Verra Mobility(VRRM)2025-02-27 21:54Revenue and Income - Total revenue increased by $61.9 million, or 7.6%, from $817.3 million in fiscal year 2023 to $879.2 million in fiscal year 2024[201]. - Service revenue increased by $58.1 million, or 7.4%, to $841.7 million for fiscal year 2024 from $783.6 million in fiscal year 2023, representing 95.7% of total revenue[228]. - Government Solutions service revenue rose by $23.9 million to $367.9 million in fiscal year 2024, driven by the expansion of speed and bus lane programs, contributing approximately $17.1 million to the increase[229]. - Product sales increased by $3.8 million year-over-year to $37.5 million in fiscal year 2024, primarily due to an $8.6 million increase in sales to Government Solutions customers[231]. - Net income decreased by $25.6 million, or 44.8%, to $31.4 million in fiscal year 2024 from $57.0 million in fiscal year 2023[227]. - Net income for fiscal year 2024 was $31.4 million, a decrease of $25.6 million compared to $57.0 million in 2023, primarily due to goodwill impairment[244]. Expenses and Costs - Total costs and expenses increased by $114.7 million, or 18.2%, from $628.5 million in fiscal year 2023 to $743.2 million in fiscal year 2024[227]. - Operating expenses increased by $22.6 million, or 8.3%, from $273.3 million in fiscal year 2023 to $295.9 million in fiscal year 2024, with wages expense accounting for a significant portion of the increase[234]. - Selling, general and administrative expenses decreased by $3.5 million to approximately $195.1 million for fiscal year 2024 compared to $198.6 million for fiscal year 2023[235]. Cash Flow and Financing - Cash flows from operating activities were $223.6 million for fiscal year 2024, compared to $206.1 million for fiscal year 2023[201]. - Cash provided by operating activities rose by $17.5 million to $223.6 million in fiscal year 2024, despite a decrease in net income[256]. - Cash used in investing activities was $69.7 million in fiscal year 2024, primarily for purchases in the Government Solutions business[257]. - The company repurchased approximately 7.9 million shares for $200.0 million during fiscal year 2024[201]. - Share repurchases totaled $200.0 million during the year ended December 31, 2024, with all repurchased shares subsequently retired[254]. - The company refinanced its debt in fiscal year 2024, reducing the interest rate by an aggregate of 111.4 basis points[202]. - Interest expense, net decreased by $12.8 million from $86.7 million in fiscal year 2023 to $73.9 million in fiscal year 2024, attributed to voluntary principal prepayments and a reduction in interest rates[237]. - Interest expense for fiscal year 2024 was $73.9 million, a decrease from $86.7 million in 2023[273]. Goodwill and Impairment - A goodwill impairment of $97.1 million was recorded in the Parking Solutions segment during fiscal year 2024[209]. - Goodwill impairment of $97.1 million was recorded in fiscal year 2024 due to the assessment of goodwill impairment in the Parking Solutions segment[236]. - The company recorded a goodwill impairment of $97.1 million in the Parking Solutions segment during fiscal year 2024 due to lower revenue growth and higher customer churn[282]. - The company performed a quantitative impairment test for the Parking Solutions reporting unit, which indicated that its carrying value exceeded the estimated fair value[282]. - The company recorded a $0.2 million impairment related to the write-down of installation and service parts during the year ended December 31, 2024[283]. - The company has four reporting units for assessing potential impairment of goodwill: Commercial Services, Government Solutions North America, Government Solutions International, and Parking Solutions[280]. Tax and Other Income - Other income, net increased to $19.0 million in fiscal year 2024 from $11.1 million in 2023, driven by a $5.6 million tax settlement payment recorded in 2023 and increased volume rebates[242]. - The effective tax rate for fiscal year 2024 was 60.2%, significantly higher than 34.5% in 2023, primarily due to permanent differences related to mark-to-market adjustments[243]. Operational Highlights - TSA Passenger Volume increased approximately 5% in fiscal year 2024 compared to fiscal year 2023, contributing to revenue growth in the Commercial Services segment[212]. - Approximately 70% of all toll roadways in the United States relied on cashless or electronic payment methods in fiscal year 2024[213]. - The company generated service revenue through the operation and maintenance of photo enforcement systems, with revenue drivers including the number of systems installed[216]. - The company executed a one-year contract extension with NYCDOT that expires on December 31, 2025, allowing continued use of its automated enforcement program[207]. Debt and Interest Rate Management - Total principal outstanding on the 2021 Term Loan was $695.6 million as of December 31, 2024, following early repayments of $9.0 million in 2024 and $172.5 million in 2023[262]. - As of December 31, 2024, the company had $74.4 million available for borrowing under its Revolver, net of letters of credit[248]. - The company recorded a $1.7 million loss on extinguishment of debt in fiscal year 2024, compared to a $3.5 million loss in 2023[263]. - As of December 31, 2024, the outstanding balance of the 2021 Term Loan was $695.6 million, with an interest rate of 6.6%[288]. - Each 1% movement in interest rates will result in an approximately $7.0 million change in annual interest expense[289]. - The company has a cancellable interest rate swap agreement to hedge exposure to interest rate fluctuations associated with the 2021 Term Loan[290]. Valuation and Estimation Methods - The company utilizes a discounted cash flow method and market approach to estimate the fair value of its reporting units[281]. - The company reviews historical credit losses and customer payment trends to develop loss rate estimates for receivables[279]. - The company applies judgment in determining the standalone selling price for performance obligations in customer arrangements[276].