John Kimbrough Davis

John Kimbrough Davis inquired about i3 Verticals' 2026 organic growth outlook, specifically the expected decline in professional services revenue, and sought clarity on the level of conservatism in the guidance and the anticipated year-over-year decrease in professional services. He also asked about the contribution of pricing to the 104% net dollar retention for fiscal 2025, future pricing tailwinds, the magnitude of justice tech investments in Q4 2025, and the company's capital allocation strategy between share buybacks and M&A.

Answer

CFO Geoffrey C. Smith explained that the company is prioritizing recurring revenue, leading to a lighter cadence for professional services in 2026, with some timing shifts to late 2026 or 2027, but noted this is not a long-term trend. He stated that price contributed 1%-2% to retention in 2025, with expectations of 1.5%-3% in 2026, as the company moves towards consistent 3%-5% price increases. Smith also confirmed that justice tech investments, primarily in personnel, were in line with Q4 expectations and would continue into fiscal 2026. Regarding capital allocation, Smith mentioned a refreshed $50 million buyback authorization for opportunistic use, while Chairman and CEO Gregory S. Daily indicated an active M&A pipeline, expecting 'meaningful' (non-transformative, $2M-$5M EBITDA) acquisitions in 2026.