Verra Mobility Announces Third Quarter 2026 Financial Results
VERRA MOBILITY Corp (VRRM) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Verra Mobility Announces Third Quarter 2026 Financial Results • Total revenue of $258.9 million • Net income of $40.4 million • Net cash provided from operations of $114.5 million • Record bookings quarter in Government Solutions, excluding quarter in which we booked
How this was made
The 30-second read
Why it matters
The earnings release introduces new financial metrics that could influence short‑term price action and sector sentiment.
Market read
Primary earnings disclosure for a mid‑cap U.S. tech company; relevance driven by fresh financial data and reaffirmed guidance.
What to watch
Growth in Government Solutions offsets Commercial Services weakness; cash flow improvement could support future investments.
Verra Mobility Announces Third Quarter 2026 Financial Results
Third-quarter revenue, net income, Adjusted EBITDA and Adjusted EPS declined from the prior-year period as Commercial Services contracted and its segment profit margin fell, while Government Solutions delivered double-digit revenue growth and higher segment profitability. Operating cash flow and Free Cash Flow increased, and the company reaffirmed full-year guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, three months ended September 30, 2026GAAP | $258.9M | – | decrease of 1% |
| Service revenue, three months ended September 30, 2026GAAP | $239.9M | – | decreased 1% |
| Product sales, three months ended September 30, 2026GAAP | $18.97M | – | – |
| Income from operations, three months ended September 30, 2026GAAP | $65.56M | – | – |
| Net income, three months ended September 30, 2026GAAP | $40.4M | – | – |
| Diluted EPS, three months ended September 30, 2026GAAP | $0.27 per share | – | – |
| Basic EPS, three months ended September 30, 2026GAAP | $0.27 | – | – |
| Diluted weighted average shares outstanding, three months ended September 30, 2026GAAP | 152.1 million diluted weighted average shares outstanding | – | – |
| Adjusted EPS, three months ended September 30, 2026non-GAAP | $0.36 per share | – | – |
| Adjusted Net Income, three months ended September 30, 2026non-GAAP | $54.05M | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $103.9M | – | – |
| Adjusted EBITDA Margin, three months ended September 30, 2026non-GAAP | 40% | – | – |
| Net Income Margin, three months ended September 30, 2026GAAP | 16% | – | – |
| Cost of service revenue, excluding depreciation and amortization, three months ended September 30, 2026GAAP | $14.89M | – | – |
| Cost of product sales, three months ended September 30, 2026GAAP | $17.64M | – | – |
| Operating expenses, three months ended September 30, 2026GAAP | $90.40M | – | – |
| Selling, general and administrative expenses, three months ended September 30, 2026GAAP | $43.44M | – | – |
| Depreciation, amortization and (gain) loss on disposal of assets, net, three months ended September 30, 2026GAAP | $26.95M | – | – |
| Interest expense, net, three months ended September 30, 2026GAAP | $15.03M | – | – |
| Income tax provision, three months ended September 30, 2026GAAP | $14.89M | – | – |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | $114.5M | – | increased by $36.8 million |
| Free Cash Flow, three months ended September 30, 2026non-GAAP | $89.4M | – | – |
| Purchases of installation and service parts and property and equipment, three months ended September 30, 2026GAAP | −$25.12M | – | – |
| Total revenue, nine months ended September 30, 2026GAAP | $746.0M | – | – |
| Income from operations, nine months ended September 30, 2026GAAP | $84.58M | – | – |
| Goodwill impairment, nine months ended September 30, 2026GAAP | $64M | – | – |
| Impairment of intangible assets, nine months ended September 30, 2026GAAP | $40.4M | – | – |
| Net income, nine months ended September 30, 2026GAAP | $18.95M | – | – |
| Diluted EPS, nine months ended September 30, 2026GAAP | $0.12 | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $300.6M | – | – |
| Adjusted EBITDA Margin, nine months ended September 30, 2026non-GAAP | 40% | – | – |
| Adjusted EPS, nine months ended September 30, 2026non-GAAP | $0.99 | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | $211.8M | – | – |
| Free Cash Flow, nine months ended September 30, 2026non-GAAP | $131.6M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Commercial ServicesA $16.1 million or 20% reduction in rental car companies tolling revenue reflected less favorable contract-extension terms with two significant customers, fleet volume fluctuations with one significant customer, and reduced travel demand. Fleet management company revenue decreased $2.2 million or 13% due to a one-time operational adjustment and prior-period churn. | $100.3M | – | 14% decrease |
| Government SolutionsService revenue increased 13%, including $8.6 million from expansion in speed, red light, bus lane, school bus and other services outside NYCDOT. NYCDOT installation revenue contributed $5.6 million of growth, net of pricing changes under the new contract. | $136.8M | – | 12% increase |
| Parking SolutionsRevenue declined primarily because of lower professional services and subscription services related to parking management solutions, partly offset by increases in SaaS product offerings. | $21.7M | – | 2% decrease |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Full Year 2026 outlook
- Revenue$945 million to $965 million
- Tax rate28.0% to 29.0%
- NoteAdjusted EBITDA of $360 million to $370 million
- NoteAdjusted EPS of $1.11 to $1.17
- NoteFree Cash Flow of $105 million to $115 million
- NoteFull Year 2026 TSA volume assumed to decline over 1% compared to full year 2025.
- NoteWeighted average fully diluted share count expected to be approximately 153 million shares for the full year 2026
- Noteapproximately $30 million in total cash taxes expected to be paid in 2026
- NoteDepreciation and amortization expense expected to be approximately $120 million for 2026
- NoteTotal interest expense, net expected to be approximately $62 million, of which approximately $60 million is expected to be net cash interest paid
- NoteChange in working capital is expected to result in a use of cash of approximately $40 million for 2026
- NoteCapital expenditures are expected to be approximately $125 million for 2026
Capital returns
- Share repurchases and retirement of $(51,567) (in thousands) for the nine months ended September 30, 2026.
What drove it
- Government Solutions recorded a record bookings quarter, excluding the quarter in which the company booked the NYCDOT contract renewal.
- Government Solutions segment profit was $39.1 million compared to $31.3 million in the prior-year period, and segment profit margin was 29% compared to 26%, driven by NYCDOT installation volume, revenue mix and decreased wage expenses.
- Commercial Services segment profit was $61.3 million compared to $78.3 million, while segment profit margin was 61% compared to 67%.
- The primary driver of the Adjusted EBITDA margin decline was an approximate 560 basis point decline in the Commercial Services segment profit margin.
- Operating cash flow increased primarily due to decreases in accounts receivable, partially offset by a decrease in accounts payable.
- Free Cash Flow increased due to the operating-cash-flow items and a reduction in capital expenditures.
Concerns
- Commercial Services revenue declined 14%, and the company cited less favorable terms under contract extensions, fleet volume fluctuations, and reduced travel demand.
- Verra Mobility terminated its agreement with Avis Budget Group effective January 30, 2027 after ABG significantly and abruptly reduced fleet volumes under the parties' agreement.
- The Hertz contract extension was on materially less favorable terms and includes fleet volume modulation rights subject to agreement terms and conditions.
- The Enterprise Mobility contract expires September 30, 2027, and Verra Mobility is following Enterprise's procurement process.
- Parking Solutions recorded a $64.0 million goodwill impairment and a $40.4 million impairment to intangibles during the nine months ended September 30, 2026.
- The company is undergoing CEO and CFO leadership transitions and stated it may determine future segment reporting following the leadership transition.
What to watch
- Financial implications of the Avis Budget Group contract termination effective January 30, 2027 and the company's ability to replace expected revenue.
- Fleet-volume changes under the Hertz agreement and the Enterprise Mobility procurement process ahead of the September 30, 2027 contract expiration.
- Government Solutions expansion outside NYCDOT, NYCDOT installation revenue, and the effect of pricing changes under the new NYCDOT contract.
- Commercial Services margin, including credit loss expense, rental car company tolling revenue, travel demand and volume rebates.
- Execution against reaffirmed full-year 2026 revenue, Adjusted EBITDA, Adjusted EPS and Free Cash Flow guidance.
- Selection of a permanent CFO and any future change to segment reporting.
Balance sheet and cash flow
- Cash and cash equivalents were $137.0 million as of September 30, 2026.
- Total debt, net was $1,033 million as of September 30, 2026.
- Net Debt was $903.3 million as of September 30, 2026, compared to $971.8 million as of December 31, 2025.
- Net Leverage was 2.2x as of September 30, 2026, compared to 2.3x as of December 31, 2025.
- Accounts receivable were $192,181 (in thousands) as of September 30, 2026, compared to $234,288 (in thousands) as of December 31, 2025.
- Unbilled receivables were $108,721 (in thousands) as of September 30, 2026, compared to $56,100 (in thousands) as of December 31, 2025.
- Total assets were $1,672,409 (in thousands) as of September 30, 2026.
- Net cash provided by operating activities was $114.5 million for the three months ended September 30, 2026 and $211.8 million for the nine months ended September 30, 2026.
Analysis
Third-quarter revenue was $258.9 million, down 1% from $261.9 million in the third quarter of 2025. The revenue result reflected a 14% decline in Commercial Services to $100.3 million, partly offset by 12% Government Solutions growth to $136.8 million. Parking Solutions revenue declined 2% to $21.7 million. Government Solutions reported a record bookings quarter, excluding the quarter in which the NYCDOT contract renewal was booked.
Commercial Services was the principal pressure point. Segment profit declined to $61.3 million from $78.3 million and segment profit margin was 61% versus 67%. The company attributed the decline to lower rental car company tolling revenue under less favorable customer contract terms, fleet volume fluctuations, lower travel demand, higher credit loss expense and lower credit-card transaction volume rebates. U.S. Transportation Security Administration passenger volume was approximately 3% less than the prior-year period.
Government Solutions provided the counterweight, with $136.8 million of revenue and $39.1 million of segment profit, compared with $31.3 million in the prior-year period. Its segment profit margin increased to 29% from 26%, supported by NYCDOT installation volume, revenue mix and decreased wage expenses. Parking Solutions remained smaller and weaker, and the nine-month results include a $64.0 million goodwill impairment and a $40.4 million impairment of intangibles in that segment.
Consolidated profitability declined in the quarter. Net income was $40.4 million versus $46.8 million, Adjusted EBITDA was $103.9 million versus $113.3 million, and Adjusted EBITDA Margin was 40% versus 43%. Cash conversion improved: net cash provided by operating activities increased to $114.5 million from $77.7 million and Free Cash Flow rose to $89.4 million from $49.0 million. The company had $137.0 million of cash and cash equivalents, $1,033 million of total debt, net, and Net Leverage of 2.2x at September 30, 2026.
Management reaffirmed its full-year 2026 outlook, including total revenue of $945 million to $965 million, Adjusted EBITDA of $360 million to $370 million, Adjusted EPS of $1.11 to $1.17 and Free Cash Flow of $105 million to $115 million. Attention is centered on the termination of the Avis Budget Group agreement effective January 30, 2027, the less favorable Hertz extension, the upcoming Enterprise Mobility procurement process, and the CEO and CFO transitions.
Not in the filing
stated, not guessed- Gross margin for the third quarter of 2026 and prior-year period was not reported.
- GAAP operating-income margin was not reported.
- Quarterly dividend information was not reported.
- Third-quarter share repurchase amount was not reported.
- Prior-quarter revenue, EPS, segment revenue, cash flow and Free Cash Flow comparisons were not reported on the corresponding line items.
- Prior guidance comparison is unavailable because the previous outlook section was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Verra Mobility (NASDAQ: VRRM) provides smart mobility solutions across commercial, government, and parking segments.
Ticker impact
VRRM reported Q3 2026 results with revenue down 1% YoY and net income decreasing, while reaffirming FY 2026 guidance.
likely slight downside as investors digest lower earnings despite reaffirmed guidance
The primary disclosure of earnings numbers provides new data; the modest decline suggests pressure, while unchanged guidance limits upside.
Market effects
Smart mobility and toll‑management sector may see modest re‑rating as revenue mix shifts toward government contracts.
U.S. listed mobility tech stocks could experience slight pullback.
Limited to niche transportation technology segment.
Counterpoint
Reaffirmed guidance may signal confidence; investors could view the modest decline as temporary and buy on dip.
Key entities
- companyVerra Mobility Corp
Provider of smart mobility technology solutions.
