Verra Mobility(US:VRRM)2025-05-07 20:43PART I—FINANCIAL INFORMATION Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2025, showing total revenue of $223.3 million and net income of $32.3 million, with total assets growing to $1.64 billion Condensed Consolidated Statement of Operations Highlights (Q1 2025 vs Q1 2024) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total Revenue | $223.3 million | $209.7 million | | Income from Operations | $57.4 million | $54.4 million | | Net Income | $32.3 million | $29.1 million | | Diluted EPS | $0.20 | $0.17 | Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $426.1 million | $394.0 million | | Total Assets | $1.64 billion | $1.61 billion | | Total Liabilities | $1.34 billion | $1.35 billion | | Total Stockholders' Equity | $299.6 million | $265.1 million | Condensed Consolidated Statement of Cash Flows Highlights | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $63.0 million | $34.3 million | | Net cash used in investing activities | ($21.2) million | ($13.9) million | | Net cash used in financing activities | ($8.7) million | ($6.3) million | - The company operates through three reportable segments: Commercial Services, Government Solutions, and Parking Solutions3088 - Significant customer concentration exists, with NYCDOT representing 15.4% of total revenue and three Commercial Services customers collectively accounting for 37.9% of total revenue for Q1 20253839172 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial results, highlighting a 6.4% increase in total revenue to $223.3 million driven by Commercial Services and Government Solutions growth, alongside progress on the NYCDOT contract and an Accelerated Share Repurchase program - Total revenue increased by 6.4% to $223.3 million in Q1 2025, primarily due to higher service revenue from increased travel volume in the Commercial Services segment and growth from bus lane enforcement and SaaS programs in the Government Solutions segment100 Service Revenue by Segment (Q1 2025 vs Q1 2024) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Commercial Services | $101.4 million | $95.9 million | +5.7% | | Government Solutions | $94.0 million | $90.3 million | +4.1% | | Parking Solutions | $16.5 million | $16.6 million | -0.2% | - NYCDOT identified the Company as the vendor for a new five-year contract for its automated enforcement camera safety programs, with contract negotiations currently underway, and the existing contract extended through December 31, 202512101 - An Accelerated Share Repurchase (ASR) agreement was completed, with a final settlement on March 3, 2025, resulting in the receipt of an additional 685,934 shares102141 - Net cash from operating activities increased by $28.7 million to $63.0 million, primarily due to a reduction in the net use of working capital compared to the prior year143 - Interest expense decreased by $3.0 million year-over-year due to voluntary debt prepayments and a lower interest rate from refinancing the 2021 Term Loan in October 2024128 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk from its variable-rate 2021 Term Loan, with a $693.3 million outstanding balance as of March 31, 2025, where a 1% change in interest rates would impact annual interest expense by approximately $6.9 million - The company is exposed to interest rate risk from its variable-rate 2021 Term Loan, with an outstanding balance of $693.3 million at March 31, 2025162163 - A 1% movement in interest rates is estimated to result in an approximately $6.9 million change in annual interest expense164 - The company canceled its interest rate swap agreement, which was used to hedge against interest rate fluctuations, at the end of Q3 2024164 Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2025165 - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control166 PART II—OTHER INFORMATION Legal Proceedings The company is involved in ordinary course legal actions, including a class action lawsuit, Brantley v. City of Gretna, which has reached a preliminary settlement agreement in April 2025, with estimated losses accrued - The company is subject to legal and regulatory actions that arise from time to time in the ordinary course of business167 - In the Brantley v. City of Gretna class action lawsuit, the parties entered into a settlement agreement which received preliminary court approval in April 2025, though a final settlement amount has not yet been determined86168 - The company has accrued estimated amounts for legal proceedings as of March 31, 2025, within accrued liabilities on the condensed consolidated balance sheets169 Risk Factors This section highlights the material risk of customer concentration, with NYCDOT accounting for 15.4% of total revenue and three Commercial Services customers collectively representing 37.9% of total revenue in Q1 2025 - The Government Solutions segment has significant customer concentration, with NYCDOT representing 15.4% of total revenues for Q1 2025, and the company is currently in contract negotiations for a new five-year agreement171 - The Commercial Services segment also experiences customer concentration, with three customers collectively accounting for 37.9% of total revenue for Q1 2025172 - A reduction in demand or loss of one or more of these large customers could have a material adverse effect on the company's business, financial condition, and results of operations171172 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities This section details the company's equity purchase activities for the quarter, including the final settlement of an Accelerated Share Repurchase agreement and the remaining authorization for repurchases - The final settlement of the December 2024 Accelerated Share Repurchase (ASR) agreement occurred on March 3, 2025, with the company receiving an additional 685,934 shares173 - As of March 31, 2025, less than $0.1 million remained available for repurchase under the existing share repurchase authorization173 - There were no sales of unregistered equity securities during the three months ended March 31, 2025174 Defaults Upon Senior Securities The company reports no defaults upon its senior securities for the period - None175 Mine Safety Disclosures This item is not applicable to the company - Not Applicable176 Other Information The company reports that none of its directors or executive officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q1 2025 - During the three months ended March 31, 2025, none of the company's directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement177 Exhibits This section provides an index of the exhibits filed as part of the 10-Q report, including certifications and Inline XBRL documents - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002180 - Inline XBRL documents are filed as exhibits with the report180