Verra Mobility (VRRM) Morgan Stanley Technology, Media & Telecom Conference 2026 summary

Business segment overview and growth drivers

• Operates in urban mobility (city transportation, safety, congestion) and commercial fleets (toll, violation, registration management), with a strong presence in universities for parking solutions.

• Government Solutions is experiencing a renaissance, driven by legislative changes and increased adoption of automated enforcement, especially for school zones and work zones.

• Commercial Services growth is tied to travel demand, cashless toll adoption, new toll roads, and international expansion, with mid-single-digit growth expected.

• Growth in Commercial Services is split evenly among travel demand, secular tailwinds (cashless tolls, new roads), and standard growth initiatives (fleet penetration, new offerings, Europe expansion).

• International expansion, especially in Europe, is progressing slower than expected but is anticipated to accelerate in the next 2–4 years as cashless tolling expands.

Customer concentration, renewals, and competitive dynamics

• Maintains long-term relationships with major U.S. rental car companies, with contract renewals typically every 3–5 years.

• Customer concentration is recognized, with diversification efforts focused on M&A and expanding to other customer types.

• Insourcing by customers is less of a risk compared to competition from fleet management companies, due to the complexity of tolling and the need for ongoing platform investment.

• Competitive environment features regional players, but win rates remain high due to resource redeployment and focus on key regions.

Government Solutions and legislative opportunities

• New five-year contract with NYC DOT begins January 2026, expanding automated enforcement camera programs, with most installations in 2026 and the rest in 2027.

• Contract includes EBITDA growth from expansion, new use cases, and margin improvements, offset by price rationalization and required investment in minority and women-owned businesses.

• Minority and women-owned business participation is a fixed percentage of the NYC contract and is expected to remain consistent.

• Margin improvement in Government Solutions is targeted through the Mosaic project, a cloud-based, modular platform expected to reduce costs and improve efficiency over the next 6–8 months.

• Legislative changes in California and Florida are expanding the addressable market, with California offering the largest near-term opportunity and similar economics to legacy programs.