i3 Verticals, Inc. (IIIV) DCF Valuation & Fundamental Primer
i3 Verticals, Inc. (IIIV) trades at $40.19 with a market enterprise value of $897.1M and generated $218.2M in TTM revenue and $49.9M in free cash flow (filed 2026-08-07 (period ended 2026-06-30)). Our 5-year DCF model estimates an implied intrinsic value of $24.00 per diluted share ($580.7M DCF enterprise value, Grade: B+ · 66/100 · Quality Software Operator).
SEC 10-K/10-Q DCF teardown of i3 Verticals, Inc. (IIIV): $218.2M TTM revenue (-1.2% growth), 54.4% GAAP gross margin, 22.9% FCF margin, 8.3% SBC/revenue, and Rule of 40 score of 21.6%.
i3 Verticals, Inc. (IIIV) earns a "Pass" rating and an institutional Quality Score of 66/100 (Grade B+). On $218.2M in baseline revenue (-1.2% growth, 54.4% gross margin, 22.9% FCF margin), our 5-year DCF yields an Enterprise Value of $580.7M ($24.00/share vs. $40.19 market price). On the R&D Return Benchmark, IIIV ranks #175 of 174 (Faders · Grade D, -1479012.41× return).
Gross Margin & Unit Economics: i3 Verticals, Inc. operates at a 54.4% gross margin on $218.2M revenue (18.0 pts below the Software - Infrastructure median of 72.4%).
R&D Productivity (Faders · Grade D): Investing 0.0% of revenue in R&D ($0) generates $-1479012.41 of incremental gross profit per R&D dollar (Rank #175 of 174).
Rule of 40 & Cash Conversion: Combining -1.2% top-line growth with 22.9% FCF margin yields a 21.6% Rule of 40 score (vs. 38.4% cohort median) and $580.7M DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (54.4% Gross Margin · -1.3% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $218.2M | $215.4M | $212.8M |
| Cost of Revenue (COGS) | ($99.5M) | ($97.2M) | ($94.9M) |
| Gross Profit & Margin | $118.7M (54.4%) | $118.3M (54.9%) | $117.9M (55.4%) |
| Research & Development (R&D) | $0 | $10.3M | $9.8M |
| Sales & Marketing (S&M) | $81.2M | $77.0M | $72.8M |
| General & Administrative (G&A) | $31.6M | $29.9M | $28.3M |
| Operating EBIT | $5.9M (2.7%) | $1.1M (0.5%) | $6.9M (3.3%) |
| Adjusted EBITDA | $34.9M (16.0%) | $29.7M (13.8%) | $35.2M (16.5%) |
3 Key Underwriting Risks
Structural sensitivities monitored in the 3-Statement Financial Engine
Value-Creation Levers · Quantified Statement Impact
Apply any lever below to write its operating assumptions directly into the 3-Statement Model
Automate cloud hosting & support workflows to lift gross margin from 54.4% to 59.4%.
Align R&D intensity and ASC 350-40 capitalization to the R&D Compounders cohort median, recapturing $4.4M in annual EBITDA.
Lift net dollar retention and expansion velocity by +300 bps, compounding Year 3 revenue to $225.9M.
i3 Verticals, Inc. (IIIV) 3-Scenario DCF Valuation Range
Stress-test IIIV's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Simulate how deploying Gemini workflow automation and autonomous engineering expands IIIV's Gross Margin, FCF Margin, DCF share price, and 2x2 R&D Return Quadrant.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $40.19).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $27.23 -32% | $29.14 -27% | $31.36 -22% | $34.00 -15% | $37.15 -8% |
| 9.3% | $24.09 -40% | $25.59 -36% | $27.32 -32% | $29.32 -27% | $31.67 -21% |
| 10.0% | $21.50 -47% | $22.71 -43% | $24.08 -40% | $25.64 -36% | $27.45 -32% |
| 10.8% | $19.33 -52% | $20.32 -49% | $21.43 -47% | $22.68 -44% | $24.10 -40% |
| 11.5% | $17.48 -56% | $18.30 -54% | $19.21 -52% | $20.23 -50% | $21.38 -47% |
Institutional Software Quality Scorecard (66/100 · Grade B+)
Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.
Elite deferred revenue float; FCF exceeds operating income by >20%
Disciplined equity compensation well below software industry average
Sub-par gross margins; higher cost of delivery or hardware/services mix
Moderate leverage or cash burn; monitor liquidity runway
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 841% of EBIT driven by upfront annual collections
Key Operational & Dilution Risks
- Lower software gross margins (54.4%), indicating higher hosting or service delivery drag
Compare i3 Verticals, Inc. (IIIV) against the software universe on the 2x2 R&D Return vs. R&D Intensity matrix.
Reverse-DCF Solver: What Growth is Priced Into IIIV?
The current share price demands 9.1% 5-year CAGR (16.2% net of SBC & dilution)—a +10.3% acceleration over historical run-rate (-1.2%). Any growth slowdown risks valuation multiple contraction.
Headline Reverse-DCF ignores Stock-Based Compensation (8.3% of revenue) and annual share dilution (1.9%/yr). Accounting for both requires 16.2% 5-year revenue CAGR to justify $40.19/sh on a true per-share economic cash flow basis.
i3 Verticals, Inc. (IIIV) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $218.2M | $218.2M | $215.4M | $212.7M | $210.1M | $207.5M | $204.9M |
| Gross Profit | $118.7M | $118.7M | $117.2M | $115.7M | $114.3M | $112.9M | $111.4M |
| Operating Income (EBIT) | $5.9M | $5.9M | $5.9M | $5.8M | $5.7M | $5.6M | $5.6M |
| Stock-Based Compensation (SBC) | $18.1M | $18.1M | $17.9M | $17.7M | $17.5M | $17.2M | $17.0M |
| Unlevered Free Cash Flow (FCF) | $49.9M | $49.9M | $49.3M | $48.7M | $48.1M | $47.5M | $46.9M |
| SBC-Adjusted True Cash Flow | $31.8M | $31.8M | $31.4M | $31.0M | $30.6M | $30.2M | $29.9M |
Software - Infrastructure Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 6.7 + 0.05 × (Rule of 40) · R² = 12%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| i3 Verticals, Inc. | IIIV | $785.5M | $218.2M | 54.4% | 22.9% | 21.6% | 8.3% | 4.1× |
| Block, Inc. | XYZ | $41.67B | $25.04B | 46.4% | 15.5% | 23.7% | 4.8% | 1.6× |
| CoreWeave, Inc. | CRWV | $35.80B | $1.92B | 74.2% | -80.0% | 0.0% | 1.6% | 23.5× |
| VeriSign, Inc. | VRSN | $22.52B | $1.56B | 87.7% | 56.1% | 61.5% | 3.9% | 15.5× |
| CORPAY, INC. | CPAY | $22.17B | $3.97B | 78.1% | 44.4% | 52.1% | 2.9% | 7.2× |
| NetApp, Inc. | NTAP | $21.02B | $7.39B | 70.6% | 22.3% | 24.6% | 5.4% | 3.0× |
| Joint Stock Co Kaspi.kz | KSPI | $11,481.85B | $2,520.93B | 62.3% | 19.3% | 59.8% | — | 4.4× |
| Peer Cohort Median Benchmark (N=6) | 72.4% | 20.8% | 38.4% | 3.9% | 5.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 4.1× | $897.1M | $785.5M | $40.19 | 0.0% |
| -20% Multiple Compression | 3.3× | $717.7M | $606.0M | $31.01 | -20.0% |
| -35% Multiple Compression | 2.7× | $583.1M | $471.5M | $24.12 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $1.09B | $979.2M | $50.10 | +21.6% |
Frequently Asked Questions: i3 Verticals, Inc. (IIIV) Valuation
What is i3 Verticals, Inc. (IIIV)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, i3 Verticals, Inc. (IIIV) has a Base Case implied value of $24.00 per share (with a Bear Case of $14.17 and a Bull Case of $33.51), compared to its current price of $40.19. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is i3 Verticals, Inc. (IIIV)'s Rule of 40 score and Free Cash Flow margin?
i3 Verticals, Inc. achieves a Rule of 40 score of 21.6%, combining a -1.2% revenue growth run-rate with a 22.9% TTM free cash flow margin on $218.2M in trailing twelve-month revenue. In the Software - Infrastructure peer cohort, the median Rule of 40 benchmark is 38.4%.
What revenue growth rate is priced into IIIV stock according to Reverse-DCF analysis?
At $40.19 per share (Enterprise Value of $897.1M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 9.1%, compared to i3 Verticals, Inc.'s historical CAGR of -1.2%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
What is i3 Verticals, Inc. (IIIV)'s R&D Return Score and innovation productivity?
i3 Verticals, Inc. (IIIV) recorded N/A in FY R&D expense (tracked from SEC filings) and N/A in FY gross profit. It is currently unranked on the letter-grade leaderboard (pending full multi-year XBRL R&D history).
How does i3 Verticals, Inc. compare to Software - Infrastructure peers?
i3 Verticals, Inc. (IIIV) earns an institutional Software Quality Score of 66/100 (Grade B+ — Quality Software Operator). Across its Software - Infrastructure peer group (XYZ, CRWV, VRSN, CPAY, NTAP), the cohort trades at a median EV/TTM Revenue multiple of 5.8× and a median gross margin of 72.4%.
How does Stock-Based Compensation (SBC) impact i3 Verticals, Inc. (IIIV)'s valuation?
i3 Verticals, Inc. recorded $18.1M in TTM stock-based compensation (8.3% of revenue). When treating SBC as a cash-equivalent compensation expense, i3 Verticals, Inc.'s SBC-adjusted free cash flow yield is 4.0%, scoring 21/25 on our Shareholder Dilution Friction pillar.