0001728688-23-000048 | 10-K | XBRL Viewer

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Credit Risk and Other Concentrations (Details)	12 Months Ended
Credit Risk and Other Concentrations (Details)	Sep. 30, 2023 processing_bank
Risks and Uncertainties [Abstract]
Number of third party payment processors	6

Equity-Based Compensation

12 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

EQUITY-BASED COMPENSATION

A summary of equity-based compensation expense recognized during the years ended September 30, 2023, 2022 and 2021 is as follows:


	Year ended September 30,
	2023		2022		2021
Stock options	$	24,276	$	25,163	$	20,860
Restricted stock units	3,602		1,067		—
Equity-based compensation expense	$	27,878	$	26,230	$	20,860

Amounts are included in general and administrative expense on the consolidated statements of operations. Income tax benefits of $785, $468 and $1,083 were recognized related to equity-based compensation during the years ended September 30, 2023, 2022, and 2021, respectively.

Stock Options

In May 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”) under which the Company may grant up to 3,500,000 stock options and other equity-based awards to employees, directors and officers. The number of shares of Class A common stock available for issuance under the 2018 Plan includes an annual increase on the first day of each year, beginning with the 2019 calendar year, equal to 4.0% of the outstanding shares of all classes of the Company's common stock as of the last day of the immediately preceding calendar year, unless the Company’s board of directors determines prior to the last trading day of December of the immediately preceding calendar year that the increase shall be less than 4%. As of September 30, 2023, there were 1,075,549 shares of equity awards available to grant under the 2018 Plan.

In September 2020, the Company adopted the 2020 Acquisition Equity Incentive Plan (the “2020 Inducement Plan”) under which the Company may grant up to 1,500,000 stock options and other equity-based awards to individuals that were not previously employees of the Company or its subsidiaries in connection with acquisitions, as a material inducement to the individual's entry into employment with the Company or its subsidiaries within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. In May 2021, the Company amended the 2020 Inducement Plan to increase the number of shares of the Company's Class A common stock available for issuance from 1,500,000 to 3,000,000 shares. As of September 30, 2023, there were 1,154,571 shares of equity awards available for grant under the 2020 Inducement Plan.

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

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


	September 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.For the year ended September 30, 2023, expected volatility is based on the volatility of the Company's own share price. For the year ended September 30, 2022, expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.

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

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

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

A summary of stock option activity for the year ended September 30, 2023 is as follows:


	Stock Options	Weighted Average Exercise Price
Outstanding at September 30, 2022	8,222,322	$	25.07
Granted	1,286,629	24.13
Exercised	(460,760)	18.14
Forfeited	(471,521)	27.69
Outstanding at September 30, 2023	8,576,670	$	25.16

Exercisable at September 30, 2023	5,586,736	$	24.79

The weighted-average grant date fair value of stock options granted during the year ended September 30, 2023 was $13.68.

As of September 30, 2023, there were 8,576,670 stock options outstanding, of which 5,586,736 were exercisable. As of September 30, 2023, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $23,395, which is expected to be recognized over a weighted-average period of 2.1 years. The Company's policy is to account for forfeitures of stock-based compensation awards as they occur.

The total fair value of stock options that vested during the year ended September 30, 2023 was $24,652.

Restricted Stock Units

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

A summary of activity related to restricted stock units as of September 30, 2023 is as follows:


	Restricted Stock Units	Weighted Average Exercise Price
Outstanding at September 30, 2022	486,652	$	24.93
Granted	536,882	25.28
Vested	(67,854)	26.34
Forfeited	(81,656)	24.09
Outstanding at September 30, 2023	874,024	$	24.95

The weighted-average grant date fair value of RSUs granted during the year ended September 30, 2023 was $25.28.

As of September 30, 2023, total unrecognized compensation expense related to unvested RSUs, including an estimate for pre-vesting forfeitures, was $12,126, which is expected to be recognized over a weighted average period of 3.1 years.

Equity-Based Compensation - Restricted Stock Units (Details) - Restricted stock units	12 Months Ended
	Sep. 30, 2023 $ / shares shares
Restricted Stock Units
Outstanding at beginning of period (in shares) \| shares	486,652
Granted (in shares) \| shares	536,882
Vested (in shares) \| shares	(67,854)
Forfeited (in shares) \| shares	(81,656)
Outstanding at end of period (in shares) \| shares	874,024
Weighted Average Exercise Price
Outstanding, weighted average exercise price, beginning balance (in USD per share) \| $ / shares	$ 24.93
Granted, weighted average exercise price (in USD per share) \| $ / shares	25.28
Vested, weighted average exercise price (in USD per share) \| $ / shares	26.34
Forfeited, weighted average exercise price (in USD per share) \| $ / shares	24.09
Outstanding, weighted average exercise price, ending balance (in USD per share) \| $ / shares	$ 24.95

Summary of Significant Accounting Policies - Additional Information (Details)	12 Months Ended
	Sep. 30, 2023 USD ($) reportable_unit	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Oct. 01, 2022 USD ($)	Sep. 30, 2020 USD ($)
Concentration Risk [Line Items]
Allowance for doubtful accounts	$ 743,000	$ 590,000
Settlement assets	4,873,000	7,540,000	$ 4,768,000		$ 0
Settlement obligations	4,873,000	7,540,000
Inventory	4,138,000	4,121,000
Impairment charges	$ 0	0	0
Estimated useful life	3 years
Loss on impairment of related to an internal use software project	$ 2,660,000	0	0
Notes receivable, fair value disclosure	199,000	5,125,000
Revenue from acquisitions	18,365,000
Net income	$ 3,350,000
Number of reporting units \| reportable_unit	5
Write down of intangible asset	$ 0	0	0
Contract with customer, asset, before allowance for credit loss	15,131,000	9,716,000
Capitalized contract cost, gross	4,966,000	4,185,000
Amortization expense of intangible assets	20,539,000	17,892,000	15,830,000
Advertising expense	3,966,000	4,028,000	2,623,000
Equity-based compensation expense	27,878,000	26,230,000	20,860,000
Long-term debt, less current portion and debt issuance costs, net	385,081,000	287,020,000
Additional paid-in-capital	249,688,000	241,958,000
Accumulated earnings	(12,944,000)	(23,582,000)
Cumulative Effect, Period of Adoption, Adjustment \| Accounting Standards Update 2020-06
Concentration Risk [Line Items]
Long-term debt, less current portion and debt issuance costs, net				$ 11,933,000
Additional paid-in-capital				(23,382,000)
Accumulated earnings				$ 11,449,000
Intangible Assets, Amortization Period
Concentration Risk [Line Items]
Amortization expense of intangible assets	$ 792,000	$ 707,000	$ 533,000
Minimum
Concentration Risk [Line Items]
Maturity period of settlement assets and obligations (in years)	1 day
Maximum
Concentration Risk [Line Items]
Maturity period of settlement assets and obligations (in years)	4 days

Equity-Based Compensation - Schedule of Equity-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	$ 27,878	$ 26,230	$ 20,860
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	24,276	25,163	20,860
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	$ 3,602	$ 1,067	$ 0

- 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

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+ Details

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Inventory	$ 4,138	$ 4,121
Prepaid licenses	3,115	5,743
Prepaid insurance	697	736
Notes receivable — current portion	4	4,930
Other current assets	4,495	3,915
Prepaid expenses and other current assets	$ 12,449	$ 19,445

Property and Equipment, Net

12 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

PROPERTY AND EQUIPMENT, NET

A summary of the Company's property and equipment as of September 30, 2023 and 2022 is as follows:


	Estimated Useful Life	2023		2022
Buildings	20 years	4,711		—
Computer equipment and software(1)	2 to 7 years	4,980		3,040
Furniture and fixtures	2 to 7 years	2,522		2,159
Terminals	2 to 3 years	1,035		813
Office equipment	2 to 5 years	1,643		1,289
Automobiles	3 years	526		477
Leasehold improvements	2 to 7 years	3,638		2,945
Accumulated depreciation		(6,747)		(5,053)
Property and equipment, net		$	12,308	$	5,670

____________________

1.Includes computer software of $299 and $129 as of September 30, 2023 and 2022, respectively.

Depreciation expense for the years ended September 30, 2023, 2022 and 2021 amounted to $3,377, $2,545 and $2,312, respectively.

Capitalized Software, Net (Tables)

12 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Capitalized Computer Software

A summary of the Company's capitalized software as of September 30, 2023 and 2022 is as follows:


	Estimated Useful Life	2023		2022
Software development costs	3 to 7 years	$	81,141	$	60,013
Development in progress		8,634		9,265
Accumulated amortization		(27,198)		(16,937)
Capitalized software, net		$	62,577	$	52,341

Acquisitions - Schedule of Preliminary Purchase Consideration of the Acquired Assets and Assumed Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Business Acquisition [Line Items]
Goodwill	$ 409,563	$ 353,639	$ 292,243
2022 Business Combinations
Business Acquisition [Line Items]
Accounts receivable		651
Settlement assets		685
Prepaid expenses and other current assets		83
Property and equipment		190
Goodwill		61,347
Operating lease right-of-use assets		263
Other assets		22
Total assets acquired		115,671
Accrued expenses and other current liabilities		287
Settlement obligations		685
Deferred revenue, current		30
Current portion of operating lease liabilities		82
Operating lease liabilities, less current portion		181
Other long-term liabilities		6,725
Net assets acquired		107,681
2021 Business Combinations
Business Acquisition [Line Items]
Accounts receivable			9,705
Settlement assets			7,009
Inventories			619
Prepaid expenses and other current assets			4,950
Property and equipment			951
Goodwill			105,023
Operating lease right-of-use assets			816
Other assets			38
Total assets acquired			229,991
Accrued expenses and other current liabilities			1,049
Settlement obligations			7,009
Deferred revenue, current			13,814
Current portion of operating lease liabilities			296
Operating lease liabilities, less current portion			501
Net assets acquired			207,322
BIS
Business Acquisition [Line Items]
Accounts receivable			1,567
Settlement assets			6,889
Inventories			458
Prepaid expenses and other current assets			10
Property and equipment			206
Goodwill			46,660
Operating lease right-of-use assets			0
Other assets			0
Total assets acquired			104,090
Accrued expenses and other current liabilities			138
Settlement obligations			6,889
Deferred revenue, current			1,568
Current portion of operating lease liabilities			0
Operating lease liabilities, less current portion			0
Net assets acquired			95,495
ImageSoft, Inc.
Business Acquisition [Line Items]
Accounts receivable			4,997
Settlement assets			120
Inventories			0
Prepaid expenses and other current assets			2,897
Property and equipment			433
Goodwill			22,408
Operating lease right-of-use assets			332
Other assets			6
Total assets acquired			54,403
Accrued expenses and other current liabilities			910
Settlement obligations			120
Deferred revenue, current			6,748
Current portion of operating lease liabilities			75
Operating lease liabilities, less current portion			250
Net assets acquired			46,300
Other
Business Acquisition [Line Items]
Accounts receivable			3,141
Settlement assets			0
Inventories			161
Prepaid expenses and other current assets			2,043
Property and equipment			312
Goodwill			35,955
Operating lease right-of-use assets			484
Other assets			32
Total assets acquired			71,498
Accrued expenses and other current liabilities			1
Settlement obligations			0
Deferred revenue, current			5,498
Current portion of operating lease liabilities			221
Operating lease liabilities, less current portion			251
Net assets acquired			65,527
Celtic
Business Acquisition [Line Items]
Accounts receivable	7,660
Prepaid expenses and other current assets	103
Property and equipment	5,437
Goodwill	43,695
Total assets acquired	104,095
Accounts payable	9
Accrued expenses and other current liabilities	3,182
Deferred revenue, current	2,741
Other long-term liabilities	13,162
Net assets acquired	85,001
Capitalized software \| 2022 Business Combinations
Business Acquisition [Line Items]
Intangible assets		9,790
Capitalized software \| 2021 Business Combinations
Business Acquisition [Line Items]
Intangible assets			24,500
Capitalized software \| BIS
Business Acquisition [Line Items]
Intangible assets			15,200
Capitalized software \| ImageSoft, Inc.
Business Acquisition [Line Items]
Intangible assets			5,200
Capitalized software \| Other
Business Acquisition [Line Items]
Intangible assets			4,100
Capitalized software \| Celtic
Business Acquisition [Line Items]
Intangible assets	12,600
Acquired customer relationships \| 2022 Business Combinations
Business Acquisition [Line Items]
Intangible assets		41,090
Acquired customer relationships \| 2021 Business Combinations
Business Acquisition [Line Items]
Intangible assets			72,640
Acquired customer relationships \| BIS
Business Acquisition [Line Items]
Intangible assets			32,300
Acquired customer relationships \| ImageSoft, Inc.
Business Acquisition [Line Items]
Intangible assets			16,300
Acquired customer relationships \| Other
Business Acquisition [Line Items]
Intangible assets			24,040
Acquired customer relationships \| Celtic
Business Acquisition [Line Items]
Intangible assets	33,800
Non-compete agreements \| 2021 Business Combinations
Business Acquisition [Line Items]
Intangible assets			1,100
Non-compete agreements \| BIS
Business Acquisition [Line Items]
Intangible assets			100
Non-compete agreements \| ImageSoft, Inc.
Business Acquisition [Line Items]
Intangible assets			610
Non-compete agreements \| Other
Business Acquisition [Line Items]
Intangible assets			390
Non-compete agreements \| Celtic
Business Acquisition [Line Items]
Intangible assets	200
Trade name \| 2022 Business Combinations
Business Acquisition [Line Items]
Intangible assets		$ 1,550
Trade name \| 2021 Business Combinations
Business Acquisition [Line Items]
Intangible assets			2,640
Trade name \| BIS
Business Acquisition [Line Items]
Intangible assets			700
Trade name \| ImageSoft, Inc.
Business Acquisition [Line Items]
Intangible assets			1,100
Trade name \| Other
Business Acquisition [Line Items]
Intangible assets			$ 840
Trade name \| Celtic
Business Acquisition [Line Items]
Intangible assets	$ 600

Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
2024	$ 20,506
2025	20,215
2026	19,743
2027	19,123
2028	18,540
Thereafter	128,782
Finite-lived intangible assets, carrying value	$ 226,909	$ 195,877

Prepaid Expenses and Other Current Assets

12 Months Ended

Sep. 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 September 30, 2023 and 2022 is as follows:


	2023		2022
Inventory	$	4,138	$	4,121
Prepaid licenses	3,115		5,743
Prepaid insurance	697		736
Notes receivable — current portion	4		4,930
Other current assets	4,495		3,915
Prepaid expenses and other current assets	$	12,449	$	19,445

Property and Equipment, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Property, Plant and Equipment [Line Items]
Accumulated depreciation	$ (6,747)	$ (5,053)
Property and equipment, net	12,308	5,670
Depreciation expense	$ 3,377	2,545	$ 2,312
Buildings
Property, Plant and Equipment [Line Items]
Estimated Useful Life	20 years
Property and equipment	$ 4,711	0
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property and equipment	4,980	3,040
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment	2,522	2,159
Terminals
Property, Plant and Equipment [Line Items]
Property and equipment	1,035	813
Office equipment
Property, Plant and Equipment [Line Items]
Property and equipment	$ 1,643	1,289
Automobiles
Property, Plant and Equipment [Line Items]
Estimated Useful Life	3 years
Property and equipment	$ 526	477
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment	3,638	2,945
Computer software
Property, Plant and Equipment [Line Items]
Property and equipment	$ 299	$ 129
Minimum \| Computer equipment and software
Property, Plant and Equipment [Line Items]
Estimated Useful Life	2 years
Minimum \| Furniture and fixtures
Property, Plant and Equipment [Line Items]
Estimated Useful Life	2 years
Minimum \| Terminals
Property, Plant and Equipment [Line Items]
Estimated Useful Life	2 years
Minimum \| Office equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Life	2 years
Minimum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Estimated Useful Life	2 years
Maximum \| Computer equipment and software
Property, Plant and Equipment [Line Items]
Estimated Useful Life	7 years
Maximum \| Furniture and fixtures
Property, Plant and Equipment [Line Items]
Estimated Useful Life	7 years
Maximum \| Terminals
Property, Plant and Equipment [Line Items]
Estimated Useful Life	3 years
Maximum \| Office equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Life	5 years
Maximum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Estimated Useful Life	7 years

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net loss	$ (2,652)	$ (23,217)	$ (7,839)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	36,461	29,424	24,418
Equity-based compensation	27,878	26,230	20,860
Amortization of debt discount and issuance costs	1,514	5,795	5,450
Net gain on sale of investments	(295)	0	(2,100)
Write down of intangible asset	2,660	0	0
(Benefit from) Provision for deferred income taxes	(5,935)	2,588	(287)
Non-cash lease expense	4,683	4,922	3,204
Other non-cash adjustments to net income	1,546	1,131	555
Increase in non-cash contingent consideration expense from original estimate	10,781	23,725	7,140
Changes in operating assets:
Accounts receivable	(7,657)	(15,771)	(10,938)
Prepaid expenses and other current assets	1,530	(3,629)	(1,564)
Other assets	(1,865)	(1,197)	(4,054)
Changes in operating liabilities:
Accounts payable	1,674	1,537	3,883
Accrued expenses and other current liabilities	318	9,812	5,749
Acquisition escrow obligations	(8,319)	3,218	4,704
Settlement obligations	(2,667)	2,087	(2,241)
Deferred revenue	(1,319)	2,041	5,150
Operating lease liabilities	(4,530)	(4,753)	(3,139)
Other long-term liabilities	0	(25)	(782)
Contingent consideration paid in excess of original estimates	(19,303)	(18,072)	(3,636)
Net cash provided by operating activities	34,503	45,846	44,533
Cash flows from investing activities:
Expenditures for property and equipment	(4,204)	(2,268)	(1,938)
Expenditures for capitalized software	(12,171)	(10,167)	(6,159)
Purchases of merchant portfolios and residual buyouts	(2,191)	(52)	(1,819)
Acquisitions of businesses, net of cash acquired	(101,998)	(100,715)	(142,486)
Payments for other investing activities	(1,251)	(443)	(104)
Proceeds from investments	295	600	3,200
Net cash used in investing activities	(121,520)	(113,045)	(149,306)
Cash flows from financing activities:
Proceeds from revolving credit facility	365,022	335,720	302,816
Payments on revolving credit facility	(281,534)	(255,100)	(198,421)
Payments of debt issuance costs	(694)	0	0
Proceeds from issuance of Class A common stock, net of underwriting discounts and offering costs	0	17,692	0
Payments of equity issuance costs	0	0	(253)
Cash paid for contingent consideration	(6,832)	(25,330)	(2,886)
Proceeds from stock option exercises	180	694	1,578
Payments for employee's tax withholdings from net settled stock option exercises	(490)	(643)	(731)
Net cash provided by financing activities	75,652	73,033	102,103
Net (decrease) increase in cash, cash equivalents, and restricted cash	(11,365)	5,834	(2,670)
Cash, cash equivalents, and restricted cash at beginning of period	23,765	17,931	20,601
Cash, cash equivalents, and restricted cash at end of period	12,400	23,765	17,931
Supplemental disclosure of cash flow information:
Cash paid for interest	21,476	8,985	4,428
Cash paid for income taxes	$ 3,236	$ 1,079	$ 287

Accrued Expenses and Other Liabilities

12 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses and Other Liabilities

ACCRUED EXPENSES AND OTHER LIABILITIES

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


	2023		2022
Accrued wages, bonuses, commissions and vacation	$	8,713	$	8,117
Accrued interest	1,313		642
Accrued contingent consideration — current portion	6,825		21,385
Escrow liabilities	3,965		12,285
Tax receivable agreement liability — current portion	—		20
Customer deposits	1,258		1,575
Employee health self-insurance liability	1,014		732
Accrued interchange	2,191		2,096
Other current liabilities	12,461		10,981
Accrued expenses and other current liabilities	$	37,740	$	57,833

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


	2023		2022
Accrued contingent consideration — long-term portion	$	1,414	$	1,448
Deferred tax liability — long-term	19,646		7,896
Other long-term liabilities	3,083		196
Total other long-term liabilities	$	24,143	$	9,540

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

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

Reclassifications

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

Principles of Consolidation

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

Cash and Cash Equivalents

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

Restricted Cash

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

Accounts Receivable and Credit Policies and Notes Receivable

Accounts Receivable and Credit Policies Accounts receivable consist primarily of uncollateralized credit card processing residual payments due from processing banks requiring payment within thirty days following the end of each month. Accounts receivable also include amounts due from the sales of the Company’s technology solutions to its customers. The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts, if necessary, which reflects management’s best estimate of the amounts that will not be collected. The allowance is estimated based on management’s knowledge of its customers, historical loss experience and existing economic conditions. Accounts receivable and the allowance are written-off when, in management’s opinion, all collection efforts have been exhausted.Notes Receivable Notes receivable consist of loans made to unrelated entities. Notes receivable were $199 and $5,125 at September 30, 2023 and 2022, respectively, and are included within prepaid expenses and other current assets and other assets on the accompanying consolidated balance sheets.

Settlement Assets and Obligations

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

Inventories

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

Property and Equipment

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

Expenditures for maintenance and repairs are expensed when incurred. Expenditures for renewals or betterments are capitalized. Management reviews long-lived assets for impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company recognizes impairment when the sum of undiscounted estimated future cash flows expected to result from the use of the asset is less than the carrying value of the asset.

Capitalized Software

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

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

Software development costs may become impaired in situations where development efforts are abandoned due to the viability of a planned project becoming doubtful or due to technological obsolescence of a planned software product. Management evaluates the remaining useful lives and carrying values of capitalized software at least annually or when events and circumstances warrant such a review, to determine whether significant events or changes in circumstances indicate that impairment in value may have occurred. To the extent estimated net realizable values, which are estimated to equal future undiscounted cash flows, exceed the carrying value, no impairment is necessary. If estimated net realizable values are less than the carrying values, an impairment charge is recorded. During the year ended September 30, 2023, the Company recorded a loss on impairment of $2,660 related to an internal use software project. Impairment charges during the years ended September 30, 2022 and 2021 were nominal.

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

Acquisitions

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

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

The operating results of an acquisition are included in the consolidated statements of operations from the date of such acquisition.

Goodwill

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

The Company’s goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in business combinations. The goodwill generated from the business combinations is primarily related to the value placed on the employee workforce and expected synergies. Judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes may include, among others, a significant decline in expected future cash flows, a significant adverse change in the business climate, and unforeseen competition.

The Company has the option of performing a qualitative assessment of impairment to determine whether any further quantitative testing for impairment is necessary. The option of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit. Factors the Company considers in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of the Company’s reporting units, events or changes affecting the composition or carrying amount of the net assets of its reporting units, sustained decrease in its share price, and other relevant entity specific events. If the Company determines not to perform the qualitative assessment or if it determines, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying value, then the Company performs a quantitative test for that reporting unit. The fair value of each reporting unit is compared to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit is less than

its carrying value, the Company recognizes an impairment equal to the excess carrying value, not to exceed the total amount of goodwill allocated to that reporting unit.

Intangible Assets

Intangible assets include acquired customer relationships, residual buyouts, referral agreements, trademarks, trade names, website development costs and non-compete agreements. Customer relationships represent the fair value of customer relationships purchased by the Company. Residual buyouts represent the right to not have to pay a residual to an independent sales agent related to certain future transactions with the agent’s referred merchants. Referral agreements represent the right to exclusively obtain referrals from a partner for their customers' credit card processing services.

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

Management evaluates the remaining useful lives and carrying values of long-lived assets, including definite lived intangible assets, at least annually, or when events and circumstances warrant such a review, to determine whether significant events or changes in circumstances indicate that a change in the useful life or impairment in value may have occurred.

Income Taxes

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

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

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

Valuation of Contingent Consideration

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

Classification of Financial Instruments

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

Revenue Recognition and Deferred Revenue

Revenue is recognized as each performance obligation is satisfied, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience. The Company utilized the portfolio approach practical expedient within ASC 606-10-10-4 Revenue from Contracts with Customers—Objectives and the significant financing component practical expedient within ASC 606-10-32-18 Revenue from Contracts with Customers—The Existence of a Significant Financing Component in the Contract in performing the analysis.

The Company's revenue for the years ended September 30, 2023, 2022 and 2021 is derived from the following sources:

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

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

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

Revenues from sales of the Company’s software are recognized when the related performance obligations are satisfied. Sales of software licenses are categorized into one of two categories of intellectual property in accordance with ASC 606, functional or symbolic. The key distinction is whether the license represents a right to use (functional) or a right to access (symbolic) intellectual property. The Company generates sales of one-time software licenses, which is functional intellectual property. Revenue from functional intellectual property is recognized at a point in time, when delivered to the customer. The Company also offers access to its software under software-as-a-service (“SaaS”) arrangements, which represent services arrangements. Revenue from SaaS arrangements is recognized over time, over the term of the agreement.

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

The Company follows the requirements of ASC 606-10-55 Revenue from Contracts with Customers—Principal versus Agent Considerations, which states that the determination of whether a company should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement. The determination of gross versus net recognition of revenue requires judgment that depends on whether the Company controls the good or service before it is transferred to the merchant or whether the Company is acting as an agent of a third party. The assessment is provided separately for each performance obligation identified. Under its agreements, the Company incurs interchange and network pass-through charges from the third-party card issuers and card networks, respectively, related to the provision of payment authorization services. The Company has determined that it is acting as an agent with respect to these payment authorization services, based on the following factors: (1) the Company has no discretion over which card issuing bank will be used to process a transaction and is unable to direct the activity of the merchant to another card issuing bank, and (2) interchange and card network rates are pre-established by the card issuers or card networks, and the Company has no latitude in determining these fees. Therefore, revenue allocated to the payment authorization performance obligation is presented net of interchange and card network fees paid to the card issuing banks and card networks, respectively, for the years ended September 30, 2023, 2022 and 2021.

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 time 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.

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

•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 year ended September 30, 2023
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	170,895		13,177		(41)		184,031
Payments revenue	$	51,834	$	115,049	$	(29)	$	166,854
Other revenue	10,238		9,116		—		19,354
Total revenue	$	232,967	$	137,342	$	(70)	$	370,239


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


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

The tables below present disaggregation of the Company's revenue from contracts with customers by timing of transfer of goods or services by segment. For the year ended September 30, 2021, $25,843 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 years ended September 30, 2023 and 2022. The Company's revenue included in each category are defined as follows:

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

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


	For the year ended September 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	215,071	$	115,982	$	(41)	$	331,012
Revenue earned at a point in time	17,896		21,360		(29)		39,227
Total revenue	$	232,967	$	137,342	$	(70)	$	370,239


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


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

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. Additionally, contract assets also include software licenses sold as a right to use license but paid for under a subscription model. Under this structure, the license revenue is recognized upfront while a portion of the revenue is unbilled. Unbilled amounts associated with these services are presented as accounts receivable as the Company has an unconditional right to payment for services performed.

As of September 30, 2023 and September 30, 2022, the Company’s contract assets from contracts with customers was $15,131 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 consolidated balance sheets. The terms for most of the

Company's contracts with a deferred revenue component are one year. Substantially all of the Company's deferred revenue is anticipated to be recognized within the next year.

The following table presents the changes in deferred revenue as of and for the year ended September 30, 2023:


Balance at September 30, 2021	$	30,024
Deferral of revenue	31,926
Recognition of unearned revenue	(29,861)
Balance at September 30, 2022	$	32,089
Deferral of revenue	35,330
Recognition of unearned revenue	(31,975)
Balance at September 30, 2023	$	35,444

Costs to Obtain and Fulfill a Contract

The Company capitalizes incremental costs to obtain new contracts and contract renewals and amortizes these costs on a straight-line basis as an expense over the benefit period, which is generally the contract term, unless a commensurate payment is not expected at renewal. As of September 30, 2023, the Company had $4,966 of capitalized contract costs, compared to $4,185 of capitalized contract costs as of September 30, 2022. The contract costs relate to commissions paid to employees and agents as well as other incentives given to customers to obtain new sales, included within “Other assets" on the consolidated balance sheets. The Company recorded commissions expense related to these costs for the years ended September 30, 2023, 2022 and 2021 of $792, $707 and $533 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 and software sold is also included in other cost of services. Other costs of services are recognized at the time the associated revenue is earned.

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

Selling General and Administrative

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

Advertising and Promotion Costs

Advertising and promotion costs are expensed as incurred.

Equity-based Compensation

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

Use of Estimates

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

Recently Issued 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. Effective 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.

Earnings Per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Numerator
Net loss	$ (2,652)	$ (23,217)	$ (7,839)
Less: Net loss attributable to non-controlling interests	(1,841)	(6,115)	(3,382)
Net loss attributable to i3 Verticals, Inc.	$ (811)	$ (17,102)	$ (4,457)
Denominator
Weighted average shares of Class A common stock outstanding, basic (in shares)	23,137,586	22,249,656	20,994,598
Basic net loss per share (in USD per Share)	$ (0.04)	$ (0.77)	$ (0.21)
Numerator
Net loss attributable to Class A common stockholders	$ (811)	$ (17,102)	$ (4,457)
Denominator
Weighted average shares of Class A common stock outstanding, diluted (in shares)	23,137,586	22,249,656	20,994,598
Weighted average shares of Class A common stock outstanding - diluted (in shares)	33,246,833	22,249,656	31,714,191
Diluted net loss per share (in USD per share)	$ (0.07)	$ (0.77)	$ (0.22)
Restricted Class A Common Stock
Denominator
Antidilutive securities excluded from computation of earnings per share (in shares)			6,706
Class A Common Stock
Numerator
Net loss	$ (2,652)	$ (23,217)	$ (7,839)
Less: Net loss attributable to non-controlling interests	(1,841)	(6,115)	(3,382)
Net loss attributable to i3 Verticals, Inc.	$ (811)	$ (17,102)	$ (4,457)
Denominator
Weighted average shares of Class A common stock outstanding, basic (in shares)	23,137,586	22,249,656	20,994,598
Basic net loss per share (in USD per Share)	$ (0.04)	$ (0.77)	$ (0.21)
Numerator
Net loss attributable to Class A common stockholders	$ (811)	$ (17,102)	$ (4,457)
Reallocation of net loss assuming conversion of common units	(1,391)		(2,556)
Net loss attributable to Class A common stockholders - diluted	$ (2,202)		$ (7,013)
Denominator
Weighted average shares of Class A common stock outstanding, diluted (in shares)	23,137,586	22,249,656	20,994,598
Weighted average effect of dilutive securities (in shares)	10,109,247		10,719,593
Weighted average shares of Class A common stock outstanding - diluted (in shares)	33,246,833		31,714,191
Diluted net loss per share (in USD per share)	$ (0.07)		$ (0.22)
Antidilutive securities excluded from computation of earnings per share (in shares)		10,170,668
Class A Common Stock \| Out-of-the-money Options
Denominator
Antidilutive securities excluded from computation of earnings per share (in shares)	5,580,144	4,580,844	2,495,922
Class A Common Stock \| Stock options
Denominator
Antidilutive securities excluded from computation of earnings per share (in shares)		679,858	1,471,027
Class A Common Stock \| Stock Options and Restricted Stock Units (RSUs)
Denominator
Antidilutive securities excluded from computation of earnings per share (in shares)	723,898

Credit Risk and Other Concentrations	12 Months Ended
Credit Risk and Other Concentrations	Sep. 30, 2023
Risks and Uncertainties [Abstract]
Credit Risk and Other Concentrations	CREDIT RISK AND OTHER CONCENTRATIONS The Company places its cash with high credit quality financial institutions which provide Federal Deposit Insurance Corporation insurance. The Company performs periodic evaluations of the relative credit standing of these institutions and does not expect any losses related to such concentrations. The Company’s revenues are earned by processing transactions for merchant businesses and other institutions under contract with the Company. The Company utilizes the funds settlement services of primarily six processing banks, from which most accounts receivable are remitted monthly. No single customer accounted for more than 10% of the Company's revenue during the years ended September 30, 2023, 2022 and 2021. The Company believes that the loss of any single customer would not have a material adverse effect on the Company's financial condition or results of operations. The Company uses third party payment processors, three of which facilitate more than 10% of our processing revenues for the years ended September 30, 2023, 2022, and 2021.

Goodwill and Intangible Assets - Changes in Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Goodwill [Roll Forward]
Goodwill, beginning	$ 353,639	$ 292,243
Goodwill attributable to preliminary purchase price adjustments and acquisition activity	55,924	61,396
Goodwill, ending	409,563	353,639
Software and Services
Goodwill [Roll Forward]
Goodwill, beginning	234,553	173,157
Goodwill attributable to preliminary purchase price adjustments and acquisition activity	53,060	61,396
Goodwill, ending	287,613	234,553
Accumulated impairment losses			$ 11,458
Merchant Services
Goodwill [Roll Forward]
Goodwill, beginning	119,086	119,086
Goodwill attributable to preliminary purchase price adjustments and acquisition activity	2,864	0
Goodwill, ending	121,950	119,086
Accumulated impairment losses			0
Other
Goodwill [Roll Forward]
Goodwill, beginning	0	0
Goodwill attributable to preliminary purchase price adjustments and acquisition activity	0	0
Goodwill, ending	$ 0	$ 0
Accumulated impairment losses			$ 0

- 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

Consolidated Statement of Changes in Equity - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Class A Common Stock	Class B Common Stock	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Additional Paid-In Capital	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 (in shares) at Sep. 30, 2020					18,864,143	11,900,621
Stockholders' equity, beginning at Sep. 30, 2020	$ 240,168				$ 2	$ 1	$ 157,598		$ (2,023)		$ 84,590
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	20,860						20,860
Net loss	(7,839)		$ (7,839)						(4,457)		(3,382)
Redemption of common units in i3 Verticals, LLC (in shares)					1,671,479	(1,671,479)
Redemption of common units in i3 Verticals, LLC	0						11,714				(11,714)
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	269						269
Exercise of equity-based awards (in shares)					287,562
Exercise of equity-based awards	888						888
Allocation of equity to non-controlling interests	0						(15,337)				15,337
Issuance of Class A common stock under the 2020 Inducement Plan (in shares)					1,202,914
Issuance of Class A common stock under the 2020 Inducement Plan	35,245						35,245
Common stock, shares, outstanding, ending (in shares) at Sep. 30, 2021					22,026,098	10,229,142
Stockholders' equity, ending at Sep. 30, 2021	289,591				$ 2	$ 1	211,237		(6,480)		84,831
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation	26,230						26,230
Net loss	(23,217)		$ (23,217)						(17,102)		(6,115)
Redemption of common units in i3 Verticals, LLC (in shares)					111,000	(111,000)
Redemption of common units in i3 Verticals, LLC	0						918				(918)
Sale of Class A common stock, net (in shares)					722,000
Sale of Class A common stock, net	17,869						17,869
Capitalization of public offering costs	(440)						(440)
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	(2,554)						(2,554)
Exercise of equity-based awards (in shares)					127,350
Exercise of equity-based awards	209						209
Allocation of equity to non-controlling interests	0						(11,511)				11,511
Common stock, shares, outstanding, ending (in shares) at Sep. 30, 2022			22,986,448	10,118,142	22,986,448	10,118,142
Stockholders' equity, ending at Sep. 30, 2022	$ 307,688	$ (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
Equity-based compensation	$ 27,878						27,878
Net loss	(2,652)		$ (2,652)						(811)		(1,841)
Redemption of common units in i3 Verticals, LLC (in shares)					24,748	(24,748)
Redemption of common units in i3 Verticals, LLC	0						224				(224)
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	$ 6,407						6,407
Exercise of equity-based awards (in shares)	460,760				159,906
Exercise of equity-based awards	$ (1,092)						(1,092)
Allocation of equity to non-controlling interests	0						(4,305)				4,305
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 (in shares) at Sep. 30, 2023			23,253,272	10,093,394	23,253,272	10,093,394
Stockholders' equity, ending at Sep. 30, 2023	$ 328,296				$ 2	$ 1	$ 249,688		$ (12,944)		$ 91,549

Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands		12 Months Ended
	Oct. 04, 2021	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2018
Other Commitments [Line Items]
Operating leases for office space and equipment		$ 5,881	$ 5,992	$ 4,400
S & S Vs. State
Other Commitments [Line Items]
Loss contingency, damages sought, value	$ 15,000
S & S Vs. Sheriffs
Other Commitments [Line Items]
Loss contingency, damages sought, value	$ 7,000
Software Services L L C
Other Commitments [Line Items]
Business combination, consideration transferred					$ 17,000

Related Party Transactions	12 Months Ended
Related Party Transactions	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	RELATED PARTY TRANSACTIONS In connection with the Company's IPO, the Company and i3 Verticals, LLC entered into a Tax Receivable Agreement with the Continuing Equity Owners that provides for the payment by the Company to the Continuing Equity Owners of 85% of the amount of certain tax benefits, if any, that it actually realizes, or in some circumstances, is deemed to realize in its tax reporting, as a result of (i) future redemptions funded by the Company or exchanges, or deemed exchanges in certain circumstances, of Common Units of i3 Verticals, LLC for Class A common stock of i3 Verticals, Inc. or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement. See Note 11 for further information. As of September 30, 2023, the total amount due under the Tax Receivable Agreement was $40,079. In April 2016, the Company entered into a purchase agreement to purchase certain assets of Axia, LLC. On April 29, 2016, the Company entered into a Processing Services Agreement (the “AxiaMed Agreement”) with Axia Technologies, LLC (which has since been incorporated as Axia Technologies, Inc., doing business as AxiaMed (“AxiaMed”)), an entity controlled by the previous owner of Axia, LLC. Under the AxiaMed Agreement, the Company agreed to provide processing services for certain merchants as designated by AxiaMed from time to time. In accordance with ASC 606-10-55, revenue from the processing services is recognized net of interchange, residual expense and other fees. In March 2021, the Company became aware of an observable price change in the AxiaMed equity investment, due to a planned third party acquisition of AxiaMed. This resulted in an increase of $2,353 to the fair value of the AxiaMed investment at March 31, 2021, which the Company recognized in other income. On April 1, 2021, AxiaMed was sold to a third party and the Company received $2,453 for its investment in AxiaMed. Greg Daily, the Company’s chief executive officer; Clay Whitson, the Company’s chief financial officer; and the Company no longer have ownership interest in AxiaMed following the sale. The Company earned net revenues related to the AxiaMed Agreement of $117 during the year ended September 30, 2021.

- 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
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Segments (Tables)

12 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Reportable Segment Operating Performance

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 is a component of other cost of services. The following is a summary of reportable segment operating performance for the years ended September 30, 2023, 2022 and 2021.


	As of and for the Year ended September 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue	$	232,967	$	137,342	$	(70)	$	370,239
Other costs of services	(16,102)		(64,521)		71		(80,552)
Residuals	2,214		41,460		(32)		43,642
Processing margin	$	219,079	$	114,281	$	(31)	$	333,329

Residuals							43,642
Selling general and administrative							219,736
Depreciation and amortization							36,461
Change in fair value of contingent consideration							10,781
Income from operations							$	22,709

Total assets	$	611,515	$	210,705	$	59,273	$	881,493
Goodwill	$	287,613	$	121,950	$	—	$	409,563


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

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

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


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

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

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

Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Statement of Cash Flows [Abstract]
Cash and cash equivalents	$ 3,112	$ 3,490	$ 3,641	$ 15,568
Settlement assets	4,873	7,540	4,768	0
Restricted cash	4,415	12,735	9,522	5,033
Total cash, cash equivalents, and restricted cash	$ 12,400	$ 23,765	$ 17,931	$ 20,601

Property and Equipment, Net (Tables)

12 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

A summary of the Company's property and equipment as of September 30, 2023 and 2022 is as follows:


	Estimated Useful Life	2023		2022
Buildings	20 years	4,711		—
Computer equipment and software(1)	2 to 7 years	4,980		3,040
Furniture and fixtures	2 to 7 years	2,522		2,159
Terminals	2 to 3 years	1,035		813
Office equipment	2 to 5 years	1,643		1,289
Automobiles	3 years	526		477
Leasehold improvements	2 to 7 years	3,638		2,945
Accumulated depreciation		(6,747)		(5,053)
Property and equipment, net		$	12,308	$	5,670

____________________1.Includes computer software of $299 and $129 as of September 30, 2023 and 2022, respectively.

Long-Term Debt, Net (Tables)

12 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Long-term Debt

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


	Maturity	2023		2022
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility	May 8, 2028	$	272,505	$	—
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility	May 9, 2024	—		185,017
1.0% Exchangeable Senior Notes due 2025	February 15, 2025	117,000		104,557
Debt issuance costs, net		(4,424)		(2,554)
Total long-term debt, net of issuance costs		$	385,081	$	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 Senior Secured Credit Facility), 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 < 3.0 to 1.0	0.25	%	2.50	%	2.50	%	1.50	%
> 2.0 to 1.0 but < 2.5 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
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 69B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69B

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
-Section 55
-Paragraph 69E
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69E

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482925/835-30-45-2

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
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-SubTopic 30
-Section 45
-Paragraph 1A
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-URI https://asc.fasb.org//1943274/2147482925/835-30-45-1A

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-3

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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-Topic 835
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Topic 942
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-URI https://asc.fasb.org//1943274/2147480848/942-470-50-3

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

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, 2021 (net of accumulated impairment losses of $11,458, $0 and $0, respectively)	$	173,157	$	119,086	$	—	$	292,243
Goodwill attributable to preliminary purchase price adjustments and acquisition activity during the year ended September 30, 2022	61,396		—		—		61,396
Balance at September 30, 2022	234,553		119,086		—		353,639
Goodwill attributable to preliminary purchase price adjustments and acquisition activity during the year ended September 30, 2023	53,060		2,864		—		55,924
Balance at September 30, 2023	$	287,613	$	121,950	$	—	$	409,563

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


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Customer relationships	$	310,501	$	(98,182)	$	212,319	9 to 25 years – accelerated or straight-line
Non-compete agreements	1,300		(1,059)		241		3 to 6 years – straight-line
Website and brand development costs	44		(37)		7		3 to 4 years – straight-line
Trade names	6,531		(3,690)		2,841		3 to 7 years – straight-line
Residual buyouts	14,220		(3,111)		11,109		8 years – straight-line
Referral and exclusivity agreements	609		(217)		392		5 years – straight-line
Total finite-lived intangible assets	333,205		(106,296)		226,909

Indefinite-lived intangible assets:
Trademarks	43		—		43
Total identifiable intangible assets	$	333,248	$	(106,296)	$	226,952

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


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

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

Amortization expense for intangible assets amounted to $20,539, $17,892 and $15,830 during the years ended September 30, 2023, 2022 and 2021, respectively.

Based on gross carrying amounts at September 30, 2023, the Company's estimate of future amortization expense for intangible assets are presented in this table as follows for each fiscal year ending September 30:


2024	$	20,506
2025	20,215
2026	19,743
2027	19,123
2028	18,540
Thereafter	128,782
	$	226,909

Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Gross unrecognized tax benefits, beginning balance	$ 83	$ 108
Increase in current year tax positions	108	0
Increase in prior year tax positions	73	0
Settlements and other reductions	26	25
Gross unrecognized tax benefits, ending balance	$ 238	$ 83

Summary of Significant Accounting Policies - Disaggregated Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Concentration Risk [Line Items]
Revenue	$ 370,239	$ 317,862	$ 224,124
Revenue earned over time
Concentration Risk [Line Items]
Revenue	331,012	273,820	157,567
Revenue earned at a point in time
Concentration Risk [Line Items]
Revenue	39,227	44,042	66,557
Fixed-Price Contract \| Revenue earned over time
Concentration Risk [Line Items]
Revenue			25,843
Software and Services
Concentration Risk [Line Items]
Revenue	232,967	193,402	114,433
Software and Services \| Revenue earned over time
Concentration Risk [Line Items]
Revenue	215,071	173,368	76,367
Software and Services \| Revenue earned at a point in time
Concentration Risk [Line Items]
Revenue	17,896	20,034	38,066
Merchant Services
Concentration Risk [Line Items]
Revenue	137,342	124,481	111,870
Merchant Services \| Revenue earned over time
Concentration Risk [Line Items]
Revenue	115,982	100,488	83,203
Merchant Services \| Revenue earned at a point in time
Concentration Risk [Line Items]
Revenue	21,360	23,993	28,667
Other
Concentration Risk [Line Items]
Revenue	(70)	(21)	(2,179)
Other \| Revenue earned over time
Concentration Risk [Line Items]
Revenue	(41)	(36)	(2,003)
Other \| Revenue earned at a point in time
Concentration Risk [Line Items]
Revenue	(29)	15	(176)
Software and related services revenue
Concentration Risk [Line Items]
Revenue	184,031	154,808	87,590
Software and related services revenue \| Software and Services
Concentration Risk [Line Items]
Revenue	170,895	142,202	75,736
Software and related services revenue \| Merchant Services
Concentration Risk [Line Items]
Revenue	13,177	12,641	11,872
Software and related services revenue \| Other
Concentration Risk [Line Items]
Revenue	(41)	(35)	(18)
Payments revenue
Concentration Risk [Line Items]
Revenue	166,854	144,452	119,681
Payments revenue \| Software and Services
Concentration Risk [Line Items]
Revenue	51,834	40,951	29,451
Payments revenue \| Merchant Services
Concentration Risk [Line Items]
Revenue	115,049	103,509	92,325
Payments revenue \| Other
Concentration Risk [Line Items]
Revenue	(29)	(8)	(2,095)
Other revenue
Concentration Risk [Line Items]
Revenue	19,354	18,602	16,853
Other revenue \| Software and Services
Concentration Risk [Line Items]
Revenue	10,238	10,249	9,246
Other revenue \| Merchant Services
Concentration Risk [Line Items]
Revenue	9,116	8,331	7,673
Other revenue \| Other
Concentration Risk [Line Items]
Revenue	$ 0	$ 22	$ (66)

Commitments and Contingencies - Minimum Fee Commitments (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2024	$ 4,582
2025	488
2026	0
2027	0
2028	0
Thereafter	0
Total	$ 5,070

Commitments and Contingencies (Tables)

12 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Minimum Fee Commitments

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


Years ending September 30:
2024	$	4,582
2025	488
2026	—
2027	—
2028	—
Thereafter	—
Total	$	5,070

Equity-Based Compensation - Fair Value of Stock Option Awards (Details) - Stock options	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	54.90%	55.70%
Expected dividend yield	0.00%	0.00%
Expected term	6 years	6 years
Risk-free interest rate	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

+ Details

Segments (Details) - USD ($) $ in Thousands	12 Months Ended
Segments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Revenue	$ 370,239	$ 317,862	$ 224,124
Other costs of services	(80,552)	(73,367)	(57,706)
Residuals	43,642	38,235	28,918
Processing margin	333,329	282,730	195,336
Selling general and administrative	219,736	193,790	134,872
Depreciation and amortization	36,461	29,424	24,418
Change in fair value of contingent consideration	10,781	23,725	7,140
Income (loss) from operations	22,709	(2,444)	(12)
Total assets	881,493	770,312	651,800
Goodwill	409,563	353,639	292,243
Software and Services
Segment Reporting Information [Line Items]
Revenue	232,967	193,402	114,433
Other costs of services	(16,102)	(13,778)	(8,610)
Residuals	2,214	1,602	1,147
Processing margin	219,079	181,226	106,970
Total assets	611,515	512,792	382,014
Goodwill	287,613	234,553	173,157
Merchant Services
Segment Reporting Information [Line Items]
Revenue	137,342	124,481	111,870
Other costs of services	(64,521)	(59,647)	(51,234)
Residuals	41,460	36,666	29,842
Processing margin	114,281	101,500	90,478
Total assets	210,705	203,485	208,560
Goodwill	121,950	119,086	119,086
Other
Segment Reporting Information [Line Items]
Revenue	(70)	(21)	(2,179)
Other costs of services	71	58	2,138
Residuals	(32)	(33)	(2,071)
Processing margin	(31)	4	(2,112)
Total assets	59,273	54,035	61,226
Goodwill	$ 0	$ 0	$ 0

Non-Controlling Interest - Additional Information (Details) - i3Verticals, LLC - shares	Sep. 30, 2023	Sep. 30, 2022
Noncontrolling Interest [Line Items]
Non-controlling interest, common units (in shares)	23,253,272	22,986,448
Non-controlling interest, ownership interest	69.70%	69.40%

Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Deferred tax assets:
Investment in partnership	$ 52,432	$ 56,388
Stock-based compensation	13,144	2,421
Deferred revenue	318	448
Accrued expenses	328	269
Net operating loss carryforwards	17,132	15,992
Section 163j carryforward	5,064	1,685
Federal tax credits	698	359
Operating lease liabilities	611	677
Other	108	75
Gross deferred tax assets	89,835	78,314
Valuation allowance	(28,944)	(27,555)
Deferred tax liabilities:
Intangible assets	(26,313)	(14,270)
Operating lease right of use assets	(565)	(641)
Other	(1,145)	(285)
Net deferred tax asset	$ 32,868	$ 35,563

Significant Non-cash Transactions

12 Months Ended

Sep. 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 years ended September 30, 2023, 2022, and 2021:


	Year ended September 30,
	2023		2022		2021
Restricted Class A common stock issued as part of acquisition purchase consideration (Note 4)	$	2,000	$	—	$	35,245
Acquisition date fair value of contingent consideration in connection with business combinations	$	760	$	6,281	$	22,577
Residual buyouts financed through principal and interest forgiveness of a loan	$	5,860	$	—	$	—
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	$	927	$	7,846	$	16,879

Earnings Per Share - Additional Information (Details) - Class A Common Stock - $ / shares	Sep. 30, 2023	Feb. 18, 2020	Feb. 13, 2020
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
Warrant exercise price (in USD per share)			$ 62.88

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Revenue	$ 370,239	$ 317,862	$ 224,124
Operating expenses
Other costs of services	80,552	73,367	57,706
Selling general and administrative	219,736	193,790	134,872
Depreciation and amortization	36,461	29,424	24,418
Change in fair value of contingent consideration	10,781	23,725	7,140
Total operating expenses	347,530	320,306	224,136
Income (loss) from operations	22,709	(2,444)	(12)
Other expenses
Interest expense, net	25,128	14,775	9,799
Other expense (income)	1,436	991	(2,595)
Total other expenses	26,564	15,766	7,204
Loss before income taxes	(3,855)	(18,210)	(7,216)
(Benefit from) provision for income taxes	(1,203)	5,007	623
Net loss	(2,652)	(23,217)	(7,839)
Net loss attributable to non-controlling interest	(1,841)	(6,115)	(3,382)
Net loss attributable to i3 Verticals, Inc.	$ (811)	$ (17,102)	$ (4,457)
Net loss per share attributable to Class A common stockholders:
Basic (in USD per share)	$ (0.04)	$ (0.77)	$ (0.21)
Diluted (in USD per share)	$ (0.07)	$ (0.77)	$ (0.22)
Weighted average shares of Class A common stock outstanding:
Basic (in shares)	23,137,586	22,249,656	20,994,598
Diluted (in shares)	33,246,833	22,249,656	31,714,191

Earnings Per Share (Tables)

12 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

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

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


	Year ended September 30,
	2023		2022		2021
Basic net loss per share:
Numerator
Net loss	$	(2,652)	$	(23,217)	$	(7,839)
Less: Net loss attributable to non-controlling interests	(1,841)		(6,115)		(3,382)
Net loss attributable to Class A common stockholders	$	(811)	$	(17,102)	$	(4,457)
Denominator
Weighted average shares of Class A common stock outstanding(1)	23,137,586		22,249,656		20,994,598
Basic net loss per share(2)	$	(0.04)	$	(0.77)	$	(0.21)

Dilutive net loss per share(4):
Numerator
Net loss attributable to Class A common stockholders	$	(811)			$	(4,457)
Reallocation of net loss assuming conversion of common units(5)	(1,391)				(2,556)
Net loss attributable to Class A common stockholders - diluted	$	(2,202)			$	(7,013)
Denominator
Weighted average shares of Class A common stock outstanding(1)	23,137,586				20,994,598
Weighted average effect of dilutive securities(2)(3)(4)	10,109,247				10,719,593
Weighted average shares of Class A common stock outstanding - diluted	33,246,833				31,714,191
Diluted net loss per share	$	(0.07)			$	(0.22)

____________________

1.Excludes 6,706 shares of restricted Class A common stock for the year ended September 30, 2021.

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

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

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

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

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

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

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

4.For the year ended September 30, 2023, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted earnings per share of Class A common stock:

a.5,580,144 options to purchase shares of Class A common stock for the year ended September 30, 2023, were excluded because the exercise price of these options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive.

b.723,898 shares of Class A common stock for the year ended September 30, 2023, 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.

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

Audit Information	12 Months Ended
Audit Information	Sep. 30, 2023
Audit Information [Abstract]
Auditor Name	Deloitte & Touche LLP
Auditor Location	Nashville, Tennessee
Auditor Firm ID	34

Acquisitions (Tables)

12 Months Ended

Sep. 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	$	7,660
Prepaid expenses and other current assets	103
Property and equipment	5,437
Capitalized software	12,600
Customer relationships	33,800
Non-compete agreements	200
Trade name	600
Goodwill	43,695
Total assets acquired	104,095

Accounts payable	9
Accrued expenses and other current liabilities	3,182
Deferred revenue, current	2,741
Other long-term liabilities	13,162
Net assets acquired	$	85,001

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


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

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

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


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

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

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.


	Year ended September 30,
	2023		2022
Revenue	$	371,613	$	340,051
Net loss	$	(2,696)	$	(22,565)

Significant Non-cash Transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]
Restricted Class A common stock issued as part of acquisition purchase consideration (Note 4)	$ 2,000	$ 0	$ 35,245
Acquisition date fair value of contingent consideration in connection with business combinations	760	6,281	22,577
Residual buyouts financed through principal and interest forgiveness of a loan	5,860	0	0
Replacement of the Prior Senior Secured Credit Facility with the 2023 Senior Secured Credit Facility	284,000	0	0
Debt issuance costs financed with proceeds from the 2023 Senior Secured Credit Facility	2,386	0	0
Accrued interest financed with proceeds from the 2023 Senior Secured Credit Facility	1,617	0	0
Right-of-use assets obtained in exchange for operating lease obligations	$ 927	$ 7,846	$ 16,879

Summary of Significant Accounting Policies - Changes in Deferred Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Contract with customer, Liability [Roll Forward]
Deferred revenue, beginning	$ 32,089	$ 30,024
Deferral of revenue	35,330	31,926
Recognition of unearned revenue	(31,975)	(29,861)
Deferred revenue, ending	$ 35,444	$ 32,089

Acquisitions - Pro Forma Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]
Revenue	$ 371,613	$ 340,051
Net loss	$ (2,696)	$ (22,565)

Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Accrued expenses and other current liabilities:
Accrued wages, bonuses, commissions and vacation	$ 8,713	$ 8,117
Accrued interest	1,313	642
Accrued contingent consideration — current portion	6,825	21,385
Escrow liabilities	3,965	12,285
Tax receivable agreement liability — current portion	0	20
Customer deposits	1,258	1,575
Employee health self-insurance liability	1,014	732
Accrued interchange	2,191	2,096
Other current liabilities	12,461	10,981
Accrued expenses and other current liabilities	37,740	57,833
Long-term Liabilities
Accrued contingent consideration — long-term portion	1,414	1,448
Deferred tax liability — long-term	19,646	7,896
Other long-term liabilities	3,083	196
Total other long-term liabilities	$ 24,143	$ 9,540

Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases [Abstract]
2024	$ 5,055
2025	4,439
2026	3,454
2027	1,597
2028	755
Thereafter	1,262
Total future minimum lease payments (undiscounted)	16,562
Less: present value discount	(1,620)
Present value of lease liability	14,942
Short-term leases	$ 52

Noncontrolling Interest (Tables)

12 Months Ended

Sep. 30, 2023

Noncontrolling Interest [Abstract]

Schedule of Impact on Equity due to Changes in Ownership Interest

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


	Year ended September 30,
	2023		2022		2021
Net loss attributable to non-controlling interest	$	(1,841)	$	(6,115)	$	(3,382)
Transfers to (from) non-controlling interests:
Redemption of common units in i3 Verticals, LLC	(224)		(918)		(11,714)
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	4,305		11,511		15,337
Net transfers to non-controlling interests	4,081		10,593		3,623
Change from net income attributable to non-controlling interests and transfers to non-controlling interests	$	2,240	$	4,478	$	241

Organization and Operations	12 Months Ended
Organization and Operations	Sep. 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 in located Nashville, Tennessee, with operations throughout the United States. Unless the context otherwise requires, references to “we,” “us,” “our,” “i3 Verticals” and the “Company” refer to i3 Verticals, Inc. and its subsidiaries, including i3 Verticals, LLC. In connection with the IPO, the Company completed certain reorganization transactions, which among other things, resulted in i3 Verticals, Inc. being the sole managing member of i3 Verticals, LLC (the "Reorganization Transactions"). Following the completion of the IPO and Reorganization Transactions, the Company is a holding company and the principal asset that it owns are the common units in i3 Verticals, LLC. i3 Verticals, Inc. operates and controls all of i3 Verticals, LLC's operations and, through i3 Verticals, LLC and its subsidiaries, conducts i3 Verticals, LLC's business. i3 Verticals, Inc. has a majority economic interest in i3 Verticals, LLC. As the sole managing member of i3 Verticals, LLC, i3 Verticals, Inc. consolidates the financial results of i3 Verticals, LLC and reports a non-controlling interest representing the Common Units of i3 Verticals, LLC held by other owners other (the “Continuing Equity Owners”). i3 Verticals, Inc. is the sole managing member of i3 Verticals, LLC and as a result, consolidates the financial results of i3 Verticals, LLC and reports a non-controlling interest representing the Common Units of i3 Verticals, LLC held by the Continuing Equity Owners. As the Reorganization Transactions are considered transactions between entities under common control, the financial statements retroactively reflect the accounts of i3 Verticals, LLC for periods prior to the IPO and Reorganization Transactions. The Continuing Equity Owners who own Common Units in i3 Verticals, LLC may redeem at each of their options (subject in certain circumstances to time-based vesting requirements) their Common Units for, at the election of i3 Verticals, LLC, cash or newly-issued shares of the Company's Class A common stock. As of September 30, 2023, i3 Verticals, Inc. owned 69.7% of the economic interest in i3 Verticals, LLC. As of September 30, 2023, the Continuing Equity Owners owned Common Units in i3 Verticals, LLC representing approximately 30.3% of the economic interest in i3 Verticals, LLC, shares of Class A common stock in the Company representing approximately 0.7% of the economic interest and voting power in the Company, and shares of Class B common stock in i3 Verticals, Inc., representing approximately 30.3% of the voting power in the Company. Combining the Class A common stock and Class B common stock, the Continuing Equity Holders hold approximately 31.0% of the economic interest and voting power in i3 Verticals, Inc. At-the-Market Program On August 20, 2021, the Company, together with i3 Verticals, LLC, entered into an at-the-market offering sales agreement with Raymond James & Associates, Inc., Morgan Stanley & Co. LLC and BTIG, LLC (each a “Sales Agent”), under which the Company may issue and sell, from time to time and through the Sales Agents, shares of the Company's Class A common stock having an aggregate offering price of up to $125,000 (the “ATM Program”). During the quarter and year ended September 30, 2023, the Company did not sell any Class A common stock under the ATM Program. During the quarter and year ended September 30, 2022, the Company sold 722,000 shares of Class A common stock, raising $17,869 in net proceeds under the ATM Program. The aggregate compensation paid by the Company to the Sales Agents with respect to such sales was $440. As of September 30, 2023, the Company had remaining capacity to sell up to $107,131 of our Class A common stock under the ATM Program.

Leases - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Weighted-average remaining lease term	2 years
Weighted-average discount rate of operating leases	7.70%
Operating lease costs	$ 5,671	$ 5,815	$ 4,096
Variable lease costs	78	59	6
Short-term rent expense	$ 210	$ 177	$ 304

Significant Non-cash Transactions (Tables)

12 Months Ended

Sep. 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 years ended September 30, 2023, 2022, and 2021:


	Year ended September 30,
	2023		2022		2021
Restricted Class A common stock issued as part of acquisition purchase consideration (Note 4)	$	2,000	$	—	$	35,245
Acquisition date fair value of contingent consideration in connection with business combinations	$	760	$	6,281	$	22,577
Residual buyouts financed through principal and interest forgiveness of a loan	$	5,860	$	—	$	—
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	$	927	$	7,846	$	16,879

Acquisitions

12 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

ACQUISITIONS

During the years ended September 30, 2023, 2022 and 2021 the Company acquired the following intangible assets and businesses:

Residual Buyouts

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

During the years ended September 30, 2023, 2022 and 2021, the Company purchased $8,051, $52 and $1,819, respectively, in residual buyouts using a combination of cash on hand, loan forgiveness and borrowings on the Company's revolving credit facility. The acquired residual buyout intangible assets weighted average estimated amortization period of eight years.

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 year ended September 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.

2023 Business Combinations

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

During the year ended September 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.

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 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 $1,741 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	$	7,660
Prepaid expenses and other current assets	103
Property and equipment	5,437
Capitalized software	12,600
Customer relationships	33,800
Non-compete agreements	200
Trade name	600
Goodwill	43,695
Total assets acquired	104,095

Accounts payable	9
Accrued expenses and other current liabilities	3,182
Deferred revenue, current	2,741
Other long-term liabilities	13,162
Net assets acquired	$	85,001

Other Business Combinations during the year ended September 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 these acquisitions, the Company allocated approximately $159 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 $12,229, to goodwill, of which $2,864 is deductible for tax purposes, and approximately $2,178 to other long-term liabilities. Certain of the purchase price allocations assigned for these acquisitions is considered preliminary as of September 30, 2023. The acquired capital software and customer relationships intangible assets have estimated amortization periods of seven to eight years and ten to fifteen years, respectively.

Acquisition-related costs for these businesses amounted to approximately $317 and were expensed as incurred.

Pro Forma Results of Operations for 2023 Business Combinations

The following unaudited supplemental pro forma results of operations have been prepared as though each of the acquired businesses in the year ended September 30, 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 revised debt load, all in accordance with ASC 805. This supplemental pro forma


	Year ended September 30,
	2023		2022
Revenue	$	371,613	$	340,051
Net loss	$	(2,696)	$	(22,565)

2022 Business Combinations

During the year ended September 30, 2022, the Company completed the acquisitions of three businesses to expand the Company’s software offerings in the Public Sector and Healthcare vertical markets.

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 13.

Summary of 2022 Business Combinations

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


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

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

2021 Business Combinations

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

Purchase of Business Information Systems, Inc.

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

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

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

Certain provisions in the purchase agreement provide for additional consideration of up to $16,000 in the aggregate, to be paid based upon achievement of specified financial performance targets, as defined in the

purchase agreement, in the 24 months from February 1, 2021 through January 31, 2023. The Company determined the acquisition date fair value of the liability for the contingent consideration based on a probability forecast and discounted cash flow analysis. In each subsequent reporting period, the Company will reassess the current estimates of performance relative to the targets and adjust the contingent liability to its fair value through earnings. See additional disclosures in Note 13.

Purchase of ImageSoft, Inc.

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

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

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

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

Other Business Combinations

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

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

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

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

the targets and adjust the contingent liabilities to their fair values through earnings. See additional disclosures in Note 13.

Summary of 2021 Business Combinations

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


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

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

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Pay vs Performance Disclosure
Net Income (Loss)	$ (811)	$ (17,102)	$ (4,457)

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147480167/946-830-55-10

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 20: http://www.xbrl.org/2009/role/commonPracticeRef
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+ Details

Leases (Tables)

12 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Maturities of Lease Liabilities

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


Years ending September 30:
2024	$	5,055
2025	4,439
2026	3,454
2027	1,597
2028	755
Thereafter	1,262
Total future minimum lease payments (undiscounted)(1)	16,562
Less: present value discount	(1,620)
Present value of lease liability	$	14,942

_________________________

1.Total future minimum lease payments excludes payments of $52 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.

Long-Term Debt, Net

12 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Long-Term Debt, Net

LONG-TERM DEBT, NET

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


	Maturity	2023		2022
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility	May 8, 2028	$	272,505	$	—
Revolving lines of credit to banks under the Prior Senior Secured Credit Facility	May 9, 2024	—		185,017
1.0% Exchangeable Senior Notes due 2025	February 15, 2025	117,000		104,557
Debt issuance costs, net		(4,424)		(2,554)
Total long-term debt, net of issuance costs		$	385,081	$	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 (the “Indenture”), among i3 Verticals, LLC, the Company and U.S. Bank National Association, as trustee.

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

If the Company or i3 Verticals, LLC undergoes a fundamental change, holders may require i3 Verticals, LLC to repurchase all or part of their Exchangeable Notes at a repurchase price equal to 100% of the principal amount of the Exchangeable Notes to be repurchased, plus accrued and unpaid interest to, but not including, the fundamental change repurchase date. As of September 30, 2023, none of the conditions permitting the holders of the Exchangeable Notes to early convert have been met.

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

The Exchangeable Notes are general senior unsecured obligations of i3 Verticals, LLC and the guarantee is the Company’s senior unsecured obligation and rank senior in right of payment to all of i3 Verticals, LLC’s and the Company’s future indebtedness that is expressly subordinated in right of payment to the Exchangeable Notes or the guarantee, as applicable. The Exchangeable Notes and the guarantee rank equally in right of payment with all of i3 Verticals, LLC’s and the Company’s existing and future unsecured indebtedness that is not so expressly subordinated in the right of payment to the Exchangeable Notes or the guarantee, as applicable. The Exchangeable Notes and the guarantee are effectively subordinated to any of the Companies’ existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness (including obligations under the 2023 Senior Secured Credit Facility, defined below). The Exchangeable Notes and the guarantee will be structurally subordinated to all indebtedness and other liabilities and obligations (including the debt and trade payables) of the Company’s subsidiaries, other than i3 Verticals, LLC.

In accounting for the issuance of the Exchangeable Notes, the Company separated the Exchangeable Notes into liability and equity components. The carrying amount of the liability component before the allocation of any transaction costs was calculated by measuring the fair value of a similar liability that does not have an associated

exchangeable feature. The carrying amount of the equity component (before the allocation of any transaction costs), representing the conversion option, which does not require separate accounting as a derivative as it meets a scope exception for certain contracts involving an entity's own equity, was determined by deducting the fair value of the liability component from the par value of the Exchangeable Notes. The difference between the principal amount of the Exchangeable Notes and the liability component represented the debt discount, which was recorded as a direct deduction from the related debt liability in the consolidated balance sheet and accreted over the period from the date of issuance to the contractual maturity date, resulting in the recognition of non-cash interest expense. The equity component of the Exchangeable Notes of approximately $28,662 was included in additional paid-in capital in the consolidated balance sheet and was not remeasured as longs as continued to meet the conditions for equity classification. Transaction costs were allocated to the liability and equity components in the same proportion as the allocation of the proceeds. Transaction costs attributable to the liability component were recorded as debt issuance costs in the consolidated balance sheet and are amortized to interest expense using the effective interest method over the term of the Exchangeable Notes, and transaction costs attributable to the equity component were netted with the equity component in stockholders' equity. Effective October 1, 2022, the Company adopted ASU 2020-06, which simplified the accounting for the Exchangeable Notes and they are now reported as a single liability instrument with no separate accounting for embedded conversion features. The adoption of ASU 2020-06 resulted 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.

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

Non-cash interest expense for amortization of debt issuance costs related to the Exchangeable Notes for the years ended September 30, 2023 and 2022 was $949 and $666, respectively. The Company also wrote off a portion of the debt issuance costs in connection with the repurchase transactions in April and September 2020, as described below. Total unamortized debt issuance costs related to the Exchangeable Notes were $1,501 as of September 30, 2023.

The estimated fair value of the Exchangeable Notes was $108,506 as of September 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 13.

The Company can choose to purchase its Exchangeable Notes on the open market. In April and September 2020, the Company paid $17,414 in aggregate to repurchase $21,000 in aggregate principal amount of the Exchangeable Notes and to repay approximately $24 in accrued interest on the repurchased portion of the Exchangeable Notes.

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 Credit Facility

On May 8, 2023, i3 Verticals, LLC (the “Borrower”), entered into that certain Credit Agreement (the “2023 Senior Secured Credit Facility”) with the guarantors and lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan”). The 2023 Senior Secured Credit Facility replaces the Prior Senior Secured Credit Facility (as defined below). The 2023 Senior Secured Credit Facility provides for aggregate commitments of $450,000 in the form of a senior secured revolving credit facility (the “Revolver”).

The 2023 Senior Secured Credit Facility 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 $100,000 and 100% of the Borrower’s consolidated EBITDA (as defined in the 2023 Senior Secured Credit Facility) 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 Senior Secured Credit Facility) would not be less than 3.0 to 1.0 and the Borrower’s consolidated total net leverage ratio (as defined in the 2023 Senior Secured Credit Facility) would not exceed 5.0 to 1.0. As of September 30, 2023, the Borrower's consolidated interest coverage ratio was 4.39x and total leverage ratio was 3.77x.

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 Senior Secured Credit Facility 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 Senior Secured Credit Facility) 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 September 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 September 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 Senior Secured Credit Facility), 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 < 3.0 to 1.0	0.25	%	2.50	%	2.50	%	1.50	%
> 2.0 to 1.0 but < 2.5 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 September 30, 2023) times the actual daily amount by which $450,000 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 Senior Secured Credit Facility, 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 $450,000 at any time, the 2023 Senior Secured Credit Facility requires the Borrower to prepay such excess outstanding amounts.

All obligations under the 2023 Senior Secured Credit Facility 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 Senior Secured Credit Facility 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 Senior Secured Credit Facility 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 Senior Secured Credit Facility 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 $3,079 in debt issuance costs during the year ended September 30, 2023 and did not incur any debt issuance costs during the years ended September 30, 2022 and 2021. 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 $1,514, $1,046 and $968 during the years ended September 30, 2023, 2022 and 2021, respectively. In connection with the replacement of the Prior Senior Secured Credit Facility, the Company recorded a debt extinguishment charge of $203 for the write-off of deferred financing costs, which was recorded in interest expense in the consolidated statements of operations.

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 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

Earnings Per Share

12 Months Ended

Sep. 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:


	Year ended September 30,
	2023		2022		2021
Basic net loss per share:
Numerator
Net loss	$	(2,652)	$	(23,217)	$	(7,839)
Less: Net loss attributable to non-controlling interests	(1,841)		(6,115)		(3,382)
Net loss attributable to Class A common stockholders	$	(811)	$	(17,102)	$	(4,457)
Denominator
Weighted average shares of Class A common stock outstanding(1)	23,137,586		22,249,656		20,994,598
Basic net loss per share(2)	$	(0.04)	$	(0.77)	$	(0.21)

Dilutive net loss per share(4):
Numerator
Net loss attributable to Class A common stockholders	$	(811)			$	(4,457)
Reallocation of net loss assuming conversion of common units(5)	(1,391)				(2,556)
Net loss attributable to Class A common stockholders - diluted	$	(2,202)			$	(7,013)
Denominator
Weighted average shares of Class A common stock outstanding(1)	23,137,586				20,994,598
Weighted average effect of dilutive securities(2)(3)(4)	10,109,247				10,719,593
Weighted average shares of Class A common stock outstanding - diluted	33,246,833				31,714,191
Diluted net loss per share	$	(0.07)			$	(0.22)

____________________

1.Excludes 6,706 shares of restricted Class A common stock for the year ended September 30, 2021.

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

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

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

Equity-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021	May 31, 2021	Sep. 30, 2020	May 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income tax benefits related to equity-based compensation	$ 785	$ 468	$ 1,083
Granted, weighted average grant date fair value (in USD per share)	$ 13.68
Stock options outstanding (in shares)	8,576,670	8,222,322
Options exercisable at end of period (in shares)	5,586,736
Unrecognized compensation expense related to unvested options at end of period	$ 23,395
Period for recognition of unrecognized compensation cost	2 years 1 month 6 days
Fair value of stock options that vested	$ 24,652
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period for recognition of unrecognized compensation cost	3 years 1 month 6 days
Granted, weighted average exercise price (in USD per share)	$ 25.28
Cost not yet recognized, amount	$ 12,126
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)	1,075,549					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						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)	1,154,571			3,000,000	1,500,000

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Disaggregation of Revenue

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

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


	For the year ended September 30, 2023
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	170,895		13,177		(41)		184,031
Payments revenue	$	51,834	$	115,049	$	(29)	$	166,854
Other revenue	10,238		9,116		—		19,354
Total revenue	$	232,967	$	137,342	$	(70)	$	370,239


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


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

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

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


	For the year ended September 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	215,071	$	115,982	$	(41)	$	331,012
Revenue earned at a point in time	17,896		21,360		(29)		39,227
Total revenue	$	232,967	$	137,342	$	(70)	$	370,239


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


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

Schedule of Changes in Deferred Revenue

The following table presents the changes in deferred revenue as of and for the year ended September 30, 2023:


Balance at September 30, 2021	$	30,024
Deferral of revenue	31,926
Recognition of unearned revenue	(29,861)
Balance at September 30, 2022	$	32,089
Deferral of revenue	35,330
Recognition of unearned revenue	(31,975)
Balance at September 30, 2023	$	35,444

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Current assets
Cash and cash equivalents	$ 3,112	$ 3,490
Accounts receivable, net	65,110	53,334
Settlement assets	4,873	7,540
Prepaid expenses and other current assets	12,449	19,445
Total current assets	85,544	83,809
Property and equipment, net	12,308	5,670
Restricted cash	4,415	12,735
Capitalized software, net	62,577	52,341
Goodwill	409,563	353,639
Intangible assets, net	226,952	195,919
Deferred tax asset	52,514	43,458
Operating lease right-of-use assets	13,922	17,678
Other assets	13,698	5,063
Total assets	881,493	770,312
Current liabilities
Accounts payable	11,064	9,342
Accrued expenses and other current liabilities	37,740	57,833
Settlement obligations	4,873	7,540
Deferred revenue	35,275	31,975
Current portion of operating lease liabilities	4,509	4,568
Total current liabilities	93,461	111,258
Long-term debt, less current portion and debt issuance costs, net	385,081	287,020
Long-term tax receivable agreement obligations	40,079	40,812
Operating lease liabilities, less current portion	10,433	13,994
Other long-term liabilities	24,143	9,540
Total liabilities	553,197	462,624
Commitments and contingencies (see Note 15)
Stockholders' equity
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized; 0 shares issued and outstanding as of September 30, 2023 and 2022	0	0
Additional paid-in-capital	249,688	241,958
Accumulated deficit	(12,944)	(23,582)
Total stockholders' equity	236,747	218,379
Non-controlling interest	91,549	89,309
Total equity	328,296	307,688
Total liabilities and equity	881,493	770,312
Class A Common Stock
Stockholders' equity
Common stock	2	2
Class B Common Stock
Stockholders' equity
Common stock	$ 1	$ 1

Segments

12 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segments

SEGMENTS

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

The Company's core business is delivering seamlessly integrated payment and software solutions to customers in strategic vertical markets. This is accomplished through the Software and Services and Merchant 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.


	As of and for the Year ended September 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue	$	232,967	$	137,342	$	(70)	$	370,239
Other costs of services	(16,102)		(64,521)		71		(80,552)
Residuals	2,214		41,460		(32)		43,642
Processing margin	$	219,079	$	114,281	$	(31)	$	333,329

Residuals							43,642
Selling general and administrative							219,736
Depreciation and amortization							36,461
Change in fair value of contingent consideration							10,781
Income from operations							$	22,709

Total assets	$	611,515	$	210,705	$	59,273	$	881,493
Goodwill	$	287,613	$	121,950	$	—	$	409,563


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

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

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


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

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

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

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
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-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
-SubTopic 10
-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
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (a)
-Publisher FASB
-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

Long-Term Debt, Net - Additional Information (Details)						6 Months Ended	12 Months Ended
Long-Term Debt, Net - Additional Information (Details)	Sep. 30, 2023 USD ($) $ / shares	May 08, 2023 USD ($)	Oct. 03, 2022 USD ($)	Feb. 18, 2020 USD ($) day $ / shares	Feb. 13, 2020 USD ($) $ / shares shares	Sep. 30, 2020 USD ($)	Sep. 30, 2023 USD ($) $ / shares	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Oct. 01, 2022 USD ($)
Debt Instrument [Line Items]
Long-term debt, less current portion and debt issuance costs, net	$ 385,081,000						$ 385,081,000	$ 287,020,000
Decrease in additional paid-in-capital	(249,688,000)						(249,688,000)	(241,958,000)
Accumulated earnings	(12,944,000)						(12,944,000)	(23,582,000)
Amortization of deferred debt issuance costs							1,514,000	1,046,000	$ 968,000
Debt issuance costs, net	4,424,000						4,424,000	2,554,000
Exchangeable notes, fair value	108,506,000						108,506,000
Payments for note hedge transactions					$ 28,676,000
Debt issuance costs incurred							3,079,000	0	$ 0
Cumulative Effect, Period of Adoption, Adjustment \| Accounting Standards Update 2020-06
Debt Instrument [Line Items]
Long-term debt, less current portion and debt issuance costs, net										$ 11,933,000
Decrease in additional paid-in-capital										23,382,000
Accumulated earnings										$ 11,449,000
1.0% Exchangeable Senior Notes due 2025
Debt Instrument [Line Items]
Repayments of convertible debt						$ 17,414,000
1.0% Exchangeable Senior Notes due 2025 \| Exchangeable Notes
Debt Instrument [Line Items]
Original principal amount				$ 138,000,000
Stated interest rate				1.00%
Net proceeds from the sale of the exchangeable notes				$ 132,762,000
Long-term debt	117,000,000						117,000,000	104,557,000
Amortization of deferred debt issuance costs							949,000	666,000
Debt issuance costs, net	1,501,000						1,501,000
Debt aggregate repurchase amount						21,000,000
Debt interest, repurchase amount						$ 24,000
1.0% Exchangeable Senior Notes due 2025 \| Exchangeable Notes \| In Event of Fundamental Change
Debt Instrument [Line Items]
Repurchase price as percent of face value of notes				100.00%
1.0% Exchangeable Senior Notes due 2025 \| Exchangeable Notes \| February 20, 2023 to 47th Scheduled Trading Day Immediately Preceding the Maturity Date
Debt Instrument [Line Items]
Repurchase price as percent of face value of notes				100.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Long-term debt	$ 272,505,000						$ 272,505,000	0
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	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 \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate		2.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| One, Two, Three, Or Six Month SOFR \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate		3.00%
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	2.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| SOFR Plus 1% \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate		1.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| SOFR Plus 1% \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate		2.00%
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
Consolidation basis		1
Debt covenant, minimum consolidated interest coverage ratio	4.39	3					4.39
Debt covenant, maximum total leverage ratio	3.77	5					3.77
Commitment fee percentage	0.30%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Revolving Credit Facility \| Minimum
Debt Instrument [Line Items]
Commitment fee percentage		0.15%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Revolving Credit Facility \| Maximum
Debt Instrument [Line Items]
Commitment fee percentage		0.30%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Revolving Credit Facility \| One, Two, Three, Or Six Month SOFR
Debt Instrument [Line Items]
Basis spread on variable rate		0.10%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Revolving Credit Facility \| Adjusted Term SOFR
Debt Instrument [Line Items]
Basis spread on variable rate		0.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Revolving Credit Facility \| Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate		0.50%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Revolving Credit Facility \| Secured Overnight Financing Rate SOFR
Debt Instrument [Line Items]
Basis spread on variable rate		1.00%
Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility \| Line of Credit \| Revolving Credit Facility \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate		1.00%
2019 Senior Secured Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Long-term debt	$ 0						$ 0	$ 185,017,000
Revolving line of credit borrowing capacity			$ 375,000,000
Optional addition to borrowing capacity			$ 50,000,000
Write off of deferred debt issuance cost							$ 203,000
2019 Senior Secured Credit Facility \| Line of Credit \| Minimum
Debt Instrument [Line Items]
Commitment fee percentage			0.15%
2019 Senior Secured Credit Facility \| Line of Credit \| Maximum
Debt Instrument [Line Items]
Commitment fee percentage			0.30%
2019 Senior Secured Credit Facility \| Line of Credit \| Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate			0.50%
2019 Senior Secured Credit Facility \| Line of Credit \| Secured Overnight Financing Rate SOFR
Debt Instrument [Line Items]
Adjustment in addition to basis spread			0.10%
2019 Senior Secured Credit Facility \| Line of Credit \| Secured Overnight Financing Rate SOFR \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate			2.25%
2019 Senior Secured Credit Facility \| Line of Credit \| Secured Overnight Financing Rate SOFR \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate			3.25%
2019 Senior Secured Credit Facility \| Line of Credit \| SOFR Plus 1%
Debt Instrument [Line Items]
Basis spread on variable rate			1.00%
Adjustment in addition to basis spread			0.10%
2019 Senior Secured Credit Facility \| Line of Credit \| SOFR Plus 1% \| Minimum
Debt Instrument [Line Items]
Basis spread on variable rate			0.25%
2019 Senior Secured Credit Facility \| Line of Credit \| SOFR Plus 1% \| Maximum
Debt Instrument [Line Items]
Basis spread on variable rate			1.25%
2019 Senior Secured Credit Facility \| Line of Credit \| Letter of Credit Fee \| Maximum
Debt Instrument [Line Items]
Commitment fee percentage			3.25%
Additional Paid-In Capital
Debt Instrument [Line Items]
Equity component of exchangeable notes, net of issuance costs and deferred taxes				$ 28,662,000
Class A Common Stock
Debt Instrument [Line Items]
Exchangeable notes, exchange price per share (in USD per share) \| $ / shares	$ 40.87			$ 40.87			$ 40.87
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 offering and sale of warrants					$ 14,669,000
Class A Common Stock \| 1.0% Exchangeable Senior Notes due 2025 \| Exchangeable Notes
Debt Instrument [Line Items]
Exchangeable notes, exchange rate, shares per $1000				0.0244666
Class A Common Stock \| 1.0% Exchangeable Senior Notes due 2025 \| Exchangeable Notes \| February 20, 2023 to 47th Scheduled Trading Day Immediately Preceding the Maturity Date
Debt Instrument [Line Items]
Threshold exchange price as percent of closing price per share to allow redemption				130.00%
Threshold trading days closing price for stock must exceed exchange price \| day				20

Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Sep. 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 September 30, 2023 and 2022 is as follows:


	2023		2022
Inventory	$	4,138	$	4,121
Prepaid licenses	3,115		5,743
Prepaid insurance	697		736
Notes receivable — current portion	4		4,930
Other current assets	4,495		3,915
Prepaid expenses and other current assets	$	12,449	$	19,445

Fair Value Measurements

12 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

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 September 30, 2023 and 2022, because of the relatively short maturity dates on these instruments. The carrying amount of debt approximates fair value as of September 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, 2021	$	36,229
Contingent consideration accrued at time of business combination	6,281
Change in fair value of contingent consideration included in Operating expenses	23,725
Contingent consideration paid	(43,402)
Balance at September 30, 2022	$	22,833
Contingent consideration accrued at time of business combination	760
Change in fair value of contingent consideration included in Operating expenses	10,781
Contingent consideration paid	(26,135)
Balance at September 30, 2023	$	8,239

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 $6,825 and $21,385 of contingent consideration was recorded in accrued expenses and other current liabilities as of September 30, 2023 and 2022, respectively. Approximately $1,414 and $1,448 of contingent consideration was recorded in other long-term liabilities as of September 30, 2023 and 2022, respectively.

Disclosure of Fair Values

The Company's financial instruments that are not remeasured at fair value include the Exchangeable Notes (see Note 10). The Company estimates the fair value of the Exchangeable Notes through consideration of quoted market prices of similar instruments, classified as Level 2 as described above. The estimated fair value of the Exchangeable Notes was $108,506 as of September 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

Fair Value Measurements (Details) - USD ($) $ in Thousands	12 Months Ended
Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Costs and Expenses	Costs and Expenses
Exchangeable notes, fair value	$ 108,506
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	10,781	23,725
Contingent consideration paid	(26,135)	(43,402)
Balance, ending	8,239	22,833
Accrued Expenses and Other Current Liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration	6,825	21,385
Other Long-term Liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration	$ 1,414	$ 1,448

Fair Value Measurements (Tables)

12 Months Ended

Sep. 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, 2021	$	36,229
Contingent consideration accrued at time of business combination	6,281
Change in fair value of contingent consideration included in Operating expenses	23,725
Contingent consideration paid	(43,402)
Balance at September 30, 2022	$	22,833
Contingent consideration accrued at time of business combination	760
Change in fair value of contingent consideration included in Operating expenses	10,781
Contingent consideration paid	(26,135)
Balance at September 30, 2023	$	8,239

Non-Controlling Interest

12 Months Ended

Sep. 30, 2023

Noncontrolling Interest [Abstract]

Non-Controlling Interest

NON-CONTROLLING INTEREST

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

As of September 30, 2023, and 2022, respectively, i3 Verticals, Inc. owned 23,253,272 and 22,986,448 of i3 Verticals, LLC's Common Units, representing a 69.7% and 69.4% economic ownership interest in i3 Verticals, LLC.

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


	Year ended September 30,
	2023		2022		2021
Net loss attributable to non-controlling interest	$	(1,841)	$	(6,115)	$	(3,382)
Transfers to (from) non-controlling interests:
Redemption of common units in i3 Verticals, LLC	(224)		(918)		(11,714)
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	4,305		11,511		15,337
Net transfers to non-controlling interests	4,081		10,593		3,623
Change from net income attributable to non-controlling interests and transfers to non-controlling interests	$	2,240	$	4,478	$	241

Income Taxes - Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Current:
Federal tax expense (benefit)	$ 3,076	$ 1,098	$ (35)
State tax expense	1,656	1,321	945
Deferred:
Federal tax benefit	(7,296)	(4,151)	(285)
State tax expense (benefit)	1,361	6,739	(2)
Income tax (benefit) expense	$ (1,203)	$ 5,007	$ 623

- Definition

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

+ References + Details

Capitalized Software, Net

12 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Capitalized Software, Net

CAPITALIZED SOFTWARE, NET

A summary of the Company's capitalized software as of September 30, 2023 and 2022 is as follows:


	Estimated Useful Life	2023		2022
Software development costs	3 to 7 years	$	81,141	$	60,013
Development in progress		8,634		9,265
Accumulated amortization		(27,198)		(16,937)
Capitalized software, net		$	62,577	$	52,341

The Company capitalized software development costs (including acquisitions) totaling $25,441 and $19,957 during the years ended September 30, 2023 and 2022, respectively. Amortization expense for capitalized software development costs amounted to $12,545, $8,987 and $6,276 during the years ended September 30, 2023, 2022 and 2021, respectively. During the year ended September 30, 2023, the Company wrote down $2,660 related to an internal use software project. There were no amounts written down to net realizable value during the years ended September 30, 2022 and 2021, respectively.

Leases

12 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

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 September 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 September 30, 2023 was two years. The Company had no significant short-term leases during the year ended September 30, 2023.

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% as of September 30, 2023.

Operating lease cost is recognized on a straight-line basis over the lease term. Operating lease costs for the years ended September 30, 2023, 2022 and 2021, were $5,671, $5,815 and $4,096, respectively, which are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

Total operating lease costs for the years ended September 30, 2023, 2022 and 2021, include variable lease costs of approximately $78, $59 and $6, respectively, which are primarily comprised of costs of maintenance and utilities and changes in rates, and are determined based on the actual costs incurred during the period. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and liabilities.

Short-term rent expense for the years ended September 30, 2023, 2022 and 2021, was $210, $177 and $304, respectively, and are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

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


Years ending September 30:
2024	$	5,055
2025	4,439
2026	3,454
2027	1,597
2028	755
Thereafter	1,262
Total future minimum lease payments (undiscounted)(1)	16,562
Less: present value discount	(1,620)
Present value of lease liability	$	14,942

_________________________

Capitalized Software, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Accumulated amortization	$ (27,198)	$ (16,937)
Capitalized software, net	62,577	52,341
Software capitalized during the period	25,441	19,957
Amortization expense	12,545	8,987	$ 6,276
Amounts written down to net realizable value	2,660	0	$ 0
Software development costs
Finite-Lived Intangible Assets [Line Items]
Capitalized software	81,141	60,013
Development in progress
Finite-Lived Intangible Assets [Line Items]
Capitalized software	$ 8,634	$ 9,265
Minimum \| Software development costs
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Maximum \| Software development costs
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years

Equity-Based Compensation (Tables)

12 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Equity-Based Compensation Expense

A summary of equity-based compensation expense recognized during the years ended September 30, 2023, 2022 and 2021 is as follows:


	Year ended September 30,
	2023		2022		2021
Stock options	$	24,276	$	25,163	$	20,860
Restricted stock units	3,602		1,067		—
Equity-based compensation expense	$	27,878	$	26,230	$	20,860

Schedule of Fair Value of Stock Option Awards

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


	September 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	%

_________________

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.

Schedule of Stock Option Activity

A summary of stock option activity for the year ended September 30, 2023 is as follows:


	Stock Options	Weighted Average Exercise Price
Outstanding at September 30, 2022	8,222,322	$	25.07
Granted	1,286,629	24.13
Exercised	(460,760)	18.14
Forfeited	(471,521)	27.69
Outstanding at September 30, 2023	8,576,670	$	25.16

Exercisable at September 30, 2023	5,586,736	$	24.79

Schedule of Restricted Stock Units

A summary of activity related to restricted stock units as of September 30, 2023 is as follows:


	Restricted Stock Units	Weighted Average Exercise Price
Outstanding at September 30, 2022	486,652	$	24.93
Granted	536,882	25.28
Vested	(67,854)	26.34
Forfeited	(81,656)	24.09
Outstanding at September 30, 2023	874,024	$	24.95

Summary of Significant Accounting Policies

12 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Reclassifications

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

Principles of Consolidation

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

Cash and Cash Equivalents

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

Restricted Cash

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

Accounts Receivable and Credit Policies

Accounts receivable consist primarily of uncollateralized credit card processing residual payments due from processing banks requiring payment within thirty days following the end of each month. Accounts receivable also include amounts due from the sales of the Company’s technology solutions to its customers. The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts, if necessary, which reflects management’s best estimate of the amounts that will not be collected. The allowance is estimated based on management’s knowledge of its customers, historical loss experience and existing economic conditions. Accounts receivable and the allowance are written-off when, in management’s opinion, all collection efforts have been exhausted. The Company’s allowance for doubtful accounts was $743 and $590 as of September 30, 2023 and 2022, respectively; however, actual write-offs may exceed estimated amounts.

Settlement Assets and Obligations

Settlement assets and obligations result when funds are temporarily held or owed by the Company on behalf of merchants, consumers, schools, and other institutions. Timing differences, interchange expenses, merchant reserves and exceptional items cause differences between the amount received from the card networks and the amount funded to counterparties. These balances arising in the settlement process are reflected as settlement assets and obligations on the accompanying consolidated balance sheets. With the exception of merchant reserves, settlement assets or settlement obligations are generally collected and paid within one to four days. Settlement assets and settlement obligations were $4,873 as of September 30, 2023 and $7,540 as of September 30, 2022.

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 $4,138 and $4,121 at September 30, 2023 and 2022, respectively, and are included within prepaid expenses and other current assets on the accompanying consolidated balance sheets.

Property and Equipment

Capitalized Software

Notes Receivable

Notes receivable consist of loans made to unrelated entities. Notes receivable were $199 and $5,125 at September 30, 2023 and 2022, respectively, and are included within prepaid expenses and other current assets and other assets on the accompanying consolidated balance sheets.

Acquisitions

The operating results of an acquisition are included in the consolidated statements of operations from the date of such acquisition. Acquisitions completed during the year ended September 30, 2023 contributed $18,365 and $3,350 of revenue and net income, respectively, to the results in the Company's consolidated statements of operations for the year then ended.

Goodwill

its carrying value, the Company recognizes an impairment equal to the excess carrying value, not to exceed the total amount of goodwill allocated to that reporting unit.

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

The Company has determined that it has five reporting units as of the date of the most recent annual goodwill impairment test. For each of the years ended September 30, 2023, 2022 and 2021 the Company performed a quantitative assessment for each of its reporting units. The Company determined that none of the reporting units were impaired.

Intangible Assets

Income Taxes

Valuation of Contingent Consideration

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

Classification of Financial Instruments

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

Revenue Recognition and Deferred Revenue

The Company's revenue for the years ended September 30, 2023, 2022 and 2021 is derived from the following sources:

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

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

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

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


	For the year ended September 30, 2023
	Software and Services		Merchant Services		Other		Total
Software and related services revenue	170,895		13,177		(41)		184,031
Payments revenue	$	51,834	$	115,049	$	(29)	$	166,854
Other revenue	10,238		9,116		—		19,354
Total revenue	$	232,967	$	137,342	$	(70)	$	370,239


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


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

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

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


	For the year ended September 30, 2023
	Software and Services		Merchant Services		Other		Total
Revenue earned over time	$	215,071	$	115,982	$	(41)	$	331,012
Revenue earned at a point in time	17,896		21,360		(29)		39,227
Total revenue	$	232,967	$	137,342	$	(70)	$	370,239


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


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

Contract Assets

As of September 30, 2023 and September 30, 2022, the Company’s contract assets from contracts with customers was $15,131 and $9,716, respectively

Contract Liabilities

Company's contracts with a deferred revenue component are one year. Substantially all of the Company's deferred revenue is anticipated to be recognized within the next year.

The following table presents the changes in deferred revenue as of and for the year ended September 30, 2023:


Balance at September 30, 2021	$	30,024
Deferral of revenue	31,926
Recognition of unearned revenue	(29,861)
Balance at September 30, 2022	$	32,089
Deferral of revenue	35,330
Recognition of unearned revenue	(31,975)
Balance at September 30, 2023	$	35,444

Costs to Obtain and Fulfill a Contract

Other Cost of Services

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

Selling, General and Administrative

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

Advertising and promotion costs are expensed as incurred. Advertising expense was $3,966, $4,028 and $2,623 for the years ended September 30, 2023, 2022 and 2021, respectively, and is included in selling, general and administrative expenses in the Consolidated Statements of Operations.

Equity-based Compensation

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

Equity-based compensation was $27,878, $26,230 and $20,860 for the years ended September 30, 2023, 2022 and 2021, respectively.

Use of Estimates

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

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Related Party Transactions (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	Apr. 01, 2021	Mar. 31, 2021	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021	Jun. 25, 2018
Related Party Transaction [Line Items]
Percent of tax benefits payable to continuing equity owners						85.00%
Revenue			$ 370,239	$ 317,862	$ 224,124
Axia Med
Related Party Transaction [Line Items]
Increase in fair value		$ 2,353
Proceeds from sale of investment	$ 2,453
Axia Med \| Affiliated Entity
Related Party Transaction [Line Items]
Revenue					$ 117
Class B Common Stock \| Continuing Equity Owner
Related Party Transaction [Line Items]
Tax benefits due to continuing equity owners			$ 40,079

Goodwill and Intangible Assets (Tables)

12 Months Ended

Sep. 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, 2021 (net of accumulated impairment losses of $11,458, $0 and $0, respectively)	$	173,157	$	119,086	$	—	$	292,243
Goodwill attributable to preliminary purchase price adjustments and acquisition activity during the year ended September 30, 2022	61,396		—		—		61,396
Balance at September 30, 2022	234,553		119,086		—		353,639
Goodwill attributable to preliminary purchase price adjustments and acquisition activity during the year ended September 30, 2023	53,060		2,864		—		55,924
Balance at September 30, 2023	$	287,613	$	121,950	$	—	$	409,563

Schedule of Finite-Lived Intangible Assets

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


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Customer relationships	$	310,501	$	(98,182)	$	212,319	9 to 25 years – accelerated or straight-line
Non-compete agreements	1,300		(1,059)		241		3 to 6 years – straight-line
Website and brand development costs	44		(37)		7		3 to 4 years – straight-line
Trade names	6,531		(3,690)		2,841		3 to 7 years – straight-line
Residual buyouts	14,220		(3,111)		11,109		8 years – straight-line
Referral and exclusivity agreements	609		(217)		392		5 years – straight-line
Total finite-lived intangible assets	333,205		(106,296)		226,909

Indefinite-lived intangible assets:
Trademarks	43		—		43
Total identifiable intangible assets	$	333,248	$	(106,296)	$	226,952

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


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

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

Schedule of Indefinite-Lived Intangible Assets

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


	Cost		Accumulated Amortization		Carrying Value		Amortization Life and Method
Finite-lived intangible assets:
Customer relationships	$	310,501	$	(98,182)	$	212,319	9 to 25 years – accelerated or straight-line
Non-compete agreements	1,300		(1,059)		241		3 to 6 years – straight-line
Website and brand development costs	44		(37)		7		3 to 4 years – straight-line
Trade names	6,531		(3,690)		2,841		3 to 7 years – straight-line
Residual buyouts	14,220		(3,111)		11,109		8 years – straight-line
Referral and exclusivity agreements	609		(217)		392		5 years – straight-line
Total finite-lived intangible assets	333,205		(106,296)		226,909

Indefinite-lived intangible assets:
Trademarks	43		—		43
Total identifiable intangible assets	$	333,248	$	(106,296)	$	226,952

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


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

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

Schedule of Future Amortization Expense of Finite-lived Intangible Assets


2024	$	20,506
2025	20,215
2026	19,743
2027	19,123
2028	18,540
Thereafter	128,782
	$	226,909

- 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
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Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-2

+ Details

Acquisitions - Additional Information (Details) $ in Thousands			12 Months Ended
	Feb. 01, 2021 USD ($) shares	Nov. 17, 2020 USD ($)	Sep. 30, 2023 USD ($) business	Sep. 30, 2022 USD ($) business	Sep. 30, 2021 USD ($) business
Finite-Lived Intangible Assets [Line Items]
Goodwill			$ 409,563	$ 353,639	$ 292,243
Software and Services
Finite-Lived Intangible Assets [Line Items]
Goodwill			287,613	234,553	173,157
Merchant Services
Finite-Lived Intangible Assets [Line Items]
Goodwill			$ 121,950	$ 119,086	$ 119,086
Celtic
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			18 years
Proceeds from issuance of long-term debt used to fund the acquisition			$ 85,000
Acquisition-related costs			1,741
Property and equipment			5,437
Goodwill			43,695
Other long-term liabilities			13,162
Other Business Combinations
Finite-Lived Intangible Assets [Line Items]
Proceeds from issuance of long-term debt used to fund the acquisition			16,997
Acquisition-related costs			$ 317
Number of businesses acquired \| business			2
Total purchase consideration			$ 19,757
Business combination, contingent consideration, liability			760
Net working capital			159
Property and equipment			374
Goodwill			12,229
Business acquisition, goodwill, expected tax deductible amount			2,864
Other long-term liabilities			2,178
Other Business Combinations \| Class A Common Stock
Finite-Lived Intangible Assets [Line Items]
Common units issued to seller			2,000
2022 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				15 years
Proceeds from issuance of long-term debt used to fund the acquisition				$ 101,400
Acquisition-related costs				$ 773
Number of businesses acquired \| business				3
Total purchase consideration				$ 107,681
Property and equipment				190
Goodwill				61,347
Other long-term liabilities				6,725
Contingent cash consideration				$ 6,281
Number of businesses acquired with tax deductible goodwill \| business				2
Potential additional consideration				$ 23,000
2021 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Number of businesses acquired \| business					8
Property and equipment					$ 951
Goodwill					105,023
BIS
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	19 years
Proceeds from issuance of long-term debt used to fund the acquisition	$ 52,500
Acquisition-related costs	374
Total purchase consideration	95,495
Business combination, contingent consideration, liability	7,750
Property and equipment					206
Goodwill					46,660
Potential additional consideration	16,000
BIS \| Class A Common Stock
Finite-Lived Intangible Assets [Line Items]
Common units issued to seller	$ 35,245
Business acquisition, equity interest issued or issuable, number of shares \| shares	1,202,914
ImageSoft, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period		19 years
Proceeds from issuance of long-term debt used to fund the acquisition		$ 40,000
Acquisition-related costs		403
Total purchase consideration		46,300
Property and equipment					433
Goodwill					$ 22,408
Contingent cash consideration		6,300
Potential additional consideration		$ 20,000
Other
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					16 years
Proceeds from issuance of long-term debt used to fund the acquisition					$ 57,000
Acquisition-related costs					$ 1,110
Number of businesses acquired \| business					6
Total purchase consideration					$ 65,527
Property and equipment					312
Goodwill					35,955
Contingent cash consideration					8,527
Potential additional consideration					$ 50,200
Other \| Software and Services
Finite-Lived Intangible Assets [Line Items]
Number of businesses acquired \| business					5
Other \| Merchant Services
Finite-Lived Intangible Assets [Line Items]
Number of businesses acquired \| business					1
Residual buyouts
Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired			$ 8,051	$ 52	$ 1,819
Estimated amortization period			8 years	8 years	8 years
Referral Agreements
Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired			$ 420
Estimated amortization period			5 years
Acquired customer relationships \| Celtic
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			18 years
Intangible assets			$ 33,800
Acquired customer relationships \| Other Business Combinations
Finite-Lived Intangible Assets [Line Items]
Intangible assets			$ 8,400
Acquired customer relationships \| Other Business Combinations \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			10 years
Acquired customer relationships \| Other Business Combinations \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			15 years
Acquired customer relationships \| 2022 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Intangible assets				$ 41,090
Acquired customer relationships \| 2022 Business Combinations \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				10 years
Acquired customer relationships \| 2022 Business Combinations \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				19 years
Acquired customer relationships \| 2021 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Intangible assets					$ 72,640
Acquired customer relationships \| BIS
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	19 years
Intangible assets					32,300
Acquired customer relationships \| ImageSoft, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period		20 years
Intangible assets					16,300
Acquired customer relationships \| Other
Finite-Lived Intangible Assets [Line Items]
Intangible assets					$ 24,040
Acquired customer relationships \| Other \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					10 years
Acquired customer relationships \| Other \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					25 years
Trade name \| Celtic
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			5 years
Intangible assets			$ 600
Trade name \| Other Business Combinations
Finite-Lived Intangible Assets [Line Items]
Intangible assets			$ 100
Trade name \| 2022 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				4 years
Intangible assets				$ 1,550
Trade name \| 2021 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Intangible assets					$ 2,640
Trade name \| BIS
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	5 years
Intangible assets					700
Trade name \| ImageSoft, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period		5 years
Intangible assets					$ 1,100
Trade name \| Other
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					4 years
Intangible assets					$ 840
Non-compete agreements \| Celtic
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			3 years
Intangible assets			$ 200
Non-compete agreements \| 2021 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Intangible assets					1,100
Non-compete agreements \| BIS
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	3 years
Intangible assets					100
Non-compete agreements \| ImageSoft, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period		3 years
Intangible assets					$ 610
Non-compete agreements \| Other
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					4 years
Intangible assets					$ 390
Capitalized software \| Celtic
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			10 years
Intangible assets			$ 12,600
Capitalized software \| Other Business Combinations
Finite-Lived Intangible Assets [Line Items]
Intangible assets			$ 670
Capitalized software \| Other Business Combinations \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			7 years
Capitalized software \| Other Business Combinations \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period			8 years
Capitalized software \| 2022 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period				7 years
Intangible assets				$ 9,790
Capitalized software \| 2021 Business Combinations
Finite-Lived Intangible Assets [Line Items]
Intangible assets					24,500
Capitalized software \| BIS
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period	10 years
Intangible assets					15,200
Capitalized software \| ImageSoft, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period		7 years
Intangible assets					$ 5,200
Capitalized software \| Other
Finite-Lived Intangible Assets [Line Items]
Estimated amortization period					7 years
Intangible assets					$ 4,100

Cover - USD ($) $ in Millions	12 Months Ended
Cover - USD ($) $ in Millions	Sep. 30, 2023	Nov. 21, 2023	Mar. 31, 2023
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Sep. 30, 2023
Current Fiscal Year End Date	--09-30
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.
Entity Address, Address Line Two	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 Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction	false
Entity Shell Company	false
Entity Public Float			$ 562.7
Documents Incorporated by Reference	Portions of the registrant’s definitive Proxy Statement for its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III hereof.
Entity Central Index Key	0001728688
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		23,272,496
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		10,093,394

Long-Term Debt, Net - Schedule of Consolidated Total Net Leverage Ratio (Details) - Revolving Credit Facility - Revolving lines of credit to banks under the 2023 Senior Secured Credit Facility	Sep. 30, 2023	May 08, 2023
Line of Credit
Debt Instrument [Line Items]
Commitment Fee	0.30%
Line of Credit \| Base Rate Loans
Debt Instrument [Line Items]
Basis spread on variable rate		1.00%
Line of Credit \| Minimum
Debt Instrument [Line Items]
Commitment Fee		0.15%
Line of Credit \| Maximum
Debt Instrument [Line Items]
Commitment Fee		0.30%
Line of Credit \| Greater than 3.00 to 1.0
Debt Instrument [Line Items]
Consolidated Total Net Leverage Ratio		3
Commitment Fee		0.30%
Line of Credit \| Greater than 3.00 to 1.0 \| Base Rate Loans
Debt Instrument [Line Items]
Basis spread on variable rate		2.00%
Line of Credit \| Greater than 2.50 to 1.0 but less than 3.00 to 1.00
Debt Instrument [Line Items]
Commitment Fee		0.25%
Line of Credit \| Greater than 2.50 to 1.0 but less than 3.00 to 1.00 \| Base Rate Loans
Debt Instrument [Line Items]
Basis spread on variable rate		1.50%
Line of Credit \| Greater than 2.50 to 1.0 but less than 3.00 to 1.00 \| Minimum
Debt Instrument [Line Items]
Consolidated Total Net Leverage Ratio		2.5
Line of Credit \| Greater than 2.50 to 1.0 but less than 3.00 to 1.00 \| Maximum
Debt Instrument [Line Items]
Consolidated Total Net Leverage Ratio		3
Line of Credit \| Greater than 2.00 to 1.00 but less than 2.50 to 1.0
Debt Instrument [Line Items]
Commitment Fee		0.20%
Line of Credit \| Greater than 2.00 to 1.00 but less than 2.50 to 1.0 \| Base Rate Loans
Debt Instrument [Line Items]
Basis spread on variable rate		1.25%
Line of Credit \| Greater than 2.00 to 1.00 but less than 2.50 to 1.0 \| Minimum
Debt Instrument [Line Items]
Consolidated Total Net Leverage Ratio		2
Line of Credit \| Greater than 2.00 to 1.00 but less than 2.50 to 1.0 \| Maximum
Debt Instrument [Line Items]
Consolidated Total Net Leverage Ratio		2.5
Line of Credit \| Greater than 2.00 to 1.00
Debt Instrument [Line Items]
Consolidated Total Net Leverage Ratio		2
Commitment Fee		0.15%
Line of Credit \| Greater than 2.00 to 1.00 \| Base Rate Loans
Debt Instrument [Line Items]
Basis spread on variable rate		1.00%
Letter of Credit Fee \| Greater than 3.00 to 1.0
Debt Instrument [Line Items]
Letter of Credit Fee		3.00%
Letter of Credit Fee \| Greater than 2.50 to 1.0 but less than 3.00 to 1.00
Debt Instrument [Line Items]
Letter of Credit Fee		2.50%
Letter of Credit Fee \| Greater than 2.00 to 1.00 but less than 2.50 to 1.0
Debt Instrument [Line Items]
Letter of Credit Fee		2.25%
Letter of Credit Fee \| Greater than 2.00 to 1.00
Debt Instrument [Line Items]
Letter of Credit Fee		2.00%
Term Benchmark Loans \| Greater than 3.00 to 1.0
Debt Instrument [Line Items]
Basis spread on variable rate		3.00%
Term Benchmark Loans \| Greater than 2.50 to 1.0 but less than 3.00 to 1.00
Debt Instrument [Line Items]
Basis spread on variable rate		2.50%
Term Benchmark Loans \| Greater than 2.00 to 1.00 but less than 2.50 to 1.0
Debt Instrument [Line Items]
Basis spread on variable rate		2.25%
Term Benchmark Loans \| Greater than 2.00 to 1.00
Debt Instrument [Line Items]
Basis spread on variable rate		2.00%

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTSThe Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements.

Equity-Based Compensation - Stock Option Activity (Details) - $ / shares	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Stock Options
Outstanding at beginning of period (in shares)	8,222,322
Granted (in shares)	1,286,629
Exercised (in shares)	(460,760)
Forfeited (in shares)	(471,521)
Outstanding at end of period (in shares)	8,576,670	8,222,322
Options exercisable at end of period (in shares)	5,586,736
Weighted Average Exercise Price
Outstanding at beginning of period, weighted average exercise price (in USD per share)	$ 25.16	$ 25.07
Granted, weighted average exercise price (in USD per share)	24.13
Exercised, weighted average exercise price (in USD per share)	18.14
Forfeited, weighted average exercise price (in USD per share)	27.69
Outstanding at end of period, weighted average exercise price (in USD per share)	25.16	$ 25.07
Exercisable, weighted average exercise price (in USD per share)	$ 24.79

Accrued Expenses and Other Liabilities (Tables)

12 Months Ended

Sep. 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 September 30, 2023 and 2022 is as follows:


	2023		2022
Accrued wages, bonuses, commissions and vacation	$	8,713	$	8,117
Accrued interest	1,313		642
Accrued contingent consideration — current portion	6,825		21,385
Escrow liabilities	3,965		12,285
Tax receivable agreement liability — current portion	—		20
Customer deposits	1,258		1,575
Employee health self-insurance liability	1,014		732
Accrued interchange	2,191		2,096
Other current liabilities	12,461		10,981
Accrued expenses and other current liabilities	$	37,740	$	57,833

Schedule of Long-term Liabilities

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


	2023		2022
Accrued contingent consideration — long-term portion	$	1,414	$	1,448
Deferred tax liability — long-term	19,646		7,896
Other long-term liabilities	3,083		196
Total other long-term liabilities	$	24,143	$	9,540

Non-Controlling Interest - Impact on Equity due to Changes in Ownership Interest (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Noncontrolling Interest [Abstract]
Net loss attributable to non-controlling interest	$ (1,841)	$ (6,115)	$ (3,382)
Redemption of common units in i3 Verticals, LLC	(224)	(918)	(11,714)
Establishment of liabilities under a tax receivable agreement and related changes to deferred tax assets associated with increases in tax basis	4,305	11,511	15,337
Net transfers to non-controlling interests	4,081	10,593	3,623
Change from net income attributable to non-controlling interests and transfers to non-controlling interests	$ 2,240	$ 4,478	$ 241

- Definition

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

+ References + Details

Income Taxes

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

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


	Year ended September 30,
	2023		2022		2021
Current:
Federal tax expense (benefit)	$	3,076	$	1,098	$	(35)
State tax expense	1,656		1,321		945
Deferred:
Federal tax benefit	(7,296)		(4,151)		(285)
State tax expense (benefit)	1,361		6,739		(2)
Income tax (benefit) expense	$	(1,203)	$	5,007	$	623

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


	Year ended September 30,
	2023				2022				2021
Expected U.S. federal income taxes at statutory rate	$	(809)	21.0	%	$	(3,824)	21.0	%	$	(1,519)	21.1	%
Partnership income not taxed at federal level	865		(22.4)	%	1,035		(5.7)	%	29		(0.4)	%
Valuation allowance	(3,964)		102.8	%	7,101		(39.0)	%	712		(9.9)	%
State and local income taxes, net of federal benefit	2,451		(63.6)	%	(641)		3.5	%	552		(7.6)	%
Nondeductible expenses and other permanent items	189		(4.9)	%	83		(0.5)	%	85		(1.2)	%
Revaluation of debt and other debt transaction differences	536		(13.9)	%	1,434		(7.9)	%	609		(8.4)	%
Change in liability for uncertain tax positions	155		(4.0)	%	(25)		0.1	%	(83)		1.2	%
Federal tax credits	(636)		16.5	%	—		—	%	240		(3.3)	%
Other	10		(0.3)	%	(156)		0.9	%	(2)		—	%
Income tax (benefit) expense	$	(1,203)	31.2	%	$	5,007	(27.5)	%	$	623	(8.6)	%

Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities. Net deferred taxes spanning multiple jurisdictions as of September 30, 2023 and 2022 were as follows:


	September 30,
	2023		2022
Deferred tax assets:
Investment in partnership	$	52,432	$	56,388
Stock-based compensation	13,144		2,421
Deferred revenue	318		448
Accrued expenses	328		269
Net operating loss carryforwards	17,132		15,992
Section 163j carryforward	5,064		1,685
Federal tax credits	698		359
Operating lease liabilities	611		677
Other	108		75
Gross deferred tax assets	89,835		78,314
Valuation allowance	(28,944)		(27,555)

Deferred tax liabilities:
Intangible assets	(26,313)		(14,270)
Operating lease right of use assets	(565)		(641)
Other	(1,145)		(285)
Net deferred tax asset	$	32,868	$	35,563

Federal net operating loss carryforwards as of September 30, 2023 and 2022 were $44,098 and $43,233, respectively. Federal tax credits were $698, resulting in a deferred tax asset of $9,959 as of September 30, 2023 compared to $359 of federal tax credits, resulting in a deferred tax asset of $9,438 as of September 30, 2022. The federal net operating loss carryforwards will begin to expire in 2037 and the federal tax credits will begin to expire in 2039. The use of federal net operating losses and credits are limited to the future taxable income of separate legal entities. As a result, a valuation allowance of $387 has been provided for certain federal deferred tax assets, a decrease of $421 during the year ended September 30, 2023. State net operating loss carryforwards as of September 30, 2023 totaled $124,656, resulting in a deferred tax asset of $7,871. The state net operating loss carryforwards will begin to expire in 2026. The use of certain state net operating losses are limited to future taxable earnings of separate legal entities. As a result, a valuation allowance of $8,511 has been provided for state loss carryforwards and other state tax attributes, an increase of $3,602 during the year ended September 30, 2023. The Company also considered a valuation allowance on its $52,432 outside basis of investment in i3 Verticals, LLC deferred tax asset as of September 30, 2023. The Company has recorded a valuation allowance of $20,046 against the portion of the deferred tax benefit that is capital in nature and against the amount not expected to be realized, resulting in a decrease in valuation allowance of $1,792 during the year ended September 30, 2023. Management believes that it is more likely than not that the results of operations will generate sufficient taxable income to realize the deferred tax assets after giving consideration to the valuation allowance.

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


Gross unrecognized tax benefits as of September 30, 2021	$	108
Increase in current year tax positions	—
Increase in prior year tax positions	—
Settlements and other reductions	25
Gross unrecognized tax benefits as of September 30, 2022	83
Increase in current year tax positions	108
Increase in prior year tax positions	73
Settlements and other reductions	26
Gross unrecognized tax benefits as of September 30, 2023	$	238

As of September 30, 2023 and 2022, the Company had no accrued interest and no accrued penalties in either period related to uncertain tax positions. It is the Company’s policy to recognize interest and/or penalties related to income tax matters in income tax expense. The Company is no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2019. As of September 30, 2023 and 2022, there were unrecognized tax benefits of $238 and $83 that if recognized would affect the annual effective tax rate.

Tax Receivable Agreement

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

When Class B common stock is exchanged for Class A common stock, this triggers an increase in the tax basis of the Company's Common Units in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement. During the year ended September 30, 2021, the Company acquired an aggregate of 1,671,479 common units of i3 Verticals, LLC in connection with the redemption of common units, which resulted in an increase in the tax basis of our investment in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement. As a result of these exchanges, during the year ended September 30, 2021, the Company recognized an increase to its net deferred tax assets in the amount of $13,990, and corresponding Tax Receivable Agreement liabilities of $11,892, representing 85% of the tax benefits due to the Continuing Equity Owners.

During the year ended September 30, 2022, the Company acquired an aggregate of 111,000 common units of i3 Verticals, LLC in connection with the redemption of common units, which resulted in an increase in the tax basis of our investment in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement. As a result of these exchanges, during the year ended September 30, 2022, the Company recognized an increase to its net

deferred tax assets in the amount of $898, and corresponding Tax Receivable Agreement liabilities of $763, representing 85% of the tax benefits due to the Continuing Equity Owners.

During the year ended September 30, 2023, the Company acquired an aggregate of 24,748 common units of i3 Verticals, LLC in connection with the redemption of common units, which resulted in an increase in the tax basis of our investment in i3 Verticals, LLC subject to the provisions of the Tax Receivable Agreement. As a result of these exchanges, during the year ended September 30, 2023, the Company recognized an increase to its net deferred tax assets in the amount of $206, and corresponding Tax Receivable Agreement liabilities of $175, representing 85% of the tax benefits due to the Continuing Equity Owners.

The deferred tax asset and corresponding Tax Receivable Agreement liability balances were $37,723 and $40,079, respectively, as of September 30, 2023.

Payments to the Continuing Equity Owners related to exchanges through September 30, 2023 will range from $0 to $3,235 per year and are expected to be paid over the next 24 years. The amounts recorded as of September 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

Income Taxes - Additional Information (Details) - USD ($)	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021	Jun. 25, 2018
Class of Stock [Line Items]
Valuation allowance	$ 28,944,000	$ 27,555,000
Investment in partnership	52,432,000	56,388,000
Accrued interest related to uncertain tax positions	0	0
Accrued penalties related to uncertain tax positions	0	0
Unrecognized tax benefits	238,000	83,000	$ 108,000
Percent of tax benefits payable to continuing equity owners				85.00%
Tax benefits retained				15.00%
Increase in net deferred tax assets			13,990,000
Increase tax receivable agreement liability			$ 11,892,000
Deferred tax asset recognized	$ 89,835,000	78,314,000
Period of payment to continuing equity owners	24 years
i3 Vericals, LLC
Class of Stock [Line Items]
Valuation allowance	$ 20,046,000
Increase (decrease) in valuation allowance for deferred tax assets	(1,792,000)
Investment in partnership	52,432,000
Minimum
Class of Stock [Line Items]
Expected payments for repurchase of redeemable noncontrolling interest	0
Maximum
Class of Stock [Line Items]
Expected payments for repurchase of redeemable noncontrolling interest	3,235,000
Continuing Equity Owner \| Class B Common Stock
Class of Stock [Line Items]
Increase in deferred tax assets	206,000	898,000
Increase tax receivable agreement liability	175,000	$ 763,000
Deferred tax asset recognized	37,723,000
Tax benefits due to continuing equity owners	$ 40,079,000
Common Stock \| Class A Common Stock
Class of Stock [Line Items]
Redemption of common units in i3 Verticals, LLC (in shares)	24,748	111,000	1,671,479
Common Stock \| Class B Common Stock
Class of Stock [Line Items]
Redemption of common units in i3 Verticals, LLC (in shares)	(24,748)	(111,000)	(1,671,479)
Federal
Class of Stock [Line Items]
Net operating loss carryforwards	$ 44,098,000	$ 43,233,000
Tax credit carryforward	698,000	359,000
(Benefit from) Provision for deferred income taxes	9,959,000	$ 9,438,000
Valuation allowance	387,000
Increase (decrease) in valuation allowance for deferred tax assets	421,000
State
Class of Stock [Line Items]
Net operating loss carryforwards	124,656,000
(Benefit from) Provision for deferred income taxes	7,871,000
Valuation allowance	8,511,000
Increase (decrease) in valuation allowance for deferred tax assets	$ 3,602,000

Income Taxes - Reconciliation of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Expected U.S. federal income taxes at statutory rate	$ (809)	$ (3,824)	$ (1,519)
Partnership income not taxed at federal level	865	1,035	29
Valuation allowance	(3,964)	7,101	712
State and local income taxes, net of federal benefit	2,451	(641)	552
Nondeductible expenses and other permanent items	189	83	85
Revaluation of debt and other debt transaction differences	536	1,434	609
Change in liability for uncertain tax positions	155	(25)	(83)
Federal tax credits	(636)	0	240
Other	10	(156)	(2)
Income tax (benefit) expense	$ (1,203)	$ 5,007	$ 623
Effective Income Tax Rate Reconciliation, Percent [Abstract]
Expected U.S. federal income taxes at statutory rate	21.00%	21.00%	21.10%
Partnership income not taxed at federal level	(22.40%)	(5.70%)	(0.40%)
Valuation allowance	102.80%	(39.00%)	(9.90%)
State and local income taxes, net of federal benefit	(63.60%)	3.50%	(7.60%)
Nondeductible expenses and other permanent items	(4.90%)	(0.50%)	(1.20%)
Revaluation of debt and other debt transaction differences	(0.139)	(0.079)	(0.084)
Change in liability for uncertain tax positions	(4.00%)	0.10%	1.20%
Federal tax credits	16.50%	0.00%	(3.30%)
Other	(0.30%)	0.90%	0.00%
Income tax (benefit) expense	31.20%	(27.50%)	(8.60%)

Commitments and Contingencies

12 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Leases

The Company utilizes office space and equipment under operating leases. Rent expense under these leases amounted to $5,881, $5,992 and $4,400 during the years ended September 30, 2023, 2022 and 2021,

respectively. Refer to Note 12 for further discussion and a table of the future minimum payments under these leases.

Minimum Processing Commitments

The Company has non-exclusive agreements with several processors to provide The Company services related to transaction processing and transmittal, transaction authorization and data capture, and access to various reporting tools. Certain of these agreements require the Company to submit a minimum monthly number of transactions for processing. If the Company submits a number of transactions that is lower than the minimum, it is required to pay to the processor the fees it would have received if the Company had submitted the required minimum number of transactions. As of September 30, 2023, such minimum fee commitments were as follows:


Years ending September 30:
2024	$	4,582
2025	488
2026	—
2027	—
2028	—
Thereafter	—
Total	$	5,070

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. Oral argument on this motion in front of the United States Fifth Circuit Court of Appeals took place on April 4, 2023, and on September 1, 2023, the Fifth Circuit panel affirmed the District Court order to remand the case back to state court. On September 29, 2023, all Defendants-Appellants filed a Petition for Rehearing En Banc, which the Plaintiffs-Appellees opposed on October 12, 2023. The parties await a decision on that motion.

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

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

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense


	Year ended September 30,
	2023		2022		2021
Current:
Federal tax expense (benefit)	$	3,076	$	1,098	$	(35)
State tax expense	1,656		1,321		945
Deferred:
Federal tax benefit	(7,296)		(4,151)		(285)
State tax expense (benefit)	1,361		6,739		(2)
Income tax (benefit) expense	$	(1,203)	$	5,007	$	623

Schedule of Reconciliation of Income Tax Expense (Benefit)

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


	Year ended September 30,
	2023				2022				2021
Expected U.S. federal income taxes at statutory rate	$	(809)	21.0	%	$	(3,824)	21.0	%	$	(1,519)	21.1	%
Partnership income not taxed at federal level	865		(22.4)	%	1,035		(5.7)	%	29		(0.4)	%
Valuation allowance	(3,964)		102.8	%	7,101		(39.0)	%	712		(9.9)	%
State and local income taxes, net of federal benefit	2,451		(63.6)	%	(641)		3.5	%	552		(7.6)	%
Nondeductible expenses and other permanent items	189		(4.9)	%	83		(0.5)	%	85		(1.2)	%
Revaluation of debt and other debt transaction differences	536		(13.9)	%	1,434		(7.9)	%	609		(8.4)	%
Change in liability for uncertain tax positions	155		(4.0)	%	(25)		0.1	%	(83)		1.2	%
Federal tax credits	(636)		16.5	%	—		—	%	240		(3.3)	%
Other	10		(0.3)	%	(156)		0.9	%	(2)		—	%
Income tax (benefit) expense	$	(1,203)	31.2	%	$	5,007	(27.5)	%	$	623	(8.6)	%

Schedule of Deferred Tax Assets and Liabilities

Net deferred taxes spanning multiple jurisdictions as of September 30, 2023 and 2022 were as follows:


	September 30,
	2023		2022
Deferred tax assets:
Investment in partnership	$	52,432	$	56,388
Stock-based compensation	13,144		2,421
Deferred revenue	318		448
Accrued expenses	328		269
Net operating loss carryforwards	17,132		15,992
Section 163j carryforward	5,064		1,685
Federal tax credits	698		359
Operating lease liabilities	611		677
Other	108		75
Gross deferred tax assets	89,835		78,314
Valuation allowance	(28,944)		(27,555)

Deferred tax liabilities:
Intangible assets	(26,313)		(14,270)
Operating lease right of use assets	(565)		(641)
Other	(1,145)		(285)
Net deferred tax asset	$	32,868	$	35,563

Schedule of Components of Uncertain Tax Positions

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


Gross unrecognized tax benefits as of September 30, 2021	$	108
Increase in current year tax positions	—
Increase in prior year tax positions	—
Settlements and other reductions	25
Gross unrecognized tax benefits as of September 30, 2022	83
Increase in current year tax positions	108
Increase in prior year tax positions	73
Settlements and other reductions	26
Gross unrecognized tax benefits as of September 30, 2023	$	238

Organization and Operations (Details) - USD ($)		3 Months Ended		12 Months Ended
Organization and Operations (Details) - USD ($)	Aug. 20, 2021	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Subsidiary, Sale of Stock [Line Items]
Payments of equity issuance costs				$ 0	$ 0	$ 253,000
i3Verticals, LLC
Subsidiary, Sale of Stock [Line Items]
Non-controlling interest, ownership interest		69.70%	69.40%	69.70%	69.40%
Continuing Equity Owner
Subsidiary, Sale of Stock [Line Items]
Shareholders ownership interest		31.00%		31.00%
Class B Common Stock \| Continuing Equity Owner
Subsidiary, Sale of Stock [Line Items]
Shareholders ownership interest		30.30%		30.30%
Class A Common Stock \| Continuing Equity Owner
Subsidiary, Sale of Stock [Line Items]
Shareholders ownership interest		0.70%		0.70%
At-the-Market Program
Subsidiary, Sale of Stock [Line Items]
Payments of equity issuance costs			$ 440,000		$ 440,000
At-the-Market Program \| Class A Common Stock
Subsidiary, Sale of Stock [Line Items]
Sale of stock number of value issued in transaction	$ 125,000,000
Shares issued (in shares)		0	722,000	0	722,000
Net proceeds from IPO			$ 17,869,000		$ 17,869,000
Sale of stock, remaining capacity		$ 107,131,000		$ 107,131,000

Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 333,205	$ 284,499
Finite-lived intangible assets, accumulated amortization	(106,296)	(88,622)
Finite-lived intangible assets, carrying value	226,909	195,877
Total identifiable intangible assets, cost	333,248	284,541
Total identifiable intangible assets, carrying value	$ 226,952	195,919
Estimated Useful Life	3 years
Amortization expense of intangible assets	$ 20,539	17,892	$ 15,830
Trademarks
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	43	42
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	310,501	268,301
Finite-lived intangible assets, accumulated amortization	(98,182)	(80,681)
Finite-lived intangible assets, carrying value	$ 212,319	$ 187,620
Customer relationships \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	9 years	10 years
Customer relationships \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	25 years	25 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 1,300	$ 1,190
Finite-lived intangible assets, accumulated amortization	(1,059)	(705)
Finite-lived intangible assets, carrying value	$ 241	$ 485
Non-compete agreements \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years	3 years
Non-compete agreements \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	6 years	6 years
Website and brand development costs
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 44	$ 268
Finite-lived intangible assets, accumulated amortization	(37)	(159)
Finite-lived intangible assets, carrying value	$ 7	$ 109
Website and brand development costs \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years	3 years
Website and brand development costs \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	4 years	4 years
Trade names
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 6,531	$ 7,771
Finite-lived intangible assets, accumulated amortization	(3,690)	(4,203)
Finite-lived intangible assets, carrying value	$ 2,841	$ 3,568
Trade names \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years	3 years
Trade names \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	7 years	7 years
Residual buyouts
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 14,220	$ 6,169
Finite-lived intangible assets, accumulated amortization	(3,111)	(2,141)
Finite-lived intangible assets, carrying value	$ 11,109	$ 4,028
Estimated Useful Life	8 years
Residual buyouts \| Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life		8 years
Referral and exclusivity agreements
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, cost	$ 609	$ 800
Finite-lived intangible assets, accumulated amortization	(217)	(733)
Finite-lived intangible assets, carrying value	$ 392	$ 67
Estimated Useful Life	5 years
Referral and exclusivity agreements \| Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life		5 years

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 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)	23,253,272	22,986,448
Common Stock, outstanding (in shares)	23,253,272	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)	10,093,394	10,118,142
Common Stock, outstanding (in shares)	10,093,394	10,118,142

Long-Term Debt, Net - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Feb. 18, 2020
Debt Instrument [Line Items]
Debt issuance costs, net	$ (4,424)	$ (2,554)
Total long-term debt, net of issuance costs	385,081	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	272,505	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 \| 1.0% Exchangeable Senior Notes due 2025
Debt Instrument [Line Items]
Long-term debt	117,000	$ 104,557
Stated interest rate			1.00%
Debt issuance costs, net	$ (1,501)