Verra Mobility (VRRM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $222.4 million, up 9% year-over-year, with net income of $34.2 million and strong performance across all business segments, driven by robust travel demand and legislative expansions supporting future growth.

• Adjusted EBITDA was $102.2 million, up 8% year-over-year, with adjusted EPS rising 7% to $0.31.

• Government Solutions secured $12 million in incremental ARR in Q2, totaling $22 million year-to-date, with legislative momentum expanding the addressable market.

• Reaffirmed full-year 2024 guidance based on robust first-half performance and a strong bid pipeline.

• $51.5 million was used to repurchase 2.0 million shares in June 2024; $48.5 million remains under the current repurchase program.

Financial highlights

• Q2 2024 revenue: $222.4 million (+9% YoY); adjusted EBITDA: $102.2 million (+8% YoY); adjusted EPS: $0.31 (+7% YoY); net income: $34.2 million.

• Adjusted Free Cash Flow for Q2 was $26 million, down from $51 million in Q2 2023, impacted by seasonal tax payments and timing of collections.

• Trailing twelve months: $384 million adjusted EBITDA on $853 million revenue (45% margin); $139 million adjusted free cash flow (36% conversion).

• Net income for the first half of 2024 was $63.4 million, up from $23.7 million in the prior year period.

• Cash and cash equivalents totaled $122.0 million at quarter-end.

Outlook and guidance

• Full-year 2024 guidance reaffirmed: revenue at the upper end of $865–$880 million (~8% growth), adjusted EBITDA at $395–$405 million, adjusted EPS at $1.15–$1.20, and adjusted free cash flow of $155–$165 million.

• Net leverage expected at ~2.0x by year-end, with weighted average diluted share count projected at 168 million.

• Sequential revenue and EBITDA growth expected in Q3, with typical seasonal slowdown in Q4.

• Management expects existing cash, cash flows, and available borrowing to be sufficient for operating needs, debt service, and share repurchases for at least the next 12 months.

• Parking Solutions revenue to remain flat for the year, with SaaS growth offset by hardware declines.