Good day, everyone, and welcome to the i3 Verticals Third Quarter 2022 Earnings Conference Call. Today's call is being recorded and a replay will be available starting today through August 16. The number for the replay is 877-344-7529, and the code is 3637280. The replay may also be accessed for 30 days at the company's website. Following today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. At this time, for opening remarks, I would like to turn the call over to Geoff Smith, VP of Finance. Please go ahead, sir. Good morning. Welcome to the third 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 measures 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, and 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 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 those 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'll now turn the call over to the company's Chairman and CEO, Greg Daily. Thanks, Geoff, and good morning to all of you. We are very pleased with our third quarter 2022 results. As we round the corner towards the end of our fiscal year 2022, we expect to put the finishing touches on what has been a phenomenal year. Year to date, we set new records in revenue and EBITDA, which grew at 48% and 51% respectively for the nine months ending June 30. We continue to focus on revenue, recurring revenue sources, particularly in software and related services streams. While licensed sales will happen from time to time as certain markets necessitate them, we are focused on SaaS and recurring transaction-based revenue to align the price and the lifetime benefit of the solutions we provide. Our solutions have excellent customer service retention, and we go to market with a long-term lens. Additionally, acquiring great businesses that have underemphasized recurring revenue streams remain a significant opportunity. More than 80% of our revenue in the third quarter came from recurring revenue sources. We're extremely excited about several investments to add modern cloud-based products to offerings in the public sector. As I said, we are thinking long term and will not hesitate to invest capital within the company in addition to M&A. In the third quarter fiscal year 2022, two months of results from our May 1 healthcare acquisition. We highlighted last quarter what a great fit the business is, and we have not been disappointed. The cross-sell opportunities have been immediately materialized in their pipeline. All of our fiscal year 2022 acquisitions have integrated seamlessly, and we're excited about what comes next. Now I'll turn the call over to Clay. He'll provide you more details of our third quarter financial performance. Following Clay's comments, Rick will give us an M&A update, and then we'll open up the call for questions. Good morning. The following pertains to the third quarter of our fiscal year 2022, which is the quarter ended June 30, 2022. Please refer to the slide presentation titled Supplemental Information on our website for a reference with this discussion. We had another great quarter with record revenues and Adjusted EBITDA. Revenues for the third quarter increased 28% to $80.6 million from $63.1 million for Q3 2021, reflecting strong organic growth and acquisitions. The key metrics we track are headed in the right direction. Our integrated payments percentage improved to 62% for Q3 2022 from 60% for Q3 2021, which helped our revenue yield improve to 136 basis points for the quarter from 123 basis points for Q3 2021. Organic growth for this quarter was approximately 10%. There was no benefit from a favorable COVID comparison in the same period in the prior year, which had essentially recovered from the pandemic in our lines of business. Annual recurring revenues totaled $266.7 million for Q3 2022, compared to $204.9 million for Q3 2021, a growth rate of 30%. Over 80% of our revenues in the quarter came from recurring sources. Software and related services remained the largest portion of our revenues, growing 45% to $39 million for Q3 2022, from $26.8 million for Q3 2021. Adjusted EBITDA increased 29% to $20.1 million for Q3 2022, from $15.5 million for Q3 2021, reflecting continued momentum in our proprietary software segment. Adjusted EBITDA as a percentage of revenues increased to 24.9% for Q3 2022, from 24.6% for Q3 2021, reflecting margin improvement in our proprietary software segment and lower corporate overhead as a percentage of revenues. For the nine months, the Adjusted EBITDA margin expanded 50 basis points. Pro forma adjusted diluted earnings per share increased 28% to $0.37 for Q3 2022, from $0.29 for Q3 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 42% to $47.8 million for Q3 2022, from $33.7 million for Q3 2021, principally reflecting growth in our two largest verticals, public sector and healthcare. This quarter included two months of results from our most recent acquisition in the healthcare vertical, which is off to a good start. Revenues in our education vertical continued a strong rebound, increasing 27% Q3 to Q3, thanks to the reopening of existing customers and organic sales to new school districts. The segment's Adjusted EBITDA improved 51% to $15.6 million for Q3 2022, from $10.3 million for Q3 2021, outpacing revenues. 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%. Revenues for our merchant services segment increased 9% to $32.7 million for Q3 2022, from $30 million for Q3 2021, principally reflecting growth in our ISO channel and hospitality vertical, both of which carry thinner payment margins. Adjusted EBITDA for our merchant services segment increased slightly to $8.8 million for Q3 2022, from $8.7 million for Q3 2021, with higher revenues partially offset by higher residual expenses. In keeping with our strategy since the IPO, we have steadily redirected acquisition and internal resources from traditional merchant services into higher growth and higher margin proprietary software and services, coupled with integrated payments. Balance sheet. Our balance sheet has allowed us to continue to execute our acquisition strategy. On June 30th, we had $198 million borrowed under our revolver net of cash under a $275 million facility. The face value of our convertible notes is $117 million. As of June 30th, our total leverage ratio was approximately 4x, while the current constraint is 5x. The interest rate for the convertible notes is 1%, while the interest rate for the revolver is currently around 6%, but will increase as the Fed continues to raise rates. Over time, we expect to convert roughly two-thirds of Adjusted EBITDA into free cash flow, which can be used for debt repayment, acquisitions, and earn outs. We define free cash flow as Adjusted EBITDA minus capital expenditures, internally capitalized software, cash interest, and cash taxes. Outlook. Looking forward, our performance here today gives us confidence in raising the midpoints and narrowing our guidance ranges for fiscal year 2022. It excludes acquisitions that have not yet closed and transaction-related costs. 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. Our revenue guidance for the year $307 million-$317 million. Adjusted EBITDA $76.5 million-$80.5 million. Pro forma adjusted diluted EPS $1.41-$1.47. I will now turn the call over to Rick for company updates and M&A activity. Thank you, Clay. Good morning, everyone. Before I discuss M&A, I'll give an update on a few items. Our public sector unified product offering software solutions continue to have strong results with success in local, municipal, county, and state markets. Public sector now reaches across the United States and Canada, serving public sector clients in 48 states and three Canadian provinces. Over the last quarter, we've expanded our product reach by adding new software solution sales in 17 states. Expansion includes additional instances of our public safety, courts, payment processing, digital signature and certification, land records, data access, SafeE ncounter, and licensing software solutions. We continue to implement our recently announced LCRAA, Louisiana Clerks' Remote Access Authority case management software contract, which is supported by statewide e-filing and payments, which continues to be deployed. The i3 Education brand unifies all of our educational product lines along with marketing, sales, development, and support services that go along with it. With considerable additions in new districts and associated schools, the growth in education over the past trailing twelve months has been one of our best years for sales. Most districts are observing greater levels of à la carte purchases and higher pricing for lunches as the K-12 sector starts to shift to normalcy. In addition, federal or state money for student lunch subsidies has largely decreased or been eliminated, as have COVID protocols. In our healthcare vertical, a return to normal and elective surgical volumes is restoring pre-COVID levels for our healthcare revenue cycle clients. As the healthcare system adjusts to the shifting need for care delivery, mobile healthcare, and telehealth has also offered a new source of revenue. As COVID issues fade, we are noticing more outreach for our SaaS subscriptions because of the industry's willingness to shift. Our healthcare companies are still working together to develop and promote new products that coincide with customer demands. From a technology perspective, our efforts to transition to a private cloud infrastructure are going well, and several applications are now operating in this new environment. These solutions now benefit from improved uptime as well as geographic redundancies and improved scalability. Our next milestone involves a FedRAMP compliant environment for government solutions. We continue to invest in training as well as DevOps resources to leverage low-code development platforms, which can be hosted and managed on our AWS infrastructure. Several product projects are underway leveraging this technology to expand our offerings in the public sector and education verticals. I'll now speak to M&A. We continue to pursue growth both organically and through acquisitions of growing companies that fit within our strategy and culture, with an emphasis on companies in public sector and healthcare. Although we haven't closed any additional acquisitions this quarter, other than the healthcare tuck-in we announced in May, our pipeline remains robust with opportunities for acquisitions that are similar in size to many of our acquisitions to date, as well as some that are larger. Based on what we are seeing, we would expect acquisition multiples for these transactions to be consistent with other transactions we have closed, with the caveat that larger transactions will tend to run at the higher end of our stated range relative to multiples. Additionally, we are looking for acquisitions that provide complementary technologies to our existing products, particularly in our public sector vertical. Differing state, local, and municipal regulations have created a relatively fragmented market across the U.S. in this sector, and we believe inorganic development will continue to account for a sizable portion of customer base expansion in this vertical. This concludes my comments, M.J. At this time, we'll open the call for Q&A, please. Thank you. At this time, we will now begin the Q&A or question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question today comes from John Davis of Raymond James. Please go ahead. Hey, good morning, guys. Clay, wanted to start off on the margin. You know, we hear a lot about wage inflation. Obviously, you guys have different acquisitions mixing in. You know, it looks like the midpoint on the margin guidance ticked down 20 or 30 basis points. Just curious, is that a function of revenue mix? Are you seeing some wage inflation? I think Greg called out some organic investments that you guys potentially are willing to make or are making in the business. Just any high-level commentary on the margin would be helpful. I think that's mainly a function of revenue overperforming. Our goal on margins is to increase our overall corporate margin by 50-100 basis points a year. Year to date, we're at 50 basis points, the low end of that range. I would say that wage inflation probably is what's holding us back a little bit this year. We remain on plan and expect to continue that performance. Okay, great. Just wanted to hit on organic growth for a minute. Clay, I think you said it was 10% in the quarter. Can you help us with what's embedded for fourth quarter? It looks like, you know, by my math, it's something similar to 3Q, but just curious if you could maybe put a finer point on it. We don't guide quarterly. We did say coming into the year we would grow double digits, and we still expect to grow double digits for the year. Okay. Okay. Maybe just ARR, I think, was a strong 30% growth. Is that all organic or did you guys have an organic breakdown of ARR for the third quarter? We don't have an organic breakdown of ARR. It's not all organic. Our main verticals, hospitality, I mean, healthcare and public sector are what are driving most of the organic growth. Okay. Last one for me, just on M&A pipeline. Rick, you called out some potentially larger deals. You know, curious if you or Greg have comments. Is that just a function of the fact you guys are getting bigger and can do larger deals or what's available in the market? Still seems like very reasonable multiples kind of in that 8x-10x range. Just curious if it's, you know, what's driving kind of the comments for larger deals in the pipeline. Yeah. JD, we've always looked for larger deals. The fact that our sweet spot has been two to five is because above five, we've said before, the valuations get crazy. We're running into more companies now on the larger size that are more realistic about what they can expect to get for their company. We've broadened our resources as well in self-sourcing, so we're talking to a lot more individuals than we used to. I would expect we'll continue to stay within our range. The important note is if we do something that's larger than our sweet spot, we're probably gonna end up having to pay on the higher end of our range. Again, we're gonna stay very disciplined, and you shouldn't expect us to pay more than 10x for those deals as well. Okay, great. Appreciate the call, guys. Thanks. Thank you. The next question comes from Peter Heckmann of D.A. Davidson. Please go ahead. Good morning, gentlemen. Thanks for taking the question. In public sector, are you continuing to see some procurements that are designed to be funded by stimulus from the American Rescue Plan? In that same vein, you know, when we think about your public sector deals, you know, I guess the configuration of deals that would be transaction-oriented and have a transaction fee attached versus kind of software have a fixed recurring. Can you talk about how that mix is changing? Well, let me, I'll talk to the first part. We haven't been able to tie that back, Peter. You know, there is more demand now. It's hard to tell if that's pent-up or additional resources. We continue to educate our customers on the monies that are available to them. But we haven't really been able to black and white tie that back to the American Rescue Plan dollars. But we're excited to see our customers are changing their mindset with regard to the types of products that they'll need going forward. We're pleased with the interest and the number of deals that we're looking at. On your question about, you know, the mix of how many deals have payments attached, I would say most of the deals still do. You know, LCRAA was a big one down in Louisiana that has payments attached. Our Tennessee renewal is a large contract that has payments attached. From an acquisition standpoint, it's not a black and white criteria. We will buy software solutions that are not adjacent to payments if it rounds out our product line. We certainly like it when it's adjacent to payments because it's a clearly identifiable synergy, revenue synergy that we can, we know we have going into the deal. Got it. If I had been doing my research correctly on some of the acquisitions in public sector, you know, it looks like the company might have statewide or state-level deals in four, five, six states now. You mentioned trying to get FedRAMP certified. Is that necessary for some state-level deals or would you be looking at a contract with some federal agencies? Yeah, it's both. We have a FedRAMP environment today, but it's not in our private cloud, so that's what we're working on. We won't obviously move those products into AWS until it's FedRAMP certified. That's what I was trying to get at, Peter. Got it. Okay, that makes sense. Thank you. Again, if you have a question, please press star then one. Our next question comes from James Faucette with Morgan Stanley. Please go ahead. Hey, good morning, guys. Thanks for taking my questions here. First, like a high-level question, I guess is obviously doing a great job so far on the software transition. Where do you see the ceiling for software as a percentage of total revenue growth? And you know, is that something that you're targeting or working towards? I guess as part of that is if software takes share internally as a percent of total revenue, how much of that right now is coming from faster growth of the software capabilities versus acquisitions? Well, your last part, I would say that our public sector, our proprietary software segment, the organic growth is low double-digit%. Then, you know, if we grow revenues in the mid-20s%, that has the majority coming from acquisitions still. I think we're a little bit speculating here, but internally we talk about plateauing at software and services as a percentage of total revenues capping out at around two-thirds. That is speculation. You know, from time to time, like this quarter as an example, a surge in payments will. You know, that won't be a linear progression over time. Got it. That makes sense. You know, I guess lots of questions right now around impact from potential recessionary type environment or at least slower economy. How does that impact the different parts of your business? I guess more importantly, you know, when you think about the relationships you're building with municipalities, et cetera, on the software side, does that tend to have much of an impact on those businesses, particularly new wins and opportunities? A general comment on this recessionary environment, if we haven't seen much of it yet, I would say that July was a little softer than June, but it would be a low single digit type of. It's too early to say that that's a trend, I would say. Your question about municipalities, I think there was a recognition during COVID that state and local governments had put off modernizing for too long, and it became, you know, painfully apparent. I don't see or we don't see currently a pullback in those budgets. They're committed to them. They have the added benefit that they allow the governments to operate with fewer people, and that's become a pain point for a lot of them. You know, a key employee quits, and all of a sudden the office doesn't run correctly anymore. We believe that will continue for several years, even if at the federal level, things are cut back or not. Got it. Appreciate the color. The next question comes from Jason Kupferberg of Bank of America. Please go ahead. Thank you. Good morning. This is Tyler DuPont on for Jason Kupferberg. Thanks for taking the call. Just one question for me. I was just wondering if you could speak at all to cash flow. It looks like this quarter's conversion rate was a bit lighter than some may have anticipated, but you know, still the two-thirds conversion guidance for the full year. Is there anything specific to call out there with maybe whether it's cadence or just the puts and takes as to how we should think about cash flow conversion moving forward? Well, as far as puts and takes go, we've run higher than two-thirds of EBITDA every year since going public, and the reason for that is low cash taxes. We continue to give the two-thirds guidance because we anticipate at some stage we'll be a 25% taxpayer, although it still seems a few years out. Rising interest rates will impact the cash flow conversion, as cash interest is a part of that equation. This time of year, I'll probably need to study it a little more closely, but our receivables build a little this time of year. Do you have anything to add on cash flow for the nine months or? No. I mean, I think looking ahead, we spoke about the capital investments we're considering. That would certainly be a consideration, but at this time, we don't expect that any, you know, software CapEx is gonna throw us off of that two-thirds conversion. We think that's still a fair metric to use. All right. Perfect. Well, thank you very much. Appreciate the time. Again, if you have a question, please press star then one. The next question comes from Charles Nabhan of Stephens. Please go ahead. Good morning, and thank you for taking my question. You had alluded to the conversion of merchant services customers as a driver of software revenue. I was hoping to get a little more color in that area in terms of the magnitude of that impact as well as any particular verticals you're seeing greater success in terms of conversion. Well, I think if it was one of my comments, I was just referring to We're not putting as much effort into traditional merchant processing. We're allocating our sales and other resources towards integrated payments, which tend to be in our public sector and healthcare verticals. We just get higher margin, higher growth. It's more satisfying for the customer and their customers, to be in an integrated environment. Got it. As a follow-up, I wanted to get your comments on valuations on prospective M&A deals. Specifically, if the magnitude of compression, valuation compression you're seeing is greater at the higher end of the range as opposed to the lower end of the range you've historically looked at. Secondly, if you're seeing any differences across your verticals in terms of you know changes in valuation. Yeah. Nothing's really changed. There's a trickle-down effect to sellers, and we haven't seen that yet. We're still talking in our same range to potential sellers and engaging in good conversations with them. There's been little to no pushback on higher multiples or lower multiples. I'd like to think that we'd be able to go to our lower end of our range going forward, but right now we're still in our stated range between 7x and 10x. Got it. Thank you. Appreciate the call there. This concludes the question and answer session. I would like to turn the conference back over to Greg Daily for closing remarks. Thanks, everyone, for your interest, your support. I do feel like the company is perfectly positioned in the right place at the right time. We have a great team, a big pipeline, so excited about finishing out the last quarter of our fiscal year 2022. Anyway, thank you again. Have a good day. The i3 Verticals Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.