i3 Verticals, Inc. (IIIV): Business Model Canvas [Dec-2025 Updated]

You're trying to map out the engine room of a company that just finished a major strategic pivot, shedding non-core assets in 2025 to become a pure-play public sector software provider heavily focused on high-margin SaaS. Well, the results from fiscal year 2025 definitely tell a story: total revenue from continuing operations was $213.2 million, with Annual Recurring Revenue (ARR) hitting $165.3 million by the fourth quarter, all while keeping clients locked in with a 104% net dollar retention rate. If you want to see precisely how they blend mission-critical software, transaction processing (which accounted for 25% of Q4 revenue), and a disciplined M&A pipeline-all sitting on a clean balance sheet with $67 million in cash-check out the full breakdown of their Business Model Canvas below.

i3 Verticals, Inc. (IIIV) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that make i3 Verticals, Inc. (IIIV) tick, especially now that they've fully streamlined into a pure-play public sector software provider. These partnerships are the engine for their recurring revenue model.

Strategic M&A pipeline for vertical software acquisitions

The M&A pipeline remains active, focused on tuck-in acquisitions within the public sector. This strategy provides speed to market and immediate access to expertise and customer bases. The company has the financial flexibility to pursue these deals, reporting $67 million in cash and no debt as of September 30, 2025. This is after two major divestitures: the Merchant Services Business sale for approximately $439.5 million in September 2024 and the Healthcare RCM Business sale for $96.3 million in May 2025. Recent inorganic growth came from a utility billing acquisition in April 2025 and a permitting and licensing acquisition in August 2024.

Payment processors and financial institutions for transaction services

The partnership with payment facilitators is critical because it embeds transaction services directly into the mission-critical software, driving stickiness. For the full fiscal year 2025, recurring revenues comprised 75% of total revenue in the fourth quarter, up from 70% of RemainCo revenues in Q3 2025. Payments revenue specifically grew 11% year-over-year in the third quarter of fiscal 2025 and also grew 11% in the fourth quarter of fiscal 2025. This integration is key to their strategy, moving beyond being just a commodity processor.

State and local government agencies for large-scale contracts

Direct relationships with state and local government agencies form the bedrock of i3 Verticals, Inc.'s business. The company serves approximately 33,500 clients across its core markets. A significant recent win validates this focus: a new contract with the Supreme Court of Appeals of West Virginia to implement their case management software statewide. They are also in the process of finalizing a contract for a statewide court system in the JusticeTech market. Their solutions architecture is designed to scale from a single agency to an entire state system.

Here's a quick look at the market focus and recent growth:

Technology vendors for cloud and infrastructure support

i3 Verticals, Inc. relies on common infrastructure, security, and development platforms, which are managed internally by the i3 Infrastructure Group. This internal focus supports their delivery of mission-critical, cloud-native enterprise software. The company's focus on SaaS revenue growth, which was 24% in Q3 2025 and 25% in Q4 2025, suggests a heavy reliance on scalable, modern cloud technology partners, even if specific vendor names aren't public.

• The company completed the divestiture of its Healthcare RCM Business, which reduced headcount by over 400 employees.
• Annual Recurring Revenue (ARR) from continuing operations was $165.3 million at the end of Q4 2025.
• The full-year 2025 Adjusted EBITDA from continuing operations was $57.5 million, a 14.0% increase over the prior year.

Finance: draft 13-week cash view by Friday.

i3 Verticals, Inc. (IIIV) - Canvas Business Model: Key Activities

You're looking at the core engine driving i3 Verticals, Inc. after its major portfolio reshaping. The focus is now squarely on mission-critical software for the public sector, and the key activities reflect that pivot. This isn't about guessing; it's about the numbers from their fiscal year 2025 results, which ended September 30, 2025.

• - Developing and integrating proprietary vertical market software (VMS)

This activity is central to locking in sticky, recurring revenue. The success of this integration is visible in the Annualized Recurring Revenue (ARR) from continuing operations, which hit $165.3 million in the fourth quarter of fiscal 2025. Furthermore, the net dollar retention rate for the full fiscal year 2025 was 104%, showing that existing customers are not only staying but spending more within the platform. The company serves approximately 33,500 clients with these tailored platforms.

• - Executing the strategic M&A and integration playbook

The M&A playbook remains active, as evidenced by the inorganic revenue contribution in fiscal 2025. Specifically, a permitting and license acquisition in August 2024 and a utility billing acquisition in April 2025 added to the top line. The company is clear that it intends to use its cash position for future acquisitions. For context on the scale of the recent portfolio changes, the sale of the Healthcare RCM Business in May 2025 brought in $96.3 million in cash, following the September 2024 sale of the Merchant Services Business for approximately $439.5 million.

Here's a quick look at how the revenue composition reflects this activity:

• - Processing high-volume, non-discretionary electronic payments

Payments are embedded within the VMS, making them non-discretionary for government and utility clients. While the company has de-emphasized pure payments, the segment still contributes meaningfully to growth. For the third quarter of 2025, revenue from payments increased by 11% compared to the prior year period. This activity supports the overall recurring revenue base.

• - Transitioning clients from licensed software to SaaS models

The shift to Software-as-a-Service (SaaS) is a primary driver of the high recurring revenue percentage. The growth in this area outpaces other categories. For instance, in the third quarter of 2025, SaaS revenue grew by 24% year-over-year. This transition is key to the financial profile, as the full-year 2025 Adjusted EBITDA margin stood at 27.0%, up from 26.4% in 2024, supported by higher-margin software sales.

• - Investing in Justice and Utility product R&D for future growth

Investment in product development is a necessary cost that slightly tempers near-term margin expansion. Management noted that the investment in Justice products was a factor keeping the full-year 2025 Adjusted EBITDA margin improvement on the lower end of their long-term expectation of 50 to 100 basis points. The full-year 2025 Adjusted EBITDA was $57.5 million, an increase of 14.0% over the prior year. The guidance for fiscal year 2026 includes an expected depreciation and internally developed software amortization expense between $10.5 million and $12.5 million, reflecting ongoing capital investment in the platform.

Finance: draft 13-week cash view by Friday.

i3 Verticals, Inc. (IIIV) - Canvas Business Model: Key Resources

You're looking at the core assets that allow i3 Verticals, Inc. to operate and grow in its specialized public sector niche. These aren't just assets; they are the deep roots that make the business sticky.

• Proprietary, mission-critical public sector software platforms: i3 Verticals, Inc. provides mission-critical enterprise software solutions to public sector entities, focusing on functions like courts, public safety, public administration, utilities, transportation, and schools. The company has thousands of software installations across all 50 states and Canada. The success of this platform is visible in the recurring revenue metrics:

The focus on Software as a Service (SaaS) is key, as evidenced by the 25% year-over-year growth in SaaS revenue for Q4 2025. This shift away from one-time sales is a core strategic resource.

• Integrated payment processing technology stack: The company utilizes a proprietary payment facilitation platform designed to integrate directly with its customer business management systems. This allows i3 Verticals, Inc. to capture transaction fee revenue alongside subscription fees, making the customer relationship more durable. Payments revenue saw a healthy 11% year-over-year growth in Q4 2025.
• Deep vertical market expertise and specialized personnel: i3 Verticals, Inc. organizes its operations in a market-centric model to stay close to the customer. The company's personnel are specialized across its core public sector sub-verticals, which include JusticeTech, Utilities, Public Administration, Education, and Transportation. For direct customer engagement, the company maintains approximately 30 employees in sales and an additional 30 in supporting roles focused on cross-market sales.
• Strong balance sheet with $67 million in cash and no debt (Q4 2025): The financial foundation provides significant optionality for growth through acquisition or stock repurchases. As of September 30, 2025, i3 Verticals, Inc. reported $67 million in cash and maintained no debt. Furthermore, the company has $400 million of borrowing capacity available under its revolving credit facility. This liquidity is a direct result of divesting non-core businesses, such as the Healthcare RCM Business sale for $96.3 million in cash in May 2025.

Finance: draft 13-week cash view by Friday.

i3 Verticals, Inc. (IIIV) - Canvas Business Model: Value Propositions

You're looking at the core value i3 Verticals, Inc. (IIIV) delivers, especially now that they've sharpened their focus as a pure-play public sector software provider following the divestitures of their Merchant Services and Healthcare RCM businesses. The value proposition centers on deep vertical expertise married to modern, secure technology for government entities.

The seamless integration of software and payment solutions is a key differentiator. This isn't just about selling software; it's about embedding the transaction capability directly into the workflow. For the fourth quarter of fiscal year 2025, the revenue mix shows this integration in action: software and related services accounted for 70% of total revenues, while payments made up 25% of the total. This embedded approach helps ensure sticky customer relationships, which is reflected in the strong retention figures.

i3 Verticals, Inc. (IIIV) provides mission-critical, cloud-native solutions for government functions. They are squarely focused on state and local governments across the U.S. and Canada, serving verticals like courts, public safety, utilities, public administration, education, and transportation. Their development strategy is built on cloud-native Software as a Service (SaaS) solutions. This focus on essential government operations means their offerings are deeply embedded and necessary for daily function.

This technological foundation directly translates to increased efficiency and streamlined processes for public sector clients. The solutions are deployed to reduce or eliminate paper, automate processing, and securely manage records, establishing end-to-end enterprise content solutions that boost visibility and collaboration among affiliated parties and constituents. The success of this strategy is evident in the growth of their recurring revenue base, which was 76% of revenue from continuing operations as of the last report.

The stickiness of these mission-critical solutions is quantified by their customer loyalty metrics. For fiscal year 2025, i3 Verticals, Inc. (IIIV) achieved a high net dollar retention of 104%. That number means that even after accounting for any churn, the existing customer base spent 4% more with the company than the prior year, a defintely strong signal of value realization. Furthermore, the underlying SaaS revenue stream is accelerating, growing a healthy 25% in Q4 2025.

Here's a quick look at how the core business components are performing as of the end of fiscal year 2025:

The value propositions can be summarized by the outcomes they drive for the public sector customer base:

• Seamless integration of software and payment solutions, with payments representing 25% of Q4 2025 revenue.
• Mission-critical, cloud-native solutions for government functions including JusticeTech, Public Administration, and Utilities.
• Increased efficiency and streamlined processes, evidenced by 76% of continuing operations revenue being recurring.
• High net dollar retention of 104% in fiscal year 2025, showing existing customers expand usage.

The overall financial performance supports this value delivery, with Adjusted EBITDA as a percentage of revenue improving to 27.0% for fiscal 2025 from 26.4% in fiscal 2024. Finance: draft 13-week cash view by Friday.

i3 Verticals, Inc. (IIIV) - Canvas Business Model: Customer Relationships

You're looking at how i3 Verticals, Inc. (IIIV) locks in its public sector customers; it's all about deep integration and sticky, recurring revenue streams, especially after streamlining the portfolio.

The commitment to customer proximity is structural, with the organization intentionally set up in a market-centric model to stay as close to the customer as possible. This structure naturally pushed intra-market cross-selling into solution bundling. As of late 2025, i3 Verticals, Inc. (IIIV) serves approximately 33,500 clients across its core public sector verticals. The company's focus on deep vertical expertise and a recurring revenue model is designed to drive high client retention.

The relationship is cemented by long-term, recurring contractual agreements, which form the backbone of the financial profile. This is evident in the latest reported figures:

The emphasis on Software-as-a-Service (SaaS) shows the shift toward more predictable revenue; for instance, SaaS revenue growth in Q4 2025 hit 25%, outpacing the 9% growth in overall ARR for that quarter. This stickiness is further quantified by the fiscal 2025 Net Dollar Retention rate of 104%, meaning existing customers spent more than they did the prior year, even after accounting for churn.

For complex government installs, the sales cycle is high-touch, involving significant professional services. You see this in the Q4 2025 results where professional services revenue increased by $1.8 million, even as less predictable, high-margin nonrecurring software license sales declined by $1.9 million. The Justice vertical remains the largest market segment, accounting for approximately 25% of total revenues, with Utilities, Transportation, Education, and Public Administration all carrying roughly equal weight. The company recently secured a new contract with the Supreme Court of Appeals of West Virginia to implement its new case management software statewide, which includes ancillary value-added services.

Regarding direct customer engagement, the structure supports the following relationship elements:

• Dedicated 24/7 U.S.-based customer support team
• Client-centric approach with tailored, sticky solutions
• High-touch sales and professional services for complex government installs
• Long-term, recurring contractual relationships (SaaS/Maintenance)

The company reclassified personnel costs related to installation, data conversion, training, and customer support activities directly to other costs of services during the first quarter of fiscal year 2025, showing where these high-touch service costs are tracked internally.

i3 Verticals, Inc. (IIIV) - Canvas Business Model: Channels

You're looking at how i3 Verticals, Inc. (IIIV) gets its specialized public sector software and integrated payments into the hands of government entities. The channel strategy is heavily weighted toward direct engagement and product integration, supported by strategic tuck-in acquisitions.

Direct sales force focused on public sector and strategic verticals

The company's focus is clearly on direct engagement within its core markets, which now represent the vast majority of its business following portfolio streamlining. The public sector vertical market accounted for a 12% revenue growth in Q2 2025, and these public sector offerings represented 80% of its Q1 2025 revenue. The company recently announced a new contract with the Supreme Court of Appeals of West Virginia to implement its new case management software statewide, a clear win for the direct sales effort in the Justice Tech vertical. While the exact size of the direct sales force as of late 2025 isn't public, the focus on high-value, complex government contracts necessitates this dedicated team.

Integrated software platforms (the product itself is the channel)

The product architecture itself acts as a primary channel for revenue expansion, particularly through recurring streams. The success of this channel is visible in the growth of Annualized Recurring Revenue (ARR) and Software-as-a-Service (SaaS) revenue. For the fiscal year ended September 30, 2025, ARR from continuing operations reached $165.3 million, representing a period-to-period growth rate of 9.2% over the prior year's Q4. Furthermore, SaaS revenue, a key component of this integrated channel, grew 25% in Q4 2025, indicating strong adoption and stickiness of the embedded solutions. Overall, recurring revenue for Q4 2025 was $41.3 million, making up 75% of the total $54.9 million in Q4 revenue.

Here's a look at the financial metrics that reflect the strength of the recurring revenue channel as of the end of fiscal year 2025:

Strategic acquisitions that bring an immediate customer base

i3 Verticals, Inc. (IIIV) continues to use acquisitions as a channel to immediately expand its customer base and product footprint within the public sector. The company executed a notable acquisition in April 2025, purchasing a utility billing software company for $9.0 million. This move expanded the company's footprint in the utilities market, bringing in an established customer base in that sub-vertical. This disciplined approach to M&A is supported by a strong balance sheet, ending the fiscal year with $67 million in cash and no debt, alongside $400 million in available borrowing capacity under its credit facility, positioning the company for future channel-building acquisitions.

i3 Verticals, Inc. (IIIV) - Canvas Business Model: Customer Segments

You're looking at i3 Verticals, Inc. (IIIV) after a major strategic pivot, shedding non-core businesses to become a pure-play software provider for the public sector. This focus dictates every customer interaction now.

The customer base is overwhelmingly concentrated in government and public-facing entities, which provides a defintely resilient, non-discretionary revenue stream. As of the fiscal year ended September 30, 2025, the company reported total revenue from continuing operations of $213.2M, with approximately 76% of that being recurring revenue, underscoring the sticky nature of these government contracts.

The primary customer groups served by i3 Verticals, Inc. are:

• - Public Sector: State and local government entities, including specialized software for courts, public safety, public administration, and transportation.
• - Utilities: Customers include utility providers, supported by software like AVR uVisionPLUS.
• - Education: Institutions such as K-12 and higher education, with solutions like PaySchools being a known part of this vertical.
• - Niche Markets: The focus is on vertical market software (VMS) deeply embedded in these public functions, which is where the company sees its competitive moat.

The nature of the business within these segments is reflected in the Q4 2025 revenue breakdown, where 70% of total revenues came from software and related services, and 25% from payments, showing the integration of payment facilitation into their core government software offerings.

Here's a look at the financial context surrounding these customer segments for the fiscal year 2025:

While the outline mentions Non-profit and Property Management organizations, the company's stated strategy post-divestiture is a singular focus on the public sector verticals like justice, transportation, utilities, and education, which represented 80% of Q1 2025 revenue post-transition. The company's most adopted products, such as i3 BIS Tennessee Trustee and i3 Court Solutions MyFinePayment, directly serve these government and public service functions.

i3 Verticals, Inc. (IIIV) - Canvas Business Model: Cost Structure

You're looking at the cost base of i3 Verticals, Inc. (IIIV) after a major portfolio realignment, so the numbers reflect a pure-play public sector software provider as of late 2025. The focus shifts heavily toward maintaining and growing the core software base and integrating recent, smaller acquisitions.

High cost of software development and R&D investment (Justice/Utilities)

For a company selling mission-critical, cloud-native enterprise software, technology investment is a major, ongoing cost. While the company divested large segments, the remaining core still requires heavy investment to keep the software current and compliant. You can see a proxy for this investment in the amortization of internally developed software. For the nine months ended June 30, 2025, Depreciation and internally developed software amortization totaled $7,951 (in thousands), or approximately $7.95 million. This number reflects the long-term cost of building and upgrading the software platforms that generate the recurring revenue.

Significant personnel costs for specialized engineering and support staff

Specialized engineering talent to maintain and evolve vertical market software, plus the support staff to service government and utility clients, drives personnel costs up. While direct personnel expense isn't isolated in the latest reports, we can look at the scale of general operating costs before the major divestitures to gauge the baseline. For the full fiscal year ended September 30, 2024, the company reported Recurring cash SG&A expenses totaling $153,062 (in thousands), which is $153.06 million, across its segments. Personnel is the largest component of this figure, naturally. The current focus on a single public sector segment should, in theory, allow for some streamlining here, though specialized talent remains expensive.

Acquisition and integration costs for M&A strategy

i3 Verticals, Inc. maintains an active M&A pipeline, focusing on smaller, specialized public sector vertical acquisitions, like the utility billing acquisition mentioned in April 2025. These deals bring integration costs, which are expensed as incurred. You need to track the M&A-related expenses recorded in selling, general and administrative. Here's the quick math on those recent integration costs:

What this estimate hides is the cost of the two massive divestitures-the Merchant Services Business sale for $439.5 million in September 2024 and the Healthcare RCM Business sale for $96.3 million in May 2025-which involved their own transaction-related costs, though the net result was cash inflow.

Transaction processing fees and network costs

Since a core part of the value proposition is embedding payment processing into the vertical software, transaction processing fees are a direct cost of revenue, though they are often netted against the payment revenue stream. The company's focus on recurring revenue, with approximately 76% of revenue from continuing operations being recurring, largely from software and services integrated with its payment platform, means these variable costs scale with transaction volume. The overall cost structure efficiency is reflected in the Adjusted EBITDA margin. For the full fiscal year ended September 30, 2025, the Adjusted EBITDA from continuing operations as a percentage of revenue was 27.0%. This margin is the ultimate measure of how well i3 Verticals, Inc. manages its combined cost of services, personnel, and transaction-related network costs relative to its revenue base.

i3 Verticals, Inc. (IIIV) - Canvas Business Model: Revenue Streams

You're looking at the core of how i3 Verticals, Inc. (IIIV) makes money now that they've streamlined the business post-divestitures. The focus is heavily weighted toward predictable, high-quality software income, which is what sophisticated investors like to see.

The primary engine is recurring SaaS and subscription fees. This is the bedrock of the current model. You can see this clearly in the latest figures: Annual Recurring Revenue (ARR) hit $165.3 million in Q4 2025. That ARR growth of 9% in the quarter actually outpaced the overall revenue growth, which is a strong signal about the quality of the business they are keeping. The company is actively leaning into these recurring streams in negotiations.

Next up is the transactional component. Transaction-based payment processing fees are a significant, though smaller, piece. For the fourth quarter of 2025, payments accounted for 25% of Q4 2025 revenue. This segment still showed growth, with payments revenue increasing 11% year-over-year for the quarter.

The third category covers the less predictable, project-based work: professional services and non-recurring software license sales. This area saw some movement in Q4 2025. Nonrecurring sales of software licenses actually declined by $1.9 million, which management noted reflects the ongoing shift toward SaaS. To balance that, professional services revenue increased by $1.8 million in the same period, though this segment is expected to decline near-term, particularly in Q1 2026.

To put the whole picture together for the most recent full fiscal year, Total fiscal year 2025 revenue from continuing operations was $213.2 million. This revenue is now overwhelmingly from their core public sector software focus.

Here's the quick math on how the Q4 2025 revenue of $54.9 million broke down, which gives you a clearer view of the revenue mix:

The strategic direction is clear: they are prioritizing the durable, high-margin recurring revenue. You can see the focus on the software side, with SaaS revenues growing a healthy 25% year-over-year in the fourth quarter. This shift is what management believes will drive durable growth going forward.

The composition of that recurring bucket is also telling:

• - Recurring SaaS and subscription fees; ARR hit $165.3 million in Q4 2025
• - Transaction-based payment processing fees (Payments were 25% of Q4 2025 revenue)
• - Professional services and non-recurring software license sales (Nonrecurring licenses declined $1.9 million; professional services increased $1.8 million in Q4 2025)
• - Total fiscal year 2025 revenue from continuing operations was $213.2 million

Finance: draft 13-week cash view by Friday.