i3 Verticals, Inc. (IIIV) Income Statement

The $63.1M print in 2025Q2 appears to mark a local high; the four quarters that followed averaged roughly $54.0M, and consecutive declines of -14.6% and -9.8% in 2026Q1 and 2025Q4 indicate the contraction persisted across multiple periods rather than resolving as a one-quarter distortion. The return to positive year-over-year growth in 2026Q3 is encouraging but rests on a depressed base, and a sequential move back above $57.5M would be a more convincing confirmation of stabilization than the current 2.2% comp.

The break appears concentrated between 2025Q3 and 2025Q4, where COGS rose from $16.7M to $24.8M on essentially flat revenue, implying that cost absorption worsened materially rather than pricing power eroding at the margin. Because 2026Q3 reports zero COGS and a nominal 100% gross margin, that quarter is not comparable to the prior trend line and should be excluded from extrapolation until the underlying presentation is reconciled.

With SG&A at 54.4% of revenue in 2026Q3 versus roughly 45.5% at the 2025Q2 revenue peak, the cost base has proven largely fixed over this window, so each additional dollar of revenue erosion now drops close to dollar-for-dollar into operating income. This math implies that restoring the 4-6% operating margins seen in stronger quarters likely requires a recovery in the top line rather than incremental expense actions alone.

SG&A is unambiguously the dominant disclosed expense line at $28.9M in 2026Q3, and its stability across both revenue peaks and troughs points to a largely contractual or headcount-driven structure with limited near-term flexibility. The inconsistent R&D presentation means reported operating margin may flatter the true cost of maintaining the product stack, so any margin expansion thesis should be validated against cash flow statements and disclosure notes rather than the face of the income statement.