PART I—FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and related disclosures [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, with detailed notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement details the company's financial position, including assets, liabilities, and equity, at specific reporting dates Condensed Consolidated Balance Sheets (in thousands) | Item | Sep 30, 2021 | Dec 31, 2020 (As restated) | | :----------------------------------- | :----------- | :------------------------- | | Total assets | $1,481,916 | $1,367,325 | | Total liabilities | $1,238,250 | $1,051,753 | | Total stockholders' equity | $243,666 | $315,572 | - Total assets increased by **$114.6 million**, primarily driven by increases in property and equipment, goodwill (due to Redflex acquisition), and other non-current assets[14](index=14&type=chunk)[57](index=57&type=chunk)[63](index=63&type=chunk) - Total liabilities increased by **$186.5 million**, mainly due to higher long-term debt from refinancing and the Redflex acquisition, and increases in accounts payable and accrued liabilities[14](index=14&type=chunk)[57](index=57&type=chunk)[67](index=67&type=chunk) - Total stockholders' equity decreased by **$71.9 million**, influenced by accumulated deficit and accumulated other comprehensive loss, despite net income[14](index=14&type=chunk)[18](index=18&type=chunk)[106](index=106&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This statement presents the company's revenues, expenses, and net income over specific reporting periods Condensed Consolidated Statements of Operations (in thousands, except per share data) | Item | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 (As restated) | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 (As restated) | | :------------------------------------------ | :------------------------------ | :-------------------------------------------- | :----------------------------- | :------------------------------------------- | | Total revenue | $162,095 | $96,908 | $380,610 | $293,430 | | Income from operations | $41,874 | $15,268 | $75,131 | $27,731 | | Net income | $27,306 | $11,086 | $22,383 | $9,504 | | Basic net income per share | $0.17 | $0.07 | $0.14 | $0.06 | | Diluted net income per share | $0.14 | $0.07 | $0.14 | $0.06 | - Total revenue increased by **67.3%** for the three months and **29.7%** for the nine months ended September 30, 2021, primarily driven by service revenue growth and the Redflex acquisition[16](index=16&type=chunk)[147](index=147&type=chunk)[159](index=159&type=chunk)[175](index=175&type=chunk) - Net income increased by **146.3%** to **$27.3 million** for the three months and **135.5%** to **$22.4 million** for the nine months ended September 30, 2021, reflecting improved operating performance[16](index=16&type=chunk)[173](index=173&type=chunk)[190](index=190&type=chunk) - Basic EPS increased from **$0.07** to **$0.17** for the three months and from **$0.06** to **$0.14** for the nine months ended September 30, 2021[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement outlines changes in the company's equity components, including net income, share repurchases, and other comprehensive income - Stockholders' equity decreased from **$315.572 million** at December 31, 2020, to **$243.666 million** at September 30, 2021[18](index=18&type=chunk) - Key changes include a **$100 million** share repurchase and retirement, net income contributions, and adjustments to additional paid-in capital and accumulated deficit[18](index=18&type=chunk)[106](index=106&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities over specific reporting periods Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 (As restated) | | :----------------------------------- | :----------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $129,284 | $44,350 | | Net cash used in investing activities | $(122,412) | $(18,250) | | Net cash provided by (used in) financing activities | $5,335 | $(27,949) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $10,300 | $(2,723) | - Net cash provided by operating activities significantly increased by **$84.9 million** to **$129.3 million** for the nine months ended September 30, 2021, driven by improved cash collections, especially from NYCDOT, and better operating performance[147](index=147&type=chunk)[196](index=196&type=chunk) - Net cash used in investing activities increased to **$122.4 million**, primarily due to the Redflex acquisition (**$107.0 million**)[198](index=198&type=chunk) - Net cash provided by financing activities was **$5.3 million**, a shift from a **$27.9 million** usage in the prior year, reflecting debt refinancing and a **$100 million** share repurchase[199](index=199&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Description of Business](index=10&type=section&id=Note%201.%20Description%20of%20Business) This note outlines the company's core business activities, segments, and global operational scope - Verra Mobility Corporation provides integrated technology solutions and services for commercial fleets, rental car companies, and government agencies globally, primarily in the US, Australia, Europe, and Canada[24](index=24&type=chunk) - Commercial Services Segment: Offers toll and violation management solutions, and title and registration services for commercial fleets and rental car industries in North America and Europe - Government Solutions Segment: Provides photo enforcement solutions and services, including speed, red-light, school bus stop arm, and bus lane enforcement, expanding internationally through the Redflex acquisition [2. Significant Accounting Policies](index=10&type=section&id=Note%202.%20Significant%20Accounting%20Policies) This note details the key accounting principles, estimates, and judgments applied in preparing the financial statements - The company restated previously issued financial statements to adjust for private placement warrants, resulting in increases of **$4.4 million** and **$11.5 million** to net income for the three and nine months ended September 30, 2020, respectively[29](index=29&type=chunk)[30](index=30&type=chunk) Significant Customer Revenue Concentrations (as % of total revenue) | Customer | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | City of New York Department of Transportation | 25.5% | 32.7% | 25.6% | 32.0% | | Hertz Corporation | 12.9% | 10.4% | 13.2% | 12.1% | | Avis Budget Group, Inc. | 13.5% | 9.3% | 12.8% | 9.5% | | Enterprise Holdings, Inc. | 10.9% | 13.4% | 12.4% | 10.9% | - The allowance for credit loss increased to **$14.7 million** at September 30, 2021, from **$11.5 million** at December 31, 2020, reflecting improved economic conditions for Commercial Services (All other) but increased estimates for Commercial Services (Driver-billed) due to higher revenue volume[14](index=14&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - Accounting Standards Adopted: ASU 2018-13 (Fair Value Measurement), ASU 2019-12 (Income Taxes), and ASU 2020-06 (Convertible Instruments) were adopted in Q1 2021, with no material impact on financial statements, except for relevant disclosures for private placement warrant liabilities - Accounting Standards Not Yet Adopted: ASU 2020-04 (Reference Rate Reform),

Verra Mobility Corp (NASDAQ:VRRM) Q2 2021 Results Earnings Conference Call August 9, 2021 5:00 PM ET Company Participants Sajid Daudi - Vice President, Investor Relations David Roberts - President and Chief Executive Officer Patricia Chiodo - Chief Financial Officer Conference Call Participants Nik Cremo - Credit Suisse Daniel Moore - CJS Securities Dave Koning - Baird James Faucette - Morgan Stanley Trevor Bowers - Northcoast Research Louie DiPalma - William Blair Operator Good day. And welcome to the Verr ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR Commission File Number: 001-37979 VERRA MOBILITY CORPORATION (Exact name of registrant as specified in its charter) 1150 North Alma School Road 85201 Mesa, Arizona (Zip Code) (Address of Principal Executive Of ices) (480) 443-7000 (Registrant's telephone number, including area cod ...

VERRA Investor Overview Verra Mobility Q1 Investor Presentation For the Quarter Ended March 31, 2021 Forward-looking statements This presentation includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "forecast," "intend," "seek," "target," "anticipate," "believe," "expect," "estimate," "plan," "outlook," and "project" and other sim ...

Verra Mobility Corp (NASDAQ:VRRM) Q1 2021 Earnings Conference Call May 17, 2021 5:00 PM ET Company Participants Sajid Daudi - Vice President, Investor Relations David Roberts - President and Chief Executive Officer Patricia Chiodo - Chief Financial Officer Conference Call Participants Justin Forsythe - Crédit Suisse Daniel Moore - CJS Securities James Faucette - Morgan Stanley David Koning - Robert W. Baird & Co. Louie DiPalma - William Blair Keith Housum - Northcoast Research Partners Sameer Kalucha - Deut ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ___________. Commission File Number: 001-37979 VERRA MOBILITY CORPORATION (Exact name of registrant as specified in its charter) Delaware 81 ...

Financial Data and Key Metrics Changes - The company's fourth quarter revenue declined 11% year-over-year to $100.2 million, with adjusted EBITDA at $45.8 million, down 23% year-over-year [10] - For the full year 2020, revenue decreased 12% year-over-year to $393.6 million, and adjusted EBITDA fell 25% year-over-year to $181.8 million [10][26] - The adjusted EBITDA margin for the full year was 46.2%, reflecting strong cost control measures despite revenue declines [27] Business Segment Data and Key Metrics Changes - The Commercial Services segment reported Q4 revenues of $48.2 million and adjusted EBITDA of $25.2 million, with a 29% decline in service revenue year-over-year [11][32] - The Government Solutions segment saw revenues of $52 million in Q4, up from $44.3 million in the same quarter of the previous year, with adjusted EBITDA increasing 18.1% to $20.6 million [14][35] - Full year service revenue for the Government Solutions segment grew by 11% to $155.4 million, driven by the expansion of the school zone speed program [33] Market Data and Key Metrics Changes - The U.S. rental car market remains challenged due to COVID-19, impacting decision-making and resource availability for partners [13] - The company anticipates a slow recovery in the Commercial Services segment, expecting to return to 2019 service revenue levels by late 2021 or early 2022 [21] Company Strategy and Development Direction - The company views mergers and acquisitions as a strategic growth component, with a pending transaction with Redflex Holdings expected to close in late May 2021 [19][20] - The focus will be on geographic expansion and leveraging technology capabilities from the Redflex acquisition to enhance service offerings [45][47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future as vaccination efforts progress, expecting a decline in pandemic-related impacts on business throughout 2021 [8][9] - The company remains cautious about providing specific guidance due to ongoing uncertainties related to COVID-19's impact on travel and school reopening [40] Other Important Information - The New York Department of Transportation accounted for 31.1% of total revenue in 2020, with outstanding receivables of approximately $99 million, representing nearly 59% of the company's accounts receivable balance [29] - The company generated $22.6 million in free cash flow for the full year, maintaining a cash balance of $120.3 million at year-end [28][39] Q&A Session Summary Question: Can you discuss the Redflex opportunity and potential cross-sell? - Management indicated that opportunities are more geographic-based rather than product-based, with potential for international expansion and synergies in the U.S. [45][47] Question: What is the timeline for achieving synergies post-acquisition? - Management expects to focus on identifying key areas for synergy in the first 12 months, with technology integration taking longer [51][52] Question: How do you see the service revenue trends for Q1 2021? - Management anticipates Q1 service revenue to be slightly below Q4, with year-over-year growth expected to resume in Q2 [54][55] Question: What is the status of the New York City contract and outstanding receivables? - Management does not expect the contract to be extended before payment for outstanding receivables, which are likely to remain unresolved into Q2 [58][69] Question: How has the tolling business performed during the pandemic? - Management clarified that while the overall adoption rate has not significantly changed, the number of billable days has improved, leading to higher revenue per rental agreement [72]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________. Commission File Number 001-37979 VERRA MOBILITY CORPORATION (Exact name of registrant as specified in its charter) (State of Incorporation) (I.R.S ...

S VERRITY MOBILE Spire Credit Suisse Investor Conference December 1, 2020 For the Quarter Ended September 30, 2020 Forward-looking statements This presentation includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "forecast," "intend," "seek," "target," "anticipate," "believe," "expect," "estimate," "plan," "outlook," and "project" ...

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section outlines the forward-looking nature of statements in the report, subject to various risks and uncertainties, with no obligation for future updates - This report contains forward-looking statements regarding future operating results, financial position, business strategy, plans, products, services, technology offerings, market conditions, growth, expansion, and objectives[8](index=8&type=chunk) - These statements are subject to risks and uncertainties, including disruptions from the COVID-19 pandemic, its impact on rental car and photo enforcement revenues, customer concentration, legislative changes, competition, technological developments, and cybersecurity breaches[9](index=9&type=chunk)[10](index=10&type=chunk) - The company does not undertake any obligation to update these forward-looking statements after the report date[11](index=11&type=chunk) [PART I—FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements.](index=5&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited condensed consolidated financial statements for Verra Mobility Corporation, including the balance sheets, statements of operations and comprehensive income (loss), statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining significant accounting policies, acquisitions, and financial instrument details [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates Condensed Consolidated Balance Sheets (September 30, 2020 vs. December 31, 2019) | Metric (in thousands) | Sep 30, 2020 | Dec 31, 2019 | | :-------------------- | :----------- | :----------- | | Total assets | $1,371,971 | $1,407,426 | | Total liabilities | $1,028,049 | $1,068,079 | | Total stockholders' equity | $343,922 | $339,347 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section presents the company's financial performance over periods, including revenue, operating income, and net income (loss) Condensed Consolidated Statements of Operations (Three Months Ended September 30) | Metric (in thousands) | 2020 | 2019 | | :-------------------- | :--- | :--- | | Total revenue | $96,908 | $128,240 | | Income from operations | $15,268 | $36,659 | | Net income (loss) | $6,686 | $17,752 | | Basic EPS | $0.04 | $0.11 | | Diluted EPS | $0.04 | $0.11 | Condensed Consolidated Statements of Operations (Nine Months Ended September 30) | Metric (in thousands) | 2020 | 2019 | | :-------------------- | :--- | :--- | | Total revenue | $293,430 | $336,276 | | Income from operations | $27,731 | $72,261 | | Net income (loss) | $(2,029) | $24,163 | | Basic EPS | $(0.01) | $0.15 | | Diluted EPS | $(0.01) | $0.15 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity, including net income (loss) and stock-based compensation Changes in Stockholders' Equity (Nine Months Ended September 30, 2020) | Metric (in thousands) | Dec 31, 2019 | Sep 30, 2020 | | :-------------------- | :----------- | :----------- | | Total Stockholders' Equity | $339,347 | $343,922 | | Net income (loss) (9M) | N/A | $(2,029) | | Stock-based compensation (9M) | N/A | $9,192 | - The company issued **5,000,000 Earn-Out Shares** to the Platinum Stockholder due to stock price thresholds being met on April 26, 2019, and January 27, 2020[88](index=88&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Nine Months Ended September 30) | Metric (in thousands) | 2020 | 2019 | | :-------------------- | :--- | :--- | | Net cash provided by operating activities | $44,350 | $95,586 | | Net cash used in investing activities | $(18,250) | $(17,478) | | Net cash used in financing activities | $(27,949) | $(7,126) | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(2,723) | $70,639 | | Cash, cash equivalents and restricted cash - end of period | $129,707 | $137,720 | - Operating cash flow decreased by **$51.2 million**, primarily due to a **$26.2 million decrease** in net income (loss) and a **$34.5 million decrease** in changes in operating assets and liabilities, including increased accounts receivable and decreased accounts payable[170](index=170&type=chunk)[171](index=171&type=chunk) - Financing cash flow increased by **$20.8 million**, mainly due to a **$19.7 million mandatory prepayment** of excess cash flows on the First Lien Term Loan and costs associated with its refinancing[173](index=173&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Description of Business](index=10&type=section&id=Note%201.%20Description%20of%20Business) This note describes Verra Mobility Corporation's business, including its integrated technology solutions and operating segments - Verra Mobility Corporation provides integrated technology solutions and services to commercial fleets, rental car companies, and state/local governments across the US, Canada, and Europe[27](index=27&type=chunk) - The company operates in two segments: Commercial Services (toll and violation management, title/registration) and Government Solutions (red-light, speed, school bus stop arm, and bus lane enforcement)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) [Note 2. Significant Accounting Policies](index=10&type=section&id=Note%202.%20Significant%20Accounting%20Policies) This note details the significant accounting policies adopted by the company and the impact of recent accounting pronouncements - The company adopted ASU 2017-04 (simplifying goodwill impairment) as of January 1, 2020, with no material impact on financial statements[33](index=33&type=chunk) - The CECL standard (ASU 2016-13) was adopted on January 1, 2020, resulting in a **$0.7 million cumulative effect adjustment** (net of tax) to accumulated deficit, increasing the allowance for credit loss[34](index=34&type=chunk)[35](index=35&type=chunk) - ASU 2019-12 (simplifying income tax accounting) and ASU 2020-04 (reference rate reform) are effective for fiscal years beginning after December 15, 2020, and their impact is still being determined[36](index=36&type=chunk)[37](index=37&type=chunk) [Note 3. Acquisition](index=12&type=section&id=Note%203.%20Acquisition) This note provides details on the acquisition of Pagatelia S.L., including the purchase price and goodwill allocation - On October 31, 2019, Verra Mobility acquired Pagatelia S.L., a Spanish company providing electronic consumer tolling and parking solutions, for **$26.6 million**[38](index=38&type=chunk) Pagatelia Acquisition Purchase Price Allocation (in thousands) | Asset/Liability | Amount | | :-------------- | :----- | | Total assets acquired | $35,442 | | Total liabilities assumed | $8,846 | | Total purchase price | $26,596 | | Goodwill | $17,528 | - Goodwill from the Pagatelia acquisition was assigned to the Commercial Services segment and is not expected to be tax-deductible[38](index=38&type=chunk) [Note 4. Accounts Receivable, Net](index=12&type=section&id=Note%204.%20Accounts%20Receivable,%20Net) This note details accounts receivable, allowance for credit loss, and significant customer concentrations Accounts Receivable and Allowance for Credit Loss (September 30, 2020, in thousands) | Segment | Accounts Receivable, net | Allowance for Credit Loss | | :-------------------- | :----------------------- | :------------------------ | | Commercial Services (Driver-billed) | $8,909 | $1,368 | | Commercial Services (All other) | $53,866 | $5,242 | | Government Solutions | $78,244 | $3,536 | | **Total** | **$141,019** | **$10,146** | - Credit loss expense for the nine months ended September 30, 2020, was **$10.6 million**, with write-offs (net of recoveries) of **$8.9 million**[42](index=42&type=chunk) - The City of New York Department of Transportation (NYCDOT) represented **50.1% of accounts receivable, net**, as of September 30, 2020, with **$52.1 million** in outstanding invoices under the Emergency Contract for which no payments have been received[43](index=43&type=chunk)[168](index=168&type=chunk) [Note 5. Prepaid Expenses and Other Current Assets](index=14&type=section&id=Note%205.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This note provides a breakdown of prepaid expenses and other current assets, including prepaid tolls and services Prepaid Expenses and Other Current Assets (in thousands) | Item | Sep 30, 2020 | Dec 31, 2019 | | :-------------------- | :----------- | :----------- | | Prepaid tolls | $7,214 | $10,116 | | Prepaid services | $4,014 | $5,201 | | Deposits | $3,627 | $3,642 | | **Total prepaid expenses and other current assets** | **$24,714** | **$26,491** | [Note 6. Goodwill and Intangible Assets](index=14&type=section&id=Note%206.%20Goodwill%20and%20Intangible%20Assets) This note details the company's goodwill and intangible assets, including amortization expense and impairment tests Goodwill by Segment (in thousands) | Segment | Dec 31, 2019 | Sep 30, 2020 | | :-------------------- | :----------- | :----------- | | Commercial Services | $424,404 | $423,595 | | Government Solutions | $159,746 | $159,746 | | **Total** | **$584,150** | **$583,341** | Intangible Assets, Net (in thousands) | Item | Sep 30, 2020 | Dec 31, 2019 | | :-------------------- | :----------- | :----------- | | Trademarks | $5,316 | $13,021 | | Non-compete agreements | $28,294 | $37,715 | | Customer relationships | $252,477 | $283,630 | | Developed technology | $77,439 | $100,077 | | **Total intangible assets, net** | **$363,526** | **$434,443** | - Amortization expense was **$23.6 million** for Q3 2020 and **$70.6 million** for 9M 2020, with estimated future amortization for 2021 at **$85.5 million**[46](index=46&type=chunk)[48](index=48&type=chunk) - An interim goodwill impairment test was performed as of March 31, 2020, and June 30, 2020, due to a significant decline in market capitalization related to COVID-19, but no impairment was found[50](index=50&type=chunk)[51](index=51&type=chunk) [Note 7. Impairment of Other Long-Lived Assets](index=15&type=section&id=Note%207.%20Impairment%20of%20Other%20Long-Lived%20Assets) This note discusses the assessment of impairment indicators for long-lived assets and any recognized impairment charges - No impairment indicators for other long-lived assets were identified as of September 30, 2020[53](index=53&type=chunk) - A **$5.9 million impairment charge** was recognized in the Government Solutions segment for the nine months ended September 30, 2019, due to Texas legislation banning red-light photo enforcement programs[54](index=54&type=chunk) [Note 8. Accrued Liabilities](index=16&type=section&id=Note%208.%20Accrued%20Liabilities) This note provides a breakdown of accrued liabilities, including related party TRA liability and accrued salaries Accrued Liabilities (in thousands) | Item | Sep 30, 2020 | Dec 31, 2019 | | :-------------------- | :----------- | :----------- | | Current portion of related party TRA liability | $4,636 | $5,730 | | Accrued salaries and wages | $3,313 | $10,319 | | Current portion of operating lease liabilities | $3,137 | $2,970 | | **Total accrued liabilities** | **$17,309** | **$25,277** | [Note 9. Long-term Debt](index=16&type=section&id=Note%209.%20Long-term%20Debt) This note details the company's long-term debt, including the First Lien Term Loan, refinancing, and interest rates Long-term Debt Summary (in thousands) | Item | Sep 30, 2020 | Dec 31, 2019 | | :-------------------- | :----------- | :----------- | | First Lien Term Loan, due Feb 28, 2025 | $867,918 | $894,421 | | Less: original issue discounts | $(4,218) | $(4,778) | | Less: unamortized deferred financing costs | $(20,972) | $(23,178) | | Total long-term debt | $842,728 | $866,465 | | Less: current portion of long-term debt | $(9,104) | $(28,779) | | **Total long-term debt, net of current portion** | **$833,624** | **$837,686** | - The First Lien Term Loan was refinanced in February 2020, reducing the applicable margin by **50 basis points**, resulting in an interest rate of **3.4%** at September 30, 2020[57](index=57&type=chunk)[64](index=64&type=chunk) - A **$19.7 million mandatory prepayment** of excess cash flow was made in Q1 2020[58](index=58&type=chunk) - The company had **$44.0 million** available under its Revolver as of September 30, 2020, with no outstanding borrowings[59](index=59&type=chunk) - Interest expense, net, decreased by **$5.4 million** for Q3 2020 (YoY) and **$15.0 million** for 9M 2020 (YoY), primarily due to lower interest rates and the refinancing[62](index=62&type=chunk)[144](index=144&type=chunk)[160](index=160&type=chunk) - The company was compliant with all 2018 Credit Facilities covenants as of September 30, 2020[61](index=61&type=chunk) [Note 10. Fair Value of Financial Instruments](index=17&type=section&id=Note%2010.%20Fair%20Value%20of%20Financial%20Instruments) This note provides information on the fair value of the company's financial instruments, including long-term debt Fair Value of Long-term Debt (in thousands) | Item | Fair Value Hierarchy Level | Carrying Amount (Sep 30, 2020) | Estimated Fair Value (Sep 30, 2020) | | :-------------------- | :----------------------- | :------------------------------- | :---------------------------------- | | Total long-term debt | 2 | $842,728 | $854,899 | - The carrying amounts for cash, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short-term maturity[69](index=69&type=chunk) [Note 11. Net Income (Loss) Per Share](index=18&type=section&id=Note%2011.%20Net%20Income%20(Loss)%20Per%20Share) This note presents the calculation of basic and diluted net income (loss) per share for the reported periods Net Income (Loss) Per Share (Three Months Ended September 30) | Metric | 2020 | 2019 | | :-------------------- | :--- | :--- | | Net income (loss) (in thousands) | $6,686 | $17,752 | | Basic EPS | $0.04 | $0.11 | | Diluted EPS | $0.04 | $0.11 | Net Income (Loss) Per Share (Nine Months Ended September 30) | Metric | 2020 | 2019 | | :-------------------- | :--- | :--- | | Net income (loss) (in thousands) | $(2,029) | $24,163 | | Basic EPS | $(0.01) | $0.15 | | Diluted EPS | $(0.01) | $0.15 | - Antidilutive shares excluded from diluted EPS calculations for the nine months ended September 30, 2020, totaled **28,969 thousand**, including contingently issuable shares and warrants[71](index=71&type=chunk) [Note 12. Income Taxes](index=18&type=section&id=Note%2012.%20Income%20Taxes) This note discusses the company's effective income tax rates, the impact of the CARES Act, and unrecognized tax benefits - The effective income tax rate was **37.4%** for Q3 2020 (vs. **27.4%** in Q3 2019) and **276.9%** for 9M 2020 (vs. **28.8%** in 9M 2019), primarily due to lower pre-tax income[76](index=76&type=chunk)[145](index=145&type=chunk)[163](index=163&type=chunk) - The company applied certain provisions of the CARES Act, including increased interest deduction and delayed FICA payments[75](index=75&type=chunk) - Unrecognized tax benefits decreased by **$1.0 million** during the nine months ended September 30, 2020, primarily due to the statute expiration of prior year tax positions[77](index=77&type=chunk) [Note 13. Stock-Based Compensation](index=19&type=section&id=Note%2013.%20Stock-Based%20Compensation) This note details the stock-based compensation expense recognized by the company across different expense categories Stock-Based Compensation Expense (in thousands) | Item | Q3 2020 | Q3 2019 | 9M 2020 | 9M 2019 | | :-------------------- | :------ | :------ | :------ | :------ | | Operating expenses | $183 | $138 | $697 | $614 | | Selling, general and administrative expenses | $2,970 | $2,333 | $8,495 | $6,812 | | **Total stock-based compensation expense** | **$3,153** | **$2,471** | **$9,192** | **$7,426** | [Note 14. Related Party Transactions](index=19&type=section&id=Note%2014.%20Related%20Party%20Transactions) This note describes transactions with related parties, including the Tax Receivable Agreement liability and Earn-Out Shares - The Tax Receivable Agreement (TRA) liability increased by **$4.4 million** for the nine months ended September 30, 2020, due to higher estimated state tax rates, totaling **$70.2 million**[81](index=81&type=chunk)[82](index=82&type=chunk)[161](index=161&type=chunk) - **5,000,000 Earn-Out Shares** of Class A Common Stock were issued to the Platinum Stockholder in April 2019 and January 2020, as the stock price exceeded **$13.00** and **$15.50** thresholds, respectively[84](index=84&type=chunk)[88](index=88&type=chunk) - An additional **5,000,000 Earn-Out Shares** remain contingently issuable if further stock price thresholds (**$18.00** and **$20.50**) are met within five years of the Business Combination[84](index=84&type=chunk)[85](index=85&type=chunk)[87](index=87&type=chunk) [Note 15. Commitments and Contingencies](index=20&type=section&id=Note%2015.%20Commitments%20and%20Contingencies) This note outlines the company's outstanding commitments, contingencies, and the financial impact of legal settlements - Outstanding letters of credit totaled **$6.3 million**, and non-cancelable purchase commitments were **$8.1 million** as of September 30, 2020[89](index=89&type=chunk) - The company recognized a **$1.4 million gain** from the HTA Settlement Agreement and an additional **$1.4 million gain** from third-party insurance proceeds related to this matter in Q3 2020[94](index=94&type=chunk)[144](index=144&type=chunk)[162](index=162&type=chunk) - Legal and regulatory actions are not expected to have a material adverse impact on the company's financial position[93](index=93&type=chunk) - The company expensed **$0.6 million** in Q3 2020 and **$1.1 million** in 9M 2020 for severance and other employee separation costs[92](index=92&type=chunk) [Note 16. Segment Reporting](index=21&type=section&id=Note%2016.%20Segment%20Reporting) This note provides financial information by operating segment, detailing revenues and segment profit (loss) - The company operates in two segments: Commercial Services (toll and violation management, title and registration) and Government Solutions (traffic safety programs and products)[95](index=95&type=chunk) - Segment profit (loss) is measured based on revenues and income (loss) from operations before depreciation, amortization, gain (loss) on asset disposal, and stock-based compensation, and is inclusive of other income, net[96](index=96&type=chunk) Segment Revenue and Profit (Three Months Ended September 30, 2020, in thousands) | Segment | Total Revenue | Segment Profit (Loss) | | :-------------------- | :------------ | :-------------------- | | Commercial Services | $44,153 | $30,832 | | Government Solutions | $52,755 | $22,675 | | Corporate and Other | $0 | $(514) | | **Total** | **$96,908** | **$52,993** | Segment Revenue and Profit (Nine Months Ended September 30, 2020, in thousands) | Segment | Total Revenue | Segment Profit (Loss) | | :-------------------- | :------------ | :-------------------- | | Commercial Services | $132,667 | $71,434 | | Government Solutions | $160,763 | $64,223 | | Corporate and Other | $0 | $(1,302) | | **Total** | **$293,430** | **$134,355** | [Note 17. Guarantor/Non-Guarantor Financial Information](index=23&type=section&id=Note%2017.%20Guarantor/Non-Guarantor%20Financial%20Information) This note presents condensed consolidating financial information for the parent company, guarantor, and non-guarantor subsidiaries - This note provides condensed consolidating financial information for Verra Mobility Corporation (ultimate parent), its combined guarantor subsidiary (VM Consolidated, Inc.), and combined non-guarantor subsidiaries[99](index=99&type=chunk)[100](index=100&type=chunk) - VM Consolidated, Inc. is the lead borrower of the First Lien Term Loan and Revolver, and is a wholly-owned guarantor subsidiary[99](index=99&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting the significant negative impact of the COVID-19 pandemic on revenues, particularly in the Commercial Services segment (rental car industry) and Government Solutions segment (school closures, reduced traffic) It details revenue and expense trends for the three and nine months ended September 30, 2020, compared to 2019, and discusses liquidity, capital resources, and debt [Recent Events Affecting Our Operating Results](index=30&type=section&id=Recent%20Events%20Affecting%20Our%20Operating%20Results) This section discusses the significant impact of the COVID-19 pandemic on the company's revenues and operations - The COVID-19 pandemic significantly disrupted the global economy and travel industry, leading to reduced airline travel and widespread restrictions[114](index=114&type=chunk) - Commercial Services segment revenues decreased significantly due to reduced rental car demand and fleet sizes; Hertz, a key customer, filed for Chapter 11 bankruptcy[115](index=115&type=chunk) - Government Solutions segment revenues were negatively impacted by school closures affecting school bus stop arm and school zone speed cameras, and reductions in vehicle traffic[116](index=116&type=chunk) - The company shifted most of its workforce to remote operations in March 2020 but has not experienced significant operational disruptions[117](index=117&type=chunk) [Business Overview](index=30&type=section&id=Business%20Overview) This section provides an overview of Verra Mobility's business as a leading provider of smart mobility technology solutions - Verra Mobility is a leading provider of smart mobility technology solutions and services in the US, Canada, and Europe[119](index=119&type=chunk) - Solutions include toll and violations management, title and registration, automated safety solutions, and other data-driven solutions for RACs, FMCs, large fleet owners, municipalities, and school districts[119](index=119&type=chunk) [Segment Information](index=31&type=section&id=Segment%20Information) This section details the company's Commercial Services and Government Solutions segments and their respective offerings - Commercial Services offers toll and violation management and title/registration services for RACs and FMCs in North America, and violations processing/consumer tolling in Europe[125](index=125&type=chunk) - Government Solutions provides red-light, speed, school bus stop arm, and bus lane enforcement solutions for municipalities and local government agencies[125](index=125&type=chunk) - Segment performance is based on revenues and income (loss) from operations before depreciation, amortization, gain/loss on asset disposal, and stock-based compensation, and includes other income, net[121](index=121&type=chunk) [Executive Summary](index=31&type=section&id=Executive%20Summary) This section summarizes the company's strategic focus, key financial highlights, and cash position - The company's strategy focuses on growing existing customer revenues, expanding into adjacent markets through innovation or acquisition, and reducing operating costs[122](index=122&type=chunk) Key Financial Highlights (Nine Months Ended September 30, in millions) | Metric | 2020 | 2019 | | :-------------------- | :--- | :--- | | Total revenue | $293.4 | $336.3 | | Cash flows from operating activities | $44.4 | $95.6 | | Interest expense, net | $31.6 | $46.6 | - Cash on hand was **$129.2 million** as of September 30, 2020[126](index=126&type=chunk) [Primary Components of Our Operating Results](index=31&type=section&id=Primary%20Components%20of%20Our%20Operating%20Results) This section breaks down the main components of the company's revenue and expenses impacting operating results - Total revenue comprises service revenue (Commercial Services: toll/violation management, title/registration; Government Solutions: photo enforcement operations) and product sales (Government Solutions: photo enforcement equipment)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - Key expenses include cost of service revenue (third-party collection/professional services), cost of product sales (equipment acquisition/installation), operating expenses (payroll, call center, transaction processing), SG&A (payroll, leases, professional services), D&A, impairment, interest expense, TRA adjustment, and other income (volume rebates, foreign currency)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for the three and nine months ended September 30, 2020, compared to 2019 [Three Months Ended September 30, 2020 Compared to Three Months Ended September 30, 2019](index=33&type=section&id=Three%20Months%20Ended%20September%2030,%202020%20Compared%20to%20Three%20Months%20Ended%20September%2030,%202019) This section compares the company's financial performance for the third quarter of 2020 against the same period in 2019 - For Q3 2020, total revenue decreased by **24.4%** to **$96.9 million**, driven by a **43.1% decline** in Commercial Services revenue due to COVID-19's impact on rental car companies, partially offset by a **17.2% increase** in Government Solutions service revenue from speed program expansion Net income fell by **62.3%** to **$6.7 million**[135](index=135&type=chunk)[136](index=136&type=chunk)[146](index=146&type=chunk) Q3 2020 vs. Q3 2019 Financial Performance (in thousands) | Metric | 2020 | 2019 | Change ($) | Change (%) | | :-------------------- | :--- | :--- | :--------- | :--------- | | Total revenue | $96,908 | $128,240 | $(31,332) | (24.4)% | | Service revenue | $82,980 | $110,757 | $(27,777) | (25.1)% | | Product sales | $13,928 | $17,483 | $(3,555) | (20.3)% | | Income from operations | $15,268 | $36,659 | $(21,391) | (58.4)% | | Net income | $6,686 | $17,752 | $(11,066) | (62.3)% | - Operating expenses decreased by **$6.4 million (19.5%)** due to lower employee and transaction processing costs, while SG&A decreased by **$3.8 million (17.8%)** due to reduced credit loss expense and cost cutbacks[142](index=142&type=chunk)[143](index=143&type=chunk) - Other income, net, increased by **$2.3 million**, primarily due to gains from the HTA Settlement Agreement and insurance proceeds[144](index=144&type=chunk) [Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019](index=36&type=section&id=Nine%20Months%20Ended%20September%2030,%202020%20Compared%20to%20Nine%20Months%20Ended%20September%2030,%202019) This section compares the company's financial performance for the nine months ended September 30, 2020, against the same period in 2019 - For 9M 2020, total revenue decreased by **12.7%** to **$293.4 million** Commercial Services service revenue declined by **36.3%** due to COVID-19, while Government Solutions product sales surged by **97.4%** and service revenue grew by **8.7%** from speed program expansion The company reported a net loss of **$(2.0) million**, a significant decrease from **$24.2 million** net income in 2019[149](index=149&type=chunk)[150](index=150&type=chunk)[154](index=154&type=chunk)[164](index=164&type=chunk) 9M 2020 vs. 9M 2019 Financial Performance (in thousands) | Metric | 2020 | 2019 | Change ($) | Change (%) | | :-------------------- | :--- | :--- | :--------- | :--------- | | Total revenue | $293,430 | $336,276 | $(42,846) | (12.7)% | | Service revenue | $245,292 | $311,884 | $(66,592) | (21.4)% | | Product sales | $48,138 | $24,392 | $23,746 | 97.4% | | Income from operations | $27,731 | $72,261 | $(44,530) | (61.6)% | | Net (loss) income | $(2,029) | $24,163 | $(26,192) | (108.4)% | - Operating expenses decreased by **$8.6 million (9.1%)** due to lower employee wages and transaction processing costs[157](index=157&type=chunk) - SG&A expenses increased by **$1.5 million (2.4%)**, primarily due to a **$5.3 million increase** in credit loss expense under the new CECL standard and higher stock-based compensation, partially offset by cost cutbacks[158](index=158&type=chunk) - A **$4.4 million charge** was recorded for the tax receivable agreement adjustment due to higher estimated state tax rates[161](index=161&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's sources of liquidity, cash flow trends, and ability to meet financial obligations - The company's primary liquidity sources are cash flow from operations and borrowings under its 2018 Credit Facilities[165](index=165&type=chunk) - Cash provided by operating activities decreased by **$51.2 million** to **$44.4 million** for the nine months ended September 30, 2020, primarily due to lower net income and increased accounts receivable[170](index=170&type=chunk)[171](index=171&type=chunk) - Cash used in financing activities increased to **$27.9 million** for 9M 2020, mainly due to a **$19.7 million mandatory prepayment** of excess cash flows on the First Lien Term Loan[173](index=173&type=chunk) - As of September 30, 2020, the company had **$44.0 million** available for borrowing under its Revolver[178](index=178&type=chunk) - The company believes existing cash, operating cash flows, and Revolver availability will be sufficient to meet operating cash requirements and service debt obligations for at least the next 12 months[167](index=167&type=chunk) [Off-Balance Sheet Arrangements](index=41&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any off-balance sheet arrangements as of the reporting date - The company had no off-balance sheet arrangements as of September 30, 2020[183](index=183&type=chunk) [Critical Accounting Policies, Estimates and Judgments](index=41&type=section&id=Critical%20Accounting%20Policies,%20Estimates%20and%20Judgments) This section highlights the significant estimates and judgments made by management in preparing the financial statements - The preparation of financial statements requires management to make significant estimates and assumptions, including fair values in business combinations, carrying amounts of long-lived assets and goodwill, allowance for credit loss, deferred tax asset valuation allowances, asset retirement obligations, contingent consideration, and loss contingencies[184](index=184&type=chunk) [Recent Accounting Pronouncements](index=41&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for details on recent accounting pronouncements and their impact - Refer to Note 2, Significant Accounting Policies, in Item 1, Financial Statements, for details on recent accounting pronouncements[186](index=186&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate market risk due to its variable-rate First Lien Term Loan, which had an outstanding balance of $867.9 million at September 30, 2020 A 1% movement in interest rates would result in an approximately $8.7 million change in annual interest expense The company has not engaged in hedging activities and does not expect to - The company is exposed to interest rate market risk from its variable-rate First Lien Term Loan, with an outstanding balance of **$867.9 million** at September 30, 2020[187](index=187&type=chunk) - A **1% change** in interest rates would result in an approximately **$8.7 million change** in annual interest expense[187](index=187&type=chunk) - The company has not engaged in and does not expect to engage in hedging activities for market risk[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed ineffective as of September 30, 2020, due to a previously disclosed material weakness in internal control over financial reporting No material changes occurred in internal control over financial reporting during Q3 2020, and remediation efforts are underway, expected to be completed before the end of fiscal year 2020 - Disclosure controls and procedures were not effective as of September 30, 2020, due to a material weakness in internal control over financial reporting[189](index=189&type=chunk) - No material changes in internal control over financial reporting occurred during Q3 2020[190](index=190&type=chunk) - Remediation efforts for the material weakness are ongoing and expected to be completed before the end of fiscal year 2020[191](index=191&type=chunk) [PART II—OTHER INFORMATION](index=43&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This part contains other information, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no material legal proceedings - There are no material legal proceedings to report[193](index=193&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section supplements the risk factors from the Annual Report on Form 10-K, primarily focusing on the adverse impacts of the COVID-19 pandemic Key risks include significant negative effects on business, financial condition, and results of operations due to reduced travel, impacts on rental car customers (e.g., Hertz bankruptcy), and disruptions to photo enforcement programs from school closures and reduced traffic Historical data may not reflect these ongoing impacts - The COVID-19 pandemic has adversely affected the company's business and results of operations, leading to potential decreases in productivity, increased security risks, and delays in customer responses[196](index=196&type=chunk) - Revenues from key rental car customers (Commercial Services segment) and photo enforcement programs (Government Solutions segment) have been negatively impacted by COVID-19, with Hertz filing for bankruptcy[197](index=197&type=chunk)[198](index=198&type=chunk) - Historical financial data may not accurately reflect the ongoing adverse impacts of the COVID-19 pandemic[201](index=201&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds - There were no unregistered sales of equity securities or use of proceeds to report[202](index=202&type=chunk) [Item 3. Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities to report[203](index=203&type=chunk) [Item 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[204](index=204&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) The company reported no other information - There is no other information to report[205](index=205&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of, or incorporated by reference into, the Quarterly Report on Form 10-Q, including merger agreements, corporate documents, warrant agreements, and certifications - The exhibit index includes various documents such as merger agreements, corporate organizational documents, warrant agreements, and certifications (e.g., CEO/CFO certifications)[209](index=209&type=chunk)[210](index=210&type=chunk) [SIGNATURES](index=47&type=section&id=SIGNATURES) This section confirms the official signing of the report by the company's President, CEO, and CFO - The report was signed by David Roberts (President and CEO) and Patricia Chiodo (CFO) on November 5, 2020[214](index=214&type=chunk)