement liability | 83 | |||||
Tax benefits due to continuing equity owners | 40,915 | 40,915 | ||||
Deferred tax asset recognized | $ 39,808 | $ 39,808 | ||||
Common Stock | Class A Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Redemption of common units in i3 Verticals, LLC (in shares) | 40,000 | 15,000 | 9,924 | |||
Common Stock | Class B Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Redemption of common units in i3 Verticals, LLC (in shares) | (9,924) | (40,000) | (15,000) |
LEASES - Additional Information
LEASES - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 USD ($) lease | Mar. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) lease | Mar. 31, 2022 USD ($) | |
Leases [Abstract] | ||||
Number of finance leases | lease | 0 | 0 | ||
Weighted-average remaining lease term | 4 years | 5 years | 4 years | 5 years |
Weighted-average discount rate of operating leases | 7.30% | 7.10% | 7.30% | 7.10% |
Operating lease costs | $ 1,405 | $ 1,455 | $ 2,909 | $ 2,946 |
Variable lease costs | 9 | 6 | 20 | 44 |
Short-term rent expense | $ 75 | $ 46 | $ 110 | $ 93 |
LEASES - Maturities of Lease Li
LEASES - Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
2023 (six months remaining) | $ 2,662 |
2024 | 4,743 |
2025 | 4,125 |
2026 | 3,202 |
2027 | 1,597 |
Thereafter | 2,017 |
Total future minimum lease payments (undiscounted) | 18,346 |
Less: present value discount | (1,959) |
Present value of lease liability | 16,387 |
Short-term leases | $ 29 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in Level 3 Financial Instruments Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Exchangeable notes, fair value | $ 108,564 | ||
Accrued Contingent Consideration | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance, beginning | 22,833 | $ 36,229 | |
Contingent consideration accrued at time of business combination | 760 | 5,481 | |
Change in fair value of contingent consideration included in Operating expenses | 3,722 | 16,430 | |
Contingent consideration paid | (5,056) | (10,200) | |
Balance, ending | 22,259 | $ 47,940 | |
Accrued Expenses and Other Current Liabilities | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Contingent consideration | 20,756 | $ 21,385 | |
Other Long-term Liabilities | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Contingent consideration | $ 1,503 | $ 1,448 |
EQUITY-BASED COMPENSATION - Sha
EQUITY-BASED COMPENSATION - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 6,802 | $ 6,257 | $ 13,648 | $ 12,881 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | 5,992 | 6,042 | 12,280 | 12,666 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 810 | $ 215 | $ 1,368 | $ 215 |
EQUITY-BASED COMPENSATION - Add
EQUITY-BASED COMPENSATION - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | May 31, 2021 | Sep. 30, 2020 | May 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Income tax (expense) benefits related to equity-based compensation | $ 61,000 | $ 68,000 | $ 108,000 | $ 95,000 | |||
Granted, weighted average grant date fair value (in USD per share) | $ 13.88 | ||||||
Unrecognized compensation expense related to unvested options at end of period | 33,829,000 | $ 33,829,000 | |||||
Period for recognition of unrecognized compensation cost | 2 years 2 months 12 days | ||||||
Fair value of stock options that vested | 11,150,000 | $ 18,172,000 | |||||
Restricted stock units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Period for recognition of unrecognized compensation cost | 3 years 6 months 21 days | ||||||
Cost not yet recognized, amount | $ 14,218,000 | $ 14,218,000 | |||||
Vested in period, fair value | $ 1,544,000 | ||||||
2018 Equity Incentive Award Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for grant under the plan (in shares) | 849,900 | 849,900 | 3,500,000 | ||||
Additional Class A common shares added at the beginning of calendar year as percentage of common stock outstanding at end of previous year (percent) | 4% | ||||||
2020 Equity Incentive Award Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for grant under the plan (in shares) | 1,074,736 | 1,074,736 | 3,000,000 | 1,500,000 |
EQUITY-BASED COMPENSATION - Fai
EQUITY-BASED COMPENSATION - Fair Value of Stock Option Awards (Details) - Stock options | 6 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility (percent) | 55% | 55.70% |
Expected dividend yield (percent) | 0% | 0% |
Expected term | 6 years | 6 years |
Risk-free interest rate (percent) | 3.90% | 1.60% |
EQUITY-BASED COMPENSATION - Sto
EQUITY-BASED COMPENSATION - Stock Option Activity (Details) - $ / shares | 6 Months Ended |
Mar. 31, 2023 | |
Stock Options | |
Outstanding at beginning of period (in shares) | 8,222,322 |
Granted (in shares) | 1,154,550 |
Exercised (in shares) | (202,737) |
Forfeited (in shares) | (246,474) |
Outstanding at end of period (in shares) | 8,927,661 |
Options exercisable at end of period (in shares) | 5,543,356 |
Weighted Average Exercise Price | |
Outstanding at beginning of period, weighted average exercise price (in USD per share) | $ 25.07 |
Granted, weighted average exercise price (in USD per share) | 24.37 |
Exercised, weighted average exercise price (in USD per share) | 19.43 |
Forfeited, weighted average exercise price (in USD per share) | 26.85 |
Outstanding at end of period, weighted average exercise price (in USD per share) | 25.06 |
Exercisable, weighted average exercise price (in USD per share) | $ 24.26 |
EQUITY-BASED COMPENSATION - RSU
EQUITY-BASED COMPENSATION - RSU Activity (Details) - Restricted stock units | 6 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Stock Appreciation Rights Activity | |
Outstanding at September 30, 2022 (in shares) | shares | 486,652 |
Granted (in shares) | shares | 524,132 |
Vested (in shares) | shares | (58,234) |
Forfeited (in shares) | shares | (51,058) |
Outstanding at December 31, 2022 (in shares) | shares | 901,492 |
Weighted-Average | |
Outstanding, Weighted average grant date fair value, beginning balance (in USD per share) | $ / shares | $ 24.93 |
Granted, Weighted average grant date fair value (in USD per share) | $ / shares | 25.32 |
Vested, Weighted average grant date fair value (in USD per share) | $ / shares | 26.52 |
Forfeited, Weighted average grant date fair value (in USD per share) | $ / shares | 24.20 |
Outstanding, Weighted average grant date fair value, ending balance (in USD per share) | $ / shares | $ 24.94 |
COMMITMENTS AND CONTINGENCIES-
COMMITMENTS AND CONTINGENCIES- Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Other Commitments [Line Items] | ||||
Rent expense | $ 1,480 | $ 1,501 | $ 3,019 | $ 3,039 |
Buyout Commitment | Third Party Sales Organization | ||||
Other Commitments [Line Items] | ||||
Commitments to third party sales organization | 29,000 | 29,000 | ||
Additional Buyout Consideration | Third Party Sales Organization | ||||
Other Commitments [Line Items] | ||||
Commitments to third party sales organization | $ 9,000 | $ 9,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Minimum Fee Commitments (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 (six months remaining) | $ 2,237 |
2024 | 1,238 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
Thereafter | 0 |
Total | $ 3,475 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - S&S Litigation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 04, 2021 | Sep. 30, 2018 | |
Software & Services, LLC ("S&S") | ||
Loss Contingencies [Line Items] | ||
Total purchase consideration | $ 17,000 | |
S & S Vs. State | ||
Loss Contingencies [Line Items] | ||
Loss contingency, damages sought, value | $ 15,000 | |
S & S Vs. Sheriffs | ||
Loss Contingencies [Line Items] | ||
Loss contingency, damages sought, value | $ 7,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Jun. 25, 2018 |
Related Party Transaction [Line Items] | ||
Percent of tax benefits payable to continuing equity owners | 85% | |
Class B Common Stock | Continuing Equity Owner | ||
Related Party Transaction [Line Items] | ||
Tax benefits due to continuing equity owners | $ 40,915 |
SEGMENTS - Reportable Segment P
SEGMENTS - Reportable Segment Performance (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | |||||
Revenue | $ 93,872 | $ 78,120 | $ 179,901 | $ 152,059 | |
Other costs of services | (19,930) | (16,631) | (38,999) | (33,141) | |
Residuals | 10,829 | 8,489 | 21,150 | 17,009 | |
Processing margin | 84,771 | 69,978 | 162,052 | 135,927 | |
Residuals | (10,829) | (8,489) | (21,150) | (17,009) | |
Selling, general and administrative | (57,204) | (48,716) | (108,207) | (95,103) | |
Depreciation and amortization | (9,015) | (7,447) | (17,691) | (14,317) | |
Change in fair value of contingent consideration | (2,279) | (11,503) | (3,722) | (16,430) | |
Income (loss) from operations | 5,444 | (6,177) | 11,282 | (6,932) | |
Total assets | 883,026 | 772,656 | 883,026 | 772,656 | $ 770,312 |
Goodwill | 409,042 | 349,454 | 409,042 | 349,454 | 353,639 |
Merchant Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 33,094 | 29,180 | 65,928 | 58,357 | |
Other costs of services | (15,719) | (13,528) | (31,286) | (26,970) | |
Residuals | 10,039 | 8,054 | 19,848 | 16,235 | |
Processing margin | 27,414 | 23,706 | 54,490 | 47,622 | |
Residuals | (10,039) | (8,054) | (19,848) | (16,235) | |
Total assets | 205,898 | 205,922 | 205,898 | 205,922 | |
Goodwill | 121,950 | 119,086 | 121,950 | 119,086 | 119,086 |
Software and Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 60,797 | 48,962 | 114,010 | 93,736 | |
Other costs of services | (4,229) | (3,124) | (7,752) | (6,204) | |
Residuals | 799 | 448 | 1,322 | 791 | |
Processing margin | 57,367 | 46,286 | 107,580 | 88,323 | |
Residuals | (799) | (448) | (1,322) | (791) | |
Total assets | 620,126 | 506,409 | 620,126 | 506,409 | |
Goodwill | 287,092 | 230,368 | 287,092 | 230,368 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | (19) | (22) | (37) | (34) | |
Other costs of services | 18 | 21 | 39 | 33 | |
Residuals | (9) | (13) | (20) | (17) | |
Processing margin | (10) | (14) | (18) | (18) | |
Residuals | 9 | 13 | 20 | 17 | |
Total assets | 57,002 | 60,325 | 57,002 | 60,325 | |
Goodwill | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
NON-CONTROLLING INTEREST - Narr
NON-CONTROLLING INTEREST - Narrative (Details) - i3Verticals, LLC - shares | Mar. 31, 2023 | Mar. 31, 2022 |
Noncontrolling Interest [Line Items] | ||
Non-controlling interest, common units (in shares) | 23,167,730 | 22,133,682 |
Non-controlling interest, ownership interest (percent) | 69.60% | 68.50% |
NON-CONTROLLING INTEREST - Owne
NON-CONTROLLING INTEREST - Ownership Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Noncontrolling Interest [Abstract] | ||||
Net income (loss) attributable to non-controlling interest | $ (228) | $ (3,065) | $ 181 | $ (4,218) |
Redemption of common units in i3 Verticals, LLC | (86) | (458) | ||
Allocation of equity to non-controlling interests | 299 | 3,517 | ||
Net transfers to non-controlling interests | 213 | 3,059 | ||
Change from net income (loss) attributable to non-controlling interests and transfers to non-controlling interests | $ 394 | $ (1,159) |
EARNINGS PER SHARE - Basic and
EARNINGS PER SHARE - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator | ||||||
Net loss | $ (192) | $ 169 | $ (10,438) | $ (3,681) | $ (23) | $ (14,119) |
Less: Net (loss) income attributable to non-controlling interest | (228) | (3,065) | 181 | (4,218) | ||
Net income (loss) attributable to i3 Verticals, Inc. | $ 36 | $ (7,373) | $ (204) | $ (9,901) | ||
Denominator | ||||||
Weighted average shares of Class A common stock outstanding - basic (in shares) | 23,135,898 | 22,076,297 | 23,066,499 | 22,059,365 | ||
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 34,269,140 | 22,076,297 | 23,066,499 | 22,059,365 | ||
Basic net loss per share (in USD per share) | $ 0 | $ (0.33) | $ (0.01) | $ (0.45) | ||
Diluted net loss per share (in USD per share) | $ 0 | $ (0.33) | $ (0.01) | $ (0.45) | ||
Numerator | ||||||
Net income attributable to Class A common stockholders | $ 36 | $ (7,373) | $ (204) | $ (9,901) | ||
Denominator | ||||||
Weighted average shares of Class A common stock outstanding - basic (in shares) | 23,135,898 | 22,076,297 | 23,066,499 | 22,059,365 | ||
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 34,269,140 | 22,076,297 | 23,066,499 | 22,059,365 | ||
Diluted net loss per share (in USD per share) | $ 0 | $ (0.33) | $ (0.01) | $ (0.45) | ||
Class A Common Stock | ||||||
Numerator | ||||||
Net loss | $ (192) | $ (10,438) | $ (23) | $ (14,119) | ||
Less: Net (loss) income attributable to non-controlling interest | (228) | (3,065) | 181 | (4,218) | ||
Net income (loss) attributable to i3 Verticals, Inc. | $ 36 | $ (7,373) | $ (204) | $ (9,901) | ||
Denominator | ||||||
Weighted average shares of Class A common stock outstanding - basic (in shares) | 23,135,898 | 22,076,297 | 23,066,499 | 22,059,365 | ||
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 34,269,140 | |||||
Diluted net loss per share (in USD per share) | $ 0 | |||||
Numerator | ||||||
Net income attributable to Class A common stockholders | $ 36 | $ (7,373) | $ (204) | $ (9,901) | ||
Reallocation of net loss assuming conversion of common units | (171) | |||||
Net loss attributable to Class A common stockholders - diluted | $ (135) | |||||
Denominator | ||||||
Weighted average shares of Class A common stock outstanding - basic (in shares) | 23,135,898 | 22,076,297 | 23,066,499 | 22,059,365 | ||
Weighted average effect of dilutive securities (in shares) | 11,133,242 | |||||
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 34,269,140 | |||||
Diluted net loss per share (in USD per share) | $ 0 |
EARNINGS PER SHARE - Antidiluti
EARNINGS PER SHARE - Antidilutive Securities (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Feb. 13, 2020 | |
Class A Common Stock | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Exchangeable notes, exchange price per share (in USD per share) | $ 40.87 | $ 40.87 | |||
Warrants sold in connection with the issuance of the exchangeable notes (in USD per share) | $ 62.88 | ||||
Class B Common Stock | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (shares) | 10,210,142 | 10,114,598 | 10,216,615 | ||
Out-of-the-money Options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (shares) | 4,018,042 | 5,165,478 | |||
Out Of The Money Options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (shares) | 4,667,581 | 5,388,813 | |||
Stock options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (shares) | 522,355 | 633,453 | 613,913 |
SIGNIFICANT NON-CASH TRANSACT_3
SIGNIFICANT NON-CASH TRANSACTIONS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | ||
Acquisition date fair value of contingent consideration in connection with business combinations | $ 760 | $ 5,481 |
Debt issuance costs financed with proceeds from the Senior Secured Credit Facility | 178 | 0 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 1,098 | $ 7,584 |
SUBSEQUENT EVENTS - Additional
SUBSEQUENT EVENTS - Additional Information (Details) - Line of Credit - Revolving Credit Facility - The revolver | May 08, 2023 USD ($) | Oct. 03, 2022 |
Minimum | ||
Subsequent Event [Line Items] | ||
Unused commitment fee (percent) | 0.15% | |
Maximum | ||
Subsequent Event [Line Items] | ||
Unused commitment fee (percent) | 0.30% | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Revolving line of credit borrowing capacity | $ 450,000,000 | |
Optional addition to borrowing capacity | $ 100,000,000 | |
Consolidation basis | 1 | |
Debt covenant, minimum consolidated interest coverage ratio | 3 | |
Debt covenant, maximum total leverage ratio | 5 | |
Repayment threshold | $ 450,000,000 | |
Commitment fee multiplier | $ 450,000,000 | |
Subsequent Event | Federal Funds Rate | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 0.005% | |
Subsequent Event | Base Rate | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 1% | |
Subsequent Event | One, Two, Three or Six-month SOFR | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 0.10% | |
Subsequent Event | Adjusted Term SOFR | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 0% | |
Subsequent Event | Secured Overnight Financing Rate (SOFR) | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 1% |
SUBSEQUENT EVENTS - Consolidate
SUBSEQUENT EVENTS - Consolidated Total Net Leverage Ratio (Details) - Revolving Credit Facility - The revolver | May 08, 2023 | Oct. 03, 2022 |
Line of Credit | Minimum | ||
Subsequent Event [Line Items] | ||
Commitment Fee | 0.15% | |
Line of Credit | Maximum | ||
Subsequent Event [Line Items] | ||
Commitment Fee | 0.30% | |
Line of Credit | Subsequent Event | Base Rate | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 1% | |
Greater than 3.00 to 1.0 | Line of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Net Leverage Ratio | 3 | |
Commitment Fee | 0.30% | |
Greater than 3.00 to 1.0 | Line of Credit | Subsequent Event | Base Rate | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 2% | |
Greater than 3.00 to 1.0 | Letter of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Letter of Credit Fee | 3% | |
Greater than 3.00 to 1.0 | Secured Debt | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 3% | |
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 | Line of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Commitment Fee | 0.25% | |
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 | Line of Credit | Subsequent Event | Base Rate | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 1.50% | |
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 | Line of Credit | Subsequent Event | Minimum | ||
Subsequent Event [Line Items] | ||
Net Leverage Ratio | 2.5 | |
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 | Line of Credit | Subsequent Event | Maximum | ||
Subsequent Event [Line Items] | ||
Net Leverage Ratio | 3 | |
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 | Letter of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Letter of Credit Fee | 2.50% | |
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 | Secured Debt | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 2.50% | |
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 | Line of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Commitment Fee | 0.20% | |
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 | Line of Credit | Subsequent Event | Base Rate | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 1.25% | |
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 | Line of Credit | Subsequent Event | Minimum | ||
Subsequent Event [Line Items] | ||
Net Leverage Ratio | 2 | |
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 | Line of Credit | Subsequent Event | Maximum | ||
Subsequent Event [Line Items] | ||
Net Leverage Ratio | 2.50 | |
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 | Letter of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Letter of Credit Fee | 2.25% | |
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 | Secured Debt | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 2.25% | |
Greater than 2.00 to 1.00 | Line of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Net Leverage Ratio | 2 | |
Commitment Fee | 0.15% | |
Greater than 2.00 to 1.00 | Line of Credit | Subsequent Event | Base Rate | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 1% | |
Greater than 2.00 to 1.00 | Letter of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Letter of Credit Fee | 2% | |
Greater than 2.00 to 1.00 | Secured Debt | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate (percent) | 2% |