IIIV - Earnings call transcript Q4 2021

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Operator

Good day, everyone, and welcome to i3 Verticals Fourth Quarter 2021 Earnings Conference Call. Today’s call is being recorded, and a replay will be available starting today through November 25. The number for the replay is (877) 344-7529 and the code is 10161739. The replay may also be accessed for 30 days at the company’s website. At this time, for opening remarks, I’d like to turn the conference call over to Scott Meriwether, Chief Operating Officer. sir. ahead, go Please

Scott Meriwether

welcome Verticals. fourth and call XXXX for iX to morning, quarter the conference Good

on information call information reconciliation Rick me measures calculated It by find Clay financial To Joining a statements Act meaning COVID-XX individual the performance this extent Reform statements discussed Whitson, and accordance with as impact information our each GAAP earnings release. the in and non-GAAP you Private addition enhance may of others, according our This GAAP. Securities CEO; in Chairman today’s is provide This expected to, CFO; potential will prepared non-GAAP XXXX, in measure conference and any company’s and instead accordance financial Stanford, call, President. to reviewing within forward-looking are the Litigation to our regarding prepared directly financial of Greg also financial among with most its call to that of operating but to GAAP. of comparable measure the intent and expected by should the company’s be consolidated statements, financial contain considered understanding yesterday’s the not the non-GAAP the financial Daily, in pandemic. including of of

any be statements. forward-looking call purpose, that fact to deemed are statements this this made during historical For be not statements may of

may among from important associated filed pandemic. SEC, discussed in cautioned the materially the hereby set and the or and factors, the are that in and You actual others, risks forward-looking operations uncertainties to by results the may these including furnished statements are results Consequently, earnings COVID-XX affected differ forth forward-looking that in the reports statements. release with company’s be

applicable on Greg and undertakes obligation under Finally, this Daily. date may I’ll the call over company’s as update and is Chairman now CEO, company the today’s to be the to it, no required as law. turn call the valid except of shared information

Greg Daily

Thanks, Scott, of all and you. good morning to

We revenue, to report fourth quarter volume our records We in EBITDA, XXXX adjusted revenue, volume. are payment results. quarterly integrated pleased software set new and

close we year excited As iX. XXXX fiscal our we’re what about fiscal holds extremely for year,

Our has embedded focuses into on been a vision to opportunities. software that payment company grow

consistent of this grown total integrated have payments revenue highlight software represent results our vision as execution to Our payment of our revenues now XX% of XX% volume. and

expect have I this to momentum our continue further revenue. We growth drive momentum throughout great will technology-enabled in iX.

services over up over Our was year. XXX% The total time net fueled increase our of revenue XX% related related quarter quarter this software and services increase last revenue the fourth software and for in XXXX.

Our adjusted EBITDA XX%. increased

are delivering on We our strategy. software-focused

was year record. the segment For adjusted and EBITDA new $XX Payments adjusted our our million Merchant of Proprietary Software segment. from Software exceeded from segment and fiscal Payments Services Proprietary The EBITDA from EBITDA XXXX, adjusted quarterly our a

this is market. vertical. Public with governments believe software segment will transform how value-added modern primary expect Our payment within We need sales going for accelerate and is be software base. other to such within customer Software forward. attach we our to as software digitally largest we driver more There and we And constituents. our increase, payments our solution can trend expect sector solution as solutions our their a this total interact

and streams streamlines Our also experience product suite back-office governments. work customer-facing for enhances

process. set involved conference and court system it a to or allowed court our video dockets, inception paper-free from people cases cases the example, in found justice pay clients citizens to allows ruling manage court and court to electronically For software online,

companies. interface license car plate also inventory with allows register Another new taxes, insurance our powers also it vehicles, software temporary citizens tags, collect to and DMV issue and example, to managed

our that powers largest of a contract software we case we Our of announced municipal court and have e-filing system sector statewide in is have systems. cover spectrum This and in needs that Louisiana. software history runs management vertical, government contract in evidence solutions customers. our software ability deliver to public in this quarter a Tuesday, our technology we a first as leverage our and fiscal fourth with and software our installed was May, solution and our our full New York. full utility quarter product have suite The significant our market in to package to proprietary integrated acquisition customer create value closed software we into wins statewide our

across addition, to the had These product integration efforts payment direct and all market-leading solutions of core integrated IVR verticals. reflection our we company. and begun to developed this acquisition a product utility two in are rest optimizing overall technology delivering In a that have embedded are our of our approach strategy, interface our

within school had and expected sector Due in remain government than EBITDA also below products levels. we greater programs, quarter. fourth revenue launch contributions Our historic the payments public to provided

more and new captured we non-launch However, have installed payments, many we districts.

into our result, than forecast which as move more a As education contributed our fiscal gives XXXX. school confidence year preliminary customers we for us greater the year,

healthcare noted last that largest vertical. acquisition our most closed on I sector During X. our grown call, October had conference this We into recent our second within

includes also and payments. manage records revenue entire cycle, their appointment Our providers workflow. and including all allows services that control patient a scheduling, cloud-based confirmation, providing patient management electronic engagement while to healthcare health suite patient billing practice software communication The also software

centers medical and medical serves hospital-based laboratories, radiology software billing practices, Our physicians, companies.

acquisition The administrative and customers proprietary – its management with acquisition related direct Medicaid to Medicaid, medical suite. software, its revenue services claims and prompt consulting its reliable settlement record business Medicare product and recent and expands provides services. offer cycle leverages for various practices. medical integration other and our with for systems This comprehensive Our – hospitals

our platform us a product payments, text-to-pay a customer-facing attaching opportunity and to for This an and nimble software of in focus platforms. we and strategy. presentment will our responsive, a note Healthcare IT allow invoice this portals. infrastructure, in to development software many in for solution enhance platforms. environment to and and serving will We software a broader is these transition continue significant healthcare, be our We suite significant our within iX robust new begun within remain our we have AWS On both forward. M&A our to believe moving related overall product our move will have to

expect efficiencies product long will to believe gain operational services various the support transition the to and over our us move allow this term We platforms. from greater

continue M&A. to products geographic new business our and will through them base, We as our new customer as to existing we as customers, into cross-sell grow and launches territories integrate win product through we new our enter we

Board as We our a by well of Jenkins CEO Decosta financial of especially pursue are is man as to organizations. confident Directors. Decosta’s experience will have furthering to moment fantastic to vertical. a deliver year want and of take to complex our Electric cause in to in welcome a valuable we continue will Nashville city a large I our a a and to public fiscal strategy positioned perspective addition He and the doubt has integrity. also the the our results XXXX. to He I strong Board. be to board sector numerous greatly region Service, provide prove given room, no very organization, back of to Decosta nonprofit unique that

the Clay, Now details provide he fourth and more will I’ll over the turn quarter on to financial performance. call you

and we’ll update on will up an for M&A, call the Clay’s open questions. Following comments, then give Rick

Clay Whitson

fiscal ended morning. year September XX, Good XXXX. following The quarter fourth pertains and to the

listeners update results, want to on to development. I recent a getting accounting Before

quarter in fiscal software the we presentation XX, During write-down in revenues of of third our a – regarding with discussion June with the change of third revenues. acquisition ended the highlighted deferred connection companies

after that from ASC the the we only change, acquisitions XXX, completed during removed during year necessitated has FASB have acquirers. under leaving deferred over of we hoped, write-downs fiscal requirements completed As adopted XXXX. XX, $XXX,XXX by September of acquisitions held XXXX, XXXX software revenues Beginning with fiscal the write-down

to welcome forward, deferred connection need we revenues restores with first results this acquisitions which with development, performance our a aligns GAAP software We field write the peers. our Going better in will our very a level not and place. consider playing with in down

Please We and record website to reference Performance million results. revenues quarter quarter payment the EBITDA. slide on another this ended refer solid with increased Supplemental to titled the to reflecting adjusted fourth for we continued we September metrics through million experienced XX% track on discussion. volume, quarter had in presentation our Revenues for the with $XX.X direction. quarter, and early part for in the healthy XXXX, – all acquisitions. and June growth are September right in from during momentum the The the October of of organic Almost was QX headed $XX.X Moving November.

in compound annual least mid-XX% the total period. growth. have companies grow For that over volumes two to continue owned two-year a To years, represents not we growth, to clarify, for payment at

XX yield QX payments basis our Our improved hit integrated for helping XX%, new points quarter for to high of XXXX. the a from revenue XXX basis points percentage

overhead QX refer for completed percentage Delta revenues QX with from QX outpacing and We the was of XXXX, percentage in and million XXXX, flagship QX in a XXX% also fourth despite as of year-over-year, program record growth The a a schools million XX% outperformed education XXXX variant. Again, increased well $XX.X free for our corporate year. million after QX weighting XXXX. a Proprietary XX% revenues forma QX. Software our sector of for to reflecting in with healthcare the XX, press across QX roughly $XX.X and release Software Proprietary strong from Proprietary lower XXXX, XX% the hospitality in the vertical, the consolidated for Payments for more increased QX the we reflecting $X.XX basis, XX%, public contributed to rebound the adjusted represents per revenue healthcare every we reflecting QX exclusively the as even also Education for XXXX, XX% The continued, revenue was our have $X.X but in diluted open, EBITDA in and growth compared acquisitions. the growth On up as revenues. QX half launch momentum retail great revenues while XXXX, representing QX increased September increased a an adjusted them continued description XX%. our expectation run segment’s has reconciliation. share for to sector segment growth $XX.X XXXX. Payments for of quarter principally $X.X our to continued for of public over increased XXX% payments of now principally EBITDA EBITDA and business to full continued but and million of been Software from margin segment The to despite recent way healthcare Adjusted the estimated of vertical. improvement growth, our new services from is to the our $X.XX for acquisitions. a Pro performance. sector have please board Segment continued to million $XX.X million in $XX.X The in Acquisitions This revenues segment’s Software XXXX, for XX.X% XXXX in quarter. and to almost proprietary margin XXXX driven a of rebound vertical, showed for record improved software year. by more a record. EBITDA have XX.X% The earnings revenues. quarter for Revenues from a – percentage quarterly quarter. software, XXXX adjusted schools during wrap QX was for but principally a strength rate an public EBITDA as XX% emergence sequentially Adjusted million

public adjusted growth. for $XX.X million believe a segment, Revenues $XX.X QX year marking at continue also in higher $X.X XXXX. million million Adjusted a for retail reflecting EBITDA quarterly for can our million our in volume margin and increasing billion Merchant to XXXX rebound for Merchant as of the Services set with payment to QX, quarters EBITDA a a revenues. more The improving future be was QX continue and Services for our quarter. almost two in XX% EBITDA For healthcare XXXX, a from the XXXX will segment to EBITDA quarter, hospitality, QX the XX% Services from we for the sector margin for power for record BXB. $X verticals and $X.X segment row QX than seen sequentially segment higher increased transition, fiscal record, Merchant contributed The recovery the in XX.X%

sheet. balance Our

allowed net The cash facility. our borrowed us execute has $XXX Our million strategy. acquisition $XXX September revolver convertible million a sheet strong XX, of our we notes value $XXX to our continue On had are million. of face under to under balance

total our while current XX, As the of is September was X.Xx, Xx. leverage ratio constraint

roughly the for absence by healthcare QX, convertible of remain leverage interest December October the in rate the rate cash million, for an for the than Over the internally Greg, we taxes. interest notes of is calendar flow Xx mentioned but end a put acquisitions we for used as million. quarter, currently be filing is of The two-thirds As while the flow, acquisition or and EBITDA cash cash completed expect EBITDA recently we our at-the-market $XXX $XX X%. for less in adjusted X%, expenditures, for We on can to than repayment. ratio which convert before debt less adjusted time, shelf We X place additional expect to software, either define interest total capitalized into free cash revolver acquisitions minus year. the capital free

$XXX and million gives From acquisitions utilize us looking standpoint, not companies. excludes been $XX under generally each the the fiscal $X.XX different EPS million, yet forma if forward, sold a adjusted have to have We current the $XX seasonal different with our other transaction-related mix strong yet update to in of XXXX. closed, to have quarterly for million, shelf shelf, costs. adjusted year stock EBITDA patterns, not will that the finish counterbalance which investors following to million verticals our pro $XXX we guidance confidence Outlook, any with future. It year but seasonal we the diluted fiscal Revenues, $X.XX. in

As perpetual revenue is our generally though upon quarters more license even we vary recurring software-centric, sales, more trend streams. toward based become might

All the and updates hospitality, equal vertical. call rates our now M&A over XX%. K-XX schools, Following our includes to following retail, which BXB. Public the XX% healthcare, in and revenue acquisition, recent company XX% sector, non-profit I’ll other we other activity. parts, Rick public healthcare and run for includes all turn estimate by and

Rick Stanford

I’ve few I’ll I morning, things After a will Thanks, Clay. that, Good before. everyone. an begin on with M&A. addressed discuss update

First, sector offering unified our we are vertical. public within aggressively our moving product on

multiple sales both expanded Carolina, sales judicial North North Tennessee with solution last iX through sector Over and and Georgia Tennessee. among have Georgia, product entities. also secured Alabama AI quarter, we geographic Carolina, product iX We’ve software reach in the our software and successfully collaboration a in public

Alabama encompasses accounting. we in of court companies within state level Our signed Georgia, have and utilities with multiple expanded into our contract types billing our courts first also solution, which

and the secured was signed recently of statewide we LCRAA, Authority. significant UPO Remote Additionally, Clerks a That with Louisiana direct a result Access our contract efforts.

experience solution provide their of in aligns in vision and Louisiana. time, Court will the able be This For that comprehensive all across electronic the Clerk with first or Parish standardized constituents support to for LCRAA’s courthouse of will be throughout state. technology standardized processes

feeds reporting solution their sector requests expertise management paperless demonstrations other solutions our It addition, for from coordination for number constituents. payment insight and state systems, interface. fully from unified in integrated public result bench a iX we product solutions In responsive data the presentations an and criminal seven for smart expanded include customers three system. case integrated be solutions assisting noted calendaring average civil uptick The by This offering companies. the integrated that Clarks, we is agencies our e-filing, have Through software will and the and of a benefit them AI an domain among our quarter. are of enabling new seen and in to provide fourth integrations, of seamless should and

governments. local we state was around of of tied purchases. likely effects two plan, more A billion next this or is those it’s too increase earmarked for the the American see believe real $XXX We and to While rescue to is outcome. which a year gradual early education believe over growing in some still

end signed front, XX% ISVs process of fiscal ISV quarter of in integrated fourth seven integration. was the the our the our of more total and with On number at

and technologies, enhance realizing Platform critical users our continue to bring together. will to a developers. to single into and we our and technology for is our for destination services updates, Platform, Burton vision which Burton capabilities modular end how technology acquired built suite investments is product Regarding come The purposely together a of

of accelerate serverless educated solutions and other verticals. significant investments to as the to needs term allow and the we us us infrastructure hardware make which These infrastructure multiple We from of pace having to using one example be many in and continue made cloud-based technology each without services farms person our acquire mitigating on to and settings our than specific architecture that all from infrastructure of products piece products use manage the at of a patterns, to the support be hardware. code is resources managing adjustments the take including to modern cloud-based hardware on technology This also Expanding rather settings, assurance. server better in code new rather templates It across control spin others acquisitions. network allow I our will allowing specifically enterprise. of save directly us micro vision. machines to to the and is up us that other to managed each hardware than in and new and directly. needs allows and allows sure make accessing would matches post code, use across infrastructure’s it place without close This AWS quickly deploy exactly quickly hardware just

its Now, trends, briefs pandemic. intergovernmental and action of prompt who The team research grants reimbursement practices coding pursued vertical. The its departments new be By combining service managing customers focused on provide of of as and leverages of vertical. to stepped our improved a reimbursement, M&A. attracted potential technologies established has purchased to including able quarter, for mentioned relationships couple accounts reimbursement optimized, secure record Last that we’re revenue devoted sheet remain from agreements hospital and completion coding loan That execution has I’ll previously marketplace. expertise software X, the services proactive that and safety negotiating revenue integrations healthcare are Analytics to residents, cycle have thrilled COVID reliable provides This healthcare to on are we flow. medical and billing that contracts cash to acquisition, second the This and during array Medicare defined Legislative date varied with reimbursement purchase diligence payments. announce of speak for in administrative are direct and processes, we for non-binding was To an largest performance and a soup platform various expertise, transfer being closed other stayed up that offer October systems software deal process. with hospitals. and the initially. products angles, and for allow term become academic attractive hospitals, cycle from that to other collections. major ahead implications acquisition founder management, Southeast. teaching been customizable the The has groups has to this Cross-pollination with impending and and an healthcare shifting with businesses and practice institutions primarily issuing in the look including intends nuts CEO. business are that business increased telehealth seamless the exception position resulting related medical is and our synergies clients by original and he operate consulting net changes business management management in old fantastic stay providers. consulting comprehensive and to business. and physician a expanding They applications not forward Opportunities of business XX the prompt services. auditing. This to payers, to business, among but including on in resources and critical cycle to the our revenue are and efforts of claims enhanced modeled successor systems, clients years trends is health with service a in to are healthcare ahead Medicaid clear, There to over receivable proprietary only provides

sector similar we we unified of our have the created have to public vertical, process Now product of breadth size vertical. and that enough creating product our within healthcare a offering begun

healthcare within a this multiples within template, We the remain relative we We range. successful vertical. fell our have our approach intend standard in acquisition replicate to and and disciplined it to

sector this please. we’ll pipeline the acquisition has and my sharing in the on M&A healthcare Our more Jamie. At call near-term. we and forward comments, for look public time, that open Q&A, order, emphasis an on in This to front the concludes

Operator

Please [Operator Ladies and begin Davis your the from Our today John with Raymond we’ll session. ahead go first question. question-and-answer gentlemen, comes Instructions] now from James. question

John Davis

a guys. that ones quick deal good couple the in just Maybe Hey, of recently you closed on X. healthcare guys October morning, just

ranges. So the help than Rick, guide. to to But I average? impact just trying the kind us back margins appreciate valuation the of revenue Clay, corporate similar into competed Just on commentary maybe

Clay Whitson

Yes.

expect margins most like the We area of our in XX%s businesses.

John Davis

of here. Okay. a stands split And payments talked software? The revenue revenue then, today? about the you and synergy – today, as it is what’s business XXX% bit software Rick, potential little Or the the business kind

Rick Stanford

they small our software The total and businesses. services where software It’s today services. opportunity a those they have it’s dependent obviously, big services they’re use is JD, model. payment revenue. healthcare some other – us into perform That’s their piece cross-selling a to on of revenues, for obviously, products of but more

John Davis

it. Got

just Okay. there midpoint, at any growth digit on what is. getting Clay, the guide, rev I the a organic obviously, in And on kind organic My guide math the XX% on it’s just the low-double side. think, of commentary somewhere implied But growth. then is the

Clay Whitson

it year. this coming Yes, is. expect We growth do double-digit

John Davis

about around think, organic? mostly the been then are you’ve corporate so, Great. Okay. done or the level. And that most margins, implied think basis deals XXX I Is that’s I points. have margin about XX% of

there? So forward, should that’s any the color think XXX kind way about just kind going of points if basis curious there of we margins or

Clay Whitson

the on which Well, get line. midpoint, to I basis XX.X%, expect our at we where leverage not get is quite corporate points. the XXX is But

as corporate line. from the at quarter, revenues we to example, If X.X% you revenues fell of of the X% fourth an look on

go fixed. are expenses there. get So the good we pretty leverage And relatively up, revenues as corporate

John Davis

guide quickly, one Last on the Okay. Clay.

guide. add you midpoint if kind it, So just you deal, annualize the take the in you you when of of the get XQ and

me much but question you vice to clearly few built swing talk guide million factors be of over $XX to impacts of How that conservatism some closer is that the conservative, could it is just versa. it about the maybe So end appears for the months. next in unknown to higher the to Delta of guess I in

Clay Whitson

we’re think do, is sure scientific our you earnings, Yes. the XX% to are like the one from open, feel the variant, all but not economy. but two When like upside like back like in about but people that. I if XX% a there’s general The I I’m going XXX keeps internally, think used in general feel number, on variability which they now, we they of hold I feel and Restaurants it’s but hold XX anyway, California very things, people, Hawaii, just another we out, Delta economy.

forecasting year, our Those if of of our XX% the today. the versus are perpetual In earnings remains of year a our almost dropped factor it in line. of is from the the is last XXX% We’re margin. same variability And QX QX to it total. big to They other total sales perpetual deliveries. this the license as fell as bottom straight X%

percentage so any quarter, fair a margin and of line. that’s in And bottom amount given

John Davis

it Very for That’s Okay. guys. helpful. me, Thanks.

Operator

from comes Mihalos ahead Please question question. your go from next Our George with Cowen.

George Mihalos

education sector business, ask, on changes sort lot of business, more health the you seasonality, norms, in sort I on sort of a wanted guys. going an compared of talked there. Clay, are your and in you there you or to some don’t public about historical have as of Congrats results, to mentioned Great. big obviously, and

fiscal call of kind can us anything to or may you quarterly point on So basis? next think sort out of want we year the as you modeling about just to a

Clay Whitson

quarters. When are different in we look factors different there it, at

sort of We like all They’re in have for fourth boards calendar thing. does a boards, the that licenses that strong types company nursing quarter. of

I think in spoken up the warrant about round we’ve the past.

some traffic refunds, in to get and of come out tax our and their tickets they pay warrants. companies, respond So people after

a balance for September quarter. fourth quarter. In sort out. these the have so of the quarter, And March things so all But we that’s our the best bump quarter, education in us

think I of to there’s with is so quarter, give the growth if are model advice – it when think But it’s could closed. quarter. quarter the bit And weak the every little just I best a completely I June best a schools

So half, our as would used the front than back half verticals. not seasonal be we’re as little diversification be we but across of steeper the to because the a year of

George Mihalos

Okay. here. Then helpful. That’s a just for maybe that color. question I appreciate Rick

a about M&A is I pipeline, smaller think that the the still opportunity just non-profit, the of focus hospitality, some now company BXB the verticals, think, of sort As standpoint you given health? sector and be have are schools back? start temporarily if expect even to in public constrained it all you coming really a obviously, you And at And from leverage you for near-term?

Rick Stanford

Yes, George.

public to our the focus public M&A of the sector or on forward. going today. forward, our That’s BXB find sector going we and big want that’s that and won’t focus say pipeline healthcare, and care understand in So are if non-profit, take you health our at we something to not a look majority we it, but

was, The was second question you what that? ask

George Mihalos

leverage on to related near-term constrained the all leverage, Just you ratio. based at Rick, feel

Rick Stanford

to M&A there There’s full. continuing is to No. the entire of deals, and talk. depending on plenty for The still and out stuff my partner, go want Clay, look team. people pipeline I’m out

we’re the So to middle. keeping the pedal

Clay Whitson

cash fair a Yes. I flow amount. mean, we

like And so think and people were I pay million we it a but last December. quarter, acquisition we a just by did again down felt constrained, we’ll $XX little

$XX deal, is for usual our big pretty So million us.

Rick Our much a way smaller. to out if finance does we’ll usual deals And find figure something it. outsized, that’s are

George Mihalos

on Congrats guys. the you quarter. Thank Great. Okay.

Clay Whitson

you. Thank

Greg Daily

Thanks, George.

Operator

your from go Please from D.A. Peter with Heckmann question ahead comes next Davidson. question. Our

Peter Heckmann

Good the morning It and sounds Louisiana on congrats like deal. a real nice opportunity.

well, fees. on recognizing revenue would as a variable would multiyear LCRAA expect be regards fees and if deal perpetual that a And Or a that to expect structured both has – one, is that you fixed begin deal would As deal? when when that – license? that then to has you as the

Clay Whitson

a get years. bit we’ll to like XXXX, fiscal bulk but of three be in five e-filing, of little some the over will it quarter, Pete, in it fourth revenues the for payment

that, is some course people contract things – then our so the for need year this And to hire people going great customize pretty hope get is the pricey short-term, something to to over us. build of this and and the will XX In some I business understand about installed. we’re is it things

land And the healthcare so But it. year really out to way. contracts, six will. the the number of if Also, act it that’s a lucky enough for line. bottom our contract that years, certainly LCRAA case need won’t But help we’re before businesses we’ll way, think invest our in a up it of I up. for fiscal And couple to that can a brought to would you are XXXX, that we rewards for months from any this staff with reap big

Peter Heckmann

great. That’s of functionality public Have you number to and or to brand sector and of crossing about umbrella – build something really brand bigger just And a mean an great. list Verticals then your have built in just you over public the contracts. you all would sector of potentially the thought you that to That’s different sector software a about I roster really iX courts public is umbrella from on areas new engagement. that time brand unify? mean, thought creating impressive an as – to picture citizen

Rick Stanford

Yes. Good question.

public sub of iX today, the We brand iX itself by booth the allow their of public – all that’s sector. we’ll and they the are as sector DBA. and companies We’ve But materials most shows the individual And added continuing to brand, use the attend to vertical. how

So that direction. the we’re gradual, we’re but definitely going. way It’s that’s moving in

Peter Heckmann

makes I sense. have right. Okay. Thanks. That’s All right all That now.

Operator

question Jason comes next from ahead And Please question. go with Bank from your America. of Kupferberg our

Cathy Chen

Cathy is on for Hey, guys. This Jason.

to a two-part I and wanted go there. I just question back ask about margins. First, guess

seasonality. guys you have obviously, first, some So

it back to to the that as right higher. second of year about guys XX% Is then half obviously of you of year. know part the the progression in that about sounds basis did that maybe the we acceleration talked like maybe like think back in guidance I margin pipeline stronger. like XQ the So that sort typically XX XXXX though, is is materially it throughout of the jumping-off about half is you question, well. the when kind further the got expansion, like, which you the guys fiscal of long-term how historically, XXX way we and think throughout – point point annual Even And investments some two-part

Just about about how Thanks. we talk thinking that. should be

Clay Whitson

this here. first points February from through guidance or COVID. fiscal March still was half a XX And is certainly this through of the year Well, basis little depressed

And so bigger expense revenues corporate just leverage help that line.

for so basis as points XX this that account XX to might basis And year. points opposed

we has guidance our on point to plan XX always think probably basis basis the points, XXX XX I range. but more been

the the year, quarters As as seasonality, to far comparisons on think the a modest had grow if XXXX, previous by to opposed some you of. first percentage fiscal was focusing as distortions, I year just half off the course we normal a it’s given year. of normal the which through acquisitions have to year, year. compare not XXXX in – a But the any

a that need long So factor acquisitions if you the look you that at take answer? historical was of quarters. percentages, were during and kind those quarters help out Does to that made

Cathy Chen

look any a to its or guess, obviously, vertical can more that that, in Yes, any Yes, has XX% growth guess, by of a full help that’s you about grow why. Just the seeing, talk business rate maybe just the growth – would I trends revenue the on go take the maybe also you’re little volume back and year be understanding of to we you’re just something in around, call going great. growth, how yes. it, Is it’s for that bit wanted XX%? take And of That obviously code seeing is about was and payment XXXX? to zip maybe quarters, mix how ask, helpful. and revenue do volume growth output with changed. then I couple that’s Can last at

Clay Whitson

continue Well, expect been the fact since revenue And to It’s yield buying I to that increase. our companies. the we’ve do the been increasing principal driver software is that of IPO.

getting companies have third-party XX% usually And revenues, software company it or revenues. come some the so they outsourced in to something. don’t any beginning, payment with of and payment software If the they’re

there’s own software time, to not will But and the over So beginning, that add no in volume along there’s we much increase go with – our revenues. in payments volume. the

yield that’s the payment so X% revenue to And proprietary year. X% the segments, jumped software why over from

the we’ve would goes, far volume. Merchant steady normally, expect you – as segment revenues Services ratio As and between pretty

like carry equipment what with are that are quarters, we’ve things them. there of them, with couple carry in volume Services last the Merchant seen in segment, that any think fees the which any I monthly don’t is revenues volume some doesn’t

And so when the them. economy fees monthly and bounced those back from COVID, volume jumped, but don’t with equipment jump

little in now. be But economy still we’re a steady to getting comparisons some COVID. decline from forward. a normal I hesitancy have that there’s going pretty think do there, the segment should you So but bit pretty of

Cathy Chen

Okay. Yes, makes sense. that

not So really just that’s mix, it’s business more obviously, anything changed. like

then than has like the maybe to Okay, thought the in company. we higher vertical, of a kind It could of integrated by fall the are guys be organic single-digit actually that given sounds in like couple guess, double I a one. is ago, maybe at slip guess, high structurally profile. to kind businesses it? fully growth higher business I should now And the to profile historically years that, way how obviously, are mid digits, the thinking of into still growing grow that’s you way back quick right I line really that the that business like kind last story? since the Or going like know. growth good of acquired Is of about the a on if

Clay Whitson

XXXX half like In grow first are long-term question, bit Well, give XXXX, hampered. normally But a of think little the say, XXXX we’ll asked the I’m glad rights you we this. these I we rates. is double-digit. was

And so XXXX, double-digit our is growth. target

we sustain clarity have we until the guidance, high digit double-digit growth think, a of rate. as such remains Our seeing can I time single

And is so target our double-digit.

remains long-term single digit. guidance Our high

Cathy Chen

Okay.

care. Take you, guys. Sounds good. Thank

Operator

from ahead comes next Mark BTIG. with your Our Please question from go Palmer question.

Mark Palmer

morning Good question. Yes. for my thanks and taking

is likely the roads, plan potential benefits see infrastructure You is state rescue to you to benefits We couple that going the opportunities the infrastructure as your of to course, translate just to toward be be going at to years. local well of plan bridges, $X and remarks And much that’s of to but that mentioned saw bill there over for devoted there’s municipalities, in et American governments. as state or INS local disbursed governments. revenue be to be next that million into going is $XXX through enactment of a well? Do going and incremental trillion it from aimed cetera, the that any with,

Clay Whitson

more for It’s hard it. forklift truck people around, buying to heard targeted ways when think of, spend say, tell with Mark. there’s to I things money a find security, they it. washing We’ve do

spent gets intended, find way they it. spend to way other that’s when vast but majority it the So of the people to need money spend

not And so the I as think goes, particular Do the in digit. even if a money, as it’s the far better more targeted public area you… sector

Rick Stanford

I you. agree with

Mark Palmer

the the both company’s question. the And of seen integrated from the derived settled We’ve percentage percentage revenues in more just terms revenues one derived software well total payments. company progression, of of nice from a as as

would these course, thrusts there a major – the do point you be at of integrated in of example, there are cap what And payments, any is Of those Thank evolving be which terms you. on percentages strategy. How time? the see is two would there achievable. for over

Clay Whitson

several versus years. last for target the payments XX% been mix our Well, for the has software

no We’re we’ll number, customer we’re secondary And think I it’s purchases, to not – higher adjusting doubt software, target is our that. the services, end a payments. thing. when about up in there’s a a payments that the adjust because now all approaching mind The

We’ve want clearly driver’s want of seat more be felt we be. to where the owning so we the that’s the to software, more And in success and and often.

that So I will higher. go think

as a years the slower That and changing. get thought vision get far the will that always XX% would percentage, cap integrated end XX%, was we closer it ago. we we’ve out get three going, to – should As around could up from

that differently feel any about You nowadays.

Rick Stanford

with you. agree I

Mark Palmer

you. Thank

Operator

Sandler. from question Donat your And our Chris Instructions] ahead Piper with Please from question. [Operator comes go next

Chris Donat

good Maybe gentlemen. the on two Hi, for Rick Louisiana Thanks taking win. for question. morning, my

of first, like And background how RFP? give is the if then is was one it is – this has Just was, authority access could it transaction, this Parish you kind a also the because structure. us similar if an looking if mode and the structures Was process that. all some of – sort there sales forward, Clarkson of or do wondering unique seems there Louisiana you system long out unique sort and of on like it, a will. Louisiana it organized is how are I’m

Rick Stanford

and found in us we and months ago a a we smaller your that were obviously, dwindled the Chris. to definitely took very question, pandemic It out excited get shape then It Yes. Thanks it while. was three probably The to for process. a We down list slowed contract. bit. good bid down were a little

the it to The how makes decisions, is is Louisiana unique. Parish unique of about who think Parishes Parish. absolutely I whole operate, state

We’re questions? that we’ve across us think this very was and excited answer the excited for we’re contract it’s that it biggest state, signed, it’s We this in Did be a all going relationship people win. Clarks ever to pulling good hand for and your for the to had wonderful a definitely because have. for the our off,

Chris Donat

did you of Yes, you one. and caused me to think another

where of down. because and is delayed public starting pandemic has you’ve now pandemic? slowed picking the things down something that the sector bidding mentioned seen that just in slowed Is that elsewhere had processes decision-making the been that or You been up

Rick Stanford

the full projects on But in pandemic, fronts we’re public decisions had were we up steam right delayed, we delayed that were being ahead sector. early on those. couldn’t so now Definitely picking in being executed yes, start all

Chris Donat

much, Rick. very thanks Okay,

Operator

I’d And time, for ending ladies remarks. the and to turn any question-and-answer session. closing this be at back gentlemen, we’ll Greg like to floor today’s over Daily

Greg Daily

done everyone, And think here in iX participating. explaining we ever company. keyword Thank a all a good is with than that I throw like for momentum our around job of we’ve more facets you, I pivot appreciate feel our healthcare participating have forward your sector. again, a our And public well. to I there’ll call tuned, things But updates today. going are more that. in Stay day. focus on in of more and good be our

Operator

with attending We for and call. today’s conclude you Ladies conference we’ll today’s do that, presentation. thank gentlemen,

now may disconnect your You lines.

i3 Verticals (IIIV) 18 Nov 212021 Q4 Earnings call transcript