Verra Mobility(VRRM)2024-10-31 21:05Revenue Growth - Total revenue increased by $51.4 million, or 8.5%, from $606.3 million in the nine months ended September 30, 2023, to $657.7 million in the same period in 2024[90] - Service revenue for the three months ended September 30, 2024, increased by $16.2 million, or 8.1%, to $217.3 million, representing 96.3% of total revenue[109] - Service revenue increased by $50.2 million, or 8.6%, to $632.0 million for the nine months ended September 30, 2024, compared to $581.8 million for the same period in 2023[128] - Commercial Services service revenue increased by $11.0 million, or 11.2%, from approximately $98.1 million for the three months ended September 30, 2023, to $109.1 million for the same period in 2024[110] - Government Solutions service revenue increased by $5.9 million, or 6.9%, from approximately $85.1 million for the three months ended September 30, 2023, to $91.0 million for the same period in 2024[111] - Parking Solutions service revenue declined by $0.7 million, or 3.7%, from approximately $17.8 million for the three months ended September 30, 2023, to $17.1 million for the same period in 2024[112] - Commercial Services revenue rose by $30.8 million, or 11.1%, to $309.0 million, driven by increased travel volume and tolling activity[131] - Government Solutions revenue increased by $19.4 million, or 7.7%, to $272.7 million, primarily due to the expansion of speed and red light programs[132] Operating Expenses - Operating expenses increased by $7.2 million, or 10.4%, to $76.0 million for the three months ended September 30, 2024[109] - Total operating expenses increased by approximately $7.2 million, or 10.4%, from $68.9 million for the three months ended September 30, 2023, to $76.0 million for the same period in 2024[116] - Total operating expenses increased by $25.2 million, or 12.8%, to $221.6 million, with wages expense rising by $16.2 million[137] - Selling, general and administrative expenses increased to $47.9 million for the three months ended September 30, 2024, compared to $42.3 million for the same period in 2023[119] - Selling, general and administrative expenses increased to $142.4 million, up from $125.5 million, primarily due to higher wages and stock-based compensation[140] - Operating expenses as a percentage of total revenue increased from 32.8% to 33.7% for the three months ended September 30, 2023, and 2024, respectively[116] - Operating expenses as a percentage of total revenue increased from 32.4% to 33.7% for the nine months ended September 30, 2023, and 2024, respectively[137] Net Income - Net income for the three months ended September 30, 2024, was $34.7 million, an increase of $4.4 million, or 14.6%, compared to $30.3 million for the same period in 2023[109] - Net income for the nine months ended September 30, 2024, was $98.1 million, an increase of $44.1 million or 81.7% compared to $54.0 million in 2023[128] - Total net income for the nine months ended September 30, 2024, was $98.1 million, an increase of $44.1 million compared to $54.0 million for the same period in 2023[148] Cash Flow - Cash flows from operating activities were $183.2 million for the nine months ended September 30, 2024, compared to $170.4 million for the same period in 2023[90] - Cash provided by operating activities increased by approximately $12.8 million from $170.4 million in 2023 to $183.2 million in 2024[157] - Cash used in investing activities increased to $51.0 million in 2024 from $41.7 million in 2023, driven by higher purchases of installation and service parts[158] Debt and Interest - The company refinanced its debt, reducing the interest rate by 50 basis points and making early repayments of approximately $4.5 million on its 2021 Term Loan during the nine months ended September 30, 2024[90] - Interest expense, net decreased by $1.7 million, or 8.1%, to $18.7 million for the three months ended September 30, 2024[109] - Interest expense, net decreased by approximately $1.7 million from $20.4 million for the three months ended September 30, 2023, to $18.7 million for the same period in 2024[121] - Interest expense, net decreased by $8.6 million from $65.8 million in 2023 to $57.2 million in 2024, primarily due to voluntary principal prepayments and a reduction in interest rates[142] - The outstanding balance of the 2021 Term Loan was $700.1 million as of September 30, 2024, with an interest rate of 7.6%[176] - Each 1% movement in interest rates will result in an approximately $7.0 million change in annual interest expense based on the September 30, 2024 balance[176] Taxation - The effective tax rate for the three months ended September 30, 2024, was 28.4%, compared to 27.5% for the same period in 2023[125] - The effective tax rate for the nine months ended September 30, 2024, was 27.4%, down from 37.1% in 2023, primarily due to differences related to Private Placement Warrants[147] Share Repurchase and Capital - The company has $48.5 million remaining under the share repurchase program as of September 30, 2024[92] - A new share repurchase program was authorized for up to $100.0 million over an 18-month period, with $48.5 million remaining available as of September 30, 2024[154] Other Financial Information - The New York City Department of Transportation (NYCDOT) represented approximately 16% of total revenue for the nine months ended September 30, 2024[95] - The company performed a quantitative impairment test for the Parking Solutions reporting unit, which showed an estimated fair value exceeding the carrying value by approximately 7%[172] - There were no material off-balance sheet financing arrangements as of September 30, 2024[173] - The company is compliant with all debt covenants as of September 30, 2024[170] - The company amended the 2021 Term Loan agreement to refinance the entire outstanding amount and reduced the interest rate by 50 basis points[165] - VM Consolidated issued $350.0 million in Senior Unsecured Notes with a fixed interest rate of 5.50% per annum, maturing on April 15, 2029[166] - The Revolving Credit Agreement has a commitment of up to $75.0 million, with no outstanding borrowings as of September 30, 2024, and an availability to borrow of $74.6 million[168]