i3 Verticals, Inc.

Good day, everyone, and welcome to I3 Vertical's 4th Quarter 2021 Earnings Conference Call. Today's call is being recorded, and a replay will be available starting today through November 25th. The number for the replay is 877-344-7529, and the code is 101-617-3900. The replay may also be accessed for 30 days at the company's website. At this time, for opening remarks, I'd like to turn the conference call over to Scott Merriweather, Chief Operating Officer. Please go ahead, sir.

Good morning, and welcome to the fourth quarter 2021 conference call for i3 Verticals. Joining me on this call are Greg Daley, our Chairman and CEO, Clay Whitson, our CFO, and Rick Stanford, 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 by 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 and 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 a bookable 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 to report our fourth quarter 2021 results. We set new quarterly records in revenue, adjusted EBITDA, software revenue, payment volume, and integrated volume. As we close our fiscal year, we're extremely excited about what fiscal year 22 holds for for I3. Our vision has been to grow into a software company that focuses on embedded payment opportunities. Our results highlight consistent execution of this vision as software revenues have grown to 42% of our total revenue and integrated payments now represent 63% of our payment volume. We have great momentum throughout I3. I expect this momentum will continue to drive further growth in our technology-enabled revenue. Our total software and related services revenue was up 178 percent for the quarter over this time last year. The increase in software and related services fueled our fourth quarter net revenue increase of 76 percent over 2020. Our adjusted EBITDA increased 79 percent. We are delivering on our software-focused strategy. For fiscal year 21, our adjusted EBITDA from proprietary software and payment segment exceeded the adjusted EBITDA from our merchant services segment. The $11 million of adjusted EBITDA from our proprietary software and payment segment was a new quarterly record. Our software segment will be our primary driver going forward, and we expect this trend to accelerate as we expect more total software sales to increase, and we attach other value-added solutions such as payments within our customer base. Public sector is our largest vertical. There is a need for modern software and payment solution within this market. We believe our software solution can digitally transform how governments interact with their constituents. Our product suite streamlines back office work streams and also enhances customer facing experience for governments. For example, our software allows citizens to electronically file court cases or pay court fines online and it allowed the justice system to set court dockets. Video conference involved people and managed court cases from inception to ruling in a paper-free process. Another example, our software also allows citizens to register new vehicles, and it also powers DMV to issue temporary tags, collect taxes, manage license plate inventory, and interface with car insurance companies. Our software solutions cover a spectrum of government needs, as we have software that runs a municipal court, and we have software that powers statewide systems. Tuesday, we announced our largest contract in history in our public sector vertical, a statewide e-filing and case management system in Louisiana. This contract is evidence of our ability to leverage our full product suite to create significant market wins and deliver value to our customers. The fourth quarter was our full fiscal quarter with our utility technology acquisition closed in May. And we have integrated our proprietary software solution into this software package and installed our first customer in New York. In addition, this utility technology acquisition had developed a market-leading IVR product that we have begun to interface across the rest of our country company. These two efforts are a direct reflection of our overall strategy. Optimizing our product integration and delivering integrated and embedded payment solutions are core in our approach to all verticals. Our school products within public sector also provided greater revenue and EBITDA contributions than we had expected in the fourth quarter. Due to government programs, lunch payments remain below historic levels. However, we captured more non-lunch payments and we have installed many new districts. As a result, our education customers contributed more than our preliminary forecast for the school year, which gives us greater confidence as we move into fiscal year 22. During our last conference call, I noted that healthcare had grown into our second largest vertical. we closed our most recent acquisition within this sector on October 1. Our healthcare software suite includes a cloud-based electronic health records and practice management workflow. The software also allows providers to manage their entire revenue cycle, including all billing, while also providing patient engagement services that control scheduling, appointment confirmation, patient communication, and patient payments. Our software serves medical practices, laboratories, hospital-based physicians, radiology centers, and medical billing companies. A recent acquisition expands our product suite. The acquisition provides comprehensive revenue cycle management and related administrative and consulting services for hospitals and other medical practices. This business leverages its proprietary software, its integration with various medical record systems, and its direct claim settlement with Medicaid, Medicare to offer customers prompt and reliable services. We have a robust platform within healthcare, and we will continue to enhance our software product suite and our customer-facing portals. This is a significant opportunity in attaching payments, our invoice presentment software, and our text-to-pay solution within these software platforms. Healthcare will be a significant focus for I3 moving forward. On a broader note related to our overall IT infrastructure, we have begun to transition to an AWS environment for many of our platforms. We believe this move will allow us to remain nimble and responsive both in new product development and serving in our M&A strategy. We expect to gain operational efficiencies over the long term from the transition and believe this move will allow us greater support services to our various product platforms. We will continue to grow our business as we win new customers, as we integrate our products and cross-sell them to our existing customer base, as we enter into new geographic territories through new product launches and through M&A. We are very confident in our strategy and well-positioned to deliver strong financial results in fiscal year 22. I also want to take a moment to welcome DaCosta Jenkins to our board of directors. DaCosta's experience as a CEO of Nashville Electric Service, a large, complex organization, will provide a unique and valuable perspective to our boardroom, especially as we continue to pursue public sector vertical. He is a man of integrity. He has given back greatly to the city and the region by furthering the cause of numerous nonprofit organizations. I have no doubt that DaCosta will prove to be a fantastic addition to our board. Now I'll turn the call over to Clay, and he will provide you more details on the fourth quarter financial performance. Following Clay's comments, Rick will give an update on M&A, and then we'll open up the call for questions.