Financial Data and Key Metrics Changes - Total revenue for the first quarter increased by 6% year-over-year to $223 million, driven by outperformance across all business segments [5][14] - Adjusted EPS rose by 11% compared to the prior year, reflecting strong operating performance and share repurchases [5][16] - Consolidated adjusted EBITDA for the quarter was $95 million, an increase of approximately 3% year-over-year [15] Business Segment Data and Key Metrics Changes - Commercial Services revenue grew by 6% year-over-year, with RAC tolling revenue also increasing by 6% due to modest travel demand growth [17][18] - FMC revenue increased by 12% year-over-year, driven by higher vehicle enrollment and tolling activity [7][17] - Government Solutions service revenue rose by 4% year-over-year, with total revenue growing by 8% due to product sales [18][19] - T2 Systems generated revenue of $20 million, with product revenue up 13% compared to the previous year [19] Market Data and Key Metrics Changes - TSA travel volume increased by 1% year-over-year, with expectations of a modest deceleration in travel volumes in the second half of 2025 [9][12] - The company noted a broader pullback in consumer confidence, which may impact travel demand [9] Company Strategy and Development Direction - The company is engaged in contract negotiations with the New York City Department of Transportation for a five-year contract to manage automated enforcement safety programs [6] - The company is maintaining its full-year 2025 financial guidance but acknowledges risks related to uncertain travel demand [12][21] - The Government Solutions segment is expected to generate high single-digit revenue growth driven by camera installations [24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the outlook, closely monitoring the economic environment and travel demand [27] - The company anticipates that discretionary spending may be impacted, leading to potential softening in travel demand [9][12] Other Important Information - The company reported a net income of $32 million for the quarter, with an effective tax rate of 28% [15][16] - Free cash flow for the quarter was $42 million, exceeding internal expectations [16] Q&A Session Summary Question: When is the expectation for the New York City contract to be finalized? - Management expects the contract to be finalized in the next sixty to ninety days [30] Question: Can you provide updates on the attractive pipeline for Q2 and city-level RFPs in California? - The company is ahead of its internal pipeline expectations and is awaiting updates on RFPs for San Jose and Oakland [33] Question: Are you seeing a slowdown in Travel and Commercial Services revenue? - Management indicated a slight decline in travel demand but not significant enough to be material [39] Question: How exposed is the company to international travel versus domestic travel? - The company primarily focuses on domestic travel, particularly in states with significant tolling activity [72] Question: What are the initial steps being taken in T2 to improve that business? - Management has reinvigorated commercial leadership and execution, leading to small growth in T2 [71]