VRRM - Earnings call transcript Q4 2024 | Verra Mobility Corporation

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Operator

Good day, and thank you for standing by. Welcome to Verra Mobility's Fourth Quarter 2024 Earnings Conference Call. My name is Liz, and I will be your conference operator today. [Operator Instructions] Please be advised that today's conference is being recorded.

to Investor conference Relations. like Zindler, to now President, Vice would hand over the Mark I Please ahead. go

Mark Zindler

Thank you. discussing our section Good the which Fourth in Quarter is afternoon, press website market and welcome Earnings our the our Today, at to close, Call. available along ir.verramobility.com. we'll earnings issued on of be release the with announced XXXX results after Verra presentation, Mobility's Relations Investor

Conti, Chief on Chief the David Executive we'll then call David call Officer; begin Financial our Mobility's Q&A. the for will followed Craig me Officer. With by remarks, Roberts, and open are prepared up Verra and with Craig,

We variety are based make and refer forward-looking do of statements differ for today, disclosure. forward-looking we our guarantees forward-looking uncertainties Mobility's anticipated during the Actual that performance release and call press and future caution may this call undertake regarding predict. complete not results in factors beliefs obligation investor Verra and a such Any described These our may forward-looking earnings any Please company. materially performance those forward-looking statements statements. and in future due to that statements statements from are filings. you on future make of involve that statement we SEC our not update trends on are factors. are risk future events, assumptions the risks anticipated presentation projected and to to Management the to difficult the of

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

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

David Roberts

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

Fourth leverage with XX% XX% slightly quarter. quarter while X and we nearly the prior million growth adjusted adjusted consolidated million period. our solid net $XXX We of year over of of X.Xx flow expectations, fourth quarter year revenue with in about was $XX and X%, increased investing the EPS repurchase delivered of ahead million shares a free ended fourth cash the to EBITDA increased

period segment-level of Services Services RAC revenue fourth quarter by over $X were Moving adjustment of adjustment, the impacted the increased approximately year increased segment activity. year $X X% segment prior Both FMC on about the fourth financials. negatively over profit to and quarter this year profit period grew million related and million tolling, Commercial prior Commercial in includes revenue a period. X% period tolling and to prior revenue prior the which over XXXX. X%

in a million basis quarter reduction the sales, a profit segment Solutions customer, await $X flat Government fourth revenue essentially increased XXXX. including competitive charge fourth about last Government product our implementing Revenue request quarter. from credit New current up outside Government the and or X% driven in XX% points a were Total by fueled compared of year XXX was the increased service sales the programs. quarter of XXXX the York increased revenue, quarter by over City expense City, Solutions York of over the enforcement XXXX. Solutions of cities for outcome new largest million quarter photo $X expansion the New we as for proposal automated year-over-year by in year customers noncash X% increase and enforcement. product existing international revenue driven loss XX% of fourth Service year from prior to over in

I'll $X about Solutions my Solutions onetime quarter to commentary for services fourth million hardware professional sales. about profit Parking in planned revenue and we operational Total have business. Parking quarter. XX% remarks. our Segment the improvements declined TX, declined what more lower for driven later provide for to on the Moving by

focus on shaping growth of excited going trends I'm trajectory. Next, so the the our what key to about portfolio future makes businesses me and

with TSA passenger XXXX XXXX strong X% travel our business. which directly over Commercial impacts Full and driven demand, business Services Starting leisure about volume year travel increased demand. volume by

winter sets the challenging the GDP year. volume wildfires. that While up continue to California start travel due the comparable with for resilient year prior we been XXXX, anticipate volatile consistent The forecasted over trends a travel storms to and to have growth

on major and expectations we our volume. comfortable based our evaluated, sentiment industry for customers, we've with XXXX with the TSA However, airlines the remain data positive coupled from other

of toll of ongoing commercial the demonstrate profile the of secular services, Additionally, impact growth two infrastructure, that strength. number electronic roads to penetration long-term and tailwinds continue tolling positively the

XXXX, all Over to covering of cashless secular XXX in the is the penetration steady expansion. the Moreover, XXXX, toll course roadways were room cashless with or nearly converted XX roadways trend demonstrating from new electronic States. that year of toll miles for United opened, to XX% XX% about full further infrastructure across increased

over over in expand allows We opportunity. new X in and years the United these Next, as addressable Massachusetts $XX result the the bus legislation potential at market, adds States passed our photo school $XXX including in for enforcement. were bus mobile demand or approximately key legislation enforcement photo addressable across recent total, state and California. authorize, of the I'll Massachusetts local with expand authorizing enforcement, In and lane on Government XX million authorizations to to Solutions of the million enacted legislation over total for move fixed TAM, million stop prior bills business. or automated enabling programs, driver automated reform levels further arm to the $XXX positively in to market to In anticipate XXXX, the

contract revenue of strong. run this against recurring $XX awards million. $XX execution annual In quarter, bringing won year the full representing Our full TAM ARR about incremental total we to million the has incremental at been rate, fourth

program California, and to San of state expected in have is the end issuing we speed by first quarter warnings announced, of it previously the will safety XXXX. program as the start Notably, the Francisco of first speed the be

award a speed awards school bus New new in included expansion quarter and Additional an in our York program stop arm fourth Toronto. existing of Upstate

Our Government materialize conjunction bookings a XX% to into an period, believe, revenue demonstrates revenue renewal approximate XX- typically in we strong rate, predictable contract Solutions with stream. over XX-month recurring ARR a and

on City. Moving to New York

installed violation received published hours pleased proud in the New the in of more the went the XX% injuries or report, program showed program. We Transportation are XXXX, weekend photo competitive decreased for efficacy annual the Department per with of and violations into have quantifying incredibly X and daily enforcement speed in of camera between when effect. locations X which findings, without their of years enforcement since XX% the their York first hours no since outcome fatalities and of cameras, the awaiting and the XXXX locations fewer corridors XXXX city's the of in XX% automated The decreased X year, XXXX than recently we're XX% RFP automated compared City in overnight and control drivers violations start expanded programs, to camera XXXX include:

it overnight compared enforcement positive Following traffic fewer automated cameras We with to communities. of implementing the believe and locations X% these have speed our cameras weekend safety the and can during demonstrate enforcement to expansion and control impact hours. the for that injuries the findings on weekend, locations without overnight importance saw

We Next, our an across discuss to acquired business, I'll needs December is offer meet the parking the municipalities Solutions States. solutions manage software, leader, evolving TX TX industry customers' end-to-end services to universities, we which United to parking. operators XXXX. hardware in parking Parking private delivering of professional suite and and

can a of we the impairment the a business the value on when business. current moments the moment, impairment quarter of the environment As better align goodwill historic shaping impact see few we of on results, in attributed financial a and will noncash the goodwill you but to to the to Craig take comment environment the elaborate acquired fourth the the trends TX recorded I'll carrying in business.

private sales brings has Bo and joining we SaaS-enabled brought and operations our the universities, in of We in our operations. believe are growing. Lin our parking leadership this the the driving Lin leadership, sales joined third of and noted as strong manage is And market call, early for parking in seeing municipalities enhancing I to complexities new August summer, executive and in operations. tremendous quarter organization and experience Since in leading stabilizing organizations, team growth signs solutions

very We innings early permit designed and which have sales pricing. to the and our transactional through streams for e-commerce new visibility of our pipeline sales are platform, into a marketing revenue our we in of management is create SaaS-enabled strong solutions,

engine sales led that for and goal by of and goals customer XXXX 'XX a addressing We churn revenue deliver back the and XXXX XXXX, first to are solutions. flat anticipate Our with rejuvenating stabilize exiting of the our on focus simultaneously the in challenges to suite to elevated to continuing broad business 'XX. with strong is in velocity, relative the growth to getting

for universities long-term and and execution market unique demand significant. challenges increase over the we and is cities taking continue needed for and We term opportunity We're to expect the urbanization long parking, the for given TX drive to to permitting and the believe enforcement curb to steps related performance. management,

on, an active capital perspective. from a allocation Moving year we had

over X deployed to full XXXX, repurchase the in year we Over $XXX million shares. million

over twice, lowering the rate by of our the our year. basis refinanced debt Additionally, course we XXX points term borrowing loan

Additionally, price opportunities, evaluating on share M&A we and active but ultimately repurchases capital discipline. to based valuations were in redirected

on highlights. provide will but XXXX our hit I'll Craig a detailed financial outlook, the commentary

growth grow revenue Solutions, expected XXXX. our than low related in onetime long-term reflect that our lastly, third due range costs is to a revenue Government revenue X% of As sales we at commercial adjusted and indicated our services slower investments travel in anticipate Moreover, implementation, anticipated at during call, product we with ERP albeit we to in volume. X% consistent EBITDA revenue pace end mix as expect deliver installs to to quarter the lower to to and outlook,

due outpace We XXXX expect by efforts primarily count growth repurchases. just EBITDA the allocation share discussed, and will I the to lower reduced costs share capital EPS adjusted driven adjusted borrowing

fundamentals of strong a appears strength for ongoing Travel are and and Our business services. source intact. demand resilient commercial

factors, a targets our revenue anticipate the to long-term foreseeable And XXXX these future. expect finally, Solutions will and the we our we our with outlook velocity. that EBITDA in Investor growth at that exit Based XXXX solid that provided revenue drive sales remains we over to TX expect XXXX on relative intact adjusted We strong Day. bookings strong Government

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

Craig Conti

appreciate you, David, Thank hello, you and the on everyone. joining call us I today.

key which X, quarter. Slide to fourth the for for financial turn business outlines the consolidated measures Let's the

of primarily on the was revenue. consists total travel by Government service which included quarter recurring performance The revenue City the was X% business. business X% driven QX revenue, service fourth in New and York service outside Our Solutions demand plan, Commercial growth, growth revenue in solid Services growth and revenue of which

level, the delivered declined X% XXXX. the about Systems quarter $XX by X% X% the service in year, At SaaS Commercial quarter. Product GS for services revenue product the $X and prior revenue revenue the million increased contributed segment revenue Services Solutions year-over-year, sales grew while quarter, $X Government million was TX TX over of overall for million over fourth and

consolidated XX% adjusted $XXX was increase year. the EBITDA quarter last of our versus million, Additionally, for an approximately

tax for reflects The carrying provision impairment $XX full million, effective $XX million We after normalized of about goodwill the a for expense, charge the $XX net value rate impairment of represents loss the tax for XX%. million the a of year quarter, TX of which of Systems. goodwill adjusting about reported

increase Adjusted excludes the EPS profit driven for share of the $XX for by of impairment goodwill per amortization, compensation, quarter The GAAP stock-based the was loss these a fourth XXXX The which million to TX delta results for other Systems. year-over-year items, was driven of between our in prior goodwill fourth quarter adjusted of compares and year $X.XX nonrecurring two impairment period. of primarily $X.XX EPS, expense driven increase for by $X.XX sustained per was growth. year compared share in XXXX representing our XXXX, per share ongoing repricing adjusted this activities. XX% in interest by repurchase EBITDA, share the and reduction quarter a the EPS The fourth in efforts, the to $X.XX

the free Cash by delivered activities slightly totaled of million, we expectations. quarter, flow $XX million operating of flows ahead for and our $XX cash provided

full X. year Slide adjusted EBITDA of a of We XX% $XXX the revenue million to million $XXX approximately representing Turning margin. EBITDA for on generated XXXX, adjusted

tax total adjusted a this includes incurred we generated of onetime million of the XXXX. EBITDA. year costs of the flow $XXX we flow free for $XX plus quarter Additionally, million cash the Please XX% or cash conversion settlement free note past adjusted that legal first during

beginning the RAC X and over X% CS through year fourth $X fourth driven business Services in revenue I'll revenue increased our the solid increased same with tolling year-over-year each by in about volume. the or of X% Next, on last was rental segments, X. Commercial performance Slide quarter growth walk quarter. demand million travel period

As mentioned tolling and an incurred profit This we historical impacting and activity. was period million segment $X David earlier, both prior $X to revenue approximate million nonrecurring. charge due in nature impact

However, it to back not was added segment profit. our

the about business FMC customers. existing tolling FMC enrollment or $X by Our of new and grew enrolled growth year-over-year vehicles X% from and million driven newly

$X registration, of violations of quarter. year-over-year combination and million Europe the Additionally, contributed title growth revenue for the management, approximately revenue other and

to driven basis about declined earlier. by margin points primarily Commercial mentioned in XX% adjustment period Services the fourth quarter profit segment prior the XX

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

adjustment in from is representing revenue year grew over $X product year. fourth $X million by Turning credit to in Solutions benefiting of X. a service well to over million Slide the loss X% the segment Total The due margins expense expense quarter quarter the for year profit lower New the had prior City. prior the versus the same of current was in outside XX% approximately of growth as period York in prior last driven revenue XX%. sales, period increase $XX increase million solid in growth Government Solutions Government about $X million a last the quarter, margins as year primarily quarter. quarter,

year, the New year, X% XXXX, generated full increase of million York the an the was service $XXX increase $XXX over X% of City. Segment revenue total outside Solutions revenue, prior year. primarily of by for XX% For Government growth driven over a profit million

is sales recurring Slide to business and turn approximately results revenue were our $XX while revenue X% or quarter. Parking Let's of and million X for million SaaS down SaaS Breaking $XXX,XXX grew a bit a was the from revenue profit quarter, the segment service over prior which the revenue $X $X XX% quarter. year. down Systems, year and down to the of of review million about for compared services Solutions product last or SaaS We year generated the TX further, of segment. X% prior

and However, past product services offsetting the in this increase was a decline professional in other over the X installation due sales reduction quarters. to

TX For of versus approximately a $XX million. year the last million, full segment decline X% year, profit of delivered revenue $XX and of

and new carrying for million a we our end This to transactional recorded nascent environment through the strong the where TX We of platform, goodwill better we discussed, which David $XX creates the in of nature the As markets revenue view the the significant competes. TX. anticipate change and the pricing. which impairment does streams noncash current align of our business not demand, e-commerce value see value strength SaaS of highly we recurring potential of

Okay.

to discuss Slide the balance at and turn closer and sheet take Let's a look leverage. X

with repurchases the net liquidity with and As see, reflects the credit share revolver. about we of with net X.Xx, $XXX can we've ended leverage for quarter quarter. used quarter debt you maintained fourth million We $XXX the undrawn which million, in significant of a ended our balance

Our which about rate balance $XXX billion, is approximately at debt. year-end gross debt at $X million stands floating of

fixed option the rate early opted third Consequently, fully now float we swap. the yield is on and termination of forward At the the our term and canceled end utilize to for entirety floating. loan the SOFR of quarter, our based curve,

SOFR X% a a fourth savings, cumulative total yield completed over In million about reduction current course the quarter, addition, little a second plus This our weighted at lowers spread The the debt. repricing the to fees, effect our reduction was achieved oversubscribed, of XX of and in million of this the $XX successful our lowering debt year, basis coupon remaining the cash repricing repricing will a we in This XXXX. Loan was B. of stack, rate, SOFR point in repricing the $XXX it X.XX%. net XXX Term over basis full debt of life our over to levels. being a On of points successful cost this debt average our in we

and the our weakness out audit IT pleased general identified system-enforced of hiring we our I'm new report of that the Closing and material IT segregation successfully discussion remediated in the on XXXX of a through implementation enhanced combination experienced oversight, of duties XXXX, controls personnel. to

turn for XXXX. year full on discussion let's a Now Slide to XX

We preliminary representing XXXX, growth approximately $XXX call. range million the expect X% the consistent of at provided midpoint revenue third total with on earnings to in we over outlook our the $XXX guidance of million, quarter

We growth $XXX expect to of to with points year. QX margin about approximately adjusted million $XXX basis down last an This EBITDA again, outlook compared consistent EBITDA our call. in at preliminary the midpoint on over the XX%, range XXXX, the represents million, of representing about XXX adjusted X%

in As portfolio of discussed, to drive we are temporary margins. investment infrastructure reduction the expected and previously the costs, execution TAM financial mix combination

Let our our item incremental The advance TAM is relates each driven infrastructure cost item by previously business in-flight The margin of replacement business our we me aging revenue. government and the discussed a in systems. to development backlog to these provide of project of on information HR incur execution and largely growing go-live drivers. refresher ERP converting as costs financial

are costs where is primarily and The about the of expect not travel in in of to $X commercial XXXX. our the onetime past business, we year-over-year. portfolio year growth costs project half These first this continue We in incur to will project. mix non-capitalized expect complete million nature

relative be growth other growth drivers the to business, moderated will in margin expansion. limiting However, that

Moving and resilient adoption. high segment demand we Commercial revenue on by to the product Services, single-digit driven level. expect In travel growth

TSA sequential for are ramp-up the fourth breaking in in line that in with down at be reduction that further, anticipate historical a we third travel XXX.X% year. by very estimate modestly quarters, below with the quarter volume quarter, trends. modeling And a will the volume and ending We first the full in second followed much

increased In in FMC rate at expecting with line addition, a overall the CS generally we're business. growth revenue

quarter, third to revenue-generating quarter a be quarter second combined CS the season the forecast by in followed then quarters, followed to business, and decline is the in close. For the lowest a increases revenue the by driving our sequential summer as first fourth comes

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

Government Solutions the by year is existing new of awarded end expected with fiscal revenue installations generate to in expansion total driven mid-single-digit the of high growth and customers camera the customers XXXX.

comprises City We XXXX while comparable we levels. product RFP, to the GS we roughly this segment To revenue. competitive the the of of revenue digits Government annual outcome revenue low expect service revenue remaining contextualize of all Solutions we in await flat XX% be be grow to The flat, New is further, double total XX% to York mostly in Government product to XXXX. expected and of Solutions from revenue anticipate nearly expect which

is about expected with Solutions levels. Parking flat Lastly, XXXX to be

and flat by low SaaS product revenue digits, revenue to mid-single sales. professional service on We in expect a roughly to offset installation grow decline

$XXX Free to expected adjusted is For a the representing in percentile be $X.XX of company range XXXX of a we million, a conversion share. as adjusted to range million $XXX per cash guiding whole, low $X.XX to non-GAAP EBITDA. the to flow EPS of mid-XXth the rate are to in

in awarded over $XX XXXX, The majority Government in Solutions million spent expect We enforcement photo million implement of an CapEx to approximately programs. newly spend be vast $XX about XXXX. of will increase to

investments, flow assumptions reduce free on guidance, can our cash cash flow be Xx and based XXXX. to adjusted allocation capital supporting free EBITDA the key and leverage Lastly, EPS net we excluding on about found by year-end to expect Slide adjusted Other XX. and outlook

a both on are XXXX In and to positioned well closing, strong bottom deliver line. the we top

EBITDA Day the XXXX. solid are revenue in XXXX secular We trends set and in the core growth durable. and confident of back markets at the targets adjusted Investor achieving we summer our remain are Our

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

Operator

first Alwy [Operator question Instructions] line comes Faiza with the of Deutsche from Our Bank.

Faiza Alwy

up So I the to Commercial on wanted follow business. Services

this trends wildfires, cetera. and the because mentioned the weather You year, quarter, maybe some starting volatile et of

know, curious want I cadence to there. around of about travel trends So clarify sort thinking around revenues you I you'd if Craig, good seasonality And general. whether gave commercial there's you're anything it's say quarterly in or else how like But just to pretty trends. the about

Craig Conti

Yes.

Faiza. you, Thank Okay.

Let me in take that two parts.

discussed change first, we our no thing historically. as So I think to business. what look is a probably at TSA good into XXXX, we've go to for

the XXXX how recap is quick So we about of performing? quarter why don't of We XXX%. do a fourth at TSA closed

year. that's XXXX, quarter-over-quarter 'XX. 'XX versus into I XXX.X% expect So Coming the for

prepared little in I year. As XXX.X% a average I comments, said ramps the Faiza, out slower at a to the of year XXX.X%. the It lot the of end beginning to at higher the think that's than

XXX%-ish kind expect the that quarter. of says first I So in

it is what of as We January shy at like this right about XXX%. looks Here's XXX%. February just today. at of closed morning, month-to-date, of as

at we're year-to-date, XXX%. So

is I gave rolling the at comment the you wildfires a on average. of -- weather XX-day some you The if events look and

If bit of of you events. the week-to-week is variability a But general, quite at volume-wise pan of been as look we weeks, the individual from anticipated. because days in to starting and year out some there's

the commercial want that I because sure one for business. business clear sequentials on the into go me that make Let the to we're just for

high last of 'XX. to Here's overall low out, to high double to very expect quarter single expect for the second year. this Versus average I expect growth a similar And then expect high CS I to up be you as back pace would the it the digits. down expect quarter. digits. year sequentially out up quarter from low down single And if XXXX I only, the Services single-digit fourth I for I you digits. Commercial revenue be be how the that for quarter first third organic single fourth by quarter get to was come digits, to quarter

Faiza Alwy

like Great. That's business, Government the from you're very some new contracts the Services to in sounds starting build helpful. And new it revenues legislation. then from on the coming

One, And a on question two-part ARR contracts. question of for a how this secondly, these build update you some some to converts bidding then the us expect So as, maybe through sort revenue that. year similar as revenue. win to these around course rates on do the of of again, you're of

David Roberts

don't talk winning Yes. win we're saying share sure. It's David. we're We really rates, for but I is our think than fair what more

As that XX per the dollar call, to closed was our we in months months for talked That the is the is last take tends prepared pent-up total over I And about XX year revenue just of standard. industry terms of, kind build. it anywhere to demand of amount X that we've remarks, end the to from for exciting. last would an

it, behind of a that's little about can we ahead average. little a sometimes Sometimes it, but get

draw XX to backlog on expect that next would to we the So months. XX down over

Craig Conti

right, think together. a back terms XX% pacing, revenue look end growth City, product, of if so of well. about Solutions, go the for way is we and for I whole. Government -- this as that this digits still which year, as mid-single the we're business of as And forecasting New in We're talked forecasting service flat business flat at the as York high expect that and overall we we for all I would

City. business York growth growth service New So of XX% of is that's outside the in the all remaining that

roughly if number, sequentially, expect to at be double year-over-year. Faiza, look ramp that that were to low I sequentially. should And that number digit We

Again, is Government that Solutions expect a get So the total as service quarter revenue be we product little flat last through. Where That more range the could a of complicated little still line. be we revenue. revenue product, more bit the dependent. up should episodic. may year's in go to timing The on each somewhere

that is that, So majority grower. the growth all think growth, growth, outside Government line be a to York the of almost of coming that revenue I from about of the And Solutions of that service would New always City. sequential service

Operator

line question UBS. with next from the Cremo Our comes Nik of

Nikolai Cremo

First, QX. those? pilot to expect I that just I having that California other back for cities It's are Have on those just the good we for yet? SS to GS RFPs touch out business. the the RFPs wanted on program. And to going to a to hear when on wanted in similar check hear pilot track on came could be remains

David Roberts

Yes. San that's to others we'll L.A., Jose. the those X already to to. is I out not out already the has that. places already They're Oakland, gone to that Long like The next anticipating in would Beach, anytime couple months that the we're out places hear in we've one others responded a We're say, X be, but and of like are responded yet, has But ones come expecting. San Jose been

Nikolai Cremo

some of timing the RFP? then we And Great. still outcome the the right Okay. quarter for get on for when my clarity follow-up, second could the is approximate NYC

David Roberts

the dependent tell upon a it's to couldn't day. their but I the dependent reasonable it's Yes, guess you sometime say us. or and last QX, the in first day on It's That's city not really decision-making. if

Operator

comes with Securities. question Daniel next Moore CJS Our from

Will Gildea

for Dan. on Will is This

is expansion margin particularly think more looking Government we should XXXX in an opportunity into setup for or how year, Solutions, the XXXX that investment and Given beyond? of about

Craig Conti

way The look depends. I it answer, Yes. that's this And an depends. answer at the I'm -- is but the perfect going not why give here's Will, you probably it is answer to

I expect new margins or to are like XXXX. doing XXXX, To the the accelerates XXXX. that in they expanding look would that, 'XX, we do again in In geographies. did. exists degree lot it in into a We're We 'XX and

I we've I the margins next basis probably of about XX%. year, for at the if year, about think a in think If little GS got we said somewhere of neighborhood for XXX about maybe to XXX closed So better, them XXXX, pressure. think points I

a coming from ERP fact new in system. putting pressure is that Now the half that of we're

to if we to And low And in revenue. especially at before about So around high-XXs XX% I in head that revenue business. XX%. a double want when hits have geographies, quantum this pillow comes service I we've new it's past, the that. at the expect seen margin But about cost in that think think growth as of would that digits when my the night, I

Will Gildea

helpful. That's a Where an you follow-up. most are just the then seeing And M&A super opportunity perspective? potential from

David Roberts

But that I a as our of is think as a equity to M&A, ever good I we from result I assets make think, we've say, sure private maintain obviously closing us coming sight. to to broad of the line continued For of deals. deal be as Us activity financial sale to would not hot, assets want not sponsors, in been. has or meaning seems owners discipline, the X what price have mean, just view. not or it's I We level are year high been working be in last

I looking both so across assets mobility, say lot that that urban connected we're and about. And of are at a vehicle would there's, and excited

Operator

DiPalma from question Blair. comes next Our William with Louie

Louie Dipalma

Does years legislation pipeline the pending Massachusetts. Florida bookings XXXX? as new speed know relative camera ago pipeline, similar as elevated when for mentioned that's we California with out? the the to it X expect But I And XXXX in was remain you came legislation should and the in

Craig Conti

Yes, part take first first. let me the

term. TAM David's near in -- million about think opening talked $XXX prepared the about of I if remarks, So he in

speed. Somewhere XX% zone of that to school sitting in the rounds on of is XX%

question, think as strong I ago, an your yes, is to answer as emphatic looking of okay? X years first So the it the was pipeline easy part the is

look bookings way simply did, I of strong that did the they in as question, XXXX, part will don't know. second as your they The

where look year-to-date, funnel we we the good about sits. activity feel at As our very

that number. growth we on I could New about an that you service low had fact York for we booking that think basis triangulate you I can't think if to give Louie. revenue than reasons, I'll into forecasting outside done. do bookings. need going the actual But of we're obvious what think on would more bookings only get double-digit XXXX a City, we

there revenue. So in-year be some will

been, about thing ever So is we're as I as think excited to execute. want it's strong remains communicate the and pipeline ability our I the overarching that really to

Louie Dipalma

latest base. on investments the your of you advantage different of customer continued discussed you associated and opportunity. this with side customer terms the taking and wondering catering business stay ahead CapEx make curve order I in in to And your of Great. to what large of technology development the very was functionality cameras to the have with market needs

David Roberts

Yes.

We the our customers to can with only forward have globally the we but to do engineering be group landscape not product a is surveying and as always our customers. with within working what current leaning supportive that business more

that's to camera the both use partners teams we deployed our do leverage to fully dollar we the we have different as team don't I internal share, as technologies. several a have So across amount but well a that that.

Louie Dipalma

customer one customer the your A your the within a And pricing? per last lot now all-inclusive good. pricing still for day Mark, all-inclusive of Craig is seems RAC all-inclusive? you to satisfaction. there and one. ago, and few pricing Or What use and partners customers most years base? David Sounds of Do be offered have and penetration do go they

David Roberts

than better others. It's very driven all-inclusive some the by because location, Louie, locations in works

basically at rate look actually that at adoption an location. we airport-by-airport So

into any specific And so get really customers. disclosure we around don't

Craig Conti

to this we've something one today customers, about right? of a some on on is well. So it, performing which customers product. you're this right, got and this really X thing technically for continues good be is use a thought the in on that, that And say, will Right. that our Enterprise does it's wide popular that though, only But past. we The exists basis, feedback not Louie, on we've

Operator

Baird. Our next question comes David from with Koning

David Koning

growth QX. just Nice at in Commercial, job. to in I guess, wanted year-over-year look I the

a but $X was was million there it think $X I million, headwind.

the it just why deceleration growth? QX only is million been guiding even less about, kind the guess, year-over-year have kind way of core So But $X growth. normalized I kind maybe of let's say, $X for of million year-over-year you're in or basis. a should on

Craig Conti

I you're think that Dave. fourth right on quarter, the

You're sequentially you know right would at equivalent throughput on periods, as to than is year I a with comp today. TSA in to the That's one this both looking being you're $X results. seeing your that at not look I TSA period under you're into last period more the right? piece. skew going going year-over-year I don't right? that's Remember, basis. growth the than acceleration into So There add that QX would anything million, seasonal, same back. other And say would on that have

if we expect we I to that think the total, last a to if about and get be remember at the talked talked X about I other grower. XX%, it to And talked back about growth, year, still XX%, pillars a this Those same how right, you it today. we we in thing, look single-digit to XX% high X pillars. are intact single-digit high

like year. X/X, However, this X/X, X/X it's more

X/X the toll I gave travel tailwinds. the of many explain of ties That cashless also some me were how toll perspective happened XXX.X% X/X that what in what is from secular is. to and that GDP-type here on are domestically David added with let that roads. growth. my comments. coming mentioned roads So

business accelerate. fleet the of remainder remaining growth. to title that And and business, the the other are registration expect that's then X/X and our X/X, of all European another the the growth, business. the That's the That's We things.

little may when kind But year So QX, in wacky. total, year-over-year, look of the nonlinear makes if if at you're look you comparing a think comparables sense. it I

David Koning

Yes. No, then And for follow-up. on that's a that. my good just explanation

of you're is York, just Would outcome. that is are of confidence, could like the is flattish New plus/minus all X%? baseline XX%. you sorts And wondering you say or just confidence, expectation? there this it confident right down Or scenarios So flat. you that have it's be I'm within how assuming, up XX% kind your XXX% are

David Roberts

in that is I specific an really time. think we've we're been RFP where

to And be that. the So be decide specific around more we're see does. would with that able expand program, wait the we what going that the time whatever would to and time city at they be to

Operator

with from Our Keith comes Housum next Research. Northcoast question

Keith Housum

lot there. want your have a that In the growing business is the I this levels. confidence segment, guess around. terms in bit turn impairment of a the you gives what little ability Parking a of But maybe obviously, that to in confidence guys I business about charge more bit of it? guys you everybody that more that's into growing? I Is else you to understand mean, little confidence just their are market a

David Roberts

Yes.

specifically I dollars are We've a competitors growth cities, of the universities. to think that both that around maybe capital equity we've and continues And problem enforcement private permits our by is uniquely, more for and one seen watching issue. our be of and activity, significant. lot see of seen our pretty of is. own We've flowing M&A had their just a into this some execution and what we category, it's competitors only sort can and municipalities

be So data the can there's a to pointing to that the growth of a company. contributor and significant lot this

our using the and our since ground brought new own to in So as well that's development that we ear we're data the leadership. of part own pipeline as

Keith Housum

do another Okay. appreciate the I that. cash is. much And free kind XXXX, If significant of how competitive to repurchases environment M&A flow? round challenges XXXX, an I now, your of understand is share in like the you anticipate from M&A it use perspective,

David Roberts

Yes.

decision our M&A intrinsic Our different stock, looking strategy incredible of of make terms pipeline the trading for at every Because the pretty able that to all. generation make what we're time. those value We'll we of the versus in deal and quarter. and sort where much changed cash company, the at has in we're flow of are processes at decisions our of not look the every we'll

that's Absolutely, M&A continue most -- but upon our repurchase? would So to be opportunistic on pipeline. it's really contingent we share

Operator

line the Stanley. from comes question Faucette of James with Morgan next Our

Shefali Tamaskar

James. there's more to markets. in international wanted This just in Europe out I of adoption terms question anything for wins I any is seen visibility asking XXXX. a trends specifically or into change Shefali in to new and on if on international cashless wanted of you've if there behalf see the call Tamaskar to touch towards

David Roberts

our cashless. only countries. last are those a is definitely a several of because I the program, are they each thing that with of the places been say when couple year or last in of roads I couple customers Those have free Portugal. gone have the many Italy course pilots found flow renewed several roads toll in would also Spain toll we've they're in there's over working France started we in The Yes. that and that in that that of more are say value the especially like would

that So the say is to change It up toll to right. moving allow I just to will to positive slow and forward the remains trend would accelerate. the to have authorities and because also definitely that just

Shefali Tamaskar

to different And any light and Good like red you've I out to still specific hear demand all been called that's case how you've of I bus have? touch you've And on Okay. Great. demand. see more I to what offerings of a recent perspective. change you called then just types kind think if from that. in in compare across terms any arm and trends purpose-built know enforcement. want previously the where stop Government, the of on I is legislation in strength the in of terms the and economics seeing wanted And

David Roberts

Yes. and in the specific the I precious there would buses, say is school where real still same toward is that is is are effectively demand schools cargo, the areas those and shift around which that the And around think, certain what capabilities demand through things I that deployment and remain, larger by technology still, say, and to same. away, drivers. our the effectively the I our would increase economics far

Operator

today's With you this Thank participating. more for concludes call. no in questions queue,

disconnect. now may You

Verra Mobility (VRRM) 27 Feb 252024 Q4 Earnings call transcript