Verra Mobility(US:VRRM) Yahoo Finance·2025-10-29 22:16Core Insights - The new automated photo enforcement contract with the New York City Department of Transportation is expected to have a five-year term with a potential five-year renewal, valued at approximately $963 million [35][36][37] - Annual service revenue is projected to grow from about $135 million in 2024 to between $165 million and $185 million by 2027, with additional product revenue from the city’s equipment purchases expected to add $20 million to $30 million in both 2026 and 2027 [1][36] - The red light camera expansion program is anticipated to generate $30 million in revenue in 2025, with $10 million from product revenue and $20 million from installation services [5][30] Financial Performance - Total revenue for Q3 2025 increased by 16% year-over-year to $262 million, with all business segments meeting or exceeding internal plans [8][20] - Adjusted EPS for Q3 2025 rose by 16% compared to the prior year, driven by operating performance and reduced interest expenses [22][30] - Government Solutions revenue grew by 28% year-over-year, with a 46% increase in revenue from New York City, primarily due to new red light camera installations [10][26] Segment Insights - Government Solutions service revenue increased by 19% year-over-year, while Commercial Services revenue rose by 7% [21][26] - T2 Systems, the Parking Solutions business, saw a 7% revenue increase, driven by a 3% rise in SaaS and services revenue and a 30% increase in product revenue [15][27] - The company anticipates Government Solutions to grow in the low to mid-teens for total revenue in 2025, driven by new camera installations [32][36] Legislative Impact - Recent legislation in California is expected to add an incremental $140 million to the total addressable market, increasing the potential market to approximately $365 million, with the possibility of expanding to $500 million with further legislation [11][12] - The company is actively pursuing contracts in California, including a school bus stop arm program and a speed program in various cities [13][76] Future Outlook - The company expects total consolidated revenue growth to moderate to mid-single digits in 2026, with adjusted EBITDA margins anticipated to decline by 250 to 300 basis points due to the New York City renewal contract [16][39] - The company plans to invest in a new smart mobility platform, Mosaic, which is expected to drive margin expansion and productivity improvements starting in 2027 [41][42] - A $150 million increase in the stock repurchase program has been authorized, bringing the total to $250 million, reflecting confidence in long-term growth [19][44]