Verra Mobility Corporation

Company Overview

Business Model: Verra Mobility Corporation is a leading provider of smart mobility technology solutions, aiming to make transportation safer, smarter, and more connected. The Company generates revenue through integrated, data-driven solutions including automated toll and violations management, vehicle title and registration services, automated safety and traffic enforcement, and commercial parking management. Its offerings combine vehicles, hardware, software, data, and people to address transportation challenges for a diverse customer base, including commercial fleet owners (rental car companies, direct commercial fleet owner-operators, and fleet management companies), governments, universities, parking operators, healthcare facilities, and transportation hubs.

Market Position: Verra Mobility Corporation operates in the automated safety, tolling, commercial fleet management, and parking sectors. The Company holds a leading position in smart mobility technology solutions, leveraging proprietary technologies and an increasing application of artificial intelligence. It maintains long-standing relationships with the three largest rental car companies in the United States (Avis Budget Group, Enterprise Mobility, and The Hertz Corporation), as well as key European rental car companies and leading fleet management companies in the United States. The Company has established relationships with over 50 individual tolling authorities throughout the United States. While no single competitor offers a similarly broad suite of solutions across all segments, the markets are competitive, rapidly evolving, and fragmented.

Recent Strategic Developments:

• NYCDOT Contract Renewal: Verra Mobility Corporation secured a new five-year contract with the New York City Department of Transportation, effective January 1, 2026, to manage New York City’s automated enforcement camera safety programs. The total contract value is $998 million, with new terms including service level agreements, service credits, liquidated damages, cybersecurity, and subcontracting requirements.
• NYCDOT Red-Light Camera Expansion: In March 2025, the New York City Department of Transportation instructed Verra Mobility Corporation to install an additional 300 red-light cameras by year-end 2025, contributing approximately $38.4 million in revenue for fiscal year 2025.
• Debt Refinancing: In October 2025, Verra Mobility Corporation refinanced its existing senior secured term loans, reducing the interest rate by 25 basis points and extending the maturity date to October 15, 2032.
• Share Repurchase Program Expansion: In May 2025, the Board of Directors authorized a new $100.0 million share repurchase program, which was subsequently increased by an additional $150.0 million in October 2025, providing $250.0 million available for repurchases.
• International Market Exit: In November 2025, the province of Ontario, Canada, enacted legislation banning automated speed enforcement cameras, leading to Verra Mobility Corporation's exit from the province and a $9.4 million impairment charge.

Geographic Footprint: Verra Mobility Corporation primarily operates throughout the United States, Australia, Europe, and Canada.

• United States: Represents approximately 86.4% of total revenue in 2025.
• International Operations: Accounted for $133.0 million, or 13.6%, of total revenue in 2025.
  • Australia: $66.2 million (6.8% of total revenue)
  • Canada: $31.6 million (3.2% of total revenue)
  • United Kingdom: $28.2 million (2.9% of total revenue)
  • All other international: $7.0 million (0.7% of total revenue) The Company has subsidiaries in the United Kingdom, Netherlands, France, Ireland, Spain, Australia, Canada, Hungary, and India.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 92.3%
• Operating Margin: 24.4%
• Net Margin: 14.0%

Investment in Growth:

• Capital Expenditures: $119.1 million (primarily for installation and service parts, property, and equipment)
• Strategic Investments: Not explicitly detailed as a separate line item for investment amounts.

Business Segment Analysis

Commercial Services

Financial Performance:

• Revenue: $435.8 million (+6.9% YoY)
• Operating Margin (Segment Profit Margin): 64.8%
• Key Growth Drivers: Primarily driven by increased product adoption and tolling activity, contributing $22.5 million in rental car company tolling revenue. European operations also contributed $4.9 million to the increase.

Product Portfolio:

• Automated toll and violations management solutions.
• Title and registration solutions.

Market Dynamics:

• Serves rental car companies, direct commercial fleet owner-operators, fleet management companies, and other large fleet owners primarily in North America.
• European operations specialize in identification, notification, and collection of unpaid traffic, parking, and public transport-related fees for foreign-registered vehicles in 20 European countries.
• Toll management solutions accounted for approximately 39% of total revenues in 2025.
• Violations management solutions accounted for approximately 4% of total revenues in 2025.
• Title and registration solutions accounted for approximately 2% of total revenues in 2025, operating in 17 states.
• Experiences seasonal fluctuations with higher volumes in the second and third quarters due to summer driving season.
• Three Commercial Services customers collectively accounted for 34.8% of total revenues in 2025.

Government Solutions

Financial Performance:

• Revenue: $460.7 million (+17.9% YoY)
• Operating Margin (Segment Profit Margin): 26.5%
• Key Growth Drivers: Driven by $24.4 million from installation service revenue related to the New York City Department of Transportation red-light expansion program, $14.2 million from the expansion of city bus lane and school bus stop arm enforcement programs, and growth from speed and red-light enforcement and international software-as-a-service programs. Product sales increased by $22.1 million, primarily from red-light camera sales to the New York City Department of Transportation and international product sales.

Product Portfolio:

• Photo enforcement automated safety solutions for red-light, speed, school bus, and city bus lanes.
• Proprietary hardware and software for event data processing, rule application, and connecting violations to drivers/vehicle owners.
• End-to-end solutions including citation mailing, billing, and administrative tasks.

Market Dynamics:

• Provides solutions to states, municipalities, counties, school districts, and law enforcement agencies primarily in the United States, Canada, and Australia.
• The New York City Department of Transportation represented 17.9% of total revenues in 2025 and 31.1% of total accounts receivable, net, as of December 31, 2025.
• Service revenue from cameras typically has initial terms of three to five years with renewal options, accounting for approximately 42% of total revenues in 2025.
• Product sales accounted for approximately 5% of total revenues in 2025.
• The province of Ontario, Canada, banned automated speed enforcement cameras in November 2025, leading to the Company's exit from that province.

Parking Solutions

Financial Performance:

• Revenue: $82.6 million (+2.5% YoY)
• Operating Margin (Segment Profit Margin): 13.9%
• Key Growth Drivers: Increased revenue primarily from software-as-a-service product offerings and professional services, partially offset by a decrease in subscription services related to parking management solutions.

Product Portfolio:

• Proprietary software, transaction processing, and hardware technologies.
• Solutions include parking access and revenue control (PARC), single- and multi-space pay stations, integrated physical and mobile payments, back-office parking rate management, permit issuance and management, online citation payment, event parking, and back-office management of violations.

Market Dynamics:

• Serves approximately 1,775 customers in the university, municipal, healthcare, and commercial operator markets in the United States and Canada.
• Processed approximately 180 million transactions using various parking solutions systems in 2025.
• Recorded a $97.1 million goodwill impairment in fiscal year 2024.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $133.4 million was paid in 2025 to repurchase 6,028,853 shares of Class A Common Stock through open market transactions, which were subsequently retired. In 2024, $200.0 million was paid for share repurchases.
• Dividend Payments: Verra Mobility Corporation has not paid any cash dividends on its Class A Common Stock to date.
• Future Capital Return Commitments: As of December 31, 2025, $116.6 million remained available under the authorized share repurchase program, which terminates on November 13, 2026, if not terminated or extended earlier.

Balance Sheet Position:

• Cash and Equivalents: $65.3 million as of December 31, 2025.
• Total Debt: $1,037.1 million (principal amount) as of December 31, 2025, comprising $687.1 million under the Amended Term Loan and $350.0 million in Senior Unsecured Notes.
• Net Cash Position: -$971.8 million (calculated as Cash and Equivalents minus Total Debt principal).
• Debt Maturity Profile: The Amended Term Loan matures on October 15, 2032. The Senior Unsecured Notes mature on April 15, 2029. The Amended Revolver matures on October 17, 2030.
• Credit Rating: Not disclosed.

Cash Flow Generation:

• Operating Cash Flow: $255.8 million in 2025, an increase from $223.6 million in 2024.
• Free Cash Flow: Approximately $136.7 million in 2025 (Operating Cash Flow minus Capital Expenditures).
• Cash Conversion Metrics: Not explicitly detailed.

Operational Excellence

Production & Service Model: Verra Mobility Corporation delivers services through a combination of software and hardware. Its business units possess expertise in hardware, software, and firmware development and testing, database design and data analytics, and product and project management. The Company also engages external contractors to supplement its team in software and firmware development, digital design, test development, and product-level testing. Research and development efforts focus on expanding product capabilities, differentiating offerings, simplifying implementation, reducing costs, increasing reliability, expanding functionality, applying new technology, and strengthening its intellectual property portfolio.

Supply Chain Architecture: Verra Mobility Corporation relies significantly on specialized third-party providers, including subcontractors, manufacturers, software vendors, software application developers, and utility and network providers. Key Suppliers & Partners:

• Data Providers: Third parties provide data sourced from state departments of motor vehicles (and their European equivalents) and other governmental agencies for driver and vehicle information.
• Government Solutions: Relies on third-party manufacturers for cameras and automated license plate recognition. Outsourcing is utilized for engineering, construction, maintenance, printing and mailing, call center, image review, and event processing.
• Commercial Services: Depends on tolling authorities for transponders and account management.
• Parking Solutions: Utilizes domestic and foreign third-party manufacturers for pay station, Parking Access and Revenue Control (PARCS), and parking enforcement hardware solutions.

Facility Network: Verra Mobility Corporation leases all properties used in its business. Its corporate headquarters is currently 108,956 square feet in Mesa, Arizona, with a planned relocation in the first half of 2026 to a new 40,000 square foot facility in Mesa, Arizona. The Company also leases additional office space for corporate and administrative purposes and multiple small warehouse locations.

Operational Metrics: Not explicitly detailed in the filing.

Market Access & Customer Relationships

Go-to-Market Strategy: Verra Mobility Corporation employs a multi-faceted approach to market access and customer engagement. Distribution Channels:

• Direct Sales: The Company engages directly with commercial fleet owners, governments, universities, and other large entities.
• Channel Partners: Key partnerships include rental car companies, fleet management companies, and various governmental agencies.
• Digital Platforms: Not explicitly detailed as a primary distribution channel in the provided text, but implied by software-as-a-service offerings.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients: In its Commercial Services segment, Verra Mobility Corporation has long-standing relationships with the three largest rental car companies in the United States: Avis Budget Group, Enterprise Mobility, and The Hertz Corporation. It also partners with key European rental car companies and leading fleet management companies in the United States.
• Strategic Partnerships: The Company has established relationships with over 50 individual tolling authorities throughout the United States. In its Government Solutions segment, it serves states, municipalities, counties, school districts, and law enforcement agencies.
• Customer Concentration: The New York City Department of Transportation (NYCDOT) represented 17.9% of total revenues in 2025 and 31.1% of total accounts receivable, net, as of December 31, 2025. Three Commercial Services customers collectively accounted for 34.8% of total revenues in 2025.

Geographic Revenue Distribution:

• United States: Approximately 86.4% of total revenue in 2025.
• Australia: $66.2 million (6.8% of total revenue)
• Canada: $31.6 million (3.2% of total revenue)
• United Kingdom: $28.2 million (2.9% of total revenue)
• All other international: $7.0 million (0.7% of total revenue)
• Growth Markets: International expansion is a component of the Company's growth strategy, involving entry into new regions and countries.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: Verra Mobility Corporation operates in the automated safety, tolling, commercial fleet management, and parking sectors. These markets are characterized by intense competition, rapid evolution, and fragmentation. They are subject to continuous technological change, shifting customer needs, contract renewals, and the introduction of new laws and policies.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: No single company provides a similarly broad suite of solutions across all of Verra Mobility Corporation's business segments.

• Commercial Services: Competition arises from customers who may develop internal solutions, and vendors offering new technologies or financial models.
• Government Solutions: Competes with other vendors in red-light, speed, school bus, and bus lane photo enforcement.
• Parking Solutions: Faces competition from a variety of competitors.

Emerging Competitive Threats:

• New Technologies: Rapid technological change in the industry, including advancements in self-driving cars, which could reduce traffic violations and parking demand.
• AI-enabled Tools: New or more efficient competing solutions leveraging artificial intelligence.
• New Entrants: Potential competition from new companies entering the market.

Competitive Response Strategy: Verra Mobility Corporation's strategy to maintain competitive advantage includes expanding the capabilities of its products, differentiating its offerings, simplifying implementation and support, reducing solution costs, increasing reliability, expanding functionality to meet customer and market requirements, applying new advances in technology, and building further competitive advantages through its intellectual property portfolio.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Macroeconomic Conditions: Negative industry and macroeconomic conditions, including government actions (tariffs, trade protection, shutdowns), travel demand fluctuations, governmental budgeting disruptions, airfare costs, energy prices, military conflicts, natural disasters, epidemic diseases, and consumer spending volatility, may materially and adversely impact business.
• Customer Concentration: Significant reliance on a few large customers, particularly the New York City Department of Transportation (17.9% of 2025 revenue) and three Commercial Services customers (34.8% of 2025 revenue). Loss or reduced demand from these customers, or materially different contract terms, could have a material adverse effect.
• Government Contract Risks: Government contracts are subject to termination rights, payment delays (e.g., $72.9 million receivable from NYCDOT as of December 31, 2025), funds appropriation requirements, audits, and investigations. Legislative changes, such as the ban on automated speed enforcement cameras in Ontario, Canada, can also force market exits.
• Political Acceptance & Restrictions: Decreases in political acceptance or increased governmental restrictions on automated photo enforcement, third-party tolling, or the ability to charge service fees could materially adversely affect the business.
• Competition & Technological Change: Intense competition in rapidly evolving and fragmented markets, coupled with the need to keep pace with technological developments (e.g., self-driving cars, AI), changing customer preferences, and new laws/policies.
• New Product/Service Success: The ability to retain and expand the customer base depends on successfully evolving existing solutions and developing new ones, which can be costly and may not achieve commercial success or customer adoption.
• AI Risks: The increasing use of AI in products, services, and operations involves inherent operational and legal risks, including delays, increased costs, technical failures, defects, bugs, vulnerabilities, governmental/regulatory scrutiny, litigation, confidentiality/cybersecurity risks, privacy concerns, ethical challenges, and inaccurate/biased outputs. Reliance on third parties for AI components also poses risks.
• Competitive Bidding: Regularly pursuing contracts and renewals through competitive bidding involves substantial costs and risks, with no guarantee of award.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Third-Party Provider Reliance: Significant reliance on specialized third-party providers (subcontractors, manufacturers, software vendors, data providers from state departments of motor vehicles, payment processors). Any failure, unwillingness to meet obligations, or termination of relationships could materially and adversely affect the business.
• Communications & IT Systems: Heavy reliance on information technology infrastructure and systems, including third-party communication services and system providers. Failures or interruptions due to network failures, power outages, cyber-attacks, errors, or catastrophic events could disrupt operations.
• Contract Performance: Failure to properly perform under contracts or satisfy customer expectations could lead to additional costs, payment delays, reduced profitability, or reputational harm.
• Acquisition Integration: Inability to successfully integrate acquired businesses (operations, systems, controls, personnel, cultures) could cause significant disruption, divert management attention, and incur substantial costs.
• Realization of Acquisition Benefits: Failure to realize anticipated benefits from acquisitions, including growth opportunities and synergies, or encountering unanticipated expenses and liabilities, could materially adversely affect financial results.

Financial & Regulatory Risks

Market & Financial Risks:

• Indebtedness: Substantial debt levels ($687.1 million term loan, $350.0 million senior notes) increase vulnerability to adverse economic conditions, limit additional financing, expose to interest rate fluctuations, and require significant cash flow for debt payments.
• Restrictive Covenants: Agreements governing indebtedness contain restrictive covenants that limit operational flexibility, including incurring additional debt, paying dividends, granting liens, making acquisitions, and disposing of assets.
• Cross-Default/Acceleration: Debt agreements contain cross-default or cross-acceleration provisions, meaning a default under one instrument could trigger immediate repayment of all debt.
• Cash Flow Sufficiency: Inability to generate sufficient cash flows to service debt obligations or refinance debt on favorable terms could have a material adverse effect.
• Financing Availability: Inability to obtain additional financing for operations and growth could impede development.
• Stock Repurchase Programs: While authorized, there is no guarantee that stock repurchase programs will enhance long-term shareholder value, and they can increase stock price volatility and diminish cash reserves. The 1% excise tax on net stock repurchases increases costs.
• Goodwill Impairment: Goodwill has been subject to impairment (e.g., $97.1 million in Parking Solutions in 2024) and may be subject to further impairment, impacting financial results.
• Litigation & Regulatory Investigations: Exposure to litigation (intellectual property, antitrust, commercial, negligence, class actions, consumer fraud, employment) and regulatory investigations (licensing, tax assessments) can be costly, time-consuming, and result in significant liabilities, fines, or reputational damage.
• Regulatory Changes: Subject to multiple, sometimes conflicting, laws and regulations across jurisdictions (transportation safety, consumer protection, procurement, anti-kickback, labor, competition, payment processing, intellectual property, environmental). Changes in laws or interpretations could limit solutions, increase costs, or impact business.
• Tax Rate Volatility: Unanticipated changes in effective tax rates or adverse outcomes from tax return examinations could adversely affect financial condition.
• Global Minimum Tax: The adoption of OECD model rules for a global minimum tax (15%) in numerous countries could increase income tax expense, reduce tax attributes, and increase compliance costs.

Geopolitical & External Risks

Geopolitical Exposure:

• International Operations Risks: Operations in international markets (e.g., UK, Netherlands, France, Ireland, Spain, Australia, Canada, Hungary, India) expose the Company to political, social, and economic instability, geopolitical fluctuations, wars, civil unrest, terrorism, increased management complexity, tariffs, trade restrictions, foreign exchange fluctuations, adverse tax consequences, varying legal/regulatory environments, and limited intellectual property protection.
• International Expansion Strategy: Growth strategy dependent on international expansion carries risks such as lack of product/service acceptance, tax issues, marketing adaptation challenges, different competitive environments, intellectual property rights protection, and unfamiliar regulatory landscapes.
• Anti-corruption & Anti-money Laundering: Failure to comply with laws like the U.S. Foreign Corrupt Practices Act and similar international laws could result in severe criminal or civil sanctions, or other liabilities.

Innovation & Technology Leadership

Research & Development Focus: Verra Mobility Corporation's research and development efforts are strategically focused on enhancing its smart mobility technology solutions. Core Technology Areas:

• Technology Development: Expertise spans hardware, software, and firmware development and testing, database design, and data analytics.
• Innovation Pipeline: Efforts are directed towards expanding product capabilities, differentiating offerings, simplifying implementation and support, reducing solution costs, increasing reliability, and expanding functionality to meet evolving customer and market requirements.
• Artificial Intelligence: The Company increasingly applies AI to enhance and support certain aspects of its offerings and business processes.

Intellectual Property Portfolio: Verra Mobility Corporation relies on a combination of patents, trademarks, trade secrets, copyrights, and confidentiality agreements to protect its intellectual property.

• Patent Strategy: As of December 31, 2025, the Company owned approximately 78 U.S.-issued and foreign-issued patents and pending patent applications related to its products and technology. The strategy is to seek patent protection for inventions likely to be incorporated into products and services or to improve competitive position.
• Trademark Strategy: The Company has approximately 205 registrations and pending applications in the United States and foreign jurisdictions for trademarks and service marks, including "Verra Mobility" and its logo.
• Copyrights & Trade Secrets: Claims copyright on all internally-developed software and relies on maintaining the confidentiality of its source code.

Technology Partnerships: Not explicitly detailed in the provided text beyond general reliance on third-party software vendors and technology partners.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company's future success is dependent on the continued services of its executive officers, including the Chief Executive Officer and Chief Financial Officer, who possess critical experience and relationships vital for implementing business and growth strategies.

Board Composition: The Board of Directors, through its Audit Committee, oversees the Company's enterprise-wide approach to risk management, including cybersecurity. The Audit Committee regularly receives presentations and reports on cybersecurity risks and discusses the Company's approach to cybersecurity risk management with management annually.

Human Capital Strategy

Workforce Composition:

• Total Employees: As of December 31, 2025, Verra Mobility Corporation had 1,901 employees, consisting of 1,888 full-time and 13 part-time employees.
• Geographic Distribution: Of the full-time employees, 1,286 were located in the United States and 602 were located internationally.
• Skill Mix: The business relies on highly skilled technical, managerial, engineering, sales, marketing, and customer support personnel.
• Labor Relations: None of the employees are represented by a labor union or covered by a collective bargaining agreement, except for 43 employees in Staten Island, New York.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Implemented purposeful hiring strategies, including internal mobility, promotion opportunities, and an employee referral program.
• Retention Metrics: Not explicitly detailed.
• Employee Value Proposition: Compensation programs are designed to align with Company and individual performance, attracting, retaining, motivating, and rewarding employees. Benefits include health insurance, health savings accounts, flexible spending accounts, life insurance, accident insurance, paid time off, paid parental leave, and a company-sponsored 401(k) plan (with immediate vesting company match). Key leadership positions receive annual incentive bonuses and long-term equity awards.

Diversity & Development:

• Diversity Metrics: Seeks to attract, retain, and develop a diverse group of talented individuals.
• Development Programs: A multifaceted talent development framework includes functional training, management training, and targeted development programs. Employees undergo annual performance reviews with dual-performance ratings and actionable feedback for professional development.
• Culture & Engagement: Fosters a culture that values collaboration, differences, global thinking, engaging climate, and recognition/development of others. Employee surveys gather insights on engagement, workplace experience, and manager effectiveness to inform action plans.

Environmental & Social Impact

Environmental Commitments: Not explicitly detailed in the provided filing.

Climate Strategy: Not explicitly detailed in the provided filing.

Supply Chain Sustainability: Not explicitly detailed in the provided filing.

Social Impact Initiatives: Not explicitly detailed in the provided filing.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: The Commercial Services segment experiences seasonal fluctuations, with higher volumes and revenue historically observed in the second and third quarters of each fiscal year, driven by increased travel demand during the summer driving season.
• Economic Sensitivity: Seasonal fluctuations can also be influenced by broader travel trends, weather conditions, general economic conditions, and shifts in consumer preferences.
• Industry Cycles: While seasonality exists, it has not historically resulted in material fluctuations in Verra Mobility Corporation's overall financial performance.

Planning & Forecasting: Not explicitly detailed in the provided filing.

Regulatory Environment & Compliance

Regulatory Framework: Verra Mobility Corporation is subject to a complex web of local, state, national, and international laws, regulations, and administrative practices. Industry-Specific Regulations:

• Photo Enforcement: Programs in the United States are regulated at state and local levels, often under state enabling legislation or home rule authority. The Company must obtain permits and licenses for general contracting, engineering, electrical work, private investigative work, and processing license plate/personal information. Foreign photo enforcement programs are also subject to regulation in their respective countries.
• Data Privacy & Security: The Company collects, processes, and retains personal information, making it subject to laws such as the U.S. Driver Privacy Protection Act, GDPR (in the E.U. and U.K.), Canadian Personal Information Protection and Electronic Documents Act, Australia Privacy Act of 1988, New Zealand’s Privacy Act of 2020, and the California Consumer Privacy Act (CCPA).
• Tolling: Subject to state and local regulations, including potential legislative efforts to limit charges by rental car companies for transponder use or administrative fees, and increased scrutiny from state attorneys general regarding consumer protection.
• Government Contracting: Operations within the Government Solutions segment are subject to laws and regulations pertaining to procurement, gifts and entertainment, payments of commissions and contingency fees, conflicts of interest, and licensing/permitting requirements. Lobbying activities are also regulated at state and local levels.
• International Compliance: Operations in the E.U., U.K., Australia, Canada, and New Zealand are subject to laws regarding access to and use of vehicle licensing information, traffic enforcement and collections, and financial/banking regulations.

Trade & Export Controls: Government actions and regulations, such as tariffs and trade protection measures, may negatively impact the business. The Company has, at times, shifted manufacturing and final assembly locations and prioritized domestic alternatives to minimize tariff impact.

Legal Proceedings:

• Brantley v. City of Gretna: A class action lawsuit against the City of Gretna and Redflex Traffic Systems, Inc. (an acquired subsidiary) alleging violations in the City's safety camera program. A settlement agreement received final court approval in September 2025, with no material financial impact on the Company.
• PlusPass Inc. v. Verra Mobility Corporation: A lawsuit filed in November 2020, which was fully and finally resolved through a confidential business arrangement and settlement payment in February 2024.
• General Litigation: The Company is subject to other legal and regulatory actions arising in the ordinary course of business, including intellectual property, antitrust, commercial arrangements, negligence, deceptive trade practices, fraud, employment law claims, and regulatory investigations.

Tax Strategy & Considerations

Tax Profile: Verra Mobility Corporation is subject to income taxes in numerous countries, with domestic tax liabilities influenced by expense allocation across jurisdictions. The Company is subject to audits by U.S. federal and state authorities, as well as foreign tax authorities.

• Effective Tax Rate: The effective tax rate for fiscal year 2025 was 29.9%, significantly lower than 60.2% in fiscal year 2024. This reduction was primarily due to the impact of permanent differences related to the goodwill impairment adjustments recorded in the Parking Solutions segment in 2024.
• Geographic Tax Planning: The Company's tax profile involves the allocation of expenses in differing jurisdictions.
• Tax Reform Impact:
  • Inflation Reduction Act (2022): Introduced a 1% excise tax on net stock repurchases, increasing the costs associated with share repurchases.
  • One Big Beautiful Bill Act (OBBBA) (2025): Enacted in the U.S. in July 2025, making permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation.
  • OECD Global Minimum Tax: Numerous countries, including those where the Company operates, have agreed to OECD model rules proposing a 15% global minimum tax for multinational companies with consolidated revenue above €750 million. While the U.S. has a "qualified SbS regime" exclusion for U.S.-parented groups, non-U.S. operations may still be subject to Qualified Domestic Minimum Top-up Taxes (QDMTT), potentially increasing income tax expense and compliance costs.

Tax Receivable Agreement: As of December 31, 2025, the Tax Receivable Agreement (TRA) liability was $43.7 million, with a current portion of $5.3 million. The Company made payments totaling approximately $5.2 million in fiscal year 2025 related to the 2024 tax year and expects to make annual payments of approximately $5.3 million for the next seven years, followed by $1.1 million in the final year.

Insurance & Risk Transfer

Risk Management Framework: Verra Mobility Corporation's Board of Directors, through the Audit Committee, oversees the Company's enterprise-wide approach to risk management, including cybersecurity. The cybersecurity program integrates policies, standards, processes, and practices based on recognized frameworks like NIST and ISO 27001. Key areas of focus include governance, cross-functional collaboration, technical safeguards, incident response and recovery planning, third-party risk management, and employee education and awareness.

Insurance Coverage: The Company maintains insurance designed to provide coverage for certain losses arising from cybersecurity incidents; however, such coverage may be insufficient to cover all losses or types of claims. General liability insurance coverage is also maintained, but may not cover all potential claims.

Risk Transfer Mechanisms: Not explicitly detailed beyond general insurance coverage.