Revenue Growth - Service revenue increased from $166.1 million for the six months ended June 30, 2018, to $201.1 million for the same period in 2019, with acquisitions contributing $21.6 million and existing product expansion contributing $13.4 million[132]. - Service revenue increased by $35.1 million, or 21.1%, to $201.1 million for the six months ended June 30, 2019[167]. - Service revenue increased by $6.0 million, or 6.2%, to $103.1 million for the three months ended June 30, 2019, compared to $97.0 million for the same period in 2018, representing 94.1% of total revenue[151]. - Total revenue for the three months ended June 30, 2019, was $109.6 million, an increase of $11.4 million or 11.6% from $98.2 million in the same period of 2018[150]. - Total revenue for the six months ended June 30, 2019 was $208.0 million, a 24.2% increase from $167.4 million in the same period in 2018[165]. - Product sales surged by $5.4 million, from $1.2 million in Q2 2018 to $6.5 million in Q2 2019, driven primarily by a single customer expanding their school zone speed program[155]. - Product sales rose significantly by 397.8% to $6.9 million for the six months ended June 30, 2019, compared to $1.4 million in the same period in 2018[165]. Operating Expenses and Profitability - Operating expenses as a percentage of total revenue decreased from 31.3% in the six months ended June 30, 2018, to 29.4% in the same period in 2019, indicating improved cost structure[132]. - Operating expenses rose by $3.0 million, or 10.4%, from $28.8 million in Q2 2018 to $31.8 million in Q2 2019, while operating expenses as a percentage of revenue decreased slightly from 29.3% to 29.0%[157]. - Selling, general and administrative expenses decreased by $6.7 million to $20.9 million in Q2 2019, down from $27.6 million in Q2 2018, with a percentage of revenue decline from 28.1% to 19.0%[158]. - Income from operations surged to $35.6 million for the six months ended June 30, 2019, compared to $4.5 million in the same period in 2018, reflecting a 687.5% increase[165]. - The company reported a net income of $3.6 million for the three months ended June 30, 2019, compared to a net loss of $4.8 million in the same period in 2018, marking a turnaround of $8.4 million[150]. - Net income improved to $3.6 million for the three months ended June 30, 2019, compared to a net loss of $4.8 million for the same period in 2018[162]. - Net income for the six months ended June 30, 2019, was $6.4 million, compared to a net loss of $26.9 million for the same period in 2018[214]. - Adjusted EBITDA increased by $5.1 million, or 9.3%, from $54.6 million in Q2 2018 to $59.7 million in Q2 2019, representing 54.5% and 55.6% of total revenue, respectively[150]. - Adjusted EBITDA for the three months ended June 30, 2019, was $59.7 million, compared to $54.6 million for the same period in 2018[214]. - Adjusted EBITDA increased by $22.6 million, or 25.5%, from $88.3 million in 2018 to $110.9 million in 2019[180]. Acquisitions - The acquisition of Highway Toll Administration, LLC, was completed for an aggregate purchase price of $603.3 million, contributing $28.1 million in revenue for the six months ended June 30, 2019[135]. - The acquisition of Euro Parking Collection plc was completed for $62.9 million, contributing $3.2 million in revenue for the six months ended June 30, 2019[137]. Cash Flow and Debt - Cash flows from operating activities for the six months ended June 30, 2019, were $45.8 million, compared to a negative impact of $18.6 million from acquisition-related expenses in the same period of 2018[132]. - Cash provided by operating activities rose from $12.5 million in 2018 to $45.8 million in 2019, an increase of $33.2 million[185]. - Average debt balance decreased from $1.04 billion in the three months ended June 30, 2018, to $900.7 million in the same period in 2019[160]. - Total borrowing under the New First Lien Term Loan was $899 million at June 30, 2019, with an interest rate of 6.15%[218]. - Each 1% movement in interest rates will result in an approximately $9.0 million change in annual interest expense based on the New First Lien Term Loan balance[218]. - Interest expense decreased from $32.2 million in 2018 to $31.7 million in 2019, a reduction of $0.5 million[177]. Tax and Impairment - The effective tax rate changed from (4.7%) in 2018 to 32.6% in 2019, primarily due to higher pretax income across multiple jurisdictions[161]. - The effective tax rate increased from (20.3%) in 2018 to 32.3% in 2019, reflecting higher pretax income[178]. - Impairment of property and equipment included a $5.9 million charge due to the legislative ban on most red-light photo enforcement programs in Texas, impacting the Government Solutions segment[159]. - Impairment charge of $5.9 million recorded in 2019 due to legislative changes affecting the Government Solutions segment[176]. Segment Performance - The company has two operating segments: Commercial Services and Government Solutions, with performance based on revenues and income from operations[130]. - The Government Solutions segment generates service revenue through long-term contracts, with revenue recognized based on service performance or citation issuance[141]. - Government Solutions service revenue decreased by $2.3 million, or 6.2%, to $35.0 million in Q2 2019, primarily due to losses in red-light photo enforcement programs in Miami and Texas[153]. - The average initial term of contracts in the Government Solutions segment is between 3 to 5 years[202]. Other Financial Information - Cash used in investing activities significantly decreased from $(536.5) million in 2018 to $(14.2) million in 2019[189]. - The company had $74.9 million available for borrowing under the New Revolver as of June 30, 2019[195]. - The company incurred $1.1 million in transaction and other related expenses for the six months ended June 30, 2019, primarily related to a secondary offering[214]. - Other income, net increased to $3.3 million for the three months ended June 30, 2019, up from $2.8 million in the same period in 2018, driven by increased tolling activity[160]. - Significant judgments are required to identify contracts with customers and estimate transaction prices under the new revenue standard[206]. - The company has not engaged in any hedging activities during the six months ended June 30, 2019[219].

Revenue Growth - Service revenue increased from $69.0 million in Q1 2018 to $98.1 million in Q1 2019, a growth of 42.1%[130] - Total revenue for Q1 2019 was $98.5 million, up 42.2% from $69.2 million in Q1 2018[148] - Service revenue increased by $29.1 million, or 42.1%, to $98.1 million for the three months ended March 31, 2019, compared to $69.0 million for the same period in 2018[150] - Commercial Services revenue rose by $30.1 million, or 92.9%, from $32.4 million in Q1 2018 to $62.6 million in Q1 2019, with acquisitions contributing $21.6 million to this growth[150] - Government Solutions service revenue decreased by $1.1 million, or 2.9%, to $35.5 million, primarily due to a decline in red light program revenues[151] Profitability - Net income improved significantly from a loss of $22.2 million in Q1 2018 to a net income of $2.8 million in Q1 2019[148] - Operating income for Q1 2019 was $18.0 million, a significant turnaround from an operating loss of $7.3 million in Q1 2018[148] - Net income for Q1 2019 was $2.8 million, a significant improvement from a net loss of $22.2 million in Q1 2018, largely due to reduced acquisition-related expenses[161] - Net income increased by $25.0 million, from a loss of $22.2 million in Q1 2018 to income of $2.8 million in Q1 2019, driven by full-period results from HTA and EPC operations[169] Operating Expenses - Operating expenses as a percentage of total revenue decreased from 34.2% in Q1 2018 to 29.8% in Q1 2019[130] - Operating expenses increased by $5.7 million, or 23.9%, from $23.7 million in Q1 2018 to $29.3 million in Q1 2019, but as a percentage of revenue, they decreased from 34.2% to 29.8%[156] - Total selling, general and administrative expenses decreased by $12.7 million to $20.6 million in Q1 2019, down from $33.3 million in Q1 2018[157] Cash Flow - Cash flows from operating activities for Q1 2019 were $37.4 million, recovering from the $15.6 million impact of HTA acquisition expenses in Q1 2018[130] - Cash provided by operating activities increased by $40.6 million from $(3.2) million in Q1 2018 to $37.4 million in Q1 2019[168] - Cash used in investing activities decreased significantly from $(537.4) million in Q1 2018 to $(9.2) million in Q1 2019, primarily due to the HTA acquisition costs in the prior year[172] - Cash provided by financing activities changed from $548.0 million in Q1 2018 to $(2.3) million in Q1 2019, mainly due to the entry into the 2018 Credit Facilities in the prior year[173] Debt and Financing - The average debt balance increased from $744.2 million in Q1 2018 to $902.4 million in Q1 2019, contributing to a rise in interest expense by $3.4 million[158] - The company had $70.0 million available for borrowing under its revolving credit facility as of March 31, 2019[166] - Total borrowing under the New First Lien Term Loan was $901 million as of March 31, 2019, with an interest rate of 6.25%[202] - Each 1% movement in interest rates will result in an approximately $9.0 million change in annual interest expense based on the New First Lien Term Loan balance[202] - The company incurred $16.033 million in interest expense for Q1 2019, up from $12.647 million in Q1 2018[199] Strategic Acquisitions - The company completed strategic acquisitions, including Highway Toll Administration for $603.3 million and Euro Parking Collection for $62.9 million[130] Adjusted EBITDA - Adjusted EBITDA for Q1 2019 was $51.3 million, representing a 51.7% increase from $33.8 million in Q1 2018[148] - Adjusted EBITDA for Q1 2019 was $51.255 million, compared to $33.781 million in Q1 2018, representing a year-over-year increase of 51.8%[199] Other Financial Metrics - The company recognized a charge of $10.2 million in Q1 2018 related to the extinguishment of the Old Term Loans and associated costs[182] - The company reported a depreciation and amortization expense of $28.939 million in Q1 2019, compared to $18.550 million in Q1 2018[199] - Stock-based compensation for Q1 2019 was $2.143 million, reflecting non-cash charges related to the 2018 Equity Incentive Plan[201] - Transformation expenses in Q1 2018 included one-time costs related to optimizing the expense structure and defining the company's growth strategy[200] - The company did not engage in any hedging activities during Q1 2019 and does not expect to do so in the future[203] - Remaining performance obligations in the Government Solutions segment amounted to approximately $0.3 million as of March 31, 2019, expected to be recognized over a two-month period[190]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K | | | For the fiscal year ended December 31, 2018 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 81‑3563824 (State of Incorporation) (I.R.S. Employer Identification No.) 1150 North Alma School Road ...