segmentsq3fy2019pres

Q3 Fiscal 2019 Supplemental Segment Information

Q3 YTD Fiscal 2019 Segment Performance(1) ($ in thousands) Nine months ended June 30, Period over 2019 2018 period growth Adjusted Net Revenue(2) Merchant Services, excluding Purchased Portfolios $ 67,647 $ 62,442 8% Purchased Portfolios 4,965 7,217 (31)% Merchant Services 72,612 69,659 4% Proprietary Software and Payments 24,420 11,223 118% Other — (4) nm Total $ 97,032 $ 80,878 20% Adjusted EBITDA(2) Merchant Services $ 24,438 $ 23,585 4% Proprietary Software and Payments 9,931 4,506 120% Other (7,350) (5,592) (31)% Total $ 27,019 $ 22,499 20% Adjusted EBITDA as a percentage of Net Revenue 28% 28% Volume Merchant Services $ 8,866,400 $ 8,221,763 8% Proprietary Software and Payments 429,479 361,823 19% Total $ 9,295,879 $ 8,583,586 8% 1. i3 Verticals has two segments, “Merchant Services,” which includes Purchased Portfolios (a subset of merchant contracts purchased in 2014 and 2017) and "Proprietary Software and Payments." i3 Verticals also has an “Other” category, which includes corporate overhead. 2. Adjusted Net Revenue and Adjusted EBITDA are non-GAAP financial measures. Refer to the following slides for the reconciliation of non-GAAP financial measures.

Reconciliation of Non-GAAP Financial Measures The reconciliation of our revenue to non-GAAP adjusted net revenue is as follows: ($ in thousands) Nine Months Ended June 30, 2019 Proprietary Software Merchant Services(2) and Payments Other Total Revenue $ 241,841 $ 25,904 $ — $ 267,745 Acquisition revenue adjustments(1) — 3,064 — 3,064 Interchange and network fees (169,229) (4,548) — (173,777) Net Revenue $ 72,612 $ 24,420 $ — $ 97,032 ($ in thousands) Nine Months Ended June 30, 2018 Proprietary Software Merchant Services(3) and Payments Other Total Revenue $ 224,671 $ 14,788 $ (4) $ 239,455 Interchange and network fees (155,012) (3,565) — (158,577) Net Revenue $ 69,659 $ 11,223 $ (4) $ 80,878 1. Under GAAP, companies must adjust, as necessary, beginning balances of acquired deferred revenue to fair value as part of acquisition accounting as defined by GAAP. Acquisition revenue adjustments remove the effect of these adjustments to acquisition date fair value from acquisitions that have closed as of the date of the earnings release. 2. Merchant Services includes purchased portfolios which had revenue of $9,761, acquisition revenue adjustments of $0 and interchange and network fees of $4,796 for the nine months ended June 30, 2019. 3. Merchant Services includes purchased portfolios which had revenue of $14,019 and interchange and network fees of $6,802 for the nine months ended June 30, 2018.

Reconciliation of Non-GAAP Financial Measures The reconciliation of our income (loss) from operations to non-GAAP pro forma adjusted net income and non-GAAP adjusted EBITDA is as follows: ($ in thousands) Nine Months Ended June 30, 2019 Nine Months Ended June 30, 2018 Proprietary Proprietary Merchant Software and Merchant Software and Services Payments Other Total Services Payments Other Total Income (loss) from operations $ 16,286 $ 1,761 $ (13,526) $ 4,521 $ 14,908 $ 1,146 $ (7,188) $ 8,866 Interest expense, net 577 (8) 3,418 3,987 923 — 6,726 7,649 Change in fair value of warrant liability — — — — — — 8,487 8,487 Provision for income taxes 435 — (437) (2) (271) — 824 553 Net income (loss) 15,274 1,769 (16,507) 536 14,256 1,146 (23,225) (7,823) Non-GAAP Adjustments: Provision for income taxes 435 — (437) (2) (271) — 824 553 Offering-related expenses(1) — — — — — — 124 124 Non-cash change in fair value of contingent consideration(2) (554) 2,290 — 1,736 1,535 1,745 — 3,280 Non-cash change in fair value of warrant liability(3) — — — — — — 8,487 8,487 Equity-based compensation(4) — — 4,122 4,122 — — 817 817 Acquisition revenue adjustments(5) — 3,064 — 3,064 — — — — Acquisition-related expenses(6) — — 1,447 1,447 — — 478 478 Acquisition intangible amortization(7) 8,179 1,571 1 9,751 6,755 247 4 7,006 Non-cash interest(8) — — 771 771 — — 835 835 Other taxes(9) 35 5 214 254 2 — 56 58 Non-GAAP adjusted income before taxes 23,369 8,699 (10,389) 21,679 22,277 3,138 (11,600) 13,815 Pro forma taxes at effective tax rate(10) (5,842) (2,175) 2,597 (5,420) (5,569) (785) 2,900 (3,454) Pro forma adjusted net income 17,527 6,524 (7,792) 16,259 16,708 2,353 (8,700) 10,361 Plus: Cash interest expense, net(11) 577 (8) 2,647 3,216 923 — 5,891 6,814 Pro forma taxes at effective tax rate(10) 5,842 2,175 (2,597) 5,420 5,569 785 (2,900) 3,454 Depreciation and internally developed software amortization(12) 492 1,240 392 2,124 385 1,368 117 1,870 Adjusted EBITDA $ 24,438 $ 9,931 $ (7,350) $ 27,019 $ 23,585 $ 4,506 $ (5,592) $ 22,499 See footnotes continued on the next slide.

Reconciliation of Non-GAAP Financial Measures 1. Includes costs associated with forming i3 Verticals, Inc. and other expenses directly related to the certain transactions as part of any offering. 2. Non-cash change in fair value of contingent consideration reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the later of the most recent balance sheet date forming the beginning of the income statement period or the original estimates made at the closing of the applicable acquisition. 3. Non-cash change in warrant liability reflects the fair value change in certain warrants for our common units associated with our mezzanine notes in the aggregate principal amount of $10.5 million. These warrants are accounted for as liabilities on our consolidated balance sheets. 4. Equity-based compensation expense consisted of $4,122 thousand related to stock options issued under the Company's 2018 Equity Incentive Plan during the nine months ended June 30, 2019. Equity-based compensation expense recognized during the nine months ended June 30, 2018 consisted of $76 thousand related to stock options issued under the Company's 2018 Equity Incentive Plan and $741 thousand related to tax receivables agreement (TRA) non-participation compensatory shares. TRA non-participation compensatory shares were issued to former equity owners as part of the Reorganization Transactions in conjunction with the IPO. 5. Under GAAP, companies must adjust, as necessary, beginning balances of acquired deferred revenue to fair value as part of acquisition accounting as defined by GAAP. Acquisition revenue adjustments remove the effect of these adjustments to acquisition date fair value from acquisitions that have closed as of the date of the earnings release. 6. Acquisition-related expenses are the professional service and related costs directly related to our acquisitions and are not part of our core performance. 7. Acquisition intangible amortization reflects amortization of intangible assets and software acquired through business combinations, acquired customer portfolios, acquired referral agreements and related asset acquisitions. 8. Non-cash interest expense reflects amortization of deferred financing costs. 9. Other taxes consist of franchise taxes, commercial activity taxes and other non-income based taxes. Taxes related to salaries or employment are not included. 10. Pro forma corporate income tax expense is based on Non-GAAP adjusted income before taxes and is calculated using a tax rate of 25.0% for both 2019 and 2018, based on blended federal and state tax rates, considering the Tax Reform Act for 2018. 11. Cash interest expense, net represents all interest expense recorded on the Company's statement of operations other than non-cash interest expense, which represents amortization of deferred financing costs. 12. Depreciation and internally developed software amortization reflects depreciation on the Company's property, plant and equipment, net, and amortization expense on its internally developed capitalized software.

Q3 QTD Fiscal 2019 Segment Performance(1) ($ in thousands) Three months ended June 30, Period over 2019 2018 period growth Adjusted Net Revenue(2) Merchant Services, excluding Purchased Portfolios $ 24,133 $ 23,025 5% Purchased Portfolios 1,387 2,068 (33)% Merchant Services 25,520 25,093 2% Proprietary Software and Payments 10,494 3,738 181% Other — — nm Total $ 36,014 $ 28,831 25% Adjusted EBITDA(2) Merchant Services $ 8,761 $ 8,275 6% Proprietary Software and Payments 3,525 1,463 141% Other (2,592) (1,801) (44)% Total $ 9,694 $ 7,937 22% Adjusted EBITDA as a percentage of Net Revenue 27% 28% Volume Merchant Services $ 3,268,141 $ 2,888,278 13% Proprietary Software and Payments 141,081 109,088 29% Total $ 3,409,222 $ 2,997,366 14% 1. i3 Verticals has two segments, “Merchant Services,” which includes Purchased Portfolios (a subset of merchant contracts purchased in 2014 and 2017) and "Proprietary Software and Payments." i3 Verticals also has an “Other” category, which includes corporate overhead. 2. Adjusted Net Revenue and Adjusted EBITDA are non-GAAP financial measures. Refer to the following slides for the reconciliation of non-GAAP financial measures.

Reconciliation of Non-GAAP Financial Measures The reconciliation of our revenue to non-GAAP adjusted net revenue is as follows: ($ in thousands) Three Months Ended June 30, 2019 Proprietary Software Merchant Services(2) and Payments Other Total Revenue $ 87,264 $ 10,219 $ — $ 97,483 Acquisition revenue adjustments(1) — 1,794 — 1,794 Interchange and network fees (61,744) (1,519) — (63,263) Adjusted Net Revenue $ 25,520 $ 10,494 $ — $ 36,014 ($ in thousands) Three Months Ended June 30, 2018 Proprietary Software Merchant Services(3) and Payments Other Total Revenue $ 79,766 $ 4,770 $ — $ 84,536 Interchange and network fees (54,673) (1,032) — (55,705) Adjusted Net Revenue $ 25,093 $ 3,738 $ — $ 28,831 1. Under GAAP, companies must adjust, as necessary, beginning balances of acquired deferred revenue to fair value as part of acquisition accounting as defined by GAAP. Acquisition revenue adjustments remove the effect of these adjustments to acquisition date fair value from acquisitions that have closed as of the date of the earnings release. 2. Merchant Services includes purchased portfolios which had revenue of $2,884, acquisition revenue adjustments of $0 and interchange and network fees of $1,497 for the three months ended June 30, 2019. 3. Merchant Services includes purchased portfolios which had revenue of $4,218 and interchange and network fees of $2,150 for the three months ended June 30, 2018.

Reconciliation of Non-GAAP Financial Measures The reconciliation of our income (loss) from operations to non-GAAP pro forma adjusted net income and non-GAAP adjusted EBITDA is as follows: ($ in thousands) Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Proprietary Proprietary Merchant Software and Merchant Software and Services Payments Other Total Services Payments Other Total Income (loss) from operations $ 5,622 $ 994 $ (5,422) $ 1,194 $ 5,762 $ (118) $ (2,721) $ 2,923 Interest expense, net (1) (8) 1,927 1,918 360 — 2,284 2,644 Change in fair value of warrant liability — — — — — — 242 242 Provision for income taxes — — (131) (131) (39) — 731 692 Net income (loss) 5,623 1,002 (7,218) (593) 5,441 (118) (5,978) (655) Non-GAAP Adjustments: Provision for income taxes — — (131) (131) (39) — 731 692 Non-cash change in fair value of contingent consideration(1) 155 (572) — (417) 87 1,064 — 1,151 Non-cash change in fair value of warrant liability(2) — — — — — — 242 242 Equity-based compensation(3) — — 1,808 1,808 — — 817 817 Acquisition revenue adjustments(4) — 1,794 — 1,794 — — — — Acquisition-related expenses(5) — — 826 826 — — 30 30 Acquisition intangible amortization(6) 2,792 849 — 3,641 2,297 79 — 2,376 Non-cash interest(7) — — 306 306 — — 370 370 Other taxes(8) 12 1 51 64 2 — 14 16 Non-GAAP adjusted income before taxes 8,582 3,074 (4,358) 7,298 7,788 1,025 (3,774) 5,039 Pro forma taxes at effective tax rate(9) (2,146) (769) 1,090 (1,825) (1,946) (256) 943 (1,259) Pro forma adjusted net income 6,436 2,305 (3,268) 5,473 5,842 769 (2,831) 3,780 Plus: Cash interest expense, net(10) (1) (8) 1,621 1,612 360 — 1,914 2,274 Pro forma taxes at effective tax rate(9) 2,146 769 (1,090) 1,825 1,946 256 (943) 1,259 Depreciation and internally developed software amortization(11) 180 459 145 784 127 438 59 624 Adjusted EBITDA $ 8,761 $ 3,525 $ (2,592) $ 9,694 $ 8,275 $ 1,463 $ (1,801) $ 7,937 See footnotes continued on the next slide.

Reconciliation of Non-GAAP Financial Measures 1. Non-cash change in fair value of contingent consideration reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the later of the most recent balance sheet date forming the beginning of the income statement period or the original estimates made at the closing of the applicable acquisition. 2. Non-cash change in warrant liability reflects the fair value change in certain warrants for our common units associated with our mezzanine notes in the aggregate principal amount of $10.5 million. These warrants are accounted for as liabilities on our consolidated balance sheets. 3. Equity-based compensation expense consisted of $1,808 thousand related to stock options issued under the Company's 2018 Equity Incentive Plan during the three months ended June 30, 2019. Equity-based compensation expense recognized during the three months ended June 30, 2018 consisted of $76 thousand related to stock options issued under the Company's 2018 Equity Incentive Plan and $741 thousand related to tax receivables agreement (TRA) non-participation compensatory shares. TRA non-participation compensatory shares were issued to former equity owners as part of the Reorganization Transactions in conjunction with the IPO. 4. Under GAAP, companies must adjust, as necessary, beginning balances of acquired deferred revenue to fair value as part of acquisition accounting as defined by GAAP. Acquisition revenue adjustments remove the effect of these adjustments to acquisition date fair value from acquisitions that have closed as of the date of the earnings release. 5. Acquisition-related expenses are the professional service and related costs directly related to our acquisitions and are not part of our core performance. 6. Acquisition intangible amortization reflects amortization of intangible assets and software acquired through business combinations, acquired customer portfolios, acquired referral agreements and related asset acquisitions. 7. Non-cash interest expense reflects amortization of deferred financing costs. 8. Other taxes consist of franchise taxes, commercial activity taxes and other non-income based taxes. Taxes related to salaries or employment are not included. 9. Pro forma corporate income tax expense is based on Non-GAAP adjusted income before taxes and is calculated using a tax rate of 25.0% for both 2019 and 2018, based on blended federal and state tax rates, considering the Tax Reform Act for 2018. 10. Cash interest expense, net represents all interest expense recorded on the Company's statement of operations other than non-cash interest expense, which represents amortization of deferred financing costs. 11. Depreciation and internally developed software amortization reflects depreciation on the Company's property, plant and equipment, net, and amortization expense on its internally developed capitalized software.

Q2 Fiscal 2019 Segment Performance(1) ($ in thousands) Three months ended March 31, Period over 2019 2018 period growth Adjusted Net Revenue(2) Merchant Services, excluding Purchased Portfolios $ 22,213 $ 20,629 8% Purchased Portfolios 1,541 2,305 (33)% Merchant Services 23,754 22,934 4% Proprietary Software and Payments 7,694 4,132 86% Other — (1) nm Total $ 31,448 $ 27,065 16% Adjusted EBITDA(2) Merchant Services $ 7,826 $ 7,707 2% Proprietary Software and Payments 3,555 1,796 98% Other (2,634) (1,790) (47)% Total $ 8,747 $ 7,713 13% Adjusted EBITDA as a percentage of Net Revenue 28% 28% Volume Merchant Services $ 2,794,120 $ 2,627,705 6% Proprietary Software and Payments 148,688 130,587 14% Total $ 2,942,808 $ 2,758,292 7% 1. i3 Verticals has two segments, “Merchant Services,” which includes Purchased Portfolios (a subset of merchant contracts purchased in 2014 and 2017) and "Proprietary Software and Payments." i3 Verticals also has an “Other” category, which includes corporate overhead. 2. Adjusted Net Revenue and Adjusted EBITDA are non-GAAP financial measures. Refer to the following slides for the reconciliation of non-GAAP financial measures.

Reconciliation of Non-GAAP Financial Measures The reconciliation of our revenue to non-GAAP adjusted net revenue is as follows: ($ in thousands) Three Months Ended March 31, 2019 Proprietary Software Merchant Services(2) and Payments Other Total Revenue $ 76,875 $ 8,519 $ — $ 85,394 Acquisition revenue adjustments(1) — 739 — 739 Interchange and network fees (53,121) (1,564) — (54,685) Adjusted Net Revenue $ 23,754 $ 7,694 $ — $ 31,448 ($ in thousands) Three Months Ended March 31, 2018 Proprietary Software Merchant Services(3) and Payments Other Total Revenue $ 72,226 $ 5,473 $ — $ 77,699 Interchange and network fees (49,292) (1,341) (1) (50,634) Adjusted Net Revenue $ 22,934 $ 4,132 $ (1) $ 27,065 1. Under GAAP, companies must adjust, as necessary, beginning balances of acquired deferred revenue to fair value as part of acquisition accounting as defined by GAAP. Acquisition revenue adjustments move the effect of these adjustments to acquisition date fair value from acquisitions that have closed as of the date of the first quarter earnings release. 2. Merchant Services includes purchased portfolios which had revenue of $3,031, acquisition revenue adjustments of $0 and interchange and network fees of $1,490 for the three months ended March 31, 2019. 3. Merchant Services includes purchased portfolios which had revenue of $4,466 and interchange and network fees of $2,161 for the three months ended March 31, 2018.

Reconciliation of Non-GAAP Financial Measures The reconciliation of our income (loss) from operations to non-GAAP pro forma adjusted net income and non-GAAP adjusted EBITDA is as follows: ($ in thousands) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Proprietary Proprietary Merchant Software and Merchant Software and Services Payments Other Total Services Payments Other Total Income (loss) from operations $ 5,276 $ (922) $ (4,557) $ (203) $ 3,728 $ 1,041 $ (2,173) $ 2,596 Interest expense, net 289 — 866 1,155 338 — 2,280 2,618 Change in fair value of warrant liability — — — — — — 6,564 6,564 Provision for (benefit from) income taxes 188 — (324) (136) 140 — 110 250 Net income (loss) 4,799 (922) (5,099) (1,222) 3,250 1,041 (11,127) (6,836) Non-GAAP Adjustments: Provision for (benefit from) income taxes 188 — (324) (136) 140 — 110 250 Offering-related expenses(1) — — — — — — 124 124 Non-cash change in fair value of contingent consideration(2) (390) 2,892 — 2,502 1,573 174 — 1,747 Non-cash change in fair value of warrant liability(3) — — — — — — 6,564 6,564 Equity-based compensation(4) — — 1,363 1,363 — — — — Acquisition revenue adjustments(5) — 739 — 739 — — — — Acquisition-related expenses(6) — — 261 261 — — 220 220 Acquisition intangible amortization(7) 2,764 440 1 3,205 2,280 88 2 2,370 Non-cash interest(8) — — 232 232 — — 248 248 Other taxes(9) 23 4 160 187 — — 6 6 Non-GAAP adjusted income (loss) before taxes 7,384 3,153 (3,406) 7,131 7,243 1,303 (3,853) 4,693 Pro forma taxes at effective tax rate(10) (1,846) (788) 851 (1,783) (1,811) (326) 964 (1,173) Pro forma adjusted net income (loss) 5,538 2,365 (2,555) 5,348 5,432 977 (2,889) 3,520 Plus: Cash interest expense, net(11) 289 — 634 923 338 — 2,032 2,370 Pro forma taxes at effective tax rate(10) 1,846 788 (851) 1,783 1,811 326 (964) 1,173 Depreciation and internally developed software amortization(12) 153 402 138 693 126 493 31 650 Adjusted EBITDA $ 7,826 $ 3,555 $ (2,634) $ 8,747 $ 7,707 $ 1,796 $ (1,790) $ 7,713 See footnotes continued on the next slide.

Reconciliation of Non-GAAP Financial Measures 1. Includes costs associated with forming i3 Verticals, Inc. and other expenses directly related to the certain transactions as part of any offering. 2. Non-cash change in fair value of contingent consideration reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the later of the most recent balance sheet date forming the beginning of the income statement period or the original estimates made at the closing of the applicable acquisition. 3. Non-cash change in warrant liability reflects the fair value change in certain warrants for our common units associated with our mezzanine notes in the aggregate principal amount of $10.5 million. These warrants are accounted for as liabilities on our consolidated balance sheets. 4. Equity-based compensation expense consisted of $1,363 thousand related to stock options issued under the Company's 2018 Equity Incentive Plan during the three months ended March 31, 2019. 5. Under GAAP, companies must adjust, as necessary, beginning balances of acquired deferred revenue to fair value as part of acquisition accounting as defined by GAAP. Acquisition revenue adjustments remove the effect of these adjustments to acquisition date fair value from acquisitions that have closed as of the date of the earnings release. 6. Acquisition-related expenses are the professional service and related costs directly related to our acquisitions and are not part of our core performance. 7. Acquisition intangible amortization reflects amortization of intangible assets and software acquired through business combinations, acquired customer portfolios, acquired referral agreements and related asset acquisitions. 8. Non-cash interest expense reflects amortization of deferred financing costs. 9. Other taxes consist of franchise taxes, commercial activity taxes and other non-income based taxes. Taxes related to salaries or employment are not included. 10. Pro forma corporate income tax expense is based on Non-GAAP adjusted income before taxes and is calculated using a tax rate of 25.0% for both 2019 and 2018, based on blended federal and state tax rates, considering the Tax Reform Act for 2018. 11. Cash interest expense, net represents all interest expense recorded on the Company's statement of operations other than non-cash interest expense, which represents amortization of deferred financing costs. 12. Depreciation and internally developed software amortization reflects depreciation on the Company's property, plant and equipment, net, and amortization expense on its internally developed capitalized software.

Q1 Fiscal 2019 Segment Performance(1) ($ in thousands) Three months ended December 31, Period over 2018 2017 period growth Adjusted Net Revenue(2) Merchant Services, excluding Purchased Portfolios $ 21,301 $ 18,788 13% Purchased Portfolios 2,037 2,844 (28)% Merchant Services 23,338 21,632 8% Proprietary Software and Payments 6,232 3,353 86% Other — (2) nm Total $ 29,570 $ 24,983 18% Adjusted EBITDA(2) Merchant Services $ 7,851 $ 7,603 3% Proprietary Software and Payments 2,851 1,248 128% Other (2,124) (2,002) (6)% Total $ 8,578 $ 6,849 25% Adjusted EBITDA as a percentage of Net Revenue 29% 27% Volume Merchant Services $ 2,804,139 $ 2,705,780 4% Proprietary Software and Payments 139,710 122,149 14% Total $ 2,943,849 $ 2,827,929 4% 1. i3 Verticals has two segments, “Merchant Services,” which includes Purchased Portfolios (a subset of merchant contracts purchased in 2014 and 2017) and "Proprietary Software and Payments." i3 Verticals also has an “Other” category, which includes corporate overhead. 2. Adjusted Net Revenue and Adjusted EBITDA are non-GAAP financial measures. Refer to the following slides for the reconciliation of non-GAAP financial measures.

Reconciliation of Non-GAAP Financial Measures The reconciliation of our revenue to non-GAAP adjusted net revenue is as follows: ($ in thousands) Three Months Ended December 31, 2018 Proprietary Software Merchant Services(2) and Payments Other Total Revenue $ 77,702 $ 7,166 $ — $ 84,868 Acquisition revenue adjustments(1) — 531 — 531 Interchange and network fees (54,364) (1,465) — (55,829) Adjusted Net Revenue $ 23,338 $ 6,232 $ — $ 29,570 ($ in thousands) Three Months Ended December 31, 2017 Proprietary Software Merchant Services(3) and Payments Other Total Revenue $ 72,679 $ 4,545 $ (3) $ 77,221 Interchange and network fees (51,047) (1,192) 1 (52,238) Adjusted Net Revenue $ 21,632 $ 3,353 $ (2) $ 24,983 1. Under GAAP, companies must adjust, as necessary, beginning balances of acquired deferred revenue to fair value as part of acquisition accounting as defined by GAAP. Acquisition revenue adjustments move the effect of these adjustments to acquisition date fair value from acquisitions that have closed as of the date of the first quarter earnings release. 2. Merchant Services includes purchased portfolios which had revenue of $3,846, acquisition revenue adjustments of $0 and interchange and network fees of $1,809 for the three months ended December 31, 2018. 3. Merchant Services includes purchased portfolios which had revenue of $5,335 and interchange and network fees of $2,491 for the three months ended December 31, 2017.

Reconciliation of Non-GAAP Financial Measures The reconciliation of our income (loss) from operations to non-GAAP pro forma adjusted net income and non-GAAP adjusted EBITDA is as follows: ($ in thousands) Three Months Ended December 31, 2018 Three Months Ended December 31, 2017 Proprietary Proprietary Merchant Software and Merchant Software and Services Payments Other Total Services Payments Other Total Income (loss) from operations $ 5,388 $ 1,689 $ (3,547) $ 3,530 $ 5,418 $ 224 $ (2,295) $ 3,347 Interest expense, net 289 — 625 914 225 — 2,162 2,387 Change in fair value of warrant liability — — — — — — 1,681 1,681 Provision for (benefit from) income taxes 247 — 18 265 (372) — (17) (389) Net income (loss) 4,852 1,689 (4,190) 2,351 5,565 224 (6,121) (332) Non-GAAP Adjustments: Provision for (benefit from) income taxes 247 — 18 265 (372) — (17) (389) Non-cash change in fair value of contingent consideration(1) (319) (30) — (349) (125) 507 — 382 Non-cash change in fair value of warrant liability(2) — — — — — — 1,681 1,681 Equity-based compensation(3) — — 951 951 — — — — Acquisition revenue adjustments(4) — 531 — 531 — — — — Acquisition-related expenses(5) — — 360 360 — — 228 228 Acquisition intangible amortization(6) 2,623 282 — 2,905 2,178 80 2 2,260 Non-cash interest(7) — — 233 233 — — 221 221 Other taxes(8) — — 3 3 — — 36 36 Non-GAAP adjusted income (loss) before taxes 7,403 2,472 (2,625) 7,250 7,246 811 (3,970) 4,087 Pro forma taxes at effective tax rate(9) (1,850) (618) 656 (1,812) (1,812) (203) 993 (1,022) Pro forma adjusted net income (loss) 5,553 1,854 (1,969) 5,438 5,434 608 (2,977) 3,065 Plus: Cash interest expense, net(10) 289 — 392 681 225 — 1,941 2,166 Pro forma taxes at effective tax rate(9) 1,850 618 (656) 1,812 1,812 203 (993) 1,022 Depreciation and internally developed software amortization(11) 159 379 109 647 132 437 27 596 Adjusted EBITDA $ 7,851 $ 2,851 $ (2,124) $ 8,578 $ 7,603 $ 1,248 $ (2,002) $ 6,849 See footnotes continued on the next slide.

Reconciliation of Non-GAAP Financial Measures 1. Non-cash change in fair value of contingent consideration reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the later of the most recent balance sheet date forming the beginning of the income statement period or the original estimates made at the closing of the applicable acquisition. 2. Non-cash change in warrant liability reflects the fair value change in certain warrants for our common units associated with our mezzanine notes in the aggregate principal amount of $10.5 million. These warrants are accounted for as liabilities on our consolidated balance sheets. 3. Equity-based compensation expense consisted of $951 thousand related to stock options issued under the Company's 2018 Equity Incentive Plan during the three months ended December 31, 2018. 4. Acquisition-related expenses are the professional service and related costs directly related to our acquisitions and are not part of our core performance. 5. Under GAAP, companies must adjust, as necessary, beginning balances of acquired deferred revenue to fair value as part of acquisition accounting as defined by GAAP. Acquisition revenue adjustments remove the effect of these adjustments to acquisition date fair value from acquisitions that have closed as of the date of the first quarter earnings release. 6. Acquisition intangible amortization reflects amortization of intangible assets and software acquired through business combinations, acquired customer portfolios, acquired referral agreements and related asset acquisitions. 7. Non-cash interest expense reflects amortization of deferred financing costs. 8. Other taxes consist of franchise taxes, commercial activity taxes and other non-income based taxes. Taxes related to salaries or employment are not included. 9. Pro forma corporate income tax expense is based on Non-GAAP adjusted income before taxes and is calculated using a tax rate of 25.0% for both fiscal 2019 and 2018, based on blended federal and state tax rates, considering the Tax Reform Act for 2018. 10. Cash interest expense, net represents all interest expense recorded on the Company's statement of operations other than non-cash interest expense, which represents amortization of deferred financing costs. 11. Depreciation and internally developed software amortization reflects depreciation on the Company's property, plant and equipment, net, and amortization expense on its internally developed capitalized software.