Earnings call transcript Q4 2022

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Operator

Good afternoon, ladies and gentlemen, and welcome to Verra Mobility's Fourth Quarter 2022 Earnings Conference Call. My name is Julie, and I will be your conference operator today. This call is being recorded.

I would like to turn the presentation over now to your host for today's call, Mark Zindler, Vice President of Investor Relations for Verra Mobility. Please go ahead, Mr. Zindler.

Mark Zindler

after Verra and Today, will Verra results we'll for our release call David we'll Officer; and afternoon, Financial XXXX with fourth announced Good With open and press Q&A. then prepared remarks, up Chief Craig are call. closed. earnings Mobility's Executive be call our issued you. welcome the Conti, Mobility's to David quarter Chief in me Craig, the Thank Roberts, on market begin the discussing Officer. followed the by

our During other business plans the acquire and future forward-looking, statements prospects. concerning to our our and call, we'll expectations ability customers, our operational make and new acquisitions, metrics the expected execute to statements regarding including to key that related our strategy, maintain business our plans performance, of growth considered existing may financial our regarding on and be benefits statements strategic

with any upcoming. view expect, be views we to words or as considered often as may our of as of should only statements statements These XXXX, not today, March be revise subsequent no We identified obligation Forward-looking statements. undertake and such update date. X, or forward-looking reflect any anticipate we our

expectations. or promises statements are our performance and subject and are a of Forward-looking not variety that cause guarantees differ the from to materially future could to uncertainties risks of actual results

ir.verramobility.com the actual the results, Form to Investor on Form our discussion and SEC's on that XXXX, filed our which at refer risks other affect on material at please of sec.gov. For section XX-Qs are our website of contained factors annual and website a in important those Relations and XX-K report our available during could

measure at call, our non-GAAP on non-GAAP be included the website A on today's sec.gov. can found SEC's is refer of GAAP in website most the financial during and at these measures. directly earnings our which certain comparable we'll release, Finally, measures to reconciliation to ir.verramobility.com

to over turn David. the With call that, I'll

David Roberts

you, joining for today. us and Thank Mark, thanks, everyone,

For results discussion shaping provide smart upon to I'm of on plan a for fourth outstanding the quarter our key outlook today's are and our I'll with trends discussion foundation that going the XXXX build we move closing July high-level call, that key and market a first strategic drivers. Investor will several influence the on operating our outlined XXXX. long-term our in mobility before Day to at priorities

strong our primarily We delivered quarter fantastic highlighted million for free Government Commercial flow. adjusted by EBITDA Services fourth in tolling quarter both of exceeded also Fourth volume-based $XX operating driven by revenue and in Services Adjusted by trends segment. of quarter EBITDA leverage million was Solutions. robust exceeded and expectations results, and and $XXX revenue generation cash Commercial forecast, strong the our our fourth driven

trends two aligned are results operating segments. macro with strong Our our across

continued demand announcements. The U.S. and strong significant First, have cited earnings consumers airlines in quarterly travel bookings by both major or their we're recent businesses, particularly in seeing the U.S. strong

in The continued need safer the second macro in communities, for automated roads which enforcement. for is trend push the investments safety drives

improvement high that very efficient advocates safety officials more these XX-year early be And in that reached a XXXX. for estimates for will in fatalities Traffic a technology looking are elected transportation save and everyone. in simply the are showing slight officials, Transportation U.S. solutions make lives while unacceptable. numbers XXXX, can

for over increase fourth XX% strong And XX% levels, compared growth represented delivered Starting with the $XX a over of last Commercial achieved Services. performance. The million to we the the year. same period quarter of Revenue XXXX. quarter pre-pandemic approximately team again

were factors this There several driving performance.

for fourth the approach XX%, First, volume, TSA throughput continued reaching to levels pre-pandemic quarter. XXXX

and growth year. last rental adopted performance indicators over the included rental key period In agreements same experienced duration addition,

positively as to business. in refleeting rack, drivers, trends implemented U.S. XXXX to these roads new were secular past and roads X underpinning continued conversion tolling, continue reached cashless XX% Cashless toll well. our the new impact and year tolling this business Lastly, toll

X and the Florida Georgia to over addition, expand significant recently In years. announced toll investment plans X next to lanes

Government Service speed prior to revenue driven of million the in being our total the the with Solutions basically last quarter about XX% Solutions We York million business. increased quarter, year. recurring Government margins service City’s New revenue $XX fourth flat of XX% completion $XX with of the fourth school generated Moving the by were over year, revenue. zone the installation.

EBITDA year revenue our and about the in Full which service expectations. with million adjusted of revenue line. and was $X million XX%, of full $XX for was of adjusted EBITDA TX delivered SaaS revenue revenues million; million. growth Systems $XX below $XX and were year, of slightly

below for were full installation prepared expectations including and remarks. the requested to due will hardware sales further being year Craig both the elaborate, actions timing. quarter fourth slightly However, taken his the in customer

In flow generation, quarter in EBITDA top are we continue trends performance durable, business experience operating our fourth summary, strong the free strong and cash was secular momentum the of our quarter to segments. outstanding line adjusted another driving of each and growth,

sheet leverage over pleased of course XXXX, the Turning full we to ending the a and capital adjusted that allocation. at turn to I'm balance EBITDA. year report the lowered X.Xx net

our course $XXX reported, And plan we all new significant a reported our In as of of we also repurchased implementation million drove new previously of remediated authorized in organization. in that to Form the shares addition, we in change $XXX all and XX-K. accomplishment you a controls XXXX. Furthermore, XXXX of Board Thank Directors is processes. by material of repurchase the this million. share over employees entire weaknesses our the This November,

very customers is take our we across shareholders, and our seriously the organization. our to it company, and Compliance critical

in forward-looking Travel travel first strong. U.S. cash Verra and XXXX revenue, secular levels demand year TSA durable. quarter in and major underpinned of history, remain in exceeding setting communicated in momentum strong Overall, demands adjusted by currently and is by highs entered as strong remain adjusted business a XXXX our XXXX throughput all-time XXXX new Mobility's trends. significant with was airlines the each We record segments free of EBITDA, EPS flow.

Second, and shift reduce efficiencies the effort across we to in a improve experience continue cashless congestion. U.S. to an tolling in

second the example, toll For cashless or for eliminated the bridge transitioned all both completely George and Lincoln Tunnel tunnel that, York Washington Bridge into crossing tolling. City half XXXX, have With payments. to booths in New of

We expect automated payments more the country. trend on roads across to the continue toll

fatalities. government Third, to place we safety of investments lastly, investments positioned to efforts a Zero in to troubling automated management cities which lane parking are trend see serve. reverse solutions the automated focus make expect curve bus and which our platforms expect to to longer well includes improve see mobility on Vision cities through term, traffic-related communities and in in renewed we over their enforcement programs, And urban a enforcement,

top strategic in With I that XXXX. turn to will a as priorities our background,

Over the the system efficiency that call At an of drives development. past the workplace. the talent the Verra outcomes, future, create business strategic and have growth, Operating what we Verra Mobility or System, of implemented standard business three robust Mobility build VMOS core year, fulfilling and VMOS. drive are heart engaging a we It's pillars: and

you'll financial and core to accelerating of pillars, opportunities, annual position expansion for in furthering As Verra XXXX work. each adoption of markets, model XXXX, have on in execution objectives best established key we our place plan, Slide the our portfolio focusing these of X making X, pursuit Mobility see accretive on a

to creation all pillars, execution strategic our we deliver poised stakeholders. of superior long-term value for are Through three

a I'll key as focus on Next, each described X, X. on down drill our in of detail layer X business for and and priorities more segments, Slide

simultaneously toll including new adoption and roads In secular we strong of on capitalizing refleeting, opportunities. cashless Commercial tolling, on core tailwinds, expansion Services, while where increased we are numerous focused benefit the from rack growing

agreement capitalize growth, laying on Our top are management, next-generation expansion foundation to Enterprise, priorities focused with fleet opportunities connected renewing fleet adjacent on and the expansion our European and opportunities. primarily

Solutions and mobility top automated for from growing across we and a platform partnerships. emerging strong where are prior strategic Government in and urban continued cities industry-leading new interest through our and states investments M&A improved through In opening opportunities legislation, safety traffic software pursuing benefit road enabling enforcement our and in flow,

increasing segment is profitability in well logo platforms with and efforts our dynamic to the the large-scale we and pricing the in and pursuit university streams our revenue continued share an as expansion And new in on of investments have existing runway, significant TX drive to Systems, as growth into segment, finally, where as with focus municipalities, municipality wallet following and mid- new penetrate customers, of focused priorities: business example.

These business. in are about our durable. strategy XXXX, are execute top our and priorities excited we as and The strong fundamentals incredibly I'm the

to and a place in operating model significant team proven management value. right create the have We

the close about Before and outlook Craig, XX we to outlook the pleased I to fundamentals I that have in remarks. we will with Day and exceeding his provided. provided. we changed it report financial am I a about or things elaborate we upbeat turn want long-term contemplated and July over our forecast the Investor to our Craig not meeting long-term further prepared remain in message

turn to I'll to results it guidance. through Craig, our over financial us XXXX guide and you

Craig Conti

afternoon, by full overview guidance. by and Thanks, allocation discussions followed today providing fourth financial year our start I'll and our And an joining and with Good us clients, on results conclude call. thanks everyone I'll out capital on to the David. our outlook. quarter for of long-term XXXX XXXX

the operating for performance Slide by increased inclusion TX of which business. the financial the year-over-year to Systems outlines approximately our to revenue company Total consolidated turn XX, X% across the performance a driven revenue results and million EBITDA year. $XXX full Let's strong adjusted and for in about for quarter,

included New proxy sales, the we City this best point, is New our year prior year-over-year. On million sales Expanding revenue the and an camera given product installations, City from York excluding an of performance. the incremental $XX basis growth on hardware XX% organic for grew York

organic grew over revenue. first, growth. same by which finally, about prior service service last and second, $XX Services service several about factors: XX% TX grew Commercial revenue Systems year, XX% of the was increased period million XX% growth QX year-over-year; XX% over revenue contributed This Government of attributable to year; Solutions the was

of reminder, a was quarter. closed quarter, was of three million in the the in December was from As revenue year early the only so prior Systems $X weeks TX TX million revenue for $X Systems. included we acquisition which XXXX, Product TX

Finally, was versus X% sales, New basis, On million an York standpoint, EBITDA City and growth excluding of Systems product consolidated increased from a total XXXX. $XX TX organic EBITDA approximately adjusted last XX% approximately adjusted over profit by year.

XX. Slide Turning to

From conversion adjusted our adjusted we in year, in million free with consistent provided a resulting of and guidance our third delivered revenue most XX.X%, all resulting expectations. $XXX of of flow cash our year, which call. million earnings recent XX%, our perspective, margins the EBITDA free flow full for was $XXX quarter of cash rate from $XXX total about of during the EBITDA For million, financial exceeded

or we million XX% XX. Moving million X% RAC impact $XX adoption travel to Florida We year, on in by last tolling and about a Services the increased year-over-year. period Commercial $XX Hurricane originally same slightly of Ian driven product revenue than quarter, fourth the from smaller increased anticipated. Slide delivered over in robust volume, increasing

Our expansion $XX a year EBITDA million growth off $XX Services revenue million, XX% representing continue investments. non-RAC -- XX% primarily Adjusted down Fourth fleet pay business sequential EBITDA growing. year, FMC about margins of company increasing normal with was last FMC quarter XX% reflected due now $XX a revenue the of quarter efforts quarter. to to the in million and and were slightly compared The fourth Commercial for year-over-year the prior seasonality growth. is annual stream over to adjusted

XX% XXX Adjusted improvement in basis or full revenue the year. of driven resulted Commercial over last leverage. about by million generated over XX%, year of $XXX year, prior volume-based For point operating a growth of EBITDA margins Services $XXX million

quarter. the of quarter by with York was in camera of to Solutions to our a by QX by This to Government or XX% expectations. Driven about million take to New same Let's fourth last line we'll photo XXXX the Due completion turn of million at the installations, efforts, and New primarily look million $X revenue over $XX business. product last the enforcement fourth revenue period year increased results expansion XX, the the York Slide service compared City our completely year. declined $XX the of $XX for City million

we programs. be quarterly $X approximately Solutions million expect forward, by rate Going international the product revenue per Government quarter run and to driven primarily

Adjusted quarter. the for representing EBITDA of year XX%, $XX flat with prior quarter, margins was the million roughly

last $XXX adjusted total X% $XXX Government year. and XXXX For year, the revenue, over XX% million year, generated increase million a of the over EBITDA for a was Solutions increase full

Full growth in York driven of year installations a were year full EBITDA City revenue and and our Redflex adjusted New financials. included by

of of is the Let's turn $X and the segment. slightly timing Systems, with slightly on proved service to to hardware a anticipated. $XX of of the Solutions approximately million take but Revenue customer-requested expectations had which for sales. business were pleased TX sales. to with We're in very XX, sales and than below due look and levels These were expectations, million certain Slide our EBITDA product line installation quarter be we'll we choppier at Parking software results adjusted

operating We Mobility improve build of are leveraging to system Verra and and strengthen quality to initiatives process. pipeline forecasting the to the drive the the

year, over million last approximately For of delivered of growth $XX TX revenue the adjusted $XX million. full year or and XX% EBITDA

Okay.

turn compared was take Let's we which approximately quarter Adjusted $X.XX to reported to of quarter of which income a per the of share prior stock-based XX year. XXXX. income share compares in fourth $XX nonrecurring leverage. the the to in in reported EPS, QX, $X.XX for for net the and million excludes income Slide amortization, the current $XX same per items, and compensation at look net In and period other quarter, million

year, the XX%. over a provision XX% a approximately XXXX. million, For EPS of increase the rate was income tax for Adjusted we tax net $X.XX full year $XX of million, of effective generated an year, including representing fiscal $XX

of This the we that you the billion, side is close of the X.Xx of year ended year. for see from the balance of can in right-hand down debt with leverage a the at X.Xx On net resulting page, about XXXX. leverage net net $X.X

The $XXX gross balance floating of quarter at which debt. billion, was over slightly end was approximately rate debt million $X.X

rates fixed rate hedge XX% to approximately swap we of quarter, portion for X X.X% a swap. to Term monthly Loan with B event with can beginning rate in we floating December our of for rate the XXX the agreement interest favor. our XXXX option point basis will fourth be debt in of float our into fixed in The an plus rate entered LIBOR exercise floating a that at a of years move During cancel

generated flow activities, free We of cash. quarter. to $XX $XX approximately resulting cash million in the on for million flow Moving in from operating cash

free XX% For the which cash flow of conversion full free year, we flow per million $X.XX cash represented share. EBITDA, generated $XXX of adjusted or

In million quarter, program. settlement fourth the million share we our repurchase completed total, the $XXX X repurchased under of During final program. shares we the approximately

last In million year. Directors addition, a $XXX repurchase authorized new November our Board of share XX-month in program of

repurchases We this quarterly new as made updates the provide will under to authorization.

solid which our a is about gears it will shift company. for let's the talk Now bit year and looking like views on another be XXXX,

Let's turn XX. to Slide

to you with laid creation As summer. align financial can broadened year last Day in have better see, we the objectives, at fiscal we Investor to shareholder value measures we our are which our guiding XXXX out

is consistent approximately range We shared On XXXX. million, million a Investor to we revenue in outlook X% total expect to July. currency to range Day X% the of $XXX over of at the basis, $XXX growth long-term to representing constant growth upward a in our the X%, adjusted X% with

$XXX growth at midpoint representing $XXX in million, EBITDA range approximately adjusted million XXXX. the over to of expect We the X%

approximately XX%, expansion margin basis of points year-over-year. We an about adjusted EBITDA XX representing expect margin of

Commercial revenue increased increased TSA In single-digit volume growth, we product and expect adoption. high driven by Services,

summer historical increased revenue be In third driving the quarter the quarter Consistent revenue. addition, by sequential we fourth to a is expecting followed by forecast as trends, comes first the our then lowest to close. are and decline FMC revenue-generating revenue quarter followed quarters, a increases second in in with season

segment in revenue a As revenue. reminder, this all is service

XX/X existing year of awarded expected York XXXX. single-digit shift installations. to customers monitoring installations with the completion prior new and customers The revenue in high driven York is of New Solutions year City, camera in the other fiscal City New Government expansion service by growth generate camera to

mentioned approximately revenue I to decline earlier, is $X per to installation expected New the million York to City due As completion. quarter product

To service give versus increase to total City is XXXX. about this revenue million York greater to revenue revenue New year-over-year, City context, product decline will XX% expected decline the while New by in XXXX York almost $X due

total single-digit low expecting we're year. growth overall, last over Solutions Government For revenue

However, outlook. drive currency our consistent expected Investor Government to long-term is on mid-single-digit with growth Solutions a constant Day basis,

by Parking we and revenue revenue sequentially continued historical Consistent hardware SaaS to Lastly, demand with high and trends, TX's of ramp a expected services lower deliver margins anticipate to and revenue, adjusted contribution. and shift driven Solutions a XXXX. is growth, weighting EBITDA strong throughout total single-digit revenue to with

about term the rate XXXX For to notably, the the total EPS assumptions guiding $XX a in expected a interest to prior debt. adjusted of outlook $X.XX, fiscal company Most in is are loan found as up due to of $XX to year XXXX, $X to expense, key floating increase XX. including be cost the on from non-GAAP whole, Slide we charges, million range million supporting this the year noncash and can

As swap beginning term rate of a discussed, point loan an into entered beginning agreement, the at about rate of which December the cancel I monthly debt previously basis in X.X% in interest XXXX. cost we plus with the to floating option fixes XXXX, XXX spread

assumes risk, discussed. with To year. we $X to November rate Expanding paid I capital that priorities. This of and our end, quarter rate to swap combined to XXXX. debt share a first our million and EPS paying the down commitment allocation press report repurchases rate million down and on XX the $XX allocation managing pleased the I'm floating that and the we approach balance a the with adjusted capital $XX interest $X.XX action, last during I our earlier, balanced demonstrate debt balanced detailed on issued the range release provided includes sheet approach of of to interest consistent debt repayment

difference about of is XX% higher generate payments long-term flow $XXX by $XXX conversion XXXX. as our conversion XX% interest rate in XXXX in of range free to adjusted well million approximately of cash XX% the taxes driven or to as cash expect NOL target increased The rate attributable to EBITDA. We reduced between primarily and a of million a utilization

reduce guidance, to the on about based and we to flow cash leverage Xx adjusted EBITDA net by expect Lastly, XXXX. free year-end

guidance, In see that addition XXXX report also we our as XX. we to track, you remain reconfirmed could and financial our on pleased financial to I'm outlook, long-term on Page

In see confident XXXX performance. interest we addition to XX% or in target are fundamentals pressure free our XXXX reaffirming estimates. And our meeting cash on we financial our the we while to our to of of see to exceeding due no conversion expect XXXX business in changes flow and commitments, rates, all XXXX

briefly have of the that pleased XX-K. are disclosed weaknesses Form all Lastly, material we our fully as mentioned, to David remediated report we in XXXX

As those accounting a revenue of focused with of a application. of our our weaknesses control were acquired material the surrounding and activities monitoring software of reminder, recognition valuation and associated on Redflex International, the evaluation third-party assets and acquisition the use environment including

In XXXX, successfully resources acquired activities and and to more instituted purchase ongoing additional support the we activities new controls hired substantively of to accounting monitor companies.

reliance implementing the our the application application. reconcile took also third-party used a and software underlying on actions address validate process corrective We data to to the by by

This and Julie At for remarks. concludes any attention. line time our to Julie? I'd time, your invite this Thank questions. open the to for like prepared you

Operator

question first from comes Moore Your Daniel Instructions] [Operator Securities. from CJS

Daniel Moore

tailwind Let cashless are at the that remind be? long how stage. this me last? as the that much start, is a do shift level How to tolling to we curve where as just on of to likely high kind you And expect of us far

David Roberts

and continuing. a can't we necessarily put specific -- you that and several see in -- I be seems to identified it's U.S. see George I number, we a is we -- about market where you numeric of others ones that the and the in were talked certainly while about that In Florida and lot XX% remarks, to -- trends hard

the So next would to years. anticipate several a be that for we trend

Daniel Moore

Very helpful. David. Curious,

milestones to progress? a for for of that Europe, us goals be your In agreements, consider would of kind Anything for what Europe general 'XX? year, terms be successful would What that revenue, new whether you are just helpful track.

David Roberts

we're we're think towards don't mean internally, we -- obviously, have working revenue. while I -- I we're

the of, enough value to and proof current concept, still place customers. in can we're improving customers do vehicles that the enough of say hey, I we we think we're locations have with finalizing

countries. also meaning we driver. sort on or program vehicles So I the one bit the distributed the get the at through economic look that a fine. it's a of we If of think several But kind of a view. customers, primary like to enrolled view, we that's would customer That's meaning have as combination, unit multiple

Daniel Moore

actually on Understood. about talk then Vision just helpful. the bit Is given government level that relatively side, dialogues services And of fatality traffic described maybe you Zero regarding it it up there? Or picking steady? little a numbers the Really initiatives. the is

David Roberts

numbers related in that even there what would fatalities at as being looking traffic of What and even already in we're the cases. reported say, occurring, programs and say newer certainly were significant I services programs, was I is a countries providing would pretty other -- use increase, the expansions current to

based I for think So of the strong it's very, next a has I -- some very the business that outlook upon years think several dynamics. current

Operator

Your from comes Dave next from question Baird. Koning

David Koning

well. kind I York three think or guess in fast do about in my think, How a then and Solutions, like New them in the than the question, to of continues distinguish I there. how do of Like is those that. to of parts, the kind doing Government well. are quarter? And somehow ones do three -- of the really really it XX ones maybe Because About service, little each each well. combined Redflex Redflex, a which revenue the that did other extremely I of seems less those often service, first kind are growing which services

Craig Conti

Yes.

that. So a shot take I'll at

you're So total right. business. I about the think We talked

If New this GS, grower. you out at just right, double-digit a take is York you look City,

We about in year. of grow. to York to XX%. City terms being grow continued talked that plus fourth in going New services the quarter to continue It's next

$XX a out well had the right? that sales at make to I'll you right, the to continue those Americas David, looking look year-over-year, have is at see a here, as I'm would another mid-single-digit year you at from a take million, one know, think you to fact GS we I down that $XX anticipate. look million growth you if thing where the as that we probably sure year. really, effectively million million right number of as the we're Redflex, was going service, going $XX year going you And in there, to $XX to right, Redflex And for nothing. give We're sales, that, of product you and product

So real the well. to across business is in New continues there perform York growth board. the install We're idiosyncratic piece XXXX. The seeing City the ending

David Koning

Yes.

Okay.

guess talked Okay. the That's then little good. And a Parking business, I you bit about QX.

I your think that been was growth little had you in TX product about year, the just overall, now. said the year a for you 'XX? all below it in did should you've expectations. you overall have And Has sequential a say Has through line?

Craig Conti

I was would to say I'd a equipment days our of quarter. the of delivery delivery to David, perform of And It yes -- those, acceptance to expectations. right? the both continued the of has really last thing say -- couple in

XXXX. about choppiness, X end X So deals getting, when I here that we'll in about up talking I'm or think, talk we

perform it's So to continued well.

and pleased. As at XX% somewhere business we're so and equipment. SaaS this business we look we XX% want And very where we're at an that XX-XX of to be, with that's of exactly of looking next split service year,

Operator

comes from from Faiza question Deutsche next Your Bank. Alwy

Faiza Alwy

how you're Tier on market your Day, lower terms pick color us TX. more Tier talked I talked you I about most X, a where Investor So X. traction. of share At wanted to about up with adjacent categories, is the in give bit you seeing guess,

cities. about of large sort talked additional You

from color terms more for of a So bit you're in give TX? us 'XX what expecting

David Roberts

turf, keeping outstanding -- and Yes. record is of now, long-term addition very in strongest for a grow. mean, have services to -- related which say of that. long-term university I home They contract would an continuing on I to to the is expanding their track is still the only strong tenure not that in customers right segment in

it's I would is the grow. and It's to still So the business. of the continuing core that's say backbone what

larger into obviously We're and at in do bring do enforcements almost other trying cities, coastal that permits has how done nice job in on call we bring really capabilities, how you take we what and those those municipalities. in. particular, a TX looking to might and we're vacation-oriented primarily smaller,

structure anticipate be. and and we're sure with where that to supporting So and level the back in that's the would going of this right And marketing sales making make the to into half growth of organizational next capability. year some probably that in we investments year we're

Craig Conti

just to on tack that. And to Right.

We out TX are next organic of high year. growth single-digit expecting

expansion X point where We this year. expect from they margin of about landed

So business on is a good trajectory.

Faiza Alwy

next was be Great. TX. margin so the segment. margins, to And ask for was my to from you expect you that on thank that expansion I each question on color about giving going going

Services, especially quarterly always especially, For out Commercial for I figure easy us like, hasn't the feel quarterly been cadence on a basis, externally. like to

of providing. I in are terms what services there type dynamics know So of some you're

the extent some can expansion other two segments. So maybe to across you of give us EBITDA margin give us quarterly of a bit more color in And cadence thoughts terms what margins. you're around on expecting the

Craig Conti

I'll of you. unpack for sure. those both Yes,

consistent we'd expecting we So on I'm and about Investor annual I portfolio, at what Faiza, at of we to margin think going drill across forward, portfolio, expect with the Day expect that is going said down, which We're into -- to expansion XXXX, start basis. point the X.X an okay?

volume. shakes good year, feel the that. we to total about just how of If look I So get terms in a this out, at quarterlies in I'll that for second now is the

to total single-digit the that's year. really continues it basis a right? CS points. that expect high As business is A And grow, that well. I be So for business scales for leverage, volume about up us the next grower XX year, lot of to

do the we in to make have XX expect at in but basis to points they that sure XX to that I platform basis of year-over-year. do the GS are internationally scale business domestically have doesn’t XX anything points to slightly so. continue down both making to And anywhere from product mix be really and we with can half some or to grow decade the investments to with

about So GS. in down slightly flat,

couple like there. And just to point. X that I A on expect about things be of said up TX, I

mix that an than business. We saw continue more XXXX. certainly in business as which and of win in XXXX to mentioned, expect of favoring to saw we and we SaaS total, the is I And than to XX% service start more I

So X.X point about that for factors out company. the to

I to make and trending, will adds I'm because how XX-plus which that you the Commercial going in going which fourth business look I Services tell you of distinction of CS the quarter, back grows make that the for you're sequentially if is kind through percent Now looks is grows more steps trending why I'll be quarter, first to happy a reason Verra bit fourth the to at the the from sense quarter. XX% business like the Mobility. out what quarter but And the to is third probably TX, tell up think little of the

muddied a gets total it at the level. company So little

single So It CS quarter bit. fourth expect the Typically, look think, let's will we we'll lot the in fourth to to the year into first quarter, grow our quarter, I quarter the digits quarter. the relatively Then I third of quarter, we'll first. it, high little single to low digits. grow like will quarter down call is the XXXX. revenue the a digits. low second digits mid-single the And go then it to do. We'll typically step as double back would digit say, fourth mid-single of into similar first I through be lowest a quarter, be but again

on and you three history. for our also average to planning in I that is gave we're what is normalized the And arithmetic the years of that spot just trajectory XXXX

track? Did So that's CS. that

Faiza Alwy

very that's helpful. Yes,

Craig Conti

a total, you is right? we're go look and muted. little then same, the And going Verra So the to if -- in but trend it's at bit

it's mid-single to CS. quarter. or through the the I high year. results. will revenue-generating which just quarter. digits in XQ lower the of way say, we'll single end quarter, of in back grow digits down lowest in company for the fourth all be that circulating the season summer the I'll digits the third mid-single again quarter, is be quarter first a driving in I'd few grow, in CS the ticks the We'll so Again, then So than the We'll step And consolidated second

Faiza Alwy

color. really the appreciate -- That's Great. all all that

mentioned you improving volumes. the think my Just Commercial of Services TSA as drivers, is, I part growth last you question mentioned

I those pre-COVID just TSA just as that. in percentage volume been to of growth? Are clarify back you XXXX? it expecting get at XXXX. you way I've that a to really Are sort is the looking levels of expecting So mean, wanted volumes

Craig Conti

question your expecting. that's to is, answer yes, we're what short The

I half that XXX% I are way kind I of done half we in plan have to I like in all through have to think the second right at of February. first a now, the the XXXX, think the year we're year-to-date there. But February to compare the get fairness, looks basis, where ramps

plan get I is this we business the in to at expect here. false would have to And think over do Now an precision look XXXX I that's as XXXX. we percentage general, levels, back in today. not -- exercise a of where XXXX and

Operator

Louie Your Dipalma next question comes from from Blair. William

Louie Dipalma

and title like David, violation, the XXXX? expected I'm is non-tolling coming terms commercial and be be Mark, Craig a by as services what pretty registration. in afternoon. well those your solid to to off growth non-tolling, What for expectation there services management growth? to and appeared referring good in the division the Is for of And

Craig Conti

you the totality, the grow the tell yes, out answer you growth than the tolling In yes. of is if But going the you ones that mentioned. in business, spike that those piece rates. specifically year-over-year. don't consolidated faster growth the growth But of I combination can We is just will look be of at there RAC to terms

Louie Dipalma

I In David follow it's and of to you you what Do know the has City Great. municipalities other but been initiative. Craig. York Oslo? lead early, And initial zero-in for New January, your feedback? the or announced expect

David Roberts

globally. I that already adopted have happening. mean been I think Yes. cities Other that's

is fatalities to sure stay it's were that attention make still year focused do draw increase in to it's relevant, to the last the wanted we so. trying I we think don't to what anyone over that given want still that, and not or to on just important we traffic

an to So increased of and congestion. attention we traffic safety term the is government we -- solutions wouldn't key believe a driver long over

Louie Dipalma

Great.

does Another you? one that on investing software. division. David, What Services indicated strategically in for enable you new software that Government the you're

David Roberts

Yes. it's software on. what is founded guess the have that that I been the business software would mean, the has -- I was I say just original we

it's as the that building in modernizing both to both streamline and new way well as coded the we're capabilities and So just architecture functionality built, service.

So an just as bit update. think of of a it

be functionality that cloud the -- future host a obviously that, the for will our in platform the in with that also new using will provided years we'll Now we'll web-based be come. that as we to

Louie Dipalma

your few new situations, in with years remember indicated software Great. your big your would you existing you the school And enforcement are ago cameras. feeds red around and for light for of safety, tap the cameras that implement light cameras such your with -- now, seems into cameras, right I to or for your that be I that focus law a able features feed a network a there guess, have have schools. to on major cameras certain And there you're to any, ability red

services wondering safety you there's your add services of type And so of cameras. of public that or cross-sell with if I'm could on existing any school top your network

David Roberts

to one looking mean, customers point look access to local extent sort technologies. have necessarily our that video. at. won't as a I customers categories the of the provide a for that looking that to service as to have on rest actually total at assured, that's add we of I ability is, yes, with speed, could cameras of I don't be package two, have we automated there They the enforcement. added the please solutions we That's part same guess, that a into we're the federal Yes. to other look we could started our certainly certainly bus. related of today. police -- just that anything And are and off X of and portfolio There's schools specific, school we but disclose obviously types be

Operator

next comes Your from question Instructions] [Operator from Research. Keith Housum Northcoast

Keith Housum

other states are pedestrian guys? traffic we you any and close in But pass passing or Dave, recently. have there, that talked states potential legislation that the terms Virginia out are of especially came look cameras the legislation Georgia enforcement some like data we -- as along about with X, pretty out far that opportunities for recently perhaps we look legislative of that see that deaths, being at next as we the more in the along year fronts to

David Roberts

those states -- are would in Yes. mean, just I now. I right look, legislative be sessions lot a of

up that California last key wouldn't -- year look so that as as State up in think a I lean one And Florida also have would I say others. that at I and we we're states opened continuing and Washington We've critical I it specific well. into. to was legislation But opened obviously, such

So offense we're looking. we're always on that, on both -- and we're always on

are So -- report but specifically nothing so and until those would now laws that right to I passed. wouldn't do

Keith Housum

it. it. Got Appreciate

perhaps quarter, large last share the space that you camera opportunities in on can think talked context construction the few terms Any being or out signed. and to of close there in about the area? guys projects zone you a I additional zone are construction thoughts

David Roberts

played an two that think Well, it's Redflex currently, it's we -- is in. of the have benefits we that's growth that working previously and not we have vector. the acquisition one was area obviously something of another It because

and going if me, that it certainly specific types lean multipliers I anything and But it's should it's enablers area have also front is seems into in workers when like I to in have school safely opportunity ahead. of you tools force have of we not rational and legislators that work where don't that which the a so is these to bus, that it just pretty of affecting school or are look an of pipeline dissimilar a or days at but as that's target say that -- from years customers the would today, that outcome. work are the zone zones belief speed in

Keith Housum

was year, not York Last XXX potential for upside you Or could is there's but it, year? that the in potential sneak it, that discussion one appreciate the I Okay. City. it. guys won guidance? busing Is If in some I yet included cameras more in for fixed New there that your the here.

David Roberts

It upside so upside. included guidance, therefore, is potential in -- is not our

Operator

There are Ladies time. this today. no at concludes conference and further gentlemen, call questions for your this

may disconnect. You now

Verra Mobility (VRRM) 1 Mar 232022 Q4 Earnings call transcript