VRRM · Verra Mobility Corporation

Verra Mobility's Q1 2026 results showed modest revenue growth of 0.1% to $223.6 million, aligning with expectations amid mixed segment performance. Government Solutions drove upside with 3% revenue growth to $105.3 million, fueled by $7.5 million from expansions in speed, red light, and bus lane programs outside NYCDOT, though offset by a $3.4 million decline from NYCDOT pricing changes and new installations. Commercial Services declined 4% to $97.8 million due to prior FMC customer churn, while Parking Solutions grew 2% to $20.4 million from SaaS and professional services gains. Profitability faced headwinds, with net income dropping to $26.7 million from $32.3 million, driven by higher operating expenses and lower product sales, partially mitigated by a legal settlement yielding Australian company shares. Adjusted EBITDA fell to $86.0 million (38% margin) from $95.4 million (43%), reflecting segment margin compression in Government Solutions to 20% from increased implementation costs and NYCDOT pricing. CEO David Roberts highlighted solid execution, strong Government Solutions bookings, and growth momentum. Operating cash flow declined to $40.8 million from $63.0 million due to working capital changes like higher unbilled receivables, with free cash flow at $9.6 million amid elevated capex. Balance sheet shows $46.9 million cash, $1,056 million net debt, and 2.5x net leverage. The company repurchased $50.2 million in shares, leaving $66.3 million authorized. Reaffirming FY2026 guidance signals confidence, with total revenue $1,020-$1,030 million, Adjusted EBITDA $405-$415 million, and free cash flow $150-$160 million, underpinned by 155 million diluted shares, 28-29% tax rate, $125 million D&A and capex, and $62 million interest expense.