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 tailwinds.

• Adjusted EBITDA was $102.2 million, an 8% increase year-over-year, and adjusted EPS grew 7% to $0.31.

• Government Solutions secured $12 million in incremental ARR in Q2, totaling $22 million year-to-date, with notable contract wins and legislative expansions in multiple states.

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

• Repurchased 2 million shares for $51.5 million 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 for Q2 2024 was $34.2 million ($0.20 per diluted share), up from $19.1 million ($0.13 per share) in Q2 2023.

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

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

• Cash and cash equivalents totaled $122 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 to be around 2.0x by year-end, with no significant debt maturities until 2028.

• 2024 assumptions: 168 million weighted average shares, 30% effective tax rate, $110 million D&A, $80 million interest expense, $90 million capex.

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

• Parking Solutions revenue expected to be flat year-over-year, with margin improvement as SaaS becomes a larger share.