Verra Mobility Corporation

Second-quarter total revenue was not explicitly stated in the call, but management said Government Solutions service revenue increased 17%, Commercial Services revenue increased 6%, Parking Solutions service revenue increased about 1%, and total product revenue was $17 million. Consolidated adjusted EBITDA was $111 million, GAAP net loss was $48 million, GAAP diluted EPS was a loss of $0.32 versus income of $0.24 a year ago, and adjusted EPS was $0.38 versus $0.34 last year. Cash flows from operating activities were $56 million and free cash flow was $33 million. For 2026, management updated guidance to $945 million-$965 million of total revenue, $360 million-$370 million of adjusted EBITDA, adjusted EBITDA margin of about 38%, adjusted EPS of $1.11-$1.17, and free cash flow of $105 million-$115 million. Government Solutions is expected to deliver high single-digit total revenue growth overall, with segment profit margins contracting 450-500 basis points versus 2025 and landing in the low twenties for the year. Commercial Services revenue is expected to grow in the high single-digit range for the year, with segment profit margins in the low 60% range, while Parking Solutions revenue is expected to rise low to mid single digits and margins to be slightly accretive to 2025.

Jon Keyser framed the quarter as an early proof point of a more customer-centric and faster-moving Verra Mobility. He emphasized three priorities: deepen customer relationships, realign costs and operations, and position the company for future growth, while also pushing AI as a tool to improve internal productivity and future products. His tone was confident and explanatory, stressing that the new Avis Budget, Hertz and Los Angeles wins show the value of the platform and the company’s ability to adapt.

Craig Conti said Q2 was ahead of expectations, with stronger-than-expected adjusted EBITDA, margin and adjusted EPS, and he tied the outperformance to NYC camera timing, operational improvements and better collections. He highlighted a GAAP net loss of $48 million due to a non-cash $104 million goodwill and intangible impairment tied to T2 Systems, along with operating cash flow of $56 million, free cash flow of $33 million, net debt of about $1 billion and net leverage of 2.4x. On capital allocation, he noted $66 million remains under the $250 million share repurchase authorization, but said the current priority is strengthening the balance sheet and preserving flexibility; he also said about $20 million of annualized cost is being removed, with run-rate savings expected in 2027.

Analysts focused heavily on the Avis Budget and Hertz renewals, asking why Avis had initially issued a termination notice and what changed. Management said it re-engaged with Avis, listened to the customer’s strategic priorities, and built a new long-term relationship; on both renewals, it said the contracts provide more visibility but come with lower pricing and some ability for customers to modulate fleet volumes. Questions also pressed on minimum fleet commitments and the impact on commercial margins, but management declined to disclose contract specifics and said it is still learning the new run-rate dynamics. Analysts also asked about Los Angeles and Parking Solutions; management said Los Angeles is expected to contribute $10 million in ARR once finalized, and that Parking Solutions has underperformed but is still growing and generating cash, with improvement opportunities still on the table.