0001728688-22-000061 | 10-K | XBRL Viewer

$ 317,862

$ 224,124

$ 150,134

Operating expenses

Selling general and administrative

73,367

57,706

47,230

193,790

134,872

78,323

Depreciation and amortization

29,424

24,418

^[1]

18,217

Change in fair value of contingent consideration

23,725

7,140

^[1]

(1,409)

Total operating expenses

320,306

224,136

142,361

(Loss) income from operations

(2,444)

(12)

7,773

Other expenses

Interest expense, net

14,775

9,799

8,926

Other expense (income)

991

(2,595)

2,621

Total other expenses

15,766

7,204

11,547

Loss before income taxes

(18,210)

(7,216)

(3,774)

Provision for (benefit from) income taxes

5,007

623

(2,795)

(23,217)

(7,839)

^[1]

(979)

Net loss attributable to i3 Verticals, Inc.

(6,115)

(3,382)

(560)

$ (17,102)

$ (4,457)

$ (419)

Net loss per share attributable to Class A common stockholders:

Basic (in USD per share)

$ (0.77)

$ (0.21)

$ (0.03)

Diluted (in USD per share)

$ (0.77)

$ (0.22)

$ (0.03)

Weighted average shares of Class A common stock outstanding:

Basic (shares)

22,249,656

20,994,598

14,833,378

Diluted (shares)

22,249,656

31,714,191

27,429,801

[1]

The prior period amounts included in the statement of cash flows have been updated to correct settlement assets as restricted cash, which were previously reported as cash flows provided by operating activities and used in investing activities. These adjustments reflect a decrease in prior year cash flows provided by operating activities of $2,241 and a decrease in prior year cash flows used in investing activities of $7,009 and a corresponding net increase in cash, cash equivalents, and restricted cash at the end of the period.

Consolidated Statement of Changes in Equity - USD ($)
$ in Thousands

Total

Cumulative Effect, Period of Adoption, Adjustment

Class A Common Stock

Class B Common Stock

Common Stock

Class A Common Stock

Common Stock

Class B Common Stock

Additional Paid-In Capital

Retained Earnings (Deficit)

Cumulative Effect, Period of Adoption, Adjustment

Non-Controlling Interest

Cumulative Effect, Period of Adoption, Adjustment

Common stock, shares, outstanding, beginning (in shares) at Sep. 30, 2019

14,444,115

12,921,637

Stockholders' equity, beginning at Sep. 30, 2019

$ 142,441

$ 1,345

$ 1

$ 82,380

$ (2,309)

$ 705

$ 62,368

$ 640

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Adjustment related to prior periods

(2,730)

2,730

10,452

(419)

$ (419)

(419)

560

(560)

Distributions to non-controlling interest holders

(979)

(3)

Redemption of common units in i3 Verticals, LLC (shares)

(1,021,016)

Redemption of common units in i3 Verticals, LLC

5,080

(5,080)

Sale of Class A common stock in public offering, net (shares)

3,250,000

Sale of Class A common stock in public offering, net

72,557

$ 1

72,556

Capitalization of public offering costs

(697)

Deferred tax asset adjustment

(941)

Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis

896

Exercise of equity-based awards (shares)

149,012

Exercise of equity-based awards

254

Allocation of equity to non-controlling interests

(24,495)

24,495

Equity component of exchangeable notes, net of issuance costs and deferred taxes

27,578

Purchases of exchangeable note hedges

(28,676)

Issuance of warrants

14,669

Repurchases of exchangeable notes

1,272

Common stock, shares, outstanding, ending (in shares) at Sep. 30, 2020

18,864,143

11,900,621

Stockholders' equity, ending at Sep. 30, 2020

240,168

$ 2

$ 1

157,598

(2,023)

84,590

Increase (Decrease) in Stockholders' Equity [Roll Forward]

20,860

(4,457)

3,382

(3,382)

Distributions to non-controlling interest holders

(7,839)

^[1]

$ (7,839)

Redemption of common units in i3 Verticals, LLC (shares)

(1,671,479)

1,671,479

Redemption of common units in i3 Verticals, LLC

11,714

(11,714)

Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis

269

Exercise of equity-based awards (shares)

287,562

Exercise of equity-based awards

888

Allocation of equity to non-controlling interests

(15,337)

15,337

Issuance of Class A common stock under the 2020 Inducement Plan (shares)

1,202,914

Issuance of Class A common stock under the 2020 Inducement Plan

35,245

Common stock, shares, outstanding, ending (in shares) at Sep. 30, 2021

22,026,098

10,229,142

22,026,098

10,229,142

Stockholders' equity, ending at Sep. 30, 2021

289,591

$ 2

$ 1

211,237

(6,480)

84,831

Increase (Decrease) in Stockholders' Equity [Roll Forward]

26,230

(17,102)

$ (17,102)

(17,102)

6,115

(6,115)

Distributions to non-controlling interest holders

(23,217)

$ (23,217)

Redemption of common units in i3 Verticals, LLC (shares)

(111,000)

111,000

Redemption of common units in i3 Verticals, LLC

918

(918)

Sale of Class A common stock in public offering, net

17,869

Capitalization of public offering costs

(440)

Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis

$ (2,554)

(2,554)

Exercise of equity-based awards (shares)

343,865

127,350

Exercise of equity-based awards

$ 209

209

Allocation of equity to non-controlling interests

(11,511)

11,511

Common stock, shares, outstanding, ending (in shares) at Sep. 30, 2022

22,986,448

10,118,142

22,986,448

10,118,142

Stockholders' equity, ending at Sep. 30, 2022

$ 307,688

$ 2

$ 1

$ 241,958

$ (23,582)

$ 89,309

[1]

Consolidated Statements of Cash Flows - USD ($)
$ in Thousands

12 Months Ended

Sep. 30, 2022

Sep. 30, 2021

^[1]

Sep. 30, 2020

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

$ (23,217)

$ (7,839)

$ (979)

Depreciation and amortization

29,424

24,418

18,217

Amortization of debt discount and issuance costs

26,230

20,860

10,452

5,795

5,450

3,703

Loss on repurchase of exchangeable notes

2,297

Net gain on sale of investments

(2,100)

Provision for (Benefit from) deferred income taxes

2,588

(287)

(3,207)

Non-cash lease expense

4,922

3,204

Other non-cash adjustments to net income

1,131

555

717

Increase (Decrease) in non-cash contingent consideration expense from original estimate

23,725

7,140

(1,409)

Changes in operating assets:

Accounts receivable

(15,771)

(10,938)

(1,028)

Prepaid expenses and other current assets

(3,629)

(1,564)

(984)

Other assets

(1,197)

(4,054)

(1,544)

Changes in operating liabilities:

Accounts payable

1,537

3,883

239

Accrued expenses and other current liabilities

13,030

10,453

1,575

Settlement obligations

2,087

(2,241)

Deferred revenue

2,041

5,150

617

Operating lease liabilities

(4,753)

(3,139)

Other long-term liabilities

(25)

(782)

Contingent consideration paid in excess of original estimates

(18,072)

(3,636)

(5,039)

Net cash provided by operating activities

45,846

44,533

23,720

Cash flows from investing activities:

Expenditures for property and equipment

(2,268)

(1,938)

(2,911)

Expenditures for capitalized software

(10,167)

(6,159)

(2,893)

Purchases of merchant portfolios and residual buyouts

(52)

(1,819)

(1,788)

Acquisitions of businesses, net of cash acquired

(100,715)

(142,486)

(27,689)

Acquisition of other intangibles

(13)

(104)

(150)

Payments for loans to third parties

(430)

Proceeds from loans to third parties

600

Proceeds from sale of investments

3,200

Net cash used in investing activities

(113,045)

(149,306)

(35,431)

Cash flows from financing activities:

Proceeds from revolving credit facility

335,720

302,816

172,123

Payments on revolving credit facility

(255,100)

(198,421)

(313,267)

Proceeds from borrowings on exchangeable notes

138,000

Payments for purchase of exchangeable senior note hedges

(28,676)

Proceeds from issuance of warrants

14,669

Payments for repurchase of exchangeable notes

(17,414)

Payments of debt issuance costs

(5,300)

Proceeds from issuance of Class A common stock, net of underwriting discounts and offering costs

17,692

Proceeds from issuance of Class A common stock sold in public offering, net of underwriting discounts and offering costs

82,901

Payments for Common Units in i3 Verticals, LLC from selling unit holders

(10,883)

Payments of equity issuance costs

(253)

Cash paid for contingent consideration

(25,330)

(2,886)

(3,492)

Payments for required distributions to members for tax obligations

(3)

Proceeds from stock option exercises

694

1,578

764

Payments for employee's tax withholdings from net settled stock option exercises

(643)

(731)

(310)

Net cash provided by financing activities

73,033

102,103

29,112

Net increase (decrease) in cash, cash equivalents, and restricted cash

5,834

(2,670)

17,401

Cash, cash equivalents, and restricted cash at beginning of period

17,931

^[1]

20,601

3,200

Cash, cash equivalents, and restricted cash at end of period

23,765

17,931

20,601

^[1]

Supplemental disclosure of cash flow information:

Cash paid for interest

8,985

4,428

5,250

Cash paid for income taxes

$ 1,079

$ 287

$ 792

[1]

Consolidated Statements of Cash Flows (Parenthetical) - USD ($)
$ in Thousands

12 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2020

Sep. 30, 2019

Decrease in cash provide by operating activities

$ (45,846)

$ (44,533)

^[1]

$ (23,720)

Decrease in cash provided by investing activities

(113,045)

(149,306)

^[1]

(35,431)

Cash and cash equivalents

3,490

3,641

15,568

$ 1,119

Settlement assets

7,540

4,768

Restricted cash

12,735

9,522

5,033

2,081

Total cash, cash equivalents, and restricted cash

$ 23,765

17,931

^[1]

$ 20,601

^[1]

$ 3,200

Adjustment

Decrease in cash provide by operating activities

2,241

Decrease in cash provided by investing activities

$ 7,009

[1]

Organization and Operations	12 Months Ended
Organization and Operations	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Operations	ORGANIZATION AND OPERATIONS i3 Verticals, Inc. (the “Company”) was formed as a Delaware corporation on January 17, 2018. The Company was formed for the purpose of completing an initial public offering (“IPO”) of its Class A common stock and other related transactions in order to carry on the business of i3 Verticals, LLC and its subsidiaries. i3 Verticals, LLC was founded in 2012 and delivers seamlessly integrated software and payment solutions to customers in strategic vertical markets. The Company’s headquarters are in located Nashville, Tennessee, with operations throughout the United States. Unless the context otherwise requires, references to “we,” “us,” “our,” “i3 Verticals” and the “Company” refer to i3 Verticals, Inc. and its subsidiaries, including i3 Verticals, LLC. In connection with the IPO, the Company completed certain reorganization transactions, which among other things, resulted in i3 Verticals, Inc. being the sole managing member of i3 Verticals, LLC (the "Reorganization Transactions"). Following the completion of the IPO and Reorganization Transactions, the Company is a holding company and the principal asset that it owns are the common units in i3 Verticals, LLC. i3 Verticals, Inc. operates and controls all of i3 Verticals, LLC's operations and, through i3 Verticals, LLC and its subsidiaries, conducts i3 Verticals, LLC's business. i3 Verticals, Inc. has a majority economic interest in i3 Verticals, LLC. As the sole managing member of i3 Verticals, LLC, i3 Verticals, Inc. consolidates the financial results of i3 Verticals, LLC and reports a non-controlling interest representing the Common Units of i3 Verticals, LLC held by other owners other (the “Continuing Equity Owners”). Public Offerings On September 15, 2020, the Company completed a primary public offering (the “September 2020 Public Offering”) of 3,737,500 shares of its Class A common stock, at a public offering price of $23.50 per share, which included a full exercise of the underwriters' option to purchase 487,500 additional shares of Class A Common Stock from the Company. The Company received approximately $83,400 of net proceeds, after deducting underwriting discounts and commissions, but before offering expenses. The Company used the net proceeds to purchase (1) 3,250,000 Common Units directly from i3 Verticals, LLC, and (2) 487,500 Common Units pursuant to the exercise of the underwriters' option to purchase additional shares in full and an equivalent number of Class B common stock (which shares were then canceled) from certain Continuing Equity Owners, in each case at a price per Common Unit equal to the price per share paid by the underwriters for shares of the Company's Class A common stock in the offering. i3 Verticals, LLC received $72,018 in net proceeds from the sale of Common Units to the Company, which it used to repay outstanding indebtedness. i3 Verticals, Inc. is the sole managing member of i3 Verticals, LLC and as a result, consolidates the financial results of i3 Verticals, LLC and reports a non-controlling interest representing the Common Units of i3 Verticals, LLC held by the Continuing Equity Owners. As the Reorganization Transactions are considered transactions between entities under common control, the financial statements retroactively reflect the accounts of i3 Verticals, LLC for periods prior to the IPO and Reorganization Transactions. The Continuing Equity Owners who own Common Units in i3 Verticals, LLC may redeem at each of their options (subject in certain circumstances to time-based vesting requirements) their Common Units for, at the election of i3 Verticals, LLC, cash or newly-issued shares of the Company's Class A common stock. As of September 30, 2022, i3 Verticals, Inc. owned 69.4% of the economic interest in i3 Verticals, LLC. As of September 30, 2022, the Continuing Equity Owners owned Common Units in i3 Verticals, LLC representing approximately 30.6% of the economic interest in i3 Verticals, LLC, shares of Class A common stock in the Company representing approximately 0.6% of the economic interest and voting power in the Company, and shares of Class B common stock in i3 Verticals, Inc., representing approximately 30.6% of the voting power in the Company. Combining the Class A common stock and Class B common stock, the Continuing Equity Holders hold approximately 31.1% of the economic interest and voting power in i3 Verticals, Inc. At-the-Market Program On August 20, 2021, the Company, together with i3 Verticals, LLC, entered into an at-the-market offering sales agreement with Raymond James & Associates, Inc., Morgan Stanley & Co. LLC and BTIG, LLC (each a “Sales Agent”), under which the Company may issue and sell, from time to time and through the Sales Agents, shares of the Company's Class A common stock having an aggregate offering price of up to $125,000 (the “ATM Program”). During the quarter and year ended September 30, 2022, the Company sold 722,000 shares of Class A common stock, raising $17,869 in net proceeds under the ATM Program. The aggregate compensation paid by the Company to the Sales Agents with respect to such sales was $440. As of September 30, 2022, the Company had a remaining capacity to sell up to $107,131 of our Class A common stock under the ATM Program. The proceeds from these issuances were used to repay outstanding indebtedness under the Senior Secured Credit Facility and for other general corporate purposes.

Summary of Significant Accounting Policies

12 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the reporting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”).

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation within the consolidated statements of cash flows.

Principles of Consolidation

These consolidated financial statements include the accounts of the Company and its subsidiary companies. All significant intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company considers cash on hand, checking accounts, and savings accounts to be cash and cash equivalents. At times, the balance in these accounts may exceed federal insured limits. Cash equivalents are defined as financial instruments readily transferable into cash with an original maturity less than 90 days.

Restricted Cash

Restricted cash represents funds held in escrow related to acquisitions or held-on-deposit with processing banks pursuant to agreements to cover potential merchant losses. It is presented as long-term assets on the accompanying consolidated balance sheets since the related agreements extend beyond the next twelve months. Following the adoption of Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230), the Company includes restricted cash along with the cash and cash equivalents balance for presentation in the consolidated statements of cash flows.

Accounts Receivable and Credit Policies

Accounts receivable consist primarily of uncollateralized credit card processing residual payments due from processing banks requiring payment within thirty days following the end of each month. Accounts receivable also include amounts due from the sales of the Company’s technology solutions to its customers. The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts, if necessary, which reflects management’s best estimate of the amounts that will not be collected. The allowance is estimated based on management’s knowledge of its customers, historical loss experience and existing economic conditions. Accounts receivable and the allowance are written-off when, in management’s opinion, all collection efforts have been exhausted. The Company’s allowance for doubtful accounts was $590 and $181 as of September 30, 2022 and 2021, respectively; however, actual write-offs may exceed estimated amounts.

Settlement Assets and Obligations

Settlement assets and obligations result when funds are temporarily held or owed by the Company on behalf of merchants, consumers, schools, and other institutions. Timing differences, interchange expenses, merchant reserves and exceptional items cause differences between the amount received from the card networks and the amount funded to counterparties. These balances arising in the settlement process are reflected as settlement assets and obligations on the accompanying consolidated balance sheets. With the exception of merchant reserves, settlement assets or settlement obligations are generally collected and paid within one to four days. Settlement assets and settlement obligations were $7,540 as of September 30, 2022 and $4,768 as of September 30, 2021.

Inventories

Inventories consist of point-of-sale equipment to be sold to customers and are stated at the lower of cost, determined on a weighted average or specific basis, or net realizable value. Inventories were $4,121 and $2,220 at September 30, 2022 and 2021, respectively, and are included within prepaid expenses and other current assets on the accompanying consolidated balance sheets.

Property and Equipment

Property and equipment are stated at cost or, if acquired through a business combination or an asset acquisition, fair value at the date of acquisition. Depreciation and amortization are provided over the assets’ estimated useful lives (or, if obtained in connection with a business acquisition, over their estimated remaining useful lives) using the straight-line method, except for leasehold improvements, which are depreciated over the shorter of the estimated useful lives of the assets or the lease term.

Expenditures for maintenance and repairs are expensed when incurred. Expenditures for renewals or betterments are capitalized. Management reviews long-lived assets for impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company recognizes impairment when the sum of undiscounted estimated future cash flows expected to result from the use of the asset is less than the carrying value of the asset. There were no impairment charges during the years ended September 30, 2022, 2021 and 2020.

Capitalized Software

Development costs for software to be sold or leased to customers are capitalized once technological feasibility of the software product has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed a detailed program design and has determined that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the product is generally available to customers. Software development costs are amortized using the greater of the straight-line method or the usage method over its estimated useful life, which is generally estimated to be three years.

Additionally, development costs for software to be used internally is capitalized under similar guidance as discussed above. Once the software product is in the application development stage, costs are required to be capitalized. Costs incurred during the preliminary product phase or post implementation stage are expensed as incurred. Overhead, general and administrative, and training costs are not capitalized.

Software development costs may become impaired in situations where development efforts are abandoned due to the viability of a planned project becoming doubtful or due to technological obsolescence of a planned software product. Management evaluates the remaining useful lives and carrying values of capitalized software at least annually or when events and circumstances warrant such a review, to determine whether significant events or changes in circumstances indicate that impairment in value may have occurred. To the extent estimated net realizable values, which are estimated to equal future undiscounted cash flows, exceed the carrying value, no impairment is necessary. If estimated net realizable values are less than the carrying values, an impairment charge is recorded. Impairment charges during the years ended September 30, 2022, 2021 and 2020 were nominal.

Identifiable software technology intangible assets resulting from acquisitions are amortized using the straight-line method over periods not exceeding their remaining estimated useful lives. GAAP requires that intangible assets with estimated useful lives be amortized over their respective estimated useful lives to their residual values, and reviewed for impairment. Acquisition technology intangibles’ net book values are included in capitalized software, net in the accompanying consolidated balance sheets.

Notes Receivable

Notes receivable consist of loans made to unrelated entities. Notes receivable were $5,125 and $4,695 at September 30, 2022 and 2021, respectively, and are included within prepaid expenses and other current assets and other assets on the accompanying consolidated balance sheets.

Acquisitions

Business acquisitions have been recorded using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), and, accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair value as of the date of acquisition. Where relevant, the fair value of contingent consideration included in an acquisition is calculated using a Monte Carlo simulation. The fair value of customer relationships and non-compete assets acquired is identified using the Income Approach. The fair values of trade names and internally-developed software acquired are identified using the Relief from Royalty Method. The fair value of deferred revenue is identified using the Adjusted Fulfillment Cost Method. After the purchase price has been allocated, goodwill is recorded to the extent the total consideration paid for the acquisition, including the acquisition date fair value of contingent consideration, if any, exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. Acquisition costs for business combinations are expensed when incurred and recorded in selling general and administrative expenses in the accompanying consolidated statements of operations.

Acquisitions not meeting the accounting criteria to be accounted for as a business combination are accounted for as an asset acquisition. An asset acquisition is recorded at its purchase price, inclusive of acquisition costs, which is allocated among the acquired assets and assumed liabilities based upon their relative fair values at the date of acquisition.

The operating results of an acquisition are included in the consolidated statements of operations from the date of such acquisition. Acquisitions completed during the year ended September 30, 2022 contributed $35,840 and $5,170 of revenue and net income, respectively, to the results in the Company's consolidated statements of operations for the year then ended.

Goodwill

In accordance with ASC 350, Intangibles—Goodwill and Other, the Company tests goodwill for impairment for each reporting unit on an annual basis in the fourth quarter, or when events or circumstances indicate the fair value of a reporting unit is below its carrying value.

The Company’s goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in business combinations. The goodwill generated from the business combinations is primarily related to the value placed on the employee workforce and expected synergies. Judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes may include, among others, a significant decline in expected future cash flows, a significant adverse change in the business climate, and unforeseen competition. No goodwill impairment charges were recognized during the years ended September 30, 2022, 2021 and 2020.

The Company has the option of performing a qualitative assessment of impairment to determine whether any further quantitative testing for impairment is necessary. The option of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit. Factors the Company considers in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of the Company’s reporting units, events or changes affecting the composition or carrying amount of the net assets of its reporting units, sustained decrease in its share price, and other relevant entity specific events. If the Company determines not to perform the qualitative assessment or if it determines, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying value, then the Company performs a quantitative test for that reporting unit. The fair value of each reporting unit is compared to the reporting unit’s carrying value, including goodwill. Subsequent to the adoption on January 1, 2017 of ASU No. 2017-04, Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment, if the fair value of a reporting unit is less than its carrying value, the Company recognizes an impairment equal to the excess carrying value, not to exceed the total amount of goodwill allocated to that reporting unit.

For a discussion of the estimation methodology, the qualitative factors considered when performing a qualitative assessment and the significance of various inputs, please see the subheading below titled “Use of Estimates.”

The Company has determined that it has five reporting units as of the date of the most recent annual good impairment test. For each of the years ended September 30, 2022, 2021 and 2020 the Company performed a quantitative assessment for each of its reporting units. The Company determined that none of the reporting units were impaired.

Intangible Assets

Intangible assets include acquired customer relationships, residual buyouts, referral agreements, trademarks, trade names, website development costs and non-compete agreements. Customer relationships represent the fair value of customer relationships purchased by the Company. Residual buyouts represent the right to not have to pay a residual to an independent sales agent related to certain future transactions with the agent’s referred

merchants. Referral agreements represent the right to exclusively obtain referrals from a partner for their customers' credit card processing services.

The Company amortizes definite lived identifiable intangible assets using a method that reflects the pattern in which the economic benefits of the intangible asset are expected to be consumed or otherwise utilized. The estimated useful lives of the Company’s customer-related intangible assets approximate the expected distribution of cash flows, whether straight-line or accelerated, generated from each asset. The useful lives of contract-based intangible assets are equal to the terms of the agreement.

Management evaluates the remaining useful lives and carrying values of long-lived assets, including definite lived intangible assets, at least annually, or when events and circumstances warrant such a review, to determine whether significant events or changes in circumstances indicate that a change in the useful life or impairment in value may have occurred. There were no impairment charges during the years ended September 30, 2022, 2021 and 2020.

Income Taxes

i3 Verticals, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from i3 Verticals, LLC based on i3 Verticals, Inc.'s economic interest in i3 Verticals, LLC. i3 Verticals, LLC's members, including the Company, are liable for federal, state and local income taxes based on their share of i3 Verticals, LLC's pass-through taxable income. i3 Verticals, LLC is not a taxable entity for federal income tax purposes, but is subject to and reports entity level tax in both Tennessee and Texas. In addition, certain subsidiaries of i3 Verticals, LLC are corporations that are subject to state and federal income taxes.

The amount provided for state income taxes is based upon the amounts of current and deferred taxes payable or refundable at the date of the consolidated financial statements as a result of all events recognized in the financial statements as measured by the provisions of enacted tax laws.

Under GAAP, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company reports a liability for unrecognized tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as part of income tax expense. See additional discussion in Note 11.

Valuation of Contingent Consideration

On occasion, the Company may have acquisitions which include contingent consideration. Accounting for business combinations requires the Company to estimate the fair value of any contingent purchase consideration at the acquisition date. For a discussion of the estimate methodology and the significance of various inputs, please see the subheading below titled “Use of Estimates.” Changes in estimates regarding the fair value contingent purchase consideration are reflected as adjustments to the related liability and recognized within operating expenses in the consolidated statements of operations. Short and long-term contingent liabilities are presented within accrued expenses and other current liabilities and other long-term liabilities on the Company's consolidated balance sheets, respectively.

Classification of Financial Instruments

The Company classifies certain financial instruments issued as either equity or as liabilities. Determination of classification is based upon the underlying properties of the instrument. See specific discussion regarding the nature of instruments issued, the presentation on the consolidated financial statements and the related valuation method applied in Notes 10, 13, and 14.

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.

The Company's revenue for the years ended September 30, 2022, 2021 and 2020 is derived from the following sources:

•Software and related services — Includes sales of software as a service, transaction-based fees, ongoing software maintenance and support, software licenses and other professional services related to our software offerings

•Payments — Includes volume-based payment processing fees (“discount fees”), gateway fees and other related fixed transaction or service fees

•Other — Includes sales of equipment, non-software related professional services and other revenues

Revenues from sales of 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 delivered to the customer. The Company also offers access to its software under software-as-a-service (“SaaS”) arrangements, which represent services arrangements. Revenue from SaaS arrangements is recognized over time, over the term of the agreement.

Discount fees represent a percentage of the dollar amount of each credit or debit transaction processed or a specified per transaction amount, depending on the card type. The Company frequently enters into agreements with customers under which the customer engages the Company to provide both payment authorization services and transaction settlement services for all of the cardholder transactions of the customer, regardless of which issuing bank and card network to which the transaction relates. The Company’s core performance obligations are to stand ready to provide continuous access to the Company’s payment authorization services and transaction settlement services in order to be able to process as many transactions as its customers require on a daily basis over the contract term. These services are stand ready obligations, as the timing and quantity of transactions to be processed is not determinable. Under a stand-ready obligation, the Company’s performance obligation is defined by each time increment rather than by the underlying activities satisfied over time based on days elapsed. Because the service of standing ready is substantially the same each day and has the same pattern of transfer to the customer, the Company has determined that its stand-ready performance obligation comprises a series of distinct days of service. Discount fees are recognized each day based on the volume or transaction count at the time the merchants’ transactions are processed.

The Company follows the requirements of ASC 606-10-55 Revenue from Contracts with Customers—Principal versus Agent Considerations, which states that the determination of whether a company should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement. The determination of gross versus net recognition of revenue requires judgment that depends on whether the Company controls the good or service before it is transferred to the merchant or whether the Company is acting as an agent of a third party. The assessment is provided separately for each performance obligation identified. Under its agreements, the Company incurs interchange and network pass-through charges from the third-party card issuers and card networks, respectively, related to the provision of payment authorization services. The Company has determined that it is acting as an agent with respect to these payment authorization services, based on the following factors: (1) the Company has no discretion over which card issuing bank will be used to process a transaction and is unable to direct the activity of the merchant to another card issuing bank, and (2) interchange and card network rates are pre-established by the card issuers or card networks, and the Company has no latitude in determining these fees. Therefore, revenue allocated to the payment authorization performance obligation is presented net of interchange and card network fees paid to the card issuing banks and card networks, respectively, for the years ended September 30, 2022, 2021 and 2020.

With regards to the Company's discount fees, generally, where the Company has control over merchant pricing, merchant portability, credit risk and ultimate responsibility for the customer relationship, revenues are reported at the time of sale equal to the full amount of the discount charged to the merchant, less interchange and network fees. Revenues generated from merchant portfolios where the Company does not have control over merchant pricing, liability for merchant losses or credit risk or rights of portability are reported net of interchange and network fees as well as third-party processing costs directly attributable to processing and bank sponsorship costs.

Revenues are also derived from a variety of fixed transaction or service fees, including authorization fees, convenience fees, statement fees, annual fees, gateway fees, which are charged for accessing our payment and software solutions, and fees for other miscellaneous services, such as handling chargebacks. Revenues derived from service fees are recognized at the time the services are performed and there are no further performance obligations. Revenue from fixed transactions, which principally relate to the sale of equipment, is recognized upon transfer of ownership and delivery to the customer, after which there are no further performance obligations.

Arrangements may contain multiple performance obligations, such as payment authorization services, transaction settlement services, hardware, software products, maintenance, and professional installation and training services. Revenues are allocated to each performance obligation based on the standalone selling price of each good or service. The selling price for a deliverable is based on standalone selling price, if available, the adjusted market assessment approach, estimated cost plus margin approach, or residual approach. The Company establishes estimated selling price, based on the judgment of the Company's management, considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle. In arrangements with multiple performance obligations, the Company determines allocation of the transaction price at inception of the arrangement and uses the standalone selling prices for the majority of the Company's revenue recognition.

Revenues from sales of the Company’s combined hardware and software element are recognized when each performance obligation has been satisfied which has been determined to be upon the delivery of the product. Revenues derived from service fees are recognized at the time the services are performed and there are no further performance obligations. The Company’s professional services, including training, installation, and repair services are recognized as revenue as these services are performed.

The tables below present a disaggregation of the Company's revenue from contracts with customers by product by segment. Refer to Note 17 for discussion of the Company's segments. The Company's products are defined as follows:

•Payments — Includes discount fees, gateway fees and other related fixed transaction or service fees.

•Software and related services — Includes sales of SaaS, transaction-based fees, ongoing software maintenance and support, software licenses, and other professional services related to our software offerings

•Other — Includes sales of equipment, non-software related professional services and other revenues.


	For the year ended September 30, 2022
	Merchant Services		Software and Services		Other		Total
Payments revenue	$	103,509	$	40,951	$	(8)	$	144,452
Software and related services revenue	12,641		142,202		(35)		154,808
Other revenue	8,331		10,249		22		18,602
Total revenue	$	124,481	$	193,402	$	(21)	$	317,862


	For the year ended September 30, 2021
	Merchant Services		Software and Services		Other		Total
Payments revenue	$	92,325	$	29,451	$	(2,095)	$	119,681
Software and related services revenue	11,872		75,736		(18)		87,590
Other revenue	7,673		9,246		(66)		16,853
Total revenue	$	111,870	$	114,433	$	(2,179)	$	224,124


	For the year ended September 30, 2020
	Merchant Services		Software and Services		Other		Total
Payments revenue	$	82,913	$	19,359	$	(1,757)	$	100,515
Software and related services revenue	10,203		26,634		—		36,837
Other revenue	7,833		4,960		(11)		12,782
Total revenue	$	100,949	$	50,953	$	(1,768)	$	150,134

The tables below present disaggregation of the Company's revenue from contracts with customers by timing of transfer of goods or services by segment. For the years ended September 30, 2021 and 2020, $25,843 and $8,047 was included in revenue earned at a point in time related to professional services or other stand ready contract revenue for fixed service fee arrangements. These types of revenue are included in revenue earned over time for the year ended September 30, 2022. The Company's revenue included in each category are defined as follows:

•Revenue earned over time — Includes discount fees, gateway fees, sales of SaaS, ongoing support or other stand-ready obligations and professional services

•Revenue earned at a point in time — Includes point in time service fees that are not stand-ready obligations, software licenses sold as functional intellectual property and other equipment


	For the year ended September 30, 2022
	Merchant Services		Software and Services		Other		Total
Revenue earned over time	$	100,488	$	173,368	$	(36)	$	273,820
Revenue earned at a point in time	23,993		20,034		15		44,042
Total revenue	$	124,481	$	193,402	$	(21)	$	317,862


	For the year ended September 30, 2021
	Merchant Services		Software and Services		Other		Total
Revenue earned over time	$	83,203	$	76,367	$	(2,003)	$	157,567
Revenue earned at a point in time	28,667		38,066		(176)		66,557
Total revenue	$	111,870	$	114,433	$	(2,179)	$	224,124


	For the year ended September 30, 2020
	Merchant Services		Software and Services		Other		Total
Revenue earned over time	$	72,800	$	35,222	$	(1,743)	$	106,279
Revenue earned at a point in time	28,149		15,731		(25)		43,855
Total revenue	$	100,949	$	50,953	$	(1,768)	$	150,134

Contract Assets

The Company bills for certain software and related services sales and fixed fee professional services upon pre-determined milestones in the contracts. Therefore, the Company may have contract assets other than trade accounts receivable for performance obligations that are partially completed, which would typically represent consulting services provided before a milestone is completed in a contract. For the Company’s time and materials professional services contracts and transaction processing services, the Company periodically bills the customer after services have been provided but has the right to invoice the customer for services performed to date at any time. Unbilled amounts associated with these services are presented as accounts receivable as the Company has an unconditional right to payment for services performed.

As of September 30, 2022 and September 30, 2021, the Company’s contract assets from contracts with customers was $9,716 and $1,505, respectively

Contract Liabilities

Deferred revenue represents amounts billed to customers by the Company for services contracts. Payment is typically collected at the start of the contract term. The initial prepaid contract agreement balance is deferred. The balance is then recognized as the services are provided over the contract term. Deferred revenue that is expected to be recognized as revenue within one year is recorded as short-term deferred revenue and the remaining portion is recorded as other long-term liabilities in the consolidated balance sheets. The terms for most of the Company's contracts with a deferred revenue component are one year. Substantially all of the Company's deferred revenue is anticipated to be recognized within the next year.

The following table presents the changes in deferred revenue as of and for the year ended September 30, 2022:


Balance at September 30, 2020	$	11,054
Deferral of revenue	29,966
Recognition of unearned revenue	(10,996)
Balance at September 30, 2021	$	30,024
Deferral of revenue	31,926
Recognition of unearned revenue	(29,861)
Balance at September 30, 2022	$	32,089

Costs to Obtain and Fulfill a Contract

The Company capitalizes incremental costs to obtain new contracts and contract renewals and amortizes these costs on a straight-line basis as an expense over the benefit period, which is generally the contract term, unless a commensurate payment is not expected at renewal. As of September 30, 2022, the Company had $4,185 of capitalized contract costs, compared to $3,851 of capitalized contract costs as of September 30, 2021. The contract costs relate to commissions paid to employees and agents as well as other incentives given to customers to obtain new sales, included within “Prepaid expenses and other current assets” and “Other assets" on the consolidated balance sheets. The Company recorded commissions expense related to these costs for the years ended September 30, 2022, 2021 and 2020 of $707, $533 and $398 respectively.

The Company expenses sales commissions as incurred for the Company's sales commission plans that are paid on recurring monthly revenues, portfolios of existing customers, or have a substantive stay requirement prior to payment.

Other Cost of Services

Other costs of services include third-party processing costs directly attributable to processing and bank sponsorship costs, which may not be based on a percentage of volume. These costs also include related costs such as residual payments to sales groups, which are based on a percentage of the net revenues generated from merchant referrals. In certain merchant processing bank relationships the Company is liable for chargebacks against a merchant equal to the volume of the transaction. Losses resulting from chargebacks against a merchant are included in other cost of services on the accompanying condensed consolidated statement of operations. The Company evaluates its risk for such transactions and estimates its potential loss from chargebacks based primarily on historical experience and other relevant factors. The reserve for merchant losses is included within accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheets. The cost of equipment sold is also included in other cost of services. Other costs of services are recognized at the time the associated revenue is earned.

The Company accounts for all governmental taxes associated with revenue transactions on a net basis.

Selling General and Administrative

Selling general and administrative include all personnel costs such as salaries, benefits, bonuses, stock based compensation and commissions, as well as marketing and advertising costs, contractor services, legal and other professional services fees, software and technological services, rental expenses and other general expenses.

Advertising and promotion costs are expensed as incurred. Advertising expense was $4,028, $2,623 and $1,813 for the years ended September 30, 2022, 2021 and 2020, respectively, and is included in selling, general and administrative expenses in the Consolidated Statements of Operations.

Equity-based Compensation

The Company accounts for grants of equity awards to employees in accordance with ASC 718, Compensation—Stock Compensation. This standard requires compensation expense to be measured based on the estimated fair value of the share-based awards on the date of grant and recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period.

Equity-based compensation was $26,230, $20,860 and $10,452 for the years ended September 30, 2022, 2021 and 2020, respectively.

Use of Estimates

The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, the value of purchase consideration paid and identifiable assets acquired and assumed in acquisitions, goodwill and intangible asset impairment review, determination of performance obligations for revenue recognition, loss reserves, assumptions used in the calculation of equity-based compensation and in the calculation of income taxes, and certain tax assets and liabilities as well as the related valuation allowances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

During the year ended September 30, 2020, the Company recorded a $2,668 reduction in the valuation allowance on the deferred tax asset related to the Company’s investment in partnership and a corresponding reduction in the Company's income tax expense for the year ended September 30, 2020. Management determined an additional portion of the deferred tax asset will be more likely than not realized based off an evaluation of the four sources of taxable income. See Note 11 for a discussion of the current period changes in valuation allowances.

During the year ended September 30, 2020, the Company elected to make a policy change to allocate stock compensation expense to the holders of shares of Class B common stock of i3 Verticals, Inc. This change resulted in a $235 reduction in the benefit from income taxes and a corresponding reduction in the Company's net loss, a $3,728 increase to the net loss attributable to non-controlling interest and a $3,493 decrease to the net loss attributable to i3 Verticals, Inc. for the year ended September 30, 2020.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. The amendments in ASU 2020-06 are effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. As the Company is an emerging growth company and has elected to use the extended transition period afforded to such companies, the Company will not be required to adopt ASU 2020-06 until October 1, 2022. Effective October 1, 2022, the adoption of ASU 2020-06 will result in an increase in long-term debt, less current portion and debt issuance costs, net of $11,933, a decrease in additional paid-in-capital of $23,382 and a decrease in accumulated deficit of $11,449. The adoption of ASU 2020-06 will have no impact on net income.

Credit Risk and Other Concentrations	12 Months Ended
Credit Risk and Other Concentrations	Sep. 30, 2022
Risks and Uncertainties [Abstract]
Credit Risk and Other Concentrations	CREDIT RISK AND OTHER CONCENTRATIONS The Company places its cash with high credit quality financial institutions which provide Federal Deposit Insurance Corporation insurance. The Company performs periodic evaluations of the relative credit standing of these institutions and does not expect any losses related to such concentrations. The Company’s revenues are earned by processing transactions for merchant businesses and other institutions under contract with the Company. The Company utilizes the funds settlement services of primarily seven processing banks, from which most accounts receivable are remitted monthly. No single customer accounted for more than 10% of the Company's revenue during the years ended September 30, 2022, 2021 and 2020. The Company believes that the loss of any single customer would not have a material adverse effect on the Company's financial condition or results of operations. The Company uses third party payment processors, three of which facilitate more than 10% of our processing revenues for the years ended September 30, 2022, 2021, and 2020.

Acquisitions

12 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions

ACQUISITIONS

During the years ended September 30, 2022, 2021 and 2020 the Company acquired the following intangible assets and businesses:

Residual Buyouts

From time to time, the Company acquires future commission streams from sales agents in exchange for an upfront cash payment. This results in an increase in overall gross processing volume to the Company. The residual buyouts are treated as asset acquisitions, resulting in recording a residual buyout intangible asset at cost on the date of acquisition. These assets are amortized using a method of amortization that reflects the pattern in which the economic benefits of the intangible asset are expected to be utilized over their estimated useful lives.

During the years ended September 30, 2022, 2021 and 2020, the Company purchased $52, $1,819 and $1,788, respectively, in residual buyouts using a combination of cash on hand and borrowings on the Company's revolving credit facility. The acquired residual buyout intangible assets weighted average estimated amortization periods of eight years.

2022 Business Combinations

During the year ended September 30, 2022, the Company completed the acquisitions of three businesses to expand the Company’s software offerings in the Public Sector and Healthcare vertical markets. Certain of the purchase price allocations assigned for these acquisitions are considered preliminary as of September 30, 2022.

Total purchase consideration was $107,681, including $101,400 in cash consideration, funded by proceeds from the Company's revolving credit facility, and $6,281 of contingent consideration.

The goodwill associated with one of the three acquisitions is deductible for tax purposes. The acquired customer relationships intangible assets have estimated amortization periods of between ten and nineteen years. The trade names have estimated weighted-average amortization periods of four years. The weighted-average amortization period for all intangibles acquired is fifteen years. The acquired capitalized software have amortization periods of seven years.

Acquisition-related costs for these businesses amounted to approximately $773 and were expensed as incurred.

Certain provisions in the purchase agreements provide for additional consideration of up to $23,000, in the aggregate, to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreements, through no later than September 2024. The Company determined the acquisition date fair values of the liabilities for the contingent consideration based on probability forecasts and discounted cash flow analyses. In each subsequent reporting period, the Company will reassess its current estimates of performance relative to the targets and adjust the contingent liabilities to their fair values through earnings. See additional disclosures in Note 13.

Summary of 2022 Business Combinations

The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2022 were as follows:


Accounts receivable	651
Settlement assets	685
Prepaid expenses and other current assets	83
Property and equipment	190
Capitalized software	9,790
Acquired customer relationships	41,090
Trade name	1,550
Goodwill	61,347
Operating lease right-of-use assets	263
Other assets	22
Total assets acquired	115,671

Accrued expenses and other current liabilities	287
Settlement obligations	685
Deferred revenue, current	30
Current portion of operating lease liabilities	82
Operating lease liabilities, less current portion	181
Other long-term liabilities	6,725
Net assets acquired	$	107,681

Pro Forma Results of Operations for 2022 Business Combinations

The following unaudited supplemental pro forma results of operations have been prepared as though each of the acquired businesses in the year ended September 30, 2022 had occurred on October 1, 2020. Pro forma adjustments were made to reflect the impact of depreciation and amortization, changes to executive compensation and the revised debt load, all in accordance with ASC 805. This supplemental pro forma

information does not purport to be indicative of the results of operations that would have been attained had the acquisitions been made on these dates, or of results of operations that may occur in the future.


	Year ended September 30,
	2022		2021
Revenue	$	321,640	$	265,077
Net loss	$	(26,622)	$	(11,310)

2021 Business Combinations

During the year ended September 30, 2021, the Company completed the acquisitions of eight unrelated businesses, including Business Information Systems, Inc., ImageSoft Inc., and six other collectively material businesses.

Purchase of Business Information Systems, Inc.

On February 1, 2021, the Company completed the acquisition of substantially all of the assets of Business Information Systems, GP, a Tennessee general partnership and Business Information Systems, Inc., a Tennessee corporation (collectively “BIS”) to expand its software offerings, primarily in the Public Sector vertical. BIS is within the Software and Services segment. Total purchase consideration was $95,495, including $52,500 in cash on hand and proceeds from the Company's revolving credit facility, 1,202,914 shares of the Company's Class A Common Stock (valued at $35,245), and $7,750 in contingent consideration.

The goodwill associated with the acquisition is deductible for tax purposes. The acquired customer relationships intangible asset has an estimated amortization period of nineteen years. The non-compete agreement and trade name have estimated amortization periods of three and five years, respectively. The weighted-average estimated amortization period of all intangibles acquired is nineteen years. The acquired capitalized software has an estimated amortization period of ten years.

Acquisition-related costs for BIS amounted to approximately $374 and were expensed as incurred.

Certain provisions in the purchase agreement provide for additional consideration of up to $16,000 in the aggregate, to be paid based upon achievement of specified financial performance targets, as defined in the purchase agreement, in the 24 months from February 1, 2021 through January 31, 2023. The Company determined the acquisition date fair value of the liability for the contingent consideration based on a probability forecast and discounted cash flow analysis. In each subsequent reporting period, the Company will reassess the current estimates of performance relative to the targets and adjust the contingent liability to its fair value through earnings. See additional disclosures in Note 13.

Purchase of ImageSoft, Inc.

On November 17, 2020, the Company completed the acquisition of substantially all of the assets of ImageSoft, Inc. (“ImageSoft”) to expand its software offerings, primarily in the Public Sector vertical. ImageSoft, is within the Software and Services segment. Total purchase consideration was $46,300, including $40,000 in cash consideration, funded by proceeds from the Company's revolving credit facility, and $6,300 in contingent consideration.

The goodwill associated with the acquisition is deductible for tax purposes. The acquired customer relationships intangible asset has an estimated amortization period of twenty years. The non-compete agreement and trade name have estimated amortization periods of three and five years, respectively. The weighted-average

estimated amortization period of all intangibles acquired is nineteen years. The acquired capitalized software has an estimated amortization period of seven years.

Acquisition-related costs for ImageSoft amounted to approximately $403 and were expensed as incurred.

Certain provisions in the purchase agreement provide for additional consideration of up to $20,000 in the aggregate, to be paid based upon achievement of specified financial performance targets, as defined in the purchase agreement, in the 24 months from May 1, 2021 through April 30, 2023. The Company determined the acquisition date fair value of the liability for the contingent consideration based on a probability forecast and discounted cash flow analysis. In each subsequent reporting period, the Company will reassess the current estimates of performance relative to the targets and adjust the contingent liability to its fair value through earnings. See additional disclosures in Note 13.

Other Business Combinations

From October 1, 2020 to September 30, 2021, the Company completed the acquisitions of six other businesses to expand the Company’s software offerings in the Public Sector and Healthcare vertical markets and to add proprietary technology that will augment the Company’s existing platform across several verticals. Five of these businesses are within the Software and Services segment and one is within the Merchant Services segment. Total purchase consideration was $65,527, including $57,000 in cash consideration, funded by proceeds from the Company's revolving credit facility, and $8,527 of contingent consideration.

For each of these businesses acquired, the goodwill associated with the acquisition is deductible for tax purposes. The acquired customer relationships intangible assets have estimated amortization periods of between ten and twenty-five years. The non-compete agreement and trade names have weighted average estimated amortization periods of four years. The weighted-average amortization period for all intangibles acquired is sixteen years. The acquired capitalized software has a weighted-average amortization period of seven years.

Acquisition-related costs for these businesses amounted to approximately $1,110 and were expensed as incurred.

Certain provisions in the purchase agreements provide for additional consideration of up to $50,200, in the aggregate, to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreements, through no later than June 2023. The Company determined the acquisition date fair values of the liabilities for the contingent consideration based on probability forecasts and discounted cash flow analyses. In each subsequent reporting period, the Company will reassess its current estimates of performance relative to the targets and adjust the contingent liabilities to their fair values through earnings. See additional disclosures in Note 13.

Summary of 2021 Business Combinations

The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2021 were as follows:


	BIS		ImageSoft, Inc.		Other		Total
Accounts receivable	$	1,567	$	4,997	$	3,141	$	9,705
Settlement assets	6,889		120		—		7,009
Inventories	458		—		161		619
Prepaid expenses and other current assets	10		2,897		2,043		4,950
Property and equipment	206		433		312		951
Capitalized software	15,200		5,200		4,100		24,500
Acquired customer relationships	32,300		16,300		24,040		72,640
Non-compete agreements	100		610		390		1,100
Trade name	700		1,100		840		2,640
Goodwill	46,660		22,408		35,955		105,023
Operating lease right-of-use assets	—		332		484		816
Other assets	—		6		32		38
Total assets acquired	104,090		54,403		71,498		229,991

Accrued expenses and other current liabilities	138		910		1		1,049
Settlement obligations	6,889		120		—		7,009
Deferred revenue, current	1,568		6,748		5,498		13,814
Current portion of operating lease liabilities	—		75		221		296
Operating lease liabilities, less current portion	—		250		251		501
Net assets acquired	$	95,495	$	46,300	$	65,527	$	207,322

During the year ended September 30, 2022, the Company finalized the purchase price allocations for the 2021 business combinations, which resulted in additional adjustments to decrease current assets by $68, increase operating lease right-of-use assets by $12, increase goodwill by $49 and decrease liabilities by $7. The table above reflects the adjusted amounts.

2020 Business Combinations

During the year ended September 30, 2020, the Company completed the acquisitions of three unrelated businesses. Two expanded the Company's geographic reach and software capabilities in the Public Sector vertical. The other adds text-to-pay capabilities and other software solutions in the Company's Non-Profit vertical. Total purchase consideration was $32,633, including $27,885 in revolving credit facility proceeds and $4,748 of contingent consideration.

For some of these business acquired, the goodwill associated with the acquisitions is deductible for tax purposes, and goodwill associated with the acquisitions of others of the businesses is not deductible for tax purposes. The acquired customer relationships intangible assets have estimated amortization periods of between fifteen and eighteen years. The non-compete agreement and trade names both have weighted-average amortization periods of three years. The weighted-average amortization period for all intangibles acquired is sixteen years. The acquired capitalized software has an estimated amortization period of seven years.

Acquisition-related costs for these businesses amounted to approximately $547 and were expensed as incurred.

Certain provisions in the purchase agreements provide for additional consideration of up to $18,600, in the aggregate, to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreements, through no later than September 2022. The Company determined the acquisition date fair values of the liabilities for the contingent consideration based on probability forecasts and discounted cash flow analyses. In each subsequent reporting period, the Company will reassess its current estimates of performance relative to the targets and adjust the contingent liabilities to their fair values through earnings. See additional disclosures in Note 13.

Summary of 2020 Business Combinations

The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2020 were as follows:


Cash and cash equivalents	$	313
Accounts receivable	846
Prepaid expenses and other current assets	54
Property and equipment	122
Capitalized software	1,970
Acquired customer relationships	11,900
Non-compete agreements	90
Trade name	300
Goodwill	20,213
Other assets	17
Total assets acquired	35,825

Accounts payable	168
Accrued expenses and other current liabilities	635
Deferred revenue, current	200
Other long-term liabilities	2,194
Net assets acquired	$	32,628

Prepaid Expenses and Other Current Assets

12 Months Ended

Sep. 30, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

PREPAID EXPENSES AND OTHER CURRENT ASSETSA summary of the Company's prepaid expenses and other current assets as of September 30, 2022 and 2021 is as follows:


	2022		2021
Inventory	$	4,121	$	2,220
Prepaid licenses	5,743		4,646
Prepaid insurance	736		1,074
Notes receivable — current portion	4,930		—
Other current assets	3,915		3,274
Prepaid expenses and other current assets	$	19,445	$	11,214

Property and Equipment, Net

12 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

PROPERTY AND EQUIPMENT, NET

A summary of the Company's property and equipment as of September 30, 2022 and 2021 is as follows:


	Estimated Useful Life	2022		2021
Computer equipment and software(1)	2 to 7 years	$	3,040	$	2,982
Furniture and fixtures	2 to 7 years	2,159		2,125
Terminals	2 to 3 years	813		945
Office equipment	2 to 5 years	1,289		1,173
Automobiles	3 years	477		481
Leasehold improvements	2 to 7 years	2,945		2,788
Accumulated depreciation		(5,053)		(4,592)
Property and equipment, net		$	5,670	$	5,902

____________________

1.Includes computer software of $129 and $707 as of September 30, 2022 and 2021, respectively.

Depreciation expense for the years ended September 30, 2022, 2021 and 2020 amounted to $2,545, $2,312 and $1,825, respectively.

Capitalized Software, Net

12 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Capitalized Software, Net

CAPITALIZED SOFTWARE, NET

A summary of the Company's capitalized software as of September 30, 2022 and 2021 is as follows:


	Estimated Useful Life	2022		2021
Software development costs	1 to 7 years	$	60,013	$	46,417
Development in progress		9,265		6,612
Accumulated amortization		(16,937)		(11,658)
Capitalized software, net		$	52,341	$	41,371

The Company capitalized software development costs (including acquisitions) totaling $19,957 and $30,659 during the years ended September 30, 2022 and 2021, respectively. Amortization expense for capitalized software development costs amounted to $8,987, $6,276 and $3,978 during the years ended September 30, 2022, 2021 and 2020, respectively. There were no amounts written down to net realizable value during the years ended September 30, 2022, 2021 and 2020, respectively.

Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill are as follows:


	Merchant Services		Software and Services		Other		Total
Balance at September 30, 2020 (net of accumulated impairment losses of $11,458, $0 and $0, respectively)	$	115,982	$	71,023	$	—	$	187,005
Goodwill attributable to preliminary purchase price adjustments and acquisition activity during the year ended September 30, 2021	3,104		102,134		—		105,238
Balance at September 30, 2021	119,086		173,157		—		292,243
Goodwill attributable to preliminary purchase price adjustments and acquisition activity during the year ended September 30, 2022	—		61,396		—		61,396
Balance at September 30, 2022	$	119,086	$	234,553	$	—	$	353,639

Intangible assets consisted of the following as of September 30, 2022:


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Customer relationships	$	268,301	$	(80,681)	$	187,620	10 to 25 years – accelerated or straight-line
Non-compete agreements	1,190		(705)		485		3 to 6 years – straight-line
Website and brand development costs	268		(159)		109		3 to 4 years – straight-line
Trade names	7,771		(4,203)		3,568		3 to 7 years – straight-line
Residual buyouts	6,169		(2,141)		4,028		8 years – straight-line
Referral and exclusivity agreements	800		(733)		67		5 years – straight-line
Total finite-lived intangible assets	284,499		(88,622)		195,877

Indefinite-lived intangible assets:
Trademarks	42		—		42
Total identifiable intangible assets	$	284,541	$	(88,622)	$	195,919

Intangible assets consisted of the following as of September 30, 2021:


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Customer relationships	$	227,211	$	(65,815)	$	161,396	10 to 25 years – accelerated or straight-line
Non-compete agreements	2,878		(1,907)		971		3 to 6 years – straight-line
Website development costs	240		(133)		107		3 to 4 years – straight-line
Trade names	6,320		(2,668)		3,652		3 to 7 years – straight-line
Residual buyouts	6,718		(1,407)		5,311		8 years – straight-line
Referral and exclusivity agreements	800		(573)		227		5 years – straight-line
Total finite-lived intangible assets	244,167		(72,503)		171,664

Indefinite-lived intangible assets:
Trademarks	42		—		42
Total identifiable intangible assets	$	244,209	$	(72,503)	$	171,706

Amortization expense for intangible assets amounted to $17,892, $15,830 and $12,414 during the years ended September 30, 2022, 2021 and 2020, respectively.

Based on gross carrying amounts at September 30, 2022, the Company's estimate of future amortization expense for intangible assets are presented in this table as follows for each fiscal year ending September 30:


2023	$	17,704
2024	16,722
2025	16,431
2026	16,025
2027	15,405
Thereafter	113,590
	$	195,877

Accrued Expenses and Other Liabilities

12 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Accrued Expenses and Other Liabilities

ACCRUED EXPENSES AND OTHER LIABILITIES

A summary of the Company's accrued expenses and other current liabilities as of September 30, 2022 and 2021 is as follows:


	2022		2021
Accrued wages, bonuses, commissions and vacation	$	8,117	$	6,649
Accrued interest	642		271
Accrued contingent consideration — current portion	21,385		25,768
Escrow liabilities	12,285		9,067
Tax receivable agreement liability — current portion	20		—
Customer deposits	1,575		1,913
Employee health self-insurance liability	732		1,032
Accrued interchange	2,096		1,086
Other current liabilities	10,981		5,029
Accrued expenses and other current liabilities	$	57,833	$	50,815

A summary of the Company's long-term liabilities as of September 30, 2022 and 2021 is as follows:


	2022		2021
Accrued contingent consideration — long-term portion	$	1,448	$	10,461
Deferred tax liability — long-term	7,896		3,280
Other long-term liabilities	196		270
Total other long-term liabilities	$	9,540	$	14,011

Long-Term Debt, Net

12 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Long-Term Debt, Net

LONG-TERM DEBT, NET

A summary of long-term debt, net as of September 30, 2022 and September 30, 2021 is as follows:


	Maturity	2022		2021
Revolving lines of credit to banks under the Senior Secured Credit Facility	May 9, 2024	$	185,017	$	104,396
1.0% Exchangeable Senior Notes due 2025	February 15, 2025	104,557		99,808
Debt issuance costs, net		(2,554)		(3,599)
Total long-term debt, net of issuance costs		$	287,020	$	200,605

2020 Exchangeable Notes Offering

On February 18, 2020, i3 Verticals, LLC issued $138,000 aggregate principal amount of 1.0% Exchangeable Senior Notes due 2025 (the “Exchangeable Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The Company

received approximately $132,762 in net proceeds from the sale of the Exchangeable Notes, as determined by deducting estimated offering expenses paid to third-parties from the aggregate principal amount.

The Exchangeable Notes bear interest at a fixed rate of 1.00% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2020. The Exchangeable Notes will mature on February 15, 2025, unless converted or repurchased at an earlier date.

i3 Verticals, LLC issued the Exchangeable Notes pursuant to an Indenture, dated as of February 18, 2020 (the “Indenture”), among i3 Verticals, LLC, the Company and U.S. Bank National Association, as trustee.

Prior to August 15, 2024, the Exchangeable Notes are exchangeable only upon satisfaction of certain conditions and during certain periods described in the Indenture, and thereafter, the Exchangeable Notes are exchangeable at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Exchangeable Notes are exchangeable on the terms set forth in the Indenture into cash, shares of Class A common stock, or a combination thereof, at i3 Verticals, LLC’s election. The exchange rate is initially 24.4666 shares of Class A common stock per $1,000 principal amount of Exchangeable Notes (equivalent to an initial exchange price of approximately $40.87 per share of Class A common stock). The exchange rate is subject to adjustment in certain circumstances. In addition, following certain corporate events that occur prior to the maturity date or i3 Verticals, LLC’s delivery of a notice of redemption, i3 Verticals, LLC will increase, in certain circumstances, the exchange rate for a holder who elects to exchange its Exchangeable Notes in connection with such a corporate event or notice of redemption, as the case may be.

If the Company or i3 Verticals, LLC undergoes a fundamental change, holders may require i3 Verticals, LLC to repurchase all or part of their Exchangeable Notes at a repurchase price equal to 100% of the principal amount of the Exchangeable Notes to be repurchased, plus accrued and unpaid interest to, but not including, the fundamental change repurchase date. As of September 30, 2022, none of the conditions permitting the holders of the Exchangeable Notes to early convert have been met.

i3 Verticals, LLC may not redeem the Exchangeable Notes prior to February 20, 2023. On or after February 20, 2023, and prior to the 47th scheduled trading day immediately preceding the maturity date, if the last reported sale price per share of Class A common stock has been at least 130% of the exchange price for the Exchangeable Notes for at least 20 trading days (whether or not consecutive), i3 Verticals, LLC may redeem all or any portion of the Exchangeable Notes at a cash redemption price equal to 100% of the principal amount of the Exchangeable Notes to be redeemed plus accrued and unpaid interest on such note to, but not including, the redemption date.

The Exchangeable Notes are general senior unsecured obligations of i3 Verticals, LLC and the guarantee is the Company’s senior unsecured obligation and rank senior in right of payment to all of i3 Verticals, LLC’s and the Company’s future indebtedness that is expressly subordinated in right of payment to the Exchangeable Notes or the guarantee, as applicable. The Exchangeable Notes and the guarantee rank equally in right of payment with all of i3 Verticals, LLC’s and the Company’s existing and future unsecured indebtedness that is not so expressly subordinated in the right of payment to the Exchangeable Notes or the guarantee, as applicable. The Exchangeable Notes and the guarantee are effectively subordinated to any of the Companies’ existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness (including obligations under the credit agreement governing the Senior Secured Credit Facility, defined below). The Exchangeable Notes and the guarantee will be structurally subordinated to all indebtedness and other liabilities and obligations (including the debt and trade payables) of the Company’s subsidiaries, other than i3 Verticals, LLC.

In accounting for the issuance of the Exchangeable Notes, the Company separated the Exchangeable Notes into liability and equity components. The carrying amount of the liability component before the allocation of any transaction costs was calculated by measuring the fair value of a similar liability that does not have an associated exchangeable feature. The carrying amount of the equity component (before the allocation of any transaction costs), representing the conversion option, which does not require separate accounting as a derivative as it meets

a scope exception for certain contracts involving an entity's own equity, was determined by deducting the fair value of the liability component from the par value of the Exchangeable Notes. The difference between the principal amount of the Exchangeable Notes and the liability component represents the debt discount, which is recorded as a direct deduction from the related debt liability in the consolidated balance sheet and accreted over the period from the date of issuance to the contractual maturity date, resulting in the recognition of non-cash interest expense. The equity component of the Exchangeable Notes of approximately $28,662 is included in additional paid-in capital in the consolidated balance sheet and is not remeasured as longs as it continues to meet the conditions for equity classification. Transaction costs were allocated to the liability and equity components in the same proportion as the allocation of the proceeds. Transaction costs attributable to the liability component were recorded as debt issuance costs in the consolidated balance sheet and are amortized to interest expense using the effective interest method over the term of the Exchangeable Notes, and transaction costs attributable to the equity component were netted with the equity component in stockholders' equity.

The Company incurred third-party issuance costs totaling $5,238, in connection with the issuance of the Exchangeable Notes for the year ended September 30, 2020. The Company capitalized $4,150 of debt issuance costs in connection with the Exchangeable Notes and allocated $1,088 of the third-party issuance costs to equity during the year ended September 30, 2020. Non-cash interest expense for amortization of debt issuance costs related to the Exchangeable Notes for the years ended September 30, 2022 and 2021 was $666 and $588, respectively. The Company also wrote off a portion of the debt issuance costs in connection with the repurchase transactions in April and September 2020, as described below. Total unamortized debt issuance costs related to the Exchangeable Notes were $1,939 as of September 30, 2022.

The estimated fair value of the Exchangeable Notes was $102,761 as of September 30, 2022. The estimated fair value of the Exchangeable Notes was determined through consideration of quoted market prices for similar instruments. The fair value is classified as Level 2, as defined in Note 13.

The Company can choose to purchase its Exchangeable Notes on the open market. In April and September 2020, the Company paid $17,414 in aggregate to repurchase $21,000 in aggregate principal amount of the Exchangeable Notes and to repay approximately $24 in accrued interest on the repurchased portion of the Exchangeable Notes. The Company recorded a loss on retirement of debt of $2,297 due to the carrying value exceeding the fair value of the repurchased portion of the Exchangeable Notes at the dates of repurchases. The Company wrote off $592 of debt issuance costs in connection with the repurchase transactions.

Exchangeable Note Hedge Transactions

On February 12, 2020, concurrently with the pricing of the Exchangeable Notes, and on February 13, 2020, concurrently with the exercise by the initial purchasers of their right to purchase additional Exchangeable Notes, i3 Verticals, LLC entered into exchangeable note hedge transactions with respect to Class A common stock (the “Note Hedge Transactions”) with certain financial institutions (collectively, the “Counterparties”). The Note Hedge Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Exchangeable Notes, the same number of shares of Class A common stock that initially underlie the Exchangeable Notes in the aggregate and are exercisable upon exchange of the Exchangeable Notes. The Note Hedge Transactions are intended to reduce potential dilution to the Class A common stock upon any exchange of the Exchangeable Notes. The Note Hedge Transactions will expire upon the maturity of the Exchangeable Notes, if not earlier exercised. The Note Hedge Transactions are separate transactions, entered into by i3 Verticals, LLC with the Counterparties, and are not part of the terms of the Exchangeable Notes. Holders of the Exchangeable Notes will not have any rights with respect to the Note Hedge Transactions. i3 Verticals, LLC used approximately $28,676 of the net proceeds from the offering of the Exchangeable Notes (net of the premiums received for the warrant transactions described below) to pay the cost of the Note Hedge Transactions.

The Note Hedge Transactions do not require separate accounting as a derivative as they meet a scope exception for certain contracts involving an entity's own equity. The premiums paid for the Note Hedge Transactions have been included as a net reduction to additional paid-in capital within stockholders' equity.

Warrant Transactions

On February 12, 2020, concurrently with the pricing of the Exchangeable Notes, and on February 13, 2020, concurrently with the exercise by the initial purchasers of their right to purchase additional Exchangeable Notes, the Company entered into warrant transactions to sell to the Counterparties warrants (the “Warrants”) to acquire, subject to customary adjustments, up to initially 3,376,391 shares of Class A common stock in the aggregate at an initial exercise price of $62.88 per share. The Company offered and sold the Warrants in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Warrants will expire over a period beginning on May 15, 2025.

The Warrants are separate transactions, entered into by the Company with the Counterparties, and are not part of the terms of the Exchangeable Notes. Holders of the Exchangeable Notes will not have any rights with respect to the Warrants. The Company received approximately $14,669 from the offering and sale of the Warrants. The Warrants do not require separate accounting as a derivative as they meet a scope exception for certain contracts involving an entity's own equity. The premiums paid for the Warrants have been included as a net increase to additional paid-in capital within stockholders' equity.

Senior Secured Credit Facility

On May 9, 2019, the Company replaced its then existing credit facility with a new credit agreement (the “Senior Secured Credit Facility”). As of September 30, 2022, the Senior Secured Credit Facility, as amended, consisted of a $275,000 revolving credit facility, together with an option to increase the revolving credit facility and/or obtain incremental term loans in an additional principal amount of up to $50,000 in the aggregate (subject to the receipt of additional commitments for any such incremental loan amounts). The Senior Secured Credit Facility accrues interest at Term SOFR (based upon an interest period of one, three or six months), plus an adjustment of 0.10%, plus an applicable margin of 2.25% to 3.25% (3.25% as of September 30, 2022), or the base rate (defined as the highest of (x) the Bank of America prime rate, (y) the federal funds rate plus 0.50% and (z) Term SOFR, plus an adjustment of 0.10%, plus 1.00%), plus an applicable margin of 0.25% to 1.25% (1.25% as of September 30, 2022), in each case depending upon the consolidated total leverage ratio, as defined in the agreement. Interest is payable at the end of the selected interest period, but no less frequently than quarterly. Additionally, the Senior Secured Credit Facility requires the Company to pay unused commitment fees of 0.15% to 0.30% (0.30% as of September 30, 2022) on any undrawn amounts under the revolving credit facility and letter of credit fees of up to 3.25% on the maximum amount available to be drawn under each letter of credit issued under the agreement. The Senior Secured Credit Facility requires maintenance of certain financial ratios on a quarterly basis as follows: (i) a minimum consolidated interest coverage ratio of 3.00 to 1.00, (ii) a maximum total leverage ratio of 5.00 to 1.00, provided, that for each of the four fiscal quarters immediately following a qualified acquisition (each a “Leverage Increase Period”), the required ratio set forth above may be increased by up to 0.25, subject to certain limitations and (iii) a maximum consolidated senior secured leverage ratio of 3.25 to 1.00, provided, that for each Leverage Increase Period, the consolidated senior leverage ratio may be increased by up to 0.25, subject to certain limitations. The maturity date of the Senior Secured Credit Facility is May 9, 2024. As of September 30, 2022, there was $89,983 available for borrowing under the revolving credit facility, subject to the financial covenants.

The Senior Secured Credit Facility is secured by substantially all assets of the Company. The lenders under the Senior Secured Credit Facility hold senior rights to collateral and principal repayment over all other creditors.

The provisions of the Senior Secured Credit Facility place certain restrictions and limitations upon the Company. These include, among others, restrictions on liens, investments, indebtedness, fundamental changes and dispositions; maintenance of certain financial ratios; and certain non-financial covenants pertaining to the activities of the Company during the period covered. The Company was in compliance with such covenants as of September 30, 2022. In addition, the Senior Secured Credit Facility restricts the Company's ability to make dividends or other distributions to the holders of the Company's equity. The Company is permitted to (i) make cash distributions to the holders of the Company's equity in order to pay taxes incurred by owners of equity in i3 Verticals, LLC, by reason of such ownership, (ii) move intercompany cash between subsidiaries that are joined to

the Senior Secured Credit Facility, (iii) repurchase equity from employees, directors, officers or consultants in an aggregate amount not to exceed $3,000 per year, (iv) make certain payments in connection with the Tax Receivable Agreement, and (v) make other dividends or distributions in an aggregate amount not to exceed 5% of the net cash proceeds received from any additional common equity issuance. The Company is also permitted to make non-cash dividends in the form of additional equity issuances. Each subsidiary may make ratable distributions to persons that own equity interests in such subsidiary. All other forms of dividends or distributions are prohibited under the Senior Secured Credit Facility.

On September 30, 2022, i3 Verticals, LLC entered into a LIBOR Transition Amendment (the “LIBOR Amendment”) with Bank of America, N.A and the other parties to the Credit Agreement. The LIBOR Amendment modified the Senior Secured Credit Agreement to reflect that the loans and other extensions of credit provided thereunder that incur interest, fees, commissions or other amounts based on the London Inter-Bank Offered Rate ("LIBOR"), will no longer incur interest based on LIBOR but instead will incur interest based on the forward-looking SOFR term rate administered by CME Group Benchmark Administration Limited (based upon an interest period of, at the borrower’s election, one, three or six months). Except as set forth in the LIBOR Amendment, the other terms and conditions of the Credit Agreement remain in full force and effect. All other material terms included in the Credit Agreement, as amended, remain unchanged as a result of the execution of the LIBOR Amendment.

On October 3, 2022, i3 Verticals, LLC entered into the Third Amendment to the Credit Agreement, which increased the maximum amount of the revolving credit facility to $375,000. See Note 21 for a discussion of the Third Amendment.

Debt issuance costs

During the year ended September 30, 2020, the Company capitalized $4,212 in connection with the issuance of the Exchangeable Notes, the Note Hedge Transactions and the Warrants and in connection with entering into the second amendment to the Senior Secured Credit Facility. The debt issuance costs are being amortized over the related term of the debt using the effective interest rate method, and are presented net against long-term debt in the consolidated balance sheets. During the years ended September 30, 2022 and 2021, the Company did not incur any additional issuance costs. The amortization of debt issuance costs is included in interest expense and amounted to approximately $1,046, $968 and $758 during the years ended September 30, 2022, 2021 and 2020, respectively.

Income Taxes

12 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXESi3 Verticals, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from i3 Verticals, LLC based on i3 Verticals, Inc.'s economic interest in i3 Verticals, LLC. i3 Verticals, LLC's members, including the Company, are liable for federal, state and local income taxes based on their share of i3 Verticals, LLC's pass-through taxable income. i3 Verticals, LLC is not a taxable entity for federal income tax purposes, but is subject to and reports entity level tax in both Tennessee and Texas. In addition, certain

subsidiaries of i3 Verticals, LLC are corporations that are subject to state and federal income taxes.


	Year ended September 30,
	2022		2021		2020
Current:
Federal tax expense (benefit)	$	1,098	$	(35)	$	(34)
State tax expense	1,321		945		446
Deferred:
Federal tax benefit	(4,151)		(285)		(3,018)
State tax expense (benefit)	6,739		(2)		(189)
Income tax expense (benefit)	$	5,007	$	623	$	(2,795)

A reconciliation of income tax expense (benefit) from operations computed at the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:


	Year ended September 30,
	2022				2021				2020
Expected U.S. federal income taxes at statutory rate	$	(3,824)	21.0	%	$	(1,519)	21.1	%	$	(792)	21.0	%
Partnership income not taxed at federal level	1,035		(5.7)	%	29		(0.4)	%	85		(2.3)	%
Valuation allowance	7,101		(39.0)	%	712		(9.9)	%	(2,694)		71.4	%
State and local income taxes, net of federal benefit	(641)		3.5	%	552		(7.6)	%	244		(6.5)	%
Nondeductible expenses and other permanent items	83		(0.5)	%	85		(1.2)	%	496		(13.1)	%
Revaluation of debt and other debt transaction differences	1,434		(7.9)	%	609		(8.4)	%	222		(5.9)	%
Change in liability for uncertain tax positions	(25)		0.1	%	(83)		1.2	%	108		(2.9)	%
Federal tax credits	—		—	%	240		(3.3)	%	(431)		11.4	%
Other	(156)		0.9	%	(2)		—	%	(33)		0.9	%
Income tax expense (benefit)	$	5,007	(27.5)	%	$	623	(8.6)	%	$	(2,795)	74.1	%

Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities. Net deferred taxes spanning multiple jurisdictions as of September 30, 2022 and 2021 were as follows:


	September 30,
	2022		2021
Deferred tax assets:
Investment in partnership	$	56,388	$	57,080
Stock-based compensation	2,421		1,714
Deferred revenue	448		561
Accrued expenses	269		232
Net operating loss carryforwards	15,992		13,441
Section 163j carryforward	1,685		1,828
Federal tax credits	359		661
Operating lease liabilities	677		638
Other	75		75
Gross deferred tax assets	78,314		76,230
Valuation allowance	(27,555)		(20,269)

Deferred tax liabilities:
Intangible assets	(14,270)		(8,308)
Operating lease right of use assets	(641)		(620)
Other	(285)		(321)
Net deferred tax asset	$	35,563	$	46,712

Federal net operating loss carryforwards as of September 30, 2022 and 2021 were $43,233 and $35,312, respectively. Federal tax credits were $359, resulting in a deferred tax asset of $9,438 as of September 30, 2022 compared to $661 of federal tax credits, resulting in a deferred tax asset of $8,077 as of September 30, 2021. The federal net operating loss carryforwards will begin to expire in 2036 and the federal tax credits will begin to expire in 2037. The use of federal net operating losses and credits are limited to the future taxable income of separate legal entities. As a result, a valuation allowance of $808 has been provided for certain federal deferred tax assets, an increase of $15 during the year ended September 30, 2022. State net operating loss carryforwards as of September 30, 2022 totaled $108,992, resulting in a deferred tax asset of $6,913. The state net operating loss carryforwards will begin to expire in 2026. The use of certain state net operating losses are limited to future taxable earnings of separate legal entities. As a result, a valuation allowance of $4,909 has been provided for state loss carryforwards, an increase of $880 during the year ended September 30, 2022. The Company also considered a valuation allowance on its $56,388 outside basis of investment in i3 Verticals, LLC deferred tax asset as of September 30, 2022. The Company has recorded a valuation allowance of $21,838 against the portion of the deferred tax benefit that is capital in nature and against the amount not expected to be realized, resulting in an increase in valuation allowance of $6,391 during the year ended September 30, 2022. Management believes that it is more likely than not that the results of operations will generate sufficient taxable income to realize the deferred tax assets after giving consideration to the valuation allowance.

The components of the Company’s liability for uncertain tax benefits are as follows:


Gross unrecognized tax benefits as of September 30, 2020	$	184
Increase in current year tax positions	—
Increase in prior year tax positions	—
Settlements and other reductions	76
Gross unrecognized tax benefits as of September 30, 2021	108
Increase in current year tax positions	—
Increase in prior year tax positions	—
Settlements and other reductions	25
Gross unrecognized tax benefits as of September 30, 2022	$	83

As of September 30, 2022 and 2021, the Company had accrued interest of no and no accrued penalties in either period related to uncertain tax positions. It is the Company’s policy to recognize interest and/or penalties related to income tax matters in income tax expense. The Company is no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2018. As of September 30, 2022 and 2021, there were unrecognized tax benefits of $83 and $108 that if recognized would affect the annual effective tax rate.

Tax Receivable Agreement

On June 25, 2018, the Company entered into a Tax Receivable Agreement with i3 Verticals, LLC and each of the Continuing Equity Owners (the “Tax Receivable Agreement”) that provides for the payment by the Company to the Continuing Equity Owners of 85% of the amount of certain tax benefits, if any, that it actually realizes, or in some circumstances, is deemed to realize in its tax reporting, as a result of (i) future redemptions funded by the Company or exchanges, or deemed exchanges in certain circumstances, of Common Units of i3 Verticals, LLC for Class A common stock of i3 Verticals, Inc. or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement. These tax benefit payments are not conditioned upon one or more of the Continuing Equity Owners maintaining a continued ownership interest in i3 Verticals, LLC. If a Continuing Equity Owner transfers Common Units but does not assign to the transferee of such units its rights under the Tax Receivable Agreement, such Continuing Equity Owner generally will continue to be entitled to receive payments under the Tax Receivable Agreement arising in respect of a subsequent exchange of such Common Units. In general, the Continuing Equity Owners’ rights under the Tax Receivable Agreement may not be assigned, sold, pledged or otherwise alienated to any person, other than certain permitted transferees, without (a) the Company's prior written consent, which should not be unreasonably withheld, conditioned or delayed, and (b) such persons becoming a party to the Tax Receivable Agreement and agreeing to succeed to the applicable Continuing Equity Owner’s interest therein. The Company expects to benefit from the remaining 15% of the tax benefits, if any, that the Company may realize.

When Class B common stock is exchanged for Class A common stock, this triggers an increase in the tax basis of the Company's Common Units in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement. During the year ended September 30, 2020, the Company acquired an aggregate of 1,021,016 common units of i3 Verticals, LLC in connection with the redemption of common units, which resulted in an increase in the tax basis of our investment in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement. As a result of these exchanges, during the year ended September 30, 2020, the Company recognized an increase to its net deferred tax assets in the amount of $6,307, and corresponding Tax Receivable Agreement liabilities of $5,361, representing 85% of the tax benefits due to the Continuing Equity Owners.

During the year ended September 30, 2021, the Company acquired an aggregate of 1,671,479 common units of i3 Verticals, LLC in connection with the redemption of common units, which resulted in an increase in the tax basis of our investment in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement. As a result of these exchanges, during the year ended September 30, 2021, the Company recognized an increase to

its net deferred tax assets in the amount of $13,990, and corresponding Tax Receivable Agreement liabilities of $11,892, representing 85% of the tax benefits due to the Continuing Equity Owners.

During the year ended September 30, 2022, the Company acquired an aggregate of 111,000 common units of i3 Verticals, LLC in connection with the redemption of common units, which resulted in an increase in the tax basis of our investment in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement. As a result of these exchanges, during the year ended September 30, 2022, the Company recognized an increase to its net deferred tax assets in the amount of $898, and corresponding Tax Receivable Agreement liabilities of $763, representing 85% of the tax benefits due to the Continuing Equity Owners.

The deferred tax asset and corresponding Tax Receivable Agreement liability balances were $40,981 and $40,832, respectively, as of September 30, 2022.

Payments to the Continuing Equity Owners related to exchanges through September 30, 2022 will range from $0 to $3,315 per year and are expected to be paid over the next 26 years. The amounts recorded as of September 30, 2022, approximate the current estimate of expected tax savings and are subject to change after the filing of the Company’s U.S. federal and state income tax returns. Future payments under the Tax Receivable Agreement with respect to subsequent exchanges would be in addition to these amounts.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Leases

12 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

LEASES

As discussed in Note 2, the Company adopted ASC 842 effective October 1, 2020, using the modified retrospective transition method, under which the prior period financial statements were not restated for the new guidance.

The Company’s leases consist primarily of real estate leases throughout the markets in which the Company operates. At contract inception, the Company determines whether an arrangement is or contains a lease, and for each identified lease, evaluates the classification as operating or financing. The Company had no finance leases as of September 30, 2022. Leased assets and obligations are recognized at the lease commencement date based on the present value of fixed lease payments to be made over the term of the lease. Renewal and termination options are factored into determination of the lease term only if the option is reasonably certain to be exercised. The weighted-average remaining lease term at September 30, 2022 was five years. The Company had no significant short-term leases during the year ended September 30, 2022.

The Company’s leases do not provide a readily determinable implicit interest rate and the Company uses its incremental borrowing rate to measure the lease liability and corresponding right-of-use asset. The incremental borrowing rates were determined based on a portfolio approach considering the Company’s current secured borrowing rate adjusted for market conditions and the length of the lease term. The weighted-average discount rate used in the measurement of our lease liabilities was 6.4% as of September 30, 2022.

Operating lease cost is recognized on a straight-line basis over the lease term. Operating lease costs for the years ended September 30, 2022 and 2021 were $5,815 and $4,096, respectively, which are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

Total operating lease costs for the years ended September 30, 2022 and 2021, include variable lease costs of approximately $59 and $6, respectively, which are primarily comprised of costs of maintenance and utilities and changes in rates, and are determined based on the actual costs incurred during the period. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and liabilities.

Short-term rent expense for the years ended September 30, 2022 and 2021 was $177 and $304, respectively, and are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

As of September 30, 2022, maturities of lease liabilities are as follows:


Years ending September 30:
2023	$	5,492
2024	4,703
2025	4,095
2026	3,344
2027	1,521
Thereafter	2,011
Total future minimum lease payments (undiscounted)(1)	21,166
Less: present value discount	(2,604)
Present value of lease liability	$	18,562

_________________________

1.Total future minimum lease payments excludes payments of $26 for leases designated as short-term leases, which are excluded from the Company's right-of-use assets. These payments will be made within the next twelve months.

Fair Value Measurements

12 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The Company applies the provisions of ASC 820, Fair Value Measurement, which defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or the price paid to transfer a liability as of the measurement date. A three-tier, fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The three levels are:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets.

The carrying value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, settlement assets and obligations, accounts receivable, other assets, accounts payable, and accrued expenses, approximated their fair values as of September 30, 2022 and 2021, because of the relatively short maturity dates on these instruments. The carrying amount of debt approximates fair value as of September 30, 2022 and 2021, because interest rates on these instruments approximate market interest rates.

The Company has no Level 1 or Level 2 financial instruments measured at fair value on a recurring basis. The following tables present the changes in the Company's Level 3 financial instruments that are measured at fair value on a recurring basis.


	Accrued Contingent Consideration
Balance at September 30, 2020	$	13,034
Contingent consideration accrued at time of business combination	22,577
Change in fair value of contingent consideration included in Operating expenses	7,140
Contingent consideration paid	(6,522)
Balance at September 30, 2021	$	36,229
Contingent consideration accrued at time of business combination	6,281
Change in fair value of contingent consideration included in Operating expenses	23,725
Contingent consideration paid	(43,402)
Balance at September 30, 2022	$	22,833

The fair value of contingent consideration obligations includes inputs not observable in the market and thus represents a Level 3 measurement. The amount to be paid under these obligations is contingent upon the achievement of certain growth metrics related to the financial performance of the entities subsequent to acquisition. The fair value of material contingent consideration included in an acquisition is calculated using a Monte Carlo simulation. The contingent consideration is revalued each period until it is settled. Management reviews the historical and projected performance of each acquisition with contingent consideration and uses an income probability method to revalue the contingent consideration. The revaluation requires management to make certain assumptions and represent management's best estimate at the valuation date. The probabilities are determined based on a management review of the expected likelihood of triggering events that would cause a change in the contingent consideration paid. The Company develops the projected future financial results based on an analysis of historical results, market conditions, and the expected impact of anticipated changes in the Company's overall business and/or product strategies.

Approximately $21,385 and $25,768 of contingent consideration was recorded in accrued expenses and other current liabilities as of September 30, 2022 and 2021, respectively. Approximately $1,448 and $10,461 of contingent consideration was recorded in other long-term liabilities as of September 30, 2022 and 2021, respectively.

Disclosure of Fair Values

The Company's financial instruments that are not remeasured at fair value include the Exchangeable Notes (see Note 10). The Company estimates the fair value of the Exchangeable Notes through consideration of quoted market prices of similar instruments, classified as Level 2 as described above. The estimated fair value of the Exchangeable Notes was $102,761 as of September 30, 2022.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

12 Months Ended

Sep. 30, 2022

Equity-Based Compensation

EQUITY-BASED COMPENSATION

A summary of equity-based compensation expense recognized during the years ended September 30, 2022, 2021 and 2020 is as follows:


	Year ended September 30,
	2022		2021		2020
Stock options	$	25,163	$	20,860	$	10,452
Restricted stock units	1,067		—		—
Equity-based compensation expense	$	26,230	$	20,860	$	10,452

Amounts are included in general and administrative expense on the consolidated statements of operations. Income tax benefits of $468, $1,083 and $604 were recognized related to equity-based compensation during the years ended September 30, 2022, 2021, and 2020, respectively.

Stock Options

In May 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”) under which the Company may grant up to 3,500,000 stock options and other equity-based awards to employees, directors and officers. The number of shares of Class A common stock available for issuance under the 2018 Plan includes an annual increase on the first day of each year, beginning with the 2019 calendar year, equal to 4.0% of the outstanding shares of all classes of the Company's common stock as of the last day of the immediately preceding calendar year, unless the Company’s board of directors determines prior to the last trading day of December of the immediately preceding calendar year that the increase shall be less than 4%. As of September 30, 2022, there were 834,807 options available to grant under the 2018 Plan.

In September 2020, the Company adopted the 2020 Acquisition Equity Incentive Plan (the “2020 Inducement Plan”) under which the Company may grant up to 1,500,000 stock options and other equity-based awards to individuals that were not previously employees of the Company or its subsidiaries in connection with acquisitions, as a material inducement to the individual's entry into employment with the Company or its subsidiaries within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. In May 2021, the Company amended the 2020 Inducement Plan to increase the number of shares of the Company's Class A common stock available for issuance from 1,500,000 to 3,000,000 shares. As of September 30, 2022, there were 992,848 equity awards available for grant under the 2020 Inducement Plan.

Share-based compensation expense includes the estimated effects of forfeitures, which will be adjusted over the requisite service period to the extent actual forfeitures differ or are expected to differ from such estimates.

The Company has issues stock option awards under the 2018 Plan and the 2020 Inducement Plan. The fair value of the stock option awards during the years ended September 30, 2022 and 2021 was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:


	September 30, 2022		September 30, 2021
Expected volatility(1)	55.7	%	59.7	%
Expected dividend yield(2)	—	%	—	%
Expected term(3)	6 years		6 years
Risk-free interest rate(4)	1.6	%	0.7	%

_________________

1.For the year ended September 30, 2022, expected volatility is based on the volatility of the Company's own share price. For the year ended September 30, 2021, expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.

2.The Company has assumed a dividend yield of zero as management has no plans to declare dividends in the foreseeable future.

3.Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method as details of employee exercise behavior are limited due to limited historical data.

4.The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.

A summary of stock option activity for the year ended September 30, 2022 is as follows:


	Stock Options	Weighted Average Exercise Price
Outstanding at September 30, 2021	7,547,622	$	25.26
Granted	1,672,808	24.50
Exercised	(343,865)	17.08
Forfeited	(654,243)	30.05
Outstanding at September 30, 2022	8,222,322	$	25.07

Exercisable at September 30, 2022	4,479,276	$	23.09

The weighted-average grant date fair value of stock options granted during the year ended September 30, 2022 was $12.92.

As of September 30, 2022, there were 8,222,322 stock options outstanding, of which 4,479,276 were exercisable. As of September 30, 2022, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $33,562, which is expected to be recognized over a weighted-average period of 1.7 years. The Company's policy is to account for forfeitures of stock-based compensation awards as they occur.

The total fair value of stock options that vested during the year ended September 30, 2022 was $24,586.

Restricted Stock Units

The Company has issued Class A common stock in the form of restricted stock units ("RSUs") under the 2018 Plan.

A summary of activity related to restricted stock units as of September 30, 2022 is as follows:


	Restricted Stock Units	Weighted Average Exercise Price
Outstanding at September 30, 2021	—	$	—
Granted	504,903	24.99
Vested	—	—
Forfeited	(18,251)	26.53
Outstanding at September 30, 2022	486,652	$	24.93

The weighted-average grant date fair value of RSUs granted during the year ended September 30, 2022 was $24.99.

As of September 30, 2022, total unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures, was $6,187, which is expected to be recognized over a weighted average period of 3.6 years.

There were no RSUs that vested during the year ended September 30, 2022.

Commitments and Contingencies

12 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Leases

The Company utilizes office space and equipment under operating leases. Rent expense under these leases amounted to $5,992, $4,400 and $2,820 during the years ended September 30, 2022, 2021 and 2020, respectively. Refer to Note 12 for further discussion and a table of the future minimum payments under these leases.

Minimum Processing Commitments

The Company has non-exclusive agreements with several processors to provide The Company services related to transaction processing and transmittal, transaction authorization and data capture, and access to various reporting tools. Certain of these agreements require the Company to submit a minimum monthly number of transactions for processing. If the Company submits a number of transactions that is lower than the minimum, it is required to pay to the processor the fees it would have received if the Company had submitted the required minimum number of transactions. As of September 30, 2022, such minimum fee commitments were as follows:


Years ending September 30:
2023	$	4,512
2024	1,230
2025	90
2026	—
2027	—
Thereafter	—
Total	$	5,832

Third Party Sales Organization Buyout Agreement

The Company has conditionally committed to a future buyout of a third party's business at the earlier of (a) the 60th day following the date upon which the founder of the third party sales organization dies or becomes disabled or (b) the 60th day following July 1, 2023. The buyout amount is dependent on certain financial metrics but is capped at $29,000, which would be net of repayment of secured loans. The buyout also contains certain provisions to provide additional consideration of up to $9,000, in the aggregate, to be paid based on the achievement of specified financial performance targets, following the buyout. As the eventual financial metrics are not known, the amount of the buyout transaction as well as the additional consideration are not able to be estimated at this time.

Litigation

With respect to all legal, regulatory and governmental proceedings, and in accordance with ASC 450-20, Contingencies—Loss Contingencies, the Company considers the likelihood of a negative outcome. If the Company determines the likelihood of a negative outcome with respect to any such matter is probable and the amount of the loss can be reasonably estimated, the Company records an accrual for the estimated amount of loss for the expected outcome of the matter. If the likelihood of a negative outcome with respect to material matters is reasonably possible and the Company is able to determine an estimate of the amount of possible loss or a range of loss, whether in excess of a related accrued liability or where there is no accrued liability, the Company discloses the estimate of the amount of possible loss or range of loss. However, the Company in some instances may be unable to estimate an amount of possible loss or range of loss based on the significant uncertainties involved in, or the preliminary nature of, the matter, and in these instances the Company will disclose the nature of the contingency and describe why the Company is unable to determine an estimate of possible loss or range of loss.

The Company is involved in ordinary course legal proceedings, which include all claims, lawsuits, investigations and proceedings, including unasserted claims, which are probable of being asserted, arising in the ordinary course of business. The Company has considered all such ordinary course legal proceedings in formulating its disclosures and assessments. After taking into consideration the evaluation of such legal matters by the Company's legal counsel, the Company's management believes at this time such matters will not have a material impact on the Company's consolidated balance sheet, results of operations or cash flows.

S&S Litigation

On June 2, 2021, the State of Louisiana, Division of Administration (the “State”) and a putative class of Louisiana law enforcement districts filed a Petition (as amended on October 4, 2021, the “Petition”), in the 19th Judicial District Court for the Parish of East Baton Rouge against i3-Software & Services, LLC (“S&S”), a subsidiary of the Company located in Shreveport, Louisiana, the Company, i3 Verticals, LLC, the current leader of the S&S business, the former leader of the S&S business, and 1120 South Pointe Properties, LLC (“South Pointe”), the former owner of the assets of the S&S business. See State of Louisiana, by and through its Division of Administration, East Baton Rouge Parish Law Enforcement District, by and through the duly elected East Baton Rouge Parish Sheriff, Sid J. Gautreaux, III, et. al., individually and as class representatives vs. i3-Software & Services, LLC; 1120 South Pointe Properties, LLC, formerly known as Software and Services of Louisiana, L.L.C.; i3 Verticals, Inc.; i3 Verticals, LLC; Gregory R. Teeters; and Scott Carrington.

The Petition was amended on October 4, 2021 to add a putative class of Louisiana sheriffs (the “Sheriffs”) and subsequently removed to the United States District Court for the Middle District of Louisiana. The Petition seeks monetary damages for the cost of network remediation of $15,000 purportedly spent by the State and $7,000 purportedly spent by the Sheriffs, return of purchase prices, potential additional expenses related to remediation and any obligation to notify parties of an alleged data breach as and if required by applicable law, and reasonable attorneys’ fees. The claimed damages relate to a third-party remote access software product used in connection with services provided by S&S to certain Louisiana Parish law enforcement districts and alleged inadequacies in the Company’s cybersecurity practices. Plaintiffs moved to remand the action to state court on November 5, 2021, and the motion was referred to a magistrate to make a report and recommendation to the district court judge. On July 5, 2022 the magistrate recommended that the matter be remanded to state court. On July 19, 2022 the Company and all other defendants filed objections to the recommendation. On August 3, 2022, the Plaintiffs filed a response to those objections. On August 16, 2022, the district court granted the Plaintiffs’ motion to remand, and all Defendants appealed, filling their opening appellant brief on October 28, 2022. The Plaintiffs’ appellee brief is due November 28, 2022.

The assets of the S&S business were acquired from South Pointe by the Company in 2018 for $17,000, including upfront cash consideration and contingent consideration, and provides software and payments services within the Company’s Public Sector vertical to local government agencies almost exclusively in Louisiana.

The Company is unable to predict the outcome of this litigation. While we do not believe that this matter will have a material adverse effect on our business or financial condition, we cannot give assurance that this matter will not have a material effect on our results of operations for the period in which it is resolved.

Other

The Company's subsidiary CP-PS, LLC has certain indemnification obligations in favor of FDS Holdings, Inc. related to the acquisition of certain assets of Merchant Processing Solutions, LLC in February 2014. The Company has incurred expenses related to these indemnification obligations in prior periods and may have additional expenses in the future. However, after taking into consideration the evaluation of such matters by the Company’s legal counsel, the Company’s management believes at this time that the anticipated outcome of any existing or potential indemnification liabilities related to this matter will not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Related Party Transactions	12 Months Ended
Related Party Transactions	Sep. 30, 2022
Related Party Transactions [Abstract]
Related Party Transactions	RELATED PARTY TRANSACTIONS In connection with the Company's IPO, the Company and i3 Verticals, LLC entered into a Tax Receivable Agreement with the Continuing Equity Owners that provides for the payment by the Company to the Continuing Equity Owners of 85% of the amount of certain tax benefits, if any, that it actually realizes, or in some circumstances, is deemed to realize in its tax reporting, as a result of (i) future redemptions funded by the Company or exchanges, or deemed exchanges in certain circumstances, of Common Units of i3 Verticals, LLC for Class A common stock of i3 Verticals, Inc. or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement. See Note 11 for further information. As of September 30, 2022, the total amount due under the Tax Receivable Agreement was $40,832. In April 2016, the Company entered into a purchase agreement to purchase certain assets of Axia, LLC. On April 29, 2016, the Company entered into a Processing Services Agreement (the “AxiaMed Agreement”) with Axia Technologies, LLC (which has since been incorporated as Axia Technologies, Inc., doing business as AxiaMed (“AxiaMed”)), an entity controlled by the previous owner of Axia, LLC. Under the AxiaMed Agreement, the Company agreed to provide processing services for certain merchants as designated by AxiaMed from time to time. In accordance with ASC 606-10-55, revenue from the processing services is recognized net of interchange, residual expense and other fees. In March 2021, the Company became aware of an observable price change in the AxiaMed equity investment, due to a planned third party acquisition of AxiaMed. This resulted in an increase of $2,353 to the fair value of the AxiaMed investment at March 31, 2021, which the Company recognized in other income. On April 1, 2021, AxiaMed was sold to a third party and the Company received $2,453 for its investment in AxiaMed. Greg Daily, the Company’s chief executive officer; Clay Whitson, the Company’s chief financial officer; and the Company no longer have ownership interest in AxiaMed following the sale. The Company earned net revenues related to the AxiaMed Agreement of $117 and $95 during the years ended September 30, 2021 and 2020 respectively.

Segments

12 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segments

SEGMENTS

The Company determines its operating segments based on ASC 280, Segment Reporting, in alignment with how the chief operating decision making group monitors and manages the performance of the business as well as the level at which financial information is reviewed. The Company’s operating segments are strategic business units that offer different products and services.

The Company's core business is delivering seamlessly integrated payment and software solutions to customers in strategic vertical markets. This is accomplished through the Merchant Services and Software and Services (formerly known as Proprietary Software and Payments) segments.

The Merchant Services segment provides comprehensive payment solutions to businesses and organizations. The Merchant Services segment includes third-party integrated payment solutions as well as traditional merchant processing services across the Company's strategic vertical markets.

The Software and Services segment delivers vertical market software solutions to customers across all of the Company's strategic vertical markets. These solutions often include embedded payments or other recurring services.

The Other category includes corporate overhead expenses, when presenting reportable segment information.

The Company primarily uses processing margin to measure operating performance. Processing margin is equal to revenue less other cost of services plus residuals expense, which are a component of other cost of services. The following is a summary of reportable segment operating performance for the years ended September 30, 2022, 2021 and 2020.


	As of and for the Year ended September 30, 2022
	Merchant Services		Software and Services		Other		Total
Revenue	$	124,481	$	193,402	$	(21)	$	317,862
Other costs of services	(59,647)		(13,778)		58		(73,367)
Residuals	36,666		1,602		(33)		38,235
Processing margin	$	101,500	$	181,226	$	4	$	282,730

Residuals							38,235
Selling general and administrative							193,790
Depreciation and amortization							29,424
Change in fair value of contingent consideration							23,725
Loss from operations							$	(2,444)

Total assets	$	203,485	$	512,792	$	54,035	$	770,312
Goodwill	$	119,086	$	234,553	$	—	$	353,639


	As of and for the Year ended September 30, 2021
	Merchant Services		Software and Services		Other		Total
Revenue	$	111,870	$	114,433	$	(2,179)	$	224,124
Other costs of services	(51,234)		(8,610)		2,138		(57,706)
Residuals	29,842		1,147		(2,071)		28,918
Processing margin	$	90,478	$	106,970	$	(2,112)	$	195,336

Residuals							28,918
Selling general and administrative							134,872
Depreciation and amortization							24,418
Change in fair value of contingent consideration							7,140
Loss from operations							$	(12)

Total assets	$	208,560	$	382,014	$	61,226	$	651,800
Goodwill	$	119,086	$	173,157	$	—	$	292,243


	As of and for the Year ended September 30, 2020
	Merchant Services		Software and Services		Other		Total
Revenue	$	100,949	$	50,953	$	(1,768)	$	150,134
Other costs of services	(43,940)		(5,057)		1,767		(47,230)
Residuals	21,618		587		(1,757)		20,448
Processing margin	$	78,627	$	46,483	$	(1,758)	$	123,352

Residuals							20,448
Selling general and administrative							78,323
Depreciation and amortization							18,217
Change in fair value of contingent consideration							(1,409)
Income from operations							$	7,773

Total assets	$	206,769	$	139,107	$	57,650	$	403,526
Goodwill	$	115,982	$	71,023	$	—	$	187,005

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]

Non-Controlling Interest

12 Months Ended

Sep. 30, 2022

Noncontrolling Interest [Abstract]

Non-Controlling Interest

NON-CONTROLLING INTEREST

i3 Verticals, Inc. is the sole managing member of i3 Verticals, LLC and as a result, consolidates the financial results of i3 Verticals, LLC and reports a non-controlling interest representing the Common Units of i3 Verticals, LLC held by the Continuing Equity Owners. Changes in i3 Verticals, Inc.’s ownership interest in i3 Verticals, LLC while i3 Verticals, Inc. retains its controlling interest in i3 Verticals, LLC will be accounted for as equity transactions. As such, future redemptions or direct exchanges of Common Units of i3 Verticals, LLC by the Continuing Equity Owners will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in capital when i3 Verticals, LLC has positive or negative net assets, respectively.

As of September 30, 2022, and 2021, respectively, i3 Verticals, Inc. owned 22,986,448 and 22,026,098 of i3 Verticals, LLC's Common Units, representing a 69.4% and 68.3% economic ownership interest in i3 Verticals, LLC.

The following table summarizes the impact on equity due to changes in the Company's ownership interest in i3 Verticals, LLC:


	Year ended September 30,
	2022		2021		2020
Net loss attributable to non-controlling interest	$	(6,115)	$	(3,382)	$	(560)
Transfers to (from) non-controlling interests:
Distributions to non-controlling interest holders	—		—		(3)
Redemption of common units in i3 Verticals, LLC	(918)		(11,714)		(5,080)
Adjustment related to prior periods	—		—		2,730
Cumulative effect of adoption of new accounting standard	—		—		640
Allocation of equity to non-controlling interests	11,511		15,337		24,495
Net transfers to (from) non-controlling interests	10,593		3,623		22,782
Change from net income attributable to non-controlling interests and transfers to (from) non-controlling interests	$	4,478	$	241	$	22,222

During the year ended September 30, 2021, the Company corrected for immaterial misstatements of equity between the Company and non-controlling interest related to its June 2019 Secondary Public Offering by increasing non-controlling interest and reducing additional paid-in capital. This adjustment related to immaterial errors associated with the ownership percentage change used in the underlying calculation giving effect to the offering.

Earnings Per Share

12 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHAREBasic earnings per share of Class A common stock is computed by dividing net income available to i3 Verticals, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to i3 Verticals, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:


	Year ended September 30,
	2022		2021		2020
Basic net loss per share:
Numerator
Net loss	$	(23,217)	$	(7,839)	$	(979)
Less: Net loss attributable to non-controlling interests	(6,115)		(3,382)		(560)
Net loss attributable to Class A common stockholders	$	(17,102)	$	(4,457)	$	(419)
Denominator
Weighted average shares of Class A common stock outstanding(1)	22,249,656		20,994,598		14,833,378
Basic net loss per share(2)	$	(0.77)	$	(0.21)	$	(0.03)

Dilutive net loss per share(4):
Numerator
Net loss attributable to Class A common stockholders			$	(4,457)	$	(419)
Reallocation of net loss assuming conversion of common units(5)			(2,556)		(422)
Net loss attributable to Class A common stockholders - diluted			$	(7,013)	$	(841)
Denominator
Weighted average shares of Class A common stock outstanding(1)			20,994,598		14,833,378
Weighted average effect of dilutive securities(2)(3)			10,719,593		12,596,423
Weighted average shares of Class A common stock outstanding - diluted			31,714,191		27,429,801
Diluted net loss per share			$	(0.22)	$	(0.03)

____________________

1.Excludes 6,706 and 204,969 shares of restricted Class A common stock for the years ended September 30, 2021 and 2020, respectively.

2.For the year ended September 30, 2020, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted earnings per share of Class A common stock:

a.1,327,500 options to purchase shares of Class A common stock for the year ended September 30, 2020, were excluded because the exercise price of these options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

b.1,179,538 shares of Class A common stock for the year ended September 30, 2020, resulting from estimated stock option exercises as calculated by the treasury stock method, and 204,969 shares of restricted Class A common stock for the year ended September 30, 2020 were excluded because the effect of including them would have been anti-dilutive.

3.For the year ended September 30, 2021, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted earnings per share of Class A common stock:

a.2,495,922 options to purchase shares of Class A common stock for the year ended September 30, 2021, were excluded because the exercise price of these options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

b.1,471,027 shares of Class A common stock for the year ended September 30, 2021, resulting from estimated stock option exercises as calculated by the treasury stock method, and 6,706 shares of restricted Class A common stock for the year ended September 30, 2021 were excluded because the effect of including them would have been anti-dilutive.

4.For the year ended September 30, 2022, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share. The following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted earnings per share of Class A common stock:

a.10,170,668 shares of weighted average Class A common stock for the year ended September 30, 2022, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive,

b.4,580,844 options to purchase shares of Class A common stock for the year ended September 30, 2022, were excluded because the exercise price of these options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

c.679,858 shares of Class A common stock for the year ended September 30, 2022, resulting from estimated stock option exercises as calculated by the treasury stock method were excluded because the effect of including them would have been anti-dilutive.

5.The reallocation of net income assuming conversion of common units represents the tax effected net income attributable to non-controlling interest using the effective income tax rates described in Note 11 above and assuming all common units of i3 Verticals, LLC were exchanged for Class A common stock at the beginning of the year. The common units of i3 Verticals, LLC held by the Continuing Equity Owners are potentially dilutive securities, and the computations of pro forma diluted net income per share assume that all common units of i3 Verticals, LLC were exchanged for shares of Class A common stock at the beginning of the year.

Since in September 2022 the Company made the irrevocable election to settle the principal portion of its Exchangeable Notes only in cash, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company's Class A common stock for a given period exceeds the exchange price of $40.87 per share for the Exchangeable Notes.

The Warrants sold in connection with the issuance of the Exchangeable Notes are considered to be dilutive when the average price of the Company's Class A common stock during the period exceeds the Warrants' stock price of $62.88 per share. The effect of the additional shares that may be issued upon exercise of the Warrants will be included in the weighted average shares of Class A common stock outstanding—diluted using the treasury stock method. The Note Hedge Transactions purchased in connection with the issuance of the Exchangeable Notes are considered to be anti-dilutive and therefore do not impact our calculation of diluted net income per share. Refer to Note 10 for further discussion regarding the Exchangeable Notes.

Shares of the Company's Class B common stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.

Significant Non-cash Transactions

12 Months Ended

Sep. 30, 2022

Significant Non-cash Transactions

SIGNIFICANT NON-CASH TRANSACTIONSThe Company engaged in the following significant non-cash investing and financing activities during the years ended September 30, 2022, 2021, and 2020:


	Year ended September 30,
	2022		2021		2020
Restricted Class A common stock issued as part of acquisition purchase consideration (Note 4)	$	—	$	35,245	$	—
Acquisition date fair value of contingent consideration in connection with business combinations	$	6,281	$	22,577	$	4,748
Right-of-use assets obtained in exchange for operating lease obligations	$	7,846	$	16,879	$	—

Subsequent Events	12 Months Ended
Subsequent Events	Sep. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	SUBSEQUENT EVENTS Recent Acquisitions Subsequent to September 30, 2022, the Company completed the acquisition of two businesses. One of the businesses is within the Company’s Public Sector vertical and is a leading provider of enterprise software solutions for the motor carrier and motor vehicle markets in the U.S. and Canada. The other business supplements our capabilities in the Merchant Services segment. Total purchase consideration for the businesses included $89,497 in cash. The effect of the acquisitions will be included in the consolidated statements of operations beginning October 1, 2022. The Company is still evaluating the allocations of the preliminary purchase consideration and pro forma results of operations. Amendment to Senior Secured Credit Facility On October 3, 2022, i3 Verticals, LLC entered into a third amendment (the “Third Amendment”) to its Amended and Restated Credit Agreement, dated as of May 9, 2019, by and among i3 Verticals, LLC, as the borrower, i3 Verticals, Inc. (the “Company”), and certain subsidiaries of the Company, as guarantors, the lenders party thereto, and Bank of America, N.A., as administrative agent for the lenders, as theretofore amended (as amended, the “Credit Agreement”). The Third Amendment provides for, among other things, an increase in the maximum amount of the revolving credit facility to $375,000.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation within the consolidated statements of cash flows.

Principles of Consolidation

Principles of Consolidation These consolidated financial statements include the accounts of the Company and its subsidiary companies. All significant intercompany accounts and transactions have been eliminated in consolidation

Cash and Cash Equivalents

Cash and Cash Equivalents For purposes of reporting cash flows, the Company considers cash on hand, checking accounts, and savings accounts to be cash and cash equivalents. At times, the balance in these accounts may exceed federal insured limits. Cash equivalents are defined as financial instruments readily transferable into cash with an original maturity less than 90 days.

Restricted Cash

Restricted Cash Restricted cash represents funds held in escrow related to acquisitions or held-on-deposit with processing banks pursuant to agreements to cover potential merchant losses. It is presented as long-term assets on the accompanying consolidated balance sheets since the related agreements extend beyond the next twelve months. Following the adoption of Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230), the Company includes restricted cash along with the cash and cash equivalents balance for presentation in the consolidated statements of cash flows.

Accounts Receivable and Credit Policies

Accounts Receivable and Credit Policies Accounts receivable consist primarily of uncollateralized credit card processing residual payments due from processing banks requiring payment within thirty days following the end of each month. Accounts receivable also include amounts due from the sales of the Company’s technology solutions to its customers. The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts, if necessary, which reflects management’s best estimate of the amounts that will not be collected. The allowance is estimated based on management’s knowledge of its customers, historical loss experience and existing economic conditions. Accounts receivable and the allowance are written-off when, in management’s opinion, all collection efforts have been exhausted.Notes Receivable Notes receivable consist of loans made to unrelated entities. Notes receivable were $5,125 and $4,695 at September 30, 2022 and 2021, respectively, and are included within prepaid expenses and other current assets and other assets on the accompanying consolidated balance sheets.

Settlement Assets and Obligations

Settlement Assets and ObligationsSettlement assets and obligations result when funds are temporarily held or owed by the Company on behalf of merchants, consumers, schools, and other institutions. Timing differences, interchange expenses, merchant reserves and exceptional items cause differences between the amount received from the card networks and the amount funded to counterparties. These balances arising in the settlement process are reflected as settlement assets and obligations on the accompanying consolidated balance sheets. With the exception of merchant reserves, settlement assets or settlement obligations are generally collected and paid within one to four days.

Inventories

Inventories Inventories consist of point-of-sale equipment to be sold to customers and are stated at the lower of cost, determined on a weighted average or specific basis, or net realizable value.

Property and Equipment

merchants. Referral agreements represent the right to exclusively obtain referrals from a partner for their customers' credit card processing services.

Income Taxes

Valuation of Contingent Consideration

Valuation of Contingent Consideration On occasion, the Company may have acquisitions which include contingent consideration. Accounting for business combinations requires the Company to estimate the fair value of any contingent purchase consideration at the acquisition date. For a discussion of the estimate methodology and the significance of various inputs, please see the subheading below titled “Use of Estimates.” Changes in estimates regarding the fair value contingent purchase consideration are reflected as adjustments to the related liability and recognized within operating expenses in the consolidated statements of operations. Short and long-term contingent liabilities are presented within accrued expenses and other current liabilities and other long-term liabilities on the Company's consolidated balance sheets, respectively.

Classification of Financial Instruments

Classification of Financial Instruments The Company classifies certain financial instruments issued as either equity or as liabilities. Determination of classification is based upon the underlying properties of the instrument.

Revenue Recognition and Deferred Revenue

The Company's revenue for the years ended September 30, 2022, 2021 and 2020 is derived from the following sources:

•Payments — Includes volume-based payment processing fees (“discount fees”), gateway fees and other related fixed transaction or service fees

•Other — Includes sales of equipment, non-software related professional services and other revenues

•Payments — Includes discount fees, gateway fees and other related fixed transaction or service fees.

•Other — Includes sales of equipment, non-software related professional services and other revenues.


	For the year ended September 30, 2022
	Merchant Services		Software and Services		Other		Total
Payments revenue	$	103,509	$	40,951	$	(8)	$	144,452
Software and related services revenue	12,641		142,202		(35)		154,808
Other revenue	8,331		10,249		22		18,602
Total revenue	$	124,481	$	193,402	$	(21)	$	317,862


	For the year ended September 30, 2021
	Merchant Services		Software and Services		Other		Total
Payments revenue	$	92,325	$	29,451	$	(2,095)	$	119,681
Software and related services revenue	11,872		75,736		(18)		87,590
Other revenue	7,673		9,246		(66)		16,853
Total revenue	$	111,870	$	114,433	$	(2,179)	$	224,124


	For the year ended September 30, 2020
	Merchant Services		Software and Services		Other		Total
Payments revenue	$	82,913	$	19,359	$	(1,757)	$	100,515
Software and related services revenue	10,203		26,634		—		36,837
Other revenue	7,833		4,960		(11)		12,782
Total revenue	$	100,949	$	50,953	$	(1,768)	$	150,134

•Revenue earned over time — Includes discount fees, gateway fees, sales of SaaS, ongoing support or other stand-ready obligations and professional services

•Revenue earned at a point in time — Includes point in time service fees that are not stand-ready obligations, software licenses sold as functional intellectual property and other equipment


	For the year ended September 30, 2022
	Merchant Services		Software and Services		Other		Total
Revenue earned over time	$	100,488	$	173,368	$	(36)	$	273,820
Revenue earned at a point in time	23,993		20,034		15		44,042
Total revenue	$	124,481	$	193,402	$	(21)	$	317,862


	For the year ended September 30, 2021
	Merchant Services		Software and Services		Other		Total
Revenue earned over time	$	83,203	$	76,367	$	(2,003)	$	157,567
Revenue earned at a point in time	28,667		38,066		(176)		66,557
Total revenue	$	111,870	$	114,433	$	(2,179)	$	224,124


	For the year ended September 30, 2020
	Merchant Services		Software and Services		Other		Total
Revenue earned over time	$	72,800	$	35,222	$	(1,743)	$	106,279
Revenue earned at a point in time	28,149		15,731		(25)		43,855
Total revenue	$	100,949	$	50,953	$	(1,768)	$	150,134

Contract Assets

As of September 30, 2022 and September 30, 2021, the Company’s contract assets from contracts with customers was $9,716 and $1,505, respectively

Contract Liabilities

The following table presents the changes in deferred revenue as of and for the year ended September 30, 2022:


Balance at September 30, 2020	$	11,054
Deferral of revenue	29,966
Recognition of unearned revenue	(10,996)
Balance at September 30, 2021	$	30,024
Deferral of revenue	31,926
Recognition of unearned revenue	(29,861)
Balance at September 30, 2022	$	32,089

Costs to Obtain and Fulfill a Contract

Other Cost of Services

The Company accounts for all governmental taxes associated with revenue transactions on a net basis.

Selling General and Administrative

Selling General and AdministrativeSelling general and administrative include all personnel costs such as salaries, benefits, bonuses, stock based compensation and commissions, as well as marketing and advertising costs, contractor services, legal and other professional services fees, software and technological services, rental expenses and other general expenses.

Advertising and Promotion Costs

Advertising and promotion costs are expensed as incurred.

Equity-based Compensation

Equity-based Compensation The Company accounts for grants of equity awards to employees in accordance with ASC 718, Compensation—Stock Compensation. This standard requires compensation expense to be measured based on the estimated fair value of the share-based awards on the date of grant and recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period.

Use of Estimates

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

Fair Value Measurement

Level 1 — Quoted prices for identical instruments in active markets.

Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Schedule of Disaggregation of Revenue

•Payments — Includes discount fees, gateway fees and other related fixed transaction or service fees.

•Other — Includes sales of equipment, non-software related professional services and other revenues.


	For the year ended September 30, 2022
	Merchant Services		Software and Services		Other		Total
Payments revenue	$	103,509	$	40,951	$	(8)	$	144,452
Software and related services revenue	12,641		142,202		(35)		154,808
Other revenue	8,331		10,249		22		18,602
Total revenue	$	124,481	$	193,402	$	(21)	$	317,862


	For the year ended September 30, 2021
	Merchant Services		Software and Services		Other		Total
Payments revenue	$	92,325	$	29,451	$	(2,095)	$	119,681
Software and related services revenue	11,872		75,736		(18)		87,590
Other revenue	7,673		9,246		(66)		16,853
Total revenue	$	111,870	$	114,433	$	(2,179)	$	224,124


	For the year ended September 30, 2020
	Merchant Services		Software and Services		Other		Total
Payments revenue	$	82,913	$	19,359	$	(1,757)	$	100,515
Software and related services revenue	10,203		26,634		—		36,837
Other revenue	7,833		4,960		(11)		12,782
Total revenue	$	100,949	$	50,953	$	(1,768)	$	150,134

•Revenue earned over time — Includes discount fees, gateway fees, sales of SaaS, ongoing support or other stand-ready obligations and professional services

•Revenue earned at a point in time — Includes point in time service fees that are not stand-ready obligations, software licenses sold as functional intellectual property and other equipment


	For the year ended September 30, 2022
	Merchant Services		Software and Services		Other		Total
Revenue earned over time	$	100,488	$	173,368	$	(36)	$	273,820
Revenue earned at a point in time	23,993		20,034		15		44,042
Total revenue	$	124,481	$	193,402	$	(21)	$	317,862


	For the year ended September 30, 2021
	Merchant Services		Software and Services		Other		Total
Revenue earned over time	$	83,203	$	76,367	$	(2,003)	$	157,567
Revenue earned at a point in time	28,667		38,066		(176)		66,557
Total revenue	$	111,870	$	114,433	$	(2,179)	$	224,124


	For the year ended September 30, 2020
	Merchant Services		Software and Services		Other		Total
Revenue earned over time	$	72,800	$	35,222	$	(1,743)	$	106,279
Revenue earned at a point in time	28,149		15,731		(25)		43,855
Total revenue	$	100,949	$	50,953	$	(1,768)	$	150,134

Schedule of Contract with Customer, Asset and Liability

The following table presents the changes in deferred revenue as of and for the year ended September 30, 2022:


Balance at September 30, 2020	$	11,054
Deferral of revenue	29,966
Recognition of unearned revenue	(10,996)
Balance at September 30, 2021	$	30,024
Deferral of revenue	31,926
Recognition of unearned revenue	(29,861)
Balance at September 30, 2022	$	32,089

Acquisitions (Tables)

12 Months Ended

Sep. 30, 2022

Schedule of Pro Forma Information

This supplemental pro forma


	Year ended September 30,
	2022		2021
Revenue	$	321,640	$	265,077
Net loss	$	(26,622)	$	(11,310)

2022 Business Combinations

Schedule of Preliminary Purchase Consideration of the Acquired Assets and Assumed Liabilities

The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2022 were as follows:


Accounts receivable	651
Settlement assets	685
Prepaid expenses and other current assets	83
Property and equipment	190
Capitalized software	9,790
Acquired customer relationships	41,090
Trade name	1,550
Goodwill	61,347
Operating lease right-of-use assets	263
Other assets	22
Total assets acquired	115,671

Accrued expenses and other current liabilities	287
Settlement obligations	685
Deferred revenue, current	30
Current portion of operating lease liabilities	82
Operating lease liabilities, less current portion	181
Other long-term liabilities	6,725
Net assets acquired	$	107,681

2021 Business Combinations

Schedule of Preliminary Purchase Consideration of the Acquired Assets and Assumed Liabilities

The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2021 were as follows:


	BIS		ImageSoft, Inc.		Other		Total
Accounts receivable	$	1,567	$	4,997	$	3,141	$	9,705
Settlement assets	6,889		120		—		7,009
Inventories	458		—		161		619
Prepaid expenses and other current assets	10		2,897		2,043		4,950
Property and equipment	206		433		312		951
Capitalized software	15,200		5,200		4,100		24,500
Acquired customer relationships	32,300		16,300		24,040		72,640
Non-compete agreements	100		610		390		1,100
Trade name	700		1,100		840		2,640
Goodwill	46,660		22,408		35,955		105,023
Operating lease right-of-use assets	—		332		484		816
Other assets	—		6		32		38
Total assets acquired	104,090		54,403		71,498		229,991

Accrued expenses and other current liabilities	138		910		1		1,049
Settlement obligations	6,889		120		—		7,009
Deferred revenue, current	1,568		6,748		5,498		13,814
Current portion of operating lease liabilities	—		75		221		296
Operating lease liabilities, less current portion	—		250		251		501
Net assets acquired	$	95,495	$	46,300	$	65,527	$	207,322

2020 Business Combinations

Schedule of Preliminary Purchase Consideration of the Acquired Assets and Assumed Liabilities

The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2020 were as follows:


Cash and cash equivalents	$	313
Accounts receivable	846
Prepaid expenses and other current assets	54
Property and equipment	122
Capitalized software	1,970
Acquired customer relationships	11,900
Non-compete agreements	90
Trade name	300
Goodwill	20,213
Other assets	17
Total assets acquired	35,825

Accounts payable	168
Accrued expenses and other current liabilities	635
Deferred revenue, current	200
Other long-term liabilities	2,194
Net assets acquired	$	32,628

Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Sep. 30, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

A summary of the Company's prepaid expenses and other current assets as of September 30, 2022 and 2021 is as follows:


	2022		2021
Inventory	$	4,121	$	2,220
Prepaid licenses	5,743		4,646
Prepaid insurance	736		1,074
Notes receivable — current portion	4,930		—
Other current assets	3,915		3,274
Prepaid expenses and other current assets	$	19,445	$	11,214

Property and Equipment, Net (Tables)

12 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

A summary of the Company's property and equipment as of September 30, 2022 and 2021 is as follows:


	Estimated Useful Life	2022		2021
Computer equipment and software(1)	2 to 7 years	$	3,040	$	2,982
Furniture and fixtures	2 to 7 years	2,159		2,125
Terminals	2 to 3 years	813		945
Office equipment	2 to 5 years	1,289		1,173
Automobiles	3 years	477		481
Leasehold improvements	2 to 7 years	2,945		2,788
Accumulated depreciation		(5,053)		(4,592)
Property and equipment, net		$	5,670	$	5,902

____________________1.Includes computer software of $129 and $707 as of September 30, 2022 and 2021, respectively.

Capitalized Software, Net (Tables)

12 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Capitalized Computer Software

A summary of the Company's capitalized software as of September 30, 2022 and 2021 is as follows:


	Estimated Useful Life	2022		2021
Software development costs	1 to 7 years	$	60,013	$	46,417
Development in progress		9,265		6,612
Accumulated amortization		(16,937)		(11,658)
Capitalized software, net		$	52,341	$	41,371

Goodwill and Intangible Assets (Tables)

12 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Carrying Amount of Goodwill

Changes in the carrying amount of goodwill are as follows:


	Merchant Services		Software and Services		Other		Total
Balance at September 30, 2020 (net of accumulated impairment losses of $11,458, $0 and $0, respectively)	$	115,982	$	71,023	$	—	$	187,005
Goodwill attributable to preliminary purchase price adjustments and acquisition activity during the year ended September 30, 2021	3,104		102,134		—		105,238
Balance at September 30, 2021	119,086		173,157		—		292,243
Goodwill attributable to preliminary purchase price adjustments and acquisition activity during the year ended September 30, 2022	—		61,396		—		61,396
Balance at September 30, 2022	$	119,086	$	234,553	$	—	$	353,639

Schedule of Finite-Lived Intangible Assets

Intangible assets consisted of the following as of September 30, 2022:


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Customer relationships	$	268,301	$	(80,681)	$	187,620	10 to 25 years – accelerated or straight-line
Non-compete agreements	1,190		(705)		485		3 to 6 years – straight-line
Website and brand development costs	268		(159)		109		3 to 4 years – straight-line
Trade names	7,771		(4,203)		3,568		3 to 7 years – straight-line
Residual buyouts	6,169		(2,141)		4,028		8 years – straight-line
Referral and exclusivity agreements	800		(733)		67		5 years – straight-line
Total finite-lived intangible assets	284,499		(88,622)		195,877

Indefinite-lived intangible assets:
Trademarks	42		—		42
Total identifiable intangible assets	$	284,541	$	(88,622)	$	195,919

Intangible assets consisted of the following as of September 30, 2021:


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Customer relationships	$	227,211	$	(65,815)	$	161,396	10 to 25 years – accelerated or straight-line
Non-compete agreements	2,878		(1,907)		971		3 to 6 years – straight-line
Website development costs	240		(133)		107		3 to 4 years – straight-line
Trade names	6,320		(2,668)		3,652		3 to 7 years – straight-line
Residual buyouts	6,718		(1,407)		5,311		8 years – straight-line
Referral and exclusivity agreements	800		(573)		227		5 years – straight-line
Total finite-lived intangible assets	244,167		(72,503)		171,664

Indefinite-lived intangible assets:
Trademarks	42		—		42
Total identifiable intangible assets	$	244,209	$	(72,503)	$	171,706

Schedule of Indefinite-Lived Intangible Assets

Intangible assets consisted of the following as of September 30, 2022:


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Customer relationships	$	268,301	$	(80,681)	$	187,620	10 to 25 years – accelerated or straight-line
Non-compete agreements	1,190		(705)		485		3 to 6 years – straight-line
Website and brand development costs	268		(159)		109		3 to 4 years – straight-line
Trade names	7,771		(4,203)		3,568		3 to 7 years – straight-line
Residual buyouts	6,169		(2,141)		4,028		8 years – straight-line
Referral and exclusivity agreements	800		(733)		67		5 years – straight-line
Total finite-lived intangible assets	284,499		(88,622)		195,877

Indefinite-lived intangible assets:
Trademarks	42		—		42
Total identifiable intangible assets	$	284,541	$	(88,622)	$	195,919

Intangible assets consisted of the following as of September 30, 2021:


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Customer relationships	$	227,211	$	(65,815)	$	161,396	10 to 25 years – accelerated or straight-line
Non-compete agreements	2,878		(1,907)		971		3 to 6 years – straight-line
Website development costs	240		(133)		107		3 to 4 years – straight-line
Trade names	6,320		(2,668)		3,652		3 to 7 years – straight-line
Residual buyouts	6,718		(1,407)		5,311		8 years – straight-line
Referral and exclusivity agreements	800		(573)		227		5 years – straight-line
Total finite-lived intangible assets	244,167		(72,503)		171,664

Indefinite-lived intangible assets:
Trademarks	42		—		42
Total identifiable intangible assets	$	244,209	$	(72,503)	$	171,706

Schedule of Future Amortization Expense of Finite-lived Intangible Assets


2023	$	17,704
2024	16,722
2025	16,431
2026	16,025
2027	15,405
Thereafter	113,590
	$	195,877

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

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Summary of Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Liabilities (Tables)

12 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

A summary of the Company's accrued expenses and other current liabilities as of September 30, 2022 and 2021 is as follows:


	2022		2021
Accrued wages, bonuses, commissions and vacation	$	8,117	$	6,649
Accrued interest	642		271
Accrued contingent consideration — current portion	21,385		25,768
Escrow liabilities	12,285		9,067
Tax receivable agreement liability — current portion	20		—
Customer deposits	1,575		1,913
Employee health self-insurance liability	732		1,032
Accrued interchange	2,096		1,086
Other current liabilities	10,981		5,029
Accrued expenses and other current liabilities	$	57,833	$	50,815

Summary of Long-term Liabilities

A summary of the Company's long-term liabilities as of September 30, 2022 and 2021 is as follows:


	2022		2021
Accrued contingent consideration — long-term portion	$	1,448	$	10,461
Deferred tax liability — long-term	7,896		3,280
Other long-term liabilities	196		270
Total other long-term liabilities	$	9,540	$	14,011

Long-Term Debt, Net (Tables)

12 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Summary of Long-term Debt

A summary of long-term debt, net as of September 30, 2022 and September 30, 2021 is as follows:


	Maturity	2022		2021
Revolving lines of credit to banks under the Senior Secured Credit Facility	May 9, 2024	$	185,017	$	104,396
1.0% Exchangeable Senior Notes due 2025	February 15, 2025	104,557		99,808
Debt issuance costs, net		(2,554)		(3,599)
Total long-term debt, net of issuance costs		$	287,020	$	200,605

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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Schedule of Components of Income Tax Expense

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]


	Year ended September 30,
	2022		2021		2020
Current:
Federal tax expense (benefit)	$	1,098	$	(35)	$	(34)
State tax expense	1,321		945		446
Deferred:
Federal tax benefit	(4,151)		(285)		(3,018)
State tax expense (benefit)	6,739		(2)		(189)
Income tax expense (benefit)	$	5,007	$	623	$	(2,795)

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of income tax expense (benefit) from operations computed at the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:


	Year ended September 30,
	2022				2021				2020
Expected U.S. federal income taxes at statutory rate	$	(3,824)	21.0	%	$	(1,519)	21.1	%	$	(792)	21.0	%
Partnership income not taxed at federal level	1,035		(5.7)	%	29		(0.4)	%	85		(2.3)	%
Valuation allowance	7,101		(39.0)	%	712		(9.9)	%	(2,694)		71.4	%
State and local income taxes, net of federal benefit	(641)		3.5	%	552		(7.6)	%	244		(6.5)	%
Nondeductible expenses and other permanent items	83		(0.5)	%	85		(1.2)	%	496		(13.1)	%
Revaluation of debt and other debt transaction differences	1,434		(7.9)	%	609		(8.4)	%	222		(5.9)	%
Change in liability for uncertain tax positions	(25)		0.1	%	(83)		1.2	%	108		(2.9)	%
Federal tax credits	—		—	%	240		(3.3)	%	(431)		11.4	%
Other	(156)		0.9	%	(2)		—	%	(33)		0.9	%
Income tax expense (benefit)	$	5,007	(27.5)	%	$	623	(8.6)	%	$	(2,795)	74.1	%

Schedule of Deferred Tax Assets and Liabilities

Net deferred taxes spanning multiple jurisdictions as of September 30, 2022 and 2021 were as follows:


	September 30,
	2022		2021
Deferred tax assets:
Investment in partnership	$	56,388	$	57,080
Stock-based compensation	2,421		1,714
Deferred revenue	448		561
Accrued expenses	269		232
Net operating loss carryforwards	15,992		13,441
Section 163j carryforward	1,685		1,828
Federal tax credits	359		661
Operating lease liabilities	677		638
Other	75		75
Gross deferred tax assets	78,314		76,230
Valuation allowance	(27,555)		(20,269)

Deferred tax liabilities:
Intangible assets	(14,270)		(8,308)
Operating lease right of use assets	(641)		(620)
Other	(285)		(321)
Net deferred tax asset	$	35,563	$	46,712

Summary of Components of Uncertain Tax Positions

The components of the Company’s liability for uncertain tax benefits are as follows:


Gross unrecognized tax benefits as of September 30, 2020	$	184
Increase in current year tax positions	—
Increase in prior year tax positions	—
Settlements and other reductions	76
Gross unrecognized tax benefits as of September 30, 2021	108
Increase in current year tax positions	—
Increase in prior year tax positions	—
Settlements and other reductions	25
Gross unrecognized tax benefits as of September 30, 2022	$	83

Leases (Tables)

12 Months Ended

Sep. 30, 2022

Leases [Abstract]

Schedule of Maturities of Lease Liabilities

As of September 30, 2022, maturities of lease liabilities are as follows:


Years ending September 30:
2023	$	5,492
2024	4,703
2025	4,095
2026	3,344
2027	1,521
Thereafter	2,011
Total future minimum lease payments (undiscounted)(1)	21,166
Less: present value discount	(2,604)
Present value of lease liability	$	18,562

_________________________

Fair Value Measurements (Tables)

12 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Changes in Level 3 Financial Instruments Measured on a Recurring Basis

The following tables present the changes in the Company's Level 3 financial instruments that are measured at fair value on a recurring basis.


	Accrued Contingent Consideration
Balance at September 30, 2020	$	13,034
Contingent consideration accrued at time of business combination	22,577
Change in fair value of contingent consideration included in Operating expenses	7,140
Contingent consideration paid	(6,522)
Balance at September 30, 2021	$	36,229
Contingent consideration accrued at time of business combination	6,281
Change in fair value of contingent consideration included in Operating expenses	23,725
Contingent consideration paid	(43,402)
Balance at September 30, 2022	$	22,833

Equity-Based Compensation (Tables)

12 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Summary of Equity-Based Compensation Expense

A summary of equity-based compensation expense recognized during the years ended September 30, 2022, 2021 and 2020 is as follows:


	Year ended September 30,
	2022		2021		2020
Stock options	$	25,163	$	20,860	$	10,452
Restricted stock units	1,067		—		—
Equity-based compensation expense	$	26,230	$	20,860	$	10,452

Schedule of Fair Value of Stock Option Awards


	September 30, 2022		September 30, 2021
Expected volatility(1)	55.7	%	59.7	%
Expected dividend yield(2)	—	%	—	%
Expected term(3)	6 years		6 years
Risk-free interest rate(4)	1.6	%	0.7	%

_________________

2.The Company has assumed a dividend yield of zero as management has no plans to declare dividends in the foreseeable future.

4.The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.

Summary of Stock Option Activity

A summary of stock option activity for the year ended September 30, 2022 is as follows:


	Stock Options	Weighted Average Exercise Price
Outstanding at September 30, 2021	7,547,622	$	25.26
Granted	1,672,808	24.50
Exercised	(343,865)	17.08
Forfeited	(654,243)	30.05
Outstanding at September 30, 2022	8,222,322	$	25.07

Exercisable at September 30, 2022	4,479,276	$	23.09

Schedule of Share-based Payment Arrangement, Restricted Stock Unit, Activity

A summary of activity related to restricted stock units as of September 30, 2022 is as follows:


	Restricted Stock Units	Weighted Average Exercise Price
Outstanding at September 30, 2021	—	$	—
Granted	504,903	24.99
Vested	—	—
Forfeited	(18,251)	26.53
Outstanding at September 30, 2022	486,652	$	24.93

Commitments and Contingencies (Tables)

12 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Minimum Fee Commitments

As of September 30, 2022, such minimum fee commitments were as follows:


Years ending September 30:
2023	$	4,512
2024	1,230
2025	90
2026	—
2027	—
Thereafter	—
Total	$	5,832

Segments (Tables)

12 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Summary of Reportable Segment Performance


	As of and for the Year ended September 30, 2022
	Merchant Services		Software and Services		Other		Total
Revenue	$	124,481	$	193,402	$	(21)	$	317,862
Other costs of services	(59,647)		(13,778)		58		(73,367)
Residuals	36,666		1,602		(33)		38,235
Processing margin	$	101,500	$	181,226	$	4	$	282,730

Residuals							38,235
Selling general and administrative							193,790
Depreciation and amortization							29,424
Change in fair value of contingent consideration							23,725
Loss from operations							$	(2,444)

Total assets	$	203,485	$	512,792	$	54,035	$	770,312
Goodwill	$	119,086	$	234,553	$	—	$	353,639


	As of and for the Year ended September 30, 2021
	Merchant Services		Software and Services		Other		Total
Revenue	$	111,870	$	114,433	$	(2,179)	$	224,124
Other costs of services	(51,234)		(8,610)		2,138		(57,706)
Residuals	29,842		1,147		(2,071)		28,918
Processing margin	$	90,478	$	106,970	$	(2,112)	$	195,336

Residuals							28,918
Selling general and administrative							134,872
Depreciation and amortization							24,418
Change in fair value of contingent consideration							7,140
Loss from operations							$	(12)

Total assets	$	208,560	$	382,014	$	61,226	$	651,800
Goodwill	$	119,086	$	173,157	$	—	$	292,243


	As of and for the Year ended September 30, 2020
	Merchant Services		Software and Services		Other		Total
Revenue	$	100,949	$	50,953	$	(1,768)	$	150,134
Other costs of services	(43,940)		(5,057)		1,767		(47,230)
Residuals	21,618		587		(1,757)		20,448
Processing margin	$	78,627	$	46,483	$	(1,758)	$	123,352

Residuals							20,448
Selling general and administrative							78,323
Depreciation and amortization							18,217
Change in fair value of contingent consideration							(1,409)
Income from operations							$	7,773

Total assets	$	206,769	$	139,107	$	57,650	$	403,526
Goodwill	$	115,982	$	71,023	$	—	$	187,005

Noncontrolling Interest (Tables)

12 Months Ended

Sep. 30, 2022

Noncontrolling Interest [Abstract]

Summary of Ownership Interest

The following table summarizes the impact on equity due to changes in the Company's ownership interest in i3 Verticals, LLC:


	Year ended September 30,
	2022		2021		2020
Net loss attributable to non-controlling interest	$	(6,115)	$	(3,382)	$	(560)
Transfers to (from) non-controlling interests:
Distributions to non-controlling interest holders	—		—		(3)
Redemption of common units in i3 Verticals, LLC	(918)		(11,714)		(5,080)
Adjustment related to prior periods	—		—		2,730
Cumulative effect of adoption of new accounting standard	—		—		640
Allocation of equity to non-controlling interests	11,511		15,337		24,495
Net transfers to (from) non-controlling interests	10,593		3,623		22,782
Change from net income attributable to non-controlling interests and transfers to (from) non-controlling interests	$	4,478	$	241	$	22,222

Earnings Per Share (Tables)

12 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of Reconciliations of the Numerators and Denominators Used to Compute Basic and Diluted Earnings Per Share

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:


	Year ended September 30,
	2022		2021		2020
Basic net loss per share:
Numerator
Net loss	$	(23,217)	$	(7,839)	$	(979)
Less: Net loss attributable to non-controlling interests	(6,115)		(3,382)		(560)
Net loss attributable to Class A common stockholders	$	(17,102)	$	(4,457)	$	(419)
Denominator
Weighted average shares of Class A common stock outstanding(1)	22,249,656		20,994,598		14,833,378
Basic net loss per share(2)	$	(0.77)	$	(0.21)	$	(0.03)

Dilutive net loss per share(4):
Numerator
Net loss attributable to Class A common stockholders			$	(4,457)	$	(419)
Reallocation of net loss assuming conversion of common units(5)			(2,556)		(422)
Net loss attributable to Class A common stockholders - diluted			$	(7,013)	$	(841)
Denominator
Weighted average shares of Class A common stock outstanding(1)			20,994,598		14,833,378
Weighted average effect of dilutive securities(2)(3)			10,719,593		12,596,423
Weighted average shares of Class A common stock outstanding - diluted			31,714,191		27,429,801
Diluted net loss per share			$	(0.22)	$	(0.03)

____________________

1.Excludes 6,706 and 204,969 shares of restricted Class A common stock for the years ended September 30, 2021 and 2020, respectively.

Significant Non-cash Transactions (Tables)

12 Months Ended

Sep. 30, 2022

Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]

Schedule of Significant Noncash Transactions

The Company engaged in the following significant non-cash investing and financing activities during the years ended September 30, 2022, 2021, and 2020:


	Year ended September 30,
	2022		2021		2020
Restricted Class A common stock issued as part of acquisition purchase consideration (Note 4)	$	—	$	35,245	$	—
Acquisition date fair value of contingent consideration in connection with business combinations	$	6,281	$	22,577	$	4,748
Right-of-use assets obtained in exchange for operating lease obligations	$	7,846	$	16,879	$	—

Organization and Operations (Details) - USD ($)

12 Months Ended

Aug. 20, 2021

Sep. 15, 2020

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2020

Payments of equity issuance costs

$ 0

$ 253,000

^[1]

$ 0

i3Verticals, LLC

Non-controlling interest, ownership interest (percent)

69.40%

68.30%

Continuing Equity Owner

Shareholders ownership interest (percent)

31.10%

Class A Common Stock | Continuing Equity Owner

Shareholders ownership interest (percent)

0.60%

Class B Common Stock | Continuing Equity Owner

Shareholders ownership interest (percent)

30.60%

Primary Public Offering | i3Verticals, LLC

Common units, purchased (in units)

Net proceeds from IPO

$ 72,018,000

3,250,000

Primary Public Offering | Continuing Equity Owner

Common units, purchased (in units)

487,500

Primary Public Offering | Class A Common Stock

Public offering price (in USD per share)

Shares issued (shares)

3,737,500

$ 23.5

Net proceeds from IPO

$ 83,400,000

Underwriters' option to purchase additional shares | Class A Common Stock

Shares issued (shares)

487,500

At-the-Market Program

Payments of equity issuance costs

$ 440,000

At-the-Market Program | Class A Common Stock

Sale of stock number of value issued in transaction

Shares issued (shares)

722,000

Net proceeds from IPO

$ 17,869,000

$ 125,000,000

Sale of stock, remaining capacity

$ 107,131,000

[1]

Summary of Significant Accounting Policies (Details)	12 Months Ended
Summary of Significant Accounting Policies (Details)	Sep. 30, 2022 USD ($) reportable_unit	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Oct. 01, 2022 USD ($)	Sep. 30, 2019 USD ($)
Concentration Risk [Line Items]
Allowance for doubtful accounts	$ 590,000	$ 181,000
Settlement assets	7,540,000	4,768,000	$ 0		$ 0
Settlement obligations	7,540,000	4,768,000
Inventory	4,121,000	2,220,000
Impairment charges	$ 0	0	0
Estimated useful life	3 years
Notes receivable, fair value disclosure	$ 5,125,000	4,695,000
Revenue from acquisitions	35,840,000
Net income	5,170,000
Goodwill impairment	$ 0	0	0
Number of reporting units \| reportable_unit	5
Impairment of intangible assets, excluding goodwill	$ 0	0	0
Contract with customer, asset, before allowance for credit loss	9,716,000	1,505,000
Capitalized contract cost, gross	4,185,000	3,851,000
Amortization expense of intangible assets	17,892,000	15,830,000	12,414,000
Advertising expense	4,028,000	2,623,000	1,813,000
Equity-based compensation expense	26,230,000	20,860,000	10,452,000
Reduction in income tax expense	(5,007,000)	(623,000)	2,795,000
Long-term debt, less current portion and debt issuance costs, net	287,020,000	200,605,000
Additional paid-in-capital	241,958,000	211,237,000
Accumulated earnings	(23,582,000)	(6,480,000)
Cumulative Effect, Period of Adoption, Adjustment \| Accounting Standards Update 2020-06 \| Subsequent Event
Concentration Risk [Line Items]
Long-term debt, less current portion and debt issuance costs, net				$ 11,933,000
Additional paid-in-capital				23,382,000
Accumulated earnings				$ 11,449,000
Class B Common Stock
Concentration Risk [Line Items]
Reduction in the benefit from income taxes			235,000
Increase to net loss			3,728,000
Reduction in company's net loss			3,493,000
Intangible Assets, Amortization Period
Concentration Risk [Line Items]
Amortization expense of intangible assets	$ 707,000	$ 533,000	398,000
Change in Accounting Method Accounted for as Change in Estimate
Concentration Risk [Line Items]
Change in valuation allowance for deferred tax assets			2,668,000
Reduction in income tax expense			$ 2,668,000
Minimum
Concentration Risk [Line Items]
Maturity period of settlement assets and obligations (in years)	1 day
Maximum
Concentration Risk [Line Items]
Maturity period of settlement assets and obligations (in years)	4 days

Summary of Significant Accounting Policies - Disaggregated Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Concentration Risk [Line Items]
Revenue	$ 317,862	$ 224,124	$ 150,134
Revenue earned over time
Concentration Risk [Line Items]
Revenue	273,820	157,567	106,279
Revenue earned at a point in time
Concentration Risk [Line Items]
Revenue	44,042	66,557	43,855
Fixed-Price Contract \| Revenue earned over time
Concentration Risk [Line Items]
Revenue		25,843	8,047
Merchant Services
Concentration Risk [Line Items]
Revenue	124,481	111,870	100,949
Merchant Services \| Revenue earned over time
Concentration Risk [Line Items]
Revenue	100,488	83,203	72,800
Merchant Services \| Revenue earned at a point in time
Concentration Risk [Line Items]
Revenue	23,993	28,667	28,149
Software and Services
Concentration Risk [Line Items]
Revenue	193,402	114,433	50,953
Software and Services \| Revenue earned over time
Concentration Risk [Line Items]
Revenue	173,368	76,367	35,222
Software and Services \| Revenue earned at a point in time
Concentration Risk [Line Items]
Revenue	20,034	38,066	15,731
Other
Concentration Risk [Line Items]
Revenue	(21)	(2,179)	(1,768)
Other \| Revenue earned over time
Concentration Risk [Line Items]
Revenue	(36)	(2,003)	(1,743)
Other \| Revenue earned at a point in time
Concentration Risk [Line Items]
Revenue	15	(176)	(25)
Payments revenue
Concentration Risk [Line Items]
Revenue	144,452	119,681	100,515
Payments revenue \| Merchant Services
Concentration Risk [Line Items]
Revenue	103,509	92,325	82,913
Payments revenue \| Software and Services
Concentration Risk [Line Items]
Revenue	40,951	29,451	19,359
Payments revenue \| Other
Concentration Risk [Line Items]
Revenue	(8)	(2,095)	(1,757)
Software and related services revenue
Concentration Risk [Line Items]
Revenue	154,808	87,590	36,837
Software and related services revenue \| Merchant Services
Concentration Risk [Line Items]
Revenue	12,641	11,872	10,203
Software and related services revenue \| Software and Services
Concentration Risk [Line Items]
Revenue	142,202	75,736	26,634
Software and related services revenue \| Other
Concentration Risk [Line Items]
Revenue	(35)	(18)	0
Other revenue
Concentration Risk [Line Items]
Revenue	18,602	16,853	12,782
Other revenue \| Merchant Services
Concentration Risk [Line Items]
Revenue	8,331	7,673	7,833
Other revenue \| Software and Services
Concentration Risk [Line Items]
Revenue	10,249	9,246	4,960
Other revenue \| Other
Concentration Risk [Line Items]
Revenue	$ 22	$ (66)	$ (11)

Summary of Significant Accounting Policies - Changes in Deferred Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Contract with customer, Liability [Roll Forward]
Deferred revenue, beginning	$ 30,024	$ 11,054
Deferral of revenue	31,926	29,966
Recognition of unearned revenue	(29,861)	(10,996)
Deferred revenue, ending	$ 32,089	$ 30,024

Credit Risk and Other Concentrations (Details)	12 Months Ended
Credit Risk and Other Concentrations (Details)	Sep. 30, 2022 processing_bank
Risks and Uncertainties [Abstract]
Number of third party payment processors	7

Acquisitions - Additional Information (Details) $ in Thousands			12 Months Ended
	Feb. 01, 2021 USD ($) shares	Nov. 17, 2020 USD ($)	Sep. 30, 2022 USD ($) payment_processor	Sep. 30, 2021 USD ($) business	Sep. 30, 2020 USD ($) business
Finite-Lived Intangible Assets [Line Items]
Goodwill increase due to finalized purchase price allocations			$ 61,396	$ 105,238
Software and Services
Finite-Lived Intangible Assets [Line Items]
Goodwill increase due to finalized purchase price allocations			61,396	102,134
Merchant Services
Finite-Lived Intangible Assets [Line Items]
Goodwill increase due to finalized purchase price allocations			$ 0	$ 3,104
2022 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			15 years
Number of businesses acquired \| payment_processor			3
Total purchase consideration			$ 107,681
Proceeds from issuance of long-term debt used to fund the acquisition			101,400
Contingent cash consideration			6,281
Acquisition-related costs			773
Potential additional consideration			23,000
2021 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Number of businesses acquired \| business				8
Adjustment to current assets			(68)
Adjustment, operating lease right of use assets			12
Goodwill increase due to finalized purchase price allocations			49
Adjustment to liabilities			(7)
BIS
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	19 years
Total purchase consideration	$ 95,495
Proceeds from issuance of long-term debt used to fund the acquisition	52,500
Acquisition-related costs	374
Potential additional consideration	16,000
Business combination, contingent consideration, liability	$ 7,750
BIS \| Class A Common Stock
Finite-Lived Intangible Assets [Line Items]
Business acquisition, equity interest issued or issuable, number of shares \| shares	1,202,914
Common units issued to seller	$ 35,245
ImageSoft, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period		19 years
Total purchase consideration		$ 46,300
Proceeds from issuance of long-term debt used to fund the acquisition		40,000
Contingent cash consideration		6,300
Acquisition-related costs		403
Potential additional consideration		$ 20,000
Other
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				16 years
Number of businesses acquired \| business				6
Total purchase consideration				$ 65,527
Proceeds from issuance of long-term debt used to fund the acquisition				57,000
Contingent cash consideration				8,527
Acquisition-related costs				1,110
Potential additional consideration				$ 50,200
Other \| Software and Services
Finite-Lived Intangible Assets [Line Items]
Number of businesses acquired \| business				5
Other \| Merchant Services
Finite-Lived Intangible Assets [Line Items]
Number of businesses acquired \| business				1
2020 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					16 years
Number of businesses acquired \| business					3
Total purchase consideration					$ 32,633
Proceeds from issuance of long-term debt used to fund the acquisition					27,885
Contingent cash consideration					4,748
Acquisition-related costs					547
Potential additional consideration					18,600
Residual buyouts
Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired			$ 52	$ 1,819	$ 1,788
Estimated amortization period			8 years	8 years	8 years
Acquired customer relationships \| 2022 Business Combinations \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			10 years
Acquired customer relationships \| 2022 Business Combinations \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			19 years
Acquired customer relationships \| BIS
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	19 years
Acquired customer relationships \| ImageSoft, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period		20 years
Acquired customer relationships \| Other \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				10 years
Acquired customer relationships \| Other \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				25 years
Acquired customer relationships \| 2020 Business Combinations \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					15 years
Acquired customer relationships \| 2020 Business Combinations \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					18 years
Trade name \| 2022 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			4 years
Trade name \| BIS
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	5 years
Trade name \| ImageSoft, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period		5 years
Trade name \| Other
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				4 years
Trade name \| 2020 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					3 years
Non-compete agreements \| BIS
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	3 years
Non-compete agreements \| ImageSoft, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period		3 years
Non-compete agreements \| Other
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				4 years
Non-compete agreements \| 2020 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					3 years
Capitalized software \| 2022 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			7 years
Capitalized software \| BIS
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	10 years
Capitalized software \| ImageSoft, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period		7 years
Capitalized software \| Other
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				7 years
Capitalized software \| 2020 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					7 years

Acquisitions - Schedule of Preliminary Purchase Consideration of the Acquired Assets and Assumed Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Business Acquisition [Line Items]
Goodwill	$ 353,639	$ 292,243	$ 187,005
2022 Business Combinations
Business Acquisition [Line Items]
Accounts receivable	651
Settlement assets	685
Prepaid expenses and other current assets	83
Property and equipment	190
Goodwill	61,347
Operating lease right-of-use assets	263
Other assets	22
Total assets acquired	115,671
Accrued expenses and other current liabilities	287
Settlement obligations	685
Deferred revenue, current	30
Current portion of operating lease liabilities	82
Operating lease liabilities, less current portion	181
Other long-term liabilities	6,725
Net assets acquired	107,681
2021 Business Combinations
Business Acquisition [Line Items]
Accounts receivable		9,705
Settlement assets		7,009
Inventories		619
Prepaid expenses and other current assets		4,950
Property and equipment		951
Goodwill		105,023
Operating lease right-of-use assets		816
Other assets		38
Total assets acquired		229,991
Accrued expenses and other current liabilities		1,049
Settlement obligations		7,009
Deferred revenue, current		13,814
Current portion of operating lease liabilities		296
Operating lease liabilities, less current portion		501
Net assets acquired		207,322
2020 Business Combinations
Business Acquisition [Line Items]
Cash and cash equivalents			313
Accounts receivable			846
Prepaid expenses and other current assets			54
Property and equipment			122
Goodwill			20,213
Other assets			17
Total assets acquired			35,825
Accounts payable			168
Accrued expenses and other current liabilities			635
Deferred revenue, current			200
Other long-term liabilities			2,194
Net assets acquired			32,628
BIS
Business Acquisition [Line Items]
Accounts receivable		1,567
Settlement assets		6,889
Inventories		458
Prepaid expenses and other current assets		10
Property and equipment		206
Goodwill		46,660
Operating lease right-of-use assets		0
Other assets		0
Total assets acquired		104,090
Accrued expenses and other current liabilities		138
Settlement obligations		6,889
Deferred revenue, current		1,568
Current portion of operating lease liabilities		0
Operating lease liabilities, less current portion		0
Net assets acquired		95,495
ImageSoft, Inc.
Business Acquisition [Line Items]
Accounts receivable		4,997
Settlement assets		120
Inventories		0
Prepaid expenses and other current assets		2,897
Property and equipment		433
Goodwill		22,408
Operating lease right-of-use assets		332
Other assets		6
Total assets acquired		54,403
Accrued expenses and other current liabilities		910
Settlement obligations		120
Deferred revenue, current		6,748
Current portion of operating lease liabilities		75
Operating lease liabilities, less current portion		250
Net assets acquired		46,300
Other
Business Acquisition [Line Items]
Accounts receivable		3,141
Settlement assets		0
Inventories		161
Prepaid expenses and other current assets		2,043
Property and equipment		312
Goodwill		35,955
Operating lease right-of-use assets		484
Other assets		32
Total assets acquired		71,498
Accrued expenses and other current liabilities		1
Settlement obligations		0
Deferred revenue, current		5,498
Current portion of operating lease liabilities		221
Operating lease liabilities, less current portion		251
Net assets acquired		65,527
Capitalized software \| 2022 Business Combinations
Business Acquisition [Line Items]
Intangible assets	9,790
Capitalized software \| 2021 Business Combinations
Business Acquisition [Line Items]
Intangible assets		24,500
Capitalized software \| 2020 Business Combinations
Business Acquisition [Line Items]
Intangible assets			1,970
Capitalized software \| BIS
Business Acquisition [Line Items]
Intangible assets		15,200
Capitalized software \| ImageSoft, Inc.
Business Acquisition [Line Items]
Intangible assets		5,200
Capitalized software \| Other
Business Acquisition [Line Items]
Intangible assets		4,100
Acquired customer relationships \| 2022 Business Combinations
Business Acquisition [Line Items]
Intangible assets	41,090
Acquired customer relationships \| 2021 Business Combinations
Business Acquisition [Line Items]
Intangible assets		72,640
Acquired customer relationships \| 2020 Business Combinations
Business Acquisition [Line Items]
Intangible assets			11,900
Acquired customer relationships \| BIS
Business Acquisition [Line Items]
Intangible assets		32,300
Acquired customer relationships \| ImageSoft, Inc.
Business Acquisition [Line Items]
Intangible assets		16,300
Acquired customer relationships \| Other
Business Acquisition [Line Items]
Intangible assets		24,040
Non-compete agreements \| 2021 Business Combinations
Business Acquisition [Line Items]
Intangible assets		1,100
Non-compete agreements \| 2020 Business Combinations
Business Acquisition [Line Items]
Intangible assets			90
Non-compete agreements \| BIS
Business Acquisition [Line Items]
Intangible assets		100
Non-compete agreements \| ImageSoft, Inc.
Business Acquisition [Line Items]
Intangible assets		610
Non-compete agreements \| Other
Business Acquisition [Line Items]
Intangible assets		390
Trade name \| 2022 Business Combinations
Business Acquisition [Line Items]
Intangible assets	$ 1,550
Trade name \| 2021 Business Combinations
Business Acquisition [Line Items]
Intangible assets		2,640
Trade name \| 2020 Business Combinations
Business Acquisition [Line Items]
Intangible assets			$ 300
Trade name \| BIS
Business Acquisition [Line Items]
Intangible assets		700
Trade name \| ImageSoft, Inc.
Business Acquisition [Line Items]
Intangible assets		1,100
Trade name \| Other
Business Acquisition [Line Items]
Intangible assets		$ 840

Acquisitions - Pro Forma Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Business Combination and Asset Acquisition [Abstract]
Revenue	$ 321,640	$ 265,077
Net loss	$ (26,622)	$ (11,310)

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Inventory	$ 4,121	$ 2,220
Prepaid licenses	5,743	4,646
Prepaid insurance	736	1,074
Notes receivable — current portion	4,930	0
Other current assets	3,915	3,274
Prepaid expenses and other current assets	$ 19,445	$ 11,214

Property and Equipment, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Property, Plant and Equipment [Line Items]
Accumulated depreciation	$ (5,053)	$ (4,592)
Property and equipment, net	5,670	5,902
Depreciation expense	2,545	2,312	$ 1,825
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property and equipment	3,040	2,982
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment	2,159	2,125
Terminals
Property, Plant and Equipment [Line Items]
Property and equipment	813	945
Office equipment
Property, Plant and Equipment [Line Items]
Property and equipment	1,289	1,173
Automobiles
Property, Plant and Equipment [Line Items]
Property and equipment	$ 477	481
Estimated Useful Life	3 years
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment	$ 2,945	2,788
Computer Software
Property, Plant and Equipment [Line Items]
Property and equipment	$ 129	$ 707
Minimum \| Computer equipment and software
Property, Plant and Equipment [Line Items]
Estimated Useful Life	2 years
Minimum \| Furniture and fixtures
Property, Plant and Equipment [Line Items]
Estimated Useful Life	2 years
Minimum \| Terminals
Property, Plant and Equipment [Line Items]
Estimated Useful Life	2 years
Minimum \| Office equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Life	2 years
Minimum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Estimated Useful Life	2 years
Maximum \| Computer equipment and software
Property, Plant and Equipment [Line Items]
Estimated Useful Life	7 years
Maximum \| Furniture and fixtures
Property, Plant and Equipment [Line Items]
Estimated Useful Life	7 years
Maximum \| Terminals
Property, Plant and Equipment [Line Items]
Estimated Useful Life	3 years
Maximum \| Office equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Life	5 years
Maximum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Estimated Useful Life	7 years

Capitalized Software, Net (Details) - USD ($)	12 Months Ended
Capitalized Software, Net (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Finite-Lived Intangible Assets [Line Items]
Amortization life	3 years
Accumulated amortization	$ (16,937,000)	$ (11,658,000)
Capitalized software, net	52,341,000	41,371,000
Software capitalized during the period	19,957,000	30,659,000
Amortization expense	8,987,000	6,276,000	$ 3,978,000
Capitalized software, written down value	0	0	$ 0
Software development costs
Finite-Lived Intangible Assets [Line Items]
Capitalized software	60,013,000	46,417,000
Development in progress
Finite-Lived Intangible Assets [Line Items]
Capitalized software	$ 9,265,000	$ 6,612,000
Minimum \| Software development costs
Finite-Lived Intangible Assets [Line Items]
Amortization life	1 year
Maximum \| Software development costs
Finite-Lived Intangible Assets [Line Items]
Amortization life	7 years

Goodwill and Intangible Assets - Changes in Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Goodwill [Roll Forward]
Goodwill, beginning	$ 292,243	$ 187,005
Goodwill attributable to preliminary purchase price adjustments and acquisition activity	61,396	105,238
Goodwill, ending	353,639	292,243
Merchant Services
Goodwill [Roll Forward]
Goodwill, beginning	119,086	115,982
Goodwill attributable to preliminary purchase price adjustments and acquisition activity	0	3,104
Goodwill, ending	119,086	119,086
Accumulated impairment losses			$ 11,458
Software and Services
Goodwill [Roll Forward]
Goodwill, beginning	173,157	71,023
Goodwill attributable to preliminary purchase price adjustments and acquisition activity	61,396	102,134
Goodwill, ending	234,553	173,157
Accumulated impairment losses			0
Other
Goodwill [Roll Forward]
Goodwill, beginning	0	0
Goodwill attributable to preliminary purchase price adjustments and acquisition activity	0	0
Goodwill, ending	$ 0	$ 0
Accumulated impairment losses			$ 0

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 284,499	$ 244,167
Finite-lived intangible assets, accumulated amortization	(88,622)	(72,503)
Finite-lived intangible assets, carrying value	195,877	171,664
Total identifiable intangible assets, cost	284,541	244,209
Total identifiable intangible assets, carrying value	$ 195,919	171,706
Amortization life	3 years
Amortization expense of intangible assets	$ 17,892	15,830	$ 12,414
Trademarks
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	42	42
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	268,301	227,211
Finite-lived intangible assets, accumulated amortization	(80,681)	(65,815)
Finite-lived intangible assets, carrying value	$ 187,620	$ 161,396
Customer relationships \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization life	10 years	10 years
Customer relationships \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization life	25 years	25 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 1,190	$ 2,878
Finite-lived intangible assets, accumulated amortization	(705)	(1,907)
Finite-lived intangible assets, carrying value	$ 485	$ 971
Non-compete agreements \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization life	3 years	3 years
Non-compete agreements \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization life	6 years	6 years
Website and brand development costs
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 268	$ 240
Finite-lived intangible assets, accumulated amortization	(159)	(133)
Finite-lived intangible assets, carrying value	$ 109	$ 107
Website and brand development costs \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization life	3 years	3 years
Website and brand development costs \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization life	4 years	4 years
Trade names
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 7,771	$ 6,320
Finite-lived intangible assets, accumulated amortization	(4,203)	(2,668)
Finite-lived intangible assets, carrying value	$ 3,568	$ 3,652
Trade names \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization life	3 years	3 years
Trade names \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization life	7 years	7 years
Residual buyouts
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 6,169	$ 6,718
Finite-lived intangible assets, accumulated amortization	(2,141)	(1,407)
Finite-lived intangible assets, carrying value	$ 4,028	$ 5,311
Amortization life	8 years
Residual buyouts \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization life		8 years
Referral and exclusivity agreements
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 800	$ 800
Finite-lived intangible assets, accumulated amortization	(733)	(573)
Finite-lived intangible assets, carrying value	$ 67	$ 227
Amortization life	5 years
Referral and exclusivity agreements \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization life		5 years

Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
2023	$ 17,704
2024	16,722
2025	16,431
2026	16,025
2027	15,405
Thereafter	113,590
Finite-lived intangible assets, carrying value	$ 195,877	$ 171,664

Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Accrued expenses and other current liabilities:
Accrued wages, bonuses, commissions and vacation	$ 8,117	$ 6,649
Accrued interest	642	271
Accrued contingent consideration — current portion	21,385	25,768
Escrow liabilities	12,285	9,067
Tax receivable agreement liability — current portion	20	0
Customer deposits	1,575	1,913
Employee health self-insurance liability	732	1,032
Accrued interchange	2,096	1,086
Other current liabilities	10,981	5,029
Accrued expenses and other current liabilities	57,833	50,815
Long-term Liabilities
Accrued contingent consideration — long-term portion	1,448	10,461
Deferred tax liability — long-term	7,896	3,280
Other long-term liabilities	196	270
Total other long-term liabilities	$ 9,540	$ 14,011

Long-Term Debt, Net - Summary of Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Feb. 18, 2020
Debt Instrument [Line Items]
Debt issuance costs, net	$ (2,554)	$ (3,599)
Total long-term debt, net of issuance costs	287,020	200,605
Line of Credit \| Revolving lines of credit to banks under the Senior Secured Credit Facility
Debt Instrument [Line Items]
Long-term debt	185,017	104,396
Exchangeable Notes \| 1.0% Exchangeable Senior Notes due 2025
Debt Instrument [Line Items]
Long-term debt	104,557	$ 99,808
Stated interest rate (percent)			1.00%
Debt issuance costs, net	$ (1,939)

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

Long-Term Debt, Net - Additional Information (Details)

6 Months Ended

12 Months Ended

Feb. 18, 2020

USD ($)

day

$ / shares

Feb. 13, 2020

USD ($)

$ / shares

May 09, 2019

USD ($)

Sep. 30, 2020

USD ($)

Sep. 30, 2022

USD ($)

$ / shares

Sep. 30, 2021

USD ($)

Sep. 30, 2020

USD ($)

Oct. 03, 2022

USD ($)

Proceeds from borrowings on exchangeable notes

$ 0

^[1]

$ 138,000,000

Equity component of exchangeable notes, net of issuance costs and deferred taxes

27,578,000

Debt issuance costs incurred

4,212,000

Debt issuance costs

Amortization of deferred debt issuance costs

1,046,000

968,000

758,000

Debt issuance costs, net

2,554,000

3,599,000

Exchangeable notes, fair value

102,761,000

Repayments of convertible debt

^[1]

17,414,000

Payments for note hedge transactions

$ 28,676,000

^[1]

28,676,000

Proceeds from issuance of warrants

^[1]

14,669,000

Line of Credit | Revolving Credit Facility | Subsequent Event

Revolving line of credit borrowing capacity

$ 375,000,000

1.0% Exchangeable Senior Notes due 2025

Repayments of convertible debt

$ 17,414,000

1.0% Exchangeable Senior Notes due 2025 | Exchangeable Notes

Original principal amount

$ 138,000,000

Stated interest rate (percent)

1.00%

Proceeds from borrowings on exchangeable notes

$ 132,762,000

Debt issuance costs incurred

5,238,000

Debt issuance costs

4,150,000

Amortization of deferred debt issuance costs

666,000

$ 588,000

Debt issuance costs, net

1,939,000

Debt aggregate repurchase amount

21,000,000

Debt interest, repurchase amount

24,000

Loss on retirement of debt

2,297,000

Write off of deferred debt issuance cost

592,000

1.0% Exchangeable Senior Notes due 2025 | Exchangeable Notes | In Event of Fundamental Change

Repurchase price as percent of face value of notes (percent)

100.00%

1.0% Exchangeable Senior Notes due 2025 | Exchangeable Notes | February 20, 2023 to 47th Scheduled Trading Day Immediately Preceding the Maturity Date

Repurchase price as percent of face value of notes (percent)

100.00%

2020 Senior Secured Credit Facility | Line of Credit

Revolving line of credit borrowing capacity

275,000,000

Optional addition to borrowing capacity

50,000,000

Debt covenant, minimum consolidated interest coverage ratio

0.30%

Debt covenant, maximum total leverage ratio

Debt covenant, maximum consolidated senior secured leverage ratio

3.25

Debt covenant, increase to maximum consolidated senior secured leverage ratio during leverage increase period

0.25

Remaining borrowing capacity

$ 89,983,000

Debt covenant, equity repurchase limit from employees, directors, officers or consultants

$ 3,000,000

Debt covenant, dividend or distribution limit as percent of net cash proceeds from additional common equity issuance (percent)

5.00%

2020 Senior Secured Credit Facility | Line of Credit | Minimum

2020 Senior Secured Credit Facility | Line of Credit | Maximum

0.15%

2020 Senior Secured Credit Facility | Line of Credit | SOFR | Minimum

0.30%

2020 Senior Secured Credit Facility | Line of Credit | One, Two, Three or Six-Month LIBOR

0.10%

2020 Senior Secured Credit Facility | Line of Credit | One, Two, Three or Six-Month LIBOR | Minimum

3.25%

2020 Senior Secured Credit Facility | Line of Credit | One, Two, Three or Six-Month LIBOR | Maximum

2.25%

2020 Senior Secured Credit Facility | Line of Credit | Federal Funds Rate

3.25%

2020 Senior Secured Credit Facility | Line of Credit | SOFR Plus 1%

0.50%

2020 Senior Secured Credit Facility | Line of Credit | LIBOR Plus 1%

1.00%

2020 Senior Secured Credit Facility | Line of Credit | LIBOR Plus 1% | Minimum

1.25%

2020 Senior Secured Credit Facility | Line of Credit | LIBOR Plus 1% | Maximum

0.25%

2020 Senior Secured Credit Facility | Line of Credit | Letter of Credit | Maximum

1.25%

Additional Paid-In Capital

3.25%

Equity component of exchangeable notes, net of issuance costs and deferred taxes

$ 28,662,000

27,578,000

Additional Paid-In Capital | 1.0% Exchangeable Senior Notes due 2025 | Exchangeable Notes

Debt issuance costs

$ 1,088,000

Class A Common Stock

Exchangeable notes, exchange price per share (in USD per share) | $ / shares

$ 40.87

Warrants outstanding (shares) | shares

3,376,391

Warrants sold in connection with the issuance of the Exchangeable notes (in USD per share) | $ / shares

$ 62.88

Proceeds from issuance of warrants

$ 14,669,000

Class A Common Stock | 1.0% Exchangeable Senior Notes due 2025 | Exchangeable Notes

Exchangeable notes, exchange rate, shares per $1000

0.0244666

Class A Common Stock | 1.0% Exchangeable Senior Notes due 2025 | Exchangeable Notes | February 20, 2023 to 47th Scheduled Trading Day Immediately Preceding the Maturity Date

Threshold exchange price as percent of closing price per share to allow redemption, (percent)

130.00%

Threshold trading days closing price for stock must exceed exchange price | day

[1]

Income Taxes - Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Current:
Federal tax expense (benefit)	$ 1,098	$ (35)	$ (34)
State tax expense	1,321	945	446
Deferred:
Federal tax benefit	(4,151)	(285)	(3,018)
State tax expense (benefit)	6,739	(2)	(189)
Income tax expense (benefit)	$ 5,007	$ 623	$ (2,795)

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

Income Taxes - Income Tax Expense Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Expected U.S. federal income taxes at statutory rate	$ (3,824)	$ (1,519)	$ (792)
Partnership income not taxed at federal level	1,035	29	85
Valuation allowance	7,101	712	(2,694)
State and local income taxes, net of federal benefit	(641)	552	244
Nondeductible expenses and other permanent items	83	85	496
Revaluation of debt and other debt transaction differences	1,434	609	222
Change in liability for uncertain tax positions	(25)	(83)	108
Federal tax credits	0	240	(431)
Other	(156)	(2)	(33)
Income tax expense (benefit)	$ 5,007	$ 623	$ (2,795)
Effective Income Tax Rate Reconciliation, Percent [Abstract]
Expected U.S. federal income taxes at statutory rate (percent)	21.00%	21.10%	21.00%
Partnership income not taxed at federal level (percent)	(5.70%)	(0.40%)	(2.30%)
Valuation allowance (percent)	(39.00%)	(9.90%)	71.40%
State and local income taxes, net of federal benefit (percent)	3.50%	(7.60%)	(6.50%)
Nondeductible expenses and other permanent items (percent)	(0.50%)	(1.20%)	(13.10%)
Revaluation of debt and other debt transaction differences (percent)	(0.079)	(0.084)	(0.059)
Change in liability for uncertain tax positions (percent)	0.10%	1.20%	(2.90%)
Federal tax credit (percent)	0.00%	(3.30%)	11.40%
Other (percent)	0.90%	0.00%	0.90%
Income tax expense (percent)	(27.50%)	(8.60%)	74.10%

Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Deferred tax assets:
Investment in partnership	$ 56,388	$ 57,080
Stock-based compensation	2,421	1,714
Deferred revenue	448	561
Accrued expenses	269	232
Net operating loss carryforwards	15,992	13,441
Section 163j carryforward	1,685	1,828
Federal tax credits	359	661
Operating lease liabilities	677	638
Other	75	75
Gross deferred tax assets	78,314	76,230
Valuation allowance	(27,555)	(20,269)
Deferred tax liabilities:
Intangible assets	(14,270)	(8,308)
Operating lease right of use assets	(641)	(620)
Other	(285)	(321)
Net deferred tax asset	$ 35,563	$ 46,712

Income Taxes - Additional Information (Details) - USD ($)	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020	Jun. 25, 2018
Class of Stock [Line Items]
Valuation allowance	$ 27,555,000	$ 20,269,000
Investment in partnership	56,388,000	57,080,000
Accrued interest related to uncertain tax positions	0	0
Accrued penalties related to uncertain tax positions	0	0
Unrecognized tax benefits	83,000	108,000	$ 184,000
Percent of tax benefits payable to continuing equity owners				85.00%
Tax benefits retained (percent)				15.00%
Increase in net deferred tax assets			6,307,000
Increase tax receivable agreement liability			$ 5,361,000
Deferred tax asset recognized	$ 78,314,000	76,230,000
Period of payment to continuing equity owners	26 years
i3 Vericals, LLC
Class of Stock [Line Items]
Valuation allowance	$ 21,838,000
Change in valuation allowance for deferred tax assets	(6,391,000)
Investment in partnership	56,388,000
Minimum
Class of Stock [Line Items]
Expected payments for repurchase of redeemable noncontrolling interest	0
Maximum
Class of Stock [Line Items]
Expected payments for repurchase of redeemable noncontrolling interest	3,315,000
Continuing Equity Owner \| Class B Common Stock
Class of Stock [Line Items]
Increase in deferred tax assets	898,000	13,990,000
Increase tax receivable agreement liability	763,000	$ 11,892,000
Deferred tax asset recognized	40,981,000
Tax benefits due to continuing equity owners	$ 40,832,000
Common Stock \| Class B Common Stock
Class of Stock [Line Items]
Redemption of common units in i3 Verticals, LLC (shares)	(111,000)	(1,671,479)	1,021,016
Common Stock \| Class A Common Stock
Class of Stock [Line Items]
Redemption of common units in i3 Verticals, LLC (shares)	111,000	1,671,479	1,021,016
Federal
Class of Stock [Line Items]
Net operating loss carryforwards	$ 43,233,000	$ 35,312,000
Tax credit carryforward	359,000	661,000
Provision for (Benefit from) deferred income taxes	9,438,000	$ 8,077,000
Valuation allowance	808,000
Change in valuation allowance for deferred tax assets	(15,000)
State
Class of Stock [Line Items]
Net operating loss carryforwards	108,992,000
Provision for (Benefit from) deferred income taxes	6,913,000
Valuation allowance	4,909,000
Change in valuation allowance for deferred tax assets	$ (880,000)

Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Gross unrecognized tax benefits as of September 30, 2021	$ 108	$ 184
Increase in current year tax positions	0	0
Increase in prior year tax positions	0	0
Settlements and other reductions	25	76
Gross unrecognized tax benefits as of September 30, 2022	$ 83	$ 108

Leases - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Weighted-average remaining lease term	5 years
Weighted-average discount rate of operating leases	6.40%
Operating lease costs	$ 5,815	$ 4,096
Variable lease costs	59	6
Short-term rent expense	$ 177	$ 304

Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Leases [Abstract]
2023	$ 5,492
2024	4,703
2025	4,095
2026	3,344
2027	1,521
Thereafter	2,011
Total future minimum lease payments (undiscounted)	21,166
Less: present value discount	(2,604)
Present value of lease liability	18,562
Short-term leases	$ 26

Fair Value Measurements (Details) - USD ($) $ in Thousands	12 Months Ended
Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Costs and Expenses	Costs and Expenses
Exchangeable notes, fair value	$ 102,761
Accrued Contingent Consideration
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, beginning	36,229	$ 13,034
Contingent consideration accrued at time of business combination	6,281	22,577
Change in fair value of contingent consideration included in Operating expenses	23,725	7,140
Contingent consideration paid	(43,402)	(6,522)
Balance, ending	22,833	36,229
Accrued Expenses and Other Current Liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration	21,385	25,768
Other Long-term Liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration	$ 1,448	$ 10,461

Equity-Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	$ 26,230	$ 20,860	$ 10,452
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	25,163	20,860	10,452
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	$ 1,067	$ 0	$ 0

Equity-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020	May 31, 2021	May 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income tax benefits related to equity-based compensation	$ 468	$ 1,083	$ 604
Granted, weighted average grant date fair value (in USD per share)	$ 12.92
Stock options outstanding (in shares)	8,222,322	7,547,622
Options exercisable at end of period (shares)	4,479,276
Unrecognized compensation expense related to unvested options at end of period	$ 33,562
Period for recognition of unrecognized compensation cost	1 year 8 months 12 days
Fair value of stock options that vested	$ 24,586
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period for recognition of unrecognized compensation cost	3 years 7 months 6 days
Granted, Weighted average grant date fair value (Dollar per share)	$ 24.99
Cost not yet recognized, amount	$ 6,187
Vested (in shares)	0
2018 Equity Incentive Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant under the plan (shares)	834,807				3,500,000
Additional Class A common shares added at the beginning of calendar year as percentage of common stock outstanding at end of previous year (percent)					4.00%
2020 Equity Incentive Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant under the plan (shares)	992,848		1,500,000	3,000,000

Equity-Based Compensation - Fair Value of Stock Option Awards (Details) - Stock options	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility (percent)	55.70%	59.70%
Expected dividend yield (percent)	0.00%	0.00%
Expected term	6 years	6 years
Risk-free interest rate (percent)	1.60%	0.70%

Equity-Based Compensation - Stock Option Activity (Details) - $ / shares	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Stock Options
Outstanding at beginning of period (shares)	7,547,622
Granted (shares)	1,672,808
Exercised (shares)	(343,865)
Forfeited (shares)	(654,243)
Outstanding at end of period (shares)	8,222,322	7,547,622
Options exercisable at end of period (shares)	4,479,276
Weighted Average Exercise Price
Outstanding at beginning of period, weighted average exercise price (in USD per share)	$ 25.07	$ 25.26
Granted, weighted average exercise price (in USD per share)	24.50
Exercised, weighted average exercise price (in USD per share)	17.08
Forfeited, weighted average exercise price (in USD per share)	30.05
Outstanding at end of period, weighted average exercise price (in USD per share)	25.07	$ 25.26
Exercisable, weighted average exercise price (in USD per share)	$ 23.09

Equity-Based Compensation - Restricted Stock Units (Details) - Restricted stock units	12 Months Ended
	Sep. 30, 2022 $ / shares shares
Restricted Stock Units
Outstanding at September 30, 2021 (in shares) \| shares	0
Granted (in shares) \| shares	504,903
Vested (in shares) \| shares	0
Forfeited (in shares) \| shares	(18,251)
Outstanding at September 30, 2022 (in shares) \| shares	486,652
Weighted Average Exercise Price
Outstanding, Weighted average grant date fair value, beginning balance (Dollar per share) \| $ / shares	$ 0
Granted, Weighted average grant date fair value (Dollar per share) \| $ / shares	24.99
Vested , Weighted average grant date fair value (Dollar per share) \| $ / shares	0
Forfeited, Weighted average grant date fair value (Dollar per share) \| $ / shares	26.53
Outstanding, Weighted average grant date fair value, ending balance (Dollar per share) \| $ / shares	$ 24.93

Commitments and Contingencies - Minimum Fee Commitments (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2023	$ 4,512
2024	1,230
2025	90
2026	0
2027	0
Thereafter	0
Total	$ 5,832

Commitments and Contingencies - Loan Commitment (Details) - USD ($) $ in Thousands		12 Months Ended
	Oct. 04, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2018
Other Commitments [Line Items]
Operating leases for office space and equipment		$ 5,992	$ 4,400	$ 2,820
S & S Vs. State
Other Commitments [Line Items]
Loss contingency, damages sought, value	$ 15,000
S & S Vs. Sheriffs
Other Commitments [Line Items]
Loss contingency, damages sought, value	$ 7,000
Software Services L L C
Other Commitments [Line Items]
Business combination, consideration transferred					$ 17,000
Buyout Commitment \| Third Party Sales Organization
Other Commitments [Line Items]
Commitments to third party sales organization		29
Additional Buyout Consideration \| Third Party Sales Organization
Other Commitments [Line Items]
Commitments to third party sales organization		$ 9

Related Party Transactions (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	Apr. 01, 2021	Mar. 31, 2021	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2022	Jun. 25, 2018
Related Party Transaction [Line Items]
Percent of tax benefits payable to continuing equity owners						85.00%
Axia Med
Related Party Transaction [Line Items]
Increase in fair value		$ 2,353
Proceeds from sale of investment	$ 2,453
Axia Med \| Affiliated Entity
Related Party Transaction [Line Items]
Net revenue from related party			$ 117	$ 95
Class B Common Stock \| Continuing Equity Owner
Related Party Transaction [Line Items]
Tax benefits due to continuing equity owners					$ 40,832

Segments (Details) - USD ($)
$ in Thousands

12 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2020

$ 317,862

$ 224,124

$ 150,134

(73,367)

(57,706)

(47,230)

38,235

28,918

20,448

Selling general and administrative

282,730

195,336

123,352

193,790

134,872

78,323

Depreciation and amortization

29,424

24,418

^[1]

18,217

Change in fair value of contingent consideration

23,725

7,140

^[1]

(1,409)

(Loss) income from operations

(2,444)

(12)

7,773

770,312

651,800

403,526

353,639

292,243

187,005

Merchant Services

124,481

111,870

100,949

(59,647)

(51,234)

(43,940)

36,666

29,842

21,618

101,500

90,478

78,627

203,485

208,560

206,769

119,086

115,982

Software and Services

193,402

114,433

50,953

(13,778)

(8,610)

(5,057)

1,602

1,147

587

181,226

106,970

46,483

512,792

382,014

139,107

234,553

173,157

71,023

Other

(21)

(2,179)

(1,768)

2,138

1,767

(33)

(2,071)

(1,757)

(2,112)

(1,758)

54,035

61,226

57,650

$ 0

[1]

Non-Controlling Interest - Narrative (Details) - i3Verticals, LLC - shares	Sep. 30, 2022	Sep. 30, 2021
Noncontrolling Interest [Line Items]
Non-controlling interest, common units (shares)	22,986,448	22,026,098
Non-controlling interest, ownership interest (percent)	69.40%	68.30%

Non-Controlling Interest - Impact on Equity (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Noncontrolling Interest [Abstract]
Net loss attributable to non-controlling interest	$ (6,115)	$ (3,382)	$ (560)
Distributions to non-controlling interest holders	0	0	(3)
Redemption of common units in i3 Verticals, LLC	(918)	(11,714)	(5,080)
Adjustment related to prior periods	0	0	2,730
Cumulative effect of adoption of new accounting standard	0	0	640
Allocation of equity to non-controlling interests	11,511	15,337	24,495
Net transfers to (from) non-controlling interests	10,593	3,623	22,782
Change from net income attributable to non-controlling interests and transfers to (from) non-controlling interests	$ 4,478	$ 241	$ 22,222

Earnings Per Share - Basic and Diluted (Details) - USD ($)
$ / shares in Units, $ in Thousands

12 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2020

Numerator

Less: Net loss attributable to non-controlling interests

$ (23,217)

$ (7,839)

^[1]

$ (979)

(6,115)

(3,382)

(560)

Net loss attributable to i3 Verticals, Inc.

$ (17,102)

$ (4,457)

$ (419)

Weighted average shares of Class A common stock outstanding basic (in shares)

22,249,656

20,994,598

14,833,378

Basic net loss per share (in USD per Share)

$ (0.77)

$ (0.21)

$ (0.03)

Numerator

Net loss attributable to Class A common stockholders

$ (17,102)

$ (4,457)

$ (419)

Weighted average shares of Class A common stock outstanding basic (in shares)

22,249,656

20,994,598

14,833,378

Weighted average shares of Class A common stock outstanding - diluted (shares)

22,249,656

31,714,191

27,429,801

Diluted net loss per share (in USD per share)

$ (0.77)

$ (0.22)

$ (0.03)

Class A Common Stock

Numerator

Less: Net loss attributable to non-controlling interests

$ (23,217)

$ (7,839)

$ (979)

(6,115)

(3,382)

(560)

Net loss attributable to i3 Verticals, Inc.

$ (17,102)

$ (4,457)

$ (419)

Weighted average shares of Class A common stock outstanding basic (in shares)

22,249,656

20,994,598

14,833,378

Basic net loss per share (in USD per Share)

$ (0.77)

$ (0.21)

$ (0.03)

Numerator

Net loss attributable to Class A common stockholders

$ (17,102)

$ (4,457)

$ (419)

Reallocation of net loss assuming conversion of common units

(2,556)

(422)

Net loss attributable to Class A common stockholders - diluted

$ (7,013)

$ (841)