[10-Q] Verra Mobility Corporation Quarterly Earnings Report
Accenture plc (ACN) filed a Form 4 showing that General Counsel & Corporate Secretary Joel Unruch bought 110 Class A ordinary shares on 05-Aug-2025 at $250.74 each through the company’s Voluntary Equity Investment Program. The purchase lifted his direct ownership to 17,651 shares; no derivative positions were involved.
The additional shares enlarge Unruch’s stake by roughly 0.6% and remain immaterial versus Accenture’s total share count, but insider buying is often viewed as a modest signal of executive confidence. No dispositions, option exercises, or Rule 10b5-1 trades were disclosed.
Accenture plc (ACN) ha presentato un Modulo 4 che mostra come il Consigliere Legale e Segretario Aziendale Joel Unruch abbia acquistato 110 azioni ordinarie di Classe A il 05 agosto 2025 al prezzo di $250,74 ciascuna tramite il Programma Volontario di Investimento Azionario dell’azienda. L’acquisto ha portato la sua partecipazione diretta a 17.651 azioni; non sono state coinvolte posizioni derivanti.
Le azioni aggiuntive aumentano la quota di Unruch di circa lo 0,6% e restano irrilevanti rispetto al totale delle azioni di Accenture, ma gli acquisti da parte degli insider sono spesso considerati un segnale moderato di fiducia da parte dei dirigenti. Non sono state dichiarate cessioni, esercizi di opzioni o operazioni secondo la Regola 10b5-1.
Accenture plc (ACN) presentó un Formulario 4 que muestra que el Asesor Legal y Secretario Corporativo Joel Unruch compró 110 acciones ordinarias Clase A el 05 de agosto de 2025 a $250.74 cada una a través del Programa Voluntario de Inversión en Acciones de la empresa. La compra elevó su propiedad directa a 17,651 acciones; no se involucraron posiciones derivadas.
Las acciones adicionales aumentan la participación de Unruch en aproximadamente un 0.6% y siguen siendo insignificantes en comparación con el total de acciones de Accenture, pero las compras internas suelen considerarse una señal moderada de confianza ejecutiva. No se divulgaron disposiciones, ejercicios de opciones ni operaciones bajo la Regla 10b5-1.
Accenture plc(ACN)는 법률 고문 겸 기업 비서인 Joel Unruch가 2025년 8월 5일 회사의 자발적 주식 투자 프로그램을 통해 110주 클래스 A 보통주를 주당 $250.74에 매수했다는 내용을 담은 양식 4를 제출했습니다. 이번 매입으로 그의 직접 보유 주식 수는 17,651주가 되었으며, 파생상품 포지션은 포함되지 않았습니다.
추가된 주식은 Unruch의 지분을 약 0.6% 확대했으며, Accenture의 총 주식 수에 비해 미미한 수준입니다. 그러나 내부자 매수는 종종 경영진의 신뢰를 나타내는 소규모 신호로 간주됩니다. 처분, 옵션 행사 또는 규칙 10b5-1 거래는 공개되지 않았습니다.
Accenture plc (ACN) a déposé un formulaire 4 indiquant que le conseiller juridique et secrétaire général Joel Unruch a acheté 110 actions ordinaires de classe A le 5 août 2025 au prix de 250,74 $ chacune via le programme volontaire d’investissement en actions de l’entreprise. Cet achat a porté sa détention directe à 17 651 actions ; aucune position dérivée n’a été impliquée.
Ces actions supplémentaires augmentent la participation de Unruch d’environ 0,6 % et restent insignifiantes par rapport au nombre total d’actions d’Accenture, mais les achats d’initiés sont souvent perçus comme un signe modéré de confiance des dirigeants. Aucune cession, exercice d’option ou transaction selon la règle 10b5-1 n’a été divulguée.
Accenture plc (ACN) reichte ein Formular 4 ein, das zeigt, dass der General Counsel & Corporate Secretary Joel Unruch am 05. August 2025 110 Class A Stammaktien zu je 250,74 $ über das freiwillige Aktienbeteiligungsprogramm des Unternehmens gekauft hat. Der Kauf erhöhte seinen direkten Anteil auf 17.651 Aktien; derivative Positionen waren nicht beteiligt.
Die zusätzlichen Aktien vergrößern Unruchs Anteil um etwa 0,6 % und bleiben im Vergleich zur Gesamtzahl der Accenture-Aktien unbedeutend, doch Insider-Käufe werden oft als ein moderates Signal für das Vertrauen der Führungskräfte gewertet. Es wurden keine Veräußerungen, Optionsausübungen oder Geschäfte nach Regel 10b5-1 offengelegt.
- None.
- None.
Insights
TL;DR: Small insider buy; positive signal but quantitatively insignificant to ACN’s float or valuation.
Unruch’s $27.6k purchase marginally increases his personal exposure but does not alter institutional ownership or float. Volume represents less than 0.00003% of outstanding shares, so market impact is negligible. Still, voluntary cash purchases (vs. option exercises) tend to carry more informational value and may be viewed favorably by investors monitoring insider sentiment.
TL;DR: Compliance-clean filing; demonstrates alignment, no red flags.
The transaction occurred outside a 10b5-1 plan, indicating discretionary buying confidence. Properly reported within two business days and executed under an established employee investment program, the filing shows sound governance practices. Size is symbolic, so impact on governance risk rating is neutral.
Accenture plc (ACN) ha presentato un Modulo 4 che mostra come il Consigliere Legale e Segretario Aziendale Joel Unruch abbia acquistato 110 azioni ordinarie di Classe A il 05 agosto 2025 al prezzo di $250,74 ciascuna tramite il Programma Volontario di Investimento Azionario dell’azienda. L’acquisto ha portato la sua partecipazione diretta a 17.651 azioni; non sono state coinvolte posizioni derivanti.
Le azioni aggiuntive aumentano la quota di Unruch di circa lo 0,6% e restano irrilevanti rispetto al totale delle azioni di Accenture, ma gli acquisti da parte degli insider sono spesso considerati un segnale moderato di fiducia da parte dei dirigenti. Non sono state dichiarate cessioni, esercizi di opzioni o operazioni secondo la Regola 10b5-1.
Accenture plc (ACN) presentó un Formulario 4 que muestra que el Asesor Legal y Secretario Corporativo Joel Unruch compró 110 acciones ordinarias Clase A el 05 de agosto de 2025 a $250.74 cada una a través del Programa Voluntario de Inversión en Acciones de la empresa. La compra elevó su propiedad directa a 17,651 acciones; no se involucraron posiciones derivadas.
Las acciones adicionales aumentan la participación de Unruch en aproximadamente un 0.6% y siguen siendo insignificantes en comparación con el total de acciones de Accenture, pero las compras internas suelen considerarse una señal moderada de confianza ejecutiva. No se divulgaron disposiciones, ejercicios de opciones ni operaciones bajo la Regla 10b5-1.
Accenture plc(ACN)는 법률 고문 겸 기업 비서인 Joel Unruch가 2025년 8월 5일 회사의 자발적 주식 투자 프로그램을 통해 110주 클래스 A 보통주를 주당 $250.74에 매수했다는 내용을 담은 양식 4를 제출했습니다. 이번 매입으로 그의 직접 보유 주식 수는 17,651주가 되었으며, 파생상품 포지션은 포함되지 않았습니다.
추가된 주식은 Unruch의 지분을 약 0.6% 확대했으며, Accenture의 총 주식 수에 비해 미미한 수준입니다. 그러나 내부자 매수는 종종 경영진의 신뢰를 나타내는 소규모 신호로 간주됩니다. 처분, 옵션 행사 또는 규칙 10b5-1 거래는 공개되지 않았습니다.
Accenture plc (ACN) a déposé un formulaire 4 indiquant que le conseiller juridique et secrétaire général Joel Unruch a acheté 110 actions ordinaires de classe A le 5 août 2025 au prix de 250,74 $ chacune via le programme volontaire d’investissement en actions de l’entreprise. Cet achat a porté sa détention directe à 17 651 actions ; aucune position dérivée n’a été impliquée.
Ces actions supplémentaires augmentent la participation de Unruch d’environ 0,6 % et restent insignifiantes par rapport au nombre total d’actions d’Accenture, mais les achats d’initiés sont souvent perçus comme un signe modéré de confiance des dirigeants. Aucune cession, exercice d’option ou transaction selon la règle 10b5-1 n’a été divulguée.
Accenture plc (ACN) reichte ein Formular 4 ein, das zeigt, dass der General Counsel & Corporate Secretary Joel Unruch am 05. August 2025 110 Class A Stammaktien zu je 250,74 $ über das freiwillige Aktienbeteiligungsprogramm des Unternehmens gekauft hat. Der Kauf erhöhte seinen direkten Anteil auf 17.651 Aktien; derivative Positionen waren nicht beteiligt.
Die zusätzlichen Aktien vergrößern Unruchs Anteil um etwa 0,6 % und bleiben im Vergleich zur Gesamtzahl der Accenture-Aktien unbedeutend, doch Insider-Käufe werden oft als ein moderates Signal für das Vertrauen der Führungskräfte gewertet. Es wurden keine Veräußerungen, Optionsausübungen oder Geschäfte nach Regel 10b5-1 offengelegt.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
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For the transition period from ___________ to ___________.
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act:
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). YES ☐ NO
As of August 1, 2025, there were
VERRA MOBILITY CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2025
TABLE OF CONTENTS
PART I—FINANCIAL INFORMATION |
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5 |
Item 1. Financial Statements |
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5 |
Condensed Consolidated Balance Sheets |
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5 |
Condensed Consolidated Statements of Operations and Comprehensive Income |
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6 |
Condensed Consolidated Statements of Stockholders’ Equity |
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Condensed Consolidated Statements of Cash Flows |
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8 |
Notes to the Condensed Consolidated Financial Statements |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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24 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
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37 |
Item 4. Controls and Procedures |
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PART II—OTHER INFORMATION |
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39 |
Item 1. Legal Proceedings |
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Item 1A. Risk Factors |
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39 |
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities |
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Item 3. Defaults Upon Senior Securities |
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Item 4. Mine Safety Disclosures |
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Item 5. Other Information |
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Item 6. Exhibits |
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SIGNATURES |
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Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this Report other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, products, services, technology offerings, market conditions, growth and trends, expansion plans and opportunities, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “preliminary,” “likely” and similar expressions, and the negative of these expressions, are intended to identify forward-looking statements.
The future events and trends discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Factors that could cause actual results to differ include the risks and uncertainties described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024 (our “Annual Report”), Part II, Item 1A. of this Quarterly Report, and in other filings with the Securities and Exchange Commission (the “SEC”) which highlight, among other risks:
You should not rely on forward-looking statements as predictions of future events. We operate in a very competitive and rapidly changing environment and new risks emerge from time to time. The forward-looking statements in this Report represent our views as of the date hereof. Except as may be required by law, we undertake no obligation to update any of these forward-looking statements for any reason or to conform these statements to actual results or revised expectations.
3
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, are available free of charge on our website, verramobility.com, under the heading “Investors” immediately after they are filed with, or furnished to, the SEC. We use our investor relations website, ir.verramobility.com, as a means of disclosing information, which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media. Information contained on or accessible through, including any reports available on, our website is not a part of, and is not incorporated by reference into, this Report or any other report or document we file with the SEC. Any reference to our website in this Report is intended to be an inactive textual reference only.
Unless the context indicates otherwise, the terms “Verra Mobility,” the “Company,” “we,” “us,” and “our” as used in this Report refer to Verra Mobility Corporation, a Delaware corporation, and its subsidiaries taken as a whole.
4
Part I—Financial Information
Item 1. Financial Statements
VERRA MOBILITY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share data) |
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June 30, |
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December 31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable (net of allowance for credit losses of $ |
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Unbilled receivables |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Installation and service parts, net |
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Property and equipment, net |
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Operating lease assets |
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Intangible assets, net |
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Goodwill |
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Other non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Deferred revenue |
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Accrued liabilities |
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Tax receivable agreement liability, current portion |
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Total current liabilities |
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Long-term debt, net |
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Operating lease liabilities, net of current portion |
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Tax receivable agreement liability, net of current portion |
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Asset retirement obligations |
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Deferred tax liabilities, net |
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Other long-term liabilities |
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Total liabilities |
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Commitments and contingencies (Note 13) |
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Stockholders' equity |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive loss |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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See accompanying Notes to the Condensed Consolidated Financial Statements.
5
VERRA MOBILITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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(In thousands, except per share data) |
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2025 |
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2024 |
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2025 |
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2024 |
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Service revenue |
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Product sales |
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Total revenue |
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Cost of service revenue, excluding depreciation and amortization |
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Cost of product sales |
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Operating expenses |
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Selling, general and administrative expenses |
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Depreciation, amortization and (gain) loss on disposal of assets, net |
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Total costs and expenses |
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Income from operations |
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Interest expense, net |
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Gain on interest rate swap |
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Loss on extinguishment of debt |
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Other income, net |
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Total other expenses |
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Income before income taxes |
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Income tax provision |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss): |
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Change in foreign currency translation adjustment |
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Total comprehensive income |
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$ |
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$ |
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$ |
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Net income per share: |
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Basic |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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Weighted average shares outstanding: |
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Basic |
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Diluted |
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See accompanying Notes to the Condensed Consolidated Financial Statements.
6
VERRA MOBILITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
For the Three and Six Months Ended June 30, 2025 |
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Common |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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(In thousands) |
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Shares |
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Amount |
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Capital |
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Deficit |
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Loss |
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Equity |
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Balance as of December 31, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Share repurchases and retirement |
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— |
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— |
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( |
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Vesting of restricted stock units ("RSUs") and performance share units ("PSUs") |
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— |
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— |
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— |
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— |
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— |
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Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Payment of employee tax withholding related to RSUs and PSUs vesting |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive income, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance as of March 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Vesting of RSUs and PSUs |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Payment of employee tax withholding related to RSUs and PSUs vesting |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive income, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance as of June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
For the Three and Six Months Ended June 30, 2024 |
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Common |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|||||||||
(In thousands) |
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|
Equity |
|
||||||
Balance as of December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Share repurchases and retirement |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
Vesting of RSUs and PSUs |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Payment of employee tax withholding related to RSUs and PSUs vesting |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive loss, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Share repurchases and retirement |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Vesting of RSUs and PSUs |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Payment of employee tax withholding related to RSUs and PSUs vesting |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive income, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance as of June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
7
VERRA MOBILITY CORPORATION
condensed consolidated Statements of Cash Flows
(Unaudited)
|
|
Six Months Ended June 30, |
|
|||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of deferred financing costs and discounts |
|
|
|
|
|
|
||
Change in fair value of interest rate swap |
|
|
|
|
|
|
||
Loss on extinguishment of debt |
|
|
|
|
|
|
||
Credit loss expense |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
( |
) |
Stock-based compensation |
|
|
|
|
|
|
||
UTP reserve release |
|
|
( |
) |
|
|
|
|
Other |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Unbilled receivables |
|
|
( |
) |
|
|
( |
) |
Inventory |
|
|
|
|
|
|
||
Prepaid expenses and other assets |
|
|
|
|
|
( |
) |
|
Deferred revenue |
|
|
( |
) |
|
|
( |
) |
Accounts payable and other current liabilities |
|
|
|
|
|
( |
) |
|
Other liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
Cash Flows from Investing Activities: |
|
|
|
|
|
|
||
Cash receipts for interest rate swap |
|
|
|
|
|
|
||
Purchases of installation and service parts and property and equipment |
|
|
( |
) |
|
|
( |
) |
Cash proceeds from the sale of assets |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash Flows from Financing Activities: |
|
|
|
|
|
|
||
Repayment of long-term debt |
|
|
( |
) |
|
|
( |
) |
Payment of debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Share repurchases and retirement |
|
|
|
|
|
( |
) |
|
Proceeds from the exercise of stock options |
|
|
|
|
|
|
||
Payment of employee tax withholding related to RSUs and PSUs vesting |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
|
|
|
( |
) |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
|
|
|
( |
) |
|
Cash, cash equivalents and restricted cash - beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash - end of period |
|
$ |
|
|
$ |
|
||
See accompanying Notes to the Condensed Consolidated Financial Statements.
8
VERRA MOBILITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
|
|
Six Months Ended June 30, |
|
|||||
Reconciliation of cash, cash equivalents, and restricted cash |
|
2025 |
|
|
2024 |
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash |
|
$ |
|
|
$ |
|
||
Supplemental cash flow information: |
|
|
|
|
|
|
||
Interest paid |
|
$ |
|
|
$ |
|
||
Income taxes paid, net of refunds |
|
|
|
|
|
|
||
Supplemental non-cash information: |
|
|
|
|
|
|
||
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at period-end |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
See accompanying Notes to the Condensed Consolidated Financial Statements.
9
VERRA MOBILITY CORPORATION
Notes to the CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Description of Business
We are a leading provider of smart mobility technology solutions, principally operating throughout the United States, Australia, Europe and Canada. Our goal is to make transportation safer, smarter and more connected through our integrated, data-driven solutions, including toll and violations management, title and registration services, automated safety and traffic enforcement and commercial parking management. We bring together vehicles, hardware, software, data and people to solve transportation challenges for customers around the world. The Company is organized into
The Commercial Services segment offers automated toll and violations management and title and registration solutions to rental car companies (“RACs”), direct commercial fleet owner-operators (“Direct Fleets”) and fleet management companies (“FMCs”) and other large fleet owners in North America. Through its established relationships with individual tolling authorities throughout the United States, the segment provides an automated and outsourced administrative solution for its customers while also providing a value-added convenience for vehicle drivers and benefits to tolling and issuing authorities. The toll and violations management solutions help ensure timely payment of tolls and violations incurred by the customers’ vehicles and perform timely transfers of liability on the customers’ behalf, and driver billing and collections, as applicable. It also manages regional toll transponder installation and vehicle association—a critical and highly complex process for RAC, Direct Fleet and FMC customers—to ensure that the transponders (and corresponding toll transactions) are associated with the correct vehicle. In Europe, the Commercial Services segment provides violations processing through Euro Parking Collection plc and consumer tolling services through Pagatelia S.L.U.
The Government Solutions segment offers photo enforcement solutions and services to its customers which include complete, end-to-end speed, red-light, school bus stop arm and bus lane enforcement solutions. These programs are designed to reduce traffic violations and resulting collisions, injuries and fatalities. The Company implements and administers traffic safety programs for municipalities, counties, school districts and law enforcement agencies of all sizes. The international operations for this segment primarily involve the sale of traffic enforcement products and recurring maintenance services related to the equipment and software.
The Parking Solutions segment offers an integrated suite of parking software, transaction processing and hardware solutions to its customers, which include universities, municipalities, healthcare facilities and commercial parking operators. This segment develops specialized hardware and parking management software that provides a platform for the issuance of parking permits, enforcement, gateless vehicle counting, event parking and citation services. It also produces and markets its proprietary software as a service to its customers throughout the United States and Canada.
2. Significant Accounting Policies
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.
Use of Estimates
The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. There have been no material changes in the Company’s significant accounting policies from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024.
10
Management believes that its estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.
Concentration of Credit Risk
Significant customers are those which represent more than
Revenue from a single Government Solutions customer exceeded
Significant customer revenues were generated through three of the Company’s Commercial Services customers, with each exceeding
There were
Allowance for Credit Losses
The Company reviews historical credit losses and customer payment trends on receivables and develops loss estimates as of the balance sheet date, which includes adjustments for current and future expectations. It identifies pools of receivables based on the type of business, industry in which the customer operates and historical credit loss patterns. The Company uses collection assumptions (typically at the customer level) to estimate expected credit losses. Receivables are written off against the allowance for credit losses when it is probable that amounts will not be collected based on the terms of the customer contracts, and subsequent recoveries reverse the previous write-off and apply to the receivable in the period recovered. No interest or late fees are charged on delinquent accounts. The Company periodically evaluates the adequacy of its allowance for expected credit losses and adjusts appropriately.
The following presents the activity in the allowance for credit losses by reportable segment for the six months ended June 30, 2025 and 2024, respectively:
|
|
Commercial |
|
|
Government |
|
|
Parking |
|
|
|
|
||||
($ in thousands) |
|
Services(1) |
|
|
Solutions |
|
|
Solutions |
|
|
Total |
|
||||
Balance at January 1, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Credit loss expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Write-offs, net of recoveries |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance at June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Commercial |
|
|
Government |
|
|
Parking |
|
|
|
|
||||
($ in thousands) |
|
Services(1) |
|
|
Solutions |
|
|
Solutions |
|
|
Total |
|
||||
Balance at January 1, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Credit loss expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Write-offs, net of recoveries |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
11
Remaining Performance Obligations
Deferred revenue represents amounts that have been invoiced in advance and are expected to be recognized as revenue in future periods, and it primarily relates to Government Solutions and Parking Solutions customers. As of June 30, 2025 and December 31, 2024, the Company had approximately $
Remaining performance obligations represent the amount of contracted future revenue not yet recognized as the amounts relate to undelivered performance obligations, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. The Company elected the practical expedients to omit disclosure for the amount of the transaction price allocated to remaining performance obligations with original expected contract length of one year or less and the amount that relates to variable consideration allocated to a wholly unsatisfied performance obligation to transfer a distinct good or service within a series of distinct goods or services that form a single performance obligation. As of June 30, 2025, total transaction price allocated to performance obligations in the Government Solutions segment that were unsatisfied or partially unsatisfied was $
Interest Rate Swap
In December 2022, the Company entered into a cancellable interest rate swap agreement to hedge its exposure to interest rate fluctuations associated with the LIBOR (now transitioned to Term Secured Overnight Financing Rate, “SOFR”) portion of the variable interest rate on its 2021 Term Loan (as defined below). Under the interest rate swap agreement, the Company paid a fixed rate of 5.17% and the counterparty paid a variable interest rate. The Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement with the counterparty which provided for the net settlement of all, or a specified group, of derivative transactions through a single payment. The notional amount on the interest rate swap was $
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||
($ in thousands) |
|
June 30, 2024 |
|
|
June 30, 2024 |
|
||
Change in fair value |
|
$ |
|
|
$ |
|
||
Cash receipts |
|
|
( |
) |
|
|
( |
) |
Total gain on interest rate swap |
|
$ |
( |
) |
|
$ |
( |
) |
The effect of remeasurement to fair value was recorded within the operating activities section and the monthly cash proceeds received were recorded within the investing activities section in the condensed consolidated statements of cash flows. See Note 7, Fair Value of Financial Instruments, for further discussion on the fair value measurement of the interest rate swap.
12
Recent Accounting Pronouncements
Accounting Standards Not Yet Adopted
In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires companies to disclose specific categories in the rate reconciliation, provide additional disclosure for reconciling items that exceed proscribed thresholds, and enhance disclosure regarding income taxes paid and sources of income (loss) from continuing operations including the tax expense (or benefit) disaggregated by federal, state and foreign taxes. The guidance is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on its financial statements and disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period at a disaggregated level. The guidance is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements and disclosures.
3. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following at:
($ in thousands) |
|
June 30, |
|
|
December 31, |
|
||
Prepaid services |
|
$ |
|
|
$ |
|
||
Prepaid tolls |
|
|
|
|
|
|
||
Costs to fulfill a customer contract |
|
|
|
|
|
|
||
Deposits |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total prepaid expenses and other current assets |
|
$ |
|
|
$ |
|
||
4. Goodwill and Intangible Assets
The following table presents the changes in the carrying amount of goodwill by reportable segment:
|
|
Commercial |
|
|
Government |
|
|
Parking |
|
|
|
|
||||
($ in thousands) |
|
Services |
|
|
Solutions |
|
|
Solutions |
|
|
Total |
|
||||
Balance at December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Foreign currency translation adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Intangible assets consist of the following as of the respective period-ends:
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Gross |
|
|
|
|
|
Gross |
|
|
|
|
||||
|
|
Carrying |
|
|
Accumulated |
|
|
Carrying |
|
|
Accumulated |
|
||||
($ in thousands) |
|
Amount |
|
|
Amortization |
|
|
Amount |
|
|
Amortization |
|
||||
Trademarks |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Patent |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Customer relationships |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Developed technology |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross carrying value of intangible assets |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Less: accumulated amortization |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Intangible assets, net |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
13
Amortization expense was $
Estimated amortization expense in future years is expected to be:
($ in thousands) |
|
|
|
|
Remainder of 2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
5. Accrued Liabilities
Accrued liabilities consist of the following at:
($ in thousands) |
|
June 30, |
|
|
December 31, |
|
||
Accrued salaries and wages |
|
$ |
|
|
$ |
|
||
Current portion of operating lease liabilities |
|
|
|
|
|
|
||
Restricted cash due to customers |
|
|
|
|
|
|
||
Accrued interest payable |
|
|
|
|
|
|
||
Advanced deposits |
|
|
|
|
|
|
||
Income taxes payable |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued liabilities |
|
$ |
|
|
$ |
|
||
6. Long-term Debt, Net
The following table provides a summary of the Company’s long-term debt, net at:
($ in thousands) |
|
June 30, |
|
|
December 31, |
|
||
2021 Term Loan, due |
|
$ |
|
|
$ |
|
||
Senior Notes, due |
|
|
|
|
|
|
||
Less: original issue discounts |
|
|
( |
) |
|
|
( |
) |
Less: unamortized deferred financing costs |
|
|
( |
) |
|
|
( |
) |
Total long-term debt, net |
|
$ |
|
|
$ |
|
||
2021 Term Loan
In March 2021, VM Consolidated, Inc. (“VM Consolidated”), the Company’s wholly owned subsidiary, entered into an Amendment and Restatement Agreement No.1 to the First Lien Term Loan Credit Agreement (the “2021 Term Loan”) with a syndicate of lenders. The 2021 Term Loan has an aggregate borrowing of $
14
In February 2024, VM Consolidated entered into a third amendment to the 2021 Term Loan (the “Third Amendment”) and in October 2024, a fourth amendment to the 2021 Term Loan (the “Fourth Amendment”) to refinance the 2021 Term Loan (the “Refinancing Transactions”). Pursuant to the Third and Fourth Amendments, the interest rate was reduced by an aggregate
During each of the six months ended June 30, 2025 and 2024, the Company made early repayments of $
The Company recorded less than $
The 2021 Term Loan bears interest based at the Company’s option, on either (i) SOFR plus an applicable margin of
In addition, the 2021 Term Loan requires mandatory prepayments equal to the product of the excess cash flows of the Company (as defined in the 2021 Term Loan agreement) and the applicable prepayment percentages (calculated as of the last day of the fiscal year), as set forth in the following table:
Consolidated First Lien Net Leverage Ratio (As Defined by the 2021 Term Loan Agreement) |
|
Applicable |
> 3.70:1.00 |
|
|
< 3.70:1.00 and > 3.20:1.00 |
|
|
< 3.20:1.00 |
|
Senior Notes
In March 2021, VM Consolidated issued an aggregate principal amount of $
Interest on the Senior Notes is fixed at
Year |
|
Percentage |
2025 |
|
|
2026 and thereafter |
|
15
The Revolver
The Company has a Revolving Credit Agreement (the “Revolver”). On May 15, 2025, the Company exercised its option to increase the commitments under the terms of the Revolver and entered into a fourth amendment to the Revolver which increased the existing commitment from $
Interest on the unused portion of the Revolver is payable quarterly at
All borrowings and other extensions of credits under the 2021 Term Loan, Senior Notes and the Revolver are subject to the satisfaction of customary conditions and restrictive covenants including absence of defaults and accuracy in material respects of representations and warranties. Substantially all of the Company’s assets are pledged as collateral to secure the Company’s indebtedness under the 2021 Term Loan. At June 30, 2025, the Company was compliant with all debt covenants in its debt agreements.
Interest Expense, Net
The Company recorded interest expense, including amortization of deferred financing costs and discounts, of $
The weighted average effective interest rate on the Company’s outstanding borrowings was
7. Fair Value of Financial Instruments
Accounting Standards Codification Topic 820, Fair Value Measurement, includes a single definition of fair value to be used for financial reporting purposes, provides a framework for applying this definition and for measuring fair value under GAAP, and establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are summarized as follows:
Level 1 – Fair value is based on observable inputs such as quoted prices for identical assets or liabilities in active markets.
Level 2 – Fair value is determined using quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or inputs other than quoted prices that are directly or indirectly observable.
Level 3 – Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as a pricing model, discounted cash flow, or similar technique.
The carrying amounts reported in the Company’s condensed consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the immediate to short-term maturity of these financial instruments. The estimated fair value of the Company’s long-term debt, net was calculated based upon available market information.
|
|
Level in |
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||
|
|
Fair Value |
|
Carrying |
|
|
Estimated |
|
|
Carrying |
|
|
Estimated |
|
||||||||
($ in thousands) |
|
Hierarchy |
|
Amount |
|
|
Fair Value |
|
|
Amount |
|
|
Fair Value |
|
||||||||
2021 Term Loan |
|
2 |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
||||
Senior Notes |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
16
The Company has an equity investment measured at cost with a carrying value of $
The recurring fair value measurement of the interest rate swap was valued based on observable inputs for similar assets and liabilities including swaption values and other observable inputs for interest rates and yield curves and was classified within Level 2 of the fair value hierarchy.
The following presents the changes in the fair value of the interest rate swap in the gross balances within the below line items for the three and six months ended June 30, 2024:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||
($ in thousands) |
|
2024 |
|
|
2024 |
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Beginning balance |
|
$ |
|
|
$ |
|
||
Change in fair value of interest rate swap |
|
|
( |
) |
|
|
|
|
Ending balance |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Other non-current assets |
|
|
|
|
|
|
||
Beginning balance |
|
$ |
|
|
$ |
|
||
Change in fair value of interest rate swap |
|
|
( |
) |
|
|
( |
) |
Ending balance |
|
$ |
|
|
$ |
|
||
The Company separately classified the current and non-current components based on the value of settlements due within 12 months (current) and greater than 12 months (non-current). The Company exercised its option to cancel the interest rate swap during the third quarter of fiscal year 2024.
8. Net Income Per Share
Basic net income per share is calculated by dividing net income by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net income per share is calculated by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method.
The components of basic and diluted net income per share are as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(In thousands, except per share data) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares - basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per share - basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net income per share - diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Antidilutive shares excluded from diluted net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Performance share units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted stock units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total antidilutive shares excluded |
|
|
|
|
|
|
|
|
|
|
|
|
||||
17
9. Income Taxes
The Company’s interim income tax provision is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that period. The estimated annual effective tax rate requires judgment and is dependent upon several factors. The Company provides for income taxes under the liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the tax basis of assets or liabilities and their carrying amounts in the financial statements.
The Company provides a valuation allowance for deferred tax assets if it is more likely than not that these items will expire before the Company is able to realize their benefit. The Company calculates the valuation allowance in accordance with the authoritative guidance relating to income taxes, which requires an assessment of both positive and negative evidence regarding the realizability of these deferred tax assets, when measuring the need for a valuation allowance. Significant judgment is required in determining any valuation allowance against deferred tax assets.
The Company’s effective income tax rate was
New Legislation
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The Company is currently evaluating the impact of this legislation but is expecting a reduction to the U.S. income tax liability and net deferred tax assets. The results of this evaluation will be reflected in the Company's Form 10-Q for the quarter ended September 30, 2025.
10. Stockholders’ Equity
Share Repurchases and Retirement
In November 2022, the Company’s Board of Directors authorized a share repurchase program for up to an aggregate amount of $
The Company paid $
In October 2023, the Company’s Board of Directors authorized a share repurchase program for up to an aggregate amount of $
18
After the Company repurchased an aggregate
New Share Purchase Program
On May 17, 2025, the Company’s Board of Directors authorized a new share repurchase program for up to an aggregate amount of $
11. Stock-Based Compensation
The following details the components of stock-based compensation for the respective periods:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Operating expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
12. Tax Receivable Agreement
In October 2018, the Company entered into a Tax Receivable Agreement (“TRA”) with PE Greenlight Holdings, LLC. On August 3, 2022, PE Greenlight Holdings, LLC sold and transferred to Lakeside Smart Holdco L.P (“Lakeside”), all of its rights, remaining interests and obligations as of that date under the TRA. The TRA provides for the payment to Lakeside of
At June 30, 2025, the TRA liability was $
13. Commitments and Contingencies
The Company has issued various letters of credit under contractual arrangements with certain of its domestic and international vendors and customers. Outstanding letters of credit under these arrangements totaled $
19
The Company is subject to tax audits in the normal course of business and does not have material contingencies recorded related to such audits.
The Company accrues for claims and contingencies when losses become probable and reasonably estimable. As of the end of each applicable reporting period, the Company reviews each of its matters and, where it is probable that a liability has been or will be incurred, the Company accrues for all probable and reasonably estimable losses. Where the Company can reasonably estimate a range of loss it may incur regarding such a matter, the Company records an accrual for the amount within the range that constitutes its best estimate. If the Company can reasonably estimate a range but no amount within the range appears to be a better estimate than any other, the Company uses the amount that is the low end of such range.
Legal Proceedings
The Company is subject to legal and regulatory actions that arise from time to time in the ordinary course of business. The Company records a liability when it believes it is probable a loss will be incurred, and the amount of loss or range of loss can be reasonably estimated. The assessment as to whether a loss is probable, reasonably possible or remote, and as to whether a loss or a range of such loss is estimable, often involves significant judgment about future events. The Company has accrued estimated amounts related to legal proceedings as of June 30, 2025 and December 31, 2024 within accrued liabilities on the condensed consolidated balance sheets. The ultimate cost of litigation or settlement could be materially different than the amount of the current estimates and accruals and could have a material adverse impact on the Company’s consolidated financial position, results of operations, or cash flows.
Brantley v. City of Gretna is a class action lawsuit filed in the 24th Judicial District Court of Jefferson Parish, Louisiana against the City of Gretna (the “City”) and its safety camera vendor, Redflex Traffic Systems, Inc. in April 2016. The Company acquired Redflex Traffic Systems, Inc. as part of its June 2021 purchase of Redflex Holdings Limited. The plaintiff class, which was certified on March 30, 2021, alleges that the City’s safety camera program was implemented and operated in violation of local ordinances and the state constitution, including that the City’s hearing process violated the plaintiffs’ due process rights for lack of a “neutral” arbiter of liability for traffic infractions. Plaintiffs seek recovery of traffic infraction fines paid. The City and Redflex Traffic Systems, Inc. appealed the trial court’s ruling granting class certification, which was denied, and their petition for discretionary review of the certification ruling by the Louisiana Supreme Court was declined. The parties entered into a settlement agreement and preliminary approval was granted by the court in April 2025. A final settlement amount has not yet been determined and requires final approval from the court.
14. Segment Reporting
The Company has
The operating and reportable segments were determined based on how the Company’s Chief Operating Decision Maker (“CODM”) regularly reviews the operating results of the various components of the Company for which discrete financial information is available, including based on the nature of the products and services and the type of customer. The Company defines the CODM as its Chief Executive Officer. The Company’s CODM primarily uses actual revenues and segment profit (defined below) as compared to previously budgeted amounts to evaluate the operating performance, allocate resources and deploy capital to the segments.
Segment performance is based on revenues and income from operations before depreciation, amortization, and stock-based compensation. The measure also excludes interest expense, net, income taxes and certain other transactions and is inclusive of other income, net. The tables below refer to this measure as segment profit. The aforementioned items are not indicative of operating performance, and, as a result are not included in the measures that are reviewed by the CODM for the segments. Other income, net included in segment profit below consists primarily of credit card rebates earned on the prepayment of tolling transactions and gains or losses on foreign currency transactions, and excludes certain non-operating expenses inapplicable to segments.
The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures in the fourth quarter of fiscal year 2024, and as a result, updated the presentation of financial information by reportable segment. In addition, the CODM does not use discrete asset information to evaluate operating performance at the segment level, as such, the Company has not reported assets disaggregated by reportable segment.
20
The following tables set forth financial information by segment for the respective periods:
|
|
For the Three Months Ended June 30, 2025 |
|
|||||||||||||
|
|
Commercial |
|
|
Government |
|
|
Parking |
|
|
|
|
||||
($ in thousands) |
|
Services |
|
|
Solutions |
|
|
Solutions |
|
|
Total |
|
||||
Service revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Product sales |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Total revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of service revenue, excluding depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of product sales |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on disposal of assets, net |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Other income, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Segment profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on extinguishment of debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other reconciling items (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
(1)
21
|
|
For the Three Months Ended June 30, 2024 |
|
|||||||||||||
|
|
Commercial |
|
|
Government |
|
|
Parking |
|
|
|
|
||||
($ in thousands) |
|
Services |
|
|
Solutions |
|
|
Solutions |
|
|
Total |
|
||||
Service revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Product sales |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Total revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of service revenue, excluding depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of product sales |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on disposal of assets, net |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Other income, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Segment profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on interest rate swap |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Other reconciling items (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
(1)
|
|
For the Six Months Ended June 30, 2025 |
|
|||||||||||||
|
|
Commercial |
|
|
Government |
|
|
Parking |
|
|
|
|
||||
($ in thousands) |
|
Services |
|
|
Solutions |
|
|
Solutions |
|
|
Total |
|
||||
Service revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Product sales |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Total revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of service revenue, excluding depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of product sales |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on disposal of assets, net |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Other income, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Segment profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on extinguishment of debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other reconciling items (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
(1)
22
|
|
For the Six Months Ended June 30, 2024 |
|
|||||||||||||
|
|
Commercial |
|
|
Government |
|
|
Parking |
|
|
|
|
||||
($ in thousands) |
|
Services |
|
|
Solutions |
|
|
Solutions |
|
|
Total |
|
||||
Service revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Product sales |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Total revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of service revenue, excluding depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of product sales |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on disposal of assets, net |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Other income, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Segment profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on interest rate swap |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Loss on extinguishment of debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other reconciling items (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
(1)
The Company provides information on credit loss expense by reportable segment, refer to Note 2, Significant Accounting Policies, for additional details.
The Company primarily operates within the United States, Australia, Canada, United Kingdom and in various other countries in Europe and Asia.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Australia |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Canada |
|
|
|
|
|
|
|
|
|
|
|
|
||||
United Kingdom |
|
|
|
|
|
|
|
|
|
|
|
|
||||
All other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total international revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our Annual Report, and our financial statements and the related notes included in Part I, Item 1 “Financial Statements” of this Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Please refer to the section in this Report entitled “Cautionary Note Regarding Forward-Looking Statements.”
Overview
We are a leading provider of smart mobility technology solutions, principally operating throughout the United States, Australia, Europe and Canada. We make transportation safer, smarter and more connected through our integrated, data-driven solutions, including toll and violations management, title and registration services, automated safety and traffic enforcement and commercial parking management. We bring together vehicles, hardware, software, data and people to solve transportation challenges for customers around the world, including commercial fleet owners such as rental car companies (“RACs”), direct commercial fleet owner-operators (“Direct Fleets”) and fleet management companies (“FMCs”), as well as governments, universities, parking operators, healthcare facilities, transportation hubs and violation-issuing authorities. Our vision is to continue to develop and use technology and data intelligence to make transportation safer, smarter and more connected globally.
Our Segments
We have three operating and reportable segments, Commercial Services, Government Solutions and Parking Solutions:
Segment performance is based on revenues and income from operations before depreciation, amortization and stock-based compensation. The measure also excludes interest expense, net, income taxes and certain other transactions and is inclusive of other income, net.
Executive Summary
We operate under long-term contracts and a reoccurring service revenue model. We continue to execute our strategy to grow revenue organically year-over-year and focus on initiatives that support our long-term strategy. During the periods presented, we:
24
Recent Events
NYCDOT Contract
On March 31, 2025, the City of New York Department of Transportation (“NYCDOT”) announced that it identified the Company as the vendor to manage New York City’s automated enforcement camera safety programs for an expected five-year period after our current contract expires in December 2025. The New York City automated enforcement program remains an active procurement. We are currently engaged in contract negotiations with NYCDOT and if the contract terms and pricing are materially different from our current contract, or if the parties ultimately fail to consummate a new agreement, it could have a material adverse effect on our business, financial condition and results of operations.
Amendment to the Revolving Credit Agreement
On May 15, 2025, we entered into a fourth amendment to the Revolving Credit Agreement (the “Revolver”) which increased the existing commitment from $75.0 million to $125.0 million available for loans and letters of credit. The remaining terms of the Revolver were unchanged including the maturity date of December 18, 2026. There were no outstanding borrowings on the Revolver as of June 30, 2025 or December 31, 2024. The availability to borrow was $123.9 million, net of $1.1 million of outstanding letters of credit at June 30, 2025.
Share Repurchases and Retirement
In October 2023, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A common stock, par value $0.0001 (the “Class A Common Stock”) over an 18-month period. After we repurchased an aggregate 3.5 million shares for approximately $87.3 million in fiscal year 2024, in December 2024, our Board of Directors authorized the repurchase of up to an additional $100 million of our outstanding shares under the then-existing program, providing us with approximately $112.7 million available for repurchases. On December 11, 2024, we entered into an accelerated share repurchase (“ASR”) agreement with a third-party financial institution and paid $112.7 million to receive an initial delivery of 3,821,958 shares of our Class A Common Stock. The final settlement occurred on March 3, 2025, at which time, we received an additional 685,934 shares calculated using a volume-weighted average price over the term of the ASR agreement. All repurchased shares were subsequently retired. The authorization under this share repurchase program ended on April 30, 2025.
On May 17, 2025, our Board of Directors authorized a new share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock. Under the repurchase program, we may purchase shares of Class A Common Stock until November 2026 through open market purchases, in privately negotiated transactions or by other means, including trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, and ASR agreements, each as permitted under applicable rules and regulations. The amount and timing of repurchases will be determined at our discretion and will depend on a variety of factors, including price, general business and market conditions, applicable legal requirements, and alternative investment opportunities. The repurchase program does not obligate us to acquire any particular amount of Class A Common Stock or at any specific time intervals and may be modified, suspended or terminated at any time at our discretion. We have not yet repurchased shares of Class A Common Stock under this program.
New Corporate Headquarters Lease
On May 29, 2025, we entered into a lease agreement for our new corporate headquarters building in Mesa, Arizona and began recording lease expense when we obtained access to the building to begin tenant improvements. Accordingly, we modified our existing corporate headquarters lease term to end in early 2026 when we expect to relocate to the new building.
Key Factors Affecting Our Results of Operations
We believe that our performance and future success depends on a number of factors that present opportunities for us but also pose risks and challenges, including those discussed below and in our Annual Report on Form 10-K titled “Risk Factors” and in Part II, Item 1A of this Quarterly Report.
25
Macroeconomic Conditions
Our business is susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations. The factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following: the inflationary impact on items such as wages and travel-related costs, future travel demand, legislation regarding the adoption, expansion or prohibition of automated enforcement and traffic safety technology by local, state or national governments, and the impact of the government regulations and actions, including tariffs and trade protection measures. We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, financial condition, and results of operations.
Travel Demand
Our Commercial Services segment is largely impacted by its customer demand which in turn is impacted by a variety of factors including seasonality, demand for business and leisure travel, reductions in the level of air travel, higher airfare costs, increases in energy prices, general international, national and local economic conditions and cycles, and consumer confidence, as well as other factors affecting travel levels, such as military conflicts, terrorist incidents, natural disasters and epidemic diseases.
We monitor the Transportation and Security Administration passenger volume (“TSA Passenger Volume”) as one of several measures for Commercial Services revenue growth. TSA Passenger Volume measures the number of passengers screened by the TSA at United States airports, which correlates to the number of vehicles rented by travelers and toll road usage. TSA Passenger Volume in the second quarter of 2025 was about 1% less than TSA Passenger Volume for the same period in 2024.
Electronic Tolling Penetration
Our Commercial Services segment, which offers automated toll and violations management solutions to fleet customers, is impacted by the number of toll roads in the United States and Europe and the geographic concentration of such roads. We monitor the expansion and penetration of toll roadways across the United States and Europe and the percentage of toll roads that rely on cashless or all-electronic infrastructure.
Enabling Legislation
Our Government Solutions segment is positively impacted, in significant part, by enabling legislation that permits photo enforcement programs at the federal, state and local level in the United States. Accordingly, we depend on national, state and local governments authorizing the use of automated photo enforcement and not otherwise materially restricting its use.
Primary Components of Our Operating Results
Revenues
Service Revenue. Our Commercial Services segment generates service revenue primarily through the operation and management of tolling programs and processing violations for RACs, FMCs and other large fleet customers. These solutions are full-service offerings by which we enroll the license plates of our customers’ vehicles and transponders with tolling authority accounts, pay tolls and violations on the customers’ behalf and, through proprietary technology, integrate with customer data to match the toll or violation to the driver and then bill the driver (or our customer, as applicable) for use of the service. The cost of certain tolls, violations and our customers’ share of administration fees are netted against revenue. We also generate service revenue in our Commercial Services segment through processing titles and registrations.
Our Government Solutions segment generates service revenue through the operation and maintenance of photo enforcement systems. Revenue drivers in this segment include the number of systems installed and the monthly revenue per system. Ancillary service revenue is generated in our Government Solutions segment from payment processing, pass-through fees for collection expense, and other fees.
Our Parking Solutions segment generates service revenue mainly from offering software as a service (“SaaS”), subscription fees, professional services and citation processing services related to parking management solutions to its customers.
26
Product Sales. Product sales are generated by the sale of photo enforcement equipment in the Government Solutions segment and specialized hardware in the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.
Costs and Expenses
Cost of Service Revenue, Excluding Depreciation and Amortization. Cost of service revenue, excluding depreciation and amortization consists of recurring service costs, collection and other third-party costs in our segments.
Cost of Product Sales. Cost of product sales consists of the cost to acquire and install photo enforcement equipment purchased by Government Solutions customers and costs to develop hardware sold to Parking Solutions customers.
Operating Expenses. Operating expenses primarily include payroll and payroll-related costs (including stock-based compensation), subcontractor costs, payment processing and other operational costs, including print, postage and communication costs.
Selling, General and Administrative Expenses. Selling, general and administrative expenses include payroll and payroll-related costs (including stock-based compensation), real estate lease expense, insurance costs, professional services fees and general corporate expenses.
Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net includes depreciation on property, plant and equipment, and amortization of definite-lived intangible assets. This line item also includes any one-time gains or losses incurred in connection with the disposal of certain assets.
Interest Expense, Net. This includes interest expense and amortization of deferred financing costs and discounts and is net of interest income.
Gain on Interest Rate Swap. Gain on interest rate swap related to the changes associated with the derivative instrument re-measured to fair value at the end of the reporting period and the related periodic cash receipts or payments.
Loss on Extinguishment of Debt. Loss on extinguishment of debt consists of the write-off of pre-existing original issue discounts and deferred financing costs associated with debt extinguishment.
Other Income, Net. Other income, net primarily consists of volume rebates earned from total spend on credit card transactions, gains or losses on foreign currency transactions and other non-operating expenses.
27
Results of Operations
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
The following table sets forth our statements of operations data and expresses each item as a percentage of total revenue for the periods presented as well as the changes between periods. The tables and information provided in this section were derived from exact numbers and may have immaterial rounding differences.
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
Percentage of Revenue |
|
|
Increase (Decrease) |
|
||||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||||
Service revenue |
|
$ |
223,477 |
|
|
$ |
212,017 |
|
|
|
94.7 |
% |
|
|
95.3 |
% |
|
$ |
11,460 |
|
|
|
5.4 |
% |
Product sales |
|
|
12,548 |
|
|
|
10,409 |
|
|
|
5.3 |
% |
|
|
4.7 |
% |
|
|
2,139 |
|
|
|
20.5 |
% |
Total revenue |
|
|
236,025 |
|
|
|
222,426 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
13,599 |
|
|
|
6.1 |
% |
Cost of service revenue, excluding depreciation and amortization |
|
|
4,629 |
|
|
|
4,641 |
|
|
|
2.0 |
% |
|
|
2.1 |
% |
|
|
(12 |
) |
|
|
(0.3 |
)% |
Cost of product sales |
|
|
8,946 |
|
|
|
7,848 |
|
|
|
3.8 |
% |
|
|
3.5 |
% |
|
|
1,098 |
|
|
|
14.0 |
% |
Operating expenses |
|
|
81,317 |
|
|
|
74,903 |
|
|
|
34.5 |
% |
|
|
33.7 |
% |
|
|
6,414 |
|
|
|
8.6 |
% |
Selling, general and administrative expenses |
|
|
48,466 |
|
|
|
46,343 |
|
|
|
20.5 |
% |
|
|
20.8 |
% |
|
|
2,123 |
|
|
|
4.6 |
% |
Depreciation, amortization and (gain) loss on disposal of assets, net |
|
|
29,473 |
|
|
|
27,522 |
|
|
|
12.4 |
% |
|
|
12.4 |
% |
|
|
1,951 |
|
|
|
7.1 |
% |
Total costs and expenses |
|
|
172,831 |
|
|
|
161,257 |
|
|
|
73.2 |
% |
|
|
72.5 |
% |
|
|
11,574 |
|
|
|
7.2 |
% |
Income from operations |
|
|
63,194 |
|
|
|
61,169 |
|
|
|
26.8 |
% |
|
|
27.5 |
% |
|
|
2,025 |
|
|
|
3.3 |
% |
Interest expense, net |
|
|
16,572 |
|
|
|
18,845 |
|
|
|
7.0 |
% |
|
|
8.5 |
% |
|
|
(2,273 |
) |
|
|
(12.1 |
)% |
Gain on interest rate swap |
|
|
— |
|
|
|
(23 |
) |
|
|
— |
|
|
|
(0.0 |
)% |
|
|
23 |
|
|
|
(100.0 |
)% |
Loss on extinguishment of debt |
|
|
23 |
|
|
|
— |
|
|
|
0.0 |
% |
|
|
— |
|
|
|
23 |
|
|
n/a |
|
|
Other income, net |
|
|
(6,003 |
) |
|
|
(5,245 |
) |
|
|
(2.5 |
)% |
|
|
(2.4 |
)% |
|
|
(758 |
) |
|
|
14.5 |
% |
Total other expenses |
|
|
10,592 |
|
|
|
13,577 |
|
|
|
4.5 |
% |
|
|
6.1 |
% |
|
|
(2,985 |
) |
|
|
(22.0 |
)% |
Income before income taxes |
|
|
52,602 |
|
|
|
47,592 |
|
|
|
22.3 |
% |
|
|
21.4 |
% |
|
|
5,010 |
|
|
|
10.5 |
% |
Income tax provision |
|
|
14,027 |
|
|
|
13,369 |
|
|
|
6.0 |
% |
|
|
6.0 |
% |
|
|
658 |
|
|
|
4.9 |
% |
Net income |
|
$ |
38,575 |
|
|
$ |
34,223 |
|
|
|
16.3 |
% |
|
|
15.4 |
% |
|
$ |
4,352 |
|
|
|
12.7 |
% |
Service Revenue. Service revenue increased by $11.5 million, or 5.4%, to $223.5 million for the three months ended June 30, 2025 from $212.0 million for the three months ended June 30, 2024, representing 94.7% and 95.3% of total revenue, respectively. The following table depicts service revenue by segment:
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
Percentage of Revenue |
|
|
Increase (Decrease) |
|
||||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||||
Service revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial Services |
|
$ |
109,050 |
|
|
$ |
103,985 |
|
|
|
46.2 |
% |
|
|
46.8 |
% |
|
$ |
5,065 |
|
|
|
4.9 |
% |
Government Solutions |
|
|
97,971 |
|
|
|
91,469 |
|
|
|
41.5 |
% |
|
|
41.1 |
% |
|
|
6,502 |
|
|
|
7.1 |
% |
Parking Solutions |
|
|
16,456 |
|
|
|
16,563 |
|
|
|
7.0 |
% |
|
|
7.4 |
% |
|
|
(107 |
) |
|
|
(0.6 |
)% |
Total service revenue |
|
$ |
223,477 |
|
|
$ |
212,017 |
|
|
|
94.7 |
% |
|
|
95.3 |
% |
|
$ |
11,460 |
|
|
|
5.4 |
% |
Commercial Services service revenue increased by $5.1 million, or 4.9%, from $104.0 million for the three months ended June 30, 2024 to $109.1 million for the three months ended June 30, 2025. The increase was primarily due to increased product adoption and tolling activity compared to the prior year which contributed to a $2.7 million growth in RAC tolling revenue during the three months ended June 30, 2025, compared to the same period in 2024. In addition, we derived $2.2 million of increased revenue from our European operations, partially offset by lower revenue generated from our FMC customers due to customer churn and modest weakness attributable to macroeconomic factors compared to the same period in 2024.
28
Government Solutions service revenue increased by $6.5 million, or 7.1%, from $91.5 million for the three months ended June 30, 2024, to $98.0 million for the three months ended June 30, 2025. The increase was primarily driven by the expansion of bus lane and school bus stop arm enforcement programs contributing $4.6 million, with the remaining increase driven primarily by speed and red-light enforcement programs.
Parking Solutions service revenue decreased slightly to $16.5 million for the three months ended June 30, 2025, from $16.6 million for the three months ended June 30, 2024. The increased revenue from SaaS product offerings was offset by a decrease in subscription and professional services revenue related to parking management solutions.
Product Sales. Product sales were $12.5 million and $10.4 million for the three months ended June 30, 2025 and 2024, respectively. Product sales increased by $2.1 million, which was due to a $2.9 million increase in product sales to international customers in the Government Solutions segment which was partially offset by a decrease in product sales from the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.
Cost of Service Revenue, Excluding Depreciation and Amortization. Cost of service revenue, excluding depreciation and amortization remained flat at $4.6 million for both the three months ended June 30, 2025 and 2024.
Cost of Product Sales. Cost of product sales increased by $1.1 million from $7.8 million in the three months ended June 30, 2024 to $8.9 million in the three months ended June 30, 2025, which was in line with the increase in product sales discussed above.
Operating Expenses. Operating expenses increased by $6.4 million, or 8.6%, from $74.9 million for the three months ended June 30, 2024 to $81.3 million for the three months ended June 30, 2025. The increase in 2025 compared to the prior period was primarily in the Government Solutions business for approximately $6.3 million due to increases in subcontractor costs, wages and operational equipment, partially offset by a decrease in operating expenses in the Parking Solutions business. Operating expenses as a percentage of total revenue increased from 33.7% to 34.5% for the three months ended June 30, 2024 and 2025, respectively. The following table presents operating expenses by segment:
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
Percentage of Revenue |
|
|
Increase (Decrease) |
|
||||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial Services |
|
$ |
23,501 |
|
|
$ |
23,189 |
|
|
|
10.0 |
% |
|
|
10.4 |
% |
|
$ |
312 |
|
|
|
1.3 |
% |
Government Solutions |
|
|
52,415 |
|
|
|
46,153 |
|
|
|
22.2 |
% |
|
|
20.7 |
% |
|
|
6,262 |
|
|
|
13.6 |
% |
Parking Solutions |
|
|
3,898 |
|
|
|
4,488 |
|
|
|
1.7 |
% |
|
|
2.1 |
% |
|
|
(590 |
) |
|
|
(13.1 |
)% |
Operating expenses by segment |
|
|
79,814 |
|
|
|
73,830 |
|
|
|
33.9 |
% |
|
|
33.2 |
% |
|
|
5,984 |
|
|
|
8.1 |
% |
Other expenses |
|
|
1,503 |
|
|
|
1,073 |
|
|
|
0.6 |
% |
|
|
0.5 |
% |
|
|
430 |
|
|
|
40.1 |
% |
Total operating expenses |
|
$ |
81,317 |
|
|
$ |
74,903 |
|
|
|
34.5 |
% |
|
|
33.7 |
% |
|
$ |
6,414 |
|
|
|
8.6 |
% |
29
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $48.5 million for the three months ended June 30, 2025 compared to $46.3 million for the same period in 2024. This is primarily due to a $2.0 million increase in professional services and $1.7 million increase in credit loss expense, partially offset by a decrease in restructuring expenses compared to the same period in the prior year. Selling, general and administrative expenses as a percentage of total revenue decreased from 20.8% to 20.5% for the three months ended June 30, 2024 and 2025, respectively. The following table presents selling, general and administrative expenses by segment:
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
Percentage of Revenue |
|
|
Increase (Decrease) |
|
||||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial Services |
|
$ |
18,823 |
|
|
$ |
15,757 |
|
|
|
8.0 |
% |
|
|
7.1 |
% |
|
$ |
3,066 |
|
|
|
19.5 |
% |
Government Solutions |
|
|
17,660 |
|
|
|
16,743 |
|
|
|
7.5 |
% |
|
|
7.5 |
% |
|
|
917 |
|
|
|
5.5 |
% |
Parking Solutions |
|
|
6,500 |
|
|
|
6,644 |
|
|
|
2.7 |
% |
|
|
3.0 |
% |
|
|
(144 |
) |
|
|
(2.2 |
)% |
Selling, general and administrative expenses by segment |
|
|
42,983 |
|
|
|
39,144 |
|
|
|
18.2 |
% |
|
|
17.6 |
% |
|
|
3,839 |
|
|
|
9.8 |
% |
Other expenses |
|
|
5,483 |
|
|
|
7,199 |
|
|
|
2.3 |
% |
|
|
3.2 |
% |
|
|
(1,716 |
) |
|
|
(23.8 |
)% |
Total selling, general and administrative expenses |
|
$ |
48,466 |
|
|
$ |
46,343 |
|
|
|
20.5 |
% |
|
|
20.8 |
% |
|
$ |
2,123 |
|
|
|
4.6 |
% |
Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net, increased by $2.0 million to $29.5 million for the three months ended June 30, 2025 from $27.5 million for the same period in 2024. This was primarily due to an increase in depreciation expense for the Commercial Services and Government Solutions businesses in the 2025 period.
Interest Expense, Net. Interest expense, net decreased by approximately $2.2 million from $18.8 million for the three months ended June 30, 2024 to $16.6 million for the same period in 2025. This was primarily attributable to voluntary principal prepayments made during 2024 and 2025 reducing the balance of the 2021 Term Loan (as defined below) and a 50 basis-point reduction in the interest rate from refinancing our debt in October 2024 coupled with decreasing SOFR rates. See “Liquidity and Capital Resources” below.
Gain on Interest Rate Swap. We recorded a gain of less than $(0.1) million during the three months ended June 30, 2024, of which $0.2 million is associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $(0.3) million related to the monthly cash proceeds on the interest rate swap. We exercised our option to cancel the interest rate swap agreement effective the end of the third quarter of 2024.
Loss on Extinguishment of Debt. We recorded less than $0.1 million of loss on extinguishment of debt during the three months ended June 30, 2025 related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayment on the 2021 Term Loan.
Other Income, Net. Other income, net was $6.0 million for the three months ended June 30, 2025 compared to $5.2 million for the three months ended June 30, 2024. The increase was primarily from non-operating income from foreign currency transactions mainly in the Commercial Services business.
30
Income Tax Provision. Income tax provision was $14.0 million representing an effective tax rate of 26.7% for the three months ended June 30, 2025 compared to a tax provision of $13.4 million, with an effective tax rate of 28.1% for the same period in 2024.
Net Income. We had net income of $38.6 million for the three months ended June 30, 2025, as compared to a net income of $34.2 million for the three months ended June 30, 2024. The $4.4 million increase in net income was primarily due to the decrease in interest expense and the other statement of operations activity discussed above.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
The following table sets forth our statements of operations data and expresses each item as a percentage of total revenue for the periods presented as well as the changes between periods. The tables and information provided in this section were derived from exact numbers and may have immaterial rounding differences.
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
Percentage of Revenue |
|
|
Increase (Decrease) |
|
||||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||||
Service revenue |
|
$ |
435,379 |
|
|
$ |
414,738 |
|
|
|
94.8 |
% |
|
|
96.0 |
% |
|
$ |
20,641 |
|
|
|
5.0 |
% |
Product sales |
|
|
23,900 |
|
|
|
17,418 |
|
|
|
5.2 |
% |
|
|
4.0 |
% |
|
|
6,482 |
|
|
|
37.2 |
% |
Total revenue |
|
|
459,279 |
|
|
|
432,156 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
27,123 |
|
|
|
6.3 |
% |
Cost of service revenue, excluding depreciation and amortization |
|
|
9,412 |
|
|
|
8,946 |
|
|
|
2.0 |
% |
|
|
2.1 |
% |
|
|
466 |
|
|
|
5.2 |
% |
Cost of product sales |
|
|
16,978 |
|
|
|
13,134 |
|
|
|
3.7 |
% |
|
|
3.0 |
% |
|
|
3,844 |
|
|
|
29.3 |
% |
Operating expenses |
|
|
155,056 |
|
|
|
145,543 |
|
|
|
33.8 |
% |
|
|
33.7 |
% |
|
|
9,513 |
|
|
|
6.5 |
% |
Selling, general and administrative expenses |
|
|
99,967 |
|
|
|
94,514 |
|
|
|
21.8 |
% |
|
|
21.9 |
% |
|
|
5,453 |
|
|
|
5.8 |
% |
Depreciation, amortization and (gain) loss on disposal of assets, net |
|
|
57,287 |
|
|
|
54,497 |
|
|
|
12.5 |
% |
|
|
12.6 |
% |
|
|
2,790 |
|
|
|
5.1 |
% |
Total costs and expenses |
|
|
338,700 |
|
|
|
316,634 |
|
|
|
73.8 |
% |
|
|
73.3 |
% |
|
|
22,066 |
|
|
|
7.0 |
% |
Income from operations |
|
|
120,579 |
|
|
|
115,522 |
|
|
|
26.2 |
% |
|
|
26.7 |
% |
|
|
5,057 |
|
|
|
4.4 |
% |
Interest expense, net |
|
|
33,208 |
|
|
|
38,480 |
|
|
|
7.2 |
% |
|
|
8.9 |
% |
|
|
(5,272 |
) |
|
|
(13.7 |
)% |
Gain on interest rate swap |
|
|
— |
|
|
|
(419 |
) |
|
|
— |
|
|
|
(0.1 |
)% |
|
|
419 |
|
|
|
(100.0 |
)% |
Loss on extinguishment of debt |
|
|
48 |
|
|
|
595 |
|
|
|
0.0 |
% |
|
|
0.1 |
% |
|
|
(547 |
) |
|
|
(91.9 |
)% |
Other income, net |
|
|
(10,112 |
) |
|
|
(9,698 |
) |
|
|
(2.2 |
)% |
|
|
(2.2 |
)% |
|
|
(414 |
) |
|
|
4.3 |
% |
Total other expenses |
|
|
23,144 |
|
|
|
28,958 |
|
|
|
5.0 |
% |
|
|
6.7 |
% |
|
|
(5,814 |
) |
|
|
(20.1 |
)% |
Income before income taxes |
|
|
97,435 |
|
|
|
86,564 |
|
|
|
21.2 |
% |
|
|
20.0 |
% |
|
|
10,871 |
|
|
|
12.6 |
% |
Income tax provision |
|
|
26,521 |
|
|
|
23,192 |
|
|
|
5.8 |
% |
|
|
5.3 |
% |
|
|
3,329 |
|
|
|
14.4 |
% |
Net income |
|
$ |
70,914 |
|
|
$ |
63,372 |
|
|
|
15.4 |
% |
|
|
14.7 |
% |
|
$ |
7,542 |
|
|
|
11.9 |
% |
Service Revenue. Service revenue increased by $20.6 million, or 5.0%, to $435.4 million for the six months ended June 30, 2025 from $414.7 million for the six months ended June 30, 2024, representing 94.8% and 96.0% of total revenue, respectively. The following table depicts service revenue by segment:
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
Percentage of Revenue |
|
|
Increase (Decrease) |
|
||||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||||
Service revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial Services |
|
$ |
210,439 |
|
|
$ |
199,874 |
|
|
|
45.8 |
% |
|
|
46.3 |
% |
|
$ |
10,565 |
|
|
|
5.3 |
% |
Government Solutions |
|
|
191,953 |
|
|
|
181,744 |
|
|
|
41.8 |
% |
|
|
42.1 |
% |
|
|
10,209 |
|
|
|
5.6 |
% |
Parking Solutions |
|
|
32,987 |
|
|
|
33,120 |
|
|
|
7.2 |
% |
|
|
7.6 |
% |
|
|
(133 |
) |
|
|
(0.4 |
)% |
Total service revenue |
|
$ |
435,379 |
|
|
$ |
414,738 |
|
|
|
94.8 |
% |
|
|
96.0 |
% |
|
$ |
20,641 |
|
|
|
5.0 |
% |
31
Commercial Services service revenue increased by $10.6 million, or 5.3%, from $199.9 million for the six months ended June 30, 2024 to $210.4 million for the six months ended June 30, 2025. The increase was primarily due to increased product adoption and tolling activity compared to the prior year. These factors contributed to a $6.9 million growth in RAC tolling revenue and the remaining increase was driven mainly by an increase of $2.0 million from European operations during the six months ended June 30, 2025, compared to the same period in 2024.
Government Solutions service revenue increased by $10.2 million, or 5.6%, from $181.7 million for the six months ended June 30, 2024, to $192.0 million for the six months ended June 30, 2025. The increase was primarily driven by $8.4 million from the expansion of bus lane and school bus stop arm enforcement programs and the remaining increase is mainly from speed and red-light enforcement programs.
Parking Solutions service revenue decreased slightly to $33.0 million for the six months ended June 30, 2025, from $33.1 million for the six months ended June 30, 2024. The increased revenue from SaaS product offerings was offset by a decrease in subscription and professional services related to parking management solutions.
Product Sales. Product sales were $23.9 million and $17.4 million for the six months ended June 30, 2025 and 2024, respectively. Product sales increased by $6.5 million due to a $6.8 million increase in product sales to international customers in the Government Solutions segment which was partially offset by a decrease in product sales from the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.
Cost of Service Revenue, Excluding Depreciation and Amortization. Cost of service revenue, excluding depreciation and amortization increased from $8.9 million for the six months ended June 30, 2024 to $9.4 million for the six months ended June 30, 2025, mainly due to increased recurring service and third-party costs for our segments.
Cost of Product Sales. Cost of product sales increased by approximately $3.9 million from $13.1 million in the six months ended June 30, 2024 to $17.0 million in the six months ended June 30, 2025, which was in line with the increase in product sales discussed above.
Operating Expenses. Operating expenses increased by $9.5 million, or 6.5%, from $145.5 million for the six months ended June 30, 2024 to approximately $155.1 million for the six months ended June 30, 2025. The increase in 2025 compared to the prior year was primarily in the Government Solutions business for approximately $9.6 million due to increases in subcontractor and operational equipment costs, partially offset by a decrease in operating expenses in the Parking Solutions business. Operating expenses as a percentage of total revenue increased slightly from 33.7% to 33.8% for the six months ended June 30, 2024 and 2025, respectively. The following table presents operating expenses by segment:
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
Percentage of Revenue |
|
|
Increase (Decrease) |
|
||||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial Services |
|
$ |
45,579 |
|
|
$ |
44,668 |
|
|
|
9.9 |
% |
|
|
10.3 |
% |
|
$ |
911 |
|
|
|
2.0 |
% |
Government Solutions |
|
|
99,376 |
|
|
|
89,755 |
|
|
|
21.6 |
% |
|
|
20.8 |
% |
|
|
9,621 |
|
|
|
10.7 |
% |
Parking Solutions |
|
|
7,500 |
|
|
|
8,981 |
|
|
|
1.7 |
% |
|
|
2.1 |
% |
|
|
(1,481 |
) |
|
|
(16.5 |
)% |
Operating expenses by segment |
|
|
152,455 |
|
|
|
143,404 |
|
|
|
33.2 |
% |
|
|
33.2 |
% |
|
|
9,051 |
|
|
|
6.3 |
% |
Other expenses |
|
|
2,601 |
|
|
|
2,139 |
|
|
|
0.6 |
% |
|
|
0.5 |
% |
|
|
462 |
|
|
|
21.6 |
% |
Total operating expenses |
|
$ |
155,056 |
|
|
$ |
145,543 |
|
|
|
33.8 |
% |
|
|
33.7 |
% |
|
$ |
9,513 |
|
|
|
6.5 |
% |
32
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $100.0 million for the six months ended June 30, 2025 compared to $94.5 million for the same period in 2024. This is primarily due to a $4.6 million increase in credit loss expense and $3.6 million in increased professional services fees, partially offset by a decrease in restructuring expenses compared to the same period in 2024. Selling, general and administrative expenses as a percentage of total revenue decreased slightly from 21.9% to 21.8% for the six months ended June 30, 2024 and 2025, respectively. The following table presents selling, general and administrative expenses by segment:
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
Percentage of Revenue |
|
|
Increase (Decrease) |
|
||||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial Services |
|
$ |
38,405 |
|
|
$ |
33,254 |
|
|
|
8.4 |
% |
|
|
7.7 |
% |
|
$ |
5,151 |
|
|
|
15.5 |
% |
Government Solutions |
|
|
36,963 |
|
|
|
34,971 |
|
|
|
8.0 |
% |
|
|
8.1 |
% |
|
|
1,992 |
|
|
|
5.7 |
% |
Parking Solutions |
|
|
13,758 |
|
|
|
13,070 |
|
|
|
3.0 |
% |
|
|
3.0 |
% |
|
|
688 |
|
|
|
5.3 |
% |
Selling, general and administrative expenses by segment |
|
|
89,126 |
|
|
|
81,295 |
|
|
|
19.4 |
% |
|
|
18.8 |
% |
|
|
7,831 |
|
|
|
9.6 |
% |
Other expenses |
|
|
10,841 |
|
|
|
13,219 |
|
|
|
2.4 |
% |
|
|
3.1 |
% |
|
|
(2,378 |
) |
|
|
(18.0 |
)% |
Total selling, general and administrative expenses |
|
$ |
99,967 |
|
|
$ |
94,514 |
|
|
|
21.8 |
% |
|
|
21.9 |
% |
|
$ |
5,453 |
|
|
|
5.8 |
% |
Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net, increased by $2.8 million to $57.3 million for the six months ended June 30, 2025 from $54.5 million for the same period in 2024. This was primarily due to an increase in depreciation expense related to equipment and software in the 2025 period compared to the 2024 period.
Interest Expense, Net. Interest expense, net decreased by $5.3 million from $38.5 million for the six months ended June 30, 2024 to $33.2 million for the same period in 2025. This was primarily attributable to voluntary principal prepayments made during 2024 and 2025 reducing the balance of the 2021 Term Loan and a 50 basis-point reduction in the interest rate from refinancing our debt in October 2024 coupled with decreasing SOFR rates. See “Liquidity and Capital Resources” below.
Gain on Interest Rate Swap. We recorded a $(0.4) million gain during the six months ended June 30, 2024, of which $0.2 million is associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $(0.6) million related to the monthly cash proceeds on the interest rate swap. We exercised our option to cancel the interest rate swap agreement effective the end of the third quarter of 2024.
Loss on Extinguishment of Debt. We recorded less than $0.1 million of loss on extinguishment of debt during the six months ended June 30, 2025 related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayments on the 2021 Term Loan. We recorded a $0.6 million loss on extinguishment of debt during the six months ended June 30, 2024 related to the write-off of pre-existing deferred financing costs and discounts in connection with the refinancing of the 2021 Term Loan in February 2024.
Other Income, Net. Other income, net was $10.1 million for the six months ended June 30, 2025 compared to approximately $9.7 million for the six months ended June 30, 2024. The increase was mainly from non-operating income from foreign currency transactions in the 2025 period.
Income Tax Provision. Income tax provision was $26.5 million representing an effective tax rate of 27.2% for the six months ended June 30, 2025 compared to a tax provision of $23.2 million, with an effective tax rate of 26.8% for the same period in 2024.
Net Income. We had net income of $70.9 million for the six months ended June 30, 2025, as compared to a net income of $63.4 million for the six months ended June 30, 2024. The $7.5 million increase in net income was primarily due to the increase in service revenue and product sales, a decrease in interest expense and the other statement of operations activity discussed above.
33
Liquidity and Capital Resources
Our principal sources of liquidity are cash flows from operations and the available borrowing under our Revolver.
We believe that our existing cash and cash equivalents, cash flows provided by operating activities and our ability to borrow under our Revolver will be sufficient to meet operating cash requirements, service debt obligations and fund potential share repurchases for at least the next 12 months and thereafter for the foreseeable future. Our ability to generate sufficient cash from our operating activities depends on our future performance, which is subject to general economic, political, financial, competitive and other factors beyond our control. In addition, our future capital expenditures and other cash requirements could be higher than currently expected due to various factors, including any expansion of our business or strategic acquisitions.
We have incurred significant long-term debt as a result of acquisitions completed in prior years. Should we pursue strategic acquisitions, we may need to raise additional capital, which may be in the form of additional long-term debt, borrowings on our Revolver, or equity financings, all of which may not be available to us on favorable terms or at all.
We have the ability to borrow under our Revolver to meet obligations as they come due. On May 15, 2025, we exercised our option to increase the commitments under the terms of the Revolver and entered into a fourth amendment to the Revolver which increased the existing commitment from $75.0 million to $125.0 million available for loans and letters of credit. As of June 30, 2025, we had no outstanding borrowings and $123.9 million available for borrowing, net of letters of credit, under our Revolver. Our cash on hand was $147.7 million as of June 30, 2025.
In fiscal year 2024, we refinanced the 2021 Term Loan which reduced the interest rate by an aggregate 1.00% and eliminated the applicable credit spread adjustment. We made early repayments of approximately $2.3 million and $4.5 million on our 2021 Term Loan during the three and six months ended June 30, 2025, and as a result, the total principal outstanding on the 2021 Term Loan was $691.1 million as of June 30, 2025.
At June 30, 2025, the Tax Receivable Agreement liability was approximately $43.2 million. During the second quarter of 2025, we made an estimated payment of $5.0 million related to the 2024 tax year. We expect to make payments of approximately $5.2 million per year for the next eight years and approximately $1.1 million in the final year.
Share Repurchases and Retirement
In October 2023, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period. After we repurchased an aggregate 3.5 million shares for approximately $87.3 million in fiscal year 2024, in December 2024, our Board of Directors authorized the repurchase of up to an additional $100.0 million of our outstanding shares under the then-existing program, providing us with approximately $112.7 million available for repurchases. On December 11, 2024, we entered into an ASR agreement with a third-party financial institution and paid $112.7 million to receive an initial delivery of 3,821,958 shares of our Class A Common Stock. The final settlement occurred on March 3, 2025, at which time, we received an additional 685,934 shares calculated using a volume-weighted average price over the term of the ASR agreement. All repurchased shares were subsequently retired. The authorization under this repurchase program ended on April 30, 2025.
During the second quarter of 2025, we paid approximately $1.7 million for excise taxes related to 2024 net share repurchases.
On May 17, 2025, our Board of Directors authorized a new share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock. Under the repurchase program, we may purchase shares of Class A Common Stock until November 2026 through open market purchases, in privately negotiated transactions or by other means, including trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, and ASR agreements, each as permitted under applicable rules and regulations. The amount and timing of repurchases will be determined at our discretion and will depend on a variety of factors, including price, general business and market conditions, applicable legal requirements, and alternative investment opportunities. The repurchase program does not obligate us to acquire any particular amount of Class A Common Stock or at any specific time intervals and may be modified, suspended or terminated at any time at our discretion. We have not yet repurchased shares of Class A Common Stock under this program.
34
The following table sets forth certain captions indicated on our statements of cash flows for the respective periods:
|
|
Six Months Ended June 30, |
|
|||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
||
Net cash provided by operating activities |
|
$ |
138,113 |
|
|
$ |
74,368 |
|
Net cash used in investing activities |
|
|
(56,019 |
) |
|
|
(27,677 |
) |
Net cash used in financing activities |
|
|
(10,920 |
) |
|
|
(60,917 |
) |
Cash Flows from Operating Activities
Cash provided by operating activities increased by $63.7 million from $74.4 million for the six months ended June 30, 2024 to $138.1 million for the six months ended June 30, 2025. Net income year-over-year increased by $7.5 million, from $63.4 million in 2024 to $70.9 million in 2025. The aggregate adjustments to reconcile net income to net cash provided by operating activities increased $2.6 million mainly due to increased credit loss expense, depreciation expense and stock-based compensation, which were partially offset by a change in deferred income taxes. The aggregate changes in operating assets and liabilities increased by $53.6 million in 2025 compared to the prior year primarily due to a reduction in the net use of working capital, of which, the majority is attributable to a large payment that reduced accounts payable and other current liabilities in the first half of 2024. In addition, changes in prepaid and other current assets also contributed to the increase in 2025 compared to the prior year.
Cash Flows from Investing Activities
Cash used in investing activities was $56.0 million and $27.7 million for the six months ended June 30, 2025 and 2024, respectively. The increase in cash used was primarily driven by a $27.8 million increase for purchases of installation and service parts and property and equipment mainly for the Government Solutions business compared to the same period in the prior year.
Cash Flows from Financing Activities
Cash used in financing activities was $10.9 million and $60.9 million for the six months ended June 30, 2025 and 2024, respectively. The decreased use in cash from financing activities was mainly due to $51.5 million of share repurchases in 2024 and no comparable repurchases in the current year.
Long-term Debt, Net
2021 Term Loan
In March 2021, VM Consolidated, Inc. (“VM Consolidated”), our wholly owned subsidiary, entered into an Amendment and Restatement Agreement No.1 to the First Lien Term Loan Credit Agreement (the “2021 Term Loan”) with a syndicate of lenders. The 2021 Term Loan has an aggregate borrowing of $900.0 million, maturing on March 24, 2028. In connection with the 2021 Term Loan borrowings, we had $4.6 million of offering discount costs and $4.5 million in deferred financing costs, both of which were capitalized and are being amortized over the remaining life of the 2021 Term Loan.
In February 2024, VM Consolidated entered into a third amendment to the 2021 Term Loan (the “Third Amendment”) and in October 2024, a fourth amendment to the 2021 Term Loan (the “Fourth Amendment”) to refinance the 2021 Term Loan (the “Refinancing Transactions”). Pursuant to the Third Amendment and Fourth Amendment, the interest rate was reduced by an aggregate 1.00% to Term Secured Overnight Financing Rate (“SOFR”) plus 2.25% from SOFR plus 3.25% with the SOFR floor unchanged at 0.00%. The credit spread adjustment, ranging from 0.11448% to 0.71513%, was eliminated. In addition, the 2021 Term Loan was amended to remove a provision for principal repayments which were previously required to be paid in quarterly installments.
During each of the six months ended June 30, 2025 and 2024, we made early repayments of $4.5 million on the 2021 Term Loan, and as a result the total principal outstanding was $691.1 million as of June 30, 2025.
We recorded less than $0.1 million of loss on extinguishment of debt during both the three and six months ended June 30, 2025, related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayments. We recognized a $0.6 million loss on extinguishment of debt for the six months ended June 30, 2024, related to the write-off of pre-existing deferred financing costs and discounts in connection with the refinancing of the 2021 Term Loan in February 2024.
35
The 2021 Term Loan bears interest based at our option, on either (i) SOFR plus an applicable margin of 2.25% per annum, or (ii) an alternate base rate plus an applicable margin of 1.25% per annum. As of June 30, 2025, the interest rate on the 2021 Term Loan was 6.6%.
In addition, the 2021 Term Loan requires mandatory prepayments equal to the product of the excess cash flows of the Company (as defined in the 2021 Term Loan agreement) and the applicable prepayment percentages (calculated as of the last day of the fiscal year), as set forth in the following table:
Consolidated First Lien Net Leverage Ratio (As Defined by the 2021 Term Loan Agreement) |
|
Applicable |
> 3.70:1.00 |
|
50% |
< 3.70:1.00 and > 3.20:1.00 |
|
25% |
< 3.20:1.00 |
|
0% |
Senior Notes
In March 2021, VM Consolidated issued an aggregate principal amount of $350.0 million in Senior Unsecured Notes (the “Senior Notes”), due on April 15, 2029. In connection with the issuance of the Senior Notes, we incurred $5.7 million in lender and third-party costs, which were capitalized as deferred financing costs and are being amortized over the remaining life of the Senior Notes.
Interest on the Senior Notes is fixed at 5.50% per annum and is payable on April 15 and October 15 of each year. We may redeem all or a portion of the Senior Notes at the redemption prices set forth below in percentages by year, plus accrued and unpaid interest:
Year |
|
Percentage |
2025 |
|
101.375% |
2026 and thereafter |
|
100.000% |
The Revolver
On May 15, 2025, we exercised our option to increase the commitments under the terms of the Revolver and entered into a fourth amendment to the Revolver which increased the existing commitment from $75.0 million to $125.0 million available for loans and letters of credit. The Revolver matures on December 18, 2026. Borrowing eligibility under the Revolver is subject to a monthly borrowing base calculation based on (i) certain percentages of eligible accounts receivable and inventory, less (ii) certain reserve items, including outstanding letters of credit and other reserves. The Revolver bears interest on either (1) SOFR plus an applicable margin, or (2) an alternate base rate, plus an applicable margin. The margin percentage applied to (1) SOFR is either 1.25%, 1.50%, or 1.75%, or (2) the base rate is either 0.25%, 0.50%, or 0.75%, depending on our average availability to borrow under the commitment. There is a credit spread adjustment of 0.10% for a one-month duration, 0.15% for a three-month duration, and 0.25% for a six-month duration, in addition to SOFR and the applicable margin percentages. There were no outstanding borrowings on the Revolver as of June 30, 2025 or December 31, 2024. The availability to borrow was $123.9 million, net of $1.1 million of outstanding letters of credit at June 30, 2025.
Interest on the unused portion of the Revolver is payable quarterly at 0.375% and we are also required to pay participation and fronting fees at 1.38% on $1.1 million of outstanding letters of credit as of June 30, 2025.
All borrowings and other extensions of credits under the 2021 Term Loan, Senior Notes and the Revolver are subject to the satisfaction of customary conditions and restrictive covenants including absence of defaults and accuracy in material respects of representations and warranties. Substantially all of our assets are pledged as collateral to secure our indebtedness under the 2021 Term Loan. At June 30, 2025, we were compliant with all debt covenants in our debt agreements.
Interest Expense, Net
We recorded interest expense, including amortization of deferred financing costs and discounts, of $16.6 million and $18.8 million for the three months ended June 30, 2025 and 2024, respectively, and $33.2 million and $38.5 million for the six months ended June 30, 2025 and 2024, respectively.
36
Off-Balance Sheet Arrangements
We do not have any material off-balance sheet financing arrangements as of June 30, 2025.
Critical Accounting Policies, Estimates and Judgments
The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Please refer to our Annual Report for our critical accounting policies, estimates and judgments. We believe that our estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, refer to Note 2, Significant Accounting Policies, in Part I, Item 1, Financial Statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to interest rate risk due to the variable interest rate on the 2021 Term Loan described in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.
Interest rate risk represents our exposure to fluctuations in interest rates associated with the variable rate debt represented by the 2021 Term Loan, which has an outstanding balance of $691.1 million at June 30, 2025. The 2021 Term Loan bears interest based, at our option, on either (i) SOFR plus an applicable margin of 2.25% per annum, or (ii) an alternate base rate plus an applicable margin of 1.25% per annum. As of June 30, 2025, the interest rate on the 2021 Term Loan was 6.6%.
Based on the June 30, 2025 balance outstanding, each 1% movement in interest rates will result in an approximately $6.9 million change in annual interest expense.
In December 2022, we entered into a cancellable interest rate swap agreement to hedge our exposure to interest rate fluctuations associated with the LIBOR (now transitioned to SOFR) portion of the variable interest rate on our 2021 Term Loan. We exercised our option to cancel the interest rate swap effective the end of the third quarter of 2024.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. Our Chief Executive Officer and Chief Financial Officer, with assistance from other members of management, have evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. Based upon such evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of such date.
37
Changes in Internal Control Over Financial Reporting
During the quarter ended June 30, 2025, we completed the first phase of a multi-phase implementation of a new global enterprise resource planning (“ERP”) system that will replace components of our existing operating and financial systems. The implementation of the new ERP system is expected to be completed in fiscal year 2026. The implementation that has been completed to date has resulted in changes to certain of our processes and internal controls, including the implementation of new applications, interfaces and reports which support our financial reporting. The new ERP system is designed to accurately maintain the flow of financial information, enhance operational functionality and accelerate information reporting to our management. The implemented portion of the new ERP system was used during the quarter ended June 30, 2025, and the new and modified processes and controls implemented were used to prepare our consolidated financial statements for the three and six months ended June 30, 2025 included in this Report.
Except as described above, there have been no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
38
Part II—Other Information
Item 1. Legal Proceedings
We are subject to legal and regulatory actions that arise from time to time in the ordinary course of business, and may be subject to similar or other claims in the future. Legal disputes and other claims and proceedings may relate to, among other things, intellectual property, commercial arrangements, negligence and fiduciary duty claims, vicarious liability based on conduct of individuals or entities outside of our control, including our third-party service providers, antitrust claims, deceptive trade practices, general fraud claims and employment law claims, including compliance with wage and hour regulations. In addition to more general litigation, at times we have also been a named party in claims made against our customers, including putative class actions challenging the legality and constitutionality of automated photo enforcement and other similar programs of our Government Solutions customers, and consumer fraud claims brought against us and our Commercial Services customers alleging faulty disclosures regarding our services. From time to time, we may also be reviewed or investigated by U.S. federal, state or local regulators or regulators in the foreign jurisdictions in which we operate regarding these and other matters, including proper licensing and tax assessments. All litigation is inherently unpredictable and we could incur judgments or enter into settlements or claims in the future that could materially impact our results.
Brantley v. City of Gretna is a class action lawsuit filed in the 24th Judicial District Court of Jefferson Parish, Louisiana against the City of Gretna (the “City”) and its safety camera vendor, Redflex Traffic Systems, Inc. in April 2016. The Company acquired Redflex Traffic Systems, Inc. as part of its June 2021 purchase of Redflex Holdings Limited. The plaintiff class, which was certified on March 30, 2021, alleges that the City’s safety camera program was implemented and operated in violation of local ordinances and the state constitution, including that the City’s hearing process violated the plaintiffs’ due process rights for lack of a “neutral” arbiter of liability for traffic infractions. Plaintiffs seek recovery of traffic infraction fines paid. The City and Redflex Traffic Systems, Inc. appealed the trial court’s ruling granting class certification, which was denied, and their petition for discretionary review of the certification ruling by the Louisiana Supreme Court was declined. The parties entered into a settlement agreement and preliminary approval was granted by the court in April 2025. A final settlement amount has not yet been determined and requires final approval from the court.
We have accrued estimated amounts related to legal proceedings as of June 30, 2025 and December 31, 2024 within accrued liabilities on the condensed consolidated balance sheets. The information contained in Note 13, Commitments and Contingencies, included in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.
Item 1A.
Risks Factors
Part I, Item 1A. “Risk Factors” in our Annual Report includes a discussion of our risk factors. Other than the risk factor below and the risk factor included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, there have been no material changes from the risk factors described in our Annual Report. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future SEC filings.
We cannot guarantee that our share repurchase programs will enhance long-term shareholder value. Share repurchases could also increase the volatility of the trading price of our stock and could diminish our cash reserves. In addition, Congress enacted the Inflation Reduction Act in 2022, which (among other provisions) provided for a 1% excise tax on net share repurchases. This provision applies to share repurchases initiated after January 1, 2023.
In October 2023, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period in open market, accelerated share repurchase (“ASR”) or privately negotiated transactions. In June 2024, we entered into a share repurchase agreement with a stockholder, pursuant to which we repurchased, directly from the stockholder, 2.0 million shares of our Class A Common Stock for an aggregate purchase price of $51.5 million. During the fourth quarter of 2024, we repurchased approximately 1.5 million shares of our Class A Common Stock through open market transactions and paid $35.8 million.
In December 2024, our Board of Directors authorized the repurchase of up to an additional $100.0 million of our outstanding shares of Class A Common Stock under the October 2023 program, providing the Company with approximately $112.7 million available for repurchases. On December 11, 2024, we entered into an ASR agreement with a third-party financial institution to purchase $112.7 million of our Class A Common Stock. Pursuant to the terms of the ASR agreement, we received and retired 3,821,958 shares of our Class A Common Stock and paid $112.7 million. The final settlement occurred on March 3, 2025, at which time we received an additional 685,934 shares of our Class A Common Stock using a volume-weighted average price over the term of the ASR agreement. All repurchased shares were subsequently retired.
39
We paid a total of $200.0 million for share repurchases during the year ended December 31, 2024. In addition, we recorded approximately $1.7 million within accrued liabilities related to the excise taxes payable on net share repurchases on the consolidated balance sheets as of December 31, 2024, which has been paid as of June 30, 2025. The prior repurchase authorization expired on April 30, 2025.
On May 17, 2025, our Board of Directors authorized a new share repurchase program to repurchase up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period in open market, ASR or privately negotiated transactions. We did not make any share repurchases under this program during the second quarter of 2025.
The timing, price, and quantity of purchases under the repurchase programs have been, and will continue to be, made at the discretion of our management based upon a variety of factors including share price, general and business market conditions, compliance with applicable laws and regulations, corporate and regulatory requirements, and alternative uses of capital. There is no guarantee as to the exact number of shares that we will repurchase and we cannot guarantee that share repurchase programs will enhance long-term stockholder value. Additionally, the Inflation Reduction Act of 2022 introduced a 1% excise tax on share repurchases, which has increased the costs associated with repurchasing shares of our Class A Common Stock. Our share repurchase programs could affect the trading price of our Class A Common Stock and increase volatility. In addition, our repurchases under our share repurchase programs have diminished, and could continue to diminish, our cash reserves.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
Purchases of Equity Securities
We did not have any purchases of our Class A Common Stock during the three months ended June 30, 2025.
Sales of Unregistered Securities
We did not have any sales of unregistered equity securities during the three months ended June 30, 2025.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Insider Trading Arrangements
During the three months ended June 30, 2025, none of our directors or executive officers
40
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Report.
Exhibit Index
|
|
Incorporated by Reference |
|
|||
Exhibit Number |
Description |
Form |
File No. |
Exhibit |
Filing Date |
Filed Herewith |
3.1 |
Second Amended and Restated Certificate of Incorporation of Verra Mobility Corporation. |
8-K |
001-37979 |
3.1 |
October 22, 2018 |
|
3.2 |
Amended and Restated Bylaws of Verra Mobility Corporation. |
8-K |
001-37979 |
3.1 |
November 9, 2023 |
|
10.1# |
Executive Employment Agreement by and between VM Consolidated, Inc. and Stacey Moser, dated as of June 24, 2025. |
|
|
|
|
X |
10.2 |
Amendment No. 4 to Revolving Credit Agreement, dated as of May 15, 2025, among Greenlight Acquisition Corporation, VM Consolidated, Inc., each of the other borrowers and guarantors party thereto, and Bank of America, N.A., as Administrative Agent and Collateral Agent and as a lender. |
8-K |
001-37979 |
10.1 |
May 15, 2025 |
|
31.1 |
Certification of Principal Executive Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
X |
31.2 |
Certification of Principal Financial Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
X |
32.1* |
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
X |
32.2* |
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
X |
101.INS |
Inline XBRL Instance Document (the instance does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
|
|
|
|
X |
101.SCH |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
|
|
|
|
X |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
|
|
|
|
X |
# Management contract or compensatory plan or arrangement. * This certification is deemed not filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. |
||||||
41
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
VERRA MOBILITY CORPORATION |
|
|
|
|
Date: August 6, 2025 |
By: |
/s/ Craig Conti |
|
|
Craig Conti |
|
|
Chief Financial Officer |
|
|
(Principal Financial Officer) |
|
|
|
42
