I3 Verticals (IIIV) Stock Forecast & Price Target

i3 Verticals Inc demonstrated strong financial performance with a 14% year-over-year increase in Non-GAAP EBITDA to $58 million and an expansion of EBITDA margins by 60 basis points to 27.0%, despite ongoing investments in Justice Tech solutions. The company’s recurring revenue, which constitutes 76% of total revenue, grew by 10% year-over-year to $162 million, while non-recurring revenue also saw a significant increase of 16% year-over-year. Looking ahead, i3 Verticals projects total revenue growth of 5%-10% for fiscal 2026, with adjusted EBITDA expected to rise by 6%-16%, underscoring a positive outlook driven by strong fundamentals and an active M&A pipeline.

i3 Verticals Inc is experiencing significant declines in high-margin software license fees, which are forecasted to have decreased by 73% year-over-year to $0.7 million, contributing to a concerning financial outlook. Additionally, professional services revenue has also fallen, down 27% year-over-year to $7.0 million, indicating a broader trend of decreasing profitability in key revenue areas. Despite management's optimistic view of future recurring revenue growth, the anticipated decline in non-recurring revenue and plummeting margins raise red flags about the company's overall financial health and performance sustainability.