Verra Mobility (VRRM) UBS’s 2025 Global Technology and AI Conference summary

Business overview and market position

• Operates in three segments: government solutions, commercial services, and parking, with leading market shares in each.

• Holds about 70% market share in North American automated enforcement technology, with operations in the US, Australia, New Zealand, and Europe.

• Commercial services focus on toll management for rental and fleet vehicles, mainly in North America, with some European presence.

• Parking segment centers on ERP software and hardware for universities and municipalities, acquired through T2.

Financial outlook and growth drivers

• Government solutions expected to grow revenue at 10%-12% CAGR from 2024-2027, then high single-digit growth beyond.

• New York City contract renewal is a $963 million, five-year deal with a 1,000-camera expansion, supporting revenue growth.

• Commercial services revenue projected to grow at mid-single digits, driven by travel trends, growth initiatives, and toll road expansion.

• Parking segment expected to see low to mid-single digit growth.

Margin trends and contract impacts

• Adjusted EBITDA margin expected to decline by 250 basis points in 2026, mainly due to NYC contract price rationalization and minority/women-owned business requirements.

• NYC contract requires $20-$25 million annual investment in minority/women-owned subcontractors, causing a margin step back.

• Government solutions margins projected to grow 1-1.5 points per year through 2028, reaching high 20%-30%.