Good day, everyone, and welcome to the i3 Verticals first quarter 2022 earnings conference call. Today's call is being recorded and a replay will be available starting today through February 16th. The number for the replay is 877-344-7529, and the code is 661-7684. 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 Geoffrey Smith, VP of Finance. Please go ahead. Good morning, everyone, and welcome to the first quarter 2022 conference call for i3 Verticals. Joining me on this call are Greg Daily, 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 to the most directly comparable GAAP financial measure by reviewing yesterday's earnings release. It is the company's intent to provide non-GAAP financial information to enhance understanding of its consolidated GAAP financial information. This non-GAAP financial information should be considered by each individual in addition to, but not instead of, the GAAP financial statements. 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. 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 reports that are filed or furnished to the SEC. 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 the applicable law. I now turn the call over to the company's Chairman and CEO, Greg Daily. Thanks, Geoffrey, and good morning to all of you. We're pleased with our first quarter 2022 results, and we're confident in our ability to produce strong results for the rest of the year. We exited fiscal year 2021 with a great momentum, and this momentum has continued today, driven by our continued growth in proprietary software and payment segment. We set quarterly records in revenue, software and related services revenue, and Adjusted EBITDA. We are a software-led company, and we are delivering on that strategy. To that end, our first quarter revenue increased 66% over prior year and Adjusted EBITDA increased 72%. Our software and related services revenue increased 116% in the first quarter of fiscal year from the first quarter of fiscal year 2022. Our software and related services revenue grew 49% of our total revenue in the quarter, up from 38% in the first quarter of fiscal year 2021, and surpassed our payment revenue for the first time. To further emphasize our continued software transformation, I wanna highlight that our annualized recurring revenue grew 53% year-over-year, and our ARR is $240 million. The first quarter of fiscal year 2022 included a full quarter results from our October 1 healthcare acquisition. We're excited about this acquisition, what this acquisition has brought to the table in healthcare revenue cycle management. We've already seen multiple cross-sell opportunities and look forward to the future of this business. We announced a public sector deal acquisition on January 4th. This acquisition did not contribute to the past quarter from a revenue or Adjusted EBITDA perspective. It operates in the Southeast and the Mid-Atlantic regions and brings additional state-level contracts in our public sector vertical. We're excited about this new acquisition's fit within our team and our strategy. Beyond this recent acquisition, we saw several new state markets open in our public sector teams. These expansion opportunities include both state-level engagements, local municipality, and state court-level customers. Many of our software applications are capable of crossing state borders, and we're seeing that trend continue. Rick will describe this expansion in greater detail later. On a general market note, we have noticed an increase in RFP activity within the public sector in fiscal year 2022. This is a positive trend, and we like our win rate. Our capabilities within public sector market continues to accelerate, and this vertical will continue to drive the growth at i3 Verticals as we move forward. Now I'll turn the call over to Clay, and he'll provide you more details on our first quarter financial performance. Following Clay's comments, Rick will give us an M&A update, and then we'll open the call up for questions. The following pertains to the first quarter of our fiscal year 2022, which is the quarter ended December 31st, 2021. Please refer to the slide presentation titled Supplemental Information on our website for reference with this discussion. We had a great quarter with record revenues, Adjusted EBITDA and pro forma adjusted diluted earnings per share. Revenues for the first quarter ended in December increased 66% to $73.9 million from $44.6 million for Q1 2021, reflecting continued double-digit organic growth and acquisitions. Almost all of the metrics we track are headed in the right direction. Our integrated payments percentage improved to 61% for Q1 2022 from 56% for Q1 2021, which helped the revenue yield improve to 139 basis points for the quarter from 117 basis points for Q1 2021. Acquisitions owned less than 12 months exclusively in our proprietary software segment contributed $22.2 million of revenues during the quarter. Software and related services revenue continued strong growth, representing a record 49% of revenues for the quarter, compared to 38% for the first quarter of fiscal year 2021, reflecting the continued focus of our acquisition strategy. For the first quarter in our history, software and related services revenues exceeded payments revenues. With the public sector acquisition effective December 31st, we have crossed the 50% mark for software and related services revenues, an important milestone in our evolution. Accordingly, we have started giving more granular data on the composition of our revenue streams on page two of the supplemental presentation, including an annual recurring revenue metric, which totaled $240.4 million in Q1 2022, compared to $157.5 million for Q1 2021, a growth rate of 53%. Adjusted EBITDA increased 72%, outpacing revenues to $18.3 million for Q1 2022 from $10.6 million for Q1 2021. We showed strength across the board with continued momentum in proprietary software and merchant services. Adjusted EBITDA as a percentage of revenues increased to 24.7% for Q1 2022 from 23.7% for Q1 2021, reflecting a higher proprietary software margin and lower corporate overhead as a percentage of revenues. Pro forma adjusted diluted earnings per share increased 67% to $0.35 for Q1 2022 from $0.21 for Q1 2021. Again, please refer to the press release for a full description and reconciliation. Segment performance. Revenues in our proprietary software and payments segment increased 124% to a record $44.8 million for Q1 2022 from $20.0 million for Q1 2021, principally reflecting growth in our two largest verticals, public sector and healthcare. The December quarter included the most recent healthcare acquisition for the entire quarter, but none of the recent public sector acquisition. Education revenues were up over 50% Q1 to Q1, thanks to the reopening of existing customers and organic sales to new schools. The segment's Adjusted EBITDA improved 133% to $13.6 million for Q1 2022 from $5.8 million for Q1 2021, a new quarterly record. The growth was principally driven by our two largest verticals, public sector and healthcare. On a run rate basis, public sector represents roughly half of our consolidated business, while healthcare is an estimated 20%. The EBITDA margin expanded to 30.5% for Q1 2022 from 29.2% for Q1 2021, reflecting improvements in our public sector and education margins. Revenues for our merchant services segment increased 16% to $29.2 million for Q1 2022 from $25.1 million for Q1 2021, reflecting broad-based growth in B2B, hospitality and retail. Adjusted EBITDA for our merchant services segment increased 11% to $8.7 million for Q1 2022 from $7.8 million for Q1 2021. The Adjusted EBITDA margin was 29.7% for Q1 2022, improving sequentially 3 quarters in a row with higher revenues. Balance sheet. Our strong balance sheet has allowed us to continue to execute our acquisition strategy. On December 31st, we had $156 million borrowed under our revolver net of cash under a $275 million facility. The face value of our convertible notes are $117 million. As of December 31st, our total leverage ratio was 3.8x, while the current constraint is 5.0x. As mentioned by Greg, we completed a public sector acquisition effective December 31st for $35 million in cash. To clarify, we have rights to the revenues and cash flows beginning January 1st, but the cash was not actually wired until January 3rd because December 31st was a bank holiday. We currently expect to remain below 4x for Q2, the March quarter. The interest rate for the convertible notes is 1%, while the interest rate for the revolver is currently less than 4%, but will increase as the Fed raises rates this year. Over time, we expect to convert roughly 2/3 of our Adjusted EBITDA into free cash flow, which can either be used for debt repayment, acquisitions, or earn outs. We define free cash flow as Adjusted EBITDA minus CapEx, internally capitalized software, cash interest, and cash taxes. We have not sold any stock under our shelf registration. Outlook. Looking forward, our strong first quarter, coupled with the public sector acquisition, gives us confidence in raising guidance for fiscal year 2022. It excludes acquisitions that have not yet closed and transaction-related costs. Revenues, $288 million-$304 million. Adjusted EBITDA, $74 million-$80 million. Pro forma adjusted diluted EPS, $1.28-$1.42. From a seasonal standpoint, we have different verticals with different seasonal patterns, which generally counterbalance each other with our current mix of companies. As we become more software-centric, quarters might vary based upon perpetual license sales, even though our trend is generally toward more recurring revenue streams. I'll now turn the call over to Rick for company updates and M&A activity. Thank you, Clay. Good morning, everyone. I want to give an update on a few things, and then I'll discuss M&A. Our public sector unified product offering software solutions continue to have strong results with success in local, municipal, county, and state markets. Over the last quarter, we've expanded our geographic and product reach by adding new territory and entity software solution sales in South Carolina, Louisiana, Texas, Colorado, and Massachusetts. Our software solutions opened five new states with contribution from six i3 public sector entities. Additionally, we expanded market share in several existing footprints in multiple states. The breadth of our expansion includes additional instances of our utility billing, public safety, courts, payment processing, digital signature and certification, finance, records management, and kiosk software solutions. Lastly, we are realizing significant adoption of our recently announced LCRAA, Louisiana Clerks' Remote Access Authority software contract. Our success of the UPO and public sector in both cross-pollination of products and sheer wins over the last six months validates the work we have done over the last couple of years. We have a tried and true template to be used in other verticals now, namely healthcare. The unified product offering for healthcare is moving along nicely, and we're extremely pleased to see the collaboration amongst the team. We are hopeful very soon we will see lifts in sales activity around combining resources and the introduction of new product suites designed specifically around the healthcare vertical. From an ISV partner perspective, our total of signed and integrated ISVs at the end of the first fiscal quarter was 90, with eight more in the process of integration. Our ISV business continues to expand. I'll shift gears now and speak to M&A. On January 4th, we announced the completion of our latest acquisition in public sector. The business was formed in 1990 as a diversified software developer, application services provider, and data operations center specializing in joint court system data and information management systems. Their focus is on electronic filing systems, court case management, document management systems, document imaging systems, and online and IVR electronic payment systems. This transaction comes with an experienced and seasoned management team. We expect those individuals to continue to grow the business. We are also excited about the additional cross-selling opportunities between this business and others within our public sector vertical. This is our second acquisition that operates at the state level in public sector. The company provides statewide integrated electronic filing system. The system allows for voluntary electronic filing in all civil cases, including small claims, district and circuit courts, domestic relations, and child support. The document management system can handle any type of file, from text images to photographs to audio files and video files to standard case documents. As usual, we remain disciplined in our approach relative to multiples, and this acquisition fell within our standard range. Our M&A pipeline has an emphasis on public sector and healthcare in that order, and we look forward to sharing more on the acquisition front in the near future. This concludes my comments, Anthony. At this time, we'll open the call for Q&A, please. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. Our first question comes from Peter Heckmann with D.A. Davidson. You may now go ahead. How you doing, guys? This is John on for Peter. Just a quick one. What was the approximate growth rate in the second quarter? Organic growth rate? 16%. Got it. What's the organic rate embedded in that full year guide? Embedded in what? In the full year guide. Oh, the full year guide. Oh, we said on the last quarter when we released guidance that we do expect double-digit organic growth for fiscal 2022. Perfect. If I can just squeeze one last one in. Is it fair to assume that January public sector acquisition generates around $8 million-$12 million in annual revenue? We paid $35 million for it, and if you use a 10x multiple, that'll give you an idea of EBITDA. It does have quite a high margin, close to 50%. Perfect. Thank you so much. Appreciate it. Thank you. Our next question comes from Jason Kupferberg with Bank of America. You may now go ahead. Thank you, guys. Maybe just to start a little bit of a follow-up on that last question, just if we look at the raise and the guidance for fiscal year 2022, is that more or less coming from the recent public sector acquisition, or would you characterize some of the raise as organic? The lion's share is the acquisition, but we did beat our expectation for Q1 slightly, and so we've passed that raise through to the remainder of the year. Okay. Understood. Thank you for the new disclosures on the ARR. That slide is helpful. I think you said ARR grew 53% year-over-year in the quarter. I was wondering, on a full year basis, where you see that metric coming in. I don't think we're prepared to forecast individual line items on this page, but we will report it every quarter. Okay. All right. No, understood. Jason, if you wanna use an estimate- Yep. 80% of our revenues in this quarter were ARR or recurring, and so you could take our full year guide and use that as a proxy. Makes sense. Okay. Well, I appreciate the color. Thank you, guys. Thank you. Our next question comes from George Mihalos with Cowen. You may now go ahead. Hey, guys. Good morning, and thanks for taking my questions and nice results here. Wanted to start off with sort of a high level question, and that's, you know, just as we sort of look at inflation and is that making its way through the markets. You talked a little bit about rising rates and increased expense, but how do you think about that from both a top line and bottom line perspective? I mean, you're mostly software now, fair number of convenience fees. Is inflation a tailwind to the top line, and how are you sort of managing it or thinking about it from an expense standpoint? Well, from a top line, you'll know that, you know, with all the payment processors, that higher tickets are generally good for payment processors. From an expense standpoint, we have raises going in or that did go in January first, and they were 6%-7%, while last year we did not have raises during the COVID period. That is an impact on our expense structure. We have some 34 offices, but in certain offices, Nashville being one of them, we are feeling pressure on compensation like all companies are. Okay. That's helpful. Appreciate that commentary and what you've embedded in the guide here. Wanted to also ask, you guys sound really upbeat again on public sector. Obviously, I think you're talking about more RFPs or record RFPs out there. I'm curious, are you seeing that across the board, state, municipal, or is it skewed more to one category. I'm wondering if the nature of the competitor that you're seeing now as you move upstream, if that's starting to change, if you're seeing different logos, if you will, in some of these RFPs. Yeah, George, good question. It is across the board. Part of it is pent-up demand. The other part is confidence with the American Rescue Plan and the dollars that are available. Our marketing teams and sales teams continue to educate our customers on what's available to them. I believe only half of that package is available this year and half next year, and I guess they need to use that money by the end of 2024. We haven't been able to succinctly tie the increase in RFPs to the money that's available. Again, I think it's confidence, and there's a demand for change in the technology that many of the municipalities are using today. I don't know if I answered all your question. Yeah, no, that's perfect, Rick. Appreciate it. Just one last one, if I can sneak in. Any sort of notable Omicron impact as you went through December and maybe sort of the early days of January? Thanks again, guys. We really didn't notice any change from Omicron. You know, prior to Omicron, we were in a Delta environment. Having said that, I don't feel like the economy's come all the way back from COVID. I feel like there's still 10% of a headwind from it. Everything from supply shortages to short staffing is just some kind of sand in the gears of the economy, it seems like. Thank you. Our next question comes from Matt Schwarz with Raymond James. You may now go ahead. Hey, guys. This is Matt on for JD. Thanks for taking my questions, and congrats on another deal. Appreciate the color on organic growth. Just a quick question. Is there any reason post-COVID that 10% can't be higher as software revenue becomes a larger part of your mix? Is low teens even a possibility post-COVID? It is a possibility, and it is our target, or our goal. Our guidance for 2022 is double digit. For 2023, I think we'll address that when we come over the hill and have better visibility. But it's definitely our goal to get there. It's not yet our long-term guidance. Okay, great. Just one more on merchant services margin. On an organic basis, like, what is the normalized level of margin expansion there? Like, are we looking at 25-50 basis points a year ballpark? I know there's gonna be M&A, and that's gonna come with different margin profiles, but is it possible you can get back to 33%-34% EBITDA margin like you did back in 2019? Thanks, guys. Our guidance with our current mix of companies long term is to expand margins 50-100 basis points a year. Where we expect to get that leverage is on the corporate expense line, which should grow at an inflationary rate while the top line, as you see, is growing at a much higher rate. Over some time period, I do think it's possible to get into the 30s. Okay, great. Thanks, guys. Congrats again on the quarter. Thanks, Matt. Our next question comes from James Faucette with Morgan Stanley. You may now go ahead. Great. Thank you very much. Wanted to ask quickly on acquisitions. Obviously, you guys have had a different acquisition strategy than a lot of people and are seeing good success, and it's obviously contributing to the growth. What are you thinking about the current environment, especially given the volatility and valuations, and how should we think about or what would you like to see in terms of cadence of acquisitions as we go through 2022 compared to the last one or two years? We've generally. Well, to answer the first part of your question, private company valuations, at least for the population we look at, where it's founder-owned, maybe it's been owned 30, 40 years, it's somewhat disconnected from public valuations. So I don't anticipate a large impact from volatility and public valuations crossing over into the world we work in. As far as pace of acquisitions, we've generally guided to four to five a year. You know, generally one acquisition per quarter. You know, sometimes it worked out a little differently than that, just luck or opportunity. But that's how we go into each year planning. As you know, M&A is kind of a. There's a lot of factors that go into it, and it's hard by nature to predict. Sure. It sounds like from your perspective is that, you know, the types of companies that you're looking at and having conversations with, et cetera, they haven't been subject to the massive moves in the overall valuations, et cetera. It sounds like that from what you're saying is that, those conversations and I guess negotiations are pretty similar to what they have been historically then? They are. You know, we go out and tell our story about becoming part of something larger, taking care of key employees, giving them a lot of autonomy. Taking care of their customers. You know, they're not always looking for top dollar. We're looking for people that have built something they're proud of, and they wanna stick around and be part of something for another five or 10 years. Got it. You know, and I think you addressed this a little bit, but wanted to kind of re-ask it maybe 'cause I didn't understand it, your answer in the first place. You know, when we think about the increasing contribution of software and as we go through the integration period and, you know, kind of inorganic growth becomes organic growth just with the passage of time, how should we think about like the leverage and the margin impact? I mean, you know, obviously you're putting up good top line growth numbers, et cetera, but should there be incremental margin and margin expansion over time? Or, what's our kind of what's the framework that we should be using as we think about the integration of these acquisitions? I do. I think so. For one thing, everything we've purchased post-IPO has been software related, and those companies generally carry higher margins. The payments that get attached to those companies over time also have higher margins than non-integrated payments. I do think there's a general shift over time to improving margins. You know, an example is a company we just bought, 50% margins. That's probably about as good as it gets. Yeah, over time, I think so, but it will depend on the mix of companies we purchase. Got it. Makes sense. Appreciate your time this morning. Thank you, Jim. Thank you. Again, if you have a question, please press star, then one. Our next question comes from Chris Donat with Piper Sandler. You may now go ahead. Good morning, gentlemen. I wanted to just revisit one element of guidance and then also if anything's changed as far as the education business goes. What's embedded in your 2022 outlook, and then are you seeing any changes that can affect anything within the guidance period? Or is it more of a 2023 event at this point if there is a change? Well, I think on the last call, we gave some rough numbers for revenues and EBITDA for education. It was a little less than $4 million revenues and EBITDA of around $1.5 million. We were only slightly down from that in the December quarter, and that's a normal seasonal thing. That gives you an idea of the run rate going forward. As far as lunch goes, which would be a catalyst for stepping higher on revenues and EBITDA, that will depend on politics and local jurisdictions. We think it'll probably happen someday because it's very hard on district budgets, free lunch for everybody. I don't know of a timetable yet. I feel like it's there at some point in the future. I just. We're not privy to that. We don't have that knowledge right now. Oh, okay. I was just wondering if anything had sort of changed in the last couple months, but doesn't sound like it has. Just digging into the supplemental disclosure, as we look at the top of page 2 and the recurring software services, the increase in the quarter to $10.3 million from $3.2 million. Clay, is that all acquisition related, or is there some other business that's kind of bouncing around quarter-over-quarter there? That is mainly the healthcare acquisition we did on October 1st as the lion's share of that. Okay. Just thinking about you, I think I heard you correctly, Greg, that you hadn't really seen any change related to Omicron because you went from Delta to Omicron. But just to double-check, within the hospitality businesses, it's been steady state the last couple quarters? Just specifically for that one, 'cause we're hearing other things in some other places, but just didn't sound like there was any change in hospitality, but I wanted to double-check. We have seen a slight dip in hospitality, especially on the West Coast. We have a large presence. It's thinner margin business, so it doesn't affect our EBITDA to speak of. You know, the restaurants are open. There's new ones opening. Their volume may be down a little bit, but it's not measurable. Okay. Thanks for that additional detail. This concludes our question and answer session. I would like to turn the conference back over to Greg Daily for any closing remarks. I wanna thank everybody for their attendance and interest. Stay tuned. We've got, you know, things are rolling along really well. The team's doing awesome. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.