Verra Mobility(US:VRRM)2024-05-02 21:09Revenue Growth - Total revenue increased by $17.8 million, or 9%, from $191.9 million in Q1 2023 to $209.7 million in Q1 2024, driven by service revenue growth in the Commercial Services and Government Solutions segments [104]. - Service revenue rose by $18.0 million, or 9.8%, to $202.7 million in Q1 2024, representing 96.7% of total revenue, with Commercial Services contributing $95.9 million, an increase of 12.0% [118]. - Government Solutions service revenue increased by $7.1 million to $90.3 million in Q1 2024, primarily due to the expansion of speed and red light programs [119]. Cash Flow and Liquidity - Cash flows from operating activities were $34.3 million in Q1 2024, compared to $45.2 million in Q1 2023, with cash on hand at $149.5 million as of March 31, 2024 [104]. - Cash provided by operating activities decreased by approximately $10.9 million from $45.2 million in Q1 2023 to $34.3 million in Q1 2024 [142]. - Cash used in investing activities was $13.9 million in Q1 2024, down from $19.6 million in Q1 2023, indicating a decrease in capital expenditures [143]. - Cash used in financing activities decreased significantly from $66.6 million in Q1 2023 to $6.3 million in Q1 2024, primarily due to lower early repayments on the 2021 Term Loan [144]. - As of March 31, 2024, the company had $149.5 million in cash on hand and $74.6 million available for borrowing under its Revolver [136]. Share Repurchase and Capital Return - The company repurchased 449,432 shares for $8.1 million and paid approximately $91.9 million for an initial delivery of 4,131,551 shares under an ASR agreement [102]. - The company authorized a new share repurchase program for up to $100.0 million over an 18-month period, indicating confidence in financial health and future prospects [103]. - The company authorized a new share repurchase program for up to $100.0 million of its Class A Common Stock over an 18-month period, reflecting a commitment to return capital to shareholders [140]. Operating Expenses - Operating expenses increased by $8.8 million, or 14.2%, to $70.6 million in Q1 2024, reflecting higher payroll and operational costs [116]. - Operating expenses increased by $8.8 million, or 14.2%, from $61.8 million in Q1 2023 to $70.6 million in Q1 2024, with operating expenses as a percentage of total revenue rising from 32.2% to 33.7% [124]. - Selling, general and administrative expenses rose to $48.2 million in Q1 2024 from $40.0 million in Q1 2023, representing an increase of 20.4% [125]. Net Income and Performance - Net income surged to $29.1 million in Q1 2024, a 536.9% increase from $4.6 million in Q1 2023, driven by improved operational performance [116]. - Net income for Q1 2024 was $29.1 million, a significant increase of $24.5 million compared to $4.6 million in Q1 2023 [132]. Interest Expense and Debt Management - Interest expense decreased by 13.5% to $19.6 million in Q1 2024, reflecting effective debt management strategies [116]. - Interest expense, net decreased by $3.1 million from $22.7 million in Q1 2023 to $19.6 million in Q1 2024, primarily due to voluntary principal prepayments and a reduction in interest rates [126]. - The interest expense for the three months ended March 31, 2024, was $19.6 million, down from $22.7 million in the same period of 2023 [156]. - Each 1% movement in interest rates will result in an approximately $7.0 million change in annual interest expense based on the outstanding balance of the 2021 Term Loan [162]. - The 2021 Term Loan interest rate was reduced to SOFR + 2.75%, resulting in total savings of 61.5 basis points [146]. - The company recorded a $0.6 million loss on extinguishment of debt related to the Refinancing Transaction for the three months ended March 31, 2024 [148]. - The 2021 Term Loan now requires mandatory prepayments based on excess cash flows, with a prepayment percentage of 50% if the leverage ratio exceeds 3.70:1.00 [150]. - The company has a Revolving Credit Agreement with a commitment of up to $75.0 million, with no outstanding borrowings as of March 31, 2024 [153]. - The interest rate on the 2021 Term Loan was 8.1% as of March 31, 2024 [149]. - The company recorded a $0.4 million gain on the interest rate swap for the three months ended March 31, 2024 [163]. - The notional amount on the interest rate swap agreement is $675.0 million, with a fixed rate of 5.17% paid by the company [163].