Earnings Per Share

9 Months Ended

Jun. 30, 2019

EARNINGS PER SHAREBasic earnings per share of Class A common stock is computed by dividing net income available to i3 Verticals, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to i3 Verticals, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

Prior to the IPO, the i3 Verticals, LLC membership structure included Class A units, common units and Class P units. The Company analyzed the calculation of earnings per unit for periods prior to the IPO using the two-class method and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. Therefore, earnings per share information for the three and nine months ended June 30, 2018 represents only the period from June 25 through June 30, 2018.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the three and nine months ended June 30, 2019 and 2018:


	Three months ended June 30,						Nine months ended June 30,
	2019		2018		2019		2018
Basic and diluted⁽²⁾ net loss per share:
Numerator
Net (loss) income	$	(593)	$	(138)	$	536	$	(138)
Less: Net income (loss) attributable to non-controlling interest	598		(91)		2,651		(91)
Net loss attributable to Class A common stockholders	$	(1,191)	$	(47)	$	(2,115)	$	(47)
Denominator
Weighted average shares of Class A common stock outstanding⁽¹⁾	10,064,785		8,812,630		9,254,549		8,812,630
Basic and diluted net loss per share	$	(0.12)	$	(0.01)	$	(0.23)	$	(0.01)

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1.Excludes 285,433 restricted Class A common stock units.

2.For the three and nine months ended June 30, 2019, the following securities were excluded from the weighted average effect of dilutive securities in the computation of diluted earnings per share of Class A common stock:

a.16,184,026 and 16,846,012 shares of weighted average Class B common stock for the three and nine months ended June 30, 2019, respectively, and 17,213,806 shares of weighted average Class B common stock for the three and nine months ended June 30, 2018 along with the reallocation of net income assuming conversion of these shares, were excluded because the effect would have been anti-dilutive,

b.443,000 and 620,500 stock options for the three and nine months ended June 30, 2019, respectively, were excluded because the exercise price of these stock options exceeded the average market price of our Class A common stock during the period (“out-of-the-money”) and the effect of including them would have been anti-dilutive, and

c.1,188,987 and 974,402 shares for the three and nine months ended June 30, 2019, respectively, and 377,537 shares for the three and nine months ended June 30, 2018 resulting from estimated stock option exercises as calculated by the treasury stock method, and 285,433 restricted Class A common units for the three and nine months ended June 30, 2019 and 279,273 restricted Class A common units for the three and nine months ended June 30, 2018 were excluded because the effect of including them would have been anti-dilutive.

Shares of the Company's Class B common stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.