i3 Verticals, Inc.

everyone and welcome to the i3 verticals year-end 2020 earnings conference call. Today's conference is being recorded and a replay will be available starting today through November 27th. The number for the replay is 719-457-0820 and the code is 427-1451. The replay may also be accessed for 30 days at the company's website. At this time, for opening remarks, I would like to turn the call over to Scott Merriweather, Chief Operating Officer. Please go ahead, sir.

Good morning, and welcome to the fourth quarter 2020 conference call for i3 Verticals. Joining me on this call are Greg Daly, our Chairman and CEO, Clay Whitson, our CFO, and Rick Sanford, our President. To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP for reviewing yesterday's earnings release. It is the company's intent to provide non-GAAP financial information to enhance understanding of its consolidated financial information as prepared in accordance with GAAP. This non-GAAP information should be considered by each individual in addition to, but not instead of, the financial statements prepared in accordance with GAAP. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements among others regarding the company's expected financial and operating performance and the expected potential impact of the COVID-19 pandemic. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. You are hereby cautioned that these forward-looking statements may be affected by the important factors among others set forth in the company's earnings release and in reports that are filed or furnished to the SEC, including risk and uncertainties associated with the COVID-19 pandemic. Consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. Finally, the information shared on this call is valid as of today's date, and the company undertakes no obligation to update it, except as may be required under applicable law. I now turn the call over to the company's chairman and CEO, Greg Daly. Thanks, Scott.

And good morning to all of you. We are pleased with our fourth quarter and our full 2020 fiscal year. We're optimistic about how we are exiting fiscal year 20 as our core business continues to recover and we execute on our M&A strategy. Payment volumes have continued to improve over the last two quarters, though there are lingering effects from continued government regulations or restrictions. For fiscal year 2020, our adjusted net revenue increased 10%, and our adjusted EBITDA was relatively flat with the prior year due to the effects of the pandemic. We expect there will be some continued volatility in our payment volume in the coming months, but the increase in our software revenue will reduce some of that impact. We are confident in our company's market position moving forward. We continue to execute our software-driven payment strategy. After pausing our M&A activity at the onset of COVID, we began to reengage on the M&A front and have completed seven acquisitions since July 1st. All seven acquisitions are focused on software payments. Four of them are in the public sector, which continues to grow as our fastest vertical. We have announced six of these acquisitions previously, and I will discuss the seventh one momentarily. We also now have our first software footholds in nonprofit and healthcare, which were big strategic steps for us forward. We will continue to pursue additional opportunities in these verticals. We continue to streamline our payment technology platforms and work toward developing existing software product offerings. We believe these acquisitions and a return to normal economic conditions in fiscal year 21 will help us deliver strong results next year and going forward. Our recent acquisition was ImageSoft, a public sector company positioned as a leader in paperless processes. E-filings within courts is one of their key products, and we are excited about ImageSoft's product suites enhancing our current offering in the public sector market. This will be our largest office from a headcount perspective, and we welcome the ImageSoft employees to the i3 family. We've seen major wins across the company during the last quarter. We have had the greatest number of monthly approved payment accounts in the history of the company, which is a continued, the strong run that began in June. Within our public sector teams, we signed several significant new projects in Louisiana and Texas. And despite the continued shutdown of restaurant activity on the West Coast, we shipped out a record amount of POS systems in October. Winds like this gives me excitement about the upcoming year. The education vertical remains depressed as many students continue to participate in online or remote environments. The federal government extended free lunch program for students through the end of the current school year. Over half of our payment revenue within K through 12 education comes from lunch payments. We currently expect this program will end at the start of next school year, but we will continue to monitor federal actions in this vertical and will respond accordingly. We've signed many new school districts this year, but the depressed lunch payment volume has outweighed our customer gains. We are still believers in this vertical and its long-term potential. Our integrated payment volume continues to grow. 57% of our payment volume was integrated during Q4, up from 54% in Q4 of 2019. As all of our recent acquisitions have been software-based, we believe we will be able to drive this metric higher in the future. Now I will turn the call over to Clay, and he will provide you some details on our fourth quarter financial performance. And following Clay's comments, Rick will provide an M&A update, and then we'll open up the call for questions.