Verra Mobility (VRRM) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenue grew 16% year-over-year to $258 million, driven by NYC red-light camera installations and core market growth, with full-year revenue reaching $979.1 million, up 11% year-over-year.

• Adjusted EBITDA was $102 million in Q4, flat year-over-year; full-year Adjusted EBITDA was $416 million (42% margin), with Adjusted EPS at $1.32, up from $1.23 in 2024.

• Net income for 2025 was $137 million, a significant increase from $31.4 million in 2024, with Q4 net income at $19 million.

• Finalized a $998 million, five-year contract with NYCDOT, effective January 2026, with an option for a five-year renewal and expanded service requirements.

• Repurchased $133 million of stock in Q4 under an expanded $250 million buyback program.

Financial highlights

• Full-year 2025 revenue was $979 million, with a 4-year CAGR of 15%; Q4 service revenue up 14%, driven by NYC expansion and Commercial Services growth.

• Q4 consolidated adjusted EBITDA was $102 million (39% margin), flat year-over-year due to NYC investments.

• Q4 net income was $19 million; GAAP diluted EPS $0.12 vs. a loss of $0.41 prior year; adjusted EPS $0.30 vs. $0.33 prior year.

• Trailing 12-month adjusted EBITDA $416 million on $979 million revenue (42% margin); free cash flow $137 million (33% conversion).

• Net leverage at 2.3x; gross debt ~$1 billion, net debt $972 million; no debt maturities until 2029.

Outlook and guidance

• 2026 revenue guidance: $1.02–$1.03 billion (5% growth at midpoint); adjusted EBITDA $405–$415 million (40% margin, down 250 bps year-over-year); adjusted EPS $1.32–$1.38.

• Free cash flow projected at $150–$160 million; CapEx ~$125 million, mainly for Government Solutions and technology upgrades.

• Q1 2026 revenue and EBITDA expected flat year-over-year, with growth accelerating in Q2–Q4 as weather and contract timing impacts subside.

• Government Solutions margins expected to decline 450–500 bps in 2026 due to NYC contract pricing and MWBE requirements, but ramp up to mid-20s by Q4.

• Long-term, expect margin expansion from Mosaic implementation and volume leverage starting 2027.