Company: IIIV
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001728688-25-000108
Chunk: 16

Company: i3 Verticals, Inc.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 2
Chunk 16
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The provision for income taxes increased to a provision for $3.3 million for the nine months ended June 30, 2025 from a provision of $3.2 million for nine months ended June 30, 2024. Our effective tax rate was 44% for the nine months ended June 30, 2025. Our effective tax rate differs from the federal statutory rate of 21% primarily due to the tax structure of the Company. The income of majority-owned i3 Verticals, LLC is not taxed at the entity-level. i3 Verticals, Inc. is subject to federal, state and local income taxes with respect to its allocable share of any taxable income of i3 Verticals, LLC and is taxed at the prevailing corporate tax rates.

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Net Income from Discontinued Operations, Net of Income Taxes

We had $18.2 million in net income from discontinued operations, net of income tax, for the nine months ended June 30, 2025 compared to $19.0 million in net income from discontinued operations, net of income tax, for the nine months ended June 30, 2024. See Note 2 to our condensed consolidated financial statements for additional information and detail on the financial results of discontinued operations.

The net income from discontinued operations, net of income tax, for the nine months ended June 30, 2025 reflects the gain on the sale of the Healthcare RCM Business of $26.0 million and a complete nine months of business activity for the Healthcare RCM Business, including revenue of $22.5 million, operating expenses of $25.1 million and a provision for income taxes of $4.6 million. The net income from discontinued operations, net of income tax, for the nine months ended June 30, 2024 included a complete nine months of business activity for both the Merchant Services Business and the Healthcare RCM Business, including revenue of $141.3 million, operating expenses of $118.1 million, and a provision for income taxes of $4.2 million.

Seasonality

We have experienced in the past, and may continue to experience, seasonal fluctuations in our revenues as a result of consumer and business spending patterns. The number of business days in a month or quarter also may affect seasonal fluctuations. Certain revenues fluctuate with the fiscal calendars of our customers. Transactional revenue for certain education customers is strongest in August, September, October, January and February, at the start of each semester, and generally weakens throughout