Verra Mobility Reports Strong Financial Performance with Revenue and Net Income Growth in Q3 and Nine Months 2024

Verra Mobility Corporation reported significant financial performance improvements for the three and nine months ended September 30, 2024, compared to the same periods in 2023. Total revenue for the third quarter reached $225.6 million, an increase of $15.6 million or 7.4%, while service revenue rose to $217.3 million, up by $16.2 million or 8.1%. For the nine-month period, total revenue increased by $51.4 million or 8.5% to $657.7 million, with service revenue growing by $50.2 million or 8.6% to $632.0 million.

Net income for the third quarter was $34.7 million, reflecting a 14.6% increase from $30.3 million in the prior year. For the nine months, net income surged to $98.1 million, an 81.7% increase from $54.0 million in 2023. The company’s income from operations also improved, reaching $63.9 million for the third quarter and $179.4 million for the nine months, both showing increases from the previous year.

The Commercial Services segment was a key driver of revenue growth, with service revenue increasing by 11.2% to $109.1 million in Q3 2024, attributed to higher rental car tolling revenue. The Government Solutions segment also saw a revenue increase of 6.9% to $91.0 million, driven by expanded traffic enforcement programs. However, the Parking Solutions segment experienced a slight decline in revenue, down 3.7% to $17.1 million, primarily due to reduced professional services.

Operating expenses rose by 10.4% in Q3 2024 to $76.0 million, influenced by higher wages and IT costs. Selling, general, and administrative expenses increased by 13.3% to $47.9 million, with notable increases in wages, stock-based compensation, and professional services.

The company maintained a strong cash position, with cash and cash equivalents totaling $206.1 million as of September 30, 2024, up from $136.3 million at the end of 2023. Verra Mobility also refinanced its 2021 Term Loan, reducing the interest rate from SOFR plus 2.75% to SOFR plus 2.25%, while the total principal outstanding on the loan was $700.1 million.

In terms of strategic developments, Verra Mobility authorized a new share repurchase program for up to $100 million in October 2023, with $48.5 million remaining as of September 30, 2024. The company also canceled an interest rate swap agreement that was previously used to hedge against interest rate fluctuations.

Despite these positive developments, the company reported a material weakness in its internal controls over financial reporting, which it is actively addressing through a remediation plan expected to be completed by the end of the fiscal year.