Exploring i3 Verticals, Inc. (IIIV) Investor Profile: Who’s Buying and Why?

You're looking at i3 Verticals, Inc. (IIIV) and asking the right question: with all the market noise, who is defintely buying this stock, and what's their conviction? The answer is a wave of institutional money, but it's a story of strategic transformation. We're seeing a significant 84.22% of the stock now held by hedge funds and other institutional investors, who collectively own over 33.1 million shares, and their buying accelerated in the third quarter of 2025. For example, Jennison Associates LLC dramatically increased its stake by 485.8%, adding 778,616 shares to its portfolio, which is a massive vote of confidence. Why the rush? The company's pivot to a pure-play public sector software provider is finally showing up in the numbers, with full-year 2025 revenue from continuing operations hitting $213.2 million and Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rising by 14.0% to $57.5 million. That's a powerful signal. But with the stock's price at around $28.54/share and a mixed bag of insider selling, are these big players betting on a low P/E ratio, or is it the stability of that 76% recurring revenue base that has them piling in?

Who Invests in i3 Verticals, Inc. (IIIV) and Why?

If you're looking at i3 Verticals, Inc. (IIIV), you're looking at a stock dominated by professional money managers and company insiders, not the average retail investor. This ownership structure tells you the investment thesis is complex, but the core attraction is the company's strategic pivot toward a high-margin, recurring revenue model in a sticky market: the public sector.

The investor base is overwhelmingly institutional. As of late 2025, institutional ownership sits at a massive 84.51% of the shares outstanding. Insider ownership is also remarkably high at 32.01%, with CEO Gregory S. Daily being the largest individual shareholder, holding over 7.18 million shares, representing 22.26% of the company. That level of skin in the game from management is defintely a good sign.

Key Investor Types: The Institutional Heavyweights

The sheer volume of institutional money means the stock's price movements are largely driven by large-scale capital allocation decisions, not retail sentiment. These institutions fall into a few key categories, each with a slightly different mandate for holding i3 Verticals, Inc. (IIIV).

• Mutual Funds/Index Funds: Giants like Vanguard Group Inc and BlackRock, Inc. are among the top holders. They are largely passive, holding the stock because it's part of a small-cap or technology index, or because their active funds see a long-term growth story.
• Active Asset Managers: Firms like T. Rowe Price Investment Management, Inc. and Geneva Capital Management LLC are actively selecting i3 Verticals, Inc. (IIIV). They are betting on the company's successful transition to a pure-play public sector software provider.
• Hedge Funds/Specialty Funds: These investors, including Long Path Partners LP, are more opportunistic. Their activity is mixed, with some funds increasing positions (like Jennison Associates LLC adding 778,616 shares in Q3 2025) and others exiting, indicating a focus on the short-term volatility around the transition.

Investment Motivations: Betting on the SaaS Pivot

The primary attraction for these large investors is the company's successful divestiture of non-core businesses (like Merchant Services and Healthcare RCM) to focus on providing mission-critical enterprise software solutions to government entities. This shift translates to a more predictable, high-quality revenue stream.

Here's the quick math: For the fiscal year ended September 30, 2025, i3 Verticals, Inc. (IIIV) reported total revenue of $213.2 million, with Annualized Recurring Revenue (ARR) from continuing operations growing 9.2% to $165.3 million in Q4 2025. More importantly, Software-as-a-Service (SaaS) revenue jumped a healthy 23% in Q4 2025, showing the pivot is working. Plus, the company has a strong balance sheet with $67 million in cash and no debt as of September 30, 2025, giving them dry powder for strategic acquisitions.

Investment Strategies: Growth, Value, and Volatility

You see two main strategies at play here. The first is a classic long-term growth strategy. Investors are willing to ride out the near-term transitional volatility (like the stock drop following conservative 2026 guidance) because they believe the public sector software market-courts, public safety, utilities-is inherently sticky with high barriers to entry. They are buying the future of a pure-play software company.

The second strategy is value investing. Despite the growth in recurring revenue, the company's P/E ratio of 5.56 is relatively low compared to its historical range, suggesting potential undervaluation. Investors focused on this are buying a company in transition, believing the market is mispricing the long-term stability and high gross margin (87.21%) of the new business model. Some hedge funds also engage in short-term trading, capitalizing on the stock's volatility as the market reacts to quarterly earnings and transitional challenges.

To understand the full context of this shift, you might want to review the company's history and core business model: i3 Verticals, Inc. (IIIV): History, Ownership, Mission, How It Works & Makes Money.

The key takeaway is that the smart money is focused on the long-term story: a software company with a strong balance sheet and a protected public sector moat. Your action should be to model the discounted cash flow (DCF) based on the projected recurring revenue growth of 8% to 10% for fiscal 2026.

Institutional Ownership and Major Shareholders of i3 Verticals, Inc. (IIIV)

You want to know who is buying i3 Verticals, Inc. (IIIV) and why. The direct takeaway is that this is a stock overwhelmingly controlled by large financial institutions, which signals a core belief in its specialized business model, particularly the Public Sector segment. As of late 2025, institutional investors hold a substantial portion of the company's stock, providing a foundation of stability but also magnifying price movements.

The institutional ownership in i3 Verticals, Inc. is exceptionally high, sitting at approximately 84.22% of the outstanding shares. This means that for every dollar of stock traded, over 84 cents is held by professional money managers-not individual retail investors. This level of control suggests these sophisticated investors see a clear, long-term thesis in the company's integrated payment and software solutions. The company's market capitalization is around $936.2 million, as of November 2025, putting it squarely in the small-cap growth territory where specialized institutional interest is common.

Top Institutional Investors: Who Holds the Keys?

The largest shareholders of i3 Verticals, Inc. are a mix of major asset managers and specialized small-cap funds. Their presence is a strong vote of confidence, as these firms do deep due diligence before committing capital. You'll see names you recognize, like BlackRock, Inc., alongside firms that specialize in the kind of growth story i3 Verticals, Inc. offers.

Here is a snapshot of the top institutional holders, based on their most recent 2025 filings:

Here's the quick math: T. Rowe Price Group, Inc., Vanguard Group Inc, and BlackRock, Inc. alone control a combined stake of over 28% of the company. That's a massive concentration, and it means their investment decisions defintely move the stock. If you want to dive deeper into the fundamentals that attract these giants, you should check out Breaking Down i3 Verticals, Inc. (IIIV) Financial Health: Key Insights for Investors.

Recent Ownership Changes: A Mixed Signal

The recent trading activity among institutions has been mixed, which is typical for a growth stock like i3 Verticals, Inc. that recently reported Q4 2025 earnings of $0.27 per share on revenue of $54.90 million. In the most recent reporting quarter, 89 institutional investors increased their positions while 85 decreased them. This near-even split shows a divergence of opinion on the near-term outlook, but the overall institutional presence remains robust.

• Buy-Side Conviction: JENNISON ASSOCIATES LLC was a major buyer in Q3 2025, adding 778,616 shares, an increase of over 485%. That's a significant conviction trade.
• Sell-Side Caution: Conversely, HARBOR CAPITAL ADVISORS, INC. removed 327,115 shares in Q3 2025, reducing their stake by over 71%.

The key takeaway here is that while some funds are taking profits or rotating out, others are aggressively building positions, seeing the recent quarterly performance as an inflection point. It's a battle of short-term caution versus long-term belief in the company's focus on high-margin segments like the public sector.

Impact of Institutional Investors on Strategy and Price

These large institutional holders play a critical role. Their sheer size means they act as a stabilizing force, but also a source of volatility. When a fund like BlackRock, Inc. buys or sells, the volume can easily push the stock price. The stock's Beta, a measure of volatility, is around 1.32, meaning it tends to be about 32% more volatile than the overall market. High institutional ownership contributes to this, as coordinated large-scale selling can trigger sharp drops.

More importantly, these investors influence strategy. They demand clear communication and execution, especially around the company's core growth drivers-recurring revenue from its Software-as-a-Service (SaaS) offerings and strategic acquisitions. The high institutional confidence suggests they approve of the current management's direction, which has delivered Q3 2025 revenue growth of 12.4% year-over-year. Their continued investment is a tacit approval of the company's focus on the public sector vertical, which is a stable, sticky source of revenue. The action for you is to track the top holders' movements closely; they are the market's leading indicators for i3 Verticals, Inc.

Key Investors and Their Impact on i3 Verticals, Inc. (IIIV)

The investor profile for i3 Verticals, Inc. (IIIV) is dominated by large institutional money managers who are betting on the company's strategic pivot to a pure-play public-sector software provider. As of late 2025, institutions hold a commanding stake, owning over 84% of the stock, which means their collective sentiment drives stock movements far more than retail investors do.

The investment thesis for these large holders centers on the quality of the new business model. i3 Verticals, Inc. has streamlined operations by divesting its Merchant Services Business for about $439.5 million in September 2024 and its Healthcare RCM Business for $96.3 million in May 2025, allowing them to focus almost entirely on high-margin, sticky government contracts. The most recent fiscal year 2025 results show this strategy is gaining traction, with Annualized Recurring Revenue (ARR) from continuing operations hitting $165.3 million in Q4 2025. That recurring revenue is the defintely the core value proposition here.

The Institutional Heavyweights and Their Stakes

The largest shareholders are major, long-term-focused asset managers, not typically activist hedge funds, which suggests a belief in the company's existing management and strategic direction. These firms generally file a Schedule 13G (passive investment) rather than a 13D (activist intent), indicating they are capital allocators, not operational disruptors.

For context, here is a snapshot of the largest institutional positions as of the most recent filings, demonstrating the concentration of ownership at the top:

The presence of firms like BlackRock, Inc. and The Vanguard Group, Inc. is common, as they manage vast index and passively managed funds, but their combined stake of over 3.6 million shares still represents a significant vote of confidence in the underlying public sector software business.

Recent Investor Moves and Market Reaction

The second half of fiscal year 2025 saw mixed signals, which is typical during a major strategic transition. While some investors were adding, others were reducing their exposure, reflecting a debate over the near-term growth trajectory versus the long-term value.

• Buying Activity: Jennison Associates Llc made a significant move in Q3 2025, adding 778,616 shares, a nearly 486% increase to their portfolio, signaling a strong conviction in the new model. Thrivent Financial for Lutherans and 12th Street Asset Management Company, LLC also made large additions.
• Selling Activity: Conversely, firms like Ameriprise Financial Inc and Marshall Wace, LLP completely removed their positions in Q2 2025, selling off an estimated 339,681 and 332,828 shares, respectively.
• Insider Activity: Insiders, including the General Counsel and Chief Revenue Officer, were net sellers in the six months leading up to November 2025, which can sometimes be viewed as a cautious signal despite the high overall insider ownership of 19.92%.

The market reacted sharply to the company's conservative fiscal year 2026 guidance, despite strong Q4 2025 revenue of $54.9 million. This is an expectation reset; the market is telling i3 Verticals, Inc. to prove that the strategic investments in JusticeTech and Utility offerings will translate into faster growth beyond 2026, even with $67 million in cash reserves to fund acquisitions. You can find more detail on the company's long-term vision in their Mission Statement, Vision, & Core Values of i3 Verticals, Inc. (IIIV).

Market Impact and Investor Sentiment

You're looking at i3 Verticals, Inc. (IIIV) and wondering who's buying and why the stock has been so volatile lately. The direct takeaway is that while major institutional investors like BlackRock, Inc. maintain significant stakes, the near-term sentiment is mixed, largely due to the company's strategic pivot and conservative fiscal year 2026 guidance.

Institutional confidence remains high, which is a strong foundational signal. Hedge funds and other institutional investors own a substantial 84.22% of the stock. This level of ownership suggests that the smart money believes in the long-term value of the company's transition to a pure-play public sector software provider. Honestly, that's a big vote of confidence.

Here's a quick look at the top institutional holders as of late 2025, showing who is defintely a key player:

• T. Rowe Price Group, Inc.: Holding 13.35% of shares.
• Nationwide Fund Advisors: Holding 7.91% of shares.
• The Vanguard Group, Inc.: Holding 7.67% of shares.
• BlackRock, Inc.: Holding 7.54% of shares.

But, to be fair, the sentiment isn't universally positive right now. While institutions are net buyers over the long haul, recent activity is mixed. For example, in Q3 2025, Jennison Associates LLC added a massive 778,616 shares, but at the same time, company insiders have been net sellers in the last quarter, which can give investors pause. Still, the put/call ratio of 0.23 indicates a generally bullish outlook among options traders, who are betting on price increases over declines.

Recent Market Reactions to Ownership Shifts

The market's response to i3 Verticals, Inc.'s transition and its latest financial results has been a classic case of short-term pain for long-term gain. The stock's price action around the fiscal 2025 Q4 earnings release (November 21, 2025) highlights this tension. The company reported Q4 revenue of $54.90 million, a 7.0% increase year-over-year, which beat expectations.

Despite the revenue beat, the stock's short-term performance was volatile. Shares initially rose 1.66% on the day of the report. However, the broader reaction was negative, with the stock seeing a 17.02% weekly decline and a 24.41% month-to-date drop as of November 21, 2025. This sharp drop reflects investor uncertainty, not about the past, but about the future.

The core issue is the company's guidance for fiscal year 2026, which was underwhelming. The market is reacting to the near-term margin compression and the expected decline in non-recurring professional services revenue as i3 Verticals, Inc. pivots to a higher-margin, but slower-to-recognize, Software as a Service (SaaS) model. This is a transitional challenge, and you can dive deeper into the fundamentals in Breaking Down i3 Verticals, Inc. (IIIV) Financial Health: Key Insights for Investors.

Analyst Perspectives on Key Investor Impact

Wall Street analysts are generally optimistic about the long-term story, but they are factoring in the current transitional headwinds. The consensus rating from eight Wall Street analysts is a 'Moderate Buy,' with five Buy ratings and three Hold ratings. This is a more favorable rating than the average for the broader 'computer and technology' sector.

The average 12-month price target is set at $33.33, implying a significant upside from the recent trading price. Here's the quick math: the highest target is a bullish $40.00, while the lowest is $26.00.

The impact of key investors and the company's strategic shift is clear in the recent target adjustments. KeyBanc, for instance, maintained its 'Overweight' rating-meaning they still like the stock-but lowered its price target from $35.00 to $32.00. This isn't a loss of faith; it's a realistic adjustment based on the company's own conservative outlook for fiscal year 2026 growth, which will see lighter professional services revenue due to the timing of projects. The analysts are essentially telling you that the long-term thesis holds, but the path over the next year will be bumpy.

The next concrete step is to monitor the Q1 2026 earnings call for any deviation from the conservative guidance. Action for you: Re-evaluate your entry point based on the $33.33 average price target and the risk of transitional volatility.