VERRA MOBILITY Corp
For the period ended Sep 30, 2024. Filed Oct 31, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 31, 2024
VRRM$2.19-5.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000950170-24-094172
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0000950170-24-119627
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 123 current paragraphs.
58 unchanged; 52 reworded; 12 added; 5 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Cancellation of the Interest Rate Swap
Current report
NYCDOT Contract
Current report
The New York City Department of Transportation (“NYCDOT”) represented approximately 16% and 17% of our total revenue for the nine months ended September 30, 2024 and 2023, respectively, and 13% and 18% of total accounts receivable, net as of September 30, 2024 and December 31, 2023, respectively. Our contract with NYCDOT expires on December 31, 2024, and we are presently participating in a competitive procurement for a new NYCDOT automated enforcement program contract. We are in discussions with NYCDOT on an extension and expect to conclude those discussions in a way that will allow NYCDOT to continue to utilize our automated enforcement program until the competitive procurement process is completed. However, there is no assurance that we will be successful in extending the contract at the conclusion of its term or winning the competitive procurement for the new automated enforcement contract. If we are unable to extend the contract with NYCDOT or win the competitive procurement for a new contact with NYCDOT, it would have a material adverse effect on our business, financial condition and results of operations.
Current report
Commercial Services service revenue increased by $11.0 million, or 11.2%, from approximately $98.1 million for the three months ended September 30, 2023 to $109.1 million for the three months ended September 30, 2024. The increase in higher travel volume, product adoption and tolling activity compared to the prior year, contributed to a $4.9 million growth in RAC tolling revenue. In addition, the remaining $6.1 million in revenue growth was contributed from processing violations, titles and registrations, FMC and other revenue during the three months ended September 30, 2024 compared to the same period in 2023.
Current report
Government Solutions service revenue increased by $5.9 million, or 6.9%, from approximately $85.1 million for the three months ended September 30, 2023, to $91.0 million for the three months ended September 30, 2024. The increase was primarily driven by the expansion of speed and maintenance programs, contributing approximately $3.8 million to the increase in service revenue for the 2024 quarter. The remaining increase was attributable to expansions across school bus stop arm and bus lane programs. Service revenue growth was driven by 12% of growth outside of New York City.
Current report
Other Income, Net. Other income, net decreased to $4.3 million for the three months ended September 30, 2024 compared to $4.5 million for the three months ended September 30, 2023 primarily due to foreign currency transaction losses.
Current report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Current report
We recorded $0.1 million and $0.6 million loss on extinguishment of debt during the three and nine months ended September 30, 2024 primarily related to the write-off of pre-existing deferred financing costs and discounts in connection with the Refinancing Transaction. We recognized a loss on extinguishment of debt of $2.0 million and $3.5 million for the three and nine months ended September 30, 2023, respectively, related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayments.
Current report
Subsequent to September 30, 2024, we amended the 2021 Term Loan agreement to refinance the entire outstanding amount under the 2021 Term Loan and reduced the interest rate by 50 basis points. See Note 15, Subsequent Event, in Part I, Item 1, Financial Statements, for additional information.
Current report
Goodwill
Current report
We perform our annual goodwill impairment assessment at October 1 of each year, or more frequently if events or changes in circumstances indicate the carrying value may not be recoverable. In connection with the 2023 annual assessment, we concluded there was no impairment for any of our four reporting units. We performed a quantitative impairment test for the Parking Solutions reporting unit as of October 1, 2023 which resulted in the estimated fair value exceeding the reporting unit’s carrying value by approximately 7%.
Current report
Due to recent performance that unfavorably impacted the Parking Solutions business, including changes in leadership as well as lower revenue growth and profitability margins for certain programs than previously estimated, it is reasonably possible that the changes in one or more assumptions, including a significant decline in compounded annual revenue growth rates, increase in the discount rate, or shortfalls in the financial performance relative to projections used to estimate fair value could result in a material impairment of goodwill in future periods. Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations within the 2023 Annual Report on Form 10-K for further discussion of assumptions and methodology used.
Removed paragraphs (5)
Previous report
Used existing cash on hand of $51.5 million to repurchase 2.0 million shares of our Class A Common Stock directly from a stockholder in June 2024.
Previous report
Government Solutions service revenue increased by $6.5 million, or 7.6%, from approximately $85 million for the three months ended June 30, 2023, to $91.5 million for the three months ended June 30, 2024. The increase was primarily driven by program expansion from existing customers, new cities implementing automated enforcement efforts to improve road safety and from maintenance programs for international customers which together contributed $4.7 million growth compared to the prior year. Outside of our contract with NYCDOT, we experienced a 14% increase in service revenue due to these factors. The remaining increase is attributable to expansions across school bus stop-arm and bus lane programs.
Previous report
Other Income, Net. Other income, net was $5.2 million for the three months ended June 30, 2024 compared to $4.5 million for the three months ended June 30, 2023. The increase of $0.7 million is primarily attributable to volume rebates earned on increased credit card purchases from prepayment of tolling transactions driven by travel demand.
Previous report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Previous report
Share Repurchases and Retirement
Reworded paragraphs (52)
Previous wording
We believe we are a leading provider of smart mobility technology solutions, principally operating throughout the United States, Australia, Europe and Canada. We make transportation safer, smarter and more connected through our integrated, data-driven solutions, including toll and violations management, title and registration services, automated safety and traffic enforcement and commercial parking management. We bring together vehicles, hardware, software, data and people to solve transportation challenges for customers around the world, including commercial fleet owners such as rental car companies (“RACs”), direct commercial fleet owner-operators (“Direct Fleets”) and fleet management companies (“FMCs”), as well as governments, universities, parking operators, healthcare facilities, transportation hubs and other violation-issuing authorities. Our vision is to continue to develop and use technology and data intelligence to make transportation safer, smarter and more connected globally.
Current wording
We believe we are a leading provider of smart mobility technology solutions, principally operating throughout the United States, Australia, Europe and Canada. We make transportation safer, smarter and more connected through our integrated, data-driven solutions, including toll and violations management, title and registration services, automated safety and traffic enforcement and commercial parking management. We bring together vehicles, hardware, software, data and people to solve transportation challenges for customers around the world, including commercial fleet owners such as rental car companies (“RACs”), direct commercial fleet owner-operators (“Direct Fleets”) and fleet management companies (“FMCs”), as well as governments, universities, parking operators, healthcare facilities, transportation hubs and violation-issuing authorities. Our vision is to continue to develop and use technology and data intelligence to make transportation safer, smarter and more connected globally.
Previous wording
Increased total revenue by $35.8 million, or 9.0%, from $396.4 million in the six months ended June 30, 2023 to $432.2 million in the same period in 2024. The increase was mainly due to service revenue resulting from increased travel volume in the Commercial Services segment and the growth from speed, red light and maintenance programs in the Government Solutions segment.
Current wording
Increased total revenue by $51.4 million, or 8.5%, from $606.3 million in the nine months ended September 30, 2023 to $657.7 million in the same period in 2024. The increase was mainly due to service revenue resulting from increased travel volume in the Commercial Services segment and the growth from speed, red light and maintenance programs in the Government Solutions segment.
Previous wording
Generated cash flows from operating activities of $74.4 million and $107.9 million for the six months ended June 30, 2024 and 2023, respectively. Our cash on hand was $122.0 million as of June 30, 2024.
Current wording
Generated cash flows from operating activities of $183.2 million and $170.4 million for the nine months ended September 30, 2024 and 2023, respectively. Our cash on hand was $206.1 million as of September 30, 2024.
Previous wording
Continued to focus on debt management and lowering our exposure to higher interest rates, and as a result, we refinanced our debt and reduced our interest rate by 50 basis points and made early repayments of approximately $4.5 million on our 2021 Term Loan during the six months ended June 30, 2024.
Current wording
Continued to focus on debt management and lowering our exposure to higher interest rates, and as a result, we refinanced our debt and reduced our interest rate by 50 basis points and made early repayments of approximately $4.5 million on our 2021 Term Loan during the nine months ended September 30, 2024.
Previous wording
See Note 2, Significant Accounting Policies, in Part I, Item 1, Financial Statements, for additional information on the interest rate swap entered into in December 2022 to hedge our exposure against higher interest rates.
Current wording
We exercised our option to cancel the interest rate swap agreement, effective September 30, 2024, which was previously used to hedge our exposure to higher interest rates associated with the variable portion of the interest rate on our 2021 Term Loan. Refer to Note 2, Significant Accounting Policies, in Part I, Item 1, Financial Statements, for additional information.
Previous wording
In October 2023, our Board of Directors authorized a new share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period in open market, ASR or privately negotiated transactions. On June 6, 2024, we entered into a share repurchase agreement with a stockholder, pursuant to which we repurchased, directly from the stockholder, 2.0 million shares of our Class A Common Stock for an aggregate purchase price of $51.5 million. Refer to Note 10, Stockholders' Equity, in Part I, Item 1, Financial Statements for additional information on our share repurchases.
Current wording
In October 2023, our Board of Directors authorized a new share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period in open market, ASR or privately negotiated transactions. On June 6, 2024, we entered into a share repurchase agreement with a stockholder, pursuant to which we repurchased, directly from the stockholder, 2.0 million shares of our Class A Common Stock for an aggregate purchase price of $51.5 million. The repurchased shares were subsequently retired. As of September 30, 2024, $48.5 million remains available under the share repurchase program. Refer to Note 10, Stockholders' Equity, in Part I, Item 1, Financial Statements for additional information on our share repurchases.
Previous wording
Change in Fair Value of Private Placement Warrants. Change in fair value of private placement warrants consists of liability adjustments related to the Private Placement Warrants originally issued to Gores Sponsor II, LLC re-measured to fair value at the end of the reporting period.
Current wording
Change in Fair Value of Private Placement Warrants. Change in fair value of private placement warrants consists of liability adjustments related to the Private Placement Warrants originally issued to Gores Sponsor II, LLC re-measured to fair value at the end of the reporting period, and the final re-measurement upon their exercise.
Previous wording
Gain on Interest Rate Swap. Gain on interest rate swap relates to the changes associated with the derivative instrument re-measured to fair value at the end of the reporting period and the related periodic cash receipts or payments.
Current wording
Loss (Gain) on Interest Rate Swap. Loss (gain) on interest rate swap related to the changes associated with the derivative instrument re-measured to fair value at the end of the reporting period and the related periodic cash receipts or payments.
Previous wording
Other Income, Net. Other income, net primarily consists of volume rebates earned from total spend on purchasing cards, gains or losses on foreign currency transactions and other non-operating expenses.
Current wording
Other Income, Net. Other income, net primarily consists of volume rebates earned from total spend on credit card transactions, gains or losses on foreign currency transactions and other non-operating expenses.
Previous wording
Service Revenue. Service revenue increased by $16.0 million, or 8.1%, to $212.0 million for the three months ended June 30, 2024 from $196.1 million for the three months ended June 30, 2023, representing 95.3% and 95.9% of total revenue, respectively. The following table depicts service revenue by segment:
Current wording
Service Revenue. Service revenue increased by $16.2 million, or 8.1%, to $217.3 million for the three months ended September 30, 2024 from $201.0 million for the three months ended September 30, 2023, representing 96.3% and 95.8% of total revenue, respectively. The following table depicts service revenue by segment:
Previous wording
Parking Solutions service revenue grew by $0.7 million, from $32.4 million for the six months ended June 30, 2023 to $33.1 million for the six months ended June 30, 2024. The growth was primarily due to increased revenue from SaaS product offerings, partially offset by a decrease in professional services related to parking management solutions.
Current wording
Parking Solutions service revenue modestly declined by $0.7 million, or 3.7%, from approximately $17.8 million for the three months ended September 30, 2023 to $17.1 million for the three months ended September 30, 2024. The increased revenue from SaaS product offerings was offset by a reduction in professional services related to parking management solutions.
Previous wording
Product Sales. Product sales were $10.4 million and $8.4 million for the three months ended June 30, 2024 and 2023, respectively. Product sales increased by $2.0 million, which was due to a $3.0 million growth in product sales to Government Solutions customers, partially offset by a $1.0 million decrease in product sales in the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.
Current wording
Product Sales. Product sales were $8.3 million and $8.9 million for the three months ended September 30, 2024 and 2023, respectively. Product sales decreased by $0.6 million, which was due to a $0.3 million decline in product sales to Government Solutions international customers, along with a $0.3 million decrease in product sales to Parking Solutions customers driven by a structural transition from hardware to software and mobile payment solutions. Customer buying patterns vary greatly from period to period related to product sales.
Previous wording
Cost of Service Revenue, Excluding Depreciation and Amortization. Cost of service revenue, excluding depreciation and amortization increased from $4.3 million for the three months ended June 30, 2023 to $4.6 million for the three months ended June 30, 2024, mainly due to increased recurring service costs.
Current wording
Cost of Service Revenue, Excluding Depreciation and Amortization. Cost of service revenue, excluding depreciation and amortization increased from $5.2 million for the three months ended September 30, 2023 to $5.4 million for the same period in 2024, mainly due to increased recurring service costs.
Previous wording
Cost of Product Sales. Cost of product sales increased by approximately $1.8 million from $6.0 million in the three months ended June 30, 2023 to $7.8 million in the three months ended June 30, 2024, which was in line with the increase in product sales discussed above.
Current wording
Cost of Product Sales. Cost of product sales decreased by approximately $1.3 million from $6.9 million in the three months ended September 30, 2023 to $5.6 million in the three months ended September 30, 2024, which was in line with the decrease in product sales discussed above.
Previous wording
Operating Expenses. Operating expenses increased by $9.2 million, or 14.1%, from $65.7 million for the three months ended June 30, 2023 to $74.9 million for the three months ended June 30, 2024. The increase in 2024 was primarily attributable to increases of $5.0 million in wages expense, $1.9 million of information technology costs, and $1.5 million of subcontractor costs compared to the prior period. Operating expenses as a percentage of total revenue increased from 32.1% to 33.7% for the three months ended June 30, 2023 and 2024, respectively.
Current wording
Operating Expenses. Operating expenses increased by approximately $7.2 million, or 10.4%, from $68.9 million for the three months ended September 30, 2023 to $76.0 million for the three months ended September 30, 2024. The increase in 2024 compared to the prior year period was primarily due to increases of $5.1 million in wages expense, $1.3 million of information technology costs and $1.2 million of subcontractor costs, partially offset by lower costs related to operational equipment and maintenance. Operating expenses as a percentage of total revenue increased from 32.8% to 33.7% for the three months ended September 30, 2023 and 2024, respectively.
Previous wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $46.3 million for the three months ended June 30, 2024 compared to $43.2 million for the same period in 2023. This increase was primarily due to $2.2 million in higher wages expense, and overall increases in stock-based compensation, marketing and other general expenses which were partially offset by a decrease in professional services costs compared to prior year. Selling, general and administrative expenses as a percentage of total revenue decreased slightly from 21.1% to 20.8% for the three months ended June 30, 2023 and 2024, respectively. The following table presents selling, general and administrative expenses by segment:
Current wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $47.9 million for the three months ended September 30, 2024 compared to $42.3 million for the same period in 2023. This increase was mainly due to $2.4 million in higher wages and benefits expense, $1.6 million in stock-based compensation, and higher professional services and marketing costs compared to the prior year period. Selling, general and administrative expenses as a percentage of total revenue increased from 20.1% to 21.2% for the three months ended September 30, 2023 and 2024, respectively. The following table presents selling, general and administrative expenses by segment:
Previous wording
Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net, decreased by approximately $1.6 million to $27.5 million for the three months ended June 30, 2024 from $29.1 million for the same period in 2023. This was mainly due to a developed technology intangible asset being fully amortized in the three months ended June 30, 2024 as compared to the prior year. This decrease was partially offset by an increase in depreciation expense in the 2024 period.
Current wording
Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net, decreased by $0.9 million to $26.7 million for the three months ended September 30, 2024 from $27.6 million for the same period in 2023. This was mainly due to a developed technology intangible asset being fully amortized in the three months ended September 30, 2024 as compared to the prior year. This decrease was partially offset by an increase in depreciation expense in the 2024 period.
Previous wording
Interest Expense, Net. Interest expense, net decreased by approximately $4.0 million from $22.8 million for the three months ended June 30, 2023 to $18.8 million for the same period in 2024 which was primarily attributable to voluntary principal prepayments made during 2023 and 2024 which lowered the outstanding debt balance. In addition, the average variable interest rate on the 2021 Term Loan was 27 basis points lower for the three months ended June 30, 2024 compared to the prior period. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”in Part I, Item 2.”
Current wording
Interest Expense, Net. Interest expense, net decreased by approximately $1.7 million from $20.4 million for the three months ended September 30, 2023 to $18.7 million for the same period in 2024. This was primarily related to the February 2024 repricing of the 2021 Term Loan and the voluntary principal prepayments made during 2023 and 2024 which lowered the outstanding debt balance. The average variable interest rate on the 2021 Term Loan was 46 basis points lower for the three months ended September 30, 2024 compared to the prior year period. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”in Part I, Item 2.”
Previous wording
Change in Fair Value of Private Placement Warrants. We recorded a loss of $25.5 million for the six months ended June 30, 2023 related to the change in fair value of our Private Placement Warrants which were accounted for as liabilities on our condensed consolidated balance sheets. The change in fair value was the result of re-measurement of the liability at the end of the reporting period, or a final re-measurement upon their exercise.
Current wording
Change in Fair Value of Private Placement Warrants. We recorded a gain of approximately $0.6 million for the three months ended September 30, 2023 related to the change in fair value of our Private Placement Warrants which were accounted for as liabilities on our condensed consolidated balance sheets. The change in fair value was the result of re-measurement of the liability at the end of the reporting period or a final re-measurement upon their exercise.
Previous wording
Gain on Interest Rate Swap. We recorded a $(0.4) million gain during the six months ended June 30, 2024, of which $0.2 million is associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $(0.6) million related to the monthly cash proceeds. We recorded a $(2.0) million gain during the six months ended June 30, 2023, of which approximately $(3.6) million is associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $1.6 million related to the monthly cash payments.
Current wording
Loss on Interest Rate Swap. We recorded a loss of $0.9 million during the three months ended September 30, 2024, of which $1.2 million was associated with the derivative instrument re-measured to fair value at the end of the reporting period, offset by $0.3 million related to the monthly cash proceeds on the interest rate swap. We recorded a $0.1 million loss during the three months ended September 30, 2023, of which approximately $0.2 million was associated with the derivative instrument re-measured to fair value at the end of the reporting period, offset by $0.1 million related to the monthly cash proceeds. We exercised our option to cancel the interest rate swap agreement as of September 30, 2024.
Previous wording
Loss on Extinguishment of Debt. We recorded a $0.2 million loss on extinguishment of debt during the three months ended June 30, 2023 related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayments of $10.0 million on the 2021 Term Loan.
Current wording
Loss on Extinguishment of Debt. We recorded a less than $0.1 million loss on extinguishment of debt during the three months ended September 30, 2024 related to the write-off of pre-existing deferred financing costs and discounts on the 2021 Term Loan. We recorded a $2.0 million loss on extinguishment of debt during the three months ended September 30, 2023 related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayment of $100.0 million on the 2021 Term Loan.
Previous wording
Income Tax Provision. Income tax provision was $13.4 million representing an effective tax rate of 28.1% for the three months ended June 30, 2024 compared to a tax provision of $12.5 million, with an effective tax rate of 39.6% for the same period in 2023. The primary driver for the effective tax rate variance is the permanent difference related to the mark-to-market adjustments on the Private Placement Warrants that impacted the rate in the prior year without a comparable impact in the current period.
Current wording
Income Tax Provision. Income tax provision was $13.8 million representing an effective tax rate of 28.4% for the three months ended September 30, 2024 compared to a tax provision of $11.5 million, with an effective tax rate of 27.5% for the same period in 2023. The primary driver for the effective tax rate variance is the permanent difference related to the mark-to-market adjustments on the Private Placement Warrants that impacted the rate in the prior year without a comparable impact in the current period.
Previous wording
Net Income. We had net income of $63.4 million for the six months ended June 30, 2024, as compared to a net income of $23.7 million for the six months ended June 30, 2023. The $39.7 million increase in net income was primarily due to the change in fair value of Private Placement Warrants expense in the prior year period, decrease in interest expense and the other statement of operations activity discussed above.
Current wording
Net Income. We had net income of $34.7 million for the three months ended September 30, 2024, as compared to a net income of $30.3 million for the three months ended September 30, 2023. The $4.4 million increase in net income was primarily due to the decrease in loss on extinguishment of debt and the interest expense, and the other statement of operations activity discussed above.
Previous wording
Service Revenue. Service revenue increased by $34.0 million, or 8.9%, to $414.7 million for the six months ended June 30, 2024 from $380.7 million for the six months ended June 30, 2023, representing 96.0% and 96.1% of total revenue, respectively. The following table depicts service revenue by segment:
Current wording
Service Revenue. Service revenue increased by $50.2 million, or 8.6%, to $632.0 million for the nine months ended September 30, 2024 from $581.8 million for the nine months ended September 30, 2023, representing 96.1% and 96.0% of total revenue, respectively. The following table depicts service revenue by segment:
Previous wording
Commercial Services service revenue increased by $19.8 million, or 11.0%, from $180.1 million for the six months ended June 30, 2023 to $199.9 million for the six months ended June 30, 2024. The increase was primarily due to increased travel volume and related tolling activity compared to the prior year. The volume of tolls incurred by RAC vehicles contributed to a $11.4 million growth in revenue and an increase in enrolled vehicles as well as higher tolling activity for our FMC customers contributed to a $6.1 million growth in revenue during the six months ended June 30, 2024, compared to the same period in 2023. In addition, there was more revenue generated from processing violations compared to the prior year.
Current wording
Commercial Services service revenue increased by $30.8 million, or 11.1%, from $278.2 million for the nine months ended September 30, 2023 to $309.0 million for the nine months ended September 30, 2024. The increase was primarily due to increased travel volume, product adoption and increased tolling activity compared to the prior year. These factors contributed to a $16.3 million growth in RAC tolling revenue and an increase in enrolled vehicles as well as higher tolling activity for our FMC customers contributed to a $7.6 million growth in FMC revenue during the nine months ended September 30, 2024, compared to the same period in 2023. In addition, there was more revenue generated from processing titles and registrations and from processing violations compared to the prior year period.
Previous wording
Government Solutions service revenue increased by $13.5 million, or 8%, from $168.2 million for the six months ended June 30, 2023, to $181.7 million for the six months ended June 30, 2024. The increase was primarily driven by the expansion of speed, red light and maintenance programs which contributed approximately $9.5 million to the service revenue growth compared to the prior year. The remaining increase is attributable to expansions across school bus stop-arm and bus lane programs.
Current wording
Government Solutions service revenue increased by $19.4 million, or 7.7%, from $253.3 million for the nine months ended September 30, 2023, to $272.7 million for the nine months ended September 30, 2024. The increase was primarily driven by the expansion of speed, red light and maintenance programs, contributing $13.1 million to the service revenue increase compared to the prior year. The remaining increase is attributable to expansions across school bus stop arm and bus lane programs.
Previous wording
Parking Solutions service revenue was relatively consistent at $16.6 million for both the three months ended June 30, 2024 and 2023. Increased revenue from SaaS product offerings was partially offset by reduction in professional services related to parking management solutions.
Current wording
Parking Solutions service revenue was relatively consistent at $50.2 million for both the nine months ended September 30, 2024 and 2023. The increased revenue from SaaS product offerings was partially offset by a decrease in professional services related to parking management solutions.
Previous wording
Product Sales. Product sales were $17.4 million and $15.6 million for the six months ended June 30, 2024 and 2023, respectively. Product sales increased by $1.8 million, which was due to a $4.2 million growth in product sales to Government Solutions customers, offset by a $2.4 million decrease in product sales in the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.
Current wording
Product Sales. Product sales were $25.7 million and $24.5 million for the nine months ended September 30, 2024 and 2023, respectively. Product sales increased by $1.2 million, which was due to a $3.9 million increase in product sales to Government Solutions customers, offset by a $2.7 million decrease in product sales in the Parking Solutions segment driven by a structural transition from hardware to software and mobile payment solutions. Customer buying patterns vary greatly from period to period related to product sales.
Previous wording
Cost of Service Revenue, Excluding Depreciation and Amortization. Cost of service revenue, excluding depreciation and amortization increased slightly from $8.6 million for the six months ended June 30, 2023 to $8.9 million for the six months ended June 30, 2024, mainly due to increased recurring service costs.
Current wording
Cost of Service Revenue, Excluding Depreciation and Amortization. Cost of service revenue, excluding depreciation and amortization increased from $13.7 million for the nine months ended September 30, 2023 to $14.3 million for the nine months ended September 30, 2024, mainly due to increased recurring service costs for the Parking Solutions segment.
Previous wording
Cost of Product Sales. Cost of product sales increased by $1.8 million from $11.3 million in the six months ended June 30, 2023 to $13.1 million in the six months ended June 30, 2024, which was in line with the increase in product sales discussed above.
Current wording
Cost of Product Sales. Cost of product sales increased by $0.6 million from $18.2 million in the nine months ended September 30, 2023 to approximately $18.8 million in the nine months ended September 30, 2024, which was in line with the increase in product sales discussed above.
Previous wording
Operating Expenses. Operating expenses increased by $18.0 million, or 14.2%, from $127.5 million for the six months ended June 30, 2023 to $145.5 million for the six months ended June 30, 2024. The increase in 2024 was primarily attributable to increases of $11.1 million in wages expense, $4.3 million of information technology costs and $2.0 million of recurring service costs compared to the prior period. Operating expenses as a percentage of total revenue increased from 32.2% to 33.7% for the six months ended June 30, 2023 and 2024, respectively.
Current wording
Operating Expenses. Operating expenses increased by $25.2 million, or 12.8%, from $196.4 million for the nine months ended September 30, 2023 to $221.6 million for the nine months ended September 30, 2024. The increase in 2024 was primarily attributable to increases of $16.2 million in wages expense, $5.6 million of information technology costs and $3.2 million of recurring service costs compared to the prior year period. Operating expenses as a percentage of total revenue increased from 32.4% to 33.7% for the nine months ended September 30, 2023 and 2024, respectively.
Previous wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $94.5 million for the six months ended June 30, 2024 compared to $83.2 million for the same period in 2023. This is primarily due to a $4.3 million increase in credit loss expense, $4.4 million in higher wages expense and overall increases in stock-based compensation expense, marketing and other general expenses, partially offset by a decrease in professional services costs compared to the prior year. Selling, general and administrative expenses as a percentage of total revenue increased from 21.0% to 21.9% for the six months ended June 30, 2023 and 2024, respectively. The following table presents selling, general and administrative expenses by segment:
Current wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $142.4 million for the nine months ended September 30, 2024 compared to $125.5 million for the same period in 2023. This is primarily due to increases of $6.2 million in wages expense, $3.9 million of credit loss expense, $4.6 million in stock-based compensation expense, and increases in marketing and other general expenses, partially offset by a decrease in professional services costs compared to the prior year. Selling, general and administrative expenses as a percentage of total revenue increased from 20.7% to 21.7% for the nine months ended September 30, 2023 and 2024, respectively. The following table presents selling, general and administrative expenses by segment:
Previous wording
Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net, decreased by $4.9 million to $54.5 million for the six months ended June 30, 2024 from $59.4 million for the same period in 2023. This was mainly due to certain non-compete, trademark and developed technology intangible assets being fully amortized in the six months ended June 30, 2024 as compared to the prior year. This decrease was partially offset by an increase in depreciation expense in the 2024 period.
Current wording
Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net, decreased by $5.8 million to $81.2 million for the nine months ended September 30, 2024 from $87.0 million for the same period in 2023. This was mainly due to certain non-compete, trademark and developed technology intangible assets being fully amortized in the nine months ended September 30, 2024 as compared to the prior year. This decrease was partially offset by an increase in depreciation expense in the 2024 period.
Previous wording
Interest Expense, Net. Interest expense, net decreased by $7.0 million from approximately $45.5 million for the six months ended June 30, 2023 to $38.5 million for the same period in 2024. This was primarily attributable to voluntary principal prepayments made during 2023 and 2024 which lowered the outstanding debt balance in 2024 coupled with a 50 basis-point reduction in the interest rate from refinancing our debt on February 8, 2024. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in Part I, Item 2.
Current wording
Interest Expense, Net. Interest expense, net decreased by $8.6 million from $65.8 million for the nine months ended September 30, 2023 to $57.2 million for the same period in 2024. This was primarily attributable to voluntary principal prepayments made during 2023 and 2024 which lowered the outstanding debt balance in 2024 coupled with a 50 basis-point reduction in the interest rate from refinancing our debt on February 8, 2024. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in Part I, Item 2.
Previous wording
Change in Fair Value of Private Placement Warrants. We recorded a loss of $10.9 million for the three months ended June 30, 2023 related to the change in fair value of our Private Placement Warrants which were accounted for as liabilities on our condensed consolidated balance sheets. The change in fair value was the result of re-measurement of the liability at the end of the reporting period or a final re-measurement upon their exercise.
Current wording
Change in Fair Value of Private Placement Warrants. We recorded a loss of $25.0 million for the nine months ended September 30, 2023 related to the change in fair value of our Private Placement Warrants which were accounted for as liabilities on our condensed consolidated balance sheets. The change in fair value was the result of re-measurement of the liability at the end of the reporting period, or a final re-measurement upon their exercise.
Previous wording
Gain on Interest Rate Swap. We recorded a gain of less than $(0.1) million during the three months ended June 30, 2024, of which $0.2 million is associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $(0.3) million related to the monthly cash proceeds on the interest rate swap. We recorded a $(4.8) million gain during the three months ended June 30, 2023, of which approximately $(5.1) million is associated with the derivative instrument re-measured to fair value at the end of the reporting period, offset by $0.3 million related to the monthly cash payments made.
Current wording
Loss (Gain) on Interest Rate Swap. We recorded a $0.5 million loss during the nine months ended September 30, 2024, of which $1.3 million is associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $(0.8) million related to the monthly cash proceeds. We recorded a $(1.9) million gain during the nine months ended September 30, 2023, of which approximately $(3.3) million is associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $1.4 million related to the monthly cash payments. We exercised our option to cancel the interest rate swap agreement as of September 30, 2024.
Previous wording
Loss on Extinguishment of Debt. We recorded a $0.6 million loss on extinguishment of debt during the six months ended June 30, 2024 related to the write-off of pre-existing deferred financing costs and discounts in connection with the refinancing of the 2021 Term Loan in February 2024. We recorded a $1.6 million loss on extinguishment of debt during the six months ended June 30, 2023 related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayments of $72.5 million on the 2021 Term Loan.
Current wording
Loss on Extinguishment of Debt. We recorded a $0.6 million loss on extinguishment of debt during the nine months ended September 30, 2024 related to the write-off of pre-existing deferred financing costs and discounts in connection with the refinancing of the 2021 Term Loan in February 2024. We recorded a $3.5 million loss on extinguishment of debt during the nine months ended September 30, 2023 related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayments of $172.5 million on the 2021 Term Loan.
Previous wording
Other Income, Net. Other income, net was approximately $9.7 million for the six months ended June 30, 2024 compared to $8.3 million for the six months ended June 30, 2023. The increase of $1.4 million is primarily attributable to volume rebates earned from total spend on purchasing cards from increased tolling and travel activity.
Current wording
Other Income, Net. Other income, net was $14.0 million for the nine months ended September 30, 2024 compared to $12.8 million for the nine months ended September 30, 2023. The increase of $1.2 million is primarily attributable to volume rebates earned from total spend on credit card transactions due to increased tolling and travel activity.
Previous wording
Income Tax Provision. Income tax provision was $23.2 million representing an effective tax rate of 26.8% for the six months ended June 30, 2024 compared to a tax provision of $20.4 million, with an effective tax rate of 46.2% for the same period in 2023. The primary driver for the effective tax rate variance is the permanent difference related to the mark-to-market adjustments on the Private Placement Warrants that impacted the rate in the prior year without a comparable impact in the current period.
Current wording
Income Tax Provision. Income tax provision was $37.0 million representing an effective tax rate of 27.4% for the nine months ended September 30, 2024 compared to a tax provision of $31.9 million, with an effective tax rate of 37.1% for the same period in 2023. The primary driver for the effective tax rate variance is the permanent difference related to the mark-to-market adjustments on the Private Placement Warrants that impacted the rate in the prior year without a comparable impact in 2024.
Previous wording
Net Income. We had net income of $34.2 million for the three months ended June 30, 2024, as compared to a net income of $19.1 million for the three months ended June 30, 2023. The $15.1 million increase in net income was primarily due to the change in fair value of Private Placement Warrants expense in the prior year period, decrease in interest expense and the other statement of operations activity discussed above.
Current wording
Net Income. We had net income of $98.1 million for the nine months ended September 30, 2024, as compared to a net income of $54.0 million for the nine months ended September 30, 2023. The $44.1 million increase in net income was primarily due to the change in fair value of Private Placement Warrants expense in the prior year period, decrease in interest expense and the other statement of operations activity discussed above.
Showing the first 40 of 52 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
During the nine months ended September 30, 2024 and 2023, we made early repayments of approximately $4.5 million and $172.5 million, respectively, on the 2021 Term Loan, and as a result the total principal outstanding on the 2021 Term Loan was $700.1 million as of September 30, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Commercial Services service revenue increased by $9.5 million, or 10.1%, from approximately $94.5 million for the three months ended June 30, 2023 to $104.0 million for the three months ended June 30, 2024. The increase was primarily due to increased travel volume and related tolling activity compared to the prior year. The volume of tolls incurred by RAC vehicles contributed to a $5.7 million growth in revenue and an increase in enrolled vehicles as well as higher tolling activity for our FMC customers contributed to a $2.7 million growth in revenue during the three months ended June 30, 2024, compared to the same period in 2023. In addition, there was more revenue generated from processing violations compared to the prior year.