Company: IIIV
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0001728688-25-000043
Chunk: 129

Company: i3 Verticals, Inc.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 8
Chunk 129
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 the term of the lease. The Company accounts for all components in a lease arrangement as a single combined lease component. Operating lease cost is recognized on a straight-line basis over the lease term. Total lease costs include variable lease costs, which are primarily comprised of the consumer price index adjustments and other changes based on rates, such as costs of insurance and property taxes. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and obligations.Revenue Recognition and Deferred Revenue Revenue is recognized as each performance obligation is satisfied, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience. The Company utilized the portfolio approach practical expedient within ASC 606-10-10-4 Revenue from Contracts with Customers—Objectives and the significant financing component practical expedient within ASC 606-10-32-18 Revenue from Contracts with Customers—The Existence of a Significant Financing Component in the Contract in performing the analysis.

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i3 VERTICALS, Inc.NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(in thousands, except unit, share and per share amounts)

The Company's revenue from continuing operations for the three months ended December 31, 2024 and 2023 is derived from the following sources:•Software and related services — Includes software as a service ("SaaS"), transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to our software offerings•Proprietary payments — Includes volume-based payment processing fees (“discount fees”) and other related fixed transaction or service fees•Other — Includes sales of equipment, non-software related professional services and other revenuesRevenues from the Company’s software are recognized when the related performance obligations are satisfied. Sales of software licenses are categorized into one of two categories of intellectual property in accordance with ASC 606, functional or symbolic. The key distinction is whether the license represents a right to use (functional) or a right to access (symbolic) intellectual property. The Company generates sales of one-time software licenses, which is functional intellectual property. Revenue from functional intellectual property is recognized at a point in time, when control of the software license transfers to the customer. The Company also generates revenue from maintenance services related to these software licenses, which is recognized over the term of the agreement. The Company also offers access to its software under software-as-a-service