Company: IIIV
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001728688-25-000108
Chunk: 221

Company: i3 Verticals, Inc.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 221
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 estimated useful life of the asset. Amortization expense for acquired intangible assets and internally developed software is recognized using a proportional cash flow method. Amortization expense for internally developed software is recognized over the estimated useful life of the asset. The useful lives of contract-based intangible assets are equal to the terms of the agreement.

Interest expense. Our interest expense consists of interest on our outstanding indebtedness under our 2023 Senior Secured Credit Facility, and prior to their maturity, the Exchangeable Notes, and amortization of debt issuance costs. 

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How We Assess Our Business

As a result of the sale of the Merchant Services Business in 2024, the results of operations for the Merchant Services Business have been reflected as discontinued operations in our condensed consolidated statements of operations for all periods presented. Additionally, as a result of the sale of the Healthcare RCM Business on May 5, 2025, the results of operations for the Healthcare RCM Business have been reclassified as discontinued operations in our condensed consolidated statements of operations for all periods presented. 

After giving effect to these developments, as further described above, the Company has one operating segment and reportable segment as of June 30, 2025.

After giving effect to the sale of the Healthcare RCM Business as noted above, the Company provides mission-critical enterprise  software and services solutions to its public sector customers.  These comprehensive solutions cover a broad range of applications, including cloud native enterprise software, all of which enable state and local governments and related agencies to serve their constituents in an efficient and seamless manner. 

Key Performance Indicators

We evaluate our performance through various metrics, including the following key performance indicators:

•Annualized recurring revenue ("ARR");

•Adjusted EBITDA margin

ARR is the annualized revenue derived from recurring sources where we have an ongoing contract with our customers. We believe revenue from recurring sources is a strategic priority. ARR is comprised of software-as-a-service (“SaaS”) arrangements, transaction-based software-revenue, software maintenance, recurring software-based services, payments revenue and other recurring revenue sources within the quarter. The sum of these revenue categories is multiplied by four to calculate ARR. ARR excludes revenue that is not recurring or is one-time in nature.

We believe this metric provides useful information to investors by providing visibility regarding the ongoing revenue potential of our business model and providing a clearer picture of our sustainable revenue base. Further, our management uses ARR as a metric because it helps us to assess the health and trajectory of our business. We believe that