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What changed in VERRA MOBILITY Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of VERRA MOBILITY Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+449 added−449 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-27)

Top changes in VERRA MOBILITY Corp's 2025 10-K

449 paragraphs added · 449 removed · 358 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

59 edited+7 added−17 removed11 unchanged
Biggest changeWe believe our relations with our employees are good, and we have not experienced a strike or other significant work stoppage. 8 Talent Acquisition and Development Our success depends upon attracting, retaining and developing a diverse group of talented individuals who possess the knowledge and skills necessary to support our business objectives, assist in the achievement of our strategic goals, contribute their own unique perspective and skill set and create long-term value for our stockholders.
Biggest changeTalent Acquisition and Development Our success depends, in part, on our ability to attract, retain, and develop a diverse group of talented individuals with the knowledge and skills necessary to support our business objectives and strategic goals.
We also manage regional toll transponder installation and vehicle association—a critical and highly complex process for RAC, Direct Fleet and FMC customers—to ensure that the transponders (and corresponding toll transactions) are associated with the correct vehicle. We have long-standing relationships with, among others, the three largest RACs in the United States, Avis Budget Group, Enterprise Mobility and The Hertz Corporation.
We also manage regional toll transponder installation and vehicle association—a critical and highly complex process for RAC, Direct Fleet, and FMC customers—to ensure that transponders and corresponding toll transactions are associated with the correct vehicle. We have long-standing relationships with, among others, the three largest RACs in the United States, Avis Budget Group, Enterprise Mobility, and The Hertz Corporation.
Generally, our research and development efforts are focused on expanding the capabilities of our products, differentiating our offerings, simplifying the implementation, support and utilization of our solutions, reducing the cost of our solutions, increasing the reliability of our solutions, expanding the functionality of our solutions to meet customer and market requirements, applying new advances in technology to enhance existing solutions, and building further competitive advantages through our intellectual property portfolio.
Generally, our research and development efforts are focused on expanding the capabilities of our products, differentiating our offerings, simplifying implementation, support and utilization of our solutions, reducing the cost of our solutions, increasing the reliability of our solutions, expanding the functionality of our solutions to meet customer and market requirements, applying new advances in technology to enhance existing solutions, and building further competitive advantages through our intellectual property portfolio.
Government Regulation We are subject to various local, state and national laws, regulations and administrative practices regulating matters such as data privacy, photo enforcement, consumer protection, procurement, licensing requirements, anti-corruption, equal employment, minimum wages, workplace health and safety, human rights and the environment, among others.
Government Regulation We are subject to various local, state, and national laws, regulations, and administrative practices regulating matters such as photo enforcement, data privacy, consumer protection, procurement, licensing requirements, anti-corruption, equal employment, minimum wages, workplace health and safety, and human rights and the environment, among others.
Government Contracting Our Government Solutions customers are typically government agencies, and our operations within this segment are therefore subject to various laws pertaining to procurement, gifts and entertainment, payments of commissions and contingency fees, conflicts of interest, licensing and permitting requirements and other matters.
Government Contracting Our Government Solutions customers are typically government agencies, and our operations within this segment are therefore subject to various laws and regulations pertaining to procurement, gifts and entertainment, payments of commissions and contingency fees, conflicts of interest, licensing and permitting requirements, and other matters.
Driver Privacy Protection Act, the General Data Protection Regulation (the “ GDPR ”) in the European Union (the “ E.U. ”), the Data Protection Act of 2018 and the GDPR in the United Kingdom, the Canadian Personal Information Protection and Electronic Documents Act, the Australia Privacy Act of 1988, New Zealand’s Privacy Act of 2020, the California Consumer Privacy Act (the “ CCPA ”), and other national and state privacy laws.
Driver Privacy Protection Act, the General Data Protection Regulation (the “ GDPR ”) in the E.U., the Data Protection Act of 2018 and the GDPR in the United Kingdom, the Canadian Personal Information Protection and Electronic Documents Act, the Australia Privacy Act of 1988, New Zealand’s Privacy Act of 2020, the California Consumer Privacy Act (the “ CCPA ”), and other national and state privacy laws.
The rapid rate of technological change in our industry could increase the likelihood that we will face competition from new products or services designed by companies with whom we do not currently compete. This includes advancements in the area of self-driving cars which may significantly reduce the frequency of vehicles illegally running red lights or exceeding posted speed limits.
The rapid rate of technological change in our industry could increase the likelihood that we will face competition from new products or services designed by companies with whom we do not currently compete. This includes advancements in self-driving cars, which may significantly reduce the frequency of vehicles illegally running red lights, exceeding posted speed limits, or committing other violations.
Moreover, we face competition from our own customers as they may choose to invest in developing their own internal solutions. In our Commercial Services segment, we face competition from both our own customers, who may choose to invest in their own internal solutions, and vendors offering or seeking to offer new technologies or financial models.
Moreover, we face competition from our own customers as they may choose to invest in developing internal solutions. 6 In our Commercial Services segment, we face competition from our own customers, who may choose to invest in internal solutions, and vendors offering or seeking to offer new technologies or financial models.
These laws are overseen by different government agencies, depending on the jurisdiction, including departments of procurement services, contracting offices and offices of inspector general.
These laws are overseen by different government agencies depending on the jurisdiction, including departments of procurement services, contracting offices, and offices of inspectors general.
There are, however, significant uncertainties involving the application of various legal requirements, the violation of which could result in, among other things, fines, penalties, revocation of permits or licenses, cessation of operations in a given jurisdiction and other adverse consequences. See “ Risk Factors ” for a discussion of our regulatory risks.
There are, however, significant uncertainties involving the application of various legal requirements, the violation of which could result in, among other things, fines, penalties, revocation of permits or licenses, cessation of operations in a given jurisdiction, and other adverse consequences. See Item 1A, “Risk Factors,” for a discussion of our regulatory risks.
As a government contractor providing photo enforcement services directly or through subcontractors (including design, engineering, construction, installation, and maintenance) in various locations throughout the United States and internationally, we are at times required to obtain licenses regarding general contracting, performance of engineering services, performance of electrical work, performance of private investigative work and processing license plate and related personal information.
As a government contractor providing photo enforcement services directly or through subcontractors in various locations throughout the United States and internationally, we are at times required to obtain licenses regarding general contracting, performance of engineering services, performance of electrical work, performance of private investigative work, and processing license plate and related personal information.
Vehicle-issued violations include parking and photo enforcement violations. In Europe, we specialize in the identification, notification and collection of unpaid traffic, parking and public transport related fees, charges and penalties issued to foreign registered vehicles or persons on behalf of issuing authorities in 20 European countries as of December 31, 2024.
Vehicle-issued violations include parking and photo enforcement violations. In Europe, we specialize in the identification, notification, and collection of unpaid traffic, parking, and public transport-related fees, charges, and penalties issued to foreign-registered vehicles and individuals on behalf of issuing authorities in 20 European countries, as of December 31, 2025.
These registrations and applications include our historic and acquired brands, as well as “Verra Mobility.” These marks may have a perpetual life, subject to periodic renewal and may be subject to cancellation or invalidation based on certain use requirements and third-party challenges, or on other grounds. We vigorously enforce and protect our marks.
These registrations and applications include our historic and acquired brands, as well as the “Verra Mobility” house mark. These marks may have a perpetual life, subject to periodic renewal and may be subject to cancellation or invalidation based on certain use requirements and third-party challenges, or on other grounds. We vigorously enforce and protect our marks.
We periodically receive notices from regulatory authorities regarding these matters and inquiring as to our compliance with the applicable state, local and foreign laws and regulations. In addition, our foreign photo enforcement programs are subject to regulation in the various countries in which we operate. Tolling We are also subject to state and local regulations with respect to tolling.
We periodically receive inquiries from regulatory authorities regarding our compliance with applicable state, local, and foreign laws and regulations. In addition, our foreign photo enforcement programs are subject to regulation in the various countries in which we operate. 8 Tolling We are also subject to state and local regulations with respect to tolling.
Privacy and data security laws and regulations are constantly evolving and changing, are subject to differing interpretations and may be inconsistent among countries and state and local jurisdictions, or conflict with other rules.
Privacy and data security laws and regulations continue to evolve, are subject to differing interpretations, and may be inconsistent among countries and state and local jurisdictions or conflict with other rules.
Over the past few years, bills have been introduced in multiple states to limit whether and how much RACs can charge their customers for the use of a toll transponder, limit the administrative penalties and fees that can be assessed for processing tolls, and/or impose increased disclosure requirements on RACs with respect to tolling or violation processing fees.
Over the past several years, bills have been introduced in multiple states to limit whether and how much RACs may charge their customers for the use of toll transponders, to limit the administrative penalties and fees that may be assessed for toll processing, and/or to impose additional disclosure requirements on RACs with respect to tolling or violation processing fees.
As of December 31, 2024, we own approximately 87 U.S.- and foreign-issued patents and pending patent applications, including patents and rights to patent applications acquired through strategic transactions, which relate to various aspects of our products and technology. Our patent portfolio evolves as new patents are awarded to us and as older patents expire.
As of December 31, 2025, we owned approximately 78 U.S.-issued and foreign-issued patents and pending patent applications, including patents and rights to patent applications acquired through strategic transactions, relating to various aspects of our products and technology. Our patent portfolio evolves as new patents are awarded to us and as older patents expire.
In addition, there has been an increase in interest and greater focus on RAC tolling programs from state Attorneys General related to tolling issues from a consumer protection perspective.
In addition, there has been an increased interest in, and greater focus on, RAC tolling programs by state attorneys general from a consumer protection perspective.
We are also subject to laws, regulations and administrative practices addressing many of these same matters in Europe, Australia, Canada and New Zealand, including those specifically relating to accessing and use of information obtained from vehicle licensing authorities, traffic enforcement and collections, and financial and banking regulations.
We are also subject to laws, regulations, and administrative practices addressing many of these same matters in the European Union (the “ E.U. ”), the United Kingdom, Australia, Canada, and New Zealand, including those specifically relating to access to and use of information obtained from vehicle licensing authorities, traffic enforcement and collections, and financial and banking regulations.
For key leadership positions, we also provide compensation packages that include annual incentive bonuses and long-term equity awards. Employee Engagement We seek employees who collaborate and value differences, think and act globally, foster an engaging climate, and recognize and develop others.
For key leadership positions, we also provide compensation packages that include annual incentive bonuses and long-term equity awards. Employee Engagement We seek employees who collaborate and value differences, think and act globally, foster an engaging climate, and recognize and develop others. We survey employees to gather insight, feedback, and data about employee engagement, workplace experience, and manager effectiveness.
Segments Our solutions are offered through three segments: (i) Commercial Services, (ii) Government Solutions and (iii) Parking Solutions. Commercial Services Our Commercial Services segment generated approximately $407.7 million in revenue for 2024, or approximately 46% of our total revenue.
Segments Our solutions are offered through three segments: (i) Commercial Services, (ii) Government Solutions, and (iii) Parking Solutions. Commercial Services Our Commercial Services segment generated approximately $435.8 million in revenue for 2025, or approximately 45% of our total revenue.
As we expand our operations in foreign countries, or as U.S. federal or state law changes, our liability exposure and the complexity and cost of compliance with data and privacy requirements will increase.
As we expand our operations in foreign jurisdictions, or as U.S. federal or state laws change, our liability exposure and the complexity and cost of compliance with data and privacy requirements may increase.
We face competition in each of the sectors in which we operate, but there is no single company that provides a similarly broad suite of solutions and competes across all of our business segments.
Markets and Competition The primary sectors in which we operate are automated safety, tolling, commercial fleet management, and parking. We face competition in each of the sectors in which we operate, but there is no single company that provides a similarly broad suite of solutions and competes across all of our business segments.
Seasonality Our Commercial Services business segment experiences seasonal fluctuations in usage and revenue. Historically, Commercial Services sees higher volumes in the second and third quarters of each fiscal year, driven by increases in travel demand during the summer driving season. Additionally, seasonal fluctuations can be influenced by weather conditions, economic conditions, and shifts in consumer preferences.
Historically, Commercial Services sees higher volumes in the second and third quarters of each fiscal year, driven by increases in travel demand during the summer driving season. Additionally, seasonal fluctuations can be influenced by travel trends, weather conditions, economic conditions, and shifts in consumer preferences. Seasonality has not historically resulted in material fluctuations in our overall financial performance.
In the United States, we provide government agencies with road safety cameras to detect and process traffic violations for red-light, speed, school bus, and city bus lanes. These programs are designed to reduce traffic violations and resulting collisions, injuries and fatalities.
In the United States, we provide government agencies with road safety cameras to detect and process traffic violations for red-light, speed, school bus, and city bus lanes.
In addition to cash compensation, we offer employees benefits such as health (medical, dental and vision) insurance, health savings accounts, flexible spending accounts, life insurance, accident insurance, paid time off, paid parental leave and a company-sponsored 401(k) plan, and related benefits for non-U.S. employees.
The structure of our compensation programs balances incentives for both short-term and long-term performance. In addition to cash compensation, we offer employees benefits such as health insurance, health savings accounts, flexible spending accounts, life insurance, accident insurance, paid time off, paid parental leave, and a company-sponsored 401(k) plan, and related benefits for non-U.S. employees.
In our Government Solutions segment, we face competition with respect to certain automated safety solutions from other vendors in red-light, school bus, speed and bus lane photo enforcement. In Parking Solutions, we face competition from a variety of competitors in our markets in the United States and Canada.
In our Government Solutions segment, we face competition with respect to certain automated safety solutions from other vendors in red-light, speed, school bus, and bus lane photo enforcement. In Parking Solutions, we face competition from a variety of competitors. Seasonality Our Commercial Services business segment experiences seasonal fluctuations in usage and revenue.
Our general policy is to seek patent protection for our inventions likely to be incorporated into our products and services or where obtaining such proprietary rights will improve our competitive position.
We regularly review third-party intellectual property rights to help avoid infringement and to identify strategic opportunities. Our general policy is to seek patent protection for our inventions likely to be incorporated into our products and services or where obtaining such proprietary rights will improve our competitive position.
In 2024, we processed over 190 million transactions using our various parking solutions systems, including parking access and revenue control (“ PARC ”), single- and multi-space pay stations, integrated physical and mobile payments, back-office parking rate management, permit issuance and management, online citation payment, event parking, and back-office management of violations. 5 Markets and Competition The primary sectors in which we operate are automated safety, tolling, commercial fleet management and parking.
In 2025, we processed approximately 180 million transactions using our various parking solutions systems, including parking access and revenue control (“ PARC ”), single- and multi-space pay stations, integrated physical and mobile payments, back-office parking rate management, permit issuance and management, online citation payment, event parking, and back-office management of violations.
The information on, or accessible through, our website does not constitute part of, and is not incorporated into, this Annual Report. 9 The trade names, trademarks, and service marks appearing in this Annual Report include registered marks and marks in which we claim common law rights, such as Verra Mobility and the Verra Mobility logo, all of which are our intellectual property.
The trade names, trademarks, and service marks appearing in this Annual Report include registered marks and marks in which we claim common law rights, such as “Verra Mobility” and the Verra Mobility logo, all of which are our intellectual property.
We have implemented purposeful hiring strategies that include opportunities for internal mobility and promotion and an employee referral program, both of which we believe will further strengthen our growing employee base and promote retention. We have a multifaceted talent development framework that includes functional training, management training and targeted development programs.
We have implemented purposeful hiring strategies that include internal mobility and promotion opportunities and an employee referral program to support workplace growth and retention. We have a multifaceted talent development framework that includes functional training, management training, and targeted development programs.
As of December 31, 2024, we had 1,879 employees, comprised of 1,754 full-time employees and 125 part-time employees. Of our full-time employees, 1,228 were located in the United States and 526 were located internationally.
As of December 31, 2025, we had 1,901 employees, comprised of 1,888 full-time employees and 13 part-time employees. Of our full-time employees, 1,286 were located in the United States and 602 were located internationally.
For many international customers, we design, engineer and maintain roadside photo enforcement technology, including both hardware and software, which is sold or licensed to government agencies and often maintained with maintenance contracts to support the technology. Service revenue from speed, red-light, school bus cameras and city bus lane cameras accounted for approximately 42% of our 2024 total revenues.
For many international customers, we design, engineer, and maintain roadside photo enforcement technology, including both hardware and software, which is sold or licensed to government agencies and often maintained with maintenance contracts to support the technology.
Violation management solutions accounted for approximately 4% of our 2024 total revenues. Our title and registration solutions provide RAC, Direct Fleet and FMC customers with an integrated, end-to-end solution for managing vehicle titles and registrations and annual renewals.
Violation management solutions accounted for approximately 4% of our 2025 total revenues. Our title and registration solutions provide RAC, Direct Fleet, and FMC customers with an integrated, end-to-end solution for managing vehicle title, registration, and annual renewals. We provide automated title and registration solutions by working with individual departments of motor vehicles in 17 states, as of December 31, 2025.
We have approximately 220 registrations and pending applications in the United States and foreign jurisdictions for trademarks and service marks as of December 31, 2024, reflecting our many products and services.
From time to time, these agreements may expire or be subject to renegotiation. 7 We have approximately 205 registrations and pending applications in the United States and foreign jurisdictions for trademarks and service marks as of December 31, 2025, reflecting our many products and services.
Our violations management solutions processes violations incurred by the drivers of RAC, Direct Fleet and FMC vehicles by working with more than 8,700 domestic violation-issuing authorities as of December 31, 2024, to either pay the fine on behalf of the vehicle owner (for which we are able to bill the driver) or to transfer liability directly to the vehicle driver.
Toll management solutions accounted for approximately 39% of our 2025 total revenues. Our violations management solution processes violations incurred by the drivers of RAC, Direct Fleet, and FMC vehicles by working with domestic violation-issuing authorities to pay fines on behalf of vehicle owners, for which we are able to bill individual drivers or transfer liability directly to vehicle drivers.
Our toll and violations management solutions are designed to facilitate the timely payment of tolls and violations incurred by our customers’ vehicles and perform timely transfers of liability on our customers’ behalf, and driver billing and collections, as applicable.
Our toll and violations management solutions facilitate timely payment of tolls and violations incurred by our customers’ vehicles, accurate transfer of liability on our customers’ behalf, and billing of, and collections from, individual drivers.
None of our employees are represented by a labor union or covered by a collective bargaining agreement, except for our 26 employees in Staten Island, New York.
None of our employees are represented by a labor union or covered by a collective bargaining agreement, except for our 43 employees in Staten Island, New York. We believe our relations with our employees are good, and we have not experienced a strike or other significant work stoppage.
We take steps to protect new intellectual property to safeguard our ongoing technological innovations and strengthen our brand, and believe we take appropriate action against infringement or misappropriation of our intellectual property rights by others. We regularly review third-party intellectual property rights to help avoid infringement, and to identify strategic opportunities.
Intellectual Property We rely on a combination of patents, trademarks, trade secrets, copyrights, and confidentiality agreements to protect our intellectual property. We take steps to protect new intellectual property to safeguard our ongoing technological innovations and strengthen our brand and believe we take appropriate action against infringement or misappropriation of our intellectual property rights by others.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), are filed with the SEC.
We make available free of charge on our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after those reports are electronically filed with or furnished to the SEC.
Patents expire at various dates, generally 20 years from their original filing dates. While we believe that our portfolio of patents and applications has value, in general no single patent is essential to our business or any individual segment.
Patents generally expire 20 years after their priority filing date. While we believe that our portfolio of patents and applications has value, generally no single patent is essential to our business or any individual segment. In addition, our proprietary rights could be challenged, invalidated, circumvented, or may not provide significant competitive advantages.
The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. We periodically provide other information for investors on our corporate website, www.verramobility.com, and our investor relations website, ir.verramobility.com.
In addition, the SEC maintains a website that contains reports, proxy and information statements, and other information for issuers, such as us, that file electronically with the SEC at https://www.sec.gov. We use our investor relations website, ir.verramobility.com, as a channel of distribution of material information to our investors and for complying with disclosure obligations under Regulation FD.
For customers of our end-to-end solutions, we automatically send captured events to the designated enforcement agency of the customer, where an authorized individual determines if a violation occurred. Upon law enforcement’s determination that a violation occurred, we manage the citation mailing, billing and other administrative tasks on behalf of our customers.
We also offer an end-to-end solution, in which we automatically send captured events to our customer’s designated enforcement agency, and, once a violation is confirmed, we manage citation mailing, billing, and other administrative tasks on behalf of the customer.
Laws and practices regarding handling and use of personal and other information by companies have also come under increased public scrutiny, and governmental authorities, consumer agencies and consumer advocacy groups have called for increased regulation, enforcement and changes in industry practices. 7 Photo Enforcement Automated photo enforcement programs in the United States are typically regulated at the state and local level, under either state enabling legislation or under home rule authority established under the relevant state constitution.
In addition, laws and practices regarding handling and use of personal and other information by companies have also come under increased public scrutiny, and government authorities, consumer agencies, and advocacy groups have called for increased regulation, enforcement, and changes in industry practices.
Our operations are subject to regulation by various U.S. federal agencies, including but not limited to the U.S. Department of Transportation, (“ USDOT ”), the Federal Trade Commission, (“ FTC ”), the Federal Communications Commission, the Consumer Product Safety Commission, the Consumer Financial Protection Bureau and the Environmental Protection Agency.
Department of Transportation (“ USDOT ”), the Federal Trade Commission (“ FTC ”), the Federal Communications Commission, the Consumer Product Safety Commission, the Consumer Financial Protection Bureau, and the Environmental Protection Agency, as well as the various state agencies that regulate similar areas.
Where enabling legislation is not required, local ordinances impose further restrictions within a given jurisdiction. In connection with the installation of photo enforcement systems, we or our customers routinely obtain permits from various permitting authorities.
In connection with the installation of photo enforcement systems, we or our customers obtain permits from various permitting authorities as necessary.
Corporate Information Our principal executive office is located at 1150 North Alma School Road, Mesa, AZ 85201. Our telephone number is (480) 443-7000. Our website address is www.verramobility.com.
Survey results inform and support corporate, business unit, department, and team action plans, with the goal of enhancing workplace satisfaction and overall employee well-being and effectiveness. Corporate Information Our principal executive office is located at 1150 North Alma School Road, Mesa, Arizona 85201. Our telephone number is (480) 443-7000. Our website address is www.verramobility.com.
We also develop our employees through an annual performance review and assessment process that incorporates a dual-performance rating system and provides each employee with concrete, actionable feedback that will enable them to succeed.
We also develop our employees through an annual performance review and assessment process that incorporates a dual-performance rating system and provides each employee with concrete, actionable feedback to support professional development and performance improvement. 9 Compensation and Benefits Our compensation programs are designed to align the compensation of our employees with the performance of the Company and the individual employee, and to provide a compensation package that will attract, retain, motivate, and reward employees to achieve superior results.
Human Capital Management Our employees are critical to our success as a leading provider of smart mobility solutions. To continue delivering high-quality solutions to our customers and succeed in our highly competitive and rapidly evolving market, it is critical that we continue to attract, retain and develop diverse groups of talented individuals at all levels of our organization.
Human Capital Management Our employees are critical to our success as a leading provider of smart mobility solutions. Our continued ability to deliver high-quality solutions and compete in a dynamic market depends, in part, on attracting, retaining, and developing talented individuals at all levels of our organization.
On behalf of our customers, we install, maintain and manage automated safety solution hardware and software that processes event data, apply customer specific rules and connect a traffic violation to the responsible driver or vehicle owner.
Our proprietary technologies are designed to provide government agencies with the information, data, and automated end-to-end administrative capabilities to enforce traffic violations through photo enforcement. We install, maintain, and manage hardware and software automated safety solutions to process event data, apply customer-specific rules, and connect traffic violations to responsible drivers or vehicle owners on behalf of our customers.
In addition, we utilize external contractors to supplement our team in the areas of software and firmware development, digital design, test development and product-level testing.
Technology We deliver our services through a combination of software and hardware. Our business unit teams have expertise in hardware, software, and firmware development and testing, database design and data analytics, and product and project management. In addition, we engage external contractors to supplement our team in software and firmware development, digital design, test development, and product-level testing.
Parking Solutions provides end-to-end commercial parking management solutions to approximately 2,000 customers in the university, municipal, healthcare and commercial operator markets, as of December 31, 2024. Our proprietary software, transaction processing and hardware technologies provide our customers with solutions to manage and monetize their parking and enforcement operations.
Our proprietary software, transaction processing, and hardware technologies provide customers with solutions to manage and monetize parking and enforcement operations.
In addition, any of our proprietary rights could be challenged, invalidated or circumvented, or may not provide significant competitive advantages. 6 Our business relies on both internally developed and externally licensed software, as well as internally, externally and co-developed hardware, to operate and provide our systems and deliver our services. We claim copyright on all internally developed software.
Our business relies on a combination of internally developed and externally licensed software, as well as internally-developed, externally-sourced, and co-developed hardware, to operate our systems and deliver our services. We claim copyright on all internally-developed software. We generally rely on common law protection for our copyrighted works.
Information contained on or accessible through, including any reports available on, our website is not a part of, and is not incorporated by reference into, this Annual Report or any other report or document we file with the SEC. Any reference to our website in this Annual Report is intended to be an inactive textual reference only.
The information contained on the websites referenced in this Annual Report is not incorporated by reference into this filing. Further, references to website URLs are intended to be inactive textual references only. 10
We utilize artificial intelligence (“ AI ”) to enhance our business process functions and select aspects of our solutions. Given the evolving nature and complexity of AI technologies, there remains inherent operational and legal risks.
We increasingly apply AI to enhance and support certain aspects of our offerings and business processes. Given the evolving and complex nature of AI, its use involves inherent operational and legal risks.
The Company implements and administers traffic safety programs for municipalities, counties, school districts and law enforcement agencies of all sizes. Our proprietary hardware and software technologies are designed to provide government agencies the information, data and automated end-to-end administrative capabilities to enforce traffic violations through photo enforcement.
Our Government Solutions segment provides photo enforcement automated safety solutions to states, municipalities, counties, school districts, and law enforcement agencies of all sizes, primarily in the United States, Canada, and Australia. These programs are designed to reduce traffic violations and resulting collisions, injuries, and fatalities.
We generally rely on common law protection for our copyrighted works. In addition, we rely on maintaining source code confidentiality to assure our market competitiveness. With respect to externally sourced software and hardware, we rely on contracts to retain our continued access for our business usage. From time to time, these agreements may expire or be subject to renegotiation.
In addition, we rely on maintaining the confidentiality of our source code to protect our competitive position. With respect to externally-sourced software and hardware, we rely on contractual arrangements to maintain continued access for business use.
Title and registration solutions accounted for approximately 1% of our 2024 total revenues. 4 Government Solutions Our Government Solutions segment generated approximately $390.9 million in revenue for 2024, or approximately 44% of our 2024 total revenue. Our Government Solutions segment is a provider of automated safety solutions primarily in the United States, Canada and Australia to state and local governments.
Title and registration solutions accounted for approximately 2% of our 2025 total revenues. 5 Government Solutions Our Government Solutions segment generated approximately $460.7 million in revenue for 2025, or approximately 47% of our 2025 total revenue.
We use our investor relations website, ir.verramobility.com, as a means of disclosing information, which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media.
Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media. In addition, you may enroll to automatically receive e-mail alerts and other information about our Company by visiting “Email Alerts” under the “Investor Resources” section of the “Investors” portion of our website.
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Toll management solutions accounted for approximately 41% of our 2024 total revenues.
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Service revenue from speed, red-light, school bus cameras, and city bus lane cameras typically have initial terms of three to five years with renewal options and accounted for approximately 42% of our 2025 total revenues. Product sales to customers are not recurring and are dependent on our customers’ needs, and account for approximately 5% of total revenue for 2025.
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We provide automated title and registration solutions by working with individual departments of motor vehicles for title and registration processing in 18 states as of December 31, 2024.
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Parking Solutions Our Parking Solutions segment generated approximately $82.6 million in revenue for 2025, or approximately 8% of our 2025 total revenue. Parking Solutions provides end-to-end commercial parking management solutions to approximately 1,775 customers in the university, municipal, healthcare, and commercial operator markets, as of December 31, 2025.
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Product sales to customers are not recurring and are dependent on our customers' needs, and account for approximately 2% of total revenue for 2024. Parking Solutions Our Parking Solutions segment generated approximately $80.6 million in revenue for 2024, or approximately 9% of our 2024 total revenue.
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For more details, refer to Item 1A, “Risk Factors” including “ Risks related to the development, deployment, and use of AI, together with an evolving and uncertain regulatory environment, may increase costs, create liability, and adversely affect our business, financial condition, results of operations, and reputation. ” See also Item 1C, “Cybersecurity,” for our risk management and governance disclosures.
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Seasonality has not historically resulted in material fluctuations in our overall financial performance. Technology We utilize software and hardware to deliver our services. Our business unit teams have expertise in areas such as hardware, software and firmware development and testing, database design and data analytics, and both product and project management.
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Our operations are subject to regulation by various U.S. federal and state agencies, including but not limited to the U.S.
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For more details, refer to Item 1A, Risk Factors, “ Our new products and services and changes to existing products and services may not succeed .” Intellectual Property We rely on a combination of patents, trademarks, trade secrets, copyrights and confidentiality agreements to protect our intellectual property.
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Photo Enforcement Automated photo enforcement programs in the United States are typically regulated at the state and local level, under either state enabling legislation or under home rule authority established under the relevant state constitution. Where enabling legislation is not required, local ordinances impose further restrictions within a given jurisdiction.
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Compensation and Benefits Our compensation programs are designed to align the compensation of our employees with the performance of the Company and the individual employee, and to provide a compensation package that will attract, retain, motivate and reward employees to achieve superior results. The structure of our compensation programs balances incentives for both short-term and long-term performance.
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The information on, or accessible through, our website does not constitute part of, and is not incorporated into, this Annual Report.
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We engage and survey our employee population to gather insight, feedback, and data about employees’ engagement, workplace experiences, and manager effectiveness. Survey results inform and support corporate, business unit, department, and team action plans, with the goal of enhancing workplace satisfaction and overall employee well-being and effectiveness.
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We also make available through our website other reports filed with or furnished to the SEC under the Exchange Act, including our proxy statements and reports filed by officers and directors under Section 16(a) of the Exchange Act. You may access these filings by visiting “SEC Filings” under the “Financial Information” section of the “Investors” portion of our website.
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We are subject to the informational requirements of the Exchange Act, and we file or furnish reports, proxy statements and other information with the SEC. Such reports and other information we file with the Securities and Exchange Commission (the “ SEC ”) are available free of charge at http://ir.verramobility.com/financial-information/sec-filings when such reports become available on the SEC’s website.
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This includes press releases and other information about financial performance, information on corporate governance and details related to our annual meeting of stockholders. The information contained on the websites referenced in this Annual Report is not incorporated by reference into this filing.
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Further, our references to website URLs are intended to be inactive textual references only. 10 Cautionary Note Regarding Forward-Looking Statements The discussions in this Annual Report, as well as in our other filings with the SEC and other written and oral information we release, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the " Securities Act "), and Section 21E of the Exchange Act.
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All statements contained in this Annual Report other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, products, services, technology offerings, market conditions, growth and trends, expansion plans and opportunities, and our objectives for future operations, are forward-looking statements.
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The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “preliminary,” “likely” and similar expressions, and the negative of these expressions, are intended to identify forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on them.
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These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part I, Item 1A, “Risk Factors” in this Annual Report and in our other filings with the SEC, which highlight, among other risks: • the impact of negative industry and macroeconomic conditions on our customers or us may materially and adversely impact our business, financial condition and results of operations; • customer concentration in our Commercial Services and Government Solutions segments, including risks impacting these segments such as travel demand and legislation, and risks relating to our contract with NYCDOT (defined below), which comprises a material portion of our revenue.
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We extended our current contract with NYCDOT through December 31, 2025 to allow NYCDOT to continue to operate its automated enforcement program. We are presently participating in a competitive procurement for a new NYCDOT automated enforcement program contract.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we are not successful in winning the competitive procurement for a new contract with NYCDOT, or if we win the competitive procurement at materially different terms and pricing as our current contract, it would have a material adverse effect on our business, financial condition and results of operations. • Our government contracts are subject to unique risks and uncertainties, including termination rights, delays in payment, audits and investigations, any of which could have a material adverse effect on our business. • Any decreases in the prevalence or political acceptance of, or an increase in governmental restrictions regarding, automated and other similar methods of photo enforcement, the use of third-party tolling and violations processing service providers, the ability to charge service or other fees to customers for services provided, could have a material adverse effect on our business. • Our reliance on specialized third-party providers could have a material adverse effect on our business.
Biggest changeIf we do not successfully perform pursuant to the contract terms, this could have a material adverse effect on our business, financial condition, and results of operations. • Our government contracts are subject to unique risks and uncertainties, including termination rights, delays in payment, funds appropriation requirements, audits, and investigations, any of which could have a material adverse effect on our business. • Any decreases in the prevalence or political acceptance of, or an increase in governmental restrictions regarding, automated and other similar methods of photo enforcement, third-party tolling and violations processing, or our ability to charge service or other fees to customers for services provided, could have a material adverse effect on our business. • Our use of AI, including risks related to its design, development, deployment, and use, as well as regulatory uncertainty, data privacy and cybersecurity risks, and reliance on third-party providers, could have a material adverse effect on our business. • Our reliance on specialized third-party providers could have a material adverse effect on our business.
Our Government Solutions segment provides automated safety solutions to national, state and local government agencies, generating revenues through automated photo enforcement of red-light, school bus, speed limit and bus lane laws.
Our Government Solutions segment provides automated safety solutions to national, state, and local government agencies, generating revenues through automated photo enforcement of red-light, speed limit, school bus, and bus lane laws.
Many of the contracts and renewals for which we bid, particularly those for certain larger government customers, are extremely complex and require the investment for significant resources in order to prepare accurate bids and proposals. Further, a significant percentage of new customer growth opportunities and contract renewals or extensions in our business segments are only accessible through competitive bidding.
Many of the contracts and renewals for which we bid, particularly those for certain larger government customers, are extremely complex and require the investment of significant resources in order to prepare accurate bids and proposals. Further, a significant percentage of new customer growth opportunities and contract renewals or extensions in our business segments are only accessible through competitive bidding.
Because we are dependent in part on independent third parties for the implementation and maintenance of certain aspects of our systems and because some of the causes of system interruptions may be outside of our control, we may not be able to remedy such interruptions in a timely manner, or at all.
Because we are dependent in part on independent third parties for the implementation and maintenance of certain aspects of our systems and because some causes of system interruptions may be outside of our control, we may not be able to remedy such interruptions in a timely manner, or at all.
Our ability to implement successfully any such alternative financing plans will be dependent on a range of factors, including general economic conditions, the level of activity in mergers and acquisitions and capital markets generally, and the terms of our various debt instruments then in effect.
Our ability to successfully implement any such alternative financing plans will be dependent on a range of factors, including general economic conditions, the level of activity in mergers and acquisitions and capital markets generally, and the terms of our various debt instruments then in effect.
In addition, a proxy contest for the election of directors at our annual meeting would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Board. The perceived uncertainties as to our future direction also could affect the market price and volatility of our securities.
In addition, a proxy contest for the election of directors at our annual meeting would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Board of Directors. The perceived uncertainties as to our future direction also could affect the market price and volatility of our securities.
Violations of the FCPA or other applicable anti-bribery, anti-corruption, and anti-money laundering laws by us or any of these third parties can result in severe criminal or civil sanctions, or other liabilities or proceedings against us, including class action lawsuits, whistleblower complaints, enforcement actions by the SEC, Department of Justice, and U.S. state and local and foreign regulators, adverse media coverage, non-responsibility determinations by procuring agencies, and suspension or debarment from government contracts, any of which could have a material adverse effect on our business, financial condition and results of operations.
Violations of the FCPA or other applicable anti-bribery, anti-corruption, and anti-money laundering laws by us or any of our third parties can result in severe criminal or civil sanctions, or other liabilities or proceedings against us, including class action lawsuits, whistleblower complaints, enforcement actions by the SEC, Department of Justice, and U.S. state and local and foreign regulators, adverse media coverage, non-responsibility determinations by procuring agencies, and suspension or debarment from government contracts, any of which could have a material adverse effect on our business, financial condition, and results of operations.
For example, it could: • increase our vulnerability to adverse economic and industry conditions; 27 • limit our ability to obtain additional financing for future working capital, capital expenditures, strategic acquisitions and other general corporate requirements; • expose us to interest rate fluctuations because the interest rate on certain of our debt is variable; • require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow for operations and other purposes; • make it more difficult for us to satisfy our general business obligations, including our obligations to our lenders, resulting in possible defaults on and acceleration of such indebtedness; • limit our ability to refinance indebtedness or increase the associated costs; • require us to sell assets to reduce debt or influence our decision about whether to do so; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate or prevent us from carrying out capital spending that is necessary or important to our growth strategy and efforts to improve operating margins; and • place us at a competitive disadvantage compared to any competitors that have less debt or comparable debt at more favorable interest rates and that, as a result, may be better positioned to withstand economic downturns.
For example, it could: • increase our vulnerability to adverse economic and industry conditions; • limit our ability to obtain additional financing for future working capital, capital expenditures, strategic acquisitions, and other general corporate requirements; 26 • expose us to interest rate fluctuations because the interest rate on certain of our debt is variable; • require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow for operations and other purposes; • make it more difficult for us to satisfy our general business obligations, including our obligations to our lenders, resulting in possible defaults on and acceleration of such indebtedness; • limit our ability to refinance indebtedness or increase the associated costs; • require us to sell assets to reduce debt or influence our decision about whether to do so; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate or prevent us from carrying out capital spending that is necessary or important to our growth strategy and efforts to improve operating margins; and • place us at a competitive disadvantage compared to any competitors that have less debt or comparable debt at more favorable interest rates and that, as a result, may be better positioned to withstand economic downturns.
We may experience system and service interruptions or disruptions for a variety of reasons, including as the result of network failures, power outages, cyber-attacks, employee errors, software errors, an unusually high volume of transactions, or localized conditions such as fire, explosions or power outages or broader geographic events such as earthquakes, storms, floods, epidemics, strikes, acts of war, civil unrest or terrorist acts.
We may experience system and service interruptions or disruptions for a variety of reasons, including as a result of network failures, power outages, cyber-attacks, employee errors, software errors, an unusually high volume of transactions, or localized conditions such as fire, explosions, or power outages, or broader geographic events such as earthquakes, storms, floods, epidemics, strikes, acts of war, civil unrest, or terrorist acts.
A number of vendors develop and market products and services that compete to varying extents with our offerings, and we expect this competition to intensify. The rapid rate of technological change in our industry could increase the chances that we will face competition from new products or services designed by companies that we do not currently compete with.
A number of vendors develop and market products and services that compete to varying extents with our offerings, and we expect this competition to intensify. The rapid rate of technological change in our industry could increase the chances that we will face competition from new products or services designed by companies with whom we do not currently compete.
Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations. 22 We are subject to domestic and foreign laws relating to processing certain financial transactions, including debit or credit card transactions, and failure to comply with those laws, even if inadvertent, could have a material adverse effect on our business.
Any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations. We are subject to domestic and foreign laws relating to processing certain financial transactions, including debit or credit card transactions, and failure to comply with those laws, even if inadvertent, could have a material adverse effect on our business.
These provisions include: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board; 30 • the requirement that directors may only be removed from the Board for cause; • the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • a prohibition on stockholders calling a special meeting and the requirement that a meeting of stockholders may only be called by members of our Board or our Chief Executive Officer, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement that changes or amendments to certain provisions of our certificate of incorporation or bylaws must be approved by holders of at least two-thirds of our Common Stock; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
These provisions include: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board of Directors; • the requirement that directors may only be removed from the Board of Directors for cause; 29 • the right of our Board of Directors to elect a director to fill a vacancy created by the expansion of our Board of Directors or the resignation, death, or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board of Directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • a prohibition on stockholders calling a special meeting and the requirement that a meeting of stockholders may only be called by members of our Board of Directors or our Chief Executive Officer, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement that changes or amendments to certain provisions of our certificate of incorporation or bylaws must be approved by holders of at least two-thirds of our Class A Common Stock; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our Board of Directors or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
We expect that there will continue to be new proposed laws, regulations and industry standards concerning personal information, privacy and data retention in the United States, the E.U. and other jurisdictions, and we cannot yet determine the impact of such future laws, regulations and industry standards may have on our business.
We expect that there will continue to be new proposed laws, regulations, and industry standards concerning personal information, privacy, and data retention in the United States, the E.U., and other jurisdictions, and we cannot yet determine the impact that such future laws, regulations, and industry standards may have on our business.
Our inability to generate sufficient cash flow to satisfy our debt obligations or to refinance our obligations on commercially reasonable terms could have a material adverse effect on our business, including our financial condition and results of operations. 29 We may be unable to obtain additional financing to fund operations and growth.
Our inability to generate sufficient cash flow to satisfy our debt obligations or to refinance our obligations on commercially reasonable terms could have a material adverse effect on our business, including our financial condition and results of operations. We may be unable to obtain additional financing to fund operations and growth.
For example, we rely on third parties to provide data sourced from state departments of motor vehicles (and their European equivalents) and other governmental agencies with which we do not have direct relationships for the driver and other information we use in our business.
For example, we rely on third parties to provide data sourced from state departments of motor vehicles (and their European equivalents) and other governmental agencies with which we do not have direct relationships for driver and other information we use in our business.
We rely on third-party communications service and system providers to provide technology services and link our systems with our customers’ networks and systems, including a reliable network backbone with the necessary speed, data capacity and security. We also rely on third-party vendors, including data center, bandwidth and telecommunications equipment providers.
We rely on third-party communications services and system providers to provide technology services and link our systems with our customers’ networks and systems, including a reliable network backbone with the necessary speed, data capacity, and security. We also rely on third-party vendors, including data center, bandwidth, and telecommunications equipment providers.
Any failure to properly perform under our contracts or meet our customers’ expectations could have a material adverse effect on our business, financial condition and results of operations. Risks Related to Our Acquisitions Our inability to successfully implement our acquisition strategy could have a material adverse effect on our business.
Any failure to properly perform under our contracts or meet our customers’ expectations could have a material adverse effect on our business, financial condition, and results of operations. 17 Risks Related to Our Acquisitions Our inability to successfully implement our acquisition strategy could have a material adverse effect on our business.
As these laws, regulations, and standards continue to develop in the United States and internationally, we may be required to expend significant time and resources in order to update existing processes or implement additional mechanisms as necessary to ensure compliance.
As these laws, regulations, and standards continue to develop in the United States and internationally, we may be required to expend significant time and resources in order to update existing processes or implement additional mechanisms to ensure compliance.
Responding to such actions can be costly and time-consuming, disrupt our business and operations, and divert the attention of our Board, management, and employees from the pursuit of our business strategies. Such activities could interfere with our ability to execute our strategic plan.
Responding to such actions can be costly and time-consuming, disrupt our business and operations, and divert the attention of our Board of Directors, management, and employees from the pursuit of our business strategies. Such activities could interfere with our ability to execute our strategic plan.
Further, our relationships and commercial account agreements with tolling authorities, issuing authorities, motor vehicle departments and other governmental agencies significantly enhances and enables our service offerings, and changes in those relationship or agreements could significantly adversely impact our business.
Further, our relationships and commercial account agreements with tolling authorities, issuing authorities, motor vehicle departments, and other governmental agencies significantly enhances and enables our service offerings, and changes in those relationships or agreements could significantly adversely impact our business.
Increasing regulatory burdens and corporate governance requirements could increase our legal and financial compliance costs and the amount of time management must devote to governance and compliance activities. 33 In addition to the laws and regulations discussed elsewhere in these risk factors regarding data privacy, foreign operations and other matters, we are subject to laws regarding transportation safety, consumer protection, procurement, anti-kickback, labor and employment matters, competition and antitrust, payment processing, intellectual property, environmental matters, and other trade-related laws and regulations.
Increasing regulatory burdens and corporate governance requirements could increase our legal and financial compliance costs and the amount of time management must devote to governance and compliance activities. 32 In addition to the laws and regulations discussed elsewhere in these risk factors regarding data privacy, foreign operations, and other matters, we are subject to laws regarding transportation safety, consumer protection, procurement, anti-kickback, labor and employment matters, competition and antitrust, payment processing, intellectual property, environmental matters, and other trade-related laws and regulations.
Risks Related to our International Operations 12 • Our international operations expose us to additional risks, and failure to manage those risks could have a material adverse effect on our business. Risks Related to Our Intellectual Property • Failure to acquire necessary intellectual property or adequately protect our intellectual property could have a material adverse effect on our business.
Risks Related to Our International Operations • Our international operations expose us to additional risks, and failure to manage those risks could have a material adverse effect on our business. Risks Related to Our Intellectual Property • Failure to acquire necessary intellectual property or adequately protect our intellectual property could have a material adverse effect on our business.
In addition, if we are unable to pay the amounts due under the term loan, our lenders could proceed against the collateral securing the indebtedness under the term loan, which consists of substantially all of our assets.
In addition, if we are unable to pay the amounts due under the Amended Term Loan, our lenders could proceed against the collateral securing the indebtedness under the Amended Term Loan, which consists of substantially all of our assets.
These limitations on the forum in which stockholders may initiate action against us could create costs or, inconvenience or otherwise adversely affect our stockholders’ ability to seek legal redress.
These limitations on the forum in which stockholders may initiate an action against us could create costs or inconvenience or otherwise adversely affect our stockholders’ ability to seek legal redress.
Litigation, disputes, or regulatory investigations may relate to, among other things, intellectual property, antitrust claims, commercial arrangements, negligence and fiduciary duty claims, vicarious liability based upon conduct of individuals or entities outside of our control, including our third-party service providers, deceptive trade practices, claims related to invoicing, personal injury claims, claims related to licensing, general fraud claims and employment law claims, including compliance with wage and hour regulations and contractual requirements.
Litigation, disputes, or regulatory investigations may relate to, among other things, intellectual property, antitrust claims, commercial arrangements, negligence and fiduciary duty claims, vicarious liability based upon conduct of individuals or entities outside of our control, including our third-party service providers or our customers, deceptive trade practices, claims related to compliance with laws or our contractual requirements, invoicing, personal injury claims, claims related to licensing, general fraud claims and employment law claims, including compliance with wage and hour regulations and contractual requirements.
Our ability to comply with these covenants in future periods will also depend substantially on the pricing and sales volume of our products and our ability to successfully implement our overall business strategy.
Our ability to comply with these covenants in future periods will also depend substantially on the pricing and sales volume of our products and services and our ability to successfully implement our overall business strategy.
Moreover, we face competition from our own customers as they may choose to invest in developing their own internal solutions. 15 Some of our existing competitors and potential new competitors have longer operating histories, greater name recognition, less debt, more established customer bases or significantly greater financial, technical, research and development, marketing and other resources than we do.
Moreover, we face competition from our own customers as they may choose to invest in developing their own internal solutions. 14 Some of our existing competitors and potential new competitors have longer operating histories, greater name recognition, less debt, more established customer bases, or significantly greater financial, technical, research, and development, marketing, and other resources than we do.
If we fail to maintain effective internal controls, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our securities may be negatively affected, and we could be subject to sanctions or investigation by regulatory authorities, such as the SEC or Nasdaq. 32 Litigation and other disputes and regulatory investigations could have a material adverse effect on our business.
If we fail to maintain effective internal controls, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our securities may be negatively affected, and we could be subject to sanctions or investigation by regulatory authorities, such as the SEC or Nasdaq. 31 Litigation and other disputes and regulatory investigations could have a material adverse effect on our business.
Our government contracts are subject to underlying laws and regulations related to government contractors, and often include other one-sided, customer-friendly provisions and certifications, including broad indemnification provisions and uncapped exposure or liquidated damages for certain liabilities, which can impose obligations, requirements and liabilities on us that are beyond those associated with a typical commercial arrangement.
Our government contracts are subject to underlying laws and regulations related to government contractors, and often include other one-sided, customer-friendly provisions and certifications, including termination for convenience, broad indemnification provisions, and uncapped exposure or liquidated damages for certain liabilities, which can impose obligations, requirements, and liabilities on us that are beyond those associated with a typical commercial arrangement.
Any alleged or actual violations of any law or regulation, change in law or regulation or changes in the interpretation of existing laws or regulations may subject us to government scrutiny, including government or regulatory investigations and enforcement actions, civil and criminal fines and penalties, and negative publicly, or otherwise have a material adverse effect on our business, financial condition and results of operations.
Any alleged or actual violations of any law or regulation, change in law or regulation or changes in the interpretation of existing laws or regulations may subject us to government scrutiny, including government or regulatory investigations and enforcement actions, civil and criminal fines and penalties, and negative publicity, or otherwise have a material adverse effect on our business, financial condition, and results of operations.
We may also be subject to differing or contrary policy preferences or requirements among our government customers which could result in a loss of government customers if we are unable to satisfy such potential differing requirements or preferences to the satisfaction of such customers. 14 In addition, government contracts are generally subject to audits and investigations by government agencies or higher-tier government contractors.
We may also be subject to differing or contrary policy preferences or requirements among our government customers which could result in a loss of government customers if we are unable to satisfy such potential differing requirements or preferences to the satisfaction of such customers. 13 In addition, government contracts are generally subject to audits and investigations by government agencies or higher-tier government contractors.
In addition to the risks inherent in conducting international business, expanding internationally with new and existing customers poses additional risks, including: • lack of acceptance of our products and services; • tax issues, including administration of value-added tax, restrictions on repatriating earnings, and with respect to our corporate operating structure and intercompany arrangements; • our ability to adapt our marketing and selling efforts to different cultures and customers; • a different competitive environment, including a number of smaller competitors and a more fragmented business model, as well as competition from other market participants; • our ability to obtain and protect intellectual property rights to operate successfully in each territory due to pre-existing third-party intellectual property rights; and • an unfamiliar regulatory environment, including different local, provincial and national regulations.
In addition to the risks inherent in conducting international business, expanding internationally with new and existing customers poses additional risks, including: • lack of acceptance of our products and services; • tax issues, including administration of VAT, restrictions on repatriating earnings, and with respect to our corporate operating structure and intercompany arrangements; 23 • our ability to adapt our marketing and selling efforts to different cultures and customers; • a different competitive environment, including a number of smaller competitors and a more fragmented business model, as well as competition from other market participants; • our ability to obtain and protect intellectual property rights to operate successfully in each territory due to pre-existing third-party intellectual property rights; and • an unfamiliar regulatory environment, including different local, provincial, and national regulations.
For example, our Commercial Services segment may be impacted by travel demand and extreme weather events which may impact overall travel demand in the United States. Our Government Solutions segment may be impacted to the extent our customers experience a reduction in political acceptance of or additional government restrictions on automated safety programs.
For example, our Commercial Services segment may be impacted by travel demand and extreme weather events which may affect overall travel demand in the United States. Our Government Solutions segment may be impacted to the extent our customers experience a reduction in political acceptance of, or additional government restrictions on, automated safety programs.
Additionally, defending or enforcing our intellectual property rights and agreements, and seeking an injunction or compensation for infringements or misappropriations, could result in expending significant resources and diverting management attention, which in turn may have a material adverse effect on our business, financial condition and results of operations.
Additionally, defending or enforcing our intellectual property rights and agreements, and seeking an injunction or compensation for infringements or misappropriations, could result in expending significant resources and diverting management attention, all of which may have a material adverse effect on our business, financial condition, and results of operations.
Any loans or other extensions of credit would be subject to the restrictive covenants under such agreements. 31 If our Class A Common Stock is delisted from Nasdaq, a market for our securities may not continue, which would adversely affect the liquidity and price of our securities.
Any loans or other extensions of credit would be subject to the restrictive covenants under such agreements. 30 If our Class A Common Stock is delisted from Nasdaq, a market for our securities may not continue, which would adversely affect the liquidity and price of our securities.
The financial condition and operating requirements of our operating subsidiaries may limit our ability to obtain cash from our operating subsidiaries. The earnings from, or other available assets of, our operating subsidiaries may not be sufficient to make distributions or loans to enable us to pay any dividends on our Common Stock or satisfy our other financial obligations.
The financial condition and operating requirements of our operating subsidiaries may limit our ability to obtain cash from our operating subsidiaries. The earnings from, or other available assets of, our operating subsidiaries may not be sufficient to make distributions or loans to enable us to pay any dividends on our Class A Common Stock or satisfy our other financial obligations.
Our inability to successfully integrate acquired businesses could have a material adverse effect on our business, financial condition and results of operations. 19 Any failure to realize the anticipated benefits of an acquisition, including unanticipated expenses and liabilities related to acquisitions, could have a material adverse effect on our business.
Our inability to successfully integrate acquired businesses could have a material adverse effect on our business, financial condition, and results of operations. 18 Any failure to realize the anticipated benefits of an acquisition, including unanticipated expenses and liabilities related to acquisitions, could have a material adverse effect on our business.
The agreements governing our indebtedness contain numerous covenants and require us, if availability goes below a certain threshold, to comply with a minimum “consolidated fixed charge coverage ratio” financial covenant as calculated in the revolving credit agreement.
The agreements governing our indebtedness contain numerous covenants and require us, if availability goes below a certain threshold, to comply with a minimum “consolidated fixed charge coverage ratio” financial covenant as calculated in the Amended and Restated Revolving Credit Agreement.
The agreements governing our indebtedness restrict, among other things and subject to certain exceptions, our and our restricted subsidiaries’ ability to: • incur additional indebtedness; • pay dividends or other payments on capital stock; • guarantee other obligations; • grant liens on assets; • make loans, acquisitions or other investments; • transfer or dispose of assets; • make optional payments or modify certain debt instruments; • engage in transactions with affiliates; • amend organizational documents; • engage in mergers or consolidations; • enter into arrangements that restrict the ability to pay dividends; • engage in business activities that are materially different from existing business activities; • change the nature of the business we conduct; and • designate subsidiaries as unrestricted subsidiaries.
The agreements governing our indebtedness restrict, among other things and subject to certain exceptions, our and our restricted subsidiaries’ ability to incur additional indebtedness, pay dividends or other payments on capital stock, guarantee other obligations, grant liens on assets, make loans, acquisitions, or other investments, transfer or dispose of assets, make optional payments or modify certain debt instruments, engage in transactions with affiliates, amend organizational documents, engage in mergers or consolidations, enter into arrangements that restrict the ability to pay dividends, engage in business activities that are materially different from existing business activities, and change the nature of the business we conduct.
Risks Related to Our Acquisitions • Our inability to successfully implement our acquisition strategy could have a material adverse effect on our business. Risks Related to Data Privacy and Cybersecurity • A failure in or breach of our networks or systems, including as a result of cyber-attacks, could have a material adverse effect on our business.
Risks Related to Our Acquisitions • Our inability to successfully implement our acquisition strategy could have a material adverse effect on our business. Risks Related to Data Privacy and Cybersecurity • A failure in or compromise of our networks or systems, including as a result of cyber-attacks, could have a material adverse effect on our business.
We cannot predict the nature, scope or impact of future laws, regulatory requirements or similar standards may have on our business, whether implemented through changes to existing laws or the way they are administered or interpreted, or through entirely new regulations.
We cannot predict the nature, scope, or impact that future laws, regulatory requirements, or similar standards may have on our business, whether implemented through changes to existing laws or the way they are administered or interpreted, or through entirely new regulations.
Usage may also be affected if there is an unfavorable shift in political support for, or public sentiment towards, automated enforcement, or as a result of one or more scandals related to its use.
Usage may also be affected if there is an unfavorable shift in political support for, or public sentiment toward, automated enforcement, or as a result of one or more scandals related to its use.
Certain existing and new competitors may be better positioned to acquire competitive solutions, develop new solutions, modify existing solutions, effectively negotiate third-party licenses and other strategic relationships, and take advantage of acquisition or other similar expansion opportunities.
Certain existing and new competitors may be better positioned to acquire competitive solutions, develop new solutions, modify existing solutions, effectively negotiate third-party licenses and other strategic relationships, and take advantage of acquisitions or other similar expansion opportunities.
From time to time, and as more discussed in the section entitled “ Legal Proceedings ,” we may be involved in litigation and other disputes or regulatory investigations that arise in and outside the ordinary course of business.
From time to time, and as further discussed in the section entitled “ Legal Proceedings ,” we may be involved in litigation and other disputes or regulatory investigations that arise in and outside the ordinary course of business.
For example, in 2020, after we discovered issues in our system installation practices under our agreement with NYCDOT, NYCDOT investigated the matter and we undertook significant efforts to remediate past installations. If penalties or other restrictions are imposed in one jurisdiction, they could also implicate similar provisions of contracts with other government customers in other jurisdictions.
For example, in 2020, after we discovered issues in our system installation practices under our agreement with NYCDOT, NYCDOT investigated the matter and we undertook significant efforts to remediate past installations. If penalties or other restrictions are imposed in one jurisdiction, they could implicate similar provisions in contracts with other government customers.
Further, some jurisdictions require that we subcontract a certain percentage of our work to certified businesses and failure to do so may decrease our competitiveness in the marketplace, lead to breach of contract claims or result in having to refund fees paid for failing to achieve committed targets.
Further, some jurisdictions require that we subcontract a certain percentage of our work to certified businesses and failure to do so may decrease our competitiveness in the marketplace, lead to breach of contract claims, or result in having to refund fees paid due to a failure to achieve committed targets.
Various U.S. state laws and regulations may also require us to notify affected individuals and state agencies in the event of a data breach involving personal information. Penalties for failure to adequately protect personal information, notify as required, or provide timely notice vary by jurisdiction.
Various U.S. state laws and regulations may also require us to notify affected individuals and state agencies in the event of a data breach involving personal information. Penalties for failing to adequately protect personal information or to provide required or timely notice vary by jurisdiction.
Failure to properly transition new customers to our systems or existing customers to our different systems, properly budget transition costs or accurately estimate contract costs could also result in delays and general customer dissatisfaction. Many of our contracts may be terminated by the customer upon specified advance notice without cause.
Failure to properly transition new customers to our systems or existing customers to different systems, accurately budget transition costs, or estimate contract costs could result in delays and customer dissatisfaction. In addition, many of our contracts may be terminated by the customer upon specified advance notice without cause.
In addition, we are subject to audits of our income, sales and other transaction taxes by U.S. federal and state authorities, as well as foreign tax authorities. Outcomes from these audits could have an adverse effect on our financial condition and results of operations.
In addition, we are subject to audits of our income, sales, and other transaction taxes by U.S. federal and state authorities, as well as foreign tax authorities. Outcomes from these audits could have a material adverse effect on our financial condition and results of operations.
These investigations can be commenced at the initiative of the governmental authority or as a result of complaints by private citizens, regardless of whether the complaint has any merit.
These investigations may be commenced at the initiative of a governmental authority or as a result of complaints by private citizens, regardless of whether the complaint has any merit.
Failure to comply with these laws may subject us to, among other things, additional costs or changes to our business practices, liability for monetary damages, fines or criminal prosecution, unfavorable publicity, restrictions on our ability to process and support financial transactions and allegations by customers that we have not performed our contractual obligations, any of which could have a material adverse effect on our business, financial condition and results of operations.
Failure to comply with these laws or requirements by the Payment Card Industry may subject us to, among other things, additional costs or changes to our business practices, liability for monetary damages, fines or criminal prosecution, unfavorable publicity, restrictions on our ability to process and support financial transactions, and allegations by customers that we have not performed our contractual obligations, any of which could have a material adverse effect on our business, financial condition, and results of operations.
In addition, a breach could lead to unfavorable publicity and significant damage to our brand, the loss of existing and potential customers, allegations by customers that we have not performed or have breached our contractual obligations, or decreased use and acceptance of our solutions.
In addition, a cybersecurity incident could lead to unfavorable publicity and significant damage to our brand, the loss of existing and potential customers, allegations by customers that we have not performed or have breached our contractual obligations, or decreased use and acceptance of our solutions.
We also use third-party providers such as subcontractors, software vendors, utility providers and network providers, upon whom we rely, to offer our products, services and solutions.
We also rely upon third-party providers such as subcontractors, software vendors, utility providers, and network providers to offer our products, services, and solutions.
Travel Act, the Patriot Act, and comparable foreign anti-bribery and anti-money laundering laws and regulations, including the United Kingdom Bribery Act of 2010. Our businesses are subject to a number of international, federal, state and local laws and regulations regarding similar matters.
Travel Act, the Patriot Act, and comparable foreign anti-bribery and anti-money laundering laws and regulations, such as the United Kingdom Bribery Act 2010. Our businesses are subject to a number of international, federal, state, and local laws and regulations regarding similar matters.
If we are unable to further expand internationally or if we are unable to effectively and efficiently manage the complexity of our expanded operations and compete in these new regions and countries, our business, financial condition and results of operations could be adversely affected. Failure to comply with anticorruption and anti-money laundering laws, including the U.S.
If we are unable to further expand internationally or if we are unable to effectively and efficiently manage the complexity of our expanded operations and compete in these markets, our business, financial condition, and results of operations could be adversely affected. Failure to comply with anticorruption and anti-money laundering laws, including the U.S.
Our government contracts are subject to unique risks and uncertainties, including termination rights, delays in payment, audits and investigations, any of which could have a material adverse effect on our business.
Our government contracts are subject to unique risks and uncertainties, including termination rights, delays in payment, funds appropriation requirements, audits, and investigations, any of which could have a material adverse effect on our business .
A breach or failure may also subject us to additional regulations or governmental or regulatory scrutiny, which could result in significant compliance costs, fines or enforcement actions, or potential restrictions imposed by regulators on our ability to operate our business.
A cybersecurity incident or system failure may also subject us to additional regulations or governmental or regulatory scrutiny, which could result in significant compliance costs, fines, or enforcement actions, or potential restrictions imposed by regulators on our ability to operate our business.
(“ VM Consolidated ”) issued an aggregate principal amount of $350 million in Senior Unsecured Notes (the “ Senior Notes ”) due 2029. We may also incur substantial additional debt in the future to, among other things, finance our acquisition strategy.
Additionally, pursuant to an indenture, VM Consolidated issued an aggregate principal amount of $350 million in Senior Unsecured Notes due 2029. We may also incur substantial additional debt in the future to, among other things, finance our acquisition strategy.
In that case, we may be unable to borrow under our revolving credit agreement or otherwise, may not be able to repay the amounts due under the agreements governing our indebtedness, and may not be able to make cash available by dividend, debt repayment or otherwise.
In that case, we may be unable to borrow under our Amended and Restated Revolving Credit Agreement (defined below) or otherwise, may not be able to repay the amounts due under the agreements governing our indebtedness, and may not be able to make cash available by dividend, debt repayment, or otherwise.
In addition, consumer spending and activities may be materially adversely affected in response to financial market volatility, negative financial news, conditions in the real estate and mortgage markets, declines in income or asset values, energy prices, labor and healthcare costs and other economic factors, all of which may have a negative effect on our business and results of operations.
In addition, consumer spending and activities may be materially adversely affected in response to financial market volatility, negative financial news, changes to or disruptions in governmental budgeting processes or amounts, conditions in the real estate and mortgage markets, declines in income or asset values, energy prices, labor and healthcare costs, and other economic factors, all of which may have a negative effect on our business and results of operations.
In addition, if a prospective customer is currently using a competing solution, the customer may be unwilling to switch to our solution without setup support services or other incentives.
In addition, if a prospective customer is currently using a competing solution, the customer may be unwilling to switch to our solution without set-up support services or other incentives.
Any failure to retain key management personnel or to attract additional or suitable replacement personnel could cause uncertainty among investors, employees, customers and others concerning our future direction and performance and could have a material adverse effect on our business, financial condition and results of operations. 23 A failure to attract and retain necessary skilled personnel and qualified subcontractors could have a material adverse effect on our business.
Any failure to retain key management personnel or to attract additional or suitable replacement personnel could cause uncertainty among investors, employees, customers, and others concerning our future direction and performance and could have a material adverse effect on our business, financial condition, and results of operations.
Accordingly, the demand for our products in the past has been, and in the future may be, impacted by industry and macroeconomic trends and conditions impacting our customers, including seasonality, demand for business and leisure travel, reductions in the level of air travel, higher airfare costs, energy shortages and cost increases, international, national and local economic conditions and cycles, as well as other factors affecting travel levels, such as military conflicts, terrorist incidents, natural disasters and epidemic diseases.
Accordingly, the demand for our products in the past has been, and in the future may be, impacted by industry and macroeconomic trends and conditions impacting our customers, including seasonality, demand for business and leisure travel, changes to or disruptions in governmental budgeting, reductions in the level of air travel, higher airfare costs, energy shortages, and cost increases, international, national, and local economic conditions and cycles, as well as other factors affecting travel levels, such as military conflicts, terrorist incidents, natural disasters, epidemic diseases, or government shutdowns.
Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, inflation, financial and credit market fluctuations, international trade relations, pandemics, political turmoil, natural catastrophes, warfare, and terrorist attacks on the United States or elsewhere, could negatively affect customer demand and the growth of our business. 13 Our Commercial Services and Government Solutions segments have several large customers, including the NYCDOT, that account for a significant portion of our revenue, and a reduction in demand or loss of one or more of such customers could have a material adverse effect on our business.
Negative conditions in the general economy, both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, inflation, financial and credit market fluctuations, international trade relations, government shutdowns, pandemics, political turmoil, natural catastrophes, warfare, and terrorist attacks on the United States or elsewhere, could negatively affect customer demand and the growth of our business. 12 Our Commercial Services and Government Solutions segments have several large customers, including NYCDOT, that account for a significant portion of our revenue, and a reduction in demand, materially different terms or pricing in new or amended agreements, or loss of one or more of such customers could have a material adverse effect on our business.
In addition, we recorded approximately $1.7 million within accrued liabilities related to the excise taxes payable on net share repurchases on the consolidated balance sheets as of December 31, 2024.
In addition, we recorded approximately $1.3 million within accrued liabilities related to the excise taxes payable on net share repurchases on the consolidated balance sheets as of December 31, 2025.
Risks Related to Our Customers, Industry, Competition and Vendors Negative industry and macroeconomic conditions impacting our customers or us may materially and adversely impact our business, results of operations and financial condition. We provide smart mobility technology solutions to customers in our Commercial Services, Government Solutions and Parking Solutions business segments.
Risks Related to Our Customers, Industry, Competition, and Vendors Negative industry and macroeconomic conditions, including the impact of government actions and regulations on our customers or us, may materially and adversely impact our business, results of operations, and financial condition. We provide smart mobility technology solutions to customers in our Commercial Services, Government Solutions, and Parking Solutions business segments.
During fiscal year 2023, we identified a material weakness in the design and operation of our internal controls over financial reporting in the Control Activities component of the COSO framework related to the lack of information technology general controls to prevent the risk of management override.
During fiscal year 2023, we identified a material weakness in the design and operation of our internal controls over financial reporting in the Control Activities component of the Committee of Sponsoring Organizations of the Treadway Commission (“ COSO ”) framework related to the lack of information technology general controls to prevent the risk of management override.
Although we devote significant resources to our cybersecurity programs and have implemented security measures to protect our systems and data, and to prevent, detect and respond to data security incidents, in each case that we believe are reasonable and appropriate, these efforts, and the efforts of third parties with which we interact, may not prevent these or other threats.
Although we devote significant resources to our cybersecurity programs and have implemented security measures that we believe are reasonable and appropriate to protect our systems and data and to prevent, detect, and respond to data security incidents, these efforts, as well as the efforts of third parties with which we interact, may not be sufficient to prevent these or other threats.
In addition, numerous and evolving cybersecurity threats, including advanced and persistent cyber-attacks, phishing and social engineering schemes could compromise our systems and the confidentiality, availability and integrity of data in our systems, as well as the systems and data of the third parties with which we interact.
In addition, numerous and evolving cybersecurity threats, including advanced and persistent cyber-attacks, including the use of AI tools to aid such threats, phishing, and social engineering schemes could compromise our systems and the confidentiality, availability, and integrity of data in our systems, as well as the systems and data of the third parties with which we interact.
Therefore, we depend on national, state and local governments authorizing the use of automated photo enforcement and not otherwise materially restricting its use. In states that have enabling legislation, if that legislation is amended, not renewed or is otherwise repealed, use of automated enforcement technology can be suspended until new legislation is passed.
Accordingly, our business depends on national, state, and local governments authorizing the use of automated photo enforcement and not materially restricting its use. In states that have enabling legislation, if that legislation is amended, not renewed, or is otherwise repealed, use of automated enforcement technology can be suspended until new legislation is passed.
We enter into government contracts from time to time with customers that are subject to various uncertainties, restrictions and regulations, which could result in withholding or delay of payments to us. For example, as of December 31, 2024, NYCDOT had an open receivable balance of $35.6 million, which represented 17.2% of our total accounts receivable, net .
We enter into government contracts from time to time with customers that are subject to various uncertainties, restrictions, and regulations, which could result in withholding or delay of payments to us. For example, as of December 31, 2025, NYCDOT had an open receivable balance of $72.9 million, which represented 31.1% of our total accounts receivable, net .
Our international operations subject us to risks that could increase expenses, restrict our ability to operate, result in lost revenues or otherwise materially and adversely affect our business, including: • political, social, and economic instability, including European sovereign debt issues and tightening of government budgets; • fluctuations in geopolitical relationships, which may impact our access to goods and services and our ability to contract with certain government entities; • wars, civil unrest, acts of terrorism and other conflicts; • increased complexity and costs of managing or overseeing foreign operations, including adapting and localizing our services to specific regions and countries and relying on different third-party service providers; • complying with tariffs, trade restrictions, and trade agreements and any changes thereto; • foreign exchange and other restrictions and limitations on the transfer or repatriation of funds; • adverse tax consequences; • fluctuations in currency exchange rates; • complying with varying legal and regulatory environments, and managing public perception, in multiple foreign jurisdictions, including with respect to data and consumer privacy and payment processing, labor matters and VAT, and unexpected changes in these laws, regulatory requirements, and the enforcement thereof; and • limited protection of our intellectual property and other assets as compared to the laws of the United States. 24 We have limited or no control over these and other factors related to international operations and our strategies to address these risks may not correctly anticipate any problems that arise or be successful in expanding our solutions from the United States into new markets.
Our international operations subject us to risks that could increase expenses, restrict our ability to operate, result in lost revenues, or otherwise materially and adversely affect our business, including: • political, social, and economic instability, including European sovereign debt issues and tightening of government budgets; • fluctuations in geopolitical relationships, which may impact our access to goods and services and our ability to contract with certain government entities; • wars, civil unrest, acts of terrorism, and other conflicts; • increased complexity and costs of managing or overseeing foreign operations, including adapting and localizing our services to specific regions and countries and relying on different third-party service providers; • complying with tariffs, trade restrictions, and trade agreements, and any changes thereto; • foreign exchange and other restrictions and limitations on the transfer or repatriation of funds; • adverse tax consequences; • fluctuations in currency exchange rates; • complying with varying legal and regulatory environments, and managing public perception, in multiple foreign jurisdictions, including with respect to data and consumer privacy and payment processing, labor matters, and value-added tax (“ VAT ”), and unexpected changes in these laws, regulatory requirements, and the enforcement thereof; and • limited protection of our intellectual property and other assets as compared to the laws of the United States.
This includes advancements in the area of self-driving cars which may significantly reduce the frequency of vehicles illegally running red lights or exceeding posted speed limits. This also includes AI tools, which may allow for new or more efficient competing solutions.
This includes advancements in the area of self-driving vehicles, which may significantly reduce the frequency of vehicles illegally running red lights, exceeding posted speed limits, or requiring parking, as well as AI-enabled tools, which may allow for new or more efficient competing solutions.
Competitive bidding imposes substantial costs and presents several risks, including significant time and effort and the commitment of resources, regardless of whether the contract is ultimately won. For example, we invested significant time and resources to prepare our response for the competitive procurement for the new NYCDOT automated enforcement program contract.
Competitive bidding involves substantial costs and risks, including significant time and effort and the commitment of resources, regardless of whether a contract is ultimately awarded. For example, we invested significant time and resources to prepare our response for the competitive procurement for the new NYCDOT automated enforcement program contract.
If improper or illegal activities or contractual non-compliance are identified, including improper billing or vendor non-compliance, we may be subject to various civil and criminal penalties and administrative sanctions, which may include termination of contracts, forfeiture of profits, suspension of payments, the imposition of fines, penalties and sanctions, and suspensions or debarment from doing business for or on behalf of the government in the future.
If improper or illegal activities or contractual non-compliance are identified, including improper billing or vendor non-compliance, we may be subject to various civil and criminal penalties and administrative sanctions, which could include termination, forfeiture of profits, suspension of payments, fines, penalties, sanctions, and suspension or debarment from doing business with government entities in the future.
Further, employee error or malfeasance, faulty password management or other irregularities may result in a defeat of security measures or a system breach.
Further, employee error or malfeasance, faulty password management, or other irregularities may result in a defeat of security measures or a cybersecurity incident.
Under our first lien term loan facility, we could be required to make periodic prepayments based on excess cash flow (as defined by the first lien term loan agreement) thereby limiting the amount of cash flow that can be reinvested in our business.
Under our Amended Term Loan, we could be required to make periodic prepayments based on excess cash flow (as defined by the Amended and Restated Term Loan Agreement, defined below) thereby limiting the amount of cash flow that can be reinvested in our business.
Failure to identify suitable transaction partners and to consummate transactions on acceptable terms, as well as the commitment of time and resources in connection with such transactions, could have a material adverse effect on our business, financial condition and results of operations. 18 The inability to successfully integrate our recent or future acquisitions could have a material adverse effect on our business.
Failure to identify suitable transaction partners and to consummate transactions on acceptable terms, as well as the commitment of time and resources in connection with such transactions, could have a material adverse effect on our business, financial condition, and results of operations.
Misconduct or performance deficiencies by any of our third-party providers may be perceived as misconduct or poor performance by us, cause us to fall short on our contractual obligations to our customers or harm our reputation, any of which could have a material adverse effect on our business, financial condition and results of operations. 17 We rely on communications networks and information systems and any interruption could have a material adverse effect on our business.
Misconduct or performance deficiencies by any of our third-party providers may be perceived as misconduct or poor performance by us, cause us to fall short of our contractual obligations, or harm our reputation, any of which could have a material adverse effect on our business, financial condition, and results of operations.
Our ability to retain, increase and engage our customer base and to increase our revenue depends, in large part, on our ability to continue to evolve existing solutions and to create successful new solutions.
Our ability to retain, expand, and engage our customer base and to increase revenue depends, in large part, on our ability to continue evolving our existing solutions and developing successful new solutions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHowever, evolving cybersecurity threats make it increasingly challenging to anticipate, detect, and defend against cybersecurity threats and incidents. We have in place insurance designed to provide coverage in connection with cybersecurity incidents, provided, however, that such insurance coverage may be insufficient to cover all insured losses or all types of claims that may arise.
Biggest changeWe have in place insurance designed to provide coverage in connection with cybersecurity incidents, provided, however, that such insurance coverage may be insufficient to cover all insured losses or all types of claims that may arise. Additional information on cybersecurity risks is discussed in Part I, Item 1A, “Risk Factors.”
Third-Party Risk Management : We maintain a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties , including vendors, service providers and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.
Third-Party Risk Management : We maintain a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties , including vendors, service providers, and other external users of our systems, as well as the systems of third parties that could adversely impact our business operations in the event of a cybersecurity incident affecting those third-party systems.
Our Audit Committee also receives prompt and timely information regarding cybersecurity incidents that meet established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed. On an annual basis, our Audit Committee discusses our Company’s approach to cybersecurity risk management with management.
Our Audit Committee also receives prompt and timely information regarding cybersecurity incidents that meet established reporting thresholds, as well as ongoing updates regarding any such applicable incident until it has been addressed. On an annual basis, our Audit Committee discusses our Company’s approach to cybersecurity risk management with management.
Item 1C. Cybersecurity Our Board recognizes the importance of maintaining the trust and confidence of our customers, clients, business partners and employees. Our Board, through the Audit Committee, oversees our cybersecurity program as part of our enterprise-wide approach to risk management.
Item 1C. Cybersecurity Our Board of Directors recognizes the importance of maintaining the trust and confidence of our customers, clients, business partners, and employees. Our Board of Directors, through the Audit Committee, oversees our cybersecurity program as part of our enterprise-wide approach to risk management.
We regularly engage third parties to perform assessments on our cybersecurity measures, including information security maturity assessments, audits and independent reviews of our information security control environment and operating effectiveness. The results of such assessments, audits and reviews are reported to our Board and Audit Committee by our Chief Technology Officer based on materiality.
We regularly engage third parties to perform assessments on our cybersecurity measures, including information security maturity assessments, audits, and independent reviews of our information security control environment and operating effectiveness. The results of such assessments, audits, and reviews are periodically reported to our Board of Directors and Audit Committee by our Chief Technology Officer based on materiality.
We adjust our cybersecurity policies, standards, processes and practices as necessary based on the information provided by these assessments, audits and reviews. Governance Our Board, through the Audit Committee, oversees our enterprise-wide approach to risk management, including the risks arising from cybersecurity threats.
We adjust our cybersecurity policies, standards, processes, and practices as appropriate based on the information provided by these assessments, audits, and reviews . 34 Governance Our Board, through the Audit Committee, oversees our enterprise-wide approach to risk management, including the risks arising from cybersecurity threats.
Technical Safeguards : We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, antimalware functionality and access controls, which are evaluated and improved through vulnerability assessments, certifications, audits and cybersecurity threat intelligence.
Technical Safeguards : We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, and access controls; these safeguards are evaluated and improved through vulnerability assessments, certifications, audits, and cybersecurity threat intelligence.
Education and Awareness : We provide regular, mandatory training for personnel regarding cybersecurity threats as a means to equip our personnel with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices. 35 We engage in the periodic assessment and testing of our policies, standards, processes and practices that are designed to address cybersecurity threats and incidents.
Education and Awareness : We provide regular, mandatory training for personnel regarding cybersecurity threats as a means to equip our personnel with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes, and practices.
These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability testing and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
We engage in the periodic assessment and testing of our cybersecurity policies, standards, processes, and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
The program is underpinned by our Supply Chain Risk Management Standard which outlines requirements for vendors handling confidential company data or personally identifiable information, and we conduct continuous monitoring through a third-party monitoring tool.
For vendors that handle confidential company data or personal data, our Supply Chain Risk Management Standard outlines applicable requirements and we conduct monitoring through a third-party monitoring tool .
We work with third-party firms to monitor our cybersecurity environment and report findings to executive leadership, internal audit and the Audit Committee regularly.
Our Chief Technology Officer regularly reports to our Audit Committee . Collaboration : We have implemented a comprehensive, cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents. We work with third-party firms to monitor our cybersecurity environment and report notable findings to executive leadership, internal audit, and the Audit Committee regularly.
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In general, we seek to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, integrity and availability of the information that we collect and store by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.
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Cybersecurity Threats As of December 31, 2025, during the past three years, we have not experienced any cybersecurity incidents that have resulted in material disruptions to operations, loss of data, or financial impact. However, evolving cybersecurity threats make it increasingly challenging to anticipate, detect, and defend against cybersecurity threats and incidents.
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Our Chief Technology Officer leads our cybersecurity team and regularly reports to our Audit Committee.
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Collaboration : We have implemented a comprehensive, cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.
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Our Chief Executive Officer, Chief Financial Officer and Chief Legal Officer each hold undergraduate and/or graduate degrees in their respective fields, and each has experience managing risks at our Company and at similar companies including risks arising from cybersecurity threats.
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Cybersecurity Threats As of December 31, 2024, we have not experienced any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents or threats, that have materially affected the business strategy, results of operations or financial condition of the Company or are reasonably likely to have such a material effect.
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Additional information on cybersecurity risks is discussed in Part I, Item 1A, “Risk Factors.”

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Pr operties We lease all of the properties used in our business, including 108,956 square feet of office space for our corporate headquarters in Mesa, Arizona. In addition to the corporate headquarters, we lease office space in various locations for corporate and administrative purposes and multiple small warehouse locations.
Biggest changeItem 2. Pr operties We lease all of the properties used in our business, including 108,956 square feet of office space for our corporate headquarters in Mesa, Arizona. We expect to relocate in the first half of 2026 to a new corporate headquarters building in Mesa, Arizona, under a lease for approximately 40,000 square feet of office space.
We do not consider any of these properties to be material to our overall business. 36
In addition to the corporate headquarters, we lease office space in various locations for corporate and administrative purposes and multiple small warehouse locations. We do not consider any of these properties to be material to our overall business. 35

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeBased on the information available to the Company at present, it has accrued an estimated amount within accrued liabilities on the consolidated balance sheet as of December 31, 2024. The information contained in Note 16, Commitments and Contingencies , included in Item 8 of this 10-K is incorporated herein by reference. Item 4.
Biggest changeThe information contained in Note 16, Commitments and Contingencies , included in Item 8 of this 10-K is incorporated herein by reference. Item 4. Mine Saf ety Disclosures Not applicable. 36 PART II
The plaintiff class, which was certified on March 30, 2021, alleges that the City’s safety camera program was implemented and operated in violation of local ordinances and the state constitution, including that the City’s hearing process violated the plaintiffs’ due process rights for lack of a “neutral” arbiter of liability for traffic infractions.
The plaintiff class, which was certified on March 30, 2021, alleged that the City’s safety camera program was implemented and operated in violation of local ordinances and the state constitution, including that the City’s hearing process violated the plaintiffs’ due process rights for lack of a “neutral” arbiter of liability for traffic infractions.
Plaintiffs seek recovery of traffic infraction fines paid. The City and Redflex Traffic Systems, Inc. appealed the trial court’s ruling granting class certification, which was denied and their petition for discretionary review of the certification ruling by the Louisiana Supreme Court was declined. Discovery has concluded and trial is scheduled for March 2025.
Plaintiffs sought recovery of traffic infraction fines paid. The City and Redflex Traffic Systems, Inc. appealed the trial court’s ruling granting class certification, which was denied, and their petition for discretionary review of the certification ruling by the Louisiana Supreme Court was declined.
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Mine Saf ety Disclosures Not applicable. 37 PART II
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The parties entered into a settlement agreement and preliminary approval was granted by the court in April 2025. The court provided final approval of the settlement on September 18, 2025. A final dismissal order will be entered after the class action settlement is fully administered by a neutral claims administrator.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 37 PART II 38 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 38 Item 6. [Reserved] 40 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 41 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 55 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 36 PART II 37 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 37 Item 6. [Reserved] 39 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 40 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 54 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers The following details the purchases of our Class A Common Stock during the three months ended December 31, 2024: Period Total Number of Shares Purchased (1) Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet to be Purchased Under the Plans or Programs (2) October 1, 2024 - October 31, 2024 — $ — — $ 48,500,000 November 1, 2024 - November 30, 2024 1,226,592 $ 23.38 1,226,592 $ 19,850,784 December 1, 2024 - December 31, 2024 4,121,958 $ 23.72 4,121,958 $ 21,379 Total 5,348,550 $ 23.47 5,348,550 $ 21,379 39 (1) On December 11, 2024, we entered into an ASR agreement with a third-party financial institution and paid $112.7 million to receive an initial delivery of 3,821,958 shares of our Class A Common Stock.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers The following details the purchases of our Class A Common Stock during the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet to be Purchased Under the Plans or Programs (1) October 1, 2025 - October 31, 2025 — $ — — $ 250,000,000 November 1, 2025 - November 30, 2025 3,006,209 $ 22.45 3,006,209 $ 182,692,875 December 1, 2025 - December 31, 2025 3,022,644 $ 20.94 3,022,644 $ 116,553,267 Total 6,028,853 $ 21.64 6,028,853 $ 116,553,267 38 (1) Represents amounts outstanding under our authorized share repurchase program.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item with respect to our equity compensation plans is incorporated by reference to our proxy statement for the 2025 annual meeting of stockholders. 38 Stock Performance Graph The graph above compares the cumulative total return on our Class A Common Stock with that of the S&P 500 Index, the S&P Composite 1500 Data Processing & Outsourced Services Index and the Russell 2000 Index.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item with respect to our equity compensation plans is incorporated by reference to our proxy statement for the 2026 annual meeting of stockholders. 37 Stock Performance Graph The graph above compares the cumulative total return on our Class A Common Stock with that of the S&P 500 Index, the S&P Composite 1500 Data Processing & Outsourced Services Index, and the Russell 2000 Index.
The period shown commences on December 31, 2019 and ends on December 31, 2024, the end of our last fiscal year. The graph assumes an investment of $100 in each of the above on the close of market on December 31, 2019. We did not declare or pay any dividends on our Class A Common Stock during the comparison period.
The period shown commences on December 31, 2020 and ends on December 31, 2025, the end of our last fiscal year. The graph assumes an investment of $100 in each of the above on the close of market on December 31, 2020. We did not declare or pay any dividends on our Class A Common Stock during the comparison period.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock is currently quoted on Nasdaq under the symbol “VRRM”.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock is currently quoted on Nasdaq under the symbol “VRRM”. Holders of Record As of February 19, 2026, we had 7 holders of record of our Class A Common Stock.
On December 4, 2024, our Board of Directors authorized the repurchase of up to an additional $100 million of our outstanding shares of Class A Common Stock under the existing October 2023 program, providing us with approximately $112.7 million available for repurchases. As of December 31, 2024, less than $0.1 million remained available under the share repurchase authorization.
On October 23, 2025, our Board of Directors authorized the repurchase of up to an additional $150.0 million of our outstanding shares of Class A Common Stock under the existing share repurchase program, providing the Company with an aggregate $250.0 million available for repurchases.
(2) In October 2023, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period in open market, ASR or privately negotiated transactions.
On May 17, 2025, our Board of Directors authorized a new share repurchase program to repurchase up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period in open market purchases, in privately negotiated transactions, or by other means, including trading plans intended to qualify under Rule 10b5-1 of the Exchange Act, and ASR agreements.
Removed
The following table sets forth the high and low sales prices per share of our Class A Common Stock as reported on Nasdaq for the two most recent fiscal years: Fiscal Year 2024 Fiscal Year 2023 High Low High Low First Quarter $ 25.57 $ 20.26 $ 17.87 $ 13.48 Second Quarter $ 28.45 $ 23.30 $ 19.82 $ 16.22 Third Quarter $ 31.03 $ 24.22 $ 21.54 $ 17.04 Fourth Quarter $ 27.85 $ 22.20 $ 23.29 $ 18.62 Holders of Record As of February 21, 2025, we had 7 holders of record of our Class A Common Stock.
Added
The program may be suspended or terminated at any time by the Company and will terminate on November 13, 2026, if not terminated or extended prior to that date.
Removed
The final settlement is expected to occur in the first quarter of 2025, at which time, we expect to receive additional shares calculated using a volume-weighted average price over the term of the ASR agreement.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

98 edited+37 added−35 removed39 unchanged
Biggest changeYear Ended December 31, Percentage of Revenue Increase (Decrease) 2024 vs 2023 ($ in thousands) 2024 2023 2024 2023 $ % Service revenue $ 841,676 $ 783,595 95.7 % 95.9 % $ 58,081 7.4 % Product sales 37,531 33,715 4.3 % 4.1 % 3,816 11.3 % Total revenue 879,207 817,310 100.0 % 100.0 % 61,897 7.6 % Cost of service revenue, excluding depreciation and amortization 18,988 18,232 2.2 % 2.2 % 756 4.1 % Cost of product sales 27,058 25,231 3.1 % 3.1 % 1,827 7.2 % Operating expenses 295,937 273,288 33.7 % 33.4 % 22,649 8.3 % Selling, general and administrative expenses 195,054 198,550 22.2 % 24.3 % (3,496 ) (1.8 )% Depreciation, amortization and (gain) loss on disposal of assets, net 109,072 113,195 12.3 % 13.9 % (4,123 ) (3.6 )% Goodwill impairment 97,076 — 11.0 % — 97,076 n/a Total costs and expenses 743,185 628,496 84.5 % 76.9 % 114,689 18.2 % Income from operations 136,022 188,814 15.5 % 23.1 % (52,792 ) (28.0 )% Interest expense, net 73,902 86,701 8.4 % 10.6 % (12,799 ) (14.8 )% Change in fair value of private placement warrants — 24,966 0.0 % 3.1 % (24,966 ) (100.0 )% Tax receivable agreement liability adjustment (257 ) (3,077 ) (0.0 )% (0.4 )% 2,820 (91.6 )% Loss on interest rate swap 494 817 0.1 % 0.1 % (323 ) (39.5 )% Loss on extinguishment of debt 1,745 3,533 0.2 % 0.4 % (1,788 ) (50.6 )% Other income, net (18,970 ) (11,123 ) (2.2 )% (1.3 )% (7,847 ) 70.5 % Total other expenses 56,914 101,817 6.5 % 12.5 % (44,903 ) (44.1 )% Income before income taxes 79,108 86,997 9.0 % 10.6 % (7,889 ) (9.1 )% Income tax provision 47,660 29,982 5.4 % 3.6 % 17,678 59.0 % Net income $ 31,448 $ 57,015 3.6 % 7.0 % $ (25,567 ) (44.8 )% 45 Service Revenue .
Biggest changeYear Ended December 31, Percentage of Revenue Increase (Decrease) 2025 vs 2024 ($ in thousands) 2025 2024 2025 2024 $ % Service revenue $ 918,137 $ 841,676 93.8 % 95.7 % $ 76,461 9.1 % Product sales 60,942 37,531 6.2 % 4.3 % 23,411 62.4 % Total revenue 979,079 879,207 100.0 % 100.0 % 99,872 11.4 % Cost of service revenue, excluding depreciation and amortization 30,318 18,988 3.1 % 2.2 % 11,330 59.7 % Cost of product sales 45,517 27,058 4.6 % 3.1 % 18,459 68.2 % Operating expenses 333,241 295,937 34.0 % 33.7 % 37,304 12.6 % Selling, general and administrative expenses 215,274 195,054 22.0 % 22.2 % 20,220 10.4 % Depreciation, amortization and (gain) loss on disposal of assets, net 116,315 109,072 11.9 % 12.3 % 7,243 6.6 % Goodwill impairment — 97,076 0.0 % 11.0 % (97,076 ) (100.0 )% Total costs and expenses 740,665 743,185 75.6 % 84.5 % (2,520 ) (0.3 )% Income from operations 238,414 136,022 24.4 % 15.5 % 102,392 75.3 % Interest expense, net 64,618 73,902 6.6 % 8.4 % (9,284 ) (12.6 )% Tax receivable agreement liability adjustment 687 (257 ) 0.1 % (0.0 )% 944 (367.3 )% Loss on interest rate swap — 494 0.0 % 0.1 % (494 ) (100.0 )% Loss on extinguishment of debt 1,335 1,745 0.1 % 0.2 % (410 ) (23.5 )% Other income, net (23,208 ) (18,970 ) (2.4 )% (2.2 )% (4,238 ) 22.3 % Total other expenses 43,432 56,914 4.4 % 6.5 % (13,482 ) (23.7 )% Income before income taxes 194,982 79,108 20.0 % 9.0 % 115,874 146.5 % Income tax provision 58,349 47,660 6.0 % 5.4 % 10,689 22.4 % Net income $ 136,633 $ 31,448 14.0 % 3.6 % $ 105,185 334.5 % 44 Service Revenue .
This consists of adjustments made to our tax receivable agreement liability due to changes in estimates. Loss on Interest Rate Swap. Loss on interest rate swap related to the changes associated with the derivative instrument re-measured to fair value at the end of each reporting period and the related periodic cash receipts or payments. Loss on Extinguishment of Debt.
This consists of adjustments made to our tax receivable agreement liability due to changes in estimates. 43 Loss on Interest Rate Swap. Loss on interest rate swap related to the changes associated with the derivative instrument re-measured to fair value at the end of each reporting period and the related periodic cash receipts or payments. Loss on Extinguishment of Debt.
Segment performance is based on revenues and income from operations before depreciation, amortization and stock-based compensation. The measure also excludes interest expense, net, income taxes and certain other transactions and is inclusive of other income, net. Executive Summary We operate under long-term contracts and a highly reoccurring service revenue model.
Segment performance is based on revenues and income from operations before depreciation, amortization, and stock-based compensation. The measure also excludes interest expense, net, income taxes, and certain other transactions and is inclusive of other income, net. Executive Summary We operate under long-term contracts and a reoccurring service revenue model.
We believe that our existing cash and cash equivalents, cash flows provided by operating activities and our ability to borrow under our Revolver will be sufficient to meet operating cash requirements, service debt obligations and fund potential share repurchases for at least the next 12 months and thereafter for the foreseeable future.
We believe that our existing cash and cash equivalents, cash flows provided by operating activities, and our ability to borrow under our Amended Revolver will be sufficient to meet operating cash requirements, service debt obligations and fund potential share repurchases for at least the next 12 months and thereafter for the foreseeable future.
We recorded a $97.1 million impairment of goodwill in our Parking Solutions segment during fiscal year 2024, which is presented in the goodwill impairment line item on the consolidated statements of operations. 53 We review our long-lived assets other than goodwill for impairment whenever events or circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable.
We recorded a $97.1 million impairment of goodwill in our Parking Solutions segment during fiscal year 2024, which is presented in the goodwill impairment line item on the consolidated statements of operations. 52 We review our long-lived assets other than goodwill for impairment whenever events or circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable.
Our estimates of cash flows are subjective judgments based on past experiences adjusted for trends and future expectations, and can be significantly impacted by changes in our business or economic conditions. The determination of a asset group's fair value is also subject to significant judgment and utilizes valuation techniques including discounting estimated future cash flows and market-based analyses.
Our estimates of cash flows are subjective judgments based on past experiences adjusted for trends and future expectations, and can be significantly impacted by changes in our business or economic conditions. The determination of an asset group’s fair value is also subject to significant judgment and utilizes valuation techniques including discounting estimated future cash flows and market-based analyses.
Accordingly, we depend on national, state and local governments authorizing the use of automated photo enforcement and not otherwise materially restricting its use. 43 Primary Components of Our Operating Results Revenues Service Revenue. Our Commercial Services segment generates service revenue primarily through the operation and management of tolling programs and processing violations for RACs, FMCs and other large fleet customers.
Accordingly, we depend on national, state, and local governments authorizing the use of automated photo enforcement and not otherwise materially restricting its use. 42 Primary Components of Our Operating Results Revenues Service Revenue. Our Commercial Services segment generates service revenue primarily through the operation and management of tolling programs and processing violations for RACs, FMCs, and other large fleet customers.
Discussions of 2022 items and year-to-year comparisons between fiscal years 2023 and 2022 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which specific discussions and comparisons are incorporated herein by reference.
Discussions of 2023 items and year-to-year comparisons between fiscal years 2024 and 2023 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which specific discussions and comparisons are incorporated herein by reference.
We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, and future results of operations.
We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, financial condition, and results of operations.
We exercised our option to cancel the interest rate swap agreement effective the end of the third quarter of 2024. Loss on Extinguishment of Debt .
We exercised our option to cancel the interest rate swap agreement effective as of the end of the third quarter of 2024. Loss on Extinguishment of Debt .
Variation in the actual outcome of these future tax consequences could materially impact our financial statements. 54 Private Placement Warrant Liabilities We accounted for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance.
Variation in the actual outcome of these future tax consequences could materially impact our financial statements. 53 Private Placement Warrant Liabilities We accounted for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance.
We monitor the Transportation and Security Administration passenger volume (“ TSA Passenger Volume ”) as one of several measures for Commercial Services revenue growth. TSA Passenger Volume measures the number of passengers screened by the TSA at United States airports, which correlates to the number of vehicles rented by travelers and toll road usage.
We monitor the U.S. Transportation and Security Administration (the “ TSA ”) passenger volume (“ TSA Passenger Volume ”) as one of several measures for Commercial Services revenue growth. TSA Passenger Volume measures the number of passengers screened by the TSA at United States airports, which correlates to the number of vehicles rented by travelers and toll road usage.
We recorded a $0.5 million loss in fiscal year 2024 of which $1.3 million is associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $(0.8) million related to the monthly cash proceeds.
We recorded a $0.5 million loss in fiscal year 2024 of which $1.3 million was associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $(0.8) million related to the monthly cash proceeds.
See Note 2, Significant Accounting Policies , in Item 8, Financial Statements and Supplementary Data for additional information on the Company’s policy for recognition of revenue. 52 Allowance for Credit Losses We review historical credit losses and customer payment trends on receivables and develop loss rate estimates as of the balance sheet date, which includes adjustments for current and future expectations.
See Note 2, Significant Accounting Policies , in Item 8, Financial Statements and Supplementary Data for additional information on the Company’s policy for recognition of revenue. 51 Allowance for Credit Losses We review historical credit losses and customer payment trends on receivables and develop loss estimates as of the balance sheet date, which includes adjustments for current and future expectations.
During the year ended December 31, 2023, we recorded a $4.3 million impairment which included a $3.9 million write-down of installation and service parts that no longer had future use within the operating expenses line item in our Government Solutions segment, and $0.4 million impairment of an ROU asset within the selling, general and administrative expenses line item in our Parking Solutions segment.
During the year ended December 31, 2023, we recorded a $4.3 million impairment which included a $3.9 million write-down of installation and service parts that no longer had future use within the operating expenses line item in our Government Solutions segment, and a $0.4 million impairment of a Right of Use (“ ROU ”) asset within the selling, general and administrative expenses line item in our Parking Solutions segment.
Results of Operations Fiscal Year 2024 Compared to Fiscal Year 2023 The following table sets forth our statements of operations data and expresses each item as a percentage of total revenue for the periods presented as well as the changes between periods.
Results of Operations Fiscal Year 2025 Compared to Fiscal Year 2024 The following table sets forth our statements of operations data and expresses each item as a percentage of total revenue for the periods presented as well as the changes between periods.
The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns.
The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Judgment is required to assess the future tax consequences of events that have been recognized in our financial statements or tax returns.
Our Public Warrants met the criteria for equity classification and accordingly, were reported as a component of shareholders’ equity while our Private Placement Warrants did not meet the criteria for equity classification and were instead classified as a liability.
Our Public Warrants met the criteria for equity classification and, accordingly, were reported as a component of stockholders’ equity while our Private Placement Warrants did not meet the criteria for equity classification and were instead classified as a liability.
Enabling Legislation Our Government Solutions segment is impacted, in significant part, by enabling legislation that permits photo enforcement programs at the state and local level in the United States.
Enabling Legislation Our Government Solutions segment is positively impacted, in significant part, by enabling legislation that permits photo enforcement programs at the federal, state, and local level in the United States.
Key Factors Affecting Our Results of Operations We believe that our performance and future success depend on a number of factors that present opportunities for us but also pose risks and challenges, including those discussed below and in the section of this Annual Report on Form 10-K titled “Risk Factors.” Macroeconomic Conditions Our business is susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations.
Key Factors Affecting Our Results of Operations We believe that our performance and future success depend on a number of factors that present opportunities for us but also pose risks and challenges, including those discussed below and in the section of this Annual Report entitled “Risk Factors.” Macroeconomic Conditions Our business is susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations.
Travel Demand Our Commercial Services segment is largely impacted by its customer demand which in turn is impacted by a variety of factors including seasonality, demand for business and leisure travel, reductions in the level of air travel, higher airfare costs, increases in energy prices, general international, national and local economic conditions and cycles, as well as other factors affecting travel levels, such as military conflicts, terrorist incidents, natural disasters and epidemic diseases.
Travel Demand Our Commercial Services segment is largely impacted by its customer demand which in turn is impacted by a variety of factors including seasonality, demand for business and leisure travel, reductions in the level of air travel, higher airfare costs, increases in energy prices, general international, national, and local economic conditions and cycles, and consumer confidence, as well as other factors affecting travel levels, such as military conflicts, terrorist incidents, natural disasters, epidemic diseases, or a government shutdown.
In connection with our annual impairment assessment, we determined it was more likely than not that the fair values of our reporting units were in excess of their carrying value for our Commercial Services, Government Solutions North America and Government Solutions International reporting units based on qualitative factors.
In connection with our annual impairment assessment for fiscal year 2025, we determined it was more likely than not that the fair values of our reporting units were in excess of their carrying value for our Commercial Services, Government Solutions North America, Government Solutions International, and Parking Solutions reporting units based on qualitative factors.
In addition, the 2021 Term Loan requires mandatory prepayments equal to the product of the excess cash flows of the Company (as defined in the 2021 Term Loan agreement) and the applicable prepayment percentages (calculated as of the last day of the fiscal year), as set forth in the following table: 50 Consolidated First Lien Net Leverage Ratio (As Defined by the 2021 Term Loan Agreement) Applicable Prepayment Percentage > 3.70:1.00 50% 3.70:1.00 and > 3.20:1.00 25% 3.20:1.00 0% We did not have mandatory prepayments of excess cash flows for the fiscal years ended December 31, 2024 or 2023.
In addition, the Amended Term Loan requires mandatory prepayments equal to the product of the excess cash flows of the Company (as defined in the Amended and Restated Term Loan agreement) and the applicable prepayment percentages (calculated as of the last day of the fiscal year), as set forth in the following table: Consolidated First Lien Net Leverage Ratio (As Defined in the Amended and Restated Term Loan Agreement) Applicable Prepayment Percentage > 3.70:1.00 50% 3.70:1.00 and > 3.20:1.00 25% 3.20:1.00 0% We did not have mandatory prepayments of excess cash flows for the fiscal years ended December 31, 2025 or 2024.
The cost of certain tolls, violations and our customers’ share of administration fees are netted against revenue. We also generate service revenue in our Commercial Services segment through processing titles and registrations. Our Government Solutions segment generates service revenue through the operation and maintenance of photo enforcement systems.
The cost of certain tolls, violations, and our customers’ share of administration fees are netted against revenue. We also generate service revenue in our Commercial Services segment through processing titles and registrations. Our Government Solutions segment generates service revenue through the operation and maintenance of photo enforcement systems and certain distinct hardware installation and relocation activities.
In addition, we recorded approximately $1.7 million within accrued liabilities related to the excise taxes payable on net share repurchases on the consolidated balance sheets as of December 31, 2024.
In addition, we recorded approximately $1.3 million within accrued liabilities related to the excise taxes payable on net share repurchases on the consolidated balance sheets as of December 31, 2025.
We recorded a $1.7 million loss on extinguishment of debt for fiscal year 2024 related to the write-off of pre-existing deferred financing costs and discounts in connection with the February and October 2024 refinancing of the 2021 Term Loan.
We recorded a $1.3 million loss on extinguishment of debt for fiscal year 2025 related to the write-off of pre-existing deferred financing costs and discounts in connection with the October 2025 refinancing of the 2021 Term Loan.
This Item generally discusses fiscal years 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
This Item generally discusses fiscal years 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
We recorded $1.7 million of loss on extinguishment of debt during the fiscal year ended December 31, 2024, primarily related to the write-off of pre-existing deferred financing costs and discounts in connection with the Refinancing Transactions.
We recognized a loss on extinguishment of debt of $1.7 million for the fiscal year ended December 31, 2024, related to the write-off of pre-existing deferred financing costs and discounts in connection with the 2024 refinancing transactions.
In addition, we made early repayments of approximately $9.0 million and $172.5 million on our 2021 Term Loan (defined below) during fiscal year 2024 and 2023, respectively.
In addition, we made early repayments of approximately $8.5 million and $9.0 million on our Amended Term Loan and 2021 Term Loan (defined below) during fiscal year 2025 and 2024, respectively.
Depreciation, amortization and (gain) loss on disposal of assets, net includes depreciation on property, plant and equipment, and amortization of definite-lived intangible assets. This line item also includes any one-time gains or losses incurred in connection with the disposal of certain assets. Goodwill Impairment. This relates to impairment loss recognized on goodwill from past acquisitions. Interest Expense, Net .
Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net . Depreciation, amortization and (gain) loss on disposal of assets, net includes depreciation on property, plant and equipment, and amortization of definite-lived intangible assets. This line item also includes any one-time gains or losses incurred in connection with the disposal of certain assets. Goodwill Impairment.
The factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following: the inflationary impact on items such as wages and travel-related costs, future travel demand, and legislation regarding the adoption, expansion or prohibition of automated enforcement and traffic safety technology by local or state governments.
The factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following: the inflationary impact on items such as wages and travel-related costs, future travel demand, legislation or regulation regarding the adoption, expansion, or prohibition of automated enforcement and traffic safety technology by local, state, or national governments, and the impact of government regulations and actions, including tariffs, trade protection measures, or a government shutdown.
Recent Events Share Repurchases and Retirement In October 2023, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period in open market, ASR or privately negotiated transactions.
Share Repurchases and Retirement In October 2023, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period.
If our estimates or underlying assumptions change in the future, our operating results may be materially impacted. During the year ended December 31, 2024, we recorded a $0.2 million impairment related to the write-down of installation and service parts that no longer had future use within the operating expenses line item in our Government Solutions segment.
During the year ended December 31, 2024, we recorded a $0.2 million impairment related to the write-down of installation and service parts that no longer had future use within the operating expenses line item in our Government Solutions segment.
In connection with the 2021 Term Loan borrowings, we had $4.6 million of offering discount costs and $4.5 million in deferred financing costs, both of which were capitalized and are being amortized over the remaining life of the 2021 Term Loan.
The 2021 Term Loan had an aggregate borrowing of $900.0 million, maturing on March 24, 2028. In connection with the 2021 Term Loan borrowings, we had $4.6 million of offering discount costs and $4.5 million in deferred financing costs, both of which were capitalized and are being amortized over the remaining life of the 2021 Term Loan.
Long-term Debt 2021 Term Loan In March 2021, VM Consolidated, our wholly owned subsidiary, entered into an Amendment and Restatement Agreement No.1 to the First Lien Term Loan Credit Agreement (the “ 2021 Term Loan ”) with a syndicate of lenders. The 2021 Term Loan has an aggregate borrowing of $900.0 million, maturing on March 24, 2028.
Long-term Debt 2021 Term Loan and Amended Term Loan In March 2021, VM Consolidated, our wholly owned subsidiary, entered into an Amendment and Restatement Agreement No.1 to the First Lien Term Loan Credit Agreement (the “ 2021 Term Loan ”) with a syndicate of lenders.
We continue to execute our strategy to grow revenue organically year over year and focus on initiatives that support our long-term strategy. During the periods presented, we: • Increased total revenue by $61.9 million, or 7.6%, from $817.3 million in fiscal year 2023 to $879.2 million in fiscal year 2024.
We continue to execute our strategy to grow revenue organically year over year and focus on initiatives that support our long-term strategy. During the periods presented, we: • Increased total revenue by $99.9 million, or 11.4%, from $879.2 million in fiscal year 2024 to $979.1 million in fiscal year 2025.
Our cash on hand was $77.6 million as of December 31, 2024. • Used existing cash on hand of $200.0 million during fiscal year 2024 to repurchase approximately 7.9 million shares authorized under a 2023 share repurchase program. 41 • Continued to focus on debt management and lowering our exposure to higher interest rates, and as a result, we refinanced our debt during fiscal year 2024 which reduced our interest rate by an aggregate 111.4 basis points.
Our cash on hand was $65.3 million as of December 31, 2025. 40 • Used existing cash on hand of $133.4 million during fiscal year 2025 to repurchase approximately 6.0 million shares authorized under a 2025 share repurchase program. • Continued to focus on debt management and lowering our exposure to higher interest rates, and as a result, we refinanced our debt during fiscal year 2025 which reduced our interest rate by 25 basis points.
Cost of product sales increased by approximately $1.8 million from $25.2 million in fiscal year 2023 to $27.1 million in fiscal year 2024, which was in line with the increase in product sales discussed above. Operating Expenses. Operating expenses increased by $22.6 million, or 8.3%, from $273.3 million for fiscal year 2023 to $295.9 million in fiscal year 2024.
Cost of product sales increased by approximately $18.5 million from $27.1 million in fiscal year 2024 to $45.5 million in fiscal year 2025, which was in line with the increase in product sales discussed above. Operating Expenses. Operating expenses increased by $37.3 million, or 12.6%, from $295.9 million for fiscal year 2024 to $333.2 million in fiscal year 2025.
Parking Solutions service revenue decreased by $0.7 million to $66.1 million in fiscal year 2024 compared to $66.8 million in fiscal year 2023. The increased revenue from SaaS product offerings was offset by a decrease in professional services related to parking management solutions. Product Sales.
Parking Solutions service revenue increased by $0.6 million to $66.7 million in fiscal year 2025 compared to $66.1 million in fiscal year 2024. The increased revenue was primarily driven by SaaS product offerings and professional services, partially offset by a decrease in subscription services related to parking management solutions. Product Sales.
This decrease was partially offset by an increase in depreciation expense in fiscal year 2024. Goodwill Impairment . We recorded an impairment loss of $97.1 million in fiscal year 2024 as a result of our 2024 assessment of goodwill impairment in our Parking Solutions segment. See Note 2, Significant Accounting Policies, for additional information. Interest Expense, Net.
We recorded an impairment loss of $97.1 million in fiscal year 2024 as a result of our 2024 assessment of goodwill impairment in our Parking Solutions segment. See Note 2, Significant Accounting Policies, in Item 8, Financial Statements and Supplementary Data , of this Annual Report for additional information. Interest Expense, Net.
Loss on extinguishment of debt was $3.5 million for fiscal year 2023 related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayment of $172.5 million on the 2021 Term Loan. Other Income, Net. Other income, net was $19.0 million in fiscal year 2024 compared to $11.1 million in fiscal year 2023.
We recorded a $1.7 million loss on extinguishment of debt for fiscal year 2024 related to the write-off of pre-existing deferred financing costs and discounts in connection with the February and October 2024 refinancings of the 2021 Term Loan. Other Income, Net. Other income, net was $23.2 million in fiscal year 2025 compared to $19.0 million in fiscal year 2024.
Should we pursue strategic acquisitions, we may need to raise additional capital, which may be in the form of additional long-term debt, borrowings on our Revolver, or equity financings, all of which may not be available to us on favorable terms or at all. 48 We have the ability to borrow under our Revolver to meet obligations as they come due.
We have incurred significant long-term debt as a result of acquisitions completed in prior years. Should we pursue strategic acquisitions, we may need to raise additional capital, which may be in the form of additional long-term debt, borrowings on our Amended Revolver, or equity financings, all of which may not be available to us on favorable terms or at all.
Service revenue increased by $58.1 million, or 7.4%, to $841.7 million for fiscal year 2024 from $783.6 million in fiscal year 2023, representing 95.7% and 95.9% of total revenue, respectively.
Service revenue increased by $76.5 million, or 9.1%, to $918.1 million for fiscal year 2025 from $841.7 million in fiscal year 2024, representing 93.8% and 95.7% of total revenue, respectively.
On December 4, 2024, our Board of Directors authorized the repurchase of up to an additional $100 million of our outstanding shares of Class A Common Stock under the existing October 2023 program, providing us with approximately $112.7 million available for repurchases.
On October 23, 2025, our Board of Directors authorized the repurchase of up to an additional $150.0 million of our outstanding shares of Class A Common Stock under the existing May 2025 program, providing us with $250.0 million available for repurchases.
The following table sets forth certain captions on our statements of cash flows for the respective periods: For the Year Ended December 31, ($ in thousands) 2024 2023 Net cash provided by operating activities $ 223,642 $ 206,101 Net cash used in investing activities (69,720 ) (58,290 ) Net cash used in financing activities (211,427 ) (117,793 ) Cash Flows from Operating Activities Cash provided by operating activities increased by $17.5 million, from $206.1 million in fiscal year 2023 to $223.6 million in fiscal year 2024.
The following table sets forth certain captions on our statements of cash flows for the respective periods: For the Year Ended December 31, ($ in thousands) 2025 2024 Net cash provided by operating activities $ 255,802 $ 223,642 Net cash used in investing activities (118,789 ) (69,720 ) Net cash used in financing activities (150,970 ) (211,427 ) 48 Cash Flows from Operating Activities Cash provided by operating activities increased by $32.2 million, from $223.6 million in fiscal year 2024 to $255.8 million in fiscal year 2025.
Income tax provision was $47.7 million representing an effective tax rate of 60.2% for fiscal year 2024 compared to $30.0 million, representing an effective tax rate of 34.5% for fiscal year 2023.
Income tax provision was $58.3 million, representing an effective tax rate of 29.9% for fiscal year 2025 compared to $47.7 million, representing an effective tax rate of 60.2% for fiscal year 2024.
Selling, general and administrative expenses decreased by $3.5 million to approximately $195.1 million for fiscal year 2024 compared to $198.6 million for fiscal year 2023.
Selling, general and administrative expenses increased by $20.2 million to approximately $215.3 million for fiscal year 2025 compared to $195.1 million for fiscal year 2024.
Refer to Note 12, Stockholders' Equity , in Item 8, Financial Statements and Supplementary Data, for additional information on our share repurchases.
Refer to Note 12, Stockholders’ Equity , in Item 8, Financial Statements and Supplementary Data , for additional information on our share repurchases. As of December 31, 2025, $116.6 million remained available under our share repurchase authorization.
We monitor the expansion and penetration of toll roadways across the United States and the percentage of toll roads that rely on cashless or all-electronic infrastructure. In fiscal year 2024, approximately 70% of all toll roadways in the United States relied on cashless or electronic payment methods.
We monitor the expansion and penetration of toll roadways across the United States and Europe, and the percentage of toll roads that rely on cashless or all-electronic infrastructure. In fiscal year 2025, nine toll facilities were added in the United States, representing over 100 miles of toll roads.
Our Parking Solutions segment generates service revenue mainly from offering software as a service (" SaaS "), subscription fees, professional services and citation processing services related to parking management solutions to its customers. Product Sales. Product sales are generated by the sale of photo enforcement equipment in the Government Solutions segment and specialized hardware in the Parking Solutions segment.
Our Parking Solutions segment generates service revenue mainly from offering SaaS, subscription fees, professional services, and citation processing services related to parking management solutions to its customers. Product Sales.
Interest expense, net decreased by $12.8 million from $86.7 million in fiscal year 2023 to $73.9 million in fiscal year 2024.
Interest expense, net, decreased by $9.3 million from $73.9 million in fiscal year 2024 to $64.6 million in fiscal year 2025.
The following table presents selling, general and administrative expenses by segment: Year Ended December 31, Percentage of Revenue Increase (Decrease) 2024 vs 2023 ($ in thousands) 2024 2023 2024 2023 $ % Selling, general and administrative expenses Commercial Services $ 62,942 $ 61,607 7.2 % 7.5 % $ 1,335 2.2 % Government Solutions 69,972 62,597 8.0 % 7.7 % 7,375 11.8 % Parking Solutions 25,173 23,988 2.8 % 2.9 % 1,185 4.9 % Selling, general and administrative expenses by segment 158,087 148,192 18.0 % 18.1 % 9,895 6.7 % Other expenses 36,967 50,358 4.2 % 6.2 % (13,391 ) (26.6 )% Total selling, general and administrative expenses $ 195,054 $ 198,550 22.2 % 24.3 % $ (3,496 ) (1.8 )% Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net.
The following table presents selling, general and administrative expenses by segment: Year Ended December 31, Percentage of Revenue Increase (Decrease) 2025 vs 2024 ($ in thousands) 2025 2024 2025 2024 $ % Selling, general and administrative expenses Commercial Services $ 75,082 $ 62,942 7.7 % 7.2 % $ 12,140 19.3 % Government Solutions 78,988 69,972 8.1 % 8.0 % 9,016 12.9 % Parking Solutions 26,326 25,173 2.6 % 2.8 % 1,153 4.6 % Selling, general and administrative expenses by segment 180,396 158,087 18.4 % 18.0 % 22,309 14.1 % Other expenses 34,878 36,967 3.6 % 4.2 % (2,089 ) (5.7 )% Total selling, general and administrative expenses $ 215,274 $ 195,054 22.0 % 22.2 % $ 20,220 10.4 % Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net.
In Europe, we provide tolling and violations processing services. • Our Government Solutions segment offers photo enforcement solutions and services to its customers. We provide complete, end-to-end speed, red-light, school bus stop arm and bus lane enforcement solutions.
In Europe, we provide tolling and violations processing services. • Our Government Solutions segment offers photo enforcement automated safety solutions and services to states, municipalities, counties, school districts, and law enforcement agencies of all sizes, primarily in the United States, Canada, and Australia. We provide complete, end-to-end speed, red-light, school bus stop arm, and city bus lane enforcement solutions.
During fiscal years 2024 and 2023, we made early repayments of $9.0 million and $172.5 million, respectively, on the 2021 Term Loan and as a result, the total principal outstanding was $695.6 million as of December 31, 2024. At December 31, 2024, the tax receivable agreement liability was approximately $48.1 million.
We made early repayments of approximately $8.5 million on our Amended Term Loan during the year ended December 31, 2025, and as a result, the total principal outstanding on the Amended Term Loan was $687.1 million as of December 31, 2025. At December 31, 2025, the tax receivable agreement liability was approximately $43.7 million.
Senior Notes In March 2021, VM Consolidated issued an aggregate principal amount of $350.0 million in Senior Notes, due on April 15, 2029. In connection with the issuance of the Senior Notes, we incurred $5.7 million in lender and third-party costs, which were capitalized as deferred financing costs and are being amortized over the remaining life of the Senior Notes.
In connection with the issuance of the Senior Notes, we incurred $5.7 million in lender and third-party costs, which were capitalized as deferred financing costs and are being amortized over the remaining life of the Senior Notes. Interest on the Senior Notes is fixed at 5.50% per annum and is payable on April 15 and October 15 of each year.
We first consider the option to assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.
We have four reporting units for the purposes of assessing potential impairment of goodwill which include Commercial Services, Government Solutions North America, Government Solutions International, and Parking Solutions. We first consider the option to assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.
In December 2024, our Board of Directors increased the authorization to repurchase up to an additional $100 million of our shares under the existing October 2023 program, providing us with approximately $112.7 million available for repurchases.
After we repurchased an aggregate 3.5 million shares for approximately $87.3 million in fiscal year 2024, in December 2024, our Board of Directors authorized the repurchase of up to an additional $100.0 million of our outstanding shares of Class A Common Stock under the then-existing program, providing us with approximately $112.7 million available for repurchases.
Customer buying patterns vary greatly from period to period related to product sales. Costs and Expenses Cost of Service Revenue, Excluding Depreciation and Amortization. Cost of service revenue, excluding depreciation and amortization consists of recurring service costs, collection and other third-party costs in our segments. Cost of Product Sales.
Cost of service revenue, excluding depreciation and amortization consists of recurring service costs, certain distinct hardware installation and relocation costs, collection and other third-party costs in our segments. Cost of Product Sales.
Interest Expense, Net We recorded interest expense, including amortization of deferred financing costs and discounts, of $73.9 million, $86.7 million and $69.4 million for the fiscal years ended December 31, 2024, 2023 and 2022 respectively.
At December 31, 2025, we were compliant with all debt covenants in our debt agreements. Interest Expense, Net We recorded interest expense, including amortization of deferred financing costs and discounts, of $64.6 million and $73.9 million for the fiscal years ended December 31, 2025 and 2024, respectively.
Net income decreased $25.6 million from $57.0 million in fiscal year 2023 compared to $31.4 million in fiscal year 2024.
Net income increased $105.2 million from $31.4 million in fiscal year 2024 compared to $136.6 million in fiscal year 2025.
In addition, the 2021 Term Loan no longer contains a provision for principal repayments which were previously required to be paid in quarterly installments. We evaluated the Refinancing Transactions on a lender-by-lender basis and accounted accordingly for debt extinguishment and debt modification costs (for the portion of the transactions that did not meet the accounting criteria for debt extinguishment).
We evaluated the refinancing transactions on a lender-by-lender basis and accounted accordingly for debt extinguishment and debt modification costs (for the portion of the transactions that did not meet the accounting criteria for debt extinguishment).
Cost of Service Revenue, Excluding Depreciation and Amortization. Cost of service revenue, excluding depreciation and amortization increased from $18.2 million for fiscal year 2023 to $19.0 million for fiscal year 2024, mainly due to increased recurring service costs for the Parking Solutions segment. Cost of Product Sales.
Customer buying patterns vary greatly from period to period related to product sales. Cost of Service Revenue, Excluding Depreciation and Amortization. Cost of service revenue, excluding depreciation and amortization increased from $19.0 million for fiscal year 2024 to $30.3 million for fiscal year 2025, mainly due to NYCDOT installation service costs and increased recurring service costs. Cost of Product Sales.
In February 2024 and in October 2024, we refinanced the 2021 Term Loan (as discussed below) which reduced the interest rate by an aggregate 1.00% and eliminated the applicable credit spread adjustment.
Our cash on hand was $65.3 million as of December 31, 2025. 47 In fiscal year 2024, we refinanced the 2021 Term Loan which reduced the interest rate by an aggregate 1.00% and eliminated the applicable credit spread adjustment.
The 2021 Term Loan bears interest based, at our option, on either (i) Term SOFR plus an applicable margin of 2.25% per annum, or (ii) an alternate base rate plus an applicable margin of 1.25% per annum. As of December 31, 2024, the interest rate on the 2021 Term Loan was 6.6%.
The Amended Term Loan bears interest at a per annum rate equal to SOFR plus an applicable margin of 2.00%, or a base rate plus an applicable margin of 1.00%. As of December 31, 2025, the interest rate on the Amended Term Loan was 5.7%.
We identify pools of receivables based on the type of business, industry in which the customer operates and historical credit loss patterns (for example, receivables from drivers of rental cars).
We identify pools of receivables based on the type of business, industry in which the customer operates, and historical credit loss patterns. We use collection assumptions (typically at the customer level) to estimate expected credit losses.
The following table presents operating expenses by segment: 46 Year Ended December 31, Percentage of Revenue Increase (Decrease) 2024 vs 2023 ($ in thousands) 2024 2023 2024 2023 $ % Operating expenses Commercial Services $ 92,038 $ 83,828 10.5 % 10.3 % $ 8,210 9.8 % Government Solutions 182,493 168,736 20.8 % 20.6 % 13,757 8.2 % Parking Solutions 17,353 18,236 1.9 % 2.2 % (883 ) (4.8 )% Operating expenses by segment 291,884 270,800 33.2 % 33.1 % 21,084 7.8 % Other expenses 4,053 2,488 0.5 % 0.3 % 1,565 62.9 % Total operating expenses $ 295,937 $ 273,288 33.7 % 33.4 % $ 22,649 8.3 % Selling, General and Administrative Expenses .
The following table presents operating expenses by segment: 45 Year Ended December 31, Percentage of Revenue Increase (Decrease) 2025 vs 2024 ($ in thousands) 2025 2024 2025 2024 $ % Operating expenses Commercial Services $ 96,894 $ 92,038 9.9 % 10.5 % $ 4,856 5.3 % Government Solutions 214,607 182,493 21.9 % 20.8 % 32,114 17.6 % Parking Solutions 16,400 17,353 1.7 % 1.9 % (953 ) (5.5 )% Operating expenses by segment 327,901 291,884 33.5 % 33.2 % 36,017 12.3 % Other expenses 5,340 4,053 0.5 % 0.5 % 1,287 31.8 % Total operating expenses $ 333,241 $ 295,937 34.0 % 33.7 % $ 37,304 12.6 % Selling, General and Administrative Expenses .
In fiscal year 2024, TSA Passenger Volume increased approximately five percent over fiscal year 2023, one of several factors contributing to Commercial Services revenue growth. Electronic Tolling Penetration Our Commercial Services segment is impacted by the number of toll roads in the United States and the geographic concentration of such roads.
TSA Passenger Volume increased by less than 1% in fiscal year 2025 compared to fiscal year 2024. Electronic Tolling Penetration Our Commercial Services segment, which offers automated toll and violations management solutions to fleet customers, is impacted by the number of toll roads in the United States and Europe and the geographic concentration of such roads.
We recorded a gain of approximately $3.1 million in fiscal year 2023 as a result of tax settlement adjustments related to a previous acquisition. Loss on Interest Rate Swap .
We recorded a gain of approximately $0.3 million in fiscal year 2024 as a result of lower estimated state tax rates due to changes in apportionment. 46 Loss on Interest Rate Swap .
Selling, General and Administrative Expenses . Selling, general and administrative expenses include payroll and payroll-related costs (including stock-based compensation), real estate lease expense, insurance costs, professional services fees and general corporate expenses. Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net .
Operating expenses primarily include payroll and payroll-related costs (including stock-based compensation), subcontractor costs, payment processing and other operational costs, including print, postage and communication costs. Selling, General and Administrative Expenses . Selling, general and administrative expenses include payroll and payroll-related costs (including stock-based compensation), real estate lease expense, insurance costs, professional services fees and general corporate expenses.
Our effective tax rate for 2024 was higher compared to 2023 primarily due to the impact of permanent differences related to the mark-to-market adjustment on the Private Placement Warrants and the impairment adjustments in the Parking Solutions segment. Net Income.
Our effective tax rate for 2025 was lower compared to 2024 primarily due to the impact of permanent differences related to the impairment adjustments in the Parking Solutions segment. Net Income. We had net income of $136.6 million for fiscal year 2025 compared to a net income of $31.4 million for fiscal year 2024.
Impairment of Goodwill and Long-Lived Assets We assess goodwill for impairment annually on October 1, or more frequently if events or circumstances indicate that the carrying amounts may not be fully recoverable. We have four reporting units for the purposes of assessing potential impairment of goodwill which include Commercial Services, Government Solutions North America, Government Solutions International and Parking Solutions.
We periodically evaluate the adequacy of our allowance for expected credit losses and adjust appropriately. Impairment of Goodwill and Long-Lived Assets We assess goodwill for impairment annually on October 1, or more frequently if events or circumstances indicate that the carrying amounts may not be fully recoverable.
Cost of product sales consists of the cost to acquire and install photo enforcement equipment purchased by Government Solutions customers and costs to develop hardware sold to Parking Solutions customers. Operating Expenses . Operating expenses primarily include payroll and payroll-related costs (including stock-based compensation), subcontractor costs, payment processing and other operational costs, including print, postage and communication costs.
Cost of product sales consists of the cost to acquire photo enforcement equipment purchased by Government Solutions customers, costs of certain highly interdependent and interrelated installation services, and costs to develop hardware sold to Parking Solutions customers. Operating Expenses .
The aggregate adjustments to reconcile net income to net cash provided by operating activities increased by $93.0 million mainly due to the goodwill impairment recorded in the current year and change in deferred income taxes, partially offset by a decrease in the change in the fair value of private placement warrants.
The aggregate adjustments to reconcile net income to net cash provided by operating activities decreased by $44.8 million mainly due to the goodwill impairment recorded in the prior year, partially offset by an increase in deferred income taxes, credit loss expense, impairment of long-lived assets and depreciation expense.
The increase was mainly due to service revenue resulting from increased travel volume and FMCs penetration in the Commercial Services segment and the growth from speed, maintenance and bus lane programs in the Government Solutions segment. • Generated cash flows from operating activities of $223.6 million and $206.1 million for fiscal years 2024 and 2023, respectively.
The increase was mainly due to service revenue resulting from increased product adoption, tolling activity, and activity in our European operations in the Commercial Services segment, and installation revenue from the NYCDOT program, the growth from city bus lane and school bus stop arm enforcement programs, back-office software-as-a-service (“ SaaS ”) programs and higher product sales in the Government Solutions segment. • Generated cash flows from operating activities of $255.8 million and $223.6 million for fiscal years 2025 and 2024, respectively.
The change in fair value was the result of re-measurement of the liability at the end of the reporting period, and the final re-measurement upon their exercise. Tax Receivable Agreement Liability Adjustment . We recorded a gain of approximately $0.3 million in fiscal year 2024 as a result of lower estimated state tax rates due to changes in apportionment.
Tax Receivable Agreement Liability Adjustment . We recorded a loss of approximately $0.7 million in fiscal year 2025 as a result of higher estimated state tax rates due to changes in apportionment.
The increase of approximately $7.9 million is primarily attributable to a $5.6 million tax settlement payment recorded in 2023 related to a prior year acquisition without a comparable amount in 2024, as well as increase in volume rebates earned from total spend on credit card transactions due to increased tolling and travel activity. Income Tax Provision.
The increase of approximately $4.2 million was primarily attributable to increases in volume rebates earned from total spend on credit card transactions due to increased tolling and travel activity as well as favorable impacts from fluctuations in foreign currency rates in the 2025 period. Income Tax Provision.
We recognized a loss on extinguishment of debt of $3.5 million for the fiscal year ended December 31, 2023, related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayments.
During fiscal years 2025 and 2024, we made early repayments of $8.5 million and $9.0 million, respectively, on the Amended Term Loan and the 2021 Term Loan, as applicable, and as a result, the total principal outstanding was $687.1 million as of December 31, 2025. 49 We recorded $1.3 million of loss on extinguishment of debt during the fiscal year ended December 31, 2025, primarily related to the write-off of pre-existing deferred financing costs and discounts in connection with the refinancing discussed above and issuance of the Amended Term Loan.
Commercial Services service revenue increased by $34.9 million, or 9.4%, from $372.8 million in fiscal year 2023 to $407.7 million in fiscal year 2024. This increase was primarily due to increased travel volume, product adoption and increased tolling activity compared to the prior year. These factors contributed to a $18.1 million growth in RAC tolling revenue.
This increase was primarily due to increased product adoption and tolling activity compared to the prior year. These factors contributed to a $22.5 million growth in RAC tolling revenue and the remaining increase was driven mainly by an increase of $4.9 million from European operations during the year ended December 31, 2025, compared to the prior year.
The following table depicts service revenue by segment: Year Ended December 31, Percentage of Revenue Increase (Decrease) 2024 vs 2023 ($ in thousands) 2024 2023 2024 2023 $ % Service revenue Commercial Services $ 407,680 $ 372,786 46.4 % 45.6 % $ 34,894 9.4 % Government Solutions 367,914 344,034 41.8 % 42.1 % 23,880 6.9 % Parking Solutions 66,082 66,775 7.5 % 8.2 % (693 ) (1.0 )% Total service revenue $ 841,676 $ 783,595 95.7 % 95.9 % $ 58,081 7.4 % Commercial Services service revenue includes mainly toll and violation management revenues from RACs and FMCs.
The following table depicts service revenue by segment: Year Ended December 31, Percentage of Revenue Increase (Decrease) 2025 vs 2024 ($ in thousands) 2025 2024 2025 2024 $ % Service revenue Commercial Services $ 435,791 $ 407,680 44.5 % 46.4 % $ 28,111 6.9 % Government Solutions 415,637 367,914 42.5 % 41.8 % 47,723 13.0 % Parking Solutions 66,709 66,082 6.8 % 7.5 % 627 0.9 % Total service revenue $ 918,137 $ 841,676 93.8 % 95.7 % $ 76,461 9.1 % Commercial Services service revenue increased by $28.1 million, or 6.9%, from $407.7 million in fiscal year 2024 to $435.8 million in fiscal year 2025.
As of December 31, 2024, we had $74.4 million available for borrowing, net of letters of credit, under our Revolver. Our cash on hand was $77.6 million as of December 31, 2024.
As of December 31, 2025, we had no outstanding borrowings and $146.3 million available for borrowing, net of letters of credit, under our Amended Revolver.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−4 removed0 unchanged
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources .” Interest rate risk represents our exposure to fluctuations in interest rates associated with the variable rate debt represented by the 2021 Term Loan, which has an outstanding balance of $695.6 million at December 31, 2024.
Biggest changeQuantitative and Qualitat ive Disclosures About Market Risk We are exposed to interest rate risk due to the variable interest rate on the Amended Term Loan described in “Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources .” Interest rate risk represents our exposure to fluctuations in interest rates associated with the variable rate debt represented by the Amended Term Loan, which has an outstanding balance of $687.1 million at December 31, 2025.
Based on the December 31, 2024 balance outstanding, each 1% movement in interest rates will result in an approximately $7.0 million change in annual interest expense.
As of December 31, 2025, the interest rate on the Amended Term Loan was 5.7%. Based on the December 31, 2025 balance outstanding, each 1% movement in interest rates will result in an approximately $6.9 million change in annual interest expense. 54 VERRA MOBILITY CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Removed
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk We are exposed to interest rate risk due to the variable interest rate on the 2021 Term Loan described in “Item 7.
Removed
The 2021 Term Loan bears interest based, at our option, on either (i) Term SOFR plus an applicable margin of 2.25% per annum, or (ii) an alternate base rate plus an applicable margin of 1.25% per annum. As of December 31, 2024, the interest rate on the 2021 Term Loan was 6.6%.
Removed
In December 2022, we entered into a cancellable interest rate swap agreement to hedge our exposure to interest rate fluctuations associated with the LIBOR (now transitioned to Term SOFR) portion of the variable interest rate on our 2021 Term Loan.
Removed
We exercised our option to cancel the interest rate swap effective the end of the third quarter of 2024. 55 VERRA MOBILITY CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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