Verra Mobility Receives Termination of Agreement Notice From Avis Budget Group

Rhea-AI Summary

Verra Mobility (NASDAQ:VRRM) received a contract termination notice from Avis Budget Group, effective September 2026. The company is cutting costs, reallocating resources, and intends to protect its contractual rights and intellectual property.

Revised 2026 guidance includes revenue of $985–$995 million, adjusted EBITDA of $380–$385 million, adjusted EPS of $1.19–$1.25, and free cash flow of $140–$150 million. Verra Mobility expects the termination to reduce 2026 annualized Commercial Services revenue by $135–$145 million and segment profit by $120–$125 million before cost actions.

Positive

• 2026 total revenue guidance of $985–$995 million
• 2026 adjusted EBITDA guidance of $380–$385 million
• 2026 adjusted EPS guided to $1.19–$1.25
• 2026 free cash flow expected at $140–$150 million
• Planned capital expenditures of about $125 million for growth projects
• Cost reduction initiatives to mitigate contract termination impact

Negative

• Avis Budget Group contract termination effective September 2026
• Commercial Services 2026 annualized revenue expected down $135–$145 million
• Commercial Services 2026 annualized segment profit expected down $120–$125 million
• Total 2026 net interest expense expected at approximately $62 million
• 2026 cash taxes expected to total about $50 million

News Market Reaction – VRRM

-70.57% 17.2x vol

91 alerts

-70.57% Session close to close

-72.3% Trough in 18 hr 43 min

$1.99B Market Cap

17.2x Rel. Volume

In the May 27 session, VRRM declined 70.57%, reflecting a significant negative market reaction. Argus tracked a trough of -72.3% from its starting point during tracking. Our momentum scanner triggered 91 alerts that day, indicating high trading interest and price volatility. Trading volume was exceptionally heavy at 17.2x the daily average, suggesting significant selling pressure.

Data tracked by StockTitan Argus on the day of publication.

Market Context

The stock dropped -70.6% in the session following this news. A negative reaction despite management’...

Analysis

The stock dropped -70.6% in the session following this news. A negative reaction despite management’s cost actions would fit the magnitude of the disclosed impact. The termination is expected to cut 2026 Commercial Services revenue by $135–145M and segment profit by $120–125M, leading to reduced 2026 guidance of $985–995M revenue and $380–385M Adjusted EBITDA. Investors have previously seen modest moves on operational news, so a sharper drop could reflect repricing of customer concentration risk and uncertainty around mitigation efforts.

Key Figures

2026 revenue guidance: $985–995M 2026 Adjusted EBITDA: $380–385M 2026 Adjusted EPS: $1.19–1.25 +5 more

8 metrics

2026 revenue guidance $985–995M Revised 2026 full-year total revenue outlook after termination notice

2026 Adjusted EBITDA $380–385M Revised 2026 full-year Adjusted EBITDA outlook

2026 Adjusted EPS $1.19–1.25 Revised 2026 full-year Adjusted EPS outlook

2026 Free Cash Flow $140–150M Revised 2026 full-year Free Cash Flow outlook

Diluted share count 155M shares Expected weighted average fully diluted shares for full-year 2026

Effective tax rate 28.0–29.0% Expected 2026 effective tax rate including state taxes

Revenue impact $135–145M Expected 2026 annualized Commercial Services revenue reduction from termination

Segment profit impact $120–125M Expected 2026 annualized Commercial Services segment profit reduction

Historical Context

5 past events · Latest: May 06 (Positive)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
May 06	Q1 2026 earnings	Positive	+2.2%	Reported Q1 results and reaffirmed full-year 2026 guidance, shares rose modestly.
Apr 16	Earnings call notice	Neutral	-0.9%	Announced date and time for Q1 2026 earnings call and webcast.
Apr 15	Product launch	Positive	-0.9%	Launched AutoKinex Virtual Agent to enhance in-vehicle rental add-on selection.
Mar 10	Conference participation	Neutral	-1.1%	Announced CFO fireside chat at 2026 J.P. Morgan Industrials Conference.
Mar 03	Safety program win	Positive	+0.5%	Secured Pittsburgh red light camera program with multi-year deployment plan.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Recent company news has generally seen modest price moves, with product and conference updates sometimes met with flat-to-negative reactions even when operationally positive.

Recent Company History

Over the past few months, Verra Mobility reported Q1 2026 results on May 6 with $223.6M revenue, reaffirming stronger 2026 guidance at that time and seeing a 2.16% positive reaction. Earlier, it announced the Q1 earnings call schedule and launched the AutoKinex™ Virtual Agent, both drawing small negative moves. The company also highlighted growth initiatives like Pittsburgh’s red-light safety program. Today’s contract termination and reduced 2026 outlook contrast with the previously reaffirmed guidance trajectory.

Key Terms

adjusted EBITDA, adjusted EPS, free cash flow, weighted average fully diluted share count, +3 more

7 terms

adjusted EBITDA financial

"Adjusted EBITDA of $380 million to $385 million"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

adjusted EPS financial

"Adjusted EPS of $1.19 to $1.25"

Adjusted earnings per share (adjusted eps) is a measure of a company's profit per share that has been modified to exclude certain one-time or unusual items, such as costs from restructuring or asset sales. It provides a clearer picture of the company’s core performance by removing events that may distort the usual earnings. Investors use adjusted eps to better understand a company's ongoing profitability and compare it more accurately over time.

free cash flow financial

"Free Cash Flow of $140 million to $150 million"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

View in glossary

weighted average fully diluted share count financial

"Weighted average fully diluted share count expected to be approximately 155 million shares"

A weighted average fully diluted share count is the average number of company shares that would be outstanding over a reporting period after adding all potential shares from options, warrants, convertibles and other rights, with each addition weighted by how long it was in effect during the period. Investors use it to calculate per-share measures (like earnings per share) so they see a realistic picture of ownership and dilution; think of it like averaging how many slices of a pizza were available as more people claimed portions at different times.

effective tax rate financial

"Effective tax rate (including state taxes) is expected to be 28.0% to 29.0%"

The effective tax rate is the percentage of a company's profits that it pays in taxes. It shows how much of its earnings go to taxes after all deductions and credits are considered. For investors, it indicates how much of the company's income is taken by taxes, impacting overall profitability and financial health.

working capital financial

"Change in working capital (change in operating assets and liabilities) is expected to be zero"

Working capital is the money a business has available to cover its daily expenses, like paying bills and buying supplies. It’s like the cash in your wallet that helps you handle everyday costs; having enough ensures the business can operate smoothly without running into money shortages.

View in glossary

capital expenditures financial

"Capital expenditures ... are expected to be approximately $125 million for 2026"

Capital expenditures are the money a company spends to buy or improve big assets like buildings, equipment, or machines that will last a long time. These investments matter because they help the company grow and operate more efficiently, similar to how upgrading a home’s appliances or adding a new room can make it better and more valuable.

View in glossary

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Taking immediate actions to reduce costs, adapt operations, and position the business for continued growth and future opportunities

Provides revised 2026 full-year outlook

MESA, Ariz., May 26, 2026 /PRNewswire/ -- Verra Mobility Corporation (NASDAQ: VRRM), a leading provider of smart mobility technology solutions, announced today that it received a termination notice from Avis Budget Group regarding its contract with Verra Mobility, effective September 2026. Verra Mobility is taking steps to reduce costs and re-allocate certain resources associated with the customer to other customers.

"We were surprised and disappointed to receive this notice from Avis Budget Group given our longstanding partnership and the significant time invested by both parties in ongoing extension negotiations," said David Roberts, President and CEO of Verra Mobility. "We are now moving decisively to reduce costs, adapt our operations, and position the business for continued growth and future opportunities."

Mr. Roberts continued, "We are proud of the value our Commercial Services platform delivers by simplifying complex operational processes for fleet operators and enabling customers to focus on their core business. We remain confident in the strength of our platform, our ability to continue innovating, and our capacity to meet customers' evolving needs while mitigating the impact of this development."

Verra Mobility intends to protect its contractual rights, intellectual property, and business interests. Accordingly, the company is reviewing matters related to the parties' negotiations, the handling of confidential information, and the parties' respective rights and obligations under their agreements.

Revised 2026 Full-Year Guidance

Based on the Company's year-to-date 2026 results and outlook for the remainder of the year including the aforementioned termination notice, Verra Mobility is revising its 2026 full-year financial outlook to the following:

• Total Revenue of $985 million to $995 million
• Adjusted EBITDA of $380 million to $385 million
• Adjusted EPS of $1.19 to $1.25
• Free Cash Flow of $140 million to $150 million

Underlying Assumptions for 2026 Full-Year Guidance

• Weighted average fully diluted share count expected to be approximately 155 million shares for the full-year 2026
• Effective tax rate (including state taxes) is expected to be 28.0% to 29.0%, with approximately $50 million in total cash taxes expected to be paid in 2026. The effective tax rate for non-GAAP adjustments is provided in the Reconciliation of Net Income to Adjusted Net Income and Calculation of Adjusted EPS in our most recent earnings press release dated May 6, 2026.
• Depreciation and amortization expense expected to be approximately $125 million for 2026
• Total interest expense, net expected to be approximately $62 million, of which approximately $60 million is expected to be net cash interest paid
• Change in working capital (change in operating assets and liabilities) is expected to be zero for 2026
• Capital expenditures (purchases of installation and service parts and property and equipment) are expected to be approximately $125 million for 2026 relating primarily to camera installations and MOSAIC implementation.

The Company currently expects the termination to reduce Commercial Services' 2026 annualized revenue by approximately $135 million to $145 million and 2026 annualized segment profit by approximately $120 million to $125 million, before taking into account expected cost reduction initiatives.

About Verra Mobility
Verra Mobility Corporation (NASDAQ: VRRM) is a leading provider of smart mobility technology solutions that make transportation safer, smarter, and more connected. The company sits at the center of the mobility ecosystem, bringing together vehicles, hardware, software, data, and people to enable safe, efficient solutions for customers globally. Verra Mobility's transportation safety systems and parking management solutions protect lives, improve urban and motorway mobility, and support healthier communities. The company also solves complex payment, utilization, and compliance challenges for fleet owners and rental car companies. Headquartered in Arizona, Verra Mobility operates in the United States, Australia, Europe, and Canada. For more information, please visit www.verramobility.com.

Forward-Looking Statements

This press release contains forward-looking statements which address our expected future business and financial performance, and may contain words such as "goal," "target," "future," "estimate," "expect," "anticipate," "intend," "plan," "believe," "seek," "project," "may," "should," "will" or similar expressions. Forward-looking statements include statements regarding expected operating results and metrics, such as revenue growth and expected margins; expectations regarding the impact of the termination by Avis Budget on our business and financial outlook, including the expected reduction in Commercial Services' 2026 annualized revenue and 2026 annualized segment profit; our ability to reduce costs and minimize the impact of the Avis Budget termination; our ability to expand our customer base, meet the evolving needs of our customers; expectations regarding our long-term renewals with other significant Commercial Services customers; full-year guidance for 2026, including expected total revenue, Adjusted EBITDA, Adjusted EPS, and Free Cash Flow, and the underlying assumptions for the 2026 full-year guidance, including expected weighted average fully diluted share count, effective tax rate and cash taxes, expected depreciation and amortization expenses, expected interest expense, net and total net cash interest, expected change in working capital, expected capital expenditures, and expected operating expenditures; and our ability to meet our long-term outlook. Forward-looking statements involve risks and uncertainties, and a number of factors could cause actual results to differ materially from those currently anticipated. These factors include, but are not limited to, the impact of negative industry and macroeconomic conditions, including the impact of government actions and regulations, such as tariffs, trade protection measures, military conflicts, or a government shutdown, on our customers or Verra Mobility; customer concentration in our Commercial Services and Government Solutions segments, including risks impacting such segments such as travel demand and legislation, and the risk of losing a customer; risks related to our contract with NYCDOT, which comprises a material portion of our revenue, including the timing of payments; risks associated with the termination of the Avis Budget agreement and the renewal of other Commercial Services customer agreements; risks and uncertainties related to our government contracts, including legislative changes, termination rights, delays in payments, audits, and investigations; decreases in the prevalence or political acceptance of, or an increase in governmental restrictions regarding, automated and other similar methods of photo enforcement, parking solutions, or the use of tolling; our ability to successfully implement our acquisition strategy or integrate acquisitions; failures in or breaches of our networks or systems, including as a result of cyber-attacks or other incidents; risks and uncertainties related to our international operations and our ability to develop and successfully market new products and technologies into new markets; our failure to acquire necessary intellectual property or adequately protect our intellectual property; our ability to manage our substantial level of indebtedness; our ability to maintain effective internal controls over financial reporting; our ability to properly perform under our contracts and otherwise satisfy our customers; risks associated with the use of artificial intelligence and related tools; decreased interest in outsourcing from our customers; our ability to keep up with technological developments and changing customer preferences; our ability to compete in a highly competitive and rapidly evolving market; risks and uncertainties related to our share repurchase program; risks and uncertainties related to litigation and other disputes and regulatory investigations; our reliance on specialized third-party providers; and other risks and uncertainties indicated from time to time in documents we filed or will file with the Securities and Exchange Commission  (the "SEC"). In addition, no assurance can be given that any plan, initiative, projection, goal, commitment, expectation, or prospect set forth in this press release can or will be achieved. This press release should be read in conjunction with the information included in our other press releases, reports, and other filings with the SEC. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our 2025 Annual Report on Form 10-K and first quarter 2026 Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date of this press release and except to the extent required by applicable law, we do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments, or otherwise. Understanding the information contained in these filings is important in order to fully understand our reported financial results and our business outlook for future periods.

Additional Information
We periodically provide information for investors on our corporate website, www.verramobility.com, and our investor relations website, ir.verramobility.com.

We intend to use our website including our quarterly earnings presentation as a means of disclosing material non-public information, additional financial and operating metrics and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media. In addition, you may enroll to automatically receive e-mail alerts and other information about our company by visiting "Email Alerts" under the "Investor Resources" section of the "Investors" portion of our website.

Non-GAAP Financial Measures

We disclose certain forward-looking financial measures in this press release that are not determined in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are not recognized measures under GAAP and are not intended to be, and should not be, considered in isolation or as a substitute for, or superior to, financial information prepared in accordance with GAAP. Adjusted EBITDA, Free Cash Flow, and Adjusted EPS are non-GAAP financial measures as defined by the SEC rules. These non-GAAP financial measures may be determined or calculated differently by other companies. As a result, they may not be comparable to similarly titled performance measures presented by other companies. We are not providing a quantitative reconciliation of Adjusted EBITDA, Adjusted EPS or Free Cash Flow which are included in our revised 2026 full-year financial guidance above, in reliance on the "unreasonable efforts" exception for forward-looking non-GAAP measures set forth in SEC rules because certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated without unreasonable effort and expense. In this regard, we are unable to provide a reconciliation of forward-looking Adjusted EBITDA to GAAP net income, Adjusted EPS to net income per share and Free Cash Flow to net cash provided by operating activities, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Due to the uncertainty of estimates and assumptions used in preparing forward-looking non-GAAP measures, we caution investors that actual results could differ materially from these non-GAAP financial projections.

We use non-GAAP financial measures to measure our performance from period to period, to evaluate and fund incentive compensation programs, to manage the business and to compare our results to those of our competitors. In addition, we also believe that the non-GAAP measures we disclose provide useful information to investors regarding financial and business trends related to our results of operations and that when non-GAAP financial information is viewed with GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating performance, liquidity, and leverage relative to other periods. Non-GAAP measures have certain limitations as analytical tools and should not be used as substitutes for financial information prepared in accordance with GAAP.

Investor Relations Contact
Mark Zindler
mark.zindler@verramobility.com

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SOURCE Verra Mobility

FAQ

What did Verra Mobility (NASDAQ:VRRM) announce about its agreement with Avis Budget Group on May 26, 2026?

Verra Mobility announced that Avis Budget Group issued a contract termination notice effective September 2026. According to Verra Mobility, it is reducing costs, reallocating resources linked to this customer, and reviewing the parties’ rights, obligations, and handling of confidential information under their agreements.

How will the Avis contract termination affect Verra Mobility’s 2026 Commercial Services revenue and profit?

Verra Mobility expects the termination to significantly reduce its Commercial Services segment financials. According to Verra Mobility, 2026 annualized revenue is projected to decline by about $135–$145 million and segment profit by about $120–$125 million, before considering planned cost reduction initiatives.

What is Verra Mobility’s revised 2026 revenue and EBITDA guidance after the Avis termination notice?

Verra Mobility now guides 2026 total revenue to $985–$995 million and adjusted EBITDA to $380–$385 million. According to Verra Mobility, the outlook reflects year-to-date performance and expected effects from the Avis termination, alongside cost actions and operational adjustments across the business.

What are Verra Mobility’s updated 2026 adjusted EPS and free cash flow targets (VRRM)?

Verra Mobility targets 2026 adjusted EPS of $1.19–$1.25 and free cash flow of $140–$150 million. According to Verra Mobility, these figures incorporate revised assumptions for revenue, profitability, capital expenditures of about $125 million, and an expected neutral change in working capital.

When does the Avis Budget Group contract with Verra Mobility end, and what actions is the company taking?

The Avis Budget Group contract is scheduled to terminate in September 2026. According to Verra Mobility, the company is cutting costs, reallocating resources to other customers, and intends to protect its contractual rights, intellectual property, and broader business interests following this notice.

What tax, interest, and share count assumptions underpin Verra Mobility’s revised 2026 guidance?

Verra Mobility assumes a 2026 effective tax rate of 28.0%–29.0%, with about $50 million in cash taxes. According to Verra Mobility, guidance also reflects roughly $62 million net interest expense and a weighted average fully diluted share count of about 155 million shares.

How might Verra Mobility’s cost reduction initiatives impact shareholders after the Avis termination?

Verra Mobility plans to reduce costs and reallocate resources to offset lost Avis revenue. According to Verra Mobility, these initiatives aim to support 2026 adjusted EBITDA of $380–$385 million and free cash flow of $140–$150 million, which may help stabilize profitability for shareholders.