Verra Mobility (VRRM) Q4 2025 earnings summary

Executive summary

• Fourth quarter 2025 revenue grew 16% year-over-year to $258 million, driven by NYC red-light camera installations and core market growth, surpassing internal expectations.

• Adjusted EBITDA for Q4 was $102 million, flat year-over-year; Adjusted EPS declined 9% to $0.30, in line with guidance.

• Major $998 million, five-year automated photo enforcement contract signed with NYCDOT, including a five-year renewal option and expanded service requirements.

• $133 million of stock repurchased in Q4 under an expanded $250 million authorization.

• Investments in technology modernization, notably the Mosaic platform and connected vehicle initiatives, are expected to drive future competitive advantage.

Financial highlights

• Full-year 2025 revenue was $979 million, with a 4-year CAGR of 15%; Q4 revenue up 16% year-over-year.

• Adjusted EBITDA for 2025 was $416 million (42% margin); Q4 Adjusted EBITDA was $102 million (39% margin), flat year-over-year.

• Adjusted EPS for 2025 was $1.32 (up from $1.23); Q4 Adjusted EPS was $0.30 (down from $0.33), impacted by NYC readiness costs.

• Net income for 2025 was $137 million, up sharply from $31.4 million in 2024; Q4 net income was $19 million.

• Free cash flow for 2025 was $137 million (33% conversion), impacted by higher capital expenditures.

Outlook and guidance

• 2026 revenue expected at $1.02–$1.03 billion (5% growth); adjusted EBITDA $405–$415 million; adjusted EPS $1.32–$1.38; free cash flow $150–$160 million.

• 2026 capital expenditures projected at $125 million, mainly for Government Solutions and technology modernization.

• Margins expected to recover in 2027 and beyond, driven by Mosaic cost savings and volume leverage.

• Quarterly cadence: Q1 2026 revenue flat, then high single-digit growth in Q2, mid-single-digit in Q3/Q4.

• Assumptions include a 28–29% effective tax rate, $125 million in depreciation/amortization, and $62 million in interest expense.