0001193125-26-209227
SEC filingRevenue grew 0.1% to $223.6M, but net income fell 17.3% to $26.7M due to higher operating expenses and lower product sales, partially offset by legal settlement benefit.
For the three months ended March 31, 2026, Verra Mobility reported total revenue of $223.6 million, a slight increase of 0.1% from $223.3 million in the same period last year. Service revenue grew 0.7% to $213.4 million, while product sales declined 10.4% to $10.2 million. Net income decreased 17.3% to $26.7 million from $32.3 million, resulting in a net income margin of 12.0% compared to 14.5% a year ago. The decline was primarily driven by a 16.6% increase in operating expenses to $85.9 million, partially offset by a 20.7% decrease in selling, general and administrative expenses to $40.9 million, which benefited from a $10.3 million legal settlement finalized in February 2026. Operating income fell 9.7% to $51.8 million, with operating margin contracting to 23.2% from 25.7%.
In Commercial Services, service revenue decreased 3.5% to $97.8 million due to customer churn among FMC customers. Government Solutions service revenue grew 4.4% to $98.1 million, driven by expansions in speed, red light and bus lane programs outside of New York City Department of Transportation (NYCDOT), partially offset by a $3.4 million revenue decrease from the NYCDOT pricing change. Parking Solutions service revenue increased 5.8% to $17.5 million, led by higher SaaS and professional services revenue. Product sales declined across Government Solutions and Parking Solutions by $0.6 million each. Operating expenses increased significantly in Government Solutions (up $9.5 million or 20.3%) and Parking Solutions (up $1.5 million or 42.8%), driven by wages, subcontractor, and technology costs.
Management highlighted several strategic initiatives: a new $150.0 million amended revolver (increased from $125.0 million) maturing in 2030, and refinancing of the term loan in October 2025, reducing the interest rate by 25 basis points to 5.7% as of March 31, 2026. The company continued share repurchases, spending $50.2 million in Q1 2026 under a Board-authorized program with $66.3 million remaining. Key factors influencing future performance include travel demand (TSA passenger volume up 1.5% in Q1 2026 vs. Q1 2025), electronic tolling penetration, and enabling legislation for photo enforcement. A significant risk is contract negotiations with a Commercial Services customer representing over 10% of total revenue; if not renewed on favorable terms, it could materially affect results. No explicit financial guidance was provided.
Total assets were $1,656M, with cash and cash equivalents of $46.9M and restricted cash of $3.2M. Short-term investments (marketable securities) from a legal settlement totaled $6.1M. Total debt, net stood at $1,055.6M, up from $1,028.0M at year-end, driven by $26.0M drawn on the Amended Revolver and $2.9M in equipment financing, partially offset by $1.7M term loan repayment. Shareholders' equity decreased to $272.0M from $293.0M due to share repurchases and the accumulated deficit. Deferred revenue was $24.4M, primarily from Government Solutions ($9.4M) and Parking Solutions ($17.5M).
The company had $3.7M in outstanding letters of credit and $2.8M in bank guarantees. More notably, remaining performance obligations in Government Solutions totaled $194.8M, with $76.1M expected in the next twelve months. This represents contracted but unrecognized revenue, a key indicator of future top-line visibility.
In Q1 2026, Verra Mobility repurchased 2.2M shares for $50.2M under its existing authorization, leaving $66.3M available. No dividends were declared. Capital expenditures (purchases of installation/service parts and property/equipment) were $31.2M, representing 14.0% of total revenue. Net debt increased by $27.6M as the company utilized the revolver for share buybacks and operational needs.
Commercial Services revenue declined 3.5% YoY to $97.8M, with segment profit down to $61.8M from $63.1M. Government Solutions revenue grew 3.5% to $105.3M, but segment profit fell sharply to $20.8M from $29.4M, likely due to higher operating expenses. Parking Solutions revenue increased 1.9% to $20.4M, with segment profit rising to $3.4M from $2.9M. International revenues (Australia, UK, Canada, and other) totaled $27.3M, down from $31.4M in the prior year.
The provided excerpt from Verra Mobility Corporation's 10-Q for the three months ended March 31, 2026, does not include the full cash flow statement (operating, investing, and financing activities). Only the net change in cash, cash equivalents, and restricted cash is disclosed, showing a decrease of $18.2 million from $68.3 million at beginning of period to $50.1 million at end of period. Supplemental cash flow information reveals interest paid of $13.9 million and income taxes paid of $3.1 million. Additionally, non-cash investing and financing activities include $10.6 million in purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities. Without the detailed cash flow breakdown, it is not possible to assess operating cash flow trends, capital expenditure intensity, or free cash flow. The net cash decrease suggests potential uses of cash such as debt repayment, share repurchases, or investment, but specific drivers remain undisclosed in this excerpt.