0001728688-23-000040 | 10-Q | XBRL Viewer

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

9 Months Ended

Jun. 30, 2023

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

Schedule of Prepaid Expenses and Other Current Assets

A summary of the Company's prepaid expenses and other current assets as of June 30, 2023 and September 30, 2022 is as follows:


	June 30,		September 30,
	2023		2022
Inventory	$	4,537	$	4,121
Prepaid licenses	7,813		5,743
Prepaid insurance	1,126		736
Notes receivable — current portion	5,106		4,930
Other current assets	1,475		3,915
Prepaid expenses and other current assets	$	20,057	$	19,445

LONG-TERM DEBT, NET

9 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

LONG-TERM DEBT, NET

A summary of long-term debt, net as of June 30, 2023 and September 30, 2022 is as follows:


		June 30,		September 30,
	Maturity	2023		2022
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility	May 8, 2028	$	277,400	$	—
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility	May 9, 2024	—		185,017
1% Exchangeable Senior Notes due 2025	February 15, 2025	117,000		104,557
Debt issuance costs, net		(4,831)		(2,554)
Total long-term debt, net of issuance costs		$	389,569	$	287,020

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.

On October 1, 2022, the Company adopted ASU 2020-06 using the modified retrospective method, which resulted in the Exchangeable Notes being presented as a single liability instrument with no separate accounting for embedded conversion features. Refer to Note 2 for further discussion.

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, among i3 Verticals, LLC, the Company and U.S. Bank National Association, as trustee.

As of June 30, 2023, the aggregate principal amount outstanding of the Exchangeable Notes was $117,000.

For a discussion of the terms of the Exchangeable Notes, refer to the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

Non-cash interest expense, including amortization of debt issuance costs, related to the Exchangeable Notes for the three and nine months ended June 30, 2023 was $241 and $701, respectively $169 and $492 for the three and nine months ended June 30, 2022, respectively. Total unamortized debt issuance costs related to the Exchangeable Notes were $1,749 as of June 30, 2023.

The estimated fair value of the Exchangeable Notes was $108,206 as of June 30, 2023. 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 10.

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.

2023 Senior Secured Revolving Credit Facility

On May 8, 2023, i3 Verticals, LLC (the “Borrower”), entered into that certain Credit Agreement (the “2023 Credit Agreement”) with the guarantors and lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan”). The 2023 Credit Agreement replaces the Prior Senior Secured Credit Facility (as defined below). The 2023 Credit Agreement provides for aggregate commitments of $450 million in the form of a senior secured revolving credit facility (the “Revolver”).

The 2023 Credit Agreement provides that the Borrower has the right to seek additional commitments to provide additional term loan facilities or additional revolving credit commitments in an aggregate principal amount up to, as of any date of determination, the sum of (i) the greater of $100 million and 100% of the Borrower’s consolidated EBITDA (as defined in the 2023 Credit Agreement) for the most recently completed four quarter period, plus (ii) the amount of certain prepayments of certain indebtedness, so long as, among other things, after giving pro forma effect to the incurrence of such additional borrowings and any related transactions, the Borrower’s consolidated interest coverage ratio (as defined in the 2023 Credit Agreement) would not be less than 3.0 to 1.0 and the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Credit Agreement) would not exceed 5.0 to 1.0. As of June 30, 2023, the Borrower's consolidated interest coverage ratio was 4.31x and total leverage ratio was 4.00x.

The provision of any such additional amounts under the additional term loan facilities or additional revolving credit commitments are subject to certain additional conditions and the receipt of certain additional commitments by existing or additional lenders. The lenders under the 2023 Credit Agreement are not under any obligation to provide any such additional term loan facilities or revolving credit commitments.

The proceeds of the Revolver, together with proceeds from any additional amounts under the additional term loan facilities or additional revolving credit commitments, may only be used by the Borrower to (i) finance working capital, capital expenditures and other lawful corporate purposes, (ii) finance permitted acquisitions (as defined in the 2023 Credit Agreement) and (iii) to refinance certain existing indebtedness.

Borrowings under the Revolver will be made, at the Borrower’s option, at the Adjusted Term SOFR rate or the base rate, plus, in each case, an applicable margin.

The Adjusted Term SOFR rate will be the rate of interest per annum equal to the Term SOFR rate (based upon an interest period of one, three or six months), plus 0.10%, plus an applicable margin of 2.00% to 3.00% (3.00% at June 30, 2023). The Adjusted Term SOFR rate shall not be less than 0% in any event.

The base rate is a fluctuating rate of interest per annum equal to the highest of (a) the greater of the federal funds rate or the overnight bank funding rate, plus ½ of 1%, (b) Wall Street Journal prime rate and (c) the Adjusted Term SOFR rate for an interest period of one month, plus 1%, plus an applicable margin of 1.00% to 2.00% (2.00% at June 30, 2023). The base rate shall not be less than 1% in any event.

The applicable margin is based upon the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Credit Agreement), as reflected in the schedule below:


Consolidated Total Net Leverage Ratio	Commitment Fee		Letter of Credit Fee		Term Benchmark Loans		Base Rate Loans
> 3.0 to 1.0	0.30	%	3.00	%	3.00	%	2.00	%
> 2.5 to 1.0 but < 3.00 to 1.0	0.25	%	2.50	%	2.50	%	1.50	%
> 2.0 to 1.0 but < 2.50 to 1.0	0.20	%	2.25	%	2.25	%	1.25	%
< 2.0 to 1.0	0.15	%	2.00	%	2.00	%	1.00	%

In addition to paying interest on outstanding principal under the Revolver, the Borrower will be required to pay a commitment fee equal to the product of between 0.15% and 0.30% (the applicable percentage depending on the Borrower’s consolidated total net leverage ratio as reflected in the schedule above, 0.30% at June 30, 2023) times the actual daily amount by which $450 million exceeds the total amount outstanding under the Revolver and available to be drawn under all outstanding letters of credit.

The Borrower will be permitted to voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans under the 2023 Credit Agreement, whether such amounts are issued under the Revolver or under the additional term loan facilities or additional revolving credit facilities, at any time without premium or penalty.

In addition, if the total amount borrowed under the Revolver exceeds $450 million at any time, the 2023 Credit Agreement requires the Borrower to prepay such excess outstanding amounts.

All obligations under the 2023 Credit Agreement are unconditionally guaranteed by the Company, and each of the Company’s existing and future direct and indirect material, wholly owned domestic subsidiaries, subject to certain exceptions. The obligations are secured by first-priority security interests in substantially all tangible and intangible assets of the Borrower, the Company and each subsidiary guarantor, in each case whether owned on the date of the initial borrowings or thereafter acquired.

The 2023 Credit Agreement places certain restrictions on the ability of the Borrower, the Company and their subsidiaries to, among other things, incur debt and liens; merge, consolidate or liquidate; dispose of assets; enter into hedging arrangements; make certain restricted payments; undertake transactions with affiliates; enter into sale-leaseback transactions; make certain investments; prepay or modify the terms of certain indebtedness; and modify the terms of certain organizational agreements.

The 2023 Credit Agreement contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, certain events of bankruptcy and insolvency, material judgments, certain events with respect to employee benefit plans, invalidity of loan documents and certain changes in control.

Prior Senior Secured Credit Facility

On May 9, 2019, the Company replaced its then existing credit facility with a new credit agreement (the "Prior Senior Secured Credit Facility") (as noted above, the Prior Senior Secured Credit Facility was replaced by the 2023 Credit Agreement in May 2023). Effective October 3, 2022, the Prior Senior Secured Credit Facility, as amended, consisted of a $375,000 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 Prior Senior Secured Credit Facility accrued 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%, 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%, in each case depending upon the consolidated total leverage ratio, as defined in the agreement. Interest was payable at the end of the selected interest period, but no less frequently than quarterly. Additionally, the Prior Senior Secured Credit Facility required the Company to pay unused commitment fees of 0.15% to 0.30% 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.

Debt issuance costs

The Company incurred $2,814 and $3,079 in debt issuance costs during the three and nine months ended June 30, 2023, respectively, and did not incur any debt issuance costs during the three and nine months ended June 30, 2022. The Company's debt issuance costs are being amortized over the related term of the debt using the straight-line method, which is not materially different than the effective interest rate method, and are presented net against long-term debt in the condensed consolidated balance sheets. The amortization of deferred debt issuance costs is included in interest expense and amounted to approximately $583 and $1,312 during the three and nine months ended June 30, 2023, respectively and $263 and $776 during the three and nine months ended June 30, 2022, respectively.

NON-CONTROLLING INTEREST - Narrative (Details) - i3Verticals, LLC - shares	Jun. 30, 2023	Jun. 30, 2022
Noncontrolling Interest [Line Items]
Non-controlling interest, common units (in shares)	23,193,447	22,252,640
Non-controlling interest, ownership interest (percent)	69.60%	68.70%

COMMITMENTS AND CONTINGENCIES - Minimum Fee Commitments (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2023 (three months remaining)	$ 1,225
2024	2,077
2025	0
2026	0
2027	0
Thereafter	0
Total	$ 3,302

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2021
Statement of Cash Flows [Abstract]
Cash and cash equivalents	$ 5,043	$ 3,490	$ 9,046	$ 3,641
Settlement assets	10,793	7,540	6,365	4,768
Restricted cash	4,366	12,735	14,705	9,522
Total cash, cash equivalents, and restricted cash	$ 20,202	$ 23,765	$ 30,116	$ 17,931

LONG-TERM DEBT, NET - Additional Information (Details)						3 Months Ended		9 Months Ended
LONG-TERM DEBT, NET - Additional Information (Details)	Jun. 30, 2023 USD ($)	May 08, 2023 USD ($)	Oct. 03, 2022 USD ($)	Feb. 18, 2020 USD ($)	Feb. 13, 2020 USD ($) $ / shares shares	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)
Debt Instrument [Line Items]
Amortization of deferred financing costs						$ 583,000	$ 263,000	$ 1,312,000	$ 776,000
Unamortized debt issuance costs	$ 4,831,000					4,831,000		4,831,000		$ 2,554,000
Exchangeable notes, fair value	108,206,000					108,206,000		108,206,000
Payments for note hedge transactions					$ 28,676,000
Debt issuance costs incurred						2,814,000	0	3,079,000	0
Class A Common Stock
Debt Instrument [Line Items]
Warrants outstanding ( in 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
1% Exchangeable Senior Notes due 2025 \| Exchangeable Notes
Debt Instrument [Line Items]
Original principal amount	$ 117,000,000			$ 138,000,000		$ 117,000,000		$ 117,000,000
Stated interest rate (percent)	1.00%			1.00%		1.00%		1.00%
Proceeds from convertible debt				$ 132,762,000
Amortization of deferred financing costs						$ 241,000	$ 169,000	$ 701,000	$ 492,000
Unamortized debt issuance costs	$ 1,749,000					$ 1,749,000		$ 1,749,000
1% Exchangeable Senior Notes due 2025 \| Exchangeable Notes \| Class A Common Stock
Debt Instrument [Line Items]
Exchangeable notes, exchange rate, shares per $1000				0.0244666
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Unused commitment fee (percent)	0.30%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Revolving line of credit borrowing capacity		$ 450,000,000
Optional addition to borrowing capacity		$ 100,000,000
Debt covenant, minimum consolidated interest coverage ratio	4.31	3.0				4.31		4.31
Debt covenant, maximum total leverage ratio	4.00	5.0				4.00		4.00
Consolidation basis		1
Commitment fee multiplier		$ 450,000,000
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| One, Two, Three or Six-month SOFR
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	3.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| One, Two, Three or Six-month SOFR \| Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	0.10%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| SOFR plus 1%
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	2.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Secured Overnight Financing Rate (SOFR) \| Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		1.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Adjusted Term SOFR \| Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	0.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Base Rate \| Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		1.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Minimum \| Revolving Credit Facility
Debt Instrument [Line Items]
Unused commitment fee (percent)			0.15%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Minimum \| One, Two, Three or Six-month SOFR
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	2.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Minimum \| SOFR plus 1%
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	1.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Maximum \| Revolving Credit Facility
Debt Instrument [Line Items]
Unused commitment fee (percent)			0.30%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Maximum \| One, Two, Three or Six-month SOFR
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	3.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Maximum \| SOFR plus 1%
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	2.00%
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Revolving line of credit borrowing capacity			$ 375,000,000
Optional addition to borrowing capacity			$ 50,000,000
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit \| Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			0.50%
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit \| SOFR plus 1%
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			1.00%
Adjustment in addition to basis spread			0.10%
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit \| Minimum
Debt Instrument [Line Items]
Unused commitment fee (percent)			0.15%
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit \| Minimum \| One, Two, Three or Six-month SOFR
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			2.25%
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit \| Minimum \| SOFR plus 1%
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			0.25%
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit \| Minimum \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			0.10%
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit \| Maximum
Debt Instrument [Line Items]
Unused commitment fee (percent)			0.30%
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit \| Maximum \| Letter of Credit
Debt Instrument [Line Items]
Unused commitment fee (percent)			3.25%
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit \| Maximum \| One, Two, Three or Six-month SOFR
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			3.25%
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility \| Line of Credit \| Maximum \| SOFR plus 1%
Debt Instrument [Line Items]
Basis spread on variable rate (percent)			1.25%

SIGNIFICANT NON-CASH TRANSACTIONS (Tables)

9 Months Ended

Jun. 30, 2023

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 nine months ended June 30, 2023 and 2022:


	Nine months ended June 30,
	2023		2022
Acquisition date fair value of contingent consideration in connection with business combinations	$	760	$	6,281
Replacement of the Prior Senior Secured Credit Facility with the 2023 Senior Secured Credit Facility	$	284,000	$	—
Debt issuance costs financed with proceeds from the 2023 Senior Secured Credit Facility	$	2,386	$	—
Accrued interest financed with proceeds from the 2023 Senior Secured Credit Facility	$	1,617	$	—
Right-of-use assets obtained in exchange for operating lease obligations	$	1,702	$	7,720

COMMITMENTS AND CONTINGENCIES- Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Other Commitments [Line Items]
Rent expense	$ 1,432	$ 1,520	$ 4,451	$ 4,559
Buyout Commitment \| Third Party Sales Organization
Other Commitments [Line Items]
Commitments to third party sales organization	29,000		29,000
Additional Buyout Consideration \| Third Party Sales Organization
Other Commitments [Line Items]
Commitments to third party sales organization	$ 9,000		$ 9,000

LEASES - Maturities of Lease Liabilities (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Leases [Abstract]
2023 (three months remaining)	$ 1,366
2024	4,945
2025	4,329
2026	3,381
2027	1,597
Thereafter	2,017
Total future minimum lease payments (undiscounted)	17,635
Less: present value discount	(1,753)
Present value of lease liability	15,882
Short-term leases	$ 43

GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Carrying Amount of Goodwill

Changes in the carrying amount of goodwill are as follows:


	Software and Services		Merchant Services		Other		Total
Balance at September 30, 2022	$	234,553	$	119,086	$	—	$	353,639
Goodwill attributable to preliminary purchase price adjustments and acquisitions during the nine months ended June 30, 2023	52,540		2,863		—		55,403
Balance at June 30, 2023	$	287,093	$	121,949	$	—	$	409,042

Schedule of Finite-Lived Intangible Assets

Intangible assets consisted of the following as of June 30, 2023:


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Merchant relationships	$	310,501	$	(93,806)	$	216,695	9 to 25 years – accelerated or straight-line
Non-compete agreements	1,390		(1,040)		350		3 to 6 years – straight-line
Website and brand development costs	267		(210)		57		3 to 4 years – straight-line
Trade names	8,471		(5,293)		3,178		3 to 7 years – straight-line
Residual buyouts	6,632		(2,745)		3,887		8 years – straight-line
Referral and exclusivity agreements	1,220		(842)		378		5 years – straight-line
Total finite-lived intangible assets	328,481		(103,936)		224,545

Indefinite-lived intangible assets:
Trademarks	43		—		43
Total identifiable intangible assets	$	328,524	$	(103,936)	$	224,588

Schedule of Indefinite-Lived Intangible Assets

Intangible assets consisted of the following as of June 30, 2023:


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Merchant relationships	$	310,501	$	(93,806)	$	216,695	9 to 25 years – accelerated or straight-line
Non-compete agreements	1,390		(1,040)		350		3 to 6 years – straight-line
Website and brand development costs	267		(210)		57		3 to 4 years – straight-line
Trade names	8,471		(5,293)		3,178		3 to 7 years – straight-line
Residual buyouts	6,632		(2,745)		3,887		8 years – straight-line
Referral and exclusivity agreements	1,220		(842)		378		5 years – straight-line
Total finite-lived intangible assets	328,481		(103,936)		224,545

Indefinite-lived intangible assets:
Trademarks	43		—		43
Total identifiable intangible assets	$	328,524	$	(103,936)	$	224,588

Schedule of Future Amortization Expense of Finite-lived Intangible Assets

Based on net carrying amounts at June 30, 2023, the Company's estimate of future amortization expense for intangible assets are presented in the table below for fiscal years ending September 30:


2023 (three months remaining)	$	5,066
2024	19,558
2025	19,266
2026	18,794
2027	18,174
Thereafter	143,687
	$	224,545

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482548/350-20-55-24

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1A
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1A

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-2

+ Details

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 25, 2018
Related Party Transaction [Line Items]
Percent of tax benefits payable to continuing equity owners		85.00%
Class B Common Stock \| Continuing Equity Owner
Related Party Transaction [Line Items]
Tax benefits due to continuing equity owners	$ 40,915

EQUITY-BASED COMPENSATION (Tables)

9 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Equity-Based Compensation Expense

A summary of equity-based compensation expense recognized during the three and nine months ended June 30, 2023 and 2022 is as follows:


	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Stock options	$	6,061	$	6,399	$	18,341	$	19,065
Restricted stock units	1,137		400		2,505		615
Equity-based compensation expense	$	7,198	$	6,799	$	20,846	$	19,680

Schedule of Fair Value of Stock Option Awards

The fair value of the stock option awards during the nine months ended June 30, 2023 and during the year ended September 30, 2022 was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:


	June 30, 2023		September 30, 2022
Expected volatility(1)	54.9	%	55.7	%
Expected dividend yield(2)	—	%	—	%
Expected term(3)	6 years		6 years
Risk-free interest rate(4)	3.9	%	1.6	%

_________________

1.Expected volatility is based on the Company's own share price.

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.

Schedule of Stock Option Activity

A summary of stock option activity for the nine months ended June 30, 2023 is as follows:


	Stock Options	Weighted Average Exercise Price
Outstanding at September 30, 2022	8,222,322	$	25.07
Granted	1,246,629	24.14
Exercised	(286,256)	19.05
Forfeited	(351,076)	27.48
Outstanding at June 30, 2023	8,831,619	$	25.04

Exercisable at June 30, 2023	5,679,982	$	24.56

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

A summary of activity related to restricted stock units for the nine months ended June 30, 2023 is as follows:


	Restricted Stock Units	Weighted Average Grant Date Fair Value
Outstanding at September 30, 2022	486,652	$	24.93
Granted	524,132	25.32
Vested	(63,484)	26.59
Forfeited	(56,631)	24.25
Outstanding at June 30, 2023	890,669	$	24.93

SEGMENTS - Reportable Segment Performance (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022
Segment Reporting Information [Line Items]
Revenue	$ 93,931	$ 80,553	$ 273,832	$ 232,612
Other costs of services	(20,532)	(19,749)	(59,531)	(52,890)
Residuals	11,537	10,657	32,687	27,666
Processing margin	84,936	71,461	246,988	207,388
Residuals	(11,537)	(10,657)	(32,687)	(27,666)
Selling, general and administrative	(55,426)	(47,775)	(163,633)	(142,878)
Depreciation and amortization	(9,158)	(7,506)	(26,849)	(21,823)
Change in fair value of contingent consideration	(6,183)	(8,254)	(9,905)	(24,684)
Income (loss) from operations	2,632	(2,731)	13,914	(9,663)
Total assets	875,824	780,424	875,824	780,424	$ 770,312
Goodwill	409,042	353,882	409,042	353,882	353,639
Software and Services
Segment Reporting Information [Line Items]
Revenue	58,901	47,839	172,911	141,575
Other costs of services	(4,164)	(3,456)	(11,916)	(9,660)
Residuals	595	348	1,917	1,139
Processing margin	55,332	44,731	162,912	133,054
Residuals	(595)	(348)	(1,917)	(1,139)
Total assets	614,290	510,336	614,290	510,336
Goodwill	287,093	234,796	287,093	234,796	234,553
Merchant Services
Segment Reporting Information [Line Items]
Revenue	35,040	32,714	100,968	91,071
Other costs of services	(16,379)	(16,303)	(47,665)	(43,273)
Residuals	10,947	10,320	30,795	26,555
Processing margin	29,608	26,731	84,098	74,353
Residuals	(10,947)	(10,320)	(30,795)	(26,555)
Total assets	204,539	204,656	204,539	204,656
Goodwill	121,949	119,086	121,949	119,086	119,086
Other
Segment Reporting Information [Line Items]
Revenue	(10)	0	(47)	(34)
Other costs of services	11	10	50	43
Residuals	(5)	(11)	(25)	(28)
Processing margin	(4)	(1)	(22)	(19)
Residuals	5	11	25	28
Total assets	56,995	65,432	56,995	65,432
Goodwill	$ 0	$ 0	$ 0	$ 0	$ 0

LEASES

9 Months Ended

Jun. 30, 2023

Leases [Abstract]

LEASES

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 June 30, 2023. 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 June 30, 2023 and 2022 was four and five years, respectively. The Company had no significant short-term leases during the three and nine months ended June 30, 2023 and 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 7.7% and 7.6% as of June 30, 2023 and 2022, respectively.

Operating lease cost is recognized on a straight-line basis over the lease term. Operating lease costs were $1,378 and $4,287 for the three and nine months ended June 30, 2023, respectively and $1,469 and $4,415 for the three and nine months ended June 30, 2022, respectively, which are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

Total operating lease costs for the three and nine months ended June 30, 2023 include variable lease costs of approximately $44 and $64, respectively and $14 and $58 for the three and nine months ended June 30, 2022, 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 three and nine months ended June 30, 2023 were $54 and $164, respectively and were $51 and $144 for the three and nine months ended June 30, 2022, respectively, and are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

As of June 30, 2023, maturities of lease liabilities are as follows:


Years ending September 30:
2023 (three months remaining)	$	1,366
2024	4,945
2025	4,329
2026	3,381
2027	1,597
Thereafter	2,017
Total future minimum lease payments (undiscounted)(1)	17,635
Less: present value discount	(1,753)
Present value of lease liability	$	15,882

__________________________

1.Total future minimum lease payments excludes payments of $43 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.

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended					9 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2023	Jun. 30, 2022	Jun. 25, 2018
Class of Stock [Line Items]
(Benefit from) Provision for income taxes	$ 2,077		$ (1,810)			$ 1,896	$ (1,154)
Percent of tax benefits payable to continuing equity owners								85.00%
Tax benefits retained (percent)								15.00%
Period of payment to continuing equity owners						24 years
Minimum
Class of Stock [Line Items]
Expected payments for repurchase of redeemable noncontrolling interest	0					$ 0
Maximum
Class of Stock [Line Items]
Expected payments for repurchase of redeemable noncontrolling interest	3,321					3,321
Class B Common Stock \| Continuing Equity Owner
Class of Stock [Line Items]
Increase in net deferred tax assets						98
Increase tax receivable agreement liability						83
Deferred tax asset recognized	39,808					39,808
Tax benefits due to continuing equity owners	$ 40,915					$ 40,915
Common Stock \| Class A Common Stock
Class of Stock [Line Items]
Redemption of common units in i3 Verticals, LLC (in shares)		9,924	56,000	40,000	15,000	9,924
Common Stock \| Class B Common Stock
Class of Stock [Line Items]
Redemption of common units in i3 Verticals, LLC (in shares)		(9,924)	(56,000)	(40,000)	(15,000)

NON-CONTROLLING INTEREST

9 Months Ended

Jun. 30, 2023

Noncontrolling Interest [Abstract]

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 June 30, 2023 and 2022, respectively, i3 Verticals, Inc. owned 23,193,447 and 22,252,640 of i3 Verticals, LLC's Common Units, representing a 69.6% and 68.7% 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:


	Nine Months Ended June 30,
	2023		2022
Net loss attributable to non-controlling interest	$	(742)	$	(5,178)
Transfers to non-controlling interests:
Redemption of common units in i3 Verticals, LLC	(86)		(918)
Allocation of equity to non-controlling interests	2,033		5,594
Net transfers to non-controlling interests	1,947		4,676
Change from net income (loss) attributable to non-controlling interests and transfers to non-controlling interests	$	1,205	$	(502)

PREPAID EXPENSES AND OTHER CURRENT ASSETS

9 Months Ended

Jun. 30, 2023

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 June 30, 2023 and September 30, 2022 is as follows:


	June 30,		September 30,
	2023		2022
Inventory	$	4,537	$	4,121
Prepaid licenses	7,813		5,743
Prepaid insurance	1,126		736
Notes receivable — current portion	5,106		4,930
Other current assets	1,475		3,915
Prepaid expenses and other current assets	$	20,057	$	19,445

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Inventory	$ 4,537	$ 4,121
Prepaid licenses	7,813	5,743
Prepaid insurance	1,126	736
Notes receivable — current portion	5,106	4,930
Other current assets	1,475	3,915
Prepaid expenses and other current assets	$ 20,057	$ 19,445

EQUITY-BASED COMPENSATION - Fair Value of Stock Option Awards (Details) - Stock options	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2022	Jun. 30, 2023	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility (percent)		54.90%	55.70%
Expected dividend yield (percent)	0.00%	0.00%	0.00%
Expected term (years)		6 years	6 years
Risk-free interest rate (percent)		3.90%	1.60%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147480483/718-10-35-3

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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

ACQUISITIONS - Additional Information (Details)	9 Months Ended		12 Months Ended
ACQUISITIONS - Additional Information (Details)	Jun. 30, 2023 USD ($) business	Jun. 30, 2022 USD ($)	Sep. 30, 2022 USD ($) business
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 409,042,000	$ 353,882,000	$ 353,639,000
Residual buyouts
Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	462,000	$ 0
Estimated amortization period		8 years
Referral agreements
Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 420,000
Estimated amortization period	5 years
Celtic
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	18 years
Payment to acquire business	$ 85,000,000
Acquisition-related costs	1,748,000
Property and equipment	5,437,000
Goodwill	42,595,000
Other long-term liabilities	$ 12,013,000
Celtic \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	18 years
Intangible assets	$ 33,800,000
Celtic \| Trade name
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	5 years
Intangible assets	$ 600,000
Celtic \| Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	3 years
Intangible assets	$ 200,000
Celtic \| Capitalized software
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	10 years
Intangible assets	$ 12,600,000
Other Business Combinations
Finite-Lived Intangible Assets [Line Items]
Payment to acquire business	$ 16,997,000
Number of businesses acquired \| business	2
Total purchase consideration	$ 19,757,000
Contingent consideration	760,000
Net working capital	180,000
Property and equipment	374,000
Goodwill	12,808,000
Business acquisition, goodwill, expected tax deductible amount	2,864,000
Other long-term liabilities	2,778,000
Other Business Combinations \| Class A Common Stock
Finite-Lived Intangible Assets [Line Items]
Common units issued to seller	2,000,000
Other Business Combinations \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets	8,400,000
Other Business Combinations \| Trade name
Finite-Lived Intangible Assets [Line Items]
Intangible assets	100,000
Other Business Combinations \| Capitalized software
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 670,000
Other Business Combinations \| Minimum \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	10 years
Other Business Combinations \| Minimum \| Capitalized software
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	7 years
Other Business Combinations \| Maximum \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	15 years
Other Business Combinations \| Maximum \| Capitalized software
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	8 years
2022 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			15 years
Payment to acquire business			$ 101,400,000
Acquisition-related costs			$ 773,000
Number of businesses acquired \| business			3
Number of businesses acquired with tax deductible goodwill associated \| business			2
Total purchase consideration			$ 107,681,000
Contingent consideration			6,281,000
Property and equipment			190,000
Goodwill			61,347,000
Other long-term liabilities			6,725,000
Potential additional consideration			23,000,000
2022 Business Combinations \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets			$ 41,090,000
2022 Business Combinations \| Trade name
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			4 years
Intangible assets			$ 1,550,000
2022 Business Combinations \| Capitalized software
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			7 years
Intangible assets			$ 9,790,000
2022 Business Combinations \| Minimum \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			10 years
2022 Business Combinations \| Maximum \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			19 years

ACQUISITIONS

9 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

ACQUISITIONS

During the nine months ended June 30, 2023 and 2022, the Company acquired the following intangible assets and businesses:

Residual Buyouts

From time to time, the Company acquires future commission streams (or "residuals") 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 nine months ended June 30, 2023, the Company purchased $462 in residuals using a combination of cash on hand and borrowings on the Company's revolving credit facility. The acquired residual buyout intangible asset has an estimated amortization period of eight years. The Company did not acquire any residuals during the nine months ended June 30, 2022.

Referral Agreements

From time to time, the Company enters into referral agreements with agent banks or other organizations (“referral partner”). Under these agreements, the referral partner refers its customers to the Company for credit card processing services. Total consideration paid for these agreements in the nine months ended June 30, 2023 was $420, all of which was settled with cash on hand. Because the Company pays an up-front fee to compensate the referral partner, the amount is treated as an asset acquisition in which the Company has acquired an intangible stream of referrals. This asset is amortized over a straight-line period of five years.

Purchase of Celtic Cross Holdings, Inc. and Celtic Systems Pvt. Ltd.

During the nine months ended June 30, 2023, the Company completed the acquisition of Celtic Cross Holdings, Inc., in Scottsdale, Arizona and Celtic Systems Pvt. Ltd. in Vadodara, India (collectively "Celtic") to expand the Company’s software offerings in the Public Sector vertical. Celtic is within the Software and Services segment. Total purchase consideration consisted of $85,000 in cash consideration, funded by proceeds from the Company's revolving credit facility. Certain of the purchase price allocations assigned for this acquisition is considered preliminary as of June 30, 2023.

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

Acquisition-related costs for this acquisition amounted to approximately $1,748 and were expensed as incurred.

Summary of Celtic Cross Holdings, Inc. and Celtic Systems Pvt. Ltd.

The fair values assigned to certain assets and liabilities assumed, as of the acquisition date, were as follows:


Accounts receivable	$	7,604
Prepaid expenses and other current assets	110
Property and equipment	5,437
Capitalized software	12,600
Customer relationships	33,800
Non-compete agreements	200
Trade name	600
Goodwill	42,595
Total assets acquired	102,946

Accounts payable	9
Accrued expenses and other current liabilities	3,182
Deferred revenue, current	2,742
Other long-term liabilities	12,013
Net assets acquired	$	85,000

Other Business Combinations during the nine months ended June 30, 2023

The Company completed the acquisition of two other businesses to expand the Company's software offerings. The total purchase consideration was $19,757, including $16,997 in cash consideration, funded by proceeds from the Company's revolving credit facility, $2,000 of the Company's Class A Common Stock, and $760 contingent consideration. In connection with this acquisition, the Company allocated approximately $180 of the consideration to net working capital, approximately $374 to property and equipment, approximately $670 to capitalized software, approximately $8,400 to customer relationships, approximately $100 to trade names, and the remainder, approximately $12,808, to goodwill, of which $2,864 is deductible for tax purposes, and approximately $2,778 to other long-term liabilities. Certain of the purchase price allocations assigned for this acquisition is considered preliminary as of June 30, 2023. The acquired capital software and customer relationships intangible asset have estimated amortization periods of seven to eight years and ten to fifteen years, respectively.

Pro Forma Results of Operations for Business Combinations during the nine months ended June 30, 2023

The following unaudited supplemental pro forma results of operations have been prepared as though each of the acquired businesses in the nine months ended June 30, 2023 had occurred on October 1, 2021. Pro forma adjustments were made to reflect the impact of depreciation and amortization, changes to executive compensation and the increased debt, 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.


	Nine months ended June 30,
	2023		2022
Revenue	$	275,206	$	249,808
Net loss	$	(6,145)	$	(17,477)

Business Combinations during the year ended September 30, 2022

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 June 30, 2023.

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 two 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 10.

Summary of Business Combinations during the year ended September 30, 2022

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 merchant 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

GOODWILL AND INTANGIBLE ASSETS - Future Amortization Expense (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2023 (three months remaining)	$ 5,066
2024	19,558
2025	19,266
2026	18,794
2027	18,174
Thereafter	143,687
Finite-lived intangible assets, carrying value	$ 224,545

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Schedule of Disaggregation of Revenue

The tables below present a disaggregation of the Company's revenue from contracts with customers by product by segment. Refer to Note 14 for discussion of the Company's segments. The Company's products are defined as follows:

•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.

•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 Three Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	43,971	$	3,303	$	(6)	$	47,268
Payments revenue	12,261		29,733		(4)		41,990
Other revenue	2,669		2,004		—		4,673
Total revenue	$	58,901	$	35,040	$	(10)	$	93,931


	For the Three Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	35,667	$	3,349	$	(10)	$	39,006
Payments revenue	9,559		27,135		(11)		36,683
Other revenue	2,613		2,230		21		4,864
Total revenue	$	47,839	$	32,714	$	—	$	80,553


	For the Nine Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	126,215	$	9,499	$	(25)	$	135,689
Payments revenue	39,299		84,976		(22)		124,253
Other revenue	7,397		6,493		—		13,890
Total revenue	$	172,911	$	100,968	$	(47)	$	273,832


	For the Nine Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	105,023	$	9,319	$	(26)	$	114,316
Payments revenue	29,341		75,365		(29)		104,677
Other revenue	7,211		6,387		21		13,619
Total revenue	$	141,575	$	91,071	$	(34)	$	232,612

The tables below present a disaggregation of the Company's revenue from contracts with customers by timing of transfer of goods or services by segment. For the three and nine months ended June 30, 2022, $10,170 and $29,716, respectively, 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 three and nine months ended June 30, 2023. 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 Three Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	54,555	$	29,891	$	(7)	$	84,439
Revenue earned at a point in time	4,346		5,149		(3)		9,492
Total revenue	$	58,901	$	35,040	$	(10)	$	93,931


	For the Three Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	33,951	$	25,643	$	(10)	$	59,584
Revenue earned at a point in time	13,888		7,071		10		20,969
Total revenue	$	47,839	$	32,714	$	—	$	80,553


	For the Nine Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	159,564	$	85,472	$	(26)	$	245,010
Revenue earned at a point in time	13,347		15,496		(21)		28,822
Total revenue	$	172,911	$	100,968	$	(47)	$	273,832


	For the Nine Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	99,390	$	70,976	$	(27)	$	170,339
Revenue earned at a point in time	42,185		20,095		(7)		62,273
Total revenue	$	141,575	$	91,071	$	(34)	$	232,612

Schedule of Contract with Customer, Asset and Liability

The following tables present the changes in deferred revenue as of and for the nine months ended June 30, 2023 and 2022, respectively:


Balance at September 30, 2022	$	32,089
Deferral of revenue	19,334
Recognition of unearned revenue	(13,925)
Balance at December 31, 2022	37,498
Deferral of revenue	10,475
Recognition of unearned revenue	(14,286)
Balance at March 31, 2023	33,687
Deferral of revenue	8,788
Recognition of unearned revenue	(15,478)
Balance at June 30, 2023	$	26,997


Balance at September 30, 2021	$	30,024
Deferral of revenue	21,032
Recognition of unearned revenue	(15,735)
Balance at December 31, 2021	35,321
Deferral of revenue	11,047
Recognition of unearned revenue	(16,034)
Balance at March 31, 2022	30,334
Deferral of revenue	8,131
Recognition of unearned revenue	(15,742)
Balance at June 30, 2022	$	22,723

FAIR VALUE MEASUREMENTS - Changes in Level 3 Financial Instruments Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Exchangeable notes, fair value	$ 108,206
Accrued Contingent Consideration
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, beginning	22,833	$ 36,229
Contingent consideration accrued at time of business combination	760	6,281
Change in fair value of contingent consideration included in Operating expenses	9,905	24,684
Contingent consideration paid	(15,642)	(28,783)
Balance, ending	17,856	$ 38,411
Accrued Expenses and Other Current Liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration	16,680		$ 21,385
Other Long-term Liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration	$ 1,176		$ 1,448

ORGANIZATION AND OPERATIONS	9 Months Ended
ORGANIZATION AND OPERATIONS	Jun. 30, 2023
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 located in 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 of 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 owners other than i3 Verticals, Inc. (the “Continuing Equity Owners”).

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (6,101)	$ (18,807)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	26,849	21,823
Equity-based compensation	20,846	19,680
Amortization of debt discount and issuance costs	1,312	4,312
Provision for (benefit from) income taxes	1,860	(1,154)
Non-cash lease expense	3,464	3,684
Increase in non-cash contingent consideration expense from original estimate	9,905	24,684
Other non-cash adjustments to net income	946	1,047
Changes in operating assets:
Accounts receivable	2,961	(4,800)
Prepaid expenses and other current assets	(200)	(2,735)
Other assets	(980)	(1,837)
Changes in operating liabilities:
Accounts payable	(1,111)	242
Accrued expenses and other current liabilities	(1,548)	5,874
Acquisition escrow obligations	(8,370)	5,189
Settlement obligations	3,253	912
Deferred revenue	(9,319)	(7,325)
Operating lease liabilities	(3,339)	(3,544)
Other long-term liabilities	2	0
Contingent consideration paid in excess of original estimates	(10,807)	(11,405)
Net cash provided by operating activities	29,623	35,840
Cash flows from investing activities:
Expenditures for property and equipment	(3,110)	(1,395)
Expenditures for capitalized software	(8,914)	(7,199)
Purchases of merchant portfolios and residual buyouts	(462)	0
Acquisitions of businesses, net of cash and restricted cash acquired	(101,997)	(100,715)
Payments for other investing activities	(1,227)	(41)
Proceeds from investments	295	0
Net cash used in investing activities	(115,415)	(109,350)
Cash flows from financing activities:
Proceeds from revolving credit facility	310,436	258,665
Payments on revolving credit facility	(222,055)	(155,655)
Payments of debt issuance costs	(694)	0
Cash paid for contingent consideration	(4,835)	(17,378)
Proceeds from stock option exercises	154	617
Payments for employee's tax withholdings from net settled stock option exercises and RSU releases	(777)	(554)
Net cash provided by financing activities	82,229	85,695
Net (decrease) increase in cash, cash equivalents and restricted cash	(3,563)	12,185
Cash, cash equivalents and restricted cash at beginning of period	23,765	17,931
Cash, cash equivalents and restricted cash at end of period	20,202	30,116
Supplemental disclosure of cash flow information:
Cash paid for interest	14,488	5,428
Cash paid for income taxes	$ 1,931	$ 835

GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 328,481
Finite-lived intangible assets, accumulated amortization	(103,936)
Finite-lived intangible assets, carrying value	224,545
Total identifiable intangible assets, cost	328,524
Total identifiable intangible assets, carrying value	224,588		$ 195,919
Amortization expense of intangible assets	15,315	$ 13,303
Trademarks
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	43
Merchant relationships
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	310,501
Finite-lived intangible assets, accumulated amortization	(93,806)
Finite-lived intangible assets, carrying value	$ 216,695
Merchant relationships \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization life	9 years
Merchant relationships \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization life	25 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 1,390
Finite-lived intangible assets, accumulated amortization	(1,040)
Finite-lived intangible assets, carrying value	$ 350
Non-compete agreements \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization life	3 years
Non-compete agreements \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization life	6 years
Website and brand development costs
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 267
Finite-lived intangible assets, accumulated amortization	(210)
Finite-lived intangible assets, carrying value	$ 57
Website and brand development costs \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization life	3 years
Website and brand development costs \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization life	4 years
Trade names
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 8,471
Finite-lived intangible assets, accumulated amortization	(5,293)
Finite-lived intangible assets, carrying value	$ 3,178
Trade names \| Minimum
Finite-Lived Intangible Assets [Line Items]
Amortization life	3 years
Trade names \| Maximum
Finite-Lived Intangible Assets [Line Items]
Amortization life	7 years
Residual buyouts
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 6,632
Finite-lived intangible assets, accumulated amortization	(2,745)
Finite-lived intangible assets, carrying value	$ 3,887
Amortization life	8 years
Referral and exclusivity agreements
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 1,220
Finite-lived intangible assets, accumulated amortization	(842)
Finite-lived intangible assets, carrying value	$ 378
Amortization life	5 years

EQUITY-BASED COMPENSATION

9 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

EQUITY-BASED COMPENSATION

A summary of equity-based compensation expense recognized during the three and nine months ended June 30, 2023 and 2022 is as follows:


	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Stock options	$	6,061	$	6,399	$	18,341	$	19,065
Restricted stock units	1,137		400		2,505		615
Equity-based compensation expense	$	7,198	$	6,799	$	20,846	$	19,680

Amounts are included in general and administrative expense on the condensed consolidated statements of operations. Income tax benefits of $197 and $305 were recognized during the three and nine months ended June 30, 2023, respectively, and $169 and $264 during the three and nine months ended June 30, 2022, respectively.

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 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 4.0%. As of June 30, 2023, equity awards with respect to 888,780 shares of the Company's Class A common stock were available for 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 June 30, 2023, equity awards with respect to 1,115,568 shares of the Company's Class A common stock were 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.

Stock Options

The Company has issued stock option awards under the 2018 Plan and the 2020 Inducement Plan. The fair value of the stock option awards during the nine months ended June 30, 2023 and during the year ended September 30, 2022 was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:


	June 30, 2023		September 30, 2022
Expected volatility(1)	54.9	%	55.7	%
Expected dividend yield(2)	—	%	—	%
Expected term(3)	6 years		6 years
Risk-free interest rate(4)	3.9	%	1.6	%

_________________

1.Expected volatility is based on the Company's own share price.

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.

A summary of stock option activity for the nine months ended June 30, 2023 is as follows:


	Stock Options	Weighted Average Exercise Price
Outstanding at September 30, 2022	8,222,322	$	25.07
Granted	1,246,629	24.14
Exercised	(286,256)	19.05
Forfeited	(351,076)	27.48
Outstanding at June 30, 2023	8,831,619	$	25.04

Exercisable at June 30, 2023	5,679,982	$	24.56

The weighted-average grant date fair value of stock options granted during the nine months ended June 30, 2023 was $13.69.

As of June 30, 2023, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $28,792, which is expected to be recognized over a weighted-average period of 2.08 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 three and nine months ended June 30, 2023 was $4,457 and $22,629, respectively.

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 for the nine months ended June 30, 2023 is as follows:


	Restricted Stock Units	Weighted Average Grant Date Fair Value
Outstanding at September 30, 2022	486,652	$	24.93
Granted	524,132	25.32
Vested	(63,484)	26.59
Forfeited	(56,631)	24.25
Outstanding at June 30, 2023	890,669	$	24.93

As of June 30, 2023, total unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures, was $13,244, which is expected to be recognized over a weighted average period of 3.31 years.

$1,688 of RSUs vested during the nine months ended June 30, 2023.

LONG-TERM DEBT, NET (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022	Feb. 18, 2020
Debt Instrument [Line Items]
Debt issuance costs, net	$ (4,831)	$ (2,554)
Total long-term debt, net of issuance costs	389,569	287,020
Line of Credit \| Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility
Debt Instrument [Line Items]
Long-term debt	277,400	0
Line of Credit \| Revolving lines of credit to banks under the Prior Senior Secured Credit Facility
Debt Instrument [Line Items]
Long-term debt	0	185,017
Exchangeable Notes \| 1% Exchangeable Senior Notes due 2025
Debt Instrument [Line Items]
Long-term debt	117,000	$ 104,557
Debt issuance costs, net	$ (1,749)
Stated interest rate (percent)	1.00%		1.00%

EARNINGS PER SHARE - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2023	Jun. 30, 2022
Numerator
Net loss	$ (6,078)	$ (192)	$ 169	$ (4,688)	$ (10,438)	$ (3,681)	$ (6,101)	$ (18,807)
Less: Net loss attributable to non-controlling interest	(923)			(960)			(742)	(5,178)
Net loss attributable to i3 Verticals, Inc.	$ (5,155)			$ (3,728)			$ (5,359)	$ (13,629)
Denominator
Weighted average shares of Class A common stock outstanding - basic (in shares)	23,179,638			22,229,787			23,104,212	22,116,172
Basic net loss per share (in USD per share)	$ (0.22)			$ (0.17)			$ (0.23)	$ (0.62)
Class A Common Stock
Numerator
Net loss	$ (6,078)			$ (4,688)			$ (6,101)	$ (18,807)
Less: Net loss attributable to non-controlling interest	(923)			(960)			(742)	(5,178)
Net loss attributable to i3 Verticals, Inc.	$ (5,155)			$ (3,728)			$ (5,359)	$ (13,629)
Denominator
Weighted average shares of Class A common stock outstanding - basic (in shares)	23,179,638			22,229,787			23,104,212	22,116,172

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

LEASES - Additional Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
LEASES - Additional Information (Details) $ in Thousands	Jun. 30, 2023 USD ($) lease	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) lease	Jun. 30, 2022 USD ($)
Leases [Abstract]
Number of finance leases \| lease	0		0
Weighted-average remaining lease term	4 years	5 years	4 years	5 years
Weighted-average discount rate of operating leases	7.70%	7.60%	7.70%	7.60%
Operating lease costs	$ 1,378	$ 1,469	$ 4,287	$ 4,415
Variable lease costs	44	14	64	58
Short-term rent expense	$ 54	$ 51	$ 164	$ 144

NON-CONTROLLING INTEREST (Tables)

9 Months Ended

Jun. 30, 2023

Noncontrolling Interest [Abstract]

Schedule of Ownership Interest

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


	Nine Months Ended June 30,
	2023		2022
Net loss attributable to non-controlling interest	$	(742)	$	(5,178)
Transfers to non-controlling interests:
Redemption of common units in i3 Verticals, LLC	(86)		(918)
Allocation of equity to non-controlling interests	2,033		5,594
Net transfers to non-controlling interests	1,947		4,676
Change from net income (loss) attributable to non-controlling interests and transfers to non-controlling interests	$	1,205	$	(502)

EARNINGS PER SHARE

9 Months Ended

Jun. 30, 2023

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 for the three and nine months ended June 30, 2023 and 2022:


	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Basic net loss per share:
Numerator
Net loss	$	(6,078)	$	(4,688)	$	(6,101)	$	(18,807)
Less: Net loss attributable to non-controlling interest	(923)		(960)		(742)		(5,178)
Net loss attributable to Class A common stockholders	$	(5,155)	$	(3,728)	$	(5,359)	$	(13,629)
Denominator
Weighted average shares of Class A common stock outstanding	23,179,638		22,229,787		23,104,212		22,116,172
Basic net loss per share(1)	$	(0.22)	$	(0.17)	$	(0.23)	$	(0.62)

__________________________

1.For the three and nine months ended June 30, 2023 and 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 net loss per share of Class A common stock:

a.10,108,218 and 10,112,471 and weighted average shares of Class B common stock for the three and nine months ended June 30, 2023, and 10,131,878 and 10,188,369 for the three and nine months ended June 30, 2022, respectively, along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive.

b.5,729,321 and 5,673,655 stock options for the three and nine months ended June 30, 2023 and 4,547,783 and 5,201,394 for the three and nine months ended June 30, 2022, respectively, were excluded because the exercise price of these stock 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.557,728 and 740,196 shares for the three and nine months ended June 30, 2023, and 716,276 and 724,484 for the three and nine months ended June 30, 2022, respectively, resulting from estimated stock option exercises and restricted stock units vesting as calculated by the treasury stock method were excluded because of the effect of including them would have been anti-dilutive.

On September 22, 2022, the Company provided the trustee notice of the Company’s irrevocable election to settle the principal portion of its Exchangeable Notes only in cash and the conversion spread in cash or shares. Accordingly, upon conversion, the Company will pay the principal in cash, and it will pay or deliver, as the case may be, the conversion premium in cash, shares of Class A Common Stock or a combination of cash and shares of Class A Common Stock, at its election. The Company applies the if-converted method and only includes the number of incremental shares that would be issued upon conversion for calculating any potential dilutive effect of the conversion spread on diluted net income per share. 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 7 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.

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill are as follows:


	Software and Services		Merchant Services		Other		Total
Balance at September 30, 2022	$	234,553	$	119,086	$	—	$	353,639
Goodwill attributable to preliminary purchase price adjustments and acquisitions during the nine months ended June 30, 2023	52,540		2,863		—		55,403
Balance at June 30, 2023	$	287,093	$	121,949	$	—	$	409,042

Intangible assets consisted of the following as of June 30, 2023:


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Merchant relationships	$	310,501	$	(93,806)	$	216,695	9 to 25 years – accelerated or straight-line
Non-compete agreements	1,390		(1,040)		350		3 to 6 years – straight-line
Website and brand development costs	267		(210)		57		3 to 4 years – straight-line
Trade names	8,471		(5,293)		3,178		3 to 7 years – straight-line
Residual buyouts	6,632		(2,745)		3,887		8 years – straight-line
Referral and exclusivity agreements	1,220		(842)		378		5 years – straight-line
Total finite-lived intangible assets	328,481		(103,936)		224,545

Indefinite-lived intangible assets:
Trademarks	43		—		43
Total identifiable intangible assets	$	328,524	$	(103,936)	$	224,588

Amortization expense for intangible assets amounted to $15,315 and $13,303 during the nine months ended June 30, 2023 and 2022 respectively.

Based on net carrying amounts at June 30, 2023, the Company's estimate of future amortization expense for intangible assets are presented in the table below for fiscal years ending September 30:


2023 (three months remaining)	$	5,066
2024	19,558
2025	19,266
2026	18,794
2027	18,174
Thereafter	143,687
	$	224,545

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenue	$ 93,931	$ 80,553	$ 273,832	$ 232,612
Operating expenses
Other costs of services	20,532	19,749	59,531	52,890
Selling, general and administrative	55,426	47,775	163,633	142,878
Depreciation and amortization	9,158	7,506	26,849	21,823
Change in fair value of contingent consideration	6,183	8,254	9,905	24,684
Total operating expenses	91,299	83,284	259,918	242,275
Income (loss) from operations	2,632	(2,731)	13,914	(9,663)
Interest expense, net	6,725	3,767	18,414	10,298
Other income	(92)	0	(295)	0
Total other expenses	6,633	3,767	18,119	10,298
Loss before income taxes	(4,001)	(6,498)	(4,205)	(19,961)
Provision for (benefit from) income taxes	2,077	(1,810)	1,896	(1,154)
Net loss	(6,078)	(4,688)	(6,101)	(18,807)
Net loss attributable to non-controlling interest	(923)	(960)	(742)	(5,178)
Net loss attributable to i3 Verticals, Inc.	$ (5,155)	$ (3,728)	$ (5,359)	$ (13,629)
Net loss per share attributable to Class A common stockholders:
Basic (in USD per share)	$ (0.22)	$ (0.17)	$ (0.23)	$ (0.62)
Diluted (in USD per share)	$ (0.22)	$ (0.17)	$ (0.23)	$ (0.62)
Weighted average shares of Class A common stock outstanding:
Basic (in shares)	23,179,638	22,229,787	23,104,212	22,116,172
Diluted (in shares)	23,179,638	22,229,787	23,104,212	22,116,172

EARNINGS PER SHARE (Tables)

9 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

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


	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Basic net loss per share:
Numerator
Net loss	$	(6,078)	$	(4,688)	$	(6,101)	$	(18,807)
Less: Net loss attributable to non-controlling interest	(923)		(960)		(742)		(5,178)
Net loss attributable to Class A common stockholders	$	(5,155)	$	(3,728)	$	(5,359)	$	(13,629)
Denominator
Weighted average shares of Class A common stock outstanding	23,179,638		22,229,787		23,104,212		22,116,172
Basic net loss per share(1)	$	(0.22)	$	(0.17)	$	(0.23)	$	(0.62)

__________________________

SIGNIFICANT NON-CASH TRANSACTIONS

9 Months Ended

Jun. 30, 2023

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

SIGNIFICANT NON-CASH TRANSACTIONS

SIGNIFICANT NON-CASH TRANSACTIONSThe Company engaged in the following significant non-cash investing and financing activities during the nine months ended June 30, 2023 and 2022:


	Nine months ended June 30,
	2023		2022
Acquisition date fair value of contingent consideration in connection with business combinations	$	760	$	6,281
Replacement of the Prior Senior Secured Credit Facility with the 2023 Senior Secured Credit Facility	$	284,000	$	—
Debt issuance costs financed with proceeds from the 2023 Senior Secured Credit Facility	$	2,386	$	—
Accrued interest financed with proceeds from the 2023 Senior Secured Credit Facility	$	1,617	$	—
Right-of-use assets obtained in exchange for operating lease obligations	$	1,702	$	7,720

ACQUISITIONS - Preliminary Purchase Consideration of the Acquired Assets and Assumed Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022	Jun. 30, 2022
Business Acquisition [Line Items]
Goodwill	$ 409,042	$ 353,639	$ 353,882
Celtic
Business Acquisition [Line Items]
Accounts receivable	7,604
Prepaid expenses and other current assets	110
Property and equipment	5,437
Goodwill	42,595
Total assets acquired	102,946
Accounts payable	9
Accrued expenses and other current liabilities	3,182
Deferred revenue, current	2,742
Other long-term liabilities	12,013
Net assets acquired	85,000
Celtic \| Capitalized software
Business Acquisition [Line Items]
Intangible assets	12,600
Celtic \| Customer relationships
Business Acquisition [Line Items]
Intangible assets	33,800
Celtic \| Non-compete agreements
Business Acquisition [Line Items]
Intangible assets	200
Celtic \| Trade name
Business Acquisition [Line Items]
Intangible assets	$ 600
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
2022 Business Combinations \| Capitalized software
Business Acquisition [Line Items]
Intangible assets		9,790
2022 Business Combinations \| Customer relationships
Business Acquisition [Line Items]
Intangible assets		41,090
2022 Business Combinations \| Trade name
Business Acquisition [Line Items]
Intangible assets		$ 1,550

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Minimum Fee Commitments

As of June 30, 2023, such minimum fee commitments were as follows:


Years ending September 30:
2023 (three months remaining)	$	1,225
2024	2,077
2025	—
2026	—
2027	—
Thereafter	—
Total	$	3,302

SEGMENTS (Tables)

9 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Schedule of Reportable Segment Performance

The following is a summary of reportable segment operating performance for the three and nine months ended June 30, 2023 and 2022.


	As of and for the Three Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue	$	58,901	$	35,040	$	(10)	$	93,931
Other costs of services	(4,164)		(16,379)		11		(20,532)
Residuals	595		10,947		(5)		11,537
Processing margin	$	55,332	$	29,608	$	(4)	$	84,936

Residuals							(11,537)
Selling, general and administrative							(55,426)
Depreciation and amortization							(9,158)
Change in fair value of contingent consideration							(6,183)
Income from operations							$	2,632

Total assets	$	614,290	$	204,539	$	56,995	$	875,824
Goodwill	$	287,093	$	121,949	$	—	$	409,042


	As of and for the Nine Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue	$	172,911	$	100,968	$	(47)	$	273,832
Other costs of services	(11,916)		(47,665)		50		(59,531)
Residuals	1,917		30,795		(25)		32,687
Processing margin	$	162,912	$	84,098	$	(22)	$	246,988

Residuals							(32,687)
Selling, general and administrative							(163,633)
Depreciation and amortization							(26,849)
Change in fair value of contingent consideration							(9,905)
Income from operations							$	13,914

Total assets	$	614,290	$	204,539	$	56,995	$	875,824
Goodwill	$	287,093	$	121,949	$	—	$	409,042


	As of and for the Three Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Revenue	$	47,839	$	32,714	$	—	$	80,553
Other costs of services	(3,456)		(16,303)		10		(19,749)
Residuals	348		10,320		(11)		10,657
Processing Margin	$	44,731	$	26,731	$	(1)	$	71,461

Residuals							(10,657)
Selling, general and administrative							(47,775)
Depreciation and amortization							(7,506)
Change in fair value of contingent consideration							(8,254)
Loss from operations							$	(2,731)

Total assets	$	510,336	$	204,656	$	65,432	$	780,424
Goodwill	$	234,796	$	119,086	$	—	$	353,882


	As of and for the Nine Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Revenue	$	141,575	$	91,071	$	(34)	$	232,612
Other costs of services	(9,660)		(43,273)		43		(52,890)
Residuals	1,139		26,555		(28)		27,666
Processing margin	$	133,054	$	74,353	$	(19)	$	207,388

Residuals							(27,666)
Selling, general and administrative							(142,878)
Depreciation and amortization							(21,823)
Change in fair value of contingent consideration							(24,684)
Loss from operations							$	(9,663)

Total assets	$	510,336	$	204,656	$	65,432	$	780,424
Goodwill	$	234,796	$	119,086	$	—	$	353,882

ACQUISITIONS (Tables)

9 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

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 date, were as follows:


Accounts receivable	$	7,604
Prepaid expenses and other current assets	110
Property and equipment	5,437
Capitalized software	12,600
Customer relationships	33,800
Non-compete agreements	200
Trade name	600
Goodwill	42,595
Total assets acquired	102,946

Accounts payable	9
Accrued expenses and other current liabilities	3,182
Deferred revenue, current	2,742
Other long-term liabilities	12,013
Net assets acquired	$	85,000

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 merchant 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

Schedule of Pro Forma Information

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.


	Nine months ended June 30,
	2023		2022
Revenue	$	275,206	$	249,808
Net loss	$	(6,145)	$	(17,477)

EQUITY-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	May 31, 2021	Sep. 30, 2020	May 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income tax (expense) benefits related to equity-based compensation	$ 197	$ 169	$ 305	$ 264
Granted, weighted average grant date fair value (in USD per share)			$ 13.69
Unrecognized compensation expense related to unvested options at end of period	28,792		$ 28,792
Period for recognition of unrecognized compensation cost			2 years 29 days
Fair value of stock options that vested	4,457		$ 22,629
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period for recognition of unrecognized compensation cost			3 years 3 months 21 days
Cost not yet recognized, amount	$ 13,244		$ 13,244
Vested in period, fair value			$ 1,688
2018 Equity Incentive Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant under the plan (in shares)	888,780		888,780				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 (in shares)	1,115,568		1,115,568		3,000,000	1,500,000

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

LONG-TERM DEBT, NET (Tables)

9 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Long-term Debt

A summary of long-term debt, net as of June 30, 2023 and September 30, 2022 is as follows:


		June 30,		September 30,
	Maturity	2023		2022
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility	May 8, 2028	$	277,400	$	—
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility	May 9, 2024	—		185,017
1% Exchangeable Senior Notes due 2025	February 15, 2025	117,000		104,557
Debt issuance costs, net		(4,831)		(2,554)
Total long-term debt, net of issuance costs		$	389,569	$	287,020

Schedule of Consolidated Total Net Leverage Ratio

The applicable margin is based upon the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Credit Agreement), as reflected in the schedule below:


Consolidated Total Net Leverage Ratio	Commitment Fee		Letter of Credit Fee		Term Benchmark Loans		Base Rate Loans
> 3.0 to 1.0	0.30	%	3.00	%	3.00	%	2.00	%
> 2.5 to 1.0 but < 3.00 to 1.0	0.25	%	2.50	%	2.50	%	1.50	%
> 2.0 to 1.0 but < 2.50 to 1.0	0.20	%	2.25	%	2.25	%	1.25	%
< 2.0 to 1.0	0.15	%	2.00	%	2.00	%	1.00	%

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
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+ Details

EARNINGS PER SHARE - Antidilutive Securities (Details) - $ / shares	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Feb. 13, 2020
Class A Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Exchangeable notes, exchange price per share (in USD per share)	$ 40.87		$ 40.87
Warrants sold in connection with the issuance of the exchangeable notes (in USD per share)					$ 62.88
Class B Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	10,108,218	10,131,878	10,112,471	10,188,369
Out-of-the-money Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	5,729,321		5,673,655
Out Of The Money Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)		4,547,783		5,201,394
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	557,728	716,276	740,196	724,484

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Current assets
Cash and cash equivalents	$ 5,043	$ 3,490
Accounts receivable, net	60,781	53,334
Settlement assets	10,793	7,540
Prepaid expenses and other current assets	20,057	19,445
Total current assets	96,674	83,809
Property and equipment, net	12,123	5,670
Restricted cash	4,366	12,735
Capitalized software, net	65,459	52,341
Goodwill	409,042	353,639
Intangible assets, net	224,588	195,919
Deferred tax asset	42,715	43,458
Operating lease right-of-use assets	14,885	17,678
Other assets	5,972	5,063
Total assets	875,824	770,312
Current liabilities
Accounts payable	8,296	9,342
Accrued expenses and other current liabilities	46,505	57,833
Settlement obligations	10,793	7,540
Deferred revenue	26,792	31,975
Current portion of operating lease liabilities	4,598	4,568
Total current liabilities	96,984	111,258
Long-term debt, less current portion and debt issuance costs, net	389,569	287,020
Long-term tax receivable agreement obligations	40,894	40,812
Operating lease liabilities, less current portion	11,284	13,994
Other long-term liabilities	24,151	9,540
Total liabilities	562,882	462,624
Commitments and contingencies (see Note 12)
Stockholders' equity
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2023 and September 30, 2022	0	0
Additional paid-in capital	239,917	241,958
Accumulated deficit	(17,492)	(23,582)
Total stockholders' equity	222,428	218,379
Non-controlling interest	90,514	89,309
Total equity	312,942	307,688
Total liabilities and equity	875,824	770,312
Class A Common Stock
Stockholders' equity
Common stock	2	2
Class B Common Stock
Stockholders' equity
Common stock	$ 1	$ 1

ACCRUED EXPENSES AND OTHER LIABILITIES

9 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

ACCRUED EXPENSES AND OTHER LIABILITIES

A summary of the Company's accrued expenses and other current liabilities as of June 30, 2023 and September 30, 2022 is as follows is as follows:


	June 30,		September 30,
	2023		2022
Accrued wages, bonuses, commissions and vacation	$	10,136	$	8,117
Accrued interest	1,545		642
Accrued contingent consideration — current portion	16,680		21,385
Escrow liabilities	3,915		12,285
Tax receivable agreement liability — current portion	21		20
Customer deposits	1,473		1,575
Employee health self-insurance liability	638		732
Accrued interchange	1,299		2,096
Other current liabilities	10,798		10,981
Accrued expenses and other current liabilities	$	46,505	$	57,833

A summary of the Company's long-term liabilities as of June 30, 2023 and September 30, 2022 is as follows:


	June 30,		September 30,
	2023		2022
Accrued contingent consideration — long-term portion	$	1,176	$	1,448
Deferred tax liability — long-term	22,687		7,896
Other long-term liabilities	288		196
Total other long-term liabilities	$	24,151	$	9,540

GOODWILL AND INTANGIBLE ASSETS - Changes in Goodwill (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2023 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning	$ 353,639
Goodwill attributable to preliminary purchase price adjustments and acquisitions during the nine months ended June 30, 2023	55,403
Goodwill, ending	409,042
Software and Services
Goodwill [Roll Forward]
Goodwill, beginning	234,553
Goodwill attributable to preliminary purchase price adjustments and acquisitions during the nine months ended June 30, 2023	52,540
Goodwill, ending	287,093
Merchant Services
Goodwill [Roll Forward]
Goodwill, beginning	119,086
Goodwill attributable to preliminary purchase price adjustments and acquisitions during the nine months ended June 30, 2023	2,863
Goodwill, ending	121,949
Other
Goodwill [Roll Forward]
Goodwill, beginning	0
Goodwill attributable to preliminary purchase price adjustments and acquisitions during the nine months ended June 30, 2023	0
Goodwill, ending	$ 0

- Definition

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.

+ References + Details

LONG-TERM DEBT, NET - Consolidated Total Net Leverage Ratio (Details) - Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility	Jun. 30, 2023	May 08, 2023	Oct. 03, 2022
Line of Credit
Debt Instrument [Line Items]
Unused commitment fee (percent)	0.30%
Revolving Credit Facility \| Line of Credit \| Maximum
Debt Instrument [Line Items]
Unused commitment fee (percent)			0.30%
Revolving Credit Facility \| Line of Credit \| Minimum
Debt Instrument [Line Items]
Unused commitment fee (percent)			0.15%
Revolving Credit Facility \| Line of Credit \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		1.00%
Greater than 3.00 to 1.0 \| Revolving Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Net leverage ratio		3.0
Unused commitment fee (percent)		0.30%
Greater than 3.00 to 1.0 \| Revolving Credit Facility \| Line of Credit \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		2.00%
Greater than 3.00 to 1.0 \| Revolving Credit Facility \| Letter of Credit
Debt Instrument [Line Items]
Letter of Credit Fee		3.00%
Greater than 3.00 to 1.0 \| Revolving Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		3.00%
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 \| Revolving Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Unused commitment fee (percent)		0.25%
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 \| Revolving Credit Facility \| Line of Credit \| Maximum
Debt Instrument [Line Items]
Net leverage ratio		3.00
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 \| Revolving Credit Facility \| Line of Credit \| Minimum
Debt Instrument [Line Items]
Net leverage ratio		2.5
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 \| Revolving Credit Facility \| Line of Credit \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		1.50%
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 \| Revolving Credit Facility \| Letter of Credit
Debt Instrument [Line Items]
Letter of Credit Fee		2.50%
Greater than 2.50 to 1.0 but less than 3.00 to 1.00 \| Revolving Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		2.50%
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 \| Revolving Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Unused commitment fee (percent)		0.20%
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 \| Revolving Credit Facility \| Line of Credit \| Maximum
Debt Instrument [Line Items]
Net leverage ratio		2.50
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 \| Revolving Credit Facility \| Line of Credit \| Minimum
Debt Instrument [Line Items]
Net leverage ratio		2.0
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 \| Revolving Credit Facility \| Line of Credit \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		1.25%
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 \| Revolving Credit Facility \| Letter of Credit
Debt Instrument [Line Items]
Letter of Credit Fee		2.25%
Greater than 2.00 to 1.00 but less than 2.50 to 1.0 \| Revolving Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		2.25%
Greater than 2.00 to 1.00 \| Revolving Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Net leverage ratio		2.0
Unused commitment fee (percent)		0.15%
Greater than 2.00 to 1.00 \| Revolving Credit Facility \| Line of Credit \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		1.00%
Greater than 2.00 to 1.00 \| Revolving Credit Facility \| Letter of Credit
Debt Instrument [Line Items]
Letter of Credit Fee		2.00%
Greater than 2.00 to 1.00 \| Revolving Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		2.00%

EQUITY-BASED COMPENSATION - RSU Activity (Details) - Restricted stock units	9 Months Ended
	Jun. 30, 2023 $ / shares shares
Stock Appreciation Rights Activity
Outstanding at September 30, 2022 (in shares) \| shares	486,652
Granted (in shares) \| shares	524,132
Vested (in shares) \| shares	(63,484)
Forfeited (in shares) \| shares	(56,631)
Outstanding at December 31, 2022 (in shares) \| shares	890,669
Weighted-Average
Outstanding, Weighted average grant date fair value, beginning balance (in USD per share) \| $ / shares	$ 24.93
Granted, Weighted average grant date fair value (in USD per share) \| $ / shares	25.32
Vested, Weighted average grant date fair value (in USD per share) \| $ / shares	26.59
Forfeited, Weighted average grant date fair value (in USD per share) \| $ / shares	24.25
Outstanding, Weighted average grant date fair value, ending balance (in USD per share) \| $ / shares	$ 24.93

RELATED PARTY TRANSACTIONS	9 Months Ended
RELATED PARTY TRANSACTIONS	Jun. 30, 2023
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONSIn 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 8 for further information. As of June 30, 2023, the total amount due under the Tax Receivable Agreement was $40,915.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
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+ Details

EQUITY-BASED COMPENSATION - Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	$ 7,198	$ 6,799	$ 20,846	$ 19,680
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	6,061	6,399	18,341	19,065
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	$ 1,137	$ 400	$ 2,505	$ 615

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Contract with customer, Liability [Roll Forward]
Deferred revenue, beginning	$ 33,687	$ 37,498	$ 32,089	$ 30,334	$ 35,321	$ 30,024
Deferral of revenue	8,788	10,475	19,334	8,131	11,047	21,032
Recognition of unearned revenue	(15,478)	(14,286)	(13,925)	(15,742)	(16,034)	(15,735)
Deferred revenue, ending	$ 26,997	$ 33,687	$ 37,498	$ 22,723	$ 30,334	$ 35,321

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the reporting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for fair presentation of the unaudited condensed consolidated financial statements of the Company and its subsidiaries as of June 30, 2023 and for the three and nine months ended June 30, 2023 and 2022. The results of operations for the three and nine months ended June 30, 2023 and 2022 are not necessarily indicative of the operating results for the full year.

As permitted by the rules and regulations of the SEC, certain information and disclosures otherwise included in the notes to the consolidated financial statements have been condensed or omitted from the summary of significant accounting policies. The Company believes the disclosures are adequate to make the information presented not misleading. It is recommended that these interim condensed consolidated financial statements be read in conjunction with the Company's consolidated financial statements and related footnotes for the years ended September 30, 2022 and 2021, included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022 filed with the SEC on November 18, 2022.

Principles of Consolidation

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

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 condensed 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.

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.

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 merchant 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. 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 condensed 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 Company’s condensed consolidated statements of operations from the date of such acquisition.

Leases

The Company adopted ASU 2016-02, Leases, on October 1, 2020, using the optional modified retrospective method under which the prior period financial statements were not restated for the new guidance. The Company

elected the accounting policy practical expedients for all classes of underlying assets to (i) combine associated lease and non-lease components in a lease arrangement as a combined lease component and (ii) exclude recording short-term leases as right-of-use assets on the condensed consolidated balance sheets.

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. 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 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 rate is a fully collateralized rate that considers the Company’s credit rating, market conditions and the term of the lease. The Company accounts for all components in a lease arrangement as a single combined lease component.

Operating lease cost is recognized on a straight-line basis over the lease term. Total lease costs include variable lease costs, which are primarily comprised of the consumer price index adjustments and other changes based on rates, such as costs of insurance and property taxes. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and obligations.

Revenue Recognition and Deferred Revenue

Revenue is recognized as each performance obligation is satisfied, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience. The Company utilized the portfolio approach practical expedient within ASC 606-10-10-4 Revenue from Contracts with Customers—Objectives and the significant financing component practical expedient within ASC 606-10-32-18 Revenue from Contracts with Customers—The Existence of a Significant Financing Component in the Contract in performing the analysis. The Company adopted ASC 606 on October 1, 2019, using the modified retrospective method and applying the standard to all contracts not completed on the date of adoption.

The Company's revenue for the nine months ended June 30, 2023 and 2022 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.

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 merchant 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 transaction fees, which are charged for accessing our payment and software solutions, and fees for other miscellaneous services. Revenues derived from such fees are recognized in the period the transactions occur and when there are no further performance obligations. Revenue from the sale of equipment, is recognized upon transfer of ownership 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.

•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 Three Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	43,971	$	3,303	$	(6)	$	47,268
Payments revenue	12,261		29,733		(4)		41,990
Other revenue	2,669		2,004		—		4,673
Total revenue	$	58,901	$	35,040	$	(10)	$	93,931


	For the Three Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	35,667	$	3,349	$	(10)	$	39,006
Payments revenue	9,559		27,135		(11)		36,683
Other revenue	2,613		2,230		21		4,864
Total revenue	$	47,839	$	32,714	$	—	$	80,553


	For the Nine Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	126,215	$	9,499	$	(25)	$	135,689
Payments revenue	39,299		84,976		(22)		124,253
Other revenue	7,397		6,493		—		13,890
Total revenue	$	172,911	$	100,968	$	(47)	$	273,832


	For the Nine Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	105,023	$	9,319	$	(26)	$	114,316
Payments revenue	29,341		75,365		(29)		104,677
Other revenue	7,211		6,387		21		13,619
Total revenue	$	141,575	$	91,071	$	(34)	$	232,612

•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 Three Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	54,555	$	29,891	$	(7)	$	84,439
Revenue earned at a point in time	4,346		5,149		(3)		9,492
Total revenue	$	58,901	$	35,040	$	(10)	$	93,931


	For the Three Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	33,951	$	25,643	$	(10)	$	59,584
Revenue earned at a point in time	13,888		7,071		10		20,969
Total revenue	$	47,839	$	32,714	$	—	$	80,553


	For the Nine Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	159,564	$	85,472	$	(26)	$	245,010
Revenue earned at a point in time	13,347		15,496		(21)		28,822
Total revenue	$	172,911	$	100,968	$	(47)	$	273,832


	For the Nine Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	99,390	$	70,976	$	(27)	$	170,339
Revenue earned at a point in time	42,185		20,095		(7)		62,273
Total revenue	$	141,575	$	91,071	$	(34)	$	232,612

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. 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 June 30, 2023 and September 30, 2022, the Company’s contract assets from contracts with customers was $12,910 and $9,716, 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 condensed 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 tables present the changes in deferred revenue as of and for the nine months ended June 30, 2023 and 2022, respectively:


Balance at September 30, 2022	$	32,089
Deferral of revenue	19,334
Recognition of unearned revenue	(13,925)
Balance at December 31, 2022	37,498
Deferral of revenue	10,475
Recognition of unearned revenue	(14,286)
Balance at March 31, 2023	33,687
Deferral of revenue	8,788
Recognition of unearned revenue	(15,478)
Balance at June 30, 2023	$	26,997


Balance at September 30, 2021	$	30,024
Deferral of revenue	21,032
Recognition of unearned revenue	(15,735)
Balance at December 31, 2021	35,321
Deferral of revenue	11,047
Recognition of unearned revenue	(16,034)
Balance at March 31, 2022	30,334
Deferral of revenue	8,131
Recognition of unearned revenue	(15,742)
Balance at June 30, 2022	$	22,723

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 June 30, 2023 and September 30, 2022, the Company had $4,650 and $4,185, respectively, of capitalized contract costs, which relates to commissions paid to employees and agents as well as other incentives given to customers to obtain new sales, included within “Other assets" on the condensed consolidated balance sheets. The Company recorded expense related to these costs of $203 and $579 for the three and nine months ended June 30, 2023, respectively, and $187 and $532 for the three and nine months ended June 30, 2022, 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.

Use of Estimates

Use of Estimates The preparation of condensed consolidated financial statements 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 condensed 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. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

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. The Company adopted this ASU on October 1, 2022. The adoption of ASU 2020-06 resulted 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 had no impact on net income.

Fair Value Measurement

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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Oct. 01, 2022	Sep. 30, 2022	Sep. 30, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Settlement assets	$ 10,793	$ 6,365	$ 10,793	$ 6,365		$ 7,540	$ 4,768
Settlement obligations	10,793		10,793			7,540
Inventories	4,537		4,537			4,121
Revenue from acquisitions			13,417
Net income from acquisitions			3,713
Revenue	93,931	80,553	273,832	232,612
Contract assets from contracts with customer	12,910		12,910			9,716
Capitalized contract costs	4,650		4,650			4,185
Commissions related to capitalized contract costs	203	187	579	532
Long-term debt, less current portion and debt issuance costs, net	389,569		389,569			287,020
Decrease in additional paid-in-capital	(239,917)		(239,917)			(241,958)
Accumulated deficit	(17,492)		(17,492)			$ (23,582)
Revenue earned at a point in time
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue	$ 9,492	20,969	$ 28,822	62,273
Fixed-Price Contract \| Revenue earned at a point in time
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue		$ 10,170		$ 29,716
Accounting Standards Update 2020-06 \| Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Long-term debt, less current portion and debt issuance costs, net					$ 11,933
Decrease in additional paid-in-capital					23,382
Accumulated deficit					$ 11,449
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Maturity period of settlement assets and obligations (in years)			4 days
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Maturity period of settlement assets and obligations (in years)			1 day

INCOME TAXES	9 Months Ended
INCOME TAXES	Jun. 30, 2023
Income Tax Disclosure [Abstract]
INCOME TAXES	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 Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. When the estimate of the annual effective tax rate is unreliable, the Company records its income tax expense or benefit based up on a period to date effective tax rate. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the Company’s estimated tax rate changes, it makes a cumulative adjustment in that period. The Company’s provision for income taxes was a provision of $2,077 and $1,896 for the three and nine months ended June 30, 2023, and a benefit of $1,810 and $1,154 during the three and nine months ended June 30, 2022. 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. During the nine months ended June 30, 2023, the Company acquired an aggregate of 9,924 Common Units in i3 Verticals, LLC in connection with the redemption of Common Units from the Continuing Equity Owners, 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 the exchange, during the nine months ended June 30, 2023 the Company recognized an increase to its net deferred tax assets in the amount of $98, and corresponding Tax Receivable Agreement liabilities of $83, representing 85% of the tax benefits due to Continuing Equity Owners. The deferred tax asset and corresponding Tax Receivable Agreement liability balances were $39,808 and $40,915, respectively, as of June 30, 2023. Payments to the Continuing Equity Owners related to exchanges through June 30, 2023 will range from $0 to $3,321 per year and are expected to be paid over the next 24 years. The amounts recorded as of June 30, 2023, 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.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregated Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Concentration Risk [Line Items]
Total revenue	$ 93,931	$ 80,553	$ 273,832	$ 232,612
Revenue earned over time
Concentration Risk [Line Items]
Total revenue	84,439	59,584	245,010	170,339
Revenue earned at a point in time
Concentration Risk [Line Items]
Total revenue	9,492	20,969	28,822	62,273
Software and Services
Concentration Risk [Line Items]
Total revenue	58,901	47,839	172,911	141,575
Software and Services \| Revenue earned over time
Concentration Risk [Line Items]
Total revenue	54,555	33,951	159,564	99,390
Software and Services \| Revenue earned at a point in time
Concentration Risk [Line Items]
Total revenue	4,346	13,888	13,347	42,185
Merchant Services
Concentration Risk [Line Items]
Total revenue	35,040	32,714	100,968	91,071
Merchant Services \| Revenue earned over time
Concentration Risk [Line Items]
Total revenue	29,891	25,643	85,472	70,976
Merchant Services \| Revenue earned at a point in time
Concentration Risk [Line Items]
Total revenue	5,149	7,071	15,496	20,095
Other
Concentration Risk [Line Items]
Total revenue	(10)	0	(47)	(34)
Other \| Revenue earned over time
Concentration Risk [Line Items]
Total revenue	(7)	(10)	(26)	(27)
Other \| Revenue earned at a point in time
Concentration Risk [Line Items]
Total revenue	(3)	10	(21)	(7)
Software and related services revenue
Concentration Risk [Line Items]
Total revenue	47,268	39,006	135,689	114,316
Software and related services revenue \| Software and Services
Concentration Risk [Line Items]
Total revenue	43,971	35,667	126,215	105,023
Software and related services revenue \| Merchant Services
Concentration Risk [Line Items]
Total revenue	3,303	3,349	9,499	9,319
Software and related services revenue \| Other
Concentration Risk [Line Items]
Total revenue	(6)	(10)	(25)	(26)
Payments revenue
Concentration Risk [Line Items]
Total revenue	41,990	36,683	124,253	104,677
Payments revenue \| Software and Services
Concentration Risk [Line Items]
Total revenue	12,261	9,559	39,299	29,341
Payments revenue \| Merchant Services
Concentration Risk [Line Items]
Total revenue	29,733	27,135	84,976	75,365
Payments revenue \| Other
Concentration Risk [Line Items]
Total revenue	(4)	(11)	(22)	(29)
Other revenue
Concentration Risk [Line Items]
Total revenue	4,673	4,864	13,890	13,619
Other revenue \| Software and Services
Concentration Risk [Line Items]
Total revenue	2,669	2,613	7,397	7,211
Other revenue \| Merchant Services
Concentration Risk [Line Items]
Total revenue	2,004	2,230	6,493	6,387
Other revenue \| Other
Concentration Risk [Line Items]
Total revenue	$ 0	$ 21	$ 0	$ 21

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Jun. 30, 2023

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, 2022	$	22,833
Contingent consideration accrued at time of business combination	760
Change in fair value of contingent consideration included in Operating expenses	9,905
Contingent consideration paid	(15,642)
Balance at June 30, 2023	$	17,856


	Accrued Contingent Consideration
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	24,684
Contingent consideration paid	(28,783)
Balance at June 30, 2022	$	38,411

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Principles of Consolidation

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

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 condensed 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.

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 both $10,793 as of June 30, 2023 and $7,540 as of September 30, 2022, respectively.

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 $4,537 and $4,121 at June 30, 2023 and September 30, 2022, respectively, and are included within prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets.

Acquisitions

The operating results of an acquisition are included in the Company’s condensed consolidated statements of operations from the date of such acquisition. Acquisitions completed during the nine months ended June 30, 2023 contributed $13,417 and $3,713 of revenue and net income, respectively, to the Company's condensed consolidated statements of operations for the nine months then ended.

Leases

Revenue Recognition and Deferred Revenue

The Company's revenue for the nine months ended June 30, 2023 and 2022 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

of the transaction price at inception of the arrangement and uses the standalone selling prices for the majority of the Company's revenue recognition.

•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 Three Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	43,971	$	3,303	$	(6)	$	47,268
Payments revenue	12,261		29,733		(4)		41,990
Other revenue	2,669		2,004		—		4,673
Total revenue	$	58,901	$	35,040	$	(10)	$	93,931


	For the Three Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	35,667	$	3,349	$	(10)	$	39,006
Payments revenue	9,559		27,135		(11)		36,683
Other revenue	2,613		2,230		21		4,864
Total revenue	$	47,839	$	32,714	$	—	$	80,553


	For the Nine Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	126,215	$	9,499	$	(25)	$	135,689
Payments revenue	39,299		84,976		(22)		124,253
Other revenue	7,397		6,493		—		13,890
Total revenue	$	172,911	$	100,968	$	(47)	$	273,832


	For the Nine Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	$	105,023	$	9,319	$	(26)	$	114,316
Payments revenue	29,341		75,365		(29)		104,677
Other revenue	7,211		6,387		21		13,619
Total revenue	$	141,575	$	91,071	$	(34)	$	232,612

•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 Three Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	54,555	$	29,891	$	(7)	$	84,439
Revenue earned at a point in time	4,346		5,149		(3)		9,492
Total revenue	$	58,901	$	35,040	$	(10)	$	93,931


	For the Three Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	33,951	$	25,643	$	(10)	$	59,584
Revenue earned at a point in time	13,888		7,071		10		20,969
Total revenue	$	47,839	$	32,714	$	—	$	80,553


	For the Nine Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	159,564	$	85,472	$	(26)	$	245,010
Revenue earned at a point in time	13,347		15,496		(21)		28,822
Total revenue	$	172,911	$	100,968	$	(47)	$	273,832


	For the Nine Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	99,390	$	70,976	$	(27)	$	170,339
Revenue earned at a point in time	42,185		20,095		(7)		62,273
Total revenue	$	141,575	$	91,071	$	(34)	$	232,612

Contract Assets

As of June 30, 2023 and September 30, 2022, the Company’s contract assets from contracts with customers was $12,910 and $9,716, respectively.

Contract Liabilities

The following tables present the changes in deferred revenue as of and for the nine months ended June 30, 2023 and 2022, respectively:


Balance at September 30, 2022	$	32,089
Deferral of revenue	19,334
Recognition of unearned revenue	(13,925)
Balance at December 31, 2022	37,498
Deferral of revenue	10,475
Recognition of unearned revenue	(14,286)
Balance at March 31, 2023	33,687
Deferral of revenue	8,788
Recognition of unearned revenue	(15,478)
Balance at June 30, 2023	$	26,997


Balance at September 30, 2021	$	30,024
Deferral of revenue	21,032
Recognition of unearned revenue	(15,735)
Balance at December 31, 2021	35,321
Deferral of revenue	11,047
Recognition of unearned revenue	(16,034)
Balance at March 31, 2022	30,334
Deferral of revenue	8,131
Recognition of unearned revenue	(15,742)
Balance at June 30, 2022	$	22,723

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.

Use of Estimates

The preparation of condensed consolidated financial statements 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 condensed 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. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

SEGMENTS

9 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

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 software and payment solutions customers in strategic vertical markets. This is accomplished through the Merchant Services and Software and Services segments.

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 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 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 three and nine months ended June 30, 2023 and 2022.


	As of and for the Three Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue	$	58,901	$	35,040	$	(10)	$	93,931
Other costs of services	(4,164)		(16,379)		11		(20,532)
Residuals	595		10,947		(5)		11,537
Processing margin	$	55,332	$	29,608	$	(4)	$	84,936

Residuals							(11,537)
Selling, general and administrative							(55,426)
Depreciation and amortization							(9,158)
Change in fair value of contingent consideration							(6,183)
Income from operations							$	2,632

Total assets	$	614,290	$	204,539	$	56,995	$	875,824
Goodwill	$	287,093	$	121,949	$	—	$	409,042


	As of and for the Nine Months Ended June 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue	$	172,911	$	100,968	$	(47)	$	273,832
Other costs of services	(11,916)		(47,665)		50		(59,531)
Residuals	1,917		30,795		(25)		32,687
Processing margin	$	162,912	$	84,098	$	(22)	$	246,988

Residuals							(32,687)
Selling, general and administrative							(163,633)
Depreciation and amortization							(26,849)
Change in fair value of contingent consideration							(9,905)
Income from operations							$	13,914

Total assets	$	614,290	$	204,539	$	56,995	$	875,824
Goodwill	$	287,093	$	121,949	$	—	$	409,042


	As of and for the Three Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Revenue	$	47,839	$	32,714	$	—	$	80,553
Other costs of services	(3,456)		(16,303)		10		(19,749)
Residuals	348		10,320		(11)		10,657
Processing Margin	$	44,731	$	26,731	$	(1)	$	71,461

Residuals							(10,657)
Selling, general and administrative							(47,775)
Depreciation and amortization							(7,506)
Change in fair value of contingent consideration							(8,254)
Loss from operations							$	(2,731)

Total assets	$	510,336	$	204,656	$	65,432	$	780,424
Goodwill	$	234,796	$	119,086	$	—	$	353,882


	As of and for the Nine Months Ended June 30, 2022
	Software and Services		Merchant Services		Other		Total
Revenue	$	141,575	$	91,071	$	(34)	$	232,612
Other costs of services	(9,660)		(43,273)		43		(52,890)
Residuals	1,139		26,555		(28)		27,666
Processing margin	$	133,054	$	74,353	$	(19)	$	207,388

Residuals							(27,666)
Selling, general and administrative							(142,878)
Depreciation and amortization							(21,823)
Change in fair value of contingent consideration							(24,684)
Loss from operations							$	(9,663)

Total assets	$	510,336	$	204,656	$	65,432	$	780,424
Goodwill	$	234,796	$	119,086	$	—	$	353,882

The Company has not disclosed expenditures on long-lived assets as such expenditures are not reviewed by or provided to the chief operating decision maker.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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-Paragraph 21
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

LEASES (Tables)

9 Months Ended

Jun. 30, 2023

Leases [Abstract]

Schedule of Maturities of Lease Liabilities

As of June 30, 2023, maturities of lease liabilities are as follows:


Years ending September 30:
2023 (three months remaining)	$	1,366
2024	4,945
2025	4,329
2026	3,381
2027	1,597
Thereafter	2,017
Total future minimum lease payments (undiscounted)(1)	17,635
Less: present value discount	(1,753)
Present value of lease liability	$	15,882

__________________________1.Total future minimum lease payments excludes payments of $43 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.

EQUITY-BASED COMPENSATION - Stock Option Activity (Details) - $ / shares	9 Months Ended
	Jun. 30, 2023
Stock Options
Outstanding at beginning of period (in shares)	8,222,322
Granted (in shares)	1,246,629
Exercised (in shares)	(286,256)
Forfeited (in shares)	(351,076)
Outstanding at end of period (in shares)	8,831,619
Options exercisable at end of period (in shares)	5,679,982
Weighted Average Exercise Price
Outstanding at beginning of period, weighted average exercise price (in USD per share)	$ 25.07
Granted, weighted average exercise price (in USD per share)	24.14
Exercised, weighted average exercise price (in USD per share)	19.05
Forfeited, weighted average exercise price (in USD per share)	27.48
Outstanding at end of period, weighted average exercise price (in USD per share)	25.04
Exercisable, weighted average exercise price (in USD per share)	$ 24.56

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Leases

The Company utilizes office space and equipment under operating leases. Rent expense under these leases amounted to $1,432 and $4,451 during the three and nine months ended June 30, 2023, respectively, and $1,520 and $4,559 during the three and nine months ended June 30, 2022, respectively. Refer to Note 9 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 the processor would have received if the Company had submitted the required minimum number of transactions. As of June 30, 2023, such minimum fee commitments were as follows:


Years ending September 30:
2023 (three months remaining)	$	1,225
2024	2,077
2025	—
2026	—
2027	—
Thereafter	—
Total	$	3,302

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, any such material 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 (collectively "Plaintiffs") 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 (collectively "Defendants"). 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. The case is fully briefed with the United States Fifth Circuit Court of Appeals, and oral argument took place on April 4, 2023.

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 S&S 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 or cash flows 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.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (5,155)	$ (3,728)	$ (5,359)	$ (13,629)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) - 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	Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment	Retained Earnings (Deficit)	Retained Earnings (Deficit) Cumulative Effect, Period of Adoption, Adjustment	Non-Controlling Interest
Common stock, shares, outstanding, beginning at Sep. 30, 2021					22,026,098	10,229,142
Stockholders' equity, beginning at Sep. 30, 2021	$ 289,591				$ 2	$ 1	$ 211,237		$ (6,480)		$ 84,831
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	6,624						6,624
Net (loss) income									(2,528)
Net (loss) income											(1,153)
Net (loss) income	(3,681)
Redemption of common units in i3 Verticals, LLC (in shares)					15,000	(15,000)
Redemption of common units in i3 Verticals, LLC	0						123				(123)
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	345						345
Exercise or release of equity-based awards (in shares)					23,219
Exercise or release of equity-based awards	174						174
Allocation of equity to non-controlling interests	0						(1,899)				1,899
Common stock, shares, outstanding, ending at Dec. 31, 2021					22,064,317	10,214,142
Stockholders' equity, ending at Dec. 31, 2021	293,053				$ 2	$ 1	216,604		(9,008)		85,454
Common stock, shares, outstanding, beginning at Sep. 30, 2021					22,026,098	10,229,142
Stockholders' equity, beginning at Sep. 30, 2021	289,591				$ 2	$ 1	211,237		(6,480)		84,831
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(13,629)		$ (13,629)
Net (loss) income	5,178		5,178
Net (loss) income	(18,807)		$ (18,807)
Common stock, shares, outstanding, ending at Jun. 30, 2022					22,252,640	10,118,142
Stockholders' equity, ending at Jun. 30, 2022	290,492				$ 2	$ 1	226,269		(20,109)		84,329
Common stock, shares, outstanding, beginning at Sep. 30, 2021					22,026,098	10,229,142
Stockholders' equity, beginning at Sep. 30, 2021	289,591				$ 2	$ 1	211,237		(6,480)		84,831
Common stock, shares, outstanding, ending 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	$ (11,933)			$ 2	$ 1	241,958	$ (23,382)	(23,582)	$ 11,449	89,309
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible List]	Accounting Standards Update 2020-06
Common stock, shares, outstanding, beginning at Dec. 31, 2021					22,064,317	10,214,142
Stockholders' equity, beginning at Dec. 31, 2021	$ 293,053				$ 2	$ 1	216,604		(9,008)		85,454
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	6,257						6,257
Net (loss) income									(7,373)
Net (loss) income											(3,065)
Net (loss) income	(10,438)
Redemption of common units in i3 Verticals, LLC (in shares)					40,000	(40,000)
Redemption of common units in i3 Verticals, LLC	0						335				(335)
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	(1,288)						(1,288)
Exercise or release of equity-based awards (in shares)					29,365
Exercise or release of equity-based awards	(89)						(89)
Allocation of equity to non-controlling interests	0						(1,618)				1,618
Common stock, shares, outstanding, ending at Mar. 31, 2022					22,133,682	10,174,142
Stockholders' equity, ending at Mar. 31, 2022	287,495				$ 2	$ 1	220,201		(16,381)		83,672
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	6,799						6,799
Net (loss) income	(3,728)		$ (3,728)						(3,728)
Net (loss) income	960		960								(960)
Net (loss) income	(4,688)		$ (4,688)
Redemption of common units in i3 Verticals, LLC (in shares)					56,000	(56,000)
Redemption of common units in i3 Verticals, LLC	0						460				(460)
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	748						748
Exercise or release of equity-based awards (in shares)					62,958
Exercise or release of equity-based awards	138						138
Allocation of equity to non-controlling interests	0						(2,077)				2,077
Common stock, shares, outstanding, ending at Jun. 30, 2022					22,252,640	10,118,142
Stockholders' equity, ending at Jun. 30, 2022	290,492				$ 2	$ 1	226,269		(20,109)		84,329
Common stock, shares, outstanding, beginning at Sep. 30, 2022			22,986,448	10,118,142	22,986,448	10,118,142
Stockholders' equity, beginning at Sep. 30, 2022	307,688	(11,933)			$ 2	$ 1	241,958	(23,382)	(23,582)	11,449	89,309
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	6,846						6,846
Net (loss) income									(240)
Net (loss) income											409
Net (loss) income	169
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	685						685
Exercise or release of equity-based awards (in shares)					24,745
Exercise or release of equity-based awards	3						3
Allocation of equity to non-controlling interests	0						1,906				(1,906)
Common stock, shares, outstanding, ending at Dec. 31, 2022					23,011,193	10,118,142
Stockholders' equity, ending at Dec. 31, 2022	303,458				$ 2	$ 1	228,016		(12,373)		87,812
Common stock, shares, outstanding, beginning at Sep. 30, 2022			22,986,448	10,118,142	22,986,448	10,118,142
Stockholders' equity, beginning at Sep. 30, 2022	307,688	$ (11,933)			$ 2	$ 1	241,958	$ (23,382)	(23,582)	$ 11,449	89,309
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(5,359)		$ (5,359)
Net (loss) income	742		742
Net (loss) income	$ (6,101)		$ (6,101)
Redemption of common units in i3 Verticals, LLC (in shares)					9,924
Exercise or release of equity-based awards (in shares)	286,256
Common stock, shares, outstanding, ending at Jun. 30, 2023			23,193,447	10,108,218	23,193,447	10,108,218
Stockholders' equity, ending at Jun. 30, 2023	$ 312,942				$ 2	$ 1	239,917		(17,492)		90,514
Common stock, shares, outstanding, beginning at Dec. 31, 2022					23,011,193	10,118,142
Stockholders' equity, beginning at Dec. 31, 2022	303,458				$ 2	$ 1	228,016		(12,373)		87,812
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	6,802						6,802
Net (loss) income									36
Net (loss) income											(228)
Net (loss) income	(192)
Redemption of common units in i3 Verticals, LLC (in shares)					9,924	(9,924)
Redemption of common units in i3 Verticals, LLC	0						86				(86)
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	349						349
Exercise or release of equity-based awards (in shares)					64,443
Exercise or release of equity-based awards	(606)						(606)
Allocation of equity to non-controlling interests	0						(2,205)				2,205
Issuance of Class A common stock under the 2020 Inducement Plan ( in shares)					82,170
Issuance of Class A common stock under the 2020 Inducement Plan	2,000						2,000
Common stock, shares, outstanding, ending at Mar. 31, 2023					23,167,730	10,108,218
Stockholders' equity, ending at Mar. 31, 2023	311,811				$ 2	$ 1	234,442		(12,337)		89,703
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	7,198						7,198
Net (loss) income	(5,155)		$ (5,155)						(5,155)
Net (loss) income	923		923								(923)
Net (loss) income	(6,078)		$ (6,078)
Exercise or release of equity-based awards (in shares)					25,717
Exercise or release of equity-based awards	11						11
Allocation of equity to non-controlling interests	0						(1,734)				1,734
Common stock, shares, outstanding, ending at Jun. 30, 2023			23,193,447	10,108,218	23,193,447	10,108,218
Stockholders' equity, ending at Jun. 30, 2023	$ 312,942				$ 2	$ 1	$ 239,917		$ (17,492)		$ 90,514

COMMITMENTS AND CONTINGENCIES - S&S Litigation (Details) - USD ($) $ in Thousands		12 Months Ended
	Oct. 04, 2021	Sep. 30, 2018
Software & Services, LLC ("S&S")
Loss Contingencies [Line Items]
Total purchase consideration		$ 17,000
S & S Vs. State
Loss Contingencies [Line Items]
Loss contingency, damages sought, value	$ 15,000
S & S Vs. Sheriffs
Loss Contingencies [Line Items]
Loss contingency, damages sought, value	$ 7,000

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Jun. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTSThe Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements.

NON-CONTROLLING INTEREST - Ownership Interest (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Noncontrolling Interest [Abstract]
Net loss attributable to non-controlling interest	$ (923)	$ (960)	$ (742)	$ (5,178)
Redemption of common units in i3 Verticals, LLC			(86)	(918)
Allocation of equity to non-controlling interests			2,033	5,594
Net transfers to non-controlling interests			1,947	4,676
Change from net income (loss) attributable to non-controlling interests and transfers to non-controlling interests			$ 1,205	$ (502)

- Definition

Amount of Net Income (Loss) attributable to noncontrolling interest.

+ References + Details

COVER - shares	9 Months Ended
COVER - shares	Jun. 30, 2023	Aug. 08, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-38532
Entity Registrant Name	i3 Verticals, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-4052852
Entity Address, Address Line One	40 Burton Hills Blvd., Suite 415
Entity Address, City or Town	Nashville
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37215
City Area Code	615
Local Phone Number	465-4487
Title of 12(b) Security	Class A Common Stock, $0.0001 Par Value
Trading Symbol	IIIV
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Central Index Key	0001728688
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		23,246,734
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		10,093,394

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2023	Sep. 30, 2022
Preferred Stock, par value (in USD per share)	$ 0.0001	$ 0.0001
Preferred Stock authorized (in shares)	10,000,000	10,000,000
Preferred Stock issued (in shares)	0	0
Preferred Stock outstanding (in shares)	0	0
Class A Common Stock
Common Stock, par value (in USD per share)	$ 0.0001	$ 0.0001
Common Stock authorized (in shares)	150,000,000	150,000,000
Common Stock issued (in shares)	23,193,447	22,986,448
Common Stock, outstanding (in shares)	23,193,447	22,986,448
Class B Common Stock
Common Stock, par value (in USD per share)	$ 0.0001	$ 0.0001
Common Stock authorized (in shares)	40,000,000	40,000,000
Common Stock issued (in shares)	10,108,218	10,118,142
Common Stock, outstanding (in shares)	10,108,218	10,118,142

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)

9 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

A summary of the Company's accrued expenses and other current liabilities as of June 30, 2023 and September 30, 2022 is as follows is as follows:


	June 30,		September 30,
	2023		2022
Accrued wages, bonuses, commissions and vacation	$	10,136	$	8,117
Accrued interest	1,545		642
Accrued contingent consideration — current portion	16,680		21,385
Escrow liabilities	3,915		12,285
Tax receivable agreement liability — current portion	21		20
Customer deposits	1,473		1,575
Employee health self-insurance liability	638		732
Accrued interchange	1,299		2,096
Other current liabilities	10,798		10,981
Accrued expenses and other current liabilities	$	46,505	$	57,833

Schedule of Long-term Liabilities

A summary of the Company's long-term liabilities as of June 30, 2023 and September 30, 2022 is as follows:


	June 30,		September 30,
	2023		2022
Accrued contingent consideration — long-term portion	$	1,176	$	1,448
Deferred tax liability — long-term	22,687		7,896
Other long-term liabilities	288		196
Total other long-term liabilities	$	24,151	$	9,540

SIGNIFICANT NON-CASH TRANSACTIONS (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]
Acquisition date fair value of contingent consideration in connection with business combinations	$ 760	$ 6,281
Replacement of the Prior Senior Secured Credit Facility with the 2023 Senior Secured Credit Facility	284,000	0
Debt issuance costs financed with proceeds from the 2023 Senior Secured Credit Facility	2,386	0
Accrued interest financed with proceeds from the 2023 Senior Secured Credit Facility	1,617	0
Right-of-use assets obtained in exchange for operating lease obligations	$ 1,702	$ 7,720

ACQUISITIONS - Pro Forma Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Business Combination and Asset Acquisition [Abstract]
Revenue	$ 275,206	$ 249,808
Net loss	$ (6,145)	$ (17,477)

ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Accrued expenses and other current liabilities:
Accrued wages, bonuses, commissions and vacation	$ 10,136	$ 8,117
Accrued interest	1,545	642
Accrued contingent consideration — current portion	16,680	21,385
Escrow liabilities	3,915	12,285
Tax receivable agreement liability — current portion	21	20
Customer deposits	1,473	1,575
Employee health self-insurance liability	638	732
Accrued interchange	1,299	2,096
Other current liabilities	10,798	10,981
Accrued expenses and other current liabilities	46,505	57,833
Long-term Liabilities
Accrued contingent consideration — long-term portion	1,176	1,448
Deferred tax liability — long-term	22,687	7,896
Other long-term liabilities	288	196
Total other long-term liabilities	$ 24,151	$ 9,540

FAIR VALUE MEASUREMENTS

9 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

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.

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 June 30, 2023 and 2022, because of the relatively short maturity dates on these instruments. The carrying amount of debt approximates fair value as of June 30, 2023 and 2022, 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, 2022	$	22,833
Contingent consideration accrued at time of business combination	760
Change in fair value of contingent consideration included in Operating expenses	9,905
Contingent consideration paid	(15,642)
Balance at June 30, 2023	$	17,856


	Accrued Contingent Consideration
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	24,684
Contingent consideration paid	(28,783)
Balance at June 30, 2022	$	38,411

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 $16,680 and $21,385 of contingent consideration was recorded in accrued expenses and other current liabilities as of June 30, 2023 and September 30, 2022, respectively. Approximately $1,176 and $1,448 of contingent consideration was recorded in other long-term liabilities as of June 30, 2023 and September 30, 2022, respectively.

Disclosure of Fair Values

The Company's financial instruments that are not remeasured at fair value include the Exchangeable Notes (see Note 7). 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 $108,206 as of June 30, 2023.

- Definition

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.

+ References + Details