Verra Mobility Corporation Conference Call Summary Company Overview - **Company**: Verra Mobility Corporation - **Industry**: Tolling, Automated Enforcement, Smart Mobility Solutions - **Market Position**: Market leader in U.S. tolling and automated enforcement with over 90% recurring revenue [1][5] - **Financial Profile**: - Projected revenue for 2025: just under $1 billion - Service revenue: 94% of total revenue - Adjusted EBITDA: over $400 million - EBITDA margins: 42% - Free cash flow generation: approximately $137 million for the trailing twelve months ending 2025 [5][6] Business Segments 1. **Commercial Services**: - Accounts for about 45% of consolidated revenue - Market leader in toll and violation management for commercial fleets - Expected mid-single digit organic growth over the next few years - EBITDA margin in the mid-60s% [7][8] 2. **Government Solutions**: - Represents nearly half of the company - Industry leader in automated traffic enforcement for cities and school districts - High single-digit growth expected - EBITDA margins in the high 20s%, projected to improve by 2028 [8][9] 3. **Parking Solutions**: - Leading technology provider of end-to-end parking management solutions in North America - Focus on SaaS services and hardware without owning real estate [9] Capital Allocation Strategy - Total capital deployed since going public in 2018: approximately $2.5 billion - Priorities include: - Organic investments (CapEx primarily in government solutions) - Strategic M&A (approximately $1.2 billion spent since going public) - Debt repayment (around $200 million paid down) - Share buybacks (approximately $650 million since going public) [12][13] Cultural and Operational Insights - **Company Purpose**: To make transportation safer, smarter, and more efficient [22] - **Cultural Pillars**: - Do what's right - Courage over comfort - Win together - Emphasis on operational discipline and customer-centricity through a common operating system [24][32] Growth Strategies - **Volume Leverage**: Significant scalability across all business segments [46] - **Market Expansion**: Growth opportunities in government solutions and parking solutions, particularly in universities and small to medium cities [47] - **Innovation**: Focus on connected vehicle strategies and new market openings [47] Key Contracts and Opportunities - **New York City Contract**: - A $998 million contract for the next five years, with options for renewal - Largest deployment of photo enforcement technology globally - Expected to be EBITDA accretive despite some initial margin impacts due to expanded scope and pricing adjustments [50][52][58] - **California Opportunities**: - Expansion of photo enforcement technology and regulatory changes expected to generate significant revenue [91][93][96] Technology Platforms - **Mosaic Project**: Aims to consolidate legacy systems in government solutions, enhancing efficiency and unlocking value [80][85] - **Transition to SaaS**: Movement towards equipment-free deployments in the parking market, targeting a true SaaS business model [88][89] Investor Insights - **Recurring Revenue Model**: 94% of revenue is service-based, primarily recurring [124] - **Market Position**: Strong presence in photo enforcement and tolling, with significant growth potential in protecting vulnerable road users [130][131] - **Future Trends**: Anticipation of technological advancements in tolling and enforcement, positioning Verra Mobility for sustained growth [132][133]

This presentation contains forward-looking statements which address our expected future business and financial performance, and may contain words such as "goal," "target," "future," "estimate," "expect," "anticipate," "intend," "plan," "believe," "seek," "project," "may," "should," "will" or similar expressions. Forward-looking statements include statements regarding changes and trends in the market for our products and services, including expected operating results and metrics, such as revenue growth and e ...

Core Insights - Verra Mobility Corporation reported strong financial results for Q4 and full year 2025, with total revenue for Q4 increasing by 16% year-over-year, reaching $257.9 million, and full year revenue of $979.1 million, an 11% increase from 2024 [2][4][5]. Financial Performance - Q4 2025 net income was $18.9 million, or $0.12 per share, compared to a net loss of $66.7 million, or $0.41 per share, in Q4 2024 [5][38]. - Full year 2025 net income was $136.6 million, or $0.85 per share, significantly up from $31.4 million, or $0.19 per share, in 2024 [8][38]. - Adjusted EBITDA for Q4 2025 was $101.8 million, with an Adjusted EBITDA Margin of 39%, down from 46% in Q4 2024 [5][9]. Segment Performance - The Government Solutions segment saw a 25% revenue increase to $129.2 million, driven by the NYCDOT red-light camera expansion [9]. - The Commercial Services segment generated $108.1 million in revenue, a 10% increase, while the Parking Solutions segment reported $20.6 million, a 5% increase [9][10]. Cash Flow and Capital Management - Net cash provided from operations for 2025 was $255.8 million, up from $223.6 million in 2024 [10][42]. - Free Cash Flow for 2025 was $136.7 million, down from $152.8 million in the previous year, attributed to increased capital expenditures [8][10]. Contractual Developments - Verra Mobility entered a new five-year contract with the NYCDOT valued at $998 million, effective January 1, 2026, to manage New York City's automated enforcement camera safety program [12][13]. Share Repurchase Program - The company repurchased $133.4 million of its common stock during Q4 2025, as part of an expanded share repurchase program totaling $250 million [15]. 2026 Guidance - For 2026, Verra Mobility expects total revenue between $1,020 million and $1,030 million, Adjusted EBITDA of $405 million to $415 million, and Free Cash Flow of $150 million to $160 million [22].

Core Insights - Verra Mobility Corporation is expanding its red-light and speed enforcement program in Hawaii through a 10-year contract worth approximately $160 million, marking the first statewide automated enforcement program in the U.S. [1] - The program will increase the number of enforcement sites from 17 to 187 dual-enforcement cameras across Hawaii's major islands [1] - Initial data from Oahu indicates significant improvements in driving behavior, with a 76% reduction in major crash rates and a 62% decline in daily red-light running violations at camera locations [1] Program Details - The red-light enforcement program has shown that 90% of violators did not receive a second citation after their first [1] - Speed enforcement was initiated earlier this year, capturing over 510,000 violations in the first six months, with some vehicles exceeding speeds of 100 mph [1] - In 2026, an additional 30 cameras are expected to be installed, with further expansions planned for subsequent years [1] Company Overview - Verra Mobility is a leading provider of smart mobility technology solutions, focusing on enhancing transportation safety and efficiency [1] - The company operates in North America, Europe, and Australia, providing solutions that protect lives and improve urban mobility [1] - Verra Mobility's services also address complex payment, utilization, and compliance challenges for fleet owners and rental car companies [1]

Core Insights - Verra Mobility Corporation has partnered with Locauto Group to provide an electronic toll payment solution across Italy, allowing drivers to bypass tollbooth lines and pay tolls automatically during the vehicle rental process [1][3] Company Overview - Verra Mobility is a leading provider of smart mobility technology solutions, operating in North America, Europe, Asia, and Australia, and focuses on making transportation safer and more connected [5] - The company processes over 300 million toll transactions annually for more than seven million vehicles globally, utilizing proprietary tolling management software [3][5] Industry Context - Italy has one of the largest toll road networks in Europe, with over 7,000 kilometers of toll motorways, and the car rental market is growing at approximately 5% annually, driven by over 70 million international visitors [2] - The demand for electronic toll payment solutions is increasing as the rental car market expands [2]

Core Insights - A recent survey by Verra Mobility indicates strong support among parents for automated enforcement measures to enhance student transportation safety, with 70% favoring such initiatives in school zones [1][9]. Survey Findings - The survey included 2,000 parents or caregivers, revealing that many have witnessed near-miss incidents involving students in school zones or near school buses [2]. - 43% of respondents reported observing a near miss in a school zone, while 33% noted similar incidents around stopped school buses [9]. Effectiveness of Automated Enforcement - Verra Mobility's data shows that school bus stop-arm programs can lead to a 50% reduction in violations within two months of implementation, with 98% of drivers who receive a violation not repeating the offense [3]. - School zone speed safety programs have achieved a 94% reduction in speeding at monitored locations [4]. Community and Educational Concerns - 38% of public school officials expressed concerns about traffic patterns around schools posing a threat to student safety during commutes [6]. - Parents are advocating for a comprehensive safety approach that includes physical improvements like speed bumps and better signage, alongside automated enforcement [6]. Company Overview - Verra Mobility is a leading provider of smart mobility technology solutions, focusing on enhancing transportation safety and efficiency [8]. - The company operates in North America, Europe, Asia, and Australia, and has launched 13 new school zone speed programs across various U.S. cities during the 2024-2025 school year [5][10].

Core Insights - Verra Mobility Corporation has been selected by Glendale and Long Beach, California, to implement speed safety programs, marking the third and fourth cities to contract with the company for this initiative [1][3] - The speed safety pilot program is part of California's Assembly Bill 645, which emphasizes data protection, equitable fines, and community engagement [3] - The deployment will include nine speed safety systems in Glendale and 18 in Long Beach, aimed at reducing speeding and preventing traffic-related injuries and fatalities [3] Company Overview - Verra Mobility is a leading provider of smart mobility technology solutions, focusing on making transportation safer and more efficient [6] - The company has over 20 years of experience in automated traffic enforcement and operates similar programs in San Francisco and Oakland [2][4] - Speed safety programs implemented by Verra Mobility have shown significant results, with reductions in speeding by up to 94% and a reported 50% decrease in traffic deaths in San Francisco [4]

Core Insights - Verra Mobility Corporation, a leader in smart mobility technology solutions, will participate in a virtual fireside chat at the CJS Securities New Ideas for the New Year Conference on January 14, 2026 [1] Company Overview - Verra Mobility Corporation (NASDAQ: VRRM) is a prominent provider of smart mobility technology solutions aimed at making transportation safer, smarter, and more connected [2] - The company integrates vehicles, hardware, software, data, and people to deliver efficient solutions globally, focusing on transportation safety systems and parking management [2] - Verra Mobility operates in North America, Europe, and Australia, addressing complex payment, utilization, and compliance challenges for fleet owners and rental car companies [2]

Core Insights - Verra Mobility Corporation has launched AutoKinex, an OEM-ready in-vehicle commerce platform that integrates payment technology for various mobility services [1][2][4] Group 1: Product Overview - AutoKinex allows drivers to pay for services such as tolling, road usage charging, parking, fueling, and EV charging directly from their vehicles [2][4] - The platform is designed to work with 2021 model year and newer Chrysler, Dodge, Jeep, and Ram vehicles in the U.S. through a partnership with Stellantis [2][7] - AutoKinex processes payments instantly and securely, providing real-time charges displayed in the vehicle's infotainment system if enabled [4][6] Group 2: User Experience - Drivers can pass through most toll plazas without stopping, and if a transponder is needed for gated tolling locations, Verra Mobility will provide one at no charge [5][6] - The service simplifies the payment process by verifying the vehicle's location in relation to toll sites and automatically paying the toll on behalf of the driver [6][8] - Enrollment for the service is free, and new users receive their first 30 days at no cost [7] Group 3: Strategic Importance - AutoKinex provides automakers with a scalable revenue channel by embedding essential services and payments in vehicles, enhancing the connected mobility experience [7][8] - The platform consolidates multiple mobility services into a single, intuitive solution, reducing complexity for drivers and manufacturers alike [8]

Core Insights - A recent survey by Verra Mobility indicates that over 75% of Americans have a positive or neutral view towards road usage charging, suggesting a shift in funding preferences for infrastructure projects [1][2] Survey Findings - 51% of respondents support toll roads for funding transportation projects, with 30% neutral and 20% against [5] - 93% of participants believe that infrastructure in their state requires improvement [5] - 73% of Americans think that electric vehicle (EV) owners should pay an 'energy tax' to recoup funds for infrastructure [5] Perceptions of Toll Roads - 67% of respondents find toll roads fairer than taxes [6] - 76% accept paying tolls if the revenue is used for improving road and bridge quality [6] - 72% believe everyone should pay the same toll rate [6] - 75% think tolls should remain constant regardless of the time of day [6] - 65% would be more willing to pay tolls if they knew the revenue was dedicated to infrastructure projects that benefit them directly [6] - 67% believe tolls should be eliminated once a project is fully funded [6] Industry Context - The U.S. tolling market was valued at approximately $12.5 billion in 2022 and is projected to grow to $18.6 billion by 2030 [4] - The federal gas tax, a traditional funding source for infrastructure since 1932, is declining due to the rise in EV sales, with Pennsylvania experiencing a $250 million drop in gas tax revenue from 2019 to 2024 [3] Company Overview - Verra Mobility is a leading provider of smart mobility technology solutions, processing over 300 million tolls and violations annually for more than seven million vehicles worldwide [7][9] - The company aims to help fleet owners manage toll payments efficiently, ensuring accurate billing and seamless travel across toll networks [7]